AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER
(this “Agreement”), dated as
of January 24, 2011, is made and entered into by and between Xxxxxx Resources, Inc., a
Nevada corporation (“Keyser”), True American Energy Corporation,
a Nevada corporation (“TAEC”), and American Liberty Petroleum
Corp., a Nevada corporation (“Parent”).
WITNESSETH:
WHEREAS, Xxxxxx is a corporation duly
organized and existing under the laws of the State of Nevada;
WHEREAS, TAEC is a corporation duly
organized and existing under the laws of the State of Nevada;
WEHREAS, Parent owns all of the issued
and outstanding shares of common stock, $1.00 par value per share, of TAEC (the
“TAEC Common
Stock”);
WHEREAS, the Board of Directors of
Xxxxxx has approved the merger of TAEC with and into Xxxxxx, with Xxxxxx being
the surviving corporation, in accordance with the terms and conditions of this
Agreement (such merger being hereinafter referred to as the “Merger”);
WHEREAS,
Parent and the Board of Directors of TAEC have approved the Merger;
and
WHEREAS,
after the Merger, the name of the Surviving Corporation shall be “True American
Energy Corporation.”
NOW, THEREFORE, in consideration of the
premises, the mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that TAEC shall be merged with and into Xxxxxx on the terms
and conditions hereinafter set forth.
ARTICLE
I
MERGER
1.01 The
Merger. Effective at the time the Articles of Merger are
accepted for filing in the office of the Secretary of State of Nevada (the
“Effective
Time”), TAEC shall be merged with and into Xxxxxx in accordance with the
Nevada Revised Statutes (“NRS”), and the
separate existence of TAEC shall cease and Xxxxxx (hereinafter sometimes
referred to as the “Surviving
Corporation”) shall continue to exist by virtue of, and shall be governed
by, the laws of the State of Nevada. The Surviving Corporation will
change its name to “True American Energy Corporation” at the time of the
Merger.
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1.02 Closing. Unless
this Agreement is earlier terminated in accordance with Article XIII, the
closing of the transaction contemplated by this Agreement will take place as
promptly as possible, but no later than the date on which the conditions set
forth in Article XII are satisfied or waived, at the office of Parent, or at
such time and place as is agreed to by all parties. The date upon
which the closing occurs is referred to herein as the “Closing Date.” On the
Closing Date, the parties will file the Articles of Merger as provided in
Section 1.01.
ARTICLE
II
ARTICLES
OF INCORPORATION
OF THE SURVIVING
CORPORATION
The Articles of Incorporation of the
Surviving Corporation shall be the Amended and Restated Articles of
Incorporation of the Surviving Corporation filed with the Secretary of State of
Nevada at the Effective Time, unless and until they are further amended as
provided by applicable law. A copy of the Amended and Restated
Articles of Incorporation of the Surviving Corporation is attached as Exhibit
A. The Amended and Restated Articles of Incorporation
will provide that the Surviving Corporation shall be named “True American Energy
Corporation.”
ARTICLE
III
BYLAWS OF THE SURVIVING
CORPORATION
The Bylaws of Xxxxxx shall be the
Bylaws of the Surviving Corporation as in effect immediately prior to the
Effective Time without change, unless and until amended or repealed in
accordance with applicable law.
ARTICLE
IV
EFFECT
OF MERGER ON STOCK
OF CONSTITUENT
CORPORATIONS
4.01. Conversion of Securities;
Merger Consideration.
(a) TAEC Common Stock. At
the Effective Time, by virtue of the Merger and without any action on the part
of Parent, TAEC or Xxxxxx:
(i) Merger Consideration.
All shares of TAEC Common Stock outstanding immediately prior to the Effective
Time, other than TAEC Common Shares held in treasury by TAEC (if any), shall
automatically be canceled and extinguished, and each of those shares shall be
converted into the right to receive, upon surrender of a certificate or
certificates representing such shares, a pro rata share (based on the number of
shares of TAEC Common Stock outstanding at the Effective Time) of (A) One
Million Six Hundred Forty Seven Thousand One Hundred Forty Two (1,647,142) fully
paid and nonassessable shares of Common Stock, $0.001 par value per share, of
Xxxxxx (“Xxxxxx Common
Stock”) and a Warrant to purchase 123,077 shares of Xxxxxx Common Stock
upon the terms and conditions described therein (the “Common Stock
Consideration”), and (B) an amount in cash equal to $700,000 (the “Cash Consideration”),
payable as provided below. The Common Stock Consideration and Cash
Consideration are sometimes referred to as the “Merger
Consideration.”
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(ii) Payment of Cash
Consideration. The Cash Consideration shall be
paid by (A) the forgiveness of all unpaid principal and accrued interest under
that certain Promissory Note dated November 30, 2010 in the original principal
amount of $290,000, executed by Parent and made payable to the order of Xxxxxx
and that certain Promissory Note dated January 7, 2011 in the original principal
amount of $200,000, executed by Parent and made payable to the order of Xxxxxx
(the “ALP Promissory
Notes”), and (B) the issuance by Xxxxxx of a new Promissory Note in the
original principal amount of $210,000, made payable to the order of Parent (the
“Merger Promissory
Note”). The Merger Promissory Note shall accrue interest at the rate of
five (5) percent
per annum, and shall be due and payable in 12 equal installments on or before
the end of each of twelve (12) consecutive calendar months beginning on the last
day of the month following the Effective Time of the Merger. A form of the
Merger Promissory Note is attached hereto as Exhibit
B.
(b) No Further Ownership Rights
in TAEC Common Stock. The amounts paid or payable upon the surrender for
exchange of TAEC Common Stock in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
TAEC Common Stock, and there shall be no further registration of transfers on
the records of the Surviving Corporation of TAEC Common Stock which were
outstanding immediately prior to the Effective Time.
(c) Capital of
Xxxxxx. Each share of common stock of Xxxxxx outstanding
immediately prior to the Effective Time shall be automatically converted into
and become one share of common stock of the Surviving Corporation.
(d) Cancellation of Treasury
Stock. All shares of TAEC Common Stock that are owned by TAEC,
if any, shall be cancelled and no Merger Consideration shall be delivered in
exchange therefor.
4.02 Surrender of
Certificates. Promptly after the Effective Time, Parent
shall deliver to Xxxxxx or to such other agent as may be appointed by Xxxxxx,
each stock certificate (the “Certificates”) in its
possession that, immediately prior to the Effective Time, represented
outstanding shares of TAEC Common Stock, all of which shall have been converted
into the right to receive the Merger Consideration pursuant to Section 4.01(a)(i).
Upon surrender of the Certificates to Xxxxxx or to such other agent, together
with such other customary documents as may be reasonably required by Xxxxxx,
Parent shall receive, in exchange therefor, the Merger Consideration and the
surrendered Certificates shall be cancelled.
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4.03 Restrictions on Xxxxxx
Common Stock.
(a) The
Xxxxxx Common Stock issuable as Common Stock Consideration:
(i) at
issuance will not be registered under the Securities Act (as hereinafter
defined), or the securities laws of any state of the United States;
(ii)
shall be issued in a transaction not involving any public offering within the
meaning of the Securities Act, and, accordingly, shall be “restricted
securities” within the meaning of Rule 144 under the Securities Act (“Rule 144”), and
therefore may not be offered or sold, directly or indirectly, without
registration under the Securities Act and any applicable state securities laws
or pursuant to an exemption from such registration requirements and applicable
state securities laws; and
(iii) shall
not be sold, pledged or otherwise transferred except (x) in another
transaction otherwise exempt from registration under the Securities Act in
compliance with Rule 144 and in compliance with any applicable state securities
laws of the United States or (y) pursuant to another applicable exemption
from such registration requirements and applicable state securities
laws.
(b) Each
certificate representing Common Stock Consideration shall bear a legend
substantially in the following form:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “1933 ACT”), OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER
THE 1933 ACT AND ALL SUCH APPLICABLE LAWS OR EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.”
ARTICLE
V
CORPORATE
EXISTENCE, POWERS AND
LIABILITIES OF SURVIVING
CORPORATION
5.01 Corporate
Existence. At the Effective Time, the separate existence of
TAEC shall cease and TAEC shall be merged with and into the Surviving
Corporation in accordance with the provisions of this
Agreement. Thereafter, the Surviving Corporation shall possess all of
the rights, privileges, powers and franchises as well of a public as of a
private nature, and shall be subject to all the restrictions, disabilities and
duties of TAEC; and all rights, privileges, powers and franchises of TAEC, and
all property, real, personal and mixed, and all debts due to each of them on
whatever account, as well as stock subscriptions and all other things in action
or belonging to TAEC, shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers and franchises, and all and every other
interest shall be thereafter effectually the property of the Surviving
Corporation as they were of TAEC, and the title to any real estate, whether by
deed or otherwise, vested in TAEC shall not revert or be in any way impaired by
reason of the Merger; but all rights of creditors and all liens upon any
property of TAEC shall be preserved unimpaired, and all debts, liabilities and
duties shall thenceforth attach to the Surviving Corporation and may be enforced
against it to the same extent as if said debts, liabilities and duties had been
incurred or contracted by it.
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5.02 Further
Assurances. TAEC agrees that it will execute and deliver (or
cause to be executed and delivered) all such deeds, assignments and other
instruments, and will take or cause to be taken such further or other action as
the Surviving Corporation may deem necessary or desirable in order to vest in
and confirm to the Surviving Corporation title to and possession of all the
property, rights, privileges, immunities, powers, purposes and franchises, and
all and every other interest, of TAEC and otherwise to carry out the intent and
purposes of this Agreement.
ARTICLE
VI
OFFICERS
AND DIRECTORS
OF SURVIVING
CORPORATION
At the Effective Time, the officers and
directors of Xxxxxx shall become the officers and directors of the Surviving
Corporation, and such persons shall hold office in accordance with the Bylaws of
the Surviving Corporation or until their respective successors shall have been
appointed or elected and qualified.
ARTICLE
VII
APPROVAL
BY TAEC STOCKHOLDERS;
AMENDMENT; EFFECTIVE
TIME
7.01 Approval by
Stockholders. This Agreement and the Merger contemplated
hereby are subject to approval by the requisite vote of the stockholders of TAEC
and of Xxxxxx in accordance with Nevada law. As promptly as practicable after
approval of this Agreement by such stockholders in accordance with applicable
law, duly authorized officers of Xxxxxx and TAEC shall make and execute an
appropriate form of Articles of Merger or other applicable certificates or
documentation effecting this Agreement and shall cause such document or
documents to be filed with the Secretary of State of Nevada, in accordance with
the applicable Nevada law.
7.02 Amendment. The
respective Boards of Directors of Xxxxxx and TAEC may amend this Agreement at
any time prior to the Effective Time, provided that an amendment made subsequent
to the approval of the Merger by the stockholders of TAEC and Xxxxxx shall not
(1) alter or change the manner or basis of exchanging TAEC Common Stock for
Merger Consideration, in whole or in part, or (2) alter or change
any of the terms and conditions of this Agreement if such alteration or change
would adversely affect the stockholders of TAEC or Xxxxxx.
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ARTICLE
VIII
PAYMENT OF FEES AND
FRANCHISE TAXES
The Surviving Corporation shall be
responsible for the payment of all fees and franchise taxes of TAEC relating to
or required to be paid in connection with the Merger.
ARTICLE
IX.
REPRESENTATIONS AND
WARRANTIES OF TAEC
AND
PARENT
TAEC and
Parent, hereby, jointly and severally, represent and warrant to Xxxxxx as
follows:
9.01 Due
Authorization. TAEC has all requisite corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. This Agreement has been duly executed and delivered by
TAEC and constitutes the legal, valid, and binding obligations of TAEC,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, and similar laws and subject to the limitations imposed
by law or equitable principles affecting the availability of specific
performance, injunctive relief and other equitable remedies.
9.02 No Conflicts or
Consents. The execution and delivery by TAEC of this
Agreement, and the performance of its obligations hereunder, do not and will not
(a) conflict with, violate or cause a default under any agreement, judgment,
license, order or permit applicable to or binding upon TAEC, including without
limitation any shareholders agreement, voting agreement, right of first refusal
agreement, or similar agreement concerning the TAEC Common Stock, (b) result in the acceleration
of any indebtedness owed by TAEC, or (c) result in or require the creation of
any lien upon the Shares, or any assets or properties of TAEC. No
consent, approval, authorization or order of, and no notice to or filing with,
any tribunal or third party is required in connection with the execution,
delivery or performance by TAEC of this Agreement, or the consummation by TAEC
of the transactions contemplated hereby.
9.03 Organization and Good
Standing. TAEC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, and has all
necessary corporate power and authority to own or lease its assets and to carry
on its business as now being conducted. TAEC has no
subsidiaries and no equity interests in any corporation, partnership, joint
venture or other entity.
9.04 Capitalization. TAEC
is authorized to issue up to 75,000 shares of common stock, $1.00 par value, 100
shares of which are issued and outstanding. All outstanding
shares of capital stock have been duly authorized and validly issued, are fully
paid and non-assessable, are held by Parent (without any encumbrances or rights
of assignment to same) and were issued in compliance in all material respects
with applicable federal and state laws governing the issuance of
securities. TAEC has (i) no outstanding securities convertible into
or exchangeable for any shares of capital stock of TAEC, (ii) no rights,
options, warrants, calls or other agreements or commitments of any nature
whatsoever relating to the purchase or other acquisition of any shares of its
capital stock or securities convertible into or exchangeable for any shares of
its capital stock, (iii) no shares of its capital stock reserved for issuance,
and (iv) no agreements or other commitments of any nature whatsoever relating to
preferential rights or voting rights of any shares of its capital stock or
securities convertible into or exchangeable for any shares of its capital stock.
Parent owns all of the issued and outstanding shares of TAEC Common
Stock.
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9.05 Certificate of Incorporation
and Bylaws. The
copies of the Certificate of Incorporation and Bylaws of TAEC, and all
amendments to each, which have been delivered or made available to Xxxxxx are
true, correct and complete as of the date hereof. Such Certificate of
Incorporation and Bylaws are in full force and effect, and TAEC is not in
violation or breach of any provisions of the Certificate of Incorporation or
Bylaws, each as amended.
9.06 Financial
Statements. The
unaudited balance sheet and statement of income for the 2 month period ended
November 30th (the
“Unaudited
Statements”) which have been delivered or made available to Xxxxxx,
present fairly and accurately in all material respects the financial position of
TAEC as at the dates indicated and the results of its operations for the periods
covered thereby. TAEC does not utilize in its business
any assets not reflected in the Balance Sheets. All properties and
assets of TAEC are in the possession and control of TAEC. As of the date hereof,
no physical assets of any material value are owned by TAEC.
9.07 No Material Adverse
Change. Since the date of the most recent Unaudited
Statements, the business of TAEC has been operated in the ordinary course and
substantially consistent with past practice, and there has not been any material
and adverse change in the business, assets, financial condition, results of
operations, affairs or prospects of TAEC.
9.08 Compliance with
Laws. TAEC has
complied with all federal, state, county, local and foreign laws, ordinances,
regulations, orders, judgments, injunctions, awards or decrees applicable to it
or its business, except to the extent non-compliance would not have a material
adverse effect.
9.09 Litigation.
There are
no outstanding or unsatisfied orders, judgments, injunctions, stipulations,
awards or decrees of any court, governmental or regulatory body or arbitration
tribunal against or involving TAEC. There is no pending, or, to the
knowledge of TAEC, any threatened litigation, claim, action, suit,
investigation, or judicial, administrative or arbitration proceeding that, if
decided adversely, could delay the transactions contemplated hereby or have a
material adverse effect upon the transactions contemplated hereby or upon TAEC’s
assets, properties, business, operations or financial condition or that would
create a material liability of TAEC.
9.10 Employment
Matters. TAEC has no employees. Xxxxxx Xxxxxxxx is
the sole officer and director of TAEC.
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9.11 Agreements. The only
material agreement to which TAEC is a party or by or to which it or its
properties are bound or subject is that certain Option Agreement by and between
TAEC, as the successor-in-interest to Oreon Rental Corporation (now known as
“American Liberty Petroleum Corp.”) and Desert Discoveries, LLC, a Nevada
limited liability company, dated May 11, 2010, as it may have been
amended (the “Option Agreement”),
which was contributed to TAEC by Parent pursuant to that certain Contribution
Agreement dated January 3, 2011. The Option Agreement is currently in full force
and effect and binding upon TAEC and, to the knowledge of TAEC, the other
parties thereto, in accordance with its terms. Neither TAEC nor, to
the knowledge of TAEC, any other party to such contract or other agreement is in
default thereunder, nor does any condition exist which with notice or lapse of
time or both would constitute a default thereunder. TAEC is not a
party to or bound by or subject to any contract or other agreement that, either
individually or in the aggregate, materially adversely affects its assets,
properties, business, operations or financial condition or which was entered
into other than in the ordinary course of business. Except for the approval of
Desert Discoveries, LLC pursuant to the Option Agreement, no approval or consent
of any person is needed in order that the contracts or other agreements continue
in full force and effect following the consummation of the transactions
contemplated by this Agreement.
9.12 Real Estate.
TAEC does
not own or lease any real property.
9.13 Tangible and Intangible
Assets. TAEC has
no tangible or intangible assets other than the Option Agreement.
9.14 No
Misrepresentation. No representation or warranty by TAEC
in this Agreement (including any Exhibit hereto) and no statements of TAEC
contained in any document, certificate, schedule or other information furnished
or to be furnished by or on behalf of TAEC pursuant to this Agreement or in
connection with the transactions contemplated hereby or thereby contains or
shall contain any untrue statement of material fact or omits or shall omit to
state a material fact required to be stated therein or necessary in order to
make such statements, in light of the circumstances under which they were made,
not misleading.
9.15 Update to
Representations. Prior to the close of this transaction, TAEC
shall give Xxxxxx immediate notice of the occurrence of any event or the receipt
by TAEC of any notice or knowledge, the effect of which would be to make a
representation or warranty of TAEC herein untrue or misleading if made on or
immediately following the occurrence of such event or the receipt of such notice
or knowledge.
ARTICLE
X.
REPRESENTATIONS AND
WARRANTIES OF PARENT
Parent
represents and warrants to Xxxxxx as follows:
10.01 Title to Shares.
Parent is the record and beneficial owner and holder of 100 shares of TAEC
Common Stock, free and clear of any lien, encumbrance, adverse claim,
restriction on sale or transfer preemptive right, limitations on voting rights
or option, or any other commitments or rights of any nature to acquire any
securities of TAEC from Parent.
-8-
10.02 Authority. Parent has
all requisite power and authority to enter into this Agreement and to carry out
its obligations hereunder. This Agreement has been duly executed and
delivered by Parent and constitutes the legal, valid, and binding obligations of
Parent, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, and similar laws and subject to the
limitations imposed by law or equitable principles affecting the availability of
specific performance, injunctive relief and other equitable
remedies.
10.03 Investment
Representations. Parent is receiving shares of Xxxxxx Common
Stock for investment for Parent’s own account, not on behalf of others and not
with a view to sell or otherwise distribute such shares. Parent acknowledges
that such shares of Xxxxxx Common Stock have not been registered under the
Securities Act or under any state securities laws, and therefore, cannot be
resold unless registered under the Securities Act and applicable state
securities laws or unless an exemption from registration is available and, as a
result, Parent must bear the risk of an investment in Xxxxxx Common Stock for an
indefinite period of time. Parent has had an opportunity to obtain and read
Xxxxxx’x current and historical filings from the Securities and Exchange
Commission (as available on the SEC’s website). Parent has had an
opportunity to ask questions of, and receive answers from, officers of Xxxxxx,
concerning Xxxxxx and Xxxxxx’x Common Stock and to obtain any additional
information, which Parent reasonably requested and is material to its investment
decision.
ARTICLE
XI.
REPRESENTATIONS AND
WARRANTIES OF XXXXXX
Xxxxxx
represents and warrants to TAEC and Parent as follows:
11.01 Due
Authorization. Xxxxxx has all requisite corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. This Agreement has been duly executed and delivered by
Xxxxxx and constitutes the legal, valid, and binding obligations of Xxxxxx,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, and similar laws and subject to the limitations imposed
by law or equitable principles affecting the availability of specific
performance, injunctive relief and other equitable remedies.
11.02 No Conflicts or
Consents. The execution and delivery by Xxxxxx of this
Agreement, and the performance of its obligations hereunder, including, without
limitation, the transfer of the Common Stock Consideration from Xxxxxx to
Parent, do not and will not (a) conflict with, violate or cause a default under
any agreement, judgment, license, order or permit applicable to or binding upon
Xxxxxx, including
without limitation any shareholders agreement, voting agreement, right of first
refusal agreement, or similar agreement concerning the Xxxxxx Common Stock, (b) result in the acceleration
of any indebtedness owed by Xxxxxx, or (c) result in or require the creation of
any lien upon any assets or properties of Xxxxxx. No consent,
approval, authorization or order of, and no notice to or filing with, any
tribunal or third party is required in connection with the execution, delivery
or performance by Xxxxxx of this Agreement, or the consummation by Xxxxxx of the
transactions contemplated hereby.
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11.03 Organization and Good
Standing. Xxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada, and
has all necessary corporate power and authority to own or lease its assets and
to carry on its business as now being conducted and presently proposed to be
conducted. There has been no amendment of Xxxxxx'x Certificate of
Incorporation or Bylaws that is not reflected in Xxxxxx'x filings with the
Securities and Exchange Commission ("SEC"). Xxxxxx
has no subsidiaries and no equity interests in any corporation, partnership,
joint venture or other entity.
11.04 SEC
Documents. Xxxxxx has filed with the SEC all reports,
statements, schedules and other documents (collectively, the "SEC Documents")
required to be filed by it pursuant to the Securities Act of 1933, as amended
from time to time (the “Securities Act”), and
the Securities Exchange Act of 1934, as amended from time to time (the “Exchange
Act”). Since February 3, 2010, all SEC Documents required to
be filed were timely filed. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a 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. As of their
respective dates, the financial statements included in the SEC Documents (the
"Financial
Statements") complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Except (i) as may be indicated in the notes to the
Financial Statements or (ii) in the case of the unaudited interim statements, as
permitted by Form 10-Q under the Exchange Act, the Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present in all material respects the financial
position of Xxxxxx as of the dates thereof and the results of its operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal recurring year-end adjustments and
footnotes). Except as set forth in the Financial Statements filed
with the SEC prior to the date hereof, Xxxxxx has no liabilities, whether
absolute, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the date of such Financial Statements,
(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 such Financial Statements, which liabilities and obligations
referred to in clauses (i) and (ii), individually or in the aggregate, are not
material to the financial condition or operating results of Xxxxxx and (iii)
liabilities and obligations incurred in connection with the closing of the
transactions contemplated thereby.
11.05 Capitalization. The
capitalization of Xxxxxx (on a fully diluted basis) is as disclosed in the SEC
Documents. All outstanding shares of capital stock have been duly
authorized and validly issued, are fully paid and non-assessable, and were
issued in compliance in all material respects with applicable federal and state
laws governing the issuance of securities. Except as disclosed in the
SEC Documents, Xxxxxx has (i) no outstanding securities convertible into or
exchangeable for any shares of capital stock of Xxxxxx, (ii) no rights, options,
warrants, calls or other agreements or commitments of any nature whatsoever
relating to the purchase or other acquisition of any shares of its capital stock
or securities convertible into or exchangeable for any shares of its capital
stock, (iii) no shares of its capital stock reserved for issuance, and (iv) no
agreements or other commitments of any nature whatsoever relating to
preferential rights or voting rights of any shares of its capital stock or
securities convertible into or exchangeable for any shares of its capital
stock.
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11.06 No Material Adverse
Change. Since the date of the most recent SEC Documents,
the business of Xxxxxx has been operated in the ordinary course and
substantially consistent with past practice, and there has not been any material
and adverse change in the business, assets, financial condition, results of
operations, affairs or prospects of Xxxxxx.
11.07 No
Misrepresentation. No representation or warranty by
Xxxxxx in this Agreement (including any Exhibit or Schedule hereto) and no
statements of Xxxxxx contained in any document, certificate, schedule or other
information furnished or to be furnished by or on behalf of Xxxxxx pursuant to
this Agreement or in connection with the transactions contemplated hereby or
thereby contains or shall contain any untrue statement of material fact or omits
or shall omit to state a material fact required to be stated therein or
necessary in order to make such statements, in light of the circumstances under
which they were made, not misleading. Except for the transactions
contemplated hereby, no event or circumstance has occurred or exists with
respect to Xxxxxx or its business affairs, assets, properties, prospects,
operations or financial condition which has not been publicly disclosed, but
which, under applicable law, rule or regulation, would be required to be
disclosed by Xxxxxx in a registration statement filed on the date hereof by
Xxxxxx under the Securities Act with respect to the primary issuance of Xxxxxx'x
securities. Xxxxxx has delivered true and complete copies of all
documents requested by Purchasers.
11.08 Update to
Representations. Prior to the close of this transaction,
Xxxxxx shall give Purchasers immediate notice of the occurrence of any event or
the receipt by Xxxxxx of any notice or knowledge, the effect of which would be
to make a representation or warranty of Xxxxxx herein untrue or misleading if
made on or immediately following the occurrence of such event or the receipt of
such notice or knowledge.
ARTICLE
XII.
CONDITIONS
PRECEDENT
12.01 Conditions Precedent to the
Obligation of TAEC and Parent. All
obligations of TAEC and Parent hereunder are subject to the fulfillment and
satisfaction of the following conditions on or prior to the Closing Date, any or
all of which may be waived in whole or in part by TAEC or Parent, provided that
no such waiver shall be effective unless it is set forth in a writing executed
by TAEC or Parent:
(a) Representations and
Warranties. The representations and warranties of Xxxxxx
contained in this Agreement (i) that are not qualified by “materiality” or words
of similar import shall have been true and correct in all material respects when
made and shall be true, correct and complete in all material respects as of the
Closing Date with the same force and effect as if made as of the Closing Date
and (ii) that are qualified by “materiality” or words of similar import
shall have been true, correct and complete when made and shall be true and
correct as of the Closing Date.
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(b) Compliance with Agreements
and Conditions. Xxxxxx shall have satisfied or performed and
complied with, in all material respects, all of the covenants and agreements and
all of the conditions required by this Agreement to be performed or complied
with or satisfied by them at or prior to Closing.
(c) Certifications. Xxxxxx
shall have delivered on the Closing Date:
(i) A
certificate from a responsible officer of Xxxxxx, dated the date of the Closing
Date, certifying that Xxxxxx has obtained all requisite approvals to enter into
this Agreement, and certifying as to the fulfillment and satisfaction of the
conditions specified in Sections 12.01(a) and
12.01(b).
(ii) A
certificate of a responsible officer of Xxxxxx, dated the Closing Date,
certifying as to the incumbency and genuineness of the signature of each officer
of Xxxxxx executing this Agreement and certifying that attached thereto is a
true, correct and complete copy of (A) Xxxxxx’x Certificate of Incorporation or
similar document and good standing certificate certified by the Secretary of
State of the State of Nevada, each dated a recent date prior to the Closing
Date, (B) Xxxxxx’x Bylaws or similar document as in effect on the Closing Date,
and (C) resolutions of Xxxxxx’x board of directors approving and authorizing the
execution, delivery and performance of this Agreement and that such resolutions
have not been modified, rescinded or amended and are in full force and
effect.
(d) Consents. Other
than the filing of the Articles of Merger, Parent, TAEC and Xxxxxx shall have
received all requisite consents from any and all public or governmental
authorities, bodies or agencies (including without limitation any
quasi-governmental agencies or public corporations or self-regulatory bodies) or
judicial authority having jurisdiction over the transactions contemplated
hereby, or any part hereof, and the consent of Desert Discoveries under the
Option Agreement.
(e) No Material Adverse
Change. There shall have been no material adverse change in
the financial condition, results of operations, business or assets of Xxxxxx
since the date hereof, and no action shall have been instituted by any
governmental authority or person (i) against a party hereto to restrain or
prohibit the consummation of the transactions herein or (ii) which could
reasonably be expected to have a material adverse effect on Xxxxxx.
12.02 Conditions Precedent to the
Obligations of Xxxxxx to Close. All
obligations of Xxxxxx hereunder are subject to the fulfillment and satisfaction
of each and every one of the following conditions on or prior to the Closing
Date, any or all of which may be waived in whole or in part by Xxxxxx, provided
that no such waiver shall be effective unless it is set forth in a writing
executed by each of Xxxxxx:
(a) Representations and
Warranties. The representations and warranties of each of TAEC
and Parent contained in this Agreement (i) that are not qualified by
“materiality” or words of similar import shall have been true and correct in all
material respects when made and shall be true, correct and complete in all
material respects as of the Closing Date with the same force and effect as if
made as of the Closing Date and (ii) that are qualified by “materiality” or
words of similar import shall have been true, correct and complete when made and
shall be true and correct as of the Closing Date.
-12-
(b) Compliance with Agreements
and Conditions. TAEC and Parent shall have satisfied or
performed and complied with, in all material respects, all of the covenants and
agreements and all of the conditions required by this Agreement to be performed
or complied with or satisfied by them at or prior to Closing.
(c) Certifications. TAEC
and/or Parent shall have delivered at the Closing:
(i) A
certificate from a responsible officer of each of TAEC and Parent, dated the
date of the Closing Date, certifying that each of TAEC and Parent, as
applicable, has obtained all requisite approvals to enter into this Agreement,
and certifying as to the fulfillment and satisfaction of the conditions
specified in Sections
12.02(a) and 12.02(b).
(ii) A
certificate of a responsible officer of TAEC dated the Closing Date, certifying
as to the incumbency and genuineness of the signature of each officer of TAEC
executing this Agreement and certifying that attached thereto is a true, correct
and complete copy of (A) TAEC’s Certificate of Incorporation or similar document
and good standing certificate certified by the Secretary of State of the State
of Nevada, each dated a recent date prior to the Closing Date, (B) TAEC’s Bylaws
or similar document as in effect on the Closing Date, and (C) resolutions of
TAEC’s board of directors approving and authorizing the execution, delivery and
performance of this Agreement and that such resolutions have not been modified,
rescinded or amended and are in full force and effect.
(iii) A
certificate of a responsible officer of Parent dated the Closing Date,
certifying as to the incumbency and genuineness of the signature of each officer
of Parent executing this Agreement and certifying that attached thereto is a
true, correct and complete copy of (A) Parent’s Certificate of Incorporation or
similar document and good standing certificate certified by the Secretary of
State of the State of Nevada, each dated a recent date prior to the Closing
Date, (B) Parent’s Bylaws or similar document as in effect on the Closing Date,
and (C) resolutions of Parent’s board of directors approving and authorizing the
execution, delivery and performance of this Agreement and that such resolutions
have not been modified, rescinded or amended and are in full force and
effect.
(d) Consents. Other
than the filing of the Articles of Merger, Parent, TAEC and Xxxxxx shall have
received all requisite consents from any and all public or governmental
authorities, bodies or agencies (including without limitation any
quasi-governmental agencies or public corporations or self-regulatory bodies) or
judicial authority having jurisdiction over the transactions contemplated
hereby, or any part hereof, and the consent of Desert Discoveries under the
Option Agreement.
(e) No Material Adverse
Change. There shall have been no material adverse change in
the financial condition, results of operations, business or assets of TAEC since
the date hereof, and no action shall have been instituted by any governmental
authority or person (i) against a party hereto to restrain or prohibit the
consummation of the transactions herein or (ii) which could reasonably be
expected to have a material adverse effect on TAEC.
-13-
ARTICLE
XIII.
TERMINATION OF
MERGER
This Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time, whether before or
after stockholder approval of this Agreement, by the consent of the Board of
Directors of Xxxxxx and the Board of Directors of TAEC.
ARTICLE
XIV.
MISCELLANEOUS
PROVISIONS
14.01 Entire
Agreement. This Agreement (including the Exhibits hereto) and
the collateral agreements executed in connection with the consummation of the
transactions contemplated herein contain the entire agreement among the parties
with respect to the merger and related transactions, and supersede all prior
agreements, written or oral, with respect thereto.
14.02 Waivers and
Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.
14.03 Assignment. This
Agreement is not assignable by any party without the prior written consent of
the other parties hereto.
14.04 Interpretation. The
headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretations of this Agreement. The word
“including” (in its various forms) means “including, without limitation.” All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the identity of the person or persons may
require.
14.05 Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
14.06 Choice of
Law. THE PARTIES HERETO HEREBY AGREE THAT THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEVADA REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE APPLY UNDER THE
CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
-14-
14.07 Notices.
Any notice or other communication required or which may be given hereunder shall
be in writing and shall be delivered personally, sent by facsimile transmission
or sent by certified, registered or express mail, postage prepaid, and shall be
deemed given when so delivered personally or sent by facsimile transmission or
if mailed, four days after the date of mailing, as follows:
|
(i)
|
if
to Parent, to:
|
|
0000
Xxxxxxxxxx Xxx., Xxxxx X-000
|
|
|
Xxxxxxxxxxx,
XX 00000
|
|
|
Attn:
President
|
|
|
(ii)
|
if
toTAEC, to:
|
|
True
American Energy Corporation
|
|
|
0000
Xxxxxxxxxx Xxx., Xxxxx X-000
|
|
|
Xxxxxxxxxxx,
XX 00000
|
|
|
Attn:
President
|
|
|
(iii)
|
if
to Xxxxxx, to:
|
|
0000
Xxxxxxxxxx Xxx., Xxxxx X-000
|
|
|
Xxxxxxxxxxx,
XX 00000
|
|
|
Attn:
President
|
(Signature
Page Follows)
-15-
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed by their respective officers, all as
of the day and year first above written.
|
a
Nevada corporation
|
||
|
By:
|
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name: Xxxxxx
Xxxxxxxx
|
||
|
Title: President
|
||
|
XXXXXX
RESOURCES, INC.,
|
||
|
a
Nevada corporation
|
||
|
By:
|
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name: Xxxxxx
Xxxxxxxx
|
||
|
Title: President
|
||
|
TRUE
AMERICAN ENERGY CORPORATION,
|
||
|
a
Nevada corporation
|
||
|
By:
|
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name: Xxxxxx
Xxxxxxxx
|
||
|
Title: President
|
||
-16-
EXHIBIT
A
AMENDED
AND RESTATED ARTICLES OF INCORPORATION OF
THE
SURVIVING CORPORATION
Exhibit
A
EXHIBIT
B
MERGER
PROMISSORY NOTE
Exhibit
A
