ASSET PURCHASE AGREEMENT
 
dated as of February 16, 2010
 
among
 
Li3 Energy, Inc.,
 
Next Lithium Corp.
 
and
 
Next Lithium (Nevada) Corp.

 

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ASSET PURCHASE AGREEMENT
 
ASSET PURCHASE AGREEMENT, dated as of February 16, 2010 (the “Agreement”), among
Li3 Energy, Inc., a Nevada corporation (“Buyer”), Next Lithium Corp., an Ontario
corporation (“Next”) and Next Lithium (Nevada) Corp., a Nevada corporation
(“Next Nevada,” and, together with Next, the “Seller Group”).
 
WHEREAS, Seller Group is a Party to (a) an Agreement dated October 30, 2009 (the
“CSV, LM and MW Option Agreement”), attached hereto as Exhibit A, pursuant to
which Geoxplor Corp, a Nevada corporation (“Geoxplor”) has granted to Seller
Group the sole, exclusive and irrevocable right and option (the “CSV, LM and MW
Option”), exercisable in the manner described in Sections 5.1 and 9.1 of the
CSV, LM and MW Option Agreement, to acquire one hundred percent (100%)
beneficial interest in the association placer mining claims known as CSV Placer
Mineral Claims, LM Placer Mineral Claims and MW Placer Mineral Claims located in
Big Smokey Valley near Tonopah, Nevada, and as more particularly listed on
Schedule B attached to the CSV, LM and MW Option Agreement and incorporated
herein by this reference (the “CSV, LM and MW Property”); and
 
WHEREAS; Seller Group is a Party to (a) an Agreement dated October 30, 2009 (the
“BSV Option Agreement,” attached hereto as Exhibit B, and, together with the
CSV, LM and MW Option Agreement, the “Option Agreements”), pursuant to which
Geoxplor has granted to Seller Group the sole, exclusive and irrevocable right
and option (the “BSV Option,” and, together with the CSV, LM and MW Option, the
“Options”), exercisable in the manner described in Sections 5.1 and 9.1 of the
BSV Option Agreement, to acquire one hundred percent (100%) beneficial interest
in the association placer mining claims known as BSV Placer Mineral Claims
located in Big Smokey Valley near Tonopah, Nevada, and as more particularly
listed on Schedule B attached to the BSV Option Agreement and incorporated
herein by this reference (the “BSV Property,” and, together with the CSV, LM and
MW Property, the “Property”); and
 
WHEREAS, the parties desire that the Seller Group sell, assign, transfer, convey
and deliver to Buyer, and that Buyer purchase and acquire from the Seller Group,
all of the right, title and interest of the Seller Group in and to the Purchased
Assets (as hereinafter defined), and that Buyer assume the Assumed Liabilities
(as hereinafter defined), upon the terms and subject to the conditions of this
Agreement.
 
NOW, THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
 
ARTICLE I
DEFINITIONS
 
1.1         Definitions. When used in this Agreement, the following terms shall
have the meanings assigned to them in this Article I or in the applicable
Section of this Agreement to which reference is made in this Article I.
 
“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such specified Person.
 
“Ancillary Agreements” means the other agreements, instruments and documents to
be delivered at the Closing.

 
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“Authorization” means any authorization, approval, consent, certificate,
license, permit or franchise of or from any Governmental Entity or pursuant to
any Law.
 
“Books and Records” means books of account, general, financial, warranty and
shipping records, invoices, supplier lists, product specifications, product
formulations, drawings, correspondence, engineering, maintenance, operating and
production records, advertising and promotional materials, credit records of
customers and other documents, records and files, in each case Related to the
Purchased Assets.
 
“Business Day” means a day other than a Saturday, Sunday or other day on which
banks located in New York City are authorized or required by Law to close.
 
“Capital Stock” means (a) in the case of a corporation, its shares of capital
stock, (b) in the case of a partnership or limited liability company, its
partnership or membership interests or units (whether general or limited), and
(c) any other interest that confers on a Person the right to receive a share of
the profits and losses of, or distribution of assets, of the issuing entity.
 
“Charter Documents” means, with respect to any entity, the certificate of
incorporation, the articles of incorporation, bylaws, articles of organization,
limited liability company agreement, partnership agreement, formation agreement,
joint venture agreement or other similar organizational documents of such entity
(in each case, as amended).
 
“Code” means the Internal Revenue Code of 1986.
 
“Contract” means any agreement, contract, license, lease, commitment,
arrangement or understanding, written or oral, including any sales order or
purchase order.
 
“Escrow Agent” means Gottbetter & Partners, LLP.
 
“Escrow Agreement” means the Escrow Agreement among Next, the Buyer and the
Escrow Agent, substantially in the form set forth in Exhibit C attached hereto.
 
“GAAP” means generally accepted accounting principles in the United States.
 
“Governmental Entity” means any entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to United States federal, state, local, or municipal government, foreign,
international, multinational or other government, including any department,
commission, board, agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority thereof, and any
nongovernmental regulatory body to the extent that the rules and regulations or
orders of such body have the force of Law.
 
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
 
“Indebtedness” means any of the following: (a) any indebtedness for borrowed
money, (b) any obligations evidenced by bonds, debentures, notes or other
similar instruments, (c) any obligations to pay the deferred purchase price of
property or services, except trade accounts payable and other current
Liabilities arising in the ordinary course of the Business, (d) any obligations
as lessee under capitalized leases, (e) any indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
acquired property, (f) any obligations, contingent or otherwise, under
acceptance credit, letters of credit or similar facilities, and (g) any guaranty
of any of the foregoing.

 
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“Indemnitee” means any Person that is seeking indemnification from an Indemnitor
pursuant to the provisions of this Agreement.
 
“Indemnitor” means any party hereto from which any Indemnitee is seeking
indemnification pursuant to the provisions of this Agreement.
 
“Knowledge of Seller” or any similar phrase means, with respect to any fact or
matter, the actual knowledge of the directors and executive officers of each
member of the Seller Group, together with such knowledge that such directors,
executive officers or other employees could be expected to discover after due
investigation concerning the existence of the fact or matter in question.
 
“Law” means any statute, law (including common law), constitution, treaty,
ordinance, code, order, decree, judgment, rule, regulation and any other binding
requirement or determination of any Governmental Entity.
 
“Liability” means with respect to any Person, any liability or obligation of
such Person of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements of
such Person.
 
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, adverse claim or other encumbrance in respect of such
property or asset.
 
“Order” means any award, injunction, judgment, decree, order, ruling, subpoena
or verdict or other decision issued, promulgated or entered by or with any
Governmental Entity of competent jurisdiction.
 
“Other Antitrust Laws” means the antitrust and competition Laws of all
jurisdictions other than those of the United States.
 
“Permitted Liens” means Liens for current real or personal property Taxes not
yet due and payable and with respect to which the Seller Group maintains
adequate reserves.
 
“Person” means an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated association, a Governmental Entity or any
other entity or body.
 
“Policy” means any public liability, product liability, general liability,
comprehensive, property damage, vehicle, life, hospital, medical, dental,
disability, worker’s compensation, key man, fidelity bond, theft, forgery,
errors and omissions, directors’ and officers’ liability, or other insurance
policy of any nature.
 
“Pre-Closing Environmental Liabilities” means Liabilities arising out of (a) the
ownership or operation of the Business at any time on or prior to the Closing or
(b) the ownership, operation or condition of the Property or any other real
property currently or formerly owned, operated or leased by any member of the
Seller Group Related to the Property at any time on or prior to the Closing, in
each case to the extent based upon or arising out of (i) Environmental Law, (ii)
a failure to obtain, maintain or comply with any Environmental Permit, (iii) a
Release of any Hazardous Substance, or (iv) the use, generation, storage,
transportation, treatment, sale or other offsite disposal of Hazardous
Substances.

 
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“Subsidiary” or “Subsidiaries” means, with respect to any party, any Person, of
which (i) such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting
interest in such partnership) or (ii) at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the Board of Directors or others performing similar functions with respect to
such Person is directly or indirectly owned or controlled by such party and/or
by any one or more of its Subsidiaries.
 
“Tax” or “Taxes” means any and all federal, state, local, or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add-on minimum, environmental, profits, windfall
profits, transaction, license, lease, service, service use, occupation,
severance, energy, unemployment, social security, workers’ compensation,
capital, premium, and other taxes, assessments, customs, duties, fees, levies,
or other governmental charges of any nature whatever, whether disputed or not,
together with any interest, penalties, additions to tax, or additional amounts
with respect thereto.
 
“Tax Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
 
“Taxing Authority” means any Governmental Entity having jurisdiction with
respect to any Tax.
 
“$” means United States dollars.
 
1.2         Other Defined Terms. The following terms have the meanings assigned
to such terms in the Sections of the Agreement set forth below:
 
Action
4.11(a)
   
Agreement
Preamble
   
Allocation Statement
2.5
   
Applicable Survival Period
10.1(d)
   
Assigned Contracts
2.1(c)
   
Assumed Liabilities
2.2
   
Business
4.8(g)
   
Buyer
Preamble
   
Buyer Closing Certificate
8.3(c)
   
Buyer Common Stock
2.4
   
Buyer Disclosure Schedule
Preamble Article V
   
Buyer Indemnitees
10.2(a)
   
Buyer Warranty Losses
10.2(b)

 
 
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CERCLA
4.12(a)(iv)
   
Closing
3.1
   
Closing Date
3.1
   
Confidentiality Agreement
???
   
Consents
4.3(a)
   
Environment
4.12(a)(i)
   
Environmental Action
4.12(a)(ii)
   
Environmental Cleanup Site
4.12(a)(iii)
   
Environmental Laws
4.12(a)(iv)
   
Environmental Permit
4.12(a)(v)
   
Excluded Liabilities
2.3
   
Hazardous Substances
4.12(a)(vi)
   
Losses
10.2(a)
   
Noncompetition Period
6.8(a)
   
Nondisclosure Agreements
4.9(c)
   
Notice of Claim
10.4(a)
   
PCBs
4.21(i)
   
Policies
4.22(a)
   
Post-Closing Tax Period
7.5(b)
   
Pre-Closing Tax Period
7.5(b)
   
Proprietary Information
4.9(a)
   
Purchase Price
2.4(a)
   
Purchase Price Shares
2.4(a)
   
Purchased Assets
2.1
   
RCRA
4.12(a)(iv)
   
Release
4.12(a)(vii)

 
 
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Representatives
6.3
   
Restricted Business
6.8(a)
   
Restricted Contract
2.6(a)
   
Section 1060 Forms
2.5
   
Seller Closing Certificate
8.2(c)
   
Seller Disclosure Schedule
Preamble Article IV
   
Seller Group
Recitals
   
Seller Indemnitees
10.3(a)
   
Seller Warranty Losses
10.3(b)
   
Third Party Claim
10.4(a)
   
Third Party Defense
10.4(b)

ARTICLE II
PURCHASE AND SALE
 
2.1         Purchase and Sale of the Purchased Assets. Upon the terms and
subject to the conditions of this Agreement, at the Closing, Seller Group shall
sell, assign, transfer, convey and deliver to Buyer or a Subsidiary of Buyer
designated by Buyer in writing to the Seller Group not less than one Business
Day prior to the Closing, and Buyer or such Subsidiary shall purchase, acquire
and accept from the Seller Group, free and clear of Liens except for Permitted
Liens, the entire right, title and interest of Seller Group in, to and under the
following assets, properties and rights (the “Purchased Assets”):
 
(a)           the Option Agreements;
 
(b)          all Proprietary Information;
 
(c)          all Contracts related to the Option Agreements (together with the
Option Agreements, the “Assigned Contracts”);
 
(d)          all Books and Records;
 

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(e)          all claims, causes of action, choses in action, rights of recovery
and rights under all warranties, representations and guarantees arising from or
relating to the other Purchased Assets;
 
(f)           all insurance benefits, including rights and proceeds, arising
from or relating to the other Purchased Assets; and
 
(g)          all security deposits, earnest deposits and all other forms of
deposit or security placed with or by any member of the Seller Group for the
performance of an Assigned Contract.

 
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2.2         Assumed Liabilities. Upon the terms and subject to the conditions of
this Agreement, Buyer or a Subsidiary of Buyer designated by Buyer in writing to
the Seller Group not less than one Business Day prior to the Closing shall
assume effective as of the Closing, and from and after the Closing, Buyer or
such Subsidiary shall pay, discharge or perform when due, as appropriate, only
the following Liabilities of the Seller Group (the “Assumed Liabilities”), and
no other Liabilities:
 
all Liabilities in respect of the Assigned Contracts, but only to the extent
that such Liabilities thereunder arise or are required to be performed after the
Closing Date and do not relate to any failure to perform, improper performance,
warranty or other breach, default or violation by any member of the Seller Group
on or prior to the Closing.
 
2.3         Excluded Liabilities. Neither Buyer nor any of its Affiliates shall
assume any Liabilities of the Seller Group (such unassumed Liabilities, the
“Excluded Liabilities”) other than those specifically set forth in Section 2.2.
Without limiting the generality of the foregoing, in no event shall Buyer or any
of its Affiliates assume or incur any Liability in respect of, and the Seller
Group shall remain bound by and liable for, and shall pay, discharge or perform
when due, the following Liabilities of the Seller Group:
 
(a)          all Liabilities for (i) Taxes relating to the Purchased Assets for
any Pre-Closing Tax Period and (ii) Taxes of the Seller Group or any Affiliate
of the Seller Group;
 
(b)          all Liabilities in respect of the Contracts and assets other than
the Purchased Assets;
 
(c)          all product Liability, warranty and similar claims for damages or
injury to person or property, claims of infringement of intellectual property
rights and all other Liabilities, regardless of when made or asserted, which
arise out of or are based upon any events occurring or actions taken or omitted
to be taken by any member of the Seller Group, or otherwise arising out of or
incurred in connection with the Purchased Property, on or before the Closing
Date;
 
(d)          all Pre-Closing Environmental Liabilities; 
 
(e)          all Indebtedness of the Seller Group; and
 
(f)          all Liabilities arising out of or incurred in connection with the
negotiation, preparation and execution of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby, including Taxes and fees and expenses of counsel, accountants and other
experts.
 
2.4         Purchase Price.
 
(a) The aggregate consideration to be paid by Buyer to the Seller Group for the
Purchased Assets (the “Purchase Price”) shall be (i) 4,000,000 newly issued
shares (the “Purchase Price Shares”) of the common stock, par value $0.001 per
share, of the Buyer (“Buyer Common Stock”), and (ii) the assumption of the
Assumed Liabilities.
 
(b)  Next, on behalf of the Seller Group, shall not be entitled to receive
immediately the Purchase Price Shares; Purchase Price Shares shall be deposited
in escrow pursuant to Section 3.4 and shall be held and disposed of in
accordance with the terms of the Escrow Agreement.  The Purchase Price Shares
shall be delivered as provided in Section 3.3(a).

 
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2.5         Allocation. As soon as reasonably practicable following the Closing,
Buyer shall deliver to the Seller Group an allocation statement setting forth
Buyer’s allocation of the Purchase Price for Tax purposes pursuant to Section
1060 of the Code and any other applicable Tax Laws (as the same may be revised
pursuant to the following sentence, the “Allocation Statement”). Except as
otherwise required by Law, Buyer and the Seller Group shall, and each member of
the Seller Group shall cause each other member of the Seller Group to, file all
Tax Returns (such as IRS Form 8594 or any other forms or reports required to be
filed pursuant to Section 1060 of the Code or any comparable provisions of Law
(“Section 1060 Forms”)) in a manner that is consistent with the Allocation
Statement and refrain from taking any action inconsistent therewith. Buyer and
the Seller Group shall, and each member of the Seller Group shall cause each
other member of the Seller Group to, cooperate in the preparation of Section
1060 Forms and file such Section 1060 Forms timely and in the manner required by
applicable Law. Buyer and the Seller Group agree to treat any payments made
pursuant to the indemnification provisions of this Agreement as an adjustment to
the Purchase Price for Tax purposes.
 
2.6         Consents.
 
(a)           Notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to sell, assign, transfer, convey or
deliver any Purchased Asset or any benefit arising under or resulting from such
Purchased Asset if the sale, assignment, transfer, conveyance or delivery
thereof, without the Consent of a third party, (i) would constitute a breach or
other contravention of the rights of such third party, (ii) would be ineffective
with respect to any party to a Contract concerning such Purchased Asset, or
(iii) would, upon transfer, in any way adversely affect the rights of Buyer
under such Purchased Asset. If the sale, assignment, transfer, conveyance or
delivery by any member of the Seller Group to, or any assumption by Buyer of,
any interest in, or Liability under, any Purchased Asset requires the Consent of
a third party, then such sale, assignment, transfer, conveyance, delivery or
assumption shall be subject to such Consent being obtained. Without limiting
subsection (b) below, to the extent any Assigned Contract may not be assigned to
Buyer by reason of the absence of any such Consent (“Restricted Contract”),
Buyer shall not be required to assume any Assumed Liabilities arising under such
Restricted Contract.
 
(b)           To the extent that any Consent in respect of a Restricted Contract
or any other Purchased Asset shall not have been obtained on or before the
Closing Date, Buyer may elect to proceed with the Closing, in which case, the
Seller Group shall continue to use reasonable best efforts to obtain any such
Consent after the Closing Date until such time as it shall have been obtained.
The Seller Group shall cooperate with Buyer in any economically feasible
arrangement proposed by Buyer to provide that Buyer shall receive the interest
of the Seller Group in the benefits under such Restricted Contract or other
Purchased Asset. The Seller Group shall pay and discharge, and shall indemnify
and hold harmless, Buyer and its Affiliates from and against any and all
out-of-pocket costs of seeking to obtain or obtaining any such Consent whether
before or after the Closing Date. As soon as a Consent for the sale, assignment,
transfer, conveyance, delivery or assumption of a Restricted Contract or other
Purchased Asset is obtained, Next shall promptly assign, transfer, convey and
deliver such Restricted Contract or Purchased Asset to Buyer, and Buyer shall
assume the Assumed Liabilities under any such Restricted Contract from and after
the date of assignment to Buyer pursuant to a special-purpose assignment and
assumption agreement in form and substance reasonably satisfactory to Buyer.
 
(c)           Nothing contained in this Section or elsewhere in this Agreement
shall be deemed a waiver by Buyer of its right to have received on the Closing
Date an effective assignment of all of the Purchased Assets or of the covenant
of the Seller Group to obtain all Consents, nor shall this Section or any other
provision of this Agreement be deemed to constitute an agreement to exclude from
the Purchased Assets any Assigned Contracts or other Purchased Asset as to which
a Consent may be necessary.

 
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ARTICLE III
CLOSING
 
3.1         Closing Date. The closing of the Transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Gottbetter &
Partners, LLP, 488 Madison Avenue, 12th Floor, New York, New York, 10022, at
10:00 a.m. on a date to be specified by the parties, which shall be no later
than two Business Days after satisfaction (or waiver as provided herein) of the
conditions set forth in Article VIII (other than those conditions that by their
nature will be satisfied at the Closing), unless another time, date and/or place
is agreed to in writing by the parties. The date on which the Closing occurs is
referred to in this Agreement as the “Closing Date.”
 
3.2         Deliveries by Seller Group at the Closing. At the Closing, the
Seller Group shall deliver to Buyer the following:
 
(a)          a memorandum of this Agreement acceptable to Buyer, duly executed
by each member of the Seller Group, for the purpose of recording the same in the
records of Clark County, Nevada, so as to give public notice, pursuant to the
laws of the State of Nevada, of the existence of this Agreement;
 
(b)          such other good and sufficient instruments of transfer as Buyer
reasonably deems necessary and appropriate to vest in Buyer all right, title and
interest in, to and under the Purchased Assets;
 
(c)          the Power of Attorney contemplated by Section 6.9 duly executed by
each relevant member of the Seller Group; and
 
(d)          the Seller Closing Certificate.
 
3.3         Deliveries by Buyer at the Closing.
 
(a) At the Closing, Buyer shall deliver to the Seller Group the Buyer Closing
Certificate.
 
(b) At the Closing, Buyer shall execute and deliver to the Seller Group, and
each member of the Seller Group shall countersign, an agreement in form and
substance satisfactory to Buyer and the Seller Group and containing customary
terms for such an agreement, providing that if the Purchase Price Shares cannot
be resold under Rule 144 without restriction at any time following the 13th
month  after Closing due to Buyer’s status as a former “shell” company and its
failure to file  required reports with the Securities and Exchange Commission
(the “SEC”), and not because of any fault of any member of the Seller Group,
Buyer will register the Purchase Price Shares with the SEC for resale on Form
S-1 or such other form as may then be available for such registration.
 
(b) In addition, at the Closing, Buyer shall (i) reimburse the Seller Group for
the reasonable, documented legal expenses incurred by the Seller Group in
connection with this Agreement and the other agreements contemplated herein and
the offer letter dated November 24, 2009, up to a maximum of CAD$25,000, and
(ii) deliver CAD$25,000 to Colonnade Capital Corp. as directed in writing by the
Seller Group, in connection with the letter agreement dated August 20, 2009 in
respect of the identification and evaluation of mining claims.

 
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3.4         Escrow. On the Closing Date, the Buyer shall deliver to the Escrow
Agent a certificate (issued in the name of the Escrow Agent or its nominee)
representing the Purchase Price Shares, as described in Section 2.4(b), for the
purpose of securing the indemnification obligations of the Seller Group set
forth in this Agreement.  The Purchase Price Shares shall be held by the Escrow
Agent pursuant to the Escrow Agreement.  The Purchase Price Shares shall be held
as a trust fund and shall not be subject to any lien, attachment, trustee
process or any other judicial process of any creditor of any Party, and shall be
held and disbursed solely for the purposes and in accordance with the terms of
the Escrow Agreement.  If directed in writing by any member of the Seller Group,
Buyer will issue certificates for the Purchase Price Shares in the names of such
member’s stockholders who shall have agreed, in form satisfactory to Buyer, to
be bound by the terms of the Escrow Agreement, in such amounts as such member
shall direct.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER GROUP
 
Each member of the Seller Group, jointly and severally, represents and warrants
to Buyer as of the date hereof and as of the Closing Date that the statements
contained in this Article IV are true and correct, except as set forth in the
disclosure schedule dated and delivered as of the date hereof by the Seller
Group to Buyer (the “Seller Disclosure Schedule”), which is attached to this
Agreement and is designated therein as being the Seller Disclosure Schedule. The
Seller Disclosure Schedule shall be arranged in paragraphs corresponding to each
representation and warranty set forth in this Article IV. Each exception to a
representation and warranty set forth in the Seller Disclosure Schedule shall
qualify the specific representation and warranty which is referenced in the
applicable paragraph of the Seller Disclosure Schedule, and no other
representation or warranty.
 
4.1         Organization and Good Standing. Each member of the Seller Group is a
corporation, limited liability company or other legal entity duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or formation, has all requisite power to own, lease and operate
its properties and to carry on its business as now being conducted and as
proposed to be conducted, and is duly qualified to do business and is in good
standing in each jurisdiction in which it owns or leases property or conducts
any business so as to require such qualification. No member of the Seller Group
is in default under its Charter Documents.
 

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4.2         Authority and Enforceability.
 
(a)           Each member of the Seller Group has the requisite power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of each member of the Seller
Group. Each member of the Seller Group has duly executed and delivered this
Agreement. This Agreement constitutes the valid and binding obligation of each
member of the Seller Group, enforceable against it in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or relating to
creditors’ rights generally, and (ii) the availability of injunctive relief and
other equitable remedies.
 
(b)           Each member of the Seller Group has the requisite power and
authority to enter into each Ancillary Agreement to which it is, or is specified
to be, a party, and to consummate the transactions contemplated thereby. The
execution and delivery by each member of the Seller Group of each Ancillary
Agreement to which it is, or specified to be, a party and the consummation of
the transactions contemplated thereby have been duly authorized by all necessary
corporate, limited liability company or other action on the part of each such
member of the Seller Group. Prior to the Closing, each member of the Seller
Group will have duly executed and delivered each Ancillary Agreement to which it
is, or specified to be, a party. The Ancillary Agreements will constitute the
valid and binding obligation of each member of the Seller Group party thereto,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to creditors’ rights
generally, and (ii) the availability of injunctive relief and other equitable
remedies. This Agreement and the Ancillary Agreements will effectively vest in
Buyer good, valid and marketable title to all the Purchased Assets free and
clear of all Liens.

 
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4.3         No Conflicts; Consents.
 
(a)           The execution and delivery of this Agreement by each member of the
Seller Group do not, and the execution and delivery of each Ancillary Agreement
to which each member of the Seller Group is, or specified to be, a party, the
performance by each member of the Seller Group of its obligations hereunder and
thereunder and the consummation by each member of the Seller Group of the
transactions contemplated hereby and thereby (in each case, with or without the
giving of notice or lapse of time, or both), will not, directly or indirectly,
(i) violate the provisions of any of the Charter Documents of any member of the
Seller Group, (ii) violate or constitute a default, an event of default or an
event creating rights of acceleration, termination, cancellation, imposition of
additional obligations or loss of rights under any Contract (A) to which any
member of the Seller Group is a party, (B) of which any member of the Seller
Group is a beneficiary or (C) by which any member of the Seller Group or any of
their respective assets is bound, (iii) violate or conflict with any Law,
Authorization or Order applicable to any member of the Seller Group, or give any
Governmental Entity or other Person the right to challenge any of the
transactions contemplated by this Agreement or the Ancillary Agreements or to
exercise any remedy, obtain any relief under or revoke or otherwise modify any
rights held under, any such Law, Authorization or Order, or (iv) result in the
creation of any Liens upon any of the assets owned or used by any member of the
Seller Group. There are no consents, waivers, assignments or other approvals or
actions that are required in connection with the transactions contemplated by
this Agreement under any Contract to which any member of the Seller Group is a
party (collectively, “Consents”) in order (i) in the case of Contracts that are
not Assigned Contracts, to preserve all rights and benefits of the Seller Group
thereunder and (ii) in the case of Contracts that are Assigned Contracts, to
sell, assign, transfer, convey and deliver to, Buyer all rights and benefits of
the Seller Group thereunder without any impairment or alteration whatsoever,
except such as have been delivered to Buyer on or before the date of this
Agreement.
 
(b)          No Authorization or Order of, registration, declaration or filing
with, or notice to, any Governmental Entity or other Person, is required by or
with respect to any member of the Seller Group in connection with the execution
and delivery of this Agreement and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby.
 
4.4         Taxes.
 
(a)           All Tax Returns required to have been filed by or with respect to
each member of the Seller Group have been duly and timely filed (or, if due
between the date hereof and the Closing Date, will be duly and timely filed),
and each such Tax Return correctly and completely reflects Liability for Taxes
and all other information required to be reported thereon. All Taxes owed by any
member of the Seller Group (whether or not shown on any Tax Return) have been
timely paid (or, if due between the date hereof and the Closing Date, will be
duly and timely paid). Each member of the Seller Group has adequately provided
for, in its books of account and related records, Liability for all unpaid
Taxes, being current Taxes not yet due and payable.
 
(b)           There is no action or audit now proposed, threatened or pending
against, or with respect to, any member of the Seller Group in respect of any
Taxes. No member of the Seller Group is the beneficiary of any extension of time
within which to file any Tax Return, nor has any member of the Seller Group made
(or had made on its behalf) any requests for such extensions. No claim has ever
been made by an authority in a jurisdiction where any member of the Seller Group
does not file Tax Returns that any of them is or may be subject to taxation by
that jurisdiction or that any of them must file Tax Returns. There are no Liens
on any of the stock or assets of any member of the Seller Group with respect to
Taxes.

 
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(c)           Each member of the Seller Group has withheld and timely paid all
Taxes required to have been withheld and paid and has complied with all
information reporting and backup withholding requirements, including maintenance
of required records with respect thereto.
 
(d)           There is no dispute or claim concerning any Liability for Taxes
with respect to any member of the Seller Group for which notice has been
provided, or which is asserted or threatened, or which is otherwise known to any
member of the Seller Group. No issues have been raised in any Taxes examination
with respect to any member of the Seller Group which, by application of similar
principles, could be expected to result in Liability for Taxes for any member of
the Seller Group or period not so examined. Each member of the Seller Group has
delivered to Buyer correct and complete copies of all federal income Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed to by any member of the Seller Group since January 1, 2007. No member of
the Seller Group has waived (or is subject to a waiver of) any statute of
limitations in respect of Taxes or has agreed to (or is subject to) any
extension of time with respect to a Tax assessment or deficiency.
 
(e)           None of the assets or properties of any member of the Seller Group
constitutes tax-exempt bond financed property or tax-exempt use property within
the meaning of Section 168 of the Code. No member of the Seller Group is a party
to any “safe harbor lease” within the meaning of Section 168(f)(8) of the Code,
as in effect prior to amendment by the Tax Equity and Fiscal Responsibility Act
of 1982, or to any “long-term contract” within the meaning of Section 460 of the
Code. No member of the Seller Group has ever been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code. No
foreign member of the Seller Group has ever held a “United States real property
interest” within the meaning of Section 897(1)(1) of the Code. No member of the
Seller Group is a “foreign person” within the meaning of Section 1445 of the
Code. No member of the Seller Group has made any payments, is obligated to make
any payments, or is a party to any agreement that under certain circumstances
could obligate it to make payments that would result in a nondeductible expense
under Section 280G of the Code or an excise Tax to the recipient of such
payments pursuant to Section 4999 of the Code. No member of the Seller Group has
participated in or cooperated with an international boycott as defined in
Section 999 of the Code.
 
(f)           No member of the Seller Group has agreed to or is required to make
by reason of a change in accounting method or otherwise, or could be required to
make by reason of a proposed or threatened change in accounting method or
otherwise, any adjustment under Section 481(a) of the Code. No member of the
Seller Group has been the “distributing corporation” (within the meaning of
Section 355(c)(2) of the Code) with respect to a transaction described in
Section 355 of the Code within the 5year period ending as of the date of this
Agreement. No member of the Seller Group has received (or is subject to) any
ruling from any Taxing Authority or has entered into (or is subject to) any
agreement with a Taxing Authority. Each member of the Seller Group has disclosed
on its federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the meaning of
Section 6662 of the Code.
 
(g)           No member of the Seller Group is a party to any Tax allocation or
sharing agreement. No member of the Seller Group has any Liability for the Taxes
of any Person, other than under Section 1.15026 of the Treasury regulations (or
any similar provision of state, local, or foreign Law) with respect to any
Relevant Group of which such member of the Seller Group currently is a member,
(i) as a transferee or successor, (ii) by contract, (iii) under Section 1.15026
of the Treasury regulations (or any similar provision of state, local or foreign
Law), or (iv) otherwise. No member of the Seller Group is a party to any joint
venture, partnership or other arrangement that is treated as a partnership for
federal income tax purposes.

 
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(h)           No member of the Seller Group will be required to include any item
of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any: (i) intercompany transactions or excess loss accounts described in Treasury
regulations under Section 1502 of the Code (or any similar provision of state,
local, or foreign Tax Law), (ii) installment sale or open transaction
disposition made on or prior to the Closing or (iii) prepaid amount received on
or prior to the Closing.
 
(i)           No member of the Seller Group that is incorporated in a non-U.S.
jurisdiction has, or at any time has had, an investment in “United States
property” within the meaning of Section 956(c) of the Code. No member of the
Seller Group is, or at any time has been, a passive foreign investment company
within the meaning of Section 1297 of the Code and no member of the Seller Group
is a shareholder, directly or indirectly, in a passive foreign investment
company. No member of the Seller Group that is incorporated in a non-U.S.
jurisdiction is, or at any time has been, engaged in the conduct of a trade or
business within the United States, or treated as or considered to be so engaged.
 
(i)           No member of the Seller Group is or at any time has been subject
to the dual consolidated loss provisions of Section 1503(d) of the Code, (ii)
the overall foreign loss provisions of Section 904(f) of the Code or (iii) the
recharacterization provisions of Section 952(c)(2) of the Code. No member of the
Seller Group has any “nonrecaptured net Section 1231 losses” within the meaning
of Section 1231(c)(2) of the Code.
 
4.5         Compliance with Law.
 
(a)           Each member of the Seller Group has conducted, and is conducting,
its business in compliance with all applicable Laws.
 
(b)          No event has occurred and no circumstances exist that (with or
without the passage of time or the giving of notice) may result in a violation
of, conflict with or failure on the part of any member of the Seller Group to
conduct its business in compliance with, any applicable Law. No member of the
Seller Group has received notice regarding any violation of, conflict with, or
failure to conduct the its business in compliance with, any applicable Law.
 
4.6         Business Authorizations.  There are no Authorizations which are
necessary for any member of the Seller Group to conduct its business as
currently conducted or as proposed to be conducted or for the ownership and use
of the assets owned or used by such member of the Seller Group in the conduct of
its business.
 
4.7         Title to Purchased Assets.
 
(a)           A member of the Seller Group has good and transferable title to
all such Purchased Assets, free and clear of all Liens except for Permitted
Liens. No Purchased Asset is leased.
 
4.8         Mining Claims.  With respect to each Property:
 
(a)           the Property is comprised of the association placer mining claims
listed on Schedule B attached to each of the Option Agreements;

 
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(b)           no member of Seller Group has received any notice of expropriation
and is not aware of any intention of any party to expropriate any part of the
Property;
 
(c)           there is as or the date of this Agreement no litigation or
proceeding, including appeals or applications for review, in progress and, to
the best of Seller’s Knowledge, no litigation or claim threatened against or
relating to any member of the Seller Group directly affecting the Property, and
there is not presently outstanding against any member of the Seller Group any
judgment, decree, injunction, rule or order of any court, government department,
commission, agency or arbitration which materially adversely affects the
Property:
 
(d)           subject to the Permitted Encumbrances and compliance therewith,
the execution and delivery of the applicable Option Agreement and the exercise
by Buyer of the rights granted to it under the applicable Option Agreement will
not conflict with or be in contravention of any law, regulation or order of any
government, government department or other competent authority or conflict with
rights of third parties or result in a breach of or default under any agreement
or other instrument of obligation to which any member of the Seller Group is a
party or by which any member of the Seller Group or the Property may be bound;
 
(e)           the applicable Option Agreement constitutes a legal, valid and
binding obligation of each member of the Seller Group enforceable against it in
accordance with its terms under the laws of the Province of Ontario, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting creditors’ rights and the discretion exercisable by courts
of competent jurisdiction in respect of the availability of equitable remedies
and application of equitable principles.
 
(f)           No Governmental Entity having the power of eminent domain over the
Property has commenced or, to Seller’s Knowledge, intends to exercise the power
of eminent domain or a similar power with respect to all or any part of the
Property. There are no pending or, to Seller’s Knowledge, threatened
condemnation, fire, health, safety, building, zoning or other land use
regulatory proceedings, lawsuits or administrative actions relating to any
portion of the Property or any other matters which do or may adversely affect
the current use, occupancy or value thereof. No member of the Seller Group has
received notice of any pending or threatened special assessment proceedings
affecting any portion of the Property.
 
(g)           The Property and all present uses and operations of the Property
comply with all Laws, covenants, conditions, restrictions, easements,
disposition agreements and similar matters affecting the Property. The Property
and its continued use, occupancy and operation as used, occupied and operated in
the conduct of the business of metals and minerals mining (the “Business”) do
not constitute a nonconforming use and is not the subject of a special use
permit under any Law.
 
(h)           The Property is in suitable condition for the conduct of the
Business as currently conducted and as proposed to be conducted. Each member of
the Seller Group has good and valid rights of ingress and egress to and from all
Property from and to the public street systems for all usual street, road and
utility purposes.
 
(i)           No Person other than a member of the Seller Group is in possession
of any of the Property or any portion thereof, and there are no leases,
subleases, licenses, concessions or other agreements, written or oral, granting
to any Person other than the Seller Group the right of use or occupancy of the
Property or any portion thereof. No easement, utility transmission line or water
main located on the Property adversely affects the use of the Property or any
improvement on the Property.

 
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(j)           No fact or condition exists which could result in the termination
or material reduction of the current access from the Property to existing roads
or to utility services presently serving the Property.
 
4.9         Proprietary Information; Intellectual Property.
 
(a)           As used in this Agreement, “Proprietary Information” means all
trade secrets, technical data, databases, customer lists, designs, tools,
methods, processes, technology, ideas, knowhow, source code, product road maps
and other proprietary information and materials relating to the other Purchased
Assets, including, without limitation, the Canadian National Instrument 43-101
Report by Coast Mountain Geological Ltd., dated September 4, 2009, relating to
the Property (the “Coast Mountain Report”).
 
(b)           No member of the Seller Group has infringed or infringes upon, or
otherwise unlawfully used or uses, any intellectual property rights of a third
party in any way directly or indirectly related to the Purchased Assets. No
member of the Seller Group has received any communication alleging that a member
of the Seller Group or any of their respective activities or operations infringe
upon or otherwise unlawfully use any intellectual property rights of a third
party nor, to Seller’s Knowledge, is there any basis therefor.
 
(c)           The documentation relating to the Proprietary Information is
current, accurate and sufficient in detail and content to identify and explain
it and to allow its full and proper use without reliance on the special
knowledge or memory of others. Each member of the Seller Group has taken
commercially reasonable steps to protect and preserve the confidentiality of all
Proprietary Information owned by any member of the Seller Group. Any receipt or
use by, or disclosure to, a third party of Proprietary Information owned by any
member of the Seller Group has been pursuant to the terms of binding written
confidentiality and nonuse agreement between a member of the Seller Group and
such third party (“Nondisclosure Agreements”). True and complete copies of the
Nondisclosure Agreements, and any amendments thereto, have been provided to
Buyer. Each member of the Seller Group is, and to Seller’s Knowledge, all other
parties thereto are, in compliance with the provisions of the Nondisclosure
Agreements. Each member of the Seller Group is in compliance with the terms of
all Contracts pursuant to which a third party has disclosed to, or authorized
such member of the Seller Group to use, Proprietary Information Related to the
Purchased Assets owned by such third party.
 
(d)           No Action has been instituted, or, to Seller’s Knowledge, is
threatened, relating to any Proprietary Information, and none of the Proprietary
Information is subject to any outstanding Order. To Seller’s Knowledge, no
Person has misappropriated or is misappropriating any Proprietary Information.
 
(e)           No Proprietary Information has been distributed, sold or licensed
to a third party by any member of the Seller Group.
 
(f)           To Seller’s Knowledge, the Coast Mountain Report does not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading.
 
(g)           The execution and delivery of this Agreement by each member of the
Seller Group does not, and the consummation of the transactions contemplated
hereby (in each case, with or without the giving of notice or lapse of time, or
both), will not, directly or indirectly, result in the loss or impairment of any
member of the Seller Group’s rights to own any of its Proprietary Information,
nor require the consent of any Governmental Entity or other third party in
respect of any such Proprietary Information.

 
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4.10       Assigned Contracts.
 
(a)           The Assigned Contracts are only the Option Agreements.
 
(b)           Each Assigned Contract is valid and enforceable in accordance with
its terms. Each member of the Seller Group party to an Assigned Contract has
complied with and is in compliance with, and to Seller’s Knowledge, all other
parties thereto have complied with and are in compliance with, the provisions of
each Assigned Contract.
 
(c)           No member of the Seller Group is, and to Seller’s Knowledge, no
other party thereto is, in default in the performance, observance or fulfillment
of any obligation, covenant, condition or other term contained in any Assigned
Contract, and no member of the Seller Group has given or received notice to or
from any Person relating to any such alleged or potential default that has not
been cured. No event has occurred which, with or without the giving of notice or
lapse of time, or both, may conflict with or result in a violation or breach of,
or give any Person the right to exercise any remedy under or accelerate the
maturity or performance of, or cancel, terminate or modify, any Assigned
Contract.
 
(d)           The Seller Group has delivered accurate and complete copies of
each Assigned Contract to Buyer.
 
4.11       Litigation.
 
(a)           There is no action, suit or proceeding, claim, arbitration,
litigation or investigation (each, an “Action”), (i) pending or, to Seller’s
Knowledge, threatened against or affecting any member of the Seller Group
relating directly or indirectly to any of the Purchased Assets, or (ii) that
challenges or seeks to prevent, enjoin or otherwise delay the transactions
contemplated by this Agreement or the Ancillary Agreements. No event has
occurred or circumstances exist that may give rise or serve as a basis for any
such Action.
 
(b)           There is no unsatisfied judgment, penalty or award against or
affecting any member of the Seller Group or any of their respective assets,
properties or rights.
 
4.12       Environmental.
 
(a)          As used in this Agreement, the following words and terms have the
following definitions:
 
(i) The term “Environment” means all indoor or outdoor air, surface water,
groundwater, surface or subsurface land, including all fish, wildlife, biota and
all other natural resources.
 
(ii) The term “Environmental Action” means any claim, proceeding or other Action
brought or threatened under any Environmental Law or the assertion of any claim
with respect to Pre-Closing Environmental Liabilities.
 
(iii) The term “Environmental Cleanup Site” means any location which is listed
on the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System, or on any similar state or
foreign list of sites requiring investigation or cleanup, or which is the
subject of any pending or threatened Action related to or arising from any
alleged violation of any Environmental Law, or at which there has been a
threatened or actual Release of a Hazardous Substance.

 
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(iv) The term “Environmental Laws” means any and all applicable Laws and
Authorizations issued, promulgated or entered into by any Governmental Entity
relating to the Environment, worker health and safety, preservation or
reclamation of natural resources, or to the management, handling, use,
generation, treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling, Release or threatened Release of
or exposure to Hazardous Substances, whether now existing or subsequently
amended or enacted, including but not limited to: the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601
et seq. (“CERCLA”); the Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Occupational Safety
and Health Act, 29 U.S.C. Section 651 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 300(f) et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq.; the Federal Insecticide,
Fungicide and Rodenticide Act 7 U.S.C. Section 136 et seq.; the Resource
Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. Section 6901 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and any similar or
implementing state or local Law, and any non-U.S. Laws and regulations of
similar import, and all amendments or regulations promulgated thereunder; and
any common law doctrine, including but not limited to, negligence, nuisance,
trespass, personal injury, or property damage related to or arising out of the
presence, Release, or exposure to Hazardous Substances.
 
(v) The term “Environmental Permit” means any Authorization under Environmental
Law and includes any and all Orders issued or entered into by a Governmental
Entity under Environmental Law.
 
(vi) The term “Hazardous Substances” means all explosive or regulated
radioactive materials or substances, hazardous or toxic materials, wastes or
chemicals, petroleum and petroleum products (including crude oil or any fraction
thereof), asbestos or asbestos containing materials, and all other materials,
chemicals or substances which are regulated by, form the basis of liability or
are defined as hazardous, extremely hazardous, toxic or words of similar import,
under any Environmental Law, including materials listed in 49 C.F.R. Section
172.101 and materials defined as hazardous pursuant to Section 101(14) of
CERCLA.
 
(vii) The term “Release” means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of Hazardous Substances into the Environment.
 
(b)          There are no Environmental Permits required in connection with the
Option Agreements or the Property.
 
(c)          There are no past, pending or, to Seller’s Knowledge, threatened
Environmental Actions against or affecting the Property or any member of the
Seller Group in connection with the Option Agreements or the Property, and no
member of the Seller Group is aware of any facts or circumstances which could be
expected to form the basis for any such Environmental Action.
 
(d)          Neither Geoxplor nor any member of the Seller Group has entered
into or agreed to any Order, and no member of the Seller Group is subject to any
Order, relating to compliance with any Environmental Law or to investigation or
cleanup of a Hazardous Substance under any Environmental Law, in each case in
connection with the Option Agreements or the Property.
 
(e)          No Lien has been attached to, or asserted against, any Property
pursuant to any Environmental Law, and, to Seller’s Knowledge, no such Lien has
been threatened. To Seller’s Knowledge, there are no facts, circumstances or
other conditions that could be expected to give rise to any Liens on or
affecting the Property under Environmental Law.

 
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(f)           There has been no treatment, storage, disposal or Release of any
Hazardous Substance at, from, into, on or under any Property. No Hazardous
Substances are present in, on, about or migrating to or from any Property that
could be expected to give rise to an Environmental Action against any member of
the Seller Group.
 
(g)          No member of the Seller Group has received a CERCLA 104(e)
information request nor has any member of the Seller Group been named a
potentially responsible party for any National Priorities List site under CERCLA
or any other site under analogous state Law, in each case in connection with the
Business. No member of the Seller Group has received an analogous notice or
request from any non-U.S. Governmental Entity.
 
(h)          There are no aboveground tanks or underground storage tanks on,
under or about the Property. Any aboveground or underground tanks previously
situated on the Property have been removed in accordance with all Environmental
Laws and no residual contamination, if any, remains at such sites in excess of
applicable standards.
 
(i)           There are no polychlorinated biphenyls (“PCBs”) leaking from any
article, container or equipment on, under or about the Property and there are no
such articles, containers or equipment containing PCBs in, at, on, under or
within the Property.
 
(j)           There is no asbestos containing material or lead based paint
containing materials in at, on, under or within the Property.
 
(k)          No member of the Seller Group has transported or arranged for the
treatment, storage, handling, disposal, or transportation of any Hazardous
Material to any offsite location which is an Environmental Cleanup Site.
 
(l)           None of the Property is an Environmental Cleanup Site.
 
(m)         The Seller Group has provided, or has caused Geoxplor to provide, to
Buyer true and complete copies of, or access to, all written environmental
assessments, materials, reports, data, analyses and compliance audits that have
been prepared by or on behalf of Geoxplor or any member of the Seller Group with
respect to the Property.
 
4.13       Solvency.
 
(a)           No member of the Seller Group is insolvent or will be rendered
insolvent by any of the transactions contemplated by this Agreement and the
Ancillary Agreements. “Insolvent” means, with respect to any Person, that the
sum of the debts and other probable Liabilities of such Person exceeds the
present fair saleable value of such Person’s assets.
 
(b)           Immediately after giving effect to the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements: (i)
each member of the Seller Group will be able to pay its Liabilities as they
become due in the usual course of its business, (ii) no member of the Seller
Group will have unreasonably small capital with which to conduct its present or
proposed business, (iii) each member of the Seller Group will have assets
(calculated at fair market value) that exceed its Liabilities, and (iv) taking
into account all pending and threatened litigation, final judgments against each
member of the Seller Group in actions for money damages are not reasonably
anticipated to be rendered at a time when, or in amounts such that, such member
of the Seller Group will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum probable amount of
such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered) as well as all other obligations of such
member of the Seller Group. The cash available to each member of the Seller
Group, after taking into account all other anticipated uses of the cash, will be
sufficient to pay all such Liabilities and judgments promptly in accordance with
their terms.

 
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4.14       Brokers or Finders. Each member of the Seller Group represents, as to
itself and its Affiliates, that no agent, broker, investment banker or other
firm or Person is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement and the Ancillary Agreements.
 
4.15       Completeness of Disclosure. No representation or warranty by any
member of the Seller Group in this Agreement, and no statement made by the
Seller Group in the Seller Disclosure Schedule, the Ancillary Agreements or any
certificate or other document furnished or to be furnished to Buyer pursuant
hereto, or in connection with the negotiation, execution or performance of this
Agreement and the Ancillary Agreements contains or will at the Closing contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated herein or therein or necessary to make any
statement herein or therein not misleading. Except as specifically set forth in
this Agreement or the Seller Disclosure Schedule, there are no facts or
circumstances of which any member of the Seller Group is aware that have had or
could be expected to have, individually or in the aggregate, a material adverse
effect on the Purchased Assets or the condition (financial or otherwise),
operations, prospects or results of operations of any member of the Seller
Group.
 
4.16       Representations Relating to Seller’s Acquisition of the Purchase
Price Shares.
 
(a)           The Seller Group is acquiring the Purchase Price Shares for
investment for its own account and not with the view to, or for resale in
connection with, any distribution thereof.  The Seller Group understands and
acknowledges that the Purchase Price Shares have not been registered under the
Securities Act or any state or foreign securities laws, by reason of a specific
exemption from the registration provisions of the Securities Act and applicable
state and foreign securities laws, which depends upon, among other things, the
bona fide nature of the investment intent as expressed herein.  Each member of
the Seller Group further represents that it does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participation to any third person with respect to any of the Purchase Price
Shares.
 
(b)           The Seller Group understands that an active public market for
Buyer Common Stock may not now exist and that there may never be an active
public market for the Purchase Price Shares acquired under this Agreement.
 
(c)           Each member of the Seller Group either (i) is an “accredited
investor” as defined in Rule 501 of Regulation D as promulgated by the
Securities and Exchange Commission under the Securities Act or (ii) is not a
“U.S. Person” as defined in Regulation S as promulgated by the Securities and
Exchange Commission under the Securities Act, and, in each case, shall submit to
Buyer such further assurances of such status as may be reasonably requested by
Buyer.
 
(d)           Each member of the Seller Group, if a non-U.S. Person, agrees that
it is acquiring the Purchase Price Shares in an offshore transaction pursuant to
Regulation S and hereby represents to Buyer as follows:

 
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(i)           Such member is outside the United States when receiving and
executing this Agreement;
 
(ii)          Such member has not acquired the Purchase Price Shares as a result
of, and will not itself engage in, any “directed selling efforts” (as defined in
Regulation S) in the United States in respect of the Purchase Price Shares which
would include any activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for the resale of the Purchase Price Shares; provided, however,
that such member may sell or otherwise dispose of the Purchase Price Shares
pursuant to registration of the Purchase Price Shares under the Securities Act
and any applicable state and provincial securities laws or under an exemption
from such registration requirements and as otherwise provided herein;
 
(iii)         Such member understands and agrees that offers and sales of any of
the Purchase Price Shares prior to the expiration of a period of one year after
the Closing Date (the “Distribution Compliance Period”), shall only be made in
compliance with the safe harbor provisions set forth in Regulation S, pursuant
to the registration provisions of the Securities Act or an exemption therefrom,
and that all offers and sales after the Distribution Compliance Period shall be
made only in compliance with the registration provisions of the Securities Act
or an exemption therefrom, and in each case only in accordance with all
applicable securities laws;
 
(iv)         Such member understands and agrees not to engage in any hedging
transactions involving the Purchase Price Shares prior to the end of the
Distribution Compliance Period unless such transactions are in compliance with
the Securities Act; and
 
(v)          Such member hereby represents that it has satisfied itself as to
the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Purchase Price Shares or any use of this
Agreement, including: (a) any applicable legal requirements incumbent upon such
member within its jurisdiction for the purchase of the Purchase Price Shares;
(b) any foreign exchange restrictions applicable to such purchase; (c) any
governmental or other consents that such member may need to obtain; and (d) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Purchase Price Shares.
Such member’s subscription and payment for, and its continued beneficial
ownership of the Purchase Price Shares, will not violate any applicable
securities or other laws of such member’s jurisdiction.
 
(e)           Each member of the Seller Group represents that neither it nor, to
its knowledge, any Person or entity controlling, controlled by or under common
control with it, nor any Person having a beneficial interest in it, nor any
Person on whose behalf Seller is acting: (i) is a Person listed in the Annex to
Executive Order No. 13224 (2001) issued by the President of the United States
(Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism); (ii) is named on the List of
Specially Designated Nationals and Blocked Persons maintained by the U.S. Office
of Foreign Assets Control; (iii) is a non-U.S. shell bank or is providing
banking services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S.
political figure or an immediate family member or close associate of such
figure; or (v) is otherwise prohibited from investing in Buyer pursuant to
applicable U.S. anti-money laundering, anti-terrorist and asset control laws,
regulations, rules or orders (categories (i) through (v), each a “Prohibited
Seller”). Each member of the Seller Group agrees to provide Buyer, promptly upon
request, all information that is reasonably necessary or appropriate to comply
with applicable U.S. anti-money laundering, anti-terrorist and asset control
laws, regulations, rules and orders. Each member of the Seller Group consents to
the disclosure to U.S. regulators and law enforcement authorities by Buyer and
its affiliates and agents of such information about such member as is reasonably
necessary or appropriate to comply with applicable U.S. anti-money-laundering,
anti-terrorist and asset control laws, regulations, rules and orders. Each
member of the Seller Group acknowledges that if, following its investment in
Buyer, Buyer reasonably believes that such member is a Prohibited Seller or is
otherwise engaged in suspicious activity or refuses to promptly provide
information that Buyer requests, Buyer has the right or may be obligated to
prohibit additional investments, segregate the assets constituting the
investment in accordance with applicable regulations or immediately require such
member to transfer the shares of Common Stock.  Each member of the Seller Group
further acknowledges that such member will have no claim against Buyer or any of
its affiliates or agents for any form of damages as a result of any of the
foregoing actions.

 
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(f)           Each member of the Seller Group or its duly authorized
representative realizes that because of the inherently speculative nature of
business activities and investments of the kind contemplated by Buyer, Buyer’s
financial position and results of operations may be expected to fluctuate from
period to period and will, generally, involve a high degree of financial and
market risk that can result in substantial or, at times, even total loss of the
value of the Purchase Price Shares.
 
(g)           Each member of the Seller Group acknowledges and agrees that Buyer
is a “shell company” as defined in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).  Pursuant to Rule 144(i) under the
Securities Act, securities issued by a current or former shell company (such as
the Purchase Price Shares) that otherwise meet the holding period and other
requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144
until one year after the date on which Buyer files current “Form 10 information”
(as defined in Rule 144(i)) with the SEC reflecting that it ceased being a shell
company, and provided that at the time of a proposed sale pursuant to Rule 144,
the issuer is subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act and has filed all reports and other materials required to be
filed by section 13 or 15(d) of the Exchange Act, as applicable, during the
preceding 12 months (or for such shorter period that the issuer was required to
file such reports and materials), other than Form 8-K reports.  As a result, the
restrictive legends on certificates for the Purchase Price Shares set forth
below cannot be removed except in connection with an actual sale meeting the
foregoing requirements.
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Buyer represents and warrants to each member of Seller Group that each statement
contained in this Article V is true and correct as of the date hereof, except as
set forth in the disclosure schedule dated and delivered as of the date hereof
by Buyer to Next (the “Buyer Disclosure Schedule”), which is attached to this
Agreement and is designated therein as being the Buyer Disclosure Schedule. The
Buyer Disclosure Schedule shall be arranged in paragraphs corresponding to each
representation and warranty set forth in this Article V. Each exception to a
representation and warranty set forth in the Buyer Disclosure Schedule shall
qualify the specific representation and warranty which is referenced in the
applicable paragraph of the Buyer Disclosure Schedule, and no other
representation or warranty.
 
5.1         Organization and Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has the requisite corporate power to own,
lease and operate its properties and to carry on its business as now being
conducted.

 
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5.2         Authority and Enforceability. Buyer has the requisite
corporate power and authority to enter into this Agreement and the Ancillary
Agreements to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Ancillary Agreements to which Buyer is a party and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Buyer. This Agreement has been,
and the Ancillary Agreements to which Buyer is a party will be, duly executed
and delivered by Buyer and, assuming due authorization, execution and delivery
by each member of the Seller Group, constitutes the valid and binding
obligations of Buyer, enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to creditors’ rights generally, and (b) the availability of injunctive
relief and other equitable remedies.
 
5.3         No Conflicts; Consents.
 
(a)           The execution and delivery of this Agreement by Buyer do not, and
the execution and delivery of the Ancillary Agreements to which Buyer is a party
and the consummation of the transactions contemplated hereby and thereby will
not, (i) violate the provisions of any of the Charter Documents of Buyer, (ii)
violate any Contract to which Buyer is a party, (iii) to the knowledge of Buyer,
violate any Law of any Governmental Entity applicable to Buyer on the date
hereof, or (iv) to the knowledge of Buyer, result in the creation of any Liens
upon any of the assets owned or used by Buyer, except in each such case where
such violation or Lien would not reasonably be expected materially to impair or
delay the ability of Buyer to perform its obligations under this Agreement or
the Ancillary Agreements.
 
(b)           No Authorization or Order of, registration, declaration or filing
with, or notice to any Governmental Entity is required by Buyer in connection
with the execution and delivery of this Agreement and the Ancillary Agreements
to which it is a party and the consummation of the transactions contemplated
hereby and thereby.
 
5.4         Purchase Price Shares. The Purchase Price Shares are duly
authorized, and upon transfer of the Purchase Price Shares to the Escrow Agent
in accordance with the terms of ARTICLE II, will be validly issued, fully paid
and nonassessable.  The Purchase Price Shares will be issued in compliance with
applicable Laws. The Purchase Price Shares will not be issued in violation of
any Contract to which Buyer is a party or is subject or in violation of any
preemptive or similar rights of any Person.
 
5.5         Litigation. There is no Action pending or, to the knowledge of
Buyer, threatened against, Buyer which (a) challenges or seeks to enjoin, alter
or materially delay the consummation of the transactions contemplated by this
Agreement, or (b) would reasonably be expected to have a material adverse effect
on Buyer.
 
5.6         Brokers or Finders. Buyer represents, as to itself and its
Affiliates, that no agent, broker, investment banker or other firm or Person is
or will be entitled to any broker’s or finder’s fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement and the Ancillary Agreements.
 
ARTICLE VI
COVENANTS OF SELLER GROUP
 
6.1         Conduct of Business. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing Date, except with the prior written consent of Buyer, each member
of the Seller Group shall, and shall cause each other member of the Seller Group
to:
 
(a)           (i) maintain its corporate existence, (ii) pay or perform its
Liabilities when due, and (iii) carry on its business in the usual, regular and
ordinary course in a manner consistent with past practice and in accordance with
the provisions of this Agreement and in compliance with all Laws and Assigned
Contracts;

 
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 (b)         maintain the assets, properties and rights included in the
Purchased Assets in the same state of repair, order and conditions as they are
on the date hereof;
 
(c)           maintain the Books and Records in accordance with past practice,
and use its reasonable best efforts to maintain in full force and effect all
Policies;
 
(e)           use its reasonable best efforts to (i) conduct its business in
such a manner that on the Closing Date the representations and warranties of the
Seller Group contained in this Agreement shall be true and correct, as though
such representations and warranties were made on and as of such date, and (ii)
cause all of the conditions to the obligations of Buyer under this Agreement to
be satisfied as soon as practicable following the date hereof.
 
6.2         Negative Covenants. Except as expressly provided in this Agreement,
neither member of the Seller Group shall do any of the following without the
prior written consent of Buyer:
 
(a)           adopt or propose any amendment to the Charter Documents of any
member of the Seller Group that could be expected to delay the consummation of
the transactions contemplated by this Agreement;
 
(b)          sell, lease, transfer or assign any Purchased Assets;
 
(c)           assume, incur or guarantee any Indebtedness or modify the terms of
any existing Indebtedness;
 
(d)          cancel any debts or waive any claims or rights of substantial
value;
 
(e)           mortgage, pledge or subject to Liens any assets, properties or
rights Related to the Purchased Assets;
 
(f)           amend, modify, cancel or waive any rights under any Contract which
is an Assigned Contract;
 
(g)           take any action or engage in any transaction that is material to
the Purchased Assets;
 
(l)            make any filings or registrations with any Governmental Entity
relating in any way to the Purchased Assets;
 
(m)         prior to the termination of the Escrow Agreement, be party to any
merger, acquisition, consolidation, recapitalization, liquidation, dissolution
or similar transaction in which such member of the Seller Group does not
survive;
 
(n)          make any changes in its accounting methods, principles or
practices;
 
(o)          make any Tax election, change its method of Tax accounting or
settle any claim relating to Taxes;
 
(p)          take any action or omit to do any act which action or omission will
cause it to breach any obligation contained in this Agreement or cause any
representation or warranty of the Seller Group not to be true and correct as of
the Closing Date; or
 
(q)          agree, whether in writing or otherwise, to do any of the foregoing.
 
 
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6.3        Access to Information; Investigation. Each member of the Seller Group
shall, and shall cause each other member of the Seller Group to, afford to
Buyer’s officers, directors, employees, accountants, counsel, consultants,
advisors and agents (“Representatives”) free and full access to and the right to
inspect, during normal business hours, all of the Property, properties, assets,
records, Contracts and other documents related to the Purchased Assets, and
shall permit them to consult with the officers, employees, accountants, counsel
and agents of the Seller Group for the purpose of making such investigation of
the Purchased Assets as Buyer shall desire to make. The Seller Group shall
furnish to Buyer all such documents and copies of documents and records and
information with respect to the Purchased Assets and copies of any working
papers relating thereto as Buyer may request. Without limiting the foregoing,
each member of the Seller Group shall permit, and will cause each other member
of the Seller Group to permit, Buyer and Buyer’s Representatives to conduct
environmental due diligence of the Property, including the collecting and
analysis of samples of indoor or outdoor air, surface water, groundwater or
surface or subsurface land on, at, in, under or from the Property.
 
6.4        Confidentiality. From and after the Closing Date, each member of the
Seller Group will, and will cause its Affiliates to, hold, and will use its
reasonable best efforts to cause its and their respective Representatives to
hold, in confidence any and all information, whether written or oral, concerning
this Agreement and all Ancillary Agreements, the Purchased Assets, except to the
extent that such member can show that such information (a) is in the public
domain through no fault of any member of the Seller Group or any of its
Affiliates or their respective Representatives or (b) is lawfully acquired by
the Seller Group or any of its Affiliates after the Closing Date from sources
that are not prohibited from disclosing such information by a legal, contractual
or fiduciary obligation. If any member of the Seller Group or any of its
Affiliates or Representatives is compelled to disclose any such information by
judicial or administrative process or by other requirements of Law, such member
shall promptly notify Buyer in writing and shall disclose only that portion of
such information that such member is advised by its counsel in writing is
legally required to be disclosed; provided that each member of the Seller Group
shall exercise its reasonable best efforts to obtain an appropriate protective
order or other reasonable assurance that confidential treatment will be accorded
such information. The Seller Group shall enforce for the benefit of Buyer all
confidentiality, assignment of inventions and similar agreements between any
member of the Seller Group and any other party relating to the Purchased Assets
that are not Assigned Contracts.
 
6.5        Release of Liens. Prior to the Closing Date, the Seller Group shall
cause to be released all Liens in and upon any of the Purchased Assets (all of
such Liens are set forth in the Seller Disclosure Schedule).
 
6.6        Consents. Each member of the Seller Group shall, and shall cause each
other member of the Seller Group to, obtain all Consents that are required under
the Assigned Contracts in connection with the consummation of the transactions
contemplated by this Agreement so as to preserve all rights of, and benefits to,
Buyer thereunder; provided that no Assigned Contract shall be amended and no
right thereunder shall be waived to obtain any such Consent. All of such
Consents are set forth in the Section 4.3(a) of the Seller Disclosure Schedule.
 
6.7        Notification of Certain Matters. The Seller Group shall give prompt
notice to Buyer of (a) any fact, event or circumstance known to it that
individually or taken together with all other facts, events and circumstances
known to it, has had or could have, individually or in the aggregate, a material
adverse effect on the Purchased Assets or the condition (financial or
otherwise), operations, prospects or results of operations of any member of
Seller Group, or would cause or constitute a breach of any of its
representations, warranties, covenants or agreements contained herein, (b) the
failure of any condition precedent to Buyer’s obligations hereunder, (c) any
notice or other communication from any third party alleging that the consent of
such third party is or may be required in connection with the consummation of
the transactions contemplated by this Agreement, (d) any notice or other
communication from any Governmental Entity in connection with the consummation
of the transactions contemplated by this Agreement, or (e) the commencement of
any Action that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.11; provided, however, (i)
the delivery of any notice pursuant to this Section 6.7 shall not limit or
otherwise affect any remedies available to Buyer, and (ii) disclosure by any
member of the Seller Group shall not be deemed to amend or supplement the Seller
Disclosure Schedule or prevent or cure any misrepresentation, breach of warranty
or breach of covenant.

 
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6.8        Restrictive Covenants.
 
(a)          The Seller Group covenants that, commencing on the Closing Date and
ending on the second anniversary of the Closing Date (the “Noncompetition
Period”), no member of the Seller Group shall, and it shall cause its Affiliates
not to, directly or indirectly, in any capacity, engage in or have any direct or
indirect ownership interest in, or permit such member’s or any such Affiliate’s
name to be used in connection with, any business anywhere in the United States
of America which is engaged, either directly or indirectly, in the Business (the
“Restricted Business”). It is recognized that the Restricted Business is
expected to be conducted throughout the United States of America and that more
narrow geographical limitations of any nature on this noncompetition covenant
(and the nonsolicitation covenant set forth in Section 6.8(b)) are therefore not
appropriate.
 
(b)          The Seller Group covenants that during the Noncompetition Period,
no member of the Seller Group shall, and it shall cause its Affiliates not to,
solicit the employment or engagement of services of any person who is or was
employed as an employee, consultant or contractor in Buyer during the
Noncompetition Period on a full or part-time basis.
 
(c)          The Seller Group acknowledges that the restrictions contained in
this Section 6.8 are reasonable and necessary to protect the legitimate
interests of Buyer and constitute a material inducement to Buyer to enter into
this Agreement and consummate the transactions contemplated by this Agreement.
The Seller Group acknowledges that any violation of this Section 6.8 will result
in irreparable injury to Buyer and agrees that Buyer shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of this Section 6.8, which rights
shall be cumulative and in addition to any other rights or remedies to which
Buyer may be entitled. Without limiting the generality of the foregoing, the
Noncompetition Period shall be extended for an additional period equal to any
period during which any member of the Seller Group or any Affiliate is in breach
of its obligations under this Section 6.8.
 
(d)          In the event that any covenant contained in this Section 6.8 should
ever be adjudicated to exceed the time, geographic, product or service or other
limitations permitted by applicable Law in any jurisdiction, then any court is
expressly empowered to reform such covenant, and such covenant shall be deemed
reformed, in such jurisdiction to the maximum time, geographic, product or
service or other limitations permitted by applicable Law. The covenants
contained in this Section 6.8 and each provision thereof are severable and
distinct covenants and provisions. The invalidity or unenforceability of any
such covenant or provision as written shall not invalidate or render
unenforceable the remaining covenants or provisions hereof, and any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such covenant or provision in any other jurisdiction.
 
6.9        Insurance. The Seller Group shall cause each Policy maintained by any
member of the Seller Group covering any Purchased Asset or Assumed Liability to
be amended prior to Closing to name Buyer as an additional insured. Effective
upon the Closing, the Seller Group shall appoint Buyer as its true and lawful
attorney-in-fact, in the name of the Seller Group and any other relevant member
of the Seller Group, but on behalf of Buyer, to pursue and enforce any and all
rights of the Seller Group or any other member of the Seller Group under the
Policies with respect to any occurrence, claim or loss with respect to any
Purchased Asset or Assumed Liability to the extent attributable to events that
occurred prior to the Closing. The Seller Group agrees that the foregoing
appointment shall be coupled with an interest and shall be irrevocable.
Notwithstanding the foregoing, no such insurance shall affect any
indemnification obligation provided in this Agreement.
 
 
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ARTICLE VII
COVENANTS OF BUYER AND SELLER
 
7.1        Regulatory Approvals.
 
(a)           Buyer and the Seller Group shall each promptly apply for, and take
all reasonably necessary actions to obtain or make, as applicable, all Orders
and Authorizations of, and all filings with, any Governmental Entity or other
Person required to be obtained or made by it for the consummation of the
transactions contemplated by this Agreement. Each party shall cooperate with and
promptly furnish information to the other party necessary in connection with any
requirements imposed upon such other party in connection with the consummation
of the transactions contemplated by this Agreement.
 
(b)          The Seller Group shall assist Buyer in identifying the
Authorizations required by Buyer to hold, own, use and enjoy the Purchased
Assets from and after the Closing Date.
 
7.2         Public Announcements. Neither Buyer nor any member of the Seller
Group shall, and each member of the Seller Group will cause the other member of
the Seller Group not to, issue any press releases or otherwise make any public
statements with respect to the transactions contemplated by this Agreement;
provided, however, that Buyer or the Seller Group may, without such approval,
make such press releases or other public announcement as it believes are
required pursuant to any listing agreement with any national securities exchange
or stock market or applicable securities Laws, in which case the party required
to make the release or announcement shall allow the other party reasonable time
to comment on such release or announcement in advance of such issuance;
provided, further, that each of the parties may make internal announcements to
their respective employees that are consistent with the parties’ prior public
disclosures regarding the transactions contemplated by this Agreement.
 
7.3        Taxes.
 
(a)          The Seller Group shall pay all federal, state and local sales,
documentary and real estate and other transfer Taxes, if any, due as a result of
the purchase, sale or transfer of the Purchased Assets in accordance herewith
whether imposed by Law on the Seller Group or Buyer.
 
(b)          All real property Taxes, personal property Taxes and similar ad
valorem obligations levied with respect to the Purchased Assets for a taxable
period that includes (but does not end on) the Closing Date shall be apportioned
between the Seller Group and Buyer as of the Closing Date based on the number of
days of such taxable period included in the period ending with and including the
Closing Date (with respect to any such taxable period, the “Pre-Closing Tax
Period”), and the number of days of such taxable period beginning after the
Closing Date (with respect to any such taxable period, the “Post-Closing Tax
Period”). The Seller Group shall be liable for the proportionate amount of such
Taxes that is attributable to the Pre-Closing Tax Period, and Buyer shall be
liable for the proportionate amount of such Taxes that is attributable to the
Post-Closing Period. If bills for such Taxes have not been issued as of the
Closing Date, and, if the amount of such Taxes for the period including the
Closing Date is not then known, the apportionment of such Taxes shall be made at
Closing on the basis of the prior period’s Taxes. After Closing, upon receipt of
bills for the period including the Closing Date, adjustments to the
apportionment shall be made by the parties, so that if either party paid more
than its proper share at the Closing, the other party shall promptly reimburse
such party for the excess amount paid by them.
 
 
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(c)          Buyer and the Seller Group agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information and assistance relating to the Purchased Assets and Assumed
Liabilities (including access to books and records) as is reasonably necessary
for the filing of all Tax Returns, the making of any election relating to Taxes,
the preparation for any audit by any Taxing Authority, and the prosecution or
defense of any Action relating to any Tax. Any expenses incurred in furnishing
such information or assistance shall be borne by the party requesting it.
 
7.4        Bulk Sales Laws. Buyer and the Seller Group hereby waive compliance
by Buyer and the Seller Group with the bulk sales Law and any other similar Laws
in any applicable jurisdiction in respect of the transactions contemplated by
this Agreement and the Ancillary Agreements; provided, however, that the Seller
Group shall pay and discharge when due all claims of creditors asserted against
Buyer or the Purchased Assets by reason of such noncompliance and shall take
promptly all necessary actions required to remove any Lien which may be placed
upon any of the Purchased Assets by reason of such noncompliance.
 
7.5        Discharge of Business Obligations after Closing.
 
(a)          From and after the Closing, each member of the Seller Group shall,
and shall cause each other member of the Seller Group to, pay and discharge on a
timely basis all of the Excluded Liabilities.
 
(b)          From and after the Closing, if any member of the Seller Group or
any of their respective Affiliates receives or collects any funds relating to
any Purchased Asset, such member of the Seller Group or its Affiliate shall
remit such funds to Buyer within five Business Days after its receipt thereof.
From and after the Closing, if Buyer receives or collects any funds relating to
any Excluded Asset, Buyer shall remit any such funds to the relevant member of
the Seller Group within five Business Days after its receipt thereof.
 
(c)          Effective upon the Closing, each member of the Seller Group shall,
and shall cause each other member of the Seller Group to, appoint Buyer as its
true and lawful attorney-in-fact, in the name of the relevant member of the
Seller Group, but on behalf of Buyer to (i) receive and open all mail, packages
and other communications addressed to any member of the Seller Group related to
the Purchased Assets, and (ii) endorse without recourse the name of any member
of the Seller Group on any check or any other evidences of Indebtedness received
by Buyer on account of the Purchased Assets transferred to Buyer hereunder. Each
member of the Seller Group agrees that the foregoing appointment shall be
coupled with an interest and shall be irrevocable.
 
7.6        Access to Books and Records. Each of the Seller Group and Buyer shall
preserve until the tenth anniversary of the Closing Date all records possessed
or to be possessed by such party relating to any of the Purchased Assets or
Assumed Liabilities prior to the Closing. After the Closing Date, where there is
a legitimate business purpose, such party shall provide the other party with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (i) the officers and employees of such party
and (ii) the books of account and records of such party, but, in each case, only
to the extent relating to the Purchased Assets or Assumed Liabilities prior to
the Closing, and the other party and its representatives shall have the right to
make copies of such books and records at their sole cost; provided, however,
that the foregoing right of access shall not be exercisable in such a manner as
to interfere unreasonably with the normal operations and business of such party.
Such records may nevertheless be destroyed by a party if such party sends to the
other party written notice of its intent to destroy records, specifying with
particularity the contents of the records to be destroyed. Such records may then
be destroyed after the 30th day after such notice is given unless the other
party objects to the destruction in which case the party seeking to destroy the
records shall deliver such records to the objecting party at the objecting
party’s cost.

 
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7.7        Further Assurances. Buyer and each member of the Seller Group shall,
and each member of the Seller Group shall cause the other members of the Seller
Group to, execute such documents and other instruments and take such further
actions as may be reasonably required or desirable to carry out the provisions
of this Agreement and the Ancillary Agreements and to consummate the
transactions contemplated hereby and thereby. Upon the terms and subject to the
conditions hereof, Buyer and the Seller Group shall each use its respective
reasonable best efforts to (a) take or cause to be taken all actions and to do
or cause to be done all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement and the Ancillary Agreements and (b) obtain in a
timely manner all Consents and Authorizations and effect all necessary
registrations and filings. From time to time after the Closing, at Buyer’s
request, each member of the Seller Group shall execute, and each member of the
Seller Group shall cause each other relevant member of the Seller Group to,
acknowledge and deliver to Buyer such other instruments of conveyance and
transfer and will take such other actions and execute and deliver such other
documents, certifications and further assurances as Buyer may reasonably require
in order to vest more effectively in Buyer, or to put Buyer more fully in
possession of, any of the Purchased Assets.
 
ARTICLE VIII
CONDITIONS TO CLOSING
 
8.1        Conditions to Obligations of Buyer and Seller. The obligations of
Buyer and the Seller Group to consummate the transactions contemplated by this
Agreement are subject to the satisfaction on or prior to the Closing Date of the
following conditions:
 
(a)          The waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act and any applicable
waiting periods under the Other Antitrust Laws shall have expired or been
terminated and all other Authorizations and Orders of, declarations and filings
with, and notices to any Governmental Entity, required to permit the
consummation of the transactions contemplated by this Agreement shall have been
obtained or made and shall be in full force and effect.
 
(b)          No temporary restraining order, preliminary or permanent injunction
or other Order preventing the consummation of the transactions contemplated by
this Agreement shall be in effect. No Law shall have been enacted or shall be
deemed applicable to the transactions contemplated by this Agreement which makes
the consummation of such transactions illegal.
 
8.2        Conditions to Obligation of Buyer. The obligation of Buyer
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver by Buyer in its sole discretion) of the following
further conditions:
 
(a)          The representations and warranties of the Seller Group set forth in
this Agreement shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, except to the extent that such representations and warranties
refer specifically to an earlier date, in which case such representations and
warranties shall have been true and correct as of such earlier date.
 
(b)          The Seller Group shall have performed or complied with all
obligations and covenants required by this Agreement to be performed or complied
with by the Seller Group at or prior to the Closing.
 
 
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(c)          Buyer shall have received a certificate dated the Closing Date
signed on behalf of each member of the Seller Group by the President of such
member to the effect that the conditions set forth in Sections 8.2(a) and 8.2(b)
have been satisfied (the “Seller Closing Certificate”).
 
(d)          There shall have been no material adverse change in the Purchased
Assets or the condition (financial or otherwise), operations, prospects or
results of operations of any member of the Seller Group.
 
(e)          No Action shall be pending or threatened before any court or other
Governmental Entity or before any other Person wherein an unfavorable Order
would (i) prevent consummation of any of the transactions contemplated by this
Agreement or the Ancillary Agreements, (ii) affect adversely the right of Buyer
to own the Purchased Assets or (iii) restrain or prohibit Buyer’s ownership or
operation (or that of its Subsidiaries or Affiliates) of all or any material
portion of the Purchased Assets, or compel Buyer or any of its Subsidiaries or
Affiliates to dispose of or hold separate all or any material portion of
Purchased Assets or all or any material portion of the business and assets of
Buyer and its Subsidiaries. No such Order shall be in effect.
 
(f)           No Law shall have been enacted or shall be deemed applicable to
the transactions contemplated by this Agreement or the Ancillary Agreements
which has any of the effects set forth in clauses (i) through (iii) in Section
8.2(e).
 
(g)          The Seller Group shall have obtained the Consent of each Person
whose Consent is required under the Assigned Contracts and shall have provided
evidence of each such Consent in form and substance satisfactory to Buyer.
 
(h)          Buyer shall have received all Authorizations (including any
Environmental Permits) that are necessary for it to hold, own, use and enjoy the
Purchased Assets.
 
(i)           The Seller Group shall have delivered to Buyer all agreements and
other documents required to be delivered by the Seller Group to Buyer pursuant
to Section 3.2 of this Agreement.
 
(j)           Buyer shall have received a certificate of the Secretary of each
member of the Seller Group dated the Closing Date and certifying:
 
(i) that attached thereto are true and complete copies of all resolutions
adopted by the Board of Directors and the stockholders of such member of the
Seller Group in connection with the transactions contemplated by this Agreement
and the Ancillary Agreements, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements; and
 
(ii) to the incumbency and specimen signature of each officer of such member of
the Seller Group executing this Agreement and/or the Ancillary Agreements, and a
certification by another officer of such member of the Seller Group as to the
incumbency and signature of the Secretary of such member of the Seller Group.
 
(k)          Buyer shall have received evidence in form and substance
satisfactory to Buyer that all Liens with respect to the Purchased Assets have
been released.
 
(l)           Buyer shall have received the written opinion of WeirFoulds LLP,
dated the Closing Date, in form and substance reasonably satisfactory to Buyer.

 
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(m)         Buyer shall have completed and shall be fully satisfied in its sole
discretion with the results of its review of, and its other due diligence
investigations with respect to, the Purchased Assets. Such review may include an
analysis by Buyer or its representatives of (i) the results of any environmental
assessment of the Property that Buyer shall deem appropriate and (ii)
environmental and OSHA practices and procedures of the Seller Group.
 
8.3        Conditions to Obligation of Seller. The obligation of the Seller
Group to consummate the transactions contemplated by this Agreement is subject
to the satisfaction (or waiver by the Seller Group in its sole discretion) of
the following further conditions:
 
(a)          The representations and warranties of Buyer set forth in this
Agreement shall have been true and correct at and as of the date hereof and
shall be true and correct at and as of the Closing Date as if made at and as of
the Closing Date, except to the extent that such representations and warranties
refer specifically to an earlier date, in which case such representations and
warranties shall have been true and correct as of such earlier date.
 
(b)          Buyer shall have performed or complied with all obligations and
covenants required by this Agreement to be performed or complied with by Buyer
at or prior to the Closing.
 
(c)          The Seller Group shall have received a certificate dated the
Closing Date signed on behalf of Buyer by the Chief Executive Officer of Buyer
to the effect that the conditions set forth in Section 8.3(a) and 8.3(b) have
been satisfied (the “Buyer Closing Certificate”).
 
(d)          No Action shall be pending or threatened before any court or other
Governmental Entity or other Person wherein an unfavorable Order would (i)
prevent consummation of any of the transactions contemplated by this Agreement
and the Ancillary Agreements or (ii) cause any of the transactions contemplated
by this Agreement and the Ancillary Agreements to be rescinded following
consummation. No such Order shall be in effect.
 
(e)          Buyer shall have delivered to the Seller Group all agreements and
other documents required to be delivered by Buyer to the Seller Group pursuant
to Section 3.3 of this Agreement.
 
(f)          The Seller Group shall have received a certificate of the Secretary
of Buyer dated the Closing Date and certifying: (A) that attached thereto are
true and complete copies of all resolutions adopted by the Board of Directors of
Buyer in connection with the transactions contemplated by this Agreement and the
Ancillary Agreements, and that all such resolutions are in full force and effect
and are all the resolutions adopted in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements; and (B) to the
incumbency and specimen signature of each officer of Buyer executing this
Agreement and the Ancillary Agreements to which it is a party, and a
certification by another officer of Buyer as to the incumbency and signature of
the Secretary of Buyer.
 
ARTICLE IX
TERMINATION
 
9.1        Termination.
 
(a)           This Agreement may be terminated at any time prior to the Closing:
 
 
(i)
by mutual written consent of Buyer and the Seller Group;

 
 
(ii)
by Buyer or the Seller Group if:

    
 
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(A)        the Closing does not occur on or before March 15, 2010; provided that
the right to terminate this Agreement under this clause (ii)(A) shall not be
available to any party whose breach of a representation, warranty, covenant or
agreement under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date; or
 
(B)         a Governmental Entity shall have issued an Order or taken any other
action, in any case having the effect of permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, which
Order or other action is final and non-appealable;
 
 
(iii)
by Buyer if:

 
(A)        any condition to the obligations of Buyer hereunder becomes incapable
of fulfillment other than as a result of a breach by Buyer of any covenant or
agreement contained in this Agreement, and such condition is not waived by
Buyer; or
 
(B)         there has been a breach by any member of the Seller Group of any
representation, warranty, covenant or agreement contained in this Agreement or
the Seller Disclosure Schedule, or if any representation or warranty of any
member of the Seller Group shall have become untrue, in either case such that
the conditions set forth in Sections 8.2(a) or 8.2(b) would not be
satisfied, and, in either case, such breach is not curable, or, if curable, is
not cured within five days after written notice of such breach is given to the
Seller Group by Buyer.; or
 
 
(iv)
by the Seller Group if:

 
(A)        any condition to the obligations of the Seller Group hereunder
becomes incapable of fulfillment other than as a result of a breach by any
member of the Seller Group of any covenant or agreement contained in this
Agreement, and such condition is not waived by the Seller Group; or
 
(B)         there has been a breach by Buyer of any representation, warranty,
covenant or agreement contained in this Agreement or the Buyer Disclosure
Schedule, or if any representation or warranty of Buyer shall have become
untrue, in either case such that the conditions set forth in Sections 8.3(a) or
8.3(b) would not be satisfied, and, in either case, such breach is not curable,
or, if curable, is not cured within five days after written notice of such
breach is given to Buyer by the Seller Group.
 
(b)           The party desiring to terminate this Agreement pursuant to clause
(ii), (iii) or (iv) shall give written notice of such termination to the other
party hereto.
 
9.2        Effect of Termination. In the event of termination of this Agreement
as provided in Section 9.1, this Agreement shall immediately become null and
void and there shall be no Liability or obligation on the part of the Seller
Group or Buyer or their respective officers, directors, stockholders or
Affiliates, except as set forth in Section 9.3; provided, however, the
provisions of Section 7.2 (Public Announcements) and Section 9.3 (Remedies) and
Article X of this Agreement shall remain in full force and effect and survive
any termination of this Agreement.
 
 
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9.3        Remedies. Any party terminating this Agreement pursuant to Section
9.1 shall have the right to recover damages sustained by such party as a result
of any breach by the other party of any representation, warranty, covenant or
agreement contained in this Agreement or fraud or willful misrepresentation;
provided, however, that the party seeking relief is not in breach of any
representation, warranty, covenant or agreement contained in this Agreement
under circumstances which would have permitted the other party to terminate the
Agreement under Section 9.1.
 
ARTICLE X
INDEMNIFICATION
 
10.1      Survival.
 
(a)           Except as set forth in Section 10.1(b), all representations and
warranties contained in this Agreement, the Ancillary Agreements, any Schedule,
certificate or other document delivered pursuant to this Agreement or the
Ancillary Agreements, shall survive the Closing for a period of three years.
 
(b)           The representations and warranties of the Seller Group contained
in Sections 4.1 (Organization and Good Standing), 4.2 (Authority and
Enforceability), 4.14 (Brokers or Finders), and the representations and
warranties of Buyer contained in Sections 5.1 (Organization and Good Standing),
5.2 (Authority and Enforceability) and 5.6 (Brokers or Finders) shall survive
the Closing indefinitely. The representations and warranties of the Seller Group
contained in Sections 4.4 (Taxes) shall survive the Closing until 60 days after
the expiration of the applicable statute of limitations period (after giving
effect to any waivers and extensions thereof). The representations and
warranties of the Seller Group contained in Section 4.12 (Environmental) shall
survive the Closing for a period of five years following the Closing Date.
 
(c)           The covenants and agreements which by their terms do not
contemplate performance after the Closing shall survive the Closing for a period
of three years. The covenants and agreements which by their terms contemplate
performance after the Closing Date shall survive the Closing indefinitely.
 
(d)           The period for which a representation or warranty, covenant or
agreement survives the Closing is referred to herein as the “Applicable Survival
Period.” In the event notice of claim for indemnification under Section 10.2 or
10.3 is given within the Applicable Survival Period, the representation or
warranty, covenant or agreement that is the subject of such indemnification
claim (whether or not formal legal action shall have been commenced based upon
such claim) shall survive with respect to such claim until such claim is finally
resolved. The Indemnitor shall indemnify the Indemnitee for all Losses (subject
to the limitations set forth herein, if applicable) that the Indemnitee may
incur in respect of such claim, regardless of when incurred.
 
10.2      Indemnification by Seller.
 
(a)           Each member of the Seller Group, jointly and severally, shall
indemnify and defend Buyer and its Affiliates and their respective stockholders,
members, managers, officers, directors, employees, agents, successors and
assigns (the “Buyer Indemnitees”) against, and shall hold them harmless from,
any and all losses, damages, claims (including third party claims), charges,
interest, penalties, Taxes, diminution in value, costs and expenses (including
legal, consultant, accounting and other professional fees, costs of sampling,
testing, investigation, removal, treatment and remediation of contamination and
fees and costs incurred in enforcing rights under this Section 10.2)
(collectively, “Losses”) resulting from, arising out of, or incurred by any
Buyer Indemnitee in connection with, or otherwise with respect to:
 
 
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(i)           the failure of any representation and warranty or other statement
by any member of the Seller Group contained in this Agreement, the Ancillary
Agreements, the Seller Disclosure Schedule or any certificate or other document
furnished or to be furnished to Buyer in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements to be true and
correct in all respects as of the date of this Agreement and as of the Closing
Date;
 
(ii)         any breach of any covenant or agreement of any member of the Seller
Group contained in this Agreement, the Ancillary Agreements, the Seller
Disclosure Schedule or any certificate or other document furnished or to be
furnished to Buyer in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements;
 
(iii)         any Excluded Liability including any Pre-Closing Environmental
Liability, regardless of whether or not the Seller Disclosure Schedule discloses
any such Excluded Liability;
 
(iv)        any fees, expenses or other payments incurred or owed by any member
of the Seller Group to any agent, broker, investment banker or other firm or
person retained or employed by it in connection with the transactions
contemplated by this Agreement and the Ancillary Agreements;  and
 
(v)           fraudulent transfer Laws or the failure to comply with any bulk
sales Laws and similar Laws.
 
provided that for purposes of this Section 10.2, the representations and
warranties herein, in the Ancillary Agreements and in the Seller Closing
Certificate shall be deemed to have been made without any qualifications as to
knowledge or materiality and, accordingly, all references herein and therein to
“knowledge,” “material,” “in all material respects” and similar qualifications
as to knowledge and materiality shall be deemed to be deleted therefrom (except
where any such provision requires disclosure of lists of items of a material
nature or above a specified threshold). Any and all Losses hereunder shall bear
interest from the date incurred until paid at the rate of 10% per annum.
 
(b)           The Seller Group shall not be liable for any Loss or Losses
pursuant to Section 10.2(a)(i) (“Buyer Warranty Losses”) (i) unless and until
the aggregate amount of all Buyer Warranty Losses incurred by the Buyer
Indemnitees exceeds $10,000, in which event the Seller Group shall be liable for
all Buyer Warranty Losses from the first dollar, and (ii) to the extent that
Buyer Warranty Losses exceed $1,000,000 in the aggregate; provided, however,
nothing contained in this Section 10.2(b) shall be deemed to limit or restrict
in any manner any rights or remedies which Buyer has, or might have, at Law, in
equity or otherwise, based on fraud or a willful misrepresentation or willful
breach of warranty hereunder.
 
10.3      Indemnification by Buyer.
 
(a)           Buyer shall indemnify and defend the Seller Group and its
Affiliates and their respective stockholders, members, managers, officers,
directors, employees, agents, successors and assigns (the “Seller Indemnitees”)
against, and shall hold them harmless from, any and all Losses resulting from,
arising out of, or incurred by any Seller Indemnitee in connection with, or
otherwise with respect to:
 
(i)           the failure of any representation and warranty or other statement
by Buyer contained in this Agreement, the Ancillary Agreements, the Buyer
Disclosure Schedule or any certificate or other document furnished or to be
furnished to the Seller Group pursuant to this Agreement to be true and correct
in all respects as of the date of this Agreement and as of the Closing Date;
 

 
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(ii)           any breach of any covenant or agreement of Buyer contained in
this Agreement, the Ancillary Agreements, the Buyer Disclosure Schedule or any
certificate or other document furnished or to be furnished to the Seller Group
in connection with the transactions contemplated hereby and thereby; and
 
(iii)           any failure to perform when due the Assumed Liabilities.
 
provided that for purposes of this Section 10.3, the representations and
warranties herein and in the Buyer Closing Certificate shall be deemed to have
been made without any qualifications as to knowledge or materiality and,
accordingly, all references herein and therein to “knowledge,” “material,” “in
all material respects” and similar qualifications as to knowledge and
materiality shall be deemed to be deleted therefrom (except where any such
provision requires disclosure of lists of items of a material nature or above a
specified threshold).
 
(b) Buyer shall not be liable for any Loss or Losses pursuant to 10.3(a)(i)
(“Seller Warranty Losses”) (i) unless and until the aggregate amount of all
Seller Warranty Losses incurred by the Seller Indemnitees exceeds $10,000, in
which event Buyer shall be liable for all Seller Warranty Losses from the first
dollar, and (ii) to the extent that Seller Warranty Losses exceed $1,000,000 in
the aggregate; provided, however, nothing contained in this Section 10.3(b)
shall be deemed to limit or restrict in any manner any rights or remedies which
the Seller Group has, or might have, at Law, in equity or otherwise, based on
fraud or a willful misrepresentation or willful breach of warranty hereunder.
 
10.4      Indemnification Procedures for Third Party Claims.
 
(a)           In the event that an Indemnitee receives notice of the assertion
of any claim or the commencement of any Action by a third party in respect of
which indemnity may be sought under the provisions of this Article X (“Third
Party Claim”), the Indemnitee shall promptly notify the Indemnitor in writing of
such Third Party Claim (“Notice of Claim”). Failure or delay in notifying the
Indemnitor will not relieve the Indemnitor of any Liability it may have to the
Indemnitee, except and only to the extent that such failure or delay causes
actual harm to the Indemnitor with respect to such Third Party Claim. The Notice
of Claim shall set forth the amount, if known, or, if not known, an estimate of
the foreseeable maximum amount of claimed Losses (which estimate shall not be
conclusive of the final amount of such Losses) and a description of the basis
for such Third Party Claim.
 
(b)           Subject to the further provisions of this Section 10.4, the
Indemnitor will have 10 days (or less if the nature of the Third Party Claim
requires) from the date on which the Indemnitor received the Notice of Claim to
notify the Indemnitee that the Indemnitor will assume the defense or prosecution
of such Third Party Claim and any litigation resulting therefrom with counsel of
its choice and at its sole cost and expense (a “Third Party Defense”). If the
Indemnitor assumes the Third Party Defense in accordance with the preceding
sentence, the Indemnitor shall be conclusively deemed to have acknowledged that
the Third Party Claim is within the scope of its indemnity obligation hereunder
and shall hold the Indemnitee harmless from and against the full amount of any
Losses resulting therefrom (subject to the terms and conditions of this
Agreement). Any Indemnitee shall have the right to employ separate counsel in
any such Third Party Defense and to participate therein, but the fees and
expenses of such counsel shall not be at the expense of the Indemnitor unless
(A) the Indemnitor shall have failed, within the time after having been notified
by the Indemnitee of the existence of the Third Party Claim as provided in the
first sentence of this paragraph (b), to assume the defense of such Third Party
Claim, or (B) the employment of such counsel has been specifically authorized in
writing by the Indemnitor, which authorization shall not be unreasonably
withheld.
 

 
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(c)           The Indemnitor will not be entitled to assume the Third Party
Defense if:
 
(i)           the Third Party Claim seeks, in addition to or in lieu of monetary
damages, any injunctive or other equitable relief;
 
(ii)          the Third Party Claim relates to or arises in connection with any
criminal proceeding, action, indictment, allegation or investigation;
 
(iii)         the Third Party Claim relates to or arises in connection with any
Environmental Action;
 
(iv)        under applicable standards of professional conduct, a conflict on
any significant issue exists between the Indemnitee and the Indemnitor in
respect of the Third Party Claim;
 
(v)         the Indemnitee reasonably believes an adverse determination with
respect to the Third Party Claim would be detrimental to or injure the
Indemnitee’s reputation or future business prospects;
 
(vi)        the Indemnitor failed or is failing to vigorously prosecute or
defend such Third Party Claim;
 
(vii)       the Indemnitor fails to provide reasonable assurance to the
Indemnitee of its financial capacity to prosecute the Third Party Defense and
provide indemnification in accordance with the provisions of this Agreement; or
 
(viii)      the Third Party Claim would give rise to Losses which are more than
the amount indemnifiable by the Indemnitor pursuant to this Article X.
 
(d)           If by reason of the Third Party Claim a Lien, attachment,
garnishment or execution is placed upon any of the property or assets of the
Indemnitee, the Indemnitor, if it desires to exercise its right to assume such
Third Party Defense, must furnish a satisfactory indemnity bond to obtain the
prompt release of such Lien, attachment, garnishment or execution.
 
(e)           If the Indemnitor assumes a Third Party Defense, it will take all
steps necessary in the defense, prosecution, or settlement of such claim or
litigation and will hold all Indemnitees harmless from and against all Losses
caused by or arising out of such Third Party Claim (subject to the last sentence
of Section 10.4(b)). The Indemnitor will not consent to the entry of any
judgment or enter into any settlement except with the written consent of the
Indemnitee to which the Indemnitor is obligated to furnish indemnification
pursuant to this Agreement; provided that the consent of the Indemnitee shall
not be required if all of the following conditions are met: (i) the terms of the
judgment or proposed settlement include as an unconditional term thereof the
giving to the Indemnitees by the third party of a release of the Indemnitees
from all Liability in respect of such Third Party Claim, (ii) there is no
finding or admission of (A) any violation of Law by the Indemnitees (or any
Affiliate thereof), (B) any violation of the rights of any Person and (C) no
effect on any other Action or claims of a similar nature that may be made
against the Indemnitees (or any Affiliate thereof), and (iii) the sole form of
relief is monetary damages which are paid in full by the Indemnitor. The
Indemnitor shall conduct the defense of the Third Party Claim actively and
diligently, and the Indemnitee will provide reasonable cooperation in the
defense of the Third Party Claim. So long as the Indemnitor is reasonably
conducting the Third Party Defense in good faith, the Indemnitee will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnitor
(not to be unreasonably withheld or delayed). Notwithstanding the foregoing, the
Indemnitee shall have the right to pay or settle any such Third Party Claim;
provided that, in such event, subject to the following sentence, it shall waive
any right to indemnity therefor by the Indemnitor for such claim unless the
Indemnitor shall have consented to such payment or settlement (such consent not
to be unreasonably withheld or delayed). If the Indemnitor is not reasonably
conducting the Third Party Defense in good faith, the Indemnitee shall have the
right to consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnitor and the Indemnitor shall reimburse the Indemnitee promptly for all
Losses incurred in connection with such judgment or settlement.
 
 
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(f)           In the event that (i) an Indemnitee gives Notice of Claim to the
Indemnitor and the Indemnitor fails or elects not to assume a Third Party
Defense which the Indemnitor had the right to assume under this Section 10.4 or
(ii) the Indemnitor is not entitled to assume the Third Party Defense pursuant
to this Section 10.4, the Indemnitee shall have the right, with counsel of its
choice, to defend, conduct and control the Third Party Defense, at the sole cost
and expense of the Indemnitor. In each case, the Indemnitee shall conduct the
Third Party Defense actively and diligently, and the Indemnitor will provide
reasonable cooperation in the Third Party Defense. The Indemnitee shall have the
right to consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim on such terms as it may deem appropriate;
provided, however, that the amount of any settlement made or entry of any
judgment consented to by the Indemnitee without the consent of the Indemnitor
shall not be determinative of the validity of the claim, except with the consent
of the Indemnitor (not to be unreasonably withheld or delayed). Notwithstanding
Section 11.6 hereof, in connection with any Third Party Claim, the Indemnitor
hereby consents to the nonexclusive jurisdiction of any court in which an Action
in respect of a Third Party Claim is brought against any Indemnitee for purposes
of any claim that the Indemnitee may have under this Article X with respect to
such Action or the matters alleged therein and agrees that process may be served
on the Indemnitor with respect to such a claim anywhere in the world. If the
Indemnitor does not elect to assume a Third Party Defense which it has the right
to assume hereunder, the Indemnitee shall have no obligation to do so.
 
(g)           Each party to this Agreement shall use its commercially reasonable
efforts to cooperate and to cause its employees to cooperate with and assist the
Indemnitee or the Indemnitor, as the case may be, in connection with any Third
Party Defense, including attending conferences, discovery proceedings, hearings,
trials and appeals and furnishing records, information and testimony, as may
reasonably be requested; provided that each party shall use its best efforts, in
respect of any Third Party Claim of which it has assumed the defense, to
preserve the confidentiality of all confidential information and the
attorney-client and work-product privileges.
 
10.5      Indemnification Procedures for Non-Third Party Claims. In the event of
a claim that does not involve a Third Party Claim being asserted against it, the
Indemnitee shall send a Notice of Claim to the Indemnitor. The Notice of Claim
shall set forth the amount, if known, or, if not known, an estimate of the
foreseeable maximum amount of claimed Losses (which estimate shall not be
conclusive of the final amount of such Losses) and a description of the basis
for such claim. The Indemnitor will have 30 days from receipt of such Notice of
Claim to dispute the claim and will reasonably cooperate and assist the
Indemnitee in determining the validity of the claim for indemnity. If the
Indemnitor does not give notice to the Indemnitee that it disputes such claim
within 30 days after its receipt of the Notice of Claim, the claim specified in
such Notice of Claim will be conclusively deemed a Loss subject to
indemnification hereunder.
 
 
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10.6      Escrowed Shares. At the Closing, the Purchase Price Shares shall be
delivered to the Escrow Agent to be held and administered by the Escrow Agent in
accordance with the terms of the Escrow Agreement. In addition to any other
remedies Buyer may have for Losses described in Section 10.2 hereof, Buyer may
make a claim against the Purchase Price Shares for the amount of such Losses by
sending a Notice of Claim described in Section 10.4 or 10.5 to the Escrow Agent.
Buyer’s recourse to the Purchase Price Shares shall be without prejudice to any
and all other remedies Buyer may have pursuant to this Article X or otherwise.
Buyer’s remedies for Losses shall not be limited to the assets comprising the
Purchase Price Shares.
 
10.7      Contingent Claims. Nothing herein shall be deemed to prevent an
Indemnitee from making a claim hereunder for potential or contingent claims or
demands; provided that the Notice of Claim sets forth the specific basis for any
such contingent claim to the extent then feasible and the Indemnified Party has
reasonable grounds to believe that such a claim may be made.
 
10.8      Environmental Actions. Buyer shall have the right (a) to defend,
conduct and control, with counsel of its choice, any Environmental Action, and
(b) to compromise or settle any Environmental Action. In the event that any
Buyer Indemnitee is required or deems it necessary to perform any Remedial Work
in connection with an Environmental Action, or to avoid the initiation of an
Environmental Action, whether or not formal proceedings have been initiated or
threatened with respect thereto, the Buyer Indemnitees shall have the right to
commence and thereafter prosecute to completion, all such Remedial Work, and
shall be indemnified by the Seller Group with respect to any and all Losses
incurred in connection therewith. “Remedial Work” means any response action,
removal action, remedial action, closure, corrective action, regulatory
permitting, monitoring program, risk assessment, deed restriction, sampling
program, investigation or other activity required, allowed by or consistent with
Environmental Law to clean up, remove, remediate, treat, abate or otherwise
address any Hazardous Substance.
 
10.9      Effect of Investigation; Waiver. An Indemnitee’s right to
indemnification or other remedies based upon the representations and warranties
and covenants and agreements of the Indemnitor will not be affected by any
investigation or knowledge of the Indemnitee or any waiver by the Indemnitee of
any condition based on the accuracy of any representation or warranty, or
compliance with any covenant or agreement. Such representations and warranties
and covenants and agreements shall not be affected or deemed waived by reason of
the fact that the Indemnitee knew or should have known that any representation
or warranty might be inaccurate or that the Indemnitor failed to comply with any
agreement or covenant. Any investigation by such party shall be for its own
protection only and shall not affect or impair any right or remedy hereunder.
 
10.10    Other Rights and Remedies Not Affected. The indemnification rights of
the parties under this Article X are independent of and in addition to such
rights and remedies as the parties may have at Law or in equity or otherwise for
any misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including the right to seek
specific performance, rescission or restitution, none of which rights or
remedies shall be affected or diminished hereby.
 
ARTICLE XI
MISCELLANEOUS
 
11.1      Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given (a) on the date established by the sender as having
been delivered personally, (b) on the date delivered by a private courier as
established by the sender by evidence obtained from the courier, (c) on the date
sent by facsimile, with confirmation of transmission, if sent during normal
business hours of the recipient, if not, then on the next business day, or (d)
on the fifth day after the date mailed, by certified or registered mail, return
receipt requested, postage prepaid. Such communications, to be valid, must be
addressed as follows:

 
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If to Buyer, to:
 
Li3 Energy, Inc.
Av. Pardo y Aliaga 699 Of. 802
San Isidro, Lima
Perú
Attention:  Luis Saenz
Facsimile:
Telephone: 51-1-212-1880

With a required copy to:
 
Gottbetter & Partners, LLP
488 Madison Avenue, 12th Floor
New York, New York  10022
USA
Attention:  Adam S. Gottbetter
Facsimile:  (212) 400-6901
Telephone:  (212) 400-6900

If to the Seller Group, to:
 
Next Lithium Corp.
131 Bloor Street West, Upper Penthouse
Toronto, Ontario  M5S 1S3
Canada
Attention:  President
Facsimile:  (416) 924-0000
 
With a required copy to:
 
WeirFoulds LLP
1600-130 King Street West
Toronto, Ontario  M5X 1J5
Canada
Attention:  Sanjay Joshi
Facsimile:  (416)-365-1876

or to such other address or to the attention of such Person or Persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.
 
11.2      Amendments and Waivers.
 
(a)           Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective.
 
 
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(b)           No failure or delay by any party in exercising any right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
 
(c)           To the maximum extent permitted by Law, (i) no waiver that may be
given by a party shall be applicable except in the specific instance for which
it was given and (ii) no notice to or demand on one party shall be deemed to be
a waiver of any obligation of such party or the right of the party giving such
notice or demand to take further action without notice or demand.
 
11.3      Expenses. Each party shall bear its own costs and expenses
in connection with this Agreement, the Ancillary Agreements and the transactions
contemplated hereby and thereby, including all legal, accounting, financial
advisory, consulting and all other fees and expenses of third parties, whether
or not the transactions contemplated by this Agreement are consummated.
 
11.4      Successors and Assigns. This Agreement may not be assigned by either
party hereto without the prior written consent of the other party; provided
that, without such consent, Buyer may transfer or assign this Agreement, in
whole or in part or from time to time, to one or more of its Affiliates, but no
such transfer or assignment will relieve Buyer of its obligations hereunder.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective executors, heirs, personal representatives, successors and assigns.
 
11.5      Governing Law. This Agreement and Schedules hereto shall be governed
by and interpreted and enforced in accordance with the Laws of the State of New
York, without giving effect to any choice of Law or conflict of Laws rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the Laws of any jurisdiction other than the State
of New York.
 
11.6      Consent to Jurisdiction. Each party irrevocably submits to
the exclusive jurisdiction of the United States District Court for the Southern
District of New York sitting in the Borough of Manhattan, for the purposes of
any Action arising out of this Agreement or any transaction contemplated hereby.
Each party agrees to commence any such Action either in the United States
District Court for the Southern District of New York sitting in the Borough of
Manhattan. Each party further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party’s respective address
set forth above shall be effective service of process for any Action in the
United States District Court for the Southern District of New York sitting in
the Borough of Manhattan with respect to any matters to which it has submitted
to jurisdiction in this Section 11.6. Each party irrevocably and unconditionally
waives any objection to the laying of venue of any Action arising out of this
Agreement or the transactions contemplated hereby in the United States District
Court for the Southern District of New York sitting in the Borough of Manhattan,
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such Action brought in any such court
has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE ANCILLARY
AGREEMENTS OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF AND THEREOF.
 
11.7      Counterparts. This Agreement may be executed in any number of
counterparts, and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. The parties
agree that the delivery of this Agreement, and the delivery of the Ancillary
Agreements and any other agreements and documents at the Closing, may be
effected by means of an exchange of facsimile signatures with original copies to
follow by mail or courier service.
 
 
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11.8      Third Party Beneficiaries. No provision of this Agreement is intended
to confer upon any Person other than the parties hereto any rights or remedies
hereunder; except that in the case of Article X hereof, the other Indemnitees
and their respective heirs, executors, administrators, legal representatives,
successors and assigns, are intended third party beneficiaries of such sections
and shall have the right to enforce such sections in their own names.
 
11.9      Entire Agreement. This Agreement, the Ancillary Agreements, the
Schedules and the other documents, instruments and agreements specifically
referred to herein or therein or delivered pursuant hereto or thereto set forth
the entire understanding of the parties hereto with respect to the transactions
contemplated by this Agreement. All Schedules referred to herein are intended to
be and hereby are specifically made a part of this Agreement. Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement, except for the Confidentiality Agreement which shall continue in full
force and effect in accordance with its terms.
 
11.10    Captions. All captions contained in this Agreement are for convenience
of reference only, do not form a part of this Agreement and shall not affect in
any way the meaning or interpretation of this Agreement.
 
11.11    Severability. Subject to Section 6.8(d), any provision of
this Agreement which is invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining provisions hereof, and any
such invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
 
11.12    Specific Performance. Buyer and each member of the Seller Group each
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed by them in accordance with the
terms hereof and that each party shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at Law or equity.
 
11.13    Interpretation.
 
(a)           The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term and vice
versa, and words denoting either gender shall include both genders as the
context requires. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
 
(b)           The terms “hereof”, “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
 
(c)           When a reference is made in this Agreement to an Article, Section,
paragraph, Exhibit or Schedule, such reference is to an Article, Section,
paragraph, Exhibit or Schedule to this Agreement unless otherwise specified.
 
(d)           The word “include”, “includes”, and “including” when used in this
Agreement shall be deemed to be followed by the words “without limitation”,
unless otherwise specified.

 
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(e)           A reference to any party to this Agreement or any other agreement
or document shall include such party’s predecessors, successors and permitted
assigns.
 
(f)           Reference to any Law means such Law as amended, modified,
codified, replaced or reenacted, and all rules and regulations promulgated
thereunder.
 
(g)           The parties have participated jointly in the negotiation and
drafting of this Agreement and the Ancillary Agreements. Any rule of
construction or interpretation otherwise requiring this Agreement or the
Ancillary Agreements to be construed or interpreted against any party by virtue
of the authorship of this Agreement or the Ancillary Agreements shall not apply
to the construction and interpretation hereof and thereof.
 
(h)           All accounting terms used and not defined herein shall have the
respective meanings given to them under GAAP.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date first above
written.
 
LI3 ENERGY, INC.
     
By:
/s/ Luis Saenz
 
Name:  Luis Saenz
 
Title:  CEO
     
NEXT LITHIUM CORP.
     
By:
/s/ David J. DesLauriers
 
Name:  David J. DesLauriers
 
Title:  Director
     
NEXT LITHIUM (NEVADA) CORP.
     
By:
/s/ David J. DesLauriers
 
Name:  David J. DesLauriers
 
Title:  Director
 

 
 

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Seller Disclosure Schedule
 
None.

 
 

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Buyer Disclosure Schedule
 
None.

 
 

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