EXHIBIT 10.20
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (this "Agreement"), dated as of July 20, 2006
(the "Effective Date"), is entered into by and among Equity Technologies &
Resources, Inc., a Delaware corporation (the "Company"), MB Holding Corporation,
a Nevada corporation ("MBH"), and H.E.B., LLC, a Nevada limited liability
company ("HEB"). Each of the parties hereto is sometimes referred to herein as a
"Party", and collectively, as the "Parties".
RECITALS:
WHEREAS, HEB is the beneficial owner of 1,000 shares of MBH's common stock,
par value $.01 per share (the "MBH Stock"), which shares constitute all of the
issued and outstanding shares of MBH;
WHEREAS, the Company desires to acquire all of the MBH Stock from HEB, and
HEB desires to acquire shares of capital stock of the Company;
WHEREAS, the transfers of MBH Stock and the Company's capital stock will
constitute a privately negotiated block transaction in reliance upon Section
4(2) of the Securities Act of 1933, as amended (the "Securities Act"); and
WHEREAS, for federal income tax purposes, the Parties intend that the
exchange of shares contemplated herein to qualify as a tax-free exchange under
the United States Revenue Code of 1986, as amended.
AGREEMENTS:
In consideration of the foregoing and of the representations, warranties
and covenants contained herein, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Certain terms used in this Agreement but not otherwise defined shall have
the meanings ascribed thereto in Exhibit A attached hereto.
ARTICLE II
THE STOCK EXCHANGE
2.1 Stock Exchange. Subject to the terms and conditions set forth in this
Agreement, at the Closing, HEB and the Company hereby agree to exchange the MBH
Stock for Thirty-Four Million (34,000,000) shares of Post Split Common Stock,
subject to the terms and conditions set forth in this Agreement.
2.2 Closing. The exchange of the MBH Stock for the Post Split Common Stock (the
"Closing") shall take place at 11:00 am, Dallas, Texas time, at the offices of
Xxxxxxx Xxxxxx L.L.P., 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 on such
later date after the conditions set forth in Article VI have been satisfied or
waived by the appropriate Party, as agreed to by the Parties (the "Closing
Date").
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2.3 Exchange under Section 368(a) of the Code. The Parties intend that the
exchange of shares contemplated in Section 1 below qualify as a tax-free
exchange under Section 368(a) of the Code and this Agreement is to be
interpreted to that effect. Each Party agrees to render to the other Parties
reasonable assistance to preserve that tax treatment, however, no representation
is made by any party hereto as to whether the transactions contemplated hereby
will so qualify.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to HEB and MBH that the statements
contained in this Article III are true and correct as of the date hereof and
will be true and correct as of the Closing Date as if made on such date, except
as set forth in the Schedules delivered by the Company to HEB concurrently
herewith and which are attached hereto.
3.1 Organization. The Company is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company (a) is
qualified or licensed in all jurisdictions where such qualification or license
is required to own and operate its properties and conduct its business in the
manner and at the places presently conducted; and (b) has full power and
authority (corporate and other) to own, lease and operate its respective
properties and assets and to carry on its business as presently conducted.
3.2 Capital Structure.
(a) As of the Effective Date, the authorized capital stock of the Company
consists of 302,500,000 shares of stock, consisting of 300,000,000 shares of
Class A Common Stock, 100,000 shares of Class B Common Stock, 2,000,000 shares
of Class A Preferred Stock, 300,000 shares of Class B Preferred Stock, and
100,000 shares of Class C Preferred Stock. As of the Effective Date, (i)
300,000,000 shares of Class A Common Stock, 100,000 shares of Class B Common
Stock, and 70,000 shares of Class B Preferred Stock were issued and outstanding,
(ii) no options or warrants for any shares of the Company's capital stock were
issued and outstanding; and (iii) no shares of the Company's capital stock were
held in the treasury of the Company. All the outstanding shares of the Company's
capital stock are duly authorized, validly issued, fully paid and
non-assessable. There are no bonds, debentures, notes or other indebtedness
having voting rights (or convertible or exchangeable into securities having such
rights) ("Company Voting Debt") of the Company issued and outstanding. Except as
set forth above, there are no equity interests of the Company authorized, issued
or outstanding and there are no existing (i) options, warrants, calls,
preemptive rights, subscriptions or other rights, convertible or exchangeable
securities, agreements, arrangements or commitments of any character, relating
to the issued or unissued equity interests of the Company, obligating the
Company to issue, transfer or sell or cause to be issued, transferred or sold
any equity interest or Company Voting Debt of, or other equity interest in, the
Company, (ii) securities convertible into or exchangeable for such equity
interests or (iii) obligations of the Company or to grant, extend or enter into
any such option, warrant, call, preemptive right, subscription or other right,
convertible security, agreement, arrangement or commitment.
(b) There are no voting trusts, proxies, shareholders agreements or other
agreements or understandings to which the Company is a party with respect to the
voting or transfer of the equity interests or capital stock of the Company. The
Company is not a party to any agreement or obligation, contingent or otherwise,
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to redeem, repurchase or otherwise acquire or retire any equity interests of the
Company, whether as a result of the transactions contemplated by this Agreement
or otherwise.
(c) The Company has not (i) made or agreed to make any split of its equity
interests or dividend, or issued or permitted to be issued any equity interests,
or securities exercisable for or convertible into equity interests, of the
Company, (ii), repurchased, redeemed or otherwise acquired any equity or capital
interests of the Company, or (iii) declared, set aside, made or paid any
dividends or other distributions on the outstanding equity interests of the
Company.
3.3 Authorization and Validity. The Company has the appropriate power and
authority and legal right to execute and deliver this Agreement and to perform
its obligations hereunder. The execution and delivery by the Company of this
Agreement and the performance of its obligations hereunder have been duly
authorized by proper corporate and other proceedings, and this Agreement
constitutes the legal, valid and binding obligation of the Company enforceable
against it in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
3.4 No Conflict; Government Consent. Neither the execution and delivery by the
Company of this Agreement, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (a) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Company, or (b) the Company's certificate of incorporation or
bylaws, (c) the provisions of any indenture, instrument or agreement to which
the Company is a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder, or result in, or require,
the creation or imposition of any Lien in, of or on the property of the Company
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Company is required to be obtained
by the Company or in connection with the execution and delivery of this
Agreement, or the legality, validity, binding effect or enforceability of any of
this Agreement. Except as set forth in Schedule 3.4, no consent, approval or
authorization of, or notice to, any other person or entity, including, without
limitation, parties to loans, contracts, leases or other agreements, is required
in connection with the execution, delivery and performance of this Agreement by
the Company or the consummation by it of the transactions contemplated hereby.
3.5 Company Financial Statements.
(a) The Company has filed all forms, reports, statements, schedules,
registration statements and other documents required to be filed with the SEC
since January 1, 2005 (the "SEC Documents"), each of which complied in all
material respects with the applicable requirements of the Securities Act, and
the rules and regulations promulgated thereunder, or the Exchange Act and the
rules and regulations promulgated thereunder, each as in effect on the date so
filed. No Company subsidiary is required to file any form, report, statement,
schedule, registration statement or other document with the SEC. No SEC
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Document, when filed (or, if amended or superseded by a filing prior to the
Closing Date, on the date of such filing) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) Each of the Company's audited and unaudited consolidated financial
statements of (including any related notes thereto) included in the SEC
Documents have been prepared in accordance with GAAP (as applied by the SEC),
applied on a consistent basis during the relevant periods (except as may be
disclosed in the notes thereto), and present fairly the consolidated financial
position and consolidated results of operations and changes in cash flows of the
Company and its subsidiaries as of the respective dates or for the respective
periods reflected therein, except, in the case of the unaudited interim
financial statements, for normal and recurring year-end adjustments that are not
material.
(c) Except as set forth in Schedule 3.5(c) and on the Company's balance
sheet of as of December 31, 2005 included in the SEC Documents (the "Company's
Latest Balance Sheet"), or in the notes thereto, the Company does not have any
liabilities, debts, claims or obligations of any nature (whether accrued,
absolute, direct or indirect, contingent or otherwise, whether due or to become
due), and there is no existing condition or set of circumstances which would
reasonably be expected, individually or in the aggregate, to result in such a
liability. All reserves shown in the Company's Latest Balance Sheet are
appropriate, reasonable and sufficient to provide for losses thereby
contemplated. Except as set forth in the Company's Latest Balance Sheet, the
Company is not liable upon or with respect to, or obligated in any other way to
provide funds in respect of or to guarantee or assume in any manner, any debt,
obligation or dividend of any person, corporation, association, partnership,
joint venture, trust or other entity.
3.6 Employee Matters. The Company does not have any employees.
3.7 Employee Benefit Plans. There are no employee benefit plans (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) sponsored by the Company or to which the Company
contributes or may be obligated to contribute on behalf of its former employees
and there are no Company employee benefit plans previously sponsored or
contributed to on behalf of the Company's employees within the three years
preceding the date hereof.
3.8 Title; Leased Assets. The Company's sole asset is a de minimis amount of
cash.
3.9 Commitments. Except as set forth in Schedule 3.9, the Company has not
entered into, nor is any of the Company's capital stock, or the assets of the
Company bound by, whether or not in writing, any (i) partnership or joint
venture agreement; (ii) deed of trust or other security agreement; (iii)
guaranty or suretyship, indemnification or contribution agreement or performance
bond; (iv) employment, consulting or compensation agreement or arrangement,
including the election or retention in office of any director or officer; (v)
labor or collective bargaining agreement; (vi) debt instrument, loan agreement
or other obligation relating to indebtedness for borrowed money or money lent or
to be lent to another; (vii) deed or other document evidencing an interest in or
contract to purchase or sell real property; (viii) agreement with dealers or
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sales or commission agents, public relations or advertising agencies,
accountants or attorneys; (ix) lease of real or personal property, whether as
lessor, lessee, sublessor or sublessee; (x) agreement between the Company and
any affiliate of the Company; (xi) agreement relating to any material matter or
transaction in which an interest is held by a person or entity that is an
affiliate of the Company; (xii) any agreement for the acquisition of services,
supplies, equipment or other personal property and involving more than $25,000
in the aggregate; (xiii) powers of attorney; (xiv) contracts containing
noncompetition covenants; (xv) any other agreement or commitment not made in the
ordinary course of business or that is material to the business or financial
condition of the Company.
All of the foregoing are hereinafter collectively referred to as the
"Company Commitments." There are no existing defaults, events of default or
events, occurrences, acts or omissions that, with the giving of notice or lapse
of time or both, would constitute defaults by the Company, and no penalties have
been incurred nor are amendments pending, with respect to the Company
Commitments, except as described in Schedule 3.9. The Company Commitments are in
full force and effect and are valid and enforceable obligations of the parties
thereto in accordance with their respective terms, and no defenses, off-sets or
counterclaims have been asserted or, to the best knowledge of the Company, may
be made by any party thereto, nor has the Company waived any rights thereunder.
The Company has not received notice of any default with respect to any Company
Commitment.
3.10 Adverse Agreements. The Company is not a party to any agreement or
instrument or subject to any charter or other corporate restriction or any
judgment, order, writ, injunction, decree, rule or regulation that materially
and adversely affects, or so far as the Company can now foresee, may in the
future materially and adversely affect, the condition (financial or otherwise),
operations, assets, liabilities, business or prospects of the Company.
3.11 Material Adverse Change. Since December 31, 2005, there has been no change
in the business, property, condition (financial or otherwise) or results of
operations of the Company which could reasonably be expected to have a Material
Adverse Effect with respect to the Company.
3.12 Taxes. The Company has filed all United States federal tax returns and all
other tax returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by the Company,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided on the Company Latest Balance Sheet and as
to which no Lien exists. No tax liens have been filed and no claims are being
asserted with respect to any such taxes. The charges, accruals and reserves on
the books of the Company in respect of any taxes or other governmental charges
are adequate. The Company is taxable as a "C" corporation for federal income tax
purposes.
3.13 Litigation and Contingent Obligations. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to best knowledge
of any of its officers, threatened against or affecting the Company. The Company
has no contingent obligations not provided for or disclosed in the Company
Latest Balance Sheet.
3.14 Compliance With Laws. The Company has complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
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conduct of their respective businesses or the ownership of their respective
Property except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a Material Adverse Effect with respect to the
Company.
3.15 Issuance of Post Split Common Stock. The shares of Post Split Common Stock
to be delivered to HEB hereunder have been, or at Closing will have been, duly
and validly authorized and when issued in accordance with this Agreement, will
be duly and validly issued, fully paid and nonassessable and will not have been
issued in violation of any statutory preemptive rights, or any other preemptive
right, co-sale right, right of first refusal or other similar right.
3.16 Information Furnished to the Company. The Company has been provided with,
and is familiar with, the financial and other information regarding the business
and operations of MBH that the Company deems necessary for evaluating the merits
and risks of the transactions contemplated by this Agreement.
3.17 Investment Purposes. The Company is acquiring the MBH Common Stock for
investment purposes and not with a view toward resale or distribution thereof,
and has no present intention of selling, granting any participation in, or
otherwise distributing the MBH Common Stock.
3.18 Restricted Securities. The Company understands that the shares of MBH
Common Stock will be transferred by HEB pursuant to an exemption from the
registration requirements of the Securities Act, and are characterized as
"restricted securities" under the Securities Act and may be resold without
registration under the Securities Act only in limited circumstances.
3.19 Broker's or Finder's Commissions. No broker's or finder's or placement fee
or commission will be payable to any broker or agent engaged by the Company or
any of its officers, directors or agents with respect to the transactions
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES MBH AND HEB
MBH and HEB represent and warrant to the Company and the Stockholders that
the statements contained in the Article IV are true and correct as of the date
hereof and will be true and correct as of the Closing Date as if made on such
date, except as set forth in the Schedules delivered by HEB to the Company
concurrently herewith.
4.1 Organization. MBH is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Nevada. HEB is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Nevada. MBH (a) is qualified or licensed in all jurisdictions where
such qualification or license is required to own and operate its properties and
conduct its business in the manner and at the places presently conducted; (b)
holds all franchises, grants, licenses, certificates, permits, consents and
orders, all of which are valid and in full force and effect, from all applicable
United States and foreign regulatory authorities necessary to own and operate
its properties and to conduct its business in the manner and at the places
presently conducted; and (c) has full power and authority (corporate and other)
to own, lease and operate its respective properties and assets and to carry on
its business as presently conducted and as proposed to be conducted, except, in
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each case, where the failure to be so qualified or licensed or to hold such
franchises, grants, licenses, certificates, permits, consents and orders or to
have such power and authority would not, when taken together with all other such
failures, reasonably be expected to have a Material Adverse Effect with respect
to MBH. MBH does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture or
other business association or entity.
4.2 Capital Structure.
(a) As of the Effective Date, the authorized capital stock of MBH consists
of 1,000 shares of MBH Common Stock, and no shares of preferred stock, par value
$0.01 per share. As of the Effective Date, (i) 1,000 shares of MBH Common Stock
and no shares of preferred stock were issued and outstanding, (ii) no options
for shares of MBH Common Stock were issued and outstanding; and (iii) no shares
of MBH Common Stock were held in the treasury of the Company. All the
outstanding shares of MBH Common Stock are duly authorized, validly issued,
fully paid and non-assessable. As of the Effective Date, HEB is the sole
stockholder of MBH. There are no bonds, debentures, notes or other indebtedness
having voting rights (or convertible or exchangeable into securities having such
rights) ("MBH Voting Debt") of MBH issued and outstanding. Except as set forth
above, there are no equity interests of MBH authorized, issued or outstanding
and there are no existing (i) options, warrants, calls, preemptive rights,
subscriptions or other rights, convertible or exchangeable securities,
agreements, arrangements or commitments of any character, relating to the issued
or unissued equity interests of MBH, obligating MBH or HEB to issue, transfer or
sell or cause to be issued, transferred or sold any equity interest or MBH
Voting Debt of, or other equity interest in, MBH, (ii) securities convertible
into or exchangeable for such equity interests or (iii) obligations of MBH or
HEB to grant, extend or enter into any such option, warrant, call, preemptive
right, subscription or other right, convertible security, agreement, arrangement
or commitment. MBH has not granted to any Person any rights to have any
securities registered under the Securities Act.
(b) There are no voting trusts, proxies, shareholders agreements or other
agreements or understandings to which MBH is a party with respect to the voting
or transfer of the equity interests or capital stock of MBH. MBH is not a party
to any agreement or obligation, contingent or otherwise, to redeem, repurchase
or otherwise acquire or retire any equity interests of MBH, whether as a result
of the transactions contemplated by this Agreement or otherwise.
(c) MBH has not (i) made or agreed to make any split of its equity
interests or dividend, or issued or permitted to be issued any equity interests,
or securities exercisable for or convertible into equity interests, of MBH,
(ii), repurchased, redeemed or otherwise acquired any equity or membership
interests of MBH, or (iii) declared, set aside, made or paid any dividends or
other distributions on the outstanding equity interests of MBH.
4.3 Authorization and Validity. Each of HEB and MBH has the appropriate power
and authority and legal right to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery by HEB and MBH of
this Agreement and the performance of their respective obligations hereunder
have been duly authorized by proper corporate and other proceedings, and this
Agreement constitutes the legal, valid and binding obligation of HEB and MBH
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enforceable against it and them in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
4.4 No Conflict; Government Consent. Neither the execution and delivery by HEB
and MBH of this Agreement, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (a) any
law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on HEB or MBH, or (b) MBH's or HEB's organizing documents, bylaws or
similar governing documents, (c) the provisions of any indenture, instrument or
agreement to which either HEB or MBH is a party or is subject, or by which it,
or its Property, is bound, or conflict with or constitute a default thereunder,
or result in, or require, the creation or imposition of any Lien in, of or on
the Property of HEB or MBH pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by HEB or MBH
is required to be obtained by HEB or MBH in connection with the execution and
delivery of this Agreement, or the legality, validity, binding effect or
enforceability of any of this Agreement. Except as set forth in Schedule 4.4, no
consent, approval or authorization of, or notice to, any other person or entity,
including, without limitation, parties to loans, contracts, leases or other
agreements, is required in connection with the execution, delivery and
performance of this Agreement by HEB or MBH or the consummation by it of the
transactions contemplated hereby.
4.5 MBH Financial Statements.
(a) HEB has delivered to the Company the unaudited balance sheet of MBH as
of December 31, 2005 and the related statements of operations, members' equity
and cash flows for the year ended December 31, 2005 (collectively, the "MBH
Financial Statements").
(b) The MBH Financial Statements have been prepared in accordance with
GAAP, applied on a consistent basis during the relevant periods (except as may
be disclosed in the notes thereto), and present fairly the consolidated
financial position and consolidated results of operations and changes in cash
flows of MBH as of the respective dates or for the respective periods reflected
therein, except, in the case of the unaudited interim financial statements, for
normal and recurring year-end adjustments that are not material.
(c) Except as set forth in Schedule 4.5(c) and on the MBH Financial
Statements, or in the notes thereto, MBH does not have any liabilities, debts,
claims or obligations of any nature (whether accrued, absolute, direct or
indirect, contingent or otherwise, whether due or to become due), and there is
no existing condition or set of circumstances which would reasonably be
expected, individually or in the aggregate, to result in such a liability. All
reserves shown in the MBH Financial Statements are appropriate, reasonable and
sufficient to provide for losses thereby contemplated. Except as set forth in
the MBH Financial Statements, MBH is not liable upon or with respect to, or
obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, obligation or dividend of any person,
corporation, association, partnership, joint venture, trust or other entity.
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4.6 Employee Matters.
(a) Schedule 4.6(a) contains a complete and accurate list of all
compensation plans sponsored by MBH or to which MBH contributes on behalf of its
employees, other than MBH Employee Benefit Plans listed in Schedule 4.7(a). The
compensation plans include without limitation plans, arrangements or practices
that provide for severance pay, deferred compensation, incentive, bonus or
performance awards, and stock ownership or stock options.
(b) Schedule 4.6(b) contains a complete and accurate list of all employment
agreements to which MBH is a party with respect to its employees or is otherwise
obligated.
(c) MBH: (i) has been and is in compliance with all laws, rules,
regulations and ordinances respecting employment and employment practices, terms
and conditions of employment and wages and hours; and (ii) is not liable for any
arrears of wages or penalties for failure to comply with any of the foregoing.
MBH has not engaged in any unfair labor practice or discriminated on the basis
of race, color, religion, sex, national origin, age or handicap in its
employment conditions or practices. There are no: (i) unfair labor practice
charges or complaints or racial, color, religious, sex, national origin, age or
handicap discrimination charges or complaints pending or threatened against MBH
before any federal, state or local court, board, department, commission or
agency nor does any basis therefor exist; or (ii) existing or threatened labor
strikes, disputes, grievances, controversies or other labor troubles affecting
MBH, nor does any basis therefor exist.
(d) MBH has never been a party to any agreement with any union, labor
organization or collective bargaining unit. No employees of MBH are represented
by any union, labor organization or collective bargaining unit. To the best
knowledge of MBH, the employees of MBH have no intention to and have not
threatened to organize or join a union, labor organization or collective
bargaining unit.
(e) All employees of MBH are citizens of, or are authorized to be employed
in, the United States.
4.7 Employee Benefit Plans.
(a) There are no employee benefit plans (within the meaning of Section 3(3)
of ERISA) sponsored by MBH or to which MBH contributes or may be obligated to
contribute on behalf of its former employees and there are no employee benefit
plans previously sponsored or contributed to on behalf of MBH's employees within
the three years preceding the date hereof.
4.8 Title; Leased Assets. A description of all interests in real property owned
by MBH (collectively, the "MBH Real Property") is set forth in Schedule 4.8(a).
Except as set forth in Schedule 4.8(a), the Company has good, valid and
marketable title to all the MBH Real Property. Except as set forth in Schedule
4.8(b), MBH has good, valid and marketable title to all tangible and intangible
personal property owned by it (collectively, the "MBH Personal Property"). A
list of all leases of real and personal property to which MBH is a party, either
as lessor or lessee, are set forth in Schedule 4.8(c). All such leases are valid
9
and enforceable in accordance with their respective terms except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies. Except
for those assets acquired since December 31, 2005, all tangible and intangible
assets used in the conduct of the business of the Company MBH are reflected in
the Financial Statements in a manner that is in conformity with generally
accepted accounting principles applied on a consistent basis with prior periods.
MBH owns, leases or otherwise possesses a right to use all assets used in the
conduct of the business of MBH, which will not be impaired by the consummation
of the transactions contemplated hereby.
4.9 MBH Commitments. Except as set forth in Schedule 4.9, MBH has not entered
into, nor is the capital stock, or the assets of MBH bound by, whether or not in
writing, any (i) partnership or joint venture agreement; (ii) deed of trust or
other security agreement; (iii) guaranty or suretyship, indemnification or
contribution agreement or performance bond; (iv) employment, consulting or
compensation agreement or arrangement, including the election or retention in
office of any director or officer; (v) labor or collective bargaining agreement;
(vi) debt instrument, loan agreement or other obligation relating to
indebtedness for borrowed money or money lent or to be lent to another; (vii)
deed or other document evidencing an interest in or contract to purchase or sell
real property; (viii) agreement with dealers or sales or commission agents,
public relations or advertising agencies, accountants or attorneys; (ix) lease
of real or personal property, whether as lessor, lessee, sublessor or sublessee;
(x) agreement between MBH and any affiliate of MBH; (xi) agreement relating to
any material matter or transaction in which an interest is held by a person or
entity that is an affiliate of MBH; (xii) any agreement for the acquisition of
services, supplies, equipment or other personal property and involving more than
$25,000 in the aggregate; (xiii) powers of attorney; (xiv) contracts containing
noncompetition covenants; (xv) any other agreement or commitment not made in the
ordinary course of business or that is material to the business or financial
condition of MBH.
All of the foregoing are hereinafter collectively referred to as the
"MBH Commitments." There are no existing defaults, events of default or events,
occurrences, acts or omissions that, with the giving of notice or lapse of time
or both, would constitute defaults by MBH, and no penalties have been incurred
nor are amendments pending, with respect to the MBH Commitments, except as
described in Schedule 4.9. The MBH Commitments are in full force and effect and
are valid and enforceable obligations of the parties thereto in accordance with
their respective terms, and no defenses, off-sets or counterclaims have been
asserted or, to the best knowledge of MBH, may be made by any party thereto, nor
has MBH waived any rights thereunder. MBH has not received notice of any default
with respect to any MBH Commitment.
4.10 Adverse Agreements. MBH is not a party to any agreement or instrument or
subject to any charter or other corporate restriction or any judgment, order,
writ, injunction, decree, rule or regulation that materially and adversely
affects, or so far as MBH or the Stockholders can now foresee, may in the future
materially and adversely affect, the condition (financial or otherwise),
operations, assets, liabilities, business or prospects of MBH.
4.11 Patents, Trade-marks, Service Marks and Copyrights.
(a) MBH owns all patents, trade-marks, service marks and copyrights, if
any, necessary to conduct its business, or possesses adequate licenses or other
rights, if any, therefor, without conflict with the rights of others. Set forth
in Schedule 4.12 is a true and correct description of the following (the "MBH
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Proprietary Rights"): (i) all trade-marks, trade-names, service marks and other
trade designations, including common law rights, registrations and applications
therefor, and all patents, copyrights and applications currently owned, in whole
or in part, by MBH with respect to the business of MBH, and all licenses,
royalties, assignments and other similar agreements relating to the foregoing to
which MBH is a party (including expiration date if applicable); and (ii) all
agreements relating to technology, know-how or processes that MBH is licensed or
authorized to use by others, or which it licenses or authorizes others to use.
(b) MBH has the sole and exclusive right to use the MBH Proprietary Rights
without infringing or violating the rights of any third parties. Use of the MBH
Proprietary Rights does not require the consent of any other person and the MBH
Proprietary Rights are freely transferable. No claim has been asserted by any
person to the ownership of or right to use any MBH Proprietary Right or
challenging or questioning the validity or effectiveness of any license or
agreement constituting a part of any MBH Proprietary Right, and MBH does not
know of any valid basis for any such claim. Each of the MBH Proprietary Rights
is valid and subsisting, has not been cancelled, abandoned or otherwise
terminated and, if applicable, has been duly issued or filed.
(c) MBH has no knowledge of any claim that, or inquiry as to whether, any
product, activity or operation of MBH infringes upon or involves, or has
resulted in the infringement of, any proprietary right of any other person,
corporation or other entity; and no proceedings have been instituted, are
pending or are threatened that challenge the rights of MBH with respect thereto.
4.12 Trade Secrets and Customer Lists. MBH has the right to use, free and clear
of any claims or rights of others all trade secrets, customer lists and
proprietary information required for the marketing of all merchandise and
services formerly or presently sold or marketed by MBH. MBH is not using or in
any way making use of any confidential information or trade secrets of any third
party, including without limitation any past or present employee of MBH.
4.13 Material Adverse Change. Since December 31, 2005, there has been no change
in the business, property, condition (financial or otherwise) or results of
operations of MBH which could reasonably be expected to have a Material Adverse
Effect with respect to MBH.
4.14 Taxes. MBH has filed all United States federal tax returns and all other
tax returns which are required to be filed and have paid all taxes due pursuant
to said returns or pursuant to any assessment received by MBH, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided on the Financial Statements and as to which no Lien
exists. No tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
MBH in respect of any taxes or other governmental charges are adequate. MBH is
taxable as a "C" corporation for federal income tax purposes.
4.15 Litigation and Contingent Obligations. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to best knowledge
of any of its officers, threatened against or affecting MBH. MBH has no
contingent obligations not provided for or disclosed in the Financial
Statements.
11
4.16 Compliance With Laws. MBH has complied with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property except
for any failure to comply with any of the foregoing which could not reasonably
be expected to have a Material Adverse Effect with respect to MBH.
4.17 Issuance of MBH Common Stock. The shares of MBH Common Stock to be
delivered to the Company hereunder have been duly and validly authorized and
when delivered in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable and will not have been transferred in
violation of any statutory preemptive rights, or any other preemptive right,
co-sale right, right of first refusal or other similar right.
4.18 Information Furnished to HEB. HEB has been provided with, and is familiar
with, the financial and other information regarding the business and operations
of the Company, including, but not limited to the information contained in the
SEC Documents, that HEB deems necessary for evaluating the merits and risks of
the transactions contemplated by this Agreement.
4.19 Investment Purposes. HEB is acquiring the shares of Post Split Common Stock
for investment purposes and not with a view toward resale or distribution
thereof, and has no present intention of selling, granting any participation in,
or otherwise distributing the shares of Post Split Common Stock.
4.20 Restricted Securities. The Company understands that the shares of Post
Split Common Stock will be issued by the Company to HEB pursuant to an exemption
from the registration requirements of the Securities Act, and are characterized
as "restricted securities" under the Securities Act and may be resold without
registration under the Securities Act only in limited circumstances.
4.21 Broker's or Finder's Commissions. No broker's or finder's or placement fee
or commission will be payable to any broker or agent engaged by HEB or MBH or
any of its officers, directors or agents with respect to the transactions
contemplated by this Agreement.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 Covenants of the Company. After the Effective Date and until the earlier
of(a) the Closing Date or (b) the expiration or termination of this Agreement,
unless MBH and HEB shall otherwise consent in writing:
(a) Conduct of Business. The Company will carry on and conduct its business
in substantially the same manner as it is presently conducted and do all things
necessary to remain duly incorporated or organized, validly existing and in good
standing in its jurisdiction of incorporation or organization and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
(b) Compliance with Laws. The Company will comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject.
(c) Dilution of Ownership. The Company will not consent to or approve of
the issuance of (i) any additional stock, securities or other equity securities
or interests, (ii) any instrument convertible voluntarily by the Company or
12
automatically upon the occurrence or non-occurrence of any event or condition
into, or exchangeable for, any such stock, securities or interests, or (iii) any
warrants, options, contracts or other commitments entitling any third party to
purchase or otherwise acquire any such stock, securities or interests.
5.2 Covenants of MBH and HEB. After the Effective Date and until the earlier of
(a) the Closing Date, or (b) the expiration or termination of this Agreement,
unless the Company shall otherwise consent in writing;
(a) Conduct of Business. MBH will, and HEB shall cause MBH to, carry on and
conduct its business in substantially the same manner as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and in good standing in its jurisdiction of incorporation or
organization and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
(b) Compliance with Laws. MBH will, and HEB will cause MBH to, comply with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which MBH may be subject.
(c) Dilution of Ownership. MBH will not consent to or approve of the
issuance of (i) any additional stock, securities or other equity securities or
interests, (ii) any instrument convertible voluntarily by MBH or automatically
upon the occurrence or non-occurrence of any event or condition into, or
exchangeable for, any such stock, securities or interests, or (iii) any
warrants, options, contracts or other commitments entitling any third party to
purchase or otherwise acquire any such stock, securities or interests. Except as
set forth in this Agreement, HEB will not consent to or approve of the sale,
transfer or other disposition of (i) any of the MBH Common Stock, (ii) any
instrument convertible into or exchangeable for the MBH Common Stock or any
interest therein, or (iii) any warrants, options, contracts or other commitments
entitling any third party to purchase or otherwise acquire any shares of MBH
Common Stock.
5.3 Access. From the Effective Date until the Closing Date (or the termination
of this Agreement), each of the Company and MBH shall afford to the other Party
and such other Party's representatives reasonable access, upon reasonable notice
during normal business hours, to all its properties, books, contracts,
commitments, personnel and records and shall furnish promptly to such other
Party all information concerning its business, properties and personnel as may
reasonably be requested. All such information as may be furnished by or on
behalf of the Company or MBH to another Party or such other Party's
representatives pursuant to this Section 5.3 shall be and remain confidential.
No investigation pursuant to this Section 5.3 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto.
5.4 Notification of Certain Matters. Each of the Company, MBH and HEB shall
promptly advise the other parties orally and in writing of (a) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (b) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or (c) any event or change
or impending occurrence of any event or change of which it has knowledge and
13
which has resulted, or which, insofar as can reasonably be foreseen, is likely
to result, in any of the conditions to the transactions contemplated hereby set
forth in Article VI not being satisfied; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
ARTICLE VI
CLOSING
6.1 Company Conditions. The obligation of the Company to consummate the
transactions contemplated under this Agreement is subject to the satisfaction,
prior to or at the Closing, of the following conditions:
(a) Representations and Warranties. The representations and warranties of
HEB and MBH contained in Article IV shall be true and correct in all material
respects and the covenants and agreements of such parties set forth in Article V
shall have been complied with at and as of the Closing Date as though then made,
except to the extent of changes caused by the transactions expressly
contemplated herein.
(b) Consents. HEB and MBH shall have received all approvals and consents
required under their respective loan agreements, leases, and indentures,
shareholders agreements or other debt documents or contracts necessary to
consummate the transactions contemplated herein including without limitation,
those set forth on Schedule 4.4.
(c) No Injunctions. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction prohibiting or imposing any condition on the consummation
of any of the transactions contemplated hereby.
6.2 HEB Conditions. The obligation of HEB to consummate the transactions
contemplated under this Agreement is subject to the satisfaction, prior to or at
the Closing, of the following conditions:
(a) Representations and Warranties. The representations and warranties of
the Company contained in Article IV hereof shall be true and correct in all
material respects and the covenants and agreements of such parties set forth in
Article V shall have been complied with at and as of the Closing Date as though
then made, except to the extent of changes caused by the transactions expressly
contemplated herein.
(b) Consents. The Company shall have received all approvals and consents
required under their respective loan agreements, leases, and indentures,
shareholders agreements or other debt documents or contracts necessary to
consummate the transactions contemplated herein including without limitation,
those set forth on Schedule 3.4.
(c) Cancellation of Capital Stock. The Company shall have cancelled all of
its outstanding shares of Class B Common Stock pursuant to the terms of the
Stock Cancellation Agreement, in the forms attached here to as Exhibit B (the
"Stock Cancellation Agreement")
(d) Reverse Stock Split, Amended and Restated Certificate of Incorporation.
The Company's Board of Directors and stockholders shall have authorized, adopted
and approved, in accordance with the applicable provisions of the DGCL, the
14
Company's Certificate of Incorporation, and bylaws: (i) a 100:1 reverse split
its Class A Common Stock; and (ii) the Amended and Restated Certificate of
Incorporation in the form attached hereto as Exhibit C (the "Amended and
Restated Certificate of Incorporation"); and the Company shall have filed the
Amended and Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware.
(e) Debt Exchange. The Company's existing debt holders shall have agreed to
exchange an aggregate of approximately $2,600,000 of debt into 2,600,000 Post
Split Common Stock pursuant to the terms of a Debt Exchange Agreement, in
substantially the form of Exhibit D attached hereto.
(f) Appointments and Resignations of Directors. Xx. Xxxxx X. Xxxxx shall
have been appointed as a member of the Company's Board of Directors, and each of
the Company's current directors may have resigned.
(g) No Injunctions. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction prohibiting or imposing any condition on the consummation
of any of the transactions contemplated hereby.
6.3 Closing Deliverables.
(a) At the Closing, the Company will have delivered or caused to be
delivered to HEB all of the following in form and substance satisfactory to MBH:
(i) a certificate of the secretary of the Company, certifying (A) that a
true, correct and complete copy of the articles of incorporation of
the Company is attached, and (B) that a true, correct and complete
copy of the bylaws of the Company is attached;
(ii) copies of the resolutions unanimously and duly adopted by the
Company's board of directors, authorizing the execution, delivery and
performance by the Company of this Agreement, and the consummation of
all of the other transactions hereunder and thereunder, certified as
of the Closing Date by the secretary of the Company;
(iii)a certificate dated as of the Closing Date from an officer of the
Company stating that the conditions specified in Section 6.2 have been
fully satisfied or waived by the Company, as applicable;
(iv) certificates representing an aggregate of 34,000,000 shares of Post
Split Common Stock; and
(v) a certificate of good standing and existence form the Secretary of
State of the State of Delaware, of a recent date, with respect to the
Company.
(b) At the Closing, HEB will have delivered or caused to be delivered to
the Company each of the following in form and substance satisfactory to the
Company:
(i) a certificate of the secretary of MBH Company, certifying (A) that a
true, correct and complete copy of the articles of incorporation of
the Company is attached, and (B) that a true, correct and complete
copy of the bylaws of the Company is attached;
15
(ii) copies of the resolutions unanimously and duly adopted by the boards
of directors of MBH and managers of HEB, authorizing the execution,
delivery and performance by MBH and HEB of this Agreement, and the
consummation of all of the other transactions hereunder and
thereunder, certified as of the Closing Date by the secretary of MBH
and HEB, as applicable;
(iii)a certificate dated as of the Closing Date from an officer of each of
MBH and HEB stating that the conditions specified in section 6.3 have
been fully satisfied or waived by MBH and HEB, as applicable;
(iv) certificates representing an aggregate of 1,000 shares of MBH Common
Stock; and
(v) a certificate of existence and good standing from the Secretaries of
State of the State of Nevada, each of a recent date, with respect to
MBH and HEB, as applicable.
ARTICLE VII
LIMITATION ON TRANSFER
7.1 Restriction on Transfer. The shares of Post Split Common Stock to be issued
to HEB will not be registered under the Securities Act on the Closing Date and
may not be transferred, sold or otherwise disposed of by HEB, except pursuant to
an effective registration statement under the Securities Act or in accordance
with an exemption from the registration requirements of the Securities Act.
7.2 Restrictive Legend. Each certificate representing shares of Post Split
Common Stock issued by the Company to HEB under this Agreement shall bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER
THE ACT, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE ACT, AS AMENDED, AND IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO OR
IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND ALSO MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT COMPLIANCE WITH
THE APPLICABLE SECURITIES AND EXCHANGE COMMISSION RULES AND
REGULATIONS.
7.3 Removal of Restrictive Legend. The Company agrees to remove such legend (or
any relevant portion thereof), by prompt delivery of substitute certificates
upon the request of the holder if at such time such legend (or portion thereof)
is no longer required for purposes of, or applicable pursuant to, the prior
provisions of this Article VII.
ARTICLE VIII
INDEMNIFICATION; TERMINATION
8.1 Indemnification by the Company. The Company hereby agrees to defend,
indemnify and hold MBH and HEB, and their respective officers, directors,
shareholders, employees, successors, heirs, assigns, attorneys and
16
representatives harmless against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not MBH or HEB is a party
thereto) which MBH or HEB may pay or incur arising out of or relating to a
breach of any representation, warranty or covenant of the Company under this
Agreement.
8.2 Indemnification by MBH and HEB. Each of MBH and HEB agrees to defend,
indemnify and hold the Company, and its officers, directors, shareholders,
members, employees, successors, assigns, attorneys and representatives harmless
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Company is a party thereto) which the
Company may pay or incur arising out of or relating to a breach of any
representation, warranty or covenant of MBH or HEB under this Agreement.
8.3 Survival of Representations and Warranties. The representations and
warranties made by parties in this Agreement and in any certificate or schedule
furnished hereunder shall survive the Effective Time for a period of two (2)
years thereafter. None of the covenants or agreements in this Agreement shall
survive the Effective Time, except for those covenants and agreements contained
herein that by their terms apply or are to be performed in whole or in part
after the Effective Time, including without limitation, the covenants and
agreements contained in Section 8.1 and 8.2 above.
8.4 Termination. This Agreement may be terminated, and the transactions
contemplated hereby abandoned, prior to the Closing as follows:
(a) by mutual written consent of all the parties;
(b) by the Company in the event any of the conditions in Section 6.2 have
not been satisfied on or before August 24, 2006, through no fault of the
Company; or
(c) by MBH or HEB in the event any of the conditions in Section 6.3 have
not been satisfied on or before August 24, 2006 through no fault of MBH or HEB;.
8.5 Effect of Termination. If this Agreement is terminated pursuant to Sections
8.4 all rights and obligations of the parties hereunder shall terminate without
liability of any Party to any other Party.
ARTICLE IX
GENERAL PROVISIONS
9.1 Headings. Section headings in this Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of this Agreement.
9.2 Expenses. Each of the parties shall bear their own expenses (including
reasonable attorneys' fees and time charges of attorneys) paid or incurred by
such party in connection with the preparation, negotiation, execution, delivery,
review, amendment, modification, and administration of this Agreement and the
Merger.
9.3 Entire Agreement; Assignment. This Agreement and the attached Exhibits and
Schedules embodies the entire agreement and understanding among the Company, MBH
and HEB and supersede all prior agreements and understandings among such parties
relating to the subject matter thereof. This Agreement may not be assigned
without the prior written consent of the other parties.
17
9.4 Benefits of this Agreement. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
9.5 Amendment. No amendment or modification to this Agreement shall be
effective, unless in writing and signed by all the parties.
9.6 Severability. Any provision in this Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
9.7 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including electronic transmission, facsimile
transmission or similar writing) and shall be given to such party at (a) its
address or facsimile number set forth on the signature pages hereof or (b) such
other address or facsimile number as such party may hereafter specify. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mail, certified or registered
with first class postage prepaid, addressed as aforesaid, or (iii) if given by
any other means, when delivered (or, in the case of electronic transmission,
received) at the address specified in this Section.
9.8 Choice Of Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CHOICE OF LAWS
PROVISIONS.
9.9 Venue. THE EXCLUSIVE JURISDICTION FOR ANY CLAIM OR CONTROVERSY ARISING OUT
OF OR RELATING TO THIS AGREEMENT SHALL BE IN THE STATE AND FEDERAL COURTS
LOCATED IN DALLAS COUNTY, TEXAS AND EACH PARTY HERETO IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM.
9.10 Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement may be executed and delivered by facsimile copy.
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EQUITY TECHNOLOGIES & RESOURCES, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx,
Title: President & CEO
Address: 000 X. Xxxx Xx Xxxxx 000
Xxxxxxxxx, XX 00000
MB HOLDING CORPORATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: President
Address: 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
HEB, LLC
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title: Manager
Address: 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
19
EXHIBIT A
DEFINITIONS
As used in this Agreement:
"Agreement" means this agreement, as it may be amended or modified and in
effect from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"DGCL" means the Delaware General Corporation Law as in effect on the
Effective Date.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended
from time to time, and any rule and regulation issued thereunder.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied in a consistent manner.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Material Adverse Effect" means, with respect to a Person, a material
adverse effect on (i) the business, Property, condition (financial or
otherwise), or results of operations of the Person taken as a whole, (ii) the
ability of the Person to perform its obligations under this Agreement, or (iii)
the validity or enforceability of this Agreement or the rights or remedies of
hereunder.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Post Split Common Stock" means the common stock of the Company, par value
$.001 per share, authorized and issued under the Amended and Restated
Certificate of Incorporation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any rule and regulation issued thereunder.
20
EXHIBIT b
FORMS OF STOCK CANCELLATION AGREEMENT
[See attached document]
21
EXHIBIT c
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
[See attached document]
22
EXHIBIT D
FORM OF DEBT EXCHANGE AGREEMENT
[See attached document]
23
