SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of November __,
2005, by and among Xxxx Xxxx Ventures, LLC ("Shareholder"), LD Acquisition LLC a
Delaware limited liability company, or its assigns ("Buyer"), and Xxxxx Xxxx
("Guarantor"), and for the certain limited purposes set forth herein Xxxxxxx
Xxxxxxx, Esq.
("Escrow Agent")
W I T N E S S E T H:
A. WHEREAS, Mountains West Exploration, Inc. is a corporation duly
organized under the laws of the State of New Mexico ("MW").
B. WHEREAS, Buyer wishes to purchase an aggregate of 425,000 shares
(the "Purchase Shares") of MW common stock, no par value ("Common Stock"), and
Shareholder wishes to sell the Purchase Shares to Buyer.
C. WHEREAS, Guarantor is the beneficial owner of the majority member
and the sole manager of Shareholder and wishes to guaranty the obligations of
Shareholder hereunder, and such guaranty is a material inducement to Buyer
entering into this Agreement.
NOW, THEREFORE, it is agreed among the parties as follows:
Article I
The Consideration
Subject to the terms and conditions set forth herein,
Shareholder shall sell to Buyer and Buyer shall purchase an aggregate of 425,000
shares of Common Stock from Shareholder. The purchase price for the shares to be
paid by Buyer to Shareholder is $230,000.00 (the "Consideration") which shall be
paid at closing by a wire transfer or transmittal of a cashier's check to the
escrow account for this transaction maintained by the Escrow Agent (the "Escrow
Account").
Article II
Closing
2.1 The Purchase Shares shall be delivered to Buyer duly issued, fully paid and
non-assessable by depositing same with Escrow Agent for delivery to Buyer, upon
receipt of the Consideration, and satisfaction of a) procedures in Article IV,
and b) the conditions precedent in Article V.
2.2 The closing of the transactions contemplated hereunder shall be completed by
delivery to Escrow Agent of the requisite closing documents and Consideration,
and delivery of the share certificate(s) to the Escrow Agent, on or before
November __, 2005 at 5:00 p.m. PST ("Closing Date") subject to satisfaction of
the terms and conditions set forth herein. The 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
Each of Shareholder and Guarantor hereby jointly and severally
represents, warrants and covenants to Buyer and agrees to those items specified
below, and Escrow Agent jointly and severally represents and warrants to Buyer
(to the extent specifically referencing Escrow Agent), each as follows:
3.1 MW is a corporation duly organized, validly existing and in good standing
under the laws of the State of New Mexico, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. MW has no active business operations or employees. The
Articles of Incorporation of MW, as amended (the "Articles"), and the Bylaws of
MW, as amended (the "Bylaws"), are complete and accurate, and the minute books
of MW, copies of which have also been made available to Buyer, contain a record,
which is complete and accurate in all material respects, of all meetings and all
corporate actions of the shareholders and Board of Directors of MW. Schedule 3.1
hereto contains true, complete and accurate copies of the Articles and Bylaws,
certified by the manager or managing member of the Shareholder.
3.2 The authorized capital stock of MW consists of 50,000,000 shares, all of
which are designated Common Stock. MW has no preferred stock authorized, issued
or outstanding. There are 1,000,018 shares of Common Stock of MW issued and
outstanding. All such shares of MW are validly issued, fully paid,
non-assessable and free of preemptive rights. MW has no outstanding options,
warrants, or other rights to purchase, or subscribe to, or other securities
convertible into or exchangeable for any shares of capital stock of MW, or
contracts or arrangements of any kind relating to the issuance, sale or transfer
of any capital stock or other equity securities of MW. All of the outstanding
shares of capital stock of MW have been offered, issued, sold and delivered in
compliance with applicable federal and state securities laws and none of such
securities were, at the time of issuance, subject to preemptive rights. None of
such issued and outstanding shares is the subject of any voting trust agreement
relating to the voting thereof or restricting in any way the sale or transfer
thereof.
3.3 Shareholder has good and valid title to the Purchase Shares and shall sell
the Purchase Shares free and clear of any lien, pledge, security interest or
other encumbrance, and the Buyer will acquire good and valid title to the
Purchase Shares, free and clear of any lien, pledge, security interest or other
encumbrance. None of the Purchase Shares are the subject of any voting trust
agreement or other agreement relating to the voting thereof or restricting in
any way the sale or transfer thereof. The Purchase Shares are Shareholder's
and/or Guarantor's (and their respective affiliates) only interests in MW.
3.4 MW does not own nor has it owned, in the last three years, any outstanding
shares of capital stock or other equity interests of any partnership, joint
venture, trust, corporation, limited liability company or other entity and there
are no obligations of MW to repurchase, redeem or otherwise acquire any capital
stock or equity interest of another entity.
3.5 This Agreement has been duly authorized, validly executed and delivered on
behalf of Shareholder, Guarantor and Escrow Agent and is a valid and binding
agreement and obligation of Shareholder, Guarantor and Escrow Agent, 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 each of
Shareholder, Guarantor and Escrow Agent has complete and unrestricted power to
enter into and, upon the appropriate approvals as required by law, to consummate
the transactions contemplated by this Agreement.
3.6 Neither the making of, nor the compliance with, the terms and provisions of
this Agreement and consummation of the transactions contemplated herein by
Shareholder will conflict with or result in a breach or violation of the
articles of organization, operating agreement or other governing document of
Shareholder or MW, or of any provisions of any indenture, mortgage, deed of
trust or other agreement or instrument to which Shareholder or MW is a party, or
of any 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
Shareholder or MW, or any of their respective properties or assets, or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of MW or Shareholder pursuant to the terms of any agreement
or instrument to which MW or Shareholder is a party or by which MW or
Shareholder may be bound or to which any of property of MW or Shareholder is
subject and no event has occurred with which lapse of time or action by a third
party could result in a breach or violation of or default by MW or Shareholder.
3.7 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 MW, the Shareholder,
Guarantor or Escrow Agent threatened against or relating to MW or affecting any
of its assets, properties, business or capital stock or with respect to
Shareholder's or Guarantor's interests in MW. There is no continuing order,
injunction or decree of any court, arbitrator or governmental authority to which
MW is a party or by which MW or its assets, properties, business or capital
stock are bound.
3.8 Each of Shareholder, Guarantor and Escrow Agent represent and warrant that
MW has truly, completely and accurately prepared and filed all federal, state
and other tax returns required by law, domestic and foreign, to be filed by it,
has paid or made provisions for the payment of all taxes due and all additional
assessments, and adequate provisions have been and are reflected in the
financial statements of MW for all current taxes and other charges to which MW
is subject and which are not currently due and payable. None of the Federal
income tax returns of MW have been audited by the Internal Revenue Service or
other foreign governmental tax agency. Each of MW, Shareholder, and Escrow Agent
has no knowledge of any additional assessments, adjustments or contingent tax
liability (whether federal or state) pending or threatened against MW for any
period, nor of any basis for any such assessment, adjustment or contingency.
3.9 MW has delivered to Buyer audited financial statements dated December 31,
2004, and unaudited interim financial statements for September 30, 2005. Each of
MW and Shareholder and Escrow Agent represent and warrant that such statements,
herein sometimes called "MW Financial Statements", are complete and correct in
all material respects and, together with the notes to these financial
statements, present fairly and completely the financial position and results of
operations of MW for the periods indicated. All financial statements of MW have
been prepared in accordance with generally accepted accounting principles.
3.10 As of the date hereof, each of MW and Shareholder and Escrow Agent
represent and warrant that all outstanding indebtedness of MW is as shown on the
financial statements (except for such additional liabilities payable as set
forth on Schedule 3.10) and all such scheduled indebtedness, if any, which will
be the sole responsibility of MW and shall be paid in full by MW at or before
the closing. In addition, at the closing, MW shall provide updated interim
financial statements as of the Closing Date specifying all accrued liabilities
of MW through such date (including legal fees of Escrow Agent related to the
transactions through the Closing Date).
3.11 Since the respective dates of the MW Financial Statements, there have not
been any material adverse changes in the business or condition or prospects,
financial or otherwise, of MW. MW does not have any liabilities, commitments or
obligations, secured or unsecured except as shown on updated financials (whether
accrued, absolute, contingent or otherwise) or accrued expenses related to the
transactions contemplated by this Agreement.
3.12 MW is not a party to any contract performable in the future. MW is not
liable on or party to any existing contract or subject to any existing contract,
except its Transfer Agent Agreement which contains no material obligations of
the Company. MW shall not enter into any contract from the date hereof through
the Closing Date without the prior written consent of Buyer.
3.13 The representations and warranties of the MW and Shareholder and Escrow
Agent set forth herein shall be true and correct as of the date hereof and the
Closing Date.
3.14 MW shall deliver to Buyer all of its corporate books and records at
closing.
3.15 MW has no employee benefit plan in effect at this time (nor any accrued
liability related to any former plan), and no open benefits or stock options or
warrants are outstanding as of date hereof and it is not now, nor ever has been,
part of a controlled group contributing to any defined contribution plan and is
not, nor never has been, a party to any collective bargaining agreement or other
employment contracts.
3.16 No representation or warranty by Shareholder, Guarantor or Escrow Agent in
this Agreement, or any certificate, report or certificate delivered pursuant
hereto or in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading or omits or
will omit to state a material fact necessary in order to provide Buyer with full
and proper information as to the business, financial condition, assets,
liabilities, results of operation or prospects of MW.
3.17 Buyer has received a copy of MW's most recent Form 10KSB as filed with the
Securities and Exchange Commission ("SEC") which includes audits for the year
ended December 31, 2004 and each of its other reports filed with the SEC through
the period ended September 30, 2005. MW is a registered company under the
Securities Exchange Act of 1934, as amended.
3.18 Each of Shareholder and the Company represent and warrant that MW has filed
all reports required to be filed by it under, and is in compliance with, the
Securities Exchange Act of 1934, as amended (the "Federal Securities Laws"). No
such reports, or any reports contained any untrue statement of material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements in such report, in light of the circumstances under which
they were made, not misleading. Following the closing, Shareholder shall make
all necessary filings related to the transaction contemplated hereby in
accordance with applicable Federal Securities Laws.
3.19 The Buyer has not received any general solicitation or general advertising
regarding the shares of MW's Common Stock.
3.20 MW has no Liabilities except as shown on the financial statements and those
fees incurred in this transaction which shall be paid at or prior to closing by
MW. "Liabilities" shall mean any direct or indirect indebtedness, liability,
claim, loss, damage, deficiency, obligation or responsibility, known or unknown,
fixed or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise, including, without
limitation, liabilities on account of taxes, other governmental charges or
litigation, whether or not of a kind required by GAAP to be set forth on a
financial statement.
3.21 Each of MW, Shareholder, and Escrow Agent represent and warrant that there
have been no material changes, debts, or liabilities incurred by MW since the
date of 10QSB for September 30, 2005, or since then to date hereof, except legal
and accounting fees for such 10QSB filing and the legal fees incurred in
connection with this transaction.
3.22 Buyer will receive a good standing certificate from the State of New Mexico
and an updated list of the Company's shareholders (the "Shareholders List") at
the time of closing.
3.23 There are presently two (2) directors of MW and no director nominees.
3.24 MW does not own any fee simple interest in real property. MW does not
lease, sublease, or have any other contractual interest in any real property.
3.25 MW is not a party to any guaranty, and no person is a party to any guaranty
for the benefit of MW.
3.26 None of the property used by MW presently or in the past has been used to
manufacture, treat, store, or dispose of any hazardous substance and such
property is free of all such substances such that the condition of the property
is in compliance with applicable environmental laws. MW is in compliance with
all environmental law applicable to MW or its business and has received no
notice of any noncompliance with such laws.
Article IV
Procedure for Closing
4.1 At the Closing Date, upon satisfaction of all conditions precedent set forth
in Article V, the purchase and sale contemplated hereby shall be consummated by
shareholder's delivery Common Stock certificates for the Purchase Shares to
Escrow Agent, together with appropriate stock powers, and Buyer's delivery of
the Consideration to Escrow Agent, together with delivery of all other items,
agreements, warranties, and representations set forth in this Agreement.
4.2 Escrow Agent for transaction is Xxxxxxx X. Xxxxxxx Attorney, 0000 Xxxxxxx
Xxxx, Xxxxxx, XX 00000.
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 Shareholder, Guarantor, Escrow Agent and Buyer shall have performed and
complied with all of their respective obligations hereunder which are to be
complied with or performed on or before the Closing Date.
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 Shareholder, Guarantor and Escrow
Agent in this Agreement shall be true as though such representations and
warranties had been made or given on and as of the Closing Date.
5.4 Shareholder shall provide written proof, together with names and contact
numbers for verification by Buyer, that all of the accrued, unpaid obligations
of MW through the Closing Date have either been satisfied in full or are capable
of being satisfied in full, including but not limited to the following:
(i) all accounts payable and loans outstanding as evidenced in the Form
10QSB for the period ended September 30, 2005 and as set forth on the
Closing Date financial statements; and
(ii) all obligations of MW through closing to each of Shareholder, Escrow
Agent, Jaspers & Hall LLC, and the transfer agent of MW, American Stock
Transfer.
5.5 Shareholder's counsel shall deliver an opinion in form reasonably acceptable
to Buyer and its counsel.
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 Shareholder or Buyer, if any condition set forth in Article V relating to
the other party has not been met or has not been waived by the party to whose
benefit the condition runs;
(c) By Shareholder or Buyer, if any suit, action, or other proceeding shall be
pending or threatened by the federal or a state government before any court or
governmental agency, in which it is sought to restrain, prohibit, or otherwise
affect the consummation of the transactions contemplated hereby;
(d) By Shareholder or Buyer, if there is discovered any material error,
misstatement or omission in the representations and warranties of another party;
(e) By Shareholder, if the closing does not occur, through no failure to act by
Shareholder, on the Closing Date, or if Buyer fails to deliver the Consideration
required herein; or
(f) By Buyer, if Shareholder fails to take all actions necessary to effect
the closing by the Closing Date.
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
respective board of directors or managers; provided, however, that such action
shall be taken only if, in the judgment of such respective board of directors or
managers 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 the covenants and agreements of the parties hereto shall survive
after the closing for a period of two (2) years.
7.2 There are no representations whatsoever about any matter relating to
Shareholder or the Purchase Shares, except as is contained in the express
language of this Agreement.
7.3 Shareholder and Guarantor jointly and severally agree to indemnify, defend
and hold harmless Buyer from and against any and all demands, claims,
complaints, actions or causes of action, suits, proceedings, investigations,
arbitrations, assessments, losses, damages, liabilities, costs and expenses,
including, but not limited to, interest, penalties and reasonable attorneys'
fees and disbursements ("Losses"), asserted against, imposed upon or incurred by
Buyer or MW directly or indirectly, by reason of or resulting from (a) any
misrepresentation or breach of the representations and warranties of
Shareholder, or Guarantor or Escrow Agent contained in or made pursuant to this
Agreement; (b) any noncompliance by Shareholder, Guarantor or Escrow Agent with
any covenants, agreements or undertakings of Guarantor, Shareholder or Escrow
Agent contained in this Agreement or made pursuant to any agreement contemplated
by this Agreement and to which any of Shareholder, Guarantor or Escrow Agent is
a party; (c) any claims by third parties against the Purchase Shares arising out
of or relating to any transaction on or prior to the Closing Date or (d) any
action or inaction on or prior to the Closing Date or any state of facts
existing on or prior to the Closing Date.
7.4 Escrow Agent agrees to indemnify, defend and hold harmless Buyer from and
against any and all Losses, asserted against, imposed upon or incurred by Buyer
or MW directly or indirectly, by reason of or resulting from any
misrepresentation or breach of the representations and warranties of Escrow
Agent contained in or made pursuant to this Agreement.
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.
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 reasonable 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 all 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:
If to Shareholder or Guarantor: c/o Xxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to Buyer: c/o LD Acquisition LLC
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
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 Shareholder.
8.7 This Agreement shall be governed by and construed in accordance with and
enforced under the laws of the state of Delaware applicable to all agreements
made hereunder. Venue and jurisdiction for any legal actions hereunder shall be
District Court in and for Newcastle County, Delaware.
8.8 In connection with this Agreement, the Buyer has appointed Xxxxxxx X.
Xxxxxxx, Esq. as its Escrow Agent to do the following upon receipt by Escrow
Agent of a signed certificate from Buyer and from Shareholder certifying that
all conditions precedent to closing have been satisfied in full:
(a) Transmit the Consideration of $230,000.00 to Shareholder for the
Purchase Shares;
(b) Accept the Common Stock certificates of Shareholder with duly signed
and guaranteed signatures for the Purchase Shares, together with the
appropriate stock powers and record such transfer of the corporate
records;
(c) Transmit by Federal Express the stock certificates to Buyer pursuant
to its instruction at the notice address set forth above;
(d) In the event of default in delivery of cash or certificates by a party
under this Agreement, any cash or certificates received from the other
party shall be returned to the remitting party three (3) business days
after demand by the remitting party; and
(e) Escrow Agent is specifically indemnified and held harmless hereby for
his 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 (10) 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.
8.9 Buyer reserves the right to assign any of its rights and obligations
hereunder to an affiliate.
8.10 Guarantor hereby unconditionally, absolutely and irrevocably guarantees the
full and punctual payment and performance when due, whether by declaration,
acceleration, demand, or otherwise, of the Shareholder, MW or Escrow Agent. The
liability of Guarantor under this Section 8.10 is irrevocable, absolute,
independent and unconditional and is exclusive and independent of any security
for or other, and the liability of Guarantor hereunder shall not be affected or
impaired by any circumstances or occurrence whatsoever.
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IN WITNESS WHEREOF, the parties have executed this Agreement this _____
day of November, 2005.
SHAREHOLDER:
Xxxx Xxxx Ventures, LLC
By:_______________________________
Its:____________________________
BUYER:
LD Acquisition LLC, a Delaware limited liability
GUARANTOR:
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Xxxxx Xxxx
ESCROW AGENT:
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Xxxxxxx Xxxxxxx, Esq.
