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EXHIBIT F
ASSIGNMENT AND AGREEMENT
THIS ASSIGNMENT AND AGREEMENT is made as of the 21st day of November, 1997 by
and between R & R RESOURCES, INC., a Nevada corporation (hereinafter called "the
Company"), and PILARES OIL & GAS, INC., a Texas corporation (hereinafter called
"Pilares").
WITNESSETH:
WHEREAS Pilares is the owner of all of the issued and outstanding shares of
stock, which is three hundred thousand (300,000) shares of stock (hereinafter
called "the Paint Rock Shares"), of PAINT ROCK ENERGY, INC., a Texas corporation
(hereinafter called "Paint Rock").
WHEREAS Pilares wishes to sell to the Company, and the Company wishes to
purchase from Pilares the Paint Rock Shares, in consideration of and in exchange
for the issuance and delivery by the Company to Pilares of three million one
hundred eighty-five thousand two hundred thirty (3,185,230) shares of the
Company's common stock having a par value of $0.001 per share (hereinafter
called "the Subject Company Shares") on the terms and conditions hereinafter set
forth; and
WHEREAS it is the intention of the parties that the exchange of stock herein
provided for be treated as a Type "B" reorganization in compliance with the
requirements of Section 368 of the Internal Revenue Code of 1954, as amended ;
WHEREAS the transactions involving the offer and sale by the Company to Pilares
of the Subject Company Shares are intended to be in accordance with (1) the
exemption of exemptions from registration under the Securities and Exchange Act
of 1933, as amended (hereinafter called "the Act"), under Section 3(b) and/or
4(2) of the Act and/or Regulation D (hereinafter called "Regulation D")
promulgated thereunder by the United States Securities and Exchange Commission
(hereinafter called "the Commission") and/or Section 4(6) of the Act; and (2)
the exemption from registration provided by Section 90.530(11) of Nevada
Revised Statutes; and
WHEREAS the transactions involving the offer and sale by Pilares to the Company
of the Pilares Shares are intended to be in accordance with (1) the exemption
from registration under Section 4(1) of the Act and (2) the exemption from
registration provided by Section 90.530(1) of Nevada Revised Statutes;
NOW THEREFORE, the parties hereto, in consideration of the promises and
covenants hereinafter contained, hereby agree as follows:
1. Plan of Reorganization. It is the intention of the parties hereto that all
of the issued and outstanding capital stock of Paint Rock, which is the Paint
Rock Shares, be acquired by the Company in exchange solely for the Company's
voting stock.
2. Exchange of Shares. The Paint Rock Shares shall be and are hereby transferred
to the Company
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Pilares. The Company hereby acknowledges receipt of the Paint Rock Shares, and
Pilares hereby acknowledges receipt of the Subject Company Shares.
3. Representations of Pilares. Pilares represents and warrants to the Company as
follows:
a. Pilares and Paint Rock were duly organized and are and shall be
validly existing under and pursuant to the laws of the State of Texas with full
power to conduct the business in which it is engaged.
b. This Assignment and Agreement has been duly authorized, executed and
delivered on behalf of Pilares, enforceable in accordance with its terms, and
Pilares has full power and lawful authority to sell the Paint Rock Shares on the
terms and conditions herein set forth.
c. The consummation of the transactions contemplated by this Assignment
and Agreement in compliance with the provisions hereof will not result in any
breach of any of the terms, conditions, or provisions of, or constitute a
default under, or result in the creation of any lein, charge, or encumbrance on,
any property or assets of Pilares pursuant to any indenture, mortgage, deed of
trust, agreement, articles of incorporation, bylaws, contract, or other
instrument to which Pilares is a party or by which Pilares may be bound.
x. Xxxxxxx is the sole owner of the Paint Rock Shares appearing of
record in its name. The Paint Rock Shares are free from claims, xxxxx, or other
encumbrances, and Pilares has the unqualified right to transfer the Paint Rock
Shares. The Paint Rock Shares constitute validly issued shares of stock of Paint
Rock, and are fully paid and nonassessable.
e. The audited financial statements of Paint Rock as of August 31, 1997,
were heretofore delivered to the Company, are true and complete statements of
the financial condition of Paint Rock as of that date; there are no substantial
liabilities, either fixed or contingent, that are not reflected in such
financial statements other than contracts or obligations in the usual course of
business; and no such contracts or obligations in the usual course of business
are xxxxx or other liabilities which, if disclosed would alter the financial
condition of Paint Rock as reflected in such financial statements.
f. Since August 31, 1997, there have not been and are not now any
material changes to the financial position of Paint Rock except changes arising
in the ordinary course of business.
g. The following additional documents, delivered to the Company by
Pilares, are true, accurate and complete to the best of Pilares's knowledge,
information and belief: (1) the production run statement with accompanying
letter from Pilares dated October 25, 1997; (2) the reports of Nova Petroleum
Resources Co; Certified Petroleum Geologists and Registered Professional
Engineers, dated August 13, 1997; and (3) the valuations contained the further
letter of Nova Petroleum Resource Corp. dated August 13, 1997, along with the
accompanying Certified Statement of Reserve Values and the Summary of Xxxxxxx
Project, Concho County, Texas.
h. Paint Rock is in good standing as a Texas corporation.
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i. The Subject Company Shares have not been registered under the Act in
reliance upon an exemption or exemptions from registration as hereinabove
stated. Pilares is purchasing the Subject Company Shares without being furnished
any offering literature or prospectus. However, during the course of the
transaction which is the subject of this Agreement and prior to the sale of the
Subject Company Shares Pilares had access to the information provided for under
paragraph (b)(2) of Rule 502 of Regulation D.
j. The Subject Company Shares are being acquired solely for Pilares's
own account, for investment, and are not being purchased with a view to or for
resale, distribution, subdivision, or fractionalization thereof, and Pilares has
no present plans to enter into any such contract, undertaking, agreement, or
arrangement or otherwise to act as an "underwriter" as defined in Section 2(11)
of the Act.
x. Xxxxxxx acknowledges and is aware of the following:
(1) The Company is a Nevada corporation which was incorporated
on June 10, 1997.
(2) The Subject Company Shares constitute a speculative
investment which involves a degree of risk to Pilares.
(3) Pilares has had access to the information and opportunities
set forth in subparagraph (b) of Rule 502 of Regulation D.
(4) There are restrictions on the transferability of the Subject
Company Shares. The Subject Company Shares will not be, and any holders
of the Subject Company Shares have no rights to require that the Subject
Company Shares be, registered under the Act. Pilares will not be able to
avail itself of the provisions of Rule 144 promulgated by the Commission
under the Act with respect to the resale of the Subject Company Shares
for at least one (1) year from the date of the issuance of the Subject
Company Shares. Accordingly, it may not be possible for Pilares to
liquidate his investment in the Subject Company Shares at the time that
it may wish to do so.
4. Representations of the Company. The Company represents and warrants to
Pilares as follows:
a. The Company, which was incorporated on June 10, 1997, was duly
organized and is and shall be validly existing under and pursuant to the laws of
the State of Nevada with full power to conduct the business in which it intends
to engage.
b. This Assignment and Agreement has been duly authorized, executed and
delivered on behalf of the Company, enforceable in accordance with its terms,
and the Company has full power and lawful authority to sell and issue the
Subject Company Shares on the terms and conditions herein set forth.
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c. The consummation of the transactions contemplated by this Assignment
and Agreement in compliance with the provisions hereof will not result in any
breach of any of the terms, conditions, or provisions of, or constitute a
default under, or result in the creation of any lien, charge, or encumbrance on,
any property or assets of the Company pursuant to any indenture, mortgage, deed
of trust, agreement, articles of incorporation, bylaws, contract, or other
instrument to which the Company is a party or by which the Company may be bound.
d. There is no litigation presently pending or threatened against the
Company.
e. The total number of shares of stock which the Company is authorized
to issue is fifty million (50,000,000) shares of common stock having a par value
of $0.001 per share.
f. The total number of the issued and outstanding shares of the common
stock of the Company prior to the issuance of the Subject Company Shares is
three million nine hundred ten thousand (3,910,000) shares. Therefore, the
Subject Company Shares, being 3,185,230 shares, when issued and delivered to
Pilares, will represent not less than forty-four percent (44%) of the issued and
outstanding shares of the common stock of the Company.
g. The Subject Company Shares all have voting rights and are fully paid
and nonassessable.
h. The Company is not supplying Pilares with any offering memorandum or
other disclosure documentation under subparagraph (b)(2) of Rule 502 of
Regulation D other than as set forth herein. However, Seller offeree has had
access to the requisite information and opportunities specified in subparagraph
(b)(2) of Rule 502 of Regulation D.
i. No commission or other similar compensation has been or will be paid
or given, directly or indirectly, to a person, other than a broker-dealer
licensed or not required to be licensed in the State of Nevada, for soliciting a
prospective purchaser or securities of the Company in the State of Nevada.
5. Indemnification. The parties hereto agree to and shall indemnify each other
and their successors, assigns, heirs, and personal representatives against any
and all damages resulting from any breach of any representation, warranty, or
agreement set forth in this Assignment and Agreement or the untruth or
inaccuracy thereof. The parties hereto further agree to and shall indemnify each
other and their successors, assigns, heirs, and personal representatives against
any and all debts, liabilities, choices in action, or claims of any nature,
absolute or contingent, resulting from such breach, untruth or inaccuracy. This
indemnity shall survive the closing of the transactions contemplated hereunder
but shall be limited to liabilities of which one party hereto shall receive
notice in writing from the other party or their or its successors and assigns
within five (5) years from the date hereof. Such party or their or its
successors and assigns shall notify the other party or parties of any such
liabilities, breach of warranty, untruth, or inaccuracy of representation or any
claim thereof with reasonable promptness, and such party or parties or their or
its successors and assigns shall have, at their election, the right to
compromise or defend any such matter involving asserted liability through
counsel of their own choosing and at their expense. Such notice and opportunity
to compromise or
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defend, if applicable, shall be a condition precedent to any liability of such
party under this indemnity. In the event that a party hereto undertakes to
compromise or defend any such liability, then such party shall notify the other
party or their or its successors and assigns shall cooperate with the other
party or parties and their or its counsel in the compromising or defending
against any such liabilities.
6. Survival of Representations. The representations, warranties, and agreements
of the parties hereto contained in this Assignment and Agreement shall not be
discharged or dissolved upon but shall survive the closing hereunder and shall
be unaffected by any investigation made by any party at any time.
7. Notices. Any notices to be given hereunder by one party hereto to the other
party hereto shall be deemed to have been made if personally delivered or sent
by certified mail, return receipt requested, Federal Express, United Parcel
Service, Airborne Express, Express Mail or other overnight mail service, or
facsimile transmission and addressed as follows:
If to the Company: R & R RESOURCES, INC.
0000 Xxxxxxxxxxx Xxx
Xxx Xxxxx, Xxxxxx 00000
With copy its counsel Xxxxxxx X. Xxxxx, Chartered
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
If to Pilares: Pilares Oil & Gas, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
The foregoing addresses may be changed in the same manner as provided
hereinabove for the giving of notices.
8. Attorneys' Fees. If any litigation is commenced between the parties hereto or
their representatives concerning any provisions of this Assignment and Agreement
or the rights and duties of any person or entity in relation to it, the party
prevailing in such litigation shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum as and for her or its attorneys'
fees in such litigation.
9. Counterparts. This Assignment and Agreement may be executed in counterparts
and as executed shall constitute one Assignment and Agreement, binding on both
of the parties to it, notwithstanding that both parties are not signatory to the
original or to the same counterpart.
10. Binding Effect. Except as otherwise provided to the contrary, this
Assignment and Agreement shall be binding upon and inure to the benefit of the
parties signatory to this Assignment and Agreement and their personal
representatives, heirs, successors and assigns.
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11. Headings. The headings of the paragraphs of this Assignment and Agreement in
no way define, limit, extend or interpret the scope of this Assignment and
Agreement or of any particular paragraph or section.
12. Additional Documents. Each of the parties hereto agrees to execute with
acknowledgment or affidavit, if required, any and all additional documents which
may be necessary or expedient in the consummation of this Assignment and
Agreement and the achievement of its purposes.
13. Validity. If any provision of this Assignment and Agreement is held to be
invalid, the same shall not affect in any respect whatsoever the validity of the
remainder of this Assignment and Agreement.
14. Interpretation. When the context in which words are used in this Assignment
and Agreement indicates that such is the intent, words in the singular number
shall include the plural and in the masculine gender shall include the feminine
and neuter, and vice versa.
15. Applicable Law. It is the intention of the parties that the laws of the
State of Nevada govern the validity of this Assignment and Agreement, the
construction of its terms and conditions, and the interpretation of the rights
and duties of the parties.
16. Integrated Agreement. This Assignment and Agreement constitutes the entire
understanding and agreement among the parties with respect to the subject matter
of it, and there are no agreements, understandings, restrictions,
representations or warranties among the parties other than those set forth or
provided in this Assignment and Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Assignment and
Agreement the day and year first hereinabove written.
R & R RESOURCES, INC.
By /s/ [SIG]
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President
ATTEST:
/s/ [SIG]
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Secretary
PILARES OIL & GAS, INC.
By /s/ [SIG]
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ATTEST:
/s/ [SIG]
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Secretary
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