ASSET PURCHASE AGREMENT

EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “ Agreement ”) is made and entered into as of March 6, 2007 by and among, XTX Energy Inc., a Nevada corporation (the “ Buyer ”) and Rothschild Trust Holdings, LLC, a Florida Limited Liability Company, Leigh Rothschild, an individual residing in the State of Florida, Adam Bauman, an individual residing in the State of New York and Neal Lenarsky, an individual residing in the State of California (Rothschild Trust Holdings, LLC, Leigh Rothschild, Adam Bauman and Neal Lenarsky are individually referred to herein as the “ Seller ” and collectively referred to herein as the “ Sellers ”).

W I T N E S S E T H:

WHEREAS, the Sellers own certain assets and intellectual property; and

WHEREAS, the Buyer wishes to purchase or acquire from the Sellers and the Sellers wish to sell, assign and transfer to the Buyer, the assets and related intellectual properties itemized on Exhibit A upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants, representations and warranties made herein, and of the mutual benefits to be derived hereby, the parties hereto agree as follows:

DEFINITIONS

The terms defined below, whenever used in this Agreement (including the Exhibits and Schedules attached hereto), shall have the respective meanings indicated below for all purposes of this Agreement.  All references herein to a Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or Schedule of or to this Agreement, unless otherwise indicated.

Affiliate :  of a Person shall mean a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the first Person.  “Control” (including the terms “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 policies of a person, whether through the ownership of voting securities, by contract or credit arrangement, or otherwise.

Agreement :  shall have the meaning provided in the first paragraph, above.

Applicable Law :  shall mean all applicable provisions of all (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Authority, (ii) Governmental Approvals and (iii) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority.

Assets :  shall have the meaning provided in Section 1.1.

Bill of Sale; Assignment and Assumption :  shall have the meaning provided in Section 4.3.

Buyer : shall mean XTX Energy, Inc., a Nevada corporation, and any of its successors and assigns.

 

 

 

 

 

Buyer Indemnitees :  shall have the meaning provided in Section 7.1(a).

Closing :  shall have the meaning provided in Section 2.1.

Closing Date :  shall have the meaning provided in Section 2.1.

Code :  shall mean the Internal Revenue Code of 1986, as amended.

Collateral Documents :  shall mean the Bill of Sale and the Intellectual Property Assignments.

Confidential Information :  shall mean any information (in any form whatsoever) concerning the Assets and each Seller’s business and affairs that is not already generally available to the public.

Consent :  shall mean any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of registration, certificate, declaration or filing with, or report or notice to, any Person, including but not limited to any Governmental Authority.

Contract :  shall mean all agreements and contracts related to each Seller’s Assets, whether oral or written.

Governmental Approval :  shall mean any Consent of, with or to any Governmental Authority.

Governmental Authority :  shall mean any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision, thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any self-regulatory organization.

Indemnified Party : shall have the meaning provided in Section 7.1(c).

Indemnifying Party :  shall have the meaning provided in Section 7.1(c).

Intellectual Property :  shall mean any and all United States and foreign:  (a) patents (including design patents, industrial designs and utility models) and patent applications (including docketed patent disclosures awaiting filing, reissues, divisions, continuations, continuations-in-part and extensions), patent disclosures awaiting filing determination, inventions and improvements thereto; (b) trademarks, service marks, trade names, trade dress, logos, business and product names, slogans, all of the goodwill in all of the foregoing, and registrations and applications for registration thereof; (c) all rights of copyright, copyrightable subject matter (including software) and registrations thereof throughout the world for the full term thereof including all renewals; (d) inventions, processes, designs, formulae, trade secrets, know-how, industrial models, confidential and technical information, manufacturing, engineering and technical drawings, product specifications and confidential business information; (e) mask work and other rights and registrations thereof; (f) software; (g) intellectual property rights similar to any of the foregoing; (h) copies and tangible embodiments thereof (in whatever form

 

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or medium, including electronic media) relating to the Sellers’ Intellectual Property itemized on Exhibit A contemplated for Buyer’s business.

Intellectual Property Assets :  shall have the meaning provided in Section 3.1.10(a).

Intellectual Property Assignments :  shall have the meaning provided in Section 4.3.

IRS :  shall mean the Internal Revenue Service.

Knowledge :  shall mean the actual knowledge of the relevant Person after due inquiry.

Lien :  shall mean any mortgage, pledge, hypothecation, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting, trust agreement, interest, equity, option, lien, right of first refusal, charge or other restrictions or limitations of any nature whatsoever, including but not limited to such as may arise under any Contracts.

Material Adverse Effect :  shall mean a materially adverse effect on the business, results of operations, assets, liabilities or condition (financial or otherwise) of Seller or Buyer, as the case may be.

Person :  shall mean any natural person, firm, partnership, association, corporation, company, limited liability company, trust, business trust, Governmental Authority or other entity.

Sellers:  shall mean Rothschild Trust Holdings, LLC, a Florida limited liability company, Leigh Rothschild, Adam Bauman and Neal Lenarsky.

Seller Indemnitees :  shall have the meaning provided in Section 7.1(b).

Tax :  shall mean any federal, state, provincial, local, foreign or other income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage registration, stamp, documentary, recording, premium, severance, environmental (including taxes under Section 59A of the Code), real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers’ compensation, payroll, health care, withholding, estimated or other similar tax, duty or other governmental charge or assessment or deficiencies thereof, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any and all interest and penalties thereon and additions thereto, whether disputed or not and including any obligation to assume or succeed to the Tax liability of any other Person.

Treasury Regulations : shall mean the United States income Tax regulations (including temporary regulations) promulgated by the IRS.

 

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ARTICLE I

SALE AND PURCHASE OF THE ASSETS

1.1

Assets .  Subject to the terms, conditions and qualifications set forth herein and for the consideration set forth in Article II hereof, Sellers agree to convey, transfer, assign and deliver to the Buyer at the Closing all of each Seller’s right, title and interest in and to the Seller’s Intellectual Property described on Exhibit A herein (including, without limitation, all goodwill associated with Seller’s permits, claims, work in process), the Intellectual Property Assets, the Confidential Information, any and all rights of the Sellers under Contracts entered into by each Seller relating to the Assets (the foregoing items are collectively referred to herein as the “ Assets ”). The Assets transferred pursuant to this Agreement shall be sold and conveyed to the Buyer free and clear of all Liens or Encumbrances of any nature or description.  The Assets are described as follows:  (a)  pending patent titled Leigh-10 (U.S. Appl. No. 11/373,322; filed March 10, 2006) owned by Rothschild Trust Holdings, LLC together with any intellectual property progeny of Leigh-10 and associated trademarks, including but not limited to codes; (b) the domain names: publoot.com, publoot.biz, publoot.info, publoot.name, publoot.mobi, publoot.net, publoot.org, publoot.tv, publoot.us, publoot.ws, squiglee.name, squiglee.us, squiglee.tv and squiglee.ws, owned by Adam Bauman; (c) the domain names:  pubmine.com, pubmine.net, pubmine.org, pubmine.biz, pubmine.info, pubmine.us, pubmine.mobi, pubmine.tv, pubmine.ws, pubmine.name, pubminers.com, publute.com, publewt.com, moolahpub.com, moolapub.com, atomicguppy.com, atomicguppy.biz, atomicguppy.net, atomicguppy.org and atomicguppie.com, owned by Leigh Rothschild; and (d) the domain names:  atomicguppy.info, atomicguppy.us, atomicguppy.mobi, atomicguppy.tv, atomicguppy.ws and atomicguppy.name, owned by Neal Lenarsky.

ARTICLE II

THE CLOSING

2.1

Date .  The closing of the sale and purchase of the Assets (the “ Closing ”) shall take place on March 9, 2007 or on such date as all the parties hereto may agree in writing (the “ Closing Date ”), but in no event later than fifteen (15) business days from the date of this Agreement.

2.2

Consideration .  In consideration of the sale, assignment, conveyance and delivery by the Sellers of the Assets to Buyer pursuant to the terms and conditions of this Agreement on the Closing Date, the Buyer shall issue an aggregate of One Hundred Forty Two Million (142,000,000) shares of its common stock (the "Shares") on a restricted basis to the Sellers or their designees as set forth on Schedule 2.2.

2.3

Allocation of Purchase Price .  The consideration referenced in Section 2.2, above (and any and all other capitalized costs), shall be allocated among the Assets in accordance with an allocation schedule to be prepared by the Buyer in accordance with Section 1060 of the Code, which allocation shall be binding upon the Buyer and the Sellers.  The Buyer shall deliver such allocation to the Sellers within sixty (60) days after the Closing Date.  The parties hereto and their Affiliates will each report the federal, state and local and other Tax consequences of the purchase and sale contemplated hereby (including the filing of IRS Form 8594) in a manner consistent with such allocation prepared by the Buyer.  The Sellers shall timely and properly prepare, execute, file and deliver all such documents, forms and other information as the Buyer may reasonably request to prepare such allocation.  None of the parties hereto shall take any

 

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position (whether in audits, tax returns or otherwise) that is inconsistent with such allocation unless required to do so by Applicable Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1

Representations and Warranties of the Sellers .  Each Seller represents, warrants and covenants to the Buyer as follows:

3.1.1

Authorization, etc .  The Seller has the power and authority to execute and deliver this Agreement and each of the Collateral Documents to which it is a party, to perform fully its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by the Seller of this Agreement and the Collateral Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all requisite legal actions.  The Seller has duly executed and delivered this Agreement and each of the Collateral Documents to which it is a party.  This Agreement is a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the exercise of judicial discretion by the court before which any proceeding therefore may be brought.  

3.1.2

Organization .  Rothschild Trust Holdings, LLC is a Florida limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation with full power and authority to carry on its business and to own or lease and to operate its properties as and in the places where such business is conducted and such properties are owned, leased or operated.

3.1.3

No Conflicts, etc .  The execution, delivery and performance by the Seller of this Agreement and each of the Collateral Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both) (i) any Applicable Law applicable to the Seller, or the Assets, (ii) the legal authority of the Seller, or (iii) any Contract or other contract, agreement or other instrument to which the Seller or any Affiliate thereof is a party or by which the Seller may be bound or affected.  Except as set forth in Schedule 3.1.3, no Governmental Approval or other Consent is required to be obtained or made by the Seller in connection with the execution and delivery of this Agreement and the Collateral Documents or the consummation of the transactions contemplated hereby and thereby.

3.1.4

Compliance with Laws; Governmental Approvals and Consents .

(a)

The Seller has complied in all material respects with all Applicable Laws applicable to the Assets and/or the operation thereof; and the Seller has not received any written notice alleging any conflict, violation, breach or default of or with respect to any such laws.

 

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(b)

All Governmental Approvals and Consents necessary for, or otherwise material to the Assets have been duly obtained and are in full force and the Seller is in compliance with each of such Governmental Approvals and Consents held by it with respect to the Assets.

3.1.5

Assets .  The Seller has good title to all the Assets free and clear of any and all Liens.  

3.1.6

Contracts .  The Seller has delivered to the Buyer complete and correct copies of any and all contracts, documents and related materials, together with all amendments thereto pertaining to the Assets.

3.1.7

Litigation .  There is no action, claim, suit, or proceeding pending or threatened against or relating to the Assets.  There is no action, claim, suit, or proceeding pending or, to the Knowledge of the Seller, threatened, against or relating to the transactions contemplated by this Agreement or any of the Collateral Documents or the Assets, except for a threatened action against Messrs. Rothschild and Bauman as set forth in correspondence dated February 5, 2007, to each, a copy of which is attached hereto under Schedule 3.1.7, and incorporated herein by reference.

3.1.8

Brokers, Finders, etc.  All negotiations relating to this Agreement, the Collateral Documents, and the transactions contemplated hereby and thereby, have been carried on without the participation of any Person acting on behalf of the Seller or any of its Affiliates in such manner as to give rise to any valid claim against the Buyer for any brokerage or finders’ commission, fee or similar compensation, or for any bonus payable to any officer, director, employee, agent or sales representative of or consultant to the Seller or any of its Affiliates upon consummation of the transactions contemplated by this Agreement or the Collateral Documents.

3.1.9

Disclosure .  No representation or warranty by the Seller contained in this Agreement or in any Collateral Document, and no certificate, schedule, list, report, instrument, or other document furnished to the Buyer pursuant hereto or thereto or in connection with the transactions contemplated hereby, contains any untrue statement of material fact, or omits to state a material fact necessary in order to make the statements and information contained herein or therein not misleading.

3.1.10

Intellectual Property .

(a)

Title .  Exhibit A contains a correct list of all Intellectual Property that is owned by the Seller and used in, held for use in connection with, or necessary for the conduct of, or otherwise material to the Seller’s conveyance of the Intellectual property contemplated by this Agreement (the “ Intellectual Property Assets ”).  The Seller is the sole owner all of the Intellectual Property Assets, free from any Liens and free from any requirement of any past, present or future royalty payments, license fees, charges or other payments, or conditions or restrictions whatsoever.  The Intellectual Property Assets comprise all of the Intellectual Property necessary to conduct and operate the proposed business contemplated by the Seller and Buyer.

(b)

Transfer .  Immediately after the Closing, the Buyer will own or otherwise have the right to use all the Intellectual Property Assets, free from any Liens.

 

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(c)

No Infringement .  The Intellectual Property Assets of the Seller does not infringe or otherwise conflict with any rights of any Person in respect of any Intellectual Property.  None of the Intellectual Property Assets is being infringed or otherwise used or available for use, by any other Person.

(d)

No Intellectual Property Litigation .  Except as set forth under Section 3.1.7 above, no claim or demand of any Person has been made nor is there, to the knowledge of Seller, any proceeding that is pending or threatened, nor is there a reasonable basis therefor, that (i) challenges the rights of the Seller and/or the Seller in respect of any Intellectual Property Assets, (ii) asserts that the Seller is infringing or otherwise in conflict with, or is, required to pay any royalty, license fee, charge or other amount, with regard to, any Intellectual Property, or (iii) claims that any default exists under any agreement or arrangement concerning any Intellectual Property Assets.  None of the Intellectual Property Assets is subject to any outstanding order, ruling, decree, judgment or stipulation by or with any court, arbitrator, or administrative agency, or has been the subject of any litigation, whether or not resolved in favor of the Seller.

(e)

Use .  There are, and immediately after the Closing will be, no contractual restriction or limitations pursuant to any orders, decisions, injunctions, judgments, awards or decrees of any Governmental Authority on the Buyer’s right to use the Intellectual Property Assets being conveyed by the Seller under this Agreement.

3.1.11

Tax Returns and Payments .   The Buyer shall not become liable for any Tax liability of the Seller or the Seller or any of its Affiliates as a result of the consummation of the transactions contemplated by this Agreement and/or the Collateral Documents.

3.1.12

Investment .

(a)

Seller is an Accredited Investor as that term is defined in Regulation D promulgated under the Securities Act of 1933, as amended (the "Act").

(b)

Seller acknowledges that the Shares are being acquired solely for the account of Seller and not with a view to, or for resale in connection with, any distribution in any jurisdiction where such sale or distribution would be precluded.  The Seller does not intend to dispose of all or any part of the Shares except in compliance with the provisions of the Act and applicable state securities laws, and understands that the Shares are being offered pursuant to a specific exemption under the provisions of the Act, which exemption(s) depends, among other things, upon the compliance with the provisions of the Act.

(c)

Seller hereby agrees that the Buyer may insert the following or similar legend on the face of any certificates evidencing the Shares if required in compliance with the Securities Act or state securities laws:

"These securities have not been registered under the Securities Act of 1933, as amended ("Act"), or any state securities laws and may not be sold or otherwise transferred or disposed of except pursuant to an effective registration statement under the Act and any applicable state securities laws, or an opinion of counsel satisfactory to counsel to the issue that an exemption from registration under the act and any applicable state securities laws is available."

 

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3.2

Representations and Warranties of the Buyer .  The Buyer represents and warrants to the Sellers as follows:

3.2.1

Authorization, etc .  The Buyer has the power and authority to execute and deliver this Agreement and each of the Collateral Documents to which it is a party, to perform fully its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by the Buyer of this Agreement and the Collateral Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all requisite action of the Buyer.  The Buyer has duly executed and delivered this Agreement and each of the Collateral Documents to which it is a party.  This Agreement is a legal, valid and binding obligation of the Buyer, enforceable against it in accordance with its terms, except that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the exercise of judicial discretion by the court before which any proceeding therefore may be brought.

3.2.2

Organization .  The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation with full power and authority to carry on its business and to own or lease and to operate its properties as and in the places where such business is conducted and such properties are owned, leased or operated.

3.2.3

No Conflicts, etc .  The execution, delivery and performance by the Buyer of this Agreement and each of the Collateral Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both) (i) any Applicable Law applicable to the Buyer, or (ii) the certificate of incorporation or by-laws of the Buyer.  No Governmental Approval or other Consent is required to be obtained or made by the Buyer in connection with the execution and delivery of this Agreement and the Collateral Documents or the consummation of the transactions contemplated hereby and thereby.

3.2.4

Disclosure .  No representation or warranty by the Buyer contained in this Agreement or in any Collateral Document to which it is a party, and no certificate, schedule, list, report, instrument, or othe