Exhibit 2.1 - Stock Exchange Agreement between Narhaniel Energy
and MNS Eagle Equity Group IV, Inc. ("MNS)-
its Shareholders
STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT (the "Agreement") dated as of December 31, 2002 by and
between ▇▇▇▇▇▇▇▇▇ Energy Corporation, a Delaware corporation ("NECX" or the
"Company"), MNS Eagle Equity Group IV, Inc. ("MNS") and those shareholders of
MNS who have executed a counterpart of this Agreement (the "MNS Holders").
WITNESSETH:
WHEREAS, NECX wishes to acquire all of the issued and outstanding stock of
MNS in exchange for total consideration of 50,000 shares of common stock of NECX
and $25,000 in cash ($20,750 for the MNS shares and $4,250 for the MNS
payables); and
WHEREAS, NECX and the MNS Holders are entering into this Agreement to
provide for the acquisition by NECX of the 647,584 shares of MNS held by the MNS
Holders (the "MNS Shares"), which today do and as of the closing of the
transactions herein contemplated shall constitute 100.0% of the issued and
outstanding capital shares of MNS, in exchange for payment to them of their
prorata share of the total consideration; and
WHEREAS, it is the intention of the parties that (i) MNS be operated as a
wholly owned subsidiary with its own board of directors but including
representatives of NECX; and that (ii) the transaction be tax free under either
Section 368 or Section 351 of the Internal Revenue Code of 1986, as amended; and
WHEREAS, MNS's common stock is registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended, (the "Act") and its reports
required to be filed in compliance with such registration are current; and
WHEREAS, the intent of the parties is that NECX will succeed, as a result
of the transaction contemplated by this Agreement, to the registration of MNS
pursuant to Section 12(g) of the Act, in reliance upon Rule 12g-3(a) thereunder,
subject to the filing of a report on Form 8-K which contains the information
about NECX that would be contained in an annual report on Form 10-K;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the sufficiency of which is acknowledged, the parties
hereto hereby agree that:
1. Purchase and Sale of Securities.
1.1 Purchase and Sale of MNS Shares. On the terms and subject to the
conditions set forth in this Agreement, NECX hereby purchases all of the 647,584
MNS Shares from the MNS Holders, and the MNS Holders hereby sell the MNS Shares
to NECX (the "Exchange").
1.2 Purchase Price. In payment for all the MNS Shares, NECX hereby
agrees to ratably pay and deliver to the MNS Holders at Closing a total of
US$20,750.00 in cash and 50,000 shares of the common stock of NECX (the "NECX
Shares") in the proportions set forth on SCHEDULE 1.2; and the MNS Holders
hereby agree to convey and deliver all of the MNS Shares to NECX at closing. All
of the MNS Shares and the NECX Shares must at closing be duly authorized, fully
paid and validly issued, free of all liens, claims and encumbrances. The MNS
Shares, and the cash and NECX Shares payable to the MNS Holders, shall be
delivered to ▇▇▇▇▇▇▇ & Company, Attorneys at Law, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as Closing agent for delivery to the proper parties, and
delivery to such firm shall constitute delivery to the parties. The "Closing"
shall be the date the MNS Shares, cash and NECX Shares are delivered to such
firm. The Closing agent shall deliver a written report to NECX and MNS
reflecting the fact and manner of closing. Closing must occur on or before
December 31, 2002.
1.3 Payment of MNS Liabilities. At Closing, NECX shall also pay all
liabilities of MNS in the total amount of US$4,250.00, which shall occur as
stated in this paragraph. Such amount shall be delivered in good funds prior to
Closing to ▇▇▇▇▇▇▇ & Company, attorneys at law. ▇▇▇▇▇▇▇ & Company shall deposit
such funds in its Client Trust Account and pay them to the creditors of MNS and
shall deliver a written accounting to NECX of all such payments.
2. Company's Representations and Warranties. The Company represents
and warrants to MNS and the MNS Holders that:
2.1 Due Organization. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to own,
operate, and lease its respective properties and assets and to conduct its
respective businesses as now conducted, and is qualified to do business in the
state or other jurisdiction where the nature of its properties, assets, or
businesses as now conducted, and is qualified to do business in the state or
other jurisdiction where the nature of its properties, assets, or businesses
requires such qualification other than where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
the condition, financial or otherwise, of the business, operations, affairs,
properties, or assets. This shall be referred to as the "Condition of the
Company."
2.2 Compliance with Law. The Company has obtained and maintains in
full force and effect all permits, licenses, consents, approvals, registrations,
memberships, authorizations, and qualifications under all federal, state, local,
and foreign laws and regulations, and with all federal, state, local, and
foreign governmental or regulatory authorities ("Authority") required for the
conduct by it of its businesses and the ownership or possession by it of its
properties and assets other than where the failure to obtain or maintain such
permits, licenses, consents, approvals, registrations, memberships,
authorizations, or qualifications could not, individually or in the aggregate,
have a material adverse effect on the Condition of the Company. The Company is
in compliance with all laws, regulations, ordinances, orders, and decrees
(including, without limitation, all environmental and occupational, health, and
safety laws) of any Authority applicable to the conduct by the Company of its
business and to its ownership and possession of its properties and assets other
than where the failure so to comply would not, individually or in the aggregate,
have a material adverse effect on the Condition of the Company.
2.3 Authorization, Execution, and Delivery of Agreement.
(a) The execution and delivery of this Agreement, the issuance and
sale of the NECX Shares to MNS, and the consummation of the transactions
contemplated hereby (i) are within the corporate power and authority of the
Company, (ii) do not require the approval or consent of any stockholders of the
Company, and (iii) have been duly authorized by all necessary corporate power on
the part of the Company. This Agreement has been duly authorized by all
necessary corporate power on the part of the Company. This Agreement has been
duly executed and delivered by the company, and this Agreement constitutes the
legal, valid, binding, and enforceable obligation of the Company, subject to
applicable bankruptcy, insolvency, and similar laws affecting creditors' rights
generally, and subject as to enforceability under general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(b) The NECX Shares have been duly authorized by all necessary
corporate action on the part of the Company and when issued will be validly
issued, fully paid, and nonassessable, and the MNS Holders will acquire valid
title to such shares, free and clear of any preemptive rights and any
encumbrances and claims of third persons.
2.4 Financial Statements. The Company's audited financial
statements for the periods ending December 31, 2001 and 2000 are true, correct
and complete, and have been prepared in accordance with generally accepted
accounting principles and standards and all applicable SEC rules.
2.5 No Misrepresentation. This Agreement and the Company's draft of
a Form 10SB-12G previously furnished contain no untrue statement of a material
fact, nor omit to state a material fact about the Company necessary to make the
statements contained herein and therein not misleading.
2.6 Capitalization. The Company has authorized 75,000,000 shares of
common stock of which 35,433,267 are issued and outstanding and 2,000,000 shares
of Preferred Stock of which none are issued and outstanding. The Board of
Directors has the right to issue preferred stock in series with the relative
rights, designations and preferences determined by the Board of Directors from
time to time.
3. Representations and Warranties of MNS and the MNS HOLDERS. MNS,
its directors, officers and controlling stockholders severally and personally
represent and warrant to the Company that:
3.1 Capitalization of MNS. MNS has authorized 50,000,000 shares of
common stock of which 647,584 are issued and outstanding and 5,000,000 shares of
Preferred Stock of which none are issued and outstanding. There are no options,
warrants or other rights pursuant to which any person has the right to purchase
or acquire capital shares of MNS, nor any instrument convertible into or
exchangeable for capital shares of MNS.
3.2 Registration under the Act. MSN's common stock is effectively
registered under the Act, which registration is and at the date of closing the
transaction contemplated by this Agreement will be in full effect. MSN has
filed, and at the date of closing the transaction contemplated by this Agreement
will have filed all reports required to be filed under the Act, all such reports
contain all of the information required to be contained therein and all such
information is materially accurate and complete, and does not omit to state any
information required to make the information contained therein not misleading.
3.3 Execution and Delivery of Agreement. This Agreement has been
duly executed and delivered by and constitutes a legal, valid, binding, and
enforceable obligation of MNS and each of the MNS Holders, subject to applicable
bankruptcy, insolvency, and similar laws affecting creditors' rights generally,
and subject as to enforceability under general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
3.4 Purchase Entirely for Own Account. The MNS Holders each confirm
that they are acquiring the NECX Shares for their respective own accounts and
not as a nominee or agent for any person, and each is acquiring the NECX Shares
for investment and not with a view to the resale or distribution of any part
thereof, other than as permitted by applicable federal and state securities
laws, and no MNS Holder is a party to any contract, undertaking, agreement, or
arrangement with any person to sell, transfer, or grant participation to such
person or to any third person with respect to any of the NECX Shares.
3.5 Representations and Warranties Correct. To the best knowledge of
each of the MNS Holders, the representations and warranties of MNS herein are
true and correct, and MNS has full power and authority to enter into this
Agreement.
3.6 Receipt of Documents. The MNS Holders each acknowledge that his,
her or its investment is based solely on the description of the Company given by
the agents of the Company without any written disclosures, but also by inviting
the MNS Holders to discuss the Company with the Company's officers or its
professional advisors.
3.7 Access to Information about NECX. The MNS Holders each have
had the opportunity to discuss the Company's business and affairs with such
officers or other officials of the Company and/or agents as they have deemed
necessary or appropriate, and each believes that he, she or it has received all
the information considered necessary or appropriate for deciding whether to
purchase the NECX Shares. Notwithstanding the foregoing, MNS and the MNS Holders
represent and warrant that MNS has no assets and mininal liabilities, no
contracts or agreements respecting MNS or the MNS Shares, MNS has engaged in no
business of any kind since its inception, there are no preemptive rights as to
the MNS Shares, and no options or other rights exist whereby any person is
entitled to buy or acquire the MNS Controll Shares or any other shares of MNS.
3.8 Restricted Securities. Each MNS Holder understands and
acknowledges that the NECX Shares he or she is purchasing are characterized as
restricted securities under the U.S. federal securities laws because they were
acquired from the Company in a transaction not involving a public offering, and
that under such laws and applicable regulations the securities may be resold or
otherwise transferred without registration under the Securities Act of 1933 and
other applicable laws only in certain limited circumstances.
3.9 Legend. The MNS Holders each understand and acknowledge that
all certificates evidencing the NECX Shares shall, unless and until removed in
accordance with law, bear a legend in substantially the following form:
"These securities have not been registered under the Securities Act of
1933. They may not be sold, offered for sale, pledged, or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel satisfactory to Company that such
registration is not required or unless sold under Rule 144 of the Securities
Act."
3.10 Ownership of MNS Shares; Etc. Each MNS Holder owns good and
merchantable title to the MNS Shares, free and clear of all liens, claims and
encumbrances of third persons, and each owns the number of shares set forth next
to his, her or its respective name.
3.11 Registration under the Act. MSN's common stock is effectively
registered under the Act, which registration is and at the date of closing the
transaction contemplated by this Agreement will be in full effect.
3.12 Reports Current, Accurate and Complete. MSN has filed, and
at the date of closing the transaction contemplated by this Agreement will have
filed all reports required to be filed under the Act, all such reports contain
all of the information required to be contained therein and all such information
is materially accurate and complete, and does not omit to state any information
required to make the information contained therein not misleading.
3.13 Knowledge of Impairment. There is no known reason, whether
in fact or in law, which would prevent NECX from succeeding to MNS's
registration under the Act; nor are there any facts which could pose an
impediment to NECX being treated as a fully reporting company under the Act,
subject to NECX filing a report on Form 8-K disclosing information about NECX
which would be required to be included in a report on Form 10-K.
4. Additional Covenants.
4.1 Covenants of MNS. MNS hereby covenants and agrees to perform or
do after Closing the following: (i) nominate and elect a board of directors
consisting of persons designated by NECX; and (ii) l cooperate with the Company
in any respect required to carry out the purposes of this Agreement, including
the execution and delivery of any additional documents deemed by counsel to the
Company to be required.
4.2 Piggyback Registration Rights. If NECX should register any of
its Common Stock or other securities under the Act, either for its own account
or for the account of a security holder or holders other than the MNS Holders,
other than (i) a registration relating solely to employee benefit plans, or (ii)
a registration relating solely to a transaction of the type described in Rule
145(a) of the Securities and Exchange Commission ("SEC") under the Act, NECX
shall, at such time, promptly give each MNS Holder written notice of the
proposed registration. Upon the written request of a Holder given within 20
days after mailing of such notice by NECX, then NECX shall cause to be
registered under the Act all of the NECX Shares that such Holder has requested
to be registered. Whenever required under this Section to effect the
registration of any NECX Shares, NECX shall, as expeditiously as is practicable:
(a) Prepare and file with the SEC a registration statement including
the requested NECX Shares and use its best efforts to cause such registration
statement to become effective, and keep such registration statement effective
for a period of up to 120 days or until the distribution contemplated in such
Registration Statement has been completed; provided, however, that such 120-day
period shall be extended as to an MNS Holder for a period of time equal to the
period the MNS Holder refrains from selling any securities included in such
registration at the request of NECX or of an underwriter of securities of NECX.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the MNS Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of NECX Shares owned by them.
(d) Register or qualify the NECX Shares covered by such registration
statement under the securities or "blue sky" laws of such jurisdictions as the
MNS Holders reasonably request.
(e) Notify each MNS Holder at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
In the event an managing underwriter engaged to effect the sale of securities
subject to any registration statement in which the MNS Holders are entitled
under this Section to include their NECX shares determines that such inclusion
would not be in the best interest of the offering, then such shares shall not be
included and the covenant herein given shall be extended to the next subsequent
registration statement to the same effect as provided herein.
4.2 Covenant as to Liquidated Damages. In the event NECX is unable
for any reason to succeed to the registration of MNS under the Act or encounters
material difficulty with respect to such registration due to events or
conditions with respect to MSN which occurred or existed prior to the
transaction contemplated by this Agreement, then, as liquidated damages in favor
or NECX, the stockholders of MSN who received NECX stock and/or cash pursuant to
this agreement shall return such stock to NECX for cancellation and repay such
cash to NECX; and NECX shall have no liability or obligation to any such person
arising out of this Agreement or the transactions contemplated hereby, including
any obligation to return the stock of MSN to the persons from whom NECX received
it. In the event it shall be demonstrated that MSN has made any material
misrepresentation herein or omission herefrom, or is in breach of any
representation or warranty, then the damages recoverable by NECX with respect
thereto shall be limited to the consideration delivered by NECX under this
Agreement.
5. General Provisions.
5.1 Survival of Representations, Warranties and Agreement.
Notwithstanding any investigation conducted or notice or knowledge obtained by
or on behalf of any party hereto, the representation and warranty in this
Agreement shall survive the sale and delivery of the NECX Shares and MNS Shares
under the terms of this Agreement.
5.2 Expenses. Each party hereto shall pay its, his or her own
expenses incidental to the preparation of this Agreement, the carrying out of
the provisions hereof, and the consummation of the transaction contemplated
hereby.
5.3 Laws. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Colorado, United States of America.
5.4. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties, and supersedes and integrates
all prior oral or written agreements, if any, and may only be modified by
written amendment signed by an authorized representative of each party.
5.5. No Conflicting Agreements. Each party states that there is no
agreement between itself and any other person, firm, or corporation which would
cause this Agreement not to have full force and effect.
5.6 Notices. Any notice required or permitted to be given to a party
may be given by U.S. mail, by messenger or courier service or by facsimile
transmission, to the addresses below or any other addresses subsequently
provided in wriitng; if to MNS or an MNS Holder to:
MNS Eagle Equity Group IV, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to NECX:
▇▇▇▇▇▇▇▇▇ Energy Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
5.7 No Conflicts of Interest; No Legal Advice. NECX acknowledges that
▇▇▇▇ ▇▇▇▇▇▇▇, the principal of ▇▇▇▇▇▇▇ & Company, attorneys at law, is an MNS
Holder, is a beneficial owner of MNS Holder Yakima Corp., and married to MNS
Holder ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and NECX waives any conflicts from his acting as closing
agent for these transactions in light of his interest in MNS. NECX also
acknowledges that it has not received any legal advice or counsel from ▇▇▇▇
▇▇▇▇▇▇▇ and has relied solely upon its own counsel or advisers. Neither NECX nor
its counsel has given any legal or other advice to MNS or any MNS Holder.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as
of the date first written above.
▇▇▇▇▇▇▇▇▇ Energy Corporation MNS Eagle Eguity Group IV, Inc. ("MNS")
("Company")
By.......................... By................................
Authorized Officer ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Pres., CEO
SIGNATURES of the MNS HOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (284,689) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. (263,189)
X........................... X.................................
Signature Signature
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (12,500) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (5,000)
X........................... X.................................
Signature Signature
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CF ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CF
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (5,000) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (5,000)
X........................... X.................................
Signature Signature
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (10,000) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Children's Trust (5,000)
X........................... X.................................
Signature Signature
▇.▇. ▇▇▇▇▇▇▇▇▇ (500) YAKIMA CORP. (20,000)
By.......................... By................................
Signature ▇▇▇▇ ▇▇▇▇▇▇▇, Vice Pres.
▇▇▇▇▇▇▇ ▇▇▇▇▇ (1,000) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (10,000)
X........................... X.................................
Signature Signature
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (2,000) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (25,000)
X........................... By................................
Signature Signature
SCHEDULE 1.2
DELIVERIES TO THE MNS HOLDERS
MNS NECX
Shares Cash Shares
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 284,689 $ 9,122.06 21,981
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. 263,189 $ 8,433.16 20,321
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 12,500 $ 400.53 965
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,000 $ 160.21 386
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
CF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,000 $ 160.21 386
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
CF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,000 $ 160.21 386
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,000 $ 320.42 772
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Children's Trust 5,000 $ 160.21 386
YAKIMA CORP. 20,000 $ 640.84 1,544
▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,000 $ 32.04 77
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,000 $ 320.42 772
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,000 $ 64.08 155
▇.▇. ▇▇▇▇▇▇▇▇▇ 500 $ 16.02 39
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 23,706 $ 759.59 1,830
------- ---------- ------
TOTALS 647,584 $20,750.00 50,000
