Document:

Exhibit 10.2

Exhibit C-1

MILLENNIUM BROKERAGE GROUP, LLC
 EMPLOYMENT AGREEMENT

          THIS AGREEMENT, is made by and between William L. Zelenik (the “Employee”) and MILLENNIUM BROKERAGE GROUP, LLC, a Tennessee limited liability company (the “Company”), effective as of ______________, 2005 (the “Effective Date”).

          WITNESSETH:

          WHEREAS, the Company is engaged in the life insurance brokerage business, representing and marketing the products of various insurance carriers.

          WHEREAS, the Company desires to retain and employ Employee as Chief Executive Officer upon the terms and subject to the conditions of this Agreement.

          WHEREAS, the execution and delivery of this Agreement is a condition precedent to the closing of the transactions contemplated by that certain Membership Interest Purchase Agreement dated September ___, 2005, by and among Employee, the Company, all other members of the Company, Enterprise Financial Services Corp. (“Enterprise”) Millennium Holding Corporation, Inc., a Missouri corporation and ________________ (the “Purchase Agreement”).

          NOW, THEREFORE, for the reasons set forth above, and in consideration of the mutual promises and agreements herein set forth, the Company and Employee agree as follows:

          1.     Employment.  Subject to the terms and conditions set forth in this Agreement, the Company hereby employs Employee for the Contract Term as hereafter defined.  During the Contract Term, Employee shall serve as Chief Executive Officer and shall have such duties and responsibilities as are customarily assigned to individuals serving in such position and such other duties as the Board of Governors (the “Board”) of the Company may from time to time specify consistent with such position.  Employee shall comply with all polices and procedures of the Company generally applicable to employees of the Company and to the extent consistent with the provisions of this Agreement.  The duties and responsibilities Employee is to perform hereunder shall be conducted primarily within the Nashville, Tennessee metropolitan area.  Employee
may be required from time to time to perform his duties hereunder on an occasional basis at such other places as the Board shall designate or as the interests or business opportunities of the Company may require; provided, however, that without Employee’s consent, the Employee shall not be required to relocate his residence from the Nashville, Tennessee metropolitan area.  Employee hereby accepts such employment and agrees to serve the Company in such capacities for the term of this Agreement.  During the Contract Term, Employee shall report directly to the Chief Executive Officer of Enterprise.

          2.     Term of Employment.  Except as otherwise provided herein, the term of this Agreement shall commence on the Effective Date and end on the “Third Installment Closing Date,” as defined in the Purchase Agreement (the “Contract Term”).  The Contract Term may be extended by mutual written agreement of Employee and the Company upon such terms, provisions and conditions which are mutually acceptable to Employee and the Company.  Notwithstanding any expiration of this Agreement at the end of the Contract Term, to the extent that Employee remains an employee of the Company thereafter, unless the parties otherwise agree in writing, (i) the obligations of the Company under Sections 4, 6 and 11 of this Agreement shall remain applicable and (ii) the obligations of Employee under Sections 7, 8, 9 and 11 of this Agreement

shall remain applicable.

          3.     Devotion to Duties.  Employee agrees that during the Contract Term Employee will devote all of his skill, knowledge, commercial efforts and customary working time to the conscientious and faithful performance of his duties and responsibilities to the Company except for  (i) permitted vacation time and absence for sickness or similar disability and (ii) to the extent that it does not interfere with the performance of Employee’s duties hereunder, such reasonable time as may be devoted to the fulfillment of Employee’s civic and charitable activities.  Employee will use his best good faith efforts to promote the success of the Company’s business and will cooperate fully with the Board in the advancement of the best interests of the Company.  During the Contract Term, Employee will not be gainfully employed in any
professional business other than that of the Company and those matters set forth on Exhibit A, attached hereto.  Notwithstanding the foregoing, no provision of this Section 3 shall prohibit the Employee from engaging in “personal production,” as such term is commonly understood within the life insurance industry, with respect to life insurance products and annuity products (“Personal Production”).

          4.     Compensation of Employee.

	
  
 
  	
  
          4.1   Base Salary.  During the Contract Term, the Company   shall pay to Employee as compensation for the services to be performed by   Employee a base salary of $275,000.00 per year (the “Base Salary”).  The Base Salary shall be payable in   installments in accordance with the Company’s normal payroll practice and   shall be subject to such income and employment tax withholdings and other   ordinary employee withholdings as may be required by law.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          4.2   Targeted Bonus. In addition to the compensation set forth elsewhere in this
Section 4, beginning in 2006 and continuing in each year or portion thereof
during the Contract Term and any extensions thereof, the Employee shall qualify
for a targeted annualized bonus as determined below (“Targeted Bonus”)
based upon meeting certain financial and operating goals which will be mutually
agreed upon by the Company and Employee in writing not later than the
Company’s January Board meeting commencing in 2006 and each subsequent year
thereafter (the financial and operating goals for 2006 and subsequent years are
referred to herein as “Targets”).  The established Targets shall
be consistent with the operating budgets, capital budgets and strategic plans
for the Company as adopted by the Company’s Board.  Within 75 days
after the end of each calendar year, the Board shall make a good faith
determination as to the extent to which the Targets have been met or exceeded
for the then-ended calendar year.  If the Targets have been met for the
2006 calendar year, then Employee shall receive a minimum Targeted Bonus of
$100,000.00.  If the Targets for a subsequent calendar year are met,
Employee shall receive a Targeted Bonus with respect to such calendar year as
the Board
 

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may determine, subject to the condition that, if the Targets are met,
the sum of annual base compensation plus Targeted Bonus for such subsequent
calendar year is at least $350,000.  In the event that the established
Targets are exceeded in any calendar year, then Employee shall be entitled to
receive additional bonus amounts above the Targeted Bonus as may be determined
in the discretion of the Board.  If the Board determines that the Targets
have not been fully met, but minimum thresholds as may be established by the
Board have been met, the Board shall make a good faith determination as to the
extent the Targets have been met and determine the amount of such Targeted Bonus
to be awarded to the Employee based proportionately upon the extent to which the
Targets are determined to have been met.  If the Targets for the 2006
calendar year and subsequent calendar years are met, the Board will review and
consider an increase in the amount of Targeted Bonus for the following calendar
year.  Employee shall also be eligible to receive such other bonuses or
incentive payments as may be approved by the Board.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          4.3   Benefits.  Employee shall be entitled to participate,   during the Contract Term, in all regular employee benefit and deferred   compensation plans provided by the Company (to the extent such participation   is not restricted by the Internal Revenue Code of 1986 (the “Code”)),   including, without limitation, any savings, Section 401(k) plan, incentive   stock plan, dental and medical plans, life insurance and disability   insurance, such participation to be as provided in said employee benefit   plans in accordance with the terms and conditions thereof as in effect from   time to time and subject to any applicable waiting period.  Employee shall also be entitled to four   weeks of   paid vacation during each year of the Contract Term, provided that any   vacation not used in any year shall not be carried over to any subsequent   year of
Employee’s employment by the Company.  Employee shall be entitled to recognize as holidays all days   recognized as such by the Company pursuant to the policies of its parent   company.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          4.4   Reimbursement of Expenses.  The Company will provide for the payment   or reimbursement of all reasonable and necessary expenses incurred by Employee   in connection with the performance of his duties under this Agreement in   accordance with the Company’s expense reimbursement policy, as such may   change from time to time.
  
	
   
  	
  
 
  
	
  
 
  	
  
          4.5   Annual   Compensation Review.  The Board will review all facets of Employee’s compensation and   benefits as set forth in this Section 4 no less often than annually, on the   same compensation review cycle as the other officers of the Company and   officers of Enterprise.  The Board,   pursuant to the provisions of the Second Amended and Restated Operating   Agreement of the Company (the “New Operating Agreement”), may make annual   adjustments to the elements of Employee’s compensation and benefits, subject   to the provisions of this Section 4 and so long as such adjustments cause   Employee’s compensation and benefits to be at least as favorable as set forth   in this Agreement.
  

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          5.     Termination of Employment.

	
  
 
  	
  

           5.1   Termination
for Cause.  “Termination for Cause”, as hereinafter
defined, may be effected by the Company, pursuant to the provisions of the New
Operating Agreement, at any time during the term of this Agreement by written
notification to Employee, specifying in detail the basis for the Termination for Cause. Not later than
thirty (30) days after Termination for Cause, Employee shall be paid all accrued salary, vested deferred
compensation, if any, (other than pension plan, Section 401(k) plan, or profit sharing plan benefits which will
be paid in accordance with the terms of the applicable plan), any benefits under any plans of the Company or
Enterprise in which Employee is a participant to the full extent of Employee’s rights under such plans, accrued
vacation pay, and any appropriate business expenses incurred by Employee reimbursable
by the Company in connection with his duties
hereunder, all to the date of termination, but Employee shall not be paid any
other compensation or reimbursement of any kind, including without limitation,
severance compensation.  “Termination for Cause” shall mean
termination by the Company of Employee’s employment by the Company by
reason of (a) an order of any federal or state regulatory authority having
jurisdiction over the Company or any suspension, prohibition or loss of license
which restricts Employee’s ability to sell, market or service life
insurance products for the Company in any state or states which, taken
individually or together, constitute a substantial portion of the commission
revenue generated by Employee, (b) the willful failure or refusal of Employee
substantially to perform Employee’s duties hereunder; (c) a willful breach
by Employee of any material provision of this Agreement or of any other written
agreement with the Company or any of its Affiliates; (d) Employee’s
commission of a crime that constitutes a felony or other crime of moral
turpitude or criminal fraud; (e) chemical or alcohol dependency which materially
and adversely affects Employee’s performance of Employee’s duties
under this Agreement; (f) any act of disloyalty or breach of responsibilities to
the Company by Employee which is intended by Employee to cause material harm to
the Company; or (g) embezzlement (or attempted embezzlement) of any of the
Company’s funds or property.
 
	
   
  	
  
 
  
	
  
 
  	
  
          5.2   Termination
Other Than for Cause.  Notwithstanding any other provisions of this
Agreement, the Company may effect a “Termination Other Than For
Cause”, as hereinafter defined, in accordance with the provisions of the
New Operating Agreement, at any time upon giving written notice to Employee of
such termination.
 

	
  
 
  	
  
          (i)     Upon   Termination Other Than For Cause, the Employee shall execute a release and   waiver of all claims with respect to Employee’s employment against the   Company, its Affiliates and their respective officers and directors in   substantially the form of Exhibit B attached hereto (the “Release”).
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)     Within   thirty (30) days of the Company’s acceptance of the Release, the Company   shall pay the Employee:
  
	
   
  	
  
 
  
	
  
 
  	
  
                    (A)     all   accrued salary, vested deferred compensation (other than pension plan, profit   sharing plan, or Section 401(k) plan benefits which will be paid in   accordance with the applicable plan), accrued vacation pay, any benefits   under any plans of the Company or Enterprise in which Employee is a   participant to the full extent of Employee’s rights under such plans, and any   appropriate business expenses incurred by Employee in connection with   Employee’s duties hereunder, all to the date of termination; and
  

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                      (B)     severance   payment as provided in subsection 6.1.
  
	
   
  	
   
  	
   
  
	
   
  	
   
  	
            (iii)     “Termination   Other Than for Cause” shall mean:
  
	
   
  	
   
  	
   
  
	
   
  	
   
  	
   
  
	
   
  	
                                 (A)     any   termination by the Company of Employee’s employment with the Company other   than termination pursuant to subsections 5.1, 5.3, 5.4 or 5.5; or
  
	
   
  	
   
  
	
   
  	
   
  	
   
  
	
   
  	
   
  	
                      (B)     termination   by Employee of Employee’s employment with the Company (x) by reason of the   Company’s willful breach of a material provision of this Agreement, or (y)   the assignment of Employee without Employee’s consent to a position,   responsibilities or duties of a materially lesser status or degree of   responsibility than Employee’s position, responsibilities or duties as of the   Effective Date (“Constructive Termination”).
  

	
  
 
  	
  
          5.3   Termination by Reason of Disability.  If, during the term of this Agreement,   Employee, in the judgment of the Board pursuant to the provisions of the New   Operating Agreement, (i) has failed to perform his duties under this   Agreement on account of illness or physical or mental incapacity, and (ii)   such illness or incapacity continues for a period of more than ninety (90)consecutive   days, or ninety (90)days during any 180 day period, the   Company shall have the right to terminate Employee’s employment hereunder by   written notification to Employee and payment to Employee of all accrued   salary, vested deferred compensation, if any, (other than pension plan,   Section 401(k) plan or profit sharing plan benefits which will be paid in   accordance with the applicable plans), accrued vacation pay, any benefits   under any plans of the Company or
Enterprise in which Employee is a   participant to the full extent of Employee’s rights under such plans, and any   appropriate business expenses incurred by Employee in connection with his   duties hereunder, all to the date of termination, but Employee shall not be   paid any other compensation or reimbursement of any kind, including without   limitation, severance compensation.
  
	
   
  	
  
 
  
	
  
 
  	
  
          5.4   Death.  In the event of Employee’s death during   the term of this Agreement, Employee’s employment shall be terminated as of   the day of his death and the Company shall pay to his estate or such   beneficiaries as Employee may from time to time designate all accrued salary,   vested deferred compensation (other than pension plan or profit sharing plan   benefits which will be paid in accordance with the applicable plan), any   benefits under any plans of the Company or Enterprise in which Employee is a   participant to the full extent of Employee’s rights under such plans, accrued   vacation pay, and any appropriate business expenses incurred by Employee in   connection with his duties hereunder, all to the date of termination, but   Employee’s estate shall not be paid any other compensation or reimbursement   of any kind, including
without limitation, severance compensation.
  

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          5.5   Voluntary
Termination.  In the event of a “Voluntary Termination,”
as hereinafter defined, provided that Employee provides the Company with at
least sixty (60) days notice of such termination (which notice and any requirement for service may
be waived or shortened by the Company), the Company shall within thirty (30) days after
such termination pay all accrued salary, vested deferred compensation, if any, (other than pension plan, Section
401(k) plan, or profit sharing plan benefits which will be paid in accordance with the applicable plans), any
benefits under any plans of the Company or Enterprise in which Employee is a participant to the full extent of
Employee’s rights under such plans, accrued vacation pay, and any appropriate business expenses incurred by
Employee in connection with his duties hereunder, all to the date of termination,
but no other compensation or reimbursement of any
kind, including without limitation, severance compensation. 
“Voluntary Termination” shall mean termination by Employee of
Employee’s employment other than (i) Constructive Termination, (ii)
termination by reason of Employee’s disability as described in subsection
5.3, and (iii) termination by reason of Employee’s death as described in
subsection 5.4.
 
	
  
 
  	
  
 
  
	
  
 
  	
  
          5.6   Resignation Upon Termination.  Effective upon any termination under this   Section 5 or otherwise, Employee shall automatically and without taking any   further actions be deemed to have resigned from all positions then held by   him with the Company and all of its Affiliates.
  

          6.     Severance Compensation

	
  
 
  	
  
          6.1   Termination Other Than for Cause.  In the event Employee’s employment is   terminated in a Termination Other Than For Cause and subject to the   provisions of subsection 5.2., Employee shall be paid as severance   compensation his Base Salary, at the rate payable at the time of such   termination, for the two year period beginning on the effective date for such   termination, plus (i) any accrued and unpaid Bonus due Employee under   paragraph 4.3 of this Agreement and (ii) an amount equal to the Targeted   Bonuses due (based on the Base Salary then in effect) for the calendar year   of Employee’s termination and the following calendar year as though all   requisite targets were fully and completely achieved.  Notwithstanding any provision in this   subsection 6.1 to the contrary, the Company may, in the Company’s sole   discretion, by delivery
of a notice to Employee within 30 days following a   Termination Other Than For Cause, elect to remit to Employee a lump sum   severance payment by bank cashier’s check equal to the present value of the   flow of cash payments that would otherwise be paid to Employee pursuant to   this subsection 6.2.  Such present   value shall be determined as of the date of delivery of the notice of   election by the Company and shall be based on a discount rate equal to the   prime rate, as reported in The Wall Street Journal, on the date of delivery   of the election notice.  If the   Company elects to remit a lump sum severance payment, the Company shall make   such payment to Employee within 30 days following the date on which the   Company notifies Employee of its election.
  
	
  
 
  	
  
 
  
	
   
  	
  
          6.2   Termination Upon Any Other Event.  In the event of a Voluntary Termination,   Termination For Cause, termination by reason of Employee’s disability   pursuant to subsection 5.3 or termination by reason of Employee’s death   pursuant to subsection 5.4, Employee or his estate shall not be paid any   severance compensation.
  

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          7.     Non-Competition; Non-Solicitation.

	
  
 
  	
  
          7.1   Definitions. For purposes of this Agreement:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    “Competition”   means, whether directly or indirectly, (i) owning any equity interest in a   Competitive Operation, (ii) acting as a lender of funds or credit to a   Competitive Operation or (iii) acting as an officer, manager, employee,   consultant, independent contractor, adviser, director, shareholder member,   partner or sales representative of a Competitive Operation.
  
	
   
  	
  
 
  
	
  
 
  	
  
                    “Competitive   Operation” means any entity that directly or indirectly engages in or   owns, invests in, manages or controls any venture or enterprise engaged in   the business of brokering, representing or marketing the products of various   life insurance carriers.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    “Non-Competition   Period” means the period commencing on the Effective Date and continuing   through and including the first anniversary of the termination of Employee’s   employment with the Company for any reason other than the death of Employee.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    “Enterprise   Entities” means Enterprise and all business entities Controlled by, under   common Control with or Controlling Enterprise, including without limitation   the Company.  For purposes of the   preceding sentence “Control,” and any derivation thereof, with respect to a   business entity means the ownership of a majority of the voting equity   securities or equity interests thereof.
  
	
   
  	
  
 
  
	
  
 
  	
  
          7.2   Covenants.  Employee agrees that during the   Non-Competition Period, Employee shall not, directly or indirectly either for   Employee’s own account or for the benefit or for the account of any other   person or entity:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    (i)     Subject   to Section 7.3(ii), engage in Competition in the United States; or
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    (ii)     (A)    induce or attempt to induce or aid   others in inducing an employee of any of the Enterprise Entities to leave the   employ of such Enterprise Entity or in any way interfere with the   relationship between the Enterprise Entities and any of their respective   employees; or (B) subject to Section 7.3(ii), induce or attempt to induce any   client, vendor, sales representative, contractor, referral source, insurance   company or other business relation of any of the Enterprise Entities to cease   doing business with such Enterprise Entity or in any way interfere with the   relationship between any client, vendor, sales representative, contractor,   referral source, insurance company or other business relation and any of the   Enterprise Entities.
  
	
   
  	
  
 
  
	
  
 
  	
  
          7.3     (i)      Nothing   herein shall prohibit Employee from being a passive owner of not more than   five percent (5%) of the outstanding stock of any class of securities of a   Competitive Operation the equity securities of which are traded on a national   exchange, the Nasdaq Stock Market or the over-the-counter market, so long as   Employee has no active participation in the business of such Competitive   Operation.
  

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                    (ii)     It   shall not be a violation of Section 7.2(i) or clause (B) of Section 7.2(ii)   for Employee to engage in, and such provisions shall not prevent Employee   from engaging, in Personal Production.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          7.4     If, at   the time of enforcement of this Agreement, a court shall hold that the   duration, scope, area or other restrictions stated herein are unreasonable   under circumstances then existing, the parties agree that the maximum   duration, scope, area or other restrictions reasonable under such   circumstances shall be substituted for the stated duration, scope, area or   other restrictions.
  

          8.     Confidentiality and Non-Disclosure Agreement.

	
  
 
  	
  
          8.1     Employee   agrees that effective immediately, Employee shall hold in strict confidence   and shall not, without the express prior written authorization of the Company   specifically referencing this subsection 8.1, make personal use of, nor   disclose to any person, firm, corporation, partnership, agency, commission,   institution or other entity, any Trade Secret or other Confidential   Information relating to the Company, Enterprise or any other Enterprise   Entity, delivered to or obtained by Employee prior to or after the date   hereof.  Upon the Company’s request,   Employee shall return all information furnished to him related to the   business of the Company without retaining any copies in electronic or other form,   provided that the Employee shall be entitled to retain a copy of all   information returned to the Company solely for file protection
purposes in   connection with any potential litigation or other dispute matters.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          8.2     As   used in this Agreement, “Confidential Information” includes, but is not   limited to, the following: (i) financial statements and other financial   information, including pricing, profitability information, budgets,   projections, costs, licenses and forecasts; (ii) personnel information   including salary, benefits and other compensation policies and practices;   (iii) sales and marketing information including reports, strategies,   techniques, plans, products, contacts and customer lists; (iv) information   relating to computer hardware, customized software, inventions, improvements,   data, reports and manuals; and (v) any other information designated in   writing by the Company or any Enterprise Entity as confidential or   proprietary in nature; provided that Confidential Information shall exclude   information: (vi) which Employee can demonstrate

was known to Employee before   receipt thereof from the Company, (vii) which Employee can demonstrate is   learned by Employee from a third party entitled to disclose it, (viii) which   Employee can demonstrate becomes known publicly other than through Employee,   or (ix) the disclosure of which by Employee is authorized by the Board,   required by any legal requirement or contemplated by any agreement to which   the Company is a party.
  
	
   
  	
  
 
  
	
  
 
  	
  
          8.3     As
used in this Agreement, the term “Trade Secret” means information
including a program, device, method, technique or process that:  (i)
derives economic value, actual or potential, from not being generally known to
and not being readily ascertainable by proper means by other persons who can
obtain economic value from its disclosure or use; and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy.
 

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          8.4     Employee   acknowledges that the Company has represented that any and all Confidential   Information or Trade Secrets of the Company and the Enterprise Entities are   proprietary, unique and commercially sensitive in nature and have been   developed over time and reflect a substantial investment.  Employee further acknowledges that the   Company has represented that the Trade Secrets of the Company and the   Enterprise Entities are not a matter of public or general knowledge in the   industry or industries in which any of the Company and the Enterprise   Entities conduct business and that the Company and the Enterprise Entities   derive substantial economic value (actual or potential) from such   information.  Employee also   acknowledges that the Company has represented that the Company and the Enterprise   Entities maintain substantial secrecy concerning

the Confidential Information   and Trade Secrets and that, absent disclosure by the Company or the   Enterprise Entities to Employee, Employee could not otherwise have readily   ascertained by proper means and/or have acquired knowledge of such   Confidential Information and Trade Secrets.
  

          9.     Representations and Acknowledgments.

	
  
 
  	
  
          9.1     Employee   represents and warrants to the Company that the execution and delivery of   this Agreement does not conflict with or result in the breach by Employee or   violation by Employee of any other agreement to which Employee is a party or   by which Employee is bound.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
          9.2     Employee   acknowledges and agrees that:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    (i)     the   restrictive covenants set forth in Sections 7 and 8 hereof are reasonable and   not more restrictive than necessary to protect the Company’s and the other   Enterprise Entities’ goodwill and other legitimate business interests,   including, without limitation, the Company’s and the other Enterprise   Entities’ strong interest in preserving and protecting their respective   Confidential Information and Trade Secrets;
  
	
   
  	
  
 
  
	
  
 
  	
  
                    (ii)     such   covenants are reasonable in scope, area and duration, particularly in light   of Employee’s experience, relationship and responsibilities with the Company;   without limiting the foregoing, Employee acknowledges that the market for the   Company’s products and services is national in scope and that the designation   of the United States as the geographic area covered by the non-competition   provisions of subsection 7.2(i) is reasonable; and
  
	
  
 
  	
  
 
  
	
  
 
  	
  
                    (iii)     the   terms of Sections 7, 8 and 11 shall survive and remain in effect following   any termination of this Agreement.
  

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          10.     Remedies.     Employee acknowledges that the extent of damages to the Company from a breach of Sections 7 and/or 8 of this Agreement would not be readily quantifiable or ascertainable, that monetary damages would be inadequate to make the Company whole in case of such a breach, and that there is not and would not be an adequate remedy at law for such a breach.  Therefore, Employee specifically agrees that the Company is entitled to injunctive or other equitable relief (without any requirement to post any bond or other security) from a breach of Sections 7 and/or 8 of this Agreement, and hereby waives and covenants not to assert against a prayer for such relief that there exists an adequate remedy at law, in monetary damages or otherwise.

          11.     Non-Disparagement.  No party hereto nor any of its Affiliates, officers,  directors or employees shall at any time during or after the Contract Term whether in writing or orally, criticize, disparage or otherwise demean in any way the other party or any Affiliate thereof or any of their respective products, officers, directors, members, governors or employees.

          12.     Successors and Assigns; Third Party Beneficiaries.  This Agreement shall be binding upon and inure to the benefit of the Company, each Enterprise Entity and their respective successors and assigns and shall be binding upon Employee and Employee’s legal representatives.  Each of the Enterprise Entities, whether currently in existence or coming into existence after the date hereof, is an intended third party beneficiary under and to this Agreement and shall have the right to commence enforcement of all rights and pursue all remedies of the Company under this Agreement as if an original party hereto.  This Agreement is for the personal services of Employee and may not be assigned by Employee.   

          13.     Modification or Waiver.  No amendment, modification, waiver, termination or cancellation of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the party against whom enforcement of such amendment, modification, waiver, termination or cancellation is sought.  No course of dealing between or among the parties to this Agreement shall be deemed to affect or to modify, amend or discharge any provision or term of this Agreement.  No delay on the part of the Company or any Enterprise Entity in the exercise of any of their respective rights or remedies shall operate as a waiver thereof and no single or partial exercise by the Company or any Enterprise Entity of any such right or remedy shall preclude other or further exercise thereof.  A waiver of a right or remedy on any one occasion shall

not be construed as a bar to or waiver of any such right or remedy on any other occasion.

          14.     Severability.  Whenever possible, each provision and term of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, then, subject to the provisions of subsection 7.4, such provision or term shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provisions or terms or the remaining provisions or terms of this Agreement.

          15.     Entire Agreement.  This Agreement and the Purchase Agreement and the other documents and agreements contemplated thereby, including without limitation the Company’s Second Amended and Restated Operating Agreement, dated as of the date hereof, contain the complete agreement concerning the employment arrangement between the parties, including without limitation severance or termination pay, and shall, as of the Effective Date, supersede all other agreements or arrangements between the parties with regard to the subject matter hereof.

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          16.     Binding Agreement.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.  The obligations of the Company under this Agreement shall not be terminated by reason of any liquidation, dissolution, bankruptcy, cessation of business or similar event relating to the Company.  This Agreement shall not be terminated by reason of any merger, consolidation or reorganization of the Company, but shall be binding upon and inure to the benefit of the surviving or resulting entity.

          17.     Manner of Giving Notice.  All notices, requests and demands to or upon the respective parties hereto shall be sent by hand, certified mail, overnight air courier service, in each case with all applicable charges paid or otherwise provided for, addressed as follows, or to such other address as may hereafter be designated in writing by the respective parties hereto:

	
  
 
  	
  
To Company:
  	
  
To Employee   at his current
  
	
  
 
  	
  
Millennium   Brokerage Group, LLC
  	
  
residential   address on file with
  
	
  
 
  	
  
611 Commerce   Street, Suite 2606
  	
  
the Company.
  
	
  
 
  	
  
Nashville,   TN  37203
  	
  
 
  
	
  
 
  	
  
c/o:   _________________________
  	
  
 
  

          Such notices, requests and demands shall be deemed to have been given or made on the date of delivery if delivered by hand or by telecopy, on the next following date if sent by nationally recognized overnight courier service or the third business day after deposit in certified mail, postage prepaid.  

          18.     Headings.  The headings have been inserted for convenience only and shall not be deemed to limit or otherwise affect any of the provisions of this Agreement.

          19.     Choice of Law.  It is the intention of the parties hereto that this Agreement and the performance hereunder be construed in accordance with, under and pursuant to the laws of the State of Tennessee without regard to the jurisdiction in which any action or special proceeding may be instituted.

          20.     Taxes.  The company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment and social insurance taxes, as shall be required by law.

          21.     Voluntary Agreement; No Conflicts.  Employee hereby represents and warrants to the Company that he is legally free to accept and perform his employment with the Company, and that the complete performance of the obligations pursuant to Employee’s employment will not violate any order or decree of any governmental or judicial body or contract by which Employee is bound.  The Company will not request or require, and Employee agrees not to use, in the course of Employee’s employment with the Company, any information obtained in Employee’s employment with any previous employer to the extent that such use would violate any contract by which Employee is bound or any decision, law, regulation, order or decree of any governmental or judicial body.

11

          22.     Certain Definitions.  As used herein, the following definitions shall apply:

          “Affiliate”   with respect to any person, means any other Person that, directly or   indirectly through one or more intermediaries, Controls, is Controlled by, or   is under common Control with the first Person, including but not limited to a   Subsidiary of the first Person, a Person of which the first Person is a   Subsidiary, or another Subsidiary of a Person of which the first Person is   also a Subsidiary.

  
          “Control”   With respect to any Person, means the possession, directly or indirectly,   severally or jointly, of the power to direct or cause the direction of the   management policies of such Person, whether through the ownership of voting   securities, by contract or credit arrangement, as trustee or executor, or   otherwise.

  
          “Person”   Any natural person, firm, partnership, limited liability company,   association, corporation, company, trust, business trust, governmental   authority or other entity.

  
          “Subsidiary”  With respect to any Person, each   corporation or other Person in which the first Person owns or Controls,   directly or indirectly, capital stock or other ownership interests   representing 50% or more of the combined voting power of the outstanding   voting stock or other ownership interests of such corporation or other   Person.

          23.     Dispute Resolution.

  
                    (a)     The
Employee and the Company shall resolve any claim, controversy or dispute arising
out of or in connection with this Agreement, or relating to or arising out of
Employee’s employment with the Company by compulsory arbitration in
Chicago, Illinois.  Any such arbitration shall be conducted according to
the Commercial Arbitration Rules of the AAA.  Notwithstanding the
provisions of this Section, the Company may seek and obtain appropriate
restraining orders and temporary or permanent injunctions in a court proceeding
without engaging in arbitration with respect to any alleged violation of the
covenants contained in Sections 7 and 8.  The Employee shall invoke his
right to arbitrate any claim, controversy or dispute with or against the Company
only after first attempting to resolve it through the exhaustion of the
employee problem solving mechanism contained in Company’s Employee Handbook (or Enterprise’s   Employee Handbook if the Company has none) without first obtaining results   satisfactory to the Employee, in his reasonable discretion.

                    (b)     In   any dispute which is finally resolved through arbitration or in a court of   competent jurisdiction, the prevailing party (as defined below) shall be   entitled to reimbursement for all reasonable attorneys’ fees and witness   expenses, and in the case of arbitration, all fees and expenses of the   arbitrators. The “prevailing party” shall be determined by the court or   arbitrator, as appropriate.

[The remainder of this page is intentionally blank.  The next page is the signature page.]

12

          THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first stated above.

	
   
  	
  MILLENNIUM BROKERAGE GROUP, LLC
  
	
   
  	
   
  	
   
  	
   
  
	
   
  	
   
  	
   
  
	
   
  	
  By:
  	
   
  
	
   
  	
   
  	
  

  
	
   
  	
   
  	
   
  
	
   
  	
   
  	
   
  
	
   
  	
  Title:
  	
   
  
	
   
  	
   
  	
  

  
	
   
  	
   
  	
   
  
	
   
  	
  ________________________________________________
  
	
   
  	
  ______________________________,   Individually
  

13AGREEMENT OF MERGER AND

PLAN OF REORGANIZATION

among

WESTERN EXPLORATION, INC.,

MDWERKS ACQUISITION CORP. and

MDWERKS GLOBAL HOLDINGS, INC.

OCTOBER 12, 2005

 

 

 

.04

 

 

 

TABLE OF CONTENTS

Page

 

i

 

 

 

	
            1.
 	
            The Merger.
 	
            1
 
	
             
 	
            1.1
 	
            Merger
 	
            1
 
	
             
 	
            1.2
 	
            Effective Time
 	
            2
 
	
             
 	
            1.3
 	
            Certificate of Incorporation, By-laws, Directors and Officers.
 	
            2
 
	
             
 	
            1.4
 	
            Assets and Liabilities
 	
            2
 
	
             
 	
            1.5
 	
            Manner and Basis of Converting Shares.
 	
            2
 
	
             
 	
            1.6
 	
            Surrender and Exchange of Certificates
 	
            3
 
	
             
 	
            1.8
 	
            Parent Common Stock
 	
            3
 
	
             
 	
            1.9
 	
            Operation of Surviving Corporation.
 	
            4
 
	
             
 	
            1.10
 	
            Further Assurances
 	
            4
 
	
            2.
 	
            Representations and Warranties of the Company
 	
            4
 
	
             
 	
            2.1
 	
            Organization, Standing, Subsidiaries, Etc.
 	
            4
 
	
             
 	
            2.2
 	
            Qualification
 	
            4
 
	
             
 	
            2.3
 	
            Capitalization of the Company
 	
            5
 
	
             
 	
            2.4
 	
            Indebtedness
 	
            5
 
	
             
 	
            2.5
 	
            Company Stockholders
 	
            5
 
	
             
 	
            2.6
 	
            Corporate Acts and Proceedings
 	
            5
 
	
             
 	
            2.7
 	
            Compliance with Laws and Instruments
 	
            5
 
	
             
 	
            2.8
 	
            Binding Obligations
 	
            6
 
	
             
 	
            2.9
 	
            Broker’s and Finder’s Fees
 	
            6
 
	
             
 	
            2.10
 	
            Financial Statements
 	
            6
 
	
             
 	
            2.11
 	
            Absence of Undisclosed Liabilities
 	
            6
 
	
             
 	
            2.12
 	
            Changes
 	
            7
 
	
             
 	
            2.14
 	
            Employees
 	
            7
 
	
             
 	
            2.15
 	
            Tax Returns and Audits
 	
            7
 
	
             
 	
            2.16
 	
            Patents and Other Intangible Assets
 	
            8
 
	
             
 	
            2.17
 	
            Employee Benefit Plans; ERISA
 	
            8
 
	
             
 	
            2.18
 	
            Title to Property and Encumbrances
 	
            9
 
	
             
 	
            2.19
 	
            Condition of Properties
 	
            9
 
	
             
 	
            2.20
 	
            Insurance Coverage
 	
            9
 
	
             
 	
            2.21
 	
            Litigation
 	
            9
 
	
             
 	
            2.22
 	
            Licenses
 	
            9
 
	
             
 	
            2.23
 	
            Interested Party Transactions
 	
            9
 
	
             
 	
            2.24
 	
            Environmental Matters
 	
            9
 
	
             
 	
            2.25
 	
            Receivables
 	
            10
 
	
             
 	
            2.26
 	
            Inventories
 	
            11
 
	
             
 	
            2.27
 	
            Customers, Suppliers and Independent Contractors
 	
            11
 
	
             
 	
            2.28
 	
            Intentionally Omitted.
 	
            11
 
	
             
 	
            2.29
 	
            Intentionally Omitted.
 	
            11
 
	
             
 	
            2.30
 	
            Questionable Payments
 	
            11
 
	
             
 	
            2.31
 	
            Obligations to or by Stockholders
 	
            11
 
	
            3.
 	
            Representations and Warranties of Parent and Acquisition Corp.
 	
            11
 
	
             
 	
            3.1
 	
            Organization and Standing
 	
            12
 
					

 

 

ii

 

 

 

	
             
 	
            3.2
 	
            Corporate Authority
 	
            12
 
	
             
 	
            3.3
 	
            Broker’s and Finder’s Fees
 	
            12
 
	
             
 	
            3.4
 	
            Capitalization of Parent
 	
            12
 
	
             
 	
            3.5
 	
            Acquisition Corp.
 	
            13
 
	
             
 	
            3.6
 	
            Validity of Shares
 	
            13
 
	
             
 	
            3.7
 	
            SEC Reporting and Compliance
 	
            13
 
	
             
 	
            3.8
 	
            Financial Statements
 	
            14
 
	
             
 	
            3.9
 	
            Governmental Consents
 	
            14
 
	
             
 	
            3.10
 	
            Compliance with Laws and Other Instruments
 	
            14
 
	
             
 	
            3.11
 	
            No General Solicitation
 	
            15
 
	
             
 	
            3.12
 	
            Binding Obligations
 	
            15
 
	
             
 	
            3.13
 	
            Absence of Undisclosed Liabilities
 	
            15
 
	
             
 	
            3.14
 	
            Changes
 	
            15
 
	
             
 	
            3.15
 	
            Tax Returns and Audits
 	
            16
 
	
             
 	
            3.16
 	
            Employee Benefit Plans; ERISA
 	
            16
 
	
             
 	
            3.17
 	
            Litigation
 	
            17
 
	
             
 	
            3.18
 	
            Interested Party Transactions
 	
            17
 
	
             
 	
            3.19
 	
            Questionable Payments
 	
            17
 
	
             
 	
            3.20
 	
            Obligations to or by Stockholders
 	
            18
 
	
             
 	
            3.21
 	
            Schedule of Assets and Contracts
 	
            18
 
	
             
 	
            3.22
 	
            Employees
 	
            19
 
	
             
 	
            3.23
 	
            Disclosure
 	
            19
 
	
            4.
 	
            Additional Representations, Warranties and Covenants of the Stockholders
 	
            19
 
	
            5.
 	
            Conduct of Businesses Pending the Merger.
 	
            20
 
	
             
 	
            5.1
 	
            Conduct of Business by the Company Pending the Merger
 	
            20
 
	
             
 	
            5.2
 	
            Conduct of Business by Parent and Acquisition Corp. Pending the Merger
 	
            20
 
	
            6.
 	
            Additional Agreements.
 	
            21
 
	
             
 	
            6.1
 	
            Access and Information
 	
            21
 
	
             
 	
            6.2
 	
            Additional Agreements
 	
            22
 
	
             
 	
            6.3
 	
            Publicity
 	
            22
 
	
             
 	
            6.4
 	
            Appointment of Directors
 	
            23
 
	
             
 	
            6.5
 	
            Parent Name Change and Exchange Listing
 	
            23
 
	
             
 	
            6.8
 	
            Stock Incentive Plan
 	
            23
 
	
            7.
 	
            Conditions of Parties’ Obligations.
 	
            23
 
	
             
 	
            7.1
 	
            Company Obligations
 	
            23
 
	
             
 	
            7.2
 	
            Parent and Acquisition Corp. Obligations
 	
            25
 
	
            8.
 	
            Non-Survival of Representations and Warranties
 	
            27
 
	
            9.
 	
            Amendment of Agreement
 	
            27
 
	
            10.
 	
            Definitions
 	
            28
 

 

 

iii

 

 

 

	
            11.
 	
            Closing
 	
            32
 
	
            12.
 	
            Termination Prior to Closing.
 	
            32
 
	
             
 	
            12.1
 	
            Termination of Agreement
 	
            32
 
	
             
 	
            12.2
 	
            Termination of Obligations
 	
            33
 
	
            13.
 	
            Miscellaneous.
 	
            33
 
	
             
 	
            13.1
 	
            Notices
 	
            33
 
	
             
 	
            13.2
 	
            Entire Agreement
 	
            33
 
	
             
 	
            13.3
 	
            Expenses
 	
            33
 
	
             
 	
            13.4
 	
            Time
 	
            34
 
	
             
 	
            13.5
 	
            Severability
 	
            34
 
	
             
 	
            13.6
 	
            Successors and Assigns
 	
            34
 
	
             
 	
            13.7
 	
            No Third Parties Benefited
 	
            34
 
	
             
 	
            13.8
 	
            Counterparts
 	
            34
 
	
             
 	
            13.9
 	
            Recitals, Schedules and Exhibits
 	
            34
 
	
             
 	
            13.10
 	
            Section Headings and Gender
 	
            34
 
	
             
 	
            13.11
 	
            Governing Law
 	
            34
 

 

 

iv

 

 

 

LIST OF EXHIBITS AND SCHEDULES

Exhibits

	
            A
 	
            Articles of Merger
 	
             

	
            B
 	
            Certificate of Incorporation of the Company
 	
             

	
            C
 	
            By-laws of the Company
 	
             

	
            D
 	
            Directors and Officers of the Surviving Corporation and Parent
 
	
            E
 	
            Letter of Transmittal
 	
             

	
            F
 	
            Lock-Up Letter
 	
             

	
            G
 	
            Form of Opinion of Company’s Counsel
 	
             

	
            H
 	
            Form of Opinion of Parent’s Counsel
 	
             

	
            I
 	
            Form of Release and Indemnity of Parent Directors
 	
             

	
            J
 	
            Form Indemnification Agreement by Parent Officers
 	
             

											

 

Company Disclosure Schedules

	
            2.3
 	
            Options
 	
             

	
            2.5
 	
            Company Stockholders
 	
             

	
            2.7
 	
            Compliance with Laws
 	
             

	
            2.9
 	
            Company Broker’s and Finder’s Fees
 
	
            2.10
 	
            Financial Statements
 	
             

	
            2.11
 	
            Undisclosed Liabilities
 	
             

	
            2.12
 	
            Changes/Indebtedness
 	
             

	
            2.16
 	
            Ownership of Intellectual Property
 	
             

	
            2.21
 	
            Litigation
 	
             

	
            2.23
 	
            Interested Party Transactions
 	
             

	
            2.28
 	
            Product Warranties
 	
             

	
            2.31
 	
            Obligations to or by Stockholders
 	
             

												

 

Parent Disclosure Schedules

	
            3.3
 	
            Parent Broker’s and Finder’s Fees
 	
             

	
            3.4
 	
            Outstanding Options and Other Convertible Securities
 
	
            3.7
 	
            SEC Reporting
 	
             

	
            3.15
 	
            Schedule of Parent Bank Accounts
 	
             

					

 

 

v

 

 

 

AGREEMENT OF MERGER AND PLAN OF REORGANIZATION

THIS AGREEMENT OF MERGER AND PLAN OF REORGANIZATION is made and entered into on October ___, 2005, by and among WESTERN EXPLORATION, INC., a Delaware corporation (“Parent”), MDWERKS ACQUISITION CORP., a Florida corporation (“Acquisition Corp.”), which is a wholly-owned subsidiary of Parent, and MDWERKS GLOBAL HOLDINGS, INC., a Florida corporation (the “Company”).

W I T N E S S E T H :

WHEREAS, the Board of Directors of each of Acquisition Corp., Parent and the Company have each determined that it is fair to and in the best interests of their respective corporations and stockholders for Acquisition Corp. to be merged with and into the Company (the “Merger”) upon the terms and subject to the conditions set forth herein;

WHEREAS, the Board of Directors of Acquisition Corp. and the Board of Directors of the Company have approved the Merger in accordance with the Florida Business Corporation Act (the “FBCA”), and upon the terms and subject to the conditions set forth herein and in the Articles of Merger ( including the Plan of Merger attached thereto as Exhibit A, the “Articles of Merger”) attached as Exhibit A hereto; and the Board of Directors of Parent also has approved this Agreement and the Articles of Merger;

WHEREAS, the requisite Stockholders (as such term is defined in Section 10 hereof) have approved by written consent pursuant to Section 607.0704 of the FBCA this Agreement and the Articles of Merger and the transactions contemplated and described hereby and thereby, including without limitation the Merger, and Parent, as the sole stockholder of Acquisition Corp., has approved this Agreement, the Articles of Merger and the transactions contemplated and described hereby and thereby, including without limitation the Merger; and

WHEREAS, simultaneously with the Closing (as such term is defined herein), Parent (as it will exist as of the closing of the Merger) is selling Units consisting of shares of its common stock, par value $0.001 per share, and detachable warrants to purchase shares of its common stock, par value $0.001 per share, in a private placement (the “Private Placement”) to accredited investors, pursuant to the terms of a Confidential Private Placement Memorandum, dated June 13, 2005 (as supplemented and amended from time to time, the “Memorandum”), for the purpose of causing the business of the Surviving Corporation (as defined below) to include the business of the Company following the Merger.

NOW, THEREFORE, in consideration of the mutual agreements and covenants hereinafter set forth, the parties hereto agree as follows:

	
            
 	
            1.
 	
            The Merger.
 

1.1          Merger. Subject to the terms and conditions of this Agreement and the Articles of Merger, Acquisition Corp. shall be merged with and into the Company in accordance with Section 607.1101 of the FBCA. At the Effective Time (as hereinafter defined), the separate legal existence of Acquisition Corp. shall cease, and the Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the “Surviving Corporation”) and 

 

1

 

 

shall continue its corporate existence under the laws of the State of Florida under the name MDWerks Global Holdings, Inc.

1.2          Effective Time. The Merger shall become effective on the date and at the time the Articles of Merger is filed with the Secretary of State of the State of Florida in accordance with Section 607.1101 of the FBCA. The time at which the Merger shall become effective as aforesaid is referred to hereinafter as the “Effective Time.” 

	
            
 	
            1.3
 	
            Certificate of Incorporation, By-laws, Directors and Officers.
 

(a)          The Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, attached as Exhibit B hereto, shall be the Certificate of Incorporation of the Surviving Corporation from and after the Effective Time until further amended in accordance with applicable law.

(b)          The By-laws of the Company, as in effect immediately prior to the Effective Time, attached as Exhibit C hereto, shall be the By-laws of the Surviving Corporation from and after the Effective Time until amended in accordance with applicable law, the Certificate of Incorporation and such By-laws.

(c)          The directors, officers and key employees listed in Exhibit D hereto shall be the directors, officers and key employees of the Surviving Corporation, and each shall hold his respective office or offices from and after the Effective Time until his successor shall have been elected and shall have qualified in accordance with applicable law, or as otherwise provided in the Certificate of Incorporation or By-laws of the Surviving Corporation.

1.4          Assets and Liabilities. At the Effective Time, the Surviving Corporation shall possess all the rights, privileges, powers and franchises of a public as well as of a private nature, and be subject to all the restrictions, disabilities and duties of each of Acquisition Corp and the Company (collectively, the “Constituent Corporations”); and all the rights, privileges, powers and franchises of each of the Constituent Corporations, and all property, real, personal and mixed, and all debts due to any of the constituent corporations on whatever account, as well for stock subscriptions as all other things in action or belonging to each of the Constituent Corporations, shall be vested in the Surviving Corporation; and all property, rights,
privileges, powers and franchises, and all and every other interest shall be thereafter as effectively the property of the Surviving Corporation as they were of the several and respective constituent corporations, and the title to any real estate vested by deed or otherwise in either of the such Constituent Corporations shall not revert or be in any way impaired by the Merger; but all rights of creditors and all liens upon any property of any of the Constituent Corporations shall be preserved unimpaired, and all debts, liabilities and duties of the Constituent Corporations shall thenceforth attach to the Surviving Corporation, and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.

	
            
 	
            1.5
 	
            Manner and Basis of Converting Shares.
 
	
             
 	
            (a)
 	
            At the Effective Time:
 	
             

(i)           each share of common stock, par value $.001 per share, of Acquisition Corp. that shall be outstanding immediately prior to the Effective Time shall, by 

 

2

 

 

virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive (10) shares of common stock, par value $.01 per share, of the Surviving Corporation, so that at the Effective Time, Parent shall be the holder of all of the issued and outstanding shares of the Surviving Corporation;

(ii)          the shares of common stock, without par value, of the Company (the “Company Common Stock”), which shares at the Closing will constitute all of the issued and outstanding shares of capital stock of the Company, beneficially owned by the Stockholders listed in Schedule 2.5 (other than shares of Company Common Stock as to which appraisal rights are perfected pursuant to the applicable provisions of the FBCA and not withdrawn or otherwise forfeited), shall, by virtue of the Merger and without any action on the part of the holders thereof, be converted into the right to receive 0.158074 shares of Parent Common Stock for each share of Company Common Stock; and

(iii)         each share of Company Common Stock held in the treasury of the Company immediately prior to the Effective Time shall be cancelled in the Merger and cease to exist.

(b)          After the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time.

1.6 Surrender and Exchange of Certificates. Promptly after the Effective Time and upon (i) surrender of a certificate or certificates representing shares of Company Common Stock that were outstanding immediately prior to the Effective Time or an affidavit and indemnification in form reasonably acceptable to counsel for the Parent stating that such Stockholder has lost their certificate or certificates or that such have been destroyed and (ii) delivery of a Letter of Transmittal (as described in Section 4 hereof), Parent shall issue to each  record holder of Company Common Stock surrendering such certificate or certificates and Letter of Transmittal, a certificate or certificates registered in the name of such Stockholder representing the number of shares of Parent Common Stock that such Stockholder
shall be entitled to receive as set forth in Section 1.5(a)(ii) hereof. Until the certificate, certificates or affidavit is or are surrendered together with the Letter of Transmittal as contemplated by this Section 1.6 and Section 4 hereof, each certificate or affidavit that immediately prior to the Effective Time represented any outstanding shares of Company Common Stock shall be deemed at and after the Effective Time to represent only the right to receive upon surrender as aforesaid the Parent Common Stock specified in Schedule 1.5 hereof for the holder thereof or to perfect any rights of appraisal which such holder may have pursuant to the applicable provisions of the FBCA.

	
             
 	
            1.7
 	
            [Intentionally Omitted]
 

1.8 Parent Common Stock. Parent agrees that it will cause the Parent Common Stock into which the Company Common Stock is converted at the Effective Time pursuant to Section 1.5(a)(ii) to be available for such purpose. Parent further covenants that immediately prior to the Effective Time there will be no more than 1,350,000 shares of Parent Common Stock issued and outstanding, not including the shares of Parent Common Stock to be issued in connection with the Private Placement and that no other common or preferred stock or equity 

 

3

 

 

securities or any options, warrants, rights or other agreements or instruments convertible, exchangeable or exercisable into common or preferred stock or other equity securities shall be issued or outstanding, except as described herein.

1.9 Operation of Surviving Corporation.  The Company acknowledges that upon the effectiveness of the Merger, and the compliance by the Parent and Acquisition Corp. of its duties and obligations hereunder, Parent shall have the absolute and unqualified right to deal with the assets and business of the Surviving Corporation as its own property without limitation on the disposition or use of such assets or the conduct of such business. 

1.10 Further Assurances. From time to time, from and after the Effective Time, as and when reasonably requested by Parent, the proper officers and directors of the Company as of the Effective Time shall, for and on behalf and in the name of the Company or otherwise,  execute and deliver all such deeds, bills of sale, assignments and other instruments and shall take or cause to be taken such further actions as Parent, Acquisition Corp. or their respective successors or assigns reasonably may deem necessary or desirable in order to confirm or record or otherwise transfer to the Surviving Corporation title to and possession of all of the properties, rights, privileges, powers, franchises and immunities of the Company or otherwise to carry out fully the provisions and purposes of this Agreement and the
Certificate of Merger. 

2. Representations and Warranties of the Company. The Company hereby represents and warrants to Parent and Acquisition Corp. as follows:

	
            
 	
            2.1
 	
            Organization, Standing, Subsidiaries, Etc.
 

(a)          The Company is a corporation duly organized and existing in good standing under the laws of the State of Florida, and has all requisite power and authority (corporate and other) to carry on its business, to own or lease its properties and assets, to enter into this Agreement and the Articles of Merger and to carry out the terms hereof and thereof. Copies of the Certificate of Incorporation and By-laws of the Company that have been delivered to Parent and Acquisition Corp. prior to the execution of this Agreement are true and complete and have not since been amended or repealed.

(b)          Other than Xeni Medical Systems, Inc., a Delaware corporation, Xeni Medical Billing, Corp., a Delaware corporation and Xeni Financial Services, Corp., a Florida corporation (each a “Subsidiary” and collectively, the “Subsidiaries”), the Company has no subsidiaries or direct or indirect interest (by way of stock ownership or otherwise) in any firm, corporation, limited liability company, partnership, association or business. The Company owns all of the issued and outstanding capital stock of each of the Subsidiaries free and clear of all Liens (as hereinafter defined), and each Subsidiary has no outstanding options, warrants or rights to purchase capital stock or other equity
securities of such Subsidiary, other than the capital stock owned by the Company. Unless the context otherwise requires, all references in this Section 2 to the “Company” shall be treated as being a reference to the Company and the Subsidiaries taken together as one enterprise.

2.2 Qualification. The Company is duly qualified to conduct business as a foreign corporation and is in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased makes such qualification necessary, except where the failure to be so 

 

4

 

 

qualified would not have a material adverse effect on the condition (financial or otherwise), properties, assets, liabilities, business operations, results of operations or prospects of the Company taken as a whole (the “Condition of the Company”). 

2.3 Capitalization of the Company. The authorized capital stock of the Company consists of 100,000,000 shares of Company Common Stock and 5,000,000 shares of Preferred Stock, and the Company has no authority to issue any other capital stock. There are 58,493,726 shares of Company Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding, and such issued shares are duly authorized, validly issued, fully paid and nonassessable, and none of  such shares have been issued in violation of the preemptive rights of any person. Except as disclosed in Schedule 2.5 or the Memorandum, the Company has no outstanding options, rights or commitments to issue Company Common Stock or other Equity Securities of the Company, and there are
no outstanding securities convertible or exercisable into or exchangeable for Company Common Stock or other Equity Securities of the Company. 

2.4 Indebtedness. The Company has no Indebtedness for Borrowed Money, except as disclosed on the Balance Sheet and Schedule 2.12 or the Memorandum.

2.5 Company Stockholders. Schedule 2.5 hereto contains a true and complete list of the record owner of all of the outstanding shares of Company Common Stock together with the number of securities held. To the knowledge of the Company, except as described in Schedule 2.5 or as disclosed in the Memorandum, there is no voting trust, agreement or arrangement among any of the beneficial holders of Common Stock affecting the nomination or election of directors or the exercise of the voting rights of Company Stock.

2.6 Corporate Acts and Proceedings. The execution, delivery and performance of this Agreement and the Certificate of Merger (together, the “Merger Documents”) have been duly authorized by the Board of Directors of the Company and have been approved by the requisite vote of the Stockholders, and all of the corporate acts and other proceedings required for the due and valid authorization, execution, delivery and performance of the Merger Documents and the consummation of the Merger have been validly and appropriately taken, except for the filing referred to in Section 1.2.

2.7 Compliance with Laws and Instruments. The business, products and operations of the Company have been and are being conducted in compliance in all material respects with all applicable laws, rules and regulations, except for such violations thereof for which the penalties, in the aggregate, would not have a material adverse effect on the Condition of the Company. The execution, delivery and performance by the Company of the Merger Documents and the consummation by the Company of the transactions contemplated by this Agreement: (a) will not require any authorization, consent or approval of, or filing or registration with, any court or governmental agency or instrumentality, except such as shall have been obtained prior to the Closing or as set forth in Schedule
2.7, (b) will not cause the Company to violate or contravene (i) any provision of law, (ii) any rule or regulation of any agency or government, (iii) any order, judgment or decree of any court, or (iv) any provision of the Certificate of Incorporation or By-laws of the Company, (c) will not violate or be in conflict with, result in a breach of or constitute (with or without notice or lapse of time, or both) a default under, any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or other contract, agreement or instrument to which the Company is a party or by which the Company or any of its properties is 

 

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bound or affected, except as would not have a material adverse effect on the Condition of the Company and (d) will not result in the creation or imposition of any Lien upon any property or asset of the Company. The Company is not in violation of, or (with or without notice or lapse of time, or both) in default under, any term or provision of its Certificate of Incorporation or By-laws or of any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or, except as would not materially and adversely affect the Condition of the Company, or any other material agreement or instrument to which the Company is a party or by which the Company or any of its properties is bound or affected.

2.8 Binding Obligations. The Merger Documents constitute the legal, valid and binding obligations of the Company and are enforceable against the Company in accordance with their respective terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

2.9 Broker’s and Finder’s Fees. No Person has, or as a result of the transactions contemplated or described herein will have, any right or valid claim against the Company, Parent, Acquisition Corp. or any Stockholder for any commission, fee or other compensation as a finder or broker, or in any similar capacity, except as disclosed in Schedule 2.9 hereto. Parent and Acquisition on the one hand and the Company on the other, hereby indemnify and hold each other harmless from and against any and all claims, losses or liabilities for any such commission, fee or other compensation as a result of the claim by any other Person that the indemnifying party or parties introduced or assisted them in connection with the transactions contemplated or described here. 

2.10 Financial Statements. Attached hereto as Schedule 2.10 the Company’s audited balance sheets (the “Balance Sheet”) for the year ended December 31, 2004 (the “Balance Sheet Date”). Such financial statements (i) are in accordance with the books and records of the Company, (ii) present fairly in all material respects the financial condition of the Company at the dates therein specified and the results of its operations and changes in financial position for the periods therein specified and (iii) have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a basis consistent with prior accounting periods.

2.11 Absence of Undisclosed Liabilities. The Company has no material obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due), arising out of any transaction entered into at or prior to the Closing, except (a) as disclosed in Schedule 2.11 and/or Schedule 2.12 hereto or in the Memorandum, (b) to the extent set forth on or reserved against in the Balance Sheet or the Notes to the Financial Statements, (c) current liabilities incurred and obligations under agreements entered into in the usual and ordinary course of business since the Balance Sheet Date, none of which (individually or in the aggregate) has had or will have a material adverse effect
on the Condition of the Company, and (d) by the specific terms of any written agreement, document or arrangement identified in the Schedules.

2.12 Changes. Since the Balance Sheet Date, except as disclosed in Schedule 2.12 hereto or in the Memorandum, the Company has not (a) incurred any debts, obligations or liabilities, absolute, accrued, contingent or otherwise, whether due or to become due, except for 

 

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fees, expenses and liabilities incurred in connection with the Private Placement, the Merger and related transactions and current liabilities incurred in the usual and ordinary course of business, (b) discharged or satisfied any Liens other than those securing, or paid any obligation or liability other than, current liabilities shown on the Balance Sheet and current liabilities incurred since the Balance Sheet Date, in each case in the usual and ordinary course of business, (c) mortgaged, pledged or subjected to Lien any of its assets, tangible or intangible other than in the usual and ordinary course of business, (d) sold, transferred or leased any of its assets, except in the usual and ordinary course of business, (e) cancelled or compromised any debt or claim, or waived or released any right, of material value, (f) suffered any physical damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the Condition of the Company, (g) entered into any transaction other than in the usual and ordinary course of business, (h) encountered any labor union difficulties, (i) declared or paid any dividends on or made any other distributions with respect to, or purchased or redeemed, any of its outstanding capital stock, (j) suffered or experienced any change in, or condition affecting, the Condition of the Company other than changes, events or conditions in the usual and ordinary course of its business, none of which (either by itself or in conjunction with all such other changes, events and conditions) has been materially adverse, (k) made any change in the accounting principles, methods or practices followed by it or depreciation or amortization policies or rates theretofore adopted, (l) made or permitted any amendment or termination of any material contract, agreement or license to which it is a party, (m) suffered any material loss not reflected in
the Balance Sheet or its statement of income for the year ended on the Balance Sheet Date, or (n) entered into any agreement, or otherwise obligated itself, to do any of the foregoing.

	
             
 	
            2.13
 	
            Intentionally Omitted.
 

2.14 Employees. The Company has complied in all material respects with all laws relating to the employment of labor, and the Company has encountered no material labor union difficulties. Other than pursuant to ordinary arrangements of employment compensation, the Company is not under any obligation or liability to any officer, director or employee of the Company.

2.15 Tax Returns and Audits. All required federal, state and local Tax Returns of the Company have been accurately prepared and duly and timely filed or extensions with respect thereto have been granted, and all federal, state and local Taxes required to be paid with respect to the periods covered by such returns have been paid. The Company is not and has not been delinquent in the payment of any Tax. The Company has not had a Tax deficiency proposed or assessed against it and has not executed a waiver of any statute of limitations on the assessment or collection of any Tax. None of the Company’s federal income tax returns nor any state or local income or franchise tax returns has been audited by governmental authorities. The reserves for Taxes reflected on the Balance Sheet are and will be
sufficient for the payment of all unpaid Taxes payable by the Company as of the Balance Sheet Date. Since the Balance Sheet Date, the Company has made adequate provisions on its books of account for all Taxes with respect to its business, properties and operations for such period. The Company has withheld or collected from each payment made to each of its employees the amount of all taxes (including, but not limited to, federal, state and local income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax  receiving officers or authorized depositaries. There are no federal, state, local or foreign audits, actions, suits, proceedings, investigations, claims or administrative 

 

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proceedings relating to Taxes or any Tax Returns of the Company now pending, and the Company has not received any notice of any proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns. The Company is not obligated to make a payment, or is a party to an agreement that under certain circumstances could obligate it to make a payment, that would not be deductible under Section 280G of the Code. The Company has not agreed nor is required to make any adjustments under Section 481(a) of the Code (or any similar provision of state, local and foreign law) by reason of a change in accounting method or otherwise for any Tax period for which the applicable statute of limitations has not yet expired. The Company (i) is not a party to, is bound by or has any obligation under, any Tax sharing agreement, Tax indemnification agreement or similar contract or arrangement,
whether written or unwritten (collectively,  “Tax Sharing Agreements”), or (ii) does not have any potential liability or obligation to any person as a result of, or pursuant to, any such Tax Sharing Agreements.

2.16       Patents and Other Intangible Assets. (a)  Except as set forth in Schedule 2.16 or as disclosed in the Memorandum, the Company (i) owns or has the right to use, free and clear of all Liens, claims and restrictions, all patents, trademarks, service marks, trade names, copyrights, licenses and rights with respect to the foregoing used in or necessary for the conduct of its business as now conducted or proposed to be conducted without infringing upon or otherwise acting adversely to the right or claimed right of any Person under or with respect to any of the foregoing and (ii) is not obligated or under any liability to make any payments by way of royalties, fees or otherwise to any owner or licensor of,
or other claimant to, any patent, trademark, service mark, trade name, copyright or other intangible asset, with respect to the use thereof or in connection with the conduct of its business or otherwise.

(b)          To the best knowledge of the Company, the Company owns and has the unrestricted right to use all trade secrets, if any, including know-how, negative know-how, formulas, patterns, programs, devices, methods, techniques, inventions, designs, processes, computer programs and technical data and all information that derives independent economic value, actual or potential, from not being generally known or known by competitors (collectively, “intellectual property”) required for or incident to the development, operation and sale of all products and services sold by the Company, free and clear of any right, Lien or claim of others; provided, however, the possibility exists that other Persons, completely independent of the Company or its employees or agents, could have developed intellectual property similar or identical to that of the Company. Except as set forth in Schedule 2.16 (b) hereof or as disclosed in the Memorandum, the Company is not aware of any such development of substantially identical trade secrets or technical information by others. 

2.17       Employee Benefit Plans; ERISA. (a)  The Company has no “employee benefit plans” (within the meaning of Section 3(3) of the ERISA) nor any other employee benefit or fringe benefit arrangements, practices, contracts, policies or programs of any type other than programs merely involving the regular payment of wages, commissions, or bonuses established, maintained or contributed to by the Company, whether written or unwritten and whether or not funded.

2.18 Title to Property and Encumbrances. The Company has good, valid and indefeasible marketable title to all properties and assets used in the conduct of its business (except for property held under valid and subsisting leases which are in full force and effect and 

 

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which are not in default) free of all Liens (except as set forth in Schedule 2.16) and other encumbrances, except Permitted Liens and such ordinary and customary imperfections of title, restrictions and encumbrances as do not, individually or in the aggregate, materially detract from the value of the property or assets or materially impair the use made thereof by the Company in its business. Without limiting the generality of the foregoing, the Company has good and indefeasible title to all of its properties and assets reflected in the Balance Sheet, except for property disposed of in the usual and ordinary course of business since the Balance Sheet Date and for property held under valid and subsisting leases which are in full force and effect and which are not in default.

2.19 Condition of Properties. All facilities, machinery, equipment, fixtures and other properties owned, leased or used by the Company are in operating condition and repair, subject to ordinary wear and tear, and are adequate and sufficient for the Company’s business.

2.20 Insurance Coverage. There is in full force and effect one or more policies of insurance issued by insurers of recognized responsibility, insuring the Company and its properties, products and business against such losses and risks, and in such amounts, as are customary for corporations engaged in the same or similar business and similarly situated. 

2.21 Litigation. Except as disclosed in Schedule 2.21 hereto or in the Memorandum, there is no legal action, suit, arbitration or other legal, administrative or other governmental proceeding pending or, to the best knowledge of the Company, threatened against or affecting the Company or its properties, assets or business, and after reasonable investigation, the Company is not aware of any incident, transaction, occurrence or circumstance that might reasonably be expected to result in or form the basis for any such action, suit, arbitration or other proceeding. The Company is not in default with respect to any order, writ, judgment, injunction, decree, determination or award of any court or any governmental agency or instrumentality or arbitration authority.

2.22       Licenses. The Company possesses from all appropriate governmental authorities all licenses, permits, authorizations, approvals, franchises and rights necessary for the Company to engage in the business currently conducted by it, all of which are in full force and effect.

2.23 Interested Party Transactions. Except as disclosed in Schedule 2.23 hereto or in the Memorandum, no officer, director or stockholder of the Company or any Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any such Person or the Company has or has had, either directly or indirectly, (a) an interest in any Person that (i) furnishes or sells services or products that are furnished or sold or are proposed to be furnished or sold by the Company or (ii) purchases from or sells or furnishes to the Company any goods or services, or (b) a beneficial interest in any contract or agreement to which the Company is a party or by which it may be bound or affected.

	
            
 	
            2.24
 	
            Environmental Matters
 

(a)          To the knowledge of the Company, the Company has never generated, used, handled, treated, released, stored or disposed of any Hazardous Materials on any 

 

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real property on which it now has or previously had any leasehold or ownership interest, except in compliance with all applicable Environmental Laws.

(b)          To the knowledge of the Company, the historical and present operations of the business of the Company are in compliance with all applicable Environmental Laws, except where any non-compliance has not had and would not reasonably be expected to have a material adverse effect on the Condition of the Company.

(c)          There are no material pending or, to the knowledge of the Company, threatened, demands, claims, information requests or notices of noncompliance or violation against or to the Company relating to any Environmental Law; and, to the knowledge of the Company, there are no conditions or occurrences on any of the real property used by the Company in connection with its business that would reasonably be expected to lead to any such demands, claims or notices against or to the Company, except such as have not had, and would not reasonably be expected to have, a material adverse effect on the Condition of the Company.

(d)          To the knowledge of the Company, (i) the Company has not, sent or disposed of, otherwise had taken or transported, arranged for the taking or disposal of (on behalf of itself, a customer or any other party) or in any other manner participated or been involved in the taking of or disposal or release of a Hazardous Material to or at a site that is contaminated by any Hazardous Material or that, pursuant to any Environmental Law, (A) has been placed on the “National Priorities List”, the “CERCLIS” list, or any similar state or federal list, or (B) is subject to or the source of a claim, an administrative order or other request to take “removal”, “remedial”, “corrective” or any other “response” action, as defined in any
Environmental Law, or to pay for the costs of any such action at the site; (ii) the Company is not involved in (and has no basis to reasonably expect to be involved in) any suit or proceeding and has not received (and has no basis to reasonably expect to receive) any notice, request for information or other communication from any governmental authority or other third party with respect to a release or threatened release of any Hazardous Material or a violation or alleged violation of any Environmental Law, and has not received (and has no basis to reasonably expect to receive) notice of any claims from any Person relating to property damage, natural resource damage or to personal injuries from exposure to any Hazardous Material; and (iii) the Company has timely filed every report required to be filed, acquired all necessary certificates, approvals and permits, and generated and maintained all required data, documentation and records under all Environmental Laws, in all such instances
except where the failure to do so would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Condition of the Company.

2.25 Receivables. The accounts receivable shown on the Balance Sheet (net of the allowance for doubtful accounts in the amount appearing thereon) have been collected or are, to the knowledge of the Company, collectible in the usual and ordinary course of the Company’s business in the amounts thereof shown on the Balance Sheet. The accounts receivable of the Company acquired after the Balance Sheet Date and prior to the Closing Date will be reflected on the books of account of the Company at 100% of the amount thereof and have been collected, or are, to the knowledge of the Company, collectible in the usual and ordinary course of the Company’s business, in the full amounts thereof (less normal allowances for doubtful accounts). All of the accounts receivable reflected on the Balance Sheet
and all accounts receivable which have arisen since the Balance Sheet Date are valid and enforceable claims, and the goods and 

 

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services sold and delivered which gave rise to such accounts receivable were sold and delivered in conformity with all applicable express and implied warranties, purchase orders, agreements and specifications, and, to knowledge of the Company, are not subject to any valid defense or offset.

2.26 Inventories. The inventories of the Company which are reflected in the Balance Sheet and all inventory items which have been acquired since the Balance Sheet Date consist of raw materials, supplies, work-in-process and finished goods of such quality and in such quantities as are being used and will be usable or are being sold and will be saleable in the ordinary course of its business with full mark-up at prevailing market prices, except to the extent of reserves for obsolete and slow-moving inventories reflected in the Balance Sheet. Such inventories are valued at the lower of cost or fair market value and were determined in accordance with generally accepted accounting principles consistently applied. The Company has not experienced, nor has any reason to believe that it will experience in
the foreseeable future, any material difficulty in obtaining, in the desired quantity and quality and upon reasonable terms and conditions, the raw materials, supplies or component products required for the manufacture, assembly or production of its products.

2.27 Customers, Suppliers and Independent Contractors. Since the Balance Sheet Date, the Company has not been advised that any customer, supplier or independent contractor of the Company intends to terminate or materially curtail its business relationship with the Company.

	
            
 	
            2.28
 	
            Intentionally Omitted.
 
	
            
 	
            2.29
 	
            Intentionally Omitted.
 

2.30 Questionable Payments. Neither the Company nor any director, officer or, to the best knowledge of the Company, agent, employee or other Person associated with or acting on behalf of the Company, has used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payments to government officials or employees from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entries on the books of record of any such corporations; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

2.31 Obligations to or by Stockholders. Except as disclosed in Schedule 2.31 or in the Memorandum, other than for accrued salary of employees of the Company who are also Stockholders and legal fees owed to the Law Firm of Peckar & Abramson, PC. of whom a Stockholder is a partner, the Company has no liability or obligation or commitment to any Stockholder or any Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any Stockholder, nor does any Stockholder or any such Affiliate or associate have any liability, obligation or commitment to the Company.

3. Representations and Warranties of Parent and Acquisition Corp.  Parent and Acquisition Corp. represent and warrant to the Company as follows:

3.1 Organization and Standing. Parent is a corporation duly organized and existing in good standing under the laws of the State of Nevada. Acquisition Corp. is a corporation duly 

 

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organized and existing in good standing under the laws of the State of Florida. Parent and Acquisition Corp. have heretofore delivered to the Company complete and correct copies of their respective Certificates of Incorporation and By-laws as now in effect. Parent and Acquisition Corp. have full corporate power and authority to carry on their respective businesses as they are now being conducted and as now proposed to be conducted and to own or lease their respective properties and assets. Neither Parent nor Acquisition Corp. has any subsidiaries (except Parent’s ownership of Acquisition Corp.) or direct or indirect interest (by way of stock ownership or otherwise) in any firm, corporation, limited liability company, partnership, association or business. Parent owns all of the issued and outstanding capital stock of Acquisition Corp. free and clear of all Liens, and Acquisition Corp. has no
outstanding options, warrants or rights to purchase capital stock or other equity securities of Acquisition Corp., other than the capital stock owned by Parent. Unless the content otherwise requires, all references in this Section 3 to the “Parent” shall be treated as being a reference to the Parent and Acquisition Corp. taken together as one enterprise.

3.2 Corporate Authority. Each of Parent and/or Acquisition Corp. (as the case may be) has full corporate power and authority to enter into the Merger Documents and the other agreements to be made pursuant to the Merger Documents, and to carry out the transactions contemplated hereby and thereby. All corporate acts and proceedings required for the authorization, execution, delivery and performance of the Merger Documents and such other agreements and documents by Parent and/or Acquisition Corp. (as the case may be) have been duly and validly taken or will have been so taken prior to the Closing. Each of the Merger Documents constitutes a legal, valid and binding obligation of Parent and/or Acquisition Corp. (as the case may be), each enforceable against them in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general principles of equity.

3.3 Broker’s and Finder’s Fees. No person, firm, corporation or other entity is entitled by reason of any act or omission of Parent or Acquisition Corp. to any broker’s or finder’s fees, commission or other similar compensation with respect to the execution and delivery of this Agreement or the Certificate of Merger, or with respect to the consummation of the transactions contemplated hereby or thereby, except as disclosed in Schedule 3.3 hereto. Parent and Acquisition Corp. jointly and severally indemnify and hold Company harmless from and against any and all loss, claim or liability arising out of any such claim from any other Person who claim they introduced Parent or Acquisition Corp. to, or assisted them with  the transactions
contemplated by or described herein. 

3.4 Capitalization of Parent. Capitalization of Parent. The authorized capital stock of Parent consists of (a) 100,000,000 shares of common stock, par value $0.001 per share (the “Parent Common Stock”), of which not more than 1,350,000 shares will be, prior to the Effective Time, issued and outstanding before taking into consideration the issuance of Parent Common Stock in the Private Placement and after taking into consideration the cancellation of Parent Common Stock as indicated in Section 7.2(f)(7)(iii) hereof, and (b) 10,000,000 shares of “blank check” preferred stock, par value $.001 per share, of which no shares are issued and outstanding on the date hereof. Except as disclosed in
Schedule 3.4, Parent has no outstanding options, rights or commitments to issue shares of Parent Common Stock or any other Equity Security of Parent or Acquisition Corp., and there are no outstanding securities convertible or exercisable into or exchangeable for shares of Parent Common Stock or any other Equity Security of Parent or 

 

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Acquisition Corp. There is no voting trust, agreement or arrangement among any of the beneficial holders of Parent Common Stock affecting the nomination or election of directors or the exercise of the voting rights of Parent Common Stock. All outstanding shares of the capital stock of Parent are validly issued and outstanding, fully paid and nonassessable, and none of such shares have been issued in violation of the preemptive rights of any person.

3.5 Acquisition Corp. Acquisition Corp. is a wholly-owned subsidiary of Parent that was formed specifically for the purpose of the Merger and that has not conducted any business or acquired any property, and will not conduct any business or acquire any property prior to the Closing Date, except in preparation for and otherwise in connection with the transactions contemplated by this Agreement, the Certificate of Merger and the other agreements to be made pursuant to or in connection with this Agreement and the Certificate of Merger.

3.6 Validity of Shares. The shares of Parent Common Stock to be issued at the Closing pursuant to Section 1.5(a)(ii) hereof, when issued and delivered in accordance with the terms hereof and of the Certificate of Merger, shall be duly and validly issued, fully paid and nonassessable. Based in part on the representations and warranties of the Stockholders as contemplated by Section 4 hereof and assuming the accuracy thereof, the issuance of the Parent Common Stock upon the Merger pursuant to Section 1.5(a)(ii) will be exempt from the registration and prospectus delivery requirements of the Securities Act and from the qualification or registration requirements of any applicable state blue sky or securities laws.

3.7          SEC Reporting and Compliance. (a)  Parent filed a registration statement on Form SB-2 under the Securities Act which became effective on January 11, 2005. Since that date, Parent has filed with the Commission all registration statements, proxy statements, information statements and reports required to be filed pursuant to the Exchange Act. Parent has not filed with the Commission a certificate on Form 15 pursuant to Rule 12h-3 of the Exchange Act.

(b)          Parent has delivered to the Company true and complete copies of the registration statements, information statements and other reports (collectively, the “Parent SEC Documents”) filed by the Parent with the Commission. None of the Parent SEC Documents, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained therein not misleading.

(c)          Except as set forth on Schedule 3.7, Parent has not filed, and nothing has occurred with respect to which Parent would be required to file, any report on Form 8-K since January 11, 2005. Prior to and until the Closing, Parent will provide to the Company copies of any and all amendments or supplements to the Parent SEC Documents filed with the Commission since January 11, 2005 and all subsequent registration statements and reports filed by Parent subsequent to the filing of the Parent SEC Documents with the Commission and any and all subsequent information statements, proxy statements, reports or notices filed by the Parent with the Commission or delivered to the stockholders of Parent.

(d)          Parent is not an investment company within the meaning of Section 3 of the Investment Company Act.

 

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(e)          The shares of Parent Common Stock are quoted on the Over-the-Counter (OTC) Bulletin Board under the symbol “WXPL,” and Parent is in compliance in all material respects with all rules and regulations of the OTC Bulletin Board applicable to it and the Parent Stock.

(f)           Between the date hereof and the Closing Date, Parent shall continue to timely satisfy the filing requirements of the Exchange Act and all other requirements of applicable securities laws and the OTC Bulletin Board including, but not limited to the timely filing of notices required by Rule 10b-17 under the Securities Act.

(g)          To the best knowledge of the Parent, the Parent has otherwise complied with the Securities Act, Exchange Act and all other applicable federal and state securities laws.

(h)          Parent is not a “blank check company” subject to the requirements of Rule 419 of the Securities Act.

3.8 Financial Statements. The balance sheets, and statements of income, changes in financial position and stockholders’ equity contained in the Parent SEC Documents (the “Parent Financial Statements”) (i) have been prepared in accordance with GAAP applied on a basis consistent with prior periods (and, in the case of unaudited financial information, on a basis consistent with year-end audits), (ii) are in accordance with the books and records of the Parent, and (iii) present fairly in all material respects the financial condition of the Parent at the dates therein specified and the results of its operations and changes in financial position for the periods therein specified. The financial statements included in the Annual Report on Form
10-KSB for the fiscal year ended December 31, 2004, are as audited by, and include the related opinions of Gately & Associates, LLC, Parent’s independent certified public accountants. The financial information included in the Quarterly Reports on Form 10-QSB for the quarters ended June 30, 2005 and March 31, 2005 are unaudited, but reflect all adjustments (including normally recurring accounts) that Parent considers necessary for a fair presentation of such information and have been prepared in accordance with generally accepted accounting principles, consistently applied.

3.9 Governmental Consents. All material consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with any federal or state governmental authority on the part of Parent or Acquisition Corp. required in connection with the consummation of the Merger shall have been obtained prior to, and be effective as of, the Closing.

3.10 Compliance with Laws and Other Instruments. The execution, delivery and performance by Parent and/or Acquisition Corp. of this Agreement, the Certificate of Merger and the other agreements to be made by Parent or Acquisition Corp. pursuant to or in connection with this Agreement or the Certificate of Merger and the consummation by Parent and/or Acquisition Corp. of the transactions contemplated by the Merger Documents will not cause Parent and/or Acquisition Corp. to violate or contravene (i) any provision of law, (ii) any rule or regulation of any agency or government, (iii) any order, judgment or decree of any court, or (v) any provision of their respective certificates of incorporation or by-laws as amended and in effect on and as of the Closing Date and will not violate or be in conflict
with, result in a breach of or constitute (with or without notice or lapse of time, or both) a default under any material 

 

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indenture, loan or credit agreement, deed of trust, mortgage, security agreement or other agreement or contract to which Parent or Acquisition Corp. is a party or by which Parent and/or Acquisition Corp. or any of their respective properties is bound.

3.11 No General Solicitation. In issuing Parent Common Stock in the Merger hereunder, neither Parent nor anyone acting on its behalf has offered to sell the Parent Common Stock by any form of general solicitation or advertising.

3.12 Binding Obligations. The Merger Documents constitute the legal, valid and binding obligations of the Parent and Acquisition Corp., and are enforceable against the Parent and Acquisition Corp., in accordance with their respective terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity. 

3.13 Absence of Undisclosed Liabilities. Neither Parent nor Acquisition Corp. has any material obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due), arising out of any transaction entered into at or prior to the Closing, except (a) as disclosed in the Parent SEC Documents, (b) to the extent set forth on or reserved against in the balance sheet of Parent as of December 31, 2004 (the “Parent Balance Sheet”) or the Notes to the Parent Financial Statements, (c) current liabilities incurred and obligations under agreements entered into in the usual and ordinary course of business since December 31, 2004 (the “Parent Balance Sheet Date”), none of which (individually or in the aggregate) materially and adversely affects the condition (financial or otherwise), properties, assets, liabilities, business operations, results of operations or prospects of the Parent or Acquisition Corp., taken as a whole (the “Condition of the Parent”), and (d) by the specific terms of any written agreement, document or arrangement attached as an exhibit to the Parent SEC Documents.

3.14 Changes. Since the Parent Balance Sheet Date, except as disclosed in the Parent SEC Documents, the Parent has not (a) incurred any debts, obligations or liabilities, absolute, accrued or, to the Parent’s knowledge, contingent, whether due or to become due, except for current liabilities incurred in the usual and ordinary course of business, (b) discharged or satisfied any Liens other than those securing, or paid any obligation or liability other than, current liabilities shown on the Parent Balance Sheet and current liabilities incurred since the Parent Balance Sheet Date, in each case in the usual and ordinary course of business, (c) mortgaged, pledged or subjected to Lien any of its assets, tangible or intangible, other than in the usual and ordinary course of business, (d) sold,
transferred or leased any of its assets, except in the usual and ordinary course of business, (e) cancelled or compromised any debt or claim, or waived or released any right of material value, (f) suffered any physical damage, destruction or loss (whether or not covered by insurance) which could reasonably be expected to have a material adverse effect on the Condition of the Parent, (g) entered into any transaction other than in the usual and ordinary course of business, (h) encountered any labor union difficulties, (i) made or granted any wage or salary increase or made any increase in the amounts payable under any profit sharing, bonus, deferred compensation, severance pay, insurance, pension, retirement or other employee benefit plan, agreement or arrangement, other than in the ordinary course of business consistent with past practice, or entered into any employment agreement, (j) issued or sold any shares of capital stock, bonds, notes, debentures or other securities or granted
any options (including employee stock options), warrants or other rights with respect thereto, (k) 

 

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declared or paid any dividends on or made any other distributions with respect to, or purchased or redeemed, any of its outstanding capital stock, (l) suffered or experienced any change in, or condition affecting, the financial condition of the Parent other than changes, events or conditions in the usual and ordinary course of its business, none of which (either by itself or in conjunction with all such other changes, events and conditions) could reasonably be expected to have a material adverse effect on the Condition of the Parent, (m) made any change in the accounting principles, methods or practices followed by it or depreciation or amortization policies or rates theretofore adopted, (n) made or permitted any amendment or termination of any material contract, agreement or license to which it is a party, (o) suffered any material loss not reflected in the Parent Balance Sheet or its statement of income
for the year ended on the Parent Balance Sheet Date, (p) paid, or made any accrual or arrangement for payment of, bonuses or special compensation of any kind or any severance or termination pay to any present or former officer, director, employee, stockholder or consultant, (q) made or agreed to make any charitable contributions or incurred any non-business expenses in excess of $5,000 in the aggregate, or (r) entered into any agreement, or otherwise obligated itself, to do any of the foregoing.

3.15 Tax Returns and Audits. All required federal, state and local Tax Returns of the Parent have been accurately prepared in all material respects and duly and timely filed, and all federal, state and local Taxes required to be paid with respect to the periods covered by such returns have been paid to the extent that the same are material and have become due, except where the failure so to file or pay could not reasonably be expected to have a material adverse effect upon the Condition of the Parent. The Parent is not and has not been delinquent in the payment of any Tax. The Parent has not had a Tax deficiency assessed against it. None of the Parent’s federal income tax returns nor any state or local income or franchise tax returns has been audited by governmental authorities. The reserves
for Taxes reflected on the Parent Balance Sheet are sufficient for the payment of all unpaid Taxes payable by the Parent with respect to the period ended on the Parent Balance Sheet Date. There are no federal, state, local or foreign audits, actions, suits, proceedings, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns of the Parent now pending, and the Parent has not received any notice of any proposed audits, investigations, claims or administrative proceedings relating to Taxes or any Tax Returns.

3.16       Employee Benefit Plans; ERISA. (a)  Except as disclosed in the Parent SEC Documents, there are no “employee benefit plans” (within the meaning of Section 3(3) of ERISA) nor any other employee benefit or fringe benefit arrangements, practices, contracts, policies or programs other than programs merely involving the regular payment of wages, commissions, or bonuses established, maintained or contributed to by the Parent. Any plans listed in the Parent SEC Documents are hereinafter referred to as the “Parent Employee Benefit Plans.”

(b)          Any current and prior material documents, including all amendments thereto, with respect to each Parent Employee Benefit Plan have been given to the Company or its advisors.

(c)          All Parent Employee Benefit Plans are in material compliance with the applicable requirements of ERISA, the Code and any other applicable state, federal or foreign law.

 

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(d)          There are no pending, or to the knowledge of the Parent, threatened, claims or lawsuits which have been asserted or instituted against any Parent Employee Benefit Plan, the assets of any of the trusts or funds under the Parent Employee Benefit Plans, the plan sponsor or the plan administrator of any of the Parent Employee Benefit Plans or against any fiduciary of a Parent Employee Benefit Plan with respect to the operation of such plan.

(e)          There is no pending, or to the knowledge of the Parent, threatened, investigation or pending or possible enforcement action by the Pension Benefit Guaranty Corporation, the Department of Labor, the Internal Revenue Service or any other government agency with respect to any Parent Employee Benefit Plan.

(f)           No actual or, to the knowledge of Parent, contingent liability exists with respect to the funding of any Parent Employee Benefit Plan or for any other expense or obligation of any Parent Employee Benefit Plan, except as disclosed on the financial statements of the Parent or the Parent SEC Documents, and to the knowledge of the Parent, no contingent liability exists under ERISA with respect to any “multi-employer plan,” as defined in Section 3(37) or Section 4001(a)(3) of ERISA.

3.17 Litigation. Except as disclosed in the Parent SEC Documents, there is no legal action, suit, arbitration or other legal, administrative or other governmental proceeding pending or, to the knowledge of the Parent, threatened against or affecting the Parent or Acquisition Corp. or their properties, assets or business. To the knowledge of the Parent, neither Parent nor Acquisition Corp. is in default with respect to any order, writ, judgment, injunction, decree, determination or award of any court or any governmental agency or instrumentality or arbitration authority.

3.18 Interested Party Transactions. Except as disclosed in the Parent SEC Documents, no officer, director or stockholder of the Parent or any Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any such Person or the Parent has or has had, either directly or indirectly, (a) an interest in any Person that (i) furnishes or sells services or products that are furnished or sold or are proposed to be furnished or sold by the Parent or (ii) purchases from or sells or furnishes to the Parent any goods or services, or (b) a beneficial interest in any contract or agreement to which the Parent is a party or by which it may be bound or affected.

3.19 Questionable Payments. Neither the Parent, Acquisition Corp. nor to the knowledge of the Parent, any director, officer, agent, employee or other Person associated with or acting on behalf of the Parent or Acquisition Corp., has used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payments to government officials or employees from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entries on the books of record of any such corporations; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

3.20 Obligations to or by Stockholders. Except as disclosed in the Parent SEC Documents, the Parent has no liability or obligation or commitment to any stockholder of Parent or any Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of 

 

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any stockholder of Parent, nor does any stockholder of Parent or any such Affiliate or associate have any liability, obligation or commitment to the Parent.

3.21 Schedule of Assets and Contracts. Except as expressly set forth in this Agreement, the Parent Balance Sheet or the notes thereto, the Parent is not a party to any written or oral agreement not made in the ordinary course of business that is material to the Parent. Parent does not own any real property. Parent is not a party to or otherwise barred by any written or oral (a) agreement with any labor union, (b) agreement for the purchase of fixed assets or for the purchase of materials, supplies or equipment in excess of normal operating requirements, (c) agreement for the employment of any officer, individual employee or other Person  on a full-time basis or any agreement with any Person for consulting services, (d) bonus, pension, profit sharing, retirement, stock purchase, stock option,
deferred compensation, medical, hospitalization or life insurance or similar plan, contract or understanding with respect to any or all of the employees of Parent or any other Person, (e) indenture, loan or credit agreement, note agreement, deed of trust, mortgage, security agreement, promissory note or other agreement or instrument relating to or evidencing Indebtedness for Borrowed Money or subjecting any asset or property of Parent to any Lien or evidencing any Indebtedness, (f) guaranty of any Indebtedness, (g) lease or agreement under which Parent is lessee of or holds or operates any property, real or personal, owned by any other Person, (h) lease or agreement under which Parent is lessor or permits any Person to hold or operate any property, real or personal, owned or controlled by Parent, (i) agreement granting any preemptive right, right of first refusal or similar right to any Person, (j) agreement or arrangement with any Affiliate or any “associate” (as such term
is defined in Rule 405 under the Securities Act) of Parent or any present or former officer, director or stockholder of Parent, (k) agreement obligating Parent to pay any royalty or similar charge for the use or exploitation of any tangible or intangible property, (1) covenant not to compete or other restriction on its ability to conduct a business or engage in any other activity, (m) distributor, dealer, manufacturer’s representative, sales agency, franchise or advertising contract or commitment, (n) agreement to register securities under the Securities Act, (o) collective bargaining agreement, or (p) agreement or other commitment or arrangement with any Person continuing for a period of more than three months from the Closing Date that involves an expenditure or receipt by Parent in excess of $1,000. The Parent maintains no insurance policies and insurance coverage of any kind with respect to Parent, its business, premises, properties, assets, employees and agents.
Schedule 3.15 contains a true and complete list and description of each bank account, savings account, other deposit relationship and safety deposit box of Parent, including the name of the bank or other depository, the account number and the names of the individuals having signature or other withdrawal authority with respect thereto. Except as disclosed on Schedule 3.15, no consent of any bank or other depository is required to maintain any bank account, other deposit relationship or safety deposit box of Parent in effect following the consummation of the Merger and the transactions contemplated hereby. Parent has furnished to the Company true and complete copies of all agreements and other documents disclosed or referred to in Schedule 3.15, as well as any additional agreements or documents, requested by the Company.

3.22 Employees. Other than pursuant to ordinary arrangements of employment compensation, Parent is not under any obligation or liability to any officer, director, employee or Affiliate of Parent.

 

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3.23 Disclosure. There is no fact relating to Parent that Parent has not disclosed to the Company in writing that materially and adversely affects nor, insofar as Parent can now foresee, will materially and adversely affect, the condition (financial or otherwise), properties, assets, liabilities, business operations, results of operations or prospects of Parent. No representation or warranty by Parent herein and no information disclosed in the schedules or exhibits hereto by Parent contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein misleading.

4. Additional Representations, Warranties and Covenants of the Stockholders. Promptly after the Effective Time, Parent shall cause to be mailed to each holder of record of Company Common Stock that was converted pursuant to Section 1.5 hereof into the right to receive Parent Common Stock a letter of transmittal (“Letter of Transmittal”) in substantially the form attached hereto as Exhibit E which shall contain additional representations, warranties and covenants of such Stockholder, including without limitation, that (i) such Stockholder has full right, power and authority to deliver such Company Common Stock and Letter of Transmittal, (ii) the delivery of such Company Common Stock will not
violate or be in conflict with, result in a breach of or constitute a default under, any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or other agreement or instrument to which such Stockholder is bound or affected, (iii) such Stockholder has good, valid and marketable title to all shares of Company Common Stock indicated in such Letter of Transmittal and that such Stockholder is not affected by any voting trust, agreement or arrangement affecting the voting rights of such Company Common Stock, (iv) such Stockholder is an “accredited investor,” as such term is defined in Regulation D under the Securities Act and that such Stockholder is acquiring Parent Common Stock for investment purposes, and not with a view to selling or otherwise distributing such Parent Common Stock in violation of the Securities Act or the securities laws of any state, and (v) such Stockholder has had an opportunity to ask and receive answers to any questions such
Stockholder may have had concerning the terms and conditions of the Merger and the Parent Common Stock and has obtained any additional information that such Stockholder has requested. Delivery shall be effected, and risk of loss and title to the Parent Common Stock shall pass, only upon delivery to the Parent (or an agent of the Parent) of (x) certificates evidencing ownership thereof as contemplated by Section 1.6 hereof (or affidavit of lost certificate), and (y) the Letter of Transmittal containing the representations, warranties and covenants contemplated by this Section 4.

 

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            5.
 	
            Conduct of Businesses Pending the Merger.
 

5.1 Conduct of Business by the Company Pending the Merger. Prior to the Effective Time, unless Parent or Acquisition Corp. shall otherwise agree in writing or as otherwise contemplated by this Agreement:

(i)           the business of the Company shall be conducted only in the ordinary course;

(ii)          the Company shall not (A) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its capital stock; (B) amend its Certificate of Incorporation or By-laws; or (C) split, combine or reclassify the outstanding Company Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any such stock, other than the one for two reverse stock split of shares of Parent Common Stock (the “Parent Stock Split”).

(iii)        the Company shall not (A) issue or agree to issue any additional shares of, or options, warrants or rights of any kind to acquire any shares of, Company Stock, except to issue shares of Company Common Stock in connection with the exercise of stock options outstanding on the date hereof; (B) acquire or dispose of any fixed assets or acquire or dispose of any other substantial assets other than in the ordinary course of business; (C) incur additional Indebtedness or any other liabilities or enter into any other transaction other than in the ordinary course of business; (D) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing; or (E) except as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to dissolve, merge,
consolidate or enter into any other material business combination;

(iv)         the Company shall use  its best efforts to preserve intact the business organization of the Company, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with it; and

(v)          the Company will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below). The Company will promptly advise Parent orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Company or for the acquisition of a substantial equity interest in it or any material assets of it other than as contemplated by this
Agreement. The Company will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any person conducted heretofore with respect to any of the foregoing.

5.2 Conduct of Business by Parent and Acquisition Corp. Pending the Merger. Prior to the Effective Time, unless the Company shall otherwise agree in writing or as otherwise contemplated by this Agreement:

 

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(i)           the business of Parent and Acquisition Corp. shall be conducted only in the ordinary course; provided, however, that Parent shall take the steps necessary to have discontinued its existing business without liability to Parent or Acquisition Corp. as of the Closing Date;

(ii)          neither Parent nor Acquisition Corp. shall (A) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its capital stock; (B) amend its certificate of incorporation or by-laws other than to effectuate the Parent Stock Split, and as reasonably request by the company; or (C) split, combine or reclassify its capital stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to such stock other than the Parent Stock Split; and

(iii)        neither Parent nor Acquisition Corp. shall (A) issue or agree to issue any additional shares of, or options, warrants or rights of any kind to acquire shares of, its capital stock; (B) acquire or dispose of any assets other than in the ordinary course of business (except for dispositions in connection with Section 5.2(i) hereof); (C) incur additional Indebtedness or any other liabilities or enter into any other transaction except in the ordinary course of business; (D) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing, or (E) except as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to dissolve, merge; consolidate or enter into any other material business contract or enter into any negotiations in
connection therewith.

(iv)         neither the Parent nor Acquisition will, nor will they  authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by them to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below for purposes of this paragraph). Parent will promptly advise the Company orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Parent or Acquisition Corp or for the acquisition of a substantial equity interest in
either of them or any material assets of either of them other than as contemplated by this Agreement. The Parent will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any person conducted heretofore with respect to any of the foregoing; and

(v)    neither the Parent nor Acquisition will enter into any new employment agreements with any of their officers or employees or grant any increases in the compensation or benefits of their officers and employees.  

	
            
 	
            6.
 	
            Additional Agreements.
 

6.1 Access and Information. The Company, Parent and Acquisition Corp. shall each afford to the other and to the other’s accountants, counsel and other representatives full access during normal business hours throughout the period prior to the Effective Time of all of its properties, books, contracts, commitments and records (including but not limited to tax returns) and during such period, each shall furnish promptly to the other all information concerning its business, properties and personnel as such other party may reasonably request, 

 

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provided that no investigation pursuant to this Section 6.1 shall affect any representations or warranties made herein. Each party shall hold, and shall cause its employees and agents to hold, in confidence all such information (other than such information which (i) is already in such party’s possession or (ii) becomes generally available to the public other than as a result of a disclosure by such party or its directors, officers, managers, employees, agents or advisors, or (iii) becomes available to such party on a non-confidential basis from a source other than a party hereto or its advisors, provided that such source is not known by such party to be bound by a confidentiality agreement with or other obligation of secrecy to a party hereto or another party until such time as such information is otherwise publicly available; provided, however, that (A) any such information may be disclosed to such party’s directors, officers, employees and representatives of such party’s advisors who need to know such information for the purpose of evaluating the transactions contemplated hereby (it being understood that such directors, officers, employees and representatives shall be informed by such party of the confidential nature of such information), (B) any disclosure of such information may be made as to which the party hereto furnishing such information has consented in writing, and (C) any such information may be disclosed pursuant to a judicial, administrative or governmental order or request; provided, however, that the requested party will promptly so notify the other party so that the other party may seek a protective order or appropriate remedy and/or waive
compliance with this Agreement and if such protective order or other remedy is not obtained or the other party waives compliance with this provision, the requested party will furnish only that portion of such information which is legally required and will exercise its best efforts to obtain a protective order or other reliable assurance that confidential treatment will be accorded the information furnished). If this Agreement is terminated, each party will deliver to the other all documents and other materials (including copies) obtained by such party or on its behalf from the other party as a result of this Agreement or in connection herewith, whether so obtained before or after the execution hereof.

6.2 Additional Agreements. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including using its commercially reasonable efforts to satisfy the conditions precedent to the obligations of any of the parties hereto to obtain all necessary waivers, and to lift any injunction or other legal bar to the Merger (and, in such case, to proceed with the Merger as expeditiously as possible). In order to obtain any necessary governmental or regulatory action or non-action, waiver, consent, extension
or approval, each of Parent, Acquisition Corp. and the Company agrees to take all reasonable actions and to enter into all reasonable agreements as may be necessary to obtain timely governmental or regulatory approvals and to take such further action in connection therewith as may be necessary. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and/or directors of Parent, Acquisition Corp. and the Company shall take all such necessary action.

6.3 Publicity. No party shall issue any press release or public announcement pertaining to the Merger that has not been agreed upon in advance by Parent and the Company, except as Parent reasonably determines to be necessary in order to comply with the rules of the Commission or of the principal trading exchange or market for Parent Common Stock, provided that in such case Parent will use its best efforts to allow Company to review and reasonably approve any same prior to its release.

 

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6.4 Appointment of Directors. Immediately upon the Effective Time, Parent shall accept the resignations of the current officers and directors of Parent as provided by Section 7.2(f)(7) hereof, and shall cause the persons listed as directors in Exhibit D hereto to be elected to the Board of Directors of Parent. At the first annual meeting of Parent stockholders and thereafter, the election of members of Parent’s Board of Directors shall be accomplished in accordance with the by-laws of Parent.

6.5          Parent Name Change and Exchange Listing. At the Effective Time, Parent shall take all required legal actions to change its corporate name to MDwerks, Inc. Promptly following the Effective Time, Parent shall take all required actions to, upon satisfaction of the original listing requirements, list the Parent Common Stock for trading on the American Stock Exchange or the Nasdaq Smallcap Market.

6.6          Parent Reverse Stock Split. Parent shall, promptly after execution of this Agreement, take all reasonable steps effectuate the Parent Stock Split, including, but not limited to the sending of all notices required by Rule 10b-17 under the Securities Act and the obtaining of stockholder approval of the Parent Stock Split.

6.7     Filing of 10-QSB. Parent shall, not later then October 14, 2005, file with the SEC its Quarterly Report on Form 10-QSB for the quarter ended September 30, 2005. 

6.8 Stock Incentive Plan. Prior to the Effective Time, the Company shall establish a new incentive stock option plan or amend the Company Incentive Plan to add additional stock options so that the total number of shares of Common Stock authorized for issuance under the Company Incentive Plan is equal to an aggregate of approximately ten percent (10%) of the number of shares of Parent Common Stock to be issued and outstanding following the Merger and after giving effect to the number of shares of Parent Common Stock issued pursuant to the Private Placement. Such new incentive stock option plan or amended Company Incentive Plan shall be assumed by Parent at the Effective Time. Stock options issuable pursuant to the Company Incentive Plan shall be used for attracting and retaining employees, directors
and advisors and such other purposes as may be deemed by Parent’s Board of Directors and shall be granted from time to time under the guidance and approval of Parent’s Board of Directors. 

	
            
 	
            7.
 	
            Conditions of Parties’ Obligations.
 

7.1 Parent and Acquisition Corp. Obligations. The obligations of Parent and Acquisition Corp. under this Agreement and the Certificate of Merger are subject to the fulfillment at or prior to the Closing of the following conditions, any of which may be waived in whole or in part by Parent.

(a)          No Errors, etc. The representations and warranties of the Company under this Agreement shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects.

(b)          Compliance with Agreement. The Company shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by them on or before the Closing Date.

 

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(c)          No Default or Adverse Change. There shall not exist on the Closing Date any Default or Event of Default or any event or condition that, with the giving of notice or lapse of time, or both, would constitute a Default or Event of Default, and since the Balance Sheet Date, there shall have been no material adverse change in the Condition of the Company.

(d)          Certificate of Officers. The Company shall have delivered to Parent and Acquisition Corp. a certificate dated the Closing Date, executed on its behalf by the Chief Executive Officer and Chief Financial Officer of the Company, certifying the satisfaction of the conditions specified in paragraphs (a), (b) and (c) of this Section 7.1.

(e)          Consummation of Private Placement. Consummation of the Merger shall occur simultaneously with the closing of the Private Placement.

(f)           No Restraining Action. No action or proceeding before any court, governmental body or agency shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement or the Certificate of Merger or the carrying out of the transactions contemplated by the Merger Documents.

(g)          Supporting Documents. Parent and Acquisition Corp. shall have received the following:

(1)          Copies of resolutions of the Board of Directors and the stockholders of the Company, certified by the Secretary of the Company, authorizing and approving the execution, delivery and performance of the Merger Documents and all other documents and instruments to be delivered pursuant hereto and thereto.

(2)          A certificate of incumbency executed by the Secretary of the Company certifying the names, titles and signatures of the officers authorized to execute any documents referred to in this Agreement and further certifying that the Certificate of Incorporation and By-laws of the Company delivered to Parent and Acquisition Corp. at the time of the execution of this Agreement have been validly adopted and have not been amended or modified.

(3)          A certificate, dated the Closing Date, executed by the Company’s Secretary, certifying that, except for the filing of the Certificate of Merger:  (i) all consents, authorizations, orders and approvals of, and filings and registrations with, any court, governmental body or instrumentality that are required for the execution and delivery of this Agreement and the Certificate of Merger and the consummation of the Merger shall have been duly made or obtained, and all material consents by third parties that are required for the Merger have been obtained; and (ii) no action or proceeding before any court, governmental body or agency has been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement or the Certificate of
Merger or the carrying out of the transactions contemplated by the Merger Documents.

(4)          Evidence as of a recent date of the good standing and corporate existence of the Company issued by the Secretary of State of the State of Delaware and evidence that the Company is qualified to transact business as a foreign corporation and is in good standing in each state of the United States and in each other jurisdiction where the character 

 

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of the property owned or leased by it or the nature of its activities makes such qualification necessary.

(5)          Such additional supporting documentation and other information with respect to the transactions contemplated hereby as Parent and Acquisition Corp. may reasonably request.

(h)          Consents. The Company shall have obtained and delivered to Acquisition Corp. written consents, reasonably satisfactory in form and substance to Parent, from each party to the leases, contracts, instruments and other documents listed in Schedules 2.13(a) through 2.13(e) consenting to the assignment to the Surviving Corporation upon the effectiveness of the Merger, of all of the rights and interests of the Company in and to such leases, contracts, instruments and documents, except to the extent (i) waived by Parent in its sole discretion, or (ii) such lease, contract, instrument or other document does not require the consent of such party to such assignment. 

(i)           Proceedings and Documents. All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments and documents mentioned herein or incident to any such transactions shall be reasonably satisfactory in form and substance to Parent and Acquisition Corp. The Company shall furnish to Parent and Acquisition Corp. such supporting documentation and evidence of the satisfaction of any or all of the conditions precedent specified in this Section 7.1 as Parent or its counsel may reasonably request.

7.2 Company Obligations. The obligations of the Company under this Agreement and the Certificate of Merger are subject to the fulfillment at or prior to the Closing of the conditions precedent specified in paragraphs (g), (h) and (i) of Section 7.1 hereof and the following additional conditions:

(a)          No Errors, etc. The representations and warranties of Parent and Acquisition Corp. under this Agreement shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects.

(b)          Compliance with Agreement. Parent and Acquisition Corp. shall have performed and complied in all material respects with all agreements and conditions required by this Agreement and the Certificate of Merger to be performed or complied with by them on or before the Closing Date.

(c)          No Default or Adverse Change. There shall not exist on the Closing Date any Default or Event of Default or any event or condition, that with the giving of notice or lapse of time, or both, would constitute a Default of Event of Default, and since the Parent Balance Sheet Date, there shall have been no material adverse change in the Condition of the Parent.

(d)          Certificate of Officers. Parent and Acquisition Corp. shall have delivered to the Company a certificate dated the Closing Date, executed on their behalf by their respective Presidents or other duly authorized officers, certifying the satisfaction of the conditions specified in paragraphs (a), (b), and (c) of this Section 7.2.

 

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(e)          Opinion of Parent’s Counsel. The Company shall have received from counsel for Parent, a favorable opinion dated the Closing Date to the effect set forth in Exhibit H hereto.

(f)           Supporting Documents. The Company shall have received the following:

(1)          Copies of resolutions of Parent’s and Acquisition Corp.’s respective board of directors and the sole stockholder of Acquisition Corp., certified by their respective Secretaries, authorizing and approving, to the extent applicable, the execution, delivery and performance of this Agreement, the Certificate of Merger and all other documents and instruments to be delivered by them pursuant hereto and thereto.

(2)          A certificate of incumbency executed by the respective Secretaries of Parent and Acquisition Corp. certifying the names, titles and signatures of the officers authorized to execute the documents referred to in paragraph (i) above and further certifying that the certificates of incorporation and by-laws of Parent and Acquisition Corp. appended thereto have not been amended or modified.

(3)          A certificate, dated the Closing Date, executed by the Secretary of each of the Parent and Acquisition Corp., certifying that, except for the filing of the Certificate of Merger:  (i) all consents, authorizations, orders and approvals of, and filings and registrations with, any court, governmental body or instrumentality that are required for the execution and delivery of this Agreement and the Certificate of Merger and the consummation of the Merger shall have been duly made or obtained, and all material consents by third parties required for the Merger have been obtained; and (ii) no action or proceeding before any court, governmental body or agency has been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement or the
Certificate of Merger or the carrying out of the transactions contemplated by any of the Merger Documents.

(4)          A certificate of American Registrar and Transfer Co., Parent’s transfer agent and registrar, certifying as of the business day prior to the date any shares of Parent Common Stock are first issued in the Private Placement, and before taking into consideration the cancellation of Parent Common Stock as indicated in Section 7.2(f)(7)(iii) hereof, a true and complete list of the names and addresses of the record owners of all of the outstanding shares of Parent Common Stock, together with the number of shares of Parent Common Stock held by each record owner.

(5)          An opinion letter from Anslow & Jaclin, LLP, Parent’s counsel setting forth that the number of shares of Parent Common Stock that would be issued and outstanding as of the Closing Date after taking into consideration the cancellation of Parent Common Stock as indicated in Section 7.2(f)(7)(iii) hereof, but prior to the closing of the Private Placement and the Merger, is no more than 1,350,000 shares of Parent Common Stock (not including the shares of Parent Common Stock to be issued pursuant to Section 6.9 hereof).

(6)          An agreement in writing from James Gately, C.P.A., in form and substance reasonably satisfactory to the Company, to deliver copies of the audit 

 

26

 

 

opinions with respect to any and all financial statements of Parent that had been audited by such firm.

(7)          (i) The executed resignations of Peter Banysch and Victor Bowman, as directors and officers of Parent, with the director resignations to take effect at the Effective Time, (ii) executed releases and indemnification agreements from each of Peter Banysch and Victor Bowman in the form attached hereto as Exhibits I and J, and (iii) stock powers executed in blank evidencing the cancellation of an aggregate of 10,960,500 post-split shares of Parent Common Stock owned by Stockholders of Parent in consideration for $645,312.50.

(8)          Evidence as of a recent date of the good standing and corporate existence of each of the Parent and Acquisition Corp. issued by the Secretary of State of their respective states of incorporation and evidence that the Parent and Acquisition Corp. are qualified to transact business as foreign corporations and are in good standing in each state of the United States and in each other jurisdiction where the character of the property owned or leased by them or the nature of their activities makes such qualification necessary.

(9)          Evidence that Parent has all tax returns required to be filed in the states of Colorado and Delaware and in Vancouver, B.C. and that Parent has no liabilities for taxes or penalties for failure to timely file tax returns.

(10)        Such additional supporting documentation and other information with respect to the transactions contemplated hereby as the Company may reasonably request.

(g)          Proceedings and Documents. All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments and documents mentioned herein or incident to any such transactions shall be mutually satisfactory in form and substance to the Company, Parent and Acquisition Corp. Parent and Acquisition Corp. shall furnish to the Company such supporting documentation and evidence of satisfaction of any or all of the conditions specified in this Section 7.2 as the Company may reasonably request.

The Company and Parent may waive compliance with any of the conditions precedent specified in this Section 7.2.

8. Non-Survival of Representations and Warranties. The representations and warranties of the parties made in Sections 2 and 3 of this Agreement (including the Schedules to the Agreement which are hereby incorporated by reference) shall not survive beyond the Effective Time. This Section 8 shall not limit any claim for fraud or any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time.

9. Amendment of Agreement. This Agreement and the Certificate of Merger may be amended or modified at any time in all respects by an instrument in writing executed (i) in the case of this Agreement by the parties hereto and (ii) in the case of the Certificate of Merger by the parties thereto.

 

27

 

 

 

10. Definitions. Unless the context otherwise requires, the terms defined in this Section 10 shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms herein defined.

“Acquisition Corp.” means MDWerks Acquisition Corp., a Florida corporation.

“Affiliate” shall mean any Person that directly or indirectly controls, is controlled by, or is under common control with, the indicated Person.

“Agreement” shall mean this Agreement.

“Articles of Merger” shall have the meaning assigned to it in the second recital of this Agreement.

“Balance Sheet” and “Balance Sheet Date” shall have the meanings assigned to such terms in Section 2.10 hereof.

 “Closing” and “Closing Date” shall have the meanings assigned to such terms in Section 11 hereof.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Commission” shall mean the U.S. Securities and Exchange Commission.

“Company” shall mean MDWerks Holdings, Inc., a Florida corporation.

“Company Common Stock” shall mean the Common Stock of the Company.

 “Condition of the Company” shall have the meaning assigned to it in Section 2.2 hereof.

“Condition of the Parent” shall have the meaning assigned to it in Section 3.13 hereof.

“Default” shall mean a default or failure in the due observance or performance of any covenant, condition or agreement on the part of the Company to be observed or performed under the terms of this Agreement or the Certificate of Merger, if such default or failure in performance shall remain unremedied for five (5) days.

 “Effective Time” shall have the meaning assigned to it in Section 1.2 hereof.

“Employee Benefit Plans” shall have the meaning assigned to it in Section 2.17 hereof.

“Environmental Laws” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601, et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§ 136, et seq. and comparable state statutes dealing with the registration, labeling and use of pesticides and 

 

28

 

 

herbicides; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. §§ 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801, et seq.; as any of the above statutes have been amended as of the date hereof, all rules, regulations and policies promulgated pursuant to any of the above statutes, and any other foreign, federal, state or local law, statute, ordinance, rule, regulation or policy governing environmental matters, as the same have been amended as of the date hereof.

“Equity Security” shall mean any stock or similar security of an issuer or any security (whether stock or Indebtedness for Borrowed Money) convertible, with or without consideration, into any stock or similar equity security, or any security (whether stock or Indebtedness for Borrowed Money) carrying any warrant or right to subscribe to or purchase any stock or similar security, or any such warrant or right.

“ERISA” shall mean the Employee Retirement Income Securities Act of 1974, as amended.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Event of Default” shall mean (a) the failure of the Company to pay any Indebtedness for Borrowed Money, or any interest or premium thereon, within five (5) days after the same shall become due, whether such Indebtedness shall become due by scheduled maturity, by required prepayment, by acceleration, by demand or otherwise, (b) an event of default under any agreement or instrument evidencing or securing or relating to any such Indebtedness, or (c) the failure of the Company to perform or observe any material term, covenant, agreement or condition on its part to be performed or observed under any agreement or instrument evidencing or securing or relating to any such Indebtedness when such term, covenant or agreement is required to be performed or observed.

“FBCA” means the Florida Business Corporation Act, as amended.

“GAAP” shall mean generally accepted accounting principles in the United States, as in effect from time to time.

“Hazardous Material” means any substance or material meeting any one or more of the following criteria:  (a) it is or contains a substance designated as or meeting the characteristics of a hazardous waste, hazardous substance, hazardous material, pollutant, contaminant or toxic substance under any Environmental Law; (b) its presence at some quantity requires investigation, notification or remediation under any Environmental Law; or (c) it contains, without limiting the foregoing, asbestos, polychlorinated biphenyls, petroleum hydrocarbons, petroleum derived substances or waste, pesticides, herbicides, crude oil or any fraction thereof, nuclear fuel, natural gas or synthetic gas.

“Indebtedness” shall mean any obligation of the Company which under generally accepted accounting principles is required to be shown on the balance sheet of the Company as a liability. Any obligation secured by a Lien on, or payable out of the proceeds of production from, property of the Company shall be deemed to be Indebtedness even though such obligation is not assumed by the Company.

 

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“Indebtedness for Borrowed Money” shall mean (a) all Indebtedness in respect of money borrowed including, without limitation, Indebtedness which represents the unpaid amount of the purchase price of any property and is incurred in lieu of borrowing money or using available funds to pay such amounts and not constituting an account payable or expense accrual incurred or assumed in the ordinary course of business of the Company, (b) all Indebtedness evidenced by a promissory note, bond or similar written obligation to pay money, or (c) all such Indebtedness guaranteed by the Company or for which the Company is otherwise contingently liable.

“Investment Company Act” shall mean the Investment Company Act of 1940, as amended.

“knowledge” and “know” means, when referring to any person or entity, the actual knowledge of such person or entity of a particular matter or fact, and what that person or entity would have reasonably known after due inquiry. An entity will be deemed to have “knowledge” of a particular fact or other matter if any individual who is serving, or who has served, as an executive officer of such entity has actual “knowledge” of such fact or other matter, or had actual “knowledge” during the time of such service of such fact or other matter, or would have had “knowledge” of such particular fact or matter after due inquiry.

“Letter of Transmittal” shall have the meaning assigned to it in Section 4 hereof.

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction and including any lien or charge arising by statute or other law.

“Memorandum” shall have the meaning assigned to it in the fourth recital hereof.

“Merger” shall have the meaning assigned to it in Section 1.1 hereof.

“Merger Documents” shall have the meaning assigned to it in Section 2.6 hereof.

“Parent” shall mean Western Exploration, Inc., a Delaware corporation.

“Parent Balance Sheet Date” shall have the meaning assigned to it in Section 3.14 hereof.

“Parent Common Stock” shall mean the common stock, par value $.001 per share, of Parent.

“Parent Employee Benefit Plans” shall have the meaning assigned to it in Section 3.16 hereof.

“Parent Financial Statements” shall have the meaning assigned to it in Section 3.8 hereof.

 

30

 

 

 

“Parent SEC Documents” shall have the meaning assigned to it in Section 3.7 hereof.

“Parent Stock Split” shall have the meaning assigned to it in Section 5.2(c) hereof.

“Permitted Liens” shall mean (a) Liens for taxes and assessments or governmental charges or levies not at the time due or in respect of which the validity thereof shall currently be contested in good faith by appropriate proceedings; (b) Liens in respect of pledges or deposits under workmen’s compensation laws or similar legislation, carriers’, warehousemen’s, mechanics’, laborers’ and materialmens’ and similar Liens, if the obligations secured by such Liens are not then delinquent or are being contested in good faith by appropriate proceedings; and (c) Liens incidental to the conduct of the business of the Company that were not incurred in connection with the borrowing of money or the obtaining of advances or credits and which do not in the aggregate materially detract from the value of its property or
materially impair the use made thereof by the Company in its business.

“Person” shall include all natural persons, corporations, business trusts, associations, limited liability companies, partnerships, joint ventures and other entities and governments and agencies and political subdivisions.

“Private Placement” shall mean the private offering of shares of Parent Stock pursuant to the terms of the Memorandum.

“Securities Act” shall mean the Securities Act of 1933, as amended.

 “Stockholders” shall mean all of the stockholders of the Company.

“Surviving Corporation” shall have the meaning assigned to it in Section 1.1 hereof.

“Tax” or “Taxes” shall mean (a) any and all taxes, assessments, customs, duties, levies, fees, tariffs, imposts, deficiencies and other governmental charges of any kind whatsoever (including, but not limited to, taxes on or with respect to net or gross income, franchise, profits, gross receipts, capital, sales, use, ad valorem, value added, transfer, real property transfer, transfer gains, transfer taxes, inventory, capital stock, license, payroll, employment, social security, unemployment, severance, occupation, real or personal property, estimated taxes, rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative minimum, doing business, withholding and stamp), together with any interest thereon, penalties, fines, damages costs, fees, additions to tax or
additional amounts with respect thereto, imposed by the United States (federal, state or local) or other applicable jurisdiction; (b) any liability for the payment of any amounts described in clause (a) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group or as a result of transferor or successor liability, including, without limitation, by reason of Regulation section 1.1502-6; and (c) any liability for the payments of any amounts as a result of being a party to any Tax Sharing Agreement or as a result of any express or implied obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clause (a) or (b).

 

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“Tax Return” shall include all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns (including Form 1099 and partnership returns filed on Form 1065) required to be supplied to a Tax authority relating to Taxes.

11. Closing. The closing of the Merger (the “Closing”) shall occur concurrently with the Effective Time (the “Closing Date”). The Closing shall occur at the offices of Peckar & Abramson, PC, 70 Grand Ave., River Edge, NJ 07661. At the Closing, Parent shall present for delivery to each Stockholder the certificate representing the Parent Common Stock to be issued pursuant to Section 1.5(a)(ii) hereof to them pursuant to Sections 1.6 and 4 hereof. Such presentment for delivery shall be against delivery to Parent and Acquisition Corp. of the certificates, opinions, agreements and other instruments referred to in Section 7.1 hereof, and the certificates representing all of the Common
Stock issued and outstanding immediately prior to the Effective Time. Parent will deliver at such Closing to the Company the officers’ certificate and opinion referred to in Section 7.2 hereof. All of the other documents and certificates and agreements referenced in Section 7 will also be executed as described therein. At the Effective Time, all actions to be taken at the Closing shall be deemed to be taken simultaneously.

	
            
 	
            12.
 	
            Termination Prior to Closing.
 

12.1 Termination of Agreement. This Agreement may be terminated at any time prior to the Closing:

(a)          By the mutual written consent of the Company, Acquisition Corp. and Parent;

(b)          By the Company, if Parent or Acquisition Corp. (i) fails to perform in any material respect any of its agreements contained herein required to be performed by it on or prior to the Closing Date, (ii) materially breaches any of its representations, warranties or covenants contained herein, which failure or breach is not cured within thirty (30) days after the Company has notified Parent and Acquisition Corp. of its intent to terminate this Agreement pursuant to this paragraph (b);

(c)          By Parent and Acquisition Corp., if the Company (i) fails to perform in any material respect any of its agreements contained herein required to be performed by it on or prior to the Closing Date, (ii) materially breach any of its representations, warranties or covenants contained herein, which failure or breach is not cured within thirty (30) days after Parent or Acquisition Corp. has notified the Company of its intent to terminate this Agreement pursuant to this paragraph (c);

(d)          By either the Company, on the one hand, or Parent and Acquisition Corp., on the other hand, if there shall be any order, writ, injunction or decree of any court or governmental or regulatory agency binding on Parent, Acquisition Corp. or the Company, which prohibits or materially restrains any of them from consummating the transactions contemplated hereby, provided that the parties hereto shall have used their best efforts to have any such order, writ, injunction or decree lifted and the same shall not have been lifted within ninety (90) days after entry, by any such court or governmental or regulatory agency; or

 

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12.2 Termination of Obligations. Termination of this Agreement pursuant to this Section 12 shall terminate all obligations of the parties hereunder, except for the obligations under Sections 6.1, 13.3 and 13.11; provided, however, that termination pursuant to paragraphs (b) or (c) of Section 12.1 shall not relieve the defaulting or breaching party or parties from any liability to the other parties hereto.

 

	
            
 	
            13.
 	
            Miscellaneous.
 

13.1 Notices. Any notice, request or other communication hereunder shall be given in writing and shall be served either personally by overnight delivery or delivered by mail, certified return receipt and addressed to the following addresses:

If to Parent

	
             
 	
            or Acquisition Corp.:
 	
            Western Exploration, Inc.
 	
             

	
             
 	
            8400 East Crescent Pkwy., #600
 	
             

	
             
 	
            Greenwood Village, Colorado 90111
 
	
             
 	
            Attention:  Peter Banysch, CEO
 	
             

	
             
 	
            With a copy to:
 	
            Anslow & Jaclin, LLP
 	
             

	
             
 	
            195 Route 9 South, Suite 204
 	
             

	
             
 	
            Manalapan, NJ 07726
 	
             

	
             
 	
            Fax:  (732) 577-1188
 	
             

	
             
 	
            Attention:  Gregg E. Jaclin, Esq.
 	
             

											

 

	
             
 	
            If to the Company:
 	
            MDWerks Global Holdings, Inc.
 
	
             
 	
            Windolph Center, Suite I
 	
             

	
             
 	
            1020 NW 6th Street
 	
             

	
             
 	
            Deerfield Beach, FL 33442
 	
             

	
             
 	
            Attention: Howard Katz, CEO
 	
             

							

 

	
             
 	
            With a copy to:
 	
            Peckar & Abramson, P.C.
 	
             

	
             
 	
            70 Grand Ave.
 	
             

	
             
 	
            River Edge, NJ 07661
 	
             

	
             
 	
            Fax:  (201) 343-6306
 	
             

	
             
 	
            Attention:  Stephen P. Katz, Esq.
 
							

 

Notices shall be deemed received at the earlier of actual receipt or three (3) business days following mailing. Counsel for a party (or any authorized representative) shall have authority to accept delivery of any notice on behalf of such party.

13.2 Entire Agreement. This Agreement, including the schedules and exhibits attached hereto and other documents referred to herein, contains the entire understanding of the parties hereto with respect to the subject matter hereof. This Agreement supersedes all prior agreements and undertakings between the parties with respect to such subject matter.

13.3 Expenses. In addition to the provisions in Section 12.3 hereof, each party shall bear and pay all of the legal, accounting and other expenses incurred by it in connection 

 

33

 

 

with the transactions contemplated by this Agreement. Expenses of Parent prior to the effective time shall be satisfied by Parent immediately prior to the effective time and Parent shall not be liable for such expenses after the effective date. 

13.4 Time. Time is of the essence in the performance of the parties’ respective obligations herein contained.

13.5 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

13.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and heirs; provided, however, that neither party shall directly or indirectly transfer or assign any of its rights hereunder in whole or in part without the written consent of the others , which may be withheld in its sole discretion , and any such transfer or assignment without said consent shall be void.

13.7 No Third Parties Benefited. This Agreement is made and entered into for the sole protection and benefit of the parties hereto, their successors, assigns and heirs, and no other Person shall have any right or action under this Agreement.

13.8 Counterparts. This Agreement may be executed in one or more counterparts, with the same effect as if all parties had signed the same document. Each such counterpart shall be an original, but all such counterparts together shall constitute a single agreement.

13.9 Recitals, Schedules and Exhibits. The Recitals, Schedules and Exhibits to this Agreement are incorporated herein and, by this reference, made a part hereof as if fully set forth herein.

13.10 Section Headings and Gender. The Section headings used herein are inserted for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. All personal pronouns used in this Agreement shall include the other genders, whether used in the masculine, feminine or neuter gender, and the singular shall include the plural, and vice versa, whenever and as often as may be appropriate.

13.11 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Florida. This Agreement and the transactions contemplated hereby shall be subject to the exclusive jurisdiction of the courts of Palm Beach County, Florida. The parties to this Agreement agree that any breach of any term or condition of this Agreement or the transactions contemplated hereby shall be deemed to be a breach occurring in the State of Florida by virtue of a failure to perform an act required to be performed in the State of Florida. The parties to this Agreement irrevocably and expressly agree to submit to the jurisdiction of the courts of the State of Florida for the purpose of resolving any disputes 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 and the transactions contemplated hereby, or any judgment entered by any court in prospect hereof brought in Palm Beach County, Florida, and further irrevocably waive any claim that any suit, action or proceeding brought in Palm Beach County, Florida has been brought in an inconvenient forum. With respect to any action before the above courts, the parties hereto agree to service of process by certified or registered United States mail, postage prepaid, addressed to the party in question.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be binding and effective as of the day and year first above written.

	
             
 	
            PARENT:

WESTERN EXPLORATION, INC.

By:      /s/ Peter Banysch____________                   

Name:  Peter Banysch

Title:  Chief Executive Officer
 
	
             
 	
            ACQUISITION CORP.:

MDWERKS ACQUISITION CORP.

By:      /s/ Peter Banysch_____________

Name:  Peter Banysch

Title:  Chief Executive Officer
 
	
             
 	
            THE COMPANY:

MDWERKS GLOBAL HOLDINGS, INC.

By:       /s/ Howard B. Katz________

Howard B. Katz, CEO
 

 

 

 

 

34

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