EXHIBIT
2.1
STOCK PURCHASE
AGREEMENT
Agreement entered into
on as of July 14, 2009 by and Evolution Resources, Inc., a Nevada
corporation (the " Buyer "), and Mark Mollo (the "
Seller "). The Buyer and the Seller are referred to
collectively herein as the " Parties. "
The Seller in the
aggregate own all of the outstanding capital stock of corporation
Liquafaction Corporation (“Liq Corp”) and 54.2675% of
all outstanding membership interests in Liqua Ethanol, LLC
(“Liqua LLC”) (collectively the " Target
").
This Agreement
contemplates a transaction in which the Buyer will purchase from
the Seller, and the Seller will sell to the Buyer, all of the
outstanding capital stock of the Target in return for cash and the
Buyer Notes.
Now, therefore, in
consideration of the premises and the mutual promises herein made,
and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as
follows.
1.
Definitions .
" Accredited
Investor " has the meaning set forth in Regulation D
promulgated under the Securities Act.
" Adverse
Consequences " means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, reasonable amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including
court costs and attorneys' fees and expenses.
" Affiliate "
has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
" Affiliated
Group " means any affiliated group within the meaning of Code
§1504(a).
" Allocable
Portion " means with respect to the share of any Seller in a
particular amount that fraction equal to the number of Target
Shares the Seller holds as set forth in §4(b) of the
Disclosure Schedule over the total number of outstanding Target
Shares.
" Buyer " has
the meaning set forth in the preface above.
" Buyer Note "
has the meaning set forth in §2(b) below.
" Cash " means
cash and cash equivalents (including marketable securities and
short term investments) calculated in accordance with GAAP applied
on a basis consistent with the preparation of the Financial
Statements.
" Closing " has
the meaning set forth in §2(d) below.
" Closing Date "
has the meaning set forth in §2(d) below.
" Code " means
the Internal Revenue Code of 1986, as amended.
" Confidential
Information " means any information concerning the businesses
and affairs of the Target and its Subsidiaries that is not already
generally available to the public.
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" Disclosure
Schedule " has the meaning set forth in §4
below.
" Employee Benefit
Plan " means any "employee benefit plan" (as such term is
defined in ERISA §3(3)) and any other material employee
benefit plan, program or arrangement of any kind.
" Employee Pension
Benefit Plan " has the meaning set forth in ERISA
§3(2).
" Employee Welfare
Benefit Plan " has the meaning set forth in ERISA
§3(1).
" Environmental,
Health, and Safety Requirements " shall mean all federal,
state, local and foreign statutes, regulations, and ordinances
concerning public health and safety, worker health and safety, and
pollution or protection of the environment, including without
limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials,
substances or wastes, as such requirements are enacted and in
effect on or prior to the Closing Date.
" ERISA " means
the Employee Retirement Income Security Act of 1974, as
amended.
" ERISA
Affiliate " means each entity which is treated as a single
employer with the Target for purposes of Code §414.
" Financial
Statement " has the meaning set forth in §4(g)
below.
" GAAP " means
United States generally accepted accounting principles as in effect
from time to time.
" Hart-Scott-Rodino
Act " means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
" Income Tax "
means any federal, state, local, or foreign income tax, including
any interest, penalty, or addition thereto, whether disputed or
not.
" Income Tax
Return " means any return, declaration, report, claim for
refund, or information return or statement relating to Income
Taxes, including any schedule or attachment thereto.
" Indemnified
Party " has the meaning set forth in §8(d)
below.
" Indemnifying
Party " has the meaning set forth in §8(d)
below.
" Knowledge "
means actual knowledge without independent investigation.
" Leased Real
Property " means all leasehold or subleasehold estates and
other rights to use or occupy any land, buildings, structures,
improvements, fixtures or other interest in real property which is
used in the Target's or its Subsidiaries' business.
" Leases " means
all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals,
guaranties and other agreements with respect thereto, pursuant to
which any of the Target or its Subsidiaries holds any Leased Real
Property.
" Most Recent
Financial Statements " has the meaning set forth in §4(g)
below.
" Most Recent Fiscal
Month End " has the meaning set forth in §4(g)
below.
" Multiemployer
Plan " has the meaning set forth in ERISA
§3(37).
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" Ordinary Course of
Business " means the ordinary course of business consistent
with part custom and practice (including with respect to quantity
and frequency).
" Owned Real
Property " means all land, together with all buildings,
structures, improvements and fixtures located thereon, and all
easements and other rights and interests appurtenant thereto, owned
by any of the Target or its Subsidiaries and used in the business
of the Target and its Subsidiaries taken as a whole.
" Party " has
the meaning set forth in the preface above.
" PBGC " means
the Pension Benefit Guaranty Corporation.
" Permitted
Encumbrances " means with respect to each parcel of Owned Real
Property: (a) real estate taxes, assessments and other governmental
levies, fees or charges imposed with respect to such Owned Real
Property which are not due and payable as of the Closing Date or
which are being contested by appropriate proceedings; (b) mechanics
liens and similar liens for labor, materials or supplies provided
with respect to such Owned Real Property incurred in the ordinary
course of business for amounts which are not delinquent and which
would not, in the aggregate, have a material adverse effect on the
business of the Target and its Subsidiaries taken as a whole or
which are being contested by appropriate proceedings; (c) zoning,
building codes and other land use laws regulating the use or
occupancy of such Owned Real Property or the activities conducted
thereon which are imposed by any governmental authority having
jurisdiction over such Owned Real Property; (d) liens for any
financing secured by such Owned Real Property which is an
obligation of any of the Target or its Subsidiaries which will not
be paid off at Closing; and (e) easements, covenants, conditions,
restrictions and other similar matters affecting title to such
Owned Real Property and other title defects, all of which do not or
would not materially impair the use or occupancy of such Owned Real
Property in the operation of the business of the Target and its
Subsidiaries taken as a whole.
" Person " means
an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency,
or political subdivision thereof).
" Purchase Price
" has the meaning set forth in §2(b) below.
" Requisite
Seller " means Seller holding in interest of the Target Shares
as set forth in §4(b) of the Disclosure Schedule.
" Securities Act
" means the Securities Act of 1933, as amended.
" Securities
Exchange Act " means the Securities Exchange Act of 1934, as
amended.
" Security
Interest " means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due
and payable, (c) purchase money liens and liens securing rental
payments under capital lease arrangements, and (d) other liens
arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
" Seller " has
the meaning set forth in the preface above.
" Subsidiary "
means any corporation with respect to which a specified Person (or
a Subsidiary thereof) owns a majority of the common stock or has
the power to vote or direct the voting of sufficient securities to
elect a majority of the directors.
" Target " has
the meaning set forth in the preface above.
" Target Share "
means any share of the common stock or membership interests of the
Target.
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" Tax " means
any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under
Code §59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or
not.
" Tax Return "
means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.
" Third Party
Claim " has the meaning set forth in §8(d)
below.
2.
Purchase and Sale of
Target Shares .
(a)
Basic
Transaction . On and subject to the terms
and conditions of this Agreement, the Buyer agrees to purchase from
each of the Seller, and each of the Seller agrees to sell to the
Buyer, all of his or its Target Shares for the consideration
specified below in this §2.
(b)
Purchase Price. The
Buyer agrees to pay to the Seller $100,000 (the "Purchase Price")
payable as follows (i) $35,000 paid from prior deposit upon the
execution of this Agreement, (ii) $30,000 in equal weekly payments
for the ten weeks from the date hereof and (iii) $150,000 upon the
earlier of the completion of Buyer’s Moses Lake project
funding or 120 days following the execution of this Agreement at
which time $50,000 of the $150,000 shall be paid. In any
event, such $150,000 shall be paid in full no later than January
31, 2010. Additionally the Seller shall receive at closing
warrants to purchase 1,150,000 shares of Buyer’s common stock
at an exercise price of $7.00 per share in a substantially the form
attached here to as Exhibit A. Further, the Seller will
receive warrants to purchase an additional 400,000 shares of
Buyer’s common stock at an exercise price of $7.00 per share
per the following schedule: (a) warrants to purchase 200,000 shares
upon the project producing cellulosic ethanol at a rate of at least
3 millions of gallons per year (“mmgy”) for 15
consecutive days; (b) warrants to purchase 100,000 shares upon the
project producing cellulosic ethanol at a rate of at least 5 mmgy
for 15 consecutive days; (c) warrants to purchase 100,000 shares
upon the project producing cellulosic ethanol at a rate of at least
15 mmgy for 15 consecutive days.
(c)
Net Cash Payment to
Seller .
Immediately prior to the Closing, the Seller will cause the Target
to pay the Seller in proportion to their respective holdings of
Target Shares an aggregate amount (and may cause each Subsidiary of
the Target to pay to the Target any necessary component thereof)
equal to the Seller' good faith estimate of the excess (if any) of
(i) the consolidated Cash of the Target and its Subsidiaries as of
the Closing over (ii) the aggregate liability of the Target
and its Subsidiaries for unpaid Income Taxes as of the Closing
(computed in accordance with the past custom and practice of the
Target and its Subsidiaries in filing their Income Tax Returns).
The Seller may cause (A) the Target to make any such payment to
them in the form of a dividend or a redemption and (B) any
Subsidiary of the Target to make any such payment to the Target in
the form of a dividend, a redemption, or an intercompany
loan.
(d)
The
Closing .
The closing of the transactions contemplated by this
Agreement (the " Closing ") shall occur as of the date of
this Agreement.
(e)
Deliveries at the
Closing .
At the Closing, (i) the Seller will deliver to the Buyer the
various certificates, instruments, and documents referred to in
§7(a) below, (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in
§7(b) below, (iii) each of the Seller will deliver to the
Buyer stock certificates representing all of his or its
Target
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Shares, endorsed in
blank or accompanied by duly executed assignment documents, and
(iv) the Buyer will deliver to each of the Seller the consideration
specified in §2(b) above.
(f)
Sales Commission.
Seller shall receive a sales commission of 25% of the selling
price (plus related expenses) on all sales of excess equipment
owned by Target not needed by Buyer, for those equipment sales
directly negotiated by Buyer.
3.
Representations and
Warranties Concerning the Transaction .
(a)
Representations and
Warranties of the Seller . Each of the Seller
represents and warrants to the Buyer that the statements contained
in this §3(a) are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this
§3(a)) with respect to himself or itself, except as set forth
in Annex I attached hereto.
(i)
Organization of
Certain Seller. If the Seller is a corporation, the
Seller is duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation.
(ii)
Authorization of
Transaction. The Seller has full power and
authority (including, if the Seller is a corporation, full
corporate power and authority) to execute and deliver this
Agreement and to perform his or its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms and
conditions. The Seller need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(iii)
Noncontravention.
Neither the execution
and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject or, if
the Seller is a corporation, any provision of its charter or
bylaws.
(iv)
Brokers'
Fees. The
Seller has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.
(v)
Investment. The Seller (A) understands that the
Buyer Notes have not been, and will not be, registered under the
Securities Act, or under any state securities laws, and are being
offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (B) is acquiring
the Buyer Notes solely for his or its own account for investment
purposes, and not with a view to the distribution thereof, (C) is a
sophisticated investor with knowledge and experience in business
and financial matters, (D) has received certain information
concerning the Buyer and has had the opportunity to obtain
additional information as desired in order to evaluate the merits
and the risks inherent in holding the Buyer Notes, (E) is able to
bear the economic risk and lack of liquidity inherent in holding
the Buyer Notes, and (F) is an Accredited Investor for the reasons
set forth on Annex I.
(vi)
Target
Shares. The
Seller holds of record and owns beneficially the number of Target
Shares set forth next to his or its name in §4(b) of the
Disclosure Schedule, free and clear of any restrictions on transfer
(other than restrictions under the Securities Act and state
securities laws), taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and
demands. The Seller is not a party to any option, warrant, purchase
right, or other contract or
5
commitment that could
require the Seller to sell, transfer, or otherwise dispose of any
capital stock of the Target (other than this Agreement). The Seller
is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of
the Target.
(b)
Representations and
Warranties of the Buyer . The Buyer represents and warrants
to the Seller that the statements contained in this §3(b) are
correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of
this Agreement throughout this §3(b)), except as set forth in
Annex II attached hereto.
(i)
Organization of the
Buyer. The
Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its
incorporation.
(ii)
Authorization of
Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms
and conditions. The Buyer need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order to consummate the
transactions contemplated by this Agreement.
(iii)
Noncontravention.
Neither the execution
and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (A) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is
subject or any provision of its charter or bylaws or (B) conflict
with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound
or to which any of its assets is subject.
(iv)
Brokers'
Fees. The
Buyer has no liability or obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any Seller could become
liable or obligated.
(v)
Investment. The Buyer is not acquiring the
Target Shares with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities
Act.
4.
Representations and
Warranties Concerning the Target and Its Subsidiaries
. The Seller
represent and warrant to the Buyer that the statements contained in
this §4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this
§4), except as set forth in the disclosure schedule delivered
by the Seller to the Buyer on the date hereof and initialed by the
Parties (the " Disclosure Schedule ").
(a)
Organization,
Qualification, and Corporate Power . Each of the Target and its
Subsidiaries is a corporation duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its
incorporation. Each of the Target and its Subsidiaries is duly
authorized to conduct business and is in good standing under the
laws of each jurisdiction where such qualification is required,
except where the lack of such qualification would not have a
material adverse effect on the financial condition of the
Targ
