SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of August 25, 2004,
between Cheyenne Resources, Inc. ("Seller") a Wyoming Corporation, Xxxx Xxxx
Ventures, ("Seller") and Ultimate Investments Corp., Shortline Equity Partners
Inc. and X. Xxxx Consulting Corp. (the "Buyers").
W I T N E S S E T H:
A. WHEREAS, Seller is a corporation duly organized under the laws of the State
of Wyoming and Seller is the principal shareholder and creditor.
B. WHEREAS, Buyers wish to purchase an aggregate of 250,585 shares
(post-reverse split) of common stock from Seller (the "Purchase Shares"),
after all of the conditions under this contract have been performed and
Seller desires to sell the Purchase Shares to Buyers pursuant to this
agreement.
C. WHEREAS, prior to the transaction Buyers is not an affiliate of Seller.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
Subject to the conditions set forth herein, Seller shall sell to Buyers and
Buyers shall purchase 250,585 (post-reverse split) common shares from Seller.
The aggregate purchase price for the shares to be paid by Buyers to Seller is
$200,000 (the "Consideration") of which $200,000 is herewith paid in escrow with
M.A. Xxxxxxx Attorney at Law as Escrow Agent 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 (250,585) (post reverse split) shall be
deposited in escrow subject to delivery of the cash purchase consideration of
$200,000 to Seller.
2.2 Closing hereunder shall be completed by release from escrow of the
cash consideration, the loan proceeds and share certificates on or before August
26, 2004 at 5:00 p.m. MST ("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.
ARTICLE III
Representations, Warranties and Covenants of Seller
Seller hereby, represents, warrants and covenants to Buyers as follows:
3.1 Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Wyoming, and has the corporate power and
authority carry on its business. The Articles of Incorporation and Amendments
and Bylaws of Seller, which will be delivered to Buyers at closing, are complete
and accurate, and the minute books of Seller, copies of which have also been
delivered to Buyers, 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 Seller.
3.2 The authorized capital stock of Seller consists of 50,000,000 shares of
common stock. There are 588,235 shares (post reverse split one for 85)
(approximately) of Common Stock of Seller issued and outstanding as of date
hereof. All such shares of capital stock of Seller are validly issued, fully
paid, non-assessable and free of preemptive rights. Seller 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 Seller, or
contracts or arrangements of any kind relating to the issuance, sale or transfer
of any capital stock or other equity securities of Seller, except that 150,000
shares (post reverse split) are due to be issued, registered on to former
officers, directors, and accountants in the next Registration Statement filed
after the reverse split is effective. 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.
3.3 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 Seller, or of any material provisions of any
indenture, mortgage, deed of trust or other material agreement or instrument to
which Seller 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 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 Seller pursuant to
the terms of any agreement or instrument to which Seller is a party or by which
Seller may be bound or to which any of Seller 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.
3.4 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 Seller or affecting any of its assets,
properties, business or capital stock (except lawsuits with forced pooling
parties). There is no continuing order, injunction or decree of any court,
arbitrator or governmental authority to which Seller is a party or by which
Seller or its assets, properties, business or capital stock are bound.
3.5 Seller 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 Seller for all current
taxes and other charges to which Seller is subject and which are not currently
due and payable. None of the Federal income tax returns of Seller 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 Seller for any period, nor of any basis for any such assessment,
adjustment or contingency.
3.6 Seller has delivered to Buyers unaudited financial statements for the
period ended June 30, 2004. All such statements, herein sometimes called "Seller
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 Seller for the periods indicated
within the knowledge of Seller and/or Seller. All financial statements of Seller
have been prepared in accordance with generally accepted accounting principles.
3.7 As of the date hereof, Seller, represents and warrants that all
outstanding indebtedness of Seller is as shown on the financial statements
attached hereto (the updated statements), except debts incurred in 2004 after
December 31, 2003 financial statements, and accrued since such date all of which
will be paid at closing pursuant to a schedule to be furnished to Escrow Agent.
Any and all accruals to officers and directors shall be waived and released by
each officer or director, in writing.
3.8 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 Seller within the knowledge of Seller and/or Seller. Seller 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.
3.9 Seller is not a party to any contract performable in the future except,
for issuance of shares as set forth in 3.2 above.
3.10 The representations and warranties of Seller shall be true and correct
as of the date hereof and closing date.
3.11 Seller will deliver to Buyers, all of its corporate books and records
for review, and will turn over all original corporate records at closing.
3.12 Seller has no employee benefit plan in effect at this time.
3.13 No representation or warranty by the Seller 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.
3.14 Buyers 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 June 30, 2004. Seller is a registered company under
the Securities Exchange Act of 1934, as amended and is current in its filings.
3.15 Seller has not made to Buyers any general solicitation or general
advertising regarding the shares of Seller common stock.
3.16 Seller has incurred no liabilities except as shown on the financial
statements or referenced in 3.7 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 common stock certificates for the Purchase Shares being delivered, duly
signed and guaranteed by Seller for 250,585 shares (post reverse split) of
common stock to Buyers, 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 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.
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 Buyers.
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 Buyers, 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 Buyers, 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 Buyers fails to deliver the
consideration required herein;
(f) If all of the outstanding liabilities cannot be settled at
closing;
(g) Buyers may cancel this agreement without penalty, and receive a
return of all monies in escrow if the aggregate liabilities
exceed.
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, 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 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.
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: Xxxx Xxxx Ventures LLC
0000 Xxxxxxxxx Xxxx., #000
Xxxxxxxx, XX 00000
To Buyers: Ultimate Investments Corp
0000 Xxxxx Xxxxxxxx Xxx
Xxxxxx, 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 Buyers
and Sellers. However, Seller 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.
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 Seller and Buyers agree that Buyers and Seller can and will cause
the effectuation, of a reverse split, of the common shares of Seller issued and
outstanding at such date, in a ratio of one for 85 shares within 10 days
following the Closing hereunder.
8.9 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.
8.10 Buyers shall designate at least one new directors to be effective
immediately to and Seller agree to appoint such Director by consent minutes.
8.11 In connection with this Agreement the parties have appointed
the escrow agent, M. A. Xxxxxxx Attorney at Law as Escrow Agent which shall be
authorized by this agreement to do the following:
1) Accept the deposit of $200,000 as purchase price for Seller's
shares, from Buyers, upon receipt of a copy of this Agreement
signed by Seller, Seller and Buyers;
2) Accept the common stock certificates from Seller for 250,585
common shares of common stock duly executed by Seller;
3) Upon receipt of all items in this agreement, Escrow Agent shall
disburse the proceeds received from the escrow in accordance with
this Agreement; $200,000 to Seller.
4) Deliver the stock certificates to Buyers at: 0000 Xxxxxxx Xxxx,
Xxxxxx, XX;
5) In the event of default in delivery any item 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; and
6) 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.
8.12 Xxxxx Xxxx shall resign at closing as CEO/CFO, and director and
Xxxxxx Xxxxx shall resign as a director, effective upon compliance with Section
14f. A new director of Buyers chosen shall be appointed effective immediately.
8.13 Concurrent with the execution hereof, the Board of Seller
shall appoint two new directors, of Buyer's choice.
8.14 Concurrent with closing the Board shall appoint a new President,
effective immediately, and Xxxx Xxxxx shall be appointed as a Director.
IN WITNESS WHEREOF, the parties have executed this Agreement this 25th
day of August, 2004.
SELLER: XXXX XXXX VENTURES LLC
By: ______________________________
Name: ____________________________
Tile: ____________________________
BUYER:
Ultimate Investments Corp.
By:________________________________
Shortline Equity Partners Inc.
By:________________________________
X. Xxxx Consulting Corp.
By:________________________________
