UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) September 21, 2018

 

U.S. RARE EARTH MINERALS, INC.
(Exact Name if Business Issuer as specified in its Charter)

 

Nevada   26-2797630
(State or other Jurisdiction
of Incorporation)
  (IRS Employer
Identification Number)

 

C/O BIOXYTRAN, INC.

233 Needham Street,
Suite 300 

Newton MA, 02464

 

(Address of principal executive offices, including zip code)

 

(617) 494-1199

 

(Registrant's telephone number including area code)

 

23 South 6 th Panaca, NV 89042

(Former Address, if Changed Since the Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 1 4a- 12 under the Exchange Act (17 CFR 240.1 4a- 12)
Pre-commencement communications pursuant to Rule 1 4d-2(b) under the Exchange Act (17 CFR 240.1 4d-2(b))
Pre-commencement communications pursuant to Rule 1 3e-4(c) under the Exchange Act (17 CFR 240.1 3e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Explanatory Note:

 

On September 21, 2018, U.S. Rare Earth Minerals, Inc. (the “Company”) completed a series of transactions arising out of the satisfaction of defaulted secured debt that resulted in the sale of the Company’s former business and acquisition of a new developmental pharmaceutical company called BioxyTran Inc. There was a change of control of the majority ownership of the Company. Dr. David Platt, a seasoned public company pharmaceutical executive, was retained Chief Executive officer, and new board of directors was appointed, effective upon the satisfaction of regulatory filing requirements with the Securities and Exchange Commission.

 

The transactions described below resulted in the mandatory conversion of all of the outstanding shares of the Company’s Class A 6% Cumulative Convertible Voting Preferred Stock, par value $.001 per share (“Preferred Stock”), with 5 shares of common stock, par value $.001 per share (the “Common Stock”) of the Company being issued for each outstanding share of Preferred Stock.

 

After completion of the transactions, the Company will have approximately 85,073,173 shares of Common Stock issued and outstanding, no shares of Preferred Stock after converting the Preferred Stock to approximately 23,417 shares of Common Stock. The Company will have no further operating revenues from the former assets and will rely solely on external funding until commercialization of its drug candidates

 

The Company’s lead product candidate, BXT-25 , will be tested as a potent resuscitative agent to treat strokes during the first hour of a stroke and for other brain trauma. The product is based on a new molecule reversing hypoxia, or oxygen deficiency. The molecule is expected to be injected intravenously and bind to oxygen in the lungs. The molecule then carries the oxygen and delivers it to the area in the brain blocked by the clot. During the next 18 months, the Company plans to submit an Investigational New Drug Application (IND) to the Food and Drug Administration (FDA) and, immediately thereafter, begin clinical trials on brain stroke patients. In addition, the company will be working on additional applications to treat ischemia, an inadequate blood supply to an organ or part of the body, with a focus on the heart. The compound is also expected to be effective in healing wound.

 

The Company plans to change its name from U.S. Rare Earth Minerals, Inc. and apply for a new symbol after the filing of this Current Report on Form 8-K. The Company plans file audited consolidated financial statements on or before December 3, 2018.

 

Item 1.01 Entry Into a Material Definitive Agreement.

 

Item 5.01(a), (b) and (c) are incorporated by reference herein.

 

Item 1.02 Termination of a Material Definitive Agreement.

 

Item 5.01(c) is incorporated by reference herein.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

Item 5.01(b) is incorporated by reference herein.

 

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Item 3.02 Unregistered Sales

 

Item 5.01(c) is incorporated by reference herein.

 

Item 5.01 Changes in Control of Registrant

 

a. Accord and Satisfaction.

 

On September 21, 2018, the Company completed a series of transactions with a secured creditor reaching an accord and satisfaction of a 6% secured promissory note (the “Note”) in the principal amount of $110,000, including all interest due thereon, which had been in default since August 23, 2013 (the “Settlement”). The Note was secured by substantially all of the assets of the Company. As consideration for the satisfaction of the obligation and as a condition to the Settlement, the Company agreed to divest substantially all of its assets and remaining liabilities to an affiliate of the creditor and former majority stockholder of the Company after the completion of the acquisition by the Company of BioxTran, Inc., a Delaware company. The creditor agreed to release all liens upon the completion of the asset sale. In connection with the Settlement, AFCC, LLC, the former majority stockholder of the Company received 4,455,856 shares of common stock, par value $.001 per share (the “Common Stock”), of the Company and the directors and officers received 850,732 shares of Common Stock.

 

The foregoing description of the Agreement of Accord and Satisfaction, dated September 17, 2018 (the “Accord and Satisfaction”), between the creditor and Company does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Agreement of Accord and Satisfaction, which is filed as Exhibit 10.9 to this Current Report on Form 8-K and incorporated herein by reference.

 

b. Merger.

 

On September 21, 2018, the Company completed a series of transactions as set forth in the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated September 17, 2018, by and among the Company, Bioxy Acquisition Corp., a Wyoming corporation wholly owned by the Company (“Acquisition-Sub”), and BioxyTran, Inc., a Delaware corporation (“BioxyTran”) whereby Acquisition-Sub was merged into BioxyTran with BioxyTran being the surviving company (the “Merger”). As consideration for the Merger, the stockholders of BioxyTran were issued 76,586937 shares of common stock of the Company and 10,000 shares of Preferred Stock were returned to treasury. The Merger was structured as a tax-free reorganization.

 

The Company plans to change its name to BioxyTran, Inc. and apply for a new symbol as soon as practically possible.

 

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Merger Agreement, which is filed as Exhibit 10.10 to this Current Report on Form 8-K and incorporated herein by reference.

 

c. Asset Sale.

 

On September 21, 2018, the Company completed a series of transactions as set forth in the Asset Purchase Agreement, dated September 17, 2018 (the “Asset Purchase Agreement”) between the Company and U.S. Rare Earth Minerals, Inc, a Wyoming Corporation (“USREM Wyoming”), controlled by the former majority owner of the Company. Substantially all of the assets and liabilities of the former business of the Company were transferred to USREM Wyoming for a purchase price of $1.00.

 

The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the Asset Purchase Agreement, which is filed as Exhibit 10.11 to this Current Report on Form 8-K and incorporated herein by reference.

 

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Item   5.02.   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On September 21, 2018, Lawrence Bonafide, resigned as Chief Financial Officer CFO, Secretary, Treasurer and as Chairman of the Board of the Company. Mr. Bonafide’s resignation was not due to any disagreement with the Company’s operations, policies or practices.

 

On September 21, 2018, D. Quincy Farber resigned as President and Chief Operating Officer of the Company. Mr. Farber’s resignation was not due to any disagreement with the Company’s operations, policies or practices.

 

D. Quincy Farber, Nathan Marks, David Lee and Lawrence Bonafide resigned as directors of the Company effective at 8:00 am (eastern time) the 11 th day following the filing of the Schedule 14F-1 with the Securities and Exchange Commission. None of the directors’ resignations were due to any disagreement with the Company’s operations, policies or practices.

 

On September 21, 2018, D. Quincy Farber resigned as President and Chief Operating Officer of the Company. Mr. Farber’s resignation was not due to any disagreement with the Company’s operations, policies or practices.

 

On September 21, 2018, David Platt was appointed President, Chief Executive Officer and as a director of the Company and Ola Soderquist was appointed Chief Financial Officer, Secretary and Treasurer of the Company by the Board of Directors of the Company.

 

David Platt, Ph.D.  is the Chief Executive Officer and Chairman of our Board of Directors. Dr. Platt is a world-renowned expert in carbohydrate chemistry and has founded three publicly-traded companies, creating nearly $1B for investors. He has raised $150M directly in public markets in the U.S., and has led development of two drug candidates from concept through phase II clinical trials. Prior to Oxygen Therapy, Inc. Dr. Platt founded Boston Therapeutics Inc. in 2010 (OTC: BTHE) where he served as chief executive officer from 2010 to April 1, 2015 and as a director from March 2016 to June 8, 2016, and from 2001 to 2009, Dr. Platt was a founder, Chief Executive Officer and Chairman of the Board at Pro-Pharmaceuticals, Inc. (OTC: PRWP and AMEX: PRW, now NASDAQ: GALT). From 1995 to 2000 Dr. Platt was the founder of International Gene Group (NASDAQ: IGGI, GLGS now LPJC). Dr. Platt received a Ph.D. in Chemistry in 1988 from Hebrew University in Jerusalem. In 1989, Dr. Platt was a research fellow at the Weizmann Institute of Science, Rehovot, Israel, and from 1989 to 1991, was a research fellow at the Michigan Foundation (re-named Barbara Ann Karmanos Institute). From 1991 to 1992, Dr. Platt was a research scientist with the Department of Internal Medicine at the University of Michigan. Dr. Platt has published peer-reviewed articles and holds many patents, primarily in the field of carbohydrate chemistry.

 

Ola Soderquist, MBA, CPA, CMA, CM&AA  has more than 30 years of senior international entrepreneurial management experience within technology companies. Ola’s managerial experience portfolio includes; Start-ups, Private, Public, Venture Capital and Private Equity ownership. He has served in CFO and other managerial capacities in multiple industry sectors and companies. His public company tenures include companies in the Wallenberg Sphere (1986-1996): Industrivarden (OMX:INDU), Electrolux (OMX:ELUX), Ericsson (NASDAQ:ERIC), Swedish Match (OMX:SWMA) and SKF AB (OMX:SKF), and most recently in Traction (OMX:TRAC) (1996-2001) and Belden (NYSE: BDC) (2006-2011). His private company experience includes CFO and CAO positions in Proditec, Inc. (2001-2006), LFA Corp. (2012-2014) and Faria Beede Instruments, Inc. (2014-2016). Ola is a multi-lingual senior finance professional poised to work globally and cross-functionally, particularly with complex projects involving change management, business integration, systems implementation, continuous improvement, and process excellence. He obtained a BS and an MS in Accounting from Stockholm School of Economics and an MBA from Babson College.

 

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Item 7.01 Regulation FD Disclosure.

 

Representatives of the Company intend to make presentations to investment bankers and potential investors using the using slides containing the information attached in draft form to this Current Report on Form 8-K as Exhibit 99.1 (the “Investor Presentation”). The Company expects to use the Investor Presentation, in whole or in part, and possibly with modifications, in connection with presentations to investors, analysts and others during the remaining portion of the current fiscal year and in the fiscal year ending December 31, 2019.

 

By filing this Current Report on Form 8-K and furnishing the information contained herein, the Company makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.

 

The information contained in the Investor Presentation is summary information that, unless otherwise provided therein, expresses the opinion of management and is intended to be considered in the context of the Company's Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time.  The Company undertakes no duty or obligation to publicly update or revise the information contained in Item 7.01 of this Current Report on Form 8-K, although it may do so from time to time as its management believes is warranted.  Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

 

The information presented in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or specifically incorporates it by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

Item 8.01 Other Events

 

On September 24, 2018, the Company issued a Press release which is filed as Exhibit 99.2 to this Current Report on Form 8-K.

 

Item  9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number  

Description

     
4.3   Certificates of Merger merging Bioxy Acquisition Corp. into BioxyTran, Inc. filed with the Secretaries of State of Wyoming and Delaware, effective September 21, 2018
     
10.9   Form of Agreement of Accord and Satisfaction between U.S. Rare Earth Minerals, Inc., and creditor, dated September 17, 2018.
     
10.10   Form of Agreement and Plan of Merger and Reorganization by and among U.S. Rare Earth Minerals, Inc., Bioxy Acquisition Corp and BioxyTran, Inc., dated September 17, 2018.
     
10.11   Form of Asset Purchase Agreement between U.S. Rare Earth Minerals, Inc., a Nevada corporation, and U.S. Rare Earth Minerals, Inc. a Wyoming corporation, dated September 17, 2018.
     
99.1   Draft BioxyTran, Inc. Presentation, dated August 28, 2018
     
99.2   Press Release of U.S. Rare Earth Minerals, Inc., dated September 24, 2018

 

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SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  U.S. RARE EARTH MINERALS, INC.
   
  By: /s/ Dr. David Platt
    Name: Dr. David Platt
    Title:   President and Chief Executive Officer

 

Dated:  September 24, 2018

  

 

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Exhibit 4.3

 

ARTICLES OF MERGER

 

MERGING

 

 

BIOXY ACQUISITION CORP.

 

A WYOMING CORPORATION

 

 

WITH AND INTO

 

 

BIOXYTRAN, INC.

 

A DELAWARE CORPORATION

 

 

Pursuant to Section 17-16-1106 of the Wyoming Business Corporation Act

 

 

 

 

 

 

 

 

 

 

Bioxy Acquisition Corp. (the “Acquisition-Sub”), does hereby certify as follows:

 

FIRST: BioxTran, Inc. (the “Company”) is a corporation duly organized and existing under the laws of the State of Delaware and Acquisition-Sub is a corporation duly organized and existing under the laws of the State of Wyoming.

 

SECOND: An Agreement and Plan of Reorganization dated September 17, 2018 (the “Merger Agreement”), setting forth the terms and conditions of the merger of Acquisition-Sub with and into the Company (the “Merger”), has been approved, adopted, certified, executed and acknowledged by the shareholder of the Acquisition-Sub in accordance with all applicable statutes of the Wyoming Business Corporation Act

 

THIRD: The Merger Agreement and the Merger have been approved, adopted, certified, executed and acknowledged by the directors and stockholders of the Company and the Company in accordance with all applicable statutes of the Delaware General Corporation Law.

 

FOURTH: The name of the surviving entity in the Merger (the “Surviving Entity”) shall be BioxyTran, Inc.

 

FIFTH: The articles of incorporation of the Surviving Entity shall be the articles of incorporation of Acquisition-Sub.

 

SIXTH: These Articles of Merger shall be effective on September 21, 2018.

 

* * * * *

 

IN WITNESS WHEREOF, Bioxy Acquisition Corp. has caused these Articles of Merger to be executed in its name as of September 20, 2018.

 

          BIOXY ACQUISTION CORP.
   
By: /s/ Lawrence Bonafide
  Name: Lawrence Bonafide
  Title: President

  

 

 

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State of Delaware
Secretary of State
Division of Corporations
Delivered 01:08 PM 09/20/2018
FILED 01:08 PM 09/20/2018
SR 20186752844 - File Number 6569785
 

 

STATE OF DELAWARE
CERTIFICATE OF MERGER OF
FOREIGN CORPORATION INTO
A DOMESTIC CORPORATION

 

Pursuant to Title 8, Section 252 of the Delaware General Corporation Law, the undersigned corporation executed the following Certificate of Merger:

 

FIRST: The name of the surviving corporation is     BioxyTran, Inc.                                       , a Delaware corporation, and the name of the corporation being merged into this surviving corporation is Bioxy Acquisition Corp.                                         , a Wyoming                 corporation.

 

SECOND: The Agreement of Merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations pursuant to Title 8 Section 252 of the General Corporation Law of the State of Delaware.

 

THIRD: The name of the surviving corporation is BioxyTran, Inc.                                                    , a Delaware corporation.

 

FOURTH: The Certificate of Incorporation of the surviving corporation shall be its Certificate of Incorporation. (If amendments are affected please set forth)

 

FIFTH: The authorized stock and par value of the non-Delaware corporation is 100 share, par value $.001 per share                         .

 

SIXTH: The merger is to become effective on September 21, 2018                  .

 

SEVENTH: The Agreement of Merger is on file at                     233 Needham Street, Suite 300 Newton MA, 02464              , an office of the surviving corporation.

 

EIGHTH: A copy of the Agreement of Merger will be furnished by the surviving corporation on request, without cost, to any stockholder of the constituent corporations.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, said surviving corporation has caused this certificate to be signed by an authorized officer, the           20th           day of September           , A.D., 2018         .

 

  By: /s/ David Platt
    Authorizd Officer
     
  Name: David Platt
    Print or Type
     
  Title: Cheif Exeutive Officer

 

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Exhibit 10.9

 

This AGREEMENT OF ACCORD AND SATISFACTION (this “ Agreement ”) is made on September 17, 2018 by and between, U.S. Rare Earth Minerals, Inc., a Nevada corporation with it principal executive offices located at 78365 Highway 111 suite 287, La Quinta, California 92243 (“the Company ”) and Mrs. Eleanor Yarbray (the “ Creditor ”).

 

WHEREAS , Creditor holds a 6% Senior Unsubordinated Promissory Note, dated May 23, 2013 in the principal amount of One Hundred and Ten Thousand Dollars ($110,000), together with all interest, penalty interest and penalty fees thereon, which is attached hereto as Exhibit A hereof (the “ Promissory Note ”);

 

WHEREAS , Creditor has filed UCC-1s (“ UCC-1s ” securing the Promissory Note with substantially all of the assets of the Company in the form attached hereto as Exhibit B;

 

WHEREAS , all interest and principal on the Promissory Note was due and payable on or before August 23, 2013 and is in default;

 

WHEREAS , Company seeks to mitigate all fees and expenses associated with foreclosure on the collateral secured by the UCC-1s by the Creditor and Company and Creditor seek to resolve the default on the Promissory Note in an amicable fashion;

 

WHEREAS , Creditor will accept as full payment and satisfaction of the Promissory Note and all other obligations Company may have to Creditor (the “ Satisfaction Payment ”) the satisfaction of the conditions set forth in Section 2 of this Agreement; and

 

WHEREAS , the Board of Directors has determined it is in the best interests of the Company, creditors and its stockholders to enter into this Agreement.

 

NOW, THEREFORE , in consideration of the foregoing premises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Creditor Representations . The Creditor represents and warrants that:

 

(a) the Creditor has a valid interest in the Promissory Note and has made a payment of $110,000 to the Company in USD.

 

(b) the Creditor has not previously transferred the Promissory or granted to any other individual, trust, corporation, partnership or other entity (each, a “ Person ”) any right or option to purchase or any security or other interest in, the Promissory Note or entered into any agreement or understanding with any Person to sell, option or transfer the Promissory Note or grant any security or other interest therein.

 

 

 

 

(c) the Promissory Note is not subject to any judgment, tax or other lien or encumbrance or subject to any restriction.

 

(e) Creditor is of sound mind and has reached the age of majority.

 

(d) Other than the Promissory Note of the Company to Creditor, there are no other loans, obligations or liabilities, contingent or otherwise, owed to the Creditor by the Company as of the date hereof.

 

2. Company Representations .

 

(a) Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite power and authority to execute and deliver this Agreement and all other instruments which are ancillary hereto.

 

(b) The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Company. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due execution and delivery of this Agreement by Creditor, shall constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, moratorium, fraudulent transfer, reorganization and other laws of general applicability affecting the rights and remedies of creditors and by general equitable principles (whether considered in a proceeding in equity or at law).

 

(c) Once issued in accordance with the terms of this Agreement, the shares of Common Stock issued by the Company as required by Section 3 hereof shall be duly authorized, validly issued, fully paid and non-assessable shares of the Company’s Common Stock.

 

3. Payment in Full and Final Satisfaction of All Obligations Under Promissory Note . Contemporaneously with or prior to the execution of this Agreement, the Company shall enter into and consummate the following transactions:

 

(a) Transfer of such assets and liabilities of the Company to U.S. Rare Earth Minerals, Inc., a Wyoming corporation (“ U.S. REM ”), as set forth in the Asset Purchase Agreement between the Company and U.S. REM attached hereto as Exhibit C hereof;

 

(b) AFCC, LLC (“ AFCC ”) shall return 10,000 shares (post reverse split) of the Company’s preferred stock, par value $.001 per share (the “ Preferred Stock ”) [to treasury];

 

(c) Company shall issue 4,455,856 shares of Common Stock to AFCC;

 

(d) Company shall issue 147,648 shares of Common Stock to Lawrence W. Bonafide or his designee;

 

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(e) Company shall issue 106,399 shares of Common Stock to David Quincy Farber or his designee;

 

(f) Company shall issue 35,067 shares of Common Stock to David Lee or his designee;

 

(g) Company shall issue 30,060 shares of common stock to Nathan Marks or his designee;

 

(h) Company and BioxyTran, Inc. shall enter into the Agreement and Plan of Merger by and Among BioxyTran, Inc., Bioxy Acquisition Corp. and the Company and complete the transaction contemplated thereby.

 

Upon completion of the foregoing, Creditor shall deliver the original copy of the Promissory Note to the Company and an executed copy of this Agreement which shall be countersigned by an authorized representative of the Company. Creditor authorizes Company to file UCC termination statements removing all liens held by the Creditor.

 

(b) Effect of Agreement . Effective immediately at the time of the execution of this Agreement by the parties hereto, all obligations of the Company to the Creditor will be canceled and terminated and the Company, except as provided herein.

 

4. Notices . All notices or other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if sent by registered or certified mail, postage prepaid, and return receipt requested to the parties or by an overnight courier service that provides evidence of delivery or attempted delivery, addressed as set forth in the preamble of this Agreement (or at such other addresses as designated by the parties from time to time, in writing, and delivered to the parties as provided below). Notices or other communications so delivered shall be deemed received on the day of delivery or attempted delivery if sent by overnight courier and three days after the date deposited in the U.S. mail if sent registered or certified mail, return receipt requested.

 

5. No Third Party Beneficiaries . Except with respect to the covenants of the parties hereto relating to the Law Firm in Section 2(a) hereof, this Agreement is solely for the benefit of the parties hereto and their successor and assigns and is not intended for the benefit of any other individual or business entity.

 

6. Delay No Waiver; No Oral Changes . No delay on the part of any party in exercising any right or remedy under this Agreement or failure to exercise the same shall operate as a waiver in whole or in part of any such right or remedy. No amendment or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by party against whom such waiver or amendment is to be enforced, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

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7. Assignment . No party may assign or transfer its rights or delegate its duties under this Agreement without the prior written consent of the other party, which may be granted or withheld in its sole discretion.

 

8. Release .

 

(a) Effective at the time of the execution of this Agreement, the Creditor releases and forever discharges the Company and each of its past and present directors, officers, employees, attorneys, agents, affiliates, successors and assigns (such group, collectively, the “ Released Persons ”), from any and all claims, actions, causes of action, suits, debts, dues, sums of money, accounts, costs, expenses, liabilities, covenants, contracts, agreements, promises, damages, judgments, executions and demands whatsoever (each a “ Claim ”), in law or equity, that the Creditor ever had, now has or hereafter may have against the Company and Released Persons arising from or relating to any matter, cause or thing whatsoever from the beginning of time through the time of such execution of this Agreement, except for any Claims of the Creditor arising under this Agreement. The Creditor represents and warrants that the Creditor has not assigned or otherwise transferred the released Claims, or any portion thereof.

 

(b) Creditor acknowledges and agrees that the release she gives to the Company upon executing this Agreement applies to all claims for injuries, damages, or losses to the Company’s person and property, real or personal (whether those injuries, damages, or losses are known or unknown, foreseen or unforeseen, or patent or latent) which Creditor may have against the Company. Creditor explicitly waives application of the California Civil Code Section 1542 :

 

(b) Creditor certifies that she has read the following provisions of California Civil Code Section 1542: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”

 

(d) Creditor understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if she should eventually suffer additional damages arising out of the Promissory Note or any other obligation of Company to Creditor she will not be able to make any claim for those damages. Further, Creditor acknowledges that she intends these consequences even as to claims for damages that may exist as of the date of this release but which she does not know exist, and which, if known, would materially affect her decision to execute this release, regardless, of whether its lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

 

9. No Pending or Future Lawsuits . Creditor represents that he has not commenced, and agrees he will not commence, any civil, criminal or regulatory claims, actions or lawsuit against the Company or any of the other Released Person arising out of the Promissory.

 

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10. Representation by Counsel . Creditor represents that she has been advised to consult with an attorney and has carefully read and understands the scope and effect of the provisions of this Agreement. In the event that Creditor elects to not consult with an attorney, he irrevocably waives any claim to inadequate representation by counsel. Creditor has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

 

11. Governing Law; Consent to Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its principles of conflict of laws. Each of the parties hereby (i) irrevocably consents and agrees that any legal or equitable action or proceeding arising under or in connection with this Agreement shall be brought exclusively in the United States District Court for the Southern District of New York or Supreme Court of the State of New York in the County of New York, (ii) by execution and delivery of this Agreement, irrevocably submits to and accepts, with respect to its properties and assets, generally and unconditionally, the jurisdiction of the aforesaid courts, and irrevocably waives any and all rights it may have to object to such jurisdiction under the Constitution or laws of the State of New York or the Constitution of the United States or otherwise, and (iii) irrevocably consents that service of process upon it in any such action or proceeding shall be valid and effective against it or him if made either (x) in the manner provided herein for delivery of notices hereunder or (y) any other manner permitted by law.

 

12. Waiver of Trial by Jury . ALL PARTIES TO THIS AGREEMENT HEREBY WAIVE THEIR RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE RELATING TO THIS AGREEMENT.

 

13. Severability. In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

 

14. Entire Agreement . This Agreement represents the entire agreement and understanding between the Creditor and Company concerning the subject matter of this Agreement and supersedes and replaces any and all prior agreements and understandings, whether written or oral, concerning the subject matter of this Agreement.

 

15. Headings . Headings in this Agreement are for convenience only and will not affect the construction of this Agreement.

 

16. Counterparts . This Agreement may be executed and delivered in counterparts and by facsimile and as so executed and delivered shall be fully effective and binding once executed by all parties listed as signatories hereto.

 

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IN WITNESS WHEREOF , the undersigned have executed and delivered this Agreement effective as of the date first written above.

 

  The Company:
   
  U.S. RARE EARTH MINERALS, INC.
     
  By:  
   

Name: Mr. Lawrence W. Bonafide

Title: Chairman, Secretary & Treasurer

     
  Creditor:
   
   
    Print name: Mrs. Eleanor Yarbray

 

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Exhibit A Promissory Note

 

SENIOR UNSUBORDINATED PROMISSORY NOTE

 

May 23. 2013

$ 110,000.00

 

U.S. Rare Earth Minerals, Inc. (a Nevada corporation), 18614 Riverwoods Drive, Bend, OR 97702, referred to herein as “MAKER,” agrees to pay to the Order of Eleanor Yarbray, a Married Woman as Her Sole and Separate Property, 74795 North Cove Drive, Indian Wells, CA 92210 , referred to herein as “HOLDER”, or order, the sum of $110,000.00 (One Hundred and Ten Thousand & NO/100 Dollars), at Indian Wells, CA 92210 with interest thereon at rate of 6% per annum, simple interest.

 

The full amount of principal and interest due herein shall be payable on or before August 23, 2013.

 

This note is payable in U.S. Dollars bearing 6% per annum, simple interest. At any time the maximum rate of interest applicable to this transaction shall not exceed the legal maximum rate of interest for a note of this type. Any sums paid in excess of any lawful limitation shall be applied to principal.

 

After default herein, this Senior Unsubordinated Promissory Note will bear interest at the highest legal rate for this type of note until paid in full. Upon any default, MAKER agrees to pay a reasonable attorney’s fee for any and all services of an attorney, whether in or out of court, and for appeal and post-judgment collection legal services.

 

Dated: May 23, 2013

 

IN WITNESS WHEREOF, U.S. Rare Earth Minerals, Inc., a Nevada corporation, has caused this note to be executed by its duly authorized President and CEO.

 

/s/ Dennis Cullison  
MAKER  
U.S. Rare Earth Minerals, Inc. (a Nevada corporation)  
Dennis Cullison, President and CEO  

 

  7  

 

 

Exhibit B

 

 

  8  

 

Exhibit 10.10

 

 

 

 

 

 

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

among

 

U.S. RARE EARTH MINERALS, INC.

 

BIOXY ACQUISITION CORP.

 

and

 

BIOXYTRAN, INC.

 

SEPTEMBER 17, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1  

 

 

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 

AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this “Agreement”), dated as of September 17, 2018, by and among U.S. Rare Earth Minerals, Inc., a Nevada corporation (the “Parent”), BiOxy Acquisition Corp., a Wyoming corporation wholly owned by Parent (the “Acquisition Subsidiary”), and BioxyTran, Inc., a Delaware corporation (the “Company”). The Parent, the Acquisition Subsidiary and the Company are each a “Party” and referred to collectively herein as the “Parties.”

 

WHEREAS , the Parent is in default of a 6% Senior Unsubordinated Promissory Note, Dated May 23, 2013, together with all interest due there on (the “Notes”), and, contemporaneously with the closing of the transactions contemplated by this Agreement Parent is entering into an Accord and Satisfaction with the Holder of the Note (“Settlement Agreement”);

 

WHEREAS , the execution and closing of the transactions contemplated by this Agreement is a condition precedent to the execution of the Settlement Agreement by the holder of the Note;

 

WHEREAS , the Board of Directors of the Parent has determined that entering into the Settlement Agreement is in the best interest of the Parent, its creditors and stockholders and has approved and adopted the Settlement Agreement and the transactions contemplated thereby;

 

WHEREAS,  the respective Boards of Directors of the Parent, Company and Acquisition Subsidiary deem it advisable and in the best interests of the Parent, Company and the Acquisition Subsidiary, respectively, for Acquisition Subsidiary to merge with and into the Company (the “Merger”) pursuant to this Agreement, and the applicable provisions of the laws of the States of Nevada and Delaware; and,

 

WHEREAS , Parent, Acquisition Subsidiary and Company desire that the Merger qualifies as a “plan of reorganization” under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and not subject the holders of equity securities of the Company to tax liability under the Code.

 

NOW, THEREFORE , in consideration of the representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties hereto, intending legally to be bound, agree as follows:

 

ARTICLE I

THE MERGER

 

1.1  The Merger . Upon and subject to the terms and conditions of this Agreement, the Acquisition Subsidiary shall merge with and into the Company at the Effective Time (as defined below). From and after the Effective Time, the separate corporate existence of the Acquisition Subsidiary shall cease and the Company shall continue as the surviving corporation in the Merger (the “Surviving Corporation”). The “Effective Time” shall be the time at which the Articles of Merger (the “Articles of Merger”) and other appropriate or required documents prepared and executed in accordance with the relevant provisions of the Delaware Business Corporation Law (the “DGCA”) and the Wyoming Business Corporations Act (“WBCA) are filed with the Secretaries of State of the states of Delaware and Wyoming, respectively. The Merger shall have the effects set forth in the applicable provisions of the WBCA.

 

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1.2  The Closing . The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of the Law Office of R.J. Newman P.C. in Westchester, New York or, at such other place as agreed to by the Parties, at 10:00 a.m. local time on September 24, 2018, or, if all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby have not been satisfied or waived by such date, on such mutually agreeable later date as soon as practicable after the satisfaction or waiver of all conditions (excluding the delivery of any documents to be delivered at the Closing by any of the Parties) set forth in Article V hereof (the “Closing Date”).

 

1.3  Actions at the Closing . At the Closing:

 

(a) the Company shall deliver to the Parent and the Acquisition Subsidiary the various certificates, instruments and documents referred to in Section 5.2;

 

(b) the Parent and the Acquisition Subsidiary shall deliver to the Company the various certificates, instruments and documents referred to in Section 5.3;

 

 (c) the Surviving Corporation shall file the Articles of Merger with the Secretary of State of the State of Nevada;

 

(d) each of the stockholders of record of the Company immediately prior to the Effective Time (collectively, the “Company Stockholders”) shall, if requested by the Parent, deliver to the Parent the certificate(s) representing his, her or its Company Shares (as defined below);

 

(e) the Parent shall deliver certificates for the Parent Common Stock (as defined below) to each Company Stockholder in accordance with Section 1.5;

 

(f) all approvals required by the Financial Industry Regulatory Association (FINRA) have been received

 

(g)  the current directors and officers of Parent shall submit letters of resignation in a form acceptable to the Company and the following persons will be appointed as directors of the Parent: Dale Conway, David Platt, Alan Hoberman, Henry Esber and Anders Utter, which resignations and appointments shall be effective on the 10 th day following the filing of the Schedule 14F-1 with the Securities and Exchange Commission (the “SEC”), except in the case of David Platt whose appointment to the Board of Directors of the Parent shall be effective immediately upon the Closing; and

 

(h)  David Platt shall be appointed as Chairman and Chief Executive Officer and Ola Soderquist shall be appointed as Chief Financial Officer of the Parent.

 

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1.4  Additional Actions . If at any time after the Effective Time the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of either the Company or the Acquisition Subsidiary or (b) otherwise to carry out the purposes of this Agreement, the Surviving Corporation and its proper officers and directors or their designees shall be authorized (to the fullest extent allowed under applicable law) to execute and deliver, in the name and on behalf of either the Company or the Acquisition Subsidiary, all such deeds, bills of sale, assignments and assurances and do, in the name and on behalf of the Company or the Acquisition Subsidiary, all such other acts and things necessary, desirable or proper to vest, perfect or confirm its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of the Company or the Acquisition Subsidiary, as applicable, and otherwise to carry out the purposes of this Agreement.

 

1.5  Conversion of Company Securities . At the Effective Time, by virtue of the Merger and without any action on the part of any Party or the holder of any of the following securities:

 

(a) Each share of common stock, par value $.001 per share, of the Company (“Company Shares”) issued and outstanding immediately prior to the Effective Time (other than Company Shares owned beneficially by the Parent or the Acquisition Subsidiary and Dissenting Shares (as defined below)) shall be converted into and represent the right to receive (subject to the provisions of Section 1.6) 5.1057958 shares of common stock, par value $0.001 per share, of the Parent (“Parent Common Stock”). An aggregate of 75,586,937 shares of Parent Common Stock shall be issued to the security holders of the Company in connection with the Merger (the “Merger Shares”).

 

(b) Each issued and outstanding share of common stock, par value $0.001 per share, of the Acquisition Subsidiary shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

 

1.6  Dissenting Shares .

 

(a) For purposes of this Agreement, “Dissenting Shares” means Company Shares held as of the Effective Time by a Company Stockholder who has not voted such Company Shares in favor of the adoption of this Agreement and the Merger and with respect to which appraisal shall have been duly demanded and perfected in accordance with Sections 262 of the DGCA and not effectively withdrawn or forfeited prior to the Effective Time. Dissenting Shares shall not be converted into or represent the right to receive shares of Parent Common Stock unless such Company Stockholder’s right to appraisal shall have ceased in accordance with the DGCA. If such Company Stockholder has so forfeited or withdrawn his, her or its right to appraisal of Dissenting Shares, then, (i) as of the occurrence of such event, such holder’s Dissenting Shares shall cease to be Dissenting Shares and shall be converted into and represent the right to receive the Merger Shares issuable in respect of such Company Shares pursuant to Section 1.5, and (ii) promptly following the occurrence of such event, the Parent shall deliver to such Company Stockholder a certificate representing the Merger Shares to which such holder is entitled pursuant to Section 1.5.

 

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(b) The Company shall give the Parent prompt notice of any written demands for appraisal of any Company Shares, withdrawals of such demands, and any other instruments that relate to such demands received by the Company. The Company shall not, except with the prior written consent of the Parent, make any payment with respect to any demands for appraisal of Company Shares or offer to settle or settle any such demands.

 

1.7  Certificate of Incorporation and Bylaws .

 

(a) The certificate of incorporation of the Company in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation until duly amended or repealed.

 

(b) The bylaws of the Company in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation until duly amended or repealed.

 

1.8  No Further Rights . From and after the Effective Time, no Company Shares shall be deemed to be outstanding, and holders of certificates that immediately prior to the Effective Time represented Company Shares converted into Merger Shares pursuant to Section 1.5 (“Certificates”) shall cease to have any rights with respect thereto, except as provided herein or by law.

 

1.9  Closing of Transfer Books . At the Effective Time, the stock transfer books of the Company shall be closed and no transfer of Company Shares shall thereafter be made. If, after the Effective Time, Certificates are presented to the Parent or the Surviving Corporation, they shall be cancelled and exchanged for Merger Shares in accordance with Section 1.5, subject to applicable law in the case of Dissenting Shares.

 

1.10  Exemption from Registration . The Parent and the Company intend that the shares of Parent Common Stock to be issued pursuant to Section 1.5 hereof in connection with the Merger, will be issued in a transaction exempt from registration under the Securities Act of 1933, as amended (“Securities Act”), by reason of Section 4(a)(2) of the Securities Act, Rule 506 of Regulation D promulgated by the SEC thereunder and/or Regulation S promulgated by the SEC.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Parent that the statements contained in this Article II are true and correct, except as set forth in the disclosure schedule provided by the Company to the Parent on the date hereof and accepted in writing by the Parent (the “Disclosure Schedule”). The Disclosure Schedule shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article II. The inclusion of any item on the Disclosure Schedule shall constitute disclosure for all purposes under this Agreement and shall not be construed as an indication of the materiality or lack thereof of such item.

 

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2.1  Organization, Qualification and Corporate Power . The Company is a corporation duly organized, validly existing and in corporate and tax good standing under the laws of the State of Delaware. The Company is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect (as defined below). The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has furnished or made available to the Parent complete and accurate copies of its certificate of incorporation and bylaws. The Company is not in default under or in violation of any provision of its certificate of incorporation, as amended to date, or its bylaws, as amended to date. For purposes of this Agreement, “Company Material Adverse Effect” means a material adverse effect on the assets, business, financial condition, or results of operations or future prospects of the Company taken as a whole.

 

2.2  Capitalization . The authorized capital stock of the Company consists of 95,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of the date of this Agreement, 15,000,000 Company Shares were issued and outstanding and no preferred shares were issued and outstanding, and no Company Shares or preferred shares were held in the treasury of the Company. As of the date of this Agreement, there were no issued and outstanding options or warrants to purchase Company Shares. All of the issued and outstanding shares of capital stock of the Company, as of the Closing Date, are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. There are no voting trusts or any other agreements or understandings with respect to the voting of the Company’s capital stock. No other class of capital stock or other security of the Company is authorized, issued, reserved for issuance or outstanding. There are no authorized or outstanding options, warrants, equity securities, calls, rights, commitments or agreements of any character by which the Company is obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of the Company. There are no outstanding contractual obligations (contingent or otherwise) of the Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Company.

 

2.3  Authorization of Transaction . The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery by the Company of this Agreement and, subject to the adoption of this Agreement and the approval of the Merger by no less than a majority of the votes represented by the outstanding Company Shares entitled to vote on this Agreement and the Merger (the “Stockholder Approval”), the consummation by the Company of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Company. Without limiting the generality of the foregoing, the board of directors of the Company (i) determined that the Merger is fair and in the best interests of the Company and the Company Stockholders, (ii) adopted this Agreement in accordance with the provisions of the DGCA, and (iii) directed that this Agreement and the Merger be submitted to the Company Stockholders for their adoption and approval and resolved to recommend that the Company Stockholders vote in favor of the adoption of this Agreement and the approval of the Merger. This Agreement has been duly and validly executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

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2.4  Noncontravention . Subject to receipt of Stockholder Approval and the filing of the Articles of Merger as required by the DGCA and WBCA, neither the execution and delivery by the Company of this Agreement, nor the consummation by the Company of the transactions contemplated hereby, will (a) conflict with or violate any provision of the certificate of incorporation or bylaws of the Company, as amended to date, (b) require on the part of the Company any filing with, or any permit, authorization, consent or approval of, any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency (a “Governmental Entity”), except for such permits, authorizations, consents and approvals for which the Company is obligated to use its Reasonable Best Efforts (as defined below) to obtain pursuant to Section 4.2(a), (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Company is a party or by which the Company is bound or to which any of its assets is subject, except for (i) any conflict, breach, default, acceleration, termination, modification or cancellation in any contract or instrument set forth in Section 2.4 of the Disclosure Schedule, for which the Company is obligated to use its Reasonable Best Efforts to obtain waiver, consent or approval pursuant to Section 4.2(b), (ii) any conflict, breach, default, acceleration, termination, modification or cancellation which would not have a Company Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby or (iii) any notice, consent or waiver the absence of which would not have a Company Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets.

 

2.5  Subsidiaries . The Company has no Company Subsidiaries. For purposes of this Agreement, a “Subsidiary” shall mean any corporation, partnership, joint venture or other entity in which a Party has, directly or indirectly, an equity interest representing 50% or more of the equity securities thereof or other equity interests therein.

 

2.6  Financial Statements . The Company has provided or made available to the Parent the unaudited but reviewed balance sheets of the Company at December 31, 2017 and June 30, 2018 and the related statements of operations and cash flows (collectively, the “Company Financial Statements”). The Company Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods covered thereby, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of the respective dates thereof and for the periods referred to therein, are able to comply as to form with the applicable rules and regulations of the SEC for inclusion of such Company Financial Statements in the Parent’s filings with the SEC as required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are consistent in all material respects with the books and records of the Company.

 

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2.7  Absence of Certain Changes . Since June 30, 2018 (the “Company Balance Sheet Date”), (a) to the knowledge of the Company, there has not occurred any event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Company Material Adverse Effect, and (b)  the Company has not taken any of the actions set forth in paragraphs (a) through (l) of Section 4.4.

 

2.8  Undisclosed Liabilities . The Company does not have any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown in the Company Financial Statements referred to in Section 2.6, (b) liabilities which have arisen since the Company Balance Sheet Date in the ordinary course of business and (c) contractual and other liabilities incurred in the ordinary course of business which are not required by GAAP to be reflected on a balance sheet.

 

2.9  Tax Matters .

 

(a) For purposes of this Agreement, the following terms shall have the following meanings:

 

(i) “Taxes” means all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, unemployment insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof.

 

(ii) “Tax Returns” means all reports, returns, declarations, statements or other information required to be supplied to a taxing authority in connection with the Taxes.

 

(b) Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company has filed all necessary Tax Returns and has paid or accrued all Taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company.

 

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2.10  Assets . The Company owns or leases all tangible assets reasonably necessary for the conduct of its businesses as presently conducted and as presently proposed to be conducted. Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used. No asset of the Company (tangible or intangible) is subject to any security interest.

 

2.11  Owned Real Property . The Company does not own any real property.

 

2.12  Real Property Leases . Section 2.12 of the Disclosure Schedule lists all real property leased or subleased to or by the Company and lists the term of such lease, any extension and expansion options, and the rent payable thereunder. The Company has delivered or made available to the Parent complete and accurate copies of the leases and subleases listed in Section 2.12 of the Disclosure Schedule. With respect to each lease and sublease listed in Section 2.12 of the Disclosure Schedule:

 

(a) the lease or sublease is legal, valid, binding, enforceable and in full force and effect;

 

(b) the lease or sublease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing;

 

(c) neither the Company nor, to the knowledge of the Company, any other party is in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of the Company, is threatened, which, after the giving of notice, with lapse of time or otherwise, would constitute a breach or default by the Company or, to the knowledge of the Company, any other party under such lease or sublease;

 

(d) the Company has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; and

 

(e) to the knowledge of the Company, there is no security interest, easement, covenant or other restriction applicable to the real property subject to such lease, except for recorded easements, covenants and other restrictions which do not materially impair the current uses or the occupancy by the Company of the property subject thereto.

 

2.13  Contracts .

 

(a) Section 2.13 of the Disclosure Schedule lists the following agreements (written or oral) to which the Company is a party as of the date of this Agreement:

 

(i) any agreement (or group of related agreements) for the lease of personal property from or to third parties providing for lease payments in excess of $25,000 per annum or having a remaining term longer than 12 months;

 

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(ii) any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services (A) which calls for performance over a period of more than one year, (B) which involves more than the sum of $25,000, or (C) in which the Company has granted manufacturing rights, “most favored nation” pricing provisions or exclusive marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;

 

(iii) any agreement which, to the knowledge of the Company, establishes a partnership or joint venture;

 

(iv) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) involving more than $25,000 or under which it has imposed (or may impose) a security interest on any of its assets, tangible or intangible;

 

(v) any agreement concerning confidentiality or noncompetition;

 

(vi) any employment or consulting agreement;

 

(vii) any agreement involving any officer, director or stockholder of the Company or any affiliate (as defined in Rule 12b-2 under the Exchange Act) thereof (an “Affiliate”);

 

(viii) any agreement or commitment for capital expenditures in excess of $25,000, for a single project (it being represented and warranted that the liability under all undisclosed agreements and commitments for capital expenditures does not exceed $100,000 in the aggregate for all projects);

 

(ix) any agreement under which the consequences of a default or termination would reasonably be expected to have a Company Material Adverse Effect;

 

(x) any agreement which contains any provisions requiring the Company to indemnify any other party thereto (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the ordinary course of business);

 

(xi) any other agreement (or group of related agreements) either involving more than $25,000 or not entered into in the ordinary course of business; and

 

(xii) any agreement, other than as contemplated by this Agreement, relating to the sales of securities of the Company to which the Company is a party.

 

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(b) The Company has delivered or made available to the Parent a complete and accurate copy of each agreement listed in Section 2.13 of the Disclosure Schedule. With respect to each agreement so listed, and except as set forth in Section 2.13 of the Disclosure Schedule: (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) the agreement will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing; and (iii) neither the Company nor, to the knowledge of the Company, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Company, is threatened, which, after the giving of notice, with lapse of time or otherwise, would constitute a material breach or default by the Company or, to the knowledge of the Company, any other party under such contract.

 

2.14  Litigation . As of the date of this Agreement, there is no action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator (a “Legal Proceeding”) which is pending or has been threatened in a writing received by the Company against the Company which (a) seeks either damages in excess of $10,000 individually, or $25,000 in the aggregate, or (b) if determined adversely to the Company, could have, individually or in the aggregate, a Company Material Adverse Effect.

 

2.15  Legal Compliance . The Company, and the conduct and operations of its business, is in compliance with each applicable law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

 

2.16  Permits . Section 2.16 of the Disclosure Schedule sets forth a list of all material permits, licenses, registrations, certificates, orders or approvals from any Governmental Entity (including without limitation those issued or required under environmental laws and those relating to the occupancy or use of owned or leased real property) (“Permits”) issued to or held by the Company. Such listed Permits are the only material Permits that are required for the Company to conduct its business as presently conducted except for those the absence of which, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. Each such Permit is in full force and effect and, to the knowledge of the Company, no suspension or cancellation of such Permit is threatened and, to the knowledge of the Company, there is no reasonable basis for believing that such Permit will not be renewable upon expiration. Each such Permit, to the knowledge of the Company, will continue in full force and effect immediately following the Closing.

 

2.17  Certain Business Relationships with Affiliates . Except as listed in Section 2.17 of the Disclosure Schedule, no Affiliate of the Company (a) owns any material property or right, tangible or intangible, which is used in the business of the Company, (b) has any claim or cause of action against the Company, or (c) owes any money to, or is owed any money by, the Company. Section 2.17 of the Disclosure Schedule describes any transactions involving the receipt or payment in excess of $25,000 in any fiscal year between the Company and any Affiliate of the Company thereof which have occurred or existed since the Company’s inception, other than employment agreements.

 

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2.18  Brokers’ Fees . The Company does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

 

2.19  Books and Records . The minute books and other similar records of the Company contain complete and accurate records in all material respects of all actions taken at any meetings of the Company’s stockholders, board of directors or any committees thereof and of all written consents executed in lieu of the holding of any such meetings.

 

2.20  Intellectual Property .

 

(a) The Company owns, is licensed or otherwise possesses legally enforceable rights to use, license and exploit all issued patents, copyrights, trademarks, service marks, trade names, trade secrets, and registered domain names and all applications for registration therefor (collectively, the “Intellectual Property Rights”) and all computer programs and other computer software, databases, know-how, proprietary technology, formulae, and development tools, together with all goodwill related to any of the foregoing (collectively, the “Intellectual Property”), in each case as is necessary to conduct their respective businesses as presently conducted, the absence of which would be considered reasonably likely to result in a Company Material Adverse Effect.

 

(b) Section 2.20(b) of the Disclosure Schedule sets forth, with respect to all issued patents and all registered copyrights, trademarks, service marks and domain names registered with any Governmental Entity by the Company or for which an application for registration has been filed with any Governmental Entity by the Company, (i) the registration or application number, the date filed and the title, if applicable, of the registration or application and (ii) the names of the jurisdictions covered by the applicable registration or application. Section 2.20(b) of the Disclosure Schedule identifies each agreement currently in effect containing any ongoing royalty or payment obligations of the Company in excess of $25,000 per annum with respect to Intellectual Property Rights and Intellectual Property that are licensed or otherwise made available to the Company.

 

(c) Except as set forth on Section 2.20(c) of the Disclosure Schedule, all Intellectual Property Rights of the Company that have been registered with any Governmental Entity are valid and subsisting, except as would not reasonably be expected to have a Company Material Adverse Effect. As of the Effective Date, in connection with such registered Intellectual Property Rights, all necessary registration, maintenance and renewal fees will have been paid and all necessary documents and certificates will have been filed with the relevant Governmental Entities.

 

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(d) The Company is not, and will not as a result of the consummation of the Merger or other transactions contemplated by this Agreement be, in breach in any material respect of any license, sublicense or other agreement relating to the Intellectual Property Rights of the Company, or any licenses, sublicenses or other agreements as to which the Company is a party and pursuant to which the Company uses any patents, copyrights (including software), trademarks or other intellectual property rights of or owned by third parties (the “Third Party Intellectual Property Rights”), the breach of which would be reasonably likely to result in a Company Material Adverse Effect.

 

(e) The Company has not been named as a defendant in any suit, action or proceeding which involves a claim of infringement or misappropriation of any Third Party Intellectual Property Right and the Company has not received any written notice of any actual or alleged infringement, misappropriation or unlawful or unauthorized use of any Third Party Intellectual Property Right. With respect to its product candidates and products in research or development, after the same are marketed, the Company will not, to its knowledge, infringe any Third Party Intellectual Property Rights in any material manner.

 

(f) To the knowledge of the Company no other person is infringing, misappropriating or making any unlawful or unauthorized use of any Intellectual Property Rights of the Company in a manner that has a material impact on the business of the Company, except for such infringement, misappropriation or unlawful or unauthorized use as would not be reasonably expected to have a Company Material Adverse Effect.

 

2.21  Disclosure . No representation or warranty by the Company contained in this Agreement, and no statement contained in the Disclosure Schedule or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Company pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading. The Company has disclosed to the Parent all material information relating to the business of the Company or the transactions contemplated by this Agreement.

 

2.22  Duty to Make Inquiry . To the extent that any of the representations or warranties in this Article II are qualified by “knowledge” or “belief,” the Company represents and warrants that it has made due and reasonable inquiry and investigation concerning the matters to which such representations and warranties relate, including, but not limited to, diligent inquiry by its directors, officers and key personnel.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PARENT

AND THE ACQUISITION SUBSIDIARY

 

Each of the Parent and the Acquisition Subsidiary represents and warrants to the Company that the statements contained in this Article III are true and correct, except as set forth in the disclosure schedule provided by the Parent and the Acquisition Subsidiary to the Company on the date hereof and accepted in writing by the Company (the “Parent Disclosure Schedule”). The Parent Disclosure Schedule shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article III. The inclusion of any item on the Disclosure Schedule shall constitute disclosure for all purposes under this Agreement and shall not be construed as an indication of the materiality or lack thereof of such item.

 

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3.1  Organization, Qualification and Corporate Power . The Parent and the Acquisition Subsidiary are each a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Parent is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not have a Parent Material Adverse Effect (as defined below). The Parent has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Parent has furnished or made available to the Company complete and accurate copies of its certificate of incorporation and bylaws. Neither the Parent nor the Acquisition Subsidiary is in default under or in violation of any provision of its certificate of incorporation, as amended to date, or its bylaws, as amended to date. For purposes of this Agreement, “Parent Material Adverse Effect” means a material adverse effect on the assets, business, condition (financial or otherwise), or results of operations of the Parent and its subsidiaries, taken as a whole.

 

3.2  Capitalization . The authorized capital stock of the Parent consists of 300,000,000 shares of Parent Common Stock, of which 3,771,213 shares are issued and outstanding as of the date of this Agreement, and 50,000,000 shares of preferred stock, $0.001 par value per share, of which 14,683 shares are issued and outstanding (“Parent Preferred Stock”). Each share of Parent Preferred Stock is convertible into 5 shares of Parent Common Stock. The Parent Common Stock is presently eligible for quotation and trading on the OTC Pink Market run by the OTC Markets, Inc. (the “OTC Pink”) in all 50 states of the United States and is not subject to any notice of suspension or delisting. The Parent Common Stock is eligible for registration under the Exchange Act. As of the date of this Agreement, there were no issued and outstanding options or warrants to purchase Parent Common Stock. All of the issued and outstanding shares of capital stock of the Parent, as of the Closing Date, are duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. There are no voting trusts or any other agreements or understandings with respect to the voting of the Parent’s capital stock. No other class of capital stock or other security of the Parent is authorized, issued, reserved for issuance or outstanding. There are no authorized or outstanding options, warrants, equity securities, calls, rights, commitments or agreements of any character by which the Parent is obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of the Parent. There are no outstanding contractual obligations (contingent or otherwise) of the Parent to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Parent. The Merger Shares to be issued at the Closing pursuant to Section 1.5 hereof, when issued and delivered in accordance with the terms hereof and of the Articles of Merger, shall be duly and validly issued, fully paid and nonassessable and free of all preemptive rights and will be issued in compliance with applicable federal and state securities laws. Immediately prior to the Effective Time, there will be 3,771,211 shares of Parent Common Stock issued and outstanding.

 

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3.3  Authorization of Transaction . Each of the Parent and the Acquisition Subsidiary has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder and thereunder. The execution and delivery by the Parent and the Acquisition Subsidiary of this Agreement, and the agreements contemplated hereby and thereby (collectively, the “Transaction Documentation”), and the consummation by the Parent and the Acquisition Subsidiary of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Parent and the Acquisition Subsidiary. Each of the documents included in the Transaction Documentation has been duly and validly executed and delivered by the Parent or the Acquisition Subsidiary and constitutes a valid and binding obligation of the Parent or the Acquisition Subsidiary enforceable against them in accordance with its terms.

 

3.4  Noncontravention . Subject to the filing of the Articles of Merger as required by the DGCA and WBCA, neither the execution and delivery by the Parent or the Acquisition Subsidiary, as the case may be, of this Agreement or the Transaction Documentation, nor the consummation by the Parent or the Acquisition Subsidiary, as the case may be, of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the certificate of incorporation or bylaws of the Parent or the Acquisition Subsidiary, as the case may be, (b) require on the part of the Parent or the Acquisition Subsidiary, as the case may be, any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Parent or the Acquisition Subsidiary, as the case may be, is a party or by which either is bound or to which any of their assets are subject, except for (i) any conflict, breach, default, acceleration, termination, modification or cancellation which would not have a Parent Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby or (ii) any notice, consent or waiver the absence of which would not have a Parent Material Adverse Effect and would not adversely affect the consummation of the transactions contemplated hereby, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Parent or the Acquisition Subsidiary or any of their properties or assets.

 

3.5  Subsidiaries . The Parent has no Subsidiaries other than the Acquisition Subsidiary. The Acquisition Subsidiary is an entity duly organized, validly existing and in corporate and tax good standing under the laws of the jurisdiction of its organization. The Acquisition Subsidiary was formed solely to effectuate the Merger and it has not conducted any business operations since its organization. The Parent has delivered or made available to the Company complete and accurate copies of the charter, bylaws or other organizational documents of the Acquisition Subsidiary. The Acquisition Subsidiary has no assets other than minimal paid-in capital, it has no liabilities or other obligations, and it is not in default under or in violation of any provision of its charter, bylaws or other organizational documents. All of the issued and outstanding shares of capital stock of the Acquisition Subsidiary are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. All shares of the Acquisition Subsidiary are owned by the Parent free and clear of any restrictions on transfer (other than restrictions under the Securities Act and state securities laws), claims, security interests, options, warrants, rights, contracts, calls, commitments, equities and demands. There are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Parent or the Acquisition Subsidiary is a party, or which are binding on any of them providing for the issuance, disposition or acquisition of any capital stock of the Acquisition Subsidiary (except as contemplated by this Agreement). There are no outstanding stock appreciation, phantom stock or similar rights with respect to the Acquisition Subsidiary. There are no voting trusts, proxies or other agreements or understandings with respect to the voting of any capital stock of the Acquisition Subsidiary.

 

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3.6  Exchange Act Reports . The Parent has furnished or made available to the Company complete and accurate copies, as amended or supplemented, of its reports filed by the Parent under Section 13 or subsections (a) or (c) of Section 14 of the Exchange Act with the SEC since April 10, 2009 (such reports are collectively referred to herein as the “Parent Reports”). The Parent Reports constitute all of the documents required to be filed by the Parent with the SEC, including under Section 13 or subsections (a) or (c) of Section 14 of the Exchange Act, from March 22, 2016 through the date of this Agreement. The Parent Reports complied in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder when filed.

 

3.7  Compliance with Laws . Each of the Parent and its Subsidiaries:

 

(a) and the conduct and operations of their respective businesses, are in compliance with each applicable law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect;

 

(b) has complied with all federal and state securities laws and regulations, including being current in all of its reporting obligations under such federal and state securities laws and regulations;

 

(c) has not, and the past and present officers, directors and Affiliates of the Parent have not, been the subject of, nor does any officer or director of the Parent have any reason to believe that the Parent or any of its officers, directors or Affiliates will be the subject of, any civil or criminal proceeding or investigation by any federal or state agency alleging a violation of securities laws;

 

(d) has not been the subject of any voluntary or involuntary bankruptcy proceeding, nor has it been a party to any material litigation;

 

(e) has not, and the past and present officers, directors and Affiliates have not, been the subject of, nor does any officer or director of the Parent have any reason to believe that the Parent or any of its officers, directors or Affiliates will be the subject of, any civil, criminal or administrative investigation or proceeding brought by any federal or state agency having regulatory authority over such entity or person;

 

(f) does not and will not on the Closing, have any liabilities, contingent or otherwise, including but not limited to notes payable and accounts payable, and is not a party to any executory agreements; and

 

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(g) is not a “blank check company” as such term is defined by Rule 419 of the Securities Act nor a “shell company” as such term is defined in Rule 12b-2 of the Exchange Act.

 

3.8  Financial Statements . The audited financial statements and unaudited interim financial statements of the Parent included in the Parent Reports (collectively, the “Parent Financial Statements”) (i) complied as to form in all material respects with applicable accounting requirements and, as appropriate, the published rules and regulations of the SEC with respect thereto when filed, (ii) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby (except as may be indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q under the Exchange Act), (iii) fairly present the consolidated financial condition, results of operations and cash flows of the Parent as of the respective dates thereof and for the periods referred to therein, and (iv) are consistent with the books and records of the Parent.

 

3.9  Absence of Certain Changes . Since the date of the balance sheet contained in the most recent Parent Report, (a) there has occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Parent Material Adverse Effect and (b) neither the Parent nor the Acquisition Subsidiary has taken any of the actions set forth in paragraphs (a) through (l) of Section 4.6. Set forth on Schedule 3.9 of the Disclosure Schedule are all outstanding liabilities of Parent as of the Closing Date. Acquisition Subsidiary has no liabilities.

 

3.10  Litigation . Except as disclosed in the Parent Reports, as of the date of this Agreement, there is no Legal Proceeding which is pending or, to the Parent’s knowledge, threatened against the Parent or any Subsidiary of the Parent which, if determined adversely to the Parent or such Subsidiary, could have, individually or in the aggregate, a Parent Material Adverse Effect or which in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement. For purposes of this Section 3.10, any such pending or threatened Legal Proceedings where the amount at issue exceeds or could reasonably be expected to exceed the lesser of $5,000 per Legal Proceeding or $10,000 in the aggregate shall be considered to possibly result in a Parent Material Adverse Effect hereunder.

 

3.11  Undisclosed Liabilities . None of the Parent and its Subsidiaries has any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the balance sheet contained in the most recent Parent Report, (b) liabilities which have arisen since the date of the balance sheet contained in the most recent Parent Report in the ordinary course of business (c) contractual and other liabilities incurred in the ordinary course of business which are not required by GAAP to be reflected on a balance sheet and (d) liabilities set forth in Schedule 3.9..

 

3.12  Tax Matters . Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Parent Material Adverse Effect, the Parent has filed all necessary Tax Returns and has paid or accrued all Taxes shown as due thereon, and the Parent has no knowledge of a tax deficiency which has been asserted or threatened against the Parent.

 

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3.13  Assets . Each of the Parent and the Acquisition Subsidiary owns or leases all tangible assets necessary for the conduct of its businesses as presently conducted and as presently proposed to be conducted. Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used. No asset of the Parent or the Acquisition Subsidiary (tangible or intangible) is subject to any security interest.

 

3.14  Owned Real Property . Neither the Parent nor any of its Subsidiaries owns any real property. The mining claims held by the Parent are set forth in Schedule 3.14 of the Disclosure schedule.

 

3.15  Real Property Leases . Section 3.15 of the Parent Disclosure Schedule lists all real property leased or subleased to or by the Parent or any of its Subsidiaries and lists the term of such lease, any extension and expansion options, and the rent payable thereunder. The Parent has delivered or made available to the Company complete and accurate copies of the leases and subleases listed in Section 3.15 of the Parent Disclosure Schedule. With respect to each lease and sublease listed in Section 3.15 of the Parent Disclosure Schedule:

 

(a) the lease or sublease is legal, valid, binding, enforceable and in full force and effect;

 

(b) the lease or sublease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing;

 

(c) neither the Parent nor any of its Subsidiaries nor, to the knowledge of the Parent, any other party, is in breach or violation of, or default under, any such lease or sublease, and no event has occurred, is pending or, to the knowledge of the Parent, is threatened, which, after the giving of notice, with lapse of time or otherwise, would constitute a breach or default by the Parent or any of its Subsidiaries or, to the knowledge of the Parent, any other party under such lease or sublease;

 

(d) neither the Parent nor any of its Subsidiaries has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; and

 

(e) to the knowledge of the Parent, there is no security interest, easement, covenant or other restriction applicable to the real property subject to such lease, except for recorded easements, covenants and other restrictions which do not materially impair the current uses or the occupancy by the Parent or any of its Subsidiaries of the property subject thereto.

 

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3.16  Contracts .

 

(a) Section 3.16 of the Parent Disclosure Schedule lists the following agreements (written or oral) to which the Parent or any of its Subsidiaries is a party as of the date of this Agreement:

 

(i) any agreement (or group of related agreements) for the lease of personal property from or to third parties;

 

(ii) any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services;

 

(iii) any agreement establishing a partnership or joint venture;

 

(iv) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) or under which it has imposed (or may impose) a security interest on any of its assets, tangible or intangible;

 

(v) any agreement concerning confidentiality or noncompetition;

 

(vi) any employment or consulting agreement;

 

(vii) any agreement involving any current or former officer, director or stockholder of the Parent or any Affiliate thereof;

 

(viii) any agreement under which the consequences of a default or termination would reasonably be expected to have a Parent Material Adverse Effect;

 

(ix) any agreement which contains any provisions requiring the Parent or any of its Subsidiaries to indemnify any other party thereto (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the ordinary course of business);

 

(x) any other agreement (or group of related agreements) either involving more than $5,000 or not entered into in the ordinary course of business; and

 

(xi) any agreement, other than as contemplated by this Agreement, relating to the sales of securities of the Parent or any of its Subsidiaries to which the Parent or such Subsidiary is a party.

 

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(b) The Parent has delivered or made available to the Company a complete and accurate copy of each agreement listed in Section 3.16 of the Parent Disclosure Schedule. With respect to each agreement so listed: (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) the agreement will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing; and (iii) neither the Parent nor any of its Subsidiaries nor, to the knowledge of the Parent, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Parent, is threatened, which, after the giving of notice, with lapse of time or otherwise, would constitute a breach or default by the Parent or any of its Subsidiaries or, to the knowledge of the Parent, any other party under such contract.

 

3.17  Permits . Section 3.17 of the Parent Disclosure Schedule sets forth a list of all permits, licenses, registrations, certificates, orders or approvals from any Governmental Entity (including without limitation those issued or required under environmental laws and those relating to the occupancy or use of owned or leased real property) (“Parent Permits”) issued to or held by the Parent or any of its Subsidiaries. Such listed permits are the only Parent Permits that are required for the Parent and any of its Subsidiaries to conduct their respective businesses as presently conducted except for those the absence of which, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect. Each such Parent Permit is in full force and effect and, to the knowledge of the Parent, no suspension or cancellation of such Parent Permit is threatened and there is no basis for believing that such Parent Permit will not be renewable upon expiration. Each such Parent Permit will continue in full force and effect immediately following the Closing.

 

3.18  Certain Business Relationships with Affiliates . No Affiliate of the Parent or of any of its Subsidiaries (a) owns any property or right, tangible or intangible, which is used in the business of the Parent or any of its Subsidiaries, (b) has any claim or cause of action against the Parent or any of its Subsidiaries, or (c) owes any money to, or is owed any money by, the Parent or any of its Subsidiaries. Section 3.18 of the Parent Disclosure Schedule describes any transactions involving the receipt or payment in excess of $1,000 in any fiscal year between the Parent or any of its Subsidiaries and any Affiliate thereof which have occurred or existed since the beginning of the time period covered by the Parent Financial Statements.

 

3.19  Tax-Free Reorganization .

 

(a) The Parent (i) is not an “investment company” as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code; (ii) has no present plan or intention to liquidate the Surviving Corporation or to merge the Surviving Corporation with or into any other corporation or entity, or to sell or otherwise dispose of the stock of the Surviving Corporation which the Parent will acquire in the Merger, or to cause the Surviving Corporation to sell or otherwise dispose of its assets, all except in the ordinary course of business if such liquidation, merger or disposition is described in Section 368(a)(2)(C) or Treasury Regulation Section 1.368-2(d)(4) or Section 1.368-2(k) or pursuant to the transfer of any of its assets pursuant to the Settlement Agreement; and (iii) has no present plan or intention, following the Merger, to issue any additional shares of stock of the Surviving Corporation or to create any new class of stock of the Surviving Corporation.

 

(b) The Acquisition Subsidiary is a wholly-owned subsidiary of the Parent, formed solely for the purpose of engaging in the Merger, and will carry on no business prior to the Merger.

 

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(c) Immediately prior to the Merger, the Parent will be in control of Acquisition Subsidiary within the meaning of Section 368(c) of the Code.

 

(d) Immediately following the Merger, the Surviving Corporation will hold at least 90% of the fair market value of the net assets and at least 70% of the fair market value of the gross assets held by the Company immediately prior to the Merger (for purposes of this representation, amounts used by the Company to pay reorganization expenses, if any, will be included as assets of the Company held immediately prior to the Merger).

 

(e) The Parent has no present plan or intention to reacquire any of the Merger Shares.

 

(f) The Acquisition Subsidiary will have no liabilities assumed by the Surviving Corporation and will not transfer to the Surviving Corporation any assets subject to liabilities in the Merger.

 

(g) Following the Merger, the Surviving Corporation will continue the Company’s historic business or use a significant portion of the Company’s historic business assets in a business as required by Section 368 of the Code and the Treasury Regulations promulgated thereunder.

 

3.20  Brokers’ Fees . Neither the Parent nor the Acquisition Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

 

3.21  Disclosure . No representation or warranty by the Parent contained in this Agreement, and no statement contained in the any document, certificate or other instrument delivered or to be delivered by or on behalf of the Parent pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading. The Parent has disclosed to the Company all material information relating to the business of the Parent or any of its Subsidiaries or the transactions contemplated by this Agreement.

 

3.22  Duty to Make Inquiry . To the extent that any of the representations or warranties in this Article III are qualified by “knowledge” or “belief,” the Parent represents and warrants that it has made due and reasonable inquiry and investigation concerning the matters to which such representations and warranties relate, including, but not limited to, diligent inquiry by its directors, officers and key personnel.

 

3.23  Minute Books . The minute books and other similar records of the Parent and each of its Subsidiaries contain, in all material respects, complete and accurate records of all actions taken at any meetings of directors (or committees thereof) and stockholders or actions by written consent in lieu of the holding of any such meetings since the time of organization of each such corporation through the date of this Agreement. The Parent has provided true and complete copies of all such minute books and other similar records to the Company’s representatives.

 

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3.24  Board Action . The Parent’s Board of Directors (a) has unanimously determined that the Merger is advisable and in the best interests of the Parent’s stockholders and is on terms that are fair to such Parent stockholders and (b) has caused the Parent, in its capacity as the sole stockholder of the Acquisition Subsidiary, and the Board of Directors of the Acquisition Subsidiary, to approve the Merger and this Agreement by unanimous written consent.

 

ARTICLE IV

COVENANTS

 

4.1  Closing Efforts . Each of the Parties shall use its commercially reasonable efforts (“Reasonable Best Efforts”), to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including without limitation using its Reasonable Best Efforts to ensure that (i) its representations and warranties remain true and correct in all material respects through the Closing Date and (ii) the conditions to the obligations of the other Parties to consummate the Merger are satisfied.

 

4.2  Governmental and Third-Party Notices and Consents .

 

(a) Each Party shall use its Reasonable Best Efforts to obtain, at its expense, all waivers, permits, consents, approvals or other authorizations from Governmental Entities, and to effect all registrations, filings and notices with or to Governmental Entities, as may be required for such Party to consummate the transactions contemplated by this Agreement and to otherwise comply with all applicable laws and regulations in connection with the consummation of the transactions contemplated by this Agreement.

 

(b) The Company shall use its Reasonable Best Efforts to obtain, at its expense, all such waivers, consents or approvals from third parties, and to give all such notices to third parties, as are required to be listed in Section 2.4 of the Disclosure Schedule.

 

4.3  Current Report . As soon as reasonably practicable after the execution of this Agreement, the Parties shall prepare a Current Report on Form 8-K relating to this Agreement and the transactions contemplated hereby (the “Current Report”). Each of the Company and the Parent shall use its Reasonable Best Efforts to cause the Current Report to be filed with the SEC within four business days of the execution of this Agreement and to otherwise comply with all requirements of applicable federal and state securities laws. Further, the Parties shall prepare and file with the SEC an amendment to the Current Report within four business days after the Closing Date, if such Current Report was filed before the Closing Date.

 

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4.4  Operation of Company Business . Except as contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, the Company shall conduct its operations in the ordinary course of business and in material compliance with all applicable laws and regulations and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Effective Time, the Company shall not, without the written consent of the Parent (which shall not be unreasonably withheld or delayed):

 

(a) issue or sell, or redeem or repurchase, any stock or other securities of the Company or any warrants, options or other rights to acquire any such stock or other securities;

 

(b) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;

 

(c) create, incur or assume any indebtedness for borrowed money (including obligations in respect of capital leases) except in the ordinary course of business or in connection with the transactions contemplated by this Agreement; assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;

 

(d) acquire, sell, lease, license or dispose of any assets or property, other than purchases and sales of assets in the ordinary course of business;

 

(e) mortgage or pledge any of its property or assets or subject any such property or assets to any security interest (except in connection with senior debt in existence on the date of this Agreement);

 

(f) discharge or satisfy any security interest or pay any obligation or liability other than in the ordinary course of business;

 

(g) amend its charter, by-laws or other organizational documents;

 

(h) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;

 

(i) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any material contract or agreement;

 

(j) institute or settle any Legal Proceeding;

 

(k) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Merger set forth in Article V not being satisfied; or

 

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(l) agree in writing or otherwise to take any of the foregoing actions.

 

4.5  Access to Company Information .

 

(a) The Company shall permit representatives of the Parent to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Company) to all premises, properties, financial and accounting records, contracts, other records and documents, and personnel of or pertaining to the Company.

 

(b) Each of the Parent and the Acquisition Subsidiary (i) shall treat and hold as confidential any Company Confidential Information (as defined below), (ii) shall not use any of the Company Confidential Information except in connection with this Agreement, and (iii) if this Agreement is terminated for any reason whatsoever, shall return to the Company all tangible embodiments (and all copies) thereof which are in its possession. For purposes of this Agreement, “Company Confidential Information” means any information of the Company that is furnished to the Parent or the Acquisition Subsidiary by the Company in connection with this Agreement; provided , however , that it shall not include any information (A) which, at the time of disclosure, is available publicly other than as a result of non-permitted disclosure by the Parent, the Acquisition Subsidiary or their respective directors, officers or employees, (B) which, after disclosure, becomes available publicly through no fault of the Parent or the Acquisition Subsidiary or their respective directors, officers or employees, (C) which the Parent or the Acquisition Subsidiary knew or to which the Parent or the Acquisition Subsidiary had access prior to disclosure, provided that the source of such information is not known by the Parent or the Acquisition Subsidiary to be bound by a confidentiality obligation to the Company, or (D) which the Parent or the Acquisition Subsidiary rightfully obtains from a source other than the Company, provided that the source of such information is not known by the Parent or the Acquisition Subsidiary to be bound by a confidentiality obligation to the Company.

 

4.6  Operation of Parent Business . Except as contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, the Parent shall (and shall cause each of its Subsidiaries to) conduct its operations in the ordinary course of business and in material compliance with all applicable laws and regulations and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Effective Time and at any time prior to the 10 th after the filing of the Schedule 14F-1 with the SEC, the Parent shall not (and shall cause each of its Subsidiaries not to), without the written consent of the Company, in the case of any action prior the Effective Time, and without the written consent of David Platt, in the case of any action after the Effective Time but prior to the 10 th day following the filing of the Schedule 14F-1 with the SEC:

 

(a) issue or sell, or redeem or repurchase, any stock or other securities of the Parent or any rights, warrants or options to acquire any such stock or other securities;

 

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(b) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;

 

(c) create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;

 

(d) acquire, sell, lease, license or dispose of any assets or property (including without limitation any shares or other equity interests in or securities of any Subsidiary of the Parent or any corporation, partnership, association or other business organization or division thereof);

 

(e) mortgage or pledge any of its property or assets or subject any such property or assets to any security interest;

 

(f) discharge or satisfy any security interest or pay any obligation or liability other than in the ordinary course of business;

 

(g) amend its charter, by-laws or other organizational documents;

 

(h) change in any material respect its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP;

 

(i) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any contract or agreement;

 

(j) institute or settle any Legal Proceeding;

 

(k) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Parent and/or the Acquisition Subsidiary set forth in this Agreement becoming untrue in any material respect or (ii) any of the conditions to the Merger set forth in Article V not being satisfied; or

 

(l) agree in writing or otherwise to take any of the foregoing actions.

 

4.7  Access to Parent Information .

 

(a) The Parent shall (and shall cause the Acquisition Subsidiary to) permit representatives of the Company to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Parent and the Acquisition Subsidiary) to all premises, properties, financial and accounting records, contracts, other records and documents, and personnel of or pertaining to the Parent and the Acquisition Subsidiary.

 

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(b) The Company (i) shall treat and hold as confidential any Parent Confidential Information (as defined below), (ii) shall not use any of the Parent Confidential Information except in connection with this Agreement, and (iii) if this Agreement is terminated for any reason whatsoever, shall return to the Parent all tangible embodiments (and all copies) thereof which are in its possession. For purposes of this Agreement, “Parent Confidential Information” means any information of the Parent or any Parent Subsidiary that is furnished to the Company by the Parent or its Subsidiaries in connection with this Agreement; provided , however , that it shall not include any information (A) which, at the time of disclosure, is available publicly other than as a result of non-permitted disclosure by the Company or its directors, officers or employees, (B) which, after disclosure, becomes available publicly through no fault of the Company or its directors, officers or employees, (C) which the Company knew or to which the Company had access prior to disclosure, provided that the source of such information is not known by the Company to be bound by a confidentiality obligation to the Parent or any Subsidiary of the Parent or (D) which the Company rightfully obtains from a source other than the Parent or a Subsidiary of the Parent, provided that the source of such information is not known by the Company to be bound by a confidentiality obligation to the Parent or any Subsidiary of the Parent.

 

4.8  Indemnification .

 

(a) The Parent shall not, for a period of three years after the Effective Time, take any action to alter or impair any exculpatory or indemnification provisions now existing in the certificate of incorporation or bylaws of the Company for the benefit of any individual who served as a director or officer of the Company at any time prior to the Effective Time, except for any changes which may be required to conform with changes in applicable law and any changes which do not affect the application of such provisions to acts or omissions of such individuals prior to the Effective Time.

 

(b) From and after the Effective Time, the Parent agrees that it will, and will cause the Surviving Corporation to, indemnify and hold harmless each present and former director and officer of the Company (the “Indemnified Executives”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages, liabilities or amounts paid in settlement incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent permitted under Florida law (and the Parent and the Surviving Corporation shall also advance expenses as incurred to the fullest extent permitted under Florida law, provided the Indemnified Executive to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Indemnified Executive is not entitled to indemnification).

 

4.9  Listing of Merger Shares . The Parent shall take whatever steps are necessary to cause the Merger Shares to be eligible for quotation on the OTC Pink.

 

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4.10  Information Provided to Company Stockholders . The Company shall prepare, with the cooperation of the Parent, information to be sent to the holders of Company Shares in connection with receiving their approval of the Merger, this Agreement and related transactions. Such information shall constitute a disclosure of the offer and issuance of the shares of Parent Common Stock to be received by the Company Stockholders in the Merger. The Parent and the Company shall each use Reasonable Best Efforts to cause information provided to such holders to comply with applicable federal and state securities laws requirements. Each of the Parent and the Company agrees to provide promptly to the other such information concerning its business and financial statements and affairs as, in the reasonable judgment of the providing party or its counsel, may be required or appropriate for inclusion in the information sent, or in any amendments or supplements thereto, and to cause its counsel and auditors to cooperate with the other’s counsel and auditors in the preparation of the information to be sent to the holders of Company Shares. The Company will promptly advise the Parent, and the Parent will promptly advise the Company, in writing if at any time prior to the Effective Time either the Company or the Parent shall obtain knowledge of any facts that might make it necessary or appropriate to amend or supplement the information sent in order to make the statements contained or incorporated by reference therein not misleading or to comply with applicable law. The information sent shall contain the recommendation of the Board of Directors of the Company that the holders of Company Shares approve the Merger and this Agreement and the conclusion of the Board of Directors of the Company that the terms and conditions of the Merger are advisable and fair and in the best interests of the Company and such holders. Anything to the contrary contained herein notwithstanding, the Company shall not include in the information sent to such holders any information with respect to the Parent or its affiliates or associates, the form and content of which information shall not have been approved by the Parent in its reasonable discretion prior to such inclusion.

  

ARTICLE V

CONDITIONS TO CONSUMMATION OF MERGER

 

5.1  Conditions to Each Party’s Obligations . The respective obligations of each Party to consummate the Merger are subject to the satisfaction of the following conditions:

 

(a) this Agreement and the Merger shall have received the approval of 100% of the votes represented by the outstanding Company Shares entitled to vote on this Agreement and the Merger; and

 

(b) satisfactory completion by the Parent and the Company of all necessary legal due diligence.

 

5.2  Conditions to Obligations of the Parent and the Acquisition Subsidiary . The obligation of each of the Parent and the Acquisition Subsidiary to consummate the Merger is subject to the satisfaction (or waiver by the Parent) of the following additional conditions:

 

(a) There shall be no Dissenting Shares from the all of the issued and outstanding Company Shares as of the Effective Time;

 

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(b) the Company shall have obtained (and shall have provided copies thereof to the Parent) all waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of the Company, except for any the failure of which to obtain or effect does not, individually or in the aggregate, have a Company Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;

 

(c) the representations and warranties of the Company set forth in this Agreement (when read without regard to any qualification as to materiality or Company Material Adverse Effect contained therein) shall be true and correct as of the date of this Agreement and shall be true and correct as of the Effective Time as though made as of the Effective Time ( provided , however , that to the extent such representation and warranty expressly relates to an earlier date, such representation and warranty shall be true and correct as of such earlier date), except for any untrue or incorrect representation and warranty that, individually or in the aggregate, do not have a Company Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;

 

(d) the Company shall have performed or complied with its agreements and covenants required to be performed or complied with under this as of or prior to the Effective Time, except when any non-performance or non-compliance does not have a Company Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;

 

 

(e) no Legal Proceeding shall be pending wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect; and

 

(f) the Company shall have delivered to the Parent and the Acquisition Subsidiary a certificate to the effect that each of the conditions specified in clauses (a) and (b) (with respect to the Company’s due diligence of the Parent) of Section 5.1 and clauses (a) through (e) (insofar as clause (e) relates to Legal Proceedings involving the Company) of this Section 5.2 is satisfied in all respects.

 

5.3  Conditions to Obligations of the Company . The obligation of the Company to consummate the Merger is subject to the satisfaction of the following additional conditions:

 

(a) the Parent shall have obtained (and shall have provided copies thereof to the Company) all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of the Parent or any of its Subsidiaries, except for any the failure of which to obtain or effect does not, individually or in the aggregate, have a Parent Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;

 

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(b) the representations and warranties of the Parent set forth in this Agreement (when read without regard to any qualification as to materiality or Parent Material Adverse Effect contained therein) shall be true and correct as of the date of this Agreement and shall be true and correct as of the Effective Time as though made as of the Effective Time ( provided , however , that to the extent such representation and warranty expressly relates to an earlier date, such representation and warranty shall be true and correct as of such earlier date), except for any untrue or incorrect representation and warranty that, individually or in the aggregate, do not have a Parent Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;

 

(c) each of the Parent and the Acquisition Subsidiary shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Effective Time, except when any non-performance or non-compliance does not have a Parent Material Adverse Effect or a material adverse effect on the ability of the Parties to consummate the transactions contemplated by this Agreement;

 

(d) no Legal Proceeding shall be pending wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect

 

(e) The Parent shall have entered into the Settlement Agreement and complied with its agreements and covenants required to be performed or complied with under the Settlement Agreement as provided therein;

 

(f) the Parent shall have delivered to the Company a certificate to the effect that each of the conditions specified in clauses (b) and (c) (with respect to the Parent’s due diligence of the Company) of Section 5.1 and clauses (a) through (d) (insofar as clause (d) relates to Legal Proceedings involving the Parent or the Acquisition Subsidiary) of this Section 5.3 is satisfied in all respects; and

 

(g) the total number of shares of Parent Common Stock issued and outstanding immediately prior to the Effective Time shall equal 3,711,213 shares.

 

ARTICLE VI

RELEASE; INDEMNIFICATION

 

6.1  General Release . Effective upon Closing, each Company Stockholder, on his behalf and on behalf of his spouse, heirs, children, executors, administrators, assigns, agents, and past and present attorneys (collectively, the “Stockholder Releasors”), releases and discharges the Company and its parent company, holding company, subsidiaries, affiliates, funds, successors, predecessors, officers, directors, principals, control persons, past and present employees, agents, insurers, past and present attorneys, and assigns (the “Company Releasees”) from all actions, cause of action, suits, debts, dues, sums of money, commissions, salaries, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity, against the Company Releasees that the Shareholder Releasors ever had, now have or hereafter can, shall or may, have for, upon, or by reason of any matter, cause or thing whatsoever, whether or not known or unknown, from the beginning of the world to the day of the date of this Agreement.

 

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6.2  Indemnification

 

(a) Subject to the provisions of this Article VI , and irrespective of any due diligence investigation conducted by Parent with regard to the transactions contemplated hereby, Company agrees to indemnify fully in respect of, hold harmless and defend the Parent, and each of the officers, agents and directors of the Parent, against any damages, liabilities, costs, claims, proceedings, investigations, penalties, judgments, deficiencies, including taxes, expenses (including, but not limited to, any and all interest, penalties and expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever) and losses (each, a “Claim” and collectively “Claims”) to which it or they may become subject arising out of or based on any breach of or inaccuracy in any of the representations and warranties or covenants or conditions made by Company herein in this Agreement.

 

(b) Subject to the provisions of this Article VI , and irrespective of any due diligence investigation conducted by Company with regard to the transactions contemplated hereby, Parent agrees to indemnify fully in respect of, hold harmless and defend the Company, and each of the officers, agents and directors of the Company, against any Claims to which it or they may become subject arising out of or based on any breach of or inaccuracy in any of the representations and warranties or covenants or conditions made by Parent herein in this Agreement.

 

6.3  Survival of Representations and Warranties . Notwithstanding any provision in this Agreement to the contrary, the representations and warranties given or made under this Agreement shall survive the date hereof for a period of twelve (12) months from and after the Closing Date (the last day of such period is herein referred to as the “Expiration Date”), except that any written claim for breach thereof made and delivered prior to the Expiration Date to the party against whom such indemnification is sought shall survive thereafter and, as to any such claim, such applicable expiration will not affect the rights to indemnification of the party making such claim; provided , however , that any representations and warranties that were fraudulently made shall not expire on the Expiration Date and shall survive indefinitely and claims with respect to fraud by any party must be made at any time, as long as such claim is made within a reasonable period of time after discovery by the claiming party.

 

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6.4  Method of Asserting Claims, Etc . The party claiming indemnification is hereinafter referred to as the “Indemnified Party” and the party against whom such claims are asserted hereunder is hereinafter referred to as the “Indemnifying Party.” All Claims for indemnification by any Indemnified Party under this Article VI shall be asserted as follows:

 

(a) In the event that any Claim or demand for which an Indemnifying Party would be liable to an Indemnified Party hereunder is asserted against or sought to be collected from such Indemnified Party by a third party, said Indemnified Party shall, within ten (10) business days from the date upon which the Indemnified Party has Knowledge of such Claim, notify the Indemnifying Party of such claim or demand, specifying the nature of and specific basis for such claim or demand and the amount or the estimated amount thereof to the extent then feasible (which estimate shall not be conclusive of the final amount of such Claim or demand) (the “Claim Notice”). The Indemnified Party’s failure to so notify the Indemnifying Party in accordance with the provisions of this Agreement shall not relieve the Indemnifying Party of liability hereunder unless such failure materially prejudices the Indemnifying Party’s ability to defend against the claim or demand. The Indemnifying Party shall have 30 days from the giving of the Claim Notice (the “Notice Period”) to notify the Indemnified Party: (i) whether or not the Indemnifying Party disputes the liability of the Indemnifying Party to the Indemnified Party hereunder with respect to such Claim or demand, and (ii) whether or not the Indemnifying Party desires, at the sole cost and expense of the Indemnifying Party, to defend the Indemnified Party against such Claims or demand; provided, however, that any Indemnified Party is hereby authorized prior to and during the Notice Period to file any motion, answer or other pleading which he shall deem necessary or appropriate to protect his interests or those of the Indemnifying Party and not prejudicial to the Indemnifying Party. In the event that the Indemnifying Party notifies the Indemnified Party within the Notice Period that he does not dispute liability for indemnification under this Article VI and that he desires to defend the Indemnified Party against such claim or demand and except as hereinafter provided, the Indemnifying Party shall have the right to defend by all appropriate proceedings, which proceedings shall be promptly settled or prosecuted by him to a final conclusion. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party except to the extent that the employment thereof has been specifically authorized by the Indemnifying Party in writing, the Indemnifying Party has failed after a reasonable period of time to assume such defense and to employ counsel, or in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Indemnifying Party and the position of such Indemnified Party (a “Material Conflict”). If requested by the Indemnifying Party and there is no Material Conflict, the Indemnified Party agrees to cooperate with the Indemnifying Party and his counsel in contesting any Claim or demand which the Indemnifying Party elects to contest or, if appropriate and related to the Claim in question, in making any Counterclaim against the person asserting the third party Claim or demand, or any cross-complaint against any person. No Claim for which indemnity is sought hereunder and for which the Indemnifying Party has acknowledged liability for indemnification under this Article VI may be settled without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

 

(b) In the event any Indemnified Party should have a Claim against any Indemnifying Party hereunder which does not involve a Claim or demand being asserted against or sought to be collected from him by a third party, the Indemnified Party shall give a Claim Notice with respect to such Claim to the Indemnifying Party. If, after receipt of a Claim Notice, the Indemnifying Party does not notify the Indemnified Party within the Notice Period that he disputes such Claim, then the Indemnifying Party shall be deemed to have admitted liability for such Claim in the amount set forth in the Claim Notice.

 

(c) The Indemnifying Party shall be given the opportunity to defend the respective Claim.

 

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ARTICLE VII

DEFINITIONS

 

For purposes of this Agreement, each of the following defined terms is defined in the Section of this Agreement indicated below.

 

Defined Term   Section
Acquisition Subsidiary   Introduction
Affiliate   2.13(a)(vii)
Agreement   Introduction
Articles of Merger   1.1
Certificates   1.7
Claim Notice   6.4(a)
Claims   6.2
Closing   1.2
Closing Date   1.2
Code   Introduction
Company   Introduction
Company Balance Sheet Date   2.6
Company Confidential Information   4.5(b)
Company Financial Statements   2.6
Company Material Adverse Effect   2.1
Company Shares   1.5(a)
Company Stockholders   1.3(d)
Current Report   4.3
Disclosure Schedule   Article II
Dissenting Shares   1.6(a)
Effective Time   1.1
Employee Benefit Plan   2.19(a)(i)
Exchange Act   2.6
DGCA   1.1
GAAP   2.6
Governmental Entity   2.4
Indemnified Executives   4.9(b)
Intellectual Property   2.27(a)
Intellectual Property Rights   2.27(a)
Legal Proceeding   2.17
Merger   Introduction
Merger Shares   1.5(b)
OTC Pink   3.2
Parent   Introduction
Parent Common Stock   1.5(a)
Parent Confidential Information   4.7(b)
Parent Disclosure Schedule   Article III
Parent Financial Statements   3.8
Parent Material Adverse Effect   3.1
Parent Permits   3.24
Parent Reports   3.6
Party   Introduction
Permits   2.23
Reasonable Best Efforts   4.1
SEC   1.13
Securities Act   1.14
Stockholder Approval   2.3
Subsidiary   2.5(a)
Surviving Corporation   1.1
Tax Returns   2.9(a)(ii)
Taxes   2.9(a)(i)
Third Party Intellectual Property Rights   2.27(d)
Transaction Documentation   3.3

 

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ARTICLE VIII

TERMINATION

 

8.1  Termination by Mutual Agreement . This Agreement may be terminated at any time by mutual consent of the Parties, provided that such consent to terminate is in writing and is signed by each of the Parties.

 

8.2  Termination by Operation of Law . This Agreement may be terminated by any Party hereto if there shall be any statute, rule or regulation that renders consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited, or a court of competent jurisdiction or any government (or governmental authority) shall have issued an order, decree or ruling, or has taken any other action restraining, enjoining or otherwise prohibiting the consummation of such transactions and such order, decree, ruling or other action shall have become final and nonappealable.

 

8.3  Effect of Termination or Default; Remedies . In the event of termination of this Agreement as set forth above, this Agreement shall forthwith become void and there shall be no liability on the part of any Party hereto, provided that such Party is a non-defaulting Party. The foregoing shall not relieve any Party from liability for damages actually incurred as a result of such Party’s breach of any term or provision of this Agreement.

 

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ARTICLE IX

MISCELLANEOUS

 

9.1  Press Releases and Announcements . No Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties; provided , however , that any Party may make any public disclosure it believes in good faith is required by applicable law, regulation or stock market rule (in which case the disclosing Party shall use reasonable efforts to advise the other Parties and provide them with a copy of the proposed disclosure prior to making the disclosure).

 

9.2  No Third Party Beneficiaries . This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns; provided , however , that (a) the provisions in Article I concerning issuance of the Merger Shares and Article VI concerning indemnification are intended for the benefit of the Company Stockholders and (b) the provisions in Section 4.8 concerning indemnification are intended for the benefit of the individuals specified therein and their successors and assigns.

 

9.3  Entire Agreement . This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, with respect to the subject matter hereof.

 

9.4  Succession and Assignment . This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties; provided that the Acquisition Subsidiary may assign its rights, interests and obligations hereunder to a wholly-owned subsidiary of the Parent.

 

9.5  Counterparts . This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

9.6  Headings . The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

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9.7  Notices . All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:

 

If to the Company 

 

BioxyTran Inc.

233 Needham Street, 
Suite 300 

Newton MA, 02464 

Attention: Mr. David Platt, PhD

E-mail: david.platt@bioxytraninc.com

 

 

Copy to (which copy shall not constitute notice hereunder):

 

Law Office of R.J. Newman, P.C.

1872 Pleasantville Road, Suite 177
Briarcliff Manor, NY 10510

Telephone: 917.494.9974

Facsimile: 212.202.6055

E-mail: rj@newlawtech.com

 

If to the Parent or

the Acquisition Subsidiary (prior to the Closing):

 

U.S. Rare Earth Minerals, Inc.

78365 Highway 111
Suite 287

La Quinta, Cal 92253
Att: Larry Bonafide

E-mail: Bear@us-rem.com

 

Copy to (which copy shall not
constitute notice hereunder):

 

Henry C. Casden, Esq.
73-525 El Paseo Suite E-2516

Palm Desert, CA 92260

Casdenlaw@gmail.com

 

Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the Party for whom it is intended. Any Party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

9.8  Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of New York.

 

9.9  Amendments and Waivers . The Parties may mutually amend any provision of this Agreement at any time prior to the Effective Time. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the Parties. No waiver of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver. No waiver by any Party with respect to any default, misrepresentation or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

  35  

 

 

9.10  Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

 

9.11  Submission to Jurisdiction . Each of the Parties (a) submits to the jurisdiction of any state or federal court sitting in the County of New York in the State of New York in any action or proceeding arising out of or relating to this Agreement, (b) agrees that all claims in respect of such action or proceeding may be heard and determined in any such court, and (c) agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto. Any Party may make service on another Party by sending or delivering a copy of the process to the Party to be served at the address and in the manner provided for the giving of notices in Section 9.7. Nothing in this Section 9.11, however, shall affect the right of any Party to serve legal process in any other manner permitted by law.

 

9.12  Construction .

 

(a) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

 

(b) Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

 

9.13  Separate Counsel . Each Party hereby expressly acknowledges that it has been advised to seek its own separate legal counsel for advice with respect to this Agreement, and that no counsel to any Party hereto has acted or is acting as counsel to any other Party hereto in connection with this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

  36  

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement and Plan of Merger and Reorganization as of the date first above written.

 

  PARENT:
 

 

U.S. RARE EARTH MINERALS, INC.

     
  By:  
    Name: Lawrence Bonefide
    Title: Chairman
     
 

ACQUISITION SUBSIDIARY:

   
 

BIOXY ACQUISITION CORP.

     
  By:  
    Name: Lawrence Bonefide
    Title: President
     
 

COMPANY:

   
 

BIOXYTRAN, INC.

     
  By:  
    Name David Platt
    Title: Chief Executive Officer

 

  37  

 

 

DISCLOSURE SCHEDULES

TO

AGREEMENT AND PLAN OF MERGER

AND REORGANIZATION

 

SCHEDULE 2.4

(Noncontravention)

 

NONE

 

 

 

 

 

 

 

 

 

SCHEDULE 2.5

(Subsidiaries)

 

NONE

 

 

 

SCHEDULE 2.7

(Absence of Certain Changes)

 

 None.

 

 

 

 

 

 

 

SCHEDULE 2.12

(Real Property Leases)

 

None

 

 

 

SCHEDULE 2.13

(Contracts)

 

Consulting Agreements with David Platt and Ola Soderquist. 

Indemnification provision in constituent documents.

 

  38  

 

 

SCHEDULE 2.16

(Permits)

 

None

 

 

 

 

SCHEDULE 2.17

(Certain Business Relationships with Affiliates)

 

None

 

 

SCHEDULE 2.20

(Intellectual Property)

 

(b) None

(c) [Provisional patents] 

 

 

SCHEDULE 3.9

LIABILITIES AT CLOSING

 

Vendor   Open Balance  
Edgar Agents, LLC   $ 2,176.50  
Edgar Agents, LLC   $ 191.50  
Edgar Agents, LLC   $ 109.00  
NASDAQ OMX Corporate Solutions   $ 516.00  
NASDAQ OMX Corporate Solutions/West   $ 258.00  
Pinnacle Accountancy Group   $ 8,500.00  
         
Grand total   $ 11,751.00  

 

SCHEDULE 3.14

(Panace Mining Claims)

Eagle 3 NMC1004017

Eagle 4 NMC1006216

Eagle 5 NMC1006218

Eagle 6 NMC1006217

Eagle 7 NMC1005292

Eagle 8 NMC1007241

Eagle 9 NMC1003133

Eagle 10 NMC1003134

Eagle 11 NMC1003135

 

  39  

 

 

SCHEDULE 3.15

(Real Property Leases)

 

None

 

SCHEDULE 3.16

(Contracts)

 

None 

 

 

 

 

 

SCHEDULE 3.17

(Permits)

 

None

 

 

 

SCHEDULE 3.18

(Certain Business Relationships with Affiliates)

None

 

 

40

 

Exhibit 10.11

 

ASSET PURCHASE AGREEMENT

 

This  ASSET PURCHASE AGREEMENT  (this “ Agreement ”), dated as of September 17 th , 2018, is entered into by and between, U.S. Rare Earth Minerals, Inc., a Nevada corporation, with its principal executive offices located at 78365 Highway 111 suite 287, La Quinta, California 92243 (“ Seller ”) and U.S. Rare Earth Minerals, Inc., a Wyoming corporation, with its offices at 1621 Central Avenue, Cheyenne, WY 82001 (“ Buyer ”). 

 

RECITALS

 

WHEREAS, Mrs. Eleanor Yarbray (the “ Creditor ”) holds a 6% Senior Unsubordinated Promissory Note, dated May 23, 2013, in the principal amount of One Hundred and Ten Thousand Dollars ($110,000) (the “ Promissory Note ”);

 

WHEREAS , Creditor has a security interest in substantially all of the assets of the Seller;

 

WHEREAS , all interest and principal on the Promissory Note was due and payable on or before August 23, 2013 and is now in default;

 

WHEREAS , as a condition and inducement to Creditor to enter into an Accord and Satisfaction Agreement (the “ Accord and Satisfaction ”) releasing Seller of its obligations to Creditor under the Promissory Note, Seller shall execute and deliver this Agreement with Buyer contemporaneously with the execution of the Accord and Satisfaction;

 

WHEREAS , Seller is engaged in the Business (as defined below);

 

WHEREAS , Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, the assets and liabilities used primarily in the Business (other than the Excluded Assets (as defined in Section 2.02)), subject to the terms and conditions set forth herein);

 

NOW, THEREFORE , in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Article I.
DEFINITIONS

 

Action ” means any action, appeal, petition, plea, charge, complaint, claim, suit, demand, litigation, grievance, arbitration, mediation, hearing, inquiry, investigation or similar event, occurrence, or proceeding, including, without limitation, proceedings by or before any Governmental Authority, arbitrator or mediator.

 

Affiliate ” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For the purposes of this definition, the term “ control ” (including the terms “ controlling ”, “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.

 

  Page 1 of 27  

 

 

Agreement and Plan of Merger ” means, the Agreement and Plan of Merger and Reorganization between Seller, Bioxy Acquisition Corp and Bioxytran, Inc, dated the even date hereof.

 

Assigned Contracts ” has the meaning set forth in Section 2.01(b).

 

Assumed Liabilities ” has the meaning set forth in Section 2.03.

 

Bill of Sale ” has the meaning set forth in Section 3.02(a)(i).

 

Benefit Plan ” means (i) each “ employee   benefit plan ” (as defined in Section 3(3) of ERISA, without regard to whether ERISA applies thereto), (ii) all employment, deferred compensation, retention, consulting, severance, individual compensation or similar agreements, and (iii)  all other retention, change-in-control, bonus, stock option, stock purchase, restricted stock, stock appreciation right, phantom equity, incentive, deferred compensation, medical, life insurance, flexible spending, supplemental retirement, severance, vacation, salary continuation, leave of absence, educational assistance, company car, housing allowance, paid time off, welfare, fringe-benefit or other benefit plans, programs, policies, arrangements or agreements of any kind (whether written or oral), and covering one or more Business Employees, current or former directors of the Business, or the beneficiaries or dependents of any such Persons that is maintained, sponsored, contributed to, or required to be contributed to by Seller, or under which Seller has any material liability for premiums or benefits.

 

Books and Records ” has the meaning set forth in Section 2.01(g).

 

Business ” means the (i) sales and distribution of certain products derived from the Buyer’s mining activities relating to natural mineral deposits commonly known as Calcium Montmorillonite, (ii) sales and marketing and distribution of a product extracted in the mining process under the name “Excelerite®” and (iii) the exploitation of mining rights granted by M Strata LLC to Buyer for land located in the southwestern part of southern Nevada under the First Amended and Restated Mining Agreement, dated November 1, 2013 between M. Strata LLC and the Buyer.

 

Business Day ” means any day except Saturday, Sunday or any other day on which commercial banks located in New York, New York are authorized or required by Law to be closed for business.

 

Business Employee ” means any Person who is a present or former employee of Seller at any time prior to or on the Closing Date, and who provided or previously provided any services relating to the Business.

 

Buyer ” has the meaning set forth in the preamble.

 

Buyer Indemnified Party(ies) ” has the meaning set forth in Section 7.02.

 

Closing ” has the meaning set forth in Section 3.01.

 

Closing Date ” has the meaning set forth in Section 3.01

 

Code ” means the Internal Revenue Code of 1986, as amended.

 

Contracts ” means all legally binding contracts (oral or written), leases, mortgages, licenses, sublicenses, instruments, notes, commitments, undertakings, indentures, letters of intent, memorandum of understanding, memorandum of agreement and other agreements including purchase orders.

 

  Page 2 of 27  

 

 

Current Assets of the Business ” means the current assets set forth in Section 2.01(i) of the Disclosure Schedule.

 

Current Liabilities of the Business ” means the current liabilities set forth in Section 2.03(d) of the Disclosure Schedules.

 

De-Minimis Losses ” has the meaning set forth in Section 7.04(b).

 

Designated Person ” has the meaning set forth in Section 8.14(a).

 

Direct Claim ” has the meaning set forth in Section 7.05(c).

 

Disclosure Schedules ” means the Disclosure Schedules delivered by Seller concurrently with the execution and delivery of this Agreement.

 

Dollars or $ ” means the lawful currency of the United States.

 

Encumbrance ” means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment, encumbrance or other restriction.

 

Environmental Law ” means any and all federal, state or local Laws (including common law), any Governmental Order or binding agreement with any Governmental Authority and any judicial or administrative interpretation thereof: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “  Environmental Law  ” includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

 

“Environmental Liabilities” means any and all environmental response costs (including costs of remediation), damages, natural resource damages, settlements, consulting fees, expenses, penalties, fines, orphan share, prejudgment and post-judgment interest, court costs, attorneys' fees, and other liabilities incurred or imposed (i) pursuant to any order, notice of responsibility, directive (including requirements embodied in Environmental Laws), injunction, judgment or similar act (including settlements) by any Governmental Authority or court of competent jurisdiction to the extent arising out of any violation of, or remedial obligation under, any Environmental Laws which are attributable to the ownership or operation of the Purchased Assets prior to or after the Closing Date or (ii) pursuant to any claim or cause of action by a Governmental Authority or other Person for personal injury, property damage, damage to natural resources, remediation or response costs to the extent arising out of any violation of, or any remediation obligation under, any Environmental Laws which is attributable to the ownership or operation of the Purchased Assets prior to or after the Closing Date.

 

  Page 3 of 27  

 

 

Equity Interest ” means, with respect to any Person, any share, share capital, capital stock, partnership, limited liability company, member or similar interest in such person, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable thereto or therefor.

 

Excluded Assets ” has the meaning set forth in Section 2.02.

 

Excluded Liabilities ” has the meaning set forth in Section 2.04.

 

GAAP ” means United States generally accepted accounting principles in effect from time to time.

 

Governmental Authority ” means any United States or non-United States national, federal, state, local, provincial or international government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any stock exchange or self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

Governmental Order ” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

 

Indebtedness ” means, as to any Person, without duplication, (a) all obligations or liabilities of such Person for borrowed money or in respect of loans or advances (including, without limitation, reimbursement and all other obligations with respect to surety bonds, guarantees, letters of credit, banker’s acceptances, corporate credit card or business credit lines whether or not matured, indemnities, performance letters, comfort letters and other arrangements similar to the foregoing); (b) all obligations or liabilities of such Person under or pursuant to any arrangement to pay the deferred purchase price of property or services or the acquisition of any business, as obligor or otherwise; (c) all obligations or liabilities of such Person under or pursuant to any interest rate and currency swaps, caps collars, interest rate cap agreements, interest rate swap agreements, foreign currency exchange agreements and similar agreements or hedging devices; (d) all obligations or liabilities created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of Seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (e) all obligations or liabilities of such Person under or pursuant to leases which are required to be, in accordance with GAAP, recorded as capital leases; (f) all obligations or liabilities secured by any Encumbrance on any property or asset owned by that Person, regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is non-recourse to the credit of that Person; (g) all obligations or liabilities of such Person for off balance sheet financing of such Person (other than operating leases); (h) all obligations or liabilities of such Person evidenced by bonds, debentures, notes or other similar securities or instruments; (i) all obligations or liabilities of such Person for any direct or indirect guarantees made by such Person of any Indebtedness of any other Person described in clauses (a) through (h); and (j) any accrued but unpaid interest, Taxes, interest, unpaid prepayment or redemption penalties, premiums or payments and unpaid fees and expenses that are payable in connection with retirement, payment or prepayment of any of the foregoing liabilities or obligations.

 

  Page 4 of 27  

 

 

Indemnified Party ” has the meaning set forth in Section 7.05.

 

Indemnifying Party ” has the meaning set forth in Section 7.05.

 

Intellectual Property ” means any and all intellectual property rights in the world arising under the Laws of any jurisdiction with respect to, arising from or associated with the following: (a) all Internet addresses and domain names (“ Domain Names ”); (b) trade names, trademarks and service marks (registered and unregistered), trade dress, industrial designs, brand names, trade dress rights, logos, emblems, signs or insignia, social media handles and names, and similar rights and applications to register any of the foregoing, and all goodwill associated therewith throughout the world (collectively, “ Marks ”); (c) copyrights and works of authorship (including copyrights in software programs) and registrations and applications therefor and all other rights corresponding thereto, moral rights, database and design rights, and mask works and registrations and applications therefor (collectively, “ Copyrights ”); (d) know-how, discoveries, trade secrets, methods, processes, technical data, specifications, research and development information, technology, data bases and other proprietary or confidential information, including customer lists, in each case that derives economic value from not being generally known to other Persons who can obtain economic value from its disclosure, but excluding any Copyrights or Patents that cover or protect any of the foregoing (collectively, “ Trade Secrets ”); and (f) all other intellectual property and industrial property rights and assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing.

 

Knowledge of Seller ” or any other similar knowledge qualification, means the actual knowledge, after reasonable investigation, of those persons listed on Section 1.01(d) of the Disclosure Schedules and that knowledge which such Persons would have acquired after using commercially reasonable and customary efforts to make a due inquiry into the underlying subject.

 

Law ” means any domestic or foreign statute, law, ordinance, regulation, rule, code, order, injunction, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority and generally accepted industry standards, including PCI-DSS and the Digital Advertising Alliance.

 

Liability ” means any Indebtedness, obligation, or liability, including any interest, penalties, fees, costs and expenses, whether known or unknown, matured or unmatured, accrued or unaccrued, vested or unvested, asserted or unasserted, actual or contingent.

 

Losses ” means all losses, damages, liabilities, deficiencies, claims, interest, awards, judgments, penalties, costs or expenses, including reasonable attorneys’ fees, costs and other out-of-pocket expenses incurred in investigating, preparing or defending the foregoing.

 

Person ” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

Purchase Price ” has the meaning set forth in Section 2.05.

 

Purchased Assets ” has the meaning set forth in Section 2.01.

 

Receivables ” means all receivables (including, without limitation, accounts receivable, loans receivable and customer advances) arising from or related to the Business and which are set forth in Section 2.01(a) of the Disclosure Schedules.

 

  Page 5 of 27  

 

 

Representative ” means, with respect to any Person, any and all directors, partners, members, managers, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

SEC ” means the United States Securities and Exchange Commission.

 

Seller Indemnified Party(ies) ” has the meaning set forth in Section 8.03.

 

Tangible Personal Property ” has the meaning set forth in Section 2.01(d).

 

Taxes ” means (i) all federal, state, local or foreign taxes, including all income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges in the nature of a tax, (ii) all interest, penalties, fines, additions to tax or additional amounts imposed by any Governmental Authority in connection with any item described in clause (i), and (iii) any liability in respect of any items described in clauses (i) or (ii) payable by reason of Contract, assumption, transferee liability, operation of Law, or Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under Law).

 

Tax Return ” means any return, report or statement filed or required to be filed with a Governmental Authority with respect to any Taxes (including any elections, declarations, schedules or attachments thereto, and any amendment thereof) including any information return, claim for refund, amended return or declaration of estimated Taxes.

 

Third Party Claim ” has the meaning set forth in Section 7.05(a).

 

Transaction Documents ” means this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, the Accord and Satisfaction, the Agreement and Plan of Merger, and the other agreements, instruments and documents required to be delivered at the Closing.

 

Article II.
PURCHASE AND SALE

 

Section 2.01 Purchase and Sale of the Purchased Assets . Subject to the terms and conditions set forth herein, at the Closing, Seller shall, sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller all right, title and interest in, to and under the business, properties, assets, goodwill and rights of Seller of whatever kind and nature, real or personal, tangible or intangible, that are owned, leased, used or licensed by Seller and primarily used in the operation of the Business as of the Closing Date, in each case, to the extent that such business, assets, properties, goodwill and rights exist as of the Closing Date and primarily relate to the Business, except for the Excluded Assets (collectively, the “ Purchased Assets ”), including all of such right, title and interest in and to the following:

 

(a) all Receivables as set forth in Section 2.01(a) of the Disclosure Schedules;

 

(b) all Contracts as set forth in Section 2.01(b) of the Disclosure Schedules, including the Intellectual Property Agreements (the “ Assigned Contracts ”);

 

  Page 6 of 27  

 

 

(c) the Intellectual Property set forth in Section 2.01(c) of the Disclosure Schedules;

 

(d) all furniture, fixtures, equipment, supplies, inventory and other tangible personal property of the Business, as listed on Section 2.01(d) of the Disclosure Schedules (the “ Tangible Personal Property ”);

 

(e) all leased real property of the Business listed on Section 2.01(e) of the Disclosure Schedules;

 

(f) all Permits used or held for use primarily in connection with the Business as set forth in Section 2.01(f) of the Disclosure Schedules;

 

(g) copies of Sellers’ the following books and records pertaining to the Purchased Assets: (i) executed copies of all of the Assigned Contracts; (ii) equipment, products and other warranties; (iii) all technical information and data, maps, computer files, diagrams, blueprints and schematics; (iii) all filings made with or records required to be kept by any Governmental Authority; (iv) all research and development reports; (v) all equipment and operating logs; (vi) all creative, promotional or advertising materials; (vii) all customer, vendor and supplier invoices and lists, client and supplier correspondence (in all cases, in any form or medium, including computerized media), mailing lists and other distribution lists; and (viii) all sales data and information, billing records and manuals (“ Books and Records ”);

 

(h) all credits, prepaid expenses, deferred charges, advance payments, security deposits and prepaid items that primarily relate to the Purchased Assets (except for Tax credits, Tax refunds and other Tax assets);

 

(i) all Current Assets of the Business listed in Section 2.01(i) of the Disclosure Schedule, Wells Fargo Bank Accounts and notes receivables;

 

(j) all rights to receive mail and other communications related to the Business;

 

(k) all telephone, facsimile numbers and email addresses of the Business;

 

(l) all historical records, images, advertisements, brochures and similar items related to or used or held for use in connection with the Business;

 

(m) all goodwill, trade secrets and confidential information associated with the Business including, without limitation, the goodwill associated with existing customer relationships of the Business, and all rights, claims or credits relating to or deriving from, any of the assets described in the foregoing clauses; and

 

(n) the sole right to use the name “U.S. Rare Earth Minerals, Inc.” and derivations thereof after the Seller has changed its name in the State of Nevada, the SEC and the Financial Industry Regulatory Association.

 

  Page 7 of 27  

 

 

Section 2.02 Excluded Assets. Other than the Purchased Assets subject to Section 2.01, Buyer expressly understands and agrees that it is not purchasing or acquiring, and Seller is not selling or assigning, any other assets or properties of Seller, and all such assets and properties listed below shall be excluded from the Purchased Assets (the “ Excluded Assets ”). Excluded Assets are the following assets and properties of Seller:

 

(a) all Contracts that are not Assigned Contracts; 

 

(b) the corporate seals, organizational documents, minute books, stock books, Tax Returns and related records and workpapers, books of account or other records having to do with the corporate organization of Seller, all employee-related or employee benefit-related files or records and any other books and records which Seller is prohibited from disclosing or transferring to Buyer under applicable Law and is required by applicable Law to retain;

 

(c) all insurance policies of Seller and all rights to applicable claims and proceeds thereunder;

 

(d) all Benefit Plans and trusts or other assets attributable thereto;

 

(e) all securities or other Equity Interests of any Person owned or held by Seller; and

 

(f) all documents maintained by Seller in connection with the transactions contemplated by this Agreement or any of the Transaction Documents.

 

Section 2.03 Assumed Liabilities. Subject to the terms and conditions set forth herein, at the Closing, Buyer shall assume and agree to pay, perform and discharge when due the following (collectively, the “ Assumed Liabilities ”):

 

(a) all trade accounts payable of Seller to third parties in connection with the Business that remain unpaid as of the Closing Date;

 

(b) all liabilities and obligations under the Assigned Contracts arising from the ownership, operation and conduct of the Business after the Closing, except those liabilities and obligations relating to the Excluded Assets or Excluded Liabilities; 

 

(c) all Liabilities for (i) Taxes with respect to the Business or the Purchased Assets and (ii) Transfer Taxes for which Buyer is responsible under Section 6.08(d);

 

(d) all Current Liabilities of the Business as set forth in Section 2.03(d) of the Disclosure Schedules;

 

(e) all Environmental Liabilities associated with the Purchased Assets whether in existence prior to or after the Closing Date;

 

(f) all Actions against Seller arising prior to the Closing Date;

 

(g) any Liabilities for (i) Taxes with respect to the Business or the Purchased Assets arising after the Closing Date, (ii) Taxes of Seller arising prior to the Closing Date and (iii) Transfer Taxes;

 

(h) any default or breach of any Contract, breach of warranty, tort, infringement, violation of Laws or environmental, health or safety matter; and,

 

(i) all Indebtedness of the Business on the Closing Date, together with all interest due thereon.

 

  Page 8 of 27  

 

 

Section 2.04 Excluded Liabilities . Buyer shall not assume and shall not be responsible to pay, perform or discharge any liabilities or obligations of Seller (collectively, the “ Excluded Liabilities ”) as set forth below:

 

(a) any liabilities or obligations of Seller after the Closing Date not associated with the Business or the Purchased Assets;

 

(b) any liability, obligation or commitment arising out of any Contract that is not an Assigned Contract;

 

(c) any Liabilities for Taxes with respect to the Seller arising after to the Closing Date and that are not associated with the Business or the Purchased Assets and

 

(d) any liability, obligation or commitment of any of Sellers to the extent relating to, or arising out of, any Excluded Asset, or to the extent arising out of the ownership by Seller of the Excluded Assets or associated with the realization of the benefits of any Excluded Asset or the business of the Seller after the Closing date.

 

Section 2.05 Purchase Price. The aggregate purchase price for the Purchased Assets (the “ Purchase Price ”) shall be One dollar ($1.00).

 

Article III.
CLOSING

 

Section 3.01 Closing .  Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at such place as mutually determined by the parties Contemporaneously with the execution of the Accord and Satisfaction; provided, that all the conditions to Closing set forth in Article VII are either satisfied or waived.  The date on which the Closing occurs is herein referred to as the “ Closing Date .”

 

Section 3.02 Closing Deliverables.

 

(a) At the Closing, Seller shall deliver to Buyer the following:

 

(i) a bill of sale in the form of  Exhibit A  hereto (the “ Bill of Sale ”) duly executed by Seller, transferring the tangible personal property included in the Purchased Assets to Buyer;

 

(ii) an assignment and assumption agreement in the form of  Exhibit B  hereto (the “ Assignment and Assumption Agreement ”) duly executed by Seller, effecting the assignment to and assumption by Buyer of the Purchased Assets and the Assumed Liabilities; and

 

(iii) a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Seller certifying (i) the names and signatures of the officers of Seller who are authorized to sign this Agreement and the Transaction Documents and the other documents to be delivered hereunder and thereunder, (ii) that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Seller authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and (iii) that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

 

  Page 9 of 27  

 

 

(b) At the Closing, Buyer shall deliver to Seller the following:

 

(i) the Purchase Price;

 

(ii) Assignment and Assumption Agreement duly executed by Buyer; and

 

(iii) a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying (i) the names and signatures of the officers of Buyer authorized to sign this Agreement, the Transaction Documents and the other documents to be delivered hereunder and thereunder, (ii) that attached thereto are true and complete copies of all resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and (iii) that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby.

 

Article IV.
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Buyer that the statements contained in this Article IV are true and correct as of the date hereof and as of the Closing Date.

 

Section 4.01 Organization and Qualification of Seller .  Seller is duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation and has all necessary corporate or entity power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted and contemplated to be conducted through Closing. Except as would not, individually or in the aggregate, be expected to be material to the Business taken as a whole. Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the ownership of the Purchased Assets or the operation of the Business as currently conducted makes such licensing or qualification necessary.

 

Section 4.02 Authority of Seller .  Seller has all necessary corporate power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement has been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).  When each other Transaction Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution and delivery by Buyer and each other party thereto), such Transaction Document will constitute a legal and binding obligation of Seller enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

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Section 4.03 No Conflicts; Consents .  Except as set forth in Section 4.03 of the Disclosure Schedules, the execution, delivery and performance by Seller of this Agreement and the other Transaction Documents to which Seller is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) result in a violation or breach of any provision of the certificate of incorporation or by-laws of Seller; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to Seller, the Business,  the Purchased Assets or the Assumed Liabilities; (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any Contract; (d) require the consent, notice, vote, approval or other action by the stockholders of Seller; or (e) result in the creation or imposition of any Encumbrance on any Purchased Asset. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

 

Section 4.04 Scope of Representations of Seller.

 

Seller disclaims all liability and responsibility for any representation, warranty, statements or communications (orally or in writing) to Buyer, including any information contained in any opinion, information or advice that may have been provided to Buyer by any employee, officer, director, agent, consultant, engineer or engineering firm, trustee, representative, investment banker, financial advisor, partner, member, beneficiary, stock holder or contractor of Seller whenever and however made, including those made in any data room or internet site and any supplements or amendments thereto or during any negotiations with respect to this Agreement or any confidentiality agreement previously executed by the Parties with respect to the Purchased Assets.

 

SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, STATUTORY OR IMPLIED, AS TO (I) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY DATA, INFORMATION OR RECORDS FURNISHED TO BUYER IN CONNECTION WITH THE ASSETS OR OTHERWISE CONSTITUTING A PORTION OF THE ASSETS; (II) THE PRESENCE, QUALITY AND QUANTITY OF PURCHASED ASSETS OR RESERVES (IF ANY) ATTRIBUTABLE TO THE PURCHASED ASSETS; (III) THE ABILITY OF THE PURCHASED ASSETS TO PRODUCE CALCIUM MONTMORILLONITE OR “EXCELERITE ®”; (iv) THE PRESENT OR FUTURE VALUE OF THE ANTICIPATED INCOME, COSTS OR PROFITS, IF ANY, TO BE DERIVED FROM THE PURCHASED ASSETS; (vi) THE ENVIRONMENTAL CONDITION OF THE PURCHASED ASSETS; (v) THE TAX ATTRIBUTES OF PURCHASED ASSETS; AND (VI) ANY OTHER MATTERS CONTAINED IN OR OMITTED FROM ANY INFORMATION OR MATERIAL FURNISHED TO BUYER BY SELLER OR OTHERWISE CONSTITUTING A PORTION OF THE PURCHASED ASSETS. ANY DATA, INFORMATION OR OTHER RECORDS FURNISHED BY SELLER ARE PROVIDED TO BUYER AS A CONVENIENCE AND BUYER’S RELIANCE ON OR USE OF THE SAME IS AT BUYER’S SOLE RISK.

 

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(a) Buyer has, or by Closing will have, made its own independent investigation, analysis and evaluation of the transactions contemplated by this Agreement (including Buyer’s own estimate and appraisal of the value of Purchased Assets and an independent assessment and appraisal of the environmental risks and liabilities associated with the acquisition of the Purchased Assets). Buyer has had, or will have prior to Closing, access to perform its investigation and has not relied on any representations by Seller other than those expressly set forth in this Agreement.

 

(b) Except for the Seller’s express representations and warranties in this Article IV, the Purchased Assets are to be sold AS IS AND WHERE IS AND WITHOUT WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, MERCHANTABILITY, CONDITION OR FITNESS FOR A PARTICULAR PURPOSE. PRIOR TO CLOSING, BUYER SHALL HAVE INSPECTED THE ASSETS AND UPON CLOSING WILL ACCEPT THE ASSETS “AS IS,” “WHERE IS,” AND “WITH ALL FAULTS” AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR.  

 

Article V.
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof and as of the Closing Date.

 

Section 5.01 Organization of Buyer . The Buyer is duly organized, validly existing and in good standing under the Laws of the State of Wyoming.

 

Section 5.02 Authority of Buyer . Buyer has all necessary organizational power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite organizational power on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered by Buyer (assuming due authorization, execution and delivery by Seller and each other party thereto), such Transaction Document will constitute a legal and binding obligation of Buyer enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

 

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Section 5.03 No Conflicts; Consents .  The execution, delivery and performance by Buyer of this Agreement and the other Transaction Documents to which Buyer is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) result in a violation or breach of any provision of any organizational document of Buyer; (b) result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which Buyer is a party. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

 

Section 5.04 Legal Proceedings. There are no Actions or other legal proceedings pending or, to Buyer’s knowledge, threatened in writing against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

 

Article VI.
COVENANTS

 

Section 6.01 Public Announcements .  Buyer, on the one hand, and Seller, on the other hand, shall consult with each other before issuing any press release or otherwise making any public statement with respect to this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby and shall not issue any such press release or make any such public statement without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed;  provided however , that Buyer or Seller may, without the prior written consent of the other party, issue such press release or make such public statement as may, upon the advice of counsel, be required by applicable Law or stock exchange requirements.

 

Section 6.02 Bulk Sales Laws .  The parties hereby waive compliance with the provisions of any bulk sales, bulk transfer or similar Laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the Purchased Assets to Buyer.

 

Section 6.03 Tax Matters.

 

(a) Seller and Buyer agree to furnish or cause to be furnished to the other, upon request, as promptly as practicable, information and assistance relating to the Business and the Purchased Assets, including access to Books and Records, as is reasonably necessary in connection with (i) the preparation or filing of any Tax Return by Buyer or Seller, (ii) the making of any Tax election by Buyer or Seller, (iii) Buyer or Seller’s claim for any Tax refund, (iv) the determination of liability for Taxes, and (v) any audit, examination or other proceeding in respect of Taxes related to the Business or the Purchased Assets. Each of Buyer and Seller shall retain all Tax Returns, work papers and other material records or other documentation in its possession (or in the possession of any Affiliate) in respect of Tax matters relating to the Business and the Purchased Assets for any Tax period that includes the Closing Date and all prior taxable periods until the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate.

 

(b) Taxes levied with respect to the Business or the Purchased Assets for a taxable period that includes (but does not end on) the Closing Date shall be assumed by the Buyer. For the avoidance of doubt, this Section 6.03(b)shall survive the Closing Date.

 

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(c) All transfer, documentary, sales, use, stamp, registration, value added and other similar Taxes and fees (including any additions thereto, penalties and interest) incurred in connection with this Agreement and the other Transaction Documents (“ Transfer Taxes ”) shall be divided, borne and paid equally 50% by Buyer and 50% by Seller when due. All necessary documentation and Tax Returns with respect to such Transfer Taxes shall be prepared and filed by the party required under applicable Law to file such Tax Returns. If required by applicable Law, Seller and Buyer shall, and shall cause their respective Affiliates to, cooperate in preparing and filing, and join in the execution of, any such Tax Returns.  Seller and Buyer shall cooperate in providing each other with any appropriate certification and other similar documentation relating to exemption from Transfer Taxes (including any appropriate resale exemption certifications), as provided under applicable Law.

 

Section 6.04 Further Assurances .  Following the Closing, each of the parties hereto shall, Buyer shall cause its Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.

 

Section 6.05 Third Party Consents.   Seller shall use commercially reasonable efforts to give all notices, obtain all consents and to and make all filings with third parties that are described in Section 4.03 of the Disclosure Schedules.

 

Article VII.
INDEMNIFICATION

 

Section 7.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is two (2) months from the Closing Date (the “ Expiration Date ”); provided, however, Section 4.04 shall survive the termination of this Agreement.

 

Section 7.02 Indemnification By Seller. After the Closing, subject to the other terms and conditions of this Article VII, Seller shall indemnify Buyer and its Representatives (collectively, the “ Buyer Indemnified Parties ”) against, and shall hold Buyer Indemnified Parties harmless from and against, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnified Parties based upon, arising out of, with respect to or by reason of:

 

(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or in any Transaction Document;

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or in any Transaction Document;

 

(c) any Third Party Claims related to the business, operations, properties, assets or obligations of Seller or any of its Affiliates conducted, existing or arising after the Closing; or

 

(d) any Excluded Asset or Excluded Liabilities.

 

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Section 7.03 Indemnification By Buyer. After the Closing, subject to the other terms and conditions of this Article VII, Buyer shall indemnify Seller and its Affiliates (collectively, the “ Seller Indemnified Parties ”) against, and shall hold the Seller Indemnified Parties harmless from and against, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnified Parties based upon, arising out of, with respect to or by reason of:

 

(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any Transaction Document;

 

(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement or in any Transaction Document;

 

(c) any Third Party Claims related to the Business, operations, properties, assets or obligations of Seller or any of its Affiliates; or

 

(d) any Purchased Assets or Assumed Liabilities.

 

Section 7.04 Certain Limitations. The indemnification provided for in Section 7.02 and Section 7.03 by the Buyer and Seller shall be subject to the following limitations:

 

(a) Any individual or series of related Losses must exceed $30,000 (“ De-Minimis Losses ”) for an Indemnified Party to be eligible for indemnification and shall be deducted from any award for a Loss.

 

(b) Payments by the Indemnifying Party pursuant to this Article VII in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment actually received by the Indemnified Party in respect of any such claim.

 

(c) in no event shall the Indemnifying Party be liable to the Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or any damages based on any type of multiple except to the extent adjudicated and owed to a third party with respect to a Third Party Claim.

 

(d) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss, including by pursuing insurance claims and claims against third parties, and shall reasonably consult and cooperate with the Indemnifying Party with a view toward mitigating Losses upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise to Losses.

 

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Section 7.05 Indemnification Procedures. The party making a claim under this Article VII is referred to as the “ Indemnified Party ”, and the party against whom such claims are asserted under this Article VIII is referred to as the “ Indemnifying Party ”.

 

(a) Third Party Claims . If any Indemnified Party receives written notice of the assertion or commencement of any Action or other legal proceeding made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing (a “ Third Party Claim ”) against such Indemnified Party, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof (a “ Claim Notice ”). The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations. Such Claim Notice shall describe the Third Party Claim in reasonable detail, shall include a copy of all papers served with respect to such Third Party Claim, if any, and any other documents reasonably necessary (as determined by the Indemnified Party) and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in or, by giving written notice within ten (10) Business Days of receipt of a Third Party Claim, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel; provided, that such notice contains confirmation that the Indemnifying Party has agree to indemnify the Indemnified Party (subject to the limitation on indemnification set forth herein) for the Losses arising out of or resulting from the Third Party Claim of which it is assuming the right to conduct and control the defense thereof. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 7.05(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party; provided , however , that the Indemnifying Party shall not be entitled to control, and the Indemnified Party shall be entitled to have sole control over, the defense or settlement of any claim if: (i) such claim is part of an Action to which the Indemnifying Party is also a party and the Indemnified Party is advised by counsel that a conflict exists as a result of the Indemnifying Party’s control over such proceedings, (ii) such Third Party Claim seeks injunctive or other equitable relief against the Indemnified Party, (iii) the Third Party Claim relates to or arises in connection with any governmental proceeding, action, indictment, allegation or investigation in respect of the business of Buyer or their respective Affiliates, (iv) the Indemnifying Party failed or is failing to reasonably prosecute or defend such Third Party Claim, or (vi) such claim involves any customer, supplier, distributor or other material business relation of Buyer or Seller or their respective Affiliates. If the Indemnifying Party has validly made such election, the Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnified Party. The Indemnified Party and the Indemnifying Party shall cooperate with each other in all reasonable respects to ensure the proper and adequate defense of any Third Party Claim, including making available Books and Records and other information relating to such Third Party Claim and furnishing employees and representatives as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

 

(b) Settlement of Third Party Claims . Notwithstanding any other provision of this Agreement, if the Indemnifying Party assumes the defense of any Third Party Claim pursuant to Section 7.05, (i) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to such Third Party Claim and (ii) the Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement with respect to such Third Party Claim without the prior written consent of the Indemnified Party (which consent shall be given if the settlement by its terms (1) obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third Party Claim, (2) fully and finally releases the Indemnified Party completely in connection with such Third Party Claim, and (3) does not impose any obligation or restriction on such Indemnified Party or its Affiliates). If the Indemnifying Party does not assume the defense of such Third Party Claims or fails to diligently prosecute or withdraws from the defense of a Third Party Claim, the Indemnifying Party will not be obligated to indemnify the Indemnified Party for any settlement entered into or any judgment consented to without the prior the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned). Notwithstanding any other provision of this Agreement, whether or not the Indemnifying Party shall have assumed the defense of a Third Party Claim, if the Indemnified Party admits any liability with respect to, or settles, compromises or discharges, such Third Party Claim without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned), then such admission, settlement or compromise will not be binding upon or constitute evidence against the Indemnifying Party for purposes of determining whether the Indemnified Party has incurred Losses that are indemnifiable pursuant to this Article VII or the amount thereof.

 

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(c) Direct Claims . Any claim by an Indemnified Party on account of a Loss which does not result from or involve a Third Party Claim (a “ Direct Claim ”) shall be asserted by the Indemnified Party by providing prompt written notice thereof to the Indemnifying Party after the Indemnified Party becomes aware of such Direct Claim. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim asserting or denying its responsibility with respect to such Direct Claim. During such thirty (30)-day period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall reasonably assist the Indemnifying Party’s investigation. If the Indemnifying Party does not so respond within such thirty (30)-day period, the Indemnifying Party shall be deemed to have accepted such claim.

 

Article VIII.
MISCELLANEOUS

 

Section 8.01 Expenses .  Except as otherwise expressly provided herein (including Section 6.08 hereof), all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

Section 8.02 Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing (including, without limitation, e-mail transmission) and shall be deemed to have been given (a) if delivered by hand, when such delivery is made at the address specified on the signature pages hereto; (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) if delivered by e-mail or facsimile, when such e-mail or facsimile is transmitted to the number or e-mail address specified on the signature page hereto or (d) on the day mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses or coordinates as provided Preamble hereto (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.02).

 

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Section 8.03 Interpretation . For purposes of this Agreement, (a) the words include, ” “ includes ” and “ including shall be deemed to be followed by the words without limitation ”; (b)  the word or is not exclusive ; and (c) the words herein, ” “ hereof, ” “ hereby, ” “ hereto ” and “ hereunder refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (i) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (ii) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.  All references in this Agreement or any of the other Transaction Documents to “$” or “Dollars ” are to United States Dollars, unless expressly stated otherwise.

 

Section 8.04 Headings . The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 8.05 Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

Section 8.06 Entire Agreement . This Agreement (including the Exhibits and the Disclosure Schedules) and the other Transaction Documents constitute the entire agreement of the parties with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter.

 

Section 8.07 Successors and Assigns .  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.  Except as set forth in Section 2.12, neither party may assign its rights or obligations hereunder without the prior written consent of the other party;  provided however , that Buyer can assign its rights hereunder to any lender providing the Financing.  No assignment (including pursuant to Section 2.12) shall relieve the assigning party of any of its obligations hereunder.

 

Section 8.08 No Third Party Beneficiaries .  This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 8.09 Amendment and Modification; Waiver .  This Agreement may only be amended, modified or supplemented by an agreement in writing signed by Seller and Buyer. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

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Section 8.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction).

 

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURT OF THE UNITED STATES OF AMERICA OR THE STATE COURT, IN EACH CASE LOCATED IN NEVADA, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.10(c).

 

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Section 8.11 Specific Performance .  The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof or were otherwise breached. It is accordingly agreed that the parties to this Agreement shall be entitled to seek equitable relief, including, without limitation, an injunction or injunctions (without the payment or posting of any bond) in connection with any breach or threatened breach of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction. This paragraph shall not be construed as an election of any remedy, or as a waiver of any right available to the parties under this Agreement or the law, including, without limitation, the right to seek damages from the breaching party for a breach of any provision of this Agreement, nor shall this paragraph be construed to limit the rights or remedies available under applicable law for any violation of any provision of this Agreement.

 

Section 8.12 Disclosure Schedule .  The Disclosure Schedules will be arranged to correspond to the representations and warranties in Articles IV and V of this Agreement and disclosure in one section shall be deemed to be disclosure in any other section required in the Disclosure Schedule.

 

Section 8.13 Counterparts . This Agreement may be executed and delivered (including, without limitation, by facsimile transmission or e-mail) in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

Section 8.14 Waiver of Conflicts Regarding Representation; Nonassertion of Attorney-Client Privilege.

 

(a) Buyer and Seller waive and shall not assert, and agrees to cause its Affiliates to waive and not to assert, any conflict of interest arising out of or relating to the representation, after the Closing (the “ Post-Closing Representation ”), of Seller, Buyer or any of their Affiliates or any shareholder, officer, employee or director of the or any of their Affiliates (any such Person, a “ Designated Person ”) in any matter involving this Agreement, the Transaction Documents or the transactions contemplated hereby, by Law Office of R.J. Newman, P.C.

 

(b) Buyer and Seller waive and shall not assert, and agrees to cause its Affiliates to waive and to not assert, any attorney-client privilege solely to the extent inherited as a result of the transactions contemplated by this Agreement with respect to any communication between any legal counsel and any Designated Person in any matter involving this Agreement, the Transaction Documents or the transactions contemplated hereby occurring during the Current Representation prior to the Closing Date in connection with any Post-Closing Representation.

 

(c) The attorney-client privilege, attorney work-product protection and expectation of client confidence arising from the transactions contemplated hereby prior to the Closing Date, and all information and documents covered by such privilege or protection, will belong to and be controlled by Seller and may be waived only by Seller, and not Buyer, and will not pass to or be claimed or used by Buyer;  provided , that Buyer may assert the privilege against a third party.

 

[ Remainder of Page Intentionally Left Blank ]

 

  Page 20 of 27  

 

 

  SELLER:
   
  U.S. RARE EARTH MINERALS, INC.
    (a Nevada corporation)
     
  By:  
    Name:  Mr. Lawrence W. Bonafide 
    Title: Chairman, Secretary & Treasurer
     
  BUYER:
   
  U.S. RARE EARTH MINERALS, INC.
    (a Wyoming corporation)
     
  By:  
    Name:  Mr. Thomas Yarbray  
    Title:  

 

  Page 21 of 27  

 

 

DISCLOSURE SCHEDULES

 

2.01 (a) Receivables

All accounts receivables of Seller on the Closing Date.

 

2.01 (b) Assigned Contracts

 

2.01 (c) Intellectual Property

Domain name: US-REM.com

Website: US-Rem.com

Copyrights: All material on USMN’s website and advertising material

Trademark: EXCELERITE ®

OMRI Products Listings

Distributor Contracts

Customer List

Amazon Account

E-Bay account

E-Voice account

Mail Chimp account

Google account

Quick Books On-Line account

 

2.01 (d) Tangible Personal Property

EQUIPMENT

CB Loadall 520 vin# SLP520WE0789591

John Deere 120 Excavator PIN P00120x03485

Gradall Telescopic Material Handler s/n GYG19769

Case W-14 Articulating Wheel Loader s/n 1941656

Kawasaki 85Z Articulating Wheel Loader s/n 85C3 5851

Terex T45 45 kw Generator Mod. OT451 s/n U1051113170

Stacker #1 s/n 243456 Power screen

Stacker #2 s/n 243457 Power screen

Power screen Screening Plant #1 s/n 2720256

Power screen Screening Plant #2 s/n 2737489

 

  Page 22 of 27  

 

 

2.01 (e) Leased Real Property

La Quinta, CA Office Address

PANACE MINING CLAIMS

Eagle 3 NMC1004017
Eagle 4 NMC1006216
Eagle 5 NMC1006218
Eagle 6 NMC1006217
Eagle 7 NMC1005292
Eagle 8 NMC1007241
Eagle 9 NMC1003133
Eagle 10 NMC1003134
Eagle 11 NMC1003135

 

2.01 (f) Permits

 

2.01 (i) Current Assets

Wells Fargo checking account No. 7655740426

Wells Fargo savings account No. 6454374403

 

2.03 (d) Current Liabilities

All current liabilities of the Seller in existence on the date hereof.

 

  Page 23 of 27  

 

 

Bill Of Sale

 

DATE: September ___, 2018

 

This Bill of Sale is made between U.S. Rare Earth Minerals, Inc. (a Nevada corporation) (“Seller”), located at 78365 Hwy 111, Suite 287, La Quinta, CA 92253 and U.S. Rare Earth Minerals, Inc. (a Wyoming corporation) (“Buyer”) located at1621 Central Avenue, Cheyenne, WY 82001.

 

For valuable consideration, receipt of which is hereby acknowledged. Seller hereby transfers, conveys and assigns to buyer all of its rights title and interest in and unto all of the following equipment, assets, intangible assets, banking accounts and mining claims as set forth below:

 

EQUIPMENT

CB Loadall 520 vin# SLP520WE0789591

John Deere 120 Excavator PIN P00120x03485

Gradall Telescopic Material Handler s/n GYG19769

Case W-14 Articulating Wheel Loader s/n 1941656

Kawasaki 85Z Articulating Wheel Loader s/n 85C3 5851

Terex T45 45 kw Generator Mod. OT451 s/n U1051113170

Stacker #1 s/n 243456 Power screen

Stacker #2 s/n 243457 Power screen

Power screen Screening Plant #1 s/n 2720256

Power screen Screening Plant #2 s/n 2737489

 

OTHER

Domain name: US-REM.com

Website: US-Rem.com

Copyrights: All material on USMN’s website and advertising material

Trademark: EXCELERITE ®

OMRI Products Listings

La Quinta, CA Office Address

Distributor Contracts

Customer List

Amazon Account

E-Bay account

E-Voice account

 

  Page 24 of 27  

 

 

Mail Chimp account

Google account

Quick Books On-Line accoun

 

BANKING

Wells Fargo checking account No. 7655740426

Wells Fargo savings account No. 6454374403

 

PANACE MINING CLAIMS

Eagle 3 NMC1004017
Eagle 4 NMC1006216
Eagle 5 NMC1006218
Eagle 6 NMC1006217
Eagle 7 NMC1005292
Eagle 8 NMC1007241
Eagle 9 NMC1003133
Eagle 10 NMC1003134
Eagle 11 NMC1003135

 

to Buyer in exchange for forgiveness of $110,000 a 6% Senior Unsubordinated Promissory Note, dated May 23, 2013 in the principal amount of One Hundred and Ten Thousand Dollars ($110,000), together with all interest, penalty interest and penalty fees thereon.

 

  SELLER:
   
  U.S. RARE EARTH MINERALS, INC.
    (a Nevada corporation)
     
  By:  
    Name:  Mr. Lawrence W. Bonafide 
    Title: Chairman, Secretary & Treasurer
     
  BUYER:
   
  U.S. RARE EARTH MINERALS, INC.
    (a Wyoming corporation)
     
  By:  
    Name:  Mr. Thomas Yarbray
    Title:  

 

  Page 25 of 27  

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“ Assignment and Assumption Agreement ”) is made and entered into effective on September __, 2018 (“ Effective Date ”), between U.S. Rare Earth Minerals, Inc. (a Nevada corporation) “Assignor”, located at 78365 Hwy 111, Suite 287, La Quinta, CA 92253 and U.S. Rare Earth Minerals, Inc. (a Wyoming corporation) “ Assignee ” located at1621 Central Avenue, Cheyenne, WY 82001. (“ Assignee). The Assignee and the Assignor are referred to herein individually as a “ Party ” and collectively as the “ Parties .”

 

RECITALS :

 

Pursuant to that certain Asset Purchase Agreement, dated the even date hereof (the “Asset Purchase Agreement”), the Assignor desires to assign to the Assignee 100% of its interest and its rights under the Asset Purchase Agreement associated with the Business (capitalized terms used herein but not defined have the meanings set forth in the Asset Purchase Agreement) as set forth in the Asset Purchase Agreement, (“ Assigned Interest/Rights ”) on the terms and subject to the conditions contained in this Assignment and Assumption Agreement.

 

NOW, THEREFORE , for good and valuable consideration, the receipt and the sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.  Assignment . The Assignor hereby assigns to the Assignee the Assigned Interest/Rights effective on the Effective Date in accordance with this Assignment and Assumption Agreement and the Asset Purchase Agreement.

 

2.  Assumption . The Assignee hereby assumes all of the duties, the obligations and the liabilities of the Assignor arising under the Asset Purchase Agreement on or after the Effective Date with respect to the Assigned Interest/Rights. The Assignee hereby expressly agrees to be bound by the terms and the conditions of the Asset Purchase Agreement on and after the Effective Date with respect to the Assigned Interest/Rights.

 

Signature page follows this page.

 

  Page 26 of 27  

 

 

IN WITNESS WHEREOF , the Parties have executed and delivered this Assignment and Assumption Agreement as of the Effective Date.

 

ASSIGNOR U.S. RARE EARTH MINERALS, INC.
  (A NEVADA CORPORATION)
     
  By:  
  Name: Dr. David Platt
  Title:   Chief Executive Officer
     
ASSIGNEE U.S. RARE EARTH MINERALS, INC.
  (A WYOMING CORPORATION)
   
  By:  
  Name: Mr. Thomas Yarbray
  Title: Chief Executive Officer

 

 

Page 27 of 27

 

Exhibit 99.1

 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

   
 

 

 

 

 

Exhibit 99.2

 

U.S. Rare Earth Minerals, Inc. Signs Definitive

Agreement to Acquire Bioxytran, Inc.

 

---Enters Biotech Industry with Revolutionary Compound to Treat Stroke Victims---

 

Boston, Mass., September 24, 2018 – U.S. Rare Earth Minerals, Inc. (OTC: USMN) today announced that on September 21, 2018 it acquired Bioxytran Inc., a developmental stage biotechnology company, creating a first-in-class oxygen delivery platform targeting the rapid and simplified treatment of victims with brain stroke trauma.

 

The company’s lead product candidate, BXT-25 , will be tested as a potent resuscitative agent to treat strokes during the first hour of a stroke and for other brain trauma. The product is based on a new molecule reversing hypoxia, or oxygen deficiency. The molecule is expected to be injected intravenously and bind to oxygen in the lungs. The molecule then carries the oxygen and delivers it to the area in the brain blocked by the clot. During the next 18 months, the Company plans to submit an Investigational New Drug Application (IND) to the Food and Drug Administration (FDA) and, immediately thereafter, begin clinical trials on brain stroke patients. In addition, the company will be working on additional applications to treat ischemia, an inadequate blood supply to an organ or part of the body, with a focus on the heart. The compound is also expected to be effective in healing wound.

 

Bioxytran’s management team brings over 40 years of industry experience as well as a track record of high-profile projects in biotechnology. Dr. David Platt will serve as the new Chairman and Chief Executive Officer of the company.

 

Dr. Platt had previously founded four publicly traded companies, creating as much as $1 billion in market-cap for investors. He led the development of four drug candidates from concept through phase II clinical trials.

 

Ola Soderquist will serve as the new Chief Financial Officer. Mr. Soderquist has more than 30 years of senior international entrepreneurial management experience within technology companies. He has served in CFO and other managerial capacities in multiple industry sectors and companies. The company will appoint a new board of directors in the upcoming weeks.

 

Dr. Platt commented, “developing drugs is an extremely complicated process and I will utilize my experience to make a profound difference in the rapid treatment of brain stroke and trauma victims. I look forward to developing a new drug that has the potential to change peoples’ lives in a profound manner.”

 

The company plans to change its name to Bioxytran, Inc., and apply for a new symbol.

 

About Bioxytran, Inc.:

 

Based in Newton, MA, Bioxytran Inc. is a developmental stage biopharmaceutical company developing anti-necrosis drugs that treat an inadequate blood supply to an organ by delivering oxygen. The deficiency in the amount of oxygen reaching the tissues called hypoxia, cause a variety of severe, harmful medical conditions.

 

 

 

 

The company is focusing on the development and commercialization of first-in-class treatments to prevent brain damage resulting from hypoxic conditions following brain stroke and trauma. The Company’s lead product candidate, BTX-25 , is an anti-necrosis drug that carries oxygen to tissues when the flow of blood is blocked. It will be tested as a potent resuscitative agent to treat Ischemic brain strokes, caused by severely reduced blood flow to the brain. In addition, the company plan to test another drug candidate BXT-252 , as a resuscitative agent in a variety of wound healing applications.

 

About U.S. Rare Earth Minerals, Inc.

 

U.S. Rare Earth Minerals, Inc. was formerly engaged in the sales and distribution of products derived from the Company's mining activities in Nevada.

 

Contact:

 

For more information, please visit:

www.bioxytraninc.com

or contact us at

info@bioxytraninc.com

(617) 494-1199

 

The information in this press release includes certain “forward-looking” statements within the meaning of the Safe Harbor provisions of Federal Securities Laws. Investors are cautioned that such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including the future financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this release, and the Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date of this release except as required by law.

 

Source: U.S. Rare Earth Minerals, Inc.