Exhibit 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), dated as of April 14,
2006, is by and among Equity Technologies & Resources, Inc., a Delaware
corporation (the "Company"), Xxxxx X. Xxxxxxx, President/CEO and Director; and
Xxxxx Arch, ("Arch"), and MLH Investments, LLC, a Nevada limited liability
company ("Buyer").
RECITALS:
WHEREAS, the Company is insolvent; and
WHEREAS, Buyer is interested in pursuing a potential restructuring of the
debt and equity of the Company, provided that, as an initial step to such
potential restructuring, the Company and Arch enter into this Agreement;
NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and for other good and valuable consideration, the
receipt and legal adequacy of which is hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT:
1. Agreement to Purchase.
(a) At the Closing (as hereinafter defined), the Company agrees to sell to
Buyer, and Buyer agrees to purchase from the Company, 156,196,406 shares
(the "Company Shares") of the authorized but unissued shares of Class A
Common Stock, par value $0.0001 per share (the "Class A Common Stock"), at
a purchase price of $0.0001 per share ($15,619.64 in the aggregate).
(b) At the Closing, Buyer shall purchase from Arch 100,000 shares (the
"Arch Shares") of the Class B Common Stock, par value $0.01 per share, at a
purchase price of $100 in the aggregate.
(c) The closing of the sale of the Company Shares and the Arch Shares
contemplated under this Agreement (the "Closing") shall occur on the date
of this Agreement at the executive offices of the Company (the "Closing
Date"). At the Closing:
(i) the parties hereto shall execute and deliver this Agreement;
(ii) the Company shall issue to its transfer agent irrevocable instructions
to issue a certificate to Buyer evidencing the Company Shares;
2. Arch shall deliver to Buyer certificate(s) representing the Arch Shares,
together with appropriate stock powers transferring the Arch Shares to
Buyer;
(a) Buyer shall deliver to the Company by check or wire transfer $15,606.64
representing the above purchase price for the Company Shares;
(i) Buyer shall deliver to Arch a check in the amount of $100 representing
the purchase price for the Arch Shares; and
1
(ii) the Company shall deliver to Buyer resolutions of the Board of
Directors of the Company approving this Agreement and the issuance of
the Company Shares to Buyer.
3. Representations, Warranties and Covenants of the Company. The Company
represents and warrants to Buyer that the following are true and correct as
of the date of this Agreement:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with all requisite
corporate power and authority to carry on the business in which it is
engaged, to own the properties it owns, to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
(b) The authorized capital stock of the Company consists of: (i)
300,000,000 shares of Class A Common Stock, of which 143,803,594 shares are
issued and outstanding; (ii) 100,000 shares of Class B Common Stock, of
which 100,000 shares are issued and outstanding; (iii) 2,000,000 shares of
Class A Preferred Stock, par value $0.001 per share, none of which shares
are issued or outstanding; (iv) 300,000 shares of Class B Preferred Stock,
par value $0.001 per share, of which 70,000 shares are issued and
outstanding; and (v) 100,000 shares of Class C Preferred Stock, par value
$0.001 per share, none of which share are issued and outstanding. All of
issued and outstanding shares of issued capital stock has been duly
authorized, validly issued, fully paid and is nonassessable. There exist no
options, warrants, subscriptions or other rights to purchase, or securities
convertible into or exchangeable for, the capital stock of the Company.
(c) The Company Shares have been duly authorized, and when issued to Buyer
under the terms of this Agreement, will be validly issued, fully paid and
nonassessable.
(d) The execution, delivery and performance by the Company of this
Agreement have been duly authorized by the Company. This Agreement has been
duly executed and delivered by the Company and constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies.
4. Neither the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated hereby or thereby will (i)
conflict with, or result in a violation or breach of the terms, conditions
or provisions of, or constitute a default under, the Certificate of
Incorporation or Bylaws of the Corporation or any agreement, indenture or
other instrument under which the Company is bound, or result in the
creation or imposition of any security interest, lien, charge or
encumbrance upon any of the assets of the Company, or (ii) violate or
conflict with any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company.
(a) No consent, authorization, approval, permit or license of, or filing
with, any governmental or public body or authority, any lender or lessor or
any other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement
by the Company.
(b) There are no existing violations by the Company of any federal, state
or local law or regulation.
2
(c) There are no legal actions or administrative proceedings or
investigations instituted or threatened in writing against the Company. The
Company is not: (i) subject to any continuing court or administrative
order, writ, injunction or decree applicable specifically to the Company or
to its business, assets, operations or employees; or (ii) in default with
respect to any such order, writ, injunction or decree.
5. Representations, Warranties and Covenants of Arch. Arch represents and
warrants to Buyer as follows:
(a) The offer and sale of the Arch Shares is intended to be exempt from
registration under the Securities Act, by virtue of Section 4 of the
Securities Act.
(b) This Agreement has been duly authorized, validly executed and delivered
on behalf of Arch and is a valid and binding agreement and obligation of
Arch enforceable against Arch 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 Arch has full power and authority to execute and deliver
this Agreement and the other agreements and documents contemplated hereby
and to perform its obligations hereunder and thereunder.
(c) The execution and delivery of this Agreement, the sale of the Arch
Shares and the consummation of the transactions contemplated by this
Agreement by Arch, will not conflict with or result in a breach of or a
default under any material agreement or instrument to which Arch is a party
or by which any of his material properties or assets is bound, 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
Arch, or any of his 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 Arch pursuant to the terms of any agreement
or instrument to which he is a party or by which he may be bound or to
which any of his property is subject.
(d) No authorization, approval, filing other than possible notice filings
with or consent of any governmental body is required for the sale of the
Arch Shares to Buyer pursuant to this Agreement.
(e) Arch is the legal, beneficial and registered owner of the Arch Shares,
free and clear of any liens, charges or encumbrances. At the Closing, upon
payment of the purchase price for the Arch Shares, Buyer will acquire all
right, title and interest in the Arch Shares being acquired, free and clear
of all liens, charges or encumbrances.
6. Representations, Warranties and Covenants of Buyer. Buyer represents and
warrants to the Company and Arch as follows:
(a) Buyer is an "accredited investor" as defined under Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act").
(b) Buyer is acquiring the Company Shares and the Arch Shares
(collectively, the "Subject Shares") for its own account and not with a
view to any distribution of the Subject Shares in violation of the
Securities Act.
3
(c) Buyer acknowledges that it has significant prior investment experience,
and Buyer recognizes the highly speculative nature of this investment.
(d) Buyer acknowledges that the Subject Shares have not been passed upon or
reviewed by the Securities and Exchange Commission. Buyer agrees that it
will not sell, transfer or otherwise dispose of any of the Subject Shares
it is acquiring hereunder unless they are registered under the Securities
Act, or unless an exemption from such registration is available. Buyer
understands that the Subject Shares have not been registered under the
Securities Act by reason of a claimed exemption under the provisions of the
Securities Act.
(e) This Agreement constitutes a valid and binding agreement and obligation
of Buyer enforceable against Buyer in accordance with its terms, subject to
limitations on enforcement by general principles of equity and bankruptcy
or other laws affecting the enforcement of creditors' rights generally.
(f) This Agreement has been duly authorized, validly executed and delivered
on behalf of Buyer, and Buyer has full power and authority to execute and
deliver this Agreement and the other agreements and documents contemplated
hereby and to perform its obligations hereunder and thereunder.
(g) Buyer has had access to any and all information concerning the Company
that Buyer and its financial, tax and legal advisors required or considered
necessary to make a proper evaluation of this investment. Specifically,
Buyer has had the opportunity to review Company's annual report on Form
10-KSB for the year ended December 31, 2004, quarterly reports on Form
10-QSB for the quarterly period ended March 31, 2005, June 30, 2005 and
September 30, 2005 (collectively, the "Securities Filings"). Buyer
understands that:
o The Company does not have sufficient working capital to execute its
business plan, has substantial debt obligations and has no
arrangements in place to provide it with adequate working capital.
o Between December 31, 2003 and late 2005, the Company failed to comply
with substantially all of the obligations imposed upon it by the
Securities Exchange Act of 1934 Act.
o The Company was delinquent in filing its annual reports on Form 10-KSB
for the periods ended December 31, 2003 and December 31, 2004, was
delinquent in filing is quarterly reports of Form 10-QSB for the
quarterly periods ending in 2005, is delinquent in filing its
quarterly reports on Form 10-QSB for the quarterly periods ending in
2003 and 2004 and is delinquent in filing required current reports on
Form 8-K during these periods.
In making the decision to acquire the Subject Shares, Buyer and its
advisers have relied solely upon the Securities Filings, this Agreement and
their own independent investigations, and fully understand that there are
no guarantees, assurances or promises in connection with any investment
hereunder and understand that the particular tax consequences arising from
this investment in the Company will depend upon its individual
circumstances. Buyer further understands that no opinion is being given as
to any securities or tax matters in connection herewith.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas, without giving
effect to any of the conflicts of law principles which would result in the
application of the substantive law of another jurisdiction.
4
8. Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, express overnight
courier, registered first class mail, overnight courier, or telecopier,
initially to the address set forth on the signature page hereto, and
thereafter at such other address, notice of which is given in accordance
with the provisions of this Section. All such notices and communications
shall be deemed to have been duly given: when delivered by hand, if
personally delivered; three (3) business days after being deposited in the
mail, postage prepaid, if mailed; the next business day after being
deposited with an overnight courier, if deposited with a nationally
recognized, overnight courier service; when receipt is acknowledged, if
telecopied.
9. Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein. This Agreement
may not be amended or any provision hereof waived in whole or in part,
except by a written amendment signed by all of the parties hereto.
10. Counterparts. This Agreement may be executed by facsimile signature and in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
BALANCE OF PAGE BLANK
5
IN WITNESS WHEREOF, this Stock Purchase Agreement was duly executed on the
date first written above.
EQUITY TECHNOLOGIES & RESOURCES, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxx X. Xxxxxxx
Chief Executive Officer and President
Address: X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxxx Arch
-------------------------------------------------
Xxxxx Arch
Address: X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxx 00000
MLH INVESTMENTS, LLC
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------------
Xxxxx X. Xxxxx, Manager
Address: 0000 X. Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
6
