SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of
January 30, 2004, between Cheyenne Resources, Inc. ("CH") a Wyoming
Corporation, Xxxxxx Xxxxx, ("Seller") and Xxxx Xxxx Ventures (the "Buyer"), a
Colorado Limited Liability Company.
W I T N E S S E T H:
A. WHEREAS, CH is a corporation duly organized under the laws of the State of
Wyoming and Xxxxxx Xxxxx is the principal shareholder and creditor.
B. WHEREAS, Buyer wishes to purchase an aggregate of 23,500,000 shares of
newly issued CH common stock from CH, and 1,800,000 shares of common stock
from Seller (collectively, the "Purchase Shares"), common stock after all
of the conditions under this contract have been performed and CH and Xxxxx
desire to sell the Purchase Shares to Buyer pursuant to this agreement.
C. WHEREAS, prior to the transaction Buyer is not an affiliate of CH.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE 1
The Consideration
1.1 Subject to the conditions set forth herein, Seller shall sell to Buyer
and Buyer shall purchase 1,900,000 shares from Xxxxxx Xxxxx, The
aggregate purchase price for the shares to be paid by Buyer to Seller
is $55,000 (the "Consideration") of which $55,000 is herewith paid in
escrow with Business Financial Systems, Inc., as full consideration
for the purchase of Sellers' shares if all of the terms and conditions
of this Agreement are met. The consideration to Seller for sale and
delivery of their shares is that from proceeds deposited with escrow
agent, escrow agent shall pay the purchase price of the Seller's
shares to the Sellers. Seller shall receive proceeds as follows:
$55,000 to Xxxxx.
1.2 CH shall sell 23,500,000 shares to Buyer for $45,000 and the following
consideration;
Buyer will loan the Company $25,000 in cash to be used with
the $45,000 share purchase price to pay the bills set forth in Schedule
3.17 of this Agreement. Such loan plus an amount for legal fees and
expenses to bring all SEC filings current and complete a proxy
statement estimated at $50,000 is convertible at Buyer's option into
common stock at the net tangible book value per share of the Company at
the conversion date or $.001 per share, which ever is greater, at any
time within two years after date hereof.
ARTICLE II
Closing and Issuance of Shares
2.1 The New Shares shall be issued by CH in escrow for delivery to Buyer
upon deposit of the consideration of $45,000 (plus $25,000 in loan
funds) in escrow for share purchase. The Purchase Shares shall be
deposited in escrow from Seller on deposit of $55,000 with escrow
agent. The escrow is subject to satisfaction of a) the conditions
precedent in Article VI, and b) procedures in Article V, and all other
terms and conditions of this Agreement.
2.2 Closing hereunder shall be completed by release from escrow of the
cash consideration, the loan proceeds and share certificates on or
before December 10, 2003 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 CH and Sellers
CH and Seller hereby, represents, warrants and covenants to Buyer as
follows:
3.1 CH 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 CH, which will be delivered
to Buyer at closing, are complete and accurate, and the minute books
of CH, copies of which have also been delivered to Buyer, contain a
record, which is complete and accurate in all material respects, of
all meetings, and all corporate actions of the shareholders and Board
of Directors of CH.
3.2 The authorized capital stock of CH consists of 50,000,000 shares of
common stock. There are 26,500,000 shares (approximately) of Common
Stock of CH issued and outstanding as of date hereof and will be prior
to closing. All such shares of capital stock of CH are validly issued,
fully paid, non-assessable and free of preemptive rights. CH 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 CH, or contracts or arrangements of any kind relating
to the issuance, sale or transfer of any capital stock or other equity
securities of CH. All outstanding options will be released in writing
and cancelled at the time of the closing of this transaction. This
Agreement has been duly authorized, validly executed and delivered on
behalf of CH and is a valid and binding agreement and obligation of CH
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 CH 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 CH will conflict with or result in a breach or violation of
the Articles of Incorporation or Bylaws of CH, or of any material
provisions of any indenture, mortgage, deed of trust or other material
agreement or instrument to which CH 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 CH, 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 CH
pursuant to the terms of any agreement or instrument to which CH is a
party or by which CH may be bound or to which any of CH 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 CH.
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 CH threatened against or relating to CH 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 CH is a party or by which CH or its assets,
properties, business or capital stock are bound.
3.5 CH 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 1986 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 CH for all current taxes and other charges to which CH
is subject and which are not currently due and payable. None of the
Federal income tax returns of CH have been audited by the Internal
Revenue Service or other foreign governmental tax agency. CH has no
knowledge of any additional assessments, adjustments or contingent tax
liability (whether federal or state) pending or threatened against CH
for any period, nor of any basis for any such assessment, adjustment
or contingency.
3.6 CH has delivered to Buyer unaudited financial statements for the
period ended June 30, 2003 and will provide September 30, 2003
unaudited financial statements. All such statements, herein sometimes
called "CH 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 CH for the periods indicated within the knowledge of CH
and/or Xxxxx. All financial statements of CH have been prepared in
accordance with generally accepted accounting principles.
3.7 As of the date hereof, CH, represents and warrants that all
outstanding indebtedness of CH is as shown on the financial statements
attached hereto (the updated statements), which include debts shown
and not shown in June 30, 2003 financial statements (See Schedule 3.8
hereto). 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 CH Financial Statements, there have not
been any material adverse changes in the business or condition,
financial or otherwise, of CH within the knowledge of CH and/or
Seller. CH does not have any liabilities, commitments or obligations,
secured or unsecured except as shown on updated financials (whether
accrued, absolute, contingent or otherwise).
3.9 CH is not a party to any contract performable in the future except,
and in conjunction with participation agreements on its oil and gas
interests.
3.10 The representations and warranties of CH and Seller shall be true and
correct as of the date hereof.
3.11 CH has delivered to Buyer, all of its corporate books and records for
review, and will turn over all original corporate records at closing
3.12 CH has no employee benefit plan in effect at this time.
3.13 No representation or warranty by CH or 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 Buyer has received copies of Form 10KSB as filed with the Securities
and Exchange Commission ("SEC") which included audits for the year
ended December 31, 2000 and each of its other reports to shareholders
filed with the SEC through the period. CH is a registered company
under the Securities Exchange Act of 1934, as amended but is not
current in its filings.
3.15 Seller has not made to Buyer any general solicitation or general
advertising regarding the shares of CH common stock.
3.16 CH has incurred no liabilities except as shown on the financial
statements and fees in conjunction with this transaction, which fees
incurred in conjunction with this transaction shall be paid at closing
3.17 Xxxxx and CH have attached a complete list of all obligations, leases,
notes, advances due, contracts and accounts payable upon which any
balance remains due and outstanding as Schedule 3.17 hereto, and such
is complete and accurate within the knowledge of Xxxxx and CH. It is a
requirement that the loan proceeds shall be used to settle all the
obligations and pay for the shareholders' meeting mailing up to
$10,000, except as to the shares issued for services under 8.14.
ARTICLE IV
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
VI, by CH common stock certificates for the Purchase Shares being
delivered, duly signed and guaranteed by Seller for 1,800,000 shares
of common stock to Buyer, and the issuance of the 23,500,000 share of
CH as Consideration for the share purchase, together with issuance 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 CH and Xxxxx 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 CH and Xxxxx in this
Agreement shall be true as though such representations and warranties
had been made or given on and as of the Closing Date, except to the
extent that such representations and warranties may be untrue on and
as of the Closing Date because of changes caused by transactions
suggested or approved in writing by the Buyer.
ARTICLE VI
Termination and Abandonment
6.1 Anything contained in this Agreement to the contrary notwithstanding,
the Agreement may be terminated and abandoned at any time prior to or
on the Closing Date:
(a) By mutual consent of parties;
(b) By either party, if any condition set forth in Article V or any
other Article relating to the other party has not been met or has
not been waived;
(c) By Buyer, if any suit, action, or other proceeding shall be
pending or threatened by the federal or a state government before
any court or governmental agency, in which it is sought to
restrain, prohibit, or otherwise affect the consummation of the
transactions contemplated hereby;
(d) By Buyer, if there is discovered any material error, misstatement
or omission in the representations and warranties of another
party;
(e) By CH, if the Closing does not occur, through no failure to act
by CH, on closing date, or if Buyer fails to deliver the
consideration required herein;
(f) If all of the outstanding liabilities cannot be settled for
$45,000, and audits to bring SEC filings current paid for within
the budget amount of $12,500;
(g) Buyer may cancel this agreement without penalty, and receive a
return of all monies in escrow if the aggregate debt settlement
amounts plus the costs of audits to bring SEC filings current
exceed $57,500.
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 CH: Cheyenne Resource, Inc.
To Buyer: Xxxx Xxxx Ventures LLC
0000 Xxxxxxxxx Xxxx., #000
Xxxxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
8.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of
the Buyer and Sellers. However, CH 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 CH and Buyer agree that Buyer and CH can and will cause the
effectuation, of a reverse split, of the common shares of CH issued
and outstanding at such date, in a ratio of one for 85 shares within
90 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 Buyer shall designate at least three new directors to be effective
subject to compliance with Section 14f of the Securities & Exchange
Act of 1934, and Seller and Xxxxx agree to appoint such Directors by
consent minutes to be drawn by Buyers attorney.
8.11 In connection with this Agreement the parties have appointed the
escrow agent, Business Financial Systems, Inc. which shall be
authorized by this agreement to do the following: The funds will be
disbursed to each of the debtors and Xxxxx.
1) Accept the deposit of $55,000 purchase price for Seller's shares,
$45,000 for share purchase from CH, and $25,000 loan from Buyer,
upon receipt of a copy of this Agreement signed by Sellers, CH
and Xxxxx, and Buyer and hold it in accordance with this
Agreement;
2) Accept the newly issued common stock certificates of CH duly
authorized for 23,500,000 common shares in name of Buyer and,
1,800,000 shares of CH duly executed from Seller;
3) Upon receipt of Directors & Officers Settlement Agreements for
compensation claims, audits and signed SEC filings to bring all
reporting current, Escrow Agent shall disburse the proceeds
received from the escrow in accordance with this Agreement;
4) Deliver the stock certificates to Buyer at:
_________________________;
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 agrees to sign, as CEO/CFO all filings and Sarbanes/Oxley
Certifications at closing, for all SEC filings required. Xxxxx shall
thereafter resign as CEO/CFO, and Xxxxxxx Xxxxxxxx and Xxx Xxxxxxx
shall resign effective upon compliance with Section 14f by mailing
Notice to Shareholders.
8.13 Concurrent with the execution hereof, the Board of CH shall appoint
two new directors, of Buyer's choice subject to compliance with
Section 14f.
8.14 Written Release and Waiver of any and all compensation, consulting, or
salary claims of Seller shall be delivered prior to Closing. The Board
shall authorize that Xxxxx shall be issued 90,000 S-8 shares (on a
post reverse split basis) for services rendered as a President and
30,000 shares to Xxxx Xxxx. Such shares shall be issued 90 days after
closing hereunder.
8.15 Due to the fact of ongoing plug and abandon liabilities and
fluctuations of gas and oil prices, and continuing necessity of
management and costs of litigation and accounting, Xxxxxx Xxxxx shall
have conveyed to him and he shall receive any and all Working interest
and Overiding Royalties in xxxxx in return for assumption of
liabilities.
8.16 Buyer intends to implement by shareholder meeting:
1) A reverse split of 1 for 85 shares;
2) Authorization of 250,000,000 shares of common stock;
3) Redomicile to Nevada;
4) Name change; and
5) New Directors
IN WITNESS WHEREOF, the parties have executed this Agreement this _____
day of __________________________, 2004.
Xxxxxx Xxxxx
---------------
BUYER: XXXX XXXX VENTURES LLC
CHEYENNE RESOURCES, INC.
By: _________________________________ By: ______________________________
Name: _______________________________ Name: ____________________________
Title: ________________________________ Tile: ______________________________
SCHEDULE 3.17
1. Xxxx Xxxx $10,000
2. Xxxxxx Xxxxx (reimbursement) $10,000
3. Xxxxxxx Xxxxxxx $12,500
4. Computershare $1,400
5. Bookkeeper $1,600
6. Xxx Xxxxxxx $15,000*
7. Xxxxxxx Xxxxxxxx $5,000*
8. Xxxx Xxxx $1,000
9. Xxxxxx Xxxxxxx $1,000
*for complete release for all compensation claims whatsoever for
services as officers or directors or consultants to Cheyenne Resources, Inc.
-----------
$57,500
