Tax Indemnification Agreement between Zulu Energy Corp. and LMA Hughes LLLP (December 19, 2007)
Zulu Energy Corp. agrees to indemnify LMA Hughes LLLP and its partners for any U.S. federal and state income tax liabilities, including interest and penalties, arising from a breach of Section 6.11 of their Stock Exchange Agreement and Plan of Reorganization. Zulu also covers any additional tax liability resulting from its indemnity payment. These obligations last until the statute of limitations expires for the relevant tax year. The agreement is signed by both parties and is effective as of December 19, 2007.
ZULU ENERGY CORP.
1066 West Hastings Street, Suite 2610
Vancouver, BC v6e 3x2
December 19, 2007
LMA Hughes LLLP
c/o Nerine Trust Company
PO Box 434,
Nerine House,
St George's Place
St. Peter Port
Guernsey, GY1 3ZG
Channel Islands
Attn: Phil Lockett, Esq., Executive Director
Re:
Tax Indemnification
Zulu Energy Corp., for itself and its subsidiaries (including, but not limited to Nyati Mauritius Limited) agrees to indemnify and hold harmless LMA Hughes LLLP, and all of its partners (each, an "Indemnified Party") from and against (i) any U.S. federal and state income tax liability (including interest and penalties) resulting from a breach of Section 6.11 of the Stock Exchange Agreement and Plan of Reorganization (the "Tax Indemnity Payment"); and (ii) any increase in the Indemnified Party's U.S. federal and state income tax liability resulting from Zulu's payment of the Tax Indemnity Payment to the Indemnified Party determined by dividing the Tax Indemnity Payment by the difference between (a) one and (b) the Indemnified Party’s combined effective federal and state income tax rate (expressed as a decimal) for the tax able year of the payment. The indemnity obligations of Zulu Energy Corp. pursuant to this Agreement shall expire with the applicable statute of limitations for the tax return year reflecting the transactions contemplated by the Stock Exchange Agreement and Plan of Reorganization.
Sincerely,
/s/ Paul Stroud
Paul Stroud, Chief Executive Officer
Accepted and Agreed as of
December 19, 2007:
LMA Hughes LLLP
/s/ Brian Hughes
By: Brian Hughes
Its: Partner
