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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: MAY 7, 1999
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(DATE OF EARLIEST EVENT REPORTED)
ARXA INTERNATIONAL ENERGY, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
2-99565
Commission File Number
DELAWARE 13-3784149
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2301 14TH STREET, SUITE 404
GULFPORT, MISSISSIPPI 39501
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(Address of principal executive offices, including zip code)
(228) 864-6667
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(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On May 7, 1999, Registrant sold 6,000,000 shares of its Common Stock to Gulfport
Oil & Gas Inc. ("Gulfport"), a private company, for $.20 per share. Prior to
the sale, Registrant had 5,231,922 shares of its Common Stock issued and
outstanding. Accordingly, Gulfport holds approximately 53.4% of the 11,231,922
issued and outstanding shares of the Registrant's Common Stock following such
transaction and thus acquired control of the Registrant, displacing Phoenix
Energy Group, Inc. ("Phoenix"), also a private company. The total consideration
of $1,200,000, for the which the shares were issued, was comprised of cash of
$600,000 and a Promissory Note from Gulfport for $600,000, due August 1, 1999.
Gulfport has the right to acquire additional shares in two ways. First,
Gulfport has the right to acquire an additional 15,000,000 shares of the
Registrant's Common Stock at $.20 per share for a total consideration of
$3,000,000 within 180 days from April 28, 1999. Second, Gulfport has the right
and option to roll in and sell oil and gas properties to Registrant for common
stock of Registrant. The value to be attributed to any such oil and gas
properties, both producing, non-producing and exploratory, will be determined by
independent oil and gas experts, mutually acceptable to Registrant and Gulfport.
Following the closing of the Gulfport transaction, immediate changes were made
in the directors and officers of the Registrant as noted in Item 5 below.
Prior to the Gulfport sale transaction, Phoenix, controlled by its President and
CEO, L. Craig Ford, held 2,557,262 shares or approximately 48.9% of the
Registrant. Following the transaction, Phoenix holds approximately 22.8% of the
Registrant's Common Stock. Phoenix granted Norris R. Harris, the President of
Gulfport, an exclusive and irrevocable proxy to vote all of the Common Stock of
the Registrant held by Phoenix for a period of one year.
Gulfport Oil & Gas Inc. is controlled by Norris R. Harris, its President and
CEO.
Gulfport intends to hold the shares received and to function as a holding
company of Registrant.
The re-located corporate offices of the Registrant are:
Arxa International Energy, Inc
2301 14th Street, Suite 404
Gulfport, Mississippi, 39501
228-864-6667 (fax) 228-864-6267
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ITEM 5. OTHER EVENTS
CHANGE IN BOARD OF DIRECTORS
In connection with the sale of the 6,000,000 shares of Common Stock to Gulfport,
Registrant restructured its Board of Directors. Mr. L. Craig Ford, Larry R.
Keeler, Robert G. Farris and Dennis P. McGrath resigned. Gregory A. Stephens
did not resign, but was not re-elected at the special shareholders meeting held
on May 7, 1999. William J. Bippus had resigned, earlier, from his position as a
Director and Officer of the Registrant on March 25, 1999.
The vacancies were filled by the election of:
Norris R. Harris, Chairman of the Board/(1)/
Jack R. Durland, Jr./(1)/
Jonathan G. Harris/(1)/
James David Risk
James Jeffrey Risk
/(1)/ Also directors and/or officers of Gulfport.
Norris R. Harris, age 65, has been the President , CEO and a Director of
Gulfport Oil & Gas Inc., a private oil and gas company that he formed in
January, 1999. He had been an independent oil and gas operator and consultant
to various independent oil and gas companies from 1993 to January 1999. Mr.
Harris was Founder and President of Centex Oil and Gas Inc., (Name changed to
Cenergy) which was listed on the NYSE and was Founder and President of Basin
Exploration Inc., a subsidiary of Basin Petroleum Corp., (American Stock
Exchange). Mr. Harris previously worked with Mobil Oil Corp., in the
international division and worked in the North Sea, Libya, Turkey, the Hague,
Austria, Nigeria and in Mobil Exploration's headquarters in Dallas, Texas where
he worked on Africa, Southeast Asia and Latin America exploration projects.
Jack R. Durland, Jr., age 61, has been a Director and Vice-President-
Administration and Legal of Gulfport Oil & Gas Inc. since January 1999. He was
a partner in the law firm of Durland & Durland in Oklahoma City, Oklahoma from
1990 to 1998. From 1962 to 1989, Mr. Durland was a partner, officer and
director in the law firm of Crowe & Dunlevy, a professional corporation, in
Oklahoma City, Oklahoma. He has been admitted to practice before several Courts
in the United States including the United States Supreme Court and Federal
Courts in California, Oklahoma, and Texas. Mr. Durland is a graduate of the
University of Oklahoma with a BBA degree in 1960, and a LLB degree in 1962.
Jonathan G. Harris, age 28, has been a Director and Vice-President-Geology of
Gulfport Oil & Gas Inc. since January 1999. He had been an independent oil and
gas geological consultant to various energy and environmental companies from
July 1996 to 1998. Mr. Harris was a consulting geologist for Basin Industries
Inc. and a field engineer for Sperry-Sun Drilling Services in the period from
1988 to June 1996. Over his career he has accumulated specific geological
experience in the following areas: Florida, Louisiana, Mississippi, Texas,
Puerto Rico, the Bahamas, and Turkey. He
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is a graduate of Mississippi State University with a BSc degree in 1992 and a
MSc degree in 1995. Mr. Harris is a Registered Professional Geologist in
Mississippi and a member of the American Association of Petroleum Geologists and
National Speleological Society.
James David Risk, age 50, has worked as a developer, owning and operating a
family construction company and is President of Risk Construction Company Inc.
of Boone, North Carolina since 1968. From 1995 to present, Mr. Risk has been
engaged as a working investor in numerous business ventures and as a
construction consultant on several real estate development projects in the
southeastern United States and abroad. In the years from 1981 to 1995, Mr.
Risk's company developed several large single and multi-family projects and
several large commercial business parks.
James Jeffrey Risk, age 30, has been President of RDI (Risk Design
International), an international marketing, advertising and design firm, since
1992. Mr. Risk has also been CFO of Wolf Laural Resort since 1998 and works as a
marketing and financial consultant for several corporations. From 1997 to the
present, he has been engaged as a working investor in numerous business ventures
and as a financial advisor on several real estate development projects in the
southeastern United States and abroad. He is a graduate of Appalachian State
University with a BS degree in 1992.
CHANGE IN OFFICERS
Craig Ford, President and CEO of Arxa before the change in control resigned and
was replaced by Norris R. Harris as President
Jack R. Durland, Jr., was appointed Vice President-Administration and Legal and
is the Treasurer for Registrant.
Jonathan G. Harris was appointed Vice President-Geology and is Secretary of the
Registrant.
Dennis P. McGrath, former Vice President and Controller of Registrant was
promoted to Vice President of Finance.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS - Not Applicable
EXHIBITS
10.17......Stock Purchase Agreement between ARXA International Energy, Inc. and
Covington Energy, Inc. dated April 2, 1999. Subsequently assigned to
Gulfport Oil & Gas Inc., per Exhibit 10.19
10.18......Amended Stock Purchase Agreement between ARXA International Energy,
Inc. and Covington Energy, Inc. dated April 28, 1999. Subsequently
assigned to Gulfport Oil & Gas Inc., per Exhibit 10.19
10.19......Assignment of Stock Purchase Agreement from Covington Energy, Inc. to
Gulfport Oil & Gas Inc. dated May 7, 1999
10.20......Gulfport Oil & Gas Inc. Promissory Note to Arxa International Energy
Inc. dated May 7, 1999
10.21......Irrevocable Stock Proxy Agreement between Phoenix Energy Group, Inc.
and Norris R. Harris dated May 7, 1999
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Arxa International Energy Inc
By: /s/ Jack R. Durland, Jr.
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Jack R. Durland, Jr.
Vice President-Administration and Legal
Date: May 21, 1999
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EXHIBIT 10.17
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this 2nd
day of April 1999, by and between ARXA International Energy, Inc., ("Company")
530 Wells Fargo Drive, Suite 310, Houston, Texas 77090 and Covington Energy,
Inc., ("Purchaser") 2301 14th Street, Suite 404, Gulfport, Mississippi 39501.
That for and in consideration of the premises and the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
1. Purchase and Sale of Shares. On the terms and subject to the conditions
hereof, the Company agrees to issue and sell 6,000,000 shares of its common
stock to Purchaser at $0.20 per share or a total of $1,200,000, and
Purchaser agrees at the closing to purchase 6,000,000 shares for $0.20 per
share or pay a total consideration of $1,200,000. The common stock being
purchased by Purchaser shall be free and clear of all liens, claims,
encumbrances, and restrictions.
2. Option to Purchase. Shares Company, subject to consummation of the purchase
by Purchaser of 6,000,000 shares of common stock as provided in paragraph
(1), hereby grants to Purchaser an option to acquire for cash 15,000,000
shares of common stock at a purchase price of $0.20 per share. This option
may be exercised in whole or in part, at any time and from time to time, by
Purchaser during a period of 180 days from date of this Agreement.
3. Purchaser is the owner of oil and gas properties in the States of
Mississippi and Texas. Purchaser shall have the right and option to roll in
and sell oil and gas properties to Company for common stock in Company. The
value to be attributed to the oil and gas properties, both producing and
non-producing and exploratory properties for a value determined by
independent oil and gas experts, mutually acceptable to Company and
Purchaser.
4. Representations and Warranties of the Company. The Company hereby represents
and warrants to the purchaser as follows:
(a) The Company is a validly existing corporation in good standing under the
laws of the State of Delaware. The Company has all requisite corporate
power and authority to own its properties and to conduct its business as
presently being conducted by it. The Company has not qualified to do
business as a foreign corporation in any other jurisdiction, except for
the State of Texas.
(b) Capitalization. The authorized capital stock of the Company consists of
(i) 100,000,000 shares of common stock, of which 5,231,922 shares are
issued and outstanding as of the date of execution hereof, and (ii)
2,000,000 of preferred stock par value $1.00 per share of the Company,
none of which are outstanding as of the date of execution. All of the
shares have been dully authorized and upon full payment therefor
pursuant to paragraph (1) will be validly issued, fully paid and non-
assessable. There are no options, warrants, calls,
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conversions or any other rights, or any agreements or commitments of any
nature which obligate the Company to issue any additional shares of
common stock or any securities convertible into, or exchangeable for any
such shares of capital stock and no authorization therefor has been
given other than the options granted in this Agreement, except as shown
in Form 10-KSB filed with the Securities and Exchange Commission for the
fiscal year ending October 31, 1998. During the period from the date of
execution hereof until expiration of the options granted in this
Agreement, the Company will not issue, sell, or agree to issue, or sell
any authorized and unissued shares of its common and preferred stock.
(c) Authority. The Company has full right, power and authority to enter into
this Agreement and to perform its obligations hereunder, and has duly
executed this Agreement. Assuming the due authorization, execution and
delivery hereof by Purchaser, and the binding effect upon it, this
Agreement is legal, valid and binding upon the Company and is
enforceable against the Company in accordance with the terms.
(d) Litigation. There are no legal proceedings pending or, to the knowledge
of the Company, threatened against the Company, which, if adversely
determined, could in any respect, prevent or impair the ability of the
Company to perform its obligations under this Agreement.
5. Covenants of Purchaser. Purchaser hereby covenants to the Company as
follows:
(a) It is the intention of Purchaser to continue the present business
operations of the Company and to initiate and pursue operations by the
Company in oil and gas development. Purchaser will continue with the
present management of L. Craig Ford, President and Dennis P. McGrath,
Vice President.
(b) Purchaser shall cause the Company to do all things necessary to
maintain, preserve, and renew the corporate existence of the Company in
all material, licenses, authorizations and permits now or hereafter
necessary to conduct the Company's business.
6. Closing. Provided that all terms and conditions hereof have been satisfied
or satisfaction thereof has been waived by the party entitled to require
satisfaction thereof, the purchase and sale of the shares of common stock
shall take place at the offices of the Company, at 530 Wells Fargo Drive,
Suite 310, Houston, Texas 77090 no later than 2:00 p.m. on May 1, 1999
unless otherwise agreed by the parties.
7. This Agreement contains the entire agreement between the parties, and any
agreement hereinafter made shall be ineffective to change, modify, discharge
or in effect and abandonment of it in full or in part unless such agreement
is in writing and signed by the party against whom enforcement of the
change, modification, discharge or abandonment is sought.
8. The terms of this Agreement shall be binding upon and inure to the benefit
of and shall be enforceable by, the successors and assigns of the parties
hereto. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas. This Agreement
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constitutes the entire agreement between parties and there are no
agreements, understandings, restrictions, warranties, or representations
between the parties other than those not set forth herein. In the event any
one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, unenforceability shall not effect the remaining
provisions of this Agreement and the Agreement shall be construed as if such
invalid, illegal, and unenforceable provision or provisions had never been
sustained herein.
EXECUTED AND DELIVERED the day and year first above written.
ARXA International Energy, Inc.
By: /s/ L. Craig Ford 4/2/99
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President Date
Covington Energy, Inc.
By: /s/ Norris R. Harris 4/2/99
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President Date
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EXHIBIT 10.18
AMENDED STOCK PURCHASE AGREEMENT
This AMENDED STOCK PURCHASE AGREEMENT ("Agreement') is made and entered into
this 28th day of April 1999, by and between ARXA International Energy, Inc.,
("Company") 530 Wells Fargo Drive, Suite 310, Houston, Texas 77090 and Covington
Energy, Inc., ("Purchaser") 2301 14th Street, Suite 404, Gulfport, Mississippi
39501.
That for and in consideration of the premises and the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
1. The parties hereby agree to amend the Stock Purchase Agreement by and
between Arxa International Energy, Inc. and Covington Energy, Inc. dated
April 2, 1999 as provided for in this Agreement.
2. The terms and provisions of the Stock Purchase Agreement dated April 2, 1999
are hereby confirmed by the parties are to remain in full force and effect
except as modified in this Agreement.
3. Purchase and Sale of Shares. On the terms and subject to the conditions
hereof, the Company agrees to issue and sell 6,000,000 shares of its common
stock to Purchaser at $0.20 per share or a total of $1,200,000, and
Purchaser agrees at the closing to purchase 6,000,000 shares for $0.20 per
share or pay a total consideration of $1,200,000. The common stock being
purchased by Purchaser shall be free and clear of all liens, claims,
encumbrances, and restrictions.
4. Option to Purchase Shares. Company, subject to consummation of the purchase
by Purchaser of 6,000,000 shares of common stock as provided in paragraph
(3), hereby grants to Purchaser an option to acquire for cash 15,000,000
shares of common stock at a purchase price $0.20 per share. This option may
be exercised in whole or in part at any time and from time to time, by
Purchaser during a period of 180 days from date of this agreement.
5. Purchaser is the owner of oil and gas properties in the States of
Mississippi and Texas. Purchaser shall have the right and option to roll in
and sell oil and gas properties to Company for common stock in company. The
value to be attributed to the oil and gas properties, both producing and
non-producing and exploratory properties for a value determined by
independent oil and gas experts, mutually acceptable to Company and
Purchaser.
6. Company hereby agrees that the representations and warranties of the Company
contained in the Agreement by and between Company and Purchaser dated
April 2, 1999 are true and correct. Purchaser hereby agrees that the
covenants of Purchaser in the Agreement by and between Company and Purchaser
dated April 2, 1999 are true and correct.
7. Closing. Provided that all terms and conditions hereof have been satisfied
or satisfaction thereof has been waived by the party entitled to require
satisfaction thereof, the purchase and
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sale of the shares of common stock shall take Place at the offices of the
Company, at 530 Wells Fargo Drive, Suite 310, Houston, Texas 77090 No later
than 2:00 p.m. on May 7, 1999 unless otherwise agreed by the parties.
EXECUTED AND DELIVERED the day and year first above written.
ARXA International Energy, Inc.
By: /s/ L. Craig Ford
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President
Covington Energy, Inc.
By: /s/ Norris R. Harris
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President
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EXHIBIT 10.19
ASSIGNMENT OF STOCK PURCHASE AGREEMENTS
Covington Energy Inc. ("Covington"), a Delaware corporation, 2301 14"
Street, Suite 404, Gulfport, MS 39501 for and in consideration of the sum of Ten
Dollars ($10.00) and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, does hereby Grant, Bargain, Sell,
Assign, Convey, and Transfer to Gulfport Oil & Gas Inc., ("Gulfport") a Delaware
corporation, 2301 14' Street, Suite 404, Gulfport, MS 39501, all of its right,
title, and interest in the following described Agreements: Stock Purchase
Agreement by and between ARXA International Energy Inc. ("ARXA") and Covington
dated April 2, 1999; Amended Stock Purchase Agreement by and between ARXA and
Covington dated April 28, 1999.
Covington hereby represents and warrants that it is a validly existing
corporation in good standing under the laws of the state of Delaware and has
full right, power and authority to enter into and execute this Assignment of
Stock Purchase Agreements and has duly executed this Assignment. This Assignment
of Stock Purchase Agreements is legal, valid and binding upon Covington and is
enforceable against Covington in accordance with the above terms. It is the
intent of Covington to grant, bargain, sell, and assign to Gulfport all right,
title and interest in the above Agreements to purchase 21 million shares of
common stock in ARXA.
EXECUTED AND DELIVERED THIS 7th DAY OF MAY, 1999.
Covington Energy Inc.
By: /s/ Norris R. Harris
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Norris R. Harris
President
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EXHIBIT 10.20
PROMISSORY NOTE
Principal Amount: Interest Rate: Date of Note:
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$600,000.00 7.75% May 7, 1999
FOR VALUE RECEIVED, Gulfport Oil & Gas Inc. ("Gulfport") promises to pay to ARXA
International Energy Inc. ("ARXA"), or order, in lawful money of the United
States of America, the principal amount of Six Hundred Thousand and 00/100
Dollars ($600,000.00), together with interest at the rate of 7.75% per annum on
the unpaid principal balance from May 7, 1999 until paid in full. The principal
and interest will be due and payable on or before August 1, 1999. Gulfport may
pay without penalty all or a portion of the amount owed earlier than it is due.
In the event this Promissory Note shall be in default and placed with an
attorney for collection, then Gulfport agrees to pay all reasonable attorney
fees and costs of collection. All payments hereunder shall be made to ARXA at
530 Wells Fargo Drive, Houston, TX. 77090, or at such address as may from time
to time be designated by any holder hereof
This Promissory Note is secured by 3,000,000 shares of common stock of ARXA
which are registered in the name of Gulfport, and are being held by the stock
transfer agent for ARXA.
The undersigned and all other parties to this note, whether as endorsers,
guarantors or sureties, agree to remain fully bound hereunder until this note
shall be fully paid and waive demand, presentment and protest and all notices
thereto and further agree to remain bound, notwithstanding any extension,
renewal, modification, waiver, or other indulgence by any holder or upon the
discharge or release of any obligor hereunder or to this note, or upon the
exchange, substitution, or release of any collateral granted as security for
this note. No modification or indulgence by any holder hereof shall be binding
unless in writing; and any indulgence on any one occasion shall not be an
indulgence for any other or future occasion. Any modification or change of
terms, hereunder granted by any holder hereof, shall be valid and binding upon
each of the undersigned, notwithstanding the acknowledgment of any of the
undersigned, and each of the undersigned does hereby irrevocable grant to each
of the others a power of attorney to enter into any such modification on their
behalf. The rights of any holder hereof shall be cumulative and not necessarily
successive. This note shall take effect as a sealed instrument and shall be
construed, governed and enforced in accordance with the laws of the State of
Mississippi. The undersigned hereby execute this note as principals and not as
sureties.
GULFPORT OIL & GAS INC.
By: /s/ Jack R. Durland, Jr.
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Vice President
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EXHIBIT 10.21
IRREVOCABLE STOCK PROXY AGREEMENT
This Irrevocable Stock Proxy Agreement ("Agreement") is made and entered into
this 5th day of May, 1999 by and between Phoenix Energy Group Inc., a Texas
Corporation ("Phoenix"), 530 Wells Fargo Drive, Suite 3 1 0, Houston, Texas
77090 and Norris R. Harris, ("Harris") 2301 14th Street, Suite 404, Gulfport,
Mississippi 39501.
That for and in consideration of the premises and the mutual covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
1. Phoenix hereby represents and warrants to Harris as follows:
(a) Phoenix is a valid existing corporation in good standing under the
laws of the State of Texas. Phoenix has all requisite corporate
power and authority to own its properties and to conduct its
business as presently being conducted by it.
(b) Phoenix has full right, power and authority to enter into this
Agreement and to perform its obligations hereunder, and has duly
executed this Agreement. Assuming the due authorization, execution
and delivery hereof by Harris, and the binding effect upon him, this
Agreement is legal, valid and binding upon Phoenix and is
enforceable against Phoenix in accordance with the terms.
(c) Phoenix is the owner of 2,557,262 shares of common stock in ARXA
International Energy Inc. which is free and clear from any liens or
encumbrances.
(d) There are no legal proceedings pending or, to the knowledge of
Phoenix, threatened against Phoenix, which, if adversely determined,
could in any respect, prevent or impair the ability of Phoenix to
perform its obligations under this Agreement.
2. Phoenix hereby grants, bargains, sells and conveys to Harris an
exclusive and irrevocable proxy to vote all of the common stock of ARXA
International Energy Inc. consisting of 2,557,262 shares of common stock
for a period of one year from date of this Agreement.
3. Phoenix hereby agrees that it will not exercise its right to vote its
common stock or any other rights as a common stock owner in ARXA
International Energy Inc. for a period of one year from date of this
Agreement.
4. In the event that the shares of Phoenix in ARXA International Energy
Inc. are registered with the Security Exchange Commission of the United
States of America and are subsequently sold by Phoenix then this
Agreement within thirty (30) days from date of the sale will be null and
void and will terminate.
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5. This Agreement contains the entire agreement between the parties, and
any agreement hereinafter made shall be ineffective to change, modify,
discharge or in effect and abandonment of it in full or in part unless
such agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is
sought.
6. The terms of this Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by, the successors and assigns of
the parties hereto. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi. This Agreement
constitutes the entire agreement between parties and there are no
agreements, understandings, restrictions, warranties, or representations
between the parties other than these set forth therein. In the event any
one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality, unenforceability shall not effect the
remaining provisions of this Agreement and the Agreement shall be
construed as if such invalid, illegal, and unenforceable provision or
provisions had never been sustained herein.
EXECUTED AND DELIVERED the day and year first above written.
Phoenix Energy Group, Inc.
By: /s/ L. Craig Ford
-----------------------------
L. Craig Ford, President
/s/ Norris R. Harris
-----------------------------
Norris R. Harris
