Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
CRIMSON EXPLORATION, INC.
("Crimson"),
CRIMSON EXPLORATION OPERATING, INC.
("Crimson Sub"),
CORE NATURAL RESOURCES, INC
("Target")
and
All of the Stockholders of Target
("Stockholders")
Dated as of March 14, 2006
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
<S>
<C>
ARTICLE I THE
MERGER..............................................................................................1
Section 1.1 The
Merger................................................................................1
Section 1.2 Effective Time of the
Merger..............................................................1
Section 1.3 Effect of the
Merger......................................................................1
Section 1.4 Tax
Treatment.............................................................................2
ARTICLE II THE SURVIVING
CORPORATION..............................................................................2
Section 2.1 Articles of
Incorporation.................................................................2
Section 2.2
Bylaws....................................................................................2
Section 2.3 Directors and
Officers....................................................................2
ARTICLE III CONVERSION OF SHARES; EXCHANGE OF
CERTIFICATES........................................................2
Section 3.1 Effect on
Stock...........................................................................2
Section 3.2
Exchange
of
Certificates..................................................................3
Section 3.3 No Fractional
Shares......................................................................4
Section 3.4
Closing...................................................................................4
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TARGET AND
STOCKHOLDERS..............................................4
Section 4.1 Organization and
Qualification............................................................4
Section 4.2
Capitalization............................................................................4
Section 4.3 Authority; No
Conflict....................................................................5
Section 4.4
Permits...................................................................................6
Section 4.5 Absence of Undisclosed
Liabilities........................................................6
Section 4.6
Properties................................................................................6
Section 4.7
Litigation................................................................................7
Section 4.8 Contracts and
Burdens.....................................................................8
Section 4.9 Compliance with
Law.......................................................................8
Section 4.10
Economic Risk; Sophistication; Accredited
Investors.......................................8
Section 4.11 Tax
Treatment.............................................................................8
Section 4.12
Section 368 (a) (2) (D)
Representations...................................................9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
CRIMSON..............................................................10
Section 5.1 Tax
Treatment............................................................................10
Section 5.2 Section 368(a) (2) (D)
Representations...................................................10
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER;
COVENANTS.....................................................11
Section 6.1 Conduct of Business by
Target............................................................11
Section 6.2 Representations and
Warranties...........................................................12
Section 6.3
Inspection...............................................................................12
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE
MERGER.............................................................12
Section 7.1 Conditions to
Obligation of Each
Party...................................................12
Section 7.2 Conditions to the
Obligations of
Crimson.................................................12
Section 7.3 Conditions to the
Obligations of
Target..................................................13
ARTICLE VIII SURVIVAL AND
INDEMNIFICATION........................................................................13
Section 8.1 Survival of
Representations and
Warranties...............................................13
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
<C>
Section 8.2 Survival of Covenants
and
Agreements.....................................................14
Section 8.3
Indemnity................................................................................14
ARTICLE IX TERMINATION, AMENDMENT AND
WAIVER.....................................................................14
Section 9.1
Termination..............................................................................14
Section 9.2 Effect of
Termination....................................................................15
ARTICLE X GENERAL
PROVISIONS.....................................................................................15
Section 10.1
Notices..................................................................................15
Section 10.2
Entire
Agreement.........................................................................16
Section 10.3
Assignment...............................................................................16
Section 10.4
Severability.............................................................................16
Section 10.5
Interpretation...........................................................................16
Section 10.6
Governing
Law............................................................................16
Section 10.7
Counterparts.............................................................................16
</TABLE>
ii
EXHIBITS AND SCHEDULES
Exhibit A........................................Properties
Exhibit B........................................Registration
Rights Agreement
Schedule 4.2.....................................Stockholders
Schedule 4.3(ii).................................Consents
Schedule 4.3(iii)................................Violations
Schedule 4.6.....................................Property -
Leases
Schedule 4.8.....................................Contracts
Schedule 7.3(d)..................................Target
Indebtedness
Exhibits and Schedules
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
This AGREEMENT
AND PLAN OF MERGER (this "Agreement") is dated as of March 14,
2006, by and among Crimson Exploration, Inc., a corporation organized
under the
laws of Delaware ("Crimson"), Crimson Exploration Operating, Inc.,
a corporation
organized under the laws of Delaware ("Crimson Sub"), Core Natural Resources,
Inc., a corporation
organized under the
laws of Texas
("Target"), and all
of
Target's stockholders
as set forth on the signature page to this Agreement
("Stockholders" or "stockholders of Target" or words of similar
import).
RECITALS
WHEREAS, Crimson
and Crimson Sub are corporations duly organized and existing
under the laws of the
State of Delaware,
and Target is a corporation duly
organized and existing under the laws of the State of Texas;
and
WHEREAS, Crimson
Sub is a wholly-owned subsidiary of Crimson; and
WHEREAS, the
respective Boards of Directors of Crimson Sub and Target deem
it
advisable and in the best interests of their respective
shareholders that Target
merge with and into
Crimson Sub (the
"Merger"), upon the
terms and subject to
the conditions set forth herein, and such Boards of Directors have
approved the
Merger;
NOW,
THEREFORE,
IN CONSIDERATION OF the recitals and mutual
covenants and
agreements set forth in this Agreement, the Parties hereby agree as
follows:
THE MERGER
The Merger. Upon the
terms and subject to the conditions set forth in
this Agreement, at the
Effective Time, Target shall merge with and into Crimson
Sub and the separate
corporate existence of
Target shall thereupon
cease and
Crimson Sub shall be the surviving corporation in the Merger (the "Surviving
Corporation") and shall continue its separate corporate existence
under the laws
of the State of Delaware.
Effective Time of the
Merger. The Merger
shall become effective
(the
"Effective Time")
upon the later of (i) the filing of properly executed
Certificates of Merger relating to the Merger with the Secretary of
State of the
State of Texas in accordance with Section 10.151 of the Texas Business
Organizations Code
("TBOC") and the Secretary of State of the State of Delaware
in accordance with Section 259 of the Delaware General Corporation
Law ("DGCL"),
or (ii) at such later
time as the
parties shall agree and set forth in such
Certificates of
Merger. The filing of
the Certificates
of Merger referred
to
above shall be made as
soon as practicable
on the Closing Date set forth in
Section 3.4.
Effect of the Merger.
At the Effective Time, the Merger shall have the
effects set forth in
Section 10.008 of the
TBOC and Section
259 of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the
properties, rights,
privileges, powers and
franchises
of Crimson Sub and
Target shall vest in the
Surviving Corporation,
and all debts, liabilities and duties of Crimson Sub and
Target shall
become the debts, liabilities and duties of the Surviving
Corporation.
Page 1
<PAGE>
Tax Treatment.
It is intended that the Merger shall constitute a
reorganization under section 368(a) of the Code.
THE SURVIVING CORPORATION
Certificate of
Incorporation.
The certificate of incorporation of
Crimson Sub in effect
immediately
prior to the
Effective Time shall be the
certificate of
incorporation
of the Surviving Corporation at and after the
Effective Time until thereafter amended in accordance with the
terms thereof and
the DGCL.
Bylaws. The bylaws of Crimson Sub as in effect immediately prior to
the
Effective Time shall be the bylaws of the Surviving Corporation at
and after the
Effective Time, and thereafter may be amended in accordance with
their terms and
as provided by the articles of incorporation of the Surviving Corporation and
the DGCL.
Directors and Officers. The directors and officers of Crimson Sub
immediately prior to
the Effective Time
shall be the directors and officers of
the Surviving
Corporation
until their
respective
successors
have been duly
elected or appointed and qualified or until their earlier death,
resignation or
removal in accordance with the Surviving Corporation's articles of
incorporation
and bylaws.
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Effect on Stock. As of
the Effective Time, by virtue of the Merger and
without any action on
the part of Crimson
Sub, Target or the holders of any
securities of Target or Crimson Sub:
Each share of common stock, no par value per share, of
Target
("Target Common
Stock") that is owned
directly by Target as
treasury
stock shall
automatically be
canceled and retired
and shall cease to
exist, and no consideration shall be delivered in exchange
therefor.
Subject to Section
3.3, each share of Target Common Stock
issued and outstanding
immediately prior to
the Effective Time (other
than shares to be canceled in accordance with Section 3.1(a)),
shall be
converted into the right to receive (i) 5.39270725 shares (the "Common
Stock Exchange Ratio")
of the common stock, par value $.001 per share,
of Crimson ("Crimson
Common Shares") and cash in an amount determined
by dividing $706,123.25 by 600,000 (the "Cash Consideration")
(together
(i) and (ii) being
referred to herein as the "Merger Consideration").
For purposes of this
Agreement, the parties
agree that
Schedule 4.2
accurately reflects
the number of Crimson Common Shares and the
aggregate Cash Consideration to be received by each Stockholder (as
set
forth opposite such
Stockholder's
name) assuming that the number of
shares of Target Common Stock owned by such Stockholder is accurately
reflected in such schedule. As of the Effective Time, all such shares
of Target 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 or certificates which immediately
prior to
the Effective
Time represented outstanding shares of Target Common
Stock (the "Certificates") shall cease to have any rights
with respect
thereto, except the right to receive: (i) certificates representing
the
number of whole Crimson Common Shares into which such
shares have been
converted ("Crimson Certificates"), (ii) cash in an amount equal to
the
product that is obtained by multiplying (A) the Cash Consideration by
(B) the whole number of shares of Target Common Stock surrendered,
and
(iii) cash in lieu of
fractional Crimson
Common Shares in
accordance
with Section 3.3, without interest. Notwithstanding the foregoing,
if
between the
date of this Agreement and the Effective Time the
outstanding Crimson
Common Shares or shares of Target
Common Stock
shall have
been changed into a different number of shares or a
different class,
by reason of any stock dividend, subdivision,
reclassification,
recapitalization,
split, combination or exchange of
shares, the
Common Stock Exchange Ratio shall be correspondingly
adjusted to reflect such stock dividend, subdivision,
reclassification,
recapitalization, split, combination or exchange of shares.
Page 2
<PAGE>
Each issued and outstanding share of common stock,
par value
$0.01 per share, of
Crimson Sub (the "Crimson Sub Common Stock") shall
remain outstanding following the Merger.
Exchange of Certificates.
As of the Effective
Time, Crimson shall
deliver (or cause to
be delivered) to Fidelity Transfer Company, or another bank or trust
company designated by it (the "Exchange Agent"), for the benefit of
the
holders of shares of Target Common Stock for exchange in accordance
with this Article III,
cash funds
sufficient
to make payment of
the
Cash Consideration
payable pursuant to Section 3.1(b) and Crimson
Certificates
evidencing Crimson Common Stock issuable pursuant Section
3.1(b). The
Crimson Certificates and the cash funds are hereafter
collectively referred to as the "Exchange Fund".
Upon surrender
of a Certificate for cancellation to the
Exchange Agent and
such other documents
as may reasonably be required
by the Exchange Agent, the holder of such Certificate shall be
entitled
to receive in exchange therefor: (i) a Crimson Certificate
representing
that number of whole
Crimson Common
Shares which such
holder has the
right to receive pursuant to the provisions of this Article III,
(ii) a
check payable to the order of such holder representing payment of the
Cash Consideration
for each share of
Target Common Stock evidenced by
the Certificate
surrendered and (iii)
a check payable to the order of
such holder
representing
payment of cash in lieu of any
fractional
Crimson Common
Shares in accordance with Section 3.3, and the
Certificate so
surrendered
shall
forthwith
be canceled. Until
surrendered as contemplated by this Section 3.2, each Certificate
shall
be deemed at any time after the Effective Time to represent only the
right to receive, upon such surrender, Crimson Certificates
representing the
number of whole Crimson Common Shares into which the
shares of Target Common Stock formerly represented by such
Certificate
have been converted,
the Cash
Consideration, and
cash in lieu of any
fractional Crimson
Common Share in accordance with Section 3.3. No
interest will be paid
or will accrue on any cash payable to holders of
Certificates pursuant to the provisions of this Article III.
Page 3
<PAGE>
All Crimson Common
Shares and Cash
Consideration
issued or
paid upon the surrender for exchange of Certificates in accordance
with
the terms of this
Article III shall be deemed to have been issued (and
paid) in full
satisfaction of all
rights pertaining to
the shares of
Target Common Stock theretofore represented by such Certificates.
There
shall be no further
registration of
transfers on the stock
transfer
books of the Surviving Corporation of the shares of Target Common
Stock
which were outstanding
immediately
prior to the Effective
Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the
Exchange Agent for any reason, they shall be
canceled and
exchanged as provided in this Article III, except as
otherwise provided by law.
Any portion of the Exchange Fund which remains undistributed
to the holders of the
Certificates for six
months after the Effective
Time shall be delivered to Crimson, upon demand, and any holders of
the
Certificates who have
not theretofore
complied with this
Article III
shall thereafter
look only to Crimson
for payment of their
claim for
Merger Consideration,
any cash in lieu of
fractional Crimson
Common
Shares and any
dividends or distributions with respect to Crimson
Common Shares
No Fractional
Shares. No fractional Crimson Common Shares shall be
issued in the Merger and fractional share interests shall not entitle
the owner
thereof to vote or to any rights of a stockholder of Crimson. All holders of
fractional Crimson Common Shares shall be entitled to receive,
in lieu thereof,
an amount in cash
determined by
multiplying the
fraction of a Crimson
Common
Share to which such holder would otherwise have been entitled by the closing
sales price of Crimson
Common Shares as reported in The Wall Street Journal on
the trading day prior to the Effective Time.
Closing. The closing of the transactions contemplated by this
Agreement
(the "Closing") shall take place at a location mutually acceptable
to Target and
Crimson, at 10:00 a.m., local time, on the day (the "Closing Date")
on which all
of the conditions
set forth in Article
VI hereof are
satisfied or waived (but
not later than March 21, 2006), or at such other date and time as
Crimson and
Target shall otherwise agree.
REPRESENTATIONS AND WARRANTIES OF TARGET AND STOCKHOLDERS
Target and
Stockholders
represent and warrant
to Crimson and Crimson Sub as
follows:
Organization and Qualification. Target and each entity Stockholder
is a
corporation or limited
liability company duly organized or formed, validly
existing and in good standing under the laws of the State of
Texas. Target and
each entity
Stockholder has all
requisite corporate or
other entity power and
authority to own, use or lease its properties and to carry on its
business as it
is now being
conducted. Target has
made available
to Crimson a complete
and
correct copy of its
articles of
incorporation and
bylaws, each as
amended to
date, and Target's
articles of incorporation and bylaws as so delivered are
in
full force
and effect. Target is not in default in any respect in the
performance,
observation or
fulfillment
of any provision of its articles of
incorporation or bylaws. Target does not have any subsidiaries.
Capitalization. The
authorized
capital stock of Target consists of
1,000,000 shares
of Target Common Stock. As of the date of this
Agreement,
600,000 shares of Target Common Stock were issued and outstanding,
and no shares
were held by Target as treasury shares. All of the outstanding shares of
Target
Common Stock are
validly issued, fully paid and nonassessable, and free of
preemptive rights.
There are no outstanding stock options, subscriptions,
rights, warrants,
convertible
securities,
stock appreciation
rights, phantom
equity or other agreements or commitments obligating Target to issue,
transfer,
sell, redeem, repurchase or otherwise acquire any shares of its
capital stock of
any class. All of the beneficial and record stockholders of Target
are listed on
Schedule 4.2 and the number of shares owned by each is set forth
opposite his or
her name.
Page 4
<PAGE>
Authority; No Conflict.
Target has full
corporate power and
authority to execute and
deliver this
Agreement and, subject to obtaining the approval of
Target's stockholders as contemplated by Section 7.1, to consummate
the
transactions
contemplated hereby.
Each Stockholder has full legal
right, power and authority to enter into this Agreement. The
execution,
delivery and performance of this Agreement and the consummation of the
transactions
contemplated hereby have been duly and validly authorized
by Target's
Board of Directors and each Stockholder and no other
corporate proceedings on the part of Target and the entity
Stockholders
are necessary
to authorize this Agreement or to consummate the
transactions
contemplated hereby, subject to obtaining the approval of
Target's stockholders as contemplated by Section 7.1. The Agreement
has
been duly and validly executed and delivered by Target and the
Stockholders and,
assuming the due authorization, execution and
delivery hereof by the
other parties
hereto, constitutes valid and
binding obligations of Target and the Stockholders enforceable against
Target and the
Stockholders in
accordance with its
terms, except as
such enforceability
may be subject to the effects of bankruptcy,
insolvency,
reorganization,
moratorium and other
laws relating to or
affecting the rights of creditors and of general principles of
equity.
Neither the execution
and delivery of this
Agreement nor the
consummation or
performance of any of
the transactions
contemplated
hereunder, will,
directly or
indirectly
(with or without
notice or
lapse of time):
subject to the
obtaining of the approval of Target's
stockholders as contemplated by Section 7.1 hereof, breach any
provision of Target's articles of incorporation, or bylaws or
similar documents of any entity Stockholder;
subject to the
obtaining of the approval of Target's
stockholders as
contemplated by
Section 7.1 hereof,
require
any consent, waiver, approval, order, authorization or permit
of, or registration,
filing with or
notification to, (i) any
governmental or
regulatory
authority
or agency (a
"Governmental
Authority"), except as
set forth in
Schedule
4.3(ii) and
except for
approvals that are ministerial in
nature and
are customarily obtained from Governmental
Authorities after
the Effective Time in connection with
transactions of the
same nature as are
contemplated
hereby
("Customary
Post-Closing
Consents") or (ii)
except as set
forth in Schedule
4.3(ii), any third party other than a
Governmental
Authority, other
than such non-Governmental
Authority third party consents, waivers, approvals, orders,
authorizations and
permits that would not (i) result in an
Material Adverse
Effect (as defined
below), (ii)
materially
impair the ability of Target or any Stockholder to perform its
obligations
under this
Agreement
or (iii) prevent the
consummation of any of the transactions contemplated by this
Agreement;
Page 5
<PAGE>
except as set forth in Schedule 4.3(iii), result in
any violation
of or the breach of or constitute a default
(with notice or lapse of time or both) under, or give rise to
any right of
termination,
cancellation or
acceleration
or
guaranteed payments or a loss of a material benefit under, any
of the terms,
conditions or
provisions of any
note, lease,
mortgage, license, agreement or other instrument or obligation
to which Target or a Stockholder is a party or by which Target
or Stockholder
or any of their
properties
or assets may be
bound, except for such
violations,
breaches, defaults, or
rights of termination, cancellation or acceleration, or losses
as to which requisite
waivers o
