EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is entered
into as of this 8th day of July 2004 by and between DEEP WELL OIL & GAS, INC. a
Nevada corporation (hereinafter referred to as the "Company"), MIKWEC ENERGY
CANADA LTD., an Alberta corporation (hereinafter referred to as "Mikwec"), and
the persons executing this Agreement listed on the signature page hereto
(referred to collectively as "Mikwec Shareholders") who own one hundred percent
(100%) of the outstanding common and preferred stock of Mikwec upon the
following premises:
Premises
WHEREAS, the Mikwec Shareholders collectively own 100% of the issued and
outstanding common stock of Mikwec and 100% of the issued and outstanding
preferred stock of Mikwec;
WHEREAS, the Company is a corporation organized under the laws of the State of
Nevada and its common stock is quoted on the National Quotation Bureau's Pink
Sheets under the symbol "DWOG";
WHEREAS, Mikwec is a privately held corporation organized under the laws of the
Province of Alberta, Canada;
WHEREAS, the Company desires to acquire 100% of the issued and outstanding
shares of common stock of Mikwec and obtain an exclusive option to acquire 100%
of the issued and outstanding preferred stock of Mikwec in exchange for unissued
restricted shares of the Company's common stock (the "Company's Common Shares")
(the "Exchange Offer"), so that Mikwec will become a subsidiary of the Company;
WHEREAS, the Mikwec Common Stock Shareholders desire to exchange all of their
shares of common stock of Mikwec solely in exchange for the shares of authorized
but unissued Common Stock, $.001 par value, of the Company;
WHEREAS, the Mikwec Preferred Shareholders desire to grant the Company an option
to acquire their preferred shares solely in exchange for the shares of
authorized but unissued Common Stock, $.001 par value, of the Company; and
None of the Parties is seeking tax counsel or legal or accounting opinions on
whether the Share Exchange qualifies for tax free treatment and tax free
treatment of the Exchange Offer is not a condition precedent to the enforcement
of this Agreement.
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of the mutual
covenants and agreements hereinafter set forth and the mutual benefits to the
parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF MIKWEC
AND THE MIKWEC SHAREHOLDERS
As an inducement to, and to obtain the reliance of the Company, except as set
forth on the Mikwec Schedules (as hereinafter defined), Mikwec and the Mikwec
Shareholders represent and warrant to the Company as follows:
Section 1.01 Organization. Mikwec is a corporation duly organized, validly
existing, and in good standing under the laws of the Province of Alberta, Canada
and has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the states or countries
in which the character and location of the assets owned by it or the nature of
the business transacted by it requires qualification, except where failure to be
so qualified would not have a material adverse effect on its business. Included
in the Mikwec Schedules are complete and correct copies of the Articles of
Incorporation and Bylaws of Mikwec as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Mikwec's
Articles of Incorporation or Bylaws. Mikwec has taken all actions required by
law, its Articles of Incorporation, or otherwise, to authorize the execution and
delivery of this Agreement. Mikwec has full power, authority, and legal right
and has taken all action required by law, its Articles of Incorporation, and
otherwise to consummate the transactions herein contemplated.
Section 1.02 Capitalization. Mikwec currently has 4,001,125 Common shares
currently issued and outstanding and 337,500 Class R Non-Voting Preferred Shares
issued and outstanding. All issued and outstanding shares are legally issued,
fully paid, and non-assessable and not issued in violation of the preemptive or
other rights of any person. The rights and preferences of the Preferred Shares
are set forth in their entirety on Schedule 1.02 attached hereto and made a part
hereof
Section 1.03 Subsidiaries and Predecessor Corporations. Mikwec does not have
any predecessor corporation(s) or subsidiaries, and does not own, beneficially
or of record, any shares of any other corporation.
Section 1.04 Financial Statements.
(a) Included in the Mikwec Schedules are the audited Mikwec balance sheet as of
June 30, 2004 and the related statements of operations and cash flows for such
periods.
(b) Mikwec has no liabilities with respect to the payment of any federal, state,
county, local or other taxes (including any deficiencies, interest or
penalties), except for taxes accrued but not yet due and payable.
(c) Mikwec has filed all federal, local or other income and/or franchise tax
returns required to be filed by it from inception to the date hereof. Each of
such income tax returns reflects the taxes due for the period covered thereby,
except for amounts which, in the aggregate, are immaterial.
(d) The books and records, financial and otherwise, of Mikwec are in all
material respects complete and correct and have been maintained in accordance
with good business and accounting practices.
(e) All of Mikwec's assets are reflected on its financial statements, and,
except as set forth in the Mikwec Schedules or the financial statements of
Mikwec or the notes thereto, Mikwec has no material liabilities, direct or
indirect, matured or unmatured, contingent or otherwise.
Section 1.05 Information. The information concerning Mikwec set forth in this
Agreement and in the Mikwec Schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. In addition, Mikwec
has fully disclosed in writing to the Company (through this Agreement or the
Mikwec Schedules) all information relating to matters involving Mikwec or its
assets or its present or past operations or activities which (i) indicated or
may indicate, in the aggregate, the existence of a greater than one hundred
Thousand Dollars ($100,000) liability or diminution in value, (ii) have led or
may lead to a competitive disadvantage on the part of Mikwec, or (iii) either
alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on Mikwec, its assets, or its operations or activities as
presently conducted or as contemplated to be conducted after the Closing Date,
including, but not limited to, information relating to governmental, employee,
environmental, litigation and securities matters and transactions with
affiliates.
Section 1.06 Options or Warrants. Other than as set out in Schedule 1.06, there
are no existing options, warrants, calls, or commitments of Mikwec of any
character relating to the authorized and unissued Mikwec stock other than those
granted to the Company hereunder.
Section 1.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or Mikwec Schedules (a) and (b), since the date of execution of this
agreement:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets, or condition of Mikwec or (ii) any damage,
destruction, or loss to Mikwec (whether or not covered by insurance) materially
and adversely affecting the business, operations, properties, assets, or
condition of Mikwec;
(b) Mikwec has not (i) borrowed or agreed to borrow any funds or incurred, or
become subject to, any material obligation or liability (absolute or contingent)
except as disclosed herein and except liabilities incurred in the ordinary
course of business; (ii) paid or agreed to pay any material obligations or
liability (absolute or contingent) other than current liabilities, and current
liabilities incurred in the ordinary course of business and professional and
other fees and expenses in connection with the preparation of this Agreement and
the consummation of the transactions contemplated hereby; (iii) sold or
transferred, or agreed to sell or transfer, any of its assets, properties, or
rights (except assets, properties, or rights not used or useful in its business
which, in the aggregate have a value of less than one hundred thousand
($100,000), or canceled, or agreed to cancel, any debts or claims (except debts
or claims which in the aggregate are of a value of less than Twenty Five
Thousand Dollars [$25000]); or (iv) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a party if
such amendment or termination is material, considering the business of Mikwec;
(c) Mikwec has not (i) amended its Articles of Incorporation or Bylaws; (ii)
declared or made, or agreed to declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever to Shareholders or purchased
or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii)
waived any rights of value which in the aggregate are outside of the ordinary
course of business or material considering the business of Mikwec; (iv) made any
material change in its method of management, operation or accounting; (v)
entered into any other material transaction other than sales in the ordinary
course of its business; (vi) made any accrual or arrangement for payment of
bonuses or special compensation of any kind or any severance or termination pay
to any present or former officer or employee; (vii) increased the rate of
compensation payable or to become payable by it to any of its officers or
directors or any of its salaried employees whose monthly compensation exceeds
one hundred thousand Dollars ($100,000); or (viii) made any increase in any
profit sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement made to, for, or with its
officers, directors, or employees; and
(d) To the best knowledge of Mikwec, Mikwec has not become subject to any law or
regulation which materially and adversely affects, or in the future may
adversely affect the business, operations, properties, assets, or condition of
Mikwec.
Section 1.08 Title and Related Matters. Mikwec has good and marketable title to
all of its properties, inventory, interests in properties, and assets, real and
personal, or acquired after that date (except properties, inventory, interests
in properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business) free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present, proposed or
future business operations on such properties; and (c) as described in the
Mikwec Schedules. Except as set forth in the Mikwec Schedules, Mikwec owns, free
and clear of any liens, claims, encumbrances, royalty interests, or other
restrictions or limitations of any nature whatsoever, any and all products it is
currently manufacturing, including the underlying technology and data, and all
procedures, techniques, marketing plans, business plans, methods of management,
or other information utilized in connection with Mikwec's business. Except as
set forth in the Mikwec Schedules, no third party has any right to, and Mikwec
has not received any notice of infringement of or conflict with asserted rights
of others with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, trade names, or
copyrights which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially adverse effect
on the business, operations, financial condition, income, or business prospects
of Mikwec or any material portion of its properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the Mikwec
Schedules, there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of Mikwec after reasonable investigation, threatened by or
against Mikwec or affecting Mikwec or its properties, at law or in equity,
before any court or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. Mikwec does not have any
knowledge of any material default on its part with respect to any judgment,
order, injunction, decree, award, rule, or regulation of any court, arbitrator,
or governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the Mikwec Schedules, there are no
"material" contracts, agreements, franchises, license agreements, debt
instruments or other commitments to which Mikwec is a party or by which it or
any of its assets, products, technology, or properties are bound other than
those incurred in the ordinary course of business (as used in this Agreement, a
"material" contract, agreement, franchise, license agreement, debt instrument or
commitment is one which (i) will remain in effect for more than six (6) months
after the date of this Agreement or (ii) involves aggregate obligations of at
least one hundred thousand Dollars ($100,000);
(b) All contracts, agreements, franchises, license agreements, and other
commitments to which Mikwec is a party or by which its properties are bound and
which are material to the operations of Mikwec taken as a whole are valid and
enforceable by Mikwec in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally;
(c) Mikwec is not a party to or bound by, and the properties of Mikwec are not
subject to, any contract, agreement, other commitment or instrument; any charter
or other corporate restriction; or any judgment, order, writ, injunction,
decree, or award which materially and adversely affects the business operations,
properties, assets, or condition of Mikwec; and
(d) Except as included or described in the Mikwec Schedules, Mikwec is not a
party to any oral or written (i) contract for the employment of any officer or
employee which is not terminable on thirty (30) days, or less notice; (ii)
profit sharing, bonus, deferred compensation, stock option, severance pay,
pension benefit or retirement plan; (iii) agreement, contract, or indenture
relating to the borrowing of money; (iv) guaranty of any obligation, other than
one on which Mikwec is a primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guaranties of
obligations which, in the aggregate do not exceed more than one (1) year or
providing for payments in excess of one hundred thousand Dollars ($100,000) in
the aggregate; (v) collective bargaining agreement; or (vi) agreement with any
present or former officer or director of Mikwec.
Section 1.11 Material Contract Defaults. Mikwec is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of Mikwec and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which Mikwec has not taken adequate steps to prevent such a default
from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which Mikwec is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the Mikwec
Schedules, Mikwec has all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date hereof. Except for compliance
with federal and state securities and corporation laws, as hereinafter provided,
no authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection
with the execution and delivery by Mikwec of this Agreement and the consummation
by Mikwec of the transactions contemplated hereby.
Section 1.14 Compliance with Laws and Regulations. Except as set forth in the
Mikwec Schedules, to the best of its knowledge Mikwec has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets, or
condition of Mikwec or except to the extent that noncompliance would not result
in the occurrence of any material liability for Mikwec.
Section 1.15 Approval of Agreement. The Board of Directors of Mikwec has
authorized the execution and delivery of this Agreement by Mikwec and has
approved this Agreement and the transactions contemplated hereby, and will
recommend to the Mikwec Shareholders that the Exchange Offer be accepted by
them.
Section 1.16 Material Transactions or Affiliations. Set forth in the Mikwec
Schedules or as disclosed herein there exists no contract, agreement, or
arrangement between Mikwec and any predecessor and any person who was at the
time of such contract, agreement, or arrangement an officer, director, or person
owning of record, or known by Mikwec to own beneficially, five percent (5%) or
more of the issued and outstanding common stock of Mikwec and which is to be
performed in whole or in part after the date hereof or which was entered into
not more than three (3) years prior to the date hereof.
Section 1.17 Mikwec Schedules. Mikwec has delivered or will deliver on such
times as set forth herein, the following schedules and documents to the Company
which consist of separate schedules dated as of the date of execution of this
Agreement, all certified by the chief executive officer of Mikwec as complete,
true, and correct as of the date of this Agreement in all material respects:
(a) a schedule containing complete and correct copies of the Articles of
Incorporation, and Bylaws of Mikwec in effect as of the date of this Agreement;
(b) a schedule containing the financial statements of Mikwec identified in
paragraph 1.04(a);
(c) a Schedule 1.17(c) containing a list indicating the name and address of each
shareholder of Mikwec together with the number of common and/or preferred shares
owned by him, her or it;
(d) a schedule containing a description of all real property owned by Mikwec,
together with a description of every mortgage, deed of trust, pledge, lien,
agreement, encumbrance, claim, or equity interest of any nature whatsoever in
such real property;
(e) copies of all licenses, permits, and other governmental authorizations (or
requests or applications therefore) pursuant to which Mikwec carries on or
proposes to carry on its business (except those which, in the aggregate, are
immaterial to the present or proposed business of Mikwec);
(f) a schedule setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of Mikwec since
January 31, 2004, required to be provided pursuant to section 1.07 hereof;
(g) a schedule setting forth any other information, together with any required
copies of documents, required to be disclosed in the Mikwec Schedules by
Sections 1.01 through 1.17;
(h) and such other schedules as set forth herein.
Mikwec shall cause the Mikwec Schedules and the instruments and data delivered
to the Company hereunder to be promptly updated after the date hereof up to and
including the Closing Date.
Mikwec shall have until ten days after execution of this agreement to provide
such schedules. If Mikwec cannot or fails to do so, or if the Company finds any
such schedules or updates provided after the date hereof to be unacceptable in
its sole discretion, the Company may terminate this Agreement by giving written
notice to Mikwec within five (5) days after the schedules or updates were due to
be produced or were provided.
Section 1.18 Valid Obligation. This Agreement and all agreements and other
documents executed by Mikwec in connection herewith constitute the valid and
binding obligation of Mikwec, enforceable in accordance with its or their terms,
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding therefore may be brought.
Section 1.19 Acquisition of the Company's Common Stock. The Mikwec Shareholders
are acquiring the Company's common shares for their own account without the
participation of any other person and with the intent of holding the Company's
common shares for investment and without the intent of participating, directly
or indirectly, in a distribution of the Company's common shares, or any portion
thereof, and not with a view to, or for resale in connection with, any
distribution of the Company's common shares, or any portion thereof. The Mikwec
Shareholders have read, understand and consulted with their legal counsel
regarding the limitations and requirements of Section 5 of the 1933 Act. The
Mikwec Shareholders will offer, sell, pledge, convey or otherwise transfer the
Company's common shares, or any portion thereof, only if: (i) pursuant to an
effective registration statement under the 1933 Act and any and all applicable
state securities or Blue Sky laws or in a transaction which is otherwise in
compliance with the 1933 Act and such laws; or (ii) pursuant to a valid
exemption from registration.
Section 1.20 Accredited Investor Status. Each Mikwec Shareholder is an
accredited investor as that term is defined in Rule 501 of Regulation D
promulgated under the 1933 Act and each Mikwec Shareholder acknowledges that it
has a preexisting relationship with the Company and/or its officers, directors,
employees, advisers or consultants. The Mikwec Shareholders are not investing in
the Shares based upon any representation, oral or written, by any person with
respect to the future value, if any, of, or the income, if any, from the
Company's common stock. Each Mikwec Shareholder has consulted with its own
attorneys, accountants, and financial advisors prior to executing this
agreement.
Section 1.21 Legal Opinions. Mikwec will deliver a legal opinion in the form
acceptable to the Company that the transactions contemplated by this agreement
and Mikwec have complied in all respects with applicable law.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE COMPANY
As an inducement to, and to obtain the reliance of Mikwec and the Mikwec
Shareholders, except as set forth in the Company Schedules (as hereinafter
defined), the Company represents and warrants to Mikwec and the Mikwec
Shareholders as follows:
Section 2.01 Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets, to carry on its business in
all material respects as it is now being conducted, and except where failure to
be so qualified would not have a material adverse effect on its business, there
is no jurisdiction in which it is not qualified in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Company Schedules are complete and
correct copies of the Certificate of Incorporation and Bylaws of the Company as
in effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of the Company's Certificate of Incorporation or Bylaws.
The Company has taken all action required by law, its Certificate of
Incorporation, its Bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and the Company has full power, authority, and legal right
and has taken all action required by law, its Certificate of Incorporation,
Bylaws, or otherwise to consummate the transactions herein contemplated.
Section 2.02 Capitalization. The Company's authorized capitalization consists
of 300,000,000 shares, consisting of 300,000,000 shares of Common Stock, par value
$0.001 per share of which 31,236,468 shares will be issued and outstanding at
the Closing as defined in Section 3.04. The Company is not authorized to issue
preferred stock and no preferred stock will issued and outstanding at the
Closing. All issued and outstanding shares are legally issued, fully paid, and
non-assessable and not issued in violation of the preemptive or other rights of
any person.
Section 2.03 Subsidiaries and Predecessor Corporations. The Company does not
have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation.
Section 2.04 Financial Statements.
The Company's financial statements as filed with the Securities and Exchange
Commission on the XXXXX Database are true and accurate in all material respects.
(b) All such financial statements have been prepared in accordance with United
States generally accepted accounting principles consistently applied throughout
the periods involved. The Company balance sheets present fairly as of their
respective dates the financial condition of the Company. As of the date of such
balance sheets, except as and to the extent reflected or reserved against
therein, the Company had no liabilities or obligations (absolute or contingent)
which should be reflected in the balance sheets or the notes thereto prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein are properly reported and present fairly the value of the
assets of the Company, in accordance with generally accepted accounting
principles. The statements of operations, Shareholders' equity and cash flows
reflect fairly the information required to be set forth therein by generally
accepted accounting principles.
(c) The Company has no liabilities with respect to the payment of any federal,
state, county, local or other taxes (including any deficiencies, interest or
penalties), except for taxes accrued but not yet due and payable.
(d) The books and records, financial and otherwise, of the Company are in all
material aspects complete and correct and have been maintained in accordance
with good business and accounting practices.
(e) All of the Company's assets are reflected on its financial statements, and,
except as set forth in the Company Schedules or the financial statements of the
Company or the notes thereto, the Company has no material liabilities, direct or
indirect, matured or unmatured, contingent or otherwise.
Section 2.05 Information. The information concerning the Company set forth in
this Agreement and the Company Schedules is complete and accurate in all
material respects and does not contain any untrue statements of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 2.06 Options or Warrants. There are no existing options, warrants,
calls, or commitments of any character relating to the authorized and unissued
stock of the Company.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed in
Schedule 2.07, or permitted in writing by Mikwec, since the date of the most
recent Company balance sheet:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets or condition of the Company or (ii) any damage,
destruction or loss to the Company (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties, assets
or condition of the Company;
(b) The Company has not and will not (i) amend its Certificate of Incorporation
or Bylaws except to complete the performance of the Company as set forth herein;
(ii) declare or make, or agree to declare or make any payment of dividends or
distributions of any assets of any kind whatsoever to Shareholders or purchase
or redeem, or agree to purchase or redeem, any of its capital stock; (iii) waive
any rights of value which in the aggregate are outside of the ordinary course of
business or material considering the business of the Company; (iv) make any
material change in its method of management, operation, or accounting; (v) enter
into any transaction or agreement other than in the ordinary course of business;
(vi) make any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee; (vii) increase the rate of compensation payable or
to become payable by it to any of its officers or directors or any of its
salaried employees whose monthly compensation exceeds One Thousand Dollars
($1,000); or (viii) make any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement, made to, for or with its officers, directors, or
employees;
(c) The Company has not (i) granted or agreed to grant any options or warrants;
(ii) borrowed or agreed to borrow any funds or incurred, or become subject to,
any material obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid or agreed to pay any
material obligations or liabilities (absolute or contingent) other than current
liabilities reflected in or shown on the most recent Company balance sheet and
current liabilities incurred since that date in the ordinary course of business
and professional and other fees and expenses in connection with the preparation
of this Agreement and the consummation of the transaction contemplated hereby;
(iv) sold or transferred, or agreed to sell or transfer, any of its assets,
properties, or rights (except assets, properties, or rights not used or useful
in its business which, in the aggregate have a value of less than One Thousand
Dollars [$1,000]), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value less than One Thousand
Dollars [$1,000]); and (v) made or permitted any amendment or termination of any
contract, agreement, or license to which it is a party if such amendment or
termination is material, considering the business of the Company; and
(d) The Company has not become subject to any law or regulation which materially
and adversely affects, or in the future, may adversely affect, the business,
operations, properties, assets or condition of the Company.
Section 2.08 Title and Related Matters. The Company has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in the most recent Company balance sheet
or acquired after that date (except properties, inventory, interest in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the Company Schedules.
Except as set forth in the Company Schedules, the Company owns, free and clear
of any liens, claims, encumbrances, royalty interests, or other restrictions or
limitations of any nature whatsoever, any and all products it is currently
manufacturing, including the underlying technology and data, and all procedures,
techniques, marketing plans, business plans, methods of management, or other
information utilized in connection with the Company's business. Except as set
forth in the Company Schedules, no third party has any right to, and the Company
has not received any notice of infringement of or conflict with asserted rights
of others with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, trade names, or
copyrights which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially adverse effect
on the business, operations, financial condition, income, or business prospects
of the Company or any material portion of its properties, assets, or rights.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of the Company after
reasonable investigation, threatened by or against the Company or affecting the
Company or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. The Company is not in default of any judgment, order,
writ, injunction, decree, award, rule or regulation of any court, arbitrator, or
governmental agency or instrumentality.
Section 2.10 Contracts.
(a) The Company is not a party to, and its assets, products, technology and
properties are not bound by, any material contract, franchise, license
agreement, agreement, debt instrument or other commitments whether such
agreement is in writing or oral.
(b) All contracts, agreements, franchises, license agreements, and other
commitments to which the Company is a party or by which its properties are bound
and which are material to the operations of the Company taken as a whole are
valid and enforceable by the Company in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) The Company is not a party to or bound by, and the properties of the Company
are not subject to any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of the Company; and
(d) Except as included or described in the Company Schedules or reflected in the
most recent Company balance sheet, the Company is not a party to any oral or
written (i) contract for the employment of any officer or employee which is not
terminable on thirty (30) days, or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit or
retirement plan; (iii) agreement, contract, or indenture relating to the
borrowing of money; (iv) guaranty of any obligation, other than one on which the
Company is a primary obligor, for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of obligations which, in
the aggregate do not exceed more than one year or providing for payments in
excess of One Million Dollars ($1,000,000) in the aggregate; (v) collective
bargaining agreement; or (vi) agreement with any present or former officer or
director of the Company.
Section 2.11 Material Contract Defaults. The Company is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of the Company and there is no event of default in any
material respect under any such contract, agreement, lease, or other commitment
in respect of which the Company has not taken adequate steps to prevent such a
default from occurring.
Section 2.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. The Company has all licenses,
franchises, permits, and other governmental authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, or registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, the Company has complied with all applicable statutes and regulations
of any federal, state, or other applicable governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
the Company or except to the extent that noncompliance would not result in the
occurrence of any material liability. This compliance includes, but is not
limited to, the filing of all reports, filings and schedules to date with
federal and state securities authorities.
Section 2.15 Approval of Agreement. The board of directors of the Company has
authorized the execution and delivery of this Agreement by the Company and has
approved this Agreement and the transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations. Except as disclosed herein
and in the Company Schedules, there exists no contract, agreement or arrangement
between the Company and any predecessor and any person who was at the time of
such contract, agreement or arrangement an officer, director, or person owning
of record or known by the Company to own beneficially, five percent (5%) or more
of the issued and outstanding Common Stock of the Company and which is to be
performed in whole or in part after the date hereof or was entered into not more
than three years prior to the date hereof.
Section 2.17 The Company Schedules. Within ten (10) days prior to Closing, the
Company will deliver to Mikwec the following schedules, which are collectively
referred to as the "Company Schedules" and which consist of separate schedules,
which are dated the date of this Agreement, all certified by the chief executive
officer of the Company to be complete, true, and accurate in all material
respects as of the date of this Agreement:
(a) a schedule containing complete and accurate copies of the Certificate of
Incorporation and Bylaws of the Company as in effect as of the date of this
Agreement;
(b) a certified list from the Company's Transfer Agent setting forth the name
and address of each shareholder of the Company together with the number of
shares owned by him, her or it;
(d) a schedule containing a description of all real property owned by the
Company, together with a description of every mortgage, deed of trust, pledge,
lien, agreement, encumbrance, claim, or equity interest of any nature whatsoever
in such real property;
(e) copies of all licenses, permits, and other governmental authorizations (or
requests or applications therefore) pursuant to which the Company carries on or
proposes to carry on its business (except those which, in the aggregate, are
immaterial to the present or proposed business of the Company); and (i) a
schedule setting forth any other information, together with any required copies
of documents, required to be disclosed in the Company Schedules by Sections 2.01
through 2.18.
The Company shall cause the Company Schedules and the instruments and data
delivered to Mikwec hereunder to be promptly updated after the date hereof up to
and including the Closing Date.
If the Company cannot or fails to provide the schedules required by this
Section, or if Mikwec or the Company finds any such schedules or updates
provided after the date hereof to be reasonably unacceptable, Mikwec or the
Mikwec Shareholders may terminate this Agreement by giving written notice to the
Company within five (5) days after the schedules or updates were due to be
produced or were provided.
Section 2.18 Valid Obligation. This Agreement and all agreements and other
documents executed by the Company in connection herewith constitute the valid
and binding obligation of the Company, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore may
be brought.
Section 2.19 Reporting Requirements of the Company. The Company is subject to
the reporting and filing requirements of the Securities Exchange Act of 1934
("the Exchange Act") including (1) the periodic reporting requirements and (2)
the Proxy Rules set forth thereunder.
Section 2.20 Quotation on the National Quotation Bureau's Pink Sheets. The
Company's Common Stock is quoted on the National Quotation Bureau's Pink Sheets
under the symbol "DWOG" and the Company will retain such quotation on the
National Quotation Bureau's Pink Sheets until the Closing of the transactions
contemplated herein.
Section 2.21 Approval of the Exchange by the Company's Shareholders. The
transactions contemplated by this Agreement do not require the approval of the
Company's Shareholders.
Section 2.22 The Company will obtain general releases of 1089144 Alberta Ltd.
in favor of the Company and return the 5,775,000 shares issued to 1089144
Alberta Ltd. which is owned and controlled by Xxxxxxxxx and Xxxxxx Xxxxx to
treasury for cancellation which were purchased by Xxxxxxxxx and Xxxxxx Xxxxx
from Xxxxx Xxxx a former President/Director of the Company.
Section 2.23 The Company will obtain a general release of Xxxx X. Xxxxx, the
Company's Chief Operating Officer who was terminated by the Company on or about
June 7, 2004.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions set forth
in this Agreement, on the Closing Date (as defined in Section 3.04), each Mikwec
Shareholder who shall elect to accept the Exchange Offer described herein shall
assign, transfer and deliver, free and clear of all liens, pledges,
encumbrances, charges, restrictions or known claims of any kind, nature, or
description, the number of shares of common stock of Mikwec set forth on
Schedule 3.01 attached hereto.
On the terms and subject to the conditions set forth in this Agreement, on the
Closing Date (as defined in Section 3.04), each Mikwec Preferred Shareholder
shall grant the Company an exclusive option to acquire their preferred shares
for a period of three years pursuant to the terms of the option agreement
attached hereto as Schedule 3.01 (a) and made a part hereof.
The Mikwec Common Shareholders will receive three (3) shares of the Company's
common stock for every one (1) Share of Mikwec common stock held or an aggregate
amount of 12,003,375 shares of the Company's Common Stock for 100% of the
outstanding common stock of Mikwec. The Preferred Shareholders of Mikwec shall,
in exchange for the grant of the option, receive thirty (30) Shares of the
Company's common stock for every one (1) share of Mikwec preferred stock held.
After the issuance of the shares to the common and preferred shareholders of
Mikwec, the Company will have 53,364,843 of the Company's then outstanding
Common Stock. The common stock and preferred stock shareholders will execute a
lockdown agreement attached hereto as Exhibit 3.01 (b)and made a part hereof.
The lockdown agreement generally provides that for a period of two years from
the date of execution of the lockdown agreement, the Mikwec common Shareholders
and preferred Shareholders will only sell 1% of their respective aggregate
holdings of the shares of the Company issued pursuant to the Exchange Offer
every 90 days.
Section 3.02 Tradability of Shares. The shares of the Common Stock of the
Company to be issued to the Mikwec Shareholders have not been registered under
the 1933 Act, nor registered under any state securities law, and are "restricted
securities" as that term is defined in Rule 144 under the 0000 Xxx. The
securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the 1933 Act, or pursuant
to an exemption from registration under the 1933 Act. The shares to be issued to
the Mikwec Shareholders will bear the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED WITHOUT EITHER: i)
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, OR ii) SUBMISSION TO THE CORPORATION OF AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION THAT SAID SHARES AND THE TRANSFER THEREOF ARE
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS."
Section 3.03 Dilution. The number of shares of the Company's Common Stock
issuable upon exchange pursuant to Section 3.01 shall be appropriately adjusted
to take into account any other stock split, stock dividend, reverse stock split,
adjustment, recapitalization, change in the Company's Common Stock or changes
agreed upon by the Company and the Mikwec Shareholders which may occur between
the date of the execution of this Agreement and the Closing Date.
Section 3.04 Closing. The closing ("Closing") of the transaction contemplated by
this Agreement shall be on a date and at such time as the parties may agree
("Closing Date") but not later than July 21, 2004, subject to the right of the
Company to extend such Closing Date by up to an additional ten (10) days. Such
Closing shall take place at a mutually agreeable time and place. At Closing, or
immediately thereafter, the following will occur:
(a) The Mikwec Common Shareholders shall surrender the certificates evidencing
100% of the shares of common stock of Mikwec, duly endorsed with Medallion
Guaranteed stock powers so as to make the Company the sole owner thereof;
(b) The Company will issue and deliver newly issued treasury shares of the
Company's Common Stock in the names of the Mikwec Shareholders in accordance
with this Agreement;
(c) The Mikwec Preferred Shareholders will deliver to the Company the executed
Option Agreement as defined herein and certificates evidencing 100% of the
outstanding common stock of the Company to be held in escrow pursuant to the
terms of the escrow agreement attached hereto as Schedule 3.04(c)
(d) The sole officer and director of Mikwec will resign and the officers and
directors of the Company shall become the officers and directors of Mikwec.
(e) The Closing shall be consummated by the execution and acknowledgment by the
Company and Mikwec of Articles of Share Exchange in accordance with applicable
law.
(f) The Company will deliver general releases executed by Xxxx X. Xxxxx, the
Company's Former Chief Operating officer, and 1089144 Alberta Ltd releasing the
Company from any and all charges, complaints, grievances, claims, liabilities,
obligations, promises, agreements, causes of actions, rights, controversies,
liens, demands, damages, costs, losses, debts and expenses of any nature
whatsoever, known or unknown, suspected or unsuspected, which the other, its
heirs, executors, administrators, successors and assigns ever had, now have or
hereafter can, shall or may have by reason of any matter, fact or cause
whatsoever.
(g) Mikwec will deliver the executed lockdown agreement set forth on Schedule
3.01 (a) from each of the preferred and common stock holders of Mikwec.
(h) Mikwec preferred Shareholders will delivery the executed option agreement
attached as Schedule 3.04 (c).
(i) Mikwec preferred stock holders will deliver the executed escrow agreement
attached as Schedule Section 3.05(a)
(j) Closing Events. At the Closing, the Company, Mikwec and each of the Mikwec
Shareholders shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby unless such items were required to
be delivered at other times prior to closing as set forth herein.
Section 3.06 Termination.
(a) This Agreement may be terminated by the Board of Directors of either the
Company or Mikwec or by the Mikwec Shareholders at any time prior to the Closing
Date if: (i) there shall be any actual or threatened action or proceeding before
any court or any governmental body which shall seek to restrain, prohibit, or
invalidate the transactions contemplated by this Agreement and which, in the
judgment of such Board of Directors, made in good faith and based upon the
advice of its legal counsel, makes it inadvisable to proceed with the Exchange;
(ii) any of the transactions contemplated hereby are disapproved by any
regulatory authority whose approval is required to consummate such transactions
or in the judgment of such board of directors, made in good faith and based on
the advice of counsel, there is substantial likelihood that any such approval
will not be obtained or will be obtained only on a condition or conditions which
would be unduly burdensome, making it inadvisable to proceed with the Exchange;
or (iii) if less than one hundred percent (100%) of the Mikwec common stock and
preferred shareholders agree to the Exchange Offer.
In the event of termination pursuant to this paragraph, no obligation, right or
liability shall arise hereunder, and each party shall bear all of the expenses
incurred by it in connection with the negotiation, drafting, and execution of
this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated by the Board of Directors of the Company at
any time prior to the Closing Date if: (i) the Board of Directors of the Company
determines in good faith that one or more of the Company's conditions to Closing
has not occurred, through no fault of the Company; (ii) the Company finds the
Mikwec Schedules unacceptable; or (iii) Mikwec shall fail to comply in any
material respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of Mikwec contained
herein shall be inaccurate in any material respect. If this Agreement is
terminated pursuant to this Section, this Agreement shall be of no further force
or effect, and the Company shall incur no obligation, right or liability
hereunder.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. The Company and Mikwec will each
afford to the officers and authorized representatives of the other full access
to the properties, books and records of the Company or, as the case may be, in
order that each may have a full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of the Company or Mikwec, as
the case may be, as the other shall from time to time reasonably request. Any
such investigation and examination shall be conducted at reasonable times and
under reasonable circumstances, and each party hereto shall cooperate fully
therein. No investigation by a party hereto shall, however, diminish or waive in
any way any of the representations, warranties, covenants or agreements of the
other party under this Agreement. In order that each party may investigate as it
may wish the business affairs of the other, each party shall furnish the other
during such period with all such information and copies of such documents
concerning the affairs of it as the other party may reasonably request, and
cause its officer, employees, consultants, agents, accountants, and attorneys to
cooperate fully in connection with such review and examination, and to make full
disclosure to the other parties all material facts affecting its financial
condition, business operations, and the conduct of operations. Without limiting
the foregoing, as soon as practicable after the end of each fiscal quarter (and
in any event through the last fiscal quarter prior to the Closing Date), the
Company shall provide Mikwec with quarterly internally prepared and unaudited
financial statements for all periods up to the date of Closing.
Section 4.02 Delivery of Books and Records. At the Closing, Mikwec shall deliver
to the Company copies of the corporate minute books, books of account,
contracts, records, and all other books or documents of Mikwec now in the
possession of Mikwec or its representatives.
Section 4.03 Third Party Consents and Certificates. The Company and Mikwec agree
to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein contemplated.
Section 4.04 Consent of Mikwec Shareholders. Mikwec shall use its best efforts
to obtain the consent of all Mikwec Shareholders to participate in the Exchange.
Section 4.05 Actions Prior to Closing.
(a) From and after the date of this Agreement until the Closing Date and except
as set forth in the Company Schedules or Mikwec Schedules or as permitted or
contemplated by this Agreement, the Company (subject to paragraph (d) below) and
Mikwec respectively, will each: (i) carry on its business in substantially the
same manner as it has heretofore; (ii) maintain and keep its properties in
states of good repair and condition as at present, except for depreciation due
to ordinary wear and tear and damage due to casualty; (iii) maintain in full
force and effect insurance comparable in amount and in scope of coverage to that
now maintained by it; (iv) perform in all material respects all of its
obligations under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business; (v) use its best efforts to
maintain and preserve its business organization intact, to retain its key
employees, and to maintain its relationship with its material suppliers and
customers; and (vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and all
rules, regulations, and orders imposed by federal or state governmental
authorities.
(b) From and after the date of this Agreement until the Closing Date, Mikwec
will not: (i) make any changes in it's Articles or Certificate of Incorporation
or Bylaws, except as otherwise provided in this Agreement; (ii) take any action
described in Section 1.07; (iii) enter into or amend any contract, agreement, or
other instrument of any of the types described in such party's schedules, except
that a party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business involving the sale of goods or
services; or (iv) sell any assets or discontinue any operations or conduct any
similar transactions other than in the ordinary course of business.
Section 4.06 Indemnification.
(a) Mikwec hereby agrees to indemnify the Company and it's officers, agents,
employees and advisers against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentations made by Mikwec under this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by Mikwec in this Agreement were true when
made and shall be true at the Closing Date with the same force and effect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement). Mikwec shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Mikwec prior to or at the Closing.
The Company shall be furnished with a certificate, signed by a duly authorized
executive officer of Mikwec and dated the Closing Date, to the foregoing effect.
Section 5.02 Officer's Certificate. The Company shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
Mikwec to the effect that no litigation, proceeding, investigation, or inquiry
is pending, or to the best knowledge of Mikwec threatened, which might result in
an action to enjoin or prevent the consummation of the transactions contemplated
by this Agreement, by or against Mikwec, which might result in any material
adverse change in any of the assets, properties, business, or operations of
Mikwec.
Section 5.03 No Adverse Change. Prior to the Closing Date, there shall not have
occurred any change in the financial condition, business, or operations of
Mikwec nor shall any event have occurred which, with the lapse of time or the
giving of notice, is determined to be unacceptable in the sole discretion of the
Company's Board of Directors.
Section 5.04 Approval by Mikwec Shareholders. The Exchange shall have been
approved, and shares delivered by the holders of not less than one hundred
percent (100%) of the outstanding common and preferred shares of Mikwec.
Section 5.05 No Governmental Prohibition. No order, statute, rule, regulation,
executive order, injunction, stay, decree, judgment or restraining order shall
have been enacted, entered, promulgated or enforced by any court or governmental
or regulatory authority or instrumentality which prohibits the consummation of
the transactions contemplated hereby.
Section 5.06 Consents. All consents, approvals, waivers or amendments pursuant
to all contracts, licenses, permits, trademarks and other intangibles in
connection with the transactions contemplated herein, or for the continued
operation of the Company and Mikwec after the Closing Date on the basis as
presently operated shall have been obtained.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF MIKWEC
AND THE MIKWEC SHAREHOLDERS
The obligations of Mikwec and the Mikwec Shareholders under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants. The
representations and warranties made by the Company in this Agreement were true
when made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, the Company shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
the Company and shall have satisfied the conditions described below prior to or
at the Closing:
(a) The directors of the Company shall have approved the Exchange and the
related transactions described herein.
Section 6.02 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any change in the financial condition, business or operations
of the Company nor shall any event have occurred which, with the lapse of time
or the giving of notice, is determined to be unacceptable in the sole discretion
of the Company's Board of Directors.
Section 6.03 No Governmental Prohibition. No order, statute, rule, regulation,
executive order, injunction, stay, decree, judgment or restraining order shall
have been enacted, entered, promulgated or enforced by any court or governmental
or regulatory authority or instrumentality which prohibits the consummation of
the transactions contemplated hereby.
Section 6.05 Consents. All consents, approvals, waivers or amendments pursuant
to all contracts, licenses, permits, trademarks and other intangibles in
connection with the transactions contemplated herein, or for the continued
operation of the Company and Mikwec after the Closing Date on the basis as
presently operated shall have been obtained.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Brokers. No broker's or finder's fee will be paid in connection
with the transaction contemplated by this Agreement other than fees payable to
persons registered as broker-dealers pursuant to Section 15 of the Securities
Exchange Act of 1934.
Section 7.02 Governing Law and Arbitration. This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of the State of Florida without giving effect to principles of conflicts of law
thereunder. Venue shall be in Palm Beach County, Florida. All controversies,
disputes or claims arising out of or relating to this Agreement shall be
resolved by binding arbitration. The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. All arbitrators shall possess such experience in, and knowledge of,
the subject area of the controversy or claim so as to qualify as an "expert"
with respect to such subject matter. The governing law for the purposes of any
arbitration arising hereunder shall be in Florida. The prevailing party shall be
entitled to receive its reasonable attorney's fees and all costs relating to the
arbitration. Any award rendered by arbitration shall be final and binding on the
parties, and judgment thereon may be entered in any court of competent
jurisdiction.
Section 7.03 Notices. Any notice or other communications required or permitted
hereunder shall be in writing and shall be sufficiently given if personally
delivered to it or sent by telecopy, overnight courier or registered mail or
certified mail, postage prepaid, addressed as follows:
If to the Company, to: Deep Well Oil & Gas, Inc.
Suite 2600, Sun Life Plaza
000 Xxxxxx Xxxxxx XX
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
If to MIKWEC, to: Mikwec Energy Canada Ltd.
c/o Hladun & Company
100, 00000 - 000 Xxxxxx
Xxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered; (ii) on
the day after dispatch, if sent by overnight courier; (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone; and (iv) three
(3) days after mailing, if sent by registered or certified mail.
Section 7.04 Attorney's Fees. In the event that either party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the prevailing party shall be reimbursed by the
losing party for all costs, including reasonable attorney's fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
Section 7.05 Confidentiality. Each party hereto agrees with the other that,
unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.06 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.07 Third Party Beneficiaries. This contract is strictly between the
Company and Mikwec and the Mikwec Shareholders, and, except as specifically
provided, no director, officer, Shareholder (other than the Mikwec
Shareholders), employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 7.08 Expenses. The Company and Mikwec each hereto agree to pay its own
costs and expenses incurred in negotiating this Agreement including legal,
accounting and professional fees, incurred in connection with the Exchange or
any of the other transactions contemplated hereby, and those costs and expenses
incurred in consummating the transactions described herein.
Section 7.09 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter thereof and supersedes all
prior agreements, understandings and negotiations, written or oral, with respect
to such subject matter.
Section 7.10 Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of three (3)
years.
Section 7.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.12 Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
by amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance may be extended by a writing signed by the
party or parties for whose benefit the provision is intended.
Section 7.13 Best Efforts. Subject to the terms and conditions herein provided,
each party shall use its best efforts to perform or fulfill all conditions and
obligations to be performed or fulfilled by it under this Agreement so that the
transactions contemplated hereby shall be consummated as soon as practicable.
Each party also agrees that it shall use its best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective this Agreement and the transactions contemplated herein.
Section 7.14 Faxed Copies. For purposes of this Agreement, a faxed signature
will constitute an original signature.
Section 7.15 Severability. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or other provision
of this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
Section 7.16 Conflicts of Interest. The Parties to this Agreement acknowledge
that they are aware that this Agreement has not been negotiated at "arms length"
and that various officers, directors and Shareholders of the Company may hold
common and/or preferred stock of Mikwec and that various officers, directors and
holders of common and preferred stock of Mikwec may hold common stock of the
Company or hold positions as officers or directors of the Company. The Parties
to this agreement recognize that such conflicts exist and that such conflicts
may not be resolved in a manner beneficial to them. The Parties further
acknowledge that they have been given the opportunity to receive detailed
information and or ask questions from any parties so involved about such
conflicts and have received all information requested by them and that such
information was adequate.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
8th day of July 2004.
MIKWEC ENERGY CANADA LTD.
BY: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
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