Current Report — Form 8-K Filing Table of Contents
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2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, HTML 217K Liquidation or Succession
EX-2.1 — Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
AGREEMENT AND PLAN OF MERGER (this
"Agreement"),
dated as of September 21, 2010, is by and among MANAGEMENT ENERGY, INC., a
Nevada corporation ("Parent"), MCC MERGER,
INC., a Delaware corporation and a direct wholly-owned subsidiary of Parent
("Merger Sub"),
MAPLE CARPENTER CREEK HOLDINGS, INC. f/k/a Maple Werks Corporation, a Delaware
corporation (the "Company"), AAM
INVESTMENTS, LLC, a Nevada limited liability company (“AAM”), and THE MAPLE GAS
CORPORATION, a Delaware corporation (“Maple Gas”). Parent, Merger
Sub, the Company, AAM and Maple Gas are referred to collectively herein as the
"Parties".
WHEREAS,
the Board of Directors of each of Parent and the Company have determined that it
is in the best interests of each corporation and their respective stockholders
that the Parties consummate the business combination transaction provided for
herein in which Merger Sub will merge with and into the Company (the "Merger") and, in
furtherance thereof, have approved this Agreement, the Merger and the
transactions contemplated by this Agreement and declared the Merger advisable;
and
WHEREAS,
AAM and Maple Gas are the sole shareholders of the Company (each a “Company
Shareholder” and together the “Company Shareholders”) and have joined in this
Agreement for the purpose of approving the Merger and participating in the
transactions contemplated by as further described herein; and
WHEREAS,
Parent, as the sole shareholder of Merger Sub, has approved this Agreement, the
Merger and the transactions contemplated by this Agreement pursuant to action
taken in accordance with the requirements of the Delaware General Corporation
Law (“DGCL”) and the bylaws of Merger Sub; and
WHEREAS,
pursuant to the Merger, the outstanding shares of common stock of the Company
shall be converted into shares of common stock of Parent at the rate determined
herein; and
WHEREAS,
for federal income tax purposes, it is intended that the Merger shall qualify as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder;
NOW,
THEREFORE, in consideration of the mutual representations, warranties, covenants
and agreements set forth herein, the Parties hereby agree as
follows:
ARTICLE
I
THE MERGER; EFFECTIVE TIME;
CLOSING
1.1 The
Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the DGCL, at the Effective Time,
Merger Sub shall be merged with and into the Company, the separate corporate
existence of Merger Sub shall thereupon cease and the Company shall continue as
the surviving corporation and shall succeed to and assume all the rights and
obligations of Merger Sub in accordance with the DGCL. The Company,
as the surviving corporation after the consummation of the Merger, is sometimes
hereinafter referred to as the "Surviving
Corporation."
1.2 Closing. Unless
this Agreement shall have been terminated and the transactions contemplated
herein shall have been abandoned pursuant to Article VIII, the
closing of the Merger (the "Closing") shall take
place at 10:00 a.m., local time, at the offices of counsel for Parent, on the
first business day after all of the conditions (excluding conditions that, by
their nature, cannot be satisfied until the Closing Date) to the obligations of
the Parties to consummate the Merger as set forth in Article VII have been
satisfied or waived (subject to applicable Law), or such other date, time or
place as is agreed to in writing by the Parties (the actual time and date of the
Closing being referred to herein as the "Closing
Date").
1.3 Effective
Time. Subject to the provisions of this Agreement, the Parties
shall cause the Merger to be consummated by filing the certificate of merger of
Merger Sub and the Company (the "Certificate of
Merger") with the Secretary of State of the State of Delaware in such
form as required by, and executed in accordance with, the relevant provisions of
the DGCL as soon as practicable on or before the Closing Date. The
Merger shall become effective at such time as the Certificate of Merger is duly
filed with the Secretary of State of Delaware or at such subsequent date or time
as the Parties shall agree and specify in the Certificate of Merger (the date
and time the Merger becomes effective being hereinafter referred to as the
"Effective
Time").
1.4 Effect of the
Merger. At and after the Effective Time, the effect of the
Merger shall be as provided in this Agreement and the applicable provisions of
the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the property, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving
Corporation.
2.1 Certificate of
Incorporation. At and after the Effective Time, and without
any further action on the part of the Company and Merger Sub, the certificate of
incorporation of the Company shall continue as the certificate of incorporation
of the Surviving Corporation.
2.2 Bylaws. At
and after the Effective Time, the bylaws of the Company shall continue as the
bylaws of the Surviving Corporation, until thereafter changed or amended as
provided therein or by applicable Law.
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ARTICLE
III
DIRECTORS AND OFFICERS
OF
THE SURVIVING
CORPORATION AND
PARENT
3.1 Directors of the Surviving
Corporation. The directors of the Surviving Corporation, as of
the Effective Time, will be the directors of the Company immediately prior to
the Effective Time.
3.2 Officers of the Surviving
Corporation. The officers of the Surviving Corporation, as of
the Effective Time, will be the officers of the Company immediately prior to the
Effective Time.
ARTICLE
IV
MERGER
CONSIDERATION
4.1 Share Consideration for the
Merger; Conversion or Cancellation of Shares in the Merger. At
the Effective Time, the manner of converting or canceling shares of the Company
and Merger Sub shall be as follows:
(a) Company Common
Stock. At the Effective Time, each share of common stock
(“Company
Shares”) of the Company issued and outstanding immediately prior to the
Effective Time, shall be converted into the right to receive the following
(collectively the “Merger
Consideration”): (i) 65,000 duly authorized, validly issued, fully paid
and nonassessable shares of common stock, $.001 par value, of Parent
(collectively, “Parent
Shares”), (ii) a contingent right to receive up to an additional maximum
of 15,000 additional Parent Shares and (iii) 1/1000th of the
right to receive additional Parent Shares pursuant to Section 6.14 herein, with
the result that the 1,000 outstanding Company Shares shall be converted into (i)
65,000,000 Parent Shares (the “Primary Merger
Consideration”), (ii) the right to receive a maximum of 15,000,000
additional Parent Shares (the “Contingent Merger
Consideration”) and (iii) such additional Parent Shares as may become
issuable pursuant to Section 6.14 herein (the “Adjustment Merger
Consideration”. As a result of the Merger and without any
action on the part of the holders thereof, at the Effective Time, all Company
Shares shall cease to be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each holder of a certificate which
immediately prior to the Effective Time represented any Company Shares (a "Certificate") shall
thereafter cease to have any rights with respect to such shares of Company
Common Stock, except as provided herein or by Law.
(b) Stock of Merger
Sub. Each share of common stock, $0.01 par value, of Merger
Sub issued and outstanding immediately prior to the Effective Time, shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted automatically into and exchanged for one (1) validly issued, fully
paid and nonassessable share of common stock of the Surviving
Corporation. Each stock certificate representing any shares of Merger
Sub shall continue to represent ownership of such shares of capital stock of the
Surviving Corporation.
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4.2 Payment for Shares in the
Merger. The manner of making payment for Shares in the Merger
shall be as follows:
(a) Transfer
Agent. Prior to the Closing Date, Parent shall instruct its
stock transfer agent to act as exchange agent hereunder for the purposes of
issuing the Primary Merger Consideration in exchange for the Certificates
representing the Company Shares (the "Exchange
Agent"). At or prior to the Effective Date, Parent shall
deposit with the Exchange Agent in trust for the benefit of the holders of
Company Shares, a sufficient number of certificates representing the Primary
Merger Consideration. The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the Primary Merger Consideration in accordance
with subsection (b) below.
(b) Exchange
Procedures. Parent shall cause the Exchange Agent to provide
to each holder of record of outstanding Company Shares prior to the Closing (i)
a form of letter of transmittal, in a form reasonably satisfactory to the
Parties and (ii) instructions for use in effecting the surrender of Certificates
for payment therefor. Upon surrender of Certificates for cancellation
to the Exchange Agent, together with such letter of transmittal duly executed
and completed in accordance with the instructions thereto, and any other
documents as may be required by the Exchange Act, the holder of such Certificate
shall be entitled to receive in exchange for each of the Company Shares
represented by the Certificates held of record by such holder one or more Parent
Shares representing, in the aggregate, the number of Parent Shares that such
holder has the right to receive pursuant to Section
4.1(a). The Certificates so surrendered pursuant to this Section 4.2(b) shall
forthwith be canceled. Until so surrendered, such Certificates shall
represent solely the right to receive the Merger Consideration allocable to such
Certificates.
(c) Transfers of
Ownership. If any certificate representing Parent Shares is to
be issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of such exchange that
the Certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer and that the Person requesting such exchange shall pay
to the Exchange Agent any transfer or other taxes required by reason of the
issuance of certificates for such Parent Shares in a name other than that of the
registered holder of the Certificate surrendered, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable.
(d) Contingent Merger
Consideration. The Contingent Merger Consideration shall
become issuable to Maple Gas and AAM upon and to the extent of the achievement
of the performance/vesting milestones described on Schedule I
hereto. All Parent Shares issued as Contingent Merger Consideration
must be issued within five years from the date hereof; if any such Parent Shares
have not been issued by that time, such Parent Shares shall not be
issued.
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(e) Allocation of Merger
Consideration. The Company’s principal assets consist of
mining projects at Carpenter Creek, Montana; Snider Ranch, Montana; and
Cundimarca Province, Colombia. The Parties have attributed
approximately equal value to the three Projects for purposes of allocation the
Merger Consideration.
4.3 Transfer of Shares after the
Effective Time. No transfers of Company Shares shall be made
on the stock transfer books of the Company after the close of business on the
day prior to the date of the Effective Time.
4.4 Restricted
Securities. All Parent Shares to be issued hereunder shall be
deemed “restricted
securities” as defined in paragraph (a) of Rule 144 under the Securities
Act of 1933, as amended (the “Securities
Act”). All Parent Shares to be issued under the terms of this
Agreement shall be issued pursuant to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act and
the rules and regulations promulgated thereunder. Certificates
representing the Parent Shares to be issued hereunder shall bear a restrictive
legend in substantially the following form:
The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be offered for sale, sold, or
otherwise disposed of, except in compliance with the registration provisions of
such Act or pursuant to an exemption from such registration provisions, the
availability of which is to be established to the satisfaction of the
Company.
4.5 Further
Assurances. At and after the Effective Time, the officers and
directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Company or Merger Sub, as applicable,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of the Company or Merger Sub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation any
and all right, title and interest in, to and under any of the rights, properties
or assets acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES
5.1 Representations and
Warranties of the Company. The Company hereby represents and
warrants to Parent and Merger Sub that the statements contained in this Section 5.1 are true
and correct, except to the extent specifically set forth on the disclosure
schedule delivered herewith by the Company to Parent and Merger Sub (the "Company Disclosure
Schedule").
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(a) Organization, Standing and
Power. The Company and each of its subsidiaries is duly organized,
validly existing and in good standing under the Laws of the jurisdiction in
which it is organized and has the corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on the business, operations or
financial condition of the Company, a material adverse effect on the ability of
the Company to perform its obligations under this Agreement or on the ability of
the Company to consummate the transactions contemplated herein (a “Company Material Adverse
Effect”). The Company and each of its subsidiaries is duly
qualified to do business in each jurisdiction where the nature of its business
or its ownership or leasing of its properties make such qualification necessary
except where the failure to so qualify would not reasonably be expected to have
a Company Material Adverse Effect.
(b) Capital Structure.
The authorized capital stock of the Company consists of 1,000 Company
Shares, of which 1,000 Company Shares are issued and outstanding on the date
hereof (500 Company Shares to each of AAM and Maple Gas). Section 5.1(b) of the
Company Disclosure Schedule sets forth each subsidiary of the Company, showing
the jurisdiction of its incorporation or organization. The Company is
the sole record and beneficial owner of all of the issued and outstanding equity
interests of each of its subsidiaries. All outstanding equity interests of
the Company and each of its subsidiaries are duly authorized, validly issued,
fully paid and nonassessable and not subject to or issued in violation of any
purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the applicable
Laws of its jurisdiction of formation, the Company Constituent Instruments or
any Contract to which the Company is a party or otherwise bound. There are
not any bonds, debentures, notes or other indebtedness of the Company or any of
its subsidiaries having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which holders of
Company Shares or the capital stock of any of its subsidiaries may vote.
There are not any options, warrants, rights, convertible or exchangeable
securities, “phantom” stock rights, stock appreciation rights, stock-based
performance units, commitments, Contracts, arrangements or undertakings of any
kind to which the Company or any of its subsidiaries is a party or by which any
of them is bound (i) obligating the Company or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity interests in, or any security convertible or
exercisable for or exchangeable into any capital stock of or other equity
interest in, the Company or any of its subsidiaries, (ii) obligating the Company
or any of its subsidiaries to issue, grant, extend or enter into any such
option, warrant, call, right, security, commitment, Contract, arrangement or
undertaking or (iii) that give any Person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights
occurring to holders of the capital stock of the Company or of any of its
subsidiaries. There are not any outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any subsidiary.
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(c) Authority; Execution and
Delivery; Enforceability. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein. The execution and delivery by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly authorized and approved by the
board of directors, and (subject to the approval of the Company’s shareholders)
no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement and the transactions contemplated hereby. When
executed and delivered, this Agreement will be enforceable against the Company
in accordance with its terms.
(d) No Conflicts.
The execution and delivery by the Company of this Agreement 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
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the properties or assets of the Company or any of its subsidiaries under, any
provision of (i) the Company Constituent Instruments or the comparable charter
or organizational documents of any of its subsidiaries, (ii) any Contract to
which the Company or any of its subsidiaries is a party or to which any of their
respective properties or assets is subject or (iii) any judgment, order or
decree or material Law applicable to the Company or any of its subsidiaries or
their respective properties or assets, other than, in the case of clauses (ii)
and (iii) above, any such items that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Company Material Adverse
Effect.
(e) Consents. No
Consent of, or registration, declaration or filing with, or permit from, any
Governmental Entity or other Person is required to be obtained or made by or
with respect to the Company or any of its subsidiaries in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for the filing of the Certificate of
Merger at the Effective Time with the Secretary of State of
Delaware.
(f)
Litigation.
There is no Action against or affecting the Company or any of its
subsidiaries or any of their respective properties which (i) adversely affects
or challenges the legality, validity or enforceability of any of this Agreement
or (ii) could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Company Material
Adverse Effect.
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(g) Compliance with Applicable
Laws. The Company and each of its subsidiaries have conducted their
business and operations in compliance with all applicable Laws, except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.
The Company has not received any written communication during the past two
years from a Governmental Entity that alleges that the Company is not in
compliance in any material respect with any applicable Law.
(h) Brokers. No
broker, investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company or any of its subsidiaries.
(i)
Financial Statements;
Liabilities. The Company has delivered to Parent (i) the financial
statements of Carpenter Creek, LLC as of December 31, 2009 and for the year then
ended, as accompanied by the report of Hein and Associates (independent
auditors) and (ii) the unaudited financial statements as of August 31, 2010
listed on Section
5.1(i) of the Company Disclosure Schedule and (in certain cases) for the
periods then ended (the “Company Financial
Statements”). The Company Financial Statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated. The Company Financial
Statements fairly present in all material respects the financial condition and
operating results of the Company, as of the dates, and for the periods,
indicated therein. The Company does not have any Liabilities, and there is
no existing condition, situation or set of circumstances which could reasonably
be expected to result in such a Liability, other than (i) Liabilities
incurred in the ordinary course of business subsequent to August 31, 2010, (ii)
the Liabilities listed on Schedule 6.10 hereto and (iii) obligations under
Contracts and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected in the
Company Financial Statements, which, in both cases, individually and in the
aggregate, would not be reasonably expected to result in a Company Material
Adverse Effect.
(j) Absence of Certain
Changes. Since August 31, 2010 and except as set forth on
Section 5.1(j)
of the Company Disclosure Schedule, the Company and its subsidiaries have
conducted their respective businesses in the ordinary course consistent with
past practices and there has not been:
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(i) any
material adverse change in the business, operations or financial condition of
the Company;
(ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to any shares of capital stock of the Company, or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company;
(iii)
any incurrence, assumption or
guarantee by the Company or any subsidiary of any indebtedness for borrowed
money;
(iv) any
creation or assumption by the Company or any subsidiary of any Lien on any
material asset other than in the ordinary course of business consistent with
past practices;
(v) any
making of any loan, advance or capital contributions to or investment in any
Person;
(vi) any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of the Company or any subsidiary which,
individually or in the aggregate, would reasonable be expected to have a Company
Material Adverse Effect;
(vii) any
transaction or commitment made, or any contract or agreement entered into, by
the Company or any subsidiary relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment by the Company
or any subsidiary of any material contract or other right, other than
transactions and commitments in the ordinary course consistent with past
practices and those contemplated by this Agreement;
(viii) any
change in any method of accounting or accounting practice by the Company, except
for any such change after the date hereof required by reason of a concurrent
change in generally accepted accounting principles; or
(viii) any
(A) grant of any severance or termination pay to any officer, director or
employee of the Company or any subsidiary, (B) entering into of any employment,
deferred compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee of the Company or any
subsidiary, (C) increase in benefits payable under an existing severance or
termination pay policies or employment agreements or (D) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any subsidiary.
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(k) Properties. The Company and
each of its subsidiaries has good and marketable title to, or in the case of
leased property has valid leasehold interests in, all property and assets
(whether real or personal, tangible or intangible) reflected in the Company
Financial Statements or acquired after August 31, 2010, except for properties
and assets sold since August 31, 2010 in the ordinary course of business
consistent with past practices or as contemplated by this
Agreement. None of such properties or assets is subject to any Liens,
except:
(i) Liens
for taxes not yet due or being contested in good faith (and for which adequate
accruals or reserves have been established on the Company Financial Statements);
or
(ii) Liens
which do not materially detract from the value of such property or assets as now
used.
(i)
Except for agreements, contracts, plans, leases, arrangements or
commitments set forth in Section 5.1(l) of the Company
Disclosure Schedule, neither the Company nor any subsidiary is a party to
or subject to:
(A) Any
lease providing for annual rentals of $5,000 or more;
(B) Any
contract for the purchase of materials, supplies, goods, services, equipment or
other assets providing for annual payments by the Company or any subsidiary of
$10,000 or more;
(C) Any
sales, distribution or other similar agreement providing for the sale by the
Company or any subsidiary of materials, supplies, goods, services, equipment or
other assets that provides for annual payments to the Company or any subsidiary
of $10,000 or more;
(D) Any
partnership, joint venture or other similar contract or
arrangement;
(E) Any
contract relating to indebtedness for borrowed money or the deferred purchase
price of property (whether incurred, assumed, guaranteed or secured by any
asset), except contracts relating to indebtedness incurred in the ordinary
course of business in an amount not exceeding $10,000;
(F) Any
license agreement, franchise agreement or agreement in respect of similar rights
granted to or held by the Company or any subsidiary;
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(G) Any
contract or other document that substantially limits the freedom of the Company
or any subsidiary to compete in any line of business or with any Person or in
any area or which would so limit the freedom of Parent or the Surviving
Corporation after the Closing Date;
(H) Any
other contract or commitment not made in the ordinary course of business that is
material to Company.
(ii) Each
agreement, contract, plan, lease, arrangement and commitment required to be
disclosed on Section
5.1(l)
of the Company Disclosure Schedule is a valid and binding agreement of the
Company or a subsidiary, as applicable, and is in full force and effect, and
neither the Company or any subsidiary nor any other party thereto is in default
in any material respect under the terms of any such agreement, contract, plan,
lease, arrangement or commitment.
(m) Taxes. The
Company and each of its subsidiaries has duly filed all material federal, state,
local and foreign tax returns required to be filed by it, and has duly paid,
caused to be paid or made adequate provision for the payment of all Taxes
required to be paid in respect of the periods covered by such returns and has
made adequate provision for payment of all Taxes anticipated to be payable in
respect of all calendar periods since the periods covered by such returns. None
of the federal income tax returns of the Company and its subsidiaries have been
examined or audited by the IRS. All deficiencies and
assessments asserted as a result of any such examinations or other audits by
federal, state, local or foreign taxing authorities have been paid, fully
settled or adequately provided for in the Company Financial Statements, and no
issue or claim has been asserted for Taxes by any taxing authority for any prior
period, the adverse determination of which would result in a deficiency which
would have a Company Material Adverse Effect, other than those heretofore paid
or provided for. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of the
Company or its subsidiaries.
(n) Employees. Except for the
Company’s employment agreement with Jack Hanks (its CEO):
(i) Neither
the Company nor any subsidiary has any collective bargaining arrangements or
agreements covering any of its employees. Neither the Company nor any
subsidiary has any employment contract, agreement regarding proprietary
information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be
employed or engaged by it. No officer, consultant or key employee of
the Company or any subsidiary whose termination, either individually or in the
aggregate, would be reasonably likely to have a Company Material Adverse Effect,
has terminated or, to the knowledge of Company, has any present intention of
terminating his or her employment or engagement with the Company or its
subsidiaries.
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(ii) Neither
the Company nor any subsidiary has, or contributes to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)), or have any
obligation to or customary arrangement with employees for bonuses, incentive
compensation, vacations, severance pay, sick pay, sick leave, insurance, service
award, relocation, disability, tuition refund, or other benefits, whether oral
or written. No liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any Employee Benefit Plan by the Company or
any subsidiary which is or would be materially adverse to the
Company.
(o) Environmental
Compliance. The Company and
each of its subsidiaries have obtained all material approvals, authorization,
certificates, consents, licenses, orders and permits or other similar
authorizations of all governmental authorities, or from any other person, that
are required under any Environmental Laws. To the
Company’s knowledge, the Company and each of its subsidiaries has all necessary
governmental approvals required under all Environmental Laws as necessary for
its business. Except for such instances as would not individually or
in the aggregate have a Company Material Adverse Effect, and to the knowledge of
the Company, there are no past or present events, conditions, circumstances,
incidents, actions or omissions relating to or in any way affecting the Company
or any subsidiary that violate or may violate any Environmental Law after the
Closing Date or that may give rise to any environmental liability, or otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation (i) under any Environmental Law, or (ii) based on or related to
the manufacture, processing, distribution, use, treatment, storage (including
without limitation underground storage tanks), disposal, transport or handling,
or the emission, discharge, release or threatened release of any hazardous
substance.
(p) Books and Records; Internal
Accounting Controls. The records and documents of the Company
accurately reflect in all material respects the information relating to the
business of the Company, the location of its assets, and the nature of all
transactions giving rise to the obligations or accounts receivable of the
Company. The Company maintains a system of internal accounting
controls sufficient, in the judgment of the Company's board of directors, to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate actions are taken with respect to any
differences.
12
(q) Transactions with
Affiliates. Except as set forth on Section 5.1(q) of the
Company Disclosure Schedule, there are no loans, leases, agreements, contracts,
royalty agreements, management contracts or arrangements or other continuing
transactions between (a) the Company or any of its respective customers or
suppliers on the one hand, and (b) on the other hand, any officer, employee,
consultant or director of the Company, or any person owning at least 5% of the
outstanding capital stock of the Company or any member of the immediate family
of such officer, employee, consultant, director or stockholder or any
corporation or other entity controlled by such officer, employee, consultant,
director or stockholder, or a member of the immediate family of such officer,
employee, consultant, director or stockholder.
(r)
Questionable
Payments. Neither the Company, nor any director, officer,
agent, employee, or other person associated with, or acting on behalf of, the
Company, nor any stockholder of the Company has, directly or
indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
5.2 Representations and
Warranties of the Parent. Parent hereby represents and
warrants to the Company that the statements contained in this Section 5.2 are true
and correct, except to the extent specifically set forth on the disclosure
schedule delivered herewith by Parent to the Company (the "Parent Disclosure
Schedule").
(a) Organization, Standing and
Power. Parent and each of its subsidiaries is duly organized,
validly existing and in good standing under the Laws of the jurisdiction in
which it is organized and has the corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on the business, operations or
financial condition of the Parent, a material adverse effect on the ability of
the Parent to perform its obligations under this Agreement or on the ability of
the Parent to consummate the transactions contemplated herein (a “Parent Material Adverse
Effect”). The Parent and each of its subsidiaries is duly qualified
to do business in each jurisdiction where the nature of its business or its
ownership or leasing of its properties make such qualification necessary except
where the failure to so qualify would not reasonably be expected to have a
Parent Material Adverse Effect.
13
(b) Capital Structure.
The authorized capital stock of the Parent consists of 300 million Parent
Shares, of which 41,825,000 Parent Shares are issued and outstanding on the date
hereof (subject to the transactions referenced in Article VI
herein). Section 5.3(b) of the
Parent Disclosure Schedule sets forth each subsidiary of the Parent, showing the
jurisdiction of its incorporation or organization. Parent is the sole
record and beneficial owner of all of the issued and outstanding equity
interests of each of its subsidiaries. All outstanding equity interests of
Parent and each of its subsidiaries are duly authorized, validly issued, fully
paid and nonassessable and not subject to or issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of the applicable Laws of its
jurisdiction of formation, the Parent Constituent Instruments or any Contract to
which the Parent is a party or otherwise bound. There are not any bonds,
debentures, notes or other indebtedness of the Parent or any of its subsidiaries
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which holders of Parent Shares or
the capital stock of any of its subsidiaries may vote. There are not any
options, warrants, rights, convertible or exchangeable securities, “phantom”
stock rights, stock appreciation rights, stock-based performance units,
commitments, Contracts, arrangements or undertakings of any kind to which the
Parent or any of its subsidiaries is a party or by which any of them is bound
(i) obligating the Parent or any of its subsidiaries to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of capital stock or
other equity interests in, or any security convertible or exercisable for or
exchangeable into any capital stock of or other equity interest in, the Parent
or any of its subsidiaries, (ii) obligating the Parent or any of its
subsidiaries to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking or (iii)
that give any Person the right to receive any economic benefit or right similar
to or derived from the economic benefits and rights occurring to holders of the
capital stock of the Parent or of any of its subsidiaries. There are not
any outstanding contractual obligations of the Parent or any subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Parent or any subsidiary.
(c) Authority; Execution and
Delivery; Enforceability. Each of the Parent and Merger Sub has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated herein. The execution and
delivery by the Parent and Merger Sub of this Agreement and the consummation by
them of the transactions contemplated hereby have been duly authorized and
approved by the board of directors of the Parent and Merger Sub (and by the
Parent as the sole shareholder of Merger Sub), and no other corporate
proceedings on the part of the Parent or Merger Sub are necessary to authorize
this Agreement and the transactions contemplated hereby. When executed and
delivered, this Agreement will be enforceable against the Parent and Merger Sub
in accordance with its terms.
14
(d) No Conflicts.
The execution and delivery by the Parent and Merger Sub of this Agreement
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 (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the creation
of any Lien upon any of the properties or assets of the Parent or any of its
subsidiaries under, any provision of (i) the Parent Constituent Instruments or
the comparable charter or organizational documents of any of its subsidiaries,
(ii) any Contract to which the Parent or any of its subsidiaries is a party or
to which any of their respective properties or assets is subject or (iii) any
judgment, order or decree or material Law applicable to the Parent or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Parent
Material Adverse Effect.
(e) Consents. No
Consent of, or registration, declaration or filing with, or permit from, any
Governmental Entity or other Person is required to be obtained or made by or
with respect to the Parent or any of its subsidiaries in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for the filing of the Certificate of
Merger at the Effective Time with the Secretary of State of
Delaware.
(f)
Litigation.
There is no Action against or affecting the Parent or any of its
subsidiaries or any of their respective properties which (i) adversely affects
or challenges the legality, validity or enforceability of any of this Agreement
or (ii) could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Parent Material Adverse
Effect.
(g) Compliance with Applicable
Laws. The Parent and each of its subsidiaries have conducted their
business and operations in compliance with all applicable Laws, except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Parent Material Adverse Effect.
The Parent has not received any written communication during the past two
years from a Governmental Entity that alleges that the Parent is not in
compliance in any material respect with any applicable Law.
(h) Brokers. No
broker, investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Parent or any of its subsidiaries.
15
(i)
Financial Statements;
Liabilities. Parent has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC (the
“SEC Reports”)
pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”). As of its respective filing date, each SEC Report
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder applicable to such
SEC Report. Except to the extent that information contained in any SEC
Report has been revised or superseded by a later SEC Report, none of the SEC
Reports contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Parent included in the SEC
Reports comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with the U.S. generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by the rules and regulations of the SEC) applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present the financial position of Parent as of the dates thereof and the
results of its operations and cash flows for the periods shown (subject, in the
case of unaudited statements, to normal year-end audit
adjustments). The Parent does not have any Liabilities, and
there is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a Liability, other than
(i) Liabilities incurred in the ordinary course of business subsequent to
July 31, 2010, and (ii) obligations under Contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in the SEC Reports, which, in
both cases, individually and in the aggregate, would not be
reasonably
expected
to result in a Parent Material Adverse Effect.
(j)
Application of Takeover
Protections. Parent has taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Parent Constituent
Instruments or the Laws of Delaware that is or could become applicable to the
transactions contemplated herein.
(k) Certain Registration
Matters. Parent has not granted or agreed to grant to any Person
any rights (including “piggy-back” registration rights) to have any securities
of Parent registered with the SEC or any other governmental
authority.
(l)
Absence of Certain
Changes. Since July 31, 2010 and except as set forth in Section 5.2(l) of the Parent
Disclosure Schedule, the Parent and its subsidiaries have conducted their
respective businesses in the ordinary course consistent with past practices and
there has not been:
16
(i) any
material adverse change in the business, operations or financial condition of
the Parent;
(ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to any shares of capital stock of the Parent, or any repurchase,
redemption or other acquisition by the Parent of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Parent;
(iii) any
incurrence, assumption or guarantee by the Parent or any subsidiary of any
indebtedness for borrowed money;
(iv) any
creation or assumption by the Parent or any subsidiary of any Lien on any
material asset other than in the ordinary course of business consistent with
past practices;
(v) any
making of any loan, advance or capital contributions to or investment in any
Person;
(vi) any
damage, destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of the Parent or any subsidiary which,
individually or in the aggregate, would reasonable be expected to have a Parent
Material Adverse Effect;
(vii) any
transaction or commitment made, or any contract or agreement entered into, by
the Parent or any subsidiary relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment by the Parent or
any subsidiary of any material contract or other right, other than transactions
and commitments in the ordinary course consistent with past practices and those
contemplated by this Agreement;
(viii) any
change in any method of accounting or accounting practice by the Parent, except
for any such change after the date hereof required by reason of a concurrent
change in generally accepted accounting principles; or
(viii) any
(A) grant of any severance or termination pay to any officer, director or
employee of the Parent or any subsidiary, (B) entering into of any employment,
deferred compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee of the Parent or any
subsidiary, (C) increase in benefits payable under an existing severance or
termination pay policies or employment agreements or (D) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Parent or any subsidiary.
17
(m) Properties. The Parent and each
of its subsidiaries has good and marketable title to, or in the case of leased
property has valid leasehold interests in, all property and assets (whether real
or personal, tangible or intangible) reflected in the Parent Financial
Statements or acquired after July 31, 2010, except for properties and assets
sold since July 31, 2010 in the ordinary course of business consistent with past
practices or as contemplated by this Agreement. None of such
properties or assets is subject to any Liens, except:
(i)
Liens for taxes not yet due or being contested in good faith (and for
which adequate accruals or reserves have been established on the Parent
Financial Statements); or
(ii) Liens
which do not materially detract from the value of such property or assets as now
used.
(i)
Except for agreements, contracts, plans, leases, arrangements or commitments set
forth in Section
5.3(n)
of the Parent Disclosure Schedule, neither the Parent nor any subsidiary is
a party to or subject to:
(A) Any
lease providing for annual rentals of $5,000 or more;
(B) Any
contract for the purchase of materials, supplies, goods, services, equipment or
other assets providing for annual payments by the Parent or any subsidiary of
$10,000 or more;
(C) Any
sales, distribution or other similar agreement providing for the sale by the
Parent or any subsidiary of materials, supplies, goods, services, equipment or
other assets that provides for annual payments to the Parent or any subsidiary
of $10,000 or more;
(D) Any
partnership, joint venture or other similar contract or
arrangement;
(E) Any
contract relating to indebtedness for borrowed money or the deferred purchase
price of property (whether incurred, assumed, guaranteed or secured by any
asset), except contracts relating to indebtedness incurred in the ordinary
course of business in an amount not exceeding $10,000;
(F) Any
license agreement, franchise agreement or agreement in respect of similar rights
granted to or held by the Parent or any subsidiary;
18
(G) Any
contract or other document that substantially limits the freedom of the Parent
or any subsidiary to compete in any line of business or with any Person or in
any area or which would so limit the freedom of the Surviving Corporation after
the Closing Date;
(H) Any
other contract or commitment not made in the ordinary course of business that is
material to Parent.
(ii) Each
agreement, contract, plan, lease, arrangement and commitment required to be
disclosed on Section
5.3(n)
of the Parent Disclosure Schedule is a valid and binding agreement of the Parent
or a subsidiary, as applicable, and is in full force and effect, and neither the
Parent or any subsidiary nor any other party thereto is in default in any
material respect under the terms of any such agreement, contract, plan, lease,
arrangement or commitment.
(o) Taxes. The
Parent and each of its subsidiaries has duly filed all material federal, state,
local and foreign tax returns required to be filed by it, and has duly paid,
caused to be paid or made adequate provision for the payment of all Taxes
required to be paid in respect of the periods covered by such returns and has
made adequate provision for payment of all Taxes anticipated to be payable in
respect of all calendar periods since the periods covered by such returns. None
of the federal income tax returns of the Parent and its subsidiaries have been
examined or audited by the IRS. All deficiencies and
assessments asserted as a result of any such examinations or other audits by
federal, state, local or foreign taxing authorities have been paid, fully
settled or adequately provided for in the Parent Financial Statements, and no
issue or claim has been asserted for Taxes by any taxing authority for any prior
period, the adverse determination of which would result in a deficiency which
would have a Parent Material Adverse Effect, other than those heretofore paid or
provided for. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax return of the
Parent or its subsidiaries.
(p) Employees.
(i)
Neither the
Parent nor any subsidiary has any collective bargaining arrangements or
agreements covering any of its employees. Neither the Parent nor any
subsidiary has any employment contract, agreement regarding proprietary
information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any officer, employee or consultant to be
employed or engaged by it. No officer, consultant or key employee of
the Parent or any subsidiary whose termination, either individually or in the
aggregate, would be reasonably likely to have a Parent Material Adverse Effect,
has terminated or, to the knowledge of Parent, has any present intention of
terminating his or her employment or engagement with the Parent or its
subsidiaries.
19
(ii) Neither
the Parent nor any subsidiary has, or contributes to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of ERISA, or have any obligation to or
customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, sick pay, sick leave, insurance, service award,
relocation, disability, tuition refund, or other benefits, whether oral or
written. No liability to the Pension Benefit Guaranty Corporation has
been incurred with respect to any Employee Benefit Plan by the Parent or any
subsidiary which is or would be materially adverse to the Parent.
(q) Environmental
Compliance. The Parent and
each of its subsidiaries have obtained all material approvals, authorization,
certificates, consents, licenses, orders and permits or other similar
authorizations of all governmental authorities, or from any other person, that
are required under any Environmental Laws. To the Parent’s
knowledge, the Parent and each of its subsidiaries has all necessary
governmental approvals required under all Environmental Laws as necessary for
its business. Except for such instances as would not individually or
in the aggregate have a Parent Material Adverse Effect, and to the knowledge of
the Parent, there are no past or present events, conditions, circumstances,
incidents, actions or omissions relating to or in any way affecting the Parent
or any subsidiary that violate or may violate any Environmental Law after the
Closing Date or that may give rise to any environmental liability, or otherwise
form the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation (i) under any Environmental Law, or (ii) based on or related to
the manufacture, processing, distribution, use, treatment, storage (including
without limitation underground storage tanks), disposal, transport or handling,
or the emission, discharge, release or threatened release of any hazardous
substance.
(r) Books and Records; Internal
Accounting Controls. The records and documents of the Parent
accurately reflect in all material respects the information relating to the
business of the Parent, the location of its assets, and the nature of all
transactions giving rise to the obligations or accounts receivable of the
Parent. The Parent maintains a system of internal accounting controls
sufficient, in the judgment of the Parent's board of directors, to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
actions are taken with respect to any differences.
20
(s) Transactions with
Affiliates. There are no loans, leases, agreements, contracts,
royalty agreements, management contracts or arrangements or other continuing
transactions between (a) the Parent or any of its respective customers or
suppliers on the one hand, and (b) on the other hand, any officer, employee,
consultant or director of the Parent, or any person owning at least 5% of the
outstanding capital stock of the Parent or any member of the immediate family of
such officer, employee, consultant, director or stockholder or any corporation
or other entity controlled by such officer, employee, consultant, director or
stockholder, or a member of the immediate family of such officer, employee,
consultant, director or stockholder.
(t) Questionable
Payments. Neither the Parent, nor any director, officer,
agent, employee, or other person associated with, or acting on behalf of, the
Parent, nor any stockholder of the Parent has, directly or
indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
5.3 Representations and
Warranties of the Company Shareholders. Each of the Company
Shareholders hereby represents and warrants to Parent and Merger Sub that the
statements contained in this Section 5.3 are true
and correct.
(a) Organization and
Standing. The Company Shareholder is duly organized, validly
existing and in good standing under the Laws of the jurisdiction in which it is
organized and has the power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted.
(b) Authority; Execution and
Delivery; Enforceability. The Company Shareholder has all requisite
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein. The execution and delivery by the
Company Shareholder of this Agreement and the consummation by the Company and by
the Company Shareholder of the transactions contemplated hereby (including,
without limitation, the Merger) have been duly authorized and approved by all
necessary corporate, limited liability company or other organizational action,
as the case may be, on the part of such Company Shareholder and no other action
on the part of the Company Shareholder is necessary to authorize this Agreement
and the transactions contemplated hereby. When executed and delivered,
this Agreement will be enforceable against the Company Shareholder in accordance
with its terms.
(c) Consents. No
Consent of, or registration, declaration or filing with, or permit from, any
Governmental Entity or any Person is required to be obtained or made by or with
respect to the Company Shareholder in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby.
21
(d) Ownership of Company
Shares. The
Company Shareholder owns beneficially the Company Shares set forth opposite the
Company Shareholder’s signature, free and clear of any Liens, and such shares
are not subject to any claims as to the ownership thereof, or any rights, powers
or interest therein, by any third party and are not subject to any preemptive or
similar rights of stockholders.
(e) Investment
Representations.
(i) The
Company Shareholder is acquiring the Parent Shares for its own account and for
investment only and not with a view to distribution or resale thereof within the
meaning of such phrase as defined under the Securities Act. It shall
not dispose of any part or all of such Parent Shares in violation of the
provisions of the Securities Act and the rules and regulations promulgated under
the Securities Act by the Securities and Exchange Commission and all applicable
provisions of state securities laws and regulations.
(ii) The
Company Shareholder has been informed that the Parent Shares shall be
unregistered, shall be “restricted securities” as
defined in paragraph (a) of Rule 144 under the Securities Act, and must be held
indefinitely unless (A) they are subsequently registered under the
Securities Act, or (B) an exemption from such registration is
available.
(iii) The
Company Shareholder has been afforded access to all material information which
it has requested relevant to its decision to approve the Merger and to acquire
the Parent Shares and to ask questions of Parent’s management and that, except
as set forth herein, neither Parent nor anyone acting on behalf of Parent has
made any representations or warranties to the Company Shareholder which have
induced, persuaded, or stimulated the Company to approve the Merger or to
acquire the Parent Shares.
(iv)
Either alone, or together with its investment
advisor(s), it has the knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of the prospective
investment in the Parent Shares, and it is and will be able to bear the economic
risk of the investment in such Parent Shares.
(f) Brokers. No
broker, investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company Shareholder.
22
ARTICLE
VI
ADDITIONAL COVENANTS AND
AGREEMENTS
6.1 Conduct of
Business. Each of Parent and the Company covenants and agrees
that, during the period from the date of this Agreement to the Effective Time
(unless the Parties shall otherwise agree in writing and except as otherwise
contemplated by this Agreement) it will, and will cause each of its subsidiaries
to, conduct its operations according to its ordinary and usual course of
business consistent with past practice and, to the extent consistent therewith,
with no less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organizations, use its
reasonable best efforts to keep available the service of its current officers
and employees and preserve its relationships with customers and others having
business dealings with it to the end that goodwill and ongoing businesses shall
be unimpaired at the Effective Time.
6.2 Access to
Information. Upon reasonable notice, each of Parent and the
Company shall afford to officers, employees, counsel, accountants and other
authorized representatives of the other reasonable access, during normal
business hours throughout the period prior to the Effective Time, to its
properties, assets, books and records and, during such period, shall furnish
promptly to such authorized representatives all information concerning their
business, properties, assets and personnel as may reasonably be requested for
purposes of appropriate and necessary due diligence, provided that no
investigation pursuant to this Section 6.2 shall
affect or be deemed to modify any of the representations or warranties made by
any party hereunder.
6.3 Publicity. The
Parties agree that they will consult with each other concerning any proposed
press release or public announcement pertaining to this Agreement or the Merger
in order to agree upon the text of any such press release or the making of such
public announcement, which agreement shall not be unreasonably withheld, except
as may be required by applicable Law or by obligations pursuant to any listing
agreement with a national securities exchange or national automated quotation
system, in which case the Party proposing to issue such press release or make
such public announcement shall use its reasonable best efforts to consult in
good faith with Parent or the Company, as applicable, before issuing any such
press release or making any such public announcement.
6.4 Representations and
Warranties. Each of the Company and Parent shall give prompt
notice to the other of any circumstances that would cause any of their
respective representations and warranties set forth in Section 5.1 or 5.2, as the case may
be, not to be true and correct in all material respects at and as of the
Effective Time; provided, that delivery of such notice shall not cure or be
deemed to cure any breach of a representation or warranty.
6.5 Reasonable Best Efforts to
Consummate Transactions. Subject to the terms and conditions
herein provided, the Parties shall use their reasonable best efforts promptly to
take, or cause to be taken, all actions and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement as soon as
practicable.
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6.6 Tax-Free Reorganization
Treatment. Prior to the Effective Time, the Parties shall use
their reasonable best efforts to cause the Merger to be treated as a
reorganization within the meaning of Section 368 of the Code and shall not
knowingly take or fail to take any action which action or failure to act would
jeopardize the qualification of the Merger as a reorganization within Section
368 of the Code.
6.7 Continued Existence of the
Company. The Parent agrees to continue the existence of the
Company, and the Parent shall not liquidate the Company for at least the
two-year period following the Closing.
6.8 Equity
Financing. The Parent shall use its reasonable best efforts to
complete, prior to the Effective Time, an equity financing (conditioned upon the
occurrence of the Merger) resulting in at least $250,000 in proceeds to Parent
in consideration for the issuance of up to 2,500,000 Parent
Shares. Parent shall provide to the Company confirmation of its
receipt of such funds, and Parent shall not expend any proceeds of such
financing except in payment of obligations listed on Schedule 6.10 or with the
prior consent of the Company.
6.9 Director and Officer
Indemnification.
(a) Parent
agrees that all rights to indemnification and all limitations on liability
existing in favor of any individuals who on or prior to the Effective Time were
officer, directors or agents of Parent (the “Indemnitees”) in
respect of acts or omissions of such Indemnitees on or prior to the Effective
Time as provided in the Articles of Incorporation and bylaws of Parent or an
agreement between an Indemnitee and Parent in effect as of the date hereof shall
continue in full force and effect in accordance with the terms
thereof.
(b) For
six years after the Effective Time, Parent shall indemnify and hold harmless the
Indemnitees to the same extent indemnification is provided as of the date hereof
with respect to all actions or omissions by them in their capacities as officers
or directors or agents of Parent, or taken by them at the request of
Parent. In the event any claim in respect of which indemnification is
available pursuant to the foregoing provisions is asserted or made within the
period specified in the previous sentence, all rights to indemnification shall
continue until such claim is disposed of or all judgments, orders, decrees or
other rulings in connection with such claim are duly satisfied.
(c) The
obligations of Parent under this Section 6.9 shall not be terminated or modified
in such a manner as to adversely affect any Indemnitee to whom this Section 6.9
applies without the consent of such affected Indemnitee (it being expressly
agreed that the Indemnitees to whom this Section 6.9 applies shall be third
party beneficiaries of this Section 6.9).
24
(d) Provided
that the premium cost to Parent does not exceed $15,780, Parent shall procure
directors and officers liability tail insurance coverage for the existing
directors and officers of Parent in such scope and amount as is acceptable to
Parent’s current board of directors.
6.10 Outstanding MMEX
Obligations. Parent will, as of, or as promptly as practicable
after, the Effective Time of the Merger, satisfy the liabilities listed on
Schedule 6.10 hereto in the manner set forth on such schedule.
6.11 Parent Executive Officers
and Directors. Parent will, immediately prior to the Effective
Time of the Merger, confirm to the Company that all of its existing executive
officers and directors have resigned their positions as of the Effective Time
and have caused (i) Jack W. Hanks to be appointed as the chairman of Parent’s
board of directors and as its CEO and President and (ii) Bruce Lemons to be
appointed as a member of Parent’s board of directors.
6.12 Cardiff Partners
Arrangements. Parent and Cardiff Partners will, immediately
prior to the Effective Time of the Merger, confirm to the Company that (i)
Cardiff Partners will continue to provide financial, accounting and
administrative services to Parent, and assist Parent with a transition of these
services to new financial management, for a period to be determined in the sole
discretion of the Company at the existing monthly compensation
rate. All compensation owed (which is an agreed upon total of
$276,000) to Cardiff Partners for periods up to the Effective Time
shall be converted into Parent Shares at the rate of $0.175 per Parent Share
which is equal to 1,577,142 shares.
6.13 Wilkes Lane Consulting
Arrangements. Parent will use reasonable efforts to negotiate
a resolution, satisfactory to the Company in all material respects, of the
consulting agreement and claim for outstanding warrants to Wilkes
Lane.
6.14 Adjustment Merger
Consideration. The Parties have agreed that the Company
Shareholders will not experience any dilution by virtue any equity issuances
that may result from the resolution of matters described in Section
6.13. Accordingly, Parent will issue to AAM and Maple Gas, as part of
the Merger Consideration, an additional number of Parent Shares to protect AAM
and Maple Gas from the percentage dilution arising from the foregoing equity
issuances.
25
ARTICLE
VII
CONDITIONS
7.1 Conditions to Each Party's
Obligations. The respective obligations of each Party to
consummate the Merger are subject to the satisfaction or waiver by each of the
Parties of the following: no judgment, order, decree, statute, Law, ordinance,
rule or regulation, entered, enacted, promulgated, enforced or issued by any
court or other Governmental Entity of competent jurisdiction or other legal
restraint or prohibition shall be in effect which (i) has the effect of making
the consummation of the Merger or the other transaction contemplated hereby
illegal, (ii) materially restricts, prevents or prohibits consummation of the
Merger or any of the transactions contemplated hereby or (iii) would impair the
ability of Parent to own the outstanding shares of the Surviving Corporation, or
operate its or any of its subsidiaries’ businesses (including the businesses of
the Surviving Corporation or any of its subsidiaries), following the Effective
Time (collectively, "Restraints"); and
there shall not be pending any suit, action or proceeding by any Governmental
Entity or third party which would have any of the foregoing effects; provided,
however, that each of the Parties shall have used their reasonable best efforts
to prevent the entry of such Restraints and to appeal as promptly as possible
any such Restraints that may be entered.
7.2 Additional Conditions to the
Obligations of the Company. The obligations of the Company to
consummate the Merger also are subject to the fulfillment at or prior to the
Effective Time of the following conditions, any or all of which may be waived in
whole or in part by the Company to the extent permitted by applicable
Law:
(a) the
representations and warranties of Parent set forth in Section 5.2 that are
qualified as to materiality or Parent Material Adverse Effect shall be true and
correct, and such representations and warranties that are not so qualified shall
be true and correct in all material respects, in each case as of the date of
this Agreement, and as of the Effective Time with the same force and effect as
if made on and as of the Effective Time (except to the extent expressly made as
of an earlier date, in which case as of such date), in each case except as
permitted or contemplated by this Agreement; and
(b) Parent
and its subsidiaries shall have performed or complied in all material respects
with its agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Effective Time.
7.3 Additional Conditions to the
Obligations of Parent. The obligations of Parent to consummate
the Merger also are subject to the fulfillment at or prior to the Effective Time
of the following conditions, any or all of which may be waived in whole or in
part by Parent to the extent permitted by applicable Law:
(a) the
representations and warranties of the Company set forth in Section 5.1 that are
qualified as to materiality or Company Material Adverse Effect shall be true and
correct, and such representations and warranties that are not so qualified shall
be true and correct in all material respects, in each case as of the date of
this Agreement, and as of the Effective Time with the same force and effect as
if made on and as of the Effective Time (except to the extent expressly made as
of an earlier date, in which case as of such date), in each case except as
permitted or contemplated by this Agreement; and
(b) the
Company and its subsidiaries shall have performed or complied in all material
respects with its agreements and covenants required to be performed or complied
with under this Agreement as of or prior to the Effective Time;
and
26
(c) the
representations and warranties of the Company Shareholder set forth in Section
5.3 shall be true and correct as of the date of this Agreement, and as of the
Effective Time with the same force and effect as if made on and as of the
Effective Time (except to the extent expressly made as of an earlier date, in
which case as of such date), in each case except as permitted or contemplated by
this Agreement; and
(d) this
Agreement and the Merger and the other transactions contemplated hereby shall
have been approved and ratified by holders of a majority of the outstanding
Parent Shares.
ARTICLE
VIII
TERMINATION
8.1 Termination by Mutual
Consent. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time by the mutual written
Consent of the Company and Parent.
8.2 Termination by either the
Company or Parent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, by action of
the Company or Parent if:
(a) the
Merger shall not have been consummated by September 24, 2010; provided, however,
that the right to terminate this Agreement under this Section 8.2(a) shall
not be available to any Party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before such date; or
(b) if
any Restraint shall be in effect and shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement under this Section 8.2(b) shall
not be available to any Party who fails to use reasonable best efforts to remove
such Restraint before it becomes final and nonappealable.
8.3 Termination by the
Company. This Agreement may be terminated upon written notice
to Parent, and the Merger may be abandoned, at any time prior to the Effective
Time, by action of the Company, if Parent shall have breached or failed to
perform any of the representations, warranties, covenants or other agreements
contained in this Agreement, or if any representation or warranty of Parent
shall have become untrue, in either case such that (i) the condition set forth
in Section
7.2(a) or (b) would not be
satisfied as of the time of such breach or as of such time as such
representation or warranty shall have become untrue and (ii) such breach or
failure to be true has not been or is incapable of being cured within twenty
(20) business days following receipt by Parent of notice of such breach or
failure to comply.
27
8.4 Termination by
Parent. This Agreement may be terminated upon written notice
to the Company, and the Merger may be abandoned, at any time prior to the
Effective Time, by action of any senior executive officer of Parent, if the
Company or any Company Shareholder shall have breached or failed to perform any
of the representations, warranties, covenants or other agreements contained in
this Agreement, or if any representation or warranty of the Company or Company
Shareholder shall have become untrue, in either case such that (i) the condition
set forth in Section
7.3(a) or (b) would not be
satisfied as of the time of such breach or as of such time as such
representation or warranty shall have become untrue and (ii) such breach or
failure to be true has not been or is incapable of being cured within twenty
(20) business days following receipt by the breaching Party of notice of such
breach or failure to comply.
8.5 Effect of
Termination. In the event of termination of this Agreement by
either Parent or the Company as provided in this Article VIII, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of the Parties or their respective Affiliates, officers,
directors or stockholders except (i) with respect to the treatment of
confidential information pursuant to Section 6.6 and the
payment of expenses pursuant to Section 9.1 or (ii)
to the extent that such termination results from the willful breach of a Party
of any of its representations or warranties, or any of its covenants or
agreements.
ARTICLE
IX
MISCELLANEOUS AND
GENERAL
9.1 Payment of
Expenses. Whether or not the Merger shall be consummated, each
Party shall pay its own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the transactions
contemplated hereby.
9.2 Non-Survival of
Representations and Warranties. The representations and
warranties made herein shall not survive beyond the Effective Time or a
termination of this Agreement. This Section 9.2 shall not
limit any covenant or agreement of the Parties which by its terms contemplates
performance after the Effective Time.
9.3 Modification or
Amendment. Subject to the applicable provisions of the DGCL,
at any time prior to the Effective Time, the Parties hereto, by resolution of
their respective boards of directors, may modify or amend this Agreement, by
written agreement executed and delivered by duly authorized officers of the
respective Parties.
9.4 Waiver of
Conditions. The conditions to each of the Parties' obligations
to consummate the Merger are for the sole benefit of such Party and may be
waived by such Party in whole or in part to the extent permitted by applicable
Law.
9.5 Counterparts. For
the convenience of the parties hereto, this Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
28
9.6 Governing
Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without giving effect to the
principles of conflicts of Law thereof.
9.7 Notices. Any
notice, request, instruction or other document to be given hereunder by any
Party to the other Parties shall be deemed delivered upon actual receipt and
shall be in writing and delivered personally or sent by registered or certified
mail, postage prepaid, reputable overnight courier, or by facsimile transmission
(with a confirming copy sent by reputable overnight courier), as
follows:
or to
such other Persons or addresses as may be designated in writing by the Party to
receive such notice.
9.8 Entire Agreement;
Assignment. This Agreement and the exhibits and schedules
delivered pursuant hereto (i) constitute the entire agreement among the Parties
with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the Parties or any
of them with respect to the subject matter hereof, and (ii) shall not be
assigned by operation of Law or otherwise.
9.9 Parties in
Interest. This Agreement shall be binding upon and inure
solely to the benefit of each Party hereto and their respective successors and
assigns. Nothing in this Agreement, express or implied, other than
the right to receive the consideration payable in the Merger pursuant to Article IV hereof and
the rights of Indemnitees under Section 6.9, is intended to or shall confer upon
any other Person any rights, benefits or remedies of any nature whatsoever under
or by reason of this Agreement.
9.10 Certain
Definitions. As used herein the following terms shall have the
following meanings and, unless the context otherwise requires, use of the
singular form shall include the plural and any gender shall be deemed to include
both genders:
29
(a) “Action” means any
action, suit, inquiry, notice of violation, proceeding (including any partial
proceeding such as a deposition) or investigation pending or threatened in
writing before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock
market, stock exchange or trading facility.
(b) "Affiliate" has the
meaning set forth in Rule 12b-2 under the Exchange Act.
(c) “Company Constituent
Instruments” means the Articles of Incorporation and bylaws of the
Company and such other constituent instruments of the Company as may exist, each
as amended to the date of this Agreement.
(d) “Consent” means any
material consent, approval, license, permit, order or
authorization.
(e) “Contract” means any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument.
(f) “Environmental Laws”
shall mean all applicable Laws relating to the protection of the environment
including, without limitation, all requirements pertaining to reporting,
licensing, permitting, controlling, investigating or remediating emissions,
discharges, releases or threatened releases of hazardous substances, chemical
substances, pollutants, contaminants or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature.
(g) "GAAP" means United
States Generally Accepted Accounting Principles.
(h) “Governmental Entity”
means any federal, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign.
(i) "Law" means any
federal, state, local or foreign law, statute, code, ordinance, rule or
regulation promulgated, or order, judgment, writ, stipulation, award, injunction
or decree entered, by a Governmental Entity.
(j) "Liability" means any
liability or obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for taxes.
(j) "Lien" means any lien
(statutory or other), mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance or preference, priority or security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional sale,
capitalized lease or other title retention agreement).
30
(k) "Ordinary Course of
Business" means the ordinary course of business consistent with past
custom and practice (including with respect to quantity and
frequency).
(l) “Parent Constituent
Instruments” means the Articles of Incorporation and bylaws of the Parent
and such other constituent instruments of the Parent as may exist, each as
amended to the date of this Agreement.
(m) "Person" means any
individual or corporation, company, partnership, trust, incorporated or
unincorporated association, joint venture or other entity.
9.11 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 any manner materially adverse to any
Party. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the maximum extent
possible.
9.12 Trial by
Jury. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH
ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTIONS CONTEMPLATED HEREBY.
9.13 Captions. The
Article, Section and paragraph captions herein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed to limit
or otherwise affect any of the provisions hereof.
31
IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered by the duly authorized officers of the Parties
hereto and shall be effective as of the date first herein above
written.
Performance/Vesting
Milestones for 15,000,000 Shares
Number
of
Parent
Shares to be
Distributed
Event
10,000,000
Closing
of equity or debt financing that generates at least US$2.0 million in net
proceeds to Parent
2,500,000
Parent
generates at least $250,000 in revenue from coal sales in any fiscal
quarter
2,500,000
Closing
of additional equity or debt financing that generates at least US$2.0
million in net proceeds to Parent
The
foregoing milestones will be accelerated if the percentage ownership of the
Company Shareholders of the outstanding Parent Shares is diluted by the Parent
as a result of future financings below 30% of the outstanding Parent Shares
(with such calculation excluding the effect of any disposition of Parent Shares
made by the Company Shareholders).
1. Mining
Lease, dated June 29, 2006, as amended on May 18, 2009, among Bergin Land &
Livestock, Ltd. Co., Carpenter Creek, LLC, and John P. Baugues, Jr.
2. Mining
Lease, dated June 29, 2006, as amended on May 18, 2009 and June 1, 2010, among
Clyde Brewer III, Carpenter Creek, LLC, and John P. Baugues, Jr.
3. Mining
Lease, dated June 29, 2006, as amended on May 18, 2009, among Lawrence J.
Fulton, Trustee of the Joe and June Fulton Trust, Carpenter Creek, LLC, and John
P. Baugues, Jr.
4. Exclusive
Option to Lease, dated April 1, 2010, between Haven Marsh and Carpenter Creek,
LLC.
5. Mining
Lease, dated June 29, 2006, as amended on May 1, 2009, among Thomas E. Hougen
and Helen Hougen, Carpenter Creek, LLC, and John P. Baugues, Jr.
6. Access
Agreement, dated March 1, 2008, between Carpenter Creek, LLC and Thomas P.
Hougen.
7. Mining
Lease, dated November 30, 2006, between J Bar M Corporation and John P. Baugues,
Jr.
8. Mining
Lease, dated June 18, 2007, as amended on April 1, 2009 and June 1, 2010, among
Roger R. Knapp and Judith E. Knapp, Carpenter Creek, LLC, and John P. Baugues,
Jr.
9. Mining
Lease, dated April 1, 2007, as amended on April 27, 2008, among Richard W. and
Rosella D. Meredith, Carpenter Creek, LLC, and John P. Baugues, Jr.
10. Mining
Lease, dated April 1, 2007, as amended on April 1, 2009, among James D. Wilson
and Patricia L. Wilson, Carpenter Creek, LLC, and John P. Baugues,
Jr.
11. Acknowledgement
and Ratification, dated August 26, 2007-08, from James D. Wilson, acknowledging
the existence and ratification of the Mining Lease, dated April 1, 2007, among
James D. Wilson and Patricia L. Wilson, Carpenter Creek, LLC, and John P.
Baugues, Jr.
12. Consent,
dated September 17, 2007, between Musselshell County and Carpenter Creek,
LLC.
13. Mining
Lease, dated January 1, 2008, as amended on January 4, 2010, between Musselshell
County and Carpenter Creek, LLC.
37
14. Warranty
Deed, dated June 4, 2008, from Lawrence J. Fulton, Cheryl Fischer, Lynn Wathen,
and Stephen J. Fulton to Northcom 33, LLC for Township 8 North, Range 31 East of
the Principal Meridian, in Musselshell County, Montana.
15. Musselshell
County Tax Deeds Nos. 4951, 4253, 4255, 4261, 4257, 4259, 4263, dated July 28,
1939, to Grace B. & Chas A. Howard, Superior Coal Co., E.A. Hinz, Louise L.
Hinz, and Grace & R.B. Hood.
17. Mining
Lease, dated October 15, 2007, as amended on August 6, 2009, between Greg and
Connie M. Mattfield and Carpenter Creek, LLC.
18. Amended
and Restated Overriding Royalty and Wheelage Agreement, dated March 1, 2010,
between Carpenter Creek, LLC and Montana Coal Royalty, LLC.
19. Atlantic
Coal Loan
20. Loan
Agreement, dated as of July 15, 2009, between Maple Carpenter Creek, LLC and
Alexis Latin Hanks Irrevocable Trust.
20a. Alexis
Hanks Irrevocable Trust Restated and Amended Loan Agreement, dated July 15,2010, by and between Maple Carpenter Creek and Alexis Latin Hanks Irrevocable
Trust.
21. Strategic
Alliance Agreement, dated April 16, 2010, between Maple Carpenter Creek, LLC and
The Resource Development Company.
22. Sales
Agency Agreement, dated August 15, 2008, between Carpenter Creek, LLC and
Sumitomo Corporation.
23. Confidentiality
Agreement, dated January 28, 2009, between Sumitomo Corporation and Carpenter
Creek, LLC.
24. Letter
Agreement, dated March 18, 2010, between EnerCom, Inc. and Maple Carpenter
Creek, LLC.
25. Consulting
Services Agreement, dated as of March 22, 2010, between Marston & Marston,
Inc. and Carpenter Creek, LLC.
26. Agreement
to Reimburse for Increased Road Maintenance between Carpenter Creek, LLC d/b/a
Maple Carpenter Creek and Musselshell County.
38
27. Confidentiality,
Non-Circumvention, Non-Compete and Nondisclosure Agreement, dated _____, 2009,
between Carpenter Creek, LLC and John Baugues, Jr.
28. Distribution
Agreement, dated March 1, 2010, by and among Carpenter Creek, LLC, Maple
Carpenter Creek, LLC, Montana Coal Royalty, LLC and Maple Resources, relating to
Snider Ranch option.
29. Overriding
Royalty and Wheelage Agreement for Columbia Area of Interest, dated March 1,2010, by and between Maple Carpenter Creek, LLC and Montana Coal
Royalty.
30. Distribution
Resolution and Agreement Pertaining to BVI Stock, dated September 2, 2010, by
and between Maple Carpenter Creek, LLC and the managers of Maple Carpenter
Creek, LLC.
31. Contribution,
Option and Payment Agreement, dated August 1, 2008, by and between Contributors,
Carpenter Creek, LLC, and Maple Resources Corporation.
32.
Distribution Resolution and Agreement
Pertaining to Snider Ranch, MT, dated September 2, 2010, by and between Maple
Carpenter Creek, LLC and the managers of Maple Carpenter Creek,
LLC.
33. Commercial
Loan Agreement, dated July 30, 2008, by and between Stockman Bank of Montana and
Maple Resources Corporation
34. Modification
Agreement- Mortgage, dated March 11, 2009, by and between Stockman Bank of
Montana and Maple Resources Corporation.
35. Employment
Agreement, dated June 1, 2010, by and between Maple Resources Corporation and
Nick Shakesby (may be assigned and assumed???)
36. Employment
Offer, dated May 7, 2010, by and between Maple Carpenter Creek, LLC and Jared
Sorensen as project engineer.
37. Confidentiality
and Non-Circumvention Agreement, dated September 8, 2010, by and between
Trafigura Beheer B.V. and Armadillo Mining Corporation
38. Option
Agreement/Letter of Intent, dated May 5, 2010, by and between Maple Carpenter
Creek, LLC and Jaime Castaneda Borrero and Juan Fernando Aguilar
Velez.
39. Option
Agreement/Letter of Intent, dated June 16, 2010, by and between Carbocaparrapi
S.A. and Maple Carpenter Creek, LLC.
40. Payment
Modification, dated June 16, 2010 by and between Maple Carpenter Creek, LLC and
Carbocaparrapi.
39
41. Colombia
Labor Hire Services Contract, dated August 19, 2010, by and between Armadillo
Mining Corporation and Serviases S.A.S.
42. Strategic
Alliance Agreement, dated April 16, 2010, by and between Maple Carpenter Creek,
LLC and The Resource Development Company
a.
Correspondence
between RDC and MCC, dated June 3, 2010, terminating the Strategic
Alliance Agreement.
43. Non
Disclosure Agreement and Independent Contractor Consulting Relationship, dated
July 27, 2010, by and between Norwest Corporation and Maple Carpenter Creek,
LLC.
44. Assignment
and Assumption of Engagement Letter, dated April 16, 2010, by and between
Brigard & Urrutia and Armadillo Mining Corporation for legal services in
Colombia.
45. Assignment
and Assumption of Direct Hire Service Agreement, dated April 2, 2010, bye and
between Cerami Search Group and Maple Carpenter Creek, LLC.
46. Loan
Agreement, dated August 11, 2010, by and between Maple Carpenter Creek, LLC,
Armadillo Mining Corporation, and Steve Eppig.
47. Consulting
Agreement, dated August 11, 2010, by and between Maple Carpenter Creek, LLC and
PR Consulting Services, Inc. (Steve Eppig).
48. Exchange
Agreement for Armadillo Mining Stock, dated August 11, 2010, by and between
Armadillo Holdings Group Corporation and Armadillo Mining
Corporation
49. Assignment
of Colombia Interests Agreement, dated July 21, 2010, by and between Maple
Carpenter Creek, LLC and Armadillo Mining Corporation.
50. Employment
Agreement between Maple Carpenter Creek Holdings, Inc. and Jack W.
Hanks.
51. Consulting
Agreement between Maple Carpenter Creek Holdings, Inc. and Bruce N.
Lemons.
52. Assumption
Agreement among Maple Werks Corporation and its affiliates.
40
Section
5.1(q)
Transactions
with Affiliates
Reference
is made to items 20, 28, 30-32, 35, and 48-52 on Schedule
5.1(l).
41
Schedule
6.10
Outstanding
MMEX Obligations
John
Vangel (corporate attorney): (a) for fees through August 31, 2010
- $15,000, plus $3,000 in common stock (17,143 shares at $0.175 per
share) and (b) additional amounts for services provided September 1, 2010
through Effective Time. Proceeds of the equity financing referred to
in Section 6.8 will be used to satisfy obligations in clause (a). Proceeds from
additional equity or debt financing will be used to satisfy obligations in
clause (b).
Frank
Enright (tax accountant): $1,200
Transhare
(transfer agent): $525
Directors
and Officers Tail Liability Insurance
Premium: $15,780
The
foregoing are the only amounts which will be deducted from the $250,000 equity
funding received by Parent, resulting in a minimum of $217,495 in Parent’s cash
account as of the Effective Time.
42
Dates Referenced Herein and Documents Incorporated by Reference
