EXHIBIT 10.2
PLAN OF REORGANIZATION AND SHARE EXCHANGE AGREEMENT
PLAN OF REORGANIZATION AND
SHARE EXCHANGE AGREEMENT
DATED AS OF
_________________________, 2011
BY AND AMONG
BLACK ROCK CAPITAL, LLC
AND
RED MOUNTAIN RESOURCES, INC.,
a Florida Corporation
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PLAN OF REORGANIZATION AND
SHARE EXCHANGE AGREEMENT
(BLACK ROCK CAPITAL, LLC)
This AGREEMENT, dated as of ______________________ (the "Agreement"),
by and among Red Mountain Resources, Inc., a Florida Corporation ("RMR") and
Black Rock Capital, LLC ("BRC").
WHEREAS, the boards of directors of RMR and BRC's Managing Member,
respectively, have each approved, as being in the best interest of the
respective entities and their stockholders or interest holders the Acquisition
(the "Exchange") of Black Rock Capital, LLC by RMR by an exchange of common
stock for common stock in accordance with the applicable provisions of the
Florida Business Corporation Code (the "FBCC") and the Texas Business
Organizations Code (the "TBOC") in consideration for 27,000,000 shares of common
stock of RMR to be issued to BR shareholders at closing.
WHEREAS, RMR and BRC desire to make certain representations,
warranties, covenants and agreements in connection with the Exchange and also to
prescribe various conditions to the Exchange; and
WHEREAS, this Agreement is intended to set forth the terms upon which
the Exchange will be accomplished;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties do
hereby agree as follows:
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ARTICLE I
THE CONSIDERATION
SECTION 1.01. Consideration/Acquisition & Exchange; Effective Time
The Acquisition/Exchange shall become effective upon all the conditions
of this Agreement having been met, including the precedent conversion of Black
Rock Capital, LLC into a corporation, with BRC interest holders being converted
to shareholders and delivery of the following consideration by RMR to
Interest/Shareholders of BRC:
27,000,000 shares of restricted common stock of RMR to be exchanged to
the shareholders (prorata) of BRC in exchange for 100% of the shares of
BRC. BRC owns, free and clear of encumbrances all of the oil and gas
assets.
SECTION 1.02. Effects of the Exchange.
At the Effective Time and by virtue of the Exchange, all of the
outstanding shares shall be conveyed to, and RMR shall be the owning entity of
the shares of BRC and BRC shall be a wholly owned subsidiary of RMR.
SECTION 1.03. Conversion of Securities/Consideration.
As of the Effective Time, by virtue of the Exchange:
(a) All of the shares that are outstanding immediately prior to the
Effective Time, shall be converted in exchange for shares of RMR in the
conversion amount. All such shareholders shall cease to have any rights with
respect to BRC common stock, except the right to receive the number of shares of
RMR Common Stock to be issued in consideration therefore upon such shares in
accordance with Section 1.03(b),
(b) Each 1% ownership of BRC shares shall be entitled to receive 1/100th of
27,000,000 common restricted shares of RMR in exchange for shares of BRC owned
by shareholder.
SECTION 1.04. Delivery Procedures.
(a) Upon Parties having satisfied all conditions of closing, RMR shall
provide to each shareholder a letter of transmittal and instructions for use in
effecting the delivery of the shares with such provisions as the board of
directors of RMR may reasonably specify. Upon delivery of a Certificate and Duly
Executed Stock Powers for BRC common shares, shareholders shall be entitled to
receive in exchange therefore a certificate representing that number of shares
of RMR Common Stock as is equal to the product of the percentage of the Total
Outstanding Shares represented by the shares held multiplied by the Conversion
Amount. Each shareholder shall, at and after the Effective Time, be deemed to
hold only the right to receive in exchange of such share, RMR Common Stock as
contemplated by this Section 1.05, together with any dividends and other
distributions payable thereafter. Shares of RMR Common Stock issued in the
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Exchange shall be issued, and be deemed to be outstanding, as of the Effective
Time. RMR shall cause all such shares of RMR Common Stock issued pursuant to the
Exchange to be duly authorized, validly issued, fully paid and non-assessable
and not subject to preemptive rights.
(b) If any certificate representing shares of RMR Common Stock is to be
issued in a name other than that in which the shares of BRC are registered, it
shall be a condition of such exchange that the shareholder shall deliver
properly endorsed transfer documents and that the person requesting such
exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for such shares of RMR Common Stock in a name other
than that of the registered holder of the shares.
ARTICLE II
THE CLOSING
SECTION 2.01. Closing.
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Article VIII, and
subject to the satisfaction or waiver of the conditions set forth in Article
VII, the closing of the Exchange (the "Closing") shall take place as soon as
reasonably practicable (but in no event on written notice of less than two (2)
business days) after all of the conditions set forth in Article VII are
satisfied or, to the extent permitted thereunder, waived, or extended at the
offices of, located at or at such other time and place as may be agreed to in
writing by the parties hereto (the date of such Closing being referred to herein
as the "Closing Date"), but not later than ____________________________, 2011.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RMR
Except as set forth in the applicable section of the disclosure
schedule delivered by RMR to Receiver concurrent with the execution of this
Agreement (the "RMR Disclosure Schedule"), RMR represents and warrants to BRC as
follows:
SECTION 3.01. Organization of RMR; Authority.
RMR is an Entity duly organized, validly existing and in good standing
under the laws of the State of StateplaceFlorida. RMR has all requisite
corporate power and corporate authority to enter into the Transaction Documents
to which it is a party, to consummate the transactions contemplated hereby and
thereby, to own, lease and operate its properties and to conduct its business.
Subject to the receipt of stockholder approval, the execution, delivery and
performance by RMR of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of RMR, including,
without limitation the approval of the board of directors of RMR. The
Transaction Documents have been duly executed and delivered by RMR and, assuming
that the Transaction Documents constitute a valid and binding obligation of the
other parties thereto, constitute a valid and binding obligation of RMR,
enforceable against in accordance with its terms. RMR is duly qualified or
licensed to do business as a foreign Entity and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
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of the business conducted by it makes such qualification necessary, except where
the failure to obtain such qualification or license would not, individually or
in the aggregate, have a RMR Material Adverse Effect. RMR has heretofore
delivered or made available to Receiver complete and correct copies of the
certificate of incorporation and by-laws of RMR, the minute books and stock
transfer records of RMR, as in effect as of the date of this Agreement. RMR is
not in violation of its organizational documents.
SECTION 3.02. Capitalization.
The authorized capital stock of RMR consists of 500,000,000 shares of
Common Stock, of which 10,200,000 shares are outstanding on the date hereof, and
10,000,000 shares of Preferred Stock, 1 million each of which are Series A and
Series B. No other shares of any other class or series of RMR Common Stock or
securities exercisable or convertible into or exchangeable for RMR Common Stock
("RMR Common Stock Equivalents") are authorized, issued or outstanding. The
outstanding shares of RMR Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and were not issued in violation of,
and are not subject to, any preemptive, subscription or similar rights. To RMR's
knowledge, none of the outstanding shares of RMR Common Stock was issued in
violation of any Law, including without limitation, federal and state securities
laws. There are no outstanding warrants, options, subscriptions, calls, rights,
agreements, convertible or exchangeable securities or other commitments or
arrangements relating to the issuance, sale, purchase, return or redemption,
and, to RMR's knowledge, voting or transfer of any shares, whether issued or
unissued, of RMR Common Stock, RMR Common Stock Equivalents or other securities
of RMR. On the Closing Date, the shares of RMR Common Stock for which Bonds
shall be exchanged in the Exchange will have been duly authorized and, when
issued and delivered in accordance with this Agreement, such shares of RMR
Common Stock, will be validly issued, fully paid and nonassessable. RMR plans to
issue additional shares in order to secure funding for other acquisitions
totaling up to 25,000,000 shares, to raise capital, pay fees and costs of
operations.
SECTION 3.03. No Violation; Consents and Approvals.
The execution and delivery by RMR of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and compliance
with the terms hereof will not, conflict with or result in any violation of or
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, (a) the terms and conditions or provisions of the
certificate of incorporation or by-laws of RMR or any RMR Subsidiary, (b) any
Law applicable to RMR or any RMR Subsidiary or the property or assets of RMR or
any RMR Subsidiary, or (c) give rise to any right of termination, cancellation
or acceleration under, or result in the creation of any Lien upon any of the
properties of RMR or any RMR Subsidiary under any Contract to which RMR or any
RMR Subsidiary is a party or by which RMR or any RMR Subsidiary or any assets of
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RMR or any RMR Subsidiary may be bound, No Governmental Approval is required to
be obtained or made by or with respect to RMR or any RMR Subsidiary in
connection with the execution and delivery of this Agreement or the consummation
by RMR of the transactions contemplated hereby.
SECTION 3.04. Litigation; Compliance with Laws.
(a) There are: (i) no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of RMR, threatened against, relating to or
affecting RMR or the RMR Subsidiaries, the business, the assets, or any
employee, officer, director, stockholder, or independent contractor of RMR or
the RMR Subsidiaries in their capacities as such, and (ii) no orders of any
Governmental Entity or arbitrator outstanding against RMR or the RMR
Subsidiaries, the business, the assets, or any employee, officer, director,
stockholder, or independent contractor of RMR or the RMR Subsidiaries in their
capacities as such, or that could prevent or enjoin, or delay in any respect,
consummation of the transactions contemplated hereby.
(b) RMR and the RMR Subsidiaries have complied and are in compliance in all
material respects with all Laws applicable to RMR, any Subsidiary of RMR, its
business or its assets. Neither RMR nor the RMR Subsidiaries has received notice
from any Governmental Entity or other Person of any material violation of Law
applicable to RMR, any of the RMR Subsidiaries, their business or their assets.
RMR and the RMR Subsidiaries have obtained and hold all required Licenses (all
of which are in full force and effect) from all Government Entities applicable
to RMR, the RMR Subsidiaries, their business or their assets. No violations are
or have been recorded in respect of any such License and no proceeding is
pending, or, to the knowledge of RMR, threatened to revoke or limit any such
License.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BRC
Except as set forth in the applicable section of the disclosure
schedule delivered by BRC to RMR prior to the execution of this Agreement (the
"BRC Disclosure Schedule"), BRC represents and warrants to RMR as follows:
SECTION 4.01. Organization of BRC and Authority
BRC is a Limited Liability Company duly organized, validly existing and
in good standing under the laws of the State of Arkansas. BRC has all requisite
corporate power and corporate authority to enter into the Transaction Documents
to which it is a party, to consummate the transactions contemplated hereby and
thereby, to own, lease and operate its properties and to conduct its business.
Subject to the receipt of interest holder approval, the execution, delivery and
performance by BRC of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of BRC, including,
without limitation the approval of the board of directors of BRC. The
Transaction Documents have been duly executed and delivered by BRC and, assuming
that the Transaction Documents constitute a valid and binding obligation of the
other parties thereto, constitute a valid and binding obligation of BRC,
enforceable against BRC in accordance with its terms. BRC is duly qualified or
licensed to do business as a foreign Entity and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except where
the failure to obtain such qualification or license would not, individually or
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in the aggregate, have a BRC Material Adverse Effect. BRC has heretofore
delivered or made available to Acquiree complete and correct copies of the
certificate of incorporation and by-laws of BRC, the minute books and stock
transfer records of BRC, as in effect as of the date of this Agreement. BRC is
not in violation of its organizational documents.
SECTION 4.02. Capitalization.
BRC is currently a Limited Liability Company, but intends, as a
condition hereof, to convert to a corporation prior to closing hereunder. The
authorized capital stock of BRC shall, at closing, consist of 100,000 shares of
BRC Common Stock, of which 1,000 shares shall be outstanding on the date of
closing. No other shares of any other class or series of BRC Common Stock or
securities exercisable or convertible into or exchangeable for BRC Common Stock
("BRC Common Stock Equivalents") are or shall be authorized, issued or
outstanding. The outstanding shares of BRC Common Stock shall have been duly
authorized and validly issued and are fully paid and non-assessable and were not
issued in violation of, and are not subject to, any preemptive, subscription or
similar rights. There are no outstanding warrants, options, subscriptions,
calls, rights, agreements, convertible or exchangeable securities or other
commitments or arrangements relating to the issuance, sale, purchase, return or
redemption, and, to BRC's knowledge, voting or transfer of any shares, whether
issued or unissued, of BRC Common Stock, BRC Common Stock Equivalents, Interests
in the limited liability company or other securities of BRC. On the Closing
Date, the shares of BRC Common Stock for which shares of RMR Common Stock shall
be exchanged in the Exchange will have been duly authorized and will be validly
issued, fully paid and non-assessable.
SECTION 4.03. No Violation; Consents and Approvals.
This transaction will not conflict with, or result in any violation of
or default (or an event which, with notice or lapse of time or both, would
constitute a default) under, (a) any Laws applicable to BRC or its assets, or
(b) give rise to any right of termination, cancellation or acceleration under,
or result in the creation of any Lien upon any of the assets of BRC under, any
Contracts to which BRC is a party or which requires the Approval of the
shareholders. No other Governmental Approval is required to be obtained or made
by or with respect to the interests or shares to be conveyed by BRC
Interest/Shareholders (the assets) in connection with the execution and delivery
of this Agreement.
SECTION 4.04. Litigation; Compliance with Laws.
(a) There are: (i) no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of BRC, threatened against, relating to or
affecting BRC, its business, its assets, or any employee, officer, director,
stockholder, or independent contractor of BRC in their capacities as such, and
(ii) no orders of any Governmental Entity or arbitrator are outstanding against
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BRC, its business, its assets, or any employee, officer, director, stockholder,
or independent contractor of BRC in their capacities as such, or that could
prevent or enjoin, or delay in any respect, consummation of the transactions
contemplated hereby.
(b) BRC has not received notice from any Governmental Entity or other
Person of any material violation of Law applicable to it, its business or its
assets. No violations are or have been recorded in respect of any License owned
or right to operate and no proceeding is pending, or, to the knowledge of BRC
threatened, to revoke or limit any such License.
SECTION 4.05 Financial Statements.
BRC shall provide, prior to closing hereunder, financial statements in
accordance with federal income tax accounting consistently applied, complete and
true and accurate in all respects, disclosing all liabilities, operations and
assets of the subject Assets, only, during the term of its ownership of its
assets and for the period of the prior bankruptcy and shall provide all books
and records necessary to complete audits prior to Closing in accordance with
stocktickerSEC Rules and Regulations and such other production records as may be
available from State or Federal Reports.
SECTION 4.06 Debt of BRC.
BRC's total debt as of the date of closing shall not exceed $3,000,000
to the lenders and in the amounts shown on Schedule 4.06.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF
BUSINESS PENDING THE EXCHANGE
SECTION 5.01. Conduct of the Business Pending the Exchange.
(a) During the period from the date of this Agreement and continuing until
the Effective Time, BRC agrees as to the BRC Assets, that Managing Member shall
use commercially reasonable efforts to preserve intact the Assets, maintain the
Assets in good operating condition and repair (ordinary wear and tear excepted),
retain the services of its independent contractors and use reasonable commercial
efforts to keep in full force and effect liability insurance and bonds
comparable in amount and scope of coverage to that currently maintained with
respect to the Assets, unless, in any case, RMR consents otherwise in writing.
(b) During the period from the date of this Agreement and continuing until
the Effective Time, BRC agrees that, other than in connection with the
consummation of the transactions contemplated hereby, it shall manage the Assets
in the ordinary course of with past practice, use commercially reasonable
efforts to preserve intact such business and assets and use reasonable
commercial efforts to keep in full force and effect liability insurance and
bonds comparable in amount and scope of coverage to that currently maintained
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with respect to its business, unless, in any case, RMR consents otherwise in
writing:
(1) Other than dispositions in the ordinary course of business
consistent with past practice BRC shall not, individually or in the aggregate,
to it and its subsidiaries, taken as a whole, it shall not, nor shall it permit
any of its subsidiaries to, sell, lease, encumber or otherwise dispose of, or
agree to sell, lease (whether such lease is an operating or shut in lease),
encumber or otherwise dispose of its assets.
(2) It shall not permit to occur any (1) change in accounting
principles, methods or practices, investment practices, claims, payment and
processing practices or policies regarding intercompany transactions, (2)
incurrence of Indebtedness or any commitment to incur Indebtedness, any
incurrence of a contingent liability, Contingent Obligation or other liability
of any type, except for, with respect to Receiver, other than obligations
related to the Exchange of Inventory in the ordinary course of business
consistent with past practices, (3) waiver or release of any contract, right or
claim, except for cancellations, waivers and releases in the ordinary course of
business consistent with its past practice which do not exceed $50,000 in the
aggregate, (4) amendment, termination or revocation of, or a failure to perform
obligations or the occurrence of any default under, (Y) any contract or
agreement (affecting the Working Interests) to which it is or, as of date
hereof, was a party, other than in the ordinary course of business consistent
with past practice, or (Z) any License.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Access to Information.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, each party shall give the other party and its
respective counsel, accountants, representatives and agents, and full access,
upon reasonable notice and during normal business hours, to BRC records and the
financial, legal, accounting and other representatives of such party with
knowledge of the business and the assets of such party and BRC and, upon
reasonable notice, requesting parties shall be furnished all relevant documents,
records and other information concerning the business, finances and properties
of such party and its subsidiaries and BRC that the other party and its
respective counsel, accountants, representatives and agents, may reasonably
request. No investigation pursuant to this Section 6.01 shall affect or be
deemed to modify any of the representations or warranties hereunder or the
condition to the obligations of the parties to consummate the Exchange; it being
understood that the investigation will be made for the purposes of the board of
directors of RMR and BRC determining in its good faith reasonable business
judgment the accuracy of the representations and warranties of the other party.
In the event of the termination of this Agreement, each party, if so requested
by the other party, will return or destroy promptly every document furnished to
it by or on behalf of the other party in connection with the transactions
contemplated hereby, whether so obtained before or after the execution of this
Agreement, and any copies thereof (except for copies of documents publicly
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available) which may have been made, and will use reasonable efforts to cause
its representatives and any representatives of financial institutions and
investors and others to whom such documents were furnished promptly to return or
destroy such documents and any copies thereof any of them may have made.
SECTION 6.02. Legal Conditions to Exchange; Reasonable Efforts.
BRC and RMR shall take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on itself with respect
to the Exchange and will promptly cooperate with and furnish information to each
other in connection with any such requirements imposed upon any of them or any
of their Subsidiaries in connection with the Exchange. BRC and RMR shall take
all reasonable actions necessary to obtain (and will cooperate with each other
in obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third party, required to
be obtained or made by BRC, RMR or any of the RMR Subsidiaries in connection
with the Exchange or the taking of any action contemplated thereby or by this
Agreement.
SECTION 6.03. Certain Filings.
Each party shall cooperate with the other in (a) connection with the
preparation of an 8-K, (b) determining whether any action by or in respect of,
or filing with, any governmental body, agency, official or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (c) seeking
any such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the 8-K and
seeking timely to obtain any such actions, consents, approvals or waivers. Each
party shall consult with the other in connection with the foregoing and shall
use all reasonable commercial efforts to take any steps as may be necessary in
order to obtain any consents, approvals, permits or authorizations required in
connection with the Exchange.
SECTION 6.04. Public Announcements and Filings.
Each party shall give the other a reasonable opportunity to comment
upon, and, unless disclosure is required, in the opinion of counsel, by
applicable law, approve (which approval shall not be unreasonably withheld), all
press releases or other public communications of any sort relating to this
Agreement or the transactions contemplated hereby.
SECTION 6.05. Tax Matters.
(a) No representation is made that this is a non-taxable transaction. Each
of the Parties should consult his or her own tax consultant with regard to tax
matters.
(b) BRC shall prepare and file on a timely basis all Tax Returns which are
due to be filed with respect to the Managing Member (giving effect to any
extension of time) prior to the Closing Date including any 2011 short year
return as may be necessary for subsidiary. RMR shall be responsible for the
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preparation and filing of all Tax Returns which are due to be filed (giving
effect to any extension of time) after the Closing Date, but BRC shall use its
best efforts to conduct its affairs such that any Tax Returns due after the
Closing Date can be filed on a timely basis.
SECTION 6.06. Supplements to Schedules.
Prior to the Closing, BRC will supplement or amend its disclosure
schedule with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such disclosure schedule. Prior to the Closing, RMR may
supplement or amend its disclosure schedule with respect to any matter which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such disclosure schedule. No supplement to or
amendment of the disclosure schedule made pursuant to this Section 6.06 shall be
deemed to cure any breach of any representation or warranty made in this
Agreement unless the other parties hereto specifically agree thereto in writing.
ARTICLE VII
CONDITIONS OF THE EXCHANGE
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Exchange.
The respective obligations of each party to effect the Exchange and the
other transactions contemplated herein shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part to the extent permitted by applicable law:
(a) Conversion: BRC shall have converted from a limited liability company
to a corporation pursuant to Arkansas law.
(b) No Injunctions or Restraints. No governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, execution order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Exchange or any
transaction contemplated by this Agreement; provided, however, that the parties
shall use their reasonable commercial efforts to cause any such decree,
judgment, injunction or other order to be vacated or lifted.
SECTION 7.02. Additional Conditions of Obligations of RMR.
The obligations of RMR to effect the Exchange contemplated by this
Agreement are also subject to the satisfaction at or prior to the Closing Date
of the following additional conditions unless waived by RMR:
(a) Representations and Warranties. The representations and warranties of
BRC set forth in this Agreement shall be true and correct in all material
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respects (except for those representations and warranties qualified by
materiality, which shall be true and correct in all respects) as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date, except as otherwise contemplated by this Agreement.
(b) Performance of Obligations of BRC. BRC shall have performed in all
material respects all conditions, covenants, agreements and obligations required
to be performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change to BRC. From the date hereof through and
including the Effective Time, no event shall have occurred which would have an
Material Adverse Effect, to value of the assets of BRC to be acquired by RMR
hereby, through its acquisition of BRC.
(d) Third Party Consents. BRC shall have obtained all consents and
approvals, required to be obtained prior to or at the Closing Date, from third
parties or governmental and regulatory authorities in connection with the
execution, delivery and performance by BRC of this Agreement and the
consummation of the transactions contemplated hereby.
(e) No Governmental Order or Other Proceeding or Litigation. No order of
any Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Deliveries. At the Closing, BRC shares representing 100% of the
outstanding stock of BRC duly executed by BRC shareholders, shall be delivered
to RMR.
(g) Indebtedness of Assets. All outstanding Indebtedness on the Assets of
BRC or BRC interests or shares shall have been fully paid or renegotiated in
form and substance satisfactory to RMR and shares of BRC shall be free and clear
of all liens and encumbrances except as shown on Schedule 4.06. BRC's lenders
shall have agreed, in writing, to the assumption of its debt and the transfer of
the BRC shares.
(h) Audited Financial Statements. BRC shall cooperate fully with RMR prior
to closing hereunder to complete and obtain audited financial statements in
accordance with SEC Rules and Regulations, complete and true and accurate in all
respects, disclosing all liabilities, operations and assets of the subject
prospectus, during the term of its ownership of its assets and for the period of
the prior bankruptcy and shall provide all books and records necessary for SEC
reporting compliance purposes.
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SECTION 7.03. Additional Conditions of Obligations of BRC.
(a) No Governmental Order or Other Proceeding or Litigation. No order of
any Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(b) Deliveries. At the Closing, RMR shall have delivered to BRC:
certificates, for the requisite stock certificates dated the Closing Date,
signed on behalf of RMR, by the President of RMR in the allocable pro rata
amounts of shares necessary in exchange for each of the respective bond holders
interests;
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination.
This Agreement may be terminated at any time prior to the Effective
Time, by RMR or BRC as set forth below:
(a) by mutual consent of the boards of directors of RMR and BRC and its
interest/shareholders; or
(b) by RMR upon written notice to BRC, any condition to the obligation of
RMR to close contained in Article VII hereof has not been satisfied by 60 days
after date hereof (the "End Date") (unless such failure is the result of RMR'
breach of any of its representations, warranties, covenants or agreements
contained herein); or
(c) by BRC upon written notice to RMR, if: any condition to the obligation
of Receiver to close contained in Article VII hereof has not been satisfied by
the Closing Date (unless such failure is the result of BR's breach of any of its
representations, warranties, covenants or agreements contained herein); or
(d) by RMR if the board of directors or special committee of RMR determines
in good faith, based upon the written opinion of its outside legal counsel, that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the RMR board of directors or special committee to the RMR
stockholders under applicable law; or
SECTION 8.02. Fees, Costs and Expenses.
Whether or not the Exchange is consummated, all legal costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by RMR including any legal fees related to the
transactions herein contemplated, except that BRC shall not incur legal fees in
excess of $10,000 without RMR's consent.
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ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations and warranties of the parties set forth in this
Agreement shall survive the Closing. Following the Closing Date with respect to
any particular representation or warranty, no party hereto shall have any
further liability with respect to such representation and warranty. None of the
covenants, agreements and obligations of the parties hereto shall survive the
Closing.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.
All notices, requests and other communications to any party hereunder
shall be in writing (including telecopy, telex or similar writing) and shall be
deemed given or made as of the date delivered, if delivered personally or by
telecopy (provided that delivery by telecopy shall be followed by delivery of an
additional copy personally, by mail or overnight courier), one day after being
delivered by overnight courier or three days after being mailed by registered or
certified mail (postage prepaid, return receipt requested), to the parties at
the following addresses:
if to RMR, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Red Mountain Resources, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Black Rock Capital, LLC, to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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or such other address or telex or telecopy number as such party may hereafter
specify for the purpose by notice to the other party hereto.
SECTION 10.02. Amendment; Waiver.
This Agreement may be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may be given, provided that
the same are in writing and signed by or on behalf of the parties hereto.
SECTION 10.03. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party shall assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the written consent of the
other party hereto.
SECTION 10.04. Governing Law.
This Agreement shall be construed in accordance with and governed by
the law of the State of Arkansas without regard to principles of conflict of
laws.
SECTION 10.05. Waiver of Jury Trial.
Each party hereto hereby irrevocably and unconditionally waives any
rights to a trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.
SECTION 10.06. Consent to Jurisdiction.
Each of the Parties hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of the Circuit court of Pulaski County Arkansas for
purposes of any suit, action or other proceeding arising out of this Agreement
and the Transaction Documents (and agrees not to commence any action, suit or
proceedings relating hereto or thereto except in such courts). Each of the
Parties agrees that service of any process, summons, notice or document pursuant
to the laws of the State of StateplaceArkansas and on the individuals designated
in Section 10.01 shall be effective service of process for any action, suit or
proceeding brought against it in any such court.
SECTION 10.07. Counterparts; Effectiveness.
Facsimile transmissions of any executed original document and/or
retransmission of any executed facsimile transmission shall be deemed to be the
same as the delivery of an executed original. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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SECTION 10.08. Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership.
Except as expressly provided herein, this Agreement (including the
documents and the instruments referred to herein) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof. Except as
expressly provided herein, this Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. The
parties hereby acknowledge that no person shall have the right to acquire or
shall be deemed to have acquired shares of common stock of the other party
pursuant to the Exchange until consummation thereof.
SECTION 10.09. Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
SECTION 10.10. No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises under any provision of this Agreement, this Agreement
shall be construed as if drafted jointly by the parties thereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
SECTION 10.11. Severability.
If any term or other provision of this Agreement is invalid, illegal or
unenforceable, all other provisions of this Agreement shall remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in a manner that is materially adverse to
any party.
ARTICLE XI
DEFINITIONS
"Affiliate" shall mean (a) with respect to an individual, any member of
such individual's family including lineal ancestors and descendents; (b) with
respect to an entity, any officer, director, stockholder, partner, manager,
investor or holder of an ownership shares of or in such entity or of or in any
Affiliate of such entity; and (c) with respect to a Person, any Person which
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or entity.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Closing" shall have the meaning set forth in Section 2.01 of this
Agreement.
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"Closing Date" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Code" shall have the meaning set forth in the recitals of this
Agreement.
"Contracts" shall mean all contracts, leases, subleases, notes, bonds,
mortgages, indentures, Permits and Licenses, non-competition agreements, joint
venture or partnership agreements, powers of attorney, purchase orders, and all
other agreements, arrangements and other instruments, in each case whether
written or oral, to which such Person is a party or by which any of them or any
of its assets are bound.
"Conversion Amount" shall mean an amount equal to 1/100th of 27,000,000
shares of RMR Common Stock per 1% ownership of BRC shares.
"Effective Time" shall be the date all conditions and performance here-
under has been completed but no later than --------------.
"Governmental Approval" shall mean the consent, approval, order or
authorization of, or registration, declaration or filing with any court,
administrative agency or commission or other Governmental Entity, authority or
instrumentality, domestic or foreign.
"Governmental Entity" means the government of the United States of
America, any other nation or any political subdivision thereof, whether foreign,
state or local, and any agency, authority, instrumentality, regulatory body,
court, tribunal, arbitrator, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Laws" shall mean all foreign, federal, state and local statutes,
laws, ordinances, regulations, rules, resolutions, orders, writs, injunctions,
judgments and decrees applicable to the specified Person and to the businesses
and assets thereof.
"License" shall mean any franchise, authorization, license, permit,
certificate of occupancy, easement, variance, exemption, certificate, consent or
approval of any Governmental Entity or other Person.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind.
"Exchange" shall have the meaning set forth in the recitals of this
Agreement.
"Exchange Sub" shall have the meaning set forth in the preamble to this
Agreement.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, limited liability company,
association, Entity, institution, entity, party, Governmental Entity or any
other juridical entity of any kind or nature whatsoever.
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"RMR" shall have the meaning set forth in the preamble to this
Agreement.
"RMR Common Stock" shall have the meaning set forth in the recitals to
this agreement.
"Subsidiary" shall mean any Person in which another Person, directly
or indirectly, owns 50% of either the equity shares in or voting control of,
such Person.
"Taxes" means all federal, state, county, local, municipal, foreign
and other taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, gross receipts, occupation, windfall
profits, sales, use, ad valorem, value-added, profits, license, withholding,
payroll, employment, excise, premium, real property, personal property, customs,
net worth, capital gains, transfer, stamp, documentary, social security,
disability, environmental, alternative minimum, recapture and other taxes, and
including all shares, penalties and additions imposed with respect thereto,
whether disputed or not and including any obligations to indemnify or otherwise
assume or succeed to the Tax liability of any Person, and any liability in
respect of any Tax as a result of being a member of any affiliated, combined,
consolidated, unitary or similar group.
"Tax Return" means any report, return, statement, estimate,
informational return, declaration or other written information required to be
supplied to a taxing authority in connection with Taxes.
"Taxing Authority" means any domestic, foreign, federal, national,
state, county or municipal or other local government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising tax
regulatory authority.
"Transaction Documents" shall mean this Agreement
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be duly executed as of the day and year first above written.
RED MOUNTAIN RESOURCES, INC.
By:
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
BLACK ROCK CAPITAL LLC
By:
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Managing Member
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SCHEDULE 4.06
DEBT OF BRC
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