Exhibit (6)(a)(1)
REORGANIZATION AGREEMENT
OF GENERAL ENVIRONMENTAL CORPORATION
AND
XXXXXXXXXX.XXX, INC.
This Reorganization Agreement dated as of the 15th day of April, 1999, by and
among General Environmental Corporation, a Delaware corporation and
XxxxxxXxxx.xxx, Inc., a New Hampshire corporation and the Selling Shareholders.
Whereas, the respective Boards of Directors of the business entities party to
this Reorganization Agreement, with the satisfaction of certain conditions, have
determined to effect a business combination by and among the parties to this
Reorganization Agreement through the tax free exchange of securities between the
shareholders of XxxxxxXxxx.xxx, Inc. and General Environmental Corporation; and,
Whereas, the parties have determined to set forth the terms and conditions upon
which the aforementioned business combination shall be completed in this
Reorganization Agreement.
Now, Therefore, in consideration of the mutual promises, covenants and
conditions contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Terms. As used in the Reorganization Agreement, the following terms shall
have the following meanings:
a. "GEC" shall mean General Environmental Corporation, a publicly held
Delaware corporation which is non reporting under the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934.
b. "XXXXXXXXXX.XXX, INC." shall mean XXXXXXXXXX.XXX, INC., a privately
held New Hampshire corporation.
c. "GEC Common Stock" shall mean the $.001 par value common stock of
General Environmental Corporation.
d. "Selling Shareholders" shall mean the individual shareholders of
XXXXXXXXXX.XXX, INC. fully set forth in Exhibit A.
e. "Effective date" shall mean the closing date.
f. "Reorganization Agreement" shall mean this Reorganization Agreement.
g. "Closing Date" shall mean the date of execution of this Reorganization
Agreement and satisfaction of the conditions set forth in Article X,
hereof.
ARTICLE II
GEC ACQUISITION OF XXXXXXXXXX.XXX, INC.
2.1 Tax Free Reorganization. A tax free Plan of Reorganization pursuant to the
provisions of Section 368 (a) (1) (B) of the Internal Revenue Code of 1986,
as amended, is hereby adopted to effectuate the following:
Subject to the terms and conditions hereinafter set forth on the Effective Date
of the Reorganization, and in the manner hereinafter provided: (I) GEC shall
acquire all the issued and outstanding shares of XXXXXXXXXX.XXX, INC. in
exchange for GEC Common Stock, (ii) XXXXXXXXXX.XXX, INC. shall thereafter be a
wholly owned subsidiary of GEC: (iii) to effect the acquisition the transaction
shall be valued at $162,500, and (iv) all corporate acts, plans, policies,
contracts, approvals and authorizations of XXXXXXXXXX.XXX, INC., its
shareholders, board of directors, officers and agents which were valid and
effective immediately prior to the Effective Date of the Reorganization, shall
be as effective and binding thereon as the same were prior to the Effective Date
of the Reorganization with respect to XXXXXXXXXX.XXX, INC.
2.2 Payment of Purchase Price
The purchase price shall be paid as follows:
2.3 GEC shall issue 850,000 shares of restricted common stock in exchange for
1000 shares of Xxxxxxxxxx.xxx, Inc., representing all of the issued and
outstanding shares of Xxxxxxxxxx.xxx, Inc.
2.4 SUPPLEMENTAL CORPORATE ACTION. GEC and XXXXXXXXXX.XXX, INC., respectively,
shall take, or cause to be taken, all such actions as may be necessary or
appropriate in order to effectuate the transactions contemplated hereby. In
the event at any time after the Effective Date of the Reorganization any
further action is necessary or desirable to carry out the purpose of the
Reorganization Agreement and to vest GEC with full title to all of
XXXXXXXXXX.XXX, INC. issued and outstanding stock, the officers and
directors of such corporation shall take all such necessary action.
2.6 Federal SECURITIES LAWS EXEMPTION. The parties hereto intend that the GEC
Common Stock to be issued to the Selling Shareholders shall be exempt from
the registration requirements of the Securities Act of 1933, as amended,
and pursuant to Section 4 (2) and/or Section 3 (b) thereof, and the rules
and regulations promulgated thereunder.
2.7 EFFECTIVE DATE OF THE REORGANIZATION FOR ACCOUNTING PURPOSES. The
transactions contemplated by this Reorganization Agreement shall be
effective as of the Effective Date of the Reorganization for accounting and
all other purposed to the extent permissible by law.
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ARTICLE III
As a condition to the issuance by GEC to the Selling Shareholders of share
certificates for GEC common stock, the Selling Shareholders shall each execute
and deliver to GEC an investment letter containing the investment
representations contained in Section 3.1 and acknowledging receipt of the
disclosure materials referred to in Section 3.2.
INVESTMENT REPRESENTATIONS
3.1 INVESTMENT REPRESENTATION TO BE GIVEN BY SELLING SHAREHOLDERS TO GEC.
Selling Shareholders hereby agree to execute and deliver on the Effective Date
of Reorganization, an investment letter and acknowledgment in a form
substantially as follows:
a. Selling Shareholders are acquiring GEC common stock for their own
account for the purpose of investment, and not with a view to, or for
sale in connection with, any distribution thereof; and
b. Selling Shareholder: (I) has such knowledge and experience in
financial and business matters that he is capable of evaluating the
merits and risks of his proposed investment in GEC common stock: or
(ii) has been advised by attorneys, accountants or other
representatives having such knowledge and experience. Selling
Shareholder acknowledges that his attorneys, accountants and other
representatives, had, prior to his actions as Selling Shareholder in
voting upon or otherwise consenting to the Reorganization, the
opportunity to ask questions of, and to receive answers from GEC
concerning GEC, its affiliates and their business and financial
condition; and
c. Selling Shareholders understand and acknowledge that shares of GEC
common stock to be delivered to him/it pursuant to the provisions of
Article II and Article III of this Reorganization Agreement will be
"restricted securities" within the meaning of the Securities Act of
1933, as amended (the "1933 Act"), and agrees that the certificates
therefore shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE TRANSFERRED WITHIN TWELVE MONTHS AFTER
ISSUANCE UNLESS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT, OR A NO ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER MEETING THE
REQUIREMENTS OF RULE 144 OF THE SECURITIES AND EXCHANGE
COMMISSION OR IS ACCOMPANIED BY AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER
IS EXEMPT FROM SUCH REGISTRATION.
Selling Shareholders further understand and acknowledge that stop transfer
instructions will be issued by GEC to its transfer agent with respect to all of
GEC common stock to be delivered to him/it pursuant to the provisions of this
Reorganization Agreement: and
(d) Selling Shareholders understand and acknowledge that shares of the GEC
common stock to be delivered pursuant to the provisions of this Reorganization
Agreement will not have been registered under the 1933 Act and, accordingly
Selling Shareholders recognize that he/it may be required to bear the economic
risk of his/its investment until such shares are registered. Selling
Shareholders agree on behalf of himself/itself, and his heirs, executors,
successors and assigns, that he/it will only sell, transfer, pledge or
hypothecate any of the GEC common stock to be acquired by him/it pursuant to the
provisions of this Reorganization Agreement pursuant to an effective
registration statement under the 1933 Act, in a transaction wherein registration
under the 1933 Act is not required or after the anniversary date hereof. Selling
Shareholders understand that GEC has no obligation to register such GEC common
stock under the 1933 Act.
3.2 DISCLOSURE MATERIALS
GEC has distributed to the Selling Shareholders or a representative of the
Selling Shareholders and given each the opportunity to review, prior to their
execution of and closing under this Reorganization Agreement: (I) a copy of the
Articles of Incorporation, (ii) copy of the by-laws, (iii) copy of the most
recent audit {September 30, 1997} and (vi) such other data in the possession of
GEC regarding the business and or finances of GEC as the Selling Shareholders
have reasonably requested.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GEC
GEC hereby, as of the Effective Date of the Reorganization hereof, represents
and warrants as follows:
4.1 FULL DISCLOSURE None of the representations and warranties made by GEC
herein, or in any exhibit, certificate of memorandum, furnished or to be
furnished by GEC, or on its behalf by officers and directors of GEC,
contains or will contain any untrue statement of material fact, or omit any
material fact the omission of which would be misleading.
4.2 NO GOVERNMENTAL CONSENTS. No consent, authorization or approval of,
exemption by, filing with, any domestic governmental or administrative
authority, or any court, is required to be obtained or made by GEC in
connection with the execution, delivery and performance of this
Reorganization Agreement or the consummation of the transactions
contemplated hereby.
4.3 FINDER. There is no firm, corporation, agency or other person that is
entitled to a finder's fee or any type of brokerage commission in relation
to or in connection with the transactions contemplated by this
Reorganization Agreement as a result of any agreement or understanding with
GEC.
4.4 ORGANIZATION AND GOOD STANDING GEC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has full corporate power and authority to conduct its business as now
conducted and to own or lease and operate the assets and properties now
owned or leased and operated by it. GEC is duly qualified to do business
and is in good standing in each jurisdiction in which the nature of its
business or the character of its properties requires such qualifications.
4.5 CAPITALIZATION OF GEC The total authorized capital stock of GEC consists of
30,000,000 shares of common stock, $.001 par value, and 2,000,000 shares of
Preferred Stock, $10.00 par value . The issued and outstanding shares of
GEC are as described in the Certificate of Outstanding Shares, a document
comprising a part of this transaction and incorporated herein by reference.
All of such issued and outstanding shares have been duly authorized and
validly issued, and are fully paid and non-assessable. It is understood and
agreed that GEC, as an operating Company may from time to time issue
additional shares to provide working capital. There are no preemptive
rights with respect to any prior issuance of any shares of the capital
stock of GEC.
4.6 SUBSIDIARIES OF GEC. GEC has three subsidiaries as of the effective date of
this Reorganization Agreement. The subsidiaries are Neponset Construction
Company, Inc., Enviromental Products & Container Co. Inc., and Speciality
Waste Services, Inc. GEC is planning on acquiring several companies in the
environmental industry and has signed several letters of intent and is
expected to acquire each company as a wholly owned subsidiary in exchange
for shares of GEC, cash, deferred payments and such other methods of
payment as the parties may agree.
4.7 OPTIONS, WARRANTS AND OTHER CONVERSION RIGHTS. GEC has certain Options and
Warrants outstanding as set forth in the Certificate of Outstanding Options
and Warrants. The Certificate of Outstanding Options and Warrants is hereby
incorporated herein by reference.
4.8 NO RESTRICTIONS ON SECURITIES. GEC is not a party to any written or oral
agreement:
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a. creating rights in any person with respect to shares of the capital
stock of GEC; or
b. relating to voting of shares of the capital stock of GEC on any matter
except for the ability of the president pursuant to a written
agreement to vote certain shares owned by Xxxxx Xxxxxxxx , the former
president, which are to be acquired by GEC.
4.9 DIRECTORS AND OFFICERS. Immediately prior to the Effective Date of the
Reorganization, names, addressees, and title of all officers and directors
of GEC are as follows:
Name Address Title
---- ------- -----
Xxxxxxx X. Xxxxx 00 Xxxx Xxxxxx Chairman of the Board
Xxxxxx, XX 00000 Secretary
Ado Xxxxxx 000 Xxx Xxxxx Xxxxx Director
Red Feather Lakes, CO. 80545
W. Xxxxxx Xxxxxxx 00 Xxxxxx Xxxxx Xxxxx Xxxxxxxx/Xxxxxxxxx/ General
Exeter, NH. 03833 Counsel/ Treasurer
4.10 FINANCIAL STATEMENTS. GEC has delivered their audit for the period ending
September 30, 1997 together with its unaudited balance sheet dated as of
June 30, 1998.
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4.11 BOOKS AND RECORDS.
a. The books of account and other financial records of GEC are , in all
material respects, complete and correct and are maintained in
accordance with good business practices.
b. The minute books of GEC contain accurate records of all meetings and
accurately reflect all other corporate action of the shareholders and
directors and any committees of directors of GEC.
4.12 ABSENCE OF CERTAIN EVENTS. As of the Effective Date of the Reorganization
Agreement, GEC has not:
a. Amended its Certificate of Incorporation or By-laws;
b. Changed it authorized capital stock or issued or sold, or purchased,
redeemed or otherwise acquired, or issued any rights to subscribe for,
or warrants to purchase, or entered into any agreement, commitment or
obligation (including, without limitation, any convertible securities)
to issue, sell, purchase, redeem or otherwise acquire, any share of
its capital stock, or made any declaration or any payment or
distribution of any dividend or any other distribution with respect to
its capital stock:
c. Incurred any liabilities, other than liabilities incurred in the
ordinary course of business consistent with past practice , or
discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
liabilities the failure to pay or discharge of which has caused or may
cause any material damage or risk of material loss to it or its assets
or properties;
d. Sold, assigned or transferred any of its assets or properties except
in the ordinary course of business consistent with past practice.
e. Created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected to any lien, pledge,
mortgage, security interest, conditional sales contract or other
encumbrance of any nature whatsoever any of its assets or properties,
other than the liens, if any , of current taxes not yet due and
payable;
f. Changed any of the accounting principles followed by it or the methods
of applying such principles; or
g. Entered into any transaction other than in the course of ordinary
business consistent with past practice or any other material
transaction.
4.13 TAXES AND TAX RETURNS GEC have duly made all deposits required by law to be
made with respect to employee's withholding taxes. GEC has duly filed with
all appropriate governmental agencies and bodies, whether federal, state or
local, all income, sales, license, franchise, excise, gross receipts,
employment and payroll-related and real and personal property reflect the
taxes owned by GEC for the periods covered thereby, and GEC has paid, or
established adequate liabilities or reserves for the payment of, all taxes
shown to be due on such returns.
4.14 LEGAL PROCEEDINGS, ETC. There are no disputes, claims, actions, suits,
proceedings, arbitration's or investigations, either administrative or
judicial, pending or threatened or contemplated, by or against or affecting
GEC or its business or any of its assets, properties or prospects, or the
transactions contemplated by this Reorganization Agreement, at law or in
equity or otherwise, before or by any court or governmental agency or body,
domestic or foreign, or before an arbitrator of any kind which, if
determined adversely to GEC, would materially adversely affect GEC; nor do
any facts exist which could give rise to any such dispute, claim, action,
suit, proceeding, arbitration or investigation affecting GEC or its
business or any of its assets, properties or prospects or the transactions
contemplated by this Agreement.
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4.15 NO THIRD PARTY OPTIONS. There are no existing contracts or other rights
with, to or in any person to acquire any of the assets or properties or any
interest therein of GEC, except for those contracts entered into in the
normal course of business consistent with business practices.
4.16 DELIVERY OF DOCUMENTS. GEC has delivered to XXXXXXXXXX.XXX, INC. true,
correct and complete copies of its Certificate of Incorporation, and all
amendments thereto, and the Bylaws, as amended.
4.17 AUTHORITY AND COMPLIANCE. GEC has full corporate power and lawful authority
to execute and deliver this Agreement. The consummation and performance by
GEC of the transactions contemplated by this Agreement have been duly and
validly authorized by all necessary corporate and other proceedings. This
Agreement has been duly and validly executed and delivered on behalf of GEC
and constitutes a valid obligation of GEC, enforceable in accordance with
its terms. No consent, authorization or approval of, exemption by or filing
with, any domestic governmental or administrative authority, or any court,
is required to be obtained or made by GEC in connection with the execution,
delivery and performance of this Agreement by GEC. Such delivery and
performance will not conflict with or result in the breach or violation of
any term or provisions of , or constitute a default under, the Articles of
Incorporation or Bylaws of GEC, or conflict with or result in the breach or
violation of any term or provision of, or constitute a default under, any
statute , indenture, mortgage, deed of trust, note agreement or other
material agreement or instrument to which GEC is a party or by which it is
a party or by which it is bound, or any law, order, writ, injunction,
decree, rule or regulation of any court or any governmental agency or body.
4.18 INDEMNIFICATION. GEC agrees to indemnify, defend and hold XXXXXXXXXX.XXX,
INC. and each of the Selling Shareholders harmless against and in respect
of any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries and deficiencies, including interest,
penalties, and reasonable attorney's fees, that XXXXXXXXXX.XXX, INC. or any
of such Selling Shareholders shall incur or suffer, which arise out of or
result from or relate to any breach of, or failure by GEC to perform any of
its representations or warranties, contained in this Agreement or in any
schedule, certificate, exhibit or other instrument furnished or to be
furnished by GEC under this Agreement.
4.19 SPECIAL WARRANTIES OF GEC
GEC agrees that Xxxxx Xxxxxx will be appointed to the Board of Directors of
XxxxxxXxxx.xxx. GEC further agrees that Xxxxx Xxxxx may at any time within
the Non-Compete Period take a position of President or Senior Vice
President of Business Development, subject to acceptable compensation.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXXX.XXX, INC.
XXXXXXXXXX.XXX, INC. hereby, as of the Effective Date of the Reorganization
hereof, represents and warrants as follows:
5.1 FULL DISCLOSURE. None of the representations and warranties made by
XXXXXXXXXX.XXX, INC. herein, or in any exhibit, certificate of memorandum,
furnished or to be furnished by XXXXXXXXXX.XXX, INC., or on its behalf by
officers and directors of XXXXXXXXXX.XXX, INC., contains or will contain
any untrue statement of material fact, or omit any material fact the
omission of which would be misleading.
5.2 NO GOVERNMENTAL CONSENTS. No consent, authorization or approval of,
exemption by, filing with, any domestic governmental or administrative
authority, or any court, is required to be obtained or made by
XXXXXXXXXX.XXX, INC. in connection with the execution, delivery and
performance of this Reorganization Agreement or the consummation of the
transactions contemplated hereby.
5.3 FINDER. There is no firm, corporation, agency or other person that is
entitled to a finder's fee or any type of brokerage commission in relation
to or in connection with the transactions contemplated by this
Reorganization Agreement as a result of any agreement or understanding with
XXXXXXXXXX.XXX, INC.
5.4 ORGANIZATION AND GOOD STANDING. XXXXXXXXXX.XXX, INC. is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of New Hampshire and has full corporate power and authority to
conduct its business as now conducted and to won or lease and operate the
assets and properties now owned or leased and operated by it.
XXXXXXXXXX.XXX, INC. is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the
character of its properties requires such qualifications.
5.5 CAPITALIZATION OF XXXXXXXXXX.XXX, INC. The total authorized capital stock
of XXXXXXXXXX.XXX, INC. consists of 15,000 shares of common stock, of which
as of March 1, 1999, 1,000 shares of Common stock and 0 shares of Preferred
Stock shall be issued and outstanding: all of such issued and outstanding
shares have been duly authorized and validly issued, and are fully paid and
non-assessable. There are no preemptive rights with respect to any prior
issuance of any shares of the capital stock of XXXXXXXXXX.XXX, INC..
5.6 SUBSIDIARIES OF XXXXXXXXXX.XXX, INC. XXXXXXXXXX.XXX, INC. has no
subsidiaries as of the effective date of this Reorganization Agreement.
5.7 OPTIONS, WARRANTS AND OTHER CONVERSION RIGHTS. XXXXXXXXXX.XXX, INC. has no
options or warrants outstanding.
5.8 NO RESTRICTIONS ON SECURITIES. XXXXXXXXXX.XXX, INC. is not a party to any
written or oral agreement:
a. creating rights in any person with respect to shares of the capital
stock of XXXXXXXXXX.XXX, INC.; or
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b. relating to voting of shares of the capital stock of XXXXXXXXXX.XXX,
INC. on any matter.
5.9 DIRECTORS AND OFFICERS. Immediately prior to the Effective Date of the
Reorganization, names, addressees, and title of all officers and directors
of XXXXXXXXXX.XXX, INC. are as follows:
Name Address Title
---- ------- -----
Xxxxx Xxxxxx President
Xxx Vespa Vice President/ Secretary
5.10 FINANCIAL STATEMENTS. XXXXXXXXXX.XXX, INC. has delivered their unaudited
statement for the period ending December 31, 1999. The Selling Shareholders
warrant that the audit for the period will not vary more than five percent
of the unaudited report.
5.11 BOOKS AND RECORDS.
a. The books of account and other financial records of XXXXXXXXXX.XXX,
INC. are, in all material respects, complete and correct and are
maintained in accordance with good business practices.
b. The minute books of XXXXXXXXXX.XXX, INC. contain accurate records of
all meetings and accurately reelect all other corporate action of the
shareholders and directors and any committees of directors of
XXXXXXXXXX.XXX, INC.
5.12 ABSENCE OF CERTAIN EVENTS. As of the Effective Date of the Reorganization
Agreement, XXXXXXXXXX.XXX, INC. has not:
a. Amended its Certificate of Incorporation or By-laws;
b. Changed it authorized capital stock or issued or sold, or purchased,
redeemed or otherwise acquired, or issued any rights to subscribe for,
or warrants to purchase, or entered into any agreement, commitment or
obligation (including, without limitation, any convertible securities)
to issue, sell, purchase, redeem or otherwise acquire, any share of
its capital stock, or made any declaration or any payment or
distribution of any dividend or any other distribution with respect to
its capital stock:
c. Incurred any liabilities, other than liabilities incurred in the
ordinary course of business consistent with past practice , or
discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business consistent
with past practice, or failed to pay or discharge when due any
liabilities the failure to pay or discharge of which has cause or may
cause any material damage or risk of material loss to it or its assets
or properties;
d. Sold, assigned or transferred any of its assets or properties except
in the ordinary course of business consistent with past practice.
e. Created, incurred, assumed or guaranteed any indebtedness for money
borrowed, or mortgaged, pledged or subjected to any lien, pledge,
mortgage, security interest, conditional sales contract or other
encumbrance of any nature whatsoever any of its assets or properties,
other than the liens, if any , of current taxes not yet due and
payable;
f. Changed any of the accounting principles followed by it or the methods
of applying such principles; or
g. Entered into any transaction other than in the course of ordinary
business consistent with past practice or any other material
transaction.
5.13 TAXES AND TAX RETURNS. XXXXXXXXXX.XXX, INC. has duly made all deposits
required by law to be made with respect to employee's withholding taxes.
XXXXXXXXXX.XXX, INC. has duly filed with all appropriate governmental
agencies and bodies, whether federal, state or local, all income, sales,
license, franchise, excise, gross receipts, employment and payroll-related
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and real and personal property reflect the taxes owned by XXXXXXXXXX.XXX,
INC. for the periods covered thereby, and XXXXXXXXXX.XXX, INC. has paid, or
established adequate liabilities or reserves for the payment of, all taxes
shown to be due on such returns.
5.14 LEGAL PROCEEDINGS, ETC. There are no disputes, claims, actions, suits,
proceedings, arbitration's or investigations, either administrative or
judicial, pending or threatened or contemplated, by or against or affecting
XXXXXXXXXX.XXX, INC. or its business or any of its assets, properties or
prospects, or the transactions contemplated by this Reorganization
Agreement, at law or in equity or otherwise, before or by any court or
governmental agency or body, domestic or foreign, or before an arbitrator
of any kind which, if determined adversely to XXXXXXXXXX.XXX, INC., would
materially adversely affect XXXXXXXXXX.XXX, INC.; nor do any facts exist
which could give rise to any dispute, claim, action, suit, proceeding,
arbitration or investigation affecting XXXXXXXXXX.XXX, INC. or its business
or any of its assets, properties or prospects or the transactions
contemplated by this Agreement. A full and complete list of all known
potential claims is attached hereto as Exhibit C.
5.15 NO THIRD PARTY OPTIONS. There are no existing contracts or other rights
with, to or in any person to acquire any of the assets or properties or any
interest therein of XXXXXXXXXX.XXX, INC., except for those contracts
entered into in the normal course of business consistent with business
practices.
5.16 DELIVERY OF DOCUMENTS. XXXXXXXXXX.XXX, INC. has delivered to GEC true,
correct and complete copies of its Articles of Incorporation, all
amendments thereto, its Bylaws, unaudited financial statements for the year
ending December 31, 1998, minutes of the board of directors approving the
Reorganization Agreement.
5.17 AUTHORITY AND COMPLIANCE. XXXXXXXXXX.XXX, INC. has full corporate power to
execute and deliver this Reorganization Agreement. The consummation and
performance by XXXXXXXXXX.XXX, INC. of the transactions contemplated by
this Reorganization Agreement have been duly and validly authorized by all
necessary corporate and other proceedings. This Agreement has been duly and
validly executed and delivered on behalf of XXXXXXXXXX.XXX, INC. and
constitutes a valid obligation of XXXXXXXXXX.XXX, INC., enforceable in
accordance with its terms. No consent, authorization or approval of ,
exemption by, or filing with, any domestic governmental or administrative
authority, or any court, is required to be obtained or made by
XXXXXXXXXX.XXX, INC. in connection with the execution, delivery and
performance of this Agreement or the consummation of the transaction
contemplated hereby. The execution, delivery, consummation and performance
of this Agreement by XXXXXXXXXX.XXX, INC. will not conflict with or result
in the breach or violation of any term or provision of, or constitute a
default under, the Articles of Incorporation or Bylaws of XXXXXXXXXX.XXX,
INC., or conflict with or result in the breach or violation of any term or
provision of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, note agreement or other material agreement or
instrument to which XXXXXXXXXX.XXX, INC. is a party or by which it is
bound, or any law, order, writ, injunction, decree, rule or regulation of
any court or any governmental agency or body.
5.18 INDEMNIFICATION. XXXXXXXXXX.XXX, INC. and the Selling Shareholders agree to
indemnify, defend and hold harmless GEC against and in respect of any and
all claims, demands, losses, costs and expenses, obligations, liabilities,
damages, recoveries and deficiencies, including interest, penalties, and
reasonable attorney's fees, that GEC shall incur or suffer, which arises
out of, result from or relate to any breach of, or failure by
XXXXXXXXXX.XXX, INC. to perform any of its representations, warranties,
covenants or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished or to be furnished by XXXXXXXXXX.XXX,
INC. under this Agreement provided, however, that any demand for
indemnification hereunder shall be made in writing to all indemnitors
within in one year after the date hereof, or be forever barred.
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ARTICLE VI
COVENANTS
6.1 INVESTIGATIVE RIGHTS. Up to and including the date of closing of this
Agreement, each party shall provide to the other, and such others party's
counsel, accountants, auditors, and other authorized representatives, full
access during normal business hours and upon reasonable advance written
notice to all, of each party's property, books, contracts, commitments, and
records for the purpose of examining the same. Each party shall furnish the
other party with all information concerning such party's affairs as may
reasonable be requested.
6.2 CONDUCT OF BUSINESS. Prior to the Effective Date of the Agreement,
XXXXXXXXXX.XXX, INC. shall conduct its business in the normal course and
shall not sell, pledge, or assign any assets, without the prior written
approval of GEC, except in the regular course of business. XXXXXXXXXX.XXX,
INC. shall not amend its Certificate or Articles of Incorporation, or
Bylaws, declare any dividends, redeem or sell stock or other securities,
acquire or dispose of fixed assets, change employment terms, enter into any
material or long-term contract, guarantee obligations of any third party,
settle or discharge any balance sheet receivable for less that its stated
amount, pay more on any liability than its stated amount, or enter into any
other transaction other than in the regular course of business.
ARTICLE VII
CLOSING
7.1 CLOSING. The closing under this Agreement shall be held at the offices of
GEC at 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000, or at such other
place as the parties may agree and at such date as shall be mutually agreed
upon by the parties. Unless otherwise agreed, the rights, liabilities,
obligations and duties of performance of the respective parties to this
Agreement shall automatically terminate, without liability to any of the
respective parties hereto, if the closing does not occur hereunder prior to
April 30, 1999.
7.2 DELIVERY OF DOCUMENTATION. At the closing, the following documents, in form
reasonable acceptable to the parties and their respective counsel, shall be
delivered to the respective parties :
a. A GEC officer's certificate, dated the Closing Date that all
representations, warranties, covenants and conditions set forth in
this Agreement on behalf of GEC are true and correct as of, or have
been fully performed and complied with by, the Closing Date; and
b. A XXXXXXXXXX.XXX, INC. officer's certificate, dated the Closing Date
that all representations, warranties, covenants and conditions set
forth in this Agreement on behalf of XXXXXXXXXX.XXX, INC. are true and
correct as of April 15, 1999, or have been fully performed and
complied with by the Closing Date; and
c. A signed consent and or minutes of the Directors of GEC approving the
Reorganization Agreement and each matter to be approved by the
Directors of GEC under this Agreement.
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d. A signed consent and or minutes of the Directors of XXXXXXXXXX.XXX,
INC. and each matter to be approved by the Directors of
XXXXXXXXXX.XXX, INC. under this Agreement; and
e. An affidavit of GEC's president that the shares of GEC common Stock to
be issued to the Selling Shareholders, pursuant to this Agreement
will, upon issuance, be duly and validly authorized and issued and
will be fully paid and non-assessable; and
f. Original GEC certificates evidencing 850,000 shares of GEC common
stock in the name of the Selling Shareholders as set forth in Exhibit
B, which certificates shall bear the appropriate "restrictive legend"
under the Securities Act of 1933, as amended; and
g. An original certificate(s) of XXXXXXXXXX.XXX, INC. common stock in the
name of GEC, which certificate(s) shall be accompanied by a duly
executed stock power with the signature guaranty of Selling
Shareholder transferring all right, title and interest in and to all
the issued and outstanding shares of XXXXXXXXXX.XXX, INC.
h. An original Opinion of GEC's counsel that the shares of GEC stock to
be issued to the Selling Shareholders pursuant hereto shall freely
tradable under Rule 144 as promulgated by the Securities and Exchange
Commission twelve months after the date of issuance of such stock.
i. This Reorganization Agreement executed in triplicate by each of the
respective parties hereto.
ARTICLE VIII
REMEDIES.
8.1 DISPUTES. Any dispute that might arise over the enforcement, interpretation
or execution of this Agreement and which is not amicable settled will be
submitted to arbitration in Denver, Colorado, before a panel of arbitrators
selected as follows: within 10 days of demand by a party to this Agreement
for arbitration, GEC and XXXXXXXXXX.XXX, INC. will each select one (1)
arbitrator and those two arbitrators will select a third arbitrator and
those three (3) persons shall constitute the panel of arbitrators. The
arbitrators will conduct the hearings on continuous business days, and
their decisions will be by majority vote. All costs of the arbitrators will
be shared equally, but the arbitrators are authorized to award costs and
counsel fees to the prevailing party, if necessary. All documents to be
brought into evidence will be produced within 10 days of notice of request
for arbitration.
8.2 COSTS. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorney's fees and other costs
incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled.
8.3 TERMINATION. In addition to the other remedies, any of the parties hereto
may on the Closing Date terminate this Agreement, without liability:
a. If the respective Boards of Directors of the parties shall consent to
the termination.
b. If any bona fide action or proceeding shall be pending against any of
the parties hereto on the Closing Date that could result in a
judgment, decree or order rendering this Agreement null, void,
unenforceable or against public policy or if any agency of the federal
or of any state government shall have objected in writing at or before
the Closing Date to this acquisition or to any other action required
by or in connection with the Agreement.
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ARTICLE IX
GENERAL PROVISIONS
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS, AND AGREEMENTS. The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Effective Date of the Reorganization.
9.2 AMENDMENTS. This Agreement cannot be altered or otherwise amended except
pursuant to an instrument in writing signed by each party hereto. This
Agreement shall be binding upon, and subject to the terms of the foregoing
sentence, inure to the benefit of the parties, their successors , legal
representatives and assigns.
9.3 NOTICES. Any notice, request, instruction or other document to be given
hereunder by any party to any of the other parties shall be in writing and
shall be deemed to have been duly given when delivered personally or 5 days
after dispatch by registered or certified mail, postage prepaid, return
receipt requested, to the party to whom the same is so given or made:
If to GEC addressed to: W. Xxxxxx Xxxxxxx
President
00 Xxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
If to XXXXXXXXXX.XXX, INC. to: Xxxxx Xxxxxx
0 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxxxxx
or at such other address as the one party shall specify to the other party
in writing.
9.4 EXPENSES. Whether or not the transactions contemplated by this Agreement
are consummated, each party hereto shall bear the expenses incurred by it
in connection with the transactions contemplated hereby.
9.5 ENTIRE AGREEMENT. This Agreement and the Exhibits and Schedules which are a
part hereof and the other writings and agreements specifically identified
herein contain the entire agreement between the parties with respect to the
transactions contemplated herein and supersede all previous written or oral
negotiations, commitments and understandings.
9.6 WAIVERS, REMEDIES. Any waiver must be in writing. A waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement shall
not in any way affect, limit or waive a party's rights at any time to
enforce strict compliance thereafter with every other term or condition of
this Agreement. All remedies under this Agreement shall be cumulative and
not alternative.
9.7 COUNTERPARTS AND HEADINGS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute on and the same document. All headings, the cover
page, and the index of this Agreement are inserted for convenience of
reference only and shall not affect its meaning or interpretation.
13
9.8 SEVERABILITY. If and to the extent that any court of competent jurisdiction
holds any provision of this Agreement to be invalid or unenforceable, such
holding shall in no way affect the validity of the remainder of this
Agreement.
9.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Hampshire.
IN WITNESS WHEREOF, the Parties hereto have duly executed this Reorganization
Agreement as of the day and year first above written.
GEC
GENERAL ENVIRONMENTAL CORPORATION
By: ___________________________________
W. Xxxxxx Xxxxxxx, President
XXXXXXXXXX.XXX, INC.
By: ___________________________________
President
SELLING SHAREHOLDERS
___________________________________
Xxxxx Xxxxxx
Reorg 4899
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EXHIBIT A
NAME SHARES
---- ------
Xxxxx Xxxxxx 850,000
EXHIBIT B
XxxxxxXxxx.xxx, Inc. pro forma for the period 3/1/1999 to 4/1/2000.
EXHIBIT C
Complete list of any known claims for damages that have been made or to the
knowledge of the Selling Shareholders may be made against XxxxxxXxxx.xxx, Inc.
NONE
EXHIBIT D
XXXXXXXXXX.XXX, INC. LIST OF ASSETS
NONE
EXHIBIT E
XXXXXXXXXX.XXX, INC. LIST OF ACCOUNTS RECEIVABLE AS OF DATE OF REORGANIZATION
NONE
EXHIBIT F
XXXXXXXXXX.XXX, INC. LIST OF OUTSTANDING DEBTS AND ANY INSTRUMENTS
ENTITLING XXXXXXXXXX.XXX. INC. TO INCURR ADDITIONAL DEBT
NONE
EXHIBIT G
XXXXXXXXXX.XXX, INC. LIST OF LEASED ASSETS
NONE
EXHIBIT H
LIST OF ALL BANK ACCOUNTS
