Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Cyberkinetics Neurotechnology Systems, Inc. - Exhibit 10.1

 Exhibit 10.1 

 EMPLOYMENT AGREEMENT 

                  Agreement,
  made this 3rd day of November, 2004, by and between Cyberkinetics, Inc., a Delaware
  corporation (the "Company") and Timothy R. Surgenor (the "Executive"). 

                Whereas,
  the parties wish to set forth their understanding and agreement regarding the
  employment of the Executive by the Company. 

                 Whereas,
  the Executive is currently President and Chief Executive Officer of the Company
  and the Company desires to continue to benefit from the Executive's knowledge,
  experience, and abilities, and to ensure the Executive's present and continued
  employment and service to the Company as President and Chief Executive Officer
  and to compensate him therefor. 

                  Now
  therefore, in consideration of the mutual covenants herein contained, the
  parties hereto agree as follows: 

 Section 1.       Employment Services. 

                 During
  the Employment Period (as defined herein), the Executive will serve as the Company's
  President and Chief Executive Officer, and will have such duties and responsibilities
  as would normally attach to those positions, including such duties and responsibilities
  as are customary among persons employed in similar capacities for similar companies,
  subject to the authority of the Board of Directors of the Company (the "Board").
  The Executive will faithfully and diligently carry out his duties and responsibilities
  and comply with all of the reasonable and lawful directives of the Board, to
  which the Executive will report. The Executive will, if so elected, serve as
  a director of the Company and an officer or director of any subsidiary or affiliate
  of the Company without compensation in addition to that provided in this Agreement.
  For purposes of this Agreement, an "affiliate" of the Company means any corporation,
  limited partnership, limited liability company or other entity engaged in the
  same business as the Company, or a related business, and which is controlled
  by or is under common control with the Company.

 Section 2.       Term. 

                 The
  Company shall employ the Executive, and the Executive accepts such employment,
  continuing from the date first above written and ending at such time as this
  Agreement has terminated under the provisions of Section 5 hereof (the "Employment
  Period").

 Section 3.       Performance. 

                 During
  the Employment Period, the Executive shall devote his best efforts and all of
  his business time and attention (except for vacation periods and reasonable
  periods 

of illness or other incapacity) to the business of the Company and its affiliates and will not engage in consulting work or in any other trade or business for his own account or for or on behalf of any other person, firm or corporation without the
written consent of the Board of Directors in each case, which shall not be granted if any such activity, in the opinion of the Board of Directors, competes, conflicts or interferes with the performance of his duties hereunder in any material
way.

 Section 4.       Compensation and Benefits.
  

	 	 (a)      	 Salary. For services to the Company rendered by the Executive
      in any capacity during the Employment Period, including without limitation,
      services as a manager, officer, director or member of any committee of the
      Company or of any subsidiary, affiliate or division thereof, the Company
      will pay or cause to be paid to the Executive a base salary at the rate
      of not less than $244,400 per annum (or such higher amount as the Compensation
      Committee of the Board may establish from time to time). The Executive's
      base salary for any partial year will be prorated based upon the number
      of days elapsed in such year. The Executive's base salary will be payable
      periodically in accordance with the Company's customary payroll practices
      for its executives. Such base salary shall be reviewed at least annually
      after the end of each fiscal year, starting with the fiscal year ending
      December 31, 2004, and may be increased based on the Executive's performance,
      but not decreased, by the Board of Directors of the Company (or the Compensation
      Committee thereof) in its discretion, to be effective in the first pay period
      of the ensuing January, starting with January 2005. The term "base salary"
      shall not include any payment or other benefit which is denominated as or
      is in the nature of a bonus, incentive payment, profit-sharing payment,
      performance share award, stock option, stock appreciation right, retirement
      or pension accrual, insurance benefit, other fringe benefit or expense allowance,
      whether or not taxable to the Executive as income. 
	 
	 	 (b)      	 Annual Performance Bonus. The Executive will be eligible to receive
      an annual cash performance bonus of up to $100,000 (the "Annual Performance
      Bonus"). The Compensation Committee shall consider and make a bonus determination
      not later than 60 days after the end of each fiscal year during the Employment
      Period, starting with the fiscal year ending December 31, 2004. Bonus awards
      shall be based upon the performance by the Executive as measured against
      objective and reasonable criteria mutually agreed and approved in advance
      by the Executive, and the Compensation Committee of the Board of Directors,
      which criteria but shall be set forth in Schedule 1 to this Agreement. To
      the extent that less than all of the criteria are achieved, the Executive
      shall be paid a pro rata percentage of the Annual Performance Bonus. 
	 
	 	 (c)      	 Other Benefits. In addition to the compensation described in this
      Section 4, and such other amounts not constituting base salary as may be
    

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	 	 	 provided to the Executive from time to time by the Board, the Executive
      will be entitled during the Employment Period to participate in any retirement
      plans, bonus plans, welfare benefit plans and other employee benefit plans
      of the Company that may be in effect from time to time with respect to executives
      of the Company generally, to the extent the Executive is eligible under
      the terms of those plans. Executive shall also be entitled to 15 days of
      paid vacation per year. The Company shall also reimburse the Executive for
      all reasonable and necessary business expenses incurred by him in the course
      of performing his duties hereunder. 
	 
	 	 (d)      	 Definitions. An "IPO" shall mean the initial underwritten public
      offering and sale of the Company's Common Stock registered under the Securities
      Act of 1933. A "Sale" shall mean the sale of all or substantially all of
      the Company's assets, a merger or combination with or into another entity,
      unless such merger or combination does not result in a change in ownership
      of the Company's voting securities of more than 50%, or the sale or transfer
      of more than 50% of the Company's voting securities, but shall exclude the
      pending transactions with Trafalgar Ventures Inc. 
	 
	 	 (e)      	 Accelerated Vesting of Stock Options. That, subject to completion
      of the Merger, upon any later sale, merger, or other transaction resulting
      in a change in control of Trafalgar or any successor entity (the "Surviving
      Entity") in which the per share consideration to be received by the stockholders
      of the Surviving Entity is equivalent to at least $6 per share, all options
      to purchase shares of the Corporation's Common Stock issued and outstanding
      immediately prior to the effective date of the Merger (which options shall
      be converted into options to purchase shares of common stock of Trafalgar
      as a result of the Merger) shall vest and become exercisable immediately
      prior to such sale, merger or other change of control transaction. For purposes
      of this resolution a change of control shall be deemed to occur upon: (1)
      any sale or exchange of greater than 50% of the voting interest of the Surviving
      Entity; (2) any merger of the Surviving Entity with an unaffiliated third
      party in which the Surviving Entity does not survive the merger; or (3)
      any sale of all or substantially all assets of the Surviving Entity. 

 Section 5.       Termination. 

                 The
  Executive's employment hereunder shall terminate under the following circumstances:

	 	 (a)      	 Death or Disability. This Agreement shall terminate upon the death
      or disability of the Executive. "Disability" shall mean that the Executive
      is no longer able to perform the essential functions of the President and
      Chief Executive Officer of the Company for a continuous period of six (6)
      months or a total of nine (9) months in any one-year period. If any question
      arises as to whether the Executive has been so disabled, the 

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	 	 	 Executive shall submit to an examination by a physician mutually
      acceptable to the Board of Directors of the Company and the Executive and
      following such examination, the physician shall submit to the Company and
      to the Executive a report in reasonable detail setting forth his or her
      opinion as to whether the Executive was so disabled. Such report shall for
      the purposes of this Agreement be conclusive of the issue. Notwithstanding
      the foregoing, in the event of a disability (as defined above), the Company
      shall take no action that violates the applicable provisions of the Americans
      With Disabilities Act. If this Agreement terminates due to the death or
      disability of the Executive, the Company shall promptly pay to the Executive's
      estate or to the Executive any and all amounts then owed to the Executive,
      including all accrued salary, vacation pay, other benefits, and any applicable
      portion of the Annual Performance Bonus. 
	 
	 	 (b)      	 Termination by the Company without Cause.
      The Company may at any time by action of a majority of the entire membership
      of its Board of Directors terminate the Executive's employment without Cause
      (as defined below) by giving the Executive notice of the effective date
      of termination (which effective date may be the date of such notice) (the
      "Date of Termination"). A voluntary termination by the Executive within
      (i) ninety (90) days before or (ii) twelve (12) months after a Sale of the
      Company and after (x) the Company has materially reduced the Executive's
      status or responsibilities, reduced the Executive's salary, relocated the
      Company's corporate offices more than 50 miles from its current location,
      or breached any provision of this Agreement or ( y) the successor
      to the Company in such Sale fails to assume the Company's obligations under
      this Agreement (each a "Deemed Termination Event") will be deemed to be
      termination by the Company without Cause. The Executive will provide thirty
      (30) days prior written notice to the Company of any such voluntary termination
      by reason of a Deemed Termination Event, and during such 30-day period the
      Company shall have an opportunity to cure the Deemed Termination Event.
      If a cure is effected within such 30-day period, the provisions of this
      Section 5(b) shall no longer be applicable with respect to the Event so
      cured. If the Executive terminates his employment due to a Deemed Termination
      Event, 100% of any unvested options granted hereunder that, absent such
      termination, would have otherwise vested in the 18-month period following
      the date of termination shall immediately vest and be exercisable. If the
      Company shall terminate the Executive without Cause hereunder, the Company
      shall have the obligation to pay the Executive the following: 
	 
	 	 	(1) 	Any and all amounts owed to the Executive through the Date of Termination,
      including all accrued salary, vacation pay, and any other benefits. 

 -4- 

 

	 	 	 (2)      	 Each month for a period of eighteen (18) months following the Date of
      Termination (the "Severance Period"), the Company shall pay the Executive,
      as a severance payment, 100% of the Executive's Monthly Salary (as defined
      below), less required withholding. Such amounts shall be payable periodically
      in accordance with the Company's customary payroll practices. Promptly after
      the six month anniversary of the Severance Period and promptly following
      each successive six month period during the Severance Period, the Executive
      shall reimburse the Company for any amounts (excluding investment income)
      earned or received by the Executive during the Severance Period and reportable
      as earnings on Form W-2 or Form 1099 (the "Supplementary Income"). Notwithstanding
      the foregoing, the Executive shall not be obligated to reimburse the Company
      for any amounts in excess of the aggregate amount paid by the Company to
      the Executive during the Severance Period. For purposes hereof, "Monthly
      Salary" shall mean the Executive's annual base salary immediately prior
      to the Date of Termination (except if the termination is due to a reduction
      in salary, then the annual base salary in effect immediately prior to the
      decrease in annual base salary) divided by twelve (12). 
	 
	 	 	 (3)      	 A bonus, equal to the average of the Annual Performance Bonuses earned
      by the Executive in each of the two (2) years prior to his termination of
      employment. 
	 
	 	 	 (4)      	 The Executive may continue to participate in the Company's group health,
      life and dental plans during the Severance Period at the same cost to him
      as in effect prior to his termination of employment. 
	 
	 	 	 (5)      	 Notwithstanding anything to the contrary herein, in the event that the
      Executive materially breaches Sections 6, 7, 8 or 9 of this Agreement, the
      Company's obligations under subsections (2) through (5) above shall cease
      in their entirety. 

	 	 (c)      	 Termination by the Company for Cause. The Company shall have the
      right to terminate the Executive's employment effective immediately for
      any of the following reasons (each of which is referred to herein as "Cause")
      by giving the Executive written notice which specifically identifies the
      Cause in reasonable detail: 

	 	 	 (1)      	 the breach of this Agreement, which breach is not cured within thirty
      (30) days after receipt of written notice from the Company; 
	 
	 	 	 (2)      	 any act of willful disloyalty, dishonesty, or breach of fiduciary duty
      with respect to any aspect of the Company's or any affiliate's business;
    

 -5- 

 

	 	 	 (3)      	 any act of fraud, embezzlement or deliberate disregard of a rule or policy
      of the Company known by the Executive or contained in a policy and procedure
      manual provided to the Executive which results in material loss, damage
      or injury to the Company; 
	 
	 	 	 (4)      	 the breach of any provision of Sections 6, 7, 8 or 9 of this Agreement;
      or 
	 
	 	 	 (5)      	 conviction of a felony. 

                 If
  the Executive's employment is terminated by the Company pursuant to this Section
  5(c), then (i) the Company shall have no further obligations hereunder accruing
  from and after the effective date of termination and shall have all other rights
  and remedies available under this or any other agreement and at law or in equity;
  and (ii) any unvested options granted hereunder shall immediately expire. Notwithstanding
  the foregoing, the Company shall pay to the Executive on the effective termination
  date any and all amounts then owed to the Executive, including all accrued salary,
  vacation pay, other benefits and any applicable portion of the Annual Performance
  Bonus.

	 	 (d)      	 Termination by the Executive. The Executive may terminate this
      Agreement at any time upon thirty (30) days prior written notice to the
      Company. The Board of Directors of the Company may, in such event, elect
      to waive the period of notice, or any portion thereof, in which event the
      Executive's date of termination shall be that date within the thirty (30)
      day notice period determined by the Board. Upon termination of this Agreement
      by the Executive for any reason other than a breach of this Agreement by
      the Company, or the occurrence of a Deemed Termination Event under Subsection
      5(b) hereof: (i) the Company shall have no further obligations hereunder
      accruing from and after the effective date of termination; and (ii) any
      unvested options granted to the Executive shall immediately expire. Notwithstanding
      the foregoing, the Company shall pay to the Executive on the effective termination
      date any and all amounts then owed to the Executive, including all accrued
      salary, vacation pay, other benefits and any earned portion of the Annual
      Performance Bonus. 

 Section 6.       Confidential Information
  

	 	 (a)      	 While employed by the Company and thereafter, the Executive shall not,
      directly or indirectly, disclose to anyone outside of the Company any Confidential
      Information (as hereinafter defined) or use any Confidential Information
      other than pursuant to Employee's employment by, and for the benefit of,
      the Company. 
	 
	 	 (b)      	 The term "Confidential Information," as used throughout this Agreement,
      means all data or information not generally known outside of the Company
      whether prepared or developed by or for the Company or received by the Company
      from an outside source. Without limiting the scope of this 

-6- 

 

	 	 	definition, Confidential Information includes any trade secrets, any technical
      data, design, pattern, formula, computer program, source code, object code,
      algorithm, manual, product specification, systems, methods, processes or
      plan for a new or revised product; and any business, marketing, financial,
      or sales record, data, plan, or survey; and any other record or information
      relating to the present or future business or products of the Company. All
      Confidential Information and copies thereof are the sole property of the
      Company. 

 Section 7.       Noncompetition and Nonsolicitation

                (a)
        During the term of this Agreement and
  for a period of twelve (12) months following termination of the Executive's
  employment, however caused, the Executive shall not, without prior written consent
  of the Company: 

	 	 	 (1)      	 For himself or on behalf of any other person or entity, directly or indirectly,
      either as principal, agent, stockholder, employee, consultant, representative
      or in any other capacity, own, manage, operate or control, or be concerned,
      connected or employed by, or other associate in any manner with, engage
      in or have a financial have any interest in any business which is directly
      or indirectly competitive with the business of the Company, except that
      nothing contained herein shall preclude the Executive from purchasing or
      owning stock in any such business if such stock is publicly traded and provided
      that the Executive's holdings do not exceed three percent (3%) of the issued
      and outstanding capital stock of such business. 
	 
	 	 	 (2)      	 Either individually or on behalf of or through any third party, solicit,
      divert or appropriate or attempt to solicit, divert or appropriate, for
      the purpose of competing with the Company or any present or future parent,
      subsidiary or other affiliate of the Company which is engaged in a similar
      business as the Company, any customers or patrons of the Company, or any
      prospective customers or patrons with respect to which the Company has developed
      or made a sales presentation (or similar offering of services). 
	 
	 	 	 (3)      	 Either individually or on behalf of or through any third party, directly
      or indirectly, solicit, entice or persuade or attempt to solicit, entice
      or persuade any other employees of or consultants to the Company or any
      parent or affiliate of the Company to leave the services of the Company
      or any parent or affiliate for any reason. 

                (b)
        For purposes of this Section 7, a business
  will be deemed to be competitive with the Company if it is engaged in a business
  substantially similar, in whole or in part, to the business conducted or planned
  to be conducted by the Company during the term of this Agreement. 

-7- 

 Section 8.       Ownership of Ideas, Copyrights
  and Patents.

                (a)
        The Executive agrees that all ideas,
  discoveries, creations, manuscripts and properties, innovations, improvements,
  know-how, inventions, designs, developments, apparatus, techniques, methods,
  processes and formulae (all of the foregoing being hereinafter referred to as
  "the inventions") which may be used in the business of the Company, whether
  patentable, copyrightable or not, which the Executive may conceive or develop
  during his employment with the Company, alone or in conjunction with another
  or others, whether during or out of regular business hours, and whether at the
  request or upon the suggestion of the Company or otherwise, shall be the sole
  and exclusive property of the Company, and that the Executive shall not publish
  any of the inventions without the prior written consent of the Company. The
  Executive hereby assigns to the Company all of his right, title and interest
  in and to all of the foregoing.

                (b)
        The Executive further represents and
  agrees that he will use his best efforts to prevent any inventions from violating
  or infringing upon any other right, patent, copyright, trademark or right of
  privacy, or constituting libel or slander against, or violating any other right
  of, any person, firm or corporation.

                (c)
        The Executive agrees that he will fully
  cooperate with the Company, its attorneys and agents, at any time during or
  after his employment, in the preparation and filing of all papers and other
  documents as may be required to perfect the Company's rights in and to any of
  such inventions, including, but not limited to, joining in any proceeding to
  obtain letters patent, copyrights, trademarks or other legal rights in the United
  States and in any and all other countries on such inventions, provided that
  the Company will bear the expense of such proceedings, and that any patent or
  other legal so issued to the Executive personally, shall be assigned by the
  Executive to the Company.

 Section 9.       Disclosure of Covenants
  and Return of Records.

                (a)
        The Executive agrees that he will provide,
  and that the Company may in its discretion similarly provide, a copy of the
  covenants contained in Sections 6, 7, and 8 of this Agreement to any business
  or enterprise which the Executive may directly or indirectly own, manage, operate,
  finance, join, control or participate in the ownership, management, operation,
  financing, control or control of, or with which the Executive may be connected
  as an officer, director, employee, partner, principal agent, representative,
  consultant or otherwise. 

                (b)
        Upon termination of the Executive's
  employment with the Company, the Executive shall deliver to the Company any
  property of the Company which may be in the Executive's possession, including,
  without limitation, products, materials, memoranda, notes, records, reports,
  or other documents or photocopies of the same.

-8- 

 Section 10.     Conflicting Agreements. 

                 The
  Executive hereby warrants and covenants that his employment by the Company will
  not result in a breach of the terms, conditions or provisions of any agreement
  to which the Executive is subject, and that he has not made and will not make
  any agreements in conflict with this Agreement. 

 Section 11.      Successors and Assigns.

                 This
  Agreement is intended to bind and inure to the benefit of and be enforceable
  by the Executive and the Company, except that the Executive may not assign any
  of his rights or obligations under this Agreement and the Company may not assign
  any of its rights or obligations under this Agreement without the prior written
  consent of the other party. 

 Section 12.      Severability. 

                 Whenever
  possible, each provision of this Agreement will be interpreted in such manner
  as to be effective and valid under applicable law, but if any provision of this
  Agreement is held to be invalid, illegal or unenforceable in any respect under
  applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability
  will not affect such provision in any other jurisdiction, but this Agreement
  will be reformed, construed and enforced in such jurisdiction as if such invalid,
  illegal or unenforceable provision had never been contained herein.

 Section 13.      Notice. 

                 Any
  notice provided for in this Agreement must be in writing and must be either
  personally delivered, mailed by first class mail (postage prepaid and return
  receipt requested), sent by facsimile transmission or sent by reputable overnight
  courier service, to the recipient at the address indicated below: 

	 	 To the Company:  	 Cyberkinetics, Inc.  
	 	  	 100 Foxborough Boulevard, Suite 240  
	 	  	 Foxborough, MA 02035  
	 	  	 Facsimile: 508-549-9985  
	 	  	 
	 	 To the Executive:  	 Timothy R. Surgenor  
	 	  	 201 Claybrook Road  
	  	  	 Dover, MA 02030  
	  	  	Facsimile: ________________________________________________

or to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement will be deemed to have been given when so delivered or sent
or if mailed, five days after so mailed. 

 -9- 

 Section 14.      Amendments and Waivers. 

                 Any
  provision of this Agreement may be amended or waived only with the prior written
  consent of the Executive and a majority of the Compensation Committee of the
  Board of Directors of the Company. Notwithstanding the foregoing, the failure
  of either party to require the performance of any term or obligation of this
  Agreement, or the waiver by either party of any breach of this Agreement, shall
  not prevent any subsequent enforcement of such term or obligation or be deemed
  a waiver of any subsequent breach. 

 Section 15.      Entire Agreement. 

                 This
  Agreement embodies the complete agreement and understanding between the parties
  and supersedes and preempts any prior understandings, agreements or representations
  by or between the parties, written or oral, which may have related to the subject
  matter hereof in any way, including, without limitation, that certain letter
  agreement between the parties dated, October 4, 2002. Notwithstanding the foregoing,
  that certain Option Certificate No. 2002 ISO – 031, dated January 24, 2003
  shall remain in full force and effect, as amended by Section Section 4(e) hereof.

 Section 16.      Governing Law. 

                 All
  questions concerning the construction, validity and interpretation of this agreement
  will be governed by the internal law, and not the law of conflicts, of the Commonwealth
  of Massachusetts. 

 Section 17.      Remedies.

                 Each
  of the parties to this Agreement will be entitled to enforce his or its rights
  under this Agreement specifically, to recover damages (including, without limitation,
  reasonable fees and expenses of counsel) by reason of any breach of any provision
  of this Agreement and to exercise all other rights existing in his or its favor.
  The parties hereto agree and acknowledge that money damages may not be an adequate
  remedy for any breach or threatened breach of the provisions of this Agreement
  and that any party may in his or its sole discretion apply to any court of law
  or equity of competent jurisdiction for specific performance and/or injunctive
  relief in order to enforce or prevent any violations of the provisions of this
  Agreement. 

 Section 18.      Captions. 

                 The
  captions set forth in this Agreement are for convenience only, and shall not
  be considered as part of this Agreement or as in any way limiting or amplifying
  the terms and provisions hereof. 

 [This space intentionally left blank.] 

 -10- 

                 In
  witness whereof, the parties have signed, sealed and delivered this Agreement
  as of the date first above written. 

	 	 CYBERKINETICS, INC.  
	 	 	  
	 	 	 
	 	 	 
	 	By:  	  
	 	 	  
	 	 	 Name:  
	 	 	 Title:  
	 	 	 
	 	 	 
	 	 	 
	 	 EXECUTIVE:  
	 	 	  
	 	 	 
	 	 	 
	 	 Timothy R. Surgenor  

-11- 

 SCHEDULE 1 

  TO 

  EMPLOYMENT AGREEMENT 

 

ANNUAL PERFORMANCE BONUS CRITERIASHARE PURCHASE AGREEMENT

     This Share Purchase Agreement ("Agreement"),  dated as of November 3, 2004,
between Robert A. Doak, Jr., and Skye Blue Ventures, LLC (the "Buyer").

                              W I T N E S S E T H:

     A. WHEREAS, Seller is the principal shareholder and creditor.

     B.  WHEREAS,  Buyer wishes to purchase an aggregate of 9,008,332  shares of
common  stock of  Mountains  West  Exploration,  Inc.  (MWEX)  from  Seller (the
"Purchase  Shares"),  after all of the conditions  under this contract have been
performed and MWEX desires to sell the Purchase Shares to Buyer pursuant to this
agreement.

     C. WHEREAS, prior to the transaction Buyer is not an affiliate of MWEX.

     NOW, THEREFORE, it is agreed among the parties as follows:

                                   ARTICLE I

                                The Consideration

     1.1 Subject to the conditions set forth herein,  Seller shall sell to Buyer
and Buyer shall purchase  9,008,332  common shares  Mountains West  Exploration,
Inc.. The aggregate  purchase price for the shares to be paid by Buyer to Seller
is $100,000  (the  "Consideration")  of which  $100,000 is herewith paid as full
consideration  for the  purchase  of  Sellers  shares  if all of the  terms  and
conditions of this Agreement are met. ARTICLE II

                         Closing and Issuance of Shares

     2.1 The  Sellers  shares  (9,008,332)  shall be  delivered  to  Buyer  upon
delivery of the cash purchase consideration of $100,000 to Seller.

     2.2  Closing  hereunder  shall  be  completed  upon  delivery  of the  cash
consideration, and share certificates on or before November 4, 2004 at 5:00 p.m.
MDT ("Closing  Date")  subject to  satisfaction  of the terms and conditions set
forth herein.

                                       1

<PAGE>

                                  ARTICLE III

              Representations, Warranties and Covenants of Seller

         Seller hereby, represents, warrants and covenants to Buyer as follows:

     3.1  Mountains  West  Exploration,   Inc.  (MWEX)  is  a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
New Mexico, and has the corporate power and authority carry on its business. The
Articles  of  Incorporation  and  Amendments  and Bylaws of MWEX,  which will be
delivered to Buyer at closing,  are complete and accurate,  and the minute books
of MWEX,  copies of which have also been  delivered to Buyer,  contain a record,
which is complete and accurate in all material  respects,  of all meetings,  and
all corporate actions of the shareholders and Board of Directors of MWEX.

     3.2 The authorized  capital stock of MWEX consists of 50,000,000  shares of
common  stock.  There are  37,019,271  shares of Common Stock of MWEX issued and
outstanding  as of date  hereof.  All such  shares of capital  stock of MWEX are
validly issued,  fully paid,  non-assessable and free of preemptive rights. MWEX
has no outstanding  warrants,  or other rights to purchase,  or subscribe to, or
other  securities  convertible  into or  exchangeable  for any shares of capital
stock of  MWEX,  or  contracts  or  arrangements  of any  kind  relating  to the
issuance,  sale or transfer of any capital  stock or other equity  securities of
MWEX.

     3.3 This Agreement has been duly authorized, validly executed and delivered
on behalf of Seller  and is a valid and  binding  agreement  and  obligation  of
Seller enforceable against the parties in accordance with its terms,  subject to
limitations on enforcement by general  principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors' rights generally,  and Seller
has  complete  and  unrestricted  power to  enter  into  and to  consummate  the
transactions contemplated by this Agreement.

     3.4 Neither the making of nor the compliance  with the terms and provisions
of this Agreement and  consummation of the transactions  contemplated  herein by
Seller will  conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of MWEX, or of any material provisions of any indenture,
mortgage,  deed of trust or other  material  agreement  or  instrument  to which
Seller or MWEX is a party,  or of any material  provision  of any law,  statute,
rule,  regulation,  or any existing applicable decree,  judgment or order by any
court,  federal  or  state  regulatory  body,  administrative  agency,  or other
governmental  body  having  jurisdiction  over  MWEX  or  Seller,  or any of its
material  properties or assets,  or will result in the creation or imposition of
any material lien, charge or encumbrance upon any material property or assets of
MWEX  pursuant to the terms of any  agreement or  instrument  to which MWEX is a
party or by which MWEX may be bound or to which any of MWEX  property is subject
and no event has  occurred  with which  lapse of time or action by a third party
could result in a material breach or violation of or default by Seller or MWEX.

                                       2
<PAGE>

     3.5   There  is  no  claim,   legal   action,   arbitration,   governmental
investigation or other legal or administrative proceeding, nor any order, decree
or judgment  in  progress,  pending or in effect,  or to the best  knowledge  of
Seller  threatened  against or relating to MWEX or affecting  any of its assets,
properties,  business or capital stock. There is no continuing order, injunction
or decree of any court,  arbitrator or governmental authority to which MWEX is a
party or by which MWEX or its assets, properties,  business or capital stock are
bound.

     3.6 MWEX has accurately prepared and filed all federal, state and other tax
returns  required by law,  domestic and  foreign,  to be filed by it through its
fiscal  2003 year and has paid or made  provisions  for the payment of all taxes
shown to be due and all additional  assessments,  and adequate  provisions  have
been and are reflected in the financial statements of MWEX for all current taxes
and other  charges to which MWEX is subject and which are not  currently due and
payable. None of the Federal income tax returns of MWEX have been audited by the
Internal Revenue Service or other foreign governmental tax agency. Seller has no
knowledge of any additional assessments, adjustments or contingent tax liability
(whether  federal or state)  pending or threatened  against MWEX for any period,
nor of any basis for any such assessment, adjustment or contingency.

     3.7 MWEX has  delivered to Buyer  unaudited  financial  statements  for the
period ended September 30, 2004. All such  statements,  herein  sometimes called
"MWEX Financial  Statements"  are complete and correct in all material  respects
and, together with the notes to these financial  statements,  present fairly the
financial  position and results of operations of MWEX for the periods  indicated
within  the  knowledge  of MWEX.  All  financial  statements  of MWEX  have been
prepared in accordance with generally accepted accounting principles.

     3.8  As of  the  date  hereof,  MWEX,  represents  and  warrants  that  all
outstanding  indebtedness  of  MWEX  is as  shown  on the  financial  statements
attached  hereto (the updated  statements) as of September 30, 2004. Any and all
accruals to officers and directors  shall be waived and released by each officer
or director, in writing.

     3.9 Since the dates of the updated Seller Financial Statements,  there have
not been any material adverse changes in the business or condition, financial or
otherwise,  of MWEX  within  the  knowledge  of  MWEX.  MWEX  does  not have any
liabilities, commitments or obligations, secured or unsecured except as shown on
updated financials  (whether accrued,  absolute,  contingent or otherwise),  and
except for accruals, legal fees, consulting fees and costs of this transaction.

     3.10 MWEX is not a party to any contract performable in the future.

     3.11 The representations and warranties of Seller shall be true and correct
as of the date hereof and closing date.

     3.12 Seller will deliver to Buyer, all of MWEX corporate books and records,
and will turn over all original corporate records at closing.

     3.13 MWEX has no employee benefit plan in effect at this time.

                                       3
<PAGE>

     3.14 No  representation  or warranty by the MWEX in this Agreement,  or any
certificate  delivered  pursuant  hereto  contains  any  untrue  statement  of a
material  fact or  omits to state  any  material  fact  necessary  to make  such
representation or warranty not misleading.

     3.15 Buyer has received  copies of Form 10KSB as filed with the  Securities
and  Exchange  Commission  ("SEC")  which  included  audits  for the year  ended
December 31, 2003 and each of its other reports to  shareholders  filed with the
SEC through the period of September 30, 2004. MWEX is a registered company under
the Securities Exchange Act of 1934, as amended and is current in its filings.

     3.16  Seller  has not made to Buyer any  general  solicitation  or  general
advertising regarding the shares of common stock.

     3.17 MWEX has  incurred  no  liabilities  except as shown on the  financial
statements  or  referenced  in 3.8  hereof  and fees in  conjunction  with  this
transaction,  which fees incurred in conjunction with this transaction  shall be
paid at closing

                              Procedure for Closing

     4.1 At the Closing Date, the purchase and sale shall be  consummated  after
satisfaction  of all  conditions  precedent  set forth in Article V and VIII, by
Seller's stock certificates for the Purchase Shares being delivered, duly signed
and  guaranteed  by Seller for 9,008,332  shares of common stock to Buyer,  upon
receipt of the Consideration  for the share purchase,  together with issuance or
delivery of all other items,  agreements,  warranties,  and  representations set
forth in this Agreement.

                                    ARTICLE V

                           Conditions Precedent to the
                          Consummation of the Purchase

     The following are conditions precedent to the consummation of the Agreement
on or before the Closing Date:

     5.1 Seller shall have  performed  and complied  with all of its  respective
obligations  hereunder  which are to be complied  with or performed on or before
the Closing Date.

     5.2 No action,  suit or proceeding shall have been instituted or shall have
been  threatened  before any court or other  governmental  body or by any public
authority to restrain,  enjoin or prohibit the transactions contemplated herein,
or which might  subject any of the parties or MWEX hereto or their  directors or
officers to any material liability,  fine,  forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers,  have violated any  applicable  law or regulation or have otherwise
acted improperly in connection with the transactions  contemplated  hereby,  and
the parties  hereto have been  advised by counsel  that,  in the opinion of such
counsel,  such action, suit or proceeding raises substantial questions of law or
fact which could  reasonably  be decided  adversely  to any party  hereto or its
directors or officers.

                                       4
<PAGE>

     5.3 The  representations  and  warranties  made by Seller in this Agreement
shall be true as though such  representations  and  warranties  had been made or
given  on  and  as  of  the  Closing  Date,  except  to  the  extent  that  such
representations  and  warranties  may be  untrue on and as of the  Closing  Date
because of changes  caused by  transactions  suggested or approved in writing by
the Buyer.

                                   ARTICLE VI

                           Termination and Abandonment

     6.1 Anything  contained in this Agreement to the contrary  notwithstanding,
the  Agreement  may be  terminated  and abandoned at any time prior to or on the
Closing Date:

(a)      By mutual consent of parties;

     (b)  By either party,  if any condition set forth in Article V or any other
          Article  relating  to the other party has not been met or has not been
          waived;

     (c)  By Buyer, if any suit, action, or other proceeding shall be pending or
          threatened  by the federal or a state  government  before any court or
          governmental agency, in which it is sought to restrain,  prohibit,  or
          otherwise  affect the  consummation of the  transactions  contemplated
          hereby;

     (d)  By Buyer, if there is discovered any material  error,  misstatement or
          omission in the representations and warranties of another party;

     (e)  By Seller, if the Closing does not occur, through no failure to act by
          Seller,   on  closing   date,   or  if  Buyer  fails  to  deliver  the
          consideration required herein;

     (f)  If all of the outstanding liabilities cannot be settled at closing;

     6.2 Any of the terms or conditions  of this  Agreement may be waived at any
time by the party which is entitled to the benefit thereof.

                                   ARTICLE VII

                         Continuing Representations and
                            Warranties and Covenants

         7.1 The respective  representations,  warranties,  and covenants of the
parties  hereto and  agreements  of the parties  hereto shall  survive after the
closing under this  Agreement for a period of two years  hereafter in accordance
with the terms thereof.

                                       5
<PAGE>

                                  ARTICLE VIII

                                  Miscellaneous

     8.1 This Agreement  embodies the entire agreement between the parties,  and
there have been and are no agreements,  representations  or warranties among the
parties other than those set forth herein or those  provided for herein,  except
that a companion  document,  the  Reorganization  Agreement,  has been  executed
concurrently which contains numerous warranties and representations.

     8.2  To  facilitate  the  execution  of  this  Agreement,   any  number  of
counterparts  hereof may be executed,  and each such counterpart shall be deemed
to  be  an  original  instrument,  but  all  such  counterparts  together  shall
constitute but one instrument.

     8.3 All parties to this  Agreement  agree that if it becomes  necessary  or
desirable to execute further instruments or to make such other assurances as are
deemed  necessary,  the party  requested  to do so will use its best  efforts to
provide such executed  instruments or do all things necessary or proper to carry
out the purpose of this Agreement.

     8.4 This  Agreement  may not be amended  except by written  consent of both
parties.

     8.5 Any notices,  requests,  or other communications  required or permitted
hereunder shall be delivered  personally or sent by overnight  courier  service,
prepaid, addressed as follows:

To Seller:        Robert A. Doak, Jr.
                  P.O. Box 754
                  Trinidad, CO  81082

To Buyer:         Skye Blue Ventures, LLC
                  2000 Wadsworth Blvd., #179
                  Lakewood, CO 80214

or such other  addresses as shall be furnished in writing by any party,  and any
such notice or  communication  shall be deemed to have been given as of the date
received.

     8.6 No press  release or public  statement  will be issued  relating to the
transactions  contemplated by this Agreement without prior approval of the Buyer
and  Sellers.  However,  MWEX may issue at any time any press  release  or other
public  statement  it believes on the advice of its counsel it is  obligated  to
issue to avoid liability  under the law relating to  disclosures,  but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior  notice of and  opportunity  to  participate  in such
release or statement.

                                       6
<PAGE>

     8.7 This  Agreement  shall be governed by and construed in accordance  with
and  enforced  under  the  laws  of the  state  of  Colorado  applicable  to all
agreements  made  hereunder.  Venue  and  jurisdiction  for  any  legal  actions
hereunder shall be District Court in and for Jefferson County, Colorado.

     8.8 In the event of a breach or  default  of this  Agreement  or any of the
continuing  covenants  hereunder  which  results  in a  party  or  any  effected
shareholder  who  is  a  beneficiary  of a  surviving  or  continuing  covenant,
commencing  legal  action,  the  prevailing  party in such legal action shall be
entitled  to an award of all legal  fees and costs of the  action,  against  the
non-prevailing party.

     8.9  Denis  Iler  shall be  appointed  at  closing  as  CEO/CFO,  effective
immediately.

     8.12 Concurrent with the consummation hereof,  Seller shall cause the Board
of MWEX to appoint two new directors, of Buyer's choice.

                                       7
<PAGE>

     IN WITNESS  WHEREOF,  the parties have executed this Agreement this 3rd day
of November, 2004.

                                    ROBERT A. DOAK, JR.

                                    By: ________________________________

                                    Name: ______________________________

                                    Tile: ______________________________

BUYER:

SKYE BLUE VENTURES, LLC

By:________________________________

                                       8

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