Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger (" Agreement ") is dated
September 5, 2007, by and among Wescorp Energy, Inc., a Delaware
corporation (" Wescorp "), Strategic Decision Sciences, USA,
Inc., a Texas corporation (" USA ") and Scott Shemwell (the
" Shareholder "). Wescorp, USA and the Shareholder are
sometimes referred to individually as a "Party" and collectively as
the "Parties."
RECITALS
A. Wescorp
is a corporation duly organized and existing under the laws of the
State of Delaware.
B. USA
is a corporation duly organized and existing under the laws of the
State of Texas. USA has two wholly-owned subsidiaries: (i)
Strategic Decisions Sciences LLC and (ii) Critical Systems
Solutions LLC (collectively, the "Subsidiaries" and each a
"Subsidiary"). For purpose of this Agreement, the term "Companies"
shall be used to collectively refer to USA and the
Subsidiaries.
C. Except
as otherwise provided herein, it is the intention of the parties to
this Agreement that the Merger provided for herein be treated as a
"reorganization" under Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code").
D. The
respective Boards of Directors of each of Wescorp and USA have
determined that it is in the best interests of their respective
company and their stockholders to consummate the Merger (as defined
below) provided for herein.
E. Shareholder
owns 100,000 shares of the common stock, $0.01 par value per share,
of USA ("USA Common Stock"), which constitutes one-hundred percent
(100%) of the issued and outstanding capital stock of USA.
In
consideration of the foregoing and of the covenants and agreements
set forth in this Agreement, the parties, intending to be legally
bound, agree as follows:
ARTICLE I
THE MERGER
Section
1.1. The Merger .
(a)
The Merger . Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined below), USA shall
merge with and into Wescorp in accordance with the applicable
provisions of the Delaware General Corporation Law (" DGCL
") (the " Merger "), the separate corporate existence of USA
shall cease and Wescorp shall survive and continue to exist as a
corporation incorporated under the DGCL (Wescorp, as the surviving
corporation in the Merger, sometimes being referred to herein as
the "Surviving Corporation").
(b)
Name . The name of the Surviving Corporation shall be
"Wescorp Energy, Inc.
(c)
Articles and Bylaws . The certificate of incorporation (the
" Charter ") and bylaws of Wescorp (the " Bylaws ")
immediately after the Merger shall be the Wescorp Charter and the
Wescorp Bylaws as in effect immediately prior to the Merger.
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Exhibit 10.1
(d)
Directors and Executive Officers of the Surviving
Corporation . The directors of the Surviving Corporation
immediately after the Merger shall be the directors of Wescorp
immediately prior to the Merger, each of whom shall serve until his
successor shall be duly elected and qualified. The executive
officers of the Surviving Corporation immediately after the Merger
shall be the executive officers of Wescorp immediately prior to the
Merger, each of whom shall serve until such time as his respective
successor shall be duly elected and qualified.
(e)
Authorized Capital Stock . The authorized capital stock of
the Surviving Corporation upon consummation of the Merger shall be
as set forth in the Wescorp Charter immediately prior to the
Merger.
(f)
Effect of the Merger . At the Effective Time, the effect of
the Merger shall be provided in accordance with the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the property, rights, privileges, powers
and franchises of USA shall vest in the Surviving Corporation, and
all debts, liabilities, obligations, restrictions, disabilities and
duties of USA shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving
Corporation.
(g)
Additional Actions . If, at any time after the Effective
Time, the Surviving Corporation shall consider that any further
assignments or assurances in law or any other acts are necessary or
desirable to (i) vest, perfect or confirm, of record or otherwise,
in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of USA acquired or to
be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger, or (ii) otherwise carry out the
purposes of this Agreement, USA, and its proper officers and
directors, shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver
all such proper deeds, assignments and assurances.
Section
1.2. Effective Date and
Effective Time; Closing .
(a) Subject
to the satisfaction or waiver of the conditions set forth in
Articles VI, VII and VIII (as applicable) (other than those
conditions that by their nature are to be satisfied at the
consummation of the Merger, but subject to the fulfillment or
waiver of those conditions), the parties shall cause articles of
merger relating to the Merger (the " Articles of Merger ")
to be filed with the Secretary of State of the State of Delaware
pursuant to the DGCL on a date selected by Wescorp after such
satisfaction or waiver. The Merger provided for herein shall become
effective upon such filings or on such other date as may be
specified therein, which effective date is herein called the "
Effective Date ." The " Effective Time " of
the Merger shall be the time of such filings or otherwise as set
forth in such filings.
(b) A
closing (the " Closing ") shall take place immediately prior
to the Effective Time at the offices of Patton Boggs LLP, 1801
California Street, Suite 4900, Denver, Colorado 80202 at 10:00
a.m., Denver, Colorado time, or at such other place, at such other
time, or on such other date as the parties may mutually agree upon
(such date is referred to as the " Closing Date "). At the
Closing, there shall be delivered to Wescorp and USA the
certificates and other documents required to be delivered under
Articles VII and VIII (as applicable) hereof.
ARTICLE II
CONSIDERATION
Section
2.1. Conversion of
Shares . At the Effective Time, by virtue of the Merger and
without any action on the part of a holder of shares of USA Common
Stock:
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Exhibit 10.1
(a)
Wescorp Common Stock . Each share of Wescorp Common Stock
(as defined below) that is issued and outstanding immediately prior
to the Effective Time shall remain issued and outstanding and shall
be unchanged by the Merger.
(b)
USA Common Stock . All shares of USA Common Stock issued and
outstanding immediately prior to the Effective Time shall be
converted into, and shall be canceled in exchange for, the right to
receive two million shares of Wescorp common stock, $0.00001 par
value per share (the " Wescorp Common Stock ").
Section
2.2. Rights as Shareholders; Stock
Certificates . At the Effective Time, holders of USA Common
Stock shall cease to be, and shall have no rights as, stockholders
of USA other than to receive the consideration provided under
Section 2.1(b) . On and after the Effective Date, all of the
outstanding stock certificates which prior to that time represented
shares of USA Common Stock shall be deemed for all purposes to
evidence ownership of and to represent the shares of Wescorp Common
Stock into which the shares of USA Common Stock represented by such
certificates have been converted as herein provided. The registered
owner on the books and records of Wescorp or its transfer agent of
any such outstanding stock certificate shall, until such
certificate shall have been surrendered for transfer or otherwise
accounted for to Wescorp or its transfer agent, have and be
entitled to exercise any voting and other rights with respect
thereto and to receive any dividend and other distributions upon
the shares of Wescorp Common Stock evidenced by such outstanding
certificate as above provided.
Section
2.3. No Fractional
Shares . Notwithstanding any other provision of this Agreement,
neither certificates nor scrip for fractional shares of Wescorp
Common Stock shall be issued in the Merger. Each holder of USA
Common Stock who otherwise would have been entitled to a fraction
of a share of Wescorp Common Stock (after taking into account all
stock certificates delivered by such holder) shall receive in lieu
thereof cash (without interest) in an amount determined by
multiplying the fractional share interest to which such holder
would otherwise be entitled by the closing price per share of
Wescorp Common Stock on the Closing Date, rounded to the nearest
whole cent. No such holder shall be entitled to dividends, voting
rights or any other rights in respect of any fractional share.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF USA AND SHAREHOLDER
USA and
Shareholder hereby represent and warrant, jointly and severally, to
Wescorp as follows:
Section
3.1. Organization and Good
Standing . USA (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas;
(b) has all requisite power and authority to own and operate its
property and assets, to lease the property and assets it operates
as lessee and to conduct the business in which it is currently, or
is currently proposed to be, engaged; (c) does not conduct business
in any jurisdiction other than Texas such that it would be required
to be qualified to conduct business in that jurisdiction; and (d)
has the power and authority to execute, deliver and perform its
obligations under this Agreement. USA owns 100% of the outstanding
equity of each Subsidiary. Each Subsidiary is a Texas limited
liability company duly organized and, validly existing and in good
standing with the State of Texas. Other than the Subsidiaries, USA
has no direct or indirect subsidiaries and does not own any shares
of capital stock or other securities of any other entity.
Section
3.2. Enforceability,
Authority, No Conflict . This Agreement constitutes the legal,
valid and binding obligation of USA and Shareholder, enforceable
against each of them in accordance with its terms. Upon the
execution and delivery by USA and Shareholder, this Agreement will
constitute the legal, valid and binding obligation of each of USA
and the Shareholder, enforceable against each of them in accordance
with its terms. USA has the power and authority to execute and
deliver the
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Exhibit 10.1
Agreement and to perform its obligations under
this Agreement, and such action has been duly authorized by all
necessary action by Shareholder and the USA board of directors.
Shareholder has all necessary legal capacity to enter into this
Agreement and to perform his obligations hereunder. The execution,
delivery and performance by USA and Shareholder of this Agreement
and the consummation of the transactions contemplated hereby: (a)
have been duly authorized by all necessary corporate action; (b) do
not contravene the terms of USA’s articles of incorporation
or bylaws or the articles of organization or operating agreements
of either of the Subsidiaries (the "Governing Documents"), or any
amendment thereto; and (c) upon receipt of the Consents, will not
violate, conflict with or result in any breach or contravention of
or the creation of any Encumbrance under, any USA Contract or any
legal requirement applicable to USA.
Section
3.3. Capitalization .
USA’s authorized capital stock consists of 100,000 shares of
common stock, $0.01 par value per share. USA’s issued and
outstanding capital stock consists of 100,000 shares of USA Common
Stock. Shareholder is and will be on the Closing Date the record
and beneficial owner and holder of 100,000 outstanding shares of
USA Common Stock, free and clear of all Encumbrances. There are no
securities convertible or exchangeable into or any rights of any
person or entity to acquire any capital stock of USA. There are no
buy/sell agreements, shareholders’ or partners’
agreements, subscriptions, options, warrants, calls, rights,
contracts, commitments, understandings, restrictions or
arrangements relating to the issuance or voting of any equity
interest of USA. All of the issued and outstanding shares of
USA’s capital stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of pre-emptive
rights and were issued in full compliance with applicable state and
federal securities laws and any right of third parties. There is no
person having any claim or right under any phantom interest plan,
interest appreciation rights plan, phantom interest agreement or
interest appreciation rights agreement or similar rights or
agreements entered into or maintained by USA.
Section
3.4. Financial Information .
USA has delivered to Wescorp a list of all assets and liabilities
of the Companies as of July 31, 2007 (collectively referred to
herein as the "Financial Information").
Section
3.5. Books and Records .
The books of account and other financial records of USA, all of
which have been made available to Wescorp, are complete and
correct.
Section
3.6. Sufficiency of
Assets . The assets used by USA and each Subsidiary in
USA’s business are adequate to conduct the operations of the
Companies as currently conducted by the Companies and have been
conducted during the past 12 months. The assets of USA and each
Subsidiary generally include all assets needed by the Companies to
conduct its project management consulting business, including
without limitation the electronic documentation, including
process/workflow/data maps, methodologies, know-how, technology and
business related to the Structural Dynamics, Asset Maturity Model,
Strategic Value Assessment, and any other aspects of USA’s
Strategic Decision Management Methodology, USA’s Integrated
Operations Methodology, Concurrent Process Management, and Field
Operations Process Management. Neither the business nor the assets
of any of the Companies include or relate to the know-how,
technology, business or other aspects related to process simulation
and/or lean energy.
Section
3.7. Real Property . Neither
USA nor either Subsidiary owns any real property nor leases or
subleases any real property. Wescorp will not at the Closing have
any liabilities, obligations or commitments relating to any real
property previously owned or used by USA.
Section
3.8. Title to Assets;
Encumbrances . USA owns, or otherwise has a valid leasehold
interest providing sufficient and legally enforceable rights to
use, all of the assets used in the conduct of
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Exhibit 10.1
USA’s business. USA and its Subsidiaries
have good and marketable title to all of their respective assets,
or associated leaseholds therein, free and clear of all
Encumbrances.
Section
3.9. Condition of Assets . The
assets used in the conduct of Companies’ business are in good
operating condition and repair (ordinary wear and tear excepted),
have been reasonably maintained consistent with standards generally
followed in the industry, and are suitable for their present
uses.
Section
3.10. Inventories . The
Companies have no items of inventory included as part of its
assets.
Section
3.11. No Undisclosed
Liabilities . Neither USA nor either Subsidiary has any
liability or obligation, secured or unsecured, whether accrued,
absolute, contingent, unasserted or otherwise, affecting the assets
used by USA in its business that is not specified in the Agreement
and in the Financial Information.
Section
3.12. Taxes . USA and its
Subsidiaries have filed or caused to be filed, or has properly
filed extensions for, all tax returns that are due on or before the
Closing Date, and has paid or caused to be paid all taxes due on or
before the Closing Date, except taxes the validity or amount of
which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside.
USA and its Subsidiaries have paid or caused to be paid, or has
established reserves that are adequate in all material respects
for, all applicable tax liabilities that have accrued prior to the
Closing Date for all fiscal years which have not been examined and
reported on by the taxing authorities (or closed by applicable
statutes).
Section
3.13. No Material Adverse
Change . Since the date of the Financial Information, there has
not been any material adverse change in the business, operations,
prospects, assets, results of operations or condition (financial or
other) of USA or its Subsidiaries, and no event has occurred or
circumstance exists that may result in such a material adverse
change.
Section
3.14. Legal Compliance .
USA and each Subsidiary, and the conduct and operations of
USA’s business, have been in compliance with each law
(including rules and regulations thereof) of any federal, state,
local or foreign government, administrative agency or commission,
or any other governmental or regulatory entity or agency
("Governmental Body"), which (a) affects or relates to this
Agreement or any agreement entered into in conjunction with this
Agreement or the transactions contemplated hereby or thereby or (b)
is applicable to the Assets or the Business.
Section
3.15. Legal Proceedings;
Orders . There are no pending legal proceedings,
investigations, administrative or other actions by any Governmental
Body (the "Proceedings") or, to the knowledge of USA and
Shareholder, threatened Proceedings against or affecting the
Companies, the assets of the Companies or the business of the
Companies. No injunction, writ, temporary restraining order, decree
or any order of any nature has been issued by any court or other
Governmental Body purporting to enjoin or restrain the execution,
delivery or performance of the Agreement.
Section
3.16. Absence of Certain
Changes and Events . Since the date of the Financial
Information, the Companies have conducted their business only in
the ordinary course of business and the Companies have not sold or
transferred any of its assets. Other than the sale of inventory in
the ordinary course of business, other than for the sale or other
disposition of excess, obsolete or worn-out inventory or equipment,
and other than the sale or disposition of assets constituting
tangible personal property that have been replaced with other
assets of equal or greater value or utility, and the Companies have
not sold
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Exhibit 10.1
any inventory to any customer on approval or on
any other basis which entitles the customer to return, or may
obligate USA or either Subsidiary to repurchase, such
inventory.
Section
3.17. Contracts; No Defaults
.
(a) Except
as set forth on Section 3.17(a) of the
Disclosure Schedule , neither USA nor either
Subsidiary is a party to any written Contract or any oral Contract
material to its operations as they have been conducted at any time
during the past 12 months (each a " USA Contract ").
Complete and correct copies of all USA Contracts listed on
Section 3.17(a) of the Disclosure
Schedule have been delivered to Wescorp by USA.
(b) With
respect to each USA Contract: (i) such USA Contract is legal,
valid, binding and enforceable against USA and in full force and
effect as against USA; (ii) following the Merger, each USA Contract
will continue to be legal, valid, binding, enforceable and in full
force and effect on identical terms as of the Closing Date
immediately after giving effect to the consummation of the
transactions contemplated hereby; (iii) USA is not in breach or
default and, to the Knowledge of USA and Shareholder, no other
party is in breach or default and no event has occurred which with
notice or lapse of time would constitute a breach or default or
permit termination, modification or acceleration under such USA
Contract; and (iv) USA has not repudiated any provision of such USA
Contract, and to the Knowledge of USA and Shareholder, no party has
repudiated any provision of thereof. USA is a party to all the USA
Contracts.
Section
3.18. Employee Relations . The
Companies are in compliance with all federal, state and municipal
laws related to employment and employment practices, terms and
conditions of employment, and wages and hours, and are not engaged
in any unfair labor practice, and there are no arrears in the
payment of wages or social security taxes.
Section
3.19. Employee Benefit
Plans . The Companies have no employee benefit plans, including
but not limited to any healthcare, pension, profit sharing,
retirement, deferred compensation, welfare and other similar plans,
programs or agreements, whether reduced to writing or not, relating
to the Companies’ employees, or maintained at any time by USA
or either Subsidiary.
Section
3.20. Intellectual
Property .
(a) USA
has not used any Intellectual Property material for the conduct of
its operations as they have been conducted during the past 12
months other than that listed on Section 3.30(a
) of the Disclosure Schedule . Except for
Intellectual Property licensed pursuant to agreements listed on
Section 3.20(a ) of the Disclosure
Schedule , USA and each Subsidiary (1) validly owns,
beneficially and of record, and holds the entire right, title and
interest (in the United States) in and to the Intellectual Property
material to its operations, free and clear of any lien, claim or
Encumbrance other than Encumbrances permitted by Wescorp and all
trade marks included therein are valid and enforceable; (2) validly
owns, beneficially and of record,
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