SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of November 3, 2004,
between Xxxxxx X. Xxxx, Xx., and Xxxx Xxxx Ventures, LLC (the "Buyer").
W I T N E S S E T H:
A. WHEREAS, Seller is the principal shareholder and creditor.
B. WHEREAS, Buyer wishes to purchase an aggregate of 9,008,332 shares of
common stock of Mountains West Exploration, Inc. (MWEX) from Seller (the
"Purchase Shares"), after all of the conditions under this contract have been
performed and MWEX desires to sell the Purchase Shares to Buyer pursuant to this
agreement.
C. WHEREAS, prior to the transaction Buyer is not an affiliate of MWEX.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein, Seller shall sell to Buyer
and Buyer shall purchase 9,008,332 common shares Mountains West Exploration,
Inc.. The aggregate purchase price for the shares to be paid by Buyer to Seller
is $100,000 (the "Consideration") of which $100,000 is herewith paid as full
consideration for the purchase of Sellers shares if all of the terms and
conditions of this Agreement are met. ARTICLE II
Closing and Issuance of Shares
2.1 The Sellers shares (9,008,332) shall be delivered to Buyer upon
delivery of the cash purchase consideration of $100,000 to Seller.
2.2 Closing hereunder shall be completed upon delivery of the cash
consideration, and share certificates on or before November 4, 2004 at 5:00 p.m.
MDT ("Closing Date") subject to satisfaction of the terms and conditions set
forth herein.
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ARTICLE III
Representations, Warranties and Covenants of Seller
Seller hereby, represents, warrants and covenants to Buyer as follows:
3.1 Mountains West Exploration, Inc. (MWEX) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Mexico, and has the corporate power and authority carry on its business. The
Articles of Incorporation and Amendments and Bylaws of MWEX, which will be
delivered to Buyer at closing, are complete and accurate, and the minute books
of MWEX, copies of which have also been delivered to Buyer, contain a record,
which is complete and accurate in all material respects, of all meetings, and
all corporate actions of the shareholders and Board of Directors of MWEX.
3.2 The authorized capital stock of MWEX consists of 50,000,000 shares of
common stock. There are 37,019,271 shares of Common Stock of MWEX issued and
outstanding as of date hereof. All such shares of capital stock of MWEX are
validly issued, fully paid, non-assessable and free of preemptive rights. MWEX
has no outstanding warrants, or other rights to purchase, or subscribe to, or
other securities convertible into or exchangeable for any shares of capital
stock of MWEX, or contracts or arrangements of any kind relating to the
issuance, sale or transfer of any capital stock or other equity securities of
MWEX.
3.3 This Agreement has been duly authorized, validly executed and delivered
on behalf of Seller and is a valid and binding agreement and obligation of
Seller enforceable against the parties in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors' rights generally, and Seller
has complete and unrestricted power to enter into and to consummate the
transactions contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
Seller will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of MWEX, or of any material provisions of any indenture,
mortgage, deed of trust or other material agreement or instrument to which
Seller or MWEX is a party, or of any material provision of any law, statute,
rule, regulation, or any existing applicable decree, judgment or order by any
court, federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over MWEX or Seller, or any of its
material properties or assets, or will result in the creation or imposition of
any material lien, charge or encumbrance upon any material property or assets of
MWEX pursuant to the terms of any agreement or instrument to which MWEX is a
party or by which MWEX may be bound or to which any of MWEX property is subject
and no event has occurred with which lapse of time or action by a third party
could result in a material breach or violation of or default by Seller or MWEX.
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3.5 There is no claim, legal action, arbitration, governmental
investigation or other legal or administrative proceeding, nor any order, decree
or judgment in progress, pending or in effect, or to the best knowledge of
Seller threatened against or relating to MWEX or affecting any of its assets,
properties, business or capital stock. There is no continuing order, injunction
or decree of any court, arbitrator or governmental authority to which MWEX is a
party or by which MWEX or its assets, properties, business or capital stock are
bound.
3.6 MWEX has accurately prepared and filed all federal, state and other tax
returns required by law, domestic and foreign, to be filed by it through its
fiscal 2003 year and has paid or made provisions for the payment of all taxes
shown to be due and all additional assessments, and adequate provisions have
been and are reflected in the financial statements of MWEX for all current taxes
and other charges to which MWEX is subject and which are not currently due and
payable. None of the Federal income tax returns of MWEX have been audited by the
Internal Revenue Service or other foreign governmental tax agency. Seller has no
knowledge of any additional assessments, adjustments or contingent tax liability
(whether federal or state) pending or threatened against MWEX for any period,
nor of any basis for any such assessment, adjustment or contingency.
3.7 MWEX has delivered to Buyer unaudited financial statements for the
period ended September 30, 2004. All such statements, herein sometimes called
"MWEX Financial Statements" are complete and correct in all material respects
and, together with the notes to these financial statements, present fairly the
financial position and results of operations of MWEX for the periods indicated
within the knowledge of MWEX. All financial statements of MWEX have been
prepared in accordance with generally accepted accounting principles.
3.8 As of the date hereof, MWEX, represents and warrants that all
outstanding indebtedness of MWEX is as shown on the financial statements
attached hereto (the updated statements) as of September 30, 2004. Any and all
accruals to officers and directors shall be waived and released by each officer
or director, in writing.
3.9 Since the dates of the updated Seller Financial Statements, there have
not been any material adverse changes in the business or condition, financial or
otherwise, of MWEX within the knowledge of MWEX. MWEX does not have any
liabilities, commitments or obligations, secured or unsecured except as shown on
updated financials (whether accrued, absolute, contingent or otherwise), and
except for accruals, legal fees, consulting fees and costs of this transaction.
3.10 MWEX is not a party to any contract performable in the future.
3.11 The representations and warranties of Seller shall be true and correct
as of the date hereof and closing date.
3.12 Seller will deliver to Buyer, all of MWEX corporate books and records,
and will turn over all original corporate records at closing.
3.13 MWEX has no employee benefit plan in effect at this time.
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3.14 No representation or warranty by the MWEX in this Agreement, or any
certificate delivered pursuant hereto contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
representation or warranty not misleading.
3.15 Buyer has received copies of Form 10KSB as filed with the Securities
and Exchange Commission ("SEC") which included audits for the year ended
December 31, 2003 and each of its other reports to shareholders filed with the
SEC through the period of September 30, 2004. MWEX is a registered company under
the Securities Exchange Act of 1934, as amended and is current in its filings.
3.16 Seller has not made to Buyer any general solicitation or general
advertising regarding the shares of common stock.
3.17 MWEX has incurred no liabilities except as shown on the financial
statements or referenced in 3.8 hereof and fees in conjunction with this
transaction, which fees incurred in conjunction with this transaction shall be
paid at closing
Procedure for Closing
4.1 At the Closing Date, the purchase and sale shall be consummated after
satisfaction of all conditions precedent set forth in Article V and VIII, by
Seller's stock certificates for the Purchase Shares being delivered, duly signed
and guaranteed by Seller for 9,008,332 shares of common stock to Buyer, upon
receipt of the Consideration for the share purchase, together with issuance or
delivery of all other items, agreements, warranties, and representations set
forth in this Agreement.
ARTICLE V
Conditions Precedent to the
Consummation of the Purchase
The following are conditions precedent to the consummation of the Agreement
on or before the Closing Date:
5.1 Seller shall have performed and complied with all of its respective
obligations hereunder which are to be complied with or performed on or before
the Closing Date.
5.2 No action, suit or proceeding shall have been instituted or shall have
been threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the transactions contemplated herein,
or which might subject any of the parties or MWEX hereto or their directors or
officers to any material liability, fine, forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers, have violated any applicable law or regulation or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
the parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
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5.3 The representations and warranties made by Seller in this Agreement
shall be true as though such representations and warranties had been made or
given on and as of the Closing Date, except to the extent that such
representations and warranties may be untrue on and as of the Closing Date
because of changes caused by transactions suggested or approved in writing by
the Buyer.
ARTICLE VI
Termination and Abandonment
6.1 Anything contained in this Agreement to the contrary notwithstanding,
the Agreement may be terminated and abandoned at any time prior to or on the
Closing Date:
(a) By mutual consent of parties;
(b) By either party, if any condition set forth in Article V or any other
Article relating to the other party has not been met or has not been
waived;
(c) By Buyer, if any suit, action, or other proceeding shall be pending or
threatened by the federal or a state government before any court or
governmental agency, in which it is sought to restrain, prohibit, or
otherwise affect the consummation of the transactions contemplated
hereby;
(d) By Buyer, if there is discovered any material error, misstatement or
omission in the representations and warranties of another party;
(e) By Seller, if the Closing does not occur, through no failure to act by
Seller, on closing date, or if Buyer fails to deliver the
consideration required herein;
(f) If all of the outstanding liabilities cannot be settled at closing;
6.2 Any of the terms or conditions of this Agreement may be waived at any
time by the party which is entitled to the benefit thereof.
ARTICLE VII
Continuing Representations and
Warranties and Covenants
7.1 The respective representations, warranties, and covenants of the
parties hereto and agreements of the parties hereto shall survive after the
closing under this Agreement for a period of two years hereafter in accordance
with the terms thereof.
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ARTICLE VIII
Miscellaneous
8.1 This Agreement embodies the entire agreement between the parties, and
there have been and are no agreements, representations or warranties among the
parties other than those set forth herein or those provided for herein, except
that a companion document, the Reorganization Agreement, has been executed
concurrently which contains numerous warranties and representations.
8.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
8.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
8.4 This Agreement may not be amended except by written consent of both
parties.
8.5 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
prepaid, addressed as follows:
To Seller: Xxxxxx X. Xxxx, Xx.
X.X. Xxx 000
Xxxxxxxx, XX 00000
To Buyer: Xxxx Xxxx Ventures, LLC
0000 Xxxxxxxxx Xxxx., #000
Xxxxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
8.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of the Buyer
and Sellers. However, MWEX may issue at any time any press release or other
public statement it believes on the advice of its counsel it is obligated to
issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.
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8.7 This Agreement shall be governed by and construed in accordance with
and enforced under the laws of the state of Colorado applicable to all
agreements made hereunder. Venue and jurisdiction for any legal actions
hereunder shall be District Court in and for Jefferson County, Colorado.
8.8 In the event of a breach or default of this Agreement or any of the
continuing covenants hereunder which results in a party or any effected
shareholder who is a beneficiary of a surviving or continuing covenant,
commencing legal action, the prevailing party in such legal action shall be
entitled to an award of all legal fees and costs of the action, against the
non-prevailing party.
8.9 Xxxxx Xxxx shall be appointed at closing as CEO/CFO, effective
immediately.
8.12 Concurrent with the consummation hereof, Seller shall cause the Board
of MWEX to appoint two new directors, of Buyer's choice.
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IN WITNESS WHEREOF, the parties have executed this Agreement this 3rd day
of November, 2004.
XXXXXX X. XXXX, XX.
By: ________________________________
Name: ______________________________
Tile: ______________________________
BUYER:
XXXX XXXX VENTURES, LLC
By:________________________________
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