EXHIBIT 10.2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
MOUNTAINS WEST EXPLORATION, INC.,
MW Co,
SUPERIOR ENERGY LLC,
a Limited Liability Company
April 28, 2005
TABLE OF CONTENTS
ARTICLE I Definitions..............................................1
ARTICLE II Transactions; Terms of Merger;
Manner of Converting Shares..............................5
2.1 Merger.......................................................5
2.2 Time and Place of Closing....................................5
2.3 Effective Time...............................................5
2.4 Charter......................................................5
2.5 Bylaws.......................................................5
2.6 Directors and Officers.......................................5
2.7 Conversion of Shares.........................................5
2.8 Exchange of Shares...........................................6
2.9 Rights of Former Superior Stockholders.......................6
2.10 Legending of Shares..........................................7
2.11 Fractional Shares............................................7
2.12 Lost, Stolen or Destroyed Certificates.......................7
ARTICLE III Representations and Warranties of MWEX, PURCHASER and
THE MWEX Insiders.......................................7
3.1 Organization; Standing and Power.............................7
3.2 Authorization; Enforceability................................8
3.3 No Violation or Conflict.....................................8
3.4 Consents of Governmental Authorities and Others..............8
3.5 Conduct of Business..........................................9
3.6 Litigation...................................................9
3.7 Brokers......................................................9
3.8 Compliance..................................................10
3.9 Charter, Bylaws and Corporate Records.......................10
3.10 Subsidiaries and Investments................................10
3.11 Capitalization..............................................10
3.12 Rights, Warrants, Options...................................11
3.13 Commission Filings and Financial Statements.................11
3.14 Absence of Undisclosed Liabilities..........................11
3.15 Real Property...............................................11
3.16 List of Accounts and Proxies................................12
3.17 Personnel...................................................12
3.18 Employment Agreements and Employee Benefit Plans............12
3.19 Tax Matters.................................................13
3.20 Material Agreements.........................................13
3.21 Guaranties..................................................14
3.22 Environmental Matters.......................................14
3.23 Absence of Certain Business Practices.......................14
3.24 Disclosure..................................................15
ARTICLE IV Representations and Warranties of Superior..............15
4.1 Organization................................................15
4.2 Authorization; Enforceability...............................15
4.3 No Violation or Conflict....................................16
4.4 Consents of Governmental Authorities and Others.............16
4.5 Brokers.....................................................16
4.6 Charter, Bylaws and Corporate Records.......................16
4.7 Subsidiaries and Investments................................16
4.8 Capitalization..............................................16
4.9 Rights, Warrants, Options...................................17
ARTICLE V Additional Agreements...................................17
5.1 Survival of the Representations and Warranties..............17
5.2 Investigation...............................................17
5.3 Indemnification.............................................17
5.4 Indemnity Procedure.........................................18
5.5 General Release.............................................19
ARTICLE VI Closing; Deliveries; Conditions Precedent...............19
6.1 Closing; Effective Date.....................................19
6.2 Deliveries..................................................20
6.3 Conditions Precedent to the Obligations of Superior.........21
6.4 Conditions Precedent to the Obligations of MWEX.............23
6.5 Best Efforts................................................23
6.6 Termination.................................................23
ARTICLE VII Covenants...............................................24
7.1 General Confidentiality.....................................24
7.2 Continuing Obligations......................................25
7.3 Satisfaction of Certain Outstanding Payables................25
7.4 Tax Matters.................................................25
ARTICLE VIII Miscellaneous...........................................25
8.1 Notices.....................................................25
8.2 Entire Agreement; Incorporation.............................26
8.3 Binding Effect..............................................27
8.4 Assignment..................................................27
8.5 Waiver and Amendment........................................27
8.6 No Third Party Beneficiary..................................27
8.7 Severability................................................27
8.8 Expenses....................................................27
8.9 Headings....................................................28
8.10 Other Remedies; Injunctive Relief...........................28
8.11 Counterparts................................................28
8.12 Remedies Exclusive..........................................28
8.13 Jurisdiction and Venue......................................28
8.14 Participation of Parties....................................28
8.15 Further Assurances..........................................29
8.16 Publicity...................................................29
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of April __,
2005, by and among Superior Energy LLC, a Delaware Limited Liability Company
("Superior Energy LLC"); MOUNTAINS WEST EXPLORATION, INC., a New Mexico
corporation ("MWEX"); MWEX (as defined in Article I) and MW Co, a Colorado
corporation (the "Purchaser").
W I T N E S S E T H:
Preamble
The respective Boards of Directors of Superior, MWEX and Purchaser are
of the opinion that the transactions described herein are in the best interests
of the parties to this Agreement and their respective stockholders. This
Agreement provides for the acquisition of Superior by MWEX pursuant to the
merger of Purchaser with Superior. At the effective time of such merger, the
outstanding shares of the capital stock of Superior shall be converted into the
right to receive shares of the common stock of MWEX. As a result, the
stockholders of Superior shall become stockholders of MWEX and Superior shall
continue to conduct its business and operations as a wholly owned subsidiary of
MWEX. The transactions described in this Agreement are subject to the
satisfaction of certain other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the Merger for federal income
tax purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Code.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:
ARTICLE I
Definitions
In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:
"Affiliate" shall mean with respect to a specified Person, any other
Person which, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes, with respect to a
Person (a) any other Person which beneficially owns or holds ten percent (10%)
or more of any class of voting securities or other securities convertible into
voting securities of such Person or beneficially owns or holds ten percent (10%)
or more of any other equity interests in such Person, (b) any other Person with
respect to which such Person beneficially owns or holds ten percent (10%) or
more of any class of voting securities or other securities convertible into
voting securities of such Person, or owns or holds ten percent (10%) or more of
the equity interests of the other Person, and (c) any director or senior officer
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of such Person. For purposes of this definition, the term "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agreement" shall mean this Agreement and Plan of Merger together with all
exhibits and schedules referred to herein, which exhibits and schedules are
incorporated herein and made a part hereof.
"Certificates" shall have the meaning set forth in Section 2.8.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall mean the date that the Closing takes place.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Consideration Shares" shall have the meaning set forth in Section 2.7(c).
"Effective Time" shall have the meaning set forth in Section 2.3.
"Employee Benefit Plans" shall have the meaning set forth in Section 3.18.
"Environmental Laws" shall have the meaning set forth in Section 3.22.
"ERISA" shall have the meaning set forth in Section 3.18.
"Exchange Ratio" shall have the meaning set forth in Section 2.7(c).
"Financial Statements of MWEX" shall mean (i) the audited balance sheet and
the audited statements of income, cash flow and retained earnings of MWEX for
the twelve (12) month period ended December 31, 2004, and (ii) the audited
balance sheet and the audited statements of income, cash flow and retained
earnings of MWEX for the fiscal year ended July 31, 2004, including in each such
case any related notes, each prepared according to GAAP consistently applied
with prior periods, except as set forth on Schedule 3.13.
"GAAP" shall have the meaning set forth in Section 3.13.
"Guaranty" shall mean, as to any Person, all liabilities or obligations of
such Person, with respect to any indebtedness or other obligations of any other
Person, which have been guaranteed, directly or indirectly, in any manner by
such Person, through an agreement, contingent or otherwise, to purchase such
indebtedness or obligation, or to purchase or sell property or services,
primarily for the purpose of enabling the debtor to make payment of such
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indebtedness or obligation or to guarantee the payment to the owner of such
indebtedness or obligation against loss, or to supply funds to or in any manner
invest in the debtor.
"Indemnified Party" shall have the meaning set forth in Section 5.4.
"Indemnifying Party" shall have the meaning set forth in Section 5.4.
"Intellectual Property" shall mean the rights to any patent, trademark,
copyright, service ▇▇▇▇, invention, software, software code, trade secret,
technology, product, composition, formula, method or process.
"Investments" shall mean, with respect to any Person, all advances, loans
or extensions of credit to any other Person (except for extensions of credit to
customers in the ordinary course of business), all purchases or commitments to
purchase any stock, bonds, notes, debentures or other securities of any other
Person, and any other investment in any other Person, including partnerships or
joint ventures (whether by capital contribution or otherwise) or other similar
arrangement (whether written or oral) with any Person, including, but not
limited to, arrangements in which (i) the first Person shares profits and losses
of the other Person, (ii) any such other Person has the right to obligate or
bind the first Person to any third party, or (iii) the first Person may be
wholly or partially liable for the debts or obligations of such partnership,
joint venture or other entity.
"Knowledge" shall mean, in the case of any Person who is an individual,
knowledge that a reasonable individual under similar circumstances would have
after such investigation and inquiry as such reasonable individual would under
such similar circumstances make, and in the case of a Person other than an
individual, the knowledge that a senior officer or director of such Person, or
any other Person having responsibility for the particular subject matter at
issue of such Person, would have after such investigation and inquiry as such
senior officer, director or responsible Person would under such similar
circumstances make.
"Law" and "Laws" shall have the meaning set forth in Section 3.19.
"Liabilities" shall have the meaning set forth in Section 3.14.
"Litigation" shall have the meaning set forth in Section 3.6.
"Material Adverse Effect" shall mean any event or condition of any
character which has had or could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), results of operations,
assets, liabilities, properties, business or prospects of MWEX or Superior, as
applicable.
"Material MWEX Agreements" shall have the meaning set forth in Section
3.20.
"Merger" shall have the meaning set forth in Section 2.1.
"Merger Consideration" shall have the meaning set forth in Section 2.7(c).
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"Outstanding MWEX Common Stock" shall have the meaning set forth in Section
3.11.
"Outstanding Superior Interest" shall have the meaning set forth in Section
4.8.
"Periodic Reports" shall have the meaning set forth in Section 3.13.
"Person" shall mean any natural person, corporation, unincorporated
organization, partnership, association, limited liability company, joint stock
company, joint venture, trust or government, or any agency or political
subdivision of any government or any other entity.
"Purchaser" shall mean MW Co, a Colorado corporation.
"Purchaser Documents" shall have the meaning set forth in Section 3.2.
"Superior" shall mean Superior Energy LLC, a Delaware Limited Liability
Company.
"Superior Interest" shall have the meaning set forth in Section 4.8.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" of any Person shall mean any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of more than fifty percent (50%), or which may effectively be
controlled, directly or indirectly, by such Person.
"Surviving Corporation" shall mean Superior as the surviving corporation
resulting from the Merger with Purchaser
"Tax" and "Taxes" shall have the meaning set forth in Section 3.19.
"Tax Returns" shall have the meaning set forth in Section 3.19.
"MWEX" shall mean Mountain West Exploration, Inc., a New Mexico
corporation.
"MWEX Common Stock" shall mean the shares of common stock, no par value per
share, of MWEX, as further described in Section 3.11.
"MWEX Insiders" shall mean ▇▇▇▇ ▇▇▇▇ Ventures LLC.
"MWEX Leased Property" shall have the meaning set forth in Section 3.15.
"MWEX Leases" shall have the meaning set forth in Section 3.15.
"Transaction" shall have the meaning set forth in Section 2.1.
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The words "hereof", "herein" and "hereunder" and the words of similar
import shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The terms defined in the singular shall have a
comparable meaning when used in the plural and vice versa.
ARTICLE II
Transactions; Terms of Merger; Manner of Converting Shares
2.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, Purchaser shall be merged with Superior in accordance with
the provisions of the Laws of the State of Colorado and Delaware and with the
effect provided for therein (the "Merger"). As a result of the Merger, the
separate corporate existence of Purchaser and Superior shall cease and MW Co
shall be the Surviving Corporation resulting from the Merger renamed Superior
Energy Co. and shall become a wholly owned Subsidiary of MWEX and shall continue
to be governed by the laws of the State of Colorado. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective Boards of Directors of Superior, Purchaser and MWEX,
by MWEX, as the sole stockholder of Purchaser, and by the interest holders of
Superior Energy LLC. Superior shall convert from a limited liability company at
or prior to closing to a corporation.
2.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") will take place at 10:00 A.M. on the date
that the Effective Time occurs or at such other time as the parties, acting
through their authorized officers, may mutually agree. The Closing shall be held
at the offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at
such other location as may be mutually agreed upon by the parties.
2.3 Effective Time. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the States of Colorado and Delaware (the "Effective
Time").
2.4 Charter. The Certificate of Incorporation of Superior in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation of the merging corporation until duly
amended or repealed.
2.5 Bylaws. The Bylaws of Superior in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.6 Directors and Officers. The directors of Superior in office
immediately prior to the Effective Time, together with such additional Persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of Superior in office immediately prior
to the Effective Time, together with such additional Persons as may thereafter
be elected, shall serve as the officers of the Surviving Corporation from and
after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
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2.7 Conversion of Shares. Subject to the provisions of this Article II,
at the Effective Time, by virtue of the Merger and without any action on the
part of MWEX, Superior or Purchaser or the stockholders of any of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) Each share of capital stock of MWEX issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of Purchaser's Common Stock issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into one share of Common Stock of the
Surviving Corporation.
(c) Each share of Superior's Common Stock issued and
outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into and exchanged for the right to receive
18,000,000 shares of Common Stock of MWEX, as adjusted to reflect fully the
effect of any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into common stock of MWEX),
as the case may be, occurring after the date hereof and prior to the Effective
Date (the "Exchange Ratio") (hereinafter such MWEX shares shall be referred to
as the "Consideration Shares" or the "Merger Consideration"). The Consideration
Shares shall, upon issuance and delivery to the stockholders of Superior in
accordance with the terms hereof, be fully paid, validly issued and
non-assessable, but shall not be registered securities under the Securities Act
of 1933, as amended, (the "Securities Act") pursuant to a valid exemption
thereunder.
2.8 Exchange of Shares. At the Closing, the stockholders of Superior
shall surrender each certificate or certificates which represented shares of
Superior's Common Stock immediately prior to the Effective Time (the
"Certificates") and shall promptly upon surrender thereof receive in exchange
therefor the number of whole Consideration Shares issuable in respect of all
shares of Superior's Common Stock held by such Superior stockholder (rounded to
the nearest share). MWEX shall not be obligated to deliver the consideration to
which a Superior stockholder is entitled as a result of the Merger until such
Person surrenders its Certificate or Certificates for exchange as provided in
this Section 2.8. Any other provision of this Agreement notwithstanding, neither
MWEX nor the Surviving Corporation shall be liable to a holder of Superior's
Common Stock for any amounts paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
2.9 Rights of Former Superior Stockholders. At the Effective Time, the
stock transfer books of Superior shall be closed as to holders of Superior
Common Stock immediately prior to the Effective Time and no transfer of Superior
Common Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 2.8, each
Certificate theretofore representing shares of Superior Common Stock shall from
and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Section 2.7 in exchange therefor. Whenever
a dividend or other distribution is declared by MWEX on the MWEX Common Stock,
the record date for which is at or after the Effective Time, the declaration
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shall include dividends or other distributions on all shares of MWEX Common
Stock issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of MWEX Common Stock as of any time subsequent
to the Effective Time shall be delivered to the holder of any Certificate until
such holder surrenders such Certificate for exchange as provided in Section 2.8.
However, upon surrender of such Certificate, both the MWEX Common Stock
certificate (together with all such undelivered dividends or other distributions
without interest) and any undelivered dividends payable in respect thereof
(without interest) shall be delivered and paid with respect to each share
represented by such Certificate.
2.10 Legending of Securities. Each certificate for MWEX Common Stock to
be issued to the Superior stockholders as part of the Merger Consideration shall
bear substantially the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, OR ANY STATE SECURITIES LAWS. THESE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED. OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT, IN THE CIRCUMSTANCES,
REQUIRED UNDER SAID ACT".
2.11 Fractional Shares. Notwithstanding any other provision of this
Agreement, if the Sellers would otherwise have been entitled to receive a
fraction of a share of MWEX Common Stock (after taking into account all
certificates delivered by the Superior stockholders), the number of shares
issuable to the Superior stockholder shall be rounded up to the next whole
number.
2.12 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by such Superior stockholder (setting forth the number of
shares of Superior Common Stock represented by such lost, stolen or destroyed
Certificates), MWEX shall pay such Superior stockholder the Consideration Shares
to which such Superior stockholder is entitled.
ARTICLE III
Representations and Warranties of MWEX, Purchaser and the MWEX Insiders
In order to induce Superior to enter into this Agreement and to
consummate the transactions contemplated hereby, MWEX, Purchaser, and the MWEX
Insiders (as defined in Article I above), jointly and severally, make the
representations and warranties set forth below to Superior.
3.1 Organization; Standing and Power. MWEX is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Mexico. Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. MWEX, Purchaser and each
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of the MWEX Insiders has all requisite right, power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. MWEX and Purchaser have all corporate right, power and
authority to own or lease and operate their properties, and to conduct their
business as presently conducted. MWEX and Purchaser are duly qualified to
transact business as a foreign corporation in all jurisdictions where the
ownership or leasing of their properties or the conduct of its business requires
such qualification. Each jurisdiction in which MWEX and Purchaser are so
qualified is listed on Schedule 3.1 hereto.
3.2 Authorization; Enforceability. The execution, delivery and
performance of this Agreement by MWEX, Purchaser and the MWEX Insiders and all
other agreements to be executed, delivered and performed by MWEX, Purchaser and
the MWEX Insiders pursuant to this Agreement (collectively, the "Purchaser
Documents") and the consummation by MWEX, Purchaser and the MWEX Insiders of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite corporate or individual action on the part of MWEX, Purchaser and the
MWEX Insiders, as applicable. This Agreement and the Purchaser Documents have
been duly executed and delivered by MWEX, Purchaser and the MWEX Insiders, and
constitute the legal, valid and binding obligation of MWEX, Purchaser and the
MWEX Insiders, enforceable in accordance with their respective terms, except to
the extent that their enforcement is limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity.
3.3 No Violation or Conflict. The execution, delivery and performance
of this Agreement and the Purchaser Documents by MWEX, Purchaser and the MWEX
Insiders, and the consummation by MWEX, Purchaser and the MWEX Insiders of the
transactions contemplated hereby and thereby: (a) do not violate or conflict
with any provision of law or regulation (whether federal, state or local), or
any writ, order or decree of any court or governmental or regulatory authority,
or any provision of MWEX or Purchaser's Articles or Certificate of Incorporation
or Bylaws; and (b) do not and will not, with or without the passage of time or
the giving of notice, result in the breach of, or constitute a default (or an
event that with notice or lapse of time or both would become a default), cause
the acceleration of performance, give to others any right of termination,
amendment, acceleration or cancellation of or require any consent under, or
result in the creation of any lien, charge or encumbrance upon any property or
assets of MWEX or Purchaser pursuant to any instrument or agreement to which
MWEX or Purchaser is a party or by which MWEX or Purchaser or their respective
properties may be bound or affected, other than instruments or agreements as to
which consent shall have been obtained at or prior to the Closing, each of which
instruments or agreements is listed in Schedule 3.3 hereto.
3.4 Consents of Governmental Authorities and Others. No consent,
approval, order or authorization of, or registration, declaration, qualification
or filing with any federal, state or local governmental or regulatory authority,
or any other Person, is required to be made by MWEX, Purchaser or the MWEX
Insiders in connection with the execution, delivery or performance of this
Agreement by MWEX, Purchaser and the MWEX Insiders or the consummation by MWEX,
Purchaser and the MWEX Insiders of the transactions contemplated hereby.
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3.5 Conduct of Business. Except as disclosed on Schedule 3.5 hereto,
since December 31, 2004, MWEX has conducted its businesses in the ordinary and
usual course consistent with past practices and there has not occurred any
adverse change in the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of MWEX, and no such
change is threatened. Without limiting the generality of the foregoing, except
as disclosed on Schedule 3.6, since December 31, 2004, MWEX has not: (a) amended
its Articles of Incorporation or Bylaws except as to a reverse split of one for
50 and authorization of a name change ; (b) issued, sold or authorized for
issuance or sale, shares of any class of its securities (including, but not
limited to, by way of stock split or dividend) or any subscriptions, options,
warrants, rights or convertible securities or entered into any agreements or
commitments of any character obligating it to issue or sell any such securities;
(c) redeemed, purchased or otherwise acquired, directly or indirectly, any
shares of its capital stock or any option, warrant or other right to purchase or
acquire any such capital stock; (d) suffered any damage, destruction or loss,
whether or not covered by insurance, which has had or could reasonably be
expected to have a Material Adverse Effect on any of its properties, assets,
business or prospects; (e) granted or made any mortgage or pledge or subjected
itself or any of its properties or assets to any lien, charge or encumbrance of
any kind; (f) made or committed to make any capital expenditures in excess of
$10,000; (g) become subject to any Guaranty; (h) granted any increase in the
compensation payable or to become payable to directors, officers or employees
(including, without limitation, any such increase pursuant to any severance
package, bonus, pension, profit-sharing or other plan or commitment); (i)
entered into any agreement which would be a Material Agreement, or amended or
terminated any existing Material Agreement; (j) been named as a party in any
Litigation, or become the focus of any investigation by any government or
regulatory agency or authority; (k) declared or paid any dividend or other
distribution with respect to its capital stock; or (l) experienced any other
event or condition of any character which has had or to MWEX's or the MWEX
Insiders' Knowledge, could reasonably be expected to have a Material Adverse
Effect on MWEX.
3.6 Litigation. There are no actions, suits, investigations, claims or
proceedings ("Litigation") pending or, to the Knowledge of MWEX, Purchaser or
any of the MWEX Insiders, threatened before any court or by or before any
governmental or regulatory authority or arbitrator, (a) affecting MWEX or
Purchaser (as plaintiff or defendant) or (b) against MWEX, Purchaser or the MWEX
Insiders relating to MWEX's Common Stock or the transactions contemplated by
this Agreement and there exist no facts or circumstances to the Knowledge of
MWEX, Purchaser or the MWEX Insiders creating any reasonable basis for the
institution of any Litigation against MWEX, Purchaser or the MWEX Insiders
3.7 Brokers. None of MWEX, Purchaser nor the MWEX Insiders has employed
any broker or finder, and none of them has incurred or will incur, directly or
indirectly, any broker's, finder's, investment banking or similar fees,
commissions or expenses in connection with the transactions contemplated by this
Agreement or the Purchaser Documents.
3.8 Compliance. MWEX and Purchaser are in compliance with all federal,
state, local and foreign laws, ordinances, regulations, judgments, rulings,
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orders and other requirements applicable to MWEX and Purchaser and their
respective assets and properties, including, without limitation, those relating
to (a) the registration and sale of the MWEX Common Stock, (b) the establishment
of a public trading market for the MWEX Common Stock, and (c) the public trading
of the MWEX Common Stock. MWEX and Purchaser are not subject to any judicial,
governmental or administrative inquiry, investigation, order, judgment or
decree.
3.9 Charter, Bylaws and Corporate Records. A true, correct and complete
copy of (a) the Articles of Incorporation of MWEX and Purchaser, as amended and
in effect on the date hereof, (b) the Bylaws of MWEX and Purchaser, as amended
and in effect on the date hereof, and (c) the minute books of MWEX and Purchaser
(containing all corporate proceedings from the date of incorporation) have been
furnished to Superior. Such minute books contain accurate records of all
meetings and other corporate actions of the board of directors, committees of
the board of directors, incorporators and shareholders of MWEX and Purchaser
from the date of its incorporation to the date hereof which were memorialized in
writing. No actions have been taken since the date of MWEX or Purchaser's
incorporation that are not memorialized in writing.
3.10 Subsidiaries and Investments. Except as required by this
Agreement, MWEX has no Subsidiaries or Investments. MWEX owns one hundred
percent (100%) of the issued and outstanding capital stock of the Subsidiary MW
Co.
3.11 Capitalization. The authorized capital stock of MWEX consists of
50,000,000 shares of common stock, of which 1,000,000 shares are issued and
outstanding (the "Outstanding MWEX Common Stock"). All shares of Outstanding
MWEX Common Stock have been duly authorized, are validly issued and outstanding,
and are fully paid and non-assessable. No securities issued by MWEX from the
date of its incorporation to the date hereof were issued in violation of any
statutory, contractual or common law preemptive rights. There are no dividends
which have accrued or been declared but are unpaid on the capital stock of MWEX.
All taxes required to be paid in connection with the issuance and any transfers
of MWEX's capital stock have been paid. All permits or authorizations required
to be obtained from or registrations required to be effected with any Person in
connection with any and all issuances of securities of MWEX from the date of
MWEX's incorporation to the date hereof have been obtained or effected and all
securities of MWEX have been issued and are held in accordance with the
provisions of all applicable securities or other laws. The Outstanding MWEX
Common Stock constitutes one hundred percent (100%) of the issued and
outstanding capital stock of MWEX. The Consideration Shares shall, upon issuance
and delivery to the Superior stockholders in accordance with the terms hereof,
be fully paid, validly issued and non-assessable, but shall not be registered
securities under the Securities Act of 1933. There are no registration rights
outstanding which relate to the Outstanding MWEX Common Stock and, to the
Knowledge of MWEX and the MWEX Insiders, there are no voting trusts, proxies or
other agreements or understandings with respect to any equity security of any
class of MWEX or with respect to any equity security, partnership interest or
similar ownership interest of any class of any of its Subsidiaries.
3.12 Rights, Warrants, Options. There are no outstanding (a) securities
or instruments convertible into or exercisable for any of the capital stock or
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other equity interests of MWEX or Purchaser; (b) options, warrants,
subscriptions, puts, calls, or other rights to acquire capital stock or other
equity interests of MWEX or Purchaser; or (c) commitments, agreements or
understandings of any kind, including employee benefit arrangements, relating to
the issuance or repurchase by MWEX or Purchaser of any capital stock or other
equity interests of MWEX or Purchaser, or any instruments convertible or
exercisable for any such securities or any options, warrants or rights to
acquire such securities.
3.13 Commission Filings and Financial Statements. All of the Periodic
Reports of MWEX required to satisfy the information requirements of Section 13
of the Exchange Act have been filed with the Commission, have been true,
accurate and complete in all material respects and have been filed in compliance
with the requirements of the Exchange Act. The Financial Statements of MWEX: (a)
have been prepared in accordance with the books of account and records of MWEX;
(b) fairly present, and are true, correct and complete statements in all
material respects of MWEX's financial condition and the results of its
operations at the dates and for the periods specified in those statements; and
(c) have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied with prior periods.
3.14 Absence of Undisclosed Liabilities. Other than as disclosed by the
Periodic Reports, the Financial Statements of MWEX or as disclosed on Schedule
3.14, MWEX and Purchaser do not have any direct or indirect indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility, known
or unknown, fixed or unfixed, ▇▇▇▇▇▇ 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 ("Liabilities"). Except as listed on Schedule 3.14, MWEX and
Purchaser do not have any Liabilities other than Liabilities fully and
adequately reflected in the Periodic Reports or the Financial Statements of
MWEX. MWEX, Purchaser and the MWEX Insiders have no Knowledge of any
circumstances, conditions, events or arrangements which may hereafter give rise
to any Liabilities of MWEX or Purchaser, except as set forth on Schedule 3.14.
3.15 Real Property and Mineral Leases. MWEX and Purchaser do not own
any fee simple interest in real property. MWEX and Purchaser do not lease,
sublease, or have any other contractual interest in any real property other than
as set forth on Schedule 3.15. Schedule 3.15 sets forth the street address of
each parcel of real property leased or subleased by MWEX or Purchaser, or in
which MWEX or Purchaser has any other contractual interest (collectively the
"MWEX Leased Property"). Attached hereto as Schedule 3.15 is a summary list of
all of the lease, sublease and other contractual agreements (collectively the
"MWEX Leases"), as amended to date, relating to the MWEX Mineral Leases. The
MWEX Leases are valid, binding and in full force and effect, all rent and other
sums and charges payable thereunder are current, and no notice of default or
termination under any of the MWEX Leases is outstanding.
RAD Enterprises, Inc. has entered into a Purchase Agreement to purchase
such leases for the assumption of approximately $100,000 in operating cost
assessments. There are potential liabilities (in addition to operating charges)
associated with the MWEX Leases. There is no known any liability under any
Environmental Law or regulation, which is or which may become payable after the
Closing of the Transaction.
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3.16 List of Accounts and Proxies. Set forth on Schedule 3.16 is: (a)
the name and address of each bank or other institution in which MWEX or
Purchaser maintains an account (cash, securities or other) or safe deposit box;
(b) the name and phone number of MWEX or Purchaser's contact person at such bank
or institution; (c) the account number of the relevant account and a description
of the type of account; (d) the name of each person authorized by MWEX or
Purchaser to effect transactions therewith or to have access to any safe deposit
box or vault; and (e) all proxies, powers of attorney or other like instruments
to act on behalf of MWEX or Purchaser in matters concerning its business or
affairs.
3.17 Personnel. Schedule 3.17 contains the names and annual salary
rates and other compensation of all officers, directors, consultants and
employees of MWEX or Purchaser (including compensation paid or payable by MWEX
under any employee benefit or option plans). There are no employee policies,
employee manuals or other written statements of rules or policies as to working
conditions, vacation and sick leave.
3.18 Employment Agreements and Employee Benefit Plans. MWEX has not had
any and does not have any defined contribution plan and it is not (and was
never) part of a controlled group contributing to any defined contribution plan
and is not and was never a party to any collective bargaining agreement or other
employment contracts. MWEX has not, nor does it now contribute to any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), or any health, dental, vision, long
term disability, short term disability, life insurance or other welfare benefits
plan, or have any obligation to or customary arrangement with employees for
bonuses, incentive compensation, vacations, severance pay, insurance, or other
benefits, and it is not now (and was never) a part of a controlled group with
regard to any of the foregoing. Schedule 3.17 also contains a true and correct
statement of the names, relationship with MWEX, present rates of compensation
(whether in the form of salary, bonuses, commissions, or other supplemental
compensation now or hereafter payable), and aggregate compensation for the
fiscal year ended December 31, 2004 of each director, officer, consultant or
employee of MWEX. Except as set forth on Schedule 3.17, since December 31, 2004,
MWEX has not changed the rate of compensation of any of its directors, officers,
consultants or employees, and MWEX will not be required to make any severance
payments to any of its directors, officers, consultants or employees as a result
of the Transaction.
There are no complaints, charges, claims, allegations, grievances, or
litigations pending or threatened which reflect or pertain to: (i) any federal,
state or local labor, employment, anti-discrimination, workers compensation,
disability or unemployment law, regulation or ordinance; (ii) any claim for
wrongful discharge, harassment, discrimination, breach of employment contract or
employment-related tort; or (iii) any employment agreement, restrictive
covenant, non-competition agreement or employee confidentiality agreement,
which, in any such case, if adversely determined, could reasonably be expected
to have a Material Adverse Effect on MWEX.
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3.19 Taxes.
(a) MWEX has properly prepared and timely filed all Tax Returns (as
defined below) relating to any and all Taxes (as defined below) concerning or
attributable to it or its operations for any period ending on or before the
Closing Date and such Tax Returns are true, correct and complete in all material
respects and have been completed in accordance with applicable Laws (as defined
below).
(b) All Taxes (whether or not shown on any Tax Return) payable by MWEX
have been fully and timely paid. The cash reserves or accruals for Taxes
provided in the books and records of MWEX with respect to any period for which
Tax Returns have not yet been filed or for which Taxes are not yet due and owing
have been established in accordance with GAAP and are, or prior to the Closing
Date, will be, sufficient for all unpaid Taxes of MWEX through and including the
Closing Date (including, without limitation, with respect to any Taxes resulting
from the transactions contemplated by this Agreement).
(c) Neither MWEX nor any Person on behalf of or with respect to MWEX
has executed or filed any agreements or waivers extending any statute of
limitations on or extending the period for the assessment or collection of any
Tax. No power of attorney on behalf of MWEX with respect to any Tax matter is
currently in force.
(d) MWEX is not a party to any Tax-sharing agreement or similar
arrangement with any other party (whether or not written), and MWEX has not
assumed any Tax obligations of, or with respect to any transaction relating to,
any other Person or agreed to indemnify any other Person with respect to any
Tax.
(e) No Tax Return concerning or relating to MWEX or its operations has
ever been audited by a government or taxing authority, nor is any such audit in
process or pending, and MWEX has not been notified of any request for such an
audit or other examination. No claim has been made by a taxing authority in a
jurisdiction where Tax Returns concerning or relating to MWEX or its operations
have not been filed that it is or may be subject to taxation by that
jurisdiction.
(f) MWEX has never been included in any consolidated, combined, or
unitary Tax Return.
(g) MWEX has complied in all material respects with all applicable Laws
relating to the payment and withholding of Taxes and has duly and timely
withheld from employee salaries, wages and other compensation and has paid over
to the appropriate taxing authorities all amounts required to be so withheld and
paid over for all periods under all applicable laws.
(h) Neither MWEX nor any other Person on behalf of and with respect to
MWEX has (i) agreed to or is required to make any adjustments pursuant to
Section 481(a) of the Internal Revenue Code of 1986 ("Code") or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by MWEX, and MWEX and the MWEX Insiders have no Knowledge that
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the Internal Revenue Service ("IRS") has proposed any such adjustment or change
in accounting method, or has any application pending with any taxing authority
requesting permission for any changes in accounting methods that relate to the
business or operations of MWEX, (ii) executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law with respect to
MWEX or (iii) requested any extension of time within which to file any Tax
Return concerning or relating to MWEX or its operations, which Tax Return has
since not been filed.
(i) No property owned by MWEX is (i) property required to be treated as
being owned by another Person pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect immediately prior to
the enactment of the Tax Reform Act of 1986, (ii) constitutes "tax-exempt use
property" within the meaning of Section 168(h)(1) of the Code or (iii) is
"tax-exempt bond financed property" within the meaning of Section 168(g) of the
Code.
(j) MWEX is not subject to any private letter ruling of the IRS or
comparable rulings of other taxing authorities.
(k) MWEX does not own any interest in any entity that is treated as a
partnership for U.S. federal income Tax purposes or would be treated as a
pass-through or disregarded entity for any Tax purpose.
(l) MWEX has not constituted either a "distributing corporation" or a
"controlled corporation" within the meaning of Section 355(a)(1)(A) of the Code
in a distribution qualifying for tax-free treatment under Section 355 of the
Code (i) in the two years prior to the date of this Agreement or (ii) in a
distribution that could otherwise constitute part of a "plan" or "series of
transactions" (within the meaning of Section 355(e) of the Code) in conjunction
with this Agreement.
(m) MWEX has no elections in effect for U.S. federal income Tax
purposes under Sections 108, 168, 441, 472, 1017, 1033 or 4977 of the Code.
The term "Law" or "Laws" as used in this Agreement shall mean any
federal, state, local or foreign statue, law, ordinance, regulation, rule, code,
order or other requirement or rule of law.
The term "Tax" or "Taxes" as used in this Agreement shall mean (i) all
income, excise, gross receipts, ad valorem, sales, use, employment, franchise,
profits, gains, property, transfer, payroll, withholding, severance, occupation,
social security, unemployment compensation, alternative minimum, value added,
intangibles or other taxes, fees, stamp taxes, duties, charges, levies or
assessments of any kind whatsoever (whether payable directly or by withholding),
together with any interest and any penalties, fines, additions to tax or
additional amounts imposed by any Governmental Authority with respect thereto,
(ii) any liability for the payment of any amounts of the type described in (i)
as a result of being a member of a consolidated, combined, unitary or aggregate
group for any Taxable period, and (3) any liability for the payment of any
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amounts of the type described in (i) or (ii) as a result of being a transferee
or successor to any person or as a result of any express or implied obligation
to indemnify any other Person.
The term "Tax Returns" as used in this Agreement shall mean returns,
declarations, reports, claims for refund, information returns or other documents
(including any related or supporting schedules, statements or information) filed
or required to be filed in connection with the determination, assessment or
collection of any Taxes of any party or the administration of any laws,
regulations or administrative requirements relating to any Taxes.
3.20 Material Agreements. Schedule 3.20 sets forth a brief description
of all material written and oral contracts or agreements relating to MWEX or
Purchaser (except with respect to the MWEX Leases, which are set forth on
Schedule 3.16, which is hereby incorporated by reference and made a part
thereof), including without limitation any: (i) contract resulting in a
commitment or potential commitment for expenditure or other obligation or
potential obligation, or which provides for the receipt or potential receipt,
involving in excess of Ten Thousand Dollars ($10,000.00) in any instance, or
series of related contracts that in the aggregate give rise to rights or
obligations exceeding such amount; (ii) indenture, mortgage, promissory note,
loan agreement, guarantee or other agreement or commitment for the borrowing or
lending of money or encumbrance of assets involving more than Ten Thousand
Dollars ($10,000.00) in each instance; (iii) agreement which restricts MWEX or
Purchaser from engaging in any line of business or from competing with any other
Person; or (iv) any other contract, agreement, instrument, arrangement or
commitment that is material to the condition (financial or otherwise), results
of operation, assets, properties, liabilities, business or prospects of MWEX or
Purchaser (collectively, and together with the MWEX Leases, employment
agreements, Employee Benefit Plans and all other agreements required to be
disclosed on any Schedule to this Agreement, the "Material MWEX Agreements").
MWEX has previously furnished to Superior true, complete and correct copies of
all written agreements, as amended, required to be listed on Schedule 3.20.
Except as set forth on Schedule 3.20, none of the Material MWEX
Agreements was entered into outside the ordinary course of business of MWEX or
Purchaser, or contains any provisions that will impair or adversely affect the
operations of MWEX or Purchaser. The Material MWEX Agreements are each in full
force and effect and are the valid and legally binding obligations of MWEX and,
to the Knowledge of MWEX and the MWEX Insiders, the other parties thereto. MWEX
has not received notice of default by MWEX or Purchaser under any of the
Material MWEX Agreements. Neither MWEX nor Purchaser has received notice of any
pending or threatened Litigation relating to any of the Material MWEX
Agreements.
3.21 Guaranties. Except as set forth on Schedule 3.21, MWEX and
Purchaser are not a party to any Guaranty, and no Person is a party to any
Guaranty for the benefit of MWEX or Purchaser.
3.22 Environmental Matters Except for Methane Production in Colorado.
None of the MWEX Leased Property nor any other property used by MWEX 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 (as defined below). As for it has become aware, MWEX is in compliance with
15
all laws, regulations and other federal, state or local governmental
requirements, and all applicable judgments, orders, writs, notices, decrees,
permits, licenses, approvals, consents or injunctions relating to the
generation, management, handling, transportation, treatment, disposal, storage,
delivery, discharge, release or emission of any waste, pollutant or toxic or
hazardous substance (including, without limitation, asbestos, radioactive
material and pesticides) (the "Environmental Laws") applicable to MWEX or its
business as a result of any hazardous substance utilized by MWEX in its business
or otherwise placed at any of the facilities owned, leased or operated by MWEX,
or in which MWEX has a contractual interest. Neither the MWEX Insiders, nor MWEX
(or its directors or officers), has received any complaint, notice, order, or
citation of any actual, threatened or alleged noncompliance by MWEX with any
Environmental Laws, and there is no Litigation pending or, to MWEX or the MWEX
Insiders' Knowledge, threatened against any of MWEX, the MWEX Insiders or any
director or officer of MWEX, with respect to any violation or alleged violation
of the Environmental Laws, and to MWEX and the MWEX Insiders' Knowledge, there
is no reasonable basis for the institution of any such Litigation.
3.23 Absence of Certain Business Practices. None of the MWEX Insiders,
Purchaser, nor MWEX, nor any Affiliates thereof nor, to the Knowledge of each,
any other Person acting on behalf of MWEX, has with respect to the business or
activities of MWEX: (a) received, directly or indirectly, any rebates, payments,
commissions, promotional allowances or any other economic benefits, regardless
of their nature or type, from any customer, supplier, trading company, shipping
company, governmental employee or other Person with whom MWEX has done business
directly or indirectly; or (b) directly or indirectly, given or agreed to give
any gift or similar benefit to any customer, supplier, trading company, shipping
company, governmental employee or other Person who is or may be in a position to
help or hinder the business of MWEX (or assist MWEX in connection with any
actual or proposed transaction) which (i) may subject MWEX to any material
damage or any penalty in any Litigation, (ii) if not given in the past, may have
had a Material Adverse Effect on the assets, business or operations of MWEX as
reflected in the Periodic Reports or Financial Statements of MWEX or (iii) if
not continued in the future, may materially adversely affect the assets,
business or operations of MWEX or subject MWEX to suit or penalty in any private
or governmental litigation or proceeding.
3.24 Disclosure. No representation or warranty of MWEX, Purchaser or
the MWEX Insiders contained in this Agreement, and no statement, report, or
certificate furnished by or on behalf of MWEX, Purchaser or the MWEX Insiders to
Superior or its agents pursuant hereto or in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein not misleading or omits or will omit to state a material fact
necessary in order to provide Superior with full and proper information as to
the business, financial condition, assets, liabilities, results of operation or
prospects of MWEX or Purchaser and the value of their properties or the
ownership of MWEX or Purchaser.
16
ARTICLE IV
Representations and Warranties of Superior
In order to induce MWEX, Purchaser and the MWEX Insiders to enter into
this Agreement and to consummate the transactions contemplated hereby, Superior
makes the representations and warranties set forth below to MWEX, Purchaser and
the MWEX Insiders.
4.1 Organization. Superior is a Limited Liability Company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Superior is duly qualified to transact business as a foreign
corporation in all jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to so qualify would not have a Material Adverse Effect on
Superior. Superior has the requisite power and authority to (a) own or lease and
operate its properties and (b) conduct its business as presently conducted.
Superior intends to convert to a corporation at or prior to closing.
4.2 Authorization; Enforceability. Superior has the capacity to
execute, deliver and perform this Agreement. This Agreement and all other
documents executed and delivered by Superior pursuant to this Agreement have
been duly executed and delivered and constitute the legal, valid and binding
obligations of Superior, assuming the due authorization, execution and delivery
of this Agreement by MWEX, Purchaser and the MWEX Insiders, enforceable in
accordance with their respective terms, except to the extent that their
enforcement is limited by bankruptcy, insolvency, reorganization or other laws
relating to or affecting the enforcement of creditors' rights generally and by
general principals of equity.
4.3 No Violation or Conflict. The execution, delivery and performance
of this Agreement and the other documents contemplated hereby by Superior, and
the consummation by Superior of the transactions contemplated hereby: (a) do not
violate or conflict with any provision of law or regulation (whether federal,
state or local), or any writ, order or decree of any court or governmental or
regulatory authority, or any provision of Superior's Certificate of
Incorporation or Bylaws; and (b) except as set forth on Schedule 4.3 hereto, do
not, with or without the passage of time or the giving of notice, result in the
breach of, or constitute a default, cause the acceleration of performance or
require any consent under, or result in the creation of any lien, charge or
encumbrance upon any property or assets of Superior pursuant to any instrument
or agreement to which Superior is a party or by which Superior or its properties
may be bound or affected, other than instruments or agreements as to which
consent shall have been obtained at or prior to the Closing, each of which
instruments or agreements is listed in Schedule 4.3 hereto.
4.4 Consents of Governmental Authorities and Others. No consent,
approval or authorization of, or registration, qualification or filing with any
federal, state or local governmental or regulatory authority, or any other
Person, is required to be made by Superior in connection with the execution,
delivery or performance of this Agreement by Superior or the consummation by
them of the transactions contemplated hereby, excluding the execution, delivery
and performance of this Agreement by the Sellers.
17
4.5 Brokers. Superior has not employed any broker or finder, and has
not incurred and will not incur any broker's, finder's, investment banking or
similar fees, commissions or expenses in connection with the transactions
contemplated by this Agreement.
4.6 Charter Records. A true, correct and complete copy of (a) the
Certificate of Organization of Superior, as amended and in effect on the date
hereof, and (b) the Operating Agreement of Superior, as amended and in effect on
the date hereof, have been furnished.
4.7 Subsidiaries and Investments. Except as described on Schedule 4.7,
Superior has no Subsidiaries or Investments.
4.8 Capitalization. Upon conversion of the Superior member interests to
stock, the authorized capital stock of Superior will consist of 100,000 shares
of common stock, (the "Superior Common Stock"). Superior will have issued and
outstanding 100,000 shares of Superior Common Stock (the "Outstanding Superior
Common Stock"). The Outstanding Superior Common Stock shall then constitute one
hundred percent (100%) of the issued and outstanding capital stock of Superior.
The Outstanding Superior Common Stock is owned by its stockholders will be in
the amounts set forth on Schedule A. All of the Outstanding Superior Common
Stock will have been duly authorized, is validly issued and outstanding, and is
fully paid and non-assessable. No securities issued by Superior from the date of
its incorporation to the date hereof were issued in violation of any statutory
or common law preemptive rights. All taxes required to be paid in connection
with the issuance and any transfers of Superior's capital stock have been paid.
All permits or authorizations required to be obtained from or registrations
required to be effected with any Person in connection with any and all issuances
of securities of Superior from the date of its incorporation to the date hereof
have been obtained or effected and all securities of Superior have been issued
and are held in accordance with the provisions of all applicable securities or
other laws.
4.9 Rights, Warrants, Options. There are no outstanding (a) securities
or instruments convertible into or exercisable for any of the capital stock or
other equity interests of Superior; (b) options, warrants, subscriptions or
other rights to acquire capital stock or other equity interests of Superior; or
(c) Commitments, agreements or understandings of any kind, including employee
benefit arrangements, relating to the issuance or repurchase by Superior of any
capital stock or other equity interests of Superior, or any instruments
convertible or exercisable for any such securities or any options, warrants or
rights to acquire such securities.
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ARTICLE V
Additional Agreements
5.1 Survival of the Representations and Warranties. The representations
and warranties contained in Sections 3.1, 3.2, 3.12, 3.13 and 3.14 and the
covenants in Section 7.1 and 7.3 shall survive the Closing and remain in effect
indefinitely. The representations and warranties contained in Section 3.23
(relating to environmental matters) shall survive the Closing until the
expiration of three (3) years from the Closing Date. The representations and
warranties contained in Section 3.20 (relating to taxes) shall survive the
Closing until the later of the expiration of twenty four months from the Closing
Date or the expiration of the last day of the statute of limitations applicable
to any action against MWEX based upon the non-payment of taxes, or other
violation of the Code, which occurred prior to the Closing Date. Except as set
forth above, the representations and warranties and covenants of MWEX,
Purchaser, the MWEX Insiders contained in this Agreement shall survive the
Closing until the expiration of twenty-four months from the Closing Date. No
claim for indemnity with respect to breaches of representations and warranties
may be brought by any party hereto, other than a claim for fraud or intentional
misrepresentation, after expiration of the applicable survival period therefore
as set forth in this Section 5.1
5.2 Investigation. The representations, warranties, covenants and
agreements set forth in this Agreement shall not be affected or diminished in
any way by any investigation (or failure to investigate) at any time by or on
behalf of the party for whose benefit such representations, warranties,
covenants and agreements were made. All statements contained herein or in any
schedule, certificate, exhibit, list or other document required to be delivered
pursuant hereto, shall be deemed to be representations and warranties for
purposes of this Agreement; provided, that any knowledge or materiality
qualifications contained herein shall be applicable to such other documents.
5.3 Indemnification. Each of the MWEX Insiders, jointly and severally,
agrees to indemnify and hold harmless Superior, and each of Superior's
directors, officers and employees, from and against any losses, damages, costs
or expenses (including reasonable legal fees and expenses) which are caused by
or arise out of (i) any breach or default in the performance by any of MWEX,
Purchaser or the MWEX Insiders of any covenant or agreement made by any of them
in this Agreement; (ii) any breach of any Representation or Warranty made by any
of MWEX, Purchaser or the MWEX Insiders in this Agreement;
5.4 Indemnity Procedure. A party or parties hereto agreeing to be
responsible for or to indemnify against any matter pursuant to this Agreement is
referred to herein as the "Indemnifying Party" and the other party or parties
claiming indemnity is referred to as the "Indemnified Party".
(a) An Indemnified Party under this Agreement shall, with respect to
claims asserted against such party by any third party, give written notice to
the Indemnifying Party of any liability which might give rise to a claim for
indemnity under this Agreement within sixty (60) business days of the receipt of
any written claim from any such third party, but not later than twenty (20) days
19
prior to the date any answer or responsive pleading is due, and with respect to
other matters for which the Indemnified Party may seek indemnification, give
prompt written notice to the Indemnifying Party of any liability which might
give rise to a claim for indemnity; provided, however, that any failure to give
such notice will not waive any rights of the Indemnified Party except to the
extent the rights of the Indemnifying Party are materially prejudiced.
(b) The Indemnifying Party shall have the right, at its election, to
take over the defense or settlement of such claim by giving written notice to
the Indemnified Party at least fifteen (15) days prior to the time when an
answer or other responsive pleading or notice with respect thereto is required.
If the Indemnifying Party makes such election, it may conduct the defense of
such claim through counsel of its choosing (subject to the Indemnified Party's
approval of such counsel, which approval shall not be unreasonably withheld),
shall be solely responsible for the expenses of such defense and shall be bound
by the results of its defense or settlement of the claim. The Indemnifying Party
shall not settle any such claim without prior notice to and consultation with
the Indemnified Party, and no such settlement involving any equitable relief or
which might have an adverse effect on the Indemnified Party may be agreed to
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld). So long as the Indemnifying Party is diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense and the Indemnifying Party will not be
responsible for the fees of separate legal counsel to the Indemnified Party,
unless the named parties to any proceeding include both parties and
representation of both parties by the same counsel would be inappropriate. If
the Indemnifying Party does not make such election, or having made such election
does not, in the reasonable opinion of the Indemnified Party proceed diligently
to defend such claim, then the Indemnified Party may (after written notice to
the Indemnifying Party), at the expense of the Indemnifying Party, elect to take
over the defense of and proceed to handle such claim in its discretion and the
Indemnifying Party shall be bound by any defense or settlement that the
Indemnified Party may make in good faith with respect to such claim. In
connection therewith, the Indemnifying Party will fully cooperate with the
Indemnified Party should the Indemnified Party elect to take over the defense of
any such claim.
(c) The parties agree to cooperate in defending such third party claims
and the Indemnified Party shall provide such cooperation and such access to its
books, records and properties as the Indemnifying Party shall reasonably request
with respect to any matter for which indemnification is sought hereunder; and
the parties hereto agree to cooperate with each other in order to ensure the
proper and adequate defense thereof.
With regard to claims of third parties for which indemnification is
payable hereunder, such indemnification shall be paid by the Indemnifying Party
upon the earlier to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five (5) days prior to the date that the judgment creditor has the
right to execute the judgment; (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party; or (iii) a settlement of
the claim. Notwithstanding the foregoing, provided that there is no dispute as
to the applicability of indemnification, the reasonable expenses of counsel to
the Indemnified Party shall be reimbursed on a current basis by the Indemnifying
Party if such expenses are a liability of the Indemnifying Party. With regard to
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other claims for which indemnification is payable hereunder, such
indemnification shall be paid promptly by the Indemnifying Party upon demand by
the Indemnified Party.
5.5 General Release. As additional consideration for the sale of the
Superior Common Stock pursuant to this Agreement, each of the MWEX Insiders
hereby unconditionally and irrevocably releases and forever discharges,
effective as of the Closing Date, MWEX and Purchaser and their officers,
directors, employees and agents, from any and all rights, claims, demands,
judgments, promissory notes, obligations, liabilities and damages, whether
accrued or unaccrued, asserted or unasserted, and whether known or unknown,
relating to MWEX or Purchaser which ever existed or now exist, by reason of any
tort, breach of contract, violation of law or other act or failure to act which
shall have occurred at or prior to the Closing Date, or in relation to any other
liabilities of MWEX or Purchaser to the MWEX Insiders. The MWEX Insiders
expressly intend that the foregoing release shall be effective regardless of
whether the basis for any claim or right hereby released shall have been known
to or anticipated by the MWEX Insiders. Notwithstanding the foregoing or
anything else to the contrary contained herein, the foregoing provisions of this
Section 5.5 shall not apply to claims against Superior for indemnification
pursuant to this Article V to the extent applicable.
ARTICLE VI
Closing; Deliveries; Conditions Precedent
6.1 Closing; Effective Date. All proceedings taken and all documents
executed at the Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and executed.
6.2 Deliveries
(a) At Closing, MWEX shall deliver the following documents to Superior:
(1) the certificates representing the Consideration
Shares;
(2) the written resignation of all MWEX officers and
directors from all of their positions as MWEX
directors and/or officers, all to be effective upon
Closing;
(3) the minute books of MWEX, including its corporate
seals, unissued stock certificates, stock registers,
Articles of Incorporation, Bylaws and corporate
minutes approving the terms and conditions of this
Agreement and the other documents contemplated hereby
and the transactions contemplated hereby and thereby;
(4) certificates issued by the Secretary of State of New
Mexico, as of a recent date, as to the good standing
of MWEX in its jurisdiction of incorporation and
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certifying its Articles of Incorporation;
(5) certificates issued by the Secretary of State of
Colorado, as of a recent date, as to the good
standing of Purchaser in its jurisdiction of
incorporation and certifying its Certificate of
Incorporation;
(6) a certificate, dated the Closing Date, of an officer
of MWEX setting forth that authorizing resolutions
were adopted by MWEX and Purchaser's Boards of
Directors, approving the terms and conditions of this
Agreement and the other documents contemplated hereby
and the transactions contemplated hereby and thereby;
(7) the consents of any third party including, but not
limited to, parties to any of the Material Agreements
whose consent is required under the terms of any such
Material Agreement or otherwise;
(8) the certificates referred to in Section 6.3(d);
(9) the favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.,
counsel to MWEX, dated the Closing Date, addressed to
Superior, in the form of Exhibit C hereto; and
(10) such other documents and instruments as Superior may
reasonably request.
(b) At Closing, Superior shall deliver the following documents to MWEX:
(1) the Certificates of Superior Common Stock to be
delivered to MWEX;
(2) a certificate of the Secretary of State of the State
of Delaware, as of a recent date, as to the good
standing of Superior and certifying its Certificate
of Incorporation;
(3) a certificate, dated the Closing Date, of an officer
of Superior setting forth that authorizing
resolutions were adopted by Superior's Board of
Directors, approving the terms and conditions of this
Agreement and the other documents contemplated hereby
and the transactions contemplated hereby and thereby;
(4) the certificates referred to in Section 6.4(d); and
(5) such other documents and instruments as MWEX may
reasonably request.
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6.3 Conditions Precedent to the Obligations of Superior. Each and every
obligation of Superior to consummate the transactions described in this
Agreement and any and all liability of Superior to MWEX shall be subject to the
fulfillment on or before the Closing Date of the following conditions precedent:
(a) Representations and Warranties True. Each of the representations
and warranties of MWEX, Purchaser and the MWEX Insiders contained herein or in
any certificate or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be true and correct
in all material respects as of the Closing Date with the same force and effect
as though made on and as of such date.
(b) Performance. MWEX, Purchaser and the MWEX Insiders shall have
performed and complied in all material respects with all of the agreements,
covenants and obligations required under this Agreement to be performed or
complied with by them on or prior to the Closing Date.
(c) No Material Adverse Change. Except as expressly permitted or
contemplated by this Agreement, no event or condition shall have occurred which
has adversely affected or may adversely affect in any respect the condition
(financial or otherwise) of MWEX or Purchaser.
(d) MWEX's Certificate. MWEX shall have delivered to Superior a
certificate dated the Closing Date, certifying that the conditions specified in
Section 6.3(a), (b) and (c) above have been fulfilled and as to such other
matters as Superior may reasonably request.
(e) No Litigation. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered
which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(f) Appointment. Mr. G. ▇▇▇▇▇▇ ▇▇▇▇▇ shall have been appointed to the
Board of Directors and President of MWEX effective at the Closing. ▇▇▇▇▇ ▇▇▇▇
shall resign as President effective immediately and as director effective 10
days after Notice under 14f as above. ▇▇▇▇▇▇ ▇▇▇▇▇ shall resign as Director
effective 10 days after Notice under 14f as above.
(g) Consents. MWEX shall have obtained all authorizations, consents,
waivers and approvals as may be required to consummate the transactions
contemplated by this Agreement including, but not limited to, those with respect
to any Material MWEX Agreement.
(h) Due Diligence Review. Superior shall have completed its due
diligence investigation of MWEX, Purchaser and the MWEX Insiders to its
satisfaction, in its sole and absolute discretion.
23
(i) No MWEX Options or Warrants Outstanding. On the Closing Date there
shall be no options, warrants or other securities convertible into or
exercisable for MWEX Common Stock outstanding.
(j) Opinion of Counsel. MWEX shall have obtained an opinion letter from
counsel to MWEX addressed to Superior in form and substance reasonably
acceptable to Superior, and such opinion shall not have been withdrawn.
6.4 Conditions Precedent to the Obligations of MWEX. Each and every
obligation of MWEX to consummate the transactions described in this Agreement
and any and all liability of MWEX, Purchaser or the MWEX Insiders to Superior
shall be subject to the fulfillment on or before the Closing Date of the
following conditions precedent:
(a) Representations and Warranties True. Each of the representations
and warranties of Superior contained herein or in any certificate or other
document delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though made on
and as of such date.
(b) Performance. Superior shall have performed and complied in all
material respects with all of the agreements, covenants and obligations required
under this Agreement to be performed or complied with by it on or prior to the
Closing Date.
(c) Superior's Certificate. Superior shall have delivered to MWEX, a
certificate addressed to MWEX, dated the Closing Date, certifying that the
conditions specified in Sections 6.4(a), and (b) above have been fulfilled.
(d) No Litigation. No litigation, arbitration or other legal or
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered
which enjoins or prohibits, or seeks to enjoin or prohibit, the consummation of
all or any of the transactions contemplated by this Agreement.
(e) Consents. Superior shall have obtained all authorizations,
consents, waivers and approvals as may be required to consummate the
transactions contemplated by this Agreement, including but not limited to, those
with respect to any Material Agreement of Superior.
(f) Settlement of Reimbursement claim MWEX shall achieve a settlement
with ▇▇▇ ▇▇▇▇▇▇▇ of his reimbursement claim acceptable to NexxuSoft at or prior
to closing.
6.5 Best Efforts. Subject to the terms and conditions provided in this
Agreement, each of the parties shall use their respective best efforts in good
faith to take or cause to be taken as promptly as practicable all reasonable
24
actions that are within its power to cause to be fulfilled those of the
conditions precedent to its obligations or the obligations of the other parties
to consummate the transactions contemplated by this Agreement that are dependent
upon its actions, including obtaining all necessary consents, authorizations,
orders, approvals and waivers.
6.6 Termination. This Agreement and the transactions contemplated
hereby may be terminated (i) at any time by the mutual consent of the parties
hereto; (ii) by Superior, or by MWEX, if the Closing has not occurred on or
prior to May 5, 2005 (such date of termination being referred to herein as the
"Termination Date"), provided the failure of the Closing to occur by such date
is not the result of the failure of the party seeking to terminate this
Agreement to perform or fulfill any of its obligations hereunder; (iii) by
Superior at any time at or prior to Closing in its sole discretion if (1) any of
the representations or warranties of MWEX, Purchaser or the MWEX Insiders in
this Agreement are not in all material respects true, accurate and complete or
if MWEX, Purchaser or the MWEX Insiders breach in any material respect any
covenant contained in this Agreement, provided that such misrepresentation or
breach is not cured within ten (10) business days after notice thereof, but in
any event prior to the Termination Date or (2) any of the conditions precedent
to Superior's obligations to conduct the Closing have not been satisfied by the
date required thereof; (iv) by MWEX at any time at or prior to Closing in its
sole discretion if (1) any of the representations or warranties of Superior in
this Agreement are not in all material respects true, accurate and complete or
if Superior breaches in any material respect any covenant contained in this
Agreement, provided that such misrepresentation or breach is not cured within
ten (10) business days after notice thereof, but in any event prior to the
Termination Date or (2) any of the conditions precedent to Superior's
obligations to conduct the Closing have not been satisfied by the date required
thereof. If this Agreement is terminated pursuant to this Section 6.6, written
notice thereof shall promptly be given by the party electing such termination to
the other party and, subject to the expiration of the cure periods provided in
clauses (iii) and (iv) above, if any, this Agreement shall terminate without
further actions by the parties and no party shall have any further obligations
under this Agreement. Notwithstanding the preceding sentence, the respective
obligations of the parties under Sections 7.1 shall survive the termination of
this Agreement. Notwithstanding anything to the contrary contained herein, if
the termination of this Agreement is a result of the willful misrepresentation,
willful inaccuracy or omission in a representation, willful breach of warranty,
fraud or any willful failure to perform or comply with any covenant or agreement
contained herein, the aggrieved party shall be entitled to recover from the
non-performing party all out-of-pocket expenses which such aggrieved party has
incurred and the termination of this Agreement shall not be deemed or construed
as limiting or denying any other legal or equitable right or remedy of such
party.
ARTICLE VII
Covenants
7.1 General Confidentiality. MWEX, Purchaser and the MWEX Insiders
acknowledge that the Intellectual Property and all other confidential or
proprietary information with respect to the business and operations of Superior
are valuable, special and unique assets of Superior. MWEX, Purchaser and the
MWEX Insiders shall not, at any time either before or after the Closing Date,
disclose, directly or indirectly, to any Person, or use or purport to authorize
25
any Person to use any confidential or proprietary information with respect to
Superior, whether or not for MWEX, Purchaser or the MWEX Insiders' own benefit,
without the prior written consent of Superior or unless required by law,
including without limitation, (i) any of Superior's trade secrets, designs,
formulae, drawings, Intellectual Property, diagrams, techniques, research and
development, specifications, data, know-how, formats, marketing plans, business
plans, budgets, strategies, forecasts or client data; (ii) information relating
to the products developed by Superior, (iii) the names of Superior's customers
and contacts, (iv) Superior's marketing strategies, (v) the names of Superior's
vendors and suppliers, (vi) the cost of materials and labor, and the prices
obtained for products or services sold (including the methods used in price
determination, manufacturing and sales costs), (vii) the lists or other written
records used in Superior's business, including compensation paid to employees
and consultants and other terms of employment, production operation techniques
or any other confidential information of, about or pertaining to the business of
Superior, and, (viii) all tangible material that embodies any such confidential
and proprietary information as well as all records, files, memoranda, reports,
price lists, drawings, plans, sketches and other written and graphic records,
documents, equipment, and the like, relating to the business of Superior, and
(ix) any other confidential information or trade secrets relating to the
business or affairs of Superior which MWEX, Purchaser or the MWEX Insiders may
acquire or develop in connection with or as a result of their performance of the
terms and conditions of this Agreement, excepting only such information as is
already known to the public or which may become known to the public without any
fault of MWEX, Purchaser or the MWEX Insiders or in violation of any
confidentiality restrictions; provided, however, that the restrictions of this
Section 7.1 shall not be applicable to MWEX, Purchaser or the MWEX Insiders in
connection with such Parties' enforcement of its rights under this Agreement.
MWEX, Purchaser and the MWEX Insiders acknowledge that Superior would not enter
into this Agreement without the assurance that all such confidential and
proprietary information will be used for the exclusive benefit of Superior.
7.2 Continuing Obligations. The restrictions set forth in Section 7.1
are considered by the parties to be reasonable for the purposes of protecting
the value of the business and goodwill of Superior. MWEX, Purchaser and the MWEX
Insiders acknowledge that Superior would be irreparably harmed and that monetary
damages would not provide an adequate remedy to Superior in the event the
covenants contained in Section 7.1 were not complied with in accordance with
their terms. Accordingly, MWEX, Purchaser and the MWEX Insiders agree that any
breach or threatened breach by any of them of any provision of Section 7.1 shall
entitle Superior to injunctive and other equitable relief to secure the
enforcement of these provisions, in addition to any other remedies (including
damages) which may be available to Superior. It is the desire and intent of the
parties that the provisions of Section 7.1 be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought. If any provision of Section 7.1 are adjudicated to be
invalid or unenforceable, the invalid or unenforceable provisions shall be
deemed amended (with respect only to the jurisdiction in which such adjudication
is made) in such manner as to render them enforceable and to effectuate as
nearly as possible the original intentions and agreement of the parties. In
addition, if any party brings an action to enforce Section 7.1 hereof or to
obtain damages for a breach thereof, the prevailing party in such action shall
be entitled to recover from the non-prevailing party all reasonable attorney's
fees and expenses incurred by the prevailing party in such action.
26
7.3 Satisfaction of Certain Expenses of the Transaction. Upon the
closing, Superior shall provide funds to the Escrow Account to pay expenses of
the Transaction in an aggregate amount of $350,000 including costs, with such
payments being made in cash to the entities or persons and in the amounts
identified on Schedule B hereto. Of the $350,000, $25,000 shall be paid
concurrent with the signing hereof through the Escrow Account as a
non-refundable deposit which amount is credited against the $350,000 in expenses
to be paid hereunder, and which shall be credited against legal fees.
7.4 Tax Treatment. Neither MWEX, Purchaser, the MWEX Insiders, nor
Superior will knowingly take any action, written or otherwise, which would
result in the transactions contemplated by this Agreement not being accounted
for as a tax-free exchange pursuant to Section 368(a)(1)(B) of the Code.
ARTICLE VIII
Miscellaneous
8.1 Notices. Any notice, demand, claim or other communication under
this Agreement shall be in writing and delivered personally or sent by certified
mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses as follows (or at such other
addresses as shall be specified by the parties by like notice):
If to MWEX, Purchaser or Mountains West Exploration, Inc.
the MWEX Insiders ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
If to Superior: G. ▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
and
Such notice shall be deemed delivered upon receipt against
acknowledgment thereof if delivered personally, on the third business day
following mailing if sent by certified mail, upon transmission against
confirmation if sent by facsimile and on the next business day if sent by
overnight courier.
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8.2 Entire Agreement; Incorporation. This Agreement and the documents
and instruments and other agreements among the parties hereto as contemplated by
or referred to herein contain every obligation and understanding between the
parties relating to the subject matter hereof and merges all prior discussions,
negotiations, agreements and understandings, both written and oral, if any,
between them, and none of the parties shall be bound by any conditions,
definitions, understandings, warranties or representations other than as set
forth herein. All schedules, exhibits and other documents and agreements
executed and delivered pursuant hereto are incorporated herein as if set forth
in their entirety herein.
8.3 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, heirs,
personal representatives, legal representatives, and permitted assigns.
8.4 Assignment. This Agreement may not be assigned by any party without
the written prior consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
8.5 Waiver and Amendment. Any representation, warranty, covenant, term
or condition of this Agreement which may legally be waived, may be waived, or
the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof
(including, without limitation, the period during which any condition is to be
satisfied or any obligation performed) may be amended by the parties thereto at
any time. Any such waiver, extension or amendment shall be evidenced by an
instrument in writing executed on behalf of the party against whom such waiver,
extension or amendment is sought to be charged. No waiver by any party hereto,
whether express or implied, of its rights under any provision of this Agreement
shall constitute a waiver of such party's rights under such provisions at any
other time or a waiver of such party's rights under any other provision of this
Agreement. No failure by any party thereof to take any action against any breach
of this Agreement or default by another party shall constitute a waiver of the
former party's right to enforce any provision of this Agreement or to take
action against such breach or default or any subsequent breach or default by
such other party.
8.6 No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement, except as otherwise
provided herein.
8.7 Severability. In the event that any one or more of the provisions
contained in this Agreement, or the application thereof, shall be declared
invalid, void or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall remain in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto. The
28
parties further agree to replace such invalid, void or unenforceable provision
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid, void or
unenforceable provision.
8.8 Expenses. Except as otherwise provided herein, each party agrees to
pay, without right of reimbursement from the other party, the costs incurred by
it incident to the performance of its obligations under this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, costs incident to the preparation of this Agreement, and the fees
and disbursements of counsel, accountants and consultants employed by such party
in connection herewith.
8.9 Headings. The table of contents and the section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of any provisions of this Agreement.
8.10 Other Remedies; Injunctive Relief. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity. In any action at law or suit in equity to enforce this Agreement or the
rights of the parties hereunder, the prevailing party in any such action or suit
shall be entitled to receive a reasonable sum for its attorneys' fees and all
other reasonable costs and expenses incurred in such action or suit.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Facsimile signatures
shall be deemed valid and binding.
8.12 Remedies Exclusive. Except in the case of fraud or equitable
remedies expressly provided for herein, the parties acknowledge and agree that
the indemnification provisions set forth in Article V of this Agreement
constitute the parties' sole and exclusive remedy with respect to any and all
claims relating to the transactions contemplated by this Agreement. Governing
Law. This Agreement has been entered into and shall be construed and enforced in
accordance with the laws of the State of Colorado, without reference to the
choice of law principles thereof.
8.13 Jurisdiction and Venue. This Agreement shall be subject to the
exclusive jurisdiction of the courts of Jefferson County Colorado. The parties
to this Agreement agree that any breach of any term or condition of this
Agreement shall be deemed to be a breach occurring in the State of Colorado by
virtue of a failure to perform an act required to be performed in the State of
Colorado and irrevocably and expressly agree to submit to the jurisdiction of
the courts of the State of Colorado for the purpose of resolving any disputes
29
among the parties relating to this Agreement or the transactions contemplated
hereby. The parties irrevocably waive, to the fullest extent permitted by law,
any objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement, or any
judgment entered by any court in respect hereof brought in Colorado County,
Colorado, and further irrevocably waive any claim that any suit, action or
proceeding brought in Colorado County, Colorado has been brought in an
inconvenient forum.
8.14 Participation of Parties. The parties hereby agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding,
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
8.15 Further Assurances. The parties hereto shall deliver any and all
other instruments or documents reasonably required to be delivered pursuant to,
or necessary or proper in order to give effect to, all of the terms and
provisions of this Agreement including, without limitation, all necessary stock
powers and such other instruments of transfer as may be necessary or desirable
to transfer ownership of the Superior Stock.
8.16 Publicity. No public announcement or other publicity concerning
this Agreement or the transactions contemplated hereby shall be made without the
prior written consent of both Superior and MWEX as to form, content, timing and
manner of distribution. Nothing contained herein shall prevent any party from
making any filing required by federal or state securities laws or stock exchange
rules.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
MOUNTAINS WEST EXPLORATION, INC.
By:/s/▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President
SUPERIOR ENERGY LLC
By:/s/G. ▇▇▇▇▇▇ ▇▇▇▇▇
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Manager
MW Co
By:/s/▇▇▇▇▇ ▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇
Title: President
31
Schedule
3.14
Pioneer Energy has notified ▇▇▇▇▇▇ ▇▇▇▇ and MWEX of intent to assess a
recalculation of unitizing costs in the amount of $37,000 for some small
interest methane production in Colorado.
3.15
Leases Interest and Overrides subject to Purchase Agreement.
3.20
None - Except for working interest in coalbed methane properties
operated by Pioneer, and consulting contracts related thereto, which may yield
more than $10,000 in revenue, and which may also generate unitizing
recalculation liabilities in excess of $10,000.
3.17
▇▇▇▇▇▇ ▇▇▇▇, consultant, $15,000 month consulting terminable May 5,
2005.
▇▇▇▇▇ ▇▇▇▇, $0 salary, President/Director
▇▇▇▇▇▇ ▇▇▇▇▇, $0 salary Secretary/Director