EXHIBIT 10.1
SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of April 29,
2005, among Xxxx Xxxx Ventures, LLC ("Seller"), Mountains West Exploration, Inc.
("MWEX"), and Sky Rider Energy, LLC (the "Buyer").
W I T N E S S E T H:
A. WHEREAS, MWEX is a corporation duly organized under the laws of the
State of New Mexico and is joining this Agreement to provide certain warranties
and representations.
B. WHEREAS, Buyer wishes to purchase an aggregate of 400,000 shares of
MWEX common stock on a, (the "Purchase Shares"), and Seller desires to sell the
Purchase Shares to Buyer.
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 an aggregate of 400,000 newly issued shares of common stock
of MWEX from Seller. The purchase price for the shares to be paid by Buyer to
Seller is $225,000 (the "Consideration") which shall be paid at closing by a
wire transfer or transmittal of a cashiers check to the Escrow Account for
Mountains West Exploration, Inc.
ARTICLE II
Closing and Issuance of Shares
2.1 The Purchase Shares shall be sold to Buyer as by depositing same with Escrow
Agent for delivery to buyer, upon receipt of the Consideration by Seller, and
satisfaction of a) the conditions precedent in Article VI, and b) procedures in
Article V.
2.2 Closing hereunder shall be completed by delivery to Escrow Account, of the
requisite closing documents and cash consideration, and delivery of the share
certificates to Attorney Xxxxxxx X. Xxxxxxx, Esq., on or before May 20, 2005 at
5:00 p.m. PST ("Closing Date") subject to satisfaction of the terms and
conditions set forth herein. Consideration may be delivered by Federal Express
or wire transfers, and any closing documents may be delivered by facsimile,
Federal Express or other appropriate means.
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ARTICLE III
Representations, Warranties and Covenants of MWEX and Seller
Seller and MWEX hereby, represent, warrant and covenant to Buyer as
follows:
3.1 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 to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Amendments and Bylaws of
MWEX, are complete and accurate, and the minute books of MWEX, copies of which
have also been made available 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 (a)The authorized capital stock of MWEX consists of 50,000,000 shares of
common stock and there are 1,000,000 shares of Common Stock of MWEX issued and
outstanding (post reverse split). All such shares of capital stock of MWEX are
validly issued, fully paid, non-assessable and free of preemptive rights. MWEX
has no outstanding options, 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. All of the outstanding shares of capital stock of MWEX have been offered,
issued, sold and delivered in compliance with applicable federal and state
securities laws and none of such securities were, at the time of issuance,
subject to preemptive rights. None of such issued and outstanding shares is the
subject of any voting trust agreement relating to the voting thereof or
restricting in any way the sale or transfer thereof.
(b) Seller shall deliver the Purchase Shares pursuant to this Agreement
free and clear of any lien, pledge, security interest or other encumbrance, and,
the Buyer will acquire good and valid title to the Purchase Shares, free and
clear of any lien, pledge, security interest or other encumbrance. None of the
Purchase Shares are the subject of any voting trust agreement or other agreement
relating to the voting thereof or restricting in any way the sale or transfer
thereof except for this Agreement.
3.3 This Agreement has been duly authorized, validly executed and delivered on
behalf of MWEX and Seller and is a valid and binding agreement and obligation of
MWEX and 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 MWEX and Seller have complete and unrestricted power to enter
into and, upon the appropriate approvals as required by law, 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 or MWEX 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 MWEX or Seller are 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 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 the MWEX 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, 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. MWEX 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.
3.8 MWEX has delivered to Buyer audited financial statements dated December 31,
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. All financial statements of
MWEX have been prepared in accordance with generally accepted accounting
principles.
3.9 As of the date hereof, MWEX, represents and warrants that all outstanding
indebtedness of MWEX is as shown on the financial statements (except for legal
and accounting services related to this transaction) and all such scheduled
indebtedness, if any, which will be the sole responsibility of MWEX and shall be
paid by MWEX at the Closing hereunder.
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3.10 Since the dates of the MWEX Financial Statements, there have not been any
material adverse changes in the business or condition, financial or otherwise,
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 which shall be fully paid at the closing.
3.11 MWEX is not a party to any contract performable in the future.
3.12 The representations and warranties of the MWEX shall be true and correct as
of the date hereof.
3.13 MWEX shall deliver to Buyer, all of its corporate books and records at
closing.
3.14 MWEX has no employee benefit plan in effect at this time, and no open
benefits or stock options or warrants are outstanding as of date hereof.
3.15 No representation or warranty by 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.
3.16 Buyer has received copies of Form 10KSB as filed with the Securities and
Exchange Commission ("SEC") which include audits for the year ended December 31,
2004 and each of its other reports to shareholders filed with the SEC through
the period ended December 31, 2004. MWEX is a registered company under the
Securities Exchange Act of 1934, as amended.
3.17 MWEX has filed reports required to be filed by it under the Securities
Exchange Act of 1934, as amended (the "Federal Securities Laws".) No such
reports, or any reports sent to the shareholders of MWEX generally contained any
untrue statement of material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements in such report, in
light of the circumstances under which they were made, not misleading.
3.18 The Buyer has not received any general solicitation or general advertising
regarding the shares of MWEX's common stock.
3.20 There have been no material changes, debts, or liabilities incurred by MWEX
since the date of 10KSB for December 31, 2004, or since then to date hereof
except a Pioneer assessment for unitizing, which shall be assumed and paid by a
purchaser, RAD Enterprises, Inc. who wishes to purchase the mineral leases
3.21 Buyer will receive a good standing certificate from the State of New Mexico
and an updated Shareholders List at the time of closing.
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ARTICLE IV
Termination of Representation and
Warranties and Certain Agreements; Indemnification
4.1 Any legal action or proceeding with respect to this Agreement or any matters
arising out of or in connection with this Agreement or the transactions
contemplated hereby or the documents executed and delivered in connection
herewith, and any action for enforcement of any judgment in respect thereof may
be brought in the courts of the State of New Mexico or of the United States of
America for the District of New Mexico, and, by execution and delivery of this
Agreement, the parties each hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts and appellate courts thereof. The parties irrevocably consent to service
of process out of any of the aforementioned courts in any such action or
proceeding in accordance with the notice provisions set forth in Section 9.5.
The parties each hereby irrevocably waive any objection that it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or the
transactions contemplated hereby or the documents execute and delivered in
connection herewith brought in the courts referred to above and hereby further
irrevocably waive and agree, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law.
ARTICLE V
Procedure for Closing
5.1 At the Closing Date, the purchase and sale shall be consummated after
satisfaction of all conditions precedent set forth in Article VI, by common
stock certificates for the Purchase Shares of MWEX being delivered, duly
executed by Seller, for 400,000 shares of common stock to Escrow Agent, and the
delivery of the Consideration for share purchase to Escrow Agent from the Buyer,
together with delivery of all other items, agreements, stock powers, warranties,
and representations set forth in this Agreement.
5.2 Escrow Agent for transaction is Xxxxxxx X. Xxxxxxx Attorney, 0000 Xxxxxxx
Xxxx, Xxxxxx, XX 00000. Funds from Share Purchase proceeds shall be disbursed
from Escrow to Seller.
ARTICLE VI
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:
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6.1 Seller and Buyer shall have performed and complied with all of their
respective obligations hereunder which are to be complied with or performed on
or before the Closing Date.
6.2 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 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.
6.3 The representations and warranties made by MWEX and 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 VII
Termination and Abandonment
7.1 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 any party, if any condition set forth in Article VI
relating to the other party has not been met or has not been
waived;
(c) By MWEX or 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 MWEX or Buyer, if there is discovered any material error,
misstatement or omission in the representations and warranties
of another party; or
(e) By Seller, if the Closing does not occur, through no failure
to act by MWEX, on May 5, 2005, or if Buyer fails to deliver
the consideration required herein.
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7.2 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, by action taken by its
Board of Directors provided; however, that such action shall be taken only if,
in the judgment of the Board of Directors taking the action, such waiver will
not have a materially adverse effect on the benefits intended under this
Agreement to the party waiving such term or condition.
ARTICLE VIII
Continuing Representations and
Warranties and Covenants
8.1 The respective representations, warranties, and covenants of the parties
hereto and the covenants and agreements of the parties hereto shall survive
after the closing under this Agreement in accordance with the terms thereof.
8.2 There are no representations whatsoever about any matter relating to MWEX or
any item contained in this Agreement, except as is contained in the express
language of this Agreement.
ARTICLE IX
Miscellaneous
9.1 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.
9.2 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.
9.3 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.
9.4 This Agreement may not be amended except by written consent of both parties.
9.5 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
prepaid, addressed as follows:
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To MWEX: Mountains West Exploration, Inc.
c/o 0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
To Seller: Xxxx Xxxx Ventures LLC
0000 Xxxxxxxxx Xxxx., #000
Xxxxxxxx, XX 00000
To Buyer: Sky Rider Energy, LLC
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.
9.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of the Buyer
and MWEX. 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.
9.7 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.
9.8 In connection with this Agreement the Buyers have appointed Xxxxxxx X.
Xxxxxxx, Esq. as their Escrow Agent to do the following:
1) Transmit the purchase price of $225,000 to Seller concurrent with
delivery to Xxxxxxx X. Xxxxxxx of the shares (400,000) being purchased
herein
2) Accept the common stock certificates of MWEX from Seller with duly
signed and guaranteed signatures for 400,000 common shares for delivery
to Buyer and,
3) Transmit by Federal Express the stock certificates to buyer pursuant to
its instruction: ____________
4) In the event of default in delivery of cash or certificates by a party
under this agreement, any cash or certificates received from the other
party shall be returned to the remitting party 3 business days after
default.
5) Escrow Agent is specifically indemnified and held harmless hereby for
its actions or inactions in following these instructions. In the event
of a dispute involving the escrow instructions or the consideration to
be delivered in escrow, the Escrow Agent is authorized to implead the
consideration received into the District Court of Jefferson County
Colorado upon ten days written notice, and be relieved of any further
escrow duties thereupon. Any and all costs of attorneys fees and legal
actions of Escrow Agent for any dispute resolution or impleader action
shall be paid in equal shares by the parties to this agreement.
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9.10 MWEX agrees to appoint the buyer's designee as President, and Xxxxx Xxxx
shall immediately resign as the President of MWEX, upon closing. MWEX agrees to
execute minutes appointing three buyer's designee(s) as directors of MWEX
concurrent with the closing hereunder. Buyer shall provide the names of the
appointees for officers as soon as the Buyer wishes to have the persons
appointed to the offices. MWEXs' current directors shall resign effective 10
days after mailing of Notice to Shareholders pursuant to Section 14f.
IN WITNESS WHEREOF, the parties have executed this Agreement this 28th
day of April, 2005.
Seller:
Xxxx Xxxx Ventures LLC Mountains West Exploration, Inc.
A Colorado Limited a New Mexico Corporation
Liability Corporation
By: /s/Xxxxx Xxxx
By: /s/Xxxxx Xxxx Name: Xxxxx Xxxx
Name: Xxxxx Xxxx Title: President
Title: Manager
BUYER:
Sky Rider Energy, LLC
By:/s/G. Xxxxxx Xxxxx
Name: G. Xxxxxx Xxxxx
Title: Manager
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