AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of September 3,
1996, made and entered into by and among Denom Acquisition Corp., a corporation
organized and existing under the laws of the State of Delaware (hereinafter
called "DAC"), and those persons set forth on Exhibit "A" hereof (hereinafter
called "Sellers").
WITNESSETH:
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WHEREAS, DAC and Sellers deem it advisable that a reorganization
be effected consisting of the acquisition by DAC from Sellers of all of the
issued and outstanding shares of common stock of Delta Environmental, Inc., a
corporation organized and existing under the laws of the State of Delaware
(hereinafter called "Delta"), all in accordance with the applicable statutes of
the States of Delaware and upon the terms and subject to the conditions set
forth in this Agreement and Plan of Reorganization (hereinafter called the
"Agreement"), for the purpose of carrying out a tax-free reorganization within
the meaning of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, DAC and Sellers each in consideration that the
other join herein, hereby represent, warrant and agree as follows:
1. Exchange of Shares. Subject to the terms and conditions hereof,
and in reliance on the respective representations and warranties of each party
to the other hereunder, DAC agrees to issue its shares to Sellers and Sellers
agree to assign, transfer and deliver to DAC at the Closing (as defined in
paragraph 5 below) all of the issued and outstanding shares of common stock of
Delta. Sellers will assign, transfer and deliver the number of shares set
opposite their names on Exhibit "A".
2. Exchange Ratio. The total shares to be issued to Sellers shall
be 4,091,100 restricted shares of common stock, $.001 par value of DAC as
follows:
(a) 6,363,594 existing restricted shares of common stock to be
reverse split at a ratio of One new share for each Six existing
shares pursuant to the terms set forth herein, resulting in
1,060,600 shares of post split restricted common stock;
(b) 2,530,500 newly issued post split restricted shares of
common stock
( c) 500,000 newly issued post split restricted shares of
common stock to be held in reserve in order to be made available
to future shareholders of Delta resulting from Delta's current
ongoing private placement of 500,000 shares of Delta common stock.
3. Representations. Warranties and Agreements of Sellers. Sellers
jointly and severally represent and warrant to and agree with DAC that:
(a) Delta is duly organized and existing under the laws of the
State of Delaware and is in good standing, and is authorized and
qualified to own and operate its properties and assets and conduct
its business as, and in all jurisdictions where, such properties
and assets are owned and operated and such business conducted.
Delta has duly filed any and all certificates and reports required
to be filed to date by the laws of Delaware and any other
applicable law.
(b) Delta has authorized 10,000,000 shares of common stock,
$0.01 par value, of which 3,591,100 shares of common stock are
issued and outstanding. All such outstanding shares were validly
issued and are fully paid and non assessable, and free from any
restrictions, liens, encumbrances, rights, title and interests in
others. There are no other shares of stock, convertible or other
securities, or rights, warrants or options with respect to any
share of stock or securities of Delta authorized, issued or
outstanding.
( c) Neither Delta nor any of its directors, officers, agents
or employees, is in material violation of any applicable law,
rule, regulation or requirement of any governmental authority in
any way relating to Delta's business or operations. Consummation
of the transactions contemplated hereby, and continuation of
Delta's business in the same manner as heretofore conducted by it
will be in material compliance with all presently applicable laws,
rules, regulations and requirements of all governmental
authorities without the necessity for any license
or permit or other action or permission in the nature thereof, or
any registration with, or consent of, any governmental authority.
(d) Delta is not in default under or in violation of any
provision of its Articles of Incorporation or Bylaws and Delta is
not in material default under or in violation of any restriction,
lien, encumbrance, indenture, contract, lease, sublease, loan
agreement, note or other obligation or liability relating to
Delta's business, to which it is a party or by which it is bound,
or to which its assets are subject. Neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby will conflict with or result in a
breach of or constitute a default under any provision of the
Articles of Incorporation or Bylaws of Delta or any restriction,
lien, encumbrance, indenture, contract, lease, sublease, loan
agreement, note or other material obligation or liability to which
Sellers or it is a party or by which Sellers or it is bound, or to
which any of their or its assets are subject, or result in the
creation of any lien or encumbrance upon said assets.
(e) Delta's unaudited financial statements dated September 30,
1996, attached hereto as Exhibit "B", is correct and complete and
fairly present the financial condition of Delta at the date
described therein, and have been prepared in accordance with
generally accepted accounting principles consistently applied.
(f) Except as shown on Exhibit "B", Delta has no liabilities
of any nature, whether absolute, accrued, contingent or otherwise,
including, without limitation, any tax liabilities, other than
liabilities incurred after December 31, 1996, in the ordinary
course of business as a result of transactions or occurrences
which do not and will not either singularly or in the aggregate
have a material adverse effect on the financial or business
condition of Delta. The property and assets presently owned by
Delta include all properties and assets of every kind, class and
description, real and personal, tangible and intangible, known and
unknown, or shown on the books of or used in the business of Delta
and all properties and
assets in which Delta had any night, title or interest on
September 30, 1996 except as changed in the ordinary course of
business, none of such changes being materially adverse.
(g) All buildings, fixtures and equipment owned or used by
Delta are in reasonably good and sound condition and are in
compliance with all laws, rules, regulations and requirements of
governmental authorities.
(h) Delta enjoys peaceful and undisturbed possession under all
leases to which it is a party. All such leases are valid, freely
assignable and enforceable in accordance with their terms, and no
party thereto is in default thereunder.
(i) No one other than Delta has any night, title, interest,
restriction, lien or encumbrance in, on or to the business
conducted by it.
(j) Delta does not have any material obligation, liability,
contract, agreement, lease, sublease, commitment or understanding
of any kind, nature, or description, fixed or contingent, due or
to become due, existing or inchoate, other than those reflected in
Exhibit "B".
(k) Except as disclosed on Exhibit "C", there are no suits or
proceedings at law or in equity, or before any governmental agency
or arbitrator, pending, or to the knowledge of Sellers,
threatened, anticipated or contemplated, which in any way
adversely affects Delta or its business and there are no
unsatisfied or outstanding judgments, orders, decrees or
stipulations affecting Delta or its assets or to which Delta is or
may become a party which in any way affects Delta. There are no
claims against Sellers or Delta pending, or to the knowledge of
Sellers, threatened, anticipated or contemplated, which, if valid,
would constitute or result in a breach of any representation,
warranty or agreement set forth herein.
(l) To the best of the knowledge of the Sellers, since the
date of Incorporation of Delta:
(i) Neither Delta nor any of its current or former
directors, officers or employees nor any third party acting on
behalf of Delta have, directly or indirectly, made any bribes,
kickbacks, or any other payments of a similar or comparable
nature, whether lawful or not, to any person or entity, public
or private, regardless of form, whether in money, property or
services, to obtain favorable treatment in securing business
or to obtain special concessions or to pay for favorable
treatment for business already secured or for special
concessions already obtained;
(ii) No funds or property of any kind of Delta was
donated, loaned, or made available, directly or indirectly,
for the benefit of, or for the purpose of opposing, any
government or subdivision thereof, political party, candidate
or committee, either domestic or foreign;
(iii) No officer, employees contractor or agent of
Delta was compensated, directly or indirectly, by Delta for
time spent or expenses incurred in performing services for the
benefit of, or for the purpose of opposing, any government or
subdivision thereof, political party, candidate or committee,
either domestic or foreign;
(iv) Delta has not made any loan, donation, or other
disbursement, directly or indirectly, to officers or employees
of Delta or others for contributions made, or to be made,
directly or indirectly, for the benefit of, or for the purpose
of opposing, any government or subdivision thereof, political
party, candidate or committee, either domestic or foreign; and
(v) Delta has not, or any other entity acting on
behalf of Delta, maintained or maintains a bank account, or
any other account of any kind, whether domestic or foreign,
which account was not reflected in the corporate books and
records, or which account was not listed, titled or identified
in the name of Delta.
(m) Since September 30, 1996, there has not been:
(i) Any material adverse change in the properties,
assets, business, affairs or prospects of Delta nor, to the
knowledge of Sellers, are any such changes threatened,
anticipated, or contemplated;
(ii) Any actual or, to the knowledge of Sellers,
threatened, anticipated, or contemplated damage, destruction,
loss, conversion, termination. cancellation, default or taking
by eminent domain or other action by governmental authority
which has affected or may hereafter affect the properties,
assets, business, affairs or prospects of Delta,
(iii)Any material and adverse dispute, pending or, to
the knowledge of Sellers, threatened, anticipated or
contemplated of any kind with any customer, supplier, source
of financing, employee, landlord. subtenant or licensee of
Delta or any pending or, to the knowledge of Sellers,
threatened, anticipated or contemplated occurrence or
situation of any kind, nature or description which is
reasonably likely to result in any reduction in the amount, or
any change in the terms or conditions, of the business with
any substantial customer, supplier or source of financing;
(iv) Any pending or, to the knowledge of Sellers,
threatened, anticipated or contemplated occurrence or
situation of any kind, nature or description peculiar to the
business of Delta and materially and adversely affecting the
properties, assets, business affairs or prospects of Delta; or
(v) Any reduction of capital, redemption of stock or
dividend or distribution with respect to stock by Delta.
(n) Sellers have not taken any action which may result in DAC
having any responsibility, obligation, or liability for any finder
or broker fees, commission or other compensation payable in
connection with any of the transactions contemplated hereby.
(o) Delta's Board of Directors has Authorized the execution,
delivery and performance of this Agreement by Sellers. All present
and previous stockholders, directors and officers of Delta will at
any time or from time to time hereafter execute whatever minutes
of meetings or other instruments and take whatever action DAC may
deem necessary or desirable to effect, perfect or confirm of
record or otherwise in DAC, full right, title and interest in and
to the business, properties and assets of Delta or to carry out
the intent and purpose of the transactions contemplated hereby.
(p) The corporate record books of Delta are in good order,
complete, accurate, up-to-date, with all necessary signatures, and
set forth all meetings and actions taken by the stockholders and
directors, including all actions set forth in all certificates of
votes of stockholders or directors furnished to anyone at any
time. The copies of Delta's Articles of Incorporation and Bylaws
which have been delivered to DAC are complete and correct.
(q) The stock transfer books and stock ledgers of Delta are in
good order, complete, accurate, and up to date, and with all
necessary signatures, and set forth all stock and securities
issued, transferred and surrendered. No duplicate certificate has
been issued at any time heretofore. No transfer has been made
without surrender of the proper certificate duly endorsed. All
certificates surrendered have been duly canceled and are attached
to the proper stubs with all necessary stock powers attached
thereto.
(r) Delta owns all assets, properties, real estate, equipment,
material, inventory, raw materials, copyrights, rights of
reproduction, trademarks, trade names, trademark applications,
service marks, patent applications, patents, and patent license
rights, all whether registered or unregistered, U.S. or foreign,
inventions, franchises, discoveries, ideas, research, engineering,
methods, practices, processes, systems. formulas, designs,
drawings, products, projects,
permits, improvements, developments, know-how, and trade secrets
which are used in or necessary for the conduct of its business,
without conflict or infringement of any, and subject to no
restriction, lien, encumbrance, right, title or interest in
others. All of the foregoing stand in the name of Delta and not in
the name of any stockholder, director, officer, agent, partner or
employee or anyone else known to Sellers, and none of the same
have any night, title, interest, restriction, lien or encumbrance
therein, or thereon or thereto.
(s) Sellers are the owners, free and clear of any claim, lien,
charge or encumbrance or restriction, of all of the issued and
outstanding shares of common stock of Delta and Sellers now have
and will have, at the Closing, full power and authority and the
legal night to sell such shares to DAC pursuant to this Agreement.
(t) Sellers have not made any material misstatement of fact or
omitted to state any material fact necessary or desirable to make
complete, accurate and not misleading every representation,
warranty and agreement set forth herein.
(u) Since the date of incorporation, there has not been:
(i) Any increase in the compensation, including, but
not limited to, bonus or percentage compensation payments,
payable to or to become payable by Delta to any of its
officers, employees or agents; or
(ii) Any labor strike or demands for collective
bargaining directly affecting Delta.
(v) The assets of Delta on the Closing Date shall include
current assets, inventory, machinery and equipment, office
furniture and fixtures, good will, leases and other assets set
forth on Exhibit "B".
(w) For a minimum of three years following the Close, Sellers
will cause DAC to timely file with the Securities and Exchange
Commission pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934, a Form 10-K for the
end of each fiscal year and a Form I O-Q for each of the first
three quarters of each year, and during such period will not cause
DAC to file a Form 15 pursuant to either Rule 12h-3 or 15d-6
electing to suspend its duty to file. Sellers will also cause DAC
to hold an annual meeting of shareholders for the election of
directors within 180 days after the end of each fiscal year end,
and within 180 days after the end of each fiscal year end, will
provide DAC's shareholders with the audited financial statements
of DAC as of the end of the fiscal year just completed prior
thereto. Such financial statements shall be those required by Rule
14a-3 under the Securities Exchange Act of 1934, and shall be
included in an annual report 10 meeting the requirements of such
Rule. In addition, Sellers agree that within 30 days of the
Closing they will cause DAC to submit information about DAC to be
included in various securities manuals, including Xxxxx'x
Over-the-Counter Manual and/or Standard & Poor's Standard
Corporation Records to facilitate the secondary trading in DAC's
common shares.
(x) No information furnished by Sellers to be used in
connection with any filing with the Securities and Exchange
Commission will contain when made or furnished, any untrue
statement of a material fact or omits or will omit to state any
material fact necessary to make the statements contained therein
not misleading.
(y) Each of the representations, warranties and agreements of
Sellers is true and correct in every respect as of the date hereof
Sellers will exonerate and I indemnify DAC against all claims,
suits, obligations, liabilities and damages, including, without
limitation of the foregoing, reasonable attorney's fees, based
upon, arising out of or resulting from any breach of any of the
representations, warranties or agreements of Sellers herein or any
certificate delivered pursuant hereto, or non fulfillment of any
of their undertakings hereunder or thereunder or any actual or
alleged occurrence or situation in any way inconsistent herewith
or therewith.
(z) Every representation, warranty and agreement of Sellers
set forth in this Agreement, and any certificate delivered
pursuant hereto and every one of the rights and remedies of DAC
for any one or more breaches hereof shall survive and not be
deemed waived by the Closing for a period of two years after the
Closing, and shall be effective regardless of any investigation
that may have been made at any time by or on behalf of DAC.
4. Representations. Warranties and Agreements of DAC. DAC
represents and warrants to and agrees with Sellers that:
(a) DAC is duly organized and validly existing under the laws
of the State of Delaware and is in good standing, and is
authorized and qualified to own and operate its properties and
assets and conduct its business as, and in all jurisdictions
where, such properties and assets are owned and operated and such
business conducted. DAC has duly filed any and all certificates
and reports required to be filed to date by the laws of Delaware
and any other applicable law.
(b) The shares of DAC's common stock to be issued and
delivered to Sellers pursuant to this Agreement will, upon
issuance and delivery pursuant hereto be duly authorized, validly
issued, fully paid and non assessable.
( c) DAC has full right, power and authority to execute,
deliver and perform the terms of this Agreement. This Agreement
has been duly authorized by DAC and, when approved by its
shareholders, will constitute the binding obligation enforceable
in accordance with its terms.
(d) DAC has authorized 20,000,000 shares of common stock.
$0.001 par value per share, of which 8,816,992 shares of common
stock are issued and outstanding. All such outstanding shares were
validly issued and are fully paid and non-assessable. There are no
other shares of stock, convertible or other securities, or rights,
warrants or options with respect to any shares of stock or
securities of DAC authorized, issued or outstanding. DAC has not
granted any right of first refusal or any option to any
underwriter, finder, broker or participant.
(e) DAC's audited financial statements dated September 30,
1996, which is attached hereto as Exhibit "D", is correct and
complete and fairly present the financial condition of DAC at the
dates described therein, and have been prepared in accordance with
generally accepted accounting principles consistently applied.
(f) DAC is not in default under or in violation of any
provision of its Certificate of Incorporation or Bylaws and DAC is
not in material default under or in violation of any restriction,
lien, encumbrance, indenture, contract, lease, sublease, loan
agreement, note or other obligation or liability relating to DAC's
business, to which it is a party or by which it is bound, or to
which its assets are subject. Neither the execution and delivery
of this Agreement nor consummation of the transactions
contemplated hereby will conflict with or result in a breach of or
constitute a default under any provision of DAC's Certificate of
Incorporation or Bylaws or any restriction, lien, encumbrance,
indenture, contract, lease, sublease, loan agreement, note or
other material obligation or liability to which it is a party or
by which it is bound, or to which any of its assets are subject,
or result in the creation of any lien encumbrance upon its assets.
(g) DAC has not taken any action which may result in Sellers
having any liability, obligation or liability for any finder or
broker fees, commission or other compensation payable in
connection with any of the transactions contemplated hereby.
(h) Neither DAC nor any of its directors, officers, agents or
employees, is in material violation of any applicable law, rule,
regulation or requirement of any governmental authority in any way
relating to DAC's business or operations. DAC has filed all
reports with the Securities and Exchange Commission which have
been required to be filed pursuant to either the Securities Act of
1933 or the
Securities Exchange Act of 1934. None of such reports contained
when made or furnished, any untrue statement of a material fact or
omitted to state any material fact necessary to make the
statements contained therein not misleading. Consummation of the
transactions contemplated hereby will be in compliance with all
presently applicable laws, rules, regulations and requirements of
all governmental authorities without the necessity for any license
or permit or other action or permission in the nature thereof, or
any registration with, or consent of, any governmental authority.
(i) Except as shown on Exhibit "E," DAC has no liabilities of
any nature, whether absolute, accrued, contingent or otherwise,
including, without limitation, any tax liabilities, other than
liabilities incurred after September 30, 1996, in the ordinary
course of business as a result of transactions or occurrences
which do not and will not either singularly or in the aggregate
have a material adverse effect on the financial or business
condition of DAC. The properties and assets presently owned by DAC
include all properties and assets of every kind, class and
description, real and personal, tangible and intangible, known and
unknown, or shown on the books of or used in the business of DAC
and all properties and assets in which DAC had any night, title or
interest on September 30, 1996, except as changed in the ordinary
course of business, none of such changes being materially adverse.
(j) DAC does not have any material obligation, liability,
contract, agreement, lease, sublease, commitment or understanding
of any kind, nature, or description, fixed or contingent, due or
to become due, existing or inchoate, other than those reflected in
Exhibit "D".
(k) There are no suits or proceedings at law or in equity, or
before any governmental agency or arbitrator, pending, or to the
knowledge of DAC's officers, threatened, anticipated or
contemplated, which in any way adversely
affects DAC and there are no unsatisfied or outstanding judgments,
orders, decrees or stipulations affecting DAC or its assets or to
which DAC is or may become a party which in any way affects DAC.
There are no claims against DAC pending, or to the knowledge of
DAC's officers, threatened, anticipated or contemplated, which, if
valid, would constitute or result in a breach of any
representation, warranty or agreement set forth herein.
(1) To the best of the knowledge of DAC, since the date of
Incorporation of DAC:
(i) Neither DAC nor any of its current or former
directors, officers or employees nor any third party acting on
behalf of DAC have, directly or indirectly, made any bribes,
kickbacks, or any other payments of a similar or comparable
nature, whether lawful or not, to any person or entity, public
or private, regardless of form, whether in money, property or
services, to obtain favorable treatment in securing business
or to obtain special concessions or to pay for favorable
treatment for business already secured or for special
concessions already obtained;
(ii) No funds or property of any kind of DAC was
donated, loaned, or made available, directly or indirectly,
for the benefit of, or for the purpose of opposing, any
government or subdivision thereof, political party, candidate
or committee, either domestic or foreign;
(iii)No officer, employee, contractor or agent of DAC
was compensated, directly or indirectly, by DAC for time spent
or expenses incurred in performing services for the benefit
of, or for the purpose of opposing, any government or
subdivision thereof, political party, candidate or committee,
either domestic or foreign;
(iv) DAC has not made any loan, donation, or other
disbursement, directly or indirectly, to officers or employees
of DAC or others for
contributions made, or to be made, directly or indirectly, for
the benefit of, or for the purpose of opposing, any government
or subdivision thereof, political party, candidate or
committee, either domestic or foreign; and
(v) DAC has not, or any other entity acting on behalf
of DAC, maintained or maintains a bank account, or any other
account of any kind whether domestic or foreign, which account
was not reflected in the corporate books and records, or which
account was not listed, titled or identified in the name of
DAC.
(m) The corporate record books of DAC are in good order,
complete, accurate, up to date, with all necessary signatures, and
set forth all meetings and actions set forth in all certificates
of votes of stockholders or directors furnished to anyone at any
time. The copies of DAC's Certificate of Incorporation and Bylaws
which have been delivered to Sellers are complete and correct.
(n) The stock transfer books and stock ledgers of DAC are in
good order, complete, accurate, and up to date, and with all
necessary signatures, and set forth all stock and securities
issued, transferred and surrendered. No duplicate certificate has
been issued at any time heretofore without an indemnity agreement
and/or bond being posted. No transfer has been made without
surrender of the certificate duly endorsed. All certificates so
surrendered have been duly canceled and are attached to the proper
stubs with all necessary stock powers attached thereto.
(o) DAC has filed with the appropriate governmental agencies
all tax returns required to be filed by it and there are no unpaid
assessments nor, to the best of DAC's knowledge, proposed
assessments of Federal, state or local taxes pending against DAC.
All liability for taxes shown on Federal and State tax returns
filed have been paid or the liability there for has been provided
for in the attached financial statements, and all Federal and
state income or franchise taxes
for periods subsequent to the periods covered by said returns
likewise have been paid or adequately accrued except for current
year taxes not yet due.
(p) The Board of Directors' Meeting provided for in paragraph
6 will be duly called, convened and conducted in accordance with
all applicable requirements of the corporation laws of the State
of Delaware and in accordance and compliance with all applicable
provisions of the Certificate of Incorporation and Bylaws of DAC
and the resolutions to be adopted by the Board of Directors at the
Board of Directors' Meeting when adopted, will constitute the duly
authorized actions of DAC and will be in full force and effect as
of the Closing date hereof.
(q) No information furnished by DAC to be used in connection
with any filing to be made with the Securities and Exchange
Commission will contain when made or furnished, any untrue
statement of a material fact or will omit to state a material fact
necessary to make the statements contained therein not misleading.
(r) Each of the representations, warranties and agreements of
DAC is true and correct in every respect as of the date hereof DAC
will exonerate and indemnify Sellers against all claims, suits,
obligations, liabilities and damages, including, without
limitation of the foregoing, reasonable attorney's fees, based
upon, arising out of or resulting from any breach of any of the
representations,warranties or agreements of DAC herein or any
certificate delivered pursuant hereto, or non fulfillment of any
of its undertakings hereunder or thereunder, or any actual or
alleged occurrence or situation in any way mconsistent herewith or
therewith.
(s) Every representation, warranty and agreement of DAC set
forth in this Agreement, and any certificate delivered pursuant
hereto and every one of the rights and remedies of Sellers for any
one or more breaches hereof shall survive and not be deemed waived
by the Closing for a period of two years after the
Closing, and shall be effective regardless of any investigation
that may have been made at any time by or on behalf of Sellers.
5. The Closing.
(a) The exchange of Sellers' shares in Delta to DAC shall
occur at such time and place as shall be fixed by the mutual
consent of the parties. However such date shall be no later than
October 21, 1996. Said Date is sometimes herein referred to as the
"Closing".
(b) At the Closing:
(i) Sellers shall deliver to DAC certificates
evidencing not less than 100% of the issued and outstanding
shares of Delta, in each case duly endorsed for transfer in
blank or accompanied by a blank stock power or with such other
endorsements or instruments of transfer as DAC may reasonably
request, together with other documents and matters referred to
in subparagraphs (a)(11), and (111) of paragraph 7; and
(ii) DAC shall deliver certificates to Sellers
representing the shares of common stock of DAC to be delivered
pursuant to Paragraph 2 hereof, together with other documents
and matters refer-red to in subparagraph (b)(ii) of paragraph
7.
6. Actions Before and After the Closing.
(a) After the date of this Agreement and prior to the Closing
and except as may be first approved in writing by DAC or Sellers,
as the case may be, or as otherwise permitted or contemplated by
this Agreement:
(i) The business of DAC and Delta shall be conducted
only in the usual and ordinary course without the creation of
indebtedness for money borrowed, except in the ordinary course
of business;
(ii) No change shall be made in the Articles of
Incorporation or Bylaws of DAC or Delta;
(iii)No shares of stock of any class of DAC or Delta
shall be authorized for issuance or issued or delivered from
treasury and no agreement for such issuance or delivery
thereof shall be entered into; except for the Private
Placement of a maximum of 500,000 shares of Delta's common
stock currently underway by Delta.
(iv) No dividend or other distribution and no
redemption of any shares of stock of any class shall be made
by either DAC or Delta;
(v) No increases shall be made in the compensation
(including any bonus or profit-sharing payment) payable or to
become payable by either DAC or Delta to an employee;
(vi) No contract or commitment shall be entered into by
or on behalf of DAC or Delta except in the ordinary course of
business;
(vii)Each party will continue in effect present
insurance coverage on all its properties, assets, business and
personnel;
(viii) No general increases shall be made in wages or
benefits of any group of employees as a result of collective
bargaining or otherwise; and
(ix) Neither DAC or Delta will (so far as within its
control and except in the ordinary course of business) subject
any property or assets to any material lien, claim, charge,
option or encumbrance nor will it do or omit to do any act
which will cause a material breach in any contract, agreement,
lease, commitment or obligation to which it is a party or by
which it is bound.
(b) The Parties hereto agree that each of them will fully
cooperate each with the other and their respective counsel and
accountants in connection with any steps required to be taken as
part of their obligations under this Agreement.
( c) Delta and DAC will call a meeting of its respective Board
of Directors for the purpose of voting upon and authorizing this
Agreement and the transactions contemplated hereby. At such
meeting the Directors of DAC shall be asked to consider and vote
upon the following actions:
(1) Approval of this Agreement and the issuance of new
shares of common stock to Sellers pursuant to this Agreement;
and
(ii) Approval to reverse split the issued and
outstanding shares of Delta's common stock at a ratio One new
share for each Six existing shares; and
(iii)Approval of a change of DAC's name to Soy
Environmental Products, Inc.; and
(iv) Resignation of current directors and election of
Sellers' designees as new directors of DAC.
(d) Within Sixty (60) days following the Closing, DAC will
obtain the consent of shareholders owning at least a majority of
the outstanding common shares for the following actions:
(i) Amending the Certificate of Incorporation to change
the name of the corporation to Soy Environmental Products,
Inc.
(ii) Amending the Certificate of Incorporation to
decrease the authorized and issued and outstanding shares of
common stock by ratio of One new share for each Six existing
shares and after such decrease to increase the number of
authorized shares of common stock to 20,000,000.
(iii)Electing Sellers designees as directors of DAC.
(iv) Approval of this transaction.
(v) Approval of the appointment of new Auditors as
directed by DAC.
(vi) Any other business which the new Directors of DAC
deem appropriate.
7. Conditions of DAC's and Sellers' Performance.
(a) The obligation of DAC to consummate this Agreement is
subject to the satisfaction at the Closing, by DAC in writing,
of each of the following conditions:
(ii) All proceedings taken in connection with the
transactions contemplated herein and all instruments and
documents required in connection therewith or incident thereto
shall be satisfactory in form to legal counsel for DAC.
(ii) The representations and warranties of Sellers
contained in this Agreement or in any certificate or document
delivered to DAC pursuant hereto shall be deemed to have been
made again at the Closing and shall then be true in all
material respects; Sellers shall have performed and complied
with all agreements and conditions required by this Agreement
to be performed or complied with by them prior to or at the
Closing; and DAC shall have been furnished with certificates
of appropriate officers of Delta dated at the Closing date,
certifying to the fulfillment of the foregoing conditions and
further certifying that neither Delta or Sellers are parties
to any litigation or have knowledge of any claim, brought or
threatened, seeking to recover damages or to prevent Delta or
Sellers from continuing to use Delta's assets or to conduct
its business in the manner the same were used or conducted
prior thereto, and which litigation or claim is likely to
result in any judgment, order, decree or settlement which will
materially and adversely affect the financial condition or
business of Delta.
(iii)Sellers shall have executed and delivered to DAC
investment letters in the form set forth in Exhibit "F"
hereto.
(iv) Owners of not less than 100% of the issued and
outstanding shares of common stock of Delta shall have
executed this Agreement either personally or pursuant to power
of attorney.
(b) The obligation of Sellers to consummate this Agreement is
subject to the satisfaction at the Closing, or waiver by Sellers
in writing, of each of the following conditions:
(i) All proceedings taken in connection with the
transactions contemplated herein and all instruments and
documents required in connection therewith or incident thereto
shall be satisfactory in form to counsel for Sellers.
(ii) The representations and warranties of DAC
contained in this Agreement or in any certificate or document
delivered to Sellers pursuant hereto shall be deemed to have
been made again at the Closing and shall then be true in all
material respects; DAC shall have performed and complied with
all agreements and conditions required by this Agreement to be
formed or complied with by it prior to or at the Closing; and
Sellers shall have been furnished with certificates of
appropriate officers of DAC dated at the Closing date,
certifying to the fulfillment of the foregoing conditions and
further certifying that DAC is not a party to any litigation
or has knowledge of any claim, brought or threatened, seeking
to recover damages or to prevent DAC from continuing to use
its assets or to conduct its business in the manner the same
were used or conducted prior thereto, and which litigation or
claim is likely to result in any judgment, order, decree or
settlement which will materially and adversely affect the
financial condition or business of DAC.
(iii)DAC's directors shall have resigned and appointed
Seller's designees as directors.
8. Termination and Amendment.
(a) This Agreement may be terminated by either party upon
written notice if the Closing referred to in Section 5 hereof
shall not have occurred on or prior to October 21, 1996.
(b) This Agreement may be terminated by either party at any
time prior to the time fixed for Closing in Section 5 hereof upon
written notice to the other party:
(i) If the representations, warranties and agreements
or conditions of this Agreement to be complied with or
performed by Sellers (in the case of DAC) or DAC (in the case
of Sellers) on or before the Closing shall not, in any
material respect have been complied with or performed and such
material noncompliance or nonperformance shall not have been
waived by the party giving notice of termination or shall not
have been cured by the defaulting party or cure thereof
commenced and diligently prosecuted thereafter by such party
Ten (10) days after written notice of such material
noncompliance or nonperformance is given by the nondefaulting
party;
(ii) If any governmental action is commenced to prevent
the consummation of the transactions contemplated hereby; or
(iii)By mutual consent of the parties.
( c) Any representation, warranty, agreement or condition of
this Agreement may be waived at any time by the party entitled to
the benefit thereof by action taken by the Board of Directors of
DAC or authorized committees or officers thereof or by Sellers and
evidenced by a written waiver executed by any such party.
(d) In the event of termination, this Agreement shall be of no
further force or effect and no obligation, right or liability
shall arise hereunder and each party shall bear its own costs
incurred in connection with this Agreement.
9. Separability. If any term or provision of this Agreement
including the exhibits hereto or the application thereof to any person, property
or circumstances shall to any extent be invalid or unenforceable, the remainder
of this Agreement including the exhibits or the application of such term or
provision to persons, property or circumstances other than those invalid and
unenforceable shall not be affected thereby, and each term and provision of this
Agreement and the exhibits shall be valid and enforced to the fullest extent
permitted by law,
10. Notices. Any notice hereunder shall be deemed given, and any
instrument delivered, only two days after they have been mailed by registered or
certified mail, postage prepaid, or Twelve (12) hours after such notice has been
sent by straight telegram, telegraphic charges prepaid as follows:
Name Address
---------------------------------
To DAC: Denom Acquisition Corp.
c/o Xxx Xxxxxxxx
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
To Sellers: Delta Environmental, Inc.
c/o Xxxxxx X. Xxxx, President
0000 Xxxx Xxxxxxxxx Xx., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Except that any of the foregoing may from time to time by written notice to the
others designate another address which shall thereupon become its effective
address for the purposes of this paragraph.
11. Entire Agreement and Amendments. This Agreement, including the
exhibits referred to herein as a part hereof, contains the entire understanding
of the parties hereto with
respect to the subject matter contained herein and may be amended only by a
written instrument executed by Sellers and DAC or their respective successors or
assigns. There are no restrictions, promises, warranties, covenants, or
undertakings other than those expressly set forth herein. The section and
paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
12. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
13. Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon Sellers and DAC and their respective successors but shall
not inure to the benefit of anyone other than the parties signatory to this
Agreement and their respective successors.
14. Merger of Agreements. All representations, warranties,
agreements and other inducements to this Agreement or the transactions
contemplated hereby, whether oral or written, prior to the execution and
delivery hereof, have been included herein, or in the exhibits hereto, and shall
be deemed to have been fully performed and discharged to the extent not included
herein or therein. This Agreement including the exhibits hereto sets forth all
rights, remedies, obligations and liabilities of the parties, and no term or
provision hereof or thereof, including, without rotation, the terms and
provisions contained in this sentence, shall be waived, modified or altered as
to impose any additional night or remedy, and no custom, payment, act,
knowledge, extension of time, favor or indulgence, gratuitous or otherwise, or
words or silence at any time, shall impose any additional obligation or grant
any additional night or remedy or be deemed a waiver or release of any
obligation, liability, night or remedy except as set forth in a written
instrument properly executed and delivered by the party sought to be charged,
expressly stating that it is, and to the extent to which it is, intended to be
so effective. No assent, express or implied, by either party or waiver by either
party, to or of, any breach of any term or provision of this Agreement or of the
exhibits shall be deemed to be an assent or waiver to or of such or any
succeeding breach of the same or any other such term or provision. All
representations, warranties, and agreements made herein by anyone shall survive
the Closing to the extent provided in this Agreement.
15. Applicable Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Arizona.
IN WITNESS THEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
SELLERS, STOCKHOLDERS OF DELTA
TARXLAN, INC. DENOM ACQUISITION CORP.
BY:/S/ Xxx Xxxx BY: /s/ Xxx Xxxxxxxx
----------------------------- --------------------------------
XXX XXXX, PRESIDENT XXX XXXXXXXX, PRESIDENT
CAPITAL WEST INVESTMENT HOLDING COMPANY, INC.
BY:/s/ Xxxxxxxx X. Xxxxxx
-----------------------------
XXXXXXXX X. XXXXXX, PRESIDENT
BY:/s/ Xxxxxx X. Xxxxxx BY:/s/ Xxxxxxxx X. Xxxxxx
----------------------------- --------------------------------
Xxxxxx X. Xxxxxx, Individually Xxxxxxxx X. Xxxxxx, Individually
