EXHIBIT 10.1
REORGANIZATION AGREEMENT
This REORGANIZATION AGREEMENT dated as of October 31, 2008 (the
"Agreement") is by and between Amerigo Energy, Inc., a placeDelaware
corporation ("Amerigo Energy") and Granite Energy, Inc., a placeNevada
corporation ("Granite").
RECITALS
A. WHEREAS, Amerigo Energy desires to acquire certain assets of Granite
described in Exhibit A (the "Granite Assets") in exchange for ten million
(10,000,000) post-split shares of Common Stock of Amerigo Energy (the
"Stock");
B: WHEREAS, Granite desire to exchange the Granite Assets for the Stock;
and
C: WHEREAS, the parties hereto intend that the transaction contemplated
hereby (the "Transaction") shall be completed as a tax-free
reorganization under the U.S. Internal Revenue Code.
NOW, THEREFORE, The respective Boards of Directors of Amerigo Energy and
Granite deem it advisable and in the best interests of their corporations and
the respective shareholders of their corporations that Amerigo Energy acquire
the Granite Assets in exchange for the Stock of Amerigo Energy in accordance
with the terms and conditions of this Agreement.
1. Pre-Closing Actions of Amerigo Energy. Prior to the Closing as set forth
herein, Amerigo Energy shall undertake the following actions:
(a)
The Board of Directors of Amerigo Energy shall approve the
execution of this Agreement and the transactions contemplated
thereby.
(b) Amerigo Energy shall have undertaken a 1 for 20 reverse stock split
of its outstanding Common Stock. In addition, the reverse split
shall have the following effect on all issued and outstanding
options and warrants (collectively, "Derivative Securities") to
purchase shares of Common stock of Amerigo Energy: the exercise
price of the Option Plan shares shall not be changed.
(c)
Amerigo Energy shall prepare and complete the documents necessary
to be filed by it with local, state and federal authorities to
consummate the transactions contemplated hereby, including an
Information Statement/Registration Statement for the issuance of
the Stock (the "Registration Statement").
(d) During the period from the date of this Agreement until the Closing
Date (the "Due Diligence Period"), Amerigo Energy shall make
available to Granite and Granite's employees, attorneys,
accountants, financial advisors, agents and representatives
during normal business hours all information concerning the
operation, business and prospects of Amerigo Energy as may be
reasonably requested by Granite. Amerigo Energy will
cooperate with Granite for the purpose of permitting Granite to
discuss Amerigo Energy's historical business, including without
limitation providing access to all employees, consultants, assets,
properties, books, accounts, records, tax returns, contracts and
other documents of Amerigo Energy.
(e) The accounts payable of Amerigo Energy and SGI in the amounts set
forth on the balance sheet of Amerigo Energy attached as Exhibit B
hereto (the "Payables") shall be dealt with through the issuance
of 182,030 new shares of Common Stock of the Company, all as
described in Exhibit C:
(h) The assets and liabilities of Amerigo Energy at the time of Closing
shall be as set forth on the pro forma balance sheet of Amerigo
Energy attached as Exhibit D.
(i) Amerigo Energy shall update its balance sheet to the Closing Date.
On its Closing balance sheet Amerigo Energy shall have no material
assets and no existing or contingent liabilities except as set
forth in the pro forma balance sheet of Amerigo Energy attached as
Exhibit D or commitments of any kind except those specifically
agreed to in writing by both parties prior to closing;
At the time of signing this Agreement and at the time of Closing,
Amerigo Energy shall be registered with the Securities and Exchange
Commission as a fully reporting company under Section 12(g) of the
Securities Exchange Act of 1934, current in its filings and with
not less than ten thousand (10,000) shares of its post-split Common
Stock "free trading" on the "bulletin board" and with quotations
posted by not less than 1 market maker.
(j) Amerigo Energy shall have received all permits, authorizations,
regulatory approvals and third party consents necessary for the
consummation of the Transaction and all applicable legal
requirements, including compliance with all applicable federal and
state securities laws, shall have been satisfied.
(k) Amerigo Energy shall have obtained all necessary stockholder
approvals.
2. Pre-Closing Action of Granite. Prior to the Closing as set forth herein,
Granite shall undertake the following actions:
(a) The Board of Directors and shareholders of Granite shall execute
and deliver resolutions unanimously approving the execution of
this Agreement and the transactions contemplated hereby.
(b) During the Due Diligence Period, Granite shall make available to
Amerigo Energy and Granite's employees, attorneys, accountants,
financial advisors, agents and representatives during normal
business hours all information concerning the operation, business
and prospects of Granite as may be reasonably requested by Amerigo
Energy. Granite will cooperate with Amerigo Energy for the purpose
of permitting Amerigo Energy to discuss Granite's business and
prospects with customers, creditors, suppliers and other persons
having business dealings with such party, including without
limitation providing access to all employees, consultants, assets,
properties, books, accounts, records, tax returns, contracts and
other documents of Granite, provided that such access will not
materially interfere with the normal business operations of
Granite.
(c) Granite shall update Exhibit A to the Closing Date. The Exhibit
A Granite Assets of Granite to be acquired by Amerigo Energy shall
not be in the aggregate less than eighty percent (80%) of those
stated in Exhibit A
(d) Granite shall have received all permits, authorizations,
regulatory approvals and third party consents necessary for the
consummation of the Transaction and all applicable legal
requirements, including compliance with all applicable federal and
state securities laws, shall have been satisfied.
(f) Granite shall have obtained all necessary stockholder approvals.
3. Conditions to Closing. Amerigo Energy's and Granite's obligations to
close the proposed Acquisition will be subject to specified conditions
precedent including, but not limited to, the following:
(a) The representations and warranties of Amerigo Energy as set forth
in Section 6 herein shall remain accurate as of the Closing Date
and no material adverse change in the business of Amerigo Energy
shall have occurred.
(b) The representations and warranties of Granite as set forth in
Section 7 herein shall remain accurate as of the Closing Date and
no material adverse change in the business of Granite shall have
occurred.
(c) All required approvals of Directors and shareholders of Granite and
Amerigo Energy shall have been obtained and evidenced by
appropriate documentation.
(d) All the documents necessary to be filed by Amerigo Energy and
Granite with local, state and federal authorities shall have been
prepared.
(e) Amerigo Energy shall have received all permits, authorizations
regulatory approvals and third party consents necessary for the
consummation of the Transaction and all applicable legal
requirements, including compliance with all applicable federal and
state securities laws.
(f) Amerigo Energy shall be registered with the SEC as a fully
reporting company under Section 12(g) of the Securities Exchange
Act of 1934, current in its filings and with not less than ten
thousand (10,000) shares of its post-split common stock "free
trading" on the "bulletin board" and quotations posted by not
less than 1 market maker.
(g) Granite shall be and remain in good standing as a publicly traded
company under the U.S. Securities Exchange Act of 1934, quoted and
trading on the "Pink Sheets" under the symbol "GNGI.PK".
(h) Amerigo Energy shall have obtained authorization from its transfer
agent and the NASDAQ, effective upon the c ompletion of the
Closing, to issue its post-split Common Stock with a CUSIP number
and trading symbol assigned to it by the NASD.
(i) Amerigo Energy shall have arranged with the transfer agent and the
Depository Trust Corporation (DTC) for notification to stockholders
and brokerage firms of the effectiveness of the transaction and the
preparation of new certificates for Common Stock.
4. Closing Date. The Closing the contemplated transaction (the "Closing")
will occur on a date agreed upon by the parties, no later than
October___, 2008 (the "Closing Date") as soon as reasonably possible
after the satisfaction of all conditions precedent specified in the
Definitive Agreement. The Closing Date may be extended by mutual consent
in writing.
5. Closing.
5.1 Closing. At the Closing, inter alia, the following events shall occur:
(a) Amerigo Energy shall issue to Granite and/or its nominee(s)
10,000,000 shares of restricted Common Stock, $0.001 par value,
adjusted for the stock split, in exchange for the Granite Assets.
The 10,000,000 shares of Common Stock of Amerigo Energy, as
adjusted for the stock split, shall constitute not less than eighty
percent (80%) of the total outstanding shares of Common Stock of
Amerigo Energy at the completion of the Closing and after issuing
or providing for the issuance of all shares of Common Stock to be
issued to creditors as per Section 1(e).
(b) Amerigo Energy shall issue to the creditors, as itemized in
Section 1(e) the shares of restricted Common Stock described in
Exhibit C in exchange for releases.
(c) All existing Amerigo Energy officers and directors shall resign and
new Amerigo Energy directors and officers shall be appointed.
(f) The Company shall file the Form S-4 Registration/Information
Statement with the SEC covering the proposed distribution of the
Stock to Granite stockholders.
(i) Amerigo Energy and Granite shall exchange such certificates and
other documents as shall be reasonably required by any party in
order to complete the Closing.
5.2 Post-Closing. The following will take place subsequent to the Closing:
(a) Amerigo Energy shall file a SEC Form 8-K reflecting the completion
if the Reorganization.
(b) Granite shall file an amended Form 211 with NASDAQ.
(c) The transfer agent and the Depository Trust Corporation (DTC)
shall notify stockholders and brokerage firms of the Transaction.
(c) The parties will issue such press releases and other
notifications as required.
(d) The SEC will declare Form S-4 effective.
(e) The Stock will be distributed to Granite stockholders.
6. Representations of Amerigo Energy. Amerigo Energy represents and
warrants as of the effective date of this Agreement and as of the Closing
date as follows:
(a)Organization of Amerigo Energy; Authorizations. Amerigo Energy is a
corporation duly organized, validly existing and in good standing
under the laws of placeDelaware, with full corporate power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action
of Amerigo Energy and this Agreement constitutes a valid and binding
obligation of Amerigo Energy, enforceable against it in accordance
with its terms.
(b)Capitalization. The authorized capital stock of Amerigo Energy
consists of 100,000,000 shares of Common Stock, par value $0.001 per
share, and 25,000,000 shares of preferred stock, par value $0.001 per
share. As of the Closing Date (subsequent to the proposed reverse
stock split and issuance of all shares of Common Stock at the
Closing), Amerigo Energy will have a total of 842,256 post-split
shares of Common Stock issued and outstanding and no shares of
preferred stock issued and outstanding. As of the Closing Date, all of
the issued and outstanding shares of Common Stock of Amerigo Energy
shall be validly issued, fully paid and non-assessable and there is
not and as of the Closing Date any warrants, options or other
agreements obligating Amerigo Energy to issue any additional shares of
Common Stock or preferred stock or any of its securities of any kind
or any agreements obligating Amerigo Energy to register any securities
for public sale. Amerigo Energy will not issue any shares of capital
stock from the date of this Agreement through the Closing Date. The
Common Stock of Amerigo Energy is presently trading on the OTC
Bulletin Board under the symbol "AGOE".
(c)No Conflict as to Amerigo Energy. Neither the execution and delivery
of this Agreement nor the consummation of the asset purchase will (i)
violate any provision of the certificate of incorporation or by-laws
(or other governing instrument) of Amerigo Energy or (ii) violate, or
be in conflict with, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required
by, or excuse performance by any person of any of its obligations
under, or cause the acceleration of the maturity of any debt or
obligation pursuant to, or result in the creation or imposition of any
encumbrance upon any property or assets of Amerigo Energy or any
subsidiary under, any material agreement or commitment to which
Amerigo Energy is a party or by which its property or assets is bound,
or to which any of the property or assets of Amerigo Energy or any
subsidiary is subject, or (iii) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or other
governmental body applicable to Amerigo Energy..
(d)Consents and Approvals of Governmental Authorities. Other than as
specified in this Agreement, no consent, approval or authorization
of, or declaration, filing or registration with, any governmental body
is required to be made or obtained by Amerigo Energy in connection
with the execution, delivery and performance of this Agreement by
Amerigo Energy.
(e)Other Consents. Other than as specified in this Agreement, no consent
of any person is required to be obtained by Amerigo Energy to the
execution, delivery and performance of this Agreement, including, but
not limited to, consents from parties to leases or other agreements or
commitments, except for any consent which the failure to obtain would
not be likely to have a material adverse effect on the business and
financial condition of Amerigo Energy.
(f)Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any Court or Governmental body pending or
threatened in writing against or involving Amerigo Energy which is
likely to have a material adverse effect on the business or financial
condition of Amerigo Energy or which questions or challenges the
validity of this Agreement. Amerigo Energy is not subject to any
judgment, order or decree that is likely to have a material adverse
effect on the business or financial condition of Amerigo Energy .
(j)Absence of Certain Changes. Amerigo Energy shall not have:
1. suffered the damage or destruction of any of its properties or
assets (whether or not covered by insurance) which is materially
adverse to the business or financial condition of Amerigo Energy,
or made any disposition of any of its material properties or assets
other than in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments existing on the date of
this Agreement;
3. other than the Shares or shares of Common Stock to be issued as
described in Exhibit C, issued or sold, or committed to issue or
sell, any securities or other securities, acquired, directly or
indirectly, by redemption or otherwise, any such securities,
reclassified, split-up or otherwise changed any such security, or
granted or entered into any options, warrants, calls or commitments
of any kind with respect thereto;
4. organized any new subsidiary or acquired any securities or any
equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to,
whether directly or by way of guarantee or otherwise, any
obligation or liability with respect to any such indebtedness for
borrowed money;
6. except as provided in Section 1(h) paid, discharged or satisfied
any material claim, liability or obligation (absolute, accrued,
contingent or otherwise), other than in the ordinary course of
business;
7. except as provided in Section 1(g) prepaid any material obligation
having a maturity of more than 90 days from the date such
obligation was issued or incurred;
8. except as provided in Section 1(g) cancelled any material debts or
waived any material claims or rights, except in the ordinary course
of business;
9. disposed of or permitted to lapse any rights to the use of any
material patent or registered trademark or copyright or other
intellectual property owned or used by it;
10.granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee
benefit plan);
11.purchased or entered into any contract or commitment to purchase
any material quantity of raw materials or supplies, or sold or
entered into any contract or commitment to sell any material
quantity of property or assets;
12.made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets;
13.written off or been required to write off any notes or accounts
receivable;
14.written down or been required to write down any inventory;
15.entered into any collective bargaining or union contract or
agreement; or
16.incurred any liability.
(k)
Contracts and Commitments. Other than described in Schedule 6 (k),
Amerigo Energy is not a party to any:
1. Contract or agreement involving any liability on the part of
Amerigo Energy.
2. Lease of personal property;
3. Employee bonus, stock option or stock purchase, performance unit,
profit-sharing, pension, savings, retirement, health, deferred or
incentive compensation, insurance or other material employee
benefit plan (as defined in Section 2(3) of ERISA) or program for
any of the employees, former employees or retired employees of
Amerigo Energy;
4. Commitment, contract or agreement that is currently expected by the
management of Amerigo Energy to result in any material loss upon
completion or performance thereof;
5. Contract, agreement or commitment with any officer, employee,
agent, consultant, advisor, salesman, sales representative, value
added reseller, distributor or dealer; or
6. Employment agreement or other similar agreement.
(l)Compliance with Law. The operations of Amerigo Energy have been conducted
in accordance with all applicable laws and regulations of all
governmental bodies having jurisdiction over them, except for violations
thereof which are not likely to have a material adverse effect on the
business or financial condition of Amerigo Energy. Amerigo Energy has not
received any notification of any asserted present or past failure by it
to comply with any such applicable laws or regulations. Amerigo Energy
has all material licenses, permits, orders or approvals from the
governmental bodies required for the conduct of its business, and is not
in material violation of any such licenses, permits, orders and
approvals. All such licenses, permits, orders and approvals are in full
force and effect, and no suspension or cancellation of any thereof has
been threatened.
(m)Tax Matters.
1. Amerigo Energy (a) has filed or shall file prior to Closing all
nonconsolidated and noncombined tax returns and all consolidated or
combined tax returns required to be filed through the date hereof and
will have paid any tax due through the date hereof with respect to the
time periods covered by such tax returns and shall timely pay any such
taxes required to be paid by it after the date hereof with respect to
such tax returns and shall prepare and timely file all such tax
returns required to be filed after the date hereof and through the
Closing Date and pay all taxes required to be paid by it with respect
to the periods covered by such tax returns; (b) all such tax returns
filed pursuant to clause (a) after the date hereof shall, in each
case, be prepared and filed in a manner consistent in all material
respects (including elections and accounting methods and conventions)
with such tax return most recently filed in the relevant jurisdiction
prior to the date hereof, except as otherwise required by law or
regulation. Any such tax return filed or required to be filed after
the date hereof shall not reflect any new elections or the adoption of
any new accounting methods or conventions or other similar items,
except to the extent such particular reflection or adoption is
required to comply with any law or regulation.
2. There is no (nor has there been any request for an) agreement, waiver
or consent providing for an extension of time with respect to the
assessment of any taxes attributable to Amerigo Energy or its assets
or operations and no power of attorney granted by Amerigo Energy with
respect to any tax matter is currently in force.
3. There is no action, suit, proceeding, investigation, audit, claim,
demand, deficiency or additional assessment in progress, pending or
threatened against or with respect to any tax attributable to Amerigo
Energy or its assets or operations.
4. All amounts required to be withheld as of the Closing Date for taxes
or otherwise have been withheld and paid when due to the appropriate
agency or authority.
5. There shall be delivered or made available to Granite at or prior to
Closing true and complete copies of all Amerigo Energy income tax
returns (or with respect to consolidated or combined returns, the
portion thereof) and any other tax returns requested by Granite as
may be relevant to Amerigo Energy, any subsidiaries, or their assets
or operations for any and all periods ending after December 31, 2004,
or for any tax years which are subject to audit or investigation by
any taxing authority or entity.
(n)Borrowing and Guarantees. Except as provided in Section 1(h), Amerigo
Energy (a) does not have any indebtedness for borrowed money, (b) is not
lending or committed to lend any money (except for advances to employees
in the ordinary course of business), and (c) is not a guarantor or surety
with respect to the obligations of any person.
7.
Representations of Granite. Granite represents and warrants as follows,
as of the effective date of this Agreement and as of the Closing Date:
(a)Organization; Authorization. Granite is a corporation duly organized,
validly existing and in good standing under the laws of placeNevada with
full corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action of Granite and this Agreement constitutes a valid and
binding obligation; enforceable against in accordance with its terms.
(b)Capitalization. The authorized capital stock of Granite consists of
150,000,000 shares of Common Stock, par value $.001 per share as of the
date of this Agreement, Granite has 53,040,889 shares of Common Stock
issued and outstanding. No shares have otherwise been registered under
state or federal securities laws. As of the Closing Date, all of the
issued and outstanding shares of Common Stock of Granite are validly
issued, fully paid and non-assessable and there is not and as of the
Closing Date there will not be outstanding any warrants, options or other
agreements on the part of Granite obligating Granite to issue any
additional shares of Common Stock or preferred stock or any of its
securities of any kind. Granite will not issue any shares of capital
stock from the date of this Agreement through the Closing Date.
(c)No Conflict as to Granite. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated herein
will (a) violate any provision of the articles of incorporation or
organization of Granite or (b) violate, or be in conflict with, or
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of,
or accelerate the performance required by, or excuse performance by any
Person of any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation
or imposition of any encumbrance upon any property or assets of Granite
under, any material agreement or commitment to which Granite, is a party
or by which any of their respective property or assets is bound, or to
which any of the property or assets of Granite is subject, or (c) violate
any statute or law or any judgment, decree, order, regulation or rule of
any court or other Governmental Body applicable to Granite except, in the
case of violations, conflicts, defaults, terminations, accelerations or
encumbrances described in clause (b) of this Section for such matters
which are not likely to have a material adverse effect on the business or
financial condition of Granite, taken as a whole.
(d) Consents and Approvals of Governmental
Authorities. No consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Body is required to be made
or obtained by Granite in connection with the execution, delivery and
performance of this Agreement by Granite or the consummation of the
transactions contemplated herein.
(e)Other Consents. No consent of any Person is required to be obtained by
Granite to the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated herein, including, but
not limited to, consents from parties to leases or other agreements or
commitments, except for any consent which the failure to obtain would not
be likely to have a material adverse effect on the business and financial
condition of Granite.
(f) Litigation. There is no action,
suit, inquiry, proceeding or investigation by or before any court or
Governmental Body pending or threatened in writing against or involving
Granite which is likely to have a material adverse effect on the business
or financial condition of Granite, or which would require a payment by
Granite in excess of $2,000 in the aggregate or which questions or
challenges the validity of this Agreement. Granite is not subject to any
judgment, order or decree that is likely to have a material adverse
effect on the business or financial condition of Granite or which would
require a payment by Granite in excess of $50,000 in the aggregate.
(g)Absence of Certain Changes. Granite has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to
the business or financial condition of Granite, or made any
disposition of any of its material properties or assets other than in
the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments existing on the date of this
Agreement, other than as contemplated by this Agreement;
3. paid, discharged or satisfied any material claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than in
the ordinary course of business;
4. prepaid any material obligation having a maturity of more than 90 days
from the date such obligation was issued or incurred;
5. cancelled any material debts or waived any material claims or rights,
except in the ordinary course of business;
6. disposed of or permitted to lapse any rights to the use of any
material patent or registered trademark or copyright or other
intellectual property owned or used by it;
7. granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee
benefit plan);
8. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered
into any contract or commitment to sell any material quantity of
property or assets, except (i) normal contracts or commitments for the
purchase of, and normal purchases of, raw materials or supplies, made
in the ordinary course business, (ii) normal contracts or commitments
for the sale of, and normal sales of, inventory in the ordinary course
of business, and (iii) other contracts, commitments, purchases or
sales in the ordinary course of business;
9. written off or been required to write off any notes or accounts
receivable;
10.written down or been required to write down any inventory;
11.entered into any collective bargaining or union contract or agreement;
or
(h)Compliance with Law. The operations of Granite have been conducted in
accordance with all applicable laws and regulations of all governmental
bodies having jurisdiction over them, except for violations thereof which
are not likely to have a material adverse effect on the business or
financial condition of Granite, or which would not require a payment by
Granite in excess of $50,000 in the aggregate, or which have been cured.
Granite has not received any notification of any asserted present or past
failure by it to comply with any such applicable laws or regulations.
Granite has all material licenses, permits, orders or approvals from the
Governmental Bodies required for the conduct of their businesses, and are
not in material violation of any such licenses, permits, orders and
approvals. All such licenses, permits, orders and approvals are in full
force and effect, and no suspension or cancellation of any thereof has
been threatened.
(i) Tax Matters.
1. Granite (a) has filed or shall file prior to Closing all tax returns
required to be filed through the date hereof and will have paid any
tax due through the date hereof with respect to the time periods
covered by such tax returns and shall timely pay any such taxes
required to be paid by it after the date hereof with respect to such
tax returns and shall prepare and timely file all such tax returns
required to be filed after the date hereof and through the Closing
Date and pay all taxes required to be paid by it with respect to the
periods covered by such tax returns; (a) all such tax returns filed
pursuant to clause (a) after the date hereof shall, in each case, be
prepared and filed in a manner consistent in all material respects
(including elections and accounting methods and conventions) with
each such tax return most recently filed in the relevant jurisdiction
prior to the date hereof, except as otherwise required by law or
regulation. Any such tax return filed or required to be filed after
the date hereof shall not reflect any new elections or the adoption
of any new accounting methods or conventions or other similar items,
except to the extent such particular reflection or adoption is
required to comply with any law or regulation.
2. Granite has not agreed, or been required, to make any adjustment (x)
under Section 481(a) of the Code by reason of a change in accounting
method or otherwise or (y) pursuant to any provision of the tax
Reform Act of 1986, the Revenue Act of 1987 or the Technical and
Miscellaneous Revenue Act of 1988.
3. There is no (nor has there been any request for an) agreement, waiver
or consent providing for an extension of time with respect to the
assessment of any taxes attributable to Granite or its assets or
operations and no power of attorney granted by Granite with respect
to any tax matter is currently in force.
4. There is no action, suit, proceeding, investigation, audit, claim,
demand, deficiency or additional assessment in progress, pending or
threatened against or with respect to any tax attributable to Granite
or its assets or operations.
5. All amounts required to be withheld as of the Closing Date for taxes
or otherwise have been withheld and paid when due to the appropriate
agency or authority.
6. There shall be delivered or made available to Amerigo Energy at or
prior to Closing true and complete copies of all income tax returns
(or with respect to consolidated or combined returns, the portion
thereof) and any other tax returns requested by Amerigo Energy as may
be relevant to Granite or its assets or operations for any and all
periods ending after December 31, 2004, or for any tax years which
are subject to audit or investigation by any taxing authority or
entity.
8 Notices.
Any notice which any of the parties hereto may desire to serve upon any
of the other parties hereto shall be in writing and shall be conclusively
deemed to have been received by the party at its address, if mailed,
postage prepaid, United States mail, registered, return receipt
requested, to the following addresses:
If to Amerigo Energy: Amerigo Energy, Inc.
2580 Anthem Village Drive
Henderson, NV 89052
Attn: Lawrence Schroeder, President
Facsimile No.: (702) 974-4905
If to Granite: Granite Energy, Inc.
307 West 200 South
Salt Lake City, UT 84810
Attn: Matthew Schultz, President
Facsimile No.: ( 801) 532-6810
9. Successors.
This Agreement shall be binding upon and inure to the benefit of the
heirs, personal representatives and successors and assigns of the
parties.
10.Choice of Law.
This Agreement shall be construed and enforced in accordance with the
laws of the State of placeNevada, and the parties submit to the exclusive
jurisdiction of the courts of placeNevada in respect of all disputes
arising hereunder.
11.Counterparts.
This Agreement may be signed in one or more counterparts, all of which
taken together shall constitute an entire agreement.
12.Confidential Information.
Each of Amerigo Energy and Granite hereby acknowledges and agrees that
all information disclosed to each other whether written or oral, relating
to the other's business activities, its customer names, addresses, all
operating plans, information relating to its existing services, new or
envisioned products or services and the development thereof, scientific,
engineering, or technical information relating to the others business,
marketing or product promotional material, including brochures, product
literature, plan sheets, and any and all reports generated to customers,
with regard to customers, unpublished list of names, and all information
relating to order processing, pricing, cost and quotations, and any and
all information relating to relationships with customers, is considered
confidential information, and is proprietary to, and is considered the
invaluable trade secret of such party (collectively, "Confidential
Information"). Any disclosure of any Confidential Information by any
party hereto, its employees, or representatives shall cause immediate,
substantial, and irreparable harm and loss to the other. Each party
understands that the other desires to keep such Confidential Information
in the strictest confidence, and that such party's agreement to do so is
a continuing condition of the receipt and possession of Confidential
Information, and a material provision of this agreement, and a condition
that shall survive the termination of this Agreement. Consequently, each
party shall use Confidential Information for the sole purpose of
performing its obligations as provided herein.
13. Indemnification.
Each party agrees to indemnify and hold harmless each other party from
and against all loss, liability, claim or expense (including reasonable
attorneys' fees) arising out of or connected to the indemnifying party's
acts or omissions in breach of this Agreement or wilful or grossly
negligent conduct in violation of applicable law, provide that no such
indemnification shall be available to the extent any such loss,
liability, claim or expense was caused in whole or in part by the acts or
omissions of the party seeking indemnification.
14.Public Announcement.
The parties shall make no public announcement concerning this Agreement,
their discussions or any other letters, memos or agreements between the
parties relating to this Agreement until such time as they agree to the
contents of a mutually satisfactory press release which they intend to
release on the date of execution of this Agreement. Either of the
parties, but only after reasonable consultation with the other, may make
disclosure if required under applicable law.
15. Entire Agreement.
This Agreement sets forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related
to the subject matter hereof. No understanding, promise, inducement,
statement of intention, representation, warranty, covenant or condition,
written or oral, express or implied, whether by statute or otherwise, has
been made by any Party hereto which is not embodied in this Agreement or
the written statements, certificates, or other documents delivered
pursuant hereto or in connection with the transactions contemplated
hereby, and no party hereto shall be bound by or liable for any alleged
understanding, promise, inducement, statement, representation, warranty,
covenant or condition not so set forth.
16. Costs and Expenses.
Except as otherwise specifically set forth herein, each party will bear
its own expenses, including attorneys, brokers, investment bankers,
agents, and finders employed by, such party. The parties will indemnify
each other against any claims, costs, losses, expenses or liabilities
arising from any claim for commissions, finder's fees or other
compensation in connection with the transactions contemplated herein
which may be asserted by any person based on any agreement or arrangement
for payment by the other party.
17. Attorney's Fees.
Should any action be commenced between the parties to this Agreement
concerning the matters set forth in this Agreement or the right and
duties of either in relation thereto, the prevailing party in such action
shall be entitled, in addition to such other relief as may be granted, to
a reasonable sum as and for its Attorney's fees and costs.
18. Finders.
Amerigo Energy represents and warrants that there are no finders or other
parties which have represented Amerigo Energy in connection with this
transaction. In the event any such finders make a claim for any fee,
share issuance of other compensation in connection with the transactions
contemplated hereby, they shall be the sole responsibility of Amerigo
Energy. Granite represents and warrants that there are no finders or
other parties which have represented Granite in connection with this
transaction. In the event any such finders make a claim for any fee,
share issuance of other compensation in connection with the transactions
contemplated hereby, they shall be the sole responsibility of Granite.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
AMERIGO ENERGY, INC.
By:__________________________
Lawrence Schroeder, President
GRANITE ENERGY, INC.
By:__________________________
S. Matthew Schultz, President
EXHIBITS:
EXHBIT A GRANITE ASSETS TRANSFERRED
EXHIBIT B AMERIGO ENERGY ACCOUNTS PAYABLE
EXHIBIT C AMERIGO ENERGY COMMON STOCK TO BE ISSUED
EXHIBIT D PRO FORMA BALANCE SHEET OF AMERIGO ENERGY
EXHIBIT A - GRANITE ASSETS TRANSFERRED
1. All the issued and outstanding Common Stock of Amerigo, Inc., a
Nevada corporation.
2. 3,553,322 shares of Common Stock of Green Start, Inc., a Nevada
corporation.
EXHIBIT B - AMERIGO ENERGY - ACCOUNTS PAYABLE
NAME $ OWED
- ------------------------------------------- ------------
ANTHEM VILLAGE EXECUTIVE SUITES $ 31,057.20
DEJOYA GRIFFITH & COMPANY $ 31,468.10
FRANKLIN GRIFFITH & ASSOCIATES $ 120,112.00
FRANKLIN GRIFFITH & ASSOCIATES ESCROW ACCT $ 112,735.50
JASON F. GRIFFITH $ 90,424.22
KENNETH D. OLSEN $ 13,000.00
MAREN LIFE REINSURANCE LTD. $ 10,000.00
S. MATTHEW SCHULTZ $ 46,277.85
$ 455,074.87
EXHIBIT C - AMERIGO ENERGY COMMON STOCK TO BE ISSUED
The following accounts payable of Amerigo Energy and Granite in the
amounts set forth on the balance sheet of Amerigo Energy attached as
Exhibit B hereto (the "Payables") shall be dealt with in the following
manner:
(i) General Accounts Payable of Amerigo Energy shall be converted
into 182,030 shares of Common Stock in exchange for full
releases.
(ii) UPL shall be liquidated concurrent with the Closing. As a
creditor of Amerigo Energy, UPL, shall execute a full
release in favor of Amerigo Energy and Granite.
(iii) The Amerigo Energy account payable in favor of Gregory L.
Hrncir, outside counsel to Amerigo Energy, shall remain
with Amerigo Energy post-Closing.
(iv) The Amerigo Energy account payable in favor of Franklin
Griffith & Associates shall be converted into 48,045
shares of common stock of Amerigo Energy in exchange for
a full release prior to the Closing.
(v) The Amerigo Energy account payable in favor of Kenneth D.
Olsen shall be converted into 5,200 shares of common
stock of Amerigo Energy in exchange for full release
prior to the Closing.
(vi) The Amerigo Energy account payable in favor of Maren Life
Reinsurance Ltd. shall be converted 4,000 shares of
common stock of Amerigo Energy in exchange for a full
release prior to Closing.
(vii) The Amerigo Energy account payable in favor of Reeves Evans
McBride & Zhang LLP, the independent auditors of Amerigo
Energy, shall remain with Amerigo Energy post-Closing.
(viii) The Amerigo Energy account payable in favor of Anthem Village
Executive Suites shall remain with Amerigo Energy post-
Closing and shall be payable in the form of 12,423
shares of common stock in exchange for a full release
post-Closing.
(ix) The Granite account payable in favor of American Stock
Transfer and Trust Company shall be assumed by Amerigo
Energy post-Closing and shall be paid in the form of
cash.
(x) The Amerigo Energy account payable in favor of De Joya
Griffith & Company shall remain with Amerigo Energy
post-Closing and shall be paid in the form of 12,587
shares of common stock in exchange for a full release.
(xi) The outstanding Amerigo Energy accrued salaries and related
party loans shall be addressed as follows:
(A) Jason F. Griffith -outstanding salary and loans to
Amerigo Energy to be converted into 36,170 shares
of Amerigo Energy common stock as set forth in
Exhibit C in exchange for a full release prior to
the Closing.
(B) Franklin Griffith & Associates - which represents
outstanding salary and related party loans to/from
Lawrence S. Schroeder shall be converted into
45,094 shares of common stock of Amerigo Energy in
exchange for a full release prior to the Closing
(the related party loan was used as collateral on
a defaulted loan and will be made payable/issued
to the named party)
(xii) The Amerigo Energy outstanding loan payable in favor of S.
Matthew Schultz shall be converted into 18,511 shares of
common stock of Amerigo Energy in exchange for a full
release prior to Closing.
(xiii) All intercompany loans between Amerigo Energy and its
subsidiaries will be forgiven.
EXHIBIT D PRO FORMA BALANCE SHEET OF AMERIGO ENERGY
Six Months ended June 30, 2008 (Unaudited)
AGOE GNGI GNGI Combined
Unaudited Unaudited Assets Unaudited
As of As of remaining with year ended
June 30, 2008 June 30, 2008 GNGI Adjustments June 30, 2008
------------- ------------- -------------- ----------- -------------
ASSETS
Current assets
Cash $ - $ 110,337 $ 110,337
Receivables - 359,209 359,209
Total current assets - 469,546 - 469,546
Other current assets
Bank recievable 4,089 - 4,089
Advances to related party - - -
Property, plant and equipment
Office equipment, net of depreciation - 135,669 135,669
Vehicles, net of depreciation - 14,139 14,139
Property and Equipment, net - 105,000 105,000
Proved reserves, net of depletion - 546,729 546,729
Unproved reserves, net of depletion - 6,375,246 6,375,246
Software, net - 7,303 7,303
Other Assets
Investment in Greenstart - 47,995 47,995
Investment in South Texas Oil - - -
Notes receivable - 905,489 905,489
Deposits - 950 950
------------- ------------- -------------- ----------- -------------
Total assets $ 4,089 $ 8,608,067 $ - $ 8,612,156
============= ============= ============== =========== =============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities $ 458,783 $ 214,212 $ 672,995
Accrued payroll for related party 108,304 - 108,304
Advances from related parties 175,126 - 175,126
Lawsuit settlement payable 6,000 - 6,000
Payroll liabilities - 66,233 66,233
Other liabilities - - -
Total current liabilities 748,213 280,445 - $ 1,028,658
Convertible notes payable to related party -
Long-term liabilities 7,634,704 7,634,704
Total liabilities 748,213 7,915,150 - $ 8,663,363
Stockholders' (deficit)
Preferred stock (25,000,000 shares
auth & 0 shares outstanding) - - -
Common stock; $.001 par value;
100,000,000 shares authorized;
9,447,137 shares outstanding
at December 31, 2007 - 54,674 (54,674) a -
Additional paid-in capital - 27,616,215 (27,616,215) a -
Common stock; $.001 par value; 11,073 10,000 b 21,073
Additional paid-in capital 13,218,256 682,917 b 13,901,173
-
Subscribed stock 19,500 (19,500) a -
Accumulated deficit in development stage (13,973,453) (26,997,472) 26,997,472 a (13,973,453)
------------- ------------- -------------- ----------- -------------
Total stockholders' (deficit) (744,124) 692,917 - (51,207)
------------- ------------- -------------- ----------- -------------
Total liabilities and stockholders' (deficit) $ 4,089 $ 8,608,067 $ - $ 8,612,156
============= ============= ============== =========== =============
- - - -
(a). equity does not transfer
(b). stock issued on amerigo's books for net assets of granite