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EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
ENTERED INTO MARCH ____, 2001,
BETWEEN
ERESOURCE CAPITAL GROUP, INC.
AND
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TABLE OF CONTENTS
ARTICLE I. SALE AND PURCHASE OF THE LST SHARES................................................. 1
1.1 Sale and Purchase................................................................... 1
1.2 Closing............................................................................. 1
1.3 Purchase Price...................................................................... 1
1.4 Rights of Former Stockholders....................................................... 2
1.5 Other Agreements.................................................................... 2
1.6 Basic Agreements and Transaction Defined............................................ 2
ARTICLE II. REPRESENTATIONS AND WARRANTIES...................................................... 2
2.1. Representations and Warranties of Seller............................................ 2
2.2. Representations and Warranties Concerning LST....................................... 3
2.3. Representations and Warranties of Purchaser......................................... 6
ARTICLE III. COVENANTS........................................................................... 7
3.1. Mutual Covenants.................................................................... 7
3.2. Seller's Covenants.................................................................. 8
3.3. No Shop............................................................................. 9
3.4. Public Announcements................................................................ 9
3.5. Confidentiality..................................................................... 9
ARTICLE IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
TO CLOSE............................................................................ 9
4.1. Compliance with Seller's Representations, Warranties and Covenants.................. 9
4.2. No Adverse Change................................................................... 9
4.3. No Legal Proceedings................................................................ 10
4.4 Documents to be Delivered by Seller................................................. 10
4.5 Consents............................................................................ 10
4.6 Listing of eRCG Shares.............................................................. 10
4.7 Amendment of Stock Option Plan...................................................... 10
4.8 Cancellation of Outstanding Options................................................. 10
4.9 Sale by Other LST Stockholders...................................................... 10
4.10 Consummation of Private Placement by LST............................................ 11
4.11 Investigation....................................................................... 11
ARTICLE V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO
CLOSE............................................................................. 11
5.1. Compliance with Purchaser's Representations, Warranties
and Covenants..................................................................... 11
5.2. No Legal Proceedings................................................................ 11
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5.3. Other Agreements.................................................................... 11
5.4. Payments............................................................................ 11
ARTICLE VI. TERMINATION........................................................................ 12
6.1. Termination and Abandonment......................................................... 12
ARTICLE VII. MISCELLANEOUS....................................................................... 12
7.1. Survival............................................................................ 12
7.2. Binding Effect of the Basic Agreements; No Third
Party Beneficiaries................................................................. 12
7.3. Governing Law....................................................................... 12
7.4. Notices............................................................................. 12
7.5. Headings............................................................................ 13
7.6. Severability........................................................................ 13
7.7. Expenses............................................................................ 13
7.8. Integration; Interpretation......................................................... 13
7.9. Amendments.......................................................................... 14
7.10. Variation of Pronouns............................................................... 14
7.11 Waivers............................................................................. 14
7.12. Counterparts; Facsimile Signatures.................................................. 14
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day
of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation
("PURCHASER"), and ________________, an individual resident of the State of
______________ ("SELLER") and a stockholder of LST, INC., a Delaware corporation
d/b/a LifeStyle Technologies ("LST").
WHEREAS, Seller is the record and beneficial owner of
___________________ (_______) shares ("LST SHARES") of LST's common stock, par
value $.001 per share ("LST COMMON STOCK"), representing approximately .__% of
the issued capital stock of LST; and
WHEREAS, Seller desires to sell the LST Shares to Purchaser, and
Purchaser desires to purchase the LST Shares, upon the terms and conditions set
forth herein.
NOW, THEREFORE in consideration of the mutual promises and covenants
contained herein, and for other good valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE LST SHARES
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in Section 1.2 hereof), Seller agrees to sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase from
Seller, the LST Shares.
1.2 CLOSING. The purchase shall be consummated at a closing ("CLOSING")
to take place at the offices of Purchaser on the date and time on which the last
of the conditions specified in Articles IV and V hereof have been satisfied or
waived, or such other place, time or date as may be mutually agreed upon by the
parties hereto.
1.3 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the LST
Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in
restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value
$.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's
Share being equal to the average for the five (5) trading days immediately
preceding the Closing Date of the daily closing price of eRCG Common Stock as
reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided,
however, that if the Average Share Price is less than One Dollar ($1.00), then
the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of
calculating the Purchase Price due Seller. The Purchase Price shall be paid at
Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller
receiving cash in lieu of any fractional eRCG Share that Seller may be entitled
to receive pursuant to this Section 1.3. Purchaser will give stop transfer
instructions to its transfer agent with respect to the eRCG Shares and there
will be placed on the certificate(s) representing such eRCG Shares a restrictive
legend.
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1.4 RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange, each
certificate representing LST Shares shall from and after the Closing represent
for all purposes only the right to receive the Purchase Price. Seller will not
be entitled to vote or give its consent after the Closing at any meeting or
action by written consent of Purchaser's stockholders until it has exchanged its
certificates representing the LST Shares for certificates representing the eRCG
Shares.
1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall
deliver the following additional agreements:
(a) Seller shall deliver to Purchaser stock certificate(s)
representing all of the LST Shares held by Seller, duly endorsed to
Purchaser in blank or accompanied by duly executed stock power(s),
transferring such LST Shares from Seller to Purchaser;
(b) Seller shall deliver to Purchaser an executed counterpart
signature page to the Investment Representation Agreement,
substantially in the form attached hereto as Exhibit 1.5(b); and
(c) Purchaser and Seller shall each deliver an executed counterpart
signature page to the Registration Rights Agreement, substantially in
the form attached hereto as Exhibit 1.5(c).
1.6 BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and other
agreements listed in paragraph 1.5, are sometimes referred to as the "Basic
Agreements." The transaction contemplated by the Basic Agreement and the
agreements with the other stockholders of LST are sometimes referred to as the
"Transaction".
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. With such exceptions, if
any, as may be set forth in a letter (the "SELLER DISCLOSURE LETTER") to be
delivered by Seller to Purchaser on the date hereof, Seller represents and
warrants to Purchaser as follows:
(a) TITLE TO THE LST SHARES. At Closing, Seller shall own of record
and beneficially the LST Shares free and clear of all liens,
encumbrances, pledges, claims, options, charges and assessments of any
nature whatsoever, with full right and lawful authority to transfer the
LST Shares to Purchaser. No person has any preemptive rights or rights
of first refusal with respect to any of the LST Shares. There exists no
voting agreement, voting trust, or outstanding proxy with respect to
any of the LST Shares. There are no outstanding rights, options,
warrants, calls, commitments, or any other agreements of any character,
whether oral or written, with respect to the LST Shares.
(b) AUTHORITY; CONSENTS. Seller has full power and lawful
authority, including, if Seller is a corporation, full corporate power
and authority, to execute and deliver the Basic Agreements and the
Seller Disclosure Letter and to consummate and
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perform the Transaction contemplated thereby. The Basic Agreements
constitute (or shall, upon execution, constitute) valid and legally
binding obligations of Seller, enforceable in accordance with their
terms. To Seller's knowledge, neither the execution and delivery of the
Basic Agreements and the Seller Disclosure Letter by Seller, nor the
consummation and performance of the Transaction, conflicts with,
requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by
which Seller is a party or by which Seller or any of its properties or
assets are bound or affected. Seller need not give any notice to, make
any filings with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
Transaction.
(c) NONCONTRAVENTION. Neither the execution and the delivery of the
Basic Agreements and Seller Disclosure Letter, nor the consummation of
the Transaction, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental agency, or court
to which Seller is subject or (ii) if Seller is a corporation, any
provision of such Seller's charter or bylaws.
(d) CAPITAL STOCK RIGHTS. Seller has no stock options, warrants,
rights, calls or any other agreements of any character, whether oral or
written, obligating LST to issue any shares of its capital stock.
(e) ORGANIZATION OF INCORPORATED SELLER. If Seller is a
corporation, such Seller is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.
(f) DISCLOSURE. All statements of Seller contained in the Basic
Agreements and in the Seller Disclosure Letter by and on behalf of
Seller and LST are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained
therein not misleading in light of the circumstances under which they
were made. There are no facts known to Seller, which could have a
materially adverse effect upon the business, financial condition,
results of operations, assets, liabilities, or prospects of LST, which
have not been disclosed to Purchaser in the Basic Agreements or Seller
Disclosure Letter.
2.2 REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such
exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller
represents and warrants to Purchaser, to the best of Seller's knowledge, as
follows:
(a) ORGANIZATION. LST is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware.
LST has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. LST is duly
qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its
business requires qualification.
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(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of LST
consists of 20,000,000 shares of common stock, par value $.001 per
share, of which 8,099,750 shares have been issued and are outstanding.
LST has no other capital stock authorized, issued or outstanding and
there are no shares of stock held in treasury. The outstanding shares
of LST Common Stock have been duly authorized, validly issued, fully
paid and nonassessable with no personal liability attaching to the
ownership thereof and were offered, issued, sold and delivered by LST
in compliance with all applicable state and federal laws. Except as set
forth on Schedule 2.2(b) of the Seller Disclosure Letter, LST does not
have any outstanding rights, options, warrants, calls, commitments,
conversion or any other agreements of any character, whether oral or
written, obligating it to issue any shares of its capital stock,
whether authorized or not. LST is not a party to and is not bound by
any agreement, contract, arrangement or understanding, whether oral or
written, giving any person or entity any interest in, or any right to
share, participate in or receive any portion of LST's income, profits
or assets, or obligating LST to distribute any portion of its income,
profits or assets.
(c) CONSENTS. Except as set forth on Schedule 2.2(c) of the Seller
Disclosure Letter, the consummation and performance of the Transaction
(i) does not conflict with, require the consent, waiver or approval of,
result in a breach of or default under or give to others any interest
or rights of termination, cancellation or acceleration in or with
respect to, any agreement by which LST is a party or LST or any of its
properties or assets are bound or affected, and (ii) will not result in
the imposition of any claim, lien, encumbrance or restriction of any
kind upon the assets of LST.
(d) LST FINANCIAL STATEMENTS. The financial statements of LST (the
"LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of the Seller
Disclosure Letter are complete, were prepared in accordance with
generally accepted accounting principles applied on a basis consistent
with prior periods and fairly present the financial position of LST as
of December 31, 2000 and there have been no material changes
thereafter.
(e) COMPLIANCE WITH LAWS. LST is not in violation of any federal,
state, local or other law, ordinance, rule or regulation applicable to
its business, and has not received any actual or threatened complaint,
citation or notice of violation or investigation from any governmental
authority.
(f) NO LITIGATION. There are no actions, suits, claims, complaints
or proceedings pending or threatened against LST, at law or in equity,
or before or by any governmental department, commission, court, board,
bureau, agency or instrumentality; and there are no facts which would
provide a valid basis for any such action, suit or proceeding. There
are no orders, judgments or decrees of any governmental authority
outstanding which specifically apply to LST or any of its assets.
(g) MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller Disclosure
Letter sets forth a list of all material contracts of LST. LST has in
all material respect performed all of its obligations required to be
performed by it through the date hereof, and is not in default or
alleged to be in default in any material respect, under any contract,
including
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any leases for office space, and there exists no event, condition or
occurrence which, after notice or lapse of time or both, constitutes
such a default.
(h) EMPLOYMENT MATTERS. LST is not a party to any employment
agreements, letters or other agreements with any individual with
respect to his or her employment with LST. Schedule 2.2(h) of the
Seller Disclosure Letter sets forth a complete and accurate list of
employees and each employee's rate of compensation (including wages and
guaranteed or anticipated bonuses). LST is not subject to any labor
disputes.
(i) NO UNDISCLOSED LIABILITIES. Except as set forth in LST
Financial Statements, Seller is not aware of any material liabilities
for which LST is currently liable or will become liable in the future.
(j) TAXES. LST has timely filed all federal, state, local and
foreign tax returns and tax reports required to be filed with the
appropriate governmental agency in all jurisdictions in which such
returns and reports are required to be filed, excepting only those
taxes which will not be due until after the Closing. All such returns
and reports are true, correct and complete, and all amounts shown as
owing on them have been paid, including all interest, penalties,
deficiencies and assessments heretofore levied or assessed against LST.
There is no agreement for extension of time of payment of any taxes of
LST. There is no examination or audit pending or threatened by the
Internal Revenue Service or by any state or local taxing authority with
respect to tax matters of LST.
(k) REAL PROPERTY. LST does not own any real property.
(l) INSURANCE. A complete and accurate list of all insurance
policies held by LST and now in force (including insurance policies
covering the assets, business, equipment, properties, employees,
officers and directors of LST) are set forth in Schedule 2.2(l) of the
Seller Disclosure Letter and are of the type and in amounts customarily
carried by persons conducting businesses similar to those of LST. There
is no material claim by LST pending under any of the insurance policies
as to which coverage has been questioned, denied or disputed by the
underwriters of such policies.
(m) INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller Disclosure
Letter sets forth a complete and accurate list of and describes all
franchises, licenses, patents, patent applications, trademarks, service
marks, trade names, copyrights and rights with respect to any of the
foregoing (collectively, "INTELLECTUAL PROPERTY RIGHTS") presently
owned or held by LST. LST owns the right to use all of the Intellectual
Property Rights. The Intellectual Property Rights are all that are
necessary for LST to conduct its business. No event has occurred which
permits, or after notice or lapse of time would permit, the revocation
or termination of any of the Intellectual Property Rights. LST has no
reason to believe that it is infringing, nor has it received notice
with respect to the infringement or possible or claimed infringement,
upon, or, that it is otherwise acting adversely to, any known right or
claimed right of any person with respect to any Intellectual Property
Rights.
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(n) BENEFIT PLANS. Schedule 2.2(n) of the Seller Disclosure Letter
sets forth a complete and accurate list of all of the employee benefit
plans that LST maintains or contributes to, or has maintained or to
which it has made contributions (including any terminated employee
benefit plans). LST does not have any obligation under any employee
benefit plans other than those identified on Schedule 2.2(n), and LST
is in compliance with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to
all employee benefit plans. The execution and deliver of this Agreement
and the consummation of the Transaction will not result in any
violations of ERISA or any other laws related thereto.
(o) ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts receivable of LST
represent in all material respects sales made in the ordinary course of
business. Schedule 2.2(o) of the Seller Disclosure Letter sets forth
LST's top 20 customers by ▇▇▇▇▇▇▇▇ and/or revenues received. Seller has
no knowledge of any oral or written notice or other indication from any
customer stating that it intends to terminate its business relationship
with LST or reduce the amount of business it does with LST.
2.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. With such exceptions,
if any, as may be set forth in a letter (the "PURCHASER DISCLOSURE LETTER") to
be delivered by Purchaser to Seller on the date hereof, Purchaser represents and
warrants to Seller as follows:
(a) ORGANIZATION. Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. Purchaser has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business.
Purchaser is duly qualified and in good standing as a foreign
corporation in each jurisdiction where its ownership of property or
operation of its business requires qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of
Purchaser consists of Two Hundred Million (200,000,000) shares of
common stock, of which 61,687,654 shares have been issued and are
outstanding as of March 7, 2001, and 10,000,000 shares of preferred
stock, none of which are issued or outstanding. In addition, Purchaser,
as of March 7, 2001, has outstanding warrants and options to purchase
27,380,120 shares of the eRCG Common Stock. At Closing, all issued and
outstanding stock of Purchaser, including the eRCG Shares, will have
been duly authorized, validly issued, fully paid and nonassessable with
no personal liability attaching to the ownership thereof. Seller will
receive all right, title and interest to eRCG Shares free and clear of
all liens, pledges, mortgages, security interests and claims
whatsoever, except those imposed by state and federal securities laws.
(c) AUTHORITY; CONSENTS. Purchaser has full power and lawful
authority to execute and deliver the Basic Agreements and the Purchaser
Disclosure Letter and to consummate and perform the Transaction. The
Basic Agreements constitute (or shall,
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upon execution, constitute) valid and legally binding obligations of
Purchaser, enforceable in accordance with their terms. To Purchaser's
knowledge, neither the execution and delivery of the Basic Agreements
and the Purchaser Disclosure Letter by Purchaser, nor the consummation
and performance of the Transaction, conflicts with, requires the
consent, waiver or approval of, results in a breach of or default
under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by
which Purchaser is a party or by which Purchaser or any of its
properties or assets are bound or affected.
(d) INVESTMENT INTENT. Purchaser is acquiring the LST Shares for
its own account, for investment purposes only, and not with a view to
the sale or distribution of any part thereof and Purchaser has no
present intention of selling, granting participation in, or otherwise
distributing the same. Purchaser understands the specific risks related
to an investment in the LST Shares, especially as it relates to the
financial performance of LST.
(e) FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. Purchaser
has filed all material reports, schedules, forms, statements and other
documents with the Securities and Exchange Commission (the "SEC")
pursuant to applicable state and federal securities laws through the
date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute all
material documents required to have been filed by Purchaser pursuant to
such laws.
(f) DISCLOSURE. All statements of Purchaser contained in the Basic
Agreements and in the Purchaser Disclosure Letter by or on behalf of
Purchaser are true and correct in all material respects and, when
considered in conjunction with the SEC Documents, do not omit any
material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made.
There are no facts known to Purchaser which could have a material
adverse affect upon the business, financial condition, results of
operations, assets or liabilities of Purchaser, which have not been
disclosed to Seller in the Basic Agreements, the Purchaser Disclosure
Letter or the SEC Documents.
III.
COVENANTS
3.1 MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and to the
best of Seller's ability, each covenant and agree that from the date hereof
until Closing each shall:
(a) ORDINARY COURSE OF BUSINESS. Operate its business only in the
ordinary course and use its best efforts to preserve its business,
properties, assets, contracts, organization, goodwill and relationships
with persons with whom it has business dealings.
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(b) NO INDEBTEDNESS. Not create, incur, assume, guarantee or
otherwise become liable with respect to any obligation for borrowed
money, indebtedness, capitalized lease or similar obligation, except in
the ordinary course of business consistent with past practices where
the entire net proceeds thereof are deposited with and used by and in
connection with the business.
(c) MAINTAIN BOOKS. Maintain its books, accounts and records in the
usual, regular and ordinary business manner and in accordance with
generally accepted accounting principles applied on a basis consistent
with past practices.
(d) NO AMENDMENTS. (i) Not amend its corporate charter or bylaws
(or similar documents) or material contracts, and (ii) maintain its
corporate existence, licenses, permits, powers and rights in full force
and effect.
(e) TAXES AND ACCOUNTING MATTERS. (i) File when due all federal,
state and local tax returns and reports which shall be accurate and
complete, including, but not limited to, income, franchise, excise, ad
valorem, and other taxes with respect to its business and properties,
and to pay as they become due all taxes or assessments, except for
taxes for which adequate reserves are established and which are being
contested in good faith by appropriate proceedings, and (ii) not change
its accounting methods or practices or any depreciation, amortization
or inventory valuation policies or practices.
(f) DUE COMPLIANCE. Comply in all material respects with all laws,
regulations, rules and ordinances applicable to it and to the conduct
of its business.
(g) CONSENTS. Use its best efforts to obtain the consent or
approval of each person or entity whose consent or approval is required
for the consummation of the Transactions.
(h) EFFORTS TO CONSUMMATE. Subject to the terms and conditions of
this Agreement, use its reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary, proper and advisable under applicable laws to consummate and
make effective, as soon as practicable after the date of this
Agreement, the Transaction.
3.2 SELLER'S COVENANTS. Seller, on behalf of LST and to the best of
Seller's ability, covenants and agrees from the date hereof until Closing, LST
shall:
(a) COMPENSATION. Not (i) enter into or alter any employment
agreements, (ii) grant any severance or increase in compensation other
than normal merit increases consistent with its general prevailing
practices to any officer or employee, (iii) enter into or alter any
labor or collective bargaining agreement or any bonus or other employee
fringe benefit, or (iv) adopt or amend any employee stock option plan.
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(b) NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS. Not to
(i) issue any shares of any class of capital stock, or enter into any
contract, option, warrant or right calling for the issuance of any such
shares of capital stock, or create or issue any securities convertible
into any securities, (ii) accelerate or amend the period of
exercisability of warrants or restricted stock or reprice any warrants
or authorize cash payments in exchange for any warrants, or (iii)
declare or pay any dividends on or make any other distributions in any
form in respect of capital stock, or split, combine or reclassify any
capital stock.
3.3 NO SHOP. Seller agrees to, and to the best of Seller's ability
shall cause LST to, negotiate exclusively with Purchaser and not to solicit,
negotiate, enter into any agreement or entertain other offers or alternative
proposals for the LST Shares or the acquisition of Seller, its assets or stock
from the date hereof until the earlier of (i) termination of this Agreement or
(ii) August 31, 2001.
3.4 PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of Seller's
ability shall cause LST not to, without the prior written consent of Purchaser,
make any announcement, issue any press release or make any statement to any
third party with respect to the Transaction except as may be necessary to comply
with any law, regulation or order and then only after prior notice to Purchaser
as to the content of such announcement.
3.5 CONFIDENTIALITY. Seller agrees to, and to the best of Seller's
ability shall cause LST to, maintain the confidentiality of all confidential
information furnished to it related to Purchaser and shall not use or disclose
such information for any purpose, except in furtherance of the Transaction.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF PURCHASER TO CLOSE
The obligation of Purchaser to close the Transaction is subject to the
fulfillment prior to the Closing of each of the following conditions, which may
be waived in whole or in part by Purchaser:
4.1 COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations and warranties of Seller contained in Sections 2.1 and 2.2
hereof shall have been true and correct in all material respects when made and
shall be true and correct in all material respects as of the Closing with the
same force and effort as if made at the Closing. Seller shall have performed in
all material respects all agreements, covenants and conditions required to be
performed by Seller prior to the Closing.
4.2 NO ADVERSE CHANGE. There shall have been no event, which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of LST.
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4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transaction.
4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered
the following documents:
(a) Stock certificate(s) representing all of the LST Shares held by
Seller, duly endorsed to Purchaser in blank or accompanied by duly
executed stock powers;
(b) All agreements referred to in Section 1.5 hereof, executed by
all parties thereto other than Purchaser; and
(c) Such other documents or certificates as shall be reasonably
required by Purchaser or its counsel in order to close and consummate
the Transaction.
4.5 CONSENTS.
(a) BY PURCHASER. Purchaser's Board of Directors shall have
approved and taken all necessary corporate action to execute, deliver
and perform the Basic Agreements, the Purchaser Disclosure Letter and
consummate the Transaction.
(b) BY LST. LST shall have delivered to Purchaser any and all
consents, waivers or approvals of any government, government agency or
other third party necessary to the consummation and performance of the
Transaction.
4.6 LISTING OF ERCG SHARES. The eRCG Shares to be issued in connection
with the Transaction shall be listed for trading on the American Stock Exchange.
4.7 AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article X of
that certain LST, Inc. Omnibus Stock Option and Award Plan dated September 29,
2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change of
Control" (as defined in the Stock Option Plan) all outstanding options shall be
cancelled and any vested, but unexercised options shall no longer be
exercisable.
4.8 CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled any
and all outstanding options, whether granted pursuant to the Stock Option Plan
or otherwise, and any vested but unexercised options shall no longer be
exercisable.
4.9 SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding one
hundred percent (100%) of the issued and outstanding LST Common Stock shall have
entered into stock purchase agreements with Purchaser similar to this Agreement
and the other agreements set forth in Section 1.5 hereof.
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4.10 CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold
2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00)
per share pursuant to the terms of the that certain Private Placement Memorandum
dated July 15, 2000.
4.11 INVESTIGATION. Purchaser shall have satisfactory completed its due
diligence investigation of LST. No investigation by Purchaser shall affect the
representations and warranties of Seller.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transaction is subject to the
fulfillment prior to Closing of each of the following conditions, which may be
waived in whole or in part by Seller:
5.1 COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties made by Purchaser in Section 2.3
of this Agreement shall have been true and correct in all material respects when
made and shall be true and correct in all material respects at the Closing with
the same force and effect as if made at the Closing. Purchaser shall have
performed in all material respects all agreements, covenants and conditions
required to be performed by Purchaser prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transaction.
5.3 OTHER AGREEMENTS. Purchaser shall have executed and delivered all
agreements referred to in Section 1.5 hereof, to be executed by the Purchaser.
5.4 PAYMENTS. Seller shall have received from Purchaser all of eRCG
Shares and cash in lieu of any fractional eRCG Share that Seller is entitled to
receive pursuant to the Basic Agreements.
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VI.
TERMINATION
6.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the LST Shares may be abandoned before the Closing by:
(a) The mutual consent of Seller and Purchaser;
(b) Purchaser, if the conditions precedent set forth in Article IV
hereof shall have not have been satisfied on or before the Closing Date
(as the same may be extended from time to time); and
(c) Seller, if the conditions precedent set forth in Article V
hereof shall not have been satisfied on or before the Closing Date (as
the same may be extended from time to time).
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor. Termination shall not relieve any party from
liability for any willful breach of this Agreement.
VII.
MISCELLANEOUS
7.1 SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4 and
3.5 and Article VII hereof, which shall survive the Closing or termination
hereof for a period of two (2) years, none of the representations and warranties
contained in this Agreement or in any certificate, exhibit or other document
delivered pursuant to this Agreement shall survive the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY
BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on
behalf of the parties pursuant thereto, constitute the entire agreement between
the parties. The terms and conditions of the Basic Agreements shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. Nothing in the Basic Agreements,
expressed or implied, confers any rights or remedies upon any party other than
the parties hereto and their respective heirs, legal representatives, successors
and assigns.
7.3 GOVERNING LAW. The Basic Agreements and the other instruments
delivered by or on behalf of the parties pursuant hereto are made pursuant to,
and will be construed under, the laws of the State of Delaware, without regard
to its conflicts of law principles.
7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
personally delivered, delivered by a nationally recognized overnight delivery
service, sent ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇
(receipt confirmed), or three (3) business days after it is deposited in the
United States mail, certified or registered, return receipt requested, postage
prepaid, to:
(a) If to Seller to:
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Telephone: (____) ___________
Fax: (___) _________________
(b) If to Purchaser, to:
eResource Capital Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Executive Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
These addresses may be changed from time to time by like written notice
to the other party.
7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law, then this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.7 EXPENSES. Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of the
Transaction.
7.8 INTEGRATION; INTERPRETATION. The Basic Agreements and all documents
and instruments executed pursuant hereto merge and integrate all prior
agreements and representations respecting the Transaction, whether written or
oral, and constitute the sole agreement of the parties in connection therewith.
This Agreement has been negotiated by and submitted to the scrutiny of both
Seller and Purchaser and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
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7.9 AMENDMENTS. No amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by both of the parties hereto.
7.10 VARIATION OF PRONOUNS. All pronouns and any variations thereof
shall be deemed to reflect masculine, feminine, or neuter, singular or plural,
as the identity of the person or entity may require.
7.11 WAIVERS. Purchaser and Seller may, in writing, amend the time for
or waive compliance by the other with any of the covenants or conditions of the
other contained herein. Failure to pursue any legal or equitable remedy or right
available to a party shall not constitute a waiver of such right, nor shall any
such forbearance, failure or actual waiver imply or constitute waiver of
subsequent default or breach.
7.12 COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be executed
in counterparts (whether by facsimile or otherwise), each of which will be
deemed an original and all of which together will constitute one instrument.
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IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement, or caused this Agreement to be duly executed, on the date first
written above.
PURCHASER:
eRESOURCE CAPITAL GROUP, INC.
BY:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
ITS: EXECUTIVE VICE PRESIDENT
SELLER:
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