EXHIBIT 10.1
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GMX RESOURCES INC.
COMMON STOCK INVESTMENT AGREEMENT
This Common Stock Investment Agreement (this "AGREEMENT") is made as of
April 5, 2004, by and among GMX Resources Inc., an Oklahoma corporation (the
"COMPANY"), and The Forest Hill Select Fund, LP, (the "INVESTOR").
RECITALS
WHEREAS, the Company desires to sell and the Investor desires to purchase
200,000 shares of the Company's common stock, par value $0.001 per share (the
"SHARES") for $5.00 per Share or a total of $1,000,000.00;
WHEREAS, the parties hereto desire to make the representations and
warranties, and enter into the covenants and agreement, set forth in this
Agreement in connection with the issuance of the Shares to set forth the terms
thereof in writing.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, and covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Issuance of Shares. The Company shall sell to the Investor, and the
Investor shall purchase from the Company, the Shares. Closing of the sale and
purchase of the Shares shall occur within five (5) business days after execution
of this Agreement. At the Closing, the Company shall deliver certificates for
the Shares registered in the name of Investor to Banc of America Securities,
0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, against payment by the Investor of the
purchase price of $5.00 per Share or a total of $1,000,000 (the "PURCHASE
PRICE") by wire transfer to Local Oklahoma Bank, Oklahoma City, Oklahoma, ABA
No. __________________, Account No. __________________, GMX Resources Inc.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor as follows:
2.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Oklahoma and is in good standing under such laws. The Company is
duly qualified and authorized to transact business and is in good standing
as a foreign corporation in each jurisdiction in which the failure so to
qualify would have a material adverse effect on its business, properties,
prospects or financial condition.
2.2 Corporate Power. The Company has all requisite legal and corporate
power and authority to (a) execute and deliver this Agreement and any other
instruments and documents to be executed and delivered by it pursuant to
this Agreement, (b) sell and issue the Shares hereunder and (c) carry out
and perform its obligations under the terms of this Agreement and the
transactions contemplated hereby and thereby.
2.3 Valid Issuance of Stock. The Shares, when issued, sold and
delivered in compliance with the provisions of this Agreement, will be duly
and validly issued, fully paid and nonassessable and issued in compliance
with all applicable federal and state securities laws.
2.4 Authorization. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization,
execution, delivery and performance of this Agreement has been taken. This
Agreement and the Registration Agreement constitute valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
2.5 Offering. Subject to the accuracy of the representations of the
Investor set forth in Section 3 below, the Company has complied and will
comply with all applicable United States federal and state securities laws
in connection with the offer, issuance and sale of the Shares in connection
with this Agreement. The Company has not, either directly or through any
agent, offered any securities to, or otherwise approached, negotiated or
communicated in respect of any securities with, any person so as thereby to
require that the offer or sale of the Shares be registered pursuant to the
provisions of Section 5 of the Securities Act of 1933, as amended (the
"SECURITIES ACT"). Subject to the accuracy of the representations of the
Investor set forth in Section 3 below, the offer, sale and issuance of the
Shares in conformity with the terms of this Agreement are exempt from the
registration requirements of Section 5 of the Securities Act and all
applicable state securities laws.
3. Representations and Warranties of the Investor. The Investor represents
and warrants to the Company as follows:
3.1 Investment Experience. The Investor is capable of evaluating the
merits and risks of its investment in the Shares and has the capacity to
protect its own interests. The Investor is an "accredited investor" as
defined in Rule 501 of Regulation D promulgated under the Securities Act.
The Investor is able to bear the economic risk of losing its entire
investment in the Shares, which is not disproportionate to the Investor's
net worth.
3.2 Investment. The Investor is acquiring the Shares for investment
for the Investor's own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution thereof. The
Investor understands that the Shares with respect thereto have not been,
and will not be when issued, registered under the Securities Act or any
state securities laws by reason of specific exemptions from the
registration provisions of the Securities Act and such state laws, the
availability of which
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depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the representations as expressed herein.
3.3 Rule 144. The Investor is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, which may include, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Company, the resale occurring not less than one year
after a party has purchased and paid for the security to be sold, the sale
being effected through a "broker's transaction" or in transactions directly
with a "market maker" and the number of shares being sold during any three
(3) month period not exceeding specified limitations.
3.4 Access to Information. The Investor has had an opportunity to
discuss the Company's business plan and financial condition with the
Company's management and has received all of the Company's reports filed
with the SEC and Exchange Commission within the last eighteen (18) months.
The Investor understands that a purchase of the Shares involves a high
degree of risk, and there can be no assurance that the Company's business
objectives will be obtained. No representations have been made by the
Company about the value of the Company or the Shares.
3.5 Authorization. The Investor has all requisite legal power and
authority to execute and deliver this Agreement and to carry out and
perform its obligations under the terms of this Agreement and the
transactions and documents contemplated hereby. This Agreement, when
executed and delivered by the Investor, will constitute a valid and legally
binding obligation of the Investor, enforceable in accordance with its
terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
3.6 Brokers' and Finders' Fees. The Investor has not incurred, and
will not incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby. Investor
acknowledges that the Company will pay a placement or finders' fee equal to
five percent (5%) of the Purchase Price to Xxxxxxx Xxxxxx Xxxxxx Group in
connection with the sale of the Shares.
3.7 Legends. It is understood that each certificate representing the
Shares with respect thereto shall bear a legend to the following effect:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
SALE OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR THE AVAILABILITY OF AN EXEMPTION THEREFROM.
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4. Registration Agreement. In connection with the issuance of the Shares,
the Company and the Investor will enter into the Registration Agreement in the
form attached as Exhibit A which obligates the Company to file a shelf
registration statement for resale of the Shares by Investor in non-underwritten
transactions as soon as practicable after the Closing.
5. Miscellaneous.
5.1 Entire Agreement; Successors and Assigns. This Agreement and the
Registration Agreement constitute the entire agreement between the Company
and the Investor relative to the subject matter hereof and supersede any
previous agreement between the Company and the Investor regarding such
subject matter. Subject to the exceptions specifically set forth in this
Agreement, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective executors, administrators,
heirs, successors and assigns of the parties.
5.2 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oklahoma without regard to the
conflicts of laws principles thereof.
5.3 Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute
one and the same instrument.
5.4 Headings. The section headings of this Agreement are for
convenience and shall not by themselves determine the interpretation of
this Agreement.
5.5 Notices. Any notice required or permitted hereunder shall be given
in writing and shall be effective when received by personal delivery,
delivery by overnight courier, telecopy (with confirmation of receipt), or
by United States mail, by registered or certified mail, postage prepaid,
addressed:
If to the Company: GMX Resources Inc.
0000 X. Xxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
With copy to: Xxxxxxx X. Xxxxxxx
Xxxxx & Xxxxxxx, P.C.
00 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
and If to the Investor: The Forest Hill Select Fund, L.P.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: President
Telecopy: 000-000-0000
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5.6 Survival of Warranties. The representations and warranties of the
parties contained in or made pursuant to this Agreement shall survive for a
period of one (1) year from the date hereof.
[SIGNATURES ON FOLLOWING PAGE]
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SIGNATURE PAGE TO
GMS RESOURCES INC.
COMMON STOCK INVESTMENT AGREEMENT
DATED APRIL 5, 2004
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date above set forth.
"COMPANY"
GMX RESOURCES, INC.
By: /s/ Xxx X. Xxxxxxxxx, Xx.
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Xxx X. Xxxxxxxxx, Xx., Chief Financial Officer
"INVESTOR"
THE FOREST HILL SELECT FUND, L.P.
By: FOREST HILL CAPITAL LLC,
its general partner
By: /s/ Xxxx Xxx
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Xxxx Xxx, President
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