AGREEMENT AND PLAN OF MERGER
DATED AS OF
___________________, 2007
BY AND AMONG
SUN RIVER ENERGY, INC.,
SRE Acquisition Corp.,
AND
FEDERATED OK INVESTORS, INC.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of ___________________, 2007
(this "Agreement"), by and among Sun River Energy, Inc., a Colorado corporation
("SNRV"), SRE Acquisition Corp., a Oklahoma corporation and wholly-owned
subsidiary of SNRV ("Merger Sub"), and Federated OK Investors, Inc., an Oklahoma
corporation ("FOKI").
WHEREAS, the boards of directors of SNRV, Merger Sub and FOKI,
respectively, have each approved, as being in the best interests of the
respective corporations and their stockholders, the merger (the "Merger") of
FOKI with and into Merger Sub, in accordance with the applicable provisions of
the Colorado Business Corporation Act (the "CBCA") and the Oklahoma Business
Corporations Code (the "OKBC");
WHEREAS, pursuant to the Merger, each outstanding share of common
stock, no par value, of FOKI ("FOKI Common Stock") shall, in accordance with the
provisions of this Agreement, be converted into the number of shares of SNRV's
common stock, no par value ("SNRV Common Stock"), equal to the Conversion
Amount;
WHEREAS, in connection with, the consummation of, the Merger; SNRV will
pay to the shareholders of FOKI, for prorata distribution, the sum of $1,000,000
and SNRV will pay $250,000 for consulting fees, accounting and legal related to
transaction to the designees set forth in schedules hereafter.
WHEREAS, as a result of the Merger the stockholders of FOKI immediately
after to the Effective Time (as defined in Section 1.01) will own shares, of
SNRV Common Stock outstanding immediately after the Effective Time computed
based upon the formula contained hereinafter on p.22;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a tax-free reorganization under the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, SNRV, Merger Sub and FOKI desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger; and
WHEREAS, this Agreement is intended to set forth the terms upon which
FOKI will merge with and into Merger Sub;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties do
hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. Filing of Certificate of Merger; Effective Time
Subject to the provisions of this Agreement, a certificate of merger in
the forms approved by the parties hereto (the "Certificate of Merger") shall be
duly prepared, executed and acknowledged in accordance with the CBCA and the
OKBC and thereafter delivered to the Secretary of State of the State of Colorado
for filing as provided in the CBCA and to the Secretary of State of the State of
Oklahoma for filing as provided in the OKBC simultaneously with the Closing (as
defined in Section 2.01). The Merger shall become effective upon the filing of
the Certificate of Merger with the Secretary of State and the State of Oklahoma
for filing as provided in the OKBC, respectively (the "Effective Time").
SECTION 1.02. Effects of the Merger.
(a) At the Effective Time and by virtue of the Merger, (i) the separate
corporate existence of FOKI shall cease and FOKI shall be merged with and into
Merger Sub, and Merger Sub shall be the surviving corporation (the "Surviving
Corporation"); (ii) all of the issued and outstanding FOKI Common Stock shall be
converted as provided in Section 1.03; (iii) the certificate of incorporation of
Merger Sub as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation; and (iv) the by-laws
of Merger Sub as in effect immediately prior to the Effective Time shall be the
by-laws of the Surviving Corporation.
(b) Without limiting the generality of the foregoing, and subject thereto and to
any other applicable laws, at the Effective Time, all the properties, rights,
privileges, powers and franchises of FOKI and Merger Sub shall vest in the
Surviving Corporation, and, subject to the terms of this Agreement, all debts,
liabilities, restrictions, disabilities and duties of FOKI and Merger Sub shall
become the debts, liabilities, restrictions, disabilities and duties of the
Surviving Corporation.
SECTION 1.03. Conversion of Securities.
As of the Effective Time, by virtue of the Merger and without any
action on the part of any holder thereof:
(a) Shares of FOKI Common Stock that are issued and outstanding immediately
prior to the Effective Time, other than shares of FOKI Common Stock that are
owned by shareholders who have not consented to the Merger and who have
otherwise taken all of the steps required by the OKBC to properly exercise and
perfect such shareholders' dissenters rights (such shares of FOKI Common Stock,
the "Dissenting Shares") shall, except as set forth below, be converted into
that number of shares of SNRV Common Stock equal to the Conversion Amount which
is computed as set forth on p. 22. All such shares of FOKI Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate representing such shares of
FOKI Common Stock shall cease to have any rights with respect thereto, except
(i) the right to receive the number of shares of SNRV Common Stock to be issued
in consideration therefore upon surrender of such certificate in accordance with
Section 1.05, without interest, or (ii), in the case of Dissenting Shares, the
right to receive the payment to which reference is made in Section 1.04(a).
Notwithstanding the foregoing, any FOKI Stockholders (each, a "Non-Certifying
FOKI Stockholder") who fail to provide to FOKI prior to the Effective Time
either (i) the appropriate certifications and/or questionnaires that such FOKI
Stockholder is an "accredited investor" as such term is defined in Rule 502 of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), as determined by the Surviving Corporation and its counsel,
or (ii) an executed Purchaser Representative Agreement appointing a "purchaser
representative" (as such term is defined in Rule 501(h) of Regulation D
promulgated under the Securities Act), then such Non-Certifying FOKI
Stockholder(s) shall not be entitled to receive shares of SNRV Common Stock
pursuant to this Section 1.03(a) and in lieu thereof, shall receive cash in
amount equal to the number of shares of SNRV Common Stock such FOKI Stockholder
would have received in the Merger multiplied by a price per share of SNRV Common
Stock equal to $0.01. In addition, no fractional shares shall be issued and in
the event a FOKI Stockholder is entitled to receive a fractional share, then the
number of shares to be issued to such FOKI Stockholder shall be rounded up to
the nearest whole share; and
SECTION 1.04. Dissenting Shares.
(a) As promptly as practicable but in no event later than the 11th calendar day
following approval of this Agreement by the shareholders of FOKI, FOKI will mail
to every shareholder of record of FOKI that did not consent to the approval of
this Agreement, notice of the fact and date of the approval of this Agreement
and the Merger in accordance with the OKBC and that the shareholder may exercise
the shareholder's right to dissent from the Merger in accordance with the OKBC.
The notice shall be accompanied by a copy of the OKBC, a copy of this Agreement,
and such additional information and materials as the Surviving Corporation or
SNRV may elect to provide.
(b) Any holder of shares of FOKI Common Stock who perfects such holder's rights
of dissent and appraisal in accordance with and as contemplated by the OKBC
shall not receive payment pursuant to Section 1.03 but shall instead be entitled
to receive from SNRV, the fair value of such shares in cash as determined
pursuant to such provision of the OKBC; provided, that no such payment shall be
made to any dissenting shareholder unless and until such dissenting shareholder
has complied with the applicable provisions of the OKBC and surrendered to SNRV
the certificate or certificates representing the shares for which payment is
being made. In the event that a dissenting shareholder of FOKI fails to perfect,
or effectively withdraws or loses, such holder's right to dissent and receive
payment for such holder's shares, SNRV shall issue and deliver the consideration
to which such holder of shares of SNRV Common Stock is entitled under this
Article I (without interest) upon surrender by such holder of the certificate or
certificates representing the shares of FOKI Common Stock held by such holder.
(c) FOKI shall give SNRV prompt notice of any written demands for appraisal or
payment for shares of FOKI Common Stock received by it, attempted withdrawals of
such demands and any other instruments served pursuant to applicable law that
are received by FOKI with respect to shareholders' rights to dissent. FOKI shall
not, without the prior written consent of SNRV, voluntarily make any payment
with respect to, or settle or offer to settle, any such demands.
(d) SNRV shall control all negotiations and proceedings with respect to any
demands for dissenter's rights. SNRV shall promptly pay to any dissenting
shareholder any and all amounts due and owing to such holder as a result of any
settlement or final determination by any court of competent jurisdiction with
respect to such demands.
SECTION 1.05. Exchange Procedures.
(a) As soon as practicable after the Effective Time, SNRV shall mail to each
FOKI Stockholder a letter of transmittal and instructions for use in effecting
the surrender of certificates representing shares of FOKI Common Stock
outstanding immediately prior to the Effective Time (the "Certificates") in
appropriate and customary form with such provisions as the board of directors of
SNRV after the Merger may reasonably specify. Upon surrender of a Certificate
for cancellation to SNRV, together with such letter of transmittal, duly and
properly executed, the holder of such Certificate shall be entitled to receive
in exchange therefore a certificate representing that number of shares of SNRV
Common Stock as is equal to the product of the number of shares of FOKI Common
Stock represented by the certificate multiplied by the Conversion Amount,
together with any dividends and other distributions payable as provided in
Section 1.06 hereof, and the Certificate so surrendered shall be canceled. Until
surrendered as contemplated by this Section 1.05, each Certificate shall, at and
after the Effective Time, be deemed to represent only the right to receive, upon
surrender of such Certificate, SNRV Common Stock as contemplated by this Section
1.05, together with any dividends and other distributions payable as provided in
Section 1.06 hereof, and the holders thereof shall have no rights whatsoever as
stockholders of SNRV. Shares of SNRV Common Stock issued in the Merger shall be
issued, and be deemed to be outstanding, as of the Effective Time. SNRV shall
cause all such shares of SNRV Common Stock issued pursuant to the Merger to be
duly authorized, validly issued, fully paid and non-assessable and not subject
to preemptive rights.
(b) If any certificate representing shares of SNRV Common Stock is to be issued
in a name other than that in which the Certificate surrendered in exchange
therefore 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 any
transfer or other taxes required by reason of the issuance of certificates for
such shares of SNRV Common Stock in a name other than that of the registered
holder of the Certificate so surrendered.
(c) In the event any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed and upon the posting by such person of a bond in
such amount as SNRV may reasonably direct as an indemnity against any claim that
may be made against it with respect to such Certificate, SNRV will issue in
respect of such lost, stolen or destroyed Certificate one or more certificates
representing shares of SNRV Common Stock as contemplated by this Section 1.05
and such person shall be entitled to the dividend and other distribution rights
provided in Section 1.06 hereof.
(d) If any Certificates shall not have been surrendered prior to three years
after the Effective Time (or immediately prior to such earlier date on which any
payment in respect hereof would otherwise escheat or become the property of any
governmental unit or agency), the payment in respect of such Certificates shall,
to the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any person previously
entitled thereto.
(e) SNRV shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of a Certificate
surrendered for shares of SNRV Common Stock (and dividends or distributions with
respect to SNRV Common Stock as contemplated by Section 1.06 hereof) such amount
as SNRV is required to deduct and withhold with respect to the making of such
payment under the Code, or provisions of any state, local or foreign tax law. To
the extent that amounts are so deducted and withheld, such amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
such Certificate.
SECTION 1.06. Dividends and Distributions.
No dividends or other distributions declared or made with respect to
SNRV Common Stock with a record date on or after the Effective Time shall be
paid to the holder of a Certificate entitled by reason of the Merger to receive
certificates representing SNRV Common Stock until such holder surrenders such
Certificate as provided in Section 1.05 hereof. Upon such surrender, there shall
be paid by SNRV to the person in whose name certificates representing shares of
SNRV Common Stock shall be issued pursuant to the terms of this Article I (i) at
the time of the surrender of such Certificate, the amount of any dividends and
other distributions theretofore paid with respect to that number of whole shares
of such SNRV Common Stock represented by such surrendered Certificate pursuant
to the terms of this Article I, which dividends or other distributions had a
record date on or after the Effective Time and a payment date prior to such
surrender and (ii) at the appropriate payment date, the amount of dividends and
other distributions payable with respect to that number of whole shares of SNRV
Common Stock represented by such surrendered Certificate pursuant to the terms
of this Article I, which dividends or other distributions have a record date on
or after the Effective Time and a payment date subsequent to such surrender.
SECTION 1.07. No Liability.
Neither SNRV nor FOKI shall be liable to any holder of shares of FOKI
Common Stock or SNRV Common Stock, as the case may be, for such shares (or
dividends or distributions with respect thereto) or cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE II
THE CLOSING
SECTION 2.01. Closing.
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Article VIII, and
subject to the satisfaction or waiver of the conditions set forth in Article
VII, the closing of the Merger (the "Closing") shall take place as soon as
reasonably practicable (but in no event on written notice of less than two (2)
business days) after all of the conditions set forth in Article VII are
satisfied or, to the extent permitted thereunder, waived, at the offices of SNRV
or at such other time and place as may be agreed to in writing by the parties
hereto (the date of such Closing being referred to herein as the "Closing
Date"). It is specifically understood and agreed that the closing hereunder is
subject to SNRV obtaining financing to pay the sum of $1,250,000 required to
complete the purchase hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SNRV
Except as set forth in the applicable section of the disclosure
schedule delivered by SNRV to FOKI prior to the execution of this Agreement (the
"SNRV Disclosure Schedule"), SNRV represents and warrants to FOKI as follows:
SECTION 3.01. Organization of SNRV and Merger Sub; Authority.
SNRV is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Each of SNRV and Merger sub has all requisite corporate power
and corporate authority to enter into the Transaction Documents to which it is a
party, to consummate the transactions contemplated hereby and thereby, to own,
lease and operate its properties and to conduct its business. Subject to the
receipt of stockholder approval, the execution, delivery and performance by each
of SNRV and Merger Sub of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of SNRV and Merger
Sub, including, without limitation the approval of the board of directors of
SNRV. The Transaction Documents have been duly executed and delivered by each of
SNRV and Merger Sub and, assuming that the Transaction Documents constitute a
valid and binding obligation of the other parties thereto, constitute a valid
and binding obligation of each of SNRV and Merger Sub, enforceable against SNRV
and Merger Sub in accordance with its terms. Each of SNRV and Merger Sub is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to obtain such qualification or license
would not, individually or in the aggregate, have a SNRV Material Adverse
Effect. SNRV has heretofore delivered or made available to FOKI complete and
correct copies of the certificate of incorporation and by-laws of SNRV and
Merger Sub, the minute books and stock transfer records of SNRV and Merger Sub,
as in effect as of the date of this Agreement. Neither SNRV nor Merger Sub is in
violation of its organizational documents.
SECTION 3.02. Capitalization.
The authorized capital stock of SNRV consists of 100,000,000 shares of
SNRV Common Stock, $0.0001 par value, of which approximately 15,500,000 shares
are outstanding on the date hereof including authorized shares. The authorized
capital stock of Merger Sub consists of 1,000 shares of common stock, of which
1,000 shares are issued and outstanding on the date hereof. Parties acknowledge
that SNRV will issue more common shares during pendency of the contract for
cash, assets, services, financing, without limitation. No other shares of any
other class or series of SNRV Common Stock or securities exercisable or
convertible into or exchangeable for SNRV Common Stock ("SNRV Common Stock
Equivalents") are authorized, issued or outstanding. The outstanding shares of
SNRV Common Stock have been duly authorized and validly issued and are fully
paid and nonassessable and were not issued in violation of, and are not subject
to, any preemptive, subscription or similar rights. To SNRV's knowledge, none of
the outstanding shares of SNRV Common Stock was issued in violation of any Law,
including without limitation, federal and state securities laws. There are
outstanding warrants, options, subscriptions, calls, rights, agreements,
convertible or exchangeable securities or other commitments or arrangements
relating to the issuance, sale, purchase, return or redemption, whether issued
or unissued, of SNRV Common Stock. On the Closing Date, the shares of SNRV
Common Stock for which shares of FOKI Common Stock shall be exchanged in the
Merger will have been duly authorized and, when issued and delivered in
accordance with this Agreement, such shares of SNRV Common Stock, will be
validly issued, fully paid and nonassessable.
SECTION 3.03. No Violation; Consents and Approvals.
The execution and delivery by SNRV of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not, conflict with or
result in any violation of or default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (a) the terms and conditions
or provisions of the certificate of incorporation or by-laws of SNRV or any SNRV
Subsidiary, (b) any Law applicable to SNRV or any SNRV Subsidiary or the
property or assets of SNRV or any SNRV Subsidiary, or (c) give rise to any right
of termination, cancellation or acceleration under, or result in the creation of
any Lien upon any of the properties of SNRV or any SNRV Subsidiary under any
Contract to which SNRV or any SNRV Subsidiary is a party or by which SNRV or any
SNRV Subsidiary or any assets of SNRV or any SNRV Subsidiary may be bound,
except, in the case of clauses (b) and (c), for such conflicts, violations or
defaults which are set forth in Section 3.04 of the SNRV Disclosure Schedule and
as to which requisite waivers or consents will have been obtained prior to the
Closing or which, individually or in the aggregate, would not have a SNRV
Material Adverse Effect. No Governmental Approval is required to be obtained or
made by or with respect to SNRV or any SNRV Subsidiary in connection with the
execution and delivery of this Agreement or the consummation by SNRV of the
transactions contemplated hereby.
SECTION 3.04. Litigation; Compliance with Laws.
(a) There are: (i) no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of SNRV, threatened against, relating to or
affecting SNRV or the SNRV Subsidiaries, the business, the assets, or any
employee, officer, director, stockholder, or independent contractor of SNRV or
the SNRV Subsidiaries in their capacities as such, and (ii) no orders of any
Governmental Entity or arbitrator outstanding against SNRV or the SNRV
Subsidiaries, the business, the assets, or any employee, officer, director,
stockholder, or independent contractor of SNRV or the SNRV Subsidiaries in their
capacities as such, or that could prevent or enjoin, or delay in any respect,
consummation of the transactions contemplated hereby. Section 3.12 of the SNRV
Disclosure Schedule includes a description of all pending or threatened claims,
actions, suits, investigations or proceedings involving SNRV or the SNRV
Subsidiaries, the business, the assets, or any employee, officer, director,
stockholder or independent contractor of SNRV or the SNRV Subsidiaries in their
capacities as such.
(b) SNRV and the SNRV Subsidiaries have complied and are in compliance in all
material respects with all Laws applicable to SNRV, any Subsidiary of SNRV, its
business or its assets. Neither SNRV nor the SNRV Subsidiaries has received
notice from any Governmental Entity or other Person of any material violation of
Law applicable to SNRV, any of the SNRV Subsidiaries, their business or their
assets. SNRV and the SNRV Subsidiaries have obtained and hold all required
Licenses (all of which are in full force and effect) from all Government
Entities applicable to SNRV, the SNRV Subsidiaries, their business or their
assets. No violations are or have been recorded in respect of any such License
and no proceeding is pending, or, to the knowledge of SNRV, threatened to revoke
or limit any such License.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FOKI
Except as set forth in the applicable section of the disclosure
schedule delivered by FOKI to SNRV prior to the execution of this Agreement (the
"FOKI Disclosure Schedule"), FOKI represents and warrants to SNRV as follows:
SECTION 4.01. Organization of FOKI; Authority.
FOKI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Oklahoma and has all requisite corporate
power and corporate authority to enter into the Transaction Documents, to
consummate the transactions contemplated hereby and thereby, to own, lease and
operate its properties and to conduct its business. Subject to the receipt of
stockholder approval by FOKI, the execution, delivery and performance by FOKI of
the Transaction Documents and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of FOKI, including, without limitation, the approval of the board of
directors of FOKI. The Transaction Documents have been duly executed and
delivered by FOKI and, assuming that the Transaction Documents constitute a
valid and binding obligation of SNRV and Merger Sub, constitute a valid and
binding obligation of FOKI. FOKI is duly qualified or licensed to do business as
a foreign corporation and is in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the failure to obtain
such qualification or license would not, individually or in the aggregate, have
a FOKI Material Adverse Effect. FOKI has heretofore delivered or made available
to SNRV complete and correct copies of the articles of incorporation and by-laws
of FOKI, the minute books and stock transfer records of FOKI, as in effect as of
the date of this Agreement. FOKI is not in violation of its organizational
documents.
SECTION 4.02. Capitalization.
(a) The authorized and outstanding capital stock of FOKI is set forth in Section
4.02(a) of the FOKI Disclosure Schedule ( the "FOKI Capital Stock"). All of the
outstanding shares of the FOKI Capital Stock are validly issued, fully paid and
non-assessable. To FOKI's knowledge, none of the outstanding shares of FOKI
Capital Stock or other securities of FOKI was issued in violation of any Law,
including, without limitation, state and federal securities laws. There are no
Liens on or with respect to any outstanding shares of FOKI Capital Stock.
(b) There are no outstanding: (i) securities convertible into or exchangeable
for FOKI Capital Stock; (ii) options, warrants or other rights to purchase or
subscribe for FOKI Capital Stock; or (iii) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any FOKI
Capital Stock, any such convertible or exchangeable securities or any such
options, warrants or rights. There is no outstanding right, option or other
agreement of any kind to purchase or otherwise to receive from FOKI, or any
stockholder of FOKI, any ownership interest in FOKI, and there is no outstanding
right or security of any kind convertible into such ownership interest. To
FOKI's knowledge, there are no voting trusts, proxies or other similar
agreements or understandings with respect to the shares of FOKI Capital Stock.
There are no obligations, contingent or otherwise, of FOKI to repurchase, redeem
or otherwise acquire any shares of FOKI Capital Stock or to provide funds to or
make any investment (in the form of a loan, capital contribution or otherwise)
in any other Person. There are no accrued and unpaid dividends with respect to
any outstanding shares of FOKI Capital Stock.
SECTION 4.03. No Violation; Consents and Approvals.
The execution and delivery by FOKI of the Transaction Documents does
not, and the consummation of the transactions contemplated hereby and thereby
and compliance with the terms hereof and thereof will not conflict with, or
result in any violation of or default (or an event which, with notice or lapse
of time or both, would constitute a default) under, (a) the terms and conditions
or provisions of the articles of incorporation or by-laws of FOKI, (b) any Laws
applicable to FOKI or the property or assets of FOKI, or (c) give rise to any
right of termination, cancellation or acceleration under, or result in the
creation of any Lien upon any of the properties of FOKI under, any Contracts to
which FOKI is a party or by which FOKI or any of its assets may be bound,
except, in the case of clauses (b) and (c), for such conflicts, violations or
defaults as to which requisite waivers or consents will have been obtained prior
to the Closing or which, individually or in the aggregate, would not have an
FOKI Material Adverse Effect. Except as set forth in Section 4.04 of the FOKI
Disclosure Schedule, no Governmental Approval is required to be obtained or made
by or with respect to FOKI or any FOKI Subsidiary in connection with the
execution and delivery of this Agreement or the consummation by FOKI of the
transactions contemplated hereby, except where the failure to obtain such
Governmental Approval would not, individually or in the aggregate, have an FOKI
Material Adverse Effect.
SECTION 4.04. Litigation; Compliance with Laws.
(a) Except as would not have a FOKI Material Adverse Effect, there are: (i) no
claims, actions, suits, investigations or proceedings pending or, to the
knowledge of FOKI, threatened against, relating to or affecting FOKI, its
business, its assets, or any employee, officer, director, stockholder, or
independent contractor of FOKI in their capacities as such, and (ii) no orders
of any Governmental Entity or arbitrator are outstanding against FOKI, its
business, its assets, or any employee, officer, director, stockholder, or
independent contractor of FOKI in their capacities as such, or that could
prevent or enjoin, or delay in any respect, consummation of the transactions
contemplated hereby. Section 4.04 of the FOKI Disclosure Schedule includes a
description of all claims, actions, suits, investigations or proceedings
involving FOKI, its business, its assets, or any employee, officer, director,
stockholder or independent contractor of FOKI in their capacities as such.
(b) Except as would not have an FOKI Material Adverse Effect, FOKI has complied
and is in compliance in all material respects with all Laws applicable to FOKI,
its business or its assets. FOKI has not received notice from any Governmental
Entity or other Person of any material violation of Law applicable to it, its
business or its assets. FOKI has obtained and holds all required Licenses (all
of which are in full force and effect) from all Government Entities applicable
to it, its business or its assets. No violations are or have been recorded in
respect of any such License and no proceeding is pending, or, to the knowledge
of FOKI threatened to revoke or limit any such License.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF
BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of the Business Pending the Merger.
(a) During the period from the date of this Agreement and continuing until the
Effective Time, SNRV agrees as to itself and the SNRV Subsidiaries, that SNRV
shall not, and shall cause the SNRV Subsidiaries not to, engage in any business
whatsoever other than in connection with the consummation of the transactions
contemplated by this Agreement, and shall use commercially reasonable efforts to
preserve intact its business and assets, maintain its assets in good operating
condition and repair (ordinary wear and tear excepted), retain the services of
its officers, employees and independent contractors and use reasonable
commercial efforts to keep in full force and effect liability insurance and
bonds comparable in amount and scope of coverage to that currently maintained
with respect to its business, unless, in any case, FOKI consents otherwise in
writing.
(b) During the period from the date of this Agreement and continuing until the
Effective Time, FOKI agrees that, other than in connection with the consummation
of the transactions contemplated hereby, it shall carry on its business only in
the ordinary course of business consistent with past practice, use commercially
reasonable efforts to preserve intact its business and assets and use reasonable
commercial efforts to keep in full force and effect liability insurance and
bonds comparable in amount and scope of coverage to that currently maintained
with respect to its business, unless, in any case, SNRV consents otherwise in
writing; provided that FOKI may take any and all of the actions listed in
Schedule 5.01(b) of the FOKI Disclosure Schedules at any time prior to or after
the date of this Agreement without the consent of SNRV.
(c) During the period from the date of this Agreement and continuing until the
Effective Time, each of FOKI and SNRV agrees as to itself and, with respect to
SNRV, the SNRV Subsidiaries, respectively, that except as expressly contemplated
or permitted by this Agreement, as disclosed in Section 5.01(c) of the FOKI
Disclosure Schedule or the SNRV Disclosure Schedule, as applicable, or to the
extent that the other party shall otherwise consent in writing:
(i) It shall promptly advise the other party hereto in writing of any change in
the condition (financial or otherwise), operations or properties, businesses or
business prospects of such party or any of its subsidiaries which would result
in a SNRV Material Adverse Effect or FOKI Material Adverse Effect, as the case
may be.
SECTION 5.02. No Action.
During the period from the date of this Agreement and continuing until
the Effective Time, each of FOKI and SNRV agrees as to itself and, with respect
to SNRV, the SNRV Subsidiaries, respectively, that it shall not, and SNRV shall
not permit any of the SNRV Subsidiaries to, take or agree or commit to take any
action, (i) that is reasonably likely to make any of its representations or
warranties hereunder inaccurate; or (ii) that is prohibited pursuant to the
provisions of this Article V.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Preparation of Notice to FOKI Stockholders.
If required by statute, FOKI agrees that as promptly as practicable
following the date of this Agreement it shall prepare a notice to stockholders
describing the Merger (the "FOKI Notice"). FOKI shall use commercially
reasonable efforts to cause the FOKI Notice to be mailed to its stockholders at
the earliest practicable date following such filing.
SECTION 6.02. Access to Information.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, each party shall give the other party and its
respective counsel, accountants, representatives and agents full access, upon
reasonable notice and during normal business hours, to such party's facilities
and the financial, legal, accounting and other representatives of such party
with knowledge of the business and the assets of such party and, upon reasonable
notice, shall be furnished all relevant documents, records and other information
concerning the business, finances and properties of such party and its
subsidiaries that the other party and its respective counsel, accountants,
representatives and agents, may reasonably request. No investigation pursuant to
this Section 6.02 shall affect or be deemed to modify any of the representations
or warranties hereunder or the condition to the obligations of the parties to
consummate the Merger; it being understood that the investigation will be made
for the purposes among others of the board of directors of each party
determining in its good faith reasonable business judgment the accuracy of the
representations and warranties of the other party. In the event of the
termination of this Agreement, each party, if so requested by the other party,
will return or destroy promptly every document furnished to it by or on behalf
of the other party in connection with the transactions contemplated hereby,
whether so obtained before or after the execution of this Agreement, and any
copies thereof (except for copies of documents publicly available) which may
have been made, and will use reasonable efforts to cause its representatives and
any representatives of financial institutions and investors and others to whom
such documents were furnished promptly to return or destroy such documents and
any copies thereof any of them may have made.
SECTION 6.03. No Shop; Acquisition Proposals.
From the date hereof until the Effective Time or the earlier
termination of this Agreement, neither FOKI nor SNRV shall, nor shall they
authorize or permit any of their respective officers, directors or employees or
Subsidiaries or any investment banker, financial advisor, attorney, accountant
or other representative retained by it to, solicit, initiate or encourage
(including by way of furnishing information), or take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Takeover Proposal (as hereinafter
defined), or negotiate with respect to, agree to or endorse any Takeover
Proposal (except in any case if the board of directors or special committee of
SNRV or FOKI, as the case may be, determines in good faith, based upon the
written opinion of its outside legal counsel, that the failure to do so would
constitute a breach of the fiduciary duties of the SNRV' or FOKI's board of
directors or special committee, as the case may be, to its stockholders under
applicable law). FOKI shall promptly advise SNRV and SNRV shall promptly advise
FOKI, as the case may be, orally and in writing of any such inquiries or
proposals and shall also promptly advise SNRV or FOKI, as the case may be, of
any developments or changes regarding such inquiries or proposals. FOKI and SNRV
shall immediately cease and cause to be terminated any existing discussions or
negotiations with any persons (other than FOKI, SNRV and Merger Sub) conducted
heretofore with respect to any Takeover Proposal. FOKI and SNRV agree not to
release (by waiver or otherwise) any third party from the provisions of any
confidentiality or standstill agreement to which FOKI or SNRV is a party.
SECTION 6.04. Legal Conditions to Merger; Reasonable Efforts.
Each of FOKI, SNRV and Merger Sub shall take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
itself with respect to the Merger and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with the Merger. Each of
FOKI, SNRV and Merger Sub will, and SNRV will cause the SNRV Subsidiaries to,
take all reasonable actions necessary to obtain (and will cooperate with each
other in obtaining) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity or other public or private third party,
required to be obtained or made by FOKI, SNRV or any of the SNRV Subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement.
SECTION 6.05. Certain Filings.
Each party shall cooperate with the other in (a) connection with the
preparation of an 8-K, (b) determining whether any action by or in respect of,
or filing with, any governmental body, agency, official or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (c) seeking
any such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the 8-K and
seeking timely to obtain any such actions, consents, approvals or waivers. Each
party shall consult with the other in connection with the foregoing and shall
use all reasonable commercial efforts to take any steps as may be necessary in
order to obtain any consents, approvals, permits or authorizations required in
connection with the Merger.
SECTION 6.06. Public Announcements and Filings.
Each party shall give the other a reasonable opportunity to comment
upon, and, unless disclosure is required, in the opinion of counsel, by
applicable law, approve (which approval shall not be unreasonably withheld), all
press releases or other public communications of any sort relating to this
Agreement or the transactions contemplated hereby.
SECTION 6.07. Tax Treatment.
SNRV and FOKI shall each report the Merger as a tax-free reorganization
except for "boot" received and shall not take, and shall use commercially
reasonable efforts to prevent any of their respective Subsidiaries or affiliates
from taking, any actions that could prevent the Merger from qualifying, as tax
free under the provisions of Section 351 of the Code or Section 368(a) of the
Code.
SECTION 6.08. Tax Matters.
(a) FOKI shall prepare and file on a timely basis all Tax Returns which are due
to be filed with respect to FOKI (giving effect to any extension of time) on or
prior to the Closing Date. SNRV shall be responsible for the preparation and
filing of all Tax Returns which are due to be filed (giving effect to any
extension of time) after the Closing Date, but FOKI shall use its best efforts
to conduct its affairs such that any Tax Returns due after the Closing Date can
be filed on a timely basis.
(b) From the date hereof until the Effective Time or the earlier termination of
this Agreement, without the prior written consent of the other party or if
required in the opinion of counsel, neither SNRV nor FOKI shall make or change
any election, change an annual accounting period, adopt or change any accounting
method, file any amended Tax Return, enter into any closing agreement, settle
any Tax claim or assessment relating to it, surrender any right to claim a
refund of Taxes, consent to any extension or waiver of the limitation period
applicable to any Tax claim or assessment relating to it, or take any other
action relating to the filing of any Tax Return or the payment of any Tax.
SECTION 6.09. Supplements to Schedules.
Prior to the Closing, FOKI will supplement or amend its disclosure
schedule with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such disclosure schedule. No supplement to or amendment of
the disclosure schedule made pursuant to this Section 6.09 shall be deemed to
cure any breach of any representation or warranty made in this Agreement unless
the other parties hereto specifically agree thereto in writing. Prior to the
Closing, SNRV may supplement or amend its disclosure schedule with respect to
any matter which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such disclosure schedule. No
supplement to or amendment of the disclosure schedule made pursuant to this
Section 6.09 shall be deemed to cure any breach of any representation or
warranty made in this Agreement unless the other parties hereto specifically
agree thereto in writing.
SECTION 6.10 Conditional Warrant.
SNRV shall issue a conditional warrant to FOKI shareholders providing
that in the event that the SNRV stock is not trading on the first anniversary
date of the closing hereunder at an average market price per share (based on the
prior 30 day average) equal to the closing price per share on the date of
closing hereunder, then such warrant shall be exercisable for 90 days thereafter
by the assignees (former FOKI shareholders) at a price equal to 50% of the
market closing price on the anniversary date of the closing (on a cashless
basis) for an amount of shares equal to 50% of the SNRV shares distributed in
the merger to former FOKI shareholders. As long as at least 95% of the working
interests are included, the cash payments of $1,000,000 and $250,000 expenses
shall not be adjusted.
SECTION 6.11 Adjustment for working interest holdouts.
In the event that any working interest holder on the FOKI leases in
Oklahoma (Xxxxxx County) refuses or fails to participate in this Agreement
through assignment to FOKI, then all other conditions being met, the merger
shall be consummated so long as FOKI holds at least 80% of the working interest
in the Xxxxxx County, Oklahoma leases and the number of shares issuable in the
merger and the cash dividend to FOKI shareholders shall be reduced prorata by
the % amount of working interest not owned by FOKI at closing.
ARTICLE VII
CONDITIONS OF THE MERGER
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger and the
other transactions contemplated herein shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part to the extent permitted by applicable law:
(a) Stockholder Approval. This Agreement shall have been duly adopted by the
holders of (i) a majority of the outstanding shares of FOKI Common Stock; and
(ii) a majority of the outstanding shares of capital stock of Merger Sub.
(b) No Injunctions or Restraints. No governmental authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, execution order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Merger or any
transaction contemplated by this Agreement; provided, however, that the parties
shall use their reasonable commercial efforts to cause any such decree,
judgment, injunction or other order to be vacated or lifted.
SECTION 7.02. Additional Conditions of Obligations of SNRV.
The obligations of SNRV and Merger Sub to effect the Merger and the
other transactions contemplated by this Agreement are also subject to the
satisfaction at or prior to the Closing Date of the following additional
conditions unless waived by SNRV:
(a) Representations and Warranties. The representations and warranties of FOKI
set forth in this Agreement shall be true and correct in all material respects
(except for those representations and warranties qualified by materiality, which
shall be true and correct in all respects) as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement.
(b) Performance of Obligations of FOKI. FOKI shall have performed in all
material respects all conditions, covenants, agreements and obligations required
to be performed by it under this Agreement at or prior to the Closing Date.
(c) No Material Adverse Change to FOKI. From the date hereof through and
including the Effective Time, no event shall have occurred which would have a
FOKI Material Adverse Effect.
(d) Third Party Consents. FOKI shall have obtained all consents and approvals,
required to be obtained prior to or at the Closing Date, from third parties or
governmental and regulatory authorities in connection with the execution,
delivery and performance by FOKI of this Agreement and the consummation of the
transactions contemplated hereby.
(e) No Governmental Order or Other Proceeding or Litigation. No order of any
Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Dissenters' Rights. Holders of not more than 10% of the aggregate number of
shares of FOKI Common Stock shall have elected to exercise any appraisal rights
or similar rights within the law of the State of Oklahoma, which demand was not
withdrawn or terminated as of the Closing Date.
(g) Due Diligence. SNRV shall have conducted a due diligence investigation and
shall have received a new reserve report within ten days after date hereof
sufficient to satisfy SNRV as to any and all issues. Unless written notice to
the contrary is given by SNRV to FOKI on or before the 10th day hereafter, SNRV
shall be deemed to have accepted its due diligence as satisfactory.
(h) Deliveries.
At the Closing, FOKI shall have delivered to SNRV:
a certificate, dated the Closing Date, signed on behalf of FOKI by the
Chief Executive Officer of FOKI, certifying as to the fulfillment of the
conditions specified in subsections (a), (b) and (c) of this Section 7.02;
(i) the consents set forth in Section 4.04 of the FOKI Disclosure Schedule;
(ii) true, correct and complete copies of (1) the certificate of incorporation
or other charter document, as amended to date, of FOKI, certified as of a recent
date by the Secretary of State or other appropriate official of the state or
other jurisdiction of incorporation of FOKI, (2) the by-laws or other similar
organizational document of FOKI, and (3) resolutions duly and validly adopted by
the Board of Directors and the stockholders of FOKI evidencing the authorization
of the execution and delivery of this Agreement, the other Transaction Documents
to which it is a party and the consummation of the transactions contemplated
hereby and thereby, in each case, accompanied by a certificate of the Secretary
or Assistant Secretary of FOKI, dated as of the Closing Date, stating that no
amendments have been made thereto from the date thereof through the Closing
Date; and
(iii) good standing certificates for FOKI from the Secretary of State or other
appropriate official of their respective states or other jurisdiction of
incorporation and from the Secretary of State or other appropriate official of
each other jurisdiction in which the operation of the business in such
jurisdiction requires FOKI to qualify to do business as a foreign corporation,
in each case dated as of a recent date prior to the Closing Date;
(iv) Financial Statements. audited financial statements of FOKI dated
immediately after the completion of FOKI's capitalization and contribution of
assets.
SECTION 7.03. Additional Conditions of Obligations of FOKI.
The obligation of FOKI to effect the Merger and the other transactions
contemplated by this Agreement is also subject to the satisfaction at or prior
to the Closing Date of the following additional conditions unless waived by
FOKI:
(a) Representations and Warranties. The representations and warranties of SNRV
and Merger Sub set forth in this Agreement shall be true and correct in all
material respects (except for those representations and warranties qualified by
materiality) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except as otherwise contemplated by
this Agreement.
(b) Performance of Obligations of SNRV and Merger Sub. SNRV and Merger Sub shall
have performed in all material respects all conditions, covenants, agreements
and obligations required to be performed by them under this Agreement at or
prior to the Closing Date.
(c) No Material Adverse Change to SNRV or Merger Sub. From the date hereof
through and including the Effective Time, no event shall have occurred which
would have a SNRV Material Adverse Effect.
(d) Third Party Consents. SNRV shall have obtained all consents and approvals
required to be obtained prior to or at the Closing Date from third parties or
governmental and regulatory authorities in connection with the execution,
delivery and performance by SNRV of this Agreement and the consummation of the
transactions contemplated hereby.
(e) No Governmental Order or Other Proceeding or Litigation. No order of any
Governmental Entity shall be in effect that restrains or prohibits the
transactions contemplated hereby and by the other Transaction Documents, and no
suit, action or other proceeding by any Governmental Entity shall have been
instituted or threatened which seeks to restrain or prohibit the transactions
contemplated hereby or thereby.
(f) Closing of Financing. SNRV shall have consummated a financing in form and
amount satisfactory to SNRV, to fund the cash necessary to fulfill the terms of
this agreement at closing.
(g) Deliveries.
At the Closing, SNRV shall have delivered to FOKI:
(i) certificates, dated the Closing Date, signed on behalf of each of SNRV and
Merger Sub by the President of each of SNRV and Merger, certifying as to the
fulfillment of the conditions specified in subsections (a), (b) and (c) of this
Section 7.03;
(ii) the consents set forth in Section 3.04 of the SNRV Disclosure Schedule;
(iii) true, correct and complete copies of (1) the certificate of incorporation
or other charter document, as amended to date, of each of SNRV and Merger Sub,
certified as of a recent date by the Secretary of State or other appropriate
official of the state or other jurisdiction of incorporation of such company,
(2) the by-laws or other similar organizational document of each of SNRV and
Merger Sub, and (3) resolutions duly and validly adopted by the Board of
Directors of each of SNRV and Merger Sub evidencing the authorization of the
execution and delivery of this Agreement, the other Transaction Documents to
which it is a party and the consummation of the transactions contemplated hereby
and thereby, in each case, accompanied by a certificate of the Secretary of each
of SNRV and Merger Sub, dated as of the Closing Date, stating that no amendments
have been made thereto from the date thereof through the Closing Date; and
(iv) good standing certificates for SNRV and Merger Sub from the Secretary of
State or other appropriate official of their respective states or other
jurisdiction of incorporation and from the Secretary of State or other
appropriate official of each other jurisdiction in which the operation of the
business in such jurisdiction requires SNRV to qualify to do business as a
foreign corporation, in each case dated as of a recent date prior to the Closing
Date.
(v) Cashiers funds in the amount of $1,000,000 to be distributed prorata as a
dividend to the holders of FOKI common stock immediately prior to closing
through an Escrow Agent designated by FOKI.
(vi) Cashiers funds in the amount of $250,000 to pay the costs and fees related
to the transaction, including consulting fees, legal and accounting, to be paid
in accordance with Schedule 7.03(g) to be appended hereafter.
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination.
This Agreement may be terminated at any time prior to the Effective
Time by SNRV or FOKI as set forth below:
(a) by mutual consent of the boards of directors of SNRV and FOKI; or
(b) by SNRV upon written notice to FOKI, if: (A) any condition to the obligation
of SNRV to close contained in Article VII hereof has not been satisfied by
closing date (unless such failure is the result of SNRV's breach of any of its
representations, warranties, covenants or agreements contained herein) or (B)
the SNRV stockholders do not approve the Merger; or
(c) by FOKI upon written notice to SNRV, if: (A) any condition to the obligation
of FOKI to close contained in Article VII hereof has not been satisfied by the
Closing Date (unless such failure is the result of FOKI's breach of any of its
representations, warranties, covenants or agreements contained herein); or (B)
the FOKI stockholders do not approve the Merger; or
(d) by SNRV if the board of directors or special committee of SNRV determines in
good faith, based upon the written opinion of its outside legal counsel, that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the SNRV board of directors or special committee to the SNRV
stockholders under applicable law; or
(e) by FOKI if the board of directors or special committee of BBIs determines in
good faith, based upon the written opinion of its outside legal counsel, that
the failure to terminate this Agreement would constitute a breach of the
fiduciary duties of the FOKI board of directors or special committee to the FOKI
stockholders under applicable law.
SECTION 8.02. Fees and Expenses.
(a) Whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense, and, in connection therewith, each of
SNRV and FOKI shall pay, with its own funds and not with funds provided by the
other party, any and all property or transfer taxes imposed on such party. In
the event the merger is completed, from the $250,000 allocated to pay FOKI
consulting, accounting and legal, SNRV legal fees shall be paid in an amount of
$50,000.
(b) SNRV shall pay a finder's fee in restricted stock, in the event the merger
is consummated in the amount of 5% of total shares issued to FOKI shareholders
to Square Ten, LLC.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
None of the representations and warranties of the parties set forth in this
Agreement shall survive the Closing. Following the Closing Date with respect to
any particular representation or warranty, no party hereto shall have any
further liability with respect to such representation and warranty. None of the
covenants, agreements and obligations of the parties hereto shall survive the
Closing.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.
All notices, requests and other communications to any party hereunder
shall be in writing (including telecopy, telex or similar writing) and shall be
deemed given or made as of the date delivered, if delivered personally or by
telecopy (provided that delivery by telecopy shall be followed by delivery of an
additional copy personally, by mail or overnight courier), one day after being
delivered by overnight courier or three days after being mailed by registered or
certified mail (postage prepaid, return receipt requested), to the parties at
the following addresses:
if to SNRV or Merger Sub, to:
Sun River Energy, Inc.
00000 X. 00xx Xxx., 000-X
Xxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, President
Fax: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
if to FOKI, to:
with a copy to (which shall not constitute notice):
or such other address or telex or telecopy number as such party may hereafter
specify for the purpose by notice to the other party hereto.
SECTION 10.02. Amendment; Waiver.
This Agreement may be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may be given, provided that
the same are in writing and signed by or on behalf of the parties hereto.
SECTION 10.03. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party shall assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the written consent of the
other party hereto.
SECTION 10.04. Governing Law.
This Agreement shall be construed in accordance with and governed by
the law of the State of Delaware without regard to principles of conflict of
laws.
SECTION 10.05. Waiver of Jury Trial.
Each party hereto hereby irrevocably and unconditionally waives any
rights to a trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.
SECTION 10.06. Consent to Jurisdiction.
Each of the Parties hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of any court of the State of Colorado or any federal
court sitting in Colorado for purposes of any suit, action or other proceeding
arising out of this Agreement and the Transaction Documents (and agrees not to
commence any action, suit or proceedings relating hereto or thereto except in
such courts). Each of the Parties agrees that service of any process, summons,
notice or document pursuant to the laws of the State of Colorado and on the
individuals designated in Section 10.01 shall be effective service of process
for any action, suit or proceeding brought against it in any such court.
SECTION 10.07. Counterparts; Effectiveness.
Facsimile transmissions of any executed original document and/or
retransmission of any executed facsimile transmission shall be deemed to be the
same as the delivery of an executed original. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 10.08. Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership.
Except as expressly provided herein, this Agreement (including the
documents and the instruments referred to herein) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof. Except as
expressly provided herein, this Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. The
parties hereby acknowledge that no person shall have the right to acquire or
shall be deemed to have acquired shares of common stock of the other party
pursuant to the Merger until consummation thereof.
SECTION 10.09. Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
SECTION 10.10. No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises under any provision of this
Agreement, this Agreement shall be construed as if drafted jointly by the
parties thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
SECTION 10.11. Severability.
If any term or other provision of this Agreement is invalid, illegal or
unenforceable, all other provisions of this Agreement shall remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in a manner that is materially adverse to
any party.
ARTICLE XI
DEFINITIONS
"Affiliate" shall mean (a) with respect to an individual, any member of
such individual's family including lineal ancestors and descendents; (b) with
respect to an entity, any officer, director, stockholder, partner, manager,
investor or holder of an ownership interest of or in such entity or of or in any
Affiliate of such entity; and (c) with respect to a Person, any Person which
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or entity.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"FOKI" shall have the meaning set forth in the preamble to this
Agreement.
"FOKI Capital Stock" shall have the meaning set forth in Section 4.02
of this Agreement.
"FOKI Common Stock" shall have the meaning set forth in the recitals to
this Agreement.
"FOKI Material Adverse Effect" shall mean an event or change,
individually or in the aggregate with other events or changes, that could
reasonably be expected to have a material adverse effect on (a) the business,
properties, prospects, condition (financial or otherwise) or results of
operations of FOKI taken as a whole (other than those events, changes or effects
resulting from general economic conditions or the industry in which FOKI is
engaged generally) or (b) the ability of FOKI to consummate the transactions
contemplated hereby.
"FOKI Stockholders" means the holders of common stock in FOKI.
"Certificate of Merger" shall have the meaning set forth in Section
1.01 of this Agreement.
"Certificates" shall have the meaning set forth in Section 1.05(a) of
this Agreement.
"SNRV" shall have the meaning set forth in the preamble to this
Agreement.
"SNRV Common Stock" shall have the meaning set forth in the recitals to
this agreement.
"SNRV Common Stock Equivalents" shall have the meaning set forth in
Section 3.02 of this Agreement.
"SNRV Material Adverse Effect" shall mean an event or change,
individually, or in the aggregate with other events or changes, that could
reasonably be expected to have a material adverse effect on (a) the business,
properties, prospects, condition (financial or otherwise) or results of
operations of SNRV and the SNRV Subsidiaries taken as a whole (other than those
events, changes or effects resulting from general economic conditions or the
industry in which SNRV is engaged generally) or (b) the ability of SNRV to
consummate the transactions contemplated hereby.
"Closing" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Closing Date" shall have the meaning set forth in Section 2.01 of this
Agreement.
"Code" shall have the meaning set forth in the recitals of this
Agreement.
"Contingent Obligation" as to any Person shall mean the undrawn face
amount of any letters of credit issued for the account of such Person and shall
also mean any obligation of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness, leases, dividends, letters of credit or
other obligations ("Primary Obligations") of any other Person (the "Primary
Obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such Primary Obligation or any property constituting direct or
indirect security therefore, (b) to advance or supply funds (i) for the purchase
or payment of any such Primary Obligation or (ii) to maintain working capital or
equity capital of the Primary Obligor or otherwise to maintain the financial
condition or solvency of the Primary Obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the obligee under
any such Primary Obligation of the ability of the Primary Obligor to make
payment of such Primary Obligation, or (d) otherwise to assure or hold harmless
the obligee under such Primary Obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.
"Contracts" shall mean all contracts, leases, subleases, notes, bonds,
mortgages, indentures, Permits and Licenses, non-competition agreements, joint
venture or partnership agreements, powers of attorney, purchase orders, and all
other agreements, arrangements and other instruments, in each case whether
written or oral, to which such Person is a party or by which any of them or any
of its assets are bound.
"Conversion Amount" shall mean an amount in shares of Sun River Energy,
Inc. Common Stock computed as follows:
$8,750,000 / (50% of the closing price of SNRV on the date of Agreement and
Plan) = a / 100% = b (number of shares of SNRV allocable per 1% ownership of
FOKI) each Shareholder of FOKI shall receive SNRV shares equal to b x % of FOKI
ownership (immediately pre-closing)
"CBCA" shall have the meaning set forth in the recitals of this
Agreement.
"Effective Time" shall have the meaning set forth in Section 1.01 of
this Agreement.
"Governmental Approval" shall mean the consent, approval, order or
authorization of, or registration, declaration or filing with any court,
administrative agency or commission or other Governmental Entity, authority or
instrumentality, domestic or foreign.
"Governmental Entity" means the government of the United States of
America, any other nation or any political subdivision thereof, whether foreign,
state or local, and any agency, authority, instrumentality, regulatory body,
court, tribunal, arbitrator, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Indebtedness" shall mean as to any Person and whether recourse is
secured by or is otherwise available against all or only a portion of the assets
of such Person and whether or not contingent, but without duplication: (a) every
obligation of such Person for money borrowed; (b) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (d) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not more than
120 days overdue or which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP); (e) every Capital Lease Obligation of such Person; (f) any
obligation of such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection with any sales by
such Person unless such sales are on a non-recourse basis (as to collectibility)
of (i) accounts or general intangibles for money due or to become due, (ii)
chattel paper, instruments or documents creating or evidencing a right to
payment of money or (iii) other receivables, whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement; (g)
every obligation of such Person under any forward contract, futures contract,
swap, option or other financing agreement or arrangement (including, without
limitation, caps, floors, collars and similar agreements), the value of which is
dependent upon interest rates, currency exchange rates, commodities or other
indices (a "derivative contract"); (h) every obligation in respect of
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent that such Person is liable therefore as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness provide that
such Person is not liable therefore and such terms are enforceable under
applicable law; and (i) every Contingent Obligation of such Person with respect
to Indebtedness of another Person.
"Laws" shall mean all foreign, federal, state and local statutes, laws,
ordinances, regulations, rules, resolutions, orders, writs, injunctions,
judgments and decrees applicable to the specified Person and to the businesses
and assets thereof.
"License" shall mean any franchise, authorization, license, permit,
certificate of occupancy, easement, variance, exemption, certificate, consent or
approval of any Governmental Entity or other Person.
"Lien" shall mean any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind.
"Merger" shall have the meaning set forth in the recitals of this
Agreement.
"Merger Sub" shall have the meaning set forth in the preamble to this
Agreement.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, limited liability company,
association, corporation, institution, entity, party, Governmental Entity or any
other juridical entity of any kind or nature whatsoever.
"Post-Closing Tax Period" means a taxable period (or portion thereof)
that begins after the Closing Date.
"SEC" shall have the meaning set forth in Section 3.05 of this
Agreement.
"Surviving Corporation" shall have the meaning set forth in Section
1.02(a) of this Agreement.
"Subsidiary" shall mean any Person in which another Person, directly or
indirectly, owns 50% of either the equity interests in or voting control of,
such Person.
"Takeover Proposal" shall mean any proposal for a tender or exchange
offer, merger, consolidation, sale of all or substantially all of such party's
assets, sale of in excess of fifteen percent of the shares of capital stock or
other business combination involving such party or any proposal or offer to
acquire in any manner a substantial equity interest (including any interest
exceeding fifteen percent of the equity outstanding) in, or all or substantially
all of the assets of, such party other than the transactions contemplated by
this Agreement.
"Taxes" means all federal, state, county, local, municipal, foreign and
other taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, gross receipts, occupation, windfall
profits, sales, use, ad valorem, value-added, profits, license, withholding,
payroll, employment, excise, premium, real property, personal property, customs,
net worth, capital gains, transfer, stamp, documentary, social security,
disability, environmental, alternative minimum, recapture and other taxes, and
including all interest, penalties and additions imposed with respect thereto,
whether disputed or not and including any obligations to indemnify or otherwise
assume or succeed to the Tax liability of any Person, and any liability in
respect of any Tax as a result of being a member of any affiliated, combined,
consolidated, unitary or similar group.
"Tax Return" means any report, return, statement, estimate,
informational return, declaration or other written information required to be
supplied to a taxing authority in connection with Taxes.
"Taxing Authority" means any domestic, foreign, federal, national,
state, county or municipal or other local government, any subdivision, agency,
commission or authority thereof, or any quasi-governmental body exercising tax
regulatory authority.
"OKBC" shall have the meaning set forth in the recitals of this
Agreement.
"Transaction Documents" shall mean this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to be
duly executed as of the day and year first above written.
SUN RIVER ENERGY, INC.
By:
Name:
Title:
SRE ACQUISITION CORP.
By:
Name:
Title:
FEDERATED OK INVESTORS, INC.
By:
Name:
Title:
