STOCK EXCHANGE AGREEMENT
Exhibit
No. 10.
THIS STOCK EXCHANGE AGREEMENT
(the “Agreement”) is made as of this 29th day of
November, 2008, (the “Effective Date”) by and between AmeriResource
Technologies, Inc., a Delaware corporation, (“ARIO”), and Midnight Holdings
Group, Inc., a Delaware corporation (“MHGI”), (ARIO, and MHGI may hereinafter be
referred to individually as a “Party” or collectively as the
“Parties”).
RECITALS:
WHEREAS, ARIO is interested in
expanding its business through investments and acquisitions in all industries
that have a niche market;
WHEREAS, MHGI is a holdings
company that owns intellectual property as well as subsidiary entities which are
or have been engaged in providing aftermarket automotive products and services
for both new and used automobiles; and
WHEREAS, ARIO desires to
acquire 41% of the outstanding Convertible Preferred Series A stock of MHGI, and
MHGI is interested in exchanging 41% of their Convertible Preferred Series A
stock for 250,000 shares of AmeriResource Convertible Preferred Series
“E” stock, pursuant to the terms and conditions described herein and
for the consideration set forth herein.
AGREEMENT:
NOW,
THEREFORE, in consideration of the promises, representations, and covenants
described herein, and in consideration of the recitals above, which are
incorporated herein by reference, and for other good and valuable consideration,
the receipt and sufficiency of which the Parties hereby acknowledge, the Parties
hereby agree as follows:
1. Consideration and Exchange
of Shares.
(a) Exchange of Shares.
The Parties hereto agree that MHGI will, upon the final closing, exchange,
assign, transfer and convey exclusively to ARIO FOUR MILLION ONE HUNDRED
THOUSAND SHARES (4,100,000) shares of MHGI Convertible Preferred Series “A”
stock (the “MHGI Shares”), constituting 41% of the issued and outstanding
Convertible Preferred Series A stock of MHGI, in exchange for TWO HUNDRED AND
FIFTY THOUSAND (250,000) shares of AmeriResource Convertible Preferred Series E
stock (the “ARIO Shares”). Upon the effective closing of this
Agreement, MHGI will become a majority-owned subsidiary of ARIO.
(b) Contingent Consideration
prior to Closing. The Effective Closing of the Stock Exchange between the
Parties shall occur when MHGI brings its financial statements current with the
filings of its Form 10 KSB for year-end December 31, 2007 and 2008, and all
quarterly filings, through filing of all Form 10 Qs, for the calendar years
2007, 2008, and 2009. Upon the filing of all financial statements thereby
bringing MHGI current in its filings, the Effective Closing or exchange of the
shares will take place at a designated place between the
Parties. ARIO hereby agrees that it shall provide the necessary
funding and management to allow MHGI to complete its obligations under this
contingency.
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3. Closing. The closing
of the transaction shall be held within ten (10) business days following the
final filing of MHGI financial statements thereby bringing the Company current
in its financial statements. The anticipated Closing date, (the “Closing”), is
in June or July of 2009. The Closing of this Agreement and exchange of stock
shall take place at the offices of ARIO, in the City of Las Vegas, Nevada, or at
such other place as the Parties may agree to. At Closing, the Parties shall
deliver all information and documents necessary or reasonable required by the
Parties to fulfill their respective obligations as outlined
hereunder.
4. Conditions Precedent to
Closing.
(a)
Conditions to Obligations of
AmeriResource. The obligations of AmeriResource under this Agreement are
subject to the fulfillment on or prior to Closing of the following
conditions:
(i) Representations and
Warranties Correct; Performance of Obligations. The
representations and warranties made by AmeriResource herein shall be true and
correct in all material respects when made, and shall be true and correct in all
material respects at Closing with the same force and effect as if they had been
made on and as of Closing. ARIO shall have performed in all material respects
all obligations and conditions herein required to be performed or observed by
AmeriResource and the transactions herein contemplated, on or prior to the
Closing.
(b)
Conditions to Obligations of
MGHI. The obligations of MHGI under this Agreement are subject to the
fulfillment on or prior to Closing of the following
conditions:
(i) Representations and
Warranties Correct; Performance of Obligations. The
representations and warranties made by MHGI herein shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects at Closing with the same force and effect as if they had been made on
and as of Closing. MHGI shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by it on
or prior to Closing.
5. Representations and
Warranties of MHGI. MHGI makes the following warranties and
representations to AmeriResource:
(a) MHGI
represents and warrants that prior to this transaction, MHGI is authorized to
issue One Billion (1,000,000,000) shares of voting common stock and Ten Million
10,000,000 shares of Preferred Series Stock and has approximately NINE HUNDRED
AND TWENTY EIGHT MILLION, ONE HUNDRED AND SIXTY EIGHT THOUSAND (928,168,000)
issued and outstanding of common voting stock and had a total of FOUR MILLION
(4,000,000) issued and outstanding of Preferred Series Stock as of the date of
this Agreement. MHGI further represents and warrants that MHGI is a corporation
duly incorporated and in good standing as a corporation under the laws of the
State of Delaware and have all necessary corporate power and authority to engage
in the business in which they are presently engaged.
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(b)
MHGI
represents and warrants that it has the full right, power, legal capacity, and
authority to enter into, and perform its respective obligations under this
Agreement, and that this Agreement will not conflict with any other obligations,
contracts or other agreements.
(c)
MHGI
represents and warrants that the operations of MHGI will not undergo any
material change from the date hereof until the date of Closing and that the
operations and assets of MHGI are all adequately insured.
(d)
MHGI
represents and warrants that it has disclosed, and continues to disclose in its
Due Diligence website and through email and other forms of communications, there
are no other claims, demands, proceedings, defaults, obligations, suits, or
threats of suit, seizure, or foreclosure against MHGI and that there is no suit,
action, or legal, administrative, arbitration, or other proceeding pending or
threatened which could as of Closing adversely affect ARIO’s ownership of the
MHGI Shares, except as is noted in the Company’s Form 10 K for the period ended
December 31, 2006, and its Form 10 Q for the period ended June 30, 2007 and as
disclosed in its Due Diligence.
(e) MHGI
represents and warrants that, except as disclosed in the Due Diligence provided
to ARIO, all of the assets of MHGI are free and clear of all mortgages, liens,
pledges, encumbrances, or security interests of any nature whatsoever and, upon
MHGI transfer of the MGHI Shares to ARIO, all assets and property of MGHI are,
to the best of MHGI’s knowledge, in good operating condition and repair.
Further, to the best of MHGI’s knowledge, there are no structural or operational
defects in any of the existing operations which would materially affect their
continued use in the same manner. MHGI also represents that MHGI is in default
on a number of leases, licenses, commitments, or other agreements, except as is
noted in the Company’s Form 10 K for the period ended December 31, 2006, and its
Form 10 Q for the period ended June 30, 2007 and as disclosed in its Due
Diligence.
(f)
MHGI
represents and warrants that except as disclosed in its Due Diligence,
they: (i) are not in violation of any applicable building, zoning,
occupational safety and health, pension, environmental control or similar law,
ordinance or regulation in relation to their structures or equipment or the
operation thereof or of their business, or any fair employment, equal
opportunity or similar law, ordinance or regulation, or any other law,
ordinance, regulation or order applicable to their business or assets, (ii) have
not received any complaint from any governmental authority, and none is
threatened, alleging that MHGI is in violation of any applicable law, ordinance,
regulation or order, (iii) have not received any notice from any governmental
authority of any pending proceeding to take all or any part of any properties
(whether leased or owned) by condemnation or right of eminent domain and no such
proceeding is threatened, (iv) are not a party to any agreement or instrument,
or subject to any charter or other corporate restriction or judgment, order,
writ, injunction, rule, regulation, code or ordinance, which adversely affects
the business, operations, prospects, properties, assets or condition, financial
or otherwise, of MHGI and (v) are not in violation of, and the execution of this
Agreement and the consummation of the transactions contemplated herein will not
violate, any bankruptcy law, ruling, administrative decision, agreement, or plan
to which MHGI is subject to.
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(g)
MHGI
represents and warrants that any and all authorizations, approvals or other
actions by, notices to, or filings with, any governmental authority, if
applicable, required to be obtained or made in connection with AmeriResource
have been obtained or will be made, and that except as disclosed in its Due
Diligence, no consent of any third party is required to be obtained for the due
execution, delivery and performance of this Agreement. Governmental authorities
include all Federal, State and local agencies.
(h) The
warranties and representations set forth in this Article are
ongoing warranties and representations by MHGI and shall survive the
Closing.
6. Representations and
Warranties of AmeriResource. AmeriResource makes the following warranties
and representations to MHGI:
(a)
AmeriResource
represents and warrants that it has approximately Four Billion Three Hundred
Ninety-eight Million Six Hundred Seventy-four thousand Three hundred
Thirty-seven (4,398,674,337) shares issued and outstanding as of the date of
this agreement. AmeriResource is duly incorporated and in good
standing as a corporation under the laws of the State of Delaware, and it has
all necessary corporate power and authority to engage in the business in which
it is presently engaged.
(b) AmeriResource
represents and warrants that it has the full right, power, legal capacity, and
authority to enter into, and perform their respective obligations under this
Agreement, and that this Agreement will not conflict with any other obligations,
contracts or agreements of AmeriResource.
(c)
AmeriResource
represents and warrants that there are no claims, demands, proceedings,
defaults, obligations, suits, or threats or suit, seizure, or foreclosure
against AmeriResource except as is noted in the company’s Form 10 K for period
ended December 31, 2007, and Form 10 Q for period ended September 30,
2008.
(d)
AmeriResource
represents and warrants that no authorization, approval or other action by, and
no notice to or filing with, any governmental authority is required to be
obtained or made, and no consent of any third party is required to be obtained
by AmeriResource for the due execution, delivery and performance of this
Agreement.
(e)
AmeriResource
understands and acknowledges that the MHGI Shares will not be registered under
the Securities Act nor qualified under any state securities laws, by virtue of
exemptions thereto. AmeriResource has such experience and knowledge in
investment, financial and business matters in investments similar to the MHGI
Shares that it is capable of protecting its own interest in connection therewith
and qualifying for such exemptions. Further, AmeriResource is acquiring the MHGI
Shares through a stock for stock like exchange for investment purposes only for
its own account, and not on behalf of any other person nor with a view to, or
for resale in connection with any distribution thereof. AmeriResource
understands that the certificates representing the MHGI Shares will be stamped
with a legend substantially in the following form or a similar
form:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL OR OTHER
EVIDENCE SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED.
(f) The
warranties and representations set forth in this Article are ongoing warranties
and representations by AmeriResource and shall survive the
Closing.
7. Due
Diligence. The Parties hereby acknowledge
and agree that prior to the execution of this Agreement they have conducted such
due diligence as necessary and commercially customary for this Agreement and the
transactions contemplated by it.
8. Continuing Obligations of
the Parties. The Parties hereby agreed after the Closing to assist and
cooperate in good faith with each other on a timely basis in providing any
information or documents, or executing any documents, necessary or reasonably
required to fulfill the Party’s obligations hereunder.
9. Default and Cure. In
the event some Party fails or refuses to perform its obligations under this
Agreement in a timely manner, then the other Party may give notice to such other
Party of default hereunder. Said notice shall set forth with
sufficient specificity and particularity the details of said
default. The Parties to whom said default notice is given shall have
thirty (30) days from the date of the delivery of the notice to either (a) cure
the deficiencies set forth in the notice or (b) give written reply to the notice
setting forth with particularity the reasons for the nonexistence of default or
inability to cure the default(s). In the event the Party receiving notice of
default does not cure such default or set forth reasons for the nonexistence of
default by thirty (30) calendar days from the date of delivery of the notice,
the defaulting Party will be deemed in breach of this Agreement. Upon breach of
this Agreement, the non-breaching Party shall have the right to rescind this
Agreement and the transactions contemplated by it. In the event this
Agreement is rescinded, the Parties shall take such actions as necessary to give
effect to such rescission.
10.
Indemnification. The
Parties shall indemnify, defend and hold harmless each other against any and all
undisclosed liabilities of the other not set forth in this Agreement or the
exhibits and schedules provided herewith. This indemnification
shall survive the Closing.
11.
Rescission.
Notwithstanding the rescission rights as set forth in Article 9, in the event
MHGI does not become current in its filings on or before December 31, 2009, and
provided that AmeriResource has met all of its obligations to fund and manage
the MHGI filing and audit processes required under this Agreement, the Agreement
may be terminated by mutual written consent of the parties effective December
31, 2009.
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12. Professional
Assistance. Both Parties hereby acknowledge that they had a full
opportunity to seek legal and tax assistance of their own choosing prior to the
execution of this Agreement, and that they have done so, or have expressly
waived their right to such assistance and counsel.
13. Costs. All costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and consummation of the
transactions contemplated hereby shall be paid by each Party incurring such
costs and expenses.
14.
Securities Laws and
Taxation. Both Parties hereby agree and acknowledge that the
transfer of securities pursuant to this Agreement shall constitute an exempt
isolated transaction and the restricted securities
received in such transfer and exchange do not have to be registered under
federal or state securities laws and regulations. It is the express
intention of the Parties that this Agreement and the transactions contemplated
by it is treated to the extent possible as a tax-free exchange of stock pursuant
to the IRS code of 1986 (and regulation thereto), as amended.
15.
Entire
Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter herein, and supercedes
all prior negotiations, correspondence, understandings, and agreements among the
Parties hereto respecting the subject matter hereof.
16.
Headings. The
article and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
17.
Good Faith and Fair
Dealing. The Parties agree that this Agreement imposes an
implied duty of good faith and fair dealing on all the respective obligations of
the Parties.
18.
Amendment and Modification;
Waiver of Compliance. Subject to applicable law, this
Agreement may be amended, modified, and supplemented only by written agreement
signed by the Parties. Any failure by any Party to this Agreement to
comply with any obligation, covenant, agreement, or condition contained herein
may be expressly waived in writing by the other Party hereto, but such waivers
or failure to insist upon strict compliance shall not operate as a waiver of, or
estoppels with respect to any subsequent or other failure.
19.
Counterpart’s &
Facsimile. This Agreement and its exhibits may be executed
simultaneously in one or more counterparts or by facsimile, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
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20.
Rights of
Parties. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the Parties to it and their respective
heirs, legal representatives, successors and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons not a party to this Agreement, nor shall any provision give any
such third persons any right of subordination or action over or against any
Party to this Agreement.
21. Assignment. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interest, or
obligations hereunder shall be assigned by any Party hereto without the prior
written consent of the other Party.
22. Arbitration. Any
controversy or claim arising out of or relating to this Agreement or the breach
of it, shall be settled by arbitration in accordance with the rules of the
American Arbitration Association, and judgment on the award rendered may be
entered in any court having jurisdiction.
23.
Governing Law and
Venue. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Nevada, without reference to the
conflict of laws principles thereof. In the event any dispute
regarding this Agreement arises between the Parties and is not resolved at
arbitration, such dispute shall be brought in a proper jurisdiction located
within Xxxxx County, State of Nevada.
24.
Notices. All
notices, requests, demands, and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given if
delivered by hand, overnight courier, facsimile, or mailed certified or
registered mail with postage prepaid, to the addresses set forth
below:
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If
to ARIO:
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AmeriResource
Technologies, Inc.
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0000
X. Xxxxxxx Xxxx, Xxxxx 000
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Xxx
Xxxxx, Xxxxxx 00000
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||
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Attention:
Xxxxxx Xxxxxxx
|
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TEL:
(000) 000-0000
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FAX:
(000)000-0000
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||
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Email:
Xxxxxx@xxxxxxxxxxxxxxxxxxxxxxxxx.xxx
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With
a copy to:
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Xxxxxx
& Xxxxxx
|
|
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000
Xxxxx 0 Xxxxx
|
||
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Xxxxxxxxx,
XX 00000
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||
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TEL: 000 000
0000
|
||
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FAX:
000 000 0000
|
||
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Attention:
Xxxxx X. Xxxxxx, Esq.
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||
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Email:
XXxxxxx@xxxxxxxxx.xxx
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||
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If
to MHGI:
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Midnight
Holdings Group, Inc.
|
|
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C/O
All Night Auto of Troy (Retail Service Center)
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0000
Xxxxxxxxx Xxxx
|
||
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Xxxx.
XX 00000
|
||
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TEL: (000) 000-0000
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||
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FAX:
(000) 000-0000
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Attention:
Xxxxxxxx Xxxxx
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Email:
xxxxxxxx.xxxxx@xxxxxxxxxx.xxx
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With a copy
to:
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Xxxxxx
& Jaclin
|
|
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000
Xxxxx 0 Xxxxx
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||
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Xxxxxxxxx,
XX 00000
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||
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TEL: 000 000
0000
|
||
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FAX:
000 000 0000
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Attention:
Xxxxx X. Xxxxxx, Esq.
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Email:
XXxxxxx@xxxxxxxxx.xxx
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25. Joint Effort to
Prepare. This Agreement has been prepared by the joint efforts
of the attorneys of all of the signatories to this Agreement and shall not be
construed against any particular Party. Should any provision of this Agreement
require judicial interpretation, the Parties hereto agree that the court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against one Party by reason of the rule
of construction that a document is to be more strictly construed against the
Party who itself or through its agents prepared the same, it being agreed that
the Parties hereto and their respective agents have participated in the
preparation hereof.
26. Authority. Both
Parties acknowledge that by execution of this Agreement they have the right,
power, legal capacity, and authority to enter into, and perform their respective
obligations under this Agreement, and no approvals or consents of any persons
other than the Parties are necessary in connection with this
Agreement. The execution and delivery of this Agreement have been
individually consented to in writing by all the disclosed individuals of each
Party.
Signature
page to follow.
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IN WITNESS WHEREOF, the
signatures of the Parties below evidence their approval, acceptance and
acknowledgement of the terms contained in this Agreement.
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AMERIRESOURCE
TECHNOLOGIES, INC.
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MIDNIGHT
HOLDINGS GROUP, INC.
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/s/
Xxxxxx Xxxxxxx
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/s/
Xxxxxxxx X. Xxxxx
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By:
Xxxxxx Xxxxxxx
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By:
Xxxxxxxx X. Xxxxx
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Name:
Xxxxxx Xxxxxxx
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Name: Xxxxxxxx
X. Xxxxx
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Title: President
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Title: Chairman
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EXHIBIT
A
EXCHANGE
OF SHARES
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MHGI shares
transferred to ARIO
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MHGI shares
received
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ARIO shares
transferred to MHGI
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ARIO shares
received
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10
