EXHIBIT 10.2
<PAGE>
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
MOUNTAINS WEST EXPLORATION, INC.,
MW Co,
SUPERIOR ENERGY LLC,
a Limited Liability Company
April 28, 2005
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
1
<PAGE>
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
2
<PAGE>
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 mark, 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).
3
<PAGE>
"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 Skye Blue 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.
4
<PAGE>
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 Michael A. Littman, 7609
Ralston Road, Arvada, CO 80002, 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.
5
<PAGE>
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
6
<PAGE>
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
7
<PAGE>
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.
8
<PAGE>
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,
9
<PAGE>
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
10
<PAGE>
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, choate 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. Ther
