8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):   April 3, 2001

eResource Capital Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-8662	23-2265039
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

3353 Peachtree Road, N.E., Suite 130, Atlanta, Georgia   30326

(Address of principal executive offices)  (Zip Code)

Registrant’s telephone number, including area code:   (404) 760-2570

Item 2. Acquisition or Disposition of Assets.

      On April 3, 2001, eResource Capital Group, Inc., a Delaware corporation (the “Company”), completed its acquisition (the “LST Acquisition”) of LST, Inc., a Delaware corporation d/b/a LifeStyles Technologies (“LST”). Prior to the LST Acquisition, the Company, through a wholly-owned subsidiary owned approximately four percent (4%) of the issued and outstanding shares of LST’s common stock (“LST Common Stock”). The Company acquired the remaining ninety-six percent (96%) of LST’s Common Stock directly from the stockholders of LST pursuant to the terms of separate stock purchase agreements between each stockholder and the Company (collectively the “Purchase Agreements” and, individually a “Purchase Agreement”). In connection with the LST Acquisition, the Company agreed to issue 10,074,675 shares of the Company’s common stock, par value $.04 per share (“eRCG Common Stock”). The Company was obligated to issue 8,074,675 shares of eRCG Common Stock as of the consummation of the LST Acquisition (the “Closing”), with the remaining 2,000,000 shares of eRCG Common Stock to be issued only if LST meets certain performance criteria after the Closing (as described below).

      The basic form of Purchase Agreement, with certain minor variances, is the form the Company executed with the majority of the stockholders of LST (the “Basic Agreement”), a copy of which is included as Exhibit 2.1 to this Report. The Company executed a different form of Purchase Agreement with each of (i) Glenn I. Barrett, Jr., the President, Chief Executive Officer and stockholder of LST holding approximately twenty-eight percent (28%) of the outstanding LST Common Stock (the “Barrett Agreement”), and (ii) Brandon Holdings, Inc. (“Brandon Holdings”), a stockholder of LST holding approximately twenty-nine percent (29%) of the outstanding LST Common Stock (the “Brandon Agreement”), copies of which agreements are included as Exhibits 2.2 and 2.3, respectively, to this Report.

      All of the Purchase Agreements provide a purchase price for the LST Common Stock of $1.30 per share payable in restricted shares of eRCG Common Stock, with each share of eRCG Common Stock valued at the average daily closing price of such stock over the five (5) trading days preceding the Closing; provided, however, that the value of eRCG Common Stock used to calculate such purchase price would be no less than $1.00 per share (the “Consideration”). Since the five-day average stock price of eRCG Common Stock prior to Closing was less than $1.00 per share, the value of eRCG Common Stock used to calculate the purchase price was deemed to be $1.00 per share and, as a result, the maximum number of shares of eRCG Common Stock issuable in connection with the LST Acquisition is 10,074,675, of which 8,074,675 shares the Company became obligated to issue as of Closing and of which 2,000,000 shares the Company will issue only if LST meets certain performance criteria after Closing as described in the Brandon Agreement and Barrett Agreement.

      Although the Barrett Agreement and the Brandon Agreement provide for the same Consideration as the Basic Agreement, receipt of a portion of such Consideration (up to 2,000,000 shares of eRCG Common Stock) is contingent upon LST meeting or exceeding specified performance milestones through March 31, 2002, as described more fully in the Barrett Agreement and the Brandon Agreement. The Barrett Agreement and the Brandon Agreement also have provisions limiting for a three-year period the number of shares of eRCG Common Stock that Mr. Barrett and Brandon Holdings may sell on any trading day.

      In connection with the Barrett Agreement, Mr. Barrett and the Company have executed an employment agreement (the “Employment Agreement”), included as Exhibit 10.1 to this Report. The Employment Agreement provides that Mr. Barrett will serve as President and Chief Executive Officer of LST in return for an annual base salary of $150,000. The Employment Agreement has a two year initial term and renews automatically for one year unless either party elects not to renew and provides sixty (60) days prior notice of such election. The Employment Agreement also provides for up to six months salary

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as severance if Mr. Barrett is terminated for certain reasons. In addition, certain employees of LST who will continue as employees of LST after Closing will have their options to purchase LST Common Stock cancelled in exchange for options to purchase eRCG Common Stock issued by the Company pursuant to the Company’s 2000 Stock Compensation Plan.

      Pursuant to the form of Registration Rights Agreement that the Company entered into with each LST stockholder who executed a Purchase Agreement, the Company has agreed to file a registration statement on Form S-3, or if the Company is ineligible to use such from, another appropriate form, within 180 days of Closing and has agreed to use commercially reasonable efforts to include the eRCG Common Stock issued in connection with the LST Acquisition on such registration statement, subject to certain terms and conditions set forth in the Registration Rights Agreement, a copy of which is included as Exhibit 4.1 to this Report.

      Michael D. Pruitt, a Director, Chief Executive Officer and President of the Company, is also Chairman of the Board of Directors of LST. Prior to Closing, Mr. Pruitt was also a LST stockholder holding approximately three percent (3%) of the outstanding LST Common Stock. Mr. Pruitt entered into a Purchase Agreement with the Company and, in connection with the LST Acquisition, sold his shares of LST Common Stock to the Company for per share consideration equal to the per share consideration received by other LST stockholders who sold their shares of LST Common Stock pursuant to the terms set forth in the Basic Agreement. In addition to the LST Acquisition, Mr. Pruitt loaned $100,000 to LST which loan remains outstanding.

      The foregoing description of the LST Acquisition and the Purchase Agreements, the Registration Rights Agreement and the Employment Agreement are qualified in their entirety by reference to such agreements which are filed as Exhibits 2.1, 2.2, 2.3, 4.1 and 10.1 to this Report and incorporated herein by reference.

      The shares of eRCG Common Stock issued in connection with the LST Acquisition were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption set forth in Section 4(2) of the Securities Act and Regulation D of the Securities and Exchange Commission promulgated thereunder.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

      (a) – (b)     Financial Statements and Pro Forma Information.

      All required financial statements and pro forma financial information will be filed by amendment to the Report not later than sixty (60) days after the due date of this Report.

      (c)             Exhibits.

2.1	The Stock Purchase Agreement between the Company and the majority of the stockholders of LST, Inc. (Certain of the exhibits and schedules to the Basic Agreement have been omitted from this Report pursuant to Item 601(b)(2) of Regulation S-B, and the Company agrees to furnish copies of such omitted exhibits and schedules supplementally to the Securities and Exchange Commission upon request.)
2.2	Stock Purchase Agreement between the Company and Glenn I. Barrett, Jr. dated March 16, 2001. (Certain of the exhibits and schedules to the Barrett Agreement have been omitted from this Report pursuant to Item 601(b)(2) of Regulation S-B, and the Company agrees to furnish copies of such omitted exhibits and schedules supplementally to the Securities and Exchange Commission upon request.)

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2.3	Stock Purchase Agreement between the Company and Brandon Holdings, Inc. dated March 21, 2001. (Certain of the exhibits and schedules to the Brandon Agreement have been omitted from this Report pursuant to Item 601(b)(2) of Regulation S-B, and the Company agrees to furnish copies of such omitted exhibits and schedules supplementally to the Securities and Exchange Commission upon request.)
4.2	Registration Rights Agreement entered into in connection with the Purchase Agreements.
10.1	Employment Agreement between the Company and Glenn I. Barrett, Jr. dated March 16, 2001.

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SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		eResource Capital Group, Inc.
	By:	/s/  William L. Wortman
		William L. Wortman
		Vice-President, Treasurer and Chief Financial Officer
Dated: April 18, 2001

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EXHIBIT INDEX

Exhibits.
2.1	The Stock Purchase Agreement between the Company and the majority of the stockholders of LST, Inc.
2.2	Stock Purchase Agreement between the Company and Glenn I. Barrett, Jr. dated March 16, 2001.
2.3	Stock Purchase Agreement between the Company and Brandon Holdings, Inc. dated March 21, 2001.
4.2	Registration Rights Agreement entered into in connection with the Purchase Agreements.
10.1	Employment Agreement between the Company and Glenn I. Barrett, Jr. dated March 16, 2001.

  EX-2.1 2 g68642ex2-1.txt STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.1 =============================================================================== STOCK PURCHASE AGREEMENT ENTERED INTO MARCH ____, 2001, BETWEEN ERESOURCE CAPITAL GROUP, INC. AND -------------------------------- ================================================================================ 2 TABLE OF CONTENTS ARTICLE I. SALE AND PURCHASE OF THE LST SHARES................................................. 1 1.1 Sale and Purchase................................................................... 1 1.2 Closing............................................................................. 1 1.3 Purchase Price...................................................................... 1 1.4 Rights of Former Stockholders....................................................... 2 1.5 Other Agreements.................................................................... 2 1.6 Basic Agreements and Transaction Defined............................................ 2 ARTICLE II. REPRESENTATIONS AND WARRANTIES...................................................... 2 2.1. Representations and Warranties of Seller............................................ 2 2.2. Representations and Warranties Concerning LST....................................... 3 2.3. Representations and Warranties of Purchaser......................................... 6 ARTICLE III. COVENANTS........................................................................... 7 3.1. Mutual Covenants.................................................................... 7 3.2. Seller's Covenants.................................................................. 8 3.3. No Shop............................................................................. 9 3.4. Public Announcements................................................................ 9 3.5. Confidentiality..................................................................... 9 ARTICLE IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE............................................................................ 9 4.1. Compliance with Seller's Representations, Warranties and Covenants.................. 9 4.2. No Adverse Change................................................................... 9 4.3. No Legal Proceedings................................................................ 10 4.4 Documents to be Delivered by Seller................................................. 10 4.5 Consents............................................................................ 10 4.6 Listing of eRCG Shares.............................................................. 10 4.7 Amendment of Stock Option Plan...................................................... 10 4.8 Cancellation of Outstanding Options................................................. 10 4.9 Sale by Other LST Stockholders...................................................... 10 4.10 Consummation of Private Placement by LST............................................ 11 4.11 Investigation....................................................................... 11 ARTICLE V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE............................................................................. 11 5.1. Compliance with Purchaser's Representations, Warranties and Covenants..................................................................... 11 5.2. No Legal Proceedings................................................................ 11 ii 3 5.3. Other Agreements.................................................................... 11 5.4. Payments............................................................................ 11 ARTICLE VI. TERMINATION........................................................................ 12 6.1. Termination and Abandonment......................................................... 12 ARTICLE VII. MISCELLANEOUS....................................................................... 12 7.1. Survival............................................................................ 12 7.2. Binding Effect of the Basic Agreements; No Third Party Beneficiaries................................................................. 12 7.3. Governing Law....................................................................... 12 7.4. Notices............................................................................. 12 7.5. Headings............................................................................ 13 7.6. Severability........................................................................ 13 7.7. Expenses............................................................................ 13 7.8. Integration; Interpretation......................................................... 13 7.9. Amendments.......................................................................... 14 7.10. Variation of Pronouns............................................................... 14 7.11 Waivers............................................................................. 14 7.12. Counterparts; Facsimile Signatures.................................................. 14 iii 4 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation ("PURCHASER"), and ________________, an individual resident of the State of ______________ ("SELLER") and a stockholder of LST, INC., a Delaware corporation d/b/a LifeStyle Technologies ("LST"). WHEREAS, Seller is the record and beneficial owner of ___________________ (_______) shares ("LST SHARES") of LST's common stock, par value $.001 per share ("LST COMMON STOCK"), representing approximately .__% of the issued capital stock of LST; and WHEREAS, Seller desires to sell the LST Shares to Purchaser, and Purchaser desires to purchase the LST Shares, upon the terms and conditions set forth herein. NOW, THEREFORE in consideration of the mutual promises and covenants contained herein, and for other good valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, and subject to the accuracy of the representations and warranties of the parties, the parties hereto agree as follows: I. SALE AND PURCHASE OF THE LST SHARES 1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the Closing (as defined in Section 1.2 hereof), Seller agrees to sell, assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase from Seller, the LST Shares. 1.2 CLOSING. The purchase shall be consummated at a closing ("CLOSING") to take place at the offices of Purchaser on the date and time on which the last of the conditions specified in Articles IV and V hereof have been satisfied or waived, or such other place, time or date as may be mutually agreed upon by the parties hereto. 1.3 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the LST Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value $.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's Share being equal to the average for the five (5) trading days immediately preceding the Closing Date of the daily closing price of eRCG Common Stock as reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided, however, that if the Average Share Price is less than One Dollar ($1.00), then the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of calculating the Purchase Price due Seller. The Purchase Price shall be paid at Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller receiving cash in lieu of any fractional eRCG Share that Seller may be entitled to receive pursuant to this Section 1.3. Purchaser will give stop transfer instructions to its transfer agent with respect to the eRCG Shares and there will be placed on the certificate(s) representing such eRCG Shares a restrictive legend. 5 1.4 RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange, each certificate representing LST Shares shall from and after the Closing represent for all purposes only the right to receive the Purchase Price. Seller will not be entitled to vote or give its consent after the Closing at any meeting or action by written consent of Purchaser's stockholders until it has exchanged its certificates representing the LST Shares for certificates representing the eRCG Shares. 1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall deliver the following additional agreements: (a) Seller shall deliver to Purchaser stock certificate(s) representing all of the LST Shares held by Seller, duly endorsed to Purchaser in blank or accompanied by duly executed stock power(s), transferring such LST Shares from Seller to Purchaser; (b) Seller shall deliver to Purchaser an executed counterpart signature page to the Investment Representation Agreement, substantially in the form attached hereto as Exhibit 1.5(b); and (c) Purchaser and Seller shall each deliver an executed counterpart signature page to the Registration Rights Agreement, substantially in the form attached hereto as Exhibit 1.5(c). 1.6 BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and other agreements listed in paragraph 1.5, are sometimes referred to as the "Basic Agreements." The transaction contemplated by the Basic Agreement and the agreements with the other stockholders of LST are sometimes referred to as the "Transaction". II. REPRESENTATIONS AND WARRANTIES 2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. With such exceptions, if any, as may be set forth in a letter (the "SELLER DISCLOSURE LETTER") to be delivered by Seller to Purchaser on the date hereof, Seller represents and warrants to Purchaser as follows: (a) TITLE TO THE LST SHARES. At Closing, Seller shall own of record and beneficially the LST Shares free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the LST Shares to Purchaser. No person has any preemptive rights or rights of first refusal with respect to any of the LST Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the LST Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the LST Shares. (b) AUTHORITY; CONSENTS. Seller has full power and lawful authority, including, if Seller is a corporation, full corporate power and authority, to execute and deliver the Basic Agreements and the Seller Disclosure Letter and to consummate and 2 6 perform the Transaction contemplated thereby. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations of Seller, enforceable in accordance with their terms. To Seller's knowledge, neither the execution and delivery of the Basic Agreements and the Seller Disclosure Letter by Seller, nor the consummation and performance of the Transaction, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Seller is a party or by which Seller or any of its properties or assets are bound or affected. Seller need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the Transaction. (c) NONCONTRAVENTION. Neither the execution and the delivery of the Basic Agreements and Seller Disclosure Letter, nor the consummation of the Transaction, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject or (ii) if Seller is a corporation, any provision of such Seller's charter or bylaws. (d) CAPITAL STOCK RIGHTS. Seller has no stock options, warrants, rights, calls or any other agreements of any character, whether oral or written, obligating LST to issue any shares of its capital stock. (e) ORGANIZATION OF INCORPORATED SELLER. If Seller is a corporation, such Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. (f) DISCLOSURE. All statements of Seller contained in the Basic Agreements and in the Seller Disclosure Letter by and on behalf of Seller and LST are true and correct in all material respects and do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Seller, which could have a materially adverse effect upon the business, financial condition, results of operations, assets, liabilities, or prospects of LST, which have not been disclosed to Purchaser in the Basic Agreements or Seller Disclosure Letter. 2.2 REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller represents and warrants to Purchaser, to the best of Seller's knowledge, as follows: (a) ORGANIZATION. LST is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. LST has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. LST is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. 3 7 (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of LST consists of 20,000,000 shares of common stock, par value $.001 per share, of which 8,099,750 shares have been issued and are outstanding. LST has no other capital stock authorized, issued or outstanding and there are no shares of stock held in treasury. The outstanding shares of LST Common Stock have been duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof and were offered, issued, sold and delivered by LST in compliance with all applicable state and federal laws. Except as set forth on Schedule 2.2(b) of the Seller Disclosure Letter, LST does not have any outstanding rights, options, warrants, calls, commitments, conversion or any other agreements of any character, whether oral or written, obligating it to issue any shares of its capital stock, whether authorized or not. LST is not a party to and is not bound by any agreement, contract, arrangement or understanding, whether oral or written, giving any person or entity any interest in, or any right to share, participate in or receive any portion of LST's income, profits or assets, or obligating LST to distribute any portion of its income, profits or assets. (c) CONSENTS. Except as set forth on Schedule 2.2(c) of the Seller Disclosure Letter, the consummation and performance of the Transaction (i) does not conflict with, require the consent, waiver or approval of, result in a breach of or default under or give to others any interest or rights of termination, cancellation or acceleration in or with respect to, any agreement by which LST is a party or LST or any of its properties or assets are bound or affected, and (ii) will not result in the imposition of any claim, lien, encumbrance or restriction of any kind upon the assets of LST. (d) LST FINANCIAL STATEMENTS. The financial statements of LST (the "LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of the Seller Disclosure Letter are complete, were prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods and fairly present the financial position of LST as of December 31, 2000 and there have been no material changes thereafter. (e) COMPLIANCE WITH LAWS. LST is not in violation of any federal, state, local or other law, ordinance, rule or regulation applicable to its business, and has not received any actual or threatened complaint, citation or notice of violation or investigation from any governmental authority. (f) NO LITIGATION. There are no actions, suits, claims, complaints or proceedings pending or threatened against LST, at law or in equity, or before or by any governmental department, commission, court, board, bureau, agency or instrumentality; and there are no facts which would provide a valid basis for any such action, suit or proceeding. There are no orders, judgments or decrees of any governmental authority outstanding which specifically apply to LST or any of its assets. (g) MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller Disclosure Letter sets forth a list of all material contracts of LST. LST has in all material respect performed all of its obligations required to be performed by it through the date hereof, and is not in default or alleged to be in default in any material respect, under any contract, including 4 8 any leases for office space, and there exists no event, condition or occurrence which, after notice or lapse of time or both, constitutes such a default. (h) EMPLOYMENT MATTERS. LST is not a party to any employment agreements, letters or other agreements with any individual with respect to his or her employment with LST. Schedule 2.2(h) of the Seller Disclosure Letter sets forth a complete and accurate list of employees and each employee's rate of compensation (including wages and guaranteed or anticipated bonuses). LST is not subject to any labor disputes. (i) NO UNDISCLOSED LIABILITIES. Except as set forth in LST Financial Statements, Seller is not aware of any material liabilities for which LST is currently liable or will become liable in the future. (j) TAXES. LST has timely filed all federal, state, local and foreign tax returns and tax reports required to be filed with the appropriate governmental agency in all jurisdictions in which such returns and reports are required to be filed, excepting only those taxes which will not be due until after the Closing. All such returns and reports are true, correct and complete, and all amounts shown as owing on them have been paid, including all interest, penalties, deficiencies and assessments heretofore levied or assessed against LST. There is no agreement for extension of time of payment of any taxes of LST. There is no examination or audit pending or threatened by the Internal Revenue Service or by any state or local taxing authority with respect to tax matters of LST. (k) REAL PROPERTY. LST does not own any real property. (l) INSURANCE. A complete and accurate list of all insurance policies held by LST and now in force (including insurance policies covering the assets, business, equipment, properties, employees, officers and directors of LST) are set forth in Schedule 2.2(l) of the Seller Disclosure Letter and are of the type and in amounts customarily carried by persons conducting businesses similar to those of LST. There is no material claim by LST pending under any of the insurance policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies. (m) INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller Disclosure Letter sets forth a complete and accurate list of and describes all franchises, licenses, patents, patent applications, trademarks, service marks, trade names, copyrights and rights with respect to any of the foregoing (collectively, "INTELLECTUAL PROPERTY RIGHTS") presently owned or held by LST. LST owns the right to use all of the Intellectual Property Rights. The Intellectual Property Rights are all that are necessary for LST to conduct its business. No event has occurred which permits, or after notice or lapse of time would permit, the revocation or termination of any of the Intellectual Property Rights. LST has no reason to believe that it is infringing, nor has it received notice with respect to the infringement or possible or claimed infringement, upon, or, that it is otherwise acting adversely to, any known right or claimed right of any person with respect to any Intellectual Property Rights. 5 9 (n) BENEFIT PLANS. Schedule 2.2(n) of the Seller Disclosure Letter sets forth a complete and accurate list of all of the employee benefit plans that LST maintains or contributes to, or has maintained or to which it has made contributions (including any terminated employee benefit plans). LST does not have any obligation under any employee benefit plans other than those identified on Schedule 2.2(n), and LST is in compliance with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all employee benefit plans. The execution and deliver of this Agreement and the consummation of the Transaction will not result in any violations of ERISA or any other laws related thereto. (o) ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts receivable of LST represent in all material respects sales made in the ordinary course of business. Schedule 2.2(o) of the Seller Disclosure Letter sets forth LST's top 20 customers by billings and/or revenues received. Seller has no knowledge of any oral or written notice or other indication from any customer stating that it intends to terminate its business relationship with LST or reduce the amount of business it does with LST. 2.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. With such exceptions, if any, as may be set forth in a letter (the "PURCHASER DISCLOSURE LETTER") to be delivered by Purchaser to Seller on the date hereof, Purchaser represents and warrants to Seller as follows: (a) ORGANIZATION. Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. Purchaser is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of Purchaser consists of Two Hundred Million (200,000,000) shares of common stock, of which 61,687,654 shares have been issued and are outstanding as of March 7, 2001, and 10,000,000 shares of preferred stock, none of which are issued or outstanding. In addition, Purchaser, as of March 7, 2001, has outstanding warrants and options to purchase 27,380,120 shares of the eRCG Common Stock. At Closing, all issued and outstanding stock of Purchaser, including the eRCG Shares, will have been duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof. Seller will receive all right, title and interest to eRCG Shares free and clear of all liens, pledges, mortgages, security interests and claims whatsoever, except those imposed by state and federal securities laws. (c) AUTHORITY; CONSENTS. Purchaser has full power and lawful authority to execute and deliver the Basic Agreements and the Purchaser Disclosure Letter and to consummate and perform the Transaction. The Basic Agreements constitute (or shall, 6 10 upon execution, constitute) valid and legally binding obligations of Purchaser, enforceable in accordance with their terms. To Purchaser's knowledge, neither the execution and delivery of the Basic Agreements and the Purchaser Disclosure Letter by Purchaser, nor the consummation and performance of the Transaction, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Purchaser is a party or by which Purchaser or any of its properties or assets are bound or affected. (d) INVESTMENT INTENT. Purchaser is acquiring the LST Shares for its own account, for investment purposes only, and not with a view to the sale or distribution of any part thereof and Purchaser has no present intention of selling, granting participation in, or otherwise distributing the same. Purchaser understands the specific risks related to an investment in the LST Shares, especially as it relates to the financial performance of LST. (e) FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. Purchaser has filed all material reports, schedules, forms, statements and other documents with the Securities and Exchange Commission (the "SEC") pursuant to applicable state and federal securities laws through the date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute all material documents required to have been filed by Purchaser pursuant to such laws. (f) DISCLOSURE. All statements of Purchaser contained in the Basic Agreements and in the Purchaser Disclosure Letter by or on behalf of Purchaser are true and correct in all material respects and, when considered in conjunction with the SEC Documents, do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Purchaser which could have a material adverse affect upon the business, financial condition, results of operations, assets or liabilities of Purchaser, which have not been disclosed to Seller in the Basic Agreements, the Purchaser Disclosure Letter or the SEC Documents. III. COVENANTS 3.1 MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and to the best of Seller's ability, each covenant and agree that from the date hereof until Closing each shall: (a) ORDINARY COURSE OF BUSINESS. Operate its business only in the ordinary course and use its best efforts to preserve its business, properties, assets, contracts, organization, goodwill and relationships with persons with whom it has business dealings. 7 11 (b) NO INDEBTEDNESS. Not create, incur, assume, guarantee or otherwise become liable with respect to any obligation for borrowed money, indebtedness, capitalized lease or similar obligation, except in the ordinary course of business consistent with past practices where the entire net proceeds thereof are deposited with and used by and in connection with the business. (c) MAINTAIN BOOKS. Maintain its books, accounts and records in the usual, regular and ordinary business manner and in accordance with generally accepted accounting principles applied on a basis consistent with past practices. (d) NO AMENDMENTS. (i) Not amend its corporate charter or bylaws (or similar documents) or material contracts, and (ii) maintain its corporate existence, licenses, permits, powers and rights in full force and effect. (e) TAXES AND ACCOUNTING MATTERS. (i) File when due all federal, state and local tax returns and reports which shall be accurate and complete, including, but not limited to, income, franchise, excise, ad valorem, and other taxes with respect to its business and properties, and to pay as they become due all taxes or assessments, except for taxes for which adequate reserves are established and which are being contested in good faith by appropriate proceedings, and (ii) not change its accounting methods or practices or any depreciation, amortization or inventory valuation policies or practices. (f) DUE COMPLIANCE. Comply in all material respects with all laws, regulations, rules and ordinances applicable to it and to the conduct of its business. (g) CONSENTS. Use its best efforts to obtain the consent or approval of each person or entity whose consent or approval is required for the consummation of the Transactions. (h) EFFORTS TO CONSUMMATE. Subject to the terms and conditions of this Agreement, use its reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper and advisable under applicable laws to consummate and make effective, as soon as practicable after the date of this Agreement, the Transaction. 3.2 SELLER'S COVENANTS. Seller, on behalf of LST and to the best of Seller's ability, covenants and agrees from the date hereof until Closing, LST shall: (a) COMPENSATION. Not (i) enter into or alter any employment agreements, (ii) grant any severance or increase in compensation other than normal merit increases consistent with its general prevailing practices to any officer or employee, (iii) enter into or alter any labor or collective bargaining agreement or any bonus or other employee fringe benefit, or (iv) adopt or amend any employee stock option plan. 8 12 (b) NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS. Not to (i) issue any shares of any class of capital stock, or enter into any contract, option, warrant or right calling for the issuance of any such shares of capital stock, or create or issue any securities convertible into any securities, (ii) accelerate or amend the period of exercisability of warrants or restricted stock or reprice any warrants or authorize cash payments in exchange for any warrants, or (iii) declare or pay any dividends on or make any other distributions in any form in respect of capital stock, or split, combine or reclassify any capital stock. 3.3 NO SHOP. Seller agrees to, and to the best of Seller's ability shall cause LST to, negotiate exclusively with Purchaser and not to solicit, negotiate, enter into any agreement or entertain other offers or alternative proposals for the LST Shares or the acquisition of Seller, its assets or stock from the date hereof until the earlier of (i) termination of this Agreement or (ii) August 31, 2001. 3.4 PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of Seller's ability shall cause LST not to, without the prior written consent of Purchaser, make any announcement, issue any press release or make any statement to any third party with respect to the Transaction except as may be necessary to comply with any law, regulation or order and then only after prior notice to Purchaser as to the content of such announcement. 3.5 CONFIDENTIALITY. Seller agrees to, and to the best of Seller's ability shall cause LST to, maintain the confidentiality of all confidential information furnished to it related to Purchaser and shall not use or disclose such information for any purpose, except in furtherance of the Transaction. IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE The obligation of Purchaser to close the Transaction is subject to the fulfillment prior to the Closing of each of the following conditions, which may be waived in whole or in part by Purchaser: 4.1 COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties of Seller contained in Sections 2.1 and 2.2 hereof shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing with the same force and effort as if made at the Closing. Seller shall have performed in all material respects all agreements, covenants and conditions required to be performed by Seller prior to the Closing. 4.2 NO ADVERSE CHANGE. There shall have been no event, which has had or may have a material adverse effect upon the business, financial condition, results of operation, assets, liabilities or prospects of LST. 9 13 4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceeding before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transaction. 4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the following documents: (a) Stock certificate(s) representing all of the LST Shares held by Seller, duly endorsed to Purchaser in blank or accompanied by duly executed stock powers; (b) All agreements referred to in Section 1.5 hereof, executed by all parties thereto other than Purchaser; and (c) Such other documents or certificates as shall be reasonably required by Purchaser or its counsel in order to close and consummate the Transaction. 4.5 CONSENTS. (a) BY PURCHASER. Purchaser's Board of Directors shall have approved and taken all necessary corporate action to execute, deliver and perform the Basic Agreements, the Purchaser Disclosure Letter and consummate the Transaction. (b) BY LST. LST shall have delivered to Purchaser any and all consents, waivers or approvals of any government, government agency or other third party necessary to the consummation and performance of the Transaction. 4.6 LISTING OF ERCG SHARES. The eRCG Shares to be issued in connection with the Transaction shall be listed for trading on the American Stock Exchange. 4.7 AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article X of that certain LST, Inc. Omnibus Stock Option and Award Plan dated September 29, 2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change of Control" (as defined in the Stock Option Plan) all outstanding options shall be cancelled and any vested, but unexercised options shall no longer be exercisable. 4.8 CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled any and all outstanding options, whether granted pursuant to the Stock Option Plan or otherwise, and any vested but unexercised options shall no longer be exercisable. 4.9 SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding one hundred percent (100%) of the issued and outstanding LST Common Stock shall have entered into stock purchase agreements with Purchaser similar to this Agreement and the other agreements set forth in Section 1.5 hereof. 10 14 4.10 CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold 2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00) per share pursuant to the terms of the that certain Private Placement Memorandum dated July 15, 2000. 4.11 INVESTIGATION. Purchaser shall have satisfactory completed its due diligence investigation of LST. No investigation by Purchaser shall affect the representations and warranties of Seller. V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE The obligation of Seller to close the Transaction is subject to the fulfillment prior to Closing of each of the following conditions, which may be waived in whole or in part by Seller: 5.1 COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties made by Purchaser in Section 2.3 of this Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects at the Closing with the same force and effect as if made at the Closing. Purchaser shall have performed in all material respects all agreements, covenants and conditions required to be performed by Purchaser prior to the Closing. 5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceedings before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transaction. 5.3 OTHER AGREEMENTS. Purchaser shall have executed and delivered all agreements referred to in Section 1.5 hereof, to be executed by the Purchaser. 5.4 PAYMENTS. Seller shall have received from Purchaser all of eRCG Shares and cash in lieu of any fractional eRCG Share that Seller is entitled to receive pursuant to the Basic Agreements. 11 15 VI. TERMINATION 6.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the purchase of the LST Shares may be abandoned before the Closing by: (a) The mutual consent of Seller and Purchaser; (b) Purchaser, if the conditions precedent set forth in Article IV hereof shall have not have been satisfied on or before the Closing Date (as the same may be extended from time to time); and (c) Seller, if the conditions precedent set forth in Article V hereof shall not have been satisfied on or before the Closing Date (as the same may be extended from time to time). Termination shall be effective on the date of receipt of written notice specifying the reasons therefor. Termination shall not relieve any party from liability for any willful breach of this Agreement. VII. MISCELLANEOUS 7.1 SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4 and 3.5 and Article VII hereof, which shall survive the Closing or termination hereof for a period of two (2) years, none of the representations and warranties contained in this Agreement or in any certificate, exhibit or other document delivered pursuant to this Agreement shall survive the Closing. 7.2 BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on behalf of the parties pursuant thereto, constitute the entire agreement between the parties. The terms and conditions of the Basic Agreements shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties hereto. Nothing in the Basic Agreements, expressed or implied, confers any rights or remedies upon any party other than the parties hereto and their respective heirs, legal representatives, successors and assigns. 7.3 GOVERNING LAW. The Basic Agreements and the other instruments delivered by or on behalf of the parties pursuant hereto are made pursuant to, and will be construed under, the laws of the State of Delaware, without regard to its conflicts of law principles. 7.4 NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and will be deemed to have been duly given when personally delivered, delivered by a nationally recognized overnight delivery service, sent via facsimile transmission 12 16 (receipt confirmed), or three (3) business days after it is deposited in the United States mail, certified or registered, return receipt requested, postage prepaid, to: (a) If to Seller to: --------------------------------------- --------------------------------------- --------------------------------------- Telephone: (____) ___________ Fax: (___) _________________ (b) If to Purchaser, to: eResource Capital Group, Inc. 5935 Carnegie Boulevard, Suite 101 Charlotte, NC 28209 Attention: Melinda Morris Zanoni, Executive Vice President Telephone: (704) 553-9330 Fax: (704) 553-7136 These addresses may be changed from time to time by like written notice to the other party. 7.5 HEADINGS. The headings contained in this Agreement are for reference only and will not affect in any way the meaning or interpretation of this Agreement. 7.6 SEVERABILITY. If any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable under applicable law, then this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. The remaining provisions of this Agreement shall be given effect to the maximum extent then permitted by law. 7.7 EXPENSES. Each party shall pay all fees and expenses incurred by it incident to this Agreement and in connection with the consummation of the Transaction. 7.8 INTEGRATION; INTERPRETATION. The Basic Agreements and all documents and instruments executed pursuant hereto merge and integrate all prior agreements and representations respecting the Transaction, whether written or oral, and constitute the sole agreement of the parties in connection therewith. This Agreement has been negotiated by and submitted to the scrutiny of both Seller and Purchaser and their counsel and shall be given a fair and reasonable interpretation in accordance with the words hereof, without consideration or weight being given to its having been drafted by either party hereto or its counsel. 13 17 7.9 AMENDMENTS. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto. 7.10 VARIATION OF PRONOUNS. All pronouns and any variations thereof shall be deemed to reflect masculine, feminine, or neuter, singular or plural, as the identity of the person or entity may require. 7.11 WAIVERS. Purchaser and Seller may, in writing, amend the time for or waive compliance by the other with any of the covenants or conditions of the other contained herein. Failure to pursue any legal or equitable remedy or right available to a party shall not constitute a waiver of such right, nor shall any such forbearance, failure or actual waiver imply or constitute waiver of subsequent default or breach. 7.12 COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be executed in counterparts (whether by facsimile or otherwise), each of which will be deemed an original and all of which together will constitute one instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 14 18 IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this Agreement, or caused this Agreement to be duly executed, on the date first written above. PURCHASER: eRESOURCE CAPITAL GROUP, INC. BY: ------------------------------------ MELINDA MORRIS ZANONI ITS: EXECUTIVE VICE PRESIDENT SELLER: ---------------------------------------- ---------------------------------------- 15 EX-2.2 3 g68642ex2-2.txt STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.2 ================================================================================ STOCK PURCHASE AGREEMENT ENTERED INTO MARCH ____, 2001, BETWEEN ERESOURCE CAPITAL GROUP, INC. AND GLENN I. BARRETT, JR. ================================================================================ 2 TABLE OF CONTENTS ARTICLE I. SALE AND PURCHASE OF THE LST SHARES.......................................... 1 1.1 Sale and Purchase............................................................ 1 1.2 Closing...................................................................... 1 1.3 Purchase Price............................................................... 1 1.4 Rights of Former Stockholders................................................ 2 1.5 Portion of eRCG Shares Contingent; Sale of eRCG Shares....................... 2 1.6 Other Agreements............................................................. 2 1.7 Basic Agreements and Transaction Defined..................................... 3 ARTICLE II. REPRESENTATIONS AND WARRANTIES............................................... 3 2.1. Representations and Warranties of Seller..................................... 3 2.2. Representations and Warranties Concerning LST................................ 4 2.3. Representations and Warranties of Purchaser.................................. 7 ARTICLE III. COVENANTS.................................................................... 8 3.1. Mutual Covenants............................................................. 8 3.2. Seller's Covenants........................................................... 9 3.3. No Shop...................................................................... 10 3.4. Public Announcements......................................................... 10 3.5. Confidentiality.............................................................. 10 3.6 Indemnification.............................................................. 10 ARTICLE IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE................ 13 4.1. Compliance with Seller's Representations, Warranties and Covenants........... 13 4.2. No Adverse Change............................................................ 13 4.3. No Legal Proceedings......................................................... 13 4.4 Documents to be Delivered by Seller.......................................... 14 4.5 Consents..................................................................... 14 4.6 Listing of eRCG Shares....................................................... 14 4.7 Amendment of Stock Option Plan............................................... 14 4.8 Cancellation of Outstanding Options.......................................... 14 4.9 Sale by Other LST Stockholders............................................... 14 4.10 Consummation of Private Placement by LST..................................... 14 4.11 Investigation................................................................ 14 ii 3 ARTICLE V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE................... 14 5.1. Compliance with Purchaser's Representations, Warranties and Covenants........ 14 5.2. No Legal Proceedings......................................................... 15 5.3. Other Agreements............................................................. 15 5.4. Payments..................................................................... 15 ARTICLE VI. TERMINATION.................................................................. 15 6.1. Termination and Abandonment.................................................. 15 ARTICLE VII. MISCELLANEOUS................................................................ 15 7.1. Survival..................................................................... 15 7.2. Binding Effect of the Basic Agreements; No Third Party Beneficiaries......... 15 7.3. Governing Law................................................................ 16 7.4. Notices...................................................................... 16 7.5. Headings..................................................................... 16 7.6. Severability................................................................. 16 7.7. Expenses..................................................................... 16 7.8. Integration; Interpretation.................................................. 17 7.9. Amendments................................................................... 17 7.10. Variation of Pronouns........................................................ 17 7.11 Waivers...................................................................... 17 7.12. Counterparts; Facsimile Signatures........................................... 17 iii 4 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation ("PURCHASER"), and GLENN I. BARRETT, JR., an individual resident of the State of North Carolina ("SELLER") and a stockholder and the President and Chief Executive Officer of LST, INC., a Delaware corporation d/b/a LifeStyle Technologies ("LST"). WHEREAS, Seller is the record and beneficial owner of Two Million Two Hundred and Fifty Thousand (2,250,000) shares ("LST SHARES") of LST's common stock, par value $.001 per share ("LST COMMON STOCK"), representing approximately 28% of the issued capital stock of LST; and WHEREAS, Seller desires to sell the LST Shares to Purchaser, and Purchaser desires to purchase the LST Shares, upon the terms and conditions set forth herein. NOW, THEREFORE in consideration of the mutual promises and covenants contained herein, and for other good valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, and subject to the accuracy of the representations and warranties of the parties, the parties hereto agree as follows: I. SALE AND PURCHASE OF THE LST SHARES 1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the Closing (as defined in Section 1.2 hereof), Seller agrees to sell, assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase from Seller, the LST Shares. 1.2 CLOSING. The purchase shall be consummated at a closing ("CLOSING") to take place at the offices of Purchaser on the date and time on which the last of the conditions specified in Articles IV and V hereof have been satisfied or waived, or such other place, time or date as may be mutually agreed upon by the parties hereto. 1.3 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the LST Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value $.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's Share being equal to the average for the five (5) trading days immediately preceding the Closing Date of the daily closing price of eRCG Common Stock as reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided, however, that if the Average Share Price is less than One Dollar ($1.00), then the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of calculating the Purchase Price due Seller. The Purchase Price shall be paid at Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller receiving cash in lieu of any fractional eRCG Share that Seller may be entitled to receive pursuant to this Section 1.3. Purchaser will give stop transfer instructions to its transfer 5 agent with respect to the eRCG Shares and there will be placed on the certificate(s) representing such eRCG Shares a restrictive legend. 1.4 RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange, each certificate representing LST Shares shall from and after the Closing represent for all purposes only the right to receive the Purchase Price. Seller will not be entitled to vote or give its consent after the Closing at any meeting or action by written consent of Purchaser's stockholders until it has exchanged its certificates representing the LST Shares for certificates representing the eRCG Shares. 1.5 PORTION OF ERCG SHARES CONTINGENT; SALE OF ERCG SHARES. (a) Notwithstanding Section 1.3 hereof, the delivery by Purchaser to Seller of One Million (1,000,000) eRCG Shares that Seller is entitled to receive pursuant to such Section 1.3 (the "CONTINGENT CONSIDERATION") is contingent upon LST meeting or exceeding the specified performance milestones at specified milestone dates through March 31, 2002 as set forth in Exhibit 1.5 attached hereto. Provided LST meets all the performance milestones, the Contingent Consideration shall be payable in equal installments set forth on Exhibit 1.5 attached hereto that correspond with each performance milestone within thirty (30) days of Purchaser's receipt and confirmation of financial statements and reasonable supporting documentation from LST (the "CONTINGENT PAYMENT DATE ") associated with such performance milestone. If LST does not meet a specified performance milestone, then Purchaser is not obligated to deliver to Seller the Contingent Consideration installment on the specified milestone date. However, the performance milestones are cumulative in nature, and, therefore, if LST does not meet an earlier performance milestone but does meet a subsequent performance milestone, then, upon the Contingent Payment Date corresponding to the subsequent performance milestone, Purchaser shall deliver to Seller the installment of Contingent Consideration for the performance milestone that LST met as well as the installment of Contingent Consideration for the earlier performance milestone that LST failed to meet. (b) Seller hereby agrees that for a period commencing on the Closing and ending on the three (3) year anniversary thereof, the number of shares of eRCG Common Stock sold by or for the account of Seller (whether or not (i) such shares are now owned by Seller or are acquired by Seller after the date hereof or (ii) such shares are restricted or unrestricted securities under applicable securities laws) on any day (the "SALES DATE") shall not exceed ten percent (10%) of the average five (5) day reported volume of trading of eRCG's Common Stock on all national securities exchanges and/or reported through the automated evaluation system of a registered securities association preceding the Sales Date. SELLER EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE OTHER STOCKHOLDERS OF LST ARE NOT SUBJECT TO THE PROVISIONS OF THIS SECTION 1.5 OR CERTAIN OTHER PROVISIONS OF THIS AGREEMENT. 1.6 OTHER AGREEMENTS. At the Closing, the indicated parties shall deliver the following additional agreements: 2 6 (a) Seller shall deliver to Purchaser stock certificate(s) representing all of the LST Shares held by Seller, duly endorsed to Purchaser in blank or accompanied by duly executed stock power(s), transferring such LST Shares from Seller to Purchaser; (b) Seller shall deliver to Purchaser an executed counterpart signature page to the Investment Representation Agreement, substantially in the form attached hereto as Exhibit 1.5(b); (c) Seller and LST shall each deliver an executed counterpart signature page to the Employment and Non-competition Agreement, substantially in the form attached hereto as Exhibit 1.6(c); and (d) Purchaser and Seller shall each deliver an executed counterpart signature page to the Registration Rights Agreement, substantially in the form attached hereto as Exhibit 1.5(c). 1.7 BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and other agreements listed in paragraph 1.6, are sometimes referred to as the "Basic Agreements." The transaction contemplated by the Basic Agreement and the agreements with the other stockholders of LST are sometimes referred to as the "Transaction". II. REPRESENTATIONS AND WARRANTIES 2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. With such exceptions, if any, as may be set forth in a letter (the "SELLER DISCLOSURE LETTER") to be delivered by Seller to Purchaser on the date hereof, Seller represents and warrants to Purchaser as follows: (a) TITLE TO THE LST SHARES. At Closing, Seller shall own of record and beneficially the LST Shares free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the LST Shares to Purchaser. No person has any preemptive rights or rights of first refusal with respect to any of the LST Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the LST Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the LST Shares. (b) AUTHORITY; CONSENTS. Seller has full power and lawful authority to execute and deliver the Basic Agreements and the Seller Disclosure Letter and to consummate and perform the Transaction contemplated thereby. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations of Seller, enforceable in accordance with their terms. To Seller's knowledge, neither the execution and delivery of the Basic Agreements and the Seller Disclosure Letter by Seller, nor the consummation and performance of the Transaction, conflicts with, requires 3 7 the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Seller is a party or by which Seller or any of its properties or assets are bound or affected. Seller need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the Transaction. (c) NONCONTRAVENTION. Neither the execution and the delivery of the Basic Agreements and Seller Disclosure Letter, nor the consummation of the Transaction, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject. (d) NO STOCK OPTIONS. Seller has no stock options, warrants, rights, calls or any other agreements of any character, whether oral or written, obligating LST to issue any shares of its capital stock. (e) NO EMPLOYMENT AGREEMENT. Seller does not have an employment agreement, letter or other agreement with LST with respect to employment. (f) DISCLOSURE. All statements of Seller contained in the Basic Agreements and in the Seller Disclosure Letter by and on behalf of Seller and LST are true and correct in all material respects and do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Seller, which could have a materially adverse effect upon the business, financial condition, results of operations, assets, liabilities, or prospects of LST, which have not been disclosed to Purchaser in the Basic Agreements or Seller Disclosure Letter. 2.2 REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller represents and warrants to Purchaser as follows: (a) ORGANIZATION. LST is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. LST has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. LST is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of LST consists of 20,000,000 shares of common stock, par value $.001 per share, of which 8,099,750 shares have been issued and are outstanding. LST has no other capital stock authorized, issued or outstanding and there are no shares of stock held in treasury. The outstanding shares of LST Common Stock have been duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof 4 8 and were offered, issued, sold and delivered by LST in compliance with all applicable state and federal laws. Except as set forth on Schedule 2.2(b) of the Seller Disclosure Letter, LST does not have any outstanding rights, options, warrants, calls, commitments, conversion or any other agreements of any character, whether oral or written, obligating it to issue any shares of its capital stock, whether authorized or not. LST is not a party to and is not bound by any agreement, contract, arrangement or understanding, whether oral or written, giving any person or entity any interest in, or any right to share, participate in or receive any portion of LST's income, profits or assets, or obligating LST to distribute any portion of its income, profits or assets. (c) CONSENTS. Except as set forth on Schedule 2.2(c) of the Seller Disclosure Letter, to Seller's knowledge, the consummation and performance of the Transaction (i) does not conflict with, require the consent, waiver or approval of, result in a breach of or default under or give to others any interest or rights of termination, cancellation or acceleration in or with respect to, any agreement by which LST is a party or LST or any of its properties or assets are bound or affected, and (ii) will not result in the imposition of any claim, lien, encumbrance or restriction of any kind upon the assets of LST. (d) LST FINANCIAL STATEMENTS. The financial statements of LST (the "LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of the Seller Disclosure Letter are complete, were prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods and fairly present the financial position of LST as of December 31, 2000 and there have been no material changes thereafter. (e) COMPLIANCE WITH LAWS. LST is not in violation of any federal, state, local or other law, ordinance, rule or regulation applicable to its business, and has not received any actual or threatened complaint, citation or notice of violation or investigation from any governmental authority. (f) NO LITIGATION. There are no actions, suits, claims, complaints or proceedings pending or threatened against LST, at law or in equity, or before or by any governmental department, commission, court, board, bureau, agency or instrumentality; and there are no facts which would provide a valid basis for any such action, suit or proceeding. There are no orders, judgments or decrees of any governmental authority outstanding which specifically apply to LST or any of its assets. (g) MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller Disclosure Letter sets forth a list of all material contracts of LST. LST has in all material respect performed all of its obligations required to be performed by it through the date hereof, and is not in default or alleged to be in default in any material respect, under any contract, including any leases for office space, and to Seller's knowledge, there exists no event, condition or occurrence which, after notice or lapse of time or both, constitutes such a default. (h) EMPLOYMENT MATTERS. LST is not a party to any employment agreements, letters or other agreements with any individual with respect to his or her employment with LST. Schedule 2.2(h) of the Seller Disclosure Letter sets forth a 5 9 complete and accurate list of employees and each employee's rate of compensation (including wages and guaranteed or anticipated bonuses). LST is not subject to any labor disputes. (i) NO UNDISCLOSED LIABILITIES. Except as set forth in LST Financial Statements, Seller is not aware of any material liabilities for which LST is currently liable or will become liable in the future. (j) TAXES. LST has timely filed all federal, state, local and foreign tax returns and tax reports required to be filed with the appropriate governmental agency in all jurisdictions in which such returns and reports are required to be filed, excepting only those taxes which will not be due until after the Closing. All such returns and reports are true, correct and complete, and all amounts shown as owing on them have been paid, including all interest, penalties, deficiencies and assessments heretofore levied or assessed against LST. There is no agreement for extension of time of payment of any taxes of LST. There is no examination or audit pending or threatened by the Internal Revenue Service or by any state or local taxing authority with respect to tax matters of LST. (k) REAL PROPERTY. LST does not own any real property. (l) INSURANCE. A complete and accurate list of all insurance policies held by LST and now in force (including insurance policies covering the assets, business, equipment, properties, employees, officers and directors of LST) are set forth in Schedule 2.2(l) of the Seller Disclosure Letter and are of the type and in amounts customarily carried by persons conducting businesses similar to those of LST. There is no material claim by LST pending under any of the insurance policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies. (m) INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller Disclosure Letter sets forth a complete and accurate list of and describes all franchises, licenses, patents, patent applications, trademarks, service marks, trade names, copyrights and rights with respect to any of the foregoing (collectively, "INTELLECTUAL PROPERTY RIGHTS") presently owned or held by LST. LST owns the right to use all of the Intellectual Property Rights. The Intellectual Property Rights are all that are necessary for LST to conduct its business. No event has occurred which permits, or after notice or lapse of time would permit, the revocation or termination of any of the Intellectual Property Rights. LST has no reason to believe that it is infringing, nor has it received notice with respect to the infringement or possible or claimed infringement, upon, or, that it is otherwise acting adversely to, any known right or claimed right of any person with respect to any Intellectual Property Rights. (n) BENEFIT PLANS. Schedule 2.2(n) of the Seller Disclosure Letter sets forth a complete and accurate list of all of the employee benefit plans that LST maintains or contributes to, or has maintained or to which it has made contributions (including any terminated employee benefit plans). LST does not have any obligation under any 6 10 employee benefit plans other than those identified on Schedule 2.2(n), and LST is in compliance with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all employee benefit plans. The execution and deliver of this Agreement and the consummation of the Transaction will not result in any violations of ERISA or any other laws related thereto. (o) ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts receivable of LST represent in all material respects sales made in the ordinary course of business. Schedule 2.2(o) of the Seller Disclosure Letter sets forth LST's top 20 customers by billings and/or revenues received. Seller has no knowledge of any oral or written notice or other indication from any customer stating that it intends to terminate its business relationship with LST or reduce the amount of business it does with LST. 2.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. With such exceptions, if any, as may be set forth in a letter (the "PURCHASER DISCLOSURE LETTER") to be delivered by Purchaser to Seller on the date hereof, Purchaser represents and warrants to Seller as follows: (a) ORGANIZATION. Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. Purchaser is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of Purchaser consists of Two Hundred Million (200,000,000) shares of common stock, of which 61,687,654 shares have been issued and are outstanding as of March 7, 2001, and 10,000,000 shares of preferred stock, none of which are issued or outstanding. In addition, Purchaser, as of March 7, 2001, has outstanding warrants and options to purchase 27,380,120 shares of the eRCG Common Stock. At Closing, all issued and outstanding stock of Purchaser, including the eRCG Shares, will have been duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof. Seller will receive all right, title and interest to eRCG Shares free and clear of all liens, pledges, mortgages, security interests and claims whatsoever, except those imposed by state and federal securities laws. (c) AUTHORITY; CONSENTS. Purchaser has full power and lawful authority to execute and deliver the Basic Agreements and the Purchaser Disclosure Letter and to consummate and perform the Transaction. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations of Purchaser, enforceable in accordance with their terms. To Purchaser's knowledge, neither the execution and delivery of the Basic Agreements and the Purchaser Disclosure Letter by Purchaser, nor the consummation and performance of the Transaction, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with 7 11 respect to, any agreement by which Purchaser is a party or by which Purchaser or any of its properties or assets are bound or affected. (d) INVESTMENT INTENT. Purchaser is acquiring the LST Shares for its own account, for investment purposes only, and not with a view to the sale or distribution of any part thereof and Purchaser has no present intention of selling, granting participation in, or otherwise distributing the same. Purchaser understands the specific risks related to an investment in the LST Shares, especially as it relates to the financial performance of LST. (e) FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. Purchaser has filed all material reports, schedules, forms, statements and other documents with the Securities and Exchange Commission (the "SEC") pursuant to applicable state and federal securities laws through the date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute all material documents required to have been filed by Purchaser pursuant to such laws. (f) DISCLOSURE. All statements of Purchaser contained in the Basic Agreements and in the Purchaser Disclosure Letter by or on behalf of Purchaser are true and correct in all material respects and, when considered in conjunction with the SEC Documents, do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Purchaser which could have a material adverse affect upon the business, financial condition, results of operations, assets or liabilities of Purchaser, which have not been disclosed to Seller in the Basic Agreements, the Purchaser Disclosure Letter or the SEC Documents. III. COVENANTS 3.1 MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and to the best of Seller's ability, each covenant and agree that from the date hereof until Closing each shall: (a) ORDINARY COURSE OF BUSINESS. Operate its business only in the ordinary course and use its best efforts to preserve its business, properties, assets, contracts, organization, goodwill and relationships with persons with whom it has business dealings. (b) NO INDEBTEDNESS. Not create, incur, assume, guarantee or otherwise become liable with respect to any obligation for borrowed money, indebtedness, capitalized lease or similar obligation, except in the ordinary course of business consistent with past practices where the entire net proceeds thereof are deposited with and used by and in connection with the business. 8 12 (c) MAINTAIN BOOKS. Maintain its books, accounts and records in the usual, regular and ordinary business manner and in accordance with generally accepted accounting principles applied on a basis consistent with past practices. (d) NO AMENDMENTS. (i) Not amend its corporate charter or bylaws (or similar documents) or material contracts, and (ii) maintain its corporate existence, licenses, permits, powers and rights in full force and effect. (e) TAXES AND ACCOUNTING MATTERS. (i) File when due all federal, state and local tax returns and reports which shall be accurate and complete, including, but not limited to, income, franchise, excise, ad valorem, and other taxes with respect to its business and properties, and to pay as they become due all taxes or assessments, except for taxes for which adequate reserves are established and which are being contested in good faith by appropriate proceedings, and (ii) not change its accounting methods or practices or any depreciation, amortization or inventory valuation policies or practices. (f) DUE COMPLIANCE. Comply in all material respects with all laws, regulations, rules and ordinances applicable to it and to the conduct of its business. (g) CONSENTS. Use its best efforts to obtain the consent or approval of each person or entity whose consent or approval is required for the consummation of the Transactions. (h) EFFORTS TO CONSUMMATE. Subject to the terms and conditions of this Agreement, use its reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper and advisable under applicable laws to consummate and make effective, as soon as practicable after the date of this Agreement, the Transaction. 3.2 SELLER'S COVENANTS. Seller, on behalf of LST and to the best of Seller's ability, covenants and agrees from the date hereof until Closing, LST shall: (a) COMPENSATION. Not (i) enter into or alter any employment agreements, (ii) grant any severance or increase in compensation other than normal merit increases consistent with its general prevailing practices to any officer or employee, (iii) enter into or alter any labor or collective bargaining agreement or any bonus or other employee fringe benefit, or (iv) adopt or amend any employee stock option plan. (b) NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS. Not to (i) issue any shares of any class of capital stock, or enter into any contract, option, warrant or right calling for the issuance of any such shares of capital stock, or create or issue any securities convertible into any securities, (ii) accelerate or amend the period of exercisability of warrants or restricted stock or reprice any warrants or authorize cash payments in exchange for any warrants, or (iii) declare or pay any dividends on or make any other distributions in any form in respect of capital stock, or split, combine or 9 13 reclassify any capital stock. 3.3 NO SHOP. Seller agrees to, and to the best of Seller's ability shall cause LST to, negotiate exclusively with Purchaser and not to solicit, negotiate, enter into any agreement or entertain other offers or alternative proposals for the LST Shares or the acquisition of Seller, its assets or stock from the date hereof until the earlier of (i) termination of this Agreement or (ii) August 31, 2001. 3.4 PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of Seller's ability shall cause LST not to, without the prior written consent of Purchaser, make any announcement, issue any press release or make any statement to any third party with respect to the Transaction except as may be necessary to comply with any law, regulation or order and then only after prior notice to Purchaser as to the content of such announcement. 3.5 CONFIDENTIALITY. Seller agrees to, and to the best of Seller's ability shall cause LST to, maintain the confidentiality of all confidential information furnished to it related to Purchaser and shall not use or disclose such information for any purpose, except in furtherance of the Transaction. 3.6 INDEMNIFICATION. (a) OBLIGATIONS. Seller shall indemnify, reimburse and hold harmless Purchaser, its affiliates and any successor or assigns (the "INDEMNIFIED PERSONS") for any and all direct or indirect claims, losses, liabilities (actual or contingent), damages (including special and consequential damages), costs (including court costs) and expenses (including all attorneys' and accountants' fees and expenses on a full indemnity basis) (hereinafter "A LOSS" or "LOSSES"), as a result of or in connection with (i) any breach, inaccuracy or untruth of any warranty, whether such breach, inaccuracy or untruth exists or is made on the date of this Agreement or as of the Closing, (ii) any breach of or noncompliance by Seller with any covenant or agreement of Seller contained in this Agreement or in any other agreement or instrument delivered in connection with this Agreement, or (iii) the sale of any capital stock or other securities of LST including, without limitation, the sale of LST Common Stock pursuant to that certain Private Placement Memorandum dated July 15, 2000 (the "LST PRIVATE PLACEMENT MEMORANDUM"). (b) NOTIFICATION. Seller hereby undertakes to notify Purchaser without delay of the occurrence of any event which constitutes or may with the passage of time constitute an event entitling any Indemnified Person to indemnification under this Section. 10 14 (c) NOTICE OF CLAIM. To seek indemnification hereunder, an Indemnified Person shall notify Seller of any claim for indemnification, specifying in reasonable detail the nature of the Loss and the amount or an estimate of the amount thereof. (d) DEFENSE OF CLAIMS. Seller shall have the right to undertake by counsel of its own choosing, the defense of a claim by a third party which has resulted in a claim for indemnification hereunder. If Seller shall elect not to undertake such defense, or within a reasonable time after notice of any such claim from the Indemnified Persons shall fail to defend in a reasonable manner, the Indemnified Persons (upon further written notice to Seller) shall have the right to undertake the defense, compromise or settlement of such claim, by counsel or other representatives of their own choosing, on behalf of and for the account and risk of Seller (subject to the right of Seller to assume defense of such claim at any time prior to settlement, compromise or final determination thereof). Notwithstanding anything to the contrary herein, if there is a reasonable probability that a claim may materially and adversely affect the Indemnified Persons, other than as a result of money damages or other money payments, (i) all Indemnified Persons shall have the right, at their own cost and expense, to participate in the defense, compromise or settlement of the claim, (ii) Seller shall not, without all Indemnified Persons' written consent, settle or compromise any claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to all Indemnified Persons of a release from all liability in respect of such claim, and (iii) in the event that Seller undertakes defense of any claim, the Indemnified Persons, by counsel or other representatives of their own choosing and at their sole cost and expense, shall have the right to consult with Seller and its counsel concerning such claim and Seller and the Indemnified Persons and their respective counsel or other representatives shall cooperate with respect to such claim. (e) RIGHT OF RECOUPMENT AND SET OFF. (i) Liquidated Losses; Set Off. Purchaser will be entitled at any time prior to March 31, 2002 to set off or recoup any Loss that has been actually incurred by or imposed upon Indemnified Parties (a "LIQUIDATED LOSS") against the Contingent Consideration (a "SET OFF"). Prior to or concurrently with each exercise by Purchaser of its right of Set Off, Purchaser will deliver a written notice to Seller (the "SET OFF NOTICE"), which notice will set forth the amount of the Liquidated Loss, together with a reasonably detailed statement of the circumstances under which such Liquidated Loss was incurred by or imposed upon the applicable Indemnified Party and the total of all Liquidated Losses that have been Set Off by Purchaser through the date of the Set Off Notice. (ii) Unliquidated Losses; Set Off Reserves. (1) Establishment of Set Off Reserves. At any time prior to March 31, 2002, if and to the extent that Purchaser reasonably determines that it is reasonably likely that any Loss that has not yet become a Liquidated Loss (an "UNLIQUIDATED LOSS") will be incurred by or imposed upon an Indemnified Party 11 15 at any time in the future with respect to any claim of which Purchaser has notice prior to March 31, 2002, Purchaser will be entitled to establish a reasonable reserve (a "SET OFF RESERVE") against the Contingent Consideration in respect or such Unliquidated Loss. Purchaser will take into consideration the availability of insurance coverage for any Unliquidated Loss in establishing any Set Off Reserve. (2) Set Off Reserve Notice. Prior to or concurrently with the establishment of a Set Off Reserve, Purchaser will deliver a written notice to Seller (the "SET OFF RESERVE NOTICE"), which notice will set forth the amount of the Unliquidated Loss, together with a reasonably detailed statement of the basis for Purchaser's determination that such Unliquidated Loss is reasonably likely to be incurred by or imposed upon the applicable Indemnified Party and the total of all Set Off Reserves through the date of the Set Off Reserve Notice. (3) Suspension of Obligations. The obligation of Purchaser to pay the Contingent Consideration to the Seller, as provided in Section 1.5 hereof, will be suspended to the extent of the aggregate amount of all Set Off Reserves not settled pursuant to Section 3.6(e)(ii)(4) hereof at the time of such payment; provided, however, that Purchaser shall at all times work diligently and in good faith to resolve any claims to which the Set Off Reserve relates. (4) Settlement of Set Off Reserves. If at any time it is determined that any Set Off Reserve exceeds the aggregate amount of the Losses ultimately incurred by or imposed upon the Indemnified Parties as a result of or based upon the events or conditions to which the Set Off Reserve relates (the "FINAL LOSS AMOUNT"), Purchaser will promptly pay to the Sellers the amount of such Set Off Reserve in excess of such Final Loss Amount. (iii) Good Faith Exercise; No Breach. Purchaser will act in good faith in the exercise of its rights under Section 3.6(e) hereof. It is expressly agreed that the exercise in good faith by Purchaser of the right to Set Off and to establish Set Off Reserves and the other rights and remedies granted to Purchaser pursuant to Section 3.6(e) hereof will in no event be deemed to constitute or give rise to a violation or breach of, or a default under, this Agreement. (iv) Non-Exclusive Source. The Contingent Consideration shall serve as a non-exclusive source for any claims of Purchaser for indemnification pursuant to Section 3.6 hereof. (f) OTHER RIGHTS. The indemnities granted hereunder are in addition to and not in substitution for any other right or remedy an Indemnified Person may now have or may subsequently take or hold, and may be enforced without first recourse to such other right or remedy and without taking any steps or proceedings in connection therewith, and notwithstanding any rule of law or equity or statutory 12 16 provision to the contrary. IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE The obligation of Purchaser to close the Transaction is subject to the fulfillment prior to the Closing of each of the following conditions, which may be waived in whole or in part by Purchaser: 4.1 COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties of Seller contained in Sections 2.1 and 2.2 hereof shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing with the same force and effort as if made at the Closing. Seller shall have performed in all material respects all agreements, covenants and conditions required to be performed by Seller prior to the Closing. 4.2 NO ADVERSE CHANGE. There shall have been no event, which has had or may have a material adverse effect upon the business, financial condition, results of operation, assets, liabilities or prospects of LST. 4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceeding before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transaction. 4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the following documents: (a) Stock certificate(s) representing all of the LST Shares held by Seller, duly endorsed to Purchaser in blank or accompanied by duly executed stock powers; (b) All agreements referred to in Section 1.6 hereof, executed by all parties thereto other than Purchaser; (c) Waiver of LST's right of first refusal under Stockholders' Agreement; (d) Legal opinion of counsel to LST, in a form acceptable to Purchaser; and (e) Such other documents or certificates as shall be reasonably required by Purchaser or its counsel in order to close and consummate the Transaction. 4.5 CONSENTS. (a) BY PURCHASER. Purchaser's Board of Directors shall have approved and taken all necessary corporate action to execute, deliver and perform the Basic 13 17 Agreements, the Purchaser Disclosure Letter and consummate the Transaction. (b) BY LST. LST shall have delivered to Purchaser any and all consents, waivers or approvals of any government, government agency or other third party necessary to the consummation and performance of the Transaction. 4.6 LISTING OF ERCG SHARES. The eRCG Shares to be issued in connection with the Transaction shall be listed for trading on the American Stock Exchange. 4.7 AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article X of that certain LST, Inc. Omnibus Stock Option and Award Plan dated September 29, 2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change of Control" (as defined in the Stock Option Plan) all outstanding options shall be cancelled and any vested, but unexercised options shall no longer be exercisable. 4.8 CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled any and all outstanding options, whether granted pursuant to the Stock Option Plan or otherwise, and any vested but unexercised options shall no longer be exercisable. 4.9 SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding one hundred percent (100%) of the issued and outstanding LST Common Stock shall have entered into stock purchase agreements with Purchaser similar to this Agreement and the other agreements set forth in Section 1.6 hereof. 4.10 CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold 2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00) per share pursuant to the terms of the LST Private Placement Memorandum. 4.11 INVESTIGATION. Purchaser shall have satisfactory completed its due diligence investigation of LST. No investigation by Purchaser shall affect the representations and warranties of Seller. V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE The obligation of Seller to close the Transaction is subject to the fulfillment prior to Closing of each of the following conditions, which may be waived in whole or in part by Seller: 5.1 COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties made by Purchaser in Section 2.3 of this Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects at the Closing with the same force and effect as if made at the Closing. Purchaser shall have performed in all material respects all agreements, covenants and conditions required to be performed by Purchaser prior to the Closing. 14 18 5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceedings before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transaction. 5.3 OTHER AGREEMENTS. Purchaser shall have executed and delivered all agreements referred to in Section 1.6 hereof, to be executed by the Purchaser. 5.4 PAYMENTS. Seller shall have received from Purchaser all of eRCG Shares and cash in lieu of any fractional eRCG Share that Seller is entitled to receive pursuant to the Basic Agreements. VI. TERMINATION 6.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the purchase of the LST Shares may be abandoned before the Closing by: (a) The mutual consent of Seller and Purchaser; (b) Purchaser, if the conditions precedent set forth in Article IV hereof shall have not have been satisfied on or before the Closing Date (as the same may be extended from time to time); and (c) Seller, if the conditions precedent set forth in Article V hereof shall not have been satisfied on or before the Closing Date (as the same may be extended from time to time). Termination shall be effective on the date of receipt of written notice specifying the reasons therefor. Termination shall not relieve any party from liability for any willful breach of this Agreement. VII. MISCELLANEOUS 7.1 SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4 and 3.5 and Article VII hereof, which shall survive the Closing or termination hereof for a period of two (2) years, none of the representations and warranties contained in this Agreement or in any certificate, exhibit or other document delivered pursuant to this Agreement shall survive the Closing. 7.2 BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on behalf of the parties pursuant thereto, constitute the entire agreement between the parties. The terms and conditions of the Basic Agreements shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties hereto. Nothing in the Basic Agreements, expressed or implied, confers any rights or remedies upon any party other than the parties hereto 15 19 and their respective heirs, legal representatives, successors and assigns. 7.3 GOVERNING LAW. The Basic Agreements and the other instruments delivered by or on behalf of the parties pursuant hereto are made pursuant to, and will be construed under, the laws of the State of Delaware, without regard to its conflicts of law principles. 7.4 NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and will be deemed to have been duly given when personally delivered, delivered by a nationally recognized overnight delivery service, sent via facsimile transmission (receipt confirmed), or three (3) business days after it is deposited in the United States mail, certified or registered, return receipt requested, postage prepaid, to: (a) If to Seller to: Glenn I. Barrett, Jr. c/o LST, Inc. 6201 Fairview Road, Suite 200 Charlotte, NC 28210 Telephone: (704) 401-3377 Fax: (704) 401-3333 (b) If to Purchaser, to: eResource Capital Group, Inc. 5935 Carnegie Boulevard, Suite 101 Charlotte, NC 28209 Attention: Melinda Morris Zanoni, Executive Vice President Telephone: (704) 553-9330 Fax: (704) 553-7136 These addresses may be changed from time to time by like written notice to the other party. 7.5 HEADINGS. The headings contained in this Agreement are for reference only and will not affect in any way the meaning or interpretation of this Agreement. 7.6 SEVERABILITY. If any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable under applicable law, then this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. The remaining provisions of this Agreement shall be given effect to the maximum extent then permitted by law. 7.7 EXPENSES. Each party shall pay all fees and expenses incurred by it incident to this Agreement and in connection with the consummation of the Transaction. 16 20 7.8 INTEGRATION; INTERPRETATION. The Basic Agreements and all documents and instruments executed pursuant hereto merge and integrate all prior agreements and representations respecting the Transaction, whether written or oral, and constitute the sole agreement of the parties in connection therewith. This Agreement has been negotiated by and submitted to the scrutiny of both Seller and Purchaser and their counsel and shall be given a fair and reasonable interpretation in accordance with the words hereof, without consideration or weight being given to its having been drafted by either party hereto or its counsel. 7.9 AMENDMENTS. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto. 7.10 VARIATION OF PRONOUNS. All pronouns and any variations thereof shall be deemed to reflect masculine, feminine, or neuter, singular or plural, as the identity of the person or entity may require. 7.11 WAIVERS. Purchaser and Seller may, in writing, amend the time for or waive compliance by the other with any of the covenants or conditions of the other contained herein. Failure to pursue any legal or equitable remedy or right available to a party shall not constitute a waiver of such right, nor shall any such forbearance, failure or actual waiver imply or constitute waiver of subsequent default or breach. 7.12 COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be executed in counterparts (whether by facsimile or otherwise), each of which will be deemed an original and all of which together will constitute one instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 17 21 IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this Agreement, or caused this Agreement to be duly executed, on the date first written above. PURCHASER: ERESOURCE CAPITAL GROUP, INC. BY: ----------------------------------------- MELINDA MORRIS ZANONI ITS: EXECUTIVE VICE PRESIDENT SELLER: -------------------------------------------- GLENN I. BARRETT, JR. 18 EX-2.3 4 g68642ex2-3.txt STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.3 =============================================================================== STOCK PURCHASE AGREEMENT ENTERED INTO MARCH ____, 2001 BETWEEN ERESOURCE CAPITAL GROUP, INC. AND BRANDON HOLDINGS, INC. =============================================================================== 2 TABLE OF CONTENTS ARTICLE I. SALE AND PURCHASE OF THE LST SHARES................................................. 1 1.1 Sale and Purchase................................................................... 1 1.2 Closing............................................................................. 1 1.3 Purchase Price...................................................................... 1 1.4 Rights of Former Stockholders....................................................... 2 1.5 Other Agreements.................................................................... 2 1.6 Basic Agreements and Transaction Defined............................................ 2 1.7 Portion of eRCG Shares Contingent; Sale of eRCG Shares.............................. 2 ARTICLE II. REPRESENTATIONS AND WARRANTIES...................................................... 3 2.1. Representations and Warranties of Seller............................................ 3 2.2. Representations and Warranties Concerning LST....................................... 4 2.3. Representations and Warranties of Purchaser......................................... 7 ARTICLE III. COVENANTS........................................................................... 8 3.1. Mutual Covenants.................................................................... 8 3.2. Seller's Covenants.................................................................. 9 3.3. No Shop............................................................................. 9 3.4. Public Announcements................................................................ 10 3.5. Confidentiality..................................................................... 10 ARTICLE IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE............................................................................ 10 4.1. Compliance with Seller's Representations, Warranties and Covenants.................. 10 4.2. No Adverse Change................................................................... 10 4.3. No Legal Proceedings................................................................ 10 4.4 Documents to be Delivered by Seller................................................. 10 4.5 Consents............................................................................ 11 4.6 Listing of eRCG Shares.............................................................. 11 4.7 Amendment of Stock Option Plan...................................................... 11 4.8 Cancellation of Outstanding Options................................................. 11 4.9 Sale by Other LST Stockholders...................................................... 11 4.10 Consummation of Private Placement by LST............................................ 11 4.11 Investigation....................................................................... 11 ARTICLE V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE.......................... 12 5.1. Compliance with Purchaser's Representations, Warranties and Covenants............... 12 ii 3 5.2. No Legal Proceedings................................................................ 12 5.3. Other Agreements.................................................................... 12 5.4. Payments............................................................................ 12 ARTICLE VI. TERMINATION......................................................................... 12 6.1. Termination and Abandonment......................................................... 12 ARTICLE VII. MISCELLANEOUS....................................................................... 13 7.1. Survival............................................................................ 13 7.2. Binding Effect of the Basic Agreements; No Third Party Beneficiaries................ 13 7.3. Governing Law....................................................................... 13 7.4. Notices............................................................................. 13 7.5. Headings............................................................................ 14 7.6. Severability........................................................................ 14 7.7. Expenses............................................................................ 14 7.8. Integration; Interpretation......................................................... 14 7.9. Amendments.......................................................................... 14 7.10. Variation of Pronouns............................................................... 14 7.11 Waivers............................................................................. 14 7.12. Counterparts; Facsimile Signatures.................................................. 15 iii 4 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation ("PURCHASER"), and BRANDON HOLDINGS, INC., a Delaware corporation ("SELLER") and a stockholder of LST, INC., a Delaware corporation d/b/a LifeStyle Technologies ("LST"). WHEREAS, Seller is the record and beneficial owner of Two Million Four Hundred Fifty Thousand (2,450,000) shares ("LST SHARES") of LST's common stock, par value $.001 per share ("LST COMMON STOCK"), representing approximately 29% of the issued capital stock of LST; and WHEREAS, Seller desires to sell the LST Shares to Purchaser, and Purchaser desires to purchase the LST Shares, upon the terms and conditions set forth herein. NOW, THEREFORE in consideration of the mutual promises and covenants contained herein, and for other good valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, and subject to the accuracy of the representations and warranties of the parties, the parties hereto agree as follows: I. SALE AND PURCHASE OF THE LST SHARES 1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at the Closing (as defined in Section 1.2 hereof), Seller agrees to sell, assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase from Seller, the LST Shares. 1.2 CLOSING. The purchase shall be consummated at a closing ("CLOSING") to take place at the offices of Purchaser on the date and time on which the last of the conditions specified in Articles IV and V hereof have been satisfied or waived, or such other place, time or date as may be mutually agreed upon by the parties hereto. 1.3 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the LST Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value $.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's Share being equal to the average for the five (5) trading days immediately preceding the Closing Date of the daily closing price of eRCG Common Stock as reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided, however, that if the Average Share Price is less than One Dollar ($1.00), then the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of calculating the Purchase Price due Seller. The Purchase Price shall be paid at Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller receiving cash in lieu of any fractional eRCG Share that Seller may be entitled to receive pursuant to this Section 1.3. Purchaser will give stop transfer instructions to its transfer agent with respect to the eRCG Shares and there will be placed on the certificate(s) representing such eRCG Shares a restrictive legend. 5 1.4 RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange, each certificate representing LST Shares shall from and after the Closing represent for all purposes only the right to receive the Purchase Price. Seller will not be entitled to vote or give its consent after the Closing at any meeting or action by written consent of Purchaser's stockholders until it has exchanged its certificates representing the LST Shares for certificates representing the eRCG Shares. 1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall deliver the following additional agreements: (a) Seller shall deliver to Purchaser stock certificate(s) representing all of the LST Shares held by Seller, duly endorsed to Purchaser in blank or accompanied by duly executed stock power(s), transferring such LST Shares from Seller to Purchaser; (b) Seller shall deliver to Purchaser an executed counterpart signature page to the Investment Representation Agreement, substantially in the form attached hereto as Exhibit 1.5(b); and (c) Purchaser and Seller shall each deliver an executed counterpart signature page to the Registration Rights Agreement, substantially in the form attached hereto as Exhibit 1.5(c). 1.6 BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and other agreements listed in paragraph 1.5, are sometimes referred to as the "Basic Agreements." The transaction contemplated by the Basic Agreement and the agreements with the other stockholders of LST are sometimes referred to as the "Transaction". 1.7 PORTION OF ERCG SHARES CONTINGENT; SALE OF ERCG SHARES. (a) Notwithstanding Section 1.3 hereof, the delivery by Purchaser to Seller of One Million (1,000,000) eRCG Shares that Seller is entitled to receive pursuant to such Section 1.3 (the "CONTINGENT CONSIDERATION") is contingent upon LST meeting or exceeding the specified performance milestones at specified milestone dates through March 31, 2002 as set forth in Exhibit 1.7 attached hereto. Provided LST meets all the performance milestones, the Contingent Consideration shall be payable in equal installments set forth on Exhibit 1.7 attached hereto that correspond with each performance milestone within thirty (30) days of Purchaser's receipt and confirmation of financial statements and reasonable supporting documentation from LST (the "CONTINGENT PAYMENT DATE") associated with such performance milestone. If LST does not meet a specified performance milestone, then Purchaser is not obligated to deliver to Seller the Contingent Consideration installment on the specified milestone date. However, the performance milestones are cumulative in nature, and, therefore, if LST does not meet an earlier performance milestone but does meet a subsequent performance milestone, then, upon the Contingent Payment Date corresponding to the subsequent performance milestone, Purchaser shall deliver to Seller the installment of Contingent Consideration for the performance milestone that LST met as well as the installment of Contingent Consideration for the earlier performance 2 6 milestone that LST failed to meet. (b) Seller hereby agrees that for a period commencing on the Closing and ending on the three (3) year anniversary thereof, the number of shares of eRCG Common Stock sold by or for the account of Seller (whether or not (i) such shares are now owned by Seller or are acquired by Seller after the date hereof or (ii) such shares are restricted or unrestricted securities under applicable securities laws) on any day (the "SALES DATE") shall not exceed ten percent (10%) of the average five (5) day reported volume of trading of eRCG's Common Stock on all national securities exchanges and/or reported through the automated evaluation system of a registered securities association preceding the Sales Date. SELLER EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE OTHER STOCKHOLDERS OF LST ARE NOT SUBJECT TO THE PROVISIONS OF THIS SECTION 1.7 OR CERTAIN OTHER PROVISIONS OF THIS AGREEMENT. II. REPRESENTATIONS AND WARRANTIES 2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. With such exceptions, if any, as may be set forth in a letter (the "SELLER DISCLOSURE LETTER") to be delivered by Seller to Purchaser on the date hereof, Seller represents and warrants to Purchaser as follows: (a) TITLE TO THE LST SHARES. At Closing, Seller shall own of record and beneficially the LST Shares free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the LST Shares to Purchaser. No person has any preemptive rights or rights of first refusal with respect to any of the LST Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the LST Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the LST Shares. (b) AUTHORITY; CONSENTS. Seller has full power and lawful authority, including, if Seller is a corporation, full corporate power and authority, to execute and deliver the Basic Agreements and the Seller Disclosure Letter and to consummate and perform the Transaction contemplated thereby. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations of Seller, enforceable in accordance with their terms. To Seller's knowledge, neither the execution and delivery of the Basic Agreements and the Seller Disclosure Letter by Seller, nor the consummation and performance of the Transaction, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Seller is a party or by which Seller or any of its properties or assets are bound or affected. Seller need not give any notice to, make any filings with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the Transaction. 3 7 (c) NONCONTRAVENTION. Neither the execution and the delivery of the Basic Agreements and Seller Disclosure Letter, nor the consummation of the Transaction, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject or (ii) if Seller is a corporation, any provision of such Seller's charter or bylaws. (d) CAPITAL STOCK RIGHTS. Seller has no stock options, warrants, rights, calls or any other agreements of any character, whether oral or written, obligating LST to issue any shares of its capital stock. (e) ORGANIZATION OF INCORPORATED SELLER. If Seller is a corporation, such Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. (f) DISCLOSURE. All statements of Seller contained in the Basic Agreements and in the Seller Disclosure Letter by and on behalf of Seller and LST are true and correct in all material respects and do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Seller, which could have a materially adverse effect upon the business, financial condition, results of operations, assets, liabilities, or prospects of LST, which have not been disclosed to Purchaser in the Basic Agreements or Seller Disclosure Letter. 2.2 REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller represents and warrants to Purchaser, to the best of Seller's knowledge, as follows: (a) ORGANIZATION. LST is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. LST has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. LST is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of LST consists of 20,000,000 shares of common stock, par value $.001 per share, of which 8,349,750 shares have been issued and are outstanding. LST has no other capital stock authorized, issued or outstanding and there are no shares of stock held in treasury. The outstanding shares of LST Common Stock have been duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof and were offered, issued, sold and delivered by LST in compliance with all applicable state and federal laws. Except as set forth on Schedule 2.2(b) of the Seller Disclosure Letter, LST does not have any outstanding rights, options, warrants, calls, commitments, conversion or any other agreements of any character, whether oral or written, obligating it to issue any shares of its capital stock, whether authorized or not. LST is not a party to and is not bound by any agreement, contract, arrangement or understanding, whether 4 8 oral or written, giving any person or entity any interest in, or any right to share, participate in or receive any portion of LST's income, profits or assets, or obligating LST to distribute any portion of its income, profits or assets. (c) CONSENTS. Except as set forth on Schedule 2.2(c) of the Seller Disclosure Letter, the consummation and performance of the Transaction (i) does not conflict with, require the consent, waiver or approval of, result in a breach of or default under or give to others any interest or rights of termination, cancellation or acceleration in or with respect to, any agreement by which LST is a party or LST or any of its properties or assets are bound or affected, and (ii) will not result in the imposition of any claim, lien, encumbrance or restriction of any kind upon the assets of LST. (d) LST FINANCIAL STATEMENTS. The financial statements of LST (the "LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of the Seller Disclosure Letter are complete, were prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior periods and fairly present the financial position of LST as of December 31, 2000 and there have been no material changes thereafter. (e) COMPLIANCE WITH LAWS. LST is not in violation of any federal, state, local or other law, ordinance, rule or regulation applicable to its business, and has not received any actual or threatened complaint, citation or notice of violation or investigation from any governmental authority. (f) NO LITIGATION. There are no actions, suits, claims, complaints or proceedings pending or threatened against LST, at law or in equity, or before or by any governmental department, commission, court, board, bureau, agency or instrumentality; and there are no facts which would provide a valid basis for any such action, suit or proceeding. There are no orders, judgments or decrees of any governmental authority outstanding which specifically apply to LST or any of its assets. (g) MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller Disclosure Letter sets forth a list of all material contracts of LST. LST has in all material respect performed all of its obligations required to be performed by it through the date hereof, and is not in default or alleged to be in default in any material respect, under any contract, including any leases for office space, and there exists no event, condition or occurrence which, after notice or lapse of time or both, constitutes such a default. (h) EMPLOYMENT MATTERS. LST is not a party to any employment agreements, letters or other agreements with any individual with respect to his or her employment with LST. Schedule 2.2(h) of the Seller Disclosure Letter sets forth a complete and accurate list of employees and each employee's rate of compensation (including wages and guaranteed or anticipated bonuses). LST is not subject to any labor disputes. (i) NO UNDISCLOSED LIABILITIES. Except as set forth in LST Financial Statements, Seller is not aware of any material liabilities for which LST is currently liable 5 9 or will become liable in the future. (j) TAXES. LST has timely filed all federal, state, local and foreign tax returns and tax reports required to be filed with the appropriate governmental agency in all jurisdictions in which such returns and reports are required to be filed, excepting only those taxes which will not be due until after the Closing. All such returns and reports are true, correct and complete, and all amounts shown as owing on them have been paid, including all interest, penalties, deficiencies and assessments heretofore levied or assessed against LST. There is no agreement for extension of time of payment of any taxes of LST. There is no examination or audit pending or threatened by the Internal Revenue Service or by any state or local taxing authority with respect to tax matters of LST. (k) REAL PROPERTY. LST does not own any real property. (l) INSURANCE. A complete and accurate list of all insurance policies held by LST and now in force (including insurance policies covering the assets, business, equipment, properties, employees, officers and directors of LST) are set forth in Schedule 2.2(l) of the Seller Disclosure Letter and are of the type and in amounts customarily carried by persons conducting businesses similar to those of LST. There is no material claim by LST pending under any of the insurance policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies. (m) INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller Disclosure Letter sets forth a complete and accurate list of and describes all franchises, licenses, patents, patent applications, trademarks, service marks, trade names, copyrights and rights with respect to any of the foregoing (collectively, "INTELLECTUAL PROPERTY RIGHTS") presently owned or held by LST. LST owns the right to use all of the Intellectual Property Rights. The Intellectual Property Rights are all that are necessary for LST to conduct its business. No event has occurred which permits, or after notice or lapse of time would permit, the revocation or termination of any of the Intellectual Property Rights. LST has no reason to believe that it is infringing, nor has it received notice with respect to the infringement or possible or claimed infringement, upon, or, that it is otherwise acting adversely to, any known right or claimed right of any person with respect to any Intellectual Property Rights. (n) BENEFIT PLANS. Schedule 2.2(n) of the Seller Disclosure Letter sets forth a complete and accurate list of all of the employee benefit plans that LST maintains or contributes to, or has maintained or to which it has made contributions (including any terminated employee benefit plans). LST does not have any obligation under any employee benefit plans other than those identified on Schedule 2.2(n), and LST is in compliance with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all employee benefit plans. The execution and deliver of this Agreement and the consummation of the Transaction will not result in any violations of ERISA or any other laws related thereto. 6 10 (o) ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts receivable of LST represent in all material respects sales made in the ordinary course of business. Schedule 2.2(o) of the Seller Disclosure Letter sets forth LST's top 20 customers by billings and/or revenues received. Seller has no knowledge of any oral or written notice or other indication from any customer stating that it intends to terminate its business relationship with LST or reduce the amount of business it does with LST. 2.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. With such exceptions, if any, as may be set forth in a letter (the "PURCHASER DISCLOSURE LETTER") to be delivered by Purchaser to Seller on the date hereof, Purchaser represents and warrants to Seller as follows: (a) ORGANIZATION. Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Delaware. Purchaser has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business. Purchaser is duly qualified and in good standing as a foreign corporation in each jurisdiction where its ownership of property or operation of its business requires qualification. (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of Purchaser consists of Two Hundred Million (200,000,000) shares of common stock, of which 61,687,654 shares have been issued and are outstanding as of March 7, 2001, and 10,000,000 shares of preferred stock, none of which are issued or outstanding. In addition, Purchaser, as of March 7, 2001, has outstanding warrants and options to purchase 27,380,120 shares of the eRCG Common Stock. At Closing, all issued and outstanding stock of Purchaser, including the eRCG Shares, will have been duly authorized, validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof. Seller will receive all right, title and interest to eRCG Shares free and clear of all liens, pledges, mortgages, security interests and claims whatsoever, except those imposed by state and federal securities laws. (c) AUTHORITY; CONSENTS. Purchaser has full power and lawful authority to execute and deliver the Basic Agreements and the Purchaser Disclosure Letter and to consummate and perform the Transaction. The Basic Agreements constitute (or shall, upon execution, constitute) valid and legally binding obligations of Purchaser, enforceable in accordance with their terms. To Purchaser's knowledge, neither the execution and delivery of the Basic Agreements and the Purchaser Disclosure Letter by Purchaser, nor the consummation and performance of the Transaction, conflicts with, requires the consent, waiver or approval of, results in a breach of or default under, or gives to others any interest or right of termination, cancellation or acceleration in or with respect to, any agreement by which Purchaser is a party or by which Purchaser or any of its properties or assets are bound or affected. (d) INVESTMENT INTENT. Purchaser is acquiring the LST Shares for its own account, for investment purposes only, and not with a view to the sale or distribution of any part thereof and Purchaser has no present intention of selling, granting participation 7 11 in, or otherwise distributing the same. Purchaser understands the specific risks related to an investment in the LST Shares, especially as it relates to the financial performance of LST. (e) FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. Purchaser has filed all material reports, schedules, forms, statements and other documents with the Securities and Exchange Commission (the "SEC") pursuant to applicable state and federal securities laws through the date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute all material documents required to have been filed by Purchaser pursuant to such laws. (f) DISCLOSURE. All statements of Purchaser contained in the Basic Agreements and in the Purchaser Disclosure Letter by or on behalf of Purchaser are true and correct in all material respects and, when considered in conjunction with the SEC Documents, do not omit any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made. There are no facts known to Purchaser which could have a material adverse affect upon the business, financial condition, results of operations, assets or liabilities of Purchaser, which have not been disclosed to Seller in the Basic Agreements, the Purchaser Disclosure Letter or the SEC Documents. III. COVENANTS 3.1 MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and to the best of Seller's ability, each covenant and agree that from the date hereof until Closing each shall: (a) ORDINARY COURSE OF BUSINESS. Operate its business only in the ordinary course and use its best efforts to preserve its business, properties, assets, contracts, organization, goodwill and relationships with persons with whom it has business dealings. (b) NO INDEBTEDNESS. Not create, incur, assume, guarantee or otherwise become liable with respect to any obligation for borrowed money, indebtedness, capitalized lease or similar obligation, except in the ordinary course of business consistent with past practices where the entire net proceeds thereof are deposited with and used by and in connection with the business. (c) MAINTAIN BOOKS. Maintain its books, accounts and records in the usual, regular and ordinary business manner and in accordance with generally accepted accounting principles applied on a basis consistent with past practices. (d) NO AMENDMENTS. (i) Not amend its corporate charter or bylaws (or similar documents) or material contracts, and (ii) maintain its corporate existence, licenses, permits, powers and rights in full force and effect. 8 12 (e) TAXES AND ACCOUNTING MATTERS. (i) File when due all federal, state and local tax returns and reports which shall be accurate and complete, including, but not limited to, income, franchise, excise, ad valorem, and other taxes with respect to its business and properties, and to pay as they become due all taxes or assessments, except for taxes for which adequate reserves are established and which are being contested in good faith by appropriate proceedings, and (ii) not change its accounting methods or practices or any depreciation, amortization or inventory valuation policies or practices. (f) DUE COMPLIANCE. Comply in all material respects with all laws, regulations, rules and ordinances applicable to it and to the conduct of its business. (g) CONSENTS. Use its best efforts to obtain the consent or approval of each person or entity whose consent or approval is required for the consummation of the Transactions. (h) EFFORTS TO CONSUMMATE. Subject to the terms and conditions of this Agreement, use its reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper and advisable under applicable laws to consummate and make effective, as soon as practicable after the date of this Agreement, the Transaction. 3.2 SELLER'S COVENANTS. Seller, on behalf of LST and to the best of Seller's ability, covenants and agrees from the date hereof until Closing, LST shall: (a) COMPENSATION. Not (i) enter into or alter any employment agreements, (ii) grant any severance or increase in compensation other than normal merit increases consistent with its general prevailing practices to any officer or employee, (iii) enter into or alter any labor or collective bargaining agreement or any bonus or other employee fringe benefit, or (iv) adopt or amend any employee stock option plan. (b) NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS. Not to (i) issue any shares of any class of capital stock, or enter into any contract, option, warrant or right calling for the issuance of any such shares of capital stock, or create or issue any securities convertible into any securities, (ii) accelerate or amend the period of exercisability of warrants or restricted stock or reprice any warrants or authorize cash payments in exchange for any warrants, or (iii) declare or pay any dividends on or make any other distributions in any form in respect of capital stock, or split, combine or reclassify any capital stock. 3.3 NO SHOP. Seller agrees to, and to the best of Seller's ability shall cause LST to, negotiate exclusively with Purchaser and not to solicit, negotiate, enter into any agreement or entertain other offers or alternative proposals for the LST Shares or the acquisition of Seller, its assets or stock from the date hereof until the earlier of (i) termination of this Agreement or (ii) August 31, 2001. 9 13 3.4 PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of Seller's ability shall cause LST not to, without the prior written consent of Purchaser, make any announcement, issue any press release or make any statement to any third party with respect to the Transaction except as may be necessary to comply with any law, regulation or order and then only after prior notice to Purchaser as to the content of such announcement. 3.5 CONFIDENTIALITY. Seller agrees to, and to the best of Seller's ability shall cause LST to, maintain the confidentiality of all confidential information furnished to it related to Purchaser and shall not use or disclose such information for any purpose, except in furtherance of the Transaction. IV. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE The obligation of Purchaser to close the Transaction is subject to the fulfillment prior to the Closing of each of the following conditions, which may be waived in whole or in part by Purchaser: 4.1 COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties of Seller contained in Sections 2.1 and 2.2 hereof shall have been true and correct in all material respects when made and shall be true and correct in all material respects as of the Closing with the same force and effort as if made at the Closing. Seller shall have performed in all material respects all agreements, covenants and conditions required to be performed by Seller prior to the Closing. 4.2 NO ADVERSE CHANGE. There shall have been no event, which has had or may have a material adverse effect upon the business, financial condition, results of operation, assets, liabilities or prospects of LST. 4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceeding before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transaction. 4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the following documents: (a) Stock certificate(s) representing all of the LST Shares held by Seller, duly endorsed to Purchaser in blank or accompanied by duly executed stock powers; (b) All agreements referred to in Section 1.5 hereof, executed by all parties thereto other than Purchaser; and 10 14 (c) Such other documents or certificates as shall be reasonably required by Purchaser or its counsel in order to close and consummate the Transaction. 4.5 CONSENTS. (a) BY PURCHASER. Purchaser's Board of Directors shall have approved and taken all necessary corporate action to execute, deliver and perform the Basic Agreements, the Purchaser Disclosure Letter and consummate the Transaction. (b) BY LST. LST shall have delivered to Purchaser any and all consents, waivers or approvals of any government, government agency or other third party necessary to the consummation and performance of the Transaction. 4.6 LISTING OF ERCG SHARES. The eRCG Shares to be issued in connection with the Transaction shall be listed for trading on the American Stock Exchange. 4.7 AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article X of that certain LST, Inc. Omnibus Stock Option and Award Plan dated September 29, 2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change of Control" (as defined in the Stock Option Plan) all outstanding options shall be cancelled and any vested, but unexercised options shall no longer be exercisable. 4.8 CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled any and all outstanding options, whether granted pursuant to the Stock Option Plan or otherwise, and any vested but unexercised options shall no longer be exercisable. 4.9 SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding one hundred percent (100%) of the issued and outstanding LST Common Stock shall have entered into stock purchase agreements with Purchaser similar to this Agreement and the other agreements set forth in Section 1.5 hereof. 4.10 CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold 2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00) per share pursuant to the terms of that certain Private Placement Memorandum dated July 15, 2000. 4.11 INVESTIGATION. Purchaser shall have satisfactory completed its due diligence investigation of LST. No investigation by Purchaser shall affect the representations and warranties of Seller. 11 15 V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE The obligation of Seller to close the Transaction is subject to the fulfillment prior to Closing of each of the following conditions, which may be waived in whole or in part by Seller: 5.1 COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties made by Purchaser in Section 2.3 of this Agreement shall have been true and correct in all material respects when made and shall be true and correct in all material respects at the Closing with the same force and effect as if made at the Closing. Purchaser shall have performed in all material respects all agreements, covenants and conditions required to be performed by Purchaser prior to the Closing. 5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative proceedings before any court or other governmental agency shall be pending or threatened seeking to enjoin the consummation of the Transaction. 5.3 OTHER AGREEMENTS. Purchaser shall have executed and delivered all agreements referred to in Section 1.5 hereof, to be executed by the Purchaser. 5.4 PAYMENTS. Seller shall have received from Purchaser all of eRCG Shares and cash in lieu of any fractional eRCG Share that Seller is entitled to receive pursuant to the Basic Agreements. VI. TERMINATION 6.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and the purchase of the LST Shares may be abandoned before the Closing by: (a) The mutual consent of Seller and Purchaser; (b) Purchaser, if the conditions precedent set forth in Article IV hereof shall have not have been satisfied on or before the Closing Date (as the same may be extended from time to time); and (c) Seller, if the conditions precedent set forth in Article V hereof shall not have been satisfied on or before the Closing Date (as the same may be extended from time to time). Termination shall be effective on the date of receipt of written notice specifying the reasons therefor. Termination shall not relieve any party from liability for any willful breach of 12 16 this Agreement. VII. MISCELLANEOUS 7.1 SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4 and 3.5 and Article VII hereof, which shall survive the Closing or termination hereof for a period of two (2) years, none of the representations and warranties contained in this Agreement or in any certificate, exhibit or other document delivered pursuant to this Agreement shall survive the Closing. 7.2 BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on behalf of the parties pursuant thereto, constitute the entire agreement between the parties. The terms and conditions of the Basic Agreements shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the parties hereto. Nothing in the Basic Agreements, expressed or implied, confers any rights or remedies upon any party other than the parties hereto and their respective heirs, legal representatives, successors and assigns. 7.3 GOVERNING LAW. The Basic Agreements and the other instruments delivered by or on behalf of the parties pursuant hereto are made pursuant to, and will be construed under, the laws of the State of Delaware, without regard to its conflicts of law principles. 7.4 NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and will be deemed to have been duly given when personally delivered, delivered by a nationally recognized overnight delivery service, sent via facsimile transmission (receipt confirmed), or three (3) business days after it is deposited in the United States mail, certified or registered, return receipt requested, postage prepaid, to: (a) If to Seller to: Brandon Holdings, Inc. 7633 East 63rd Place Suite 210 Tulsa, OK 74133 Telephone: (918) 254-4997 Fax: (918) 254-2988 13 17 (b) If to Purchaser, to: eResource Capital Group, Inc. 5935 Carnegie Boulevard, Suite 101 Charlotte, NC 28209 Attention: Melinda Morris Zanoni, Executive Vice President Telephone: (704) 553-9330 Fax: (704) 553-7136 These addresses may be changed from time to time by like written notice to the other party. 7.5 HEADINGS. The headings contained in this Agreement are for reference only and will not affect in any way the meaning or interpretation of this Agreement. 7.6 SEVERABILITY. If any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable under applicable law, then this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. The remaining provisions of this Agreement shall be given effect to the maximum extent then permitted by law. 7.7 EXPENSES. Each party shall pay all fees and expenses incurred by it incident to this Agreement and in connection with the consummation of the Transaction. 7.8 INTEGRATION; INTERPRETATION. The Basic Agreements and all documents and instruments executed pursuant hereto merge and integrate all prior agreements and representations respecting the Transaction, whether written or oral, and constitute the sole agreement of the parties in connection therewith. This Agreement has been negotiated by and submitted to the scrutiny of both Seller and Purchaser and their counsel and shall be given a fair and reasonable interpretation in accordance with the words hereof, without consideration or weight being given to its having been drafted by either party hereto or its counsel. 7.9 AMENDMENTS. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto. 7.10 VARIATION OF PRONOUNS. All pronouns and any variations thereof shall be deemed to reflect masculine, feminine, or neuter, singular or plural, as the identity of the person or entity may require. 7.11 WAIVERS. Purchaser and Seller may, in writing, amend the time for or waive compliance by the other with any of the covenants or conditions of the other contained herein. Failure to pursue any legal or equitable remedy or right available to a party shall not constitute a waiver of such right, nor shall any such forbearance, failure or actual waiver imply or constitute waiver of subsequent default or breach. 14 18 7.12 COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be executed in counterparts (whether by facsimile or otherwise), each of which will be deemed an original and all of which together will constitute one instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 15 19 IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this Agreement, or caused this Agreement to be duly executed, on the date first written above. PURCHASER: ERESOURCE CAPITAL GROUP, INC. BY: ----------------------------------------- MELINDA MORRIS ZANONI ITS: EXECUTIVE VICE PRESIDENT SELLER: BRANDON HOLDINGS, INC. By: ----------------------------------------- Print Name: --------------------------------- Its: ---------------------------------------- 16 EX-4.2 5 g68642ex4-2.txt REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 4.2 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered into as of the __ day of March, 2001, by and among eResource Capital Group, Inc., a Delaware corporation ("ERCG") and certain stockholders of LST, Inc., a Delaware corporation d/b/a LifeStyle Technologies ("LST") listed on Schedule 1 hereto (each such person a "SELLER" and, collectively, the "SELLERS"). NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and intending to be legally bound, the parties hereto hereby agree as follows: 1. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS 1.1 CERTAIN DEFINITIONS. (a) "Holder" shall mean any Seller who holds Registrable Securities and any holder of Registrable Securities to whom the rights conferred by this Agreement have been transferred in compliance with Section 1.2 hereof. (b) "Other Stockholders" shall mean persons who, by virtue of agreements with eRCG other than this Agreement, whether eRCG executed such agreements prior to the date hereof or subsequent to such date, are entitled to include their securities in certain registrations hereunder. (c) "Registrable Securities" shall mean shares of eRCG's common stock, par value $.04 per share ("ERCG COMMON STOCK") issued to the Sellers pursuant to those certain Stock Purchase Agreements that each Seller entered into with eRCG of even date herewith (collectively, the "PURCHASE AGREEMENTS"); provided that a Registrable Security ceases to be a Registrable Security when (i) it is registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"), (ii) it is sold or transferred in accordance with the requirements of Rule 144 (or similar provisions then in effect), (iii) it is eligible to be sold or transferred under Rule 144 without holding period or volume limitations, or (iv) it is sold in a private transaction in which the transferor's rights under this Agreement are not assigned. (d) The terms "register," "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and applicable rules and regulations thereunder and the declaration or ordering of the effectiveness of such registration statement. 2 (e) "Registration Expenses" shall mean all reasonable expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all federal and state registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for eRCG, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include (i) Selling Expenses, (ii) the compensation of regular employees of eRCG, which shall be paid in any event by eRCG, (iii) disbursements of counsel for any Holder, (iv) blue sky fees and expenses incurred in connection with the registration or qualification of any Registrable Securities in any state, province or other jurisdiction in a registration pursuant to Section 1.3 hereof only to the extent that eRCG shall otherwise be making no offers or sales in such state, province or other jurisdiction in connection with such registration and (v) any expenses of a registration for which the request has been withdrawn by the Holder(s) unless the withdrawal is based upon material adverse information concerning eRCG of which the Holder(s) were not aware at the time of the request. (f) "Restricted Securities" shall mean any Registrable Securities required to bear the legend set forth in Section 1.2(c) hereof. (g) "Rule 144" shall mean Rule 144 as promulgated by the SEC under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the SEC. (h) "SEC" shall mean the Securities and Exchange Commission. (i) "Selling Expenses" shall mean all underwriting discounts, selling commissions, brokers' fees and stock transfer taxes applicable to the sale of Registrable Securities. 1.2 RESTRICTIONS ON TRANSFER. (a) Each Holder agrees not to make any disposition of all or any portion of the Registrable Securities unless and until (i) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement, or (ii) (A) such Holder shall have notified eRCG in writing of the proposed disposition and shall have furnished eRCG with a detailed statement of the circumstances surrounding the proposed disposition and the proposed transferee agrees in writing to be subject to all restrictions set forth in this Agreement and (B) if reasonably requested by eRCG, such Holder shall have furnished eRCG with an opinion of counsel, reasonably satisfactory to eRCG, that such disposition will not require registration of such shares under the Securities Act. (b) Notwithstanding the provisions of subparagraphs (i) and (ii) of paragraph (a) above, no such registration statement or opinion of counsel shall be necessary for a transfer by a Holder which is (A) a partnership to its partners in accordance with their partnership interests, (B) a limited liability company to its members in accordance with their member interests, or (C) to the Holder's family member or a trust for the benefit of an individual Holder 2 3 or one or more of its family members; provided the transferee will be subject to the terms of this Section 1.2 to the same extent as if it were an original Holder hereunder. (c) Each certificate representing Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws): THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT OR UNLESS eRCG HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO eRCG AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. (d) eRCG shall be obligated to promptly reissue unlegended certificates at the request of any Holder thereof if the Holder shall have obtained an opinion of counsel (which counsel may be counsel to eRCG) reasonably acceptable to eRCG to the effect that the securities proposed to be disposed of may lawfully be so disposed of in compliance with the Securities Act without registration, qualification or legend. (e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by eRCG of an order of the appropriate blue sky authority authorizing such removal or if the Holder shall request such removal and shall have obtained and delivered to eRCG an opinion of counsel reasonably acceptable to eRCG to the effect that such legend and/or stop-transfer instructions are no longer required pursuant to applicable state securities laws. 1.3 ERCG REGISTRATION. (a) Registration Statement. eRCG hereby agrees that within one-hundred and eighty days (180) from the closing of the transactions contemplated in the Purchase Agreements, it shall cause to be filed with the SEC a registration statement on Form S-3 (except if eRCG is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form) and prior to such filing eRCG will: (i) promptly give to each Holder written notice thereof, which notice briefly describes the Holders' rights under this Section 1.3 (including notice deadlines); and (ii) use its commercially reasonable efforts to include in such registration (and any related filing or qualification under applicable blue sky laws; provided, however, eRCG shall not be obligated to effect any registration statement in any jurisdiction in which it would be required to qualify to do business or execute a general consent to service of 3 4 process), except as set forth in Section 1.3(b) below, and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made by any Holder and received by eRCG within ten (10) days after the written notice from eRCG described in clause (i) above is mailed or delivered by eRCG, provided that such Holders shall have requested for inclusion in such registration at least twenty-five percent (25%) of the aggregate number of the Registrable Securities which have been issued to the Holders prior to the date of such written request. Such written request may specify all or a part of a Holder's Registrable Securities. (b) Underwriting. If the registration of which eRCG gives notice is for a registered public offering involving an underwriting, eRCG shall so advise the Holders as a part of the written notice given pursuant to Section 1.3(a)(i). In such event, the right of any Holder to registration pursuant to this Section 1.3 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with eRCG and the other holders of securities of eRCG with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by eRCG. Notwithstanding any other provision of this Section 1.3, if the representative of the underwriters advises eRCG in writing that marketing factors require a limitation on the number of shares to be underwritten, the representative may (subject to the limitations set forth below) exclude all Registrable Securities from, or limit the number of Registrable Securities to be included in, the registration and underwriting. eRCG shall so advise all Holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated first to eRCG for securities being sold for its own account and thereafter the Registrable Securities so included will be apportioned pro rata among the selling Holders according to the total number of Registrable Securities entitled to be included therein (without regard to the number of Registrable Securities actually requested to be included therein) owned by each selling Holder or in such other proportions as shall mutually be agreed to by such selling Holders. For purposes of the preceding sentence, for any selling Holder which is Holder of Registrable Securities and which is a partnership or corporation, the partners, retired partners and shareholders of such Holder, or the estates and family members of such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single "selling Holder" and any pro rata reduction with respect to such "selling Holder" shall be based upon the aggregate amount of share carrying registration rights owned by all entities and individuals included in such "selling Holder," as defined in this sentence. If any person does not agree to the terms of any such underwriting, it shall be excluded therefrom by written notice from eRCG or the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. (c) Rights of Other Stockholders. Each Holder acknowledges that eRCG has granted or may grant similar or superior registration rights to Other Stockholders and eRCG may or may not file with the SEC one or more registration statements covering the resale of securities of eRCG held by such Other Stockholders (including registration statements filed in 4 5 connection with private placements commenced by eRCG prior to the date hereof) and eRCG may, but is not obligated to, offer to include in such registration statement the Registrable Securities held by the Holders, provided that eRCG does offer to include the Registrable Securities of the Holders in a registration statement filed with the SEC within the one hundred and eighty day (180) period discussed in Section 1.3(a) above. 1.4 EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 1.3 hereof shall be borne by eRCG. All Selling Expenses relating to securities so registered shall be borne by the Holders of such securities pro rata on the basis of the number of shares of securities so registered on their behalf. 1.5 REGISTRATION PROCEDURES. In the case of each registration affected by eRCG pursuant to Section 1.3 hereof, eRCG will keep each Holder advised in writing as to the initiation of each registration. At its expense, eRCG will use its commercially reasonable efforts to: (a) prepare and file with the SEC such amendments and supplements to the registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement; (b) furnish such number of prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request; (c) notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and, at the request of any Holder, prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing; provided, however, eRCG shall not be obligated to prepare and furnish any such prospectus supplements or amendments relating to any material nonpublic information at any such time as the Board of Directors of eRCG has determined that, for good business reasons, the disclosure of such material nonpublic information at that time is contrary to the best interests of eRCG in the circumstances and is not otherwise required under applicable law (including applicable securities laws); and provided, further, such obligation shall continue until the earlier of (i) the sale of all Registrable Securities registered pursuant to the registration statement of which the prospectus forms a part or (ii) withdrawal of such registration statement. 5 6 (d) cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange and/or included in any national quotation system on which similar securities issued by eRCG are then listed or included; (e) provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; and (f) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve (12) months, but not more than eighteen (18) months, beginning with the first month after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act. 1.6 INDEMNIFICATION. (a) eRCG will indemnify each Holder and its officers, directors, partners, legal counsel, accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant to this Article 1, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular, or other document (including any related registration statement) incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any material violation by eRCG of the Securities Act or any rule or regulation thereunder applicable to eRCG or relating to action or inaction required of eRCG in connection with any such registration, qualification, or compliance, and will reimburse each such Holder and its officers, directors, partners, legal counsel, accountants and each person controlling such Holder, each such underwriter, and each person who controls any such underwriter, for legal and other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided that eRCG will not be liable in any such case to the extent that any such claim, loss, damage, liability, or expense arises out of or is based on any untrue statement or omission based upon written information furnished to eRCG by such Holder (or its officers, directors, partners, legal counsel, accountants or a person controlling such Holder) or underwriter for use therein. It is agreed that the indemnity agreement contained in this Section 1.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the prior written consent of eRCG (which consent shall not be unreasonably withheld). The indemnity agreement contained in this paragraph shall not apply to the extent that any loss, claim, damage, liability or action results from the fact that a current copy of the registration statement or prospectus was not sent or given to a proposed transferee asserting any such expenses, loss, claim, damage or liability at or prior to the written 6 7 confirmation of the Registrable Securities if it is determined that eRCG provided such registration statement or prospectus to such selling Holder in a timely manner prior to such sale and it was the responsibility of the selling Holder under the Securities Act to provide the proposed transferee with a current copy of the registration statement or prospectus and such registration statement or prospectus would have cured the defect giving rise to such expense, loss, claim, damage or liability. (b) Each Holder will, if Registrable Securities held by it are included in the securities as to which such registration, qualification, or compliance is being effected, indemnify eRCG, each of its directors, officers, partners, legal counsel, accountants and each underwriter, if any, of eRCG's securities covered by such a registration statement, each person who controls eRCG or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder and Other Stockholder, and each of their officers, directors, and partners, and each person controlling such Holder or Other Stockholder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular, or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse eRCG and such Holders, Other Stockholders, directors, officers, partners, legal counsel, and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to eRCG by such Holder for use therein; provided, however, (i) that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld). (c) Each party entitled to indemnification under this Section 1.6 (the "INDEMNIFIED PARTY") shall give notice to the party required to provide indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom, provided that one (1) counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1.6, to the extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff of a release to such Indemnified Party from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably 7 8 request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom. (d) If the indemnification provided for in this Section 1.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the conduct, statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into by the Indemnifying Party and the Indemnified Party in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. 1.7 INFORMATION BY HOLDER. Each Holder of Registrable Securities shall furnish to eRCG such information regarding such Holder and the distribution proposed by such Holder as eRCG may reasonably request in writing and the furnishing of such information shall be a condition precedent to the obligations of eRCG to take action in connection with any registration, qualification, or compliance referred to in this Section 1. eRCG shall have no obligation with respect to a registration pursuant to Section 1, if, as a result of the preceding sentence, the number of shares of Registrable Securities to be included in the registration does not equal or exceed the percent of Registrable Securities required to trigger eRCG's obligation to initiate registration pursuant to Section 1.3(a)(ii) hereof. 1.8 RULE 144 REPORTING. With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Restricted Securities to the public without registration, eRCG agrees to use its commercially reasonable efforts to: (a) make and keep adequate public information regarding eRCG available as those terms are understood and defined in Rule 144 after the effective date of a registration statement; (b) file with the SEC in a timely manner all material reports and other documents required of eRCG under the Securities Act; and 8 9 (c) so long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by eRCG as to its compliance with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of a registration statement filed by eRCG) and of the Securities Act, a copy of the most recent annual or quarterly report of eRCG, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing a Holder to sell any such securities without registration. 1.9 DELAY OF REGISTRATION; CERTAIN NOTICES. (a) Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of any provision of this Agreement. (b) Notice to Discontinue. Each Holder agrees by acquisition of such securities that, upon receipt of any notice from eRCG of any event of the kind described in Section 1.5(c), the Holder will discontinue disposition of Registrable Securities until the Holder receives copies of the supplemented or amended prospectus contemplated by Section 1.5(c). In addition, if eRCG requests, the Holder will deliver to eRCG all copies of the prospectus covering the Registrable Securities current at the time of receipt of such notice. (c) Notice by Holders. Whenever the Holders have requested that any Registrable Securities be registered pursuant to this Agreement, those Holders shall notify eRCG, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event, which as to any Holder is (i) to its respective knowledge, (ii) solely within its respective knowledge and (iii) solely as to matters concerning that Holder, as a result of which the prospectus included in the registration statement, then in effect, contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances then existing, not misleading. 1.10 "MARKET STAND-OFF" AGREEMENT. (a) Each Holder hereby agrees that, during the period of duration (up to, but not exceeding, one hundred eighty (180) days) specified by eRCG and an underwriter of eRCG Common Stock or other securities of eRCG, following the effective date of a registration statement of eRCG filed under the Securities Act, it shall not, to the extent requested by eRCG and such underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of eRCG held by it at any time during such period except eRCG Common Stock included in such registration. (b) To enforce the foregoing covenant, eRCG may impose stop-transfer instructions with respect to the Registrable Securities of each Holder until the end of such period, and each Holder agrees that, if so requested, such Holder will execute an agreement in 9 10 the form provided by the underwriter containing terms which are essentially consistent with the provisions of this Section 1.10. 1.11 TERMINATION OF REGISTRATION RIGHTS. The registration rights granted under this Section 1 shall terminate and be of no further force and effect if all Registrable Securities held by and issuable to such Holder (and its affiliates, partners, former partners, members and former members) may be sold under Rule 144 during any ninety (90) day period. 2. REPRESENTATIONS AND WARRANTIES 2.1 REPRESENTATIONS AND WARRANTIES OF ERCG. eRCG represents and warrants to the Sellers as follows: (a) The execution, delivery and performance of this Agreement by eRCG have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Articles of Incorporation or Bylaws of eRCG, or any provision of any material indenture, agreement or other instrument to which it or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such material indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of eRCG, except as would not reasonably be expected to result in a material adverse effect on eRCG. (b) This Agreement has been duly executed and delivered by eRCG and constitutes the legal, valid and binding obligation of eRCG, enforceable against eRCG in accordance with its terms, subject to applicable bankruptcy, insolvency and other similar laws affecting the enforceability of creditors' rights generally, general equitable principles, the discretion of courts in granting equitable remedies and public policy considerations. 2.2 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller (severally and not jointly) represents and warrants to eRCG as follows: (a) The execution, delivery and performance of this Agreement by such Seller has been duly authorized by all requisite corporate action (if applicable) and will not violate any provision of law, any order of any court or any agency or government, the Articles of Incorporation or Bylaws of Seller (if applicable), or any provision of any material indenture or agreement or other instrument to which it or any of its respective properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such material indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge, or encumbrance of any nature whatsoever upon any of the properties or assets of the Seller except as would not reasonably be expected to result in a material adverse effect on such Seller. (b) This Agreement has been duly executed and delivered by such Seller and constitutes the legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, subject to applicable bankruptcy, insolvency and other similar 10 11 laws affecting the enforceability of creditors' rights generally, general equitable principles, the discretion of courts in granting equitable remedies and public policy considerations. 3. MISCELLANEOUS 3.1 INFORMATION CONFIDENTIAL. Each Holder acknowledges that the information received by it pursuant hereto may be confidential and for its use only, and it will not use such confidential information in violation of the Securities Act or reproduce, disclose or disseminate such information to any other person (other than its employees or agents having a need to know the contents of such information, and its attorneys, each of which are informed of the confidential nature of such information), except in connection with the exercise of rights under this Agreement, unless eRCG has made such information available to the public generally or such Holder is required to disclose such information by a governmental body and gives prior notice to eRCG. 3.2 BINDING EFFECT. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 3.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject hereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by eRCG and the Holders of at least fifty-one percent (51%) of the Registrable Securities and any such amendment, waiver, discharge or termination shall be binding on all the Holders, but in no event shall the obligation of any Holder hereunder be materially increased, except upon the written consent of such Holder. 3.4 NOTICES. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by United States first-class mail, postage prepaid, delivered personally by hand, confirmed facsimile transmission or nationally recognized overnight courier addressed (a) if to a Holder, as indicated in the stock records of eRCG or at such other address as such Holder shall have furnished to eRCG by like notice, or (b) if to eRCG, at 3353 Peachtree Road, NE, Suite 130, Atlanta, Georgia 30326, Attention: William L. Wortman or at such other address as eRCG shall have furnished to each Holder by like notice with a copy to Rogers & Hardin LLP, 2700 International Tower, 229 Peachtree Street, Atlanta, Georgia 30303, Attn: Edward J. Hardin, Esq. All such notices and other written communications shall be effective on the date of mailing or delivery. 3.5 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power or remedy accruing to eRCG or to any Holder under this Agreement shall impair any such right, power or remedy nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character of any breach or default under this Agreement or any waiver of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent 11 12 specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise, shall be cumulative and not alternative. 3.6 RIGHTS; SEVERABILITY. Unless otherwise expressly provided herein, a Holder's rights hereunder are several rights, not rights jointly held with any of the other Holders. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 3.7 TITLES AND SUBTITLES. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 3.8 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without reference to Delaware's choice of law rules and each of the parties hereto hereby consents to personal jurisdiction in any federal or state court in the State of North Carolina. 3.9 COUNTERPARTS. This Agreement may be executed and delivered (including by facsimile transmission) in any number of counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 12 13 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or have caused this Agreement to be duly executed on its behalf by an officer or representative thereto duly authorized, all as of the date first above written. ERESOURCE CAPITAL GROUP, INC. By: ------------------------------------------------ Its: ------------------------------------------ SELLER --------------------------------------------------- Signature --------------------------------------------------- Printed Name [SIGNATURES OF ADDITIONAL SELLERS ON FOLLOWING PAGES] 13 EX-10.1 6 g68642ex10-1.txt EMPLOYMENT AGREEMENT 1 EXHIBIT 10.1 EMPLOYMENT AND NON-COMPETITION AGREEMENT THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "AGREEMENT") is made as of the ____ day of March, 2001, by and between LST, INC., a Delaware corporation ("LST") and GLENN I. BARRETT, JR, an individual resident of the State of North Carolina (the "EXECUTIVE"), and is effective as of the date hereof (the "EFFECTIVE DATE"). WHEREAS, LST intends to employ Executive, and Executive desires to be employed by LST; and WHEREAS, LST and Executive desire to set forth the terms and conditions on which Executive shall be employed and provide services to LST. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by Executive and LST including, without limitation, the promises and covenants described herein, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I EMPLOYMENT SECTION 1.1 Duties and Responsibilities. LST hereby employs Executive full time as the Chief Executive Officer and President of LST. Executive shall do and perform all reasonable services and acts necessary or advisable to fulfill the duties of such office, and shall conduct and perform such additional services and activities as may be reasonably determined from time to time by the Board of Directors of LST (the "BOARD"). During the term of this Agreement, Executive shall devote his full time, energy and skill to the business of LST and to the promotion of LST's interests, and Executive acknowledges that he has a duty of loyalty to LST and shall not, during the term hereof, engage in, directly or indirectly, any other business or activity whether or not for pecuniary gain, that could materially and adversely affect LST's business or Executive's ability to perform his duties under this Agreement. The foregoing shall not, however, preclude Executive from serving on the boards of directors of other entities. In his capacity as an officer of LST, Executive shall report to the Board and abide by all rules and regulations established from time to time by the Board. Executive's authority and responsibility in LST shall at all times be subject to the review and discretion of the Board, which shall have the final authority to make decisions regarding the business of LST. SECTION 1.2 Term of Employment. The term of Executive's employment hereunder shall continue for a period of two (2) years from the Effective Date, unless earlier terminated as provided in this Agreement. At the end of the initial two (2) year term, and at the end of each renewal term, this Agreement shall automatically be extended for an additional one (1) year terms unless either party hereto shall give written notice of its or his intent to terminate for any or no reason sixty (60) days prior to the end of the initial term or any subsequent renewal term. 2 SECTION 1.3 Benefits. During the term of Executive's employment hereunder, Executive will be entitled to the following: (a) Vacation. Executive shall be entitled to two (2)weeks paid vacation annually. Any vacation not used during any calendar year shall be forfeited. Executive shall also be entitled to reasonable holidays and sick days in accordance with LST's policy as may be established and modified from time to time. (b) Employee Benefit Plans. Executive shall be entitled to participate in all employee benefit plans, including any life insurance, disability insurance, profit sharing and retirement plans that are generally offered to or provided for the senior executives of LST, said plans to be approved by the Board. Executive shall be entitled to participate in such group health and dental insurance plans (including family coverage) on the same basis, including cost provisions, as may from time to time be offered generally to the other senior executives of LST. SECTION 1.4 Compensation. For all services to be rendered by Executive under this Agreement, LST shall pay Executive an annual gross salary of One Hundred Fifty Thousand Dollars ($150,000) payable in accordance with the normal payroll practices of LST, which policies may be changed by LST from time to time, and shall be subject to appropriate withholding taxes. In any event, Executive's salary shall be paid no less frequently than monthly. SECTION 1.5 Business Expenses. Executive shall be entitled to reimbursement of all ordinary and necessary business expenses reasonably incurred for business travel, lodging, communications (including cell phone), entertainment and meals in connection with the performance of Executive's duties under this Agreement, upon submission of sufficient documentation evidencing same and in accordance with LST's established policies for reimbursement of business expenses. SECTION 1.6 Place of Employment. LST agrees to provide an office for Executive in Charlotte, North Carolina. LST will provide at the Charlotte office a computer and other equipment and assistance necessary in order for Executive to complete his duties under this Agreement. Executive shall be entitled to reside and perform his duties in Charlotte, North Carolina. ARTICLE II COVENANTS OF EXECUTIVE SECTION 2.1 Confidentiality. Executive recognizes the interest of LST in maintaining the confidential nature of its proprietary and other business and commercial information. In connection therewith, Executive covenants that during the term of his employment with LST under this Agreement, and for a period of two (2) years thereafter (except as set forth in Section 2.2 hereof), Executive shall not, directly or indirectly, except as authorized in writing by the Board, publish, disclose or use for his own benefit or for the benefit of a business or entity other 2 3 than LST or otherwise, any secret or confidential matter, or proprietary or other information not in the public domain that was acquired by Executive during his employment, relating to LST, its parent or any of their affiliates' or subsidiaries' businesses, operations, customers, suppliers, products, employees, financial information, budgets, practices, strategies, prices, methods, technology, know-how, intellectual property, documentation, concepts, improvements, plans, research and development, leads and/or marketing materials, records, files, databases, accounting journals, accounts receivable records, business plans and other similar information (the "CONFIDENTIAL INFORMATION"); provided, however, Confidential Information does not include information that (i) is or becomes generally available to the public other than as a result of a breach of this Agreement; (ii) is disclosed with the prior written consent of LST; (iii) at the time of such disclosure, was already known or in the possession of Executive; (iv) becomes available to a competitor of LST on a non-confidential basis from a source other than Executive, which source is not prohibited from disclosing such Confidential Information by a legal, contractual or fiduciary obligation to LST; or (v) is independently developed by a competitor of LST. Executive will abide by LST's policies and regulations, as established from time to time, for the protection of its Confidential Information. SECTION 2.2 Trade Secrets. Executive shall not, at any time, either during or after the term of his employment with LST under this Agreement, use or disclose any "Trade Secrets" (as defined by the Delaware Uniform Trade Secrets Act) of LST, its parent or their affiliates or subsidiaries, except in fulfillment of his duties during his employment, for so long as the pertinent information or data remain Trade Secrets, whether or not the Trade Secrets are in written or tangible form. Notwithstanding anything to the contrary contained herein, Executive shall not be prohibited hereunder from disclosing Trade Secrets if, in the written opinion of counsel for Executive, such disclosure is required by applicable law, in which event Executive shall provide LST with prompt written notice of such request and shall take all reasonable action requested by LST to obtain confidential treatment of such Trade Secrets. SECTION 2.3 Surrender of Records. Executive shall provide LST with notice of any inadvertent disclosure of Confidential Information. Executive acknowledges that all Confidential Information is and shall remain the sole property of LST and/or such affiliated entity or subsidiary and shall, upon termination of Executive's employment with LST for any reason whatsoever, or upon the request of LST, turn over to LST all Confidential Information, without retaining notes or copies thereof (together with a written statement certifying as to his compliance with the foregoing). SECTION 2.4 Non-Solicitation of Clients/Employees. During the term of Executive's employment with LST, and for the two (2) year period following the termination of Executive's employment with LST for any reason, Executive shall not, directly or indirectly: (a) solicit or acquire, or attempt to solicit or acquire any business from any individual or entity that was a customer or client of LST, its parent, their subsidiaries or affiliates during the one (1) year period ending on the date of termination of Executive's employment with LST, or actively sought after prospective clients, for the purpose of providing services or products to such customer or client which are competitive with the services or products offered or provided by LST; provided, however, nothing herein shall preclude Executive from holding 3 4 not more than one-percent (1%) of the outstanding equity of any company, so long as Executive does not, in fact, have the power to participate in controlling or directing the management of such company other than by such voting equity; or (b) employ, induce, solicit or attempt to solicit for employment, or assist others in employing, inducing or soliciting for employment, any individual who is or was an employee or independent contractor of LST, its parent, their subsidiaries or affiliates at any time during the one (1) year period ending or the date of termination of Executive's employment with LST in an attempt to have any such individual work for Executive, or any other individual or entity in the business of the development, operation and management of a home networking technology company (including Internet, security, satellite television, entertainment and communications for the home) or related companies (the "BUSINESS"). SECTION 2.5 Non-Competition. During the term of Executive's employment with LST, and for the two (2) year period following the termination of Executive's employment with LST for any reason, Employee shall not, without the prior written consent of the Board, which consent may be withheld at the sole discretion of the Board, directly or indirectly, in his individual capacity as owner, director, member, officer, employee, consultant or agent, or on behalf of any other individual, partnership, corporation, limited liability company or other entity, engage in or be associated with any business that, directly or indirectly, competes with LST, its parent, their subsidiaries or affiliates in the Business in any geographic area in which LST conducts the Business. Nothing herein shall preclude Employee from holding not more than one-percent (1%) of the outstanding equity of any company, so long as Employee does not, in fact, have the power to participate in controlling or directing the management of such company other than by such voting equity. SECTION 2.6 Acknowledgment of Reasonableness/Enforcement/Tolling. (a) The existence of any claim or cause of action by Executive against LST predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by LST of these covenants. Executive acknowledges and confirms (i) that the restrictions contained herein are fair and reasonable and not the result of overreaching, duress, or coercion of any kind, and (ii) that Executive's full, uninhibited, and faithful observance of each of the covenants contained in this Agreement will not cause Executive any undue hardship, financial or otherwise. In the event that any court shall formally hold that the restrictions in this Article II are unreasonable, Executive hereby expressly agrees that the restrictions shall not be rendered void, but shall apply to the extent that such court may judicially determine or indicate constitutes a reasonable restriction. (b) Executive acknowledges that the services to be rendered by Executive hereunder are extraordinary and unique and are vital to the success of LST, and that damages at law would be an inadequate remedy for any breach or threatened breach of this Agreement by Executive. Therefore, in the event of a breach or threatened breach by Executive of any provision of this Agreement, LST shall be entitled, in addition to all other rights or remedies, to injunctions restraining such breach, without being required to show any actual damage or to post any bond or other security. No remedy herein conferred upon any party is intended to be 4 5 exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or otherwise. No single or partial exercise by any party of any right, power or remedy hereunder shall preclude any other or further exercise thereof. (c) In the event LST should bring any legal action or other proceeding for the enforcement of the Agreement, the time for calculating the non-solicitation period, the non-competition period or terms of any other restriction herein shall not include the period of time commencing with the filing of the legal action or other proceeding to enforce the terms of the Agreement through the date of final judgment or final resolution, including all appeals, if any, of such legal action or other proceeding. ARTICLE III REPRESENTATIONS OF EXECUTIVE/INDEMNIFICATION SECTION 3.1 Representations and Warranties of Executive/Indemnification. Executive represents and warrants to LST that he is fully empowered to enter and perform his obligations under this Agreement and, without limitation, that he is under no restrictive covenants to any person or entity that will be violated by his entering into and performing this Agreement, and that this Agreement constitutes the valid and legally binding obligation of Executive enforceable in accordance with its terms. Executive shall indemnify LST upon demand for and against any and all judgments, losses, claims, damages, costs (including, without limitation, all legal fees and costs, even if incident to appeals) incurred or suffered by LST as a result of the breach of the representations and warranties made in this Article 3. ARTICLE IV TERMINATION OF EMPLOYMENT SECTION 4.1 Termination by LST. Executive's employment may be terminated by LST during the term of this Agreement upon the occurrence of one or more of the following events: (a) Termination For Death. Immediately upon Executive's death. (b) Termination For Disability. Upon the effective date of written notice from LST (which shall not be prior to the date on which such notice is sent) in the event of Executive's disability which renders Executive incapable of performing his duties for more than one hundred and twenty (120) calendar days in one calendar year or within consecutive calendar years. (c) Termination Without Cause. LST can terminate Executive's employment without cause for any or no reason (other than those set forth in Section 4.1(d) hereof), sixty (60) days after written notice (including a notice of nonrenewal sent by LST pursuant to Section 1.2 hereof) sent to Executive following a determination by the Board to so terminate Executive's employment. 5 6 (d) Termination For Cause. Upon the effective date of written notice sent to Executive (which shall not be prior to the date on which such notice is sent) stating LST's determination that it is terminating Executive for "Cause", which for purposes of this Agreement shall mean: (i) an act of fraud, embezzlement or theft of funds or property of LST or any of its clients/customers; (ii) any misconduct having a substantial, adverse effect upon LST; (iii) any intentional wrongful disclosure of Confidential Information or Trade Secrets of LST or its affiliates or any form of self-dealing detrimental to the interests of LST; (iv) conviction of a felony or any similar crime causing material harm to the reputation of LST as determined by the Board (for these purposes, conviction shall include a plea of no contest or plea to any lesser charges predicated on the same underlying conduct); (v) the habitual and debilitating use of alcohol or drugs; (vi) failure to comply in any material way with the reasonable written directives of the Board, which failure has not been cured by Executive within thirty (30) days after notice from the Board of any such act or omission; or (vii) failure to comply in any material respect with the terms of this Agreement, which failure has not been cured by Executive within thirty (30) days after notice from the Board of any such act or omission. SECTION 4.2 Resignation by Executive. Executive's employment may be terminated by Executive during the term of this Agreement upon the occurrence of one or more of the following events: (a) Voluntary Resignation. Executive may terminate his employment under this Agreement by giving sixty (60) days' prior written notice to LST (including a notice of nonrenewal sent by Executive pursuant to Section 1.2 hereof) stating Executive's election to terminate his employment with LST. LST may accept such resignation effective as of any date during such sixty (60) day period as LST deems appropriate. (b) Resignation With Cause. Upon the effective date of written notice sent to LST stating Executive's determination of "Constructive Termination" (hereinafter defined) by LST; provided, however, if the Constructive Termination is curable, then LST shall have thirty (30) days after Executive's written notice to cure such condition and if LST fails to cure such condition to the reasonable satisfaction of Executive, then Executive may immediately terminate his employment with LST, such termination to be conclusively deemed to be a resignation with cause. For purposes of this Agreement, "Constructive Termination" shall mean: 6 7 (i) A reduction in Executive's base salary specified in Section 1.4 hereof for the calendar year 2001, or a reduction in Executive's base salary in effect for the prior calendar year for all succeeding years (other than pro rata reductions in compensation for all senior executives of LST). (ii) The requirement that Executive be based anywhere other than within 30 miles of LST's current office in Charlotte, North Carolina. (iii) LST's failure to comply in any material respect with the terms of this Agreement. SECTION 4.3 Change of Control. Upon (i) the effective date of a written notice sent to Executive by LST stating that a "Change of Control" (hereinafter defined) has occurred or will occur and Executive's employment will be terminated in connection therewith, which notice must be given no later than sixty (60) days following such Change of Control or (ii) the date of termination if Executive is terminated without cause or resigns with cause within twelve (12) months of a Change of Control. A "Change of Control" shall be deemed to have occurred if (A) as a result of any merger, consolidation, sale, assignment, transfer or other transaction, any person, other than those persons who are shareholders of LST or its affiliates (within the meaning of Rule 501 of the Securities Act of 1933) on the date hereof, becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of more than 50% of the outstanding voting securities of LST or the surviving entity or becomes entitled to elect more than one-half (1/2) of the Board or other governing body of LST or the surviving entity or (B) LST sells, assigns or otherwise transfers all or substantially all of the assets of the LST, to persons other than those persons who are shareholders of LST, its subsidiaries or affiliates; provided, however, in no event shall a financing transaction (such as additional rounds of venture capital), which is approved by the Board and entered into by LST be deemed to be a "Change of Control". SECTION 4.4 Effect of Termination/Change of Control. (a) Termination for Death; Termination For Disability or Voluntary Resignation. In the event of termination of Executive's employment pursuant to Sections 4.1(a), 4.1(b) or 4.2(a) hereof: (i) LST shall pay to Executive the base salary and expenses otherwise payable to Executive under Sections 1.4 and 1.5 hereof through the date of termination (provided that in the event of Executive's disability, the base salary payable to Executive shall be less any disability benefits provided by LST), as well as any accrued but unpaid vacation time. For purposes of this Agreement, one (1) week of vacation shall be deemed to accrue every six (6) months. Executive shall not be entitled to receive any severance pay. (ii) Executive's rights under LST's benefit plans of general application shall be determined under the provisions of those plans. 7 8 (b) Termination Without Cause; Resignation With Cause; Termination in Connection with a Change of Control. In the event of termination of Executive's employment pursuant to Sections 4.1(c), 4.2(b) or 4.3 hereof: (i) LST shall pay to Executive the base salary and expenses otherwise payable to Executive under Sections 1.4 and 1.5 hereof through the date of termination as well as any accrued but unpaid vacation time. In addition, Executive shall be entitled to six (6) months' salary continuation at the then current rate, payable in accordance with the normal payroll practices of LST. Such severance payments are to be considered compensation for performance of Executive's covenants hereunder. (ii) Executive shall continue to participate in LST's group health plan for six (6) months following the date of termination upon the timely periodic payment of any amount required for employees to maintain family coverage for such plan, and rights under other benefit plans shall be determined under the provisions of those plans. (c) Termination For Cause. In the event of termination of Executive's employment prior to Section 4.1(d) hereof: (i) LST shall pay to Executive the base salary and expenses otherwise payable pursuant to Sections 1.4 and 1.5 hereof through the date of termination. Executive shall not be entitled to receive any severance pay whatsoever. (ii) Executive's rights under LST's benefit plans of general application shall be determined under the provisions of those plans. ARTICLE V GENERAL PROVISIONS SECTION 5.1 Survival. Notwithstanding anything to the contrary herein, the provisions of this Agreement shall survive and remain in effect in accordance with their respective terms in the event Executive's employment is terminated for any reason. SECTION 5.2 Enforcement Costs. If any civil action, arbitration, or other legal proceeding is brought for the enforcement of the Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with any provision of the Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys' fees, sales and use taxes, court costs, and all expenses (including, without limitation, all such fees, taxes, costs, and expenses incident to arbitration, appellate and post-judgment proceedings), incurred in that civil action, arbitration, or legal proceeding, in addition to any other relief to which such party or parties may be entitled. SECTION 5.3 Notices. For purposes of this Agreement, all communications including, without limitation, notices, consents, requests or approvals, provided for herein shall be in writing and shall be deemed to have been duly given (a) when personally delivered, (b) on the 8 9 day of transmission when given by facsimile transmission with confirmation of receipt, (c) on the following day if submitted to a nationally recognized courier service, or (d) five (5) business days after having been mailed by United States registered mail or certified mail, return receipt requested, postage prepaid, addressed to: If to LST: If to Executive: c/o eResource Capital Group, Inc. Glenn I. Barrett, Jr. 5935 Carnegie Boulevard, Suite 101 c/o LST, Inc. 6201 Fairview Road, Suite 200 Charlotte, NC 28209 Charlotte, North Carolina 28210 Attn: Melinda Morris Zanoni Facsimile: (704) 401-3333 Facsimile: (704) 553-7136 or to such other address as a party may have furnished to the other in writing and in accordance herewith, except that notices of change of address shall be effective only upon receipt. SECTION 5.4 Governing Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of North Carolina, without giving effect to the principles of conflicts of law of such State. SECTION 5.5 Severability. If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, under applicable law or regulation, the remainder of this Agreement and the application of such provision to any other person or circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it valid, enforceable and legal; provided, however, if the provision so held to be invalid, unenforceable or otherwise illegal constituted a material inducement to a party's execution and delivery of this Agreement, such provision shall not be reformed unless prior to any reformation that party agrees to be bound by the reformation. SECTION 5.6 Entire Agreement. This Agreement supersedes any other agreements, oral or written, between the parties with respect to the subject matter hereof, and contains all of the agreements and understandings between the parties with respect to the employment of Executive by LST. SECTION 5.7 Amendments. Any amendment or modification of any term of this Agreement shall be effective only if it is set forth in writing signed by the parties hereto and consented to in writing by eResource Capital Group, Inc. SECTION 5.8 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective administrators, executors, representatives, heirs, successors and permitted assigns. "Successor" shall mean any successor in interest, pursuant to a Change of Control as set forth in Section 4.3 hereof. 9 10 SECTION 5.9 Assignment. This Agreement is personal in nature and the parties shall not, without written consent, assign, transfer or delegate this Agreement or any rights or obligations hereunder; provided, however, LST may assign this Agreement to its parent or affiliates without the consent of Executive. SECTION 5.10 Waivers. No provision of this Agreement may be waived or discharged unless such waiver or discharge is agreed to in writing signed by the party to be bound. No waiver by a party hereto at any time of any breach or noncompliance with any provision or condition of this Agreement to be performed by such other party shall be deemed a waiver of any other provisions or conditions at the same or at any prior or subsequent time. SECTION 5.11 Captions. The captions in this Agreement are solely for convenience of reference and shall not be given any effect in the construction or interpretation of this Agreement. SECTION 5.12 Counterparts/Facsimile Signatures. This Agreement may be executed in one or more counterparts (whether by facsimile or otherwise), each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 10 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written. LST: LST, INC. By: ---------------------------------- John Hargette Its: Executive Vice President EXECUTIVE: ------------------------------------- Glenn I. Barrett, Jr. 11 -----END PRIVACY-ENHANCED MESSAGE-----

EX-2.1

   1

                                                                   EXHIBIT 2.1
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                            STOCK PURCHASE AGREEMENT

                         ENTERED INTO MARCH ____, 2001,

                                     BETWEEN

                          ERESOURCE CAPITAL GROUP, INC.

                                       AND

                        --------------------------------







================================================================================




   2


                                TABLE OF CONTENTS



                                                                                                      
ARTICLE I.            SALE AND PURCHASE OF THE LST SHARES.................................................   1
         1.1          Sale and Purchase...................................................................   1
         1.2          Closing.............................................................................   1
         1.3          Purchase Price......................................................................   1
         1.4          Rights of Former Stockholders.......................................................   2
         1.5          Other Agreements....................................................................   2
         1.6          Basic Agreements and Transaction Defined............................................   2

ARTICLE II.           REPRESENTATIONS AND WARRANTIES......................................................   2
         2.1.         Representations and Warranties of Seller............................................   2
         2.2.         Representations and Warranties Concerning LST.......................................   3
         2.3.         Representations and Warranties of Purchaser.........................................   6

ARTICLE III.          COVENANTS...........................................................................   7
         3.1.         Mutual Covenants....................................................................   7
         3.2.         Seller's Covenants..................................................................   8
         3.3.         No Shop.............................................................................   9
         3.4.         Public Announcements................................................................   9
         3.5.         Confidentiality.....................................................................   9

ARTICLE IV.           CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
                        TO CLOSE............................................................................ 9
         4.1.         Compliance with Seller's Representations, Warranties and Covenants..................   9
         4.2.         No Adverse Change...................................................................   9
         4.3.         No Legal Proceedings................................................................  10
         4.4          Documents to be Delivered by Seller.................................................  10
         4.5          Consents............................................................................  10
         4.6          Listing of eRCG Shares..............................................................  10
         4.7          Amendment of Stock Option Plan......................................................  10
         4.8          Cancellation of Outstanding Options.................................................  10
         4.9          Sale by Other LST Stockholders......................................................  10
         4.10         Consummation of Private Placement by LST............................................  11
         4.11         Investigation.......................................................................  11

ARTICLE V.            CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO
                        CLOSE.............................................................................  11
         5.1.         Compliance with Purchaser's Representations, Warranties
                        and Covenants.....................................................................  11
         5.2.         No Legal Proceedings................................................................  11




                                       ii

   3

                                                                                                      
         5.3.         Other Agreements....................................................................  11
         5.4.         Payments............................................................................  11

ARTICLE VI.           TERMINATION........................................................................   12
         6.1.         Termination and Abandonment.........................................................  12

ARTICLE VII.          MISCELLANEOUS.......................................................................  12
         7.1.         Survival............................................................................  12
         7.2.         Binding Effect of the Basic Agreements; No Third
                      Party Beneficiaries.................................................................  12
         7.3.         Governing Law.......................................................................  12
         7.4.         Notices.............................................................................  12
         7.5.         Headings............................................................................  13
         7.6.         Severability........................................................................  13
         7.7.         Expenses............................................................................  13
         7.8.         Integration; Interpretation.........................................................  13
         7.9.         Amendments..........................................................................  14
         7.10.        Variation of Pronouns...............................................................  14
         7.11         Waivers.............................................................................  14
         7.12.        Counterparts; Facsimile Signatures..................................................  14




                                      iii


   4



                            STOCK PURCHASE AGREEMENT



         THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day
of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation
("PURCHASER"), and ________________, an individual resident of the State of
______________ ("SELLER") and a stockholder of LST, INC., a Delaware corporation
d/b/a LifeStyle Technologies ("LST").

         WHEREAS, Seller is the record and beneficial owner of
___________________ (_______) shares ("LST SHARES") of LST's common stock, par
value $.001 per share ("LST COMMON STOCK"), representing approximately .__% of
the issued capital stock of LST; and

         WHEREAS, Seller desires to sell the LST Shares to Purchaser, and
Purchaser desires to purchase the LST Shares, upon the terms and conditions set
forth herein.

         NOW, THEREFORE in consideration of the mutual promises and covenants
contained herein, and for other good valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:

                                       I.

                       SALE AND PURCHASE OF THE LST SHARES

         1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in Section 1.2 hereof), Seller agrees to sell, assign,
transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase from
Seller, the LST Shares.

         1.2 CLOSING. The purchase shall be consummated at a closing ("CLOSING")
to take place at the offices of Purchaser on the date and time on which the last
of the conditions specified in Articles IV and V hereof have been satisfied or
waived, or such other place, time or date as may be mutually agreed upon by the
parties hereto.

         1.3 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the LST
Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in
restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value
$.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's
Share being equal to the average for the five (5) trading days immediately
preceding the Closing Date of the daily closing price of eRCG Common Stock as
reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided,
however, that if the Average Share Price is less than One Dollar ($1.00), then
the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of
calculating the Purchase Price due Seller. The Purchase Price shall be paid at
Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller
receiving cash in lieu of any fractional eRCG Share that Seller may be entitled
to receive pursuant to this Section 1.3. Purchaser will give stop transfer
instructions to its transfer agent with respect to the eRCG Shares and there
will be placed on the certificate(s) representing such eRCG Shares a restrictive
legend.



   5

         1.4 RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange, each
certificate representing LST Shares shall from and after the Closing represent
for all purposes only the right to receive the Purchase Price. Seller will not
be entitled to vote or give its consent after the Closing at any meeting or
action by written consent of Purchaser's stockholders until it has exchanged its
certificates representing the LST Shares for certificates representing the eRCG
Shares.

         1.5 OTHER AGREEMENTS. At the Closing, the indicated parties shall
deliver the following additional agreements:

             (a) Seller shall deliver to Purchaser stock certificate(s)
         representing all of the LST Shares held by Seller, duly endorsed to
         Purchaser in blank or accompanied by duly executed stock power(s),
         transferring such LST Shares from Seller to Purchaser;

             (b) Seller shall deliver to Purchaser an executed counterpart
         signature page to the Investment Representation Agreement,
         substantially in the form attached hereto as Exhibit 1.5(b); and

             (c) Purchaser and Seller shall each deliver an executed counterpart
         signature page to the Registration Rights Agreement, substantially in
         the form attached hereto as Exhibit 1.5(c).

         1.6 BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and other
agreements listed in paragraph 1.5, are sometimes referred to as the "Basic
Agreements." The transaction contemplated by the Basic Agreement and the
agreements with the other stockholders of LST are sometimes referred to as the
"Transaction".

                                      II.

                         REPRESENTATIONS AND WARRANTIES

         2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. With such exceptions, if
any, as may be set forth in a letter (the "SELLER DISCLOSURE LETTER") to be
delivered by Seller to Purchaser on the date hereof, Seller represents and
warrants to Purchaser as follows:

             (a) TITLE TO THE LST SHARES. At Closing, Seller shall own of record
         and beneficially the LST Shares free and clear of all liens,
         encumbrances, pledges, claims, options, charges and assessments of any
         nature whatsoever, with full right and lawful authority to transfer the
         LST Shares to Purchaser. No person has any preemptive rights or rights
         of first refusal with respect to any of the LST Shares. There exists no
         voting agreement, voting trust, or outstanding proxy with respect to
         any of the LST Shares. There are no outstanding rights, options,
         warrants, calls, commitments, or any other agreements of any character,
         whether oral or written, with respect to the LST Shares.

             (b) AUTHORITY; CONSENTS. Seller has full power and lawful
         authority, including, if Seller is a corporation, full corporate power
         and authority, to execute and deliver the Basic Agreements and the
         Seller Disclosure Letter and to consummate and


                                       2

   6


         perform the Transaction contemplated thereby. The Basic Agreements
         constitute (or shall, upon execution, constitute) valid and legally
         binding obligations of Seller, enforceable in accordance with their
         terms. To Seller's knowledge, neither the execution and delivery of the
         Basic Agreements and the Seller Disclosure Letter by Seller, nor the
         consummation and performance of the Transaction, conflicts with,
         requires the consent, waiver or approval of, results in a breach of or
         default under, or gives to others any interest or right of termination,
         cancellation or acceleration in or with respect to, any agreement by
         which Seller is a party or by which Seller or any of its properties or
         assets are bound or affected. Seller need not give any notice to, make
         any filings with, or obtain any authorization, consent, or approval of
         any government or governmental agency in order to consummate the
         Transaction.

             (c) NONCONTRAVENTION. Neither the execution and the delivery of the
         Basic Agreements and Seller Disclosure Letter, nor the consummation of
         the Transaction, will (i) violate any constitution, statute,
         regulation, rule, injunction, judgment, order, decree, ruling, charge,
         or other restriction of any government, governmental agency, or court
         to which Seller is subject or (ii) if Seller is a corporation, any
         provision of such Seller's charter or bylaws.

             (d) CAPITAL STOCK RIGHTS. Seller has no stock options, warrants,
         rights, calls or any other agreements of any character, whether oral or
         written, obligating LST to issue any shares of its capital stock.

             (e) ORGANIZATION OF INCORPORATED SELLER. If Seller is a
         corporation, such Seller is duly organized, validly existing and in
         good standing under the laws of the jurisdiction of its incorporation.

             (f) DISCLOSURE. All statements of Seller contained in the Basic
         Agreements and in the Seller Disclosure Letter by and on behalf of
         Seller and LST are true and correct in all material respects and do not
         omit any material fact necessary to make the statements contained
         therein not misleading in light of the circumstances under which they
         were made. There are no facts known to Seller, which could have a
         materially adverse effect upon the business, financial condition,
         results of operations, assets, liabilities, or prospects of LST, which
         have not been disclosed to Purchaser in the Basic Agreements or Seller
         Disclosure Letter.

         2.2 REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such
exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller
represents and warrants to Purchaser, to the best of Seller's knowledge, as
follows:

             (a) ORGANIZATION. LST is a corporation duly incorporated, validly
         existing and in good standing under the laws of the state of Delaware.
         LST has all requisite corporate power and authority to own, lease and
         operate its properties and to carry on its business. LST is duly
         qualified and in good standing as a foreign corporation in each
         jurisdiction where its ownership of property or operation of its
         business requires qualification.


                                       3

   7

             (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of LST
         consists of 20,000,000 shares of common stock, par value $.001 per
         share, of which 8,099,750 shares have been issued and are outstanding.
         LST has no other capital stock authorized, issued or outstanding and
         there are no shares of stock held in treasury. The outstanding shares
         of LST Common Stock have been duly authorized, validly issued, fully
         paid and nonassessable with no personal liability attaching to the
         ownership thereof and were offered, issued, sold and delivered by LST
         in compliance with all applicable state and federal laws. Except as set
         forth on Schedule 2.2(b) of the Seller Disclosure Letter, LST does not
         have any outstanding rights, options, warrants, calls, commitments,
         conversion or any other agreements of any character, whether oral or
         written, obligating it to issue any shares of its capital stock,
         whether authorized or not. LST is not a party to and is not bound by
         any agreement, contract, arrangement or understanding, whether oral or
         written, giving any person or entity any interest in, or any right to
         share, participate in or receive any portion of LST's income, profits
         or assets, or obligating LST to distribute any portion of its income,
         profits or assets.

             (c) CONSENTS. Except as set forth on Schedule 2.2(c) of the Seller
         Disclosure Letter, the consummation and performance of the Transaction
         (i) does not conflict with, require the consent, waiver or approval of,
         result in a breach of or default under or give to others any interest
         or rights of termination, cancellation or acceleration in or with
         respect to, any agreement by which LST is a party or LST or any of its
         properties or assets are bound or affected, and (ii) will not result in
         the imposition of any claim, lien, encumbrance or restriction of any
         kind upon the assets of LST.

             (d) LST FINANCIAL STATEMENTS. The financial statements of LST (the
         "LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of the Seller
         Disclosure Letter are complete, were prepared in accordance with
         generally accepted accounting principles applied on a basis consistent
         with prior periods and fairly present the financial position of LST as
         of December 31, 2000 and there have been no material changes
         thereafter.

             (e) COMPLIANCE WITH LAWS. LST is not in violation of any federal,
         state, local or other law, ordinance, rule or regulation applicable to
         its business, and has not received any actual or threatened complaint,
         citation or notice of violation or investigation from any governmental
         authority.

             (f) NO LITIGATION. There are no actions, suits, claims, complaints
         or proceedings pending or threatened against LST, at law or in equity,
         or before or by any governmental department, commission, court, board,
         bureau, agency or instrumentality; and there are no facts which would
         provide a valid basis for any such action, suit or proceeding. There
         are no orders, judgments or decrees of any governmental authority
         outstanding which specifically apply to LST or any of its assets.

             (g) MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller Disclosure
         Letter sets forth a list of all material contracts of LST. LST has in
         all material respect performed all of its obligations required to be
         performed by it through the date hereof, and is not in default or
         alleged to be in default in any material respect, under any contract,
         including


                                        4

   8

         any leases for office space, and there exists no event, condition or
         occurrence which, after notice or lapse of time or both, constitutes
         such a default.

             (h) EMPLOYMENT MATTERS. LST is not a party to any employment
         agreements, letters or other agreements with any individual with
         respect to his or her employment with LST. Schedule 2.2(h) of the
         Seller Disclosure Letter sets forth a complete and accurate list of
         employees and each employee's rate of compensation (including wages and
         guaranteed or anticipated bonuses). LST is not subject to any labor
         disputes.

             (i) NO UNDISCLOSED LIABILITIES. Except as set forth in LST
         Financial Statements, Seller is not aware of any material liabilities
         for which LST is currently liable or will become liable in the future.

             (j) TAXES. LST has timely filed all federal, state, local and
         foreign tax returns and tax reports required to be filed with the
         appropriate governmental agency in all jurisdictions in which such
         returns and reports are required to be filed, excepting only those
         taxes which will not be due until after the Closing. All such returns
         and reports are true, correct and complete, and all amounts shown as
         owing on them have been paid, including all interest, penalties,
         deficiencies and assessments heretofore levied or assessed against LST.
         There is no agreement for extension of time of payment of any taxes of
         LST. There is no examination or audit pending or threatened by the
         Internal Revenue Service or by any state or local taxing authority with
         respect to tax matters of LST.

             (k) REAL PROPERTY. LST does not own any real property.

             (l) INSURANCE. A complete and accurate list of all insurance
         policies held by LST and now in force (including insurance policies
         covering the assets, business, equipment, properties, employees,
         officers and directors of LST) are set forth in Schedule 2.2(l) of the
         Seller Disclosure Letter and are of the type and in amounts customarily
         carried by persons conducting businesses similar to those of LST. There
         is no material claim by LST pending under any of the insurance policies
         as to which coverage has been questioned, denied or disputed by the
         underwriters of such policies.

             (m) INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller Disclosure
         Letter sets forth a complete and accurate list of and describes all
         franchises, licenses, patents, patent applications, trademarks, service
         marks, trade names, copyrights and rights with respect to any of the
         foregoing (collectively, "INTELLECTUAL PROPERTY RIGHTS") presently
         owned or held by LST. LST owns the right to use all of the Intellectual
         Property Rights. The Intellectual Property Rights are all that are
         necessary for LST to conduct its business. No event has occurred which
         permits, or after notice or lapse of time would permit, the revocation
         or termination of any of the Intellectual Property Rights. LST has no
         reason to believe that it is infringing, nor has it received notice
         with respect to the infringement or possible or claimed infringement,
         upon, or, that it is otherwise acting adversely to, any known right or
         claimed right of any person with respect to any Intellectual Property
         Rights.


                                       5

   9

             (n) BENEFIT PLANS. Schedule 2.2(n) of the Seller Disclosure Letter
         sets forth a complete and accurate list of all of the employee benefit
         plans that LST maintains or contributes to, or has maintained or to
         which it has made contributions (including any terminated employee
         benefit plans). LST does not have any obligation under any employee
         benefit plans other than those identified on Schedule 2.2(n), and LST
         is in compliance with all applicable provisions of ERISA and the
         regulations and published interpretations thereunder with respect to
         all employee benefit plans. The execution and deliver of this Agreement
         and the consummation of the Transaction will not result in any
         violations of ERISA or any other laws related thereto.

             (o) ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts receivable of LST
         represent in all material respects sales made in the ordinary course of
         business. Schedule 2.2(o) of the Seller Disclosure Letter sets forth
         LST's top 20 customers by billings and/or revenues received. Seller has
         no knowledge of any oral or written notice or other indication from any
         customer stating that it intends to terminate its business relationship
         with LST or reduce the amount of business it does with LST.

         2.3 REPRESENTATIONS AND WARRANTIES OF PURCHASER. With such exceptions,
if any, as may be set forth in a letter (the "PURCHASER DISCLOSURE LETTER") to
be delivered by Purchaser to Seller on the date hereof, Purchaser represents and
warrants to Seller as follows:

             (a) ORGANIZATION. Purchaser is a corporation duly incorporated,
         validly existing and in good standing under the laws of the state of
         Delaware. Purchaser has all requisite corporate power and authority to
         own, lease and operate its properties and to carry on its business.
         Purchaser is duly qualified and in good standing as a foreign
         corporation in each jurisdiction where its ownership of property or
         operation of its business requires qualification.

             (b) AUTHORIZED CAPITALIZATION. The authorized capitalization of
         Purchaser consists of Two Hundred Million (200,000,000) shares of
         common stock, of which 61,687,654 shares have been issued and are
         outstanding as of March 7, 2001, and 10,000,000 shares of preferred
         stock, none of which are issued or outstanding. In addition, Purchaser,
         as of March 7, 2001, has outstanding warrants and options to purchase
         27,380,120 shares of the eRCG Common Stock. At Closing, all issued and
         outstanding stock of Purchaser, including the eRCG Shares, will have
         been duly authorized, validly issued, fully paid and nonassessable with
         no personal liability attaching to the ownership thereof. Seller will
         receive all right, title and interest to eRCG Shares free and clear of
         all liens, pledges, mortgages, security interests and claims
         whatsoever, except those imposed by state and federal securities laws.

             (c) AUTHORITY; CONSENTS. Purchaser has full power and lawful
         authority to execute and deliver the Basic Agreements and the Purchaser
         Disclosure Letter and to consummate and perform the Transaction. The
         Basic Agreements constitute (or shall,


                                       6

   10

         upon execution, constitute) valid and legally binding obligations of
         Purchaser, enforceable in accordance with their terms. To Purchaser's
         knowledge, neither the execution and delivery of the Basic Agreements
         and the Purchaser Disclosure Letter by Purchaser, nor the consummation
         and performance of the Transaction, conflicts with, requires the
         consent, waiver or approval of, results in a breach of or default
         under, or gives to others any interest or right of termination,
         cancellation or acceleration in or with respect to, any agreement by
         which Purchaser is a party or by which Purchaser or any of its
         properties or assets are bound or affected.

             (d) INVESTMENT INTENT. Purchaser is acquiring the LST Shares for
         its own account, for investment purposes only, and not with a view to
         the sale or distribution of any part thereof and Purchaser has no
         present intention of selling, granting participation in, or otherwise
         distributing the same. Purchaser understands the specific risks related
         to an investment in the LST Shares, especially as it relates to the
         financial performance of LST.

             (e) FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. Purchaser
         has filed all material reports, schedules, forms, statements and other
         documents with the Securities and Exchange Commission (the "SEC")
         pursuant to applicable state and federal securities laws through the
         date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute all
         material documents required to have been filed by Purchaser pursuant to
         such laws.

             (f) DISCLOSURE. All statements of Purchaser contained in the Basic
         Agreements and in the Purchaser Disclosure Letter by or on behalf of
         Purchaser are true and correct in all material respects and, when
         considered in conjunction with the SEC Documents, do not omit any
         material fact necessary to make the statements contained therein not
         misleading in light of the circumstances under which they were made.
         There are no facts known to Purchaser which could have a material
         adverse affect upon the business, financial condition, results of
         operations, assets or liabilities of Purchaser, which have not been
         disclosed to Seller in the Basic Agreements, the Purchaser Disclosure
         Letter or the SEC Documents.

                                      III.

                                    COVENANTS

         3.1 MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and to the
best of Seller's ability, each covenant and agree that from the date hereof
until Closing each shall:

             (a) ORDINARY COURSE OF BUSINESS. Operate its business only in the
         ordinary course and use its best efforts to preserve its business,
         properties, assets, contracts, organization, goodwill and relationships
         with persons with whom it has business dealings.


                                       7

   11


             (b) NO INDEBTEDNESS. Not create, incur, assume, guarantee or
         otherwise become liable with respect to any obligation for borrowed
         money, indebtedness, capitalized lease or similar obligation, except in
         the ordinary course of business consistent with past practices where
         the entire net proceeds thereof are deposited with and used by and in
         connection with the business.

             (c) MAINTAIN BOOKS. Maintain its books, accounts and records in the
         usual, regular and ordinary business manner and in accordance with
         generally accepted accounting principles applied on a basis consistent
         with past practices.

             (d) NO AMENDMENTS. (i) Not amend its corporate charter or bylaws
         (or similar documents) or material contracts, and (ii) maintain its
         corporate existence, licenses, permits, powers and rights in full force
         and effect.

             (e) TAXES AND ACCOUNTING MATTERS. (i) File when due all federal,
         state and local tax returns and reports which shall be accurate and
         complete, including, but not limited to, income, franchise, excise, ad
         valorem, and other taxes with respect to its business and properties,
         and to pay as they become due all taxes or assessments, except for
         taxes for which adequate reserves are established and which are being
         contested in good faith by appropriate proceedings, and (ii) not change
         its accounting methods or practices or any depreciation, amortization
         or inventory valuation policies or practices.

             (f) DUE COMPLIANCE. Comply in all material respects with all laws,
         regulations, rules and ordinances applicable to it and to the conduct
         of its business.

             (g) CONSENTS. Use its best efforts to obtain the consent or
         approval of each person or entity whose consent or approval is required
         for the consummation of the Transactions.

             (h) EFFORTS TO CONSUMMATE. Subject to the terms and conditions of
         this Agreement, use its reasonable efforts to take, or cause to be
         taken, all actions and to do, or cause to be done, all things
         necessary, proper and advisable under applicable laws to consummate and
         make effective, as soon as practicable after the date of this
         Agreement, the Transaction.

         3.2 SELLER'S COVENANTS. Seller, on behalf of LST and to the best of
Seller's ability, covenants and agrees from the date hereof until Closing, LST
shall:

              (a) COMPENSATION. Not (i) enter into or alter any employment
         agreements, (ii) grant any severance or increase in compensation other
         than normal merit increases consistent with its general prevailing
         practices to any officer or employee, (iii) enter into or alter any
         labor or collective bargaining agreement or any bonus or other employee
         fringe benefit, or (iv) adopt or amend any employee stock option plan.


                                       8

   12

              (b) NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS. Not to
         (i) issue any shares of any class of capital stock, or enter into any
         contract, option, warrant or right calling for the issuance of any such
         shares of capital stock, or create or issue any securities convertible
         into any securities, (ii) accelerate or amend the period of
         exercisability of warrants or restricted stock or reprice any warrants
         or authorize cash payments in exchange for any warrants, or (iii)
         declare or pay any dividends on or make any other distributions in any
         form in respect of capital stock, or split, combine or reclassify any
         capital stock.

         3.3 NO SHOP. Seller agrees to, and to the best of Seller's ability
shall cause LST to, negotiate exclusively with Purchaser and not to solicit,
negotiate, enter into any agreement or entertain other offers or alternative
proposals for the LST Shares or the acquisition of Seller, its assets or stock
from the date hereof until the earlier of (i) termination of this Agreement or
(ii) August 31, 2001.

         3.4 PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of Seller's
ability shall cause LST not to, without the prior written consent of Purchaser,
make any announcement, issue any press release or make any statement to any
third party with respect to the Transaction except as may be necessary to comply
with any law, regulation or order and then only after prior notice to Purchaser
as to the content of such announcement.

         3.5 CONFIDENTIALITY. Seller agrees to, and to the best of Seller's
ability shall cause LST to, maintain the confidentiality of all confidential
information furnished to it related to Purchaser and shall not use or disclose
such information for any purpose, except in furtherance of the Transaction.

                                       IV.

                           CONDITIONS PRECEDENT TO THE
                        OBLIGATIONS OF PURCHASER TO CLOSE

         The obligation of Purchaser to close the Transaction is subject to the
fulfillment prior to the Closing of each of the following conditions, which may
be waived in whole or in part by Purchaser:

         4.1 COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations and warranties of Seller contained in Sections 2.1 and 2.2
hereof shall have been true and correct in all material respects when made and
shall be true and correct in all material respects as of the Closing with the
same force and effort as if made at the Closing. Seller shall have performed in
all material respects all agreements, covenants and conditions required to be
performed by Seller prior to the Closing.

         4.2 NO ADVERSE CHANGE. There shall have been no event, which has had or
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of LST.


                                       9


   13

         4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transaction.

         4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered
the following documents:

             (a) Stock certificate(s) representing all of the LST Shares held by
         Seller, duly endorsed to Purchaser in blank or accompanied by duly
         executed stock powers;

             (b) All agreements referred to in Section 1.5 hereof, executed by
         all parties thereto other than Purchaser; and

             (c) Such other documents or certificates as shall be reasonably
         required by Purchaser or its counsel in order to close and consummate
         the Transaction.

         4.5 CONSENTS.

             (a) BY PURCHASER. Purchaser's Board of Directors shall have
         approved and taken all necessary corporate action to execute, deliver
         and perform the Basic Agreements, the Purchaser Disclosure Letter and
         consummate the Transaction.

             (b) BY LST. LST shall have delivered to Purchaser any and all
         consents, waivers or approvals of any government, government agency or
         other third party necessary to the consummation and performance of the
         Transaction.

         4.6 LISTING OF ERCG SHARES. The eRCG Shares to be issued in connection
with the Transaction shall be listed for trading on the American Stock Exchange.

         4.7 AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article X of
that certain LST, Inc. Omnibus Stock Option and Award Plan dated September 29,
2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change of
Control" (as defined in the Stock Option Plan) all outstanding options shall be
cancelled and any vested, but unexercised options shall no longer be
exercisable.

         4.8 CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled any
and all outstanding options, whether granted pursuant to the Stock Option Plan
or otherwise, and any vested but unexercised options shall no longer be
exercisable.

         4.9 SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding one
hundred percent (100%) of the issued and outstanding LST Common Stock shall have
entered into stock purchase agreements with Purchaser similar to this Agreement
and the other agreements set forth in Section 1.5 hereof.


                                       10

   14

         4.10 CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold
2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00)
per share pursuant to the terms of the that certain Private Placement Memorandum
dated July 15, 2000.

         4.11 INVESTIGATION. Purchaser shall have satisfactory completed its due
diligence investigation of LST. No investigation by Purchaser shall affect the
representations and warranties of Seller.

                                       V.

                           CONDITIONS PRECEDENT TO THE
                         OBLIGATIONS OF SELLER TO CLOSE

         The obligation of Seller to close the Transaction is subject to the
fulfillment prior to Closing of each of the following conditions, which may be
waived in whole or in part by Seller:

         5.1 COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties made by Purchaser in Section 2.3
of this Agreement shall have been true and correct in all material respects when
made and shall be true and correct in all material respects at the Closing with
the same force and effect as if made at the Closing. Purchaser shall have
performed in all material respects all agreements, covenants and conditions
required to be performed by Purchaser prior to the Closing.

         5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transaction.

         5.3 OTHER AGREEMENTS. Purchaser shall have executed and delivered all
agreements referred to in Section 1.5 hereof, to be executed by the Purchaser.

         5.4 PAYMENTS. Seller shall have received from Purchaser all of eRCG
Shares and cash in lieu of any fractional eRCG Share that Seller is entitled to
receive pursuant to the Basic Agreements.


                                       11
   15

                                       VI.

                                   TERMINATION

         6.1 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the LST Shares may be abandoned before the Closing by:

             (a) The mutual consent of Seller and Purchaser;

             (b) Purchaser, if the conditions precedent set forth in Article IV
         hereof shall have not have been satisfied on or before the Closing Date
         (as the same may be extended from time to time); and

             (c) Seller, if the conditions precedent set forth in Article V
         hereof shall not have been satisfied on or before the Closing Date (as
         the same may be extended from time to time).

         Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor. Termination shall not relieve any party from
liability for any willful breach of this Agreement.

                                      VII.

                                  MISCELLANEOUS

         7.1 SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4 and
3.5 and Article VII hereof, which shall survive the Closing or termination
hereof for a period of two (2) years, none of the representations and warranties
contained in this Agreement or in any certificate, exhibit or other document
delivered pursuant to this Agreement shall survive the Closing.

         7.2 BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY
BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on
behalf of the parties pursuant thereto, constitute the entire agreement between
the parties. The terms and conditions of the Basic Agreements shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. Nothing in the Basic Agreements,
expressed or implied, confers any rights or remedies upon any party other than
the parties hereto and their respective heirs, legal representatives, successors
and assigns.

         7.3 GOVERNING LAW. The Basic Agreements and the other instruments
delivered by or on behalf of the parties pursuant hereto are made pursuant to,
and will be construed under, the laws of the State of Delaware, without regard
to its conflicts of law principles.

         7.4 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
personally delivered, delivered by a nationally recognized overnight delivery
service, sent via facsimile transmission


                                       12

   16

(receipt confirmed), or three (3) business days after it is deposited in the
United States mail, certified or registered, return receipt requested, postage
prepaid, to:

               (a)    If to Seller to:
                      ---------------------------------------

                      ---------------------------------------

                      ---------------------------------------
                      Telephone: (____) ___________
                      Fax:  (___) _________________


               (b)    If to Purchaser, to:

                      eResource Capital Group, Inc.
                      5935 Carnegie Boulevard, Suite 101
                      Charlotte, NC  28209
                      Attention: Melinda Morris Zanoni, Executive Vice President
                      Telephone: (704) 553-9330
                      Fax: (704) 553-7136

         These addresses may be changed from time to time by like written notice
to the other party.

         7.5 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.

          7.6 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law, then this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.

         7.7 EXPENSES. Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of the
Transaction.

         7.8 INTEGRATION; INTERPRETATION. The Basic Agreements and all documents
and instruments executed pursuant hereto merge and integrate all prior
agreements and representations respecting the Transaction, whether written or
oral, and constitute the sole agreement of the parties in connection therewith.
This Agreement has been negotiated by and submitted to the scrutiny of both
Seller and Purchaser and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.


                                       13

   17


         7.9 AMENDMENTS. No amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by both of the parties hereto.

         7.10 VARIATION OF PRONOUNS. All pronouns and any variations thereof
shall be deemed to reflect masculine, feminine, or neuter, singular or plural,
as the identity of the person or entity may require.

         7.11 WAIVERS. Purchaser and Seller may, in writing, amend the time for
or waive compliance by the other with any of the covenants or conditions of the
other contained herein. Failure to pursue any legal or equitable remedy or right
available to a party shall not constitute a waiver of such right, nor shall any
such forbearance, failure or actual waiver imply or constitute waiver of
subsequent default or breach.

         7.12 COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be executed
in counterparts (whether by facsimile or otherwise), each of which will be
deemed an original and all of which together will constitute one instrument.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       14
   18


         IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement, or caused this Agreement to be duly executed, on the date first
written above.


                                   PURCHASER:

                                   eRESOURCE CAPITAL GROUP, INC.



                                   BY:
                                      ------------------------------------
                                      MELINDA MORRIS ZANONI
                                      ITS: EXECUTIVE VICE PRESIDENT


                                   SELLER:


                                   ----------------------------------------

                                   ----------------------------------------


                                       15

EX-2.2

   1
                                                                    EXHIBIT 2.2


================================================================================

                            STOCK PURCHASE AGREEMENT

                         ENTERED INTO MARCH ____, 2001,

                                     BETWEEN

                          ERESOURCE CAPITAL GROUP, INC.

                                       AND

                              GLENN I. BARRETT, JR.

================================================================================


   2

                                TABLE OF CONTENTS

                                                                                           
ARTICLE I.        SALE AND PURCHASE OF THE LST SHARES..........................................   1
         1.1      Sale and Purchase............................................................   1
         1.2      Closing......................................................................   1
         1.3      Purchase Price...............................................................   1
         1.4      Rights of Former Stockholders................................................   2
         1.5      Portion of eRCG Shares Contingent; Sale of eRCG Shares.......................   2
         1.6      Other Agreements.............................................................   2
         1.7      Basic Agreements and Transaction Defined.....................................   3

ARTICLE II.       REPRESENTATIONS AND WARRANTIES...............................................   3
         2.1.     Representations and Warranties of Seller.....................................   3
         2.2.     Representations and Warranties Concerning LST................................   4
         2.3.     Representations and Warranties of Purchaser..................................   7

ARTICLE III.      COVENANTS....................................................................   8
         3.1.     Mutual Covenants.............................................................   8
         3.2.     Seller's Covenants...........................................................   9
         3.3.     No Shop......................................................................  10
         3.4.     Public Announcements.........................................................  10
         3.5.     Confidentiality..............................................................  10
         3.6      Indemnification..............................................................  10

ARTICLE IV.       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE................  13
         4.1.     Compliance with Seller's Representations, Warranties and Covenants...........  13
         4.2.     No Adverse Change............................................................  13
         4.3.     No Legal Proceedings.........................................................  13
         4.4      Documents to be Delivered by Seller..........................................  14
         4.5      Consents.....................................................................  14
         4.6      Listing of eRCG Shares.......................................................  14
         4.7      Amendment of Stock Option Plan...............................................  14
         4.8      Cancellation of Outstanding Options..........................................  14
         4.9      Sale by Other LST Stockholders...............................................  14
         4.10     Consummation of Private Placement by LST.....................................  14
         4.11     Investigation................................................................  14




                                       ii
   3

                                                                                           
ARTICLE V.        CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE...................  14
         5.1.     Compliance with Purchaser's Representations, Warranties and Covenants........  14
         5.2.     No Legal Proceedings.........................................................  15
         5.3.     Other Agreements.............................................................  15
         5.4.     Payments.....................................................................  15


ARTICLE VI.       TERMINATION..................................................................  15
         6.1.     Termination and Abandonment..................................................  15

ARTICLE VII.      MISCELLANEOUS................................................................  15
         7.1.     Survival.....................................................................  15
         7.2.     Binding Effect of the Basic Agreements; No Third Party Beneficiaries.........  15
         7.3.     Governing Law................................................................  16
         7.4.     Notices......................................................................  16
         7.5.     Headings.....................................................................  16
         7.6.     Severability.................................................................  16
         7.7.     Expenses.....................................................................  16
         7.8.     Integration; Interpretation..................................................  17
         7.9.     Amendments...................................................................  17
         7.10.    Variation of Pronouns........................................................  17
         7.11     Waivers......................................................................  17
         7.12.    Counterparts; Facsimile Signatures...........................................  17




                                      iii
   4

                            STOCK PURCHASE AGREEMENT

         THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day
of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation
("PURCHASER"), and GLENN I. BARRETT, JR., an individual resident of the State of
North Carolina ("SELLER") and a stockholder and the President and Chief
Executive Officer of LST, INC., a Delaware corporation d/b/a LifeStyle
Technologies ("LST").

         WHEREAS, Seller is the record and beneficial owner of Two Million Two
Hundred and Fifty Thousand (2,250,000) shares ("LST SHARES") of LST's common
stock, par value $.001 per share ("LST COMMON STOCK"), representing
approximately 28% of the issued capital stock of LST; and

         WHEREAS, Seller desires to sell the LST Shares to Purchaser, and
Purchaser desires to purchase the LST Shares, upon the terms and conditions set
forth herein.

         NOW, THEREFORE in consideration of the mutual promises and covenants
contained herein, and for other good valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:

                                       I.

                       SALE AND PURCHASE OF THE LST SHARES

         1.1      SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing (as defined in Section 1.2 hereof), Seller agrees to sell,
assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to
purchase from Seller, the LST Shares.

         1.2      CLOSING. The purchase shall be consummated at a closing
("CLOSING") to take place at the offices of Purchaser on the date and time on
which the last of the conditions specified in Articles IV and V hereof have been
satisfied or waived, or such other place, time or date as may be mutually agreed
upon by the parties hereto.

         1.3      PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the
LST Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in
restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value
$.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's
Share being equal to the average for the five (5) trading days immediately
preceding the Closing Date of the daily closing price of eRCG Common Stock as
reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided,
however, that if the Average Share Price is less than One Dollar ($1.00), then
the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of
calculating the Purchase Price due Seller. The Purchase Price shall be paid at
Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller
receiving cash in lieu of any fractional eRCG Share that Seller may be entitled
to receive pursuant to this Section 1.3. Purchaser will give stop transfer
instructions to its transfer


   5

agent with respect to the eRCG Shares and there will be placed on the
certificate(s) representing such eRCG Shares a restrictive legend.

         1.4      RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange,
each certificate representing LST Shares shall from and after the Closing
represent for all purposes only the right to receive the Purchase Price. Seller
will not be entitled to vote or give its consent after the Closing at any
meeting or action by written consent of Purchaser's stockholders until it has
exchanged its certificates representing the LST Shares for certificates
representing the eRCG Shares.

         1.5      PORTION OF ERCG SHARES CONTINGENT; SALE OF ERCG SHARES.

         (a) Notwithstanding Section 1.3 hereof, the delivery by Purchaser to
Seller of One Million (1,000,000) eRCG Shares that Seller is entitled to receive
pursuant to such Section 1.3 (the "CONTINGENT CONSIDERATION") is contingent upon
LST meeting or exceeding the specified performance milestones at specified
milestone dates through March 31, 2002 as set forth in Exhibit 1.5 attached
hereto. Provided LST meets all the performance milestones, the Contingent
Consideration shall be payable in equal installments set forth on Exhibit 1.5
attached hereto that correspond with each performance milestone within thirty
(30) days of Purchaser's receipt and confirmation of financial statements and
reasonable supporting documentation from LST (the "CONTINGENT PAYMENT DATE ")
associated with such performance milestone. If LST does not meet a specified
performance milestone, then Purchaser is not obligated to deliver to Seller the
Contingent Consideration installment on the specified milestone date. However,
the performance milestones are cumulative in nature, and, therefore, if LST does
not meet an earlier performance milestone but does meet a subsequent performance
milestone, then, upon the Contingent Payment Date corresponding to the
subsequent performance milestone, Purchaser shall deliver to Seller the
installment of Contingent Consideration for the performance milestone that LST
met as well as the installment of Contingent Consideration for the earlier
performance milestone that LST failed to meet.

         (b) Seller hereby agrees that for a period commencing on the Closing
and ending on the three (3) year anniversary thereof, the number of shares of
eRCG Common Stock sold by or for the account of Seller (whether or not (i) such
shares are now owned by Seller or are acquired by Seller after the date hereof
or (ii) such shares are restricted or unrestricted securities under applicable
securities laws) on any day (the "SALES DATE") shall not exceed ten percent
(10%) of the average five (5) day reported volume of trading of eRCG's Common
Stock on all national securities exchanges and/or reported through the automated
evaluation system of a registered securities association preceding the Sales
Date.

         SELLER EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE OTHER STOCKHOLDERS OF
LST ARE NOT SUBJECT TO THE PROVISIONS OF THIS SECTION 1.5 OR CERTAIN OTHER
PROVISIONS OF THIS AGREEMENT.

         1.6      OTHER AGREEMENTS. At the Closing, the indicated parties shall
deliver the following additional agreements:


                                       2
   6

                  (a)      Seller shall deliver to Purchaser stock
         certificate(s) representing all of the LST Shares held by Seller, duly
         endorsed to Purchaser in blank or accompanied by duly executed stock
         power(s), transferring such LST Shares from Seller to Purchaser;

                  (b)      Seller shall deliver to Purchaser an executed
         counterpart signature page to the Investment Representation Agreement,
         substantially in the form attached hereto as Exhibit 1.5(b);

                  (c)      Seller and LST shall each deliver an executed
         counterpart signature page to the Employment and Non-competition
         Agreement, substantially in the form attached hereto as Exhibit 1.6(c);
         and

                  (d)      Purchaser and Seller shall each deliver an executed
         counterpart signature page to the Registration Rights Agreement,
         substantially in the form attached hereto as Exhibit 1.5(c).

         1.7      BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and
other agreements listed in paragraph 1.6, are sometimes referred to as the
"Basic Agreements." The transaction contemplated by the Basic Agreement and the
agreements with the other stockholders of LST are sometimes referred to as the
"Transaction".

                                       II.

                         REPRESENTATIONS AND WARRANTIES

         2.1      REPRESENTATIONS AND WARRANTIES OF SELLER. With such
exceptions, if any, as may be set forth in a letter (the "SELLER DISCLOSURE
LETTER") to be delivered by Seller to Purchaser on the date hereof, Seller
represents and warrants to Purchaser as follows:

                  (a)      TITLE TO THE LST SHARES. At Closing, Seller shall own
         of record and beneficially the LST Shares free and clear of all liens,
         encumbrances, pledges, claims, options, charges and assessments of any
         nature whatsoever, with full right and lawful authority to transfer the
         LST Shares to Purchaser. No person has any preemptive rights or rights
         of first refusal with respect to any of the LST Shares. There exists no
         voting agreement, voting trust, or outstanding proxy with respect to
         any of the LST Shares. There are no outstanding rights, options,
         warrants, calls, commitments, or any other agreements of any character,
         whether oral or written, with respect to the LST Shares.

                  (b)      AUTHORITY; CONSENTS. Seller has full power and lawful
         authority to execute and deliver the Basic Agreements and the Seller
         Disclosure Letter and to consummate and perform the Transaction
         contemplated thereby. The Basic Agreements constitute (or shall, upon
         execution, constitute) valid and legally binding obligations of Seller,
         enforceable in accordance with their terms. To Seller's knowledge,
         neither the execution and delivery of the Basic Agreements and the
         Seller Disclosure Letter by Seller, nor the consummation and
         performance of the Transaction, conflicts with, requires


                                       3
   7

         the consent, waiver or approval of, results in a breach of or default
         under, or gives to others any interest or right of termination,
         cancellation or acceleration in or with respect to, any agreement by
         which Seller is a party or by which Seller or any of its properties or
         assets are bound or affected. Seller need not give any notice to, make
         any filings with, or obtain any authorization, consent, or approval of
         any government or governmental agency in order to consummate the
         Transaction.

                  (c)      NONCONTRAVENTION. Neither the execution and the
         delivery of the Basic Agreements and Seller Disclosure Letter, nor the
         consummation of the Transaction, will violate any constitution,
         statute, regulation, rule, injunction, judgment, order, decree, ruling,
         charge, or other restriction of any government, governmental agency, or
         court to which Seller is subject.

                  (d)      NO STOCK OPTIONS. Seller has no stock options,
         warrants, rights, calls or any other agreements of any character,
         whether oral or written, obligating LST to issue any shares of its
         capital stock.

                  (e)      NO EMPLOYMENT AGREEMENT. Seller does not have an
         employment agreement, letter or other agreement with LST with respect
         to employment.

                  (f)      DISCLOSURE. All statements of Seller contained in the
         Basic Agreements and in the Seller Disclosure Letter by and on behalf
         of Seller and LST are true and correct in all material respects and do
         not omit any material fact necessary to make the statements contained
         therein not misleading in light of the circumstances under which they
         were made. There are no facts known to Seller, which could have a
         materially adverse effect upon the business, financial condition,
         results of operations, assets, liabilities, or prospects of LST, which
         have not been disclosed to Purchaser in the Basic Agreements or Seller
         Disclosure Letter.

         2.2      REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such
exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller
represents and warrants to Purchaser as follows:

                  (a)      ORGANIZATION. LST is a corporation duly incorporated,
         validly existing and in good standing under the laws of the state of
         Delaware. LST has all requisite corporate power and authority to own,
         lease and operate its properties and to carry on its business. LST is
         duly qualified and in good standing as a foreign corporation in each
         jurisdiction where its ownership of property or operation of its
         business requires qualification.

                  (b)      AUTHORIZED CAPITALIZATION. The authorized
         capitalization of LST consists of 20,000,000 shares of common stock,
         par value $.001 per share, of which 8,099,750 shares have been issued
         and are outstanding. LST has no other capital stock authorized, issued
         or outstanding and there are no shares of stock held in treasury. The
         outstanding shares of LST Common Stock have been duly authorized,
         validly issued, fully paid and nonassessable with no personal liability
         attaching to the ownership thereof


                                       4
   8

         and were offered, issued, sold and delivered by LST in compliance with
         all applicable state and federal laws. Except as set forth on Schedule
         2.2(b) of the Seller Disclosure Letter, LST does not have any
         outstanding rights, options, warrants, calls, commitments, conversion
         or any other agreements of any character, whether oral or written,
         obligating it to issue any shares of its capital stock, whether
         authorized or not. LST is not a party to and is not bound by any
         agreement, contract, arrangement or understanding, whether oral or
         written, giving any person or entity any interest in, or any right to
         share, participate in or receive any portion of LST's income, profits
         or assets, or obligating LST to distribute any portion of its income,
         profits or assets.

                  (c)      CONSENTS. Except as set forth on Schedule 2.2(c) of
         the Seller Disclosure Letter, to Seller's knowledge, the consummation
         and performance of the Transaction (i) does not conflict with, require
         the consent, waiver or approval of, result in a breach of or default
         under or give to others any interest or rights of termination,
         cancellation or acceleration in or with respect to, any agreement by
         which LST is a party or LST or any of its properties or assets are
         bound or affected, and (ii) will not result in the imposition of any
         claim, lien, encumbrance or restriction of any kind upon the assets of
         LST.

                  (d)      LST FINANCIAL STATEMENTS. The financial statements of
         LST (the "LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of
         the Seller Disclosure Letter are complete, were prepared in accordance
         with generally accepted accounting principles applied on a basis
         consistent with prior periods and fairly present the financial position
         of LST as of December 31, 2000 and there have been no material changes
         thereafter.

                  (e)      COMPLIANCE WITH LAWS. LST is not in violation of any
         federal, state, local or other law, ordinance, rule or regulation
         applicable to its business, and has not received any actual or
         threatened complaint, citation or notice of violation or investigation
         from any governmental authority.

                  (f)      NO LITIGATION. There are no actions, suits, claims,
         complaints or proceedings pending or threatened against LST, at law or
         in equity, or before or by any governmental department, commission,
         court, board, bureau, agency or instrumentality; and there are no facts
         which would provide a valid basis for any such action, suit or
         proceeding. There are no orders, judgments or decrees of any
         governmental authority outstanding which specifically apply to LST or
         any of its assets.

                  (g)      MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller
         Disclosure Letter sets forth a list of all material contracts of LST.
         LST has in all material respect performed all of its obligations
         required to be performed by it through the date hereof, and is not in
         default or alleged to be in default in any material respect, under any
         contract, including any leases for office space, and to Seller's
         knowledge, there exists no event, condition or occurrence which, after
         notice or lapse of time or both, constitutes such a default.

                  (h)      EMPLOYMENT MATTERS. LST is not a party to any
         employment agreements, letters or other agreements with any individual
         with respect to his or her employment with LST. Schedule 2.2(h) of the
         Seller Disclosure Letter sets forth a


                                       5
   9

         complete and accurate list of employees and each employee's rate of
         compensation (including wages and guaranteed or anticipated bonuses).
         LST is not subject to any labor disputes.

                  (i)      NO UNDISCLOSED LIABILITIES. Except as set forth in
         LST Financial Statements, Seller is not aware of any material
         liabilities for which LST is currently liable or will become liable in
         the future.

                  (j)      TAXES. LST has timely filed all federal, state, local
         and foreign tax returns and tax reports required to be filed with the
         appropriate governmental agency in all jurisdictions in which such
         returns and reports are required to be filed, excepting only those
         taxes which will not be due until after the Closing. All such returns
         and reports are true, correct and complete, and all amounts shown as
         owing on them have been paid, including all interest, penalties,
         deficiencies and assessments heretofore levied or assessed against LST.
         There is no agreement for extension of time of payment of any taxes of
         LST. There is no examination or audit pending or threatened by the
         Internal Revenue Service or by any state or local taxing authority with
         respect to tax matters of LST.

                  (k)      REAL PROPERTY. LST does not own any real property.

                  (l)      INSURANCE. A complete and accurate list of all
         insurance policies held by LST and now in force (including insurance
         policies covering the assets, business, equipment, properties,
         employees, officers and directors of LST) are set forth in Schedule
         2.2(l) of the Seller Disclosure Letter and are of the type and in
         amounts customarily carried by persons conducting businesses similar to
         those of LST. There is no material claim by LST pending under any of
         the insurance policies as to which coverage has been questioned, denied
         or disputed by the underwriters of such policies.

                  (m)      INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller
         Disclosure Letter sets forth a complete and accurate list of and
         describes all franchises, licenses, patents, patent applications,
         trademarks, service marks, trade names, copyrights and rights with
         respect to any of the foregoing (collectively, "INTELLECTUAL PROPERTY
         RIGHTS") presently owned or held by LST. LST owns the right to use all
         of the Intellectual Property Rights. The Intellectual Property Rights
         are all that are necessary for LST to conduct its business. No event
         has occurred which permits, or after notice or lapse of time would
         permit, the revocation or termination of any of the Intellectual
         Property Rights. LST has no reason to believe that it is infringing,
         nor has it received notice with respect to the infringement or possible
         or claimed infringement, upon, or, that it is otherwise acting
         adversely to, any known right or claimed right of any person with
         respect to any Intellectual Property Rights.

                  (n)      BENEFIT PLANS. Schedule 2.2(n) of the Seller
         Disclosure Letter sets forth a complete and accurate list of all of the
         employee benefit plans that LST maintains or contributes to, or has
         maintained or to which it has made contributions (including any
         terminated employee benefit plans). LST does not have any obligation
         under any


                                       6
   10

         employee benefit plans other than those identified on Schedule 2.2(n),
         and LST is in compliance with all applicable provisions of ERISA and
         the regulations and published interpretations thereunder with respect
         to all employee benefit plans. The execution and deliver of this
         Agreement and the consummation of the Transaction will not result in
         any violations of ERISA or any other laws related thereto.

                  (o)      ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts
         receivable of LST represent in all material respects sales made in the
         ordinary course of business. Schedule 2.2(o) of the Seller Disclosure
         Letter sets forth LST's top 20 customers by billings and/or revenues
         received. Seller has no knowledge of any oral or written notice or
         other indication from any customer stating that it intends to terminate
         its business relationship with LST or reduce the amount of business it
         does with LST.

                  2.3      REPRESENTATIONS AND WARRANTIES OF PURCHASER. With
         such exceptions, if any, as may be set forth in a letter (the
         "PURCHASER DISCLOSURE LETTER") to be delivered by Purchaser to Seller
         on the date hereof, Purchaser represents and warrants to Seller as
         follows:

                  (a)      ORGANIZATION. Purchaser is a corporation duly
         incorporated, validly existing and in good standing under the laws of
         the state of Delaware. Purchaser has all requisite corporate power and
         authority to own, lease and operate its properties and to carry on its
         business. Purchaser is duly qualified and in good standing as a foreign
         corporation in each jurisdiction where its ownership of property or
         operation of its business requires qualification.

                  (b)      AUTHORIZED CAPITALIZATION. The authorized
         capitalization of Purchaser consists of Two Hundred Million
         (200,000,000) shares of common stock, of which 61,687,654 shares have
         been issued and are outstanding as of March 7, 2001, and 10,000,000
         shares of preferred stock, none of which are issued or outstanding. In
         addition, Purchaser, as of March 7, 2001, has outstanding warrants and
         options to purchase 27,380,120 shares of the eRCG Common Stock. At
         Closing, all issued and outstanding stock of Purchaser, including the
         eRCG Shares, will have been duly authorized, validly issued, fully paid
         and nonassessable with no personal liability attaching to the ownership
         thereof. Seller will receive all right, title and interest to eRCG
         Shares free and clear of all liens, pledges, mortgages, security
         interests and claims whatsoever, except those imposed by state and
         federal securities laws.

                  (c)      AUTHORITY; CONSENTS. Purchaser has full power and
         lawful authority to execute and deliver the Basic Agreements and the
         Purchaser Disclosure Letter and to consummate and perform the
         Transaction. The Basic Agreements constitute (or shall, upon execution,
         constitute) valid and legally binding obligations of Purchaser,
         enforceable in accordance with their terms. To Purchaser's knowledge,
         neither the execution and delivery of the Basic Agreements and the
         Purchaser Disclosure Letter by Purchaser, nor the consummation and
         performance of the Transaction, conflicts with, requires the consent,
         waiver or approval of, results in a breach of or default under, or
         gives to others any interest or right of termination, cancellation or
         acceleration in or with


                                       7
   11

         respect to, any agreement by which Purchaser is a party or by which
         Purchaser or any of its properties or assets are bound or affected.

                  (d)      INVESTMENT INTENT. Purchaser is acquiring the LST
         Shares for its own account, for investment purposes only, and not with
         a view to the sale or distribution of any part thereof and Purchaser
         has no present intention of selling, granting participation in, or
         otherwise distributing the same. Purchaser understands the specific
         risks related to an investment in the LST Shares, especially as it
         relates to the financial performance of LST.

                  (e)      FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
         Purchaser has filed all material reports, schedules, forms, statements
         and other documents with the Securities and Exchange Commission (the
         "SEC") pursuant to applicable state and federal securities laws through
         the date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute
         all material documents required to have been filed by Purchaser
         pursuant to such laws.

                  (f)      DISCLOSURE. All statements of Purchaser contained in
         the Basic Agreements and in the Purchaser Disclosure Letter by or on
         behalf of Purchaser are true and correct in all material respects and,
         when considered in conjunction with the SEC Documents, do not omit any
         material fact necessary to make the statements contained therein not
         misleading in light of the circumstances under which they were made.
         There are no facts known to Purchaser which could have a material
         adverse affect upon the business, financial condition, results of
         operations, assets or liabilities of Purchaser, which have not been
         disclosed to Seller in the Basic Agreements, the Purchaser Disclosure
         Letter or the SEC Documents.

                                      III.

                                    COVENANTS

         3.1      MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and
to the best of Seller's ability, each covenant and agree that from the date
hereof until Closing each shall:

                  (a)      ORDINARY COURSE OF BUSINESS. Operate its business
         only in the ordinary course and use its best efforts to preserve its
         business, properties, assets, contracts, organization, goodwill and
         relationships with persons with whom it has business dealings.

                  (b)      NO INDEBTEDNESS. Not create, incur, assume, guarantee
         or otherwise become liable with respect to any obligation for borrowed
         money, indebtedness, capitalized lease or similar obligation, except in
         the ordinary course of business consistent with past practices where
         the entire net proceeds thereof are deposited with and used by and in
         connection with the business.


                                       8
   12

                  (c)      MAINTAIN BOOKS. Maintain its books, accounts and
         records in the usual, regular and ordinary business manner and in
         accordance with generally accepted accounting principles applied on a
         basis consistent with past practices.

                  (d)      NO AMENDMENTS. (i) Not amend its corporate charter or
         bylaws (or similar documents) or material contracts, and (ii) maintain
         its corporate existence, licenses, permits, powers and rights in full
         force and effect.

                  (e)      TAXES AND ACCOUNTING MATTERS. (i) File when due all
         federal, state and local tax returns and reports which shall be
         accurate and complete, including, but not limited to, income,
         franchise, excise, ad valorem, and other taxes with respect to its
         business and properties, and to pay as they become due all taxes or
         assessments, except for taxes for which adequate reserves are
         established and which are being contested in good faith by appropriate
         proceedings, and (ii) not change its accounting methods or practices or
         any depreciation, amortization or inventory valuation policies or
         practices.

                  (f)      DUE COMPLIANCE. Comply in all material respects with
         all laws, regulations, rules and ordinances applicable to it and to the
         conduct of its business.

                  (g)      CONSENTS. Use its best efforts to obtain the consent
         or approval of each person or entity whose consent or approval is
         required for the consummation of the Transactions.

                  (h)      EFFORTS TO CONSUMMATE. Subject to the terms and
         conditions of this Agreement, use its reasonable efforts to take, or
         cause to be taken, all actions and to do, or cause to be done, all
         things necessary, proper and advisable under applicable laws to
         consummate and make effective, as soon as practicable after the date of
         this Agreement, the Transaction.

         3.2      SELLER'S COVENANTS. Seller, on behalf of LST and to the best
of Seller's ability, covenants and agrees from the date hereof until Closing,
LST shall:

                  (a)      COMPENSATION. Not (i) enter into or alter any
         employment agreements, (ii) grant any severance or increase in
         compensation other than normal merit increases consistent with its
         general prevailing practices to any officer or employee, (iii) enter
         into or alter any labor or collective bargaining agreement or any bonus
         or other employee fringe benefit, or (iv) adopt or amend any employee
         stock option plan.

                  (b)      NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS.
         Not to (i) issue any shares of any class of capital stock, or enter
         into any contract, option, warrant or right calling for the issuance of
         any such shares of capital stock, or create or issue any securities
         convertible into any securities, (ii) accelerate or amend the period of
         exercisability of warrants or restricted stock or reprice any warrants
         or authorize cash payments in exchange for any warrants, or (iii)
         declare or pay any dividends on or make any other distributions in any
         form in respect of capital stock, or split, combine or


                                       9
   13

         reclassify any capital stock.

         3.3      NO SHOP. Seller agrees to, and to the best of Seller's ability
shall cause LST to, negotiate exclusively with Purchaser and not to solicit,
negotiate, enter into any agreement or entertain other offers or alternative
proposals for the LST Shares or the acquisition of Seller, its assets or stock
from the date hereof until the earlier of (i) termination of this Agreement or
(ii) August 31, 2001.

         3.4      PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of
Seller's ability shall cause LST not to, without the prior written consent of
Purchaser, make any announcement, issue any press release or make any statement
to any third party with respect to the Transaction except as may be necessary to
comply with any law, regulation or order and then only after prior notice to
Purchaser as to the content of such announcement.

         3.5      CONFIDENTIALITY. Seller agrees to, and to the best of Seller's
ability shall cause LST to, maintain the confidentiality of all confidential
information furnished to it related to Purchaser and shall not use or disclose
such information for any purpose, except in furtherance of the Transaction.

         3.6      INDEMNIFICATION.

                  (a)      OBLIGATIONS. Seller shall indemnify, reimburse and
         hold harmless Purchaser, its affiliates and any successor or assigns
         (the "INDEMNIFIED PERSONS") for any and all direct or indirect claims,
         losses, liabilities (actual or contingent), damages (including special
         and consequential damages), costs (including court costs) and expenses
         (including all attorneys' and accountants' fees and expenses on a full
         indemnity basis) (hereinafter "A LOSS" or "LOSSES"), as a result of or
         in connection with (i) any breach, inaccuracy or untruth of any
         warranty, whether such breach, inaccuracy or untruth exists or is made
         on the date of this Agreement or as of the Closing, (ii) any breach of
         or noncompliance by Seller with any covenant or agreement of Seller
         contained in this Agreement or in any other agreement or instrument
         delivered in connection with this Agreement, or (iii) the sale of any
         capital stock or other securities of LST including, without limitation,
         the sale of LST Common Stock pursuant to that certain Private Placement
         Memorandum dated July 15, 2000 (the "LST PRIVATE PLACEMENT
         MEMORANDUM").

                  (b)      NOTIFICATION. Seller hereby undertakes to notify
         Purchaser without delay of the occurrence of any event which
         constitutes or may with the passage of time constitute an event
         entitling any Indemnified Person to indemnification under this Section.


                                       10
   14

                  (c)      NOTICE OF CLAIM. To seek indemnification hereunder,
         an Indemnified Person shall notify Seller of any claim for
         indemnification, specifying in reasonable detail the nature of the Loss
         and the amount or an estimate of the amount thereof.

                  (d)      DEFENSE OF CLAIMS. Seller shall have the right to
         undertake by counsel of its own choosing, the defense of a claim by a
         third party which has resulted in a claim for indemnification
         hereunder. If Seller shall elect not to undertake such defense, or
         within a reasonable time after notice of any such claim from the
         Indemnified Persons shall fail to defend in a reasonable manner, the
         Indemnified Persons (upon further written notice to Seller) shall have
         the right to undertake the defense, compromise or settlement of such
         claim, by counsel or other representatives of their own choosing, on
         behalf of and for the account and risk of Seller (subject to the right
         of Seller to assume defense of such claim at any time prior to
         settlement, compromise or final determination thereof). Notwithstanding
         anything to the contrary herein, if there is a reasonable probability
         that a claim may materially and adversely affect the Indemnified
         Persons, other than as a result of money damages or other money
         payments, (i) all Indemnified Persons shall have the right, at their
         own cost and expense, to participate in the defense, compromise or
         settlement of the claim, (ii) Seller shall not, without all Indemnified
         Persons' written consent, settle or compromise any claim or consent to
         entry of any judgment which does not include as an unconditional term
         thereof the giving by the claimant or the plaintiff to all Indemnified
         Persons of a release from all liability in respect of such claim, and
         (iii) in the event that Seller undertakes defense of any claim, the
         Indemnified Persons, by counsel or other representatives of their own
         choosing and at their sole cost and expense, shall have the right to
         consult with Seller and its counsel concerning such claim and Seller
         and the Indemnified Persons and their respective counsel or other
         representatives shall cooperate with respect to such claim.

                  (e)      RIGHT OF RECOUPMENT AND SET OFF.

                           (i)      Liquidated Losses; Set Off. Purchaser will
                  be entitled at any time prior to March 31, 2002 to set off or
                  recoup any Loss that has been actually incurred by or imposed
                  upon Indemnified Parties (a "LIQUIDATED LOSS") against the
                  Contingent Consideration (a "SET OFF"). Prior to or
                  concurrently with each exercise by Purchaser of its right of
                  Set Off, Purchaser will deliver a written notice to Seller
                  (the "SET OFF NOTICE"), which notice will set forth the amount
                  of the Liquidated Loss, together with a reasonably detailed
                  statement of the circumstances under which such Liquidated
                  Loss was incurred by or imposed upon the applicable
                  Indemnified Party and the total of all Liquidated Losses that
                  have been Set Off by Purchaser through the date of the Set Off
                  Notice.

                           (ii)     Unliquidated Losses; Set Off Reserves.

                                    (1)      Establishment of Set Off Reserves.
                  At any time prior to March 31, 2002, if and to the extent that
                  Purchaser reasonably determines that it is reasonably likely
                  that any Loss that has not yet become a Liquidated Loss (an
                  "UNLIQUIDATED LOSS") will be incurred by or imposed upon an
                  Indemnified Party


                                       11
   15

                  at any time in the future with respect to any claim of which
                  Purchaser has notice prior to March 31, 2002, Purchaser will
                  be entitled to establish a reasonable reserve (a "SET OFF
                  RESERVE") against the Contingent Consideration in respect or
                  such Unliquidated Loss. Purchaser will take into consideration
                  the availability of insurance coverage for any Unliquidated
                  Loss in establishing any Set Off Reserve.

                                    (2)      Set Off Reserve Notice. Prior to or
                  concurrently with the establishment of a Set Off Reserve,
                  Purchaser will deliver a written notice to Seller (the "SET
                  OFF RESERVE NOTICE"), which notice will set forth the amount
                  of the Unliquidated Loss, together with a reasonably detailed
                  statement of the basis for Purchaser's determination that such
                  Unliquidated Loss is reasonably likely to be incurred by or
                  imposed upon the applicable Indemnified Party and the total of
                  all Set Off Reserves through the date of the Set Off Reserve
                  Notice.

                                    (3)      Suspension of Obligations. The
                  obligation of Purchaser to pay the Contingent Consideration to
                  the Seller, as provided in Section 1.5 hereof, will be
                  suspended to the extent of the aggregate amount of all Set Off
                  Reserves not settled pursuant to Section 3.6(e)(ii)(4) hereof
                  at the time of such payment; provided, however, that Purchaser
                  shall at all times work diligently and in good faith to
                  resolve any claims to which the Set Off Reserve relates.

                                    (4)      Settlement of Set Off Reserves. If
                  at any time it is determined that any Set Off Reserve exceeds
                  the aggregate amount of the Losses ultimately incurred by or
                  imposed upon the Indemnified Parties as a result of or based
                  upon the events or conditions to which the Set Off Reserve
                  relates (the "FINAL LOSS AMOUNT"), Purchaser will promptly pay
                  to the Sellers the amount of such Set Off Reserve in excess of
                  such Final Loss Amount.

                           (iii)    Good Faith Exercise; No Breach. Purchaser
                  will act in good faith in the exercise of its rights under
                  Section 3.6(e) hereof. It is expressly agreed that the
                  exercise in good faith by Purchaser of the right to Set Off
                  and to establish Set Off Reserves and the other rights and
                  remedies granted to Purchaser pursuant to Section 3.6(e)
                  hereof will in no event be deemed to constitute or give rise
                  to a violation or breach of, or a default under, this
                  Agreement.

                           (iv)     Non-Exclusive Source. The Contingent
                  Consideration shall serve as a non-exclusive source for any
                  claims of Purchaser for indemnification pursuant to Section
                  3.6 hereof.

         (f)      OTHER RIGHTS. The indemnities granted hereunder are in
                  addition to and not in substitution for any other right or
                  remedy an Indemnified Person may now have or may subsequently
                  take or hold, and may be enforced without first recourse to
                  such other right or remedy and without taking any steps or
                  proceedings in connection therewith, and notwithstanding any
                  rule of law or equity or statutory


                                       12
   16

                  provision to the contrary.

                                       IV.

                           CONDITIONS PRECEDENT TO THE
                        OBLIGATIONS OF PURCHASER TO CLOSE

         The obligation of Purchaser to close the Transaction is subject to the
fulfillment prior to the Closing of each of the following conditions, which may
be waived in whole or in part by Purchaser:

         4.1      COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties of Seller contained in Sections
2.1 and 2.2 hereof shall have been true and correct in all material respects
when made and shall be true and correct in all material respects as of the
Closing with the same force and effort as if made at the Closing. Seller shall
have performed in all material respects all agreements, covenants and conditions
required to be performed by Seller prior to the Closing.

         4.2      NO ADVERSE CHANGE. There shall have been no event, which has
had or may have a material adverse effect upon the business, financial
condition, results of operation, assets, liabilities or prospects of LST.

         4.3      NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transaction.

         4.4      DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have
delivered the following documents:

                  (a)      Stock certificate(s) representing all of the LST
         Shares held by Seller, duly endorsed to Purchaser in blank or
         accompanied by duly executed stock powers;

                  (b)      All agreements referred to in Section 1.6 hereof,
         executed by all parties thereto other than Purchaser;

                  (c)      Waiver of LST's right of first refusal under
         Stockholders' Agreement;

                  (d)      Legal opinion of counsel to LST, in a form acceptable
         to Purchaser; and

                  (e)      Such other documents or certificates as shall be
         reasonably required by Purchaser or its counsel in order to close and
         consummate the Transaction.

         4.5      CONSENTS.

                  (a)      BY PURCHASER. Purchaser's Board of Directors shall
         have approved and taken all necessary corporate action to execute,
         deliver and perform the Basic


                                       13
   17

         Agreements, the Purchaser Disclosure Letter and consummate the
         Transaction.

                  (b)      BY LST. LST shall have delivered to Purchaser any and
         all consents, waivers or approvals of any government, government agency
         or other third party necessary to the consummation and performance of
         the Transaction.

         4.6      LISTING OF ERCG SHARES. The eRCG Shares to be issued in
connection with the Transaction shall be listed for trading on the American
Stock Exchange.

         4.7      AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article
X of that certain LST, Inc. Omnibus Stock Option and Award Plan dated September
29, 2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change
of Control" (as defined in the Stock Option Plan) all outstanding options shall
be cancelled and any vested, but unexercised options shall no longer be
exercisable.

         4.8      CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled
any and all outstanding options, whether granted pursuant to the Stock Option
Plan or otherwise, and any vested but unexercised options shall no longer be
exercisable.

         4.9      SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding
one hundred percent (100%) of the issued and outstanding LST Common Stock shall
have entered into stock purchase agreements with Purchaser similar to this
Agreement and the other agreements set forth in Section 1.6 hereof.

         4.10     CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold
2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00)
per share pursuant to the terms of the LST Private Placement Memorandum.

         4.11     INVESTIGATION. Purchaser shall have satisfactory completed its
due diligence investigation of LST. No investigation by Purchaser shall affect
the representations and warranties of Seller.

                                       V.

                           CONDITIONS PRECEDENT TO THE
                         OBLIGATIONS OF SELLER TO CLOSE

         The obligation of Seller to close the Transaction is subject to the
fulfillment prior to Closing of each of the following conditions, which may be
waived in whole or in part by Seller:

         5.1      COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties made by Purchaser in Section 2.3
of this Agreement shall have been true and correct in all material respects when
made and shall be true and correct in all material respects at the Closing with
the same force and effect as if made at the Closing. Purchaser shall have
performed in all material respects all agreements, covenants and conditions
required to be performed by Purchaser prior to the Closing.


                                       14
   18

         5.2      NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transaction.

         5.3      OTHER AGREEMENTS. Purchaser shall have executed and delivered
all agreements referred to in Section 1.6 hereof, to be executed by the
Purchaser.

         5.4      PAYMENTS. Seller shall have received from Purchaser all of
eRCG Shares and cash in lieu of any fractional eRCG Share that Seller is
entitled to receive pursuant to the Basic Agreements.

                                       VI.

                                   TERMINATION

         6.1      TERMINATION AND ABANDONMENT. This Agreement may be terminated
and the purchase of the LST Shares may be abandoned before the Closing by:

                  (a)      The mutual consent of Seller and Purchaser;

                  (b)      Purchaser, if the conditions precedent set forth in
         Article IV hereof shall have not have been satisfied on or before the
         Closing Date (as the same may be extended from time to time); and

                  (c)      Seller, if the conditions precedent set forth in
         Article V hereof shall not have been satisfied on or before the Closing
         Date (as the same may be extended from time to time).

         Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor. Termination shall not relieve any party from
liability for any willful breach of this Agreement.

                                      VII.

                                  MISCELLANEOUS

         7.1      SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4
and 3.5 and Article VII hereof, which shall survive the Closing or termination
hereof for a period of two (2) years, none of the representations and warranties
contained in this Agreement or in any certificate, exhibit or other document
delivered pursuant to this Agreement shall survive the Closing.

         7.2      BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY
BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on
behalf of the parties pursuant thereto, constitute the entire agreement between
the parties. The terms and conditions of the Basic Agreements shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. Nothing in the Basic Agreements,
expressed or implied, confers any rights or remedies upon any party other than
the parties hereto


                                       15
   19

and their respective heirs, legal representatives, successors and assigns.

         7.3      GOVERNING LAW. The Basic Agreements and the other instruments
delivered by or on behalf of the parties pursuant hereto are made pursuant to,
and will be construed under, the laws of the State of Delaware, without regard
to its conflicts of law principles.

         7.4      NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and will be deemed to have been
duly given when personally delivered, delivered by a nationally recognized
overnight delivery service, sent via facsimile transmission (receipt confirmed),
or three (3) business days after it is deposited in the United States mail,
certified or registered, return receipt requested, postage prepaid, to:

                  (a)      If to Seller to:

                           Glenn I. Barrett, Jr.
                           c/o LST, Inc.
                           6201 Fairview Road, Suite 200
                           Charlotte, NC 28210
                           Telephone: (704) 401-3377
                           Fax: (704) 401-3333

                  (b)      If to Purchaser, to:

                           eResource Capital Group, Inc.
                           5935 Carnegie Boulevard, Suite 101
                           Charlotte, NC  28209
                           Attention: Melinda Morris Zanoni, Executive Vice
                                      President
                           Telephone: (704) 553-9330
                           Fax: (704) 553-7136

         These addresses may be changed from time to time by like written notice
to the other party.

         7.5      HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.

         7.6      SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law, then this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.

         7.7      EXPENSES. Each party shall pay all fees and expenses incurred
by it incident to this Agreement and in connection with the consummation of the
Transaction.


                                       16
   20

         7.8      INTEGRATION; INTERPRETATION. The Basic Agreements and all
documents and instruments executed pursuant hereto merge and integrate all prior
agreements and representations respecting the Transaction, whether written or
oral, and constitute the sole agreement of the parties in connection therewith.
This Agreement has been negotiated by and submitted to the scrutiny of both
Seller and Purchaser and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.

         7.9      AMENDMENTS. No amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by both of the parties hereto.

         7.10     VARIATION OF PRONOUNS. All pronouns and any variations thereof
shall be deemed to reflect masculine, feminine, or neuter, singular or plural,
as the identity of the person or entity may require.

         7.11     WAIVERS. Purchaser and Seller may, in writing, amend the time
for or waive compliance by the other with any of the covenants or conditions of
the other contained herein. Failure to pursue any legal or equitable remedy or
right available to a party shall not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute waiver
of subsequent default or breach.

         7.12     COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be
executed in counterparts (whether by facsimile or otherwise), each of which will
be deemed an original and all of which together will constitute one instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       17
   21

         IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement, or caused this Agreement to be duly executed, on the date first
written above.

                                    PURCHASER:

                                    ERESOURCE CAPITAL GROUP, INC.


                                    BY:
                                       -----------------------------------------
                                            MELINDA MORRIS ZANONI
                                            ITS: EXECUTIVE VICE PRESIDENT

                                    SELLER:


                                    --------------------------------------------
                                    GLENN I. BARRETT, JR.


                                       18

EX-2.3

   1
                                                                     EXHIBIT 2.3

===============================================================================







                            STOCK PURCHASE AGREEMENT

                          ENTERED INTO MARCH ____, 2001

                                     BETWEEN

                          ERESOURCE CAPITAL GROUP, INC.

                                       AND

                             BRANDON HOLDINGS, INC.









===============================================================================

   2



                                TABLE OF CONTENTS


                                                                                                      
ARTICLE I.            SALE AND PURCHASE OF THE LST SHARES.................................................   1
         1.1          Sale and Purchase...................................................................   1
         1.2          Closing.............................................................................   1
         1.3          Purchase Price......................................................................   1
         1.4          Rights of Former Stockholders.......................................................   2
         1.5          Other Agreements....................................................................   2
         1.6          Basic Agreements and Transaction Defined............................................   2
         1.7          Portion of eRCG Shares Contingent; Sale of eRCG Shares..............................   2

ARTICLE II.           REPRESENTATIONS AND WARRANTIES......................................................   3
         2.1.         Representations and Warranties of Seller............................................   3
         2.2.         Representations and Warranties Concerning LST.......................................   4
         2.3.         Representations and Warranties of Purchaser.........................................   7

ARTICLE III.          COVENANTS...........................................................................   8
         3.1.         Mutual Covenants....................................................................   8
         3.2.         Seller's Covenants..................................................................   9
         3.3.         No Shop.............................................................................   9
         3.4.         Public Announcements................................................................  10
         3.5.         Confidentiality.....................................................................  10

ARTICLE IV.           CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
                      TO CLOSE............................................................................  10
         4.1.         Compliance with Seller's Representations, Warranties and Covenants..................  10
         4.2.         No Adverse Change...................................................................  10
         4.3.         No Legal Proceedings................................................................  10
         4.4          Documents to be Delivered by Seller.................................................  10
         4.5          Consents............................................................................  11
         4.6          Listing of eRCG Shares..............................................................  11
         4.7          Amendment of Stock Option Plan......................................................  11
         4.8          Cancellation of Outstanding Options.................................................  11
         4.9          Sale by Other LST Stockholders......................................................  11
         4.10         Consummation of Private Placement by LST............................................  11
         4.11         Investigation.......................................................................  11

ARTICLE V.            CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE..........................  12
         5.1.         Compliance with Purchaser's Representations, Warranties and Covenants...............  12




                                       ii
   3


                                                                                                      
         5.2.         No Legal Proceedings................................................................  12
         5.3.         Other Agreements....................................................................  12
         5.4.         Payments............................................................................  12

ARTICLE VI.           TERMINATION.........................................................................  12
         6.1.         Termination and Abandonment.........................................................  12

ARTICLE VII.          MISCELLANEOUS.......................................................................  13
         7.1.         Survival............................................................................  13
         7.2.         Binding Effect of the Basic Agreements; No Third Party Beneficiaries................  13
         7.3.         Governing Law.......................................................................  13
         7.4.         Notices.............................................................................  13
         7.5.         Headings............................................................................  14
         7.6.         Severability........................................................................  14
         7.7.         Expenses............................................................................  14
         7.8.         Integration; Interpretation.........................................................  14
         7.9.         Amendments..........................................................................  14
         7.10.        Variation of Pronouns...............................................................  14
         7.11         Waivers.............................................................................  14
         7.12.        Counterparts; Facsimile Signatures..................................................  15




                                      iii
   4


                            STOCK PURCHASE AGREEMENT


         THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is entered into this __ day
of March, 2001, between ERESOURCE CAPITAL GROUP, INC., a Delaware corporation
("PURCHASER"), and BRANDON HOLDINGS, INC., a Delaware corporation ("SELLER") and
a stockholder of LST, INC., a Delaware corporation d/b/a LifeStyle Technologies
("LST").

         WHEREAS, Seller is the record and beneficial owner of Two Million Four
Hundred Fifty Thousand (2,450,000) shares ("LST SHARES") of LST's common stock,
par value $.001 per share ("LST COMMON STOCK"), representing approximately 29%
of the issued capital stock of LST; and

         WHEREAS, Seller desires to sell the LST Shares to Purchaser, and
Purchaser desires to purchase the LST Shares, upon the terms and conditions set
forth herein.

         NOW, THEREFORE in consideration of the mutual promises and covenants
contained herein, and for other good valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:

                                       I.

                       SALE AND PURCHASE OF THE LST SHARES

         1.1      SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing (as defined in Section 1.2 hereof), Seller agrees to sell,
assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to
purchase from Seller, the LST Shares.

         1.2      CLOSING. The purchase shall be consummated at a closing
("CLOSING") to take place at the offices of Purchaser on the date and time on
which the last of the conditions specified in Articles IV and V hereof have been
satisfied or waived, or such other place, time or date as may be mutually agreed
upon by the parties hereto.

         1.3      PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for the
LST Shares shall be One Dollar and Thirty cents ($1.30) per share, payable in
restricted shares (the "ERCG SHARES") of Purchaser's common stock, par value
$.04 per share (the "ERCG COMMON STOCK"), with the value of each Purchaser's
Share being equal to the average for the five (5) trading days immediately
preceding the Closing Date of the daily closing price of eRCG Common Stock as
reported by the American Stock Exchange (the "AVERAGE SHARE PRICE"); provided,
however, that if the Average Share Price is less than One Dollar ($1.00), then
the Average Share Price shall be deemed to be One Dollar ($1.00) for purposes of
calculating the Purchase Price due Seller. The Purchase Price shall be paid at
Closing, by issuance and delivery of the eRCG Shares to Seller, with Seller
receiving cash in lieu of any fractional eRCG Share that Seller may be entitled
to receive pursuant to this Section 1.3. Purchaser will give stop transfer
instructions to its transfer agent with respect to the eRCG Shares and there
will be placed on the certificate(s) representing such eRCG Shares a restrictive
legend.

   5

         1.4      RIGHTS OF FORMER STOCKHOLDERS. Until surrendered for exchange,
each certificate representing LST Shares shall from and after the Closing
represent for all purposes only the right to receive the Purchase Price. Seller
will not be entitled to vote or give its consent after the Closing at any
meeting or action by written consent of Purchaser's stockholders until it has
exchanged its certificates representing the LST Shares for certificates
representing the eRCG Shares.

         1.5      OTHER AGREEMENTS. At the Closing, the indicated parties shall
deliver the following additional agreements:

                  (a)      Seller shall deliver to Purchaser stock
         certificate(s) representing all of the LST Shares held by Seller, duly
         endorsed to Purchaser in blank or accompanied by duly executed stock
         power(s), transferring such LST Shares from Seller to Purchaser;

                  (b)      Seller shall deliver to Purchaser an executed
         counterpart signature page to the Investment Representation Agreement,
         substantially in the form attached hereto as Exhibit 1.5(b); and

                  (c)      Purchaser and Seller shall each deliver an executed
         counterpart signature page to the Registration Rights Agreement,
         substantially in the form attached hereto as Exhibit 1.5(c).

         1.6      BASIC AGREEMENTS AND TRANSACTION DEFINED. This Agreement and
other agreements listed in paragraph 1.5, are sometimes referred to as the
"Basic Agreements." The transaction contemplated by the Basic Agreement and the
agreements with the other stockholders of LST are sometimes referred to as the
"Transaction".

         1.7      PORTION OF ERCG SHARES CONTINGENT; SALE OF ERCG SHARES.

                  (a)      Notwithstanding Section 1.3 hereof, the delivery by
Purchaser to Seller of One Million (1,000,000) eRCG Shares that Seller is
entitled to receive pursuant to such Section 1.3 (the "CONTINGENT
CONSIDERATION") is contingent upon LST meeting or exceeding the specified
performance milestones at specified milestone dates through March 31, 2002 as
set forth in Exhibit 1.7 attached hereto. Provided LST meets all the performance
milestones, the Contingent Consideration shall be payable in equal installments
set forth on Exhibit 1.7 attached hereto that correspond with each performance
milestone within thirty (30) days of Purchaser's receipt and confirmation of
financial statements and reasonable supporting documentation from LST (the
"CONTINGENT PAYMENT DATE") associated with such performance milestone. If LST
does not meet a specified performance milestone, then Purchaser is not obligated
to deliver to Seller the Contingent Consideration installment on the specified
milestone date. However, the performance milestones are cumulative in nature,
and, therefore, if LST does not meet an earlier performance milestone but does
meet a subsequent performance milestone, then, upon the Contingent Payment Date
corresponding to the subsequent performance milestone, Purchaser shall deliver
to Seller the installment of Contingent Consideration for the performance
milestone that LST met as well as the installment of Contingent Consideration
for the earlier performance


                                       2
   6

milestone that LST failed to meet.

         (b)      Seller hereby agrees that for a period commencing on the
Closing and ending on the three (3) year anniversary thereof, the number of
shares of eRCG Common Stock sold by or for the account of Seller (whether or not
(i) such shares are now owned by Seller or are acquired by Seller after the date
hereof or (ii) such shares are restricted or unrestricted securities under
applicable securities laws) on any day (the "SALES DATE") shall not exceed ten
percent (10%) of the average five (5) day reported volume of trading of eRCG's
Common Stock on all national securities exchanges and/or reported through the
automated evaluation system of a registered securities association preceding the
Sales Date.

         SELLER EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE OTHER STOCKHOLDERS OF
LST ARE NOT SUBJECT TO THE PROVISIONS OF THIS SECTION 1.7 OR CERTAIN OTHER
PROVISIONS OF THIS AGREEMENT.

                                      II.

                         REPRESENTATIONS AND WARRANTIES

         2.1      REPRESENTATIONS AND WARRANTIES OF SELLER. With such
exceptions, if any, as may be set forth in a letter (the "SELLER DISCLOSURE
LETTER") to be delivered by Seller to Purchaser on the date hereof, Seller
represents and warrants to Purchaser as follows:

                  (a)      TITLE TO THE LST SHARES. At Closing, Seller shall own
         of record and beneficially the LST Shares free and clear of all liens,
         encumbrances, pledges, claims, options, charges and assessments of any
         nature whatsoever, with full right and lawful authority to transfer the
         LST Shares to Purchaser. No person has any preemptive rights or rights
         of first refusal with respect to any of the LST Shares. There exists no
         voting agreement, voting trust, or outstanding proxy with respect to
         any of the LST Shares. There are no outstanding rights, options,
         warrants, calls, commitments, or any other agreements of any character,
         whether oral or written, with respect to the LST Shares.

                  (b)      AUTHORITY; CONSENTS. Seller has full power and lawful
         authority, including, if Seller is a corporation, full corporate power
         and authority, to execute and deliver the Basic Agreements and the
         Seller Disclosure Letter and to consummate and perform the Transaction
         contemplated thereby. The Basic Agreements constitute (or shall, upon
         execution, constitute) valid and legally binding obligations of Seller,
         enforceable in accordance with their terms. To Seller's knowledge,
         neither the execution and delivery of the Basic Agreements and the
         Seller Disclosure Letter by Seller, nor the consummation and
         performance of the Transaction, conflicts with, requires the consent,
         waiver or approval of, results in a breach of or default under, or
         gives to others any interest or right of termination, cancellation or
         acceleration in or with respect to, any agreement by which Seller is a
         party or by which Seller or any of its properties or assets are bound
         or affected. Seller need not give any notice to, make any filings with,
         or obtain any authorization, consent, or approval of any government or
         governmental agency in order to consummate the Transaction.


                                       3
   7

                  (c)      NONCONTRAVENTION. Neither the execution and the
         delivery of the Basic Agreements and Seller Disclosure Letter, nor the
         consummation of the Transaction, will (i) violate any constitution,
         statute, regulation, rule, injunction, judgment, order, decree, ruling,
         charge, or other restriction of any government, governmental agency, or
         court to which Seller is subject or (ii) if Seller is a corporation,
         any provision of such Seller's charter or bylaws.

                  (d)      CAPITAL STOCK RIGHTS. Seller has no stock options,
         warrants, rights, calls or any other agreements of any character,
         whether oral or written, obligating LST to issue any shares of its
         capital stock.

                  (e)      ORGANIZATION OF INCORPORATED SELLER. If Seller is a
         corporation, such Seller is duly organized, validly existing and in
         good standing under the laws of the jurisdiction of its incorporation.

                  (f)      DISCLOSURE. All statements of Seller contained in the
         Basic Agreements and in the Seller Disclosure Letter by and on behalf
         of Seller and LST are true and correct in all material respects and do
         not omit any material fact necessary to make the statements contained
         therein not misleading in light of the circumstances under which they
         were made. There are no facts known to Seller, which could have a
         materially adverse effect upon the business, financial condition,
         results of operations, assets, liabilities, or prospects of LST, which
         have not been disclosed to Purchaser in the Basic Agreements or Seller
         Disclosure Letter.

         2.2      REPRESENTATIONS AND WARRANTIES CONCERNING LST. With such
exceptions, if any, as may be set forth in the Seller Disclosure Letter, Seller
represents and warrants to Purchaser, to the best of Seller's knowledge, as
follows:

                  (a)      ORGANIZATION. LST is a corporation duly incorporated,
         validly existing and in good standing under the laws of the state of
         Delaware. LST has all requisite corporate power and authority to own,
         lease and operate its properties and to carry on its business. LST is
         duly qualified and in good standing as a foreign corporation in each
         jurisdiction where its ownership of property or operation of its
         business requires qualification.

                  (b)      AUTHORIZED CAPITALIZATION. The authorized
         capitalization of LST consists of 20,000,000 shares of common stock,
         par value $.001 per share, of which 8,349,750 shares have been issued
         and are outstanding. LST has no other capital stock authorized, issued
         or outstanding and there are no shares of stock held in treasury. The
         outstanding shares of LST Common Stock have been duly authorized,
         validly issued, fully paid and nonassessable with no personal liability
         attaching to the ownership thereof and were offered, issued, sold and
         delivered by LST in compliance with all applicable state and federal
         laws. Except as set forth on Schedule 2.2(b) of the Seller Disclosure
         Letter, LST does not have any outstanding rights, options, warrants,
         calls, commitments, conversion or any other agreements of any
         character, whether oral or written, obligating it to issue any shares
         of its capital stock, whether authorized or not. LST is not a party to
         and is not bound by any agreement, contract, arrangement or
         understanding, whether


                                       4
   8

         oral or written, giving any person or entity any interest in, or any
         right to share, participate in or receive any portion of LST's income,
         profits or assets, or obligating LST to distribute any portion of its
         income, profits or assets.

                  (c)      CONSENTS. Except as set forth on Schedule 2.2(c) of
         the Seller Disclosure Letter, the consummation and performance of the
         Transaction (i) does not conflict with, require the consent, waiver or
         approval of, result in a breach of or default under or give to others
         any interest or rights of termination, cancellation or acceleration in
         or with respect to, any agreement by which LST is a party or LST or any
         of its properties or assets are bound or affected, and (ii) will not
         result in the imposition of any claim, lien, encumbrance or restriction
         of any kind upon the assets of LST.

                  (d)      LST FINANCIAL STATEMENTS. The financial statements of
         LST (the "LST FINANCIAL STATEMENTS") set forth in Schedule 2.2(d) of
         the Seller Disclosure Letter are complete, were prepared in accordance
         with generally accepted accounting principles applied on a basis
         consistent with prior periods and fairly present the financial position
         of LST as of December 31, 2000 and there have been no material changes
         thereafter.

                  (e)      COMPLIANCE WITH LAWS. LST is not in violation of any
         federal, state, local or other law, ordinance, rule or regulation
         applicable to its business, and has not received any actual or
         threatened complaint, citation or notice of violation or investigation
         from any governmental authority.

                  (f)      NO LITIGATION. There are no actions, suits, claims,
         complaints or proceedings pending or threatened against LST, at law or
         in equity, or before or by any governmental department, commission,
         court, board, bureau, agency or instrumentality; and there are no facts
         which would provide a valid basis for any such action, suit or
         proceeding. There are no orders, judgments or decrees of any
         governmental authority outstanding which specifically apply to LST or
         any of its assets.

                  (g)      MATERIAL CONTRACTS. Schedule 2.2(g) of the Seller
         Disclosure Letter sets forth a list of all material contracts of LST.
         LST has in all material respect performed all of its obligations
         required to be performed by it through the date hereof, and is not in
         default or alleged to be in default in any material respect, under any
         contract, including any leases for office space, and there exists no
         event, condition or occurrence which, after notice or lapse of time or
         both, constitutes such a default.

                  (h)      EMPLOYMENT MATTERS. LST is not a party to any
         employment agreements, letters or other agreements with any individual
         with respect to his or her employment with LST. Schedule 2.2(h) of the
         Seller Disclosure Letter sets forth a complete and accurate list of
         employees and each employee's rate of compensation (including wages and
         guaranteed or anticipated bonuses). LST is not subject to any labor
         disputes.

                  (i)      NO UNDISCLOSED LIABILITIES. Except as set forth in
         LST Financial Statements, Seller is not aware of any material
         liabilities for which LST is currently liable


                                       5
   9

         or will become liable in the future.

                  (j)      TAXES. LST has timely filed all federal, state, local
         and foreign tax returns and tax reports required to be filed with the
         appropriate governmental agency in all jurisdictions in which such
         returns and reports are required to be filed, excepting only those
         taxes which will not be due until after the Closing. All such returns
         and reports are true, correct and complete, and all amounts shown as
         owing on them have been paid, including all interest, penalties,
         deficiencies and assessments heretofore levied or assessed against LST.
         There is no agreement for extension of time of payment of any taxes of
         LST. There is no examination or audit pending or threatened by the
         Internal Revenue Service or by any state or local taxing authority with
         respect to tax matters of LST.

                  (k)      REAL PROPERTY.  LST does not own any real property.

                  (l)      INSURANCE. A complete and accurate list of all
         insurance policies held by LST and now in force (including insurance
         policies covering the assets, business, equipment, properties,
         employees, officers and directors of LST) are set forth in Schedule
         2.2(l) of the Seller Disclosure Letter and are of the type and in
         amounts customarily carried by persons conducting businesses similar to
         those of LST. There is no material claim by LST pending under any of
         the insurance policies as to which coverage has been questioned, denied
         or disputed by the underwriters of such policies.

                  (m)      INTELLECTUAL PROPERTY. Schedule 2.2(m) of the Seller
         Disclosure Letter sets forth a complete and accurate list of and
         describes all franchises, licenses, patents, patent applications,
         trademarks, service marks, trade names, copyrights and rights with
         respect to any of the foregoing (collectively, "INTELLECTUAL PROPERTY
         RIGHTS") presently owned or held by LST. LST owns the right to use all
         of the Intellectual Property Rights. The Intellectual Property Rights
         are all that are necessary for LST to conduct its business. No event
         has occurred which permits, or after notice or lapse of time would
         permit, the revocation or termination of any of the Intellectual
         Property Rights. LST has no reason to believe that it is infringing,
         nor has it received notice with respect to the infringement or possible
         or claimed infringement, upon, or, that it is otherwise acting
         adversely to, any known right or claimed right of any person with
         respect to any Intellectual Property Rights.

                  (n)      BENEFIT PLANS. Schedule 2.2(n) of the Seller
         Disclosure Letter sets forth a complete and accurate list of all of the
         employee benefit plans that LST maintains or contributes to, or has
         maintained or to which it has made contributions (including any
         terminated employee benefit plans). LST does not have any obligation
         under any employee benefit plans other than those identified on
         Schedule 2.2(n), and LST is in compliance with all applicable
         provisions of ERISA and the regulations and published interpretations
         thereunder with respect to all employee benefit plans. The execution
         and deliver of this Agreement and the consummation of the Transaction
         will not result in any violations of ERISA or any other laws related
         thereto.


                                       6
   10

                  (o)      ACCOUNTS RECEIVABLE; CUSTOMERS. All accounts
         receivable of LST represent in all material respects sales made in the
         ordinary course of business. Schedule 2.2(o) of the Seller Disclosure
         Letter sets forth LST's top 20 customers by billings and/or revenues
         received. Seller has no knowledge of any oral or written notice or
         other indication from any customer stating that it intends to terminate
         its business relationship with LST or reduce the amount of business it
         does with LST.

         2.3      REPRESENTATIONS AND WARRANTIES OF PURCHASER. With such
exceptions, if any, as may be set forth in a letter (the "PURCHASER DISCLOSURE
LETTER") to be delivered by Purchaser to Seller on the date hereof, Purchaser
represents and warrants to Seller as follows:

                  (a)      ORGANIZATION. Purchaser is a corporation duly
         incorporated, validly existing and in good standing under the laws of
         the state of Delaware. Purchaser has all requisite corporate power and
         authority to own, lease and operate its properties and to carry on its
         business. Purchaser is duly qualified and in good standing as a foreign
         corporation in each jurisdiction where its ownership of property or
         operation of its business requires qualification.

                  (b)      AUTHORIZED CAPITALIZATION. The authorized
         capitalization of Purchaser consists of Two Hundred Million
         (200,000,000) shares of common stock, of which 61,687,654 shares have
         been issued and are outstanding as of March 7, 2001, and 10,000,000
         shares of preferred stock, none of which are issued or outstanding. In
         addition, Purchaser, as of March 7, 2001, has outstanding warrants and
         options to purchase 27,380,120 shares of the eRCG Common Stock. At
         Closing, all issued and outstanding stock of Purchaser, including the
         eRCG Shares, will have been duly authorized, validly issued, fully paid
         and nonassessable with no personal liability attaching to the ownership
         thereof. Seller will receive all right, title and interest to eRCG
         Shares free and clear of all liens, pledges, mortgages, security
         interests and claims whatsoever, except those imposed by state and
         federal securities laws.

                  (c)      AUTHORITY; CONSENTS. Purchaser has full power and
         lawful authority to execute and deliver the Basic Agreements and the
         Purchaser Disclosure Letter and to consummate and perform the
         Transaction. The Basic Agreements constitute (or shall, upon execution,
         constitute) valid and legally binding obligations of Purchaser,
         enforceable in accordance with their terms. To Purchaser's knowledge,
         neither the execution and delivery of the Basic Agreements and the
         Purchaser Disclosure Letter by Purchaser, nor the consummation and
         performance of the Transaction, conflicts with, requires the consent,
         waiver or approval of, results in a breach of or default under, or
         gives to others any interest or right of termination, cancellation or
         acceleration in or with respect to, any agreement by which Purchaser is
         a party or by which Purchaser or any of its properties or assets are
         bound or affected.

                  (d)      INVESTMENT INTENT. Purchaser is acquiring the LST
         Shares for its own account, for investment purposes only, and not with
         a view to the sale or distribution of any part thereof and Purchaser
         has no present intention of selling, granting participation


                                       7
   11

         in, or otherwise distributing the same. Purchaser understands the
         specific risks related to an investment in the LST Shares, especially
         as it relates to the financial performance of LST.

                  (e)      FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
         Purchaser has filed all material reports, schedules, forms, statements
         and other documents with the Securities and Exchange Commission (the
         "SEC") pursuant to applicable state and federal securities laws through
         the date hereof (the "SEC DOCUMENTS") and the SEC Documents constitute
         all material documents required to have been filed by Purchaser
         pursuant to such laws.

                  (f)      DISCLOSURE. All statements of Purchaser contained in
         the Basic Agreements and in the Purchaser Disclosure Letter by or on
         behalf of Purchaser are true and correct in all material respects and,
         when considered in conjunction with the SEC Documents, do not omit any
         material fact necessary to make the statements contained therein not
         misleading in light of the circumstances under which they were made.
         There are no facts known to Purchaser which could have a material
         adverse affect upon the business, financial condition, results of
         operations, assets or liabilities of Purchaser, which have not been
         disclosed to Seller in the Basic Agreements, the Purchaser Disclosure
         Letter or the SEC Documents.

                                      III.

                                    COVENANTS

         3.1      MUTUAL COVENANTS. Purchaser and Seller, on behalf of LST and
to the best of Seller's ability, each covenant and agree that from the date
hereof until Closing each shall:

                  (a)      ORDINARY COURSE OF BUSINESS. Operate its business
         only in the ordinary course and use its best efforts to preserve its
         business, properties, assets, contracts, organization, goodwill and
         relationships with persons with whom it has business dealings.

                  (b)      NO INDEBTEDNESS. Not create, incur, assume, guarantee
         or otherwise become liable with respect to any obligation for borrowed
         money, indebtedness, capitalized lease or similar obligation, except in
         the ordinary course of business consistent with past practices where
         the entire net proceeds thereof are deposited with and used by and in
         connection with the business.

                  (c)      MAINTAIN BOOKS. Maintain its books, accounts and
         records in the usual, regular and ordinary business manner and in
         accordance with generally accepted accounting principles applied on a
         basis consistent with past practices.

                  (d)      NO AMENDMENTS. (i) Not amend its corporate charter or
         bylaws (or similar documents) or material contracts, and (ii) maintain
         its corporate existence, licenses, permits, powers and rights in full
         force and effect.


                                       8
   12

                  (e)      TAXES AND ACCOUNTING MATTERS. (i) File when due all
         federal, state and local tax returns and reports which shall be
         accurate and complete, including, but not limited to, income,
         franchise, excise, ad valorem, and other taxes with respect to its
         business and properties, and to pay as they become due all taxes or
         assessments, except for taxes for which adequate reserves are
         established and which are being contested in good faith by appropriate
         proceedings, and (ii) not change its accounting methods or practices or
         any depreciation, amortization or inventory valuation policies or
         practices.

                  (f)      DUE COMPLIANCE. Comply in all material respects with
         all laws, regulations, rules and ordinances applicable to it and to the
         conduct of its business.

                  (g)      CONSENTS. Use its best efforts to obtain the consent
         or approval of each person or entity whose consent or approval is
         required for the consummation of the Transactions.

                  (h)      EFFORTS TO CONSUMMATE. Subject to the terms and
         conditions of this Agreement, use its reasonable efforts to take, or
         cause to be taken, all actions and to do, or cause to be done, all
         things necessary, proper and advisable under applicable laws to
         consummate and make effective, as soon as practicable after the date of
         this Agreement, the Transaction.

         3.2      SELLER'S COVENANTS. Seller, on behalf of LST and to the best
of Seller's ability, covenants and agrees from the date hereof until Closing,
LST shall:

                  (a)      COMPENSATION. Not (i) enter into or alter any
         employment agreements, (ii) grant any severance or increase in
         compensation other than normal merit increases consistent with its
         general prevailing practices to any officer or employee, (iii) enter
         into or alter any labor or collective bargaining agreement or any bonus
         or other employee fringe benefit, or (iv) adopt or amend any employee
         stock option plan.

                  (b)      NO SECURITIES ISSUANCES OR CHANGES/NO DISTRIBUTIONS.
         Not to (i) issue any shares of any class of capital stock, or enter
         into any contract, option, warrant or right calling for the issuance of
         any such shares of capital stock, or create or issue any securities
         convertible into any securities, (ii) accelerate or amend the period of
         exercisability of warrants or restricted stock or reprice any warrants
         or authorize cash payments in exchange for any warrants, or (iii)
         declare or pay any dividends on or make any other distributions in any
         form in respect of capital stock, or split, combine or reclassify any
         capital stock.

         3.3      NO SHOP. Seller agrees to, and to the best of Seller's ability
shall cause LST to, negotiate exclusively with Purchaser and not to solicit,
negotiate, enter into any agreement or entertain other offers or alternative
proposals for the LST Shares or the acquisition of Seller, its assets or stock
from the date hereof until the earlier of (i) termination of this Agreement or
(ii) August 31, 2001.


                                       9
   13

         3.4      PUBLIC ANNOUNCEMENTS. Seller shall not, and to the best of
Seller's ability shall cause LST not to, without the prior written consent of
Purchaser, make any announcement, issue any press release or make any statement
to any third party with respect to the Transaction except as may be necessary to
comply with any law, regulation or order and then only after prior notice to
Purchaser as to the content of such announcement.

         3.5      CONFIDENTIALITY. Seller agrees to, and to the best of Seller's
ability shall cause LST to, maintain the confidentiality of all confidential
information furnished to it related to Purchaser and shall not use or disclose
such information for any purpose, except in furtherance of the Transaction.

                                       IV.

                           CONDITIONS PRECEDENT TO THE
                        OBLIGATIONS OF PURCHASER TO CLOSE

         The obligation of Purchaser to close the Transaction is subject to the
fulfillment prior to the Closing of each of the following conditions, which may
be waived in whole or in part by Purchaser:

         4.1      COMPLIANCE WITH SELLER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties of Seller contained in Sections
2.1 and 2.2 hereof shall have been true and correct in all material respects
when made and shall be true and correct in all material respects as of the
Closing with the same force and effort as if made at the Closing. Seller shall
have performed in all material respects all agreements, covenants and conditions
required to be performed by Seller prior to the Closing.

         4.2      NO ADVERSE CHANGE. There shall have been no event, which has
had or may have a material adverse effect upon the business, financial
condition, results of operation, assets, liabilities or prospects of LST.

         4.3      NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transaction.

         4.4      DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have
delivered the following documents:

                  (a)      Stock certificate(s) representing all of the LST
         Shares held by Seller, duly endorsed to Purchaser in blank or
         accompanied by duly executed stock powers;

                  (b)      All agreements referred to in Section 1.5 hereof,
         executed by all parties thereto other than Purchaser; and


                                       10
   14


                  (c)      Such other documents or certificates as shall be
         reasonably required by Purchaser or its counsel in order to close and
         consummate the Transaction.

         4.5      CONSENTS.

                  (a)      BY PURCHASER. Purchaser's Board of Directors shall
         have approved and taken all necessary corporate action to execute,
         deliver and perform the Basic Agreements, the Purchaser Disclosure
         Letter and consummate the Transaction.

                  (b)      BY LST. LST shall have delivered to Purchaser any and
         all consents, waivers or approvals of any government, government agency
         or other third party necessary to the consummation and performance of
         the Transaction.

         4.6      LISTING OF ERCG SHARES. The eRCG Shares to be issued in
connection with the Transaction shall be listed for trading on the American
Stock Exchange.

         4.7      AMENDMENT OF STOCK OPTION PLAN. LST shall have caused Article
X of that certain LST, Inc. Omnibus Stock Option and Award Plan dated September
29, 2000 (the "STOCK OPTION PLAN") to be amended to provide that upon a "Change
of Control" (as defined in the Stock Option Plan) all outstanding options shall
be cancelled and any vested, but unexercised options shall no longer be
exercisable.

         4.8      CANCELLATION OF OUTSTANDING OPTIONS. LST shall have cancelled
any and all outstanding options, whether granted pursuant to the Stock Option
Plan or otherwise, and any vested but unexercised options shall no longer be
exercisable.

         4.9      SALE BY OTHER LST STOCKHOLDERS. Stockholders of LST holding
one hundred percent (100%) of the issued and outstanding LST Common Stock shall
have entered into stock purchase agreements with Purchaser similar to this
Agreement and the other agreements set forth in Section 1.5 hereof.

         4.10     CONSUMMATION OF PRIVATE PLACEMENT BY LST. LST shall have sold
2,500,000 shares of LST Common Stock for a purchase price of One Dollar ($1.00)
per share pursuant to the terms of that certain Private Placement Memorandum
dated July 15, 2000.

         4.11     INVESTIGATION. Purchaser shall have satisfactory completed its
due diligence investigation of LST. No investigation by Purchaser shall affect
the representations and warranties of Seller.


                                       11
   15


                                       V.

                           CONDITIONS PRECEDENT TO THE
                         OBLIGATIONS OF SELLER TO CLOSE

         The obligation of Seller to close the Transaction is subject to the
fulfillment prior to Closing of each of the following conditions, which may be
waived in whole or in part by Seller:

         5.1      COMPLIANCE WITH PURCHASER'S REPRESENTATIONS, WARRANTIES AND
COVENANTS. The representations and warranties made by Purchaser in Section 2.3
of this Agreement shall have been true and correct in all material respects when
made and shall be true and correct in all material respects at the Closing with
the same force and effect as if made at the Closing. Purchaser shall have
performed in all material respects all agreements, covenants and conditions
required to be performed by Purchaser prior to the Closing.

         5.2      NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transaction.

         5.3      OTHER AGREEMENTS. Purchaser shall have executed and delivered
all agreements referred to in Section 1.5 hereof, to be executed by the
Purchaser.

         5.4      PAYMENTS. Seller shall have received from Purchaser all of
eRCG Shares and cash in lieu of any fractional eRCG Share that Seller is
entitled to receive pursuant to the Basic Agreements.

                                       VI.

                                   TERMINATION

         6.1      TERMINATION AND ABANDONMENT. This Agreement may be terminated
and the purchase of the LST Shares may be abandoned before the Closing by:

                  (a)      The mutual consent of Seller and Purchaser;

                  (b)      Purchaser, if the conditions precedent set forth in
         Article IV hereof shall have not have been satisfied on or before the
         Closing Date (as the same may be extended from time to time); and

                  (c)      Seller, if the conditions precedent set forth in
         Article V hereof shall not have been satisfied on or before the Closing
         Date (as the same may be extended from time to time).

         Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor. Termination shall not relieve any party from
liability for any willful breach of


                                       12
   16

this Agreement.

                                      VII.

                                  MISCELLANEOUS

         7.1      SURVIVAL. Except for the provisions of Sections 2.1, 2.2, 3.4
and 3.5 and Article VII hereof, which shall survive the Closing or termination
hereof for a period of two (2) years, none of the representations and warranties
contained in this Agreement or in any certificate, exhibit or other document
delivered pursuant to this Agreement shall survive the Closing.

         7.2      BINDING EFFECT OF THE BASIC AGREEMENTS; NO THIRD PARTY
BENEFICIARIES. The Basic Agreements and the other instruments delivered by or on
behalf of the parties pursuant thereto, constitute the entire agreement between
the parties. The terms and conditions of the Basic Agreements shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. Nothing in the Basic Agreements,
expressed or implied, confers any rights or remedies upon any party other than
the parties hereto and their respective heirs, legal representatives, successors
and assigns.

         7.3      GOVERNING LAW. The Basic Agreements and the other instruments
delivered by or on behalf of the parties pursuant hereto are made pursuant to,
and will be construed under, the laws of the State of Delaware, without regard
to its conflicts of law principles.

         7.4      NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and will be deemed to have been
duly given when personally delivered, delivered by a nationally recognized
overnight delivery service, sent via facsimile transmission (receipt confirmed),
or three (3) business days after it is deposited in the United States mail,
certified or registered, return receipt requested, postage prepaid, to:

                  (a)      If to Seller to:

                           Brandon Holdings, Inc.
                           7633 East 63rd Place
                           Suite 210
                           Tulsa, OK 74133
                           Telephone: (918) 254-4997
                           Fax:  (918) 254-2988


                                       13
   17


                  (b)      If to Purchaser, to:

                           eResource Capital Group, Inc.
                           5935 Carnegie Boulevard, Suite 101
                           Charlotte, NC  28209
                           Attention:  Melinda Morris Zanoni,
                                       Executive Vice President
                           Telephone: (704) 553-9330
                           Fax: (704) 553-7136

         These addresses may be changed from time to time by like written notice
to the other party.

         7.5      HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.

         7.6      SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law, then this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.

         7.7      EXPENSES. Each party shall pay all fees and expenses incurred
by it incident to this Agreement and in connection with the consummation of the
Transaction.

         7.8      INTEGRATION; INTERPRETATION. The Basic Agreements and all
documents and instruments executed pursuant hereto merge and integrate all prior
agreements and representations respecting the Transaction, whether written or
oral, and constitute the sole agreement of the parties in connection therewith.
This Agreement has been negotiated by and submitted to the scrutiny of both
Seller and Purchaser and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.

         7.9      AMENDMENTS. No amendment, modification or discharge of this
Agreement shall be valid or binding unless set forth in writing and duly
executed by both of the parties hereto.

         7.10     VARIATION OF PRONOUNS. All pronouns and any variations thereof
shall be deemed to reflect masculine, feminine, or neuter, singular or plural,
as the identity of the person or entity may require.

         7.11     WAIVERS. Purchaser and Seller may, in writing, amend the time
for or waive compliance by the other with any of the covenants or conditions of
the other contained herein. Failure to pursue any legal or equitable remedy or
right available to a party shall not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute waiver
of subsequent default or breach.


                                       14
   18


         7.12     COUNTERPART; FACSIMILE SIGNATURES. This Agreement may be
executed in counterparts (whether by facsimile or otherwise), each of which will
be deemed an original and all of which together will constitute one instrument.




                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       15
   19


         IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement, or caused this Agreement to be duly executed, on the date first
written above.


                                   PURCHASER:

                                   ERESOURCE CAPITAL GROUP, INC.



                                   BY:
                                      -----------------------------------------
                                            MELINDA MORRIS ZANONI
                                            ITS: EXECUTIVE VICE PRESIDENT


                                   SELLER:

                                   BRANDON HOLDINGS, INC.


                                   By:
                                      -----------------------------------------

                                   Print Name:
                                              ---------------------------------

                                   Its:
                                       ----------------------------------------


                                       16

EX-4.2

   1
                                                                     EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT


         THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into as of the __ day of March, 2001, by and among eResource Capital
Group, Inc., a Delaware corporation ("ERCG") and certain stockholders of LST,
Inc., a Delaware corporation d/b/a LifeStyle Technologies ("LST") listed on
Schedule 1 hereto (each such person a "SELLER" and, collectively, the
"SELLERS").

         NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, and intending to be legally bound, the parties hereto hereby
agree as follows:

1.       RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS

         1.1      CERTAIN DEFINITIONS.

                  (a)      "Holder" shall mean any Seller who holds Registrable
Securities and any holder of Registrable Securities to whom the rights conferred
by this Agreement have been transferred in compliance with Section 1.2 hereof.

                  (b)      "Other Stockholders" shall mean persons who, by
virtue of agreements with eRCG other than this Agreement, whether eRCG executed
such agreements prior to the date hereof or subsequent to such date, are
entitled to include their securities in certain registrations hereunder.

                  (c)      "Registrable Securities" shall mean shares of eRCG's
common stock, par value $.04 per share ("ERCG COMMON STOCK") issued to the
Sellers pursuant to those certain Stock Purchase Agreements that each Seller
entered into with eRCG of even date herewith (collectively, the "PURCHASE
AGREEMENTS"); provided that a Registrable Security ceases to be a Registrable
Security when (i) it is registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), (ii) it is sold or transferred in accordance with the
requirements of Rule 144 (or similar provisions then in effect), (iii) it is
eligible to be sold or transferred under Rule 144 without holding period or
volume limitations, or (iv) it is sold in a private transaction in which the
transferor's rights under this Agreement are not assigned.

                  (d)      The terms "register," "registered" and "registration"
shall refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and applicable rules and
regulations thereunder and the declaration or ordering of the effectiveness of
such registration statement.


   2

                  (e)      "Registration Expenses" shall mean all reasonable
expenses incurred in effecting any registration pursuant to this Agreement,
including, without limitation, all federal and state registration,
qualification, and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for eRCG, blue sky fees and expenses, and expenses of
any regular or special audits incident to or required by any such registration,
but shall not include (i) Selling Expenses, (ii) the compensation of regular
employees of eRCG, which shall be paid in any event by eRCG, (iii) disbursements
of counsel for any Holder, (iv) blue sky fees and expenses incurred in
connection with the registration or qualification of any Registrable Securities
in any state, province or other jurisdiction in a registration pursuant to
Section 1.3 hereof only to the extent that eRCG shall otherwise be making no
offers or sales in such state, province or other jurisdiction in connection with
such registration and (v) any expenses of a registration for which the request
has been withdrawn by the Holder(s) unless the withdrawal is based upon material
adverse information concerning eRCG of which the Holder(s) were not aware at the
time of the request.

                  (f)      "Restricted Securities" shall mean any Registrable
Securities required to bear the legend set forth in Section 1.2(c) hereof.


                  (g)      "Rule 144" shall mean Rule 144 as promulgated by the
SEC under the Securities Act, as such Rule may be amended from time to time, or
any similar successor rule that may be promulgated by the SEC.

                  (h)      "SEC" shall mean the Securities and Exchange
Commission.

                  (i)      "Selling Expenses" shall mean all underwriting
discounts, selling commissions, brokers' fees and stock transfer taxes
applicable to the sale of Registrable Securities.

         1.2      RESTRICTIONS ON TRANSFER.

                  (a)      Each Holder agrees not to make any disposition of all
or any portion of the Registrable Securities unless and until (i) there is then
in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement, or (ii) (A) such Holder shall have notified eRCG in
writing of the proposed disposition and shall have furnished eRCG with a
detailed statement of the circumstances surrounding the proposed disposition and
the proposed transferee agrees in writing to be subject to all restrictions set
forth in this Agreement and (B) if reasonably requested by eRCG, such Holder
shall have furnished eRCG with an opinion of counsel, reasonably satisfactory to
eRCG, that such disposition will not require registration of such shares under
the Securities Act.

                  (b)      Notwithstanding the provisions of subparagraphs (i)
and (ii) of paragraph (a) above, no such registration statement or opinion of
counsel shall be necessary for a transfer by a Holder which is (A) a partnership
to its partners in accordance with their partnership interests, (B) a limited
liability company to its members in accordance with their member interests, or
(C) to the Holder's family member or a trust for the benefit of an individual
Holder


                                       2
   3

or one or more of its family members; provided the transferee will be subject to
the terms of this Section 1.2 to the same extent as if it were an original
Holder hereunder.

                  (c)      Each certificate representing Registrable Securities
shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws):

         THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED,
         ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
         SUCH ACT OR UNLESS eRCG HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
         EVIDENCE, SATISFACTORY TO eRCG AND ITS COUNSEL, THAT SUCH REGISTRATION
         IS NOT REQUIRED.

                  (d)      eRCG shall be obligated to promptly reissue
unlegended certificates at the request of any Holder thereof if the Holder shall
have obtained an opinion of counsel (which counsel may be counsel to eRCG)
reasonably acceptable to eRCG to the effect that the securities proposed to be
disposed of may lawfully be so disposed of in compliance with the Securities Act
without registration, qualification or legend.

                  (e)      Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by eRCG of an order of the
appropriate blue sky authority authorizing such removal or if the Holder shall
request such removal and shall have obtained and delivered to eRCG an opinion of
counsel reasonably acceptable to eRCG to the effect that such legend and/or
stop-transfer instructions are no longer required pursuant to applicable state
securities laws.

         1.3      ERCG REGISTRATION.

                  (a)      Registration Statement. eRCG hereby agrees that
within one-hundred and eighty days (180) from the closing of the transactions
contemplated in the Purchase Agreements, it shall cause to be filed with the SEC
a registration statement on Form S-3 (except if eRCG is not then eligible to
register for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form) and prior to such filing eRCG
will:

                           (i)      promptly give to each Holder written notice
thereof, which notice briefly describes the Holders' rights under this Section
1.3 (including notice deadlines); and

                           (ii)     use its commercially reasonable efforts to
include in such registration (and any related filing or qualification under
applicable blue sky laws; provided, however, eRCG shall not be obligated to
effect any registration statement in any jurisdiction in which it would be
required to qualify to do business or execute a general consent to service of


                                       3
   4

process), except as set forth in Section 1.3(b) below, and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by any Holder and received by eRCG within ten (10) days after
the written notice from eRCG described in clause (i) above is mailed or
delivered by eRCG, provided that such Holders shall have requested for inclusion
in such registration at least twenty-five percent (25%) of the aggregate number
of the Registrable Securities which have been issued to the Holders prior to the
date of such written request. Such written request may specify all or a part of
a Holder's Registrable Securities.

                  (b)      Underwriting. If the registration of which eRCG gives
notice is for a registered public offering involving an underwriting, eRCG shall
so advise the Holders as a part of the written notice given pursuant to Section
1.3(a)(i). In such event, the right of any Holder to registration pursuant to
this Section 1.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with eRCG and the
other holders of securities of eRCG with registration rights to participate
therein distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by eRCG.

                  Notwithstanding any other provision of this Section 1.3, if
the representative of the underwriters advises eRCG in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Registrable Securities from, or limit the number of Registrable Securities to be
included in, the registration and underwriting. eRCG shall so advise all Holders
of securities requesting registration, and the number of shares of securities
that are entitled to be included in the registration and underwriting shall be
allocated first to eRCG for securities being sold for its own account and
thereafter the Registrable Securities so included will be apportioned pro rata
among the selling Holders according to the total number of Registrable
Securities entitled to be included therein (without regard to the number of
Registrable Securities actually requested to be included therein) owned by each
selling Holder or in such other proportions as shall mutually be agreed to by
such selling Holders. For purposes of the preceding sentence, for any selling
Holder which is Holder of Registrable Securities and which is a partnership or
corporation, the partners, retired partners and shareholders of such Holder, or
the estates and family members of such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling Holder" and any pro rata reduction with respect to such "selling
Holder" shall be based upon the aggregate amount of share carrying registration
rights owned by all entities and individuals included in such "selling Holder,"
as defined in this sentence. If any person does not agree to the terms of any
such underwriting, it shall be excluded therefrom by written notice from eRCG or
the underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.

                  (c)      Rights of Other Stockholders. Each Holder
acknowledges that eRCG has granted or may grant similar or superior registration
rights to Other Stockholders and eRCG may or may not file with the SEC one or
more registration statements covering the resale of securities of eRCG held by
such Other Stockholders (including registration statements filed in


                                       4
   5

connection with private placements commenced by eRCG prior to the date hereof)
and eRCG may, but is not obligated to, offer to include in such registration
statement the Registrable Securities held by the Holders, provided that eRCG
does offer to include the Registrable Securities of the Holders in a
registration statement filed with the SEC within the one hundred and eighty day
(180) period discussed in Section 1.3(a) above.

         1.4      EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Section 1.3 hereof shall be borne by eRCG. All Selling Expenses relating to
securities so registered shall be borne by the Holders of such securities pro
rata on the basis of the number of shares of securities so registered on their
behalf.

         1.5      REGISTRATION PROCEDURES. In the case of each registration
affected by eRCG pursuant to Section 1.3 hereof, eRCG will keep each Holder
advised in writing as to the initiation of each registration. At its expense,
eRCG will use its commercially reasonable efforts to:

                  (a)      prepare and file with the SEC such amendments and
supplements to the registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;

                  (b)      furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request;

                  (c)      notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and, at the request of any Holder, prepare and
furnish to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing; provided, however, eRCG shall not be obligated to prepare and furnish
any such prospectus supplements or amendments relating to any material nonpublic
information at any such time as the Board of Directors of eRCG has determined
that, for good business reasons, the disclosure of such material nonpublic
information at that time is contrary to the best interests of eRCG in the
circumstances and is not otherwise required under applicable law (including
applicable securities laws); and provided, further, such obligation shall
continue until the earlier of (i) the sale of all Registrable Securities
registered pursuant to the registration statement of which the prospectus forms
a part or (ii) withdrawal of such registration statement.


                                       5
   6

                  (d)      cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange and/or included in
any national quotation system on which similar securities issued by eRCG are
then listed or included;

                  (e)      provide a transfer agent and registrar for all
Registrable Securities registered pursuant to such registration statement and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration; and

                  (f)      otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering a period of at least twelve (12) months, but not more than
eighteen (18) months, beginning with the first month after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.

         1.6      INDEMNIFICATION.

                  (a)      eRCG will indemnify each Holder and its officers,
directors, partners, legal counsel, accountants and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification, or compliance has been effected pursuant to
this Article 1, and each underwriter, if any, and each person who controls
within the meaning of Section 15 of the Securities Act any underwriter, against
all expenses, claims, losses, damages, and liabilities (or actions, proceedings,
or settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any material violation by eRCG of the Securities Act
or any rule or regulation thereunder applicable to eRCG or relating to action or
inaction required of eRCG in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder and its
officers, directors, partners, legal counsel, accountants and each person
controlling such Holder, each such underwriter, and each person who controls any
such underwriter, for legal and other expenses reasonably incurred in connection
with investigating and defending or settling any such claim, loss, damage,
liability, or action; provided that eRCG will not be liable in any such case to
the extent that any such claim, loss, damage, liability, or expense arises out
of or is based on any untrue statement or omission based upon written
information furnished to eRCG by such Holder (or its officers, directors,
partners, legal counsel, accountants or a person controlling such Holder) or
underwriter for use therein. It is agreed that the indemnity agreement contained
in this Section 1.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the prior written consent of eRCG (which consent shall not be unreasonably
withheld). The indemnity agreement contained in this paragraph shall not apply
to the extent that any loss, claim, damage, liability or action results from the
fact that a current copy of the registration statement or prospectus was not
sent or given to a proposed transferee asserting any such expenses, loss, claim,
damage or liability at or prior to the written


                                       6
   7

confirmation of the Registrable Securities if it is determined that eRCG
provided such registration statement or prospectus to such selling Holder in a
timely manner prior to such sale and it was the responsibility of the selling
Holder under the Securities Act to provide the proposed transferee with a
current copy of the registration statement or prospectus and such registration
statement or prospectus would have cured the defect giving rise to such expense,
loss, claim, damage or liability.

                  (b)      Each Holder will, if Registrable Securities held by
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify eRCG, each of its directors,
officers, partners, legal counsel, accountants and each underwriter, if any, of
eRCG's securities covered by such a registration statement, each person who
controls eRCG or such underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder and Other Stockholder, and each of their
officers, directors, and partners, and each person controlling such Holder or
Other Stockholder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular, or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
eRCG and such Holders, Other Stockholders, directors, officers, partners, legal
counsel, and accountants, persons, underwriters, or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to eRCG by such Holder for use
therein; provided, however, (i) that the obligations of such Holder hereunder
shall not apply to amounts paid in settlement of any such claims, losses,
damages, or liabilities (or actions in respect thereof) if such settlement is
effected without the consent of such Holder (which consent shall not be
unreasonably withheld).

                  (c)      Each party entitled to indemnification under this
Section 1.6 (the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of such
claim or any litigation resulting therefrom, provided that one (1) counsel for
the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
1.6, to the extent such failure is not prejudicial. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff of a release to such Indemnified Party from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably


                                       7
   8

request in writing and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom.

                  (d)      If the indemnification provided for in this Section
1.6 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the conduct, statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.

                  (e)      Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into by the Indemnifying Party and the Indemnified Party in
connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.

         1.7      INFORMATION BY HOLDER. Each Holder of Registrable Securities
shall furnish to eRCG such information regarding such Holder and the
distribution proposed by such Holder as eRCG may reasonably request in writing
and the furnishing of such information shall be a condition precedent to the
obligations of eRCG to take action in connection with any registration,
qualification, or compliance referred to in this Section 1. eRCG shall have no
obligation with respect to a registration pursuant to Section 1, if, as a result
of the preceding sentence, the number of shares of Registrable Securities to be
included in the registration does not equal or exceed the percent of Registrable
Securities required to trigger eRCG's obligation to initiate registration
pursuant to Section 1.3(a)(ii) hereof.

         1.8      RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the SEC that may permit the sale of
the Restricted Securities to the public without registration, eRCG agrees to use
its commercially reasonable efforts to:

                  (a)      make and keep adequate public information regarding
eRCG available as those terms are understood and defined in Rule 144 after the
effective date of a registration statement;

                  (b)      file with the SEC in a timely manner all material
reports and other documents required of eRCG under the Securities Act; and


                                       8
   9

                  (c)      so long as a Holder owns any Restricted Securities,
furnish to the Holder forthwith upon written request a written statement by eRCG
as to its compliance with the reporting requirements of Rule 144 (at any time
after ninety (90) days after the effective date of a registration statement
filed by eRCG) and of the Securities Act, a copy of the most recent annual or
quarterly report of eRCG, and such other reports and documents so filed as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing a Holder to sell any such securities without registration.

         1.9      DELAY OF REGISTRATION; CERTAIN NOTICES.

                  (a)      Delay of Registration. No Holder shall have any right
to take any action to restrain, enjoin or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of any provision of this Agreement.

                  (b)      Notice to Discontinue. Each Holder agrees by
acquisition of such securities that, upon receipt of any notice from eRCG of any
event of the kind described in Section 1.5(c), the Holder will discontinue
disposition of Registrable Securities until the Holder receives copies of the
supplemented or amended prospectus contemplated by Section 1.5(c). In addition,
if eRCG requests, the Holder will deliver to eRCG all copies of the prospectus
covering the Registrable Securities current at the time of receipt of such
notice.

                  (c)      Notice by Holders. Whenever the Holders have
requested that any Registrable Securities be registered pursuant to this
Agreement, those Holders shall notify eRCG, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event, which as to any Holder is (i) to its respective
knowledge, (ii) solely within its respective knowledge and (iii) solely as to
matters concerning that Holder, as a result of which the prospectus included in
the registration statement, then in effect, contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein, in light of the circumstances then existing, not misleading.

         1.10     "MARKET STAND-OFF" AGREEMENT.

                  (a)      Each Holder hereby agrees that, during the period of
duration (up to, but not exceeding, one hundred eighty (180) days) specified by
eRCG and an underwriter of eRCG Common Stock or other securities of eRCG,
following the effective date of a registration statement of eRCG filed under the
Securities Act, it shall not, to the extent requested by eRCG and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of eRCG held by it at any time during such period except
eRCG Common Stock included in such registration.

                  (b)      To enforce the foregoing covenant, eRCG may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder until the end of such period, and each Holder agrees that, if so
requested, such Holder will execute an agreement in


                                       9
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the form provided by the underwriter containing terms which are essentially
consistent with the provisions of this Section 1.10.

         1.11     TERMINATION OF REGISTRATION RIGHTS. The registration rights
granted under this Section 1 shall terminate and be of no further force and
effect if all Registrable Securities held by and issuable to such Holder (and
its affiliates, partners, former partners, members and former members) may be
sold under Rule 144 during any ninety (90) day period.

         2.       REPRESENTATIONS AND WARRANTIES

         2.1      REPRESENTATIONS AND WARRANTIES OF ERCG.  eRCG represents and
warrants to the Sellers as follows:

                  (a)      The execution, delivery and performance of this
Agreement by eRCG have been duly authorized by all requisite corporate action
and will not violate any provision of law, any order of any court or other
agency of government, the Articles of Incorporation or Bylaws of eRCG, or any
provision of any material indenture, agreement or other instrument to which it
or any of its properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any such material indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of eRCG, except as would not
reasonably be expected to result in a material adverse effect on eRCG.

                  (b)      This Agreement has been duly executed and delivered
by eRCG and constitutes the legal, valid and binding obligation of eRCG,
enforceable against eRCG in accordance with its terms, subject to applicable
bankruptcy, insolvency and other similar laws affecting the enforceability of
creditors' rights generally, general equitable principles, the discretion of
courts in granting equitable remedies and public policy considerations.

         2.2      REPRESENTATIONS AND WARRANTIES OF THE SELLERS.  Each Seller
(severally and not jointly) represents and warrants to eRCG as follows:

                  (a)      The execution, delivery and performance of this
Agreement by such Seller has been duly authorized by all requisite corporate
action (if applicable) and will not violate any provision of law, any order of
any court or any agency or government, the Articles of Incorporation or Bylaws
of Seller (if applicable), or any provision of any material indenture or
agreement or other instrument to which it or any of its respective properties or
assets is bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such material indenture,
agreement or other instrument, or result in the creation or imposition of any
lien, charge, or encumbrance of any nature whatsoever upon any of the properties
or assets of the Seller except as would not reasonably be expected to result in
a material adverse effect on such Seller.

                  (b)      This Agreement has been duly executed and delivered
by such Seller and constitutes the legal, valid and binding obligation of such
Seller, enforceable against such Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency and other similar


                                       10
   11

laws affecting the enforceability of creditors' rights generally, general
equitable principles, the discretion of courts in granting equitable remedies
and public policy considerations.

3.       MISCELLANEOUS

         3.1      INFORMATION CONFIDENTIAL. Each Holder acknowledges that the
information received by it pursuant hereto may be confidential and for its use
only, and it will not use such confidential information in violation of the
Securities Act or reproduce, disclose or disseminate such information to any
other person (other than its employees or agents having a need to know the
contents of such information, and its attorneys, each of which are informed of
the confidential nature of such information), except in connection with the
exercise of rights under this Agreement, unless eRCG has made such information
available to the public generally or such Holder is required to disclose such
information by a governmental body and gives prior notice to eRCG.

         3.2      BINDING EFFECT. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.

         3.3      ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subject hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by eRCG
and the Holders of at least fifty-one percent (51%) of the Registrable
Securities and any such amendment, waiver, discharge or termination shall be
binding on all the Holders, but in no event shall the obligation of any Holder
hereunder be materially increased, except upon the written consent of such
Holder.

         3.4      NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, delivered personally by hand, confirmed
facsimile transmission or nationally recognized overnight courier addressed (a)
if to a Holder, as indicated in the stock records of eRCG or at such other
address as such Holder shall have furnished to eRCG by like notice, or (b) if to
eRCG, at 3353 Peachtree Road, NE, Suite 130, Atlanta, Georgia 30326, Attention:
William L. Wortman or at such other address as eRCG shall have furnished to each
Holder by like notice with a copy to Rogers & Hardin LLP, 2700 International
Tower, 229 Peachtree Street, Atlanta, Georgia 30303, Attn: Edward J. Hardin,
Esq. All such notices and other written communications shall be effective on the
date of mailing or delivery.

         3.5      DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to eRCG or to any Holder under this Agreement
shall impair any such right, power or remedy nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
therefore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character of any breach or default under this Agreement or any
waiver of any provisions or conditions of this Agreement must be made in writing
and shall be effective only to the extent


                                       11
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specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise, shall be cumulative and not alternative.

         3.6      RIGHTS; SEVERABILITY. Unless otherwise expressly provided
herein, a Holder's rights hereunder are several rights, not rights jointly held
with any of the other Holders. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

         3.7      TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

         3.8      GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State
of Delaware without reference to Delaware's choice of law rules and each of the
parties hereto hereby consents to personal jurisdiction in any federal or state
court in the State of North Carolina.

         3.9      COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in any number of counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.





                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                       12
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         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement or have caused this Agreement to be duly executed on its behalf by an
officer or representative thereto duly authorized, all as of the date first
above written.

                           ERESOURCE CAPITAL GROUP, INC.



                           By:
                              ------------------------------------------------
                                Its:
                                    ------------------------------------------


                           SELLER


                           ---------------------------------------------------
                           Signature


                           ---------------------------------------------------
                           Printed Name



              [SIGNATURES OF ADDITIONAL SELLERS ON FOLLOWING PAGES]



                                       13

EX-10.1

   1
                                                                    EXHIBIT 10.1


                    EMPLOYMENT AND NON-COMPETITION AGREEMENT


         THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "AGREEMENT") is
made as of the ____ day of March, 2001, by and between LST, INC., a Delaware
corporation ("LST") and GLENN I. BARRETT, JR, an individual resident of the
State of North Carolina (the "EXECUTIVE"), and is effective as of the date
hereof (the "EFFECTIVE DATE").

         WHEREAS, LST intends to employ Executive, and Executive desires to be
employed by LST; and

         WHEREAS, LST and Executive desire to set forth the terms and conditions
on which Executive shall be employed and provide services to LST.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Executive and LST including,
without limitation, the promises and covenants described herein, the parties
hereto, intending to be legally bound, hereby agree as follows:

                                    ARTICLE I
                                   EMPLOYMENT

         SECTION 1.1       Duties and Responsibilities. LST hereby employs
Executive full time as the Chief Executive Officer and President of LST.
Executive shall do and perform all reasonable services and acts necessary or
advisable to fulfill the duties of such office, and shall conduct and perform
such additional services and activities as may be reasonably determined from
time to time by the Board of Directors of LST (the "BOARD"). During the term of
this Agreement, Executive shall devote his full time, energy and skill to the
business of LST and to the promotion of LST's interests, and Executive
acknowledges that he has a duty of loyalty to LST and shall not, during the term
hereof, engage in, directly or indirectly, any other business or activity
whether or not for pecuniary gain, that could materially and adversely affect
LST's business or Executive's ability to perform his duties under this
Agreement. The foregoing shall not, however, preclude Executive from serving on
the boards of directors of other entities.

         In his capacity as an officer of LST, Executive shall report to the
Board and abide by all rules and regulations established from time to time by
the Board. Executive's authority and responsibility in LST shall at all times be
subject to the review and discretion of the Board, which shall have the final
authority to make decisions regarding the business of LST.

         SECTION 1.2       Term of Employment. The term of Executive's
employment hereunder shall continue for a period of two (2) years from the
Effective Date, unless earlier terminated as provided in this Agreement. At the
end of the initial two (2) year term, and at the end of each renewal term, this
Agreement shall automatically be extended for an additional one (1) year terms
unless either party hereto shall give written notice of its or his intent to
terminate for any or no reason sixty (60) days prior to the end of the initial
term or any subsequent renewal term.


   2

         SECTION 1.3       Benefits. During the term of Executive's employment
hereunder, Executive will be entitled to the following:

                  (a)      Vacation. Executive shall be entitled to two (2)weeks
paid vacation annually. Any vacation not used during any calendar year shall be
forfeited. Executive shall also be entitled to reasonable holidays and sick days
in accordance with LST's policy as may be established and modified from time to
time.

                  (b)      Employee Benefit Plans. Executive shall be entitled
to participate in all employee benefit plans, including any life insurance,
disability insurance, profit sharing and retirement plans that are generally
offered to or provided for the senior executives of LST, said plans to be
approved by the Board. Executive shall be entitled to participate in such group
health and dental insurance plans (including family coverage) on the same basis,
including cost provisions, as may from time to time be offered generally to the
other senior executives of LST.

         SECTION 1.4       Compensation. For all services to be rendered by
Executive under this Agreement, LST shall pay Executive an annual gross salary
of One Hundred Fifty Thousand Dollars ($150,000) payable in accordance with the
normal payroll practices of LST, which policies may be changed by LST from time
to time, and shall be subject to appropriate withholding taxes. In any event,
Executive's salary shall be paid no less frequently than monthly.

         SECTION 1.5       Business Expenses. Executive shall be entitled to
reimbursement of all ordinary and necessary business expenses reasonably
incurred for business travel, lodging, communications (including cell phone),
entertainment and meals in connection with the performance of Executive's duties
under this Agreement, upon submission of sufficient documentation evidencing
same and in accordance with LST's established policies for reimbursement of
business expenses.

         SECTION 1.6       Place of Employment. LST agrees to provide an office
for Executive in Charlotte, North Carolina. LST will provide at the Charlotte
office a computer and other equipment and assistance necessary in order for
Executive to complete his duties under this Agreement. Executive shall be
entitled to reside and perform his duties in Charlotte, North Carolina.


                                   ARTICLE II
                             COVENANTS OF EXECUTIVE

         SECTION 2.1       Confidentiality. Executive recognizes the interest of
LST in maintaining the confidential nature of its proprietary and other business
and commercial information. In connection therewith, Executive covenants that
during the term of his employment with LST under this Agreement, and for a
period of two (2) years thereafter (except as set forth in Section 2.2 hereof),
Executive shall not, directly or indirectly, except as authorized in writing by
the Board, publish, disclose or use for his own benefit or for the benefit of a
business or entity other


                                       2
   3

than LST or otherwise, any secret or confidential matter, or proprietary or
other information not in the public domain that was acquired by Executive during
his employment, relating to LST, its parent or any of their affiliates' or
subsidiaries' businesses, operations, customers, suppliers, products, employees,
financial information, budgets, practices, strategies, prices, methods,
technology, know-how, intellectual property, documentation, concepts,
improvements, plans, research and development, leads and/or marketing materials,
records, files, databases, accounting journals, accounts receivable records,
business plans and other similar information (the "CONFIDENTIAL INFORMATION");
provided, however, Confidential Information does not include information that
(i) is or becomes generally available to the public other than as a result of a
breach of this Agreement; (ii) is disclosed with the prior written consent of
LST; (iii) at the time of such disclosure, was already known or in the
possession of Executive; (iv) becomes available to a competitor of LST on a
non-confidential basis from a source other than Executive, which source is not
prohibited from disclosing such Confidential Information by a legal, contractual
or fiduciary obligation to LST; or (v) is independently developed by a
competitor of LST. Executive will abide by LST's policies and regulations, as
established from time to time, for the protection of its Confidential
Information.

         SECTION 2.2       Trade Secrets. Executive shall not, at any time,
either during or after the term of his employment with LST under this Agreement,
use or disclose any "Trade Secrets" (as defined by the Delaware Uniform Trade
Secrets Act) of LST, its parent or their affiliates or subsidiaries, except in
fulfillment of his duties during his employment, for so long as the pertinent
information or data remain Trade Secrets, whether or not the Trade Secrets are
in written or tangible form. Notwithstanding anything to the contrary contained
herein, Executive shall not be prohibited hereunder from disclosing Trade
Secrets if, in the written opinion of counsel for Executive, such disclosure is
required by applicable law, in which event Executive shall provide LST with
prompt written notice of such request and shall take all reasonable action
requested by LST to obtain confidential treatment of such Trade Secrets.

         SECTION 2.3       Surrender of Records. Executive shall provide LST
with notice of any inadvertent disclosure of Confidential Information. Executive
acknowledges that all Confidential Information is and shall remain the sole
property of LST and/or such affiliated entity or subsidiary and shall, upon
termination of Executive's employment with LST for any reason whatsoever, or
upon the request of LST, turn over to LST all Confidential Information, without
retaining notes or copies thereof (together with a written statement certifying
as to his compliance with the foregoing).

         SECTION 2.4       Non-Solicitation of Clients/Employees. During the
term of Executive's employment with LST, and for the two (2) year period
following the termination of Executive's employment with LST for any reason,
Executive shall not, directly or indirectly:

                  (a)      solicit or acquire, or attempt to solicit or acquire
any business from any individual or entity that was a customer or client of LST,
its parent, their subsidiaries or affiliates during the one (1) year period
ending on the date of termination of Executive's employment with LST, or
actively sought after prospective clients, for the purpose of providing services
or products to such customer or client which are competitive with the services
or products offered or provided by LST; provided, however, nothing herein shall
preclude Executive from holding


                                       3
   4

not more than one-percent (1%) of the outstanding equity of any company, so long
as Executive does not, in fact, have the power to participate in controlling or
directing the management of such company other than by such voting equity; or

                  (b)      employ, induce, solicit or attempt to solicit for
employment, or assist others in employing, inducing or soliciting for
employment, any individual who is or was an employee or independent contractor
of LST, its parent, their subsidiaries or affiliates at any time during the one
(1) year period ending or the date of termination of Executive's employment with
LST in an attempt to have any such individual work for Executive, or any other
individual or entity in the business of the development, operation and
management of a home networking technology company (including Internet,
security, satellite television, entertainment and communications for the home)
or related companies (the "BUSINESS").

         SECTION 2.5       Non-Competition. During the term of Executive's
employment with LST, and for the two (2) year period following the termination
of Executive's employment with LST for any reason, Employee shall not, without
the prior written consent of the Board, which consent may be withheld at the
sole discretion of the Board, directly or indirectly, in his individual capacity
as owner, director, member, officer, employee, consultant or agent, or on behalf
of any other individual, partnership, corporation, limited liability company or
other entity, engage in or be associated with any business that, directly or
indirectly, competes with LST, its parent, their subsidiaries or affiliates in
the Business in any geographic area in which LST conducts the Business. Nothing
herein shall preclude Employee from holding not more than one-percent (1%) of
the outstanding equity of any company, so long as Employee does not, in fact,
have the power to participate in controlling or directing the management of such
company other than by such voting equity.

         SECTION 2.6       Acknowledgment of Reasonableness/Enforcement/Tolling.

                  (a)      The existence of any claim or cause of action by
Executive against LST predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by LST of these covenants. Executive
acknowledges and confirms (i) that the restrictions contained herein are fair
and reasonable and not the result of overreaching, duress, or coercion of any
kind, and (ii) that Executive's full, uninhibited, and faithful observance of
each of the covenants contained in this Agreement will not cause Executive any
undue hardship, financial or otherwise. In the event that any court shall
formally hold that the restrictions in this Article II are unreasonable,
Executive hereby expressly agrees that the restrictions shall not be rendered
void, but shall apply to the extent that such court may judicially determine or
indicate constitutes a reasonable restriction.

                  (b)      Executive acknowledges that the services to be
rendered by Executive hereunder are extraordinary and unique and are vital to
the success of LST, and that damages at law would be an inadequate remedy for
any breach or threatened breach of this Agreement by Executive. Therefore, in
the event of a breach or threatened breach by Executive of any provision of this
Agreement, LST shall be entitled, in addition to all other rights or remedies,
to injunctions restraining such breach, without being required to show any
actual damage or to post any bond or other security. No remedy herein conferred
upon any party is intended to be


                                       4
   5

exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law, in equity or otherwise. No single or partial
exercise by any party of any right, power or remedy hereunder shall preclude any
other or further exercise thereof.

                  (c)      In the event LST should bring any legal action or
other proceeding for the enforcement of the Agreement, the time for calculating
the non-solicitation period, the non-competition period or terms of any other
restriction herein shall not include the period of time commencing with the
filing of the legal action or other proceeding to enforce the terms of the
Agreement through the date of final judgment or final resolution, including all
appeals, if any, of such legal action or other proceeding.


                                   ARTICLE III
                  REPRESENTATIONS OF EXECUTIVE/INDEMNIFICATION

         SECTION 3.1       Representations and Warranties of
Executive/Indemnification. Executive represents and warrants to LST that he is
fully empowered to enter and perform his obligations under this Agreement and,
without limitation, that he is under no restrictive covenants to any person or
entity that will be violated by his entering into and performing this Agreement,
and that this Agreement constitutes the valid and legally binding obligation of
Executive enforceable in accordance with its terms. Executive shall indemnify
LST upon demand for and against any and all judgments, losses, claims, damages,
costs (including, without limitation, all legal fees and costs, even if incident
to appeals) incurred or suffered by LST as a result of the breach of the
representations and warranties made in this Article 3.


                                   ARTICLE IV
                            TERMINATION OF EMPLOYMENT

         SECTION 4.1       Termination by LST. Executive's employment may be
terminated by LST during the term of this Agreement upon the occurrence of one
or more of the following events:

                  (a)      Termination For Death. Immediately upon Executive's
death.

                  (b)      Termination For Disability. Upon the effective date
of written notice from LST (which shall not be prior to the date on which such
notice is sent) in the event of Executive's disability which renders Executive
incapable of performing his duties for more than one hundred and twenty (120)
calendar days in one calendar year or within consecutive calendar years.

                  (c)      Termination Without Cause. LST can terminate
Executive's employment without cause for any or no reason (other than those set
forth in Section 4.1(d) hereof), sixty (60) days after written notice (including
a notice of nonrenewal sent by LST pursuant to Section 1.2 hereof) sent to
Executive following a determination by the Board to so terminate Executive's
employment.


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                  (d)      Termination For Cause. Upon the effective date of
written notice sent to Executive (which shall not be prior to the date on which
such notice is sent) stating LST's determination that it is terminating
Executive for "Cause", which for purposes of this Agreement shall mean:

                           (i)      an act of fraud, embezzlement or theft of
funds or property of LST or any of its clients/customers;

                           (ii)     any misconduct having a substantial, adverse
effect upon LST;

                           (iii)    any intentional wrongful disclosure of
Confidential Information or Trade Secrets of LST or its affiliates or any form
of self-dealing detrimental to the interests of LST;

                           (iv)     conviction of a felony or any similar crime
causing material harm to the reputation of LST as determined by the Board (for
these purposes, conviction shall include a plea of no contest or plea to any
lesser charges predicated on the same underlying conduct);

                           (v)      the habitual and debilitating use of alcohol
or drugs;

                           (vi)     failure to comply in any material way with
the reasonable written directives of the Board, which failure has not been cured
by Executive within thirty (30) days after notice from the Board of any such act
or omission; or

                           (vii)    failure to comply in any material respect
with the terms of this Agreement, which failure has not been cured by Executive
within thirty (30) days after notice from the Board of any such act or omission.

                  SECTION 4.2       Resignation by Executive. Executive's
employment may be terminated by Executive during the term of this Agreement upon
the occurrence of one or more of the following events:

                  (a)      Voluntary Resignation. Executive may terminate his
employment under this Agreement by giving sixty (60) days' prior written notice
to LST (including a notice of nonrenewal sent by Executive pursuant to Section
1.2 hereof) stating Executive's election to terminate his employment with LST.
LST may accept such resignation effective as of any date during such sixty (60)
day period as LST deems appropriate.

                  (b)      Resignation With Cause. Upon the effective date of
written notice sent to LST stating Executive's determination of "Constructive
Termination" (hereinafter defined) by LST; provided, however, if the
Constructive Termination is curable, then LST shall have thirty (30) days after
Executive's written notice to cure such condition and if LST fails to cure such
condition to the reasonable satisfaction of Executive, then Executive may
immediately terminate his employment with LST, such termination to be
conclusively deemed to be a resignation with cause. For purposes of this
Agreement, "Constructive Termination" shall mean:


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                           (i)      A reduction in Executive's base salary
specified in Section 1.4 hereof for the calendar year 2001, or a reduction in
Executive's base salary in effect for the prior calendar year for all succeeding
years (other than pro rata reductions in compensation for all senior executives
of LST).

                           (ii)     The requirement that Executive be based
anywhere other than within 30 miles of LST's current office in Charlotte, North
Carolina.

                           (iii)    LST's failure to comply in any material
respect with the terms of this Agreement.

         SECTION 4.3       Change of Control. Upon (i) the effective date of a
written notice sent to Executive by LST stating that a "Change of Control"
(hereinafter defined) has occurred or will occur and Executive's employment will
be terminated in connection therewith, which notice must be given no later than
sixty (60) days following such Change of Control or (ii) the date of termination
if Executive is terminated without cause or resigns with cause within twelve
(12) months of a Change of Control. A "Change of Control" shall be deemed to
have occurred if (A) as a result of any merger, consolidation, sale, assignment,
transfer or other transaction, any person, other than those persons who are
shareholders of LST or its affiliates (within the meaning of Rule 501 of the
Securities Act of 1933) on the date hereof, becomes the "beneficial owner" (as
defined in Rule 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as
amended) of more than 50% of the outstanding voting securities of LST or the
surviving entity or becomes entitled to elect more than one-half (1/2) of the
Board or other governing body of LST or the surviving entity or (B) LST sells,
assigns or otherwise transfers all or substantially all of the assets of the
LST, to persons other than those persons who are shareholders of LST, its
subsidiaries or affiliates; provided, however, in no event shall a financing
transaction (such as additional rounds of venture capital), which is approved by
the Board and entered into by LST be deemed to be a "Change of Control".

         SECTION 4.4       Effect of Termination/Change of Control.

                  (a)      Termination for Death; Termination For Disability or
Voluntary Resignation. In the event of termination of Executive's employment
pursuant to Sections 4.1(a), 4.1(b) or 4.2(a) hereof:

                           (i)      LST shall pay to Executive the base salary
and expenses otherwise payable to Executive under Sections 1.4 and 1.5 hereof
through the date of termination (provided that in the event of Executive's
disability, the base salary payable to Executive shall be less any disability
benefits provided by LST), as well as any accrued but unpaid vacation time. For
purposes of this Agreement, one (1) week of vacation shall be deemed to accrue
every six (6) months. Executive shall not be entitled to receive any severance
pay.

                           (ii)     Executive's rights under LST's benefit
plans of general application shall be determined under the provisions of those
plans.


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                  (b)      Termination Without Cause; Resignation With Cause;
Termination in Connection with a Change of Control. In the event of termination
of Executive's employment pursuant to Sections 4.1(c), 4.2(b) or 4.3 hereof:

                           (i)      LST shall pay to Executive the base salary
and expenses otherwise payable to Executive under Sections 1.4 and 1.5 hereof
through the date of termination as well as any accrued but unpaid vacation time.
In addition, Executive shall be entitled to six (6) months' salary continuation
at the then current rate, payable in accordance with the normal payroll
practices of LST. Such severance payments are to be considered compensation for
performance of Executive's covenants hereunder.

                           (ii)     Executive shall continue to participate in
LST's group health plan for six (6) months following the date of termination
upon the timely periodic payment of any amount required for employees to
maintain family coverage for such plan, and rights under other benefit plans
shall be determined under the provisions of those plans.

                  (c)      Termination For Cause. In the event of termination of
Executive's employment prior to Section 4.1(d) hereof:

                           (i)      LST shall pay to Executive the base salary
and expenses otherwise payable pursuant to Sections 1.4 and 1.5 hereof through
the date of termination. Executive shall not be entitled to receive any
severance pay whatsoever.

                           (ii)     Executive's rights under LST's benefit plans
of general application shall be determined under the provisions of those plans.


                                    ARTICLE V
                               GENERAL PROVISIONS

         SECTION 5.1       Survival. Notwithstanding anything to the contrary
herein, the provisions of this Agreement shall survive and remain in effect in
accordance with their respective terms in the event Executive's employment is
terminated for any reason.

         SECTION 5.2       Enforcement Costs. If any civil action, arbitration,
or other legal proceeding is brought for the enforcement of the Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any provision of the Agreement, the successful or prevailing
party or parties shall be entitled to recover reasonable attorneys' fees, sales
and use taxes, court costs, and all expenses (including, without limitation, all
such fees, taxes, costs, and expenses incident to arbitration, appellate and
post-judgment proceedings), incurred in that civil action, arbitration, or legal
proceeding, in addition to any other relief to which such party or parties may
be entitled.

         SECTION 5.3       Notices. For purposes of this Agreement, all
communications including, without limitation, notices, consents, requests or
approvals, provided for herein shall be in writing and shall be deemed to have
been duly given (a) when personally delivered, (b) on the


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day of transmission when given by facsimile transmission with confirmation of
receipt, (c) on the following day if submitted to a nationally recognized
courier service, or (d) five (5) business days after having been mailed by
United States registered mail or certified mail, return receipt requested,
postage prepaid, addressed to:

     If to LST:                                  If to Executive:

     c/o eResource Capital Group, Inc.           Glenn I. Barrett, Jr.
     5935 Carnegie Boulevard, Suite 101          c/o LST, Inc.
                                                 6201 Fairview Road, Suite 200
     Charlotte, NC 28209                         Charlotte, North Carolina 28210
     Attn:  Melinda Morris Zanoni                Facsimile: (704) 401-3333
     Facsimile: (704) 553-7136

or to such other address as a party may have furnished to the other in writing
and in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

         SECTION 5.4       Governing Law. The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed by
the laws of the State of North Carolina, without giving effect to the principles
of conflicts of law of such State.

         SECTION 5.5       Severability. If any provision of this Agreement or
the application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, under applicable law or regulation,
the remainder of this Agreement and the application of such provision to any
other person or circumstances shall not be affected, and the provision so held
to be invalid, unenforceable or otherwise illegal shall be reformed to the
extent (and only to the extent) necessary to make it valid, enforceable and
legal; provided, however, if the provision so held to be invalid, unenforceable
or otherwise illegal constituted a material inducement to a party's execution
and delivery of this Agreement, such provision shall not be reformed unless
prior to any reformation that party agrees to be bound by the reformation.

         SECTION 5.6       Entire Agreement. This Agreement supersedes any other
agreements, oral or written, between the parties with respect to the subject
matter hereof, and contains all of the agreements and understandings between the
parties with respect to the employment of Executive by LST.

         SECTION 5.7       Amendments. Any amendment or modification of any term
of this Agreement shall be effective only if it is set forth in writing signed
by the parties hereto and consented to in writing by eResource Capital Group,
Inc.

         SECTION 5.8       Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
administrators, executors, representatives, heirs, successors and permitted
assigns. "Successor" shall mean any successor in interest, pursuant to a Change
of Control as set forth in Section 4.3 hereof.


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         SECTION 5.9       Assignment. This Agreement is personal in nature and
the parties shall not, without written consent, assign, transfer or delegate
this Agreement or any rights or obligations hereunder; provided, however, LST
may assign this Agreement to its parent or affiliates without the consent of
Executive.

         SECTION 5.10      Waivers. No provision of this Agreement may be waived
or discharged unless such waiver or discharge is agreed to in writing signed by
the party to be bound. No waiver by a party hereto at any time of any breach or
noncompliance with any provision or condition of this Agreement to be performed
by such other party shall be deemed a waiver of any other provisions or
conditions at the same or at any prior or subsequent time.

         SECTION 5.11      Captions. The captions in this Agreement are solely
for convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.

         SECTION 5.12      Counterparts/Facsimile Signatures. This Agreement
may be executed in one or more counterparts (whether by facsimile or otherwise),
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.







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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.





                                    LST:

                                    LST, INC.



                                    By:
                                       ----------------------------------
                                       John Hargette
                                       Its: Executive Vice President



                                    EXECUTIVE:



                                    -------------------------------------
                                    Glenn I. Barrett, Jr.



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