AGREEMENT AND PLAN OF REORGANIZATION
FOR THE ACQUISITION OF ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK OF
DANCOR, INC.
BY ADVANCED COATING TECHNOLOGIES, INC.
THIS AGREEMENT AND PLAN OF REORGANIZATION, is executed this 23th day of
December, 1998, by and among stockholders of DANCOR, INC., whose names are
listed in Exhibit "A," a copy of which is attached hereto and incorporated
herein by this reference (the "Stockholders"), DANCOR, INC. ("DANCOR"), a
Delaware corporation, and ADVANCED COATING TECHNOLOGIES, INC. ("ACT")
(formerly A.X.R. Development Corporation, Inc.), a Nevada corporation.
RECITALS:
A. Whereas, the Stockholders together own, beneficially and of
record, all of the issued and outstanding shares of the common stock of
DANCOR (hereinafter the shares of common stock are referred to as the
"Exchanged Shares") as set forth in Exhibit "A," a copy of which is attached
hereto and incorporated herein by this reference; and
B. Whereas, ACT desires to purchase from each of the Stockholders
all of the outstanding Exchanged Shares owned by them in exchange for an
aggregate of nineteen million five hundred thousand (19,500,000) restricted
shares (the "ACT Shares") of the common stock of ACT, and each of the
Stockholders desires to exchange their Exchanged Shares for the ACT Shares,
the number of the Exchanged Shares being surrendered and the number of ACT
Shares being received by each of the Stockholders is as set forth in Exhibit
"A" hereto; and
C. Whereas, ACT, acting through XXXXX X. XXXXXXX ("XXXXXXX"), its
President and Chief Executive Officer, and XXXXXX X. XXXXX ("XXXXX"),
Chairman of the Board of Directors of DANCOR, have heretofore entered into a
letter of intent as set forth in a letter dated December 10, 1998, a copy of
which is attached hereto as Exhibit "B" (the "Letter Agreement"), providing
for the acquisition by ACT from each of the Stockholders of all of the
Exchanged Shares in exchange for the ACT Shares and on certain additional
terms and conditions specified therein; and
D. Whereas, the parties hereto desire to set forth the definitive
terms and conditions upon which each of the Stockholders shall sell to ACT,
and ACT shall purchase from each of the Stockholders, all of the Stock of
DANCOR owned by each of them, as contemplated by and in furtherance of
the Letter Agreement; and
E. Whereas, it is intended that DANCOR, ACT, and their respective
Stockholders will recognize no gain or loss for U.S. Federal income tax
purposes under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated thereunder as a result
of the Reorganization;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants, and agreements contained
herein, and in accordance with the applicable provisions of Nevada corporate
law, the parties hereto covenant and agree as follows:
ARTICLE I
THE REORGANIZATION
1.1 The Reorganization. As of the Closing (as defined in Section
1.2 below) of this Agreement, the Stockholders shall surrender all of their
Exchanged Shares in exchange for the ACT Shares in the amounts set forth
opposite the respective names of the Stockholders in Exhibit "A." The
transactions contemplated hereby are intended to qualify as a tax-free
reorganization under the Code, and the parties hereto agree to report them as
such.
1.2 Closing. The closing of the Reorganization (the "Closing")
shall take place (i) at the offices of DANCOR, located at 00000 Xxxx 0000
Xxxx, Xxxxx 00, Xxxxxx, Xxxx 00000 at 10:00 a.m., local time, on January 29,
1999; or (ii) at such other time and place and on such other date as DANCOR
and ACT agree (the "Closing Date"). The Closing Date shall be the effective
date of the Reorganization. If the Closing fails to occur by February 16,
1998, or by such later date to which the Closing may be extended as provided
herein above, this Agreement shall automatically terminate, all parties shall
pay their own expenses incurred in connection herewith, and neither ACT,
DANCOR, nor any of the Stockholders shall have any further obligations
hereunder. The Closing shall be contingent upon the agreement of Stockholders
holding a minimum of 80% of the outstanding Exchange Shares. At such time as
Stockholders holding a minimum of 80% of the Exchanged Shares have entered
into this Agreement, the parties shall proceed with the Closing.
1.3 Taking of Necessary Actions. XXXXX, acting as the
representative of the Stockholders (the "Representative"), DANCOR, and ACT
shall each take all such actions at the Closing as may be reasonably necessary
or appropriate in order to effectuate the transactions contemplated hereby and
to make the Reorganization effective as of the Effective Date. If at any time
after the Effective Date any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest ACT with full title to all of
the Exchanged Shares, the Representative, on behalf of the Stockholders, and
the officers and directors of DANCOR and ACT, at the expense of ACT, shall
take all such necessary or appropriate action. To effect the intents and
purposes of this Agreement, the following actions shall be taken at the
Closing, shall be deemed to occur simultaneously, and the accomplishment of
which actions by the parties whose duty it is to perform such actions is duly
acknowledged by the execution of this Agreement by the parties hereto:
1.3.1 Election of Directors. At the Closing, ACT shall deliver
to the Representative letters of resignation of the incumbent directors of ACT
and a Certificate of Secretary of ACT evidencing the adoption by the Board of
Directors of ACT of resolutions electing and appointing (i) XXXXX, XXXXXX
XXXXXX, XXXXXX X. XXXX, XXXX X. XXXXX, and XXXXX X. XXXXXXX as the members of
the Board of Directors of ACT, and (ii) XXXXX as Chairman of the Board and
Chief Executive Officer, XXXXXX XXXXXX as President, XXXX X. XXXXX as Chief
Financial Officer, and XXXXX X. XXXXXXX as Secretary of ACT.
1.3.2 Stockholder Approvals. At the Closing, the Representative
shall deliver a Certificate of Secretary evidencing the authorization of the
execution, delivery, and performance of this Agreement by the Stockholders.
1.3.3 Delivery of Exchanged Shares to ACT; Delivery of the ACT
Shares to the Common Stockholders. At the Closing, in consideration of the
tender by the Stockholders of their Exchanged Shares, ACT shall deliver the
ACT Shares to the Representative, on behalf of the Stockholders.
1.3.4 Assumption of Obligations to Issue Shares. At the
Closing, ACT will assume the obligations of DANCOR with respect to the
contingent issuance of shares pursuant to DANCOR s stock option plan and
commitments to issue shares as set forth in Exhibit C, a copy of which is
attached hereto and incorporated herein by this reference.
1.3.5 Legal Opinions. At the Closing, Counsel to ACT shall
deliver to the Representative an opinion of counsel addressed to the
Stockholders in the form reasonably satisfactory to counsel for DANCOR. At
the Closing, counsel to DANCOR shall deliver to the Representative an opinion
of counsel addressed to ACT in the form reasonably satisfactory to counsel for
ACT.
ARTICLE II
EXCHANGE OF SHARES
2.1 Exchange of Shares. Subject to the terms and conditions of this
Agreement, on the Closing Date, by virtue of the Reorganization and without
any further action on the part of the Stockholders, DANCOR, or ACT, all of the
Exchanged Shares shall be exchanged for the ACT Shares in the amounts to the
Stockholders as set forth in Exhibit A. Each share of the ACT Shares shall
be validly issued, fully paid, and nonassessable shares of the Common Stock of
ACT as of the Closing Date.
2.2 Exchange of Certificates. At the Closing, ACT shall present and
deliver to the Representative the stock certificates representing all of the
ACT Shares. Upon delivery thereof, the Representative shall present and
deliver to ACT all of the certificates representing the Exchanged Shares, or
lost certificate affidavits in form acceptable to ACT.
2.3 Further Rights. From and after the Closing Date, holders of
certificates formerly evidencing the Exchanged Shares shall cease to have any
rights as stockholders of DANCOR, except as provided herein or by law. Those
persons identified in Exhibit C shall have the right to the number of shares
of ACT as set forth in Exhibit C.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF DANCOR
Except as set forth in the Schedule of Exceptions attached hereto and
incorporated herein by reference as Exhibit D, DANCOR represents and
warrants to, and covenants with, ACT, as of the date hereof and as of the
Closing Date, as follows:
3.1 Organization and Corporate Power. DANCOR is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and is duly qualified and in good standing to do business as a
foreign corporation in each jurisdiction in which such qualification is
required and where the failure to be so qualified would have a materially
adverse effect upon DANCOR. DANCOR has all requisite corporate power and
authority to conduct its business as now being conducted and to own and lease
the properties which it now owns and leases. True and correct copies of the
Articles of Incorporation as amended to the Closing Date, certified by the
Secretary of State of Delaware, the Bylaws of DANCOR as amended to the Closing
Date, the resolutions of DANCOR s directors authorizing the execution,
delivery, and performance of this Agreement, the approval by the Stockholders
will be delivered to ACT at the Closing, all certified by the President and
the Secretary of DANCOR.
3.2 Authorization. DANCOR has full corporate power, legal capacity,
and authority to enter into this Agreement, to execute all attendant documents
and instruments contemplated hereby, and to perform all of its obligations
hereunder. This Agreement, and each and every other agreement, document and
instrument to be executed by DANCOR in connection herewith, has been
effectively authorized by all necessary action on the part of DANCOR,
including without limitation the approvals of DANCOR s Board of Directors
(subject to approval of the Stockholders), which authorizations remain in full
force and effect, have been duly executed and delivered by DANCOR. No other
authorizations or proceedings on the part of DANCOR, other than approval of
the Stockholders, are required to authorize this Agreement and/or the
transactions contemplated hereby. This Agreement, when approved by the
Stockholders, will constitute the legal, valid and binding obligation of
DANCOR and each of the Stockholders and will be enforceable against each of
them in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, priority, or other laws or court
decisions relating to or affecting generally the enforcement of creditors
rights or affecting generally the availability of equitable remedies.
3.3. No Conflicts; No Consents. Neither the execution and
delivery of this Agreement, nor the consummation by DANCOR or the Stockholders
of any of the transactions contemplated hereby, or compliance with any of the
provisions hereof, will (i) conflict with or result in a material breach of,
violation of, or default under, any of the terms, conditions or provisions of
any material note, bond, mortgage, indenture, license, lease, credit agreement
or other agreement, document, instrument, permit, authorization, or obligation
(including, without limitation, any of its charter documents) to which DANCOR
is a party or by which it or any of its assets or properties may be bound, or
(ii) violate any judgment, order, injunction, decree, statute, rule or
regulation applicable to DANCOR or its assets or properties, the violation of
which would have a material adverse effect upon the business, properties, or
assets, or in the condition (financial or otherwise) of DANCOR. No
authorization, consent, or approval of any public body or authority was or is
necessary for the consummation by DANCOR or the Stockholders of the
transactions contemplated by this Agreement.
3.4 Capitalization. The authorized capital stock of DANCOR consists
of ten million (10,000,000) shares of common stock, par value $.0001. As of
the Closing Date, there will be six million five hundred thousand (6,500,000)
shares of common stock issued and outstanding. Other than as set forth in
Exhibit D, there are no outstanding contracts or other rights to subscribe
for or purchase, or contracts or obligations to issue or grant any rights to
acquire any equity security of DANCOR. DANCOR does not have any contracts or
obligations to redeem, repurchase, or otherwise reacquire any equity security
of DANCOR. All of the Exchanged Shares are duly authorized, validly issued
and outstanding, fully paid and nonassessable, and have been issued in
conformity with all applicable laws.
3.5 No Pending Material Litigation or Proceedings. There are no
actions, suits, or proceedings pending or, to the best knowledge of DANCOR,
threatened against or affecting DANCOR affecting the Stockholders rights in
the Exchanged Shares (including actions, suits, or proceedings where
liabilities may be adequately covered by insurance) at law or in equity or
before or by any Federal, state, municipal or other governmental department,
commission, court, board, bureau, agency or instrumentality, domestic or
foreign, or affecting any of the officers, directors of DANCOR or the
Stockholders in connection with the business, operations, or affairs of either
of them, which might reasonably be expected to result in any material adverse
change in the business, properties or assets, or in the condition (financial
or otherwise) of DANCOR, or which question or challenge the Reorganization.
3.6 Financial Statements; Absence of Undisclosed Liabilities and
Certain Developments. At the Closing, the Company will deliver to ACT
financial statements of DANCOR for the nine months ended September 30, 1998
(unaudited) and for the years ended December 31, 1997 (unaudited) and 1996
(unaudited), consisting of DANCOR s balance sheets as of such date (the
Balance Sheets ), the related statements of profit or loss for the periods
then ended, and the respective notes thereto. Such financial statements (and
the notes related thereto) are herein sometimes collectively referred to as
the DANCOR Financial Statements. At the Closing, DANCOR shall deliver an
Officer s Certificate certifying that the DANCOR Financial Statements (i) have
been derived from the books and records of DANCOR, which books and records
fairly and accurately reflect, the assets and liabilities of DANCOR, (ii)
fairly present the financial condition of DANCOR on the date of such
statements and the results of its operations for the periods indicated, except
as may be disclosed in the notes thereto, and (iii) have been prepared in all
material respects in accordance with generally accepted accounting principles
consistently applied throughout the periods involved.
3.7 Applicable Permits; Compliance with Laws. DANCOR (i) holds all
licenses, franchises, permits, and authorizations necessary for the lawful
conduct of its business as presently conducted and which the failure to so
hold would have a material adverse effect upon the business, properties, or
assets, or the condition (financial or otherwise) of DANCOR, and (ii) has
complied in all material respects with all applicable statutes, laws,
ordinances, rules, and regulations of all governmental bodies, agencies, and
subdivisions having, asserting or claiming jurisdiction over it, which the
failure to comply with would have a material adverse effect upon the business,
properties, or assets, or the condition (financial or otherwise) of DANCOR.
3.8 Disclosure. Neither this Agreement, nor any certificate, exhibit,
or other written document or statement, furnished to ACT by or on behalf of
DANCOR or, to its knowledge, the Stockholders in connection with the
transactions contemplated by this Agreement contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to be stated in order to make the statements contained herein or
therein, when taken as a whole, not misleading. Neither DANCOR nor, to its
knowledge, any of the Stockholders has any knowledge of any fact which has not
been disclosed in writing to ACT which may reasonably be expected to
materially and adversely affect the business, properties, or assets, or the
condition (financial or otherwise) of DANCOR or title of the Stockholders to
the Exchanged Shares or their ability to perform all of the obligations to be
performed by them under this Agreement and/or any other agreement between
DANCOR, the Stockholders, and ACT to be entered into pursuant to any provision
of this Agreement.
3.9 Ownership of DANCOR. DANCOR issued each Stockholder that number
of Shares set forth opposite the Stockholder s respective name on Exhibit A,
which shares together constitute all of the issued and outstanding shares of
common stock of DANCOR. The Shares are duly authorized, validly issued and
outstanding, fully paid and nonassessable and were issued by DANCOR in
conformity with all applicable laws.
3.10 Subsidiaries. DANCOR has no subsidiaries and no investments,
directly or indirectly, or other financial interest in any other corporation
or business organization, joint venture or partnership of any kind whatsoever
except as reflected in the DANCOR Financial Statements.
3.11 Real Property. All leases of real property to which DANCOR is a
party and which are material to the business of DANCOR are fully effective in
accordance with their respective terms and afford DANCOR peaceful and
undisturbed possession of the subject matter of the lease, and there exists no
default on the part of DANCOR or termination thereof. The building and all
fixtures and improvements located on such real property are in good operating
condition, ordinary wear and tear excepted. To the best of its knowledge,
DANCOR is not in violation of any zoning, building or safety ordinance,
regulation or requirement, or other law or regulation applicable to the
operation of owned or leased properties, and DANCOR has not received any
notice of violation with which it has not complied.
3.12 Tangible Personal Property. DANCOR has good and marketable title
to, or in the case of leased equipment a valid leasehold interest in, and is
in possession of, all such items of personal property owned or leased by it,
free and clear of all title defects, mortgages, pledges, security interests
conditional sales agreements, liens, restrictions or encumbrances, the
presence of which would result in a material adverse change in the business,
properties, or assets, or the condition (financial or otherwise) of DANCOR.
All leases of tangible personal property to which DANCOR is a party and which
are material to the business of DANCOR are fully effective in accordance with
their respective terms, and there exists no default on the part of DANCOR or
termination thereof, the presence of which would result in a material adverse
change in the business, properties, or assets, or the condition (financial or
otherwise) of DANCOR. Each item of capital equipment which is used in the
current conduct of DANCOR s business is in good operating and usable condition
and repair, ordinary wear and tear excepted, and is and will be suitable for
use in the ordinary course of DANCOR s business and fit for its intended
purposes.
3.13 Tax Matters. DANCOR has, since its inception, duly filed all
Federal, state, municipal, local, and other tax returns required to have been
filed by it in those jurisdictions where the nature or conduct of its business
requires such filing and where the failure to so file would be materially
adverse to DANCOR. Copies of all such tax returns have been made available
for inspection by ACT prior to the execution hereof. All Federal, state,
municipal, local, and other taxes, including but not limited to those taxes
due with respect to DANCOR s properties, income, gross receipts, excise,
occupation, franchise, permit, licenses, sales, payroll, and inventory due and
payable as of the date of the Closing by DANCOR have been paid or will be paid
prior to the time they become delinquent.
3.14 Inventory. DANCOR has good and marketable title to all of its
inventories of raw materials, work-in-process, and finished goods, including
models and samples, free and clear of all security interests, liens, claims
and encumbrances, the presence of which would result in a material adverse
change in the business, properties, or assets, or the condition (financial or
otherwise) of DANCOR.
3.15 Contracts and Commitments. DANCOR has no contract, agreement,
obligation or commitment, written or oral, expressed or implied, which
involves a commitment or liability of DANCOR in excess of one hundred thousand
dollars ($100,000) (other than obligations which are included in accounts
payable), and no union contracts, employee or consulting contracts, financing
agreements, debtor or creditor arrangements, licenses, franchise,
manufacturing, distributorship or dealership agreements, leases, or bonus,
health or stock option plans, except as described in Exhibits C and D.
3.16 Proprietary Information. Except as disclosed in Exhibit E,
DANCOR does not have any patents, applications for patents, trademarks,
applications for trademarks, trade names, licenses or service marks relating
to the business of DANCOR, nor does any present or former stockholder,
officer, director or employee of DANCOR own any patent rights relating to any
products manufactured, rented or sold by DANCOR. DANCOR has the unrestricted
right to use, free and clear of any claims or rights of others, all trade
secrets, customer lists, and manufacturing and secret processes reasonably
necessary to the manufacture and marketing of all products made or proposed to
be made by DANCOR, except for any rights the presence of which would not
result in a material adverse change in the business, properties, or assets, or
the condition (financial or otherwise) of DANCOR, and the continued use
thereof by ACT following the Closing will not conflict with, infringe upon, or
otherwise violate any rights of others. DANCOR has not used and is not making
use of any confidential information or trade secrets of any present or past
employee of DANCOR.
3.17 Insurance. DANCOR maintains insurance with reputable insurance
companies on such of its equipment, tools, machinery, inventory, and
properties as are usually insured by companies similarly situated and to the
extent customarily insured, and maintains products and personal liability
insurance, and such other insurance against hazards, risks and liability to
persons and property as is customary for companies similarly situated. All
such insurance policies currently are in full force and effect.
3.18 Arrangements with Employees; Labor Relations. No stockholder,
director, officer, or employee of DANCOR is presently a party to any
transaction with DANCOR, including without limitation any contract, loan or
other agreement or arrangement providing for the furnishing of services by,
the rental of real or personal property from or to, or otherwise requiring
loans or payments to, any such stockholder, director, officer, or employee, or
to any member of the family of any of the foregoing, or to any corporation,
partnership, trust or other entity in which any stockholder, director,
officer, or employee or any member of the family of any of them has a
substantial interest or is an officer, director, trustee, partner, or
employee. There are no bonus, pension, profit sharing, commission, deferred
compensation or other plans or arrangements in effect as of the date of this
Agreement, except as set forth in Exhibit D. DANCOR has no obligations
under any collective bargaining agreement or other contract with a labor
union, under any employment contract or consulting agreement, or under any
executive s compensation plan, agreement or arrangement, nor is any union,
labor organization or group of employees of DANCOR presently seeking the right
to enter into collective bargaining with DANCOR on behalf of any of its
employees.
3.19 Bank Accounts. All bank and savings accounts, and other accounts
at similar financial institutions, of DANCOR existing at date of Closing are
listed on Exhibit F. Exhibit F contains a list of the name of each person
or entity authorized to sign on the bank accounts, borrow money, or incur or
guarantee indebtedness on behalf of DANCOR.
3.20 Powers of Attorney. No valid powers of attorney from DANCOR to
any person or entity exist as of the date of this Agreement, except with
respect to powers of attorney granted to the Representative by the
Stockholders to facilitate the Closing.
3.21 Absence of Questionable Payments. To the best of its knowledge,
neither DANCOR nor any stockholder, director, officer, agent, employee,
consultant, or other person associated with or acting on behalf of any of
them, has (i) used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity, (ii)
made any direct or indirect unlawful payments to governmental officials or
others from corporate funds, engaged in any payments or activity which would
be deemed a violation of the Foreign Corrupt Practices Act or rules or
regulations promulgated thereunder, or (iii) established or maintained any
unlawful or unrecorded accounts.
3.22 Relationships with Customers and Suppliers. No present
substantial customer or substantial supplier to DANCOR has indicated an
intention to terminate or materially and adversely alter its existing business
relationship with DANCOR, and DANCOR has no reason to believe that any of the
present customers of or substantial suppliers to DANCOR intends to do so.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ACT
Except as set forth in the Schedule of Exceptions attached hereto and
incorporated herein by this reference as Exhibit G, ACT hereby represents
and warrants to, and covenants with, each of the Stockholders and DANCOR as
follows:
4.1 Organization and Corporate Power. ACT is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada, and is duly qualified and in good standing to do business as a
foreign corporation in each jurisdiction in which such qualification is
required and where the failure to be so qualified would have a materially
adverse effect upon ACT. ACT has all requisite corporate power and authority
to conduct its business as now being conducted and to own and lease the
properties which it now owns and leases. The Articles of Incorporation as
amended to date, certified by the Secretary of State of Nevada, the Bylaws of
ACT as amended to date, and the resolutions of ACT s stockholders and
directors authorizing the execution, delivery, and performance of this
Agreement, all certified by the President and the Secretary of ACT, which have
previously been provided to DANCOR by ACT, are true and complete copies
thereof as currently in effect.
4.2 Authorization. ACT has full corporate power, legal capacity, and
corporate authority to enter into this Agreement, to execute all attendant
documents and instruments contemplated hereby, to enter into this
Reorganization, and to perform all of its obligations hereunder. This
Agreement, and each and every other agreement, document and instrument to be
executed by ACT in connection herewith, has been effectively authorized by all
necessary action on the part of ACT, including without limitation the
approvals of ACT s Board of Directors and its stockholders, which
authorizations remain in full force and effect, have been duly executed and
delivered by ACT, and no other authorizations or proceedings on the part of
ACT, or otherwise, are required to authorize this Agreement and/or the
transactions contemplated hereby. This Agreement constitutes the legal,
valid, and binding obligation of ACT and is enforceable against ACT in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, priority, or other laws or court decisions
relating to or affecting generally the enforcement of creditors rights or
affecting generally the availability of equitable remedies.
4.3. No Conflicts; No Consents. Neither the execution and
delivery of this Agreement, nor the consummation by ACT of any of the
transactions contemplated hereby, or compliance with any of the provisions
hereof, will (i) conflict with or result in a material breach of, violation
of, or default under, any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, license, lease, credit agreement or
other agreement, document, instrument, or obligation (including, without
limitation, any of its charter documents) to which ACT is a party or by which
it or any of its assets or properties may be bound, or (ii) violate any
judgment, order, injunction, decree, statute, rule or regulation applicable to
ACT or its assets or properties, the violation of which would have a material
adverse effect upon the business, properties, or assets, or in the condition
(financial or otherwise) of ACT. No authorization, consent, or approval of
any public body or authority was or is necessary for the consummation by ACT
of the transactions contemplated by this Agreement.
4.4 Capitalization. The authorized capital stock of ACT consists of
one hundred million ($100,000,000) shares of common stock, par value one
hundredth of one cent ($.001). As of the Closing Date, there will be one
million (1,000,000) shares of common stock issued and outstanding. All of the
shares of common stock issued and outstanding are validly issued, fully paid,
and nonassessable. There are no outstanding contracts or other rights to
subscribe for or purchase, or contracts or obligations to issue or grant any
rights to acquire any equity security of ACT. ACT does not have any contracts
or obligations to redeem, repurchase, or otherwise reacquire any equity
security of ACT. All of the ACT Shares, when issued to the Stockholders, will
be duly authorized, validly issued and outstanding, fully paid and
nonassessable and were issued in conformity with all applicable laws.
4.5 Financial Statements of ACT; Absence of Undisclosed Liabilities;
No Adverse Changes. Attached hereto as Exhibit H are the audited financial
statements of ACT for the years ended December 31, 1997, and 1996, and the
unaudited financial statements for the quarters ended March 31, 1998, June 30,
1998, and September 30, 1998, consisting of ACT s balance sheets as of such
date (the Balance Sheets ), the related statements of profit or loss for the
periods then ended, and the respective notes thereto. Such financial
statements (and the notes related thereto) are herein sometimes collectively
referred to as the ACT Financial Statements. The ACT Financial Statements
(i) are derived from the books and records of ACT, which books and records
have been consistently maintained in a manner which reflects, and such books
and records do fairly and accurately reflect, the assets and liabilities of
ACT, (ii) fairly and accurately present the financial condition of ACT on the
date of such statements and the results of its operations for the periods
indicated, except as may be disclosed in the notes thereto, and (iii) have
been prepared in all material respects in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise disclosed in the notes thereto). Except as and to the
extent reflected or reserved against in the Balance Sheets, and as to matters
arising in the ordinary course of its business since the respective dates of
the Balance Sheets, ACT has no liability or obligation (whether accrued, to
become due, contingent or otherwise) which individually or in the aggregate
could have a materially adverse effect on the business, assets, condition
(financial or otherwise) or prospects of ACT. Except as set forth in Exhibit
G, since the dates of the respective Balance Sheets, there has been (a) no
declaration, setting aside or payment of any dividend or other distribution
with respect to the common stock of ACT or redemption, purchase, or other
acquisition of any of the common stock of ACT or any split-up or other
recapitalization relative to any of the common stock of ACT or any action
authorizing or obligating ACT to do any of the foregoing, (b) no loss,
destrution, or damage to any material property or asset of ACT, whether or not
insured, (c) no acquisition or disposition of assets (or any contract or
arrangement therefor), or any other transaction by ACT otherwise than for fair
value and in the ordinary course of business, (d) no discharge or satisfaction
by ACT of any lien or encumbrance or payment of any obligation or liability
(absolute or contingent) other than current liabilities shown on the Balance
Sheets, or current liabilities incurred since the date thereof in the ordinary
course of business, (e) no sale, assignment, or transfer by ACT of any of its
tangible or intangible assets except in the ordinary course of business,
cancellation by ACT of any debts, claims or obligations, or mortgage, pledge,
subjection of any assets to any lien, charge, security interest or other
encumbrance, or waiver by ACT of any rights of value which, in any such case,
is material to the business of ACT, (f) no payment of any material bonus to or
material change in the compensation of any director, officer, or employee,
whether directly or by means of any bonus, pension plan, contract, or
commitment, (g) no write-off or material reduction in the carrying value of
any asset which is material to the business of ACT, (h) no disposition or
lapse of rights as to any intangible property which is material to the
business of ACT, (i) except for ordinary travel advances, no loans or
extensions of credit to stockholders, officers, directors, or employees of
ACT, (j) no agreement to do any of the things described in this Section 4.5,
and (k) no material adverse change in the condition (financial or otherwise)
of ACT or in its assets, liabilities, properties, business, or prospects.
4.6 Tax Matters. ACT has, since its inception, accurately prepared
and duly filed all federal, state, county and local tax returns required to
have been filed by it in those jurisdictions where the nature or conduct of
its business requires such filing and where the failure to so file would be
materially adverse to ACT. Copies of all such tax returns have been made
available for inspection by DANCOR and the Stockholders prior to the execution
hereof. All Federal, state, county, and local taxes, including but not
limited to those taxes due with respect to ACT s properties, income, gross
receipts, excise, occupation, franchise, permit, licenses, sales, payroll, and
inventory due and payable as of the date of the Closing by ACT have been paid
or will be paid prior to the time they become delinquent. The amount
reflected in the Balance Sheets of ACT as liabilities or reserves for taxes
which are due but not yet payable is sufficient for the payment of all accrued
and unpaid taxes of the types referred to hereinabove.
4.7 No Pending Material Litigation or Proceedings. There are no
actions, suits, or proceedings pending or, to the best knowledge of ACT,
threatened against or affecting ACT (including actions, suits, or proceedings
where liabilities may be adequately covered by insurance) at law or in equity
or before or by any Federal, state, municipal or other governmental
department, commission, court, board, bureau, agency or instrumentality,
domestic or foreign, or affecting any of the stockholders, officers or
directors of ACT in connection with the business, operations, or affairs of
ACT, which might result in any material adverse change in the business,
properties, or assets, or in the condition (financial or otherwise) of ACT, or
which question or challenge the Reorganization. ACT is not subject to any
voluntary or involuntary proceeding under applicable bankruptcy laws and has
not made an assignment for the benefit of creditors.
4.8 Compliance with Laws. ACT (i) holds all licenses, franchises,
permits, and authorizations necessary for the lawful conduct of its business
as presently conducted and which the failure to so hold would have a material
adverse effect upon the business, properties, or assets, or the condition
(financial or otherwise) of ACT, and (ii) has complied with all applicable
statutes, laws, ordinances, rules and regulations of all governmental bodies,
agencies and subdivisions having, asserting or claiming jurisdiction over it,
which the failure to comply with would have a material adverse effect upon the
business, properties, or assets, or the condition (financial or otherwise) of
ACT.
4.9 Disclosure. Neither this Agreement, nor any certificate, exhibit,
or other written document or statement, furnished to DANCOR or the
Stockholders by or on behalf of ACT in connection with the transactions
contemplated by this Agreement contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to be
stated in order to make the statements contained herein or therein, when taken
as a whole, not misleading. ACT has no knowledge of any fact which has not
been disclosed in writing to DANCOR or the Stockholders which may reasonably
be expected to materially and adversely affect the business, properties,
operations, and/or prospects of ACT or the ability of ACT to perform all of
the obligations to be performed by ACT under this Agreement and/or any other
agreement between DANCOR and ACT to be entered into pursuant to any provision
of this Agreement.
4.10 Subsidiaries. ACT has no subsidiaries and no investments,
directly or indirectly, or other financial interest in any other corporation
or business organization, joint venture, or partnership of any kind whatsoever
except as reflected in the ACT Financial Statements.
4.11 Offering. Subject to the accuracy of the Stockholders
representations in Section 5.4 hereof, the offer, sale, and issuance of the
ACT Shares to be issued in conformity with the terms of this Agreement and the
transactions contemplated hereby, constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, and from all applicable state registration or qualification
requirements.
4.12 Applicable Permits; Compliance with Laws. ACT (i) holds all
licenses, franchises, permits, and authorizations necessary for the lawful
conduct of its business as presently conducted and which the failure to so
hold would have a material adverse effect upon the business, properties, or
assets, or the condition (financial or otherwise) of ACT, and (ii) has
complied with all applicable statutes, laws, ordinances, rules, and
regulations of all governmental bodies, agencies, and subdivisions having,
asserting or claiming jurisdiction over it, which the failure to comply with
would have a material adverse effect upon the business, properties, or assets,
or the condition (financial or otherwise) of ACT.
4.13 Real Property. No real property is owned by, leased to, occupied,
or subleased by ACT.
4.14 Tangible Personal Property. ACT owns no tangible personal
property.
4.15 Accounts Receivable. ACT has no accounts receivable.
4.16 Inventory. ACT has no inventory.
4.17 Contracts and Commitments. ACT has no contract, agreement,
obligation or commitment, written or oral, expressed or implied, which
involves a commitment or liability of ACT in excess of one thousand ($1,000),
and no union contracts, employee or consulting contracts, financing
agreements, debtor or creditor arrangements, licenses, franchise,
manufacturing, distributorship or dealership agreements, leases, or bonus,
health, or stock option plans.
4.18 Proprietary Information. ACT does not have any patents,
applications for patents, trademarks, applications for trademarks, trade
names, licenses, or service marks relating to the business of ACT, nor does
any present or former stockholder, officer, director, or employee of ACT own
any patent rights relating to any products manufactured, rented, or sold by
ACT.
4.19 Insurance. ACT maintains insurance with reputable insurance
companies on such of its equipment, tools, machinery, inventory, and
properties as are usually insured by companies similarly situated and to the
extent customarily insured, and maintains products and personal liability
insurance, and such other insurance against hazards, risks, and liability to
persons and property as is customary for companies similarly situated.
4.20 Bank Accounts. All bank and savings accounts, and other accounts
at similar financial institutions, of ACT existing at date of Closing are
listed on Exhibit I. Exhibit I contains a list of the name of each person
or entity authorized to sign on the bank accounts, borrow money, or incur or
guarantee indebtedness on behalf of ACT.
4.21 Powers of Attorney. No valid powers of attorney from ACT to any
person or entity exist as of the date of this Agreement.
4.22 Absence of Questionable Payments. To the best of its knowledge,
neither ACT nor any stockholder, director, officer, agent, employee,
consultant, or other person associated with or acting on behalf of any of
them, has (i) used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity, (ii)
made any direct or indirect unlawful payments to governmental officials or
others from corporate funds, engaged in any payments or activity which would
be deemed a violation of the Foreign Corrupt Practices Act or rules or
regulations promulgated thereunder, or (iii) established or maintained any
unlawful or unrecorded accounts.
4.23 Reporting Requirements. ACT has complied with and will maintain
its compliance with all of the reporting requirements under the Act and the
Securities Exchange Act of 1934, as amended.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each of the Stockholders, severally and not jointly, represent and
warrant to and covenant with ACT, as of the date hereof, as follows:
5.1 Power of Attorney. The Stockholder has duly and irrevocably
executed and delivered a power of attorney in the form of Exhibit J
appointing the Representative as attorney-in-fact with full power of
substitution and with full authority to take any actions as may be necessary
or desirable, at the discretion of such attorneys-in-fact, to carry out the
provisions of this Agreement on behalf of the Stockholders (the Power of
Attorney ).
5.2 Authority. The Stockholder has full rights, power, and authority
to enter into this Agreement and the Power of Attorney; the execution,
delivery, and performance of this Agreement and the Power of Attorney by the
Stockholder and the consummation by the Stockholder or the Stockholder s
attorney-in-fact of the transactions contemplated hereby will not conflict
with or result in a breach of any agreement to which the Stockholder is a
party and which a conflict or breach thereof would have a material adverse
effect upon the Stockholder or the Stockholder s properties or assets.
5.3 Title. The Stockholder has valid and marketable title to the
number of Shares set forth opposite such Stockholder s name on Exhibit A,
free and clear of any pledge, lien, security interest, or encumbrance other
than pursuant to this Agreement. As of the date hereof there is, and at the
Closing Date there will be, no lien, charge, mortgage, pledge, conditional
sale agreement, or other encumbrance of any kind or nature recorded in the
book of registry of stockholders of DANCOR with respect to any of the
Exchanged Shares owned by the Stockholder and the Exchanged Shares set forth
in Exhibit A are duly registered in the name of the Stockholders as set
forth in Exhibit A.
5.4 Restricted Stock. The Stockholder acknowledges that the Exchanged
Shares being issued to the Stockholders hereunder will be issued by ACT
without registration or qualification or other filings being made under the
Act, or the securities or blue sky laws of any state, in reliance upon
specific exemptions therefrom, and in furtherance thereof the Stockholder
represents that he is acquiring and will hold the shares to be delivered
hereunder for his own account, for investment only, and not for distribution
within the meaning of the U.S. Federal securities laws. The Stockholder
acknowledges that a legend, substantially in the following form, shall be
placed upon the face of each certificate representing any of ACT Shares being
delivered to the Stockholders hereunder:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), ARE RESTRICTED SECURITIES, AND NO OFFER, SALE, TRANSFER OR
OTHER DISPOSITION OF THIS CERTIFICATE OR THE SECURITIES
REPRESENTED HEREBY, OR OF ANY INTEREST HEREIN, MAY BE MADE WITHOUT
SUCH REGISTRATION UNLESS, IN THE OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY, AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.
5.5 Access to Information. The Stockholder acknowledges the receipt
of ACT s Registration Statement filed on Form 10-SB and Quarterly Report on
Form 10-QSB for the nine months ended September 30, 1998. The Stockholder
further acknowledges that such Stockholder has had access to such information
from DANCOR as such Stockholder has deemed necessary to enable such
Stockholder to make an informed decision with respect to the transactions
contemplated hereby.
5.6 Waiver of Claims. As a condition precedent to ACT s obligations
hereunder, the Stockholder agrees to waive and compromise any and all claims
against DANCOR, ACT, and any of their affiliates (as that term is defined in
the Federal securities laws) as of the Closing Date, including but not limited
to claims relating to the issuance of the securities of DANCOR.
ARTICLE VI
MISCELLANEOUS
6.1 Taxes and Expenses.
6.1.1 Except as otherwise expressly provided in 6.1.2 immediately
below, each of DANCOR and ACT shall pay all of their own respective taxes,
attorneys fees, and other costs and expenses payable in connection with or as
a result of the transactions contemplated hereby and the performance and
compliance with all agreements and conditions contained in this Agreement
respectively to be performed or observed by each of them.
6.1.2 The Stockholders shall pay all income taxes, if any, which
become due on account of the sale and transfer of the Exchanged Shares to ACT.
6.1.3 The representations and warranties of DANCOR, the
Stockholders, and ACT contained herein and in any other document or instrument
delivered by or on behalf of DANCOR and/or the Stockholders or on behalf of
ACT pursuant hereto, as such may be qualified in Exhibits C, D, or G,
respectively, shall survive the Closing and any investigations made by or on
behalf of ACT made prior to the Closing, and shall remain in full force and
effect for a period of two (2) full years from the date of the Closing the
( Warranty Period ), and thereupon expire.
6.2 Other Documents. Each of the parties hereto shall execute and
deliver such other and further documents and instruments, and take such other
and further actions, as may be reasonably requested of them for the
implementation and consummation of this Agreement and the transactions herein
contemplated.
6.3 Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, the heirs, personal
representatives, successors, and assigns of ACT, the Stockholders, and DANCOR,
but shall not confer, expressly or by implication, any rights or remedies upon
any other party.
6.4 Governing Law. This Agreement is made and shall be governed in
all respects, including validity, interpretation and effect, by the laws of
the State of Nevada.
6.5 Notices. Any notice or the delivery of any item to be delivered
by a party hereto shall be delivered personally, by U.S. mail, return receipt
requested, or by Federal Express, next-day delivery. Any personal delivery
made shall be deemed to have been made upon the execution of a receipt for the
item to be delivered by the party to whom delivery is made. Delivery by U.S.
mail or Federal Express shall be deemed to have been made when delivered by
Federal Express to the party to whom addressed. All such deliveries shall be
made to the following addresses, or such other addresses as the parties may
have instructed the others in accordance with the provisions of this Section:
If to ACT: Advanced Coating Technologies, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: President
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
000 Xxxx 0xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
If to DANCOR Dancor, Inc.
or the Stockholders: 00000 Xxxxx 0000 Xxxx, Xxxxx 00
Xxxxxx, Xxxx 00000
Attention: Chief Executive Officer
With a copy to: Xxxxx X. Xxxxxxx, Esq.
Xxxxxx, Xxxxxxx & Xxxxxxx
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Any party hereto may change its address by written notice to the other party
given in accordance with this Section 6.5.
6.6 Entire Agreement. This Agreement and the exhibits attached hereto
contains the entire agreement between the parties and supersede all prior
agreements, understandings, and writings between the parties with respect to
the subject matter hereof and thereof. Each party hereto acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting with authority on behalf of any
party, which are not embodied herein or in an exhibit hereto, and that no
other agreement, statement, or promise may be relied upon or shall be valid or
binding. Neither this Agreement nor any term hereof may be changed, waived,
discharged, or terminated orally. This Agreement may be amended or any term
hereof may be changed, waived, discharged, or terminated by an agreement in
writing signed by ACT, DANCOR, and the Stockholders.
6.7 Severability. If any provision of this Agreement is determined to
be invalid, illegal, or unenforceable by any court, department, official,
political subdivision, agency, or other instrumentality of any government,
whether state, local, or Federal, the remaining provisions of this Agreement
to the extent permitted by law shall remain in full force and effect. To the
extent permitted by law, the parties hereto waive any provision of law that
renders any provision hereof invalid or unenforceable in any respect.
6.8 Headings. The captions and headings used herein are for
convenience only and shall not be construed as a part of this Agreement.
6.9 Attorneys' Fees. In the event of any litigation between or among
ACT, DANCOR, and/or the Stockholders, the prevailing party shall receive its
reasonable expenses, including attorneys' fees, from the non-prevailing party
in connection therewith.
6.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which taken together
shall constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
A.X.R. DEVELOPMENT CORPORATION, INC.
a Nevada corporation
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Chief Executive Officer
By: /s/Xxxxx Xxxxxxx
Xxxxx Xxxxxxx, Secretary
DANCOR, INC.
a Delaware corporation
By: /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Chief Executive Officer
By: /s/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Secretary
THIS IS THE STOCKHOLDER SIGNATURE PAGE TO THE
AGREEMENT AND PLAN OF REORGANIZATION
Please Sign this Page and Return it if You Wish to Participate in the Plan
STOCKHOLDERS:
(Signature of Stockholder-Your Signature)
(Printed Name of Stockholder-Your Name)
If the shares are jointly owned, the other owner(s) should also sign this
Signature Page.
(Signature of Stockholder-Co-Owner Signature)
(Printed Name of Stockholder-Co-Owner Name)
Exhibit "A"
List of Dancor Stockholders
DANCOR,INC
Alphabetical Stockholder List
# of Dancor # of ACT
Shares Shares
Xxxxx, Xxxxx Xxxxxxx 111 8,056 24,168
Xxxxx, Xxxxxx 1,500 4,500
Xxxxxxx, Xxxxx 5,000 15,000
Xxxxxxx, Xxx X. 17,112 51,336
Adorable, Reynardo 8,056 24,168
Xxxxxx, Xxxxxxxx 8,028 24,084
Xxxxxxxxx, Xxxxx X. & Xxxxx 16,112 48,336
Xxxxx, Xxxx Xxxxxx 3,021 9,063
Xxxx, Park 80,560 241,680
Xxxxxxxx, Xxxx 8,056 24,168
Xxxxxx, Xxxxxxx 14,098 42,294
Xxxxxx, Xxxxx 13,056 39,168
Xxxxxx, Xxxx 32,224 96,672
Xxxxxx, Xxxxx 150,008 450,024
X.X. Xxxxxx Irrevocable Trust 16,112 48,336
Xxxxx, Xx 8,056 24,168
Xxxxxxx, Xxxxx 143 429
Xxxxxxx, Xxxxx 8,056 24,168
Xxxxxx, Xxxxxxx 2,014 6,042
Xxxx X. Xxxxxx Irrevocable Trust 16,112 48,336
Xxxxxx, Xxxxxxx & Xxx 16,112 48,336
Xxxxxx, Xxxx 1,000 3,000
Xxxx, Xxxxx 5,000 15,000
Xxxx, Xxxxx 6,042 18,126
Xxxx, Xxxxx & Xxxxx 10,000 30,000
Xxxxxxxxx, Xxxxx & Jan 4,000 12,000
Xxxxxxx, Xxxx 16,112 48,336
Xxxxxxx, Xxxxxxxxx 8,056 24,168
Xxxxxx, Xxxxxxx 16,112 48,336
Xxxxxx, Xxxxxx 3,947 11,841
Xxxxx, Xxxxxx 10,062 30,186
Xxxxx, Xxxxxx 12,062 36,186
Big Creek Family LTD. 2,500 7,500
Birmingham, Xxxxxx 8,056 24,168
Xxxxxxxxx, Xxxxxxx 500 1,500
Blake, Jade 1,250 3,750
Xxxxxxxx, Xxxxx 18,112 54,336
Blamires, Jan & Xxxxx 5,000 15,000
Xxxxxxxx, Xxx 1,000 3,000
Xxxxxxxx, Xxxxxxx 2,500 7,500
Xxxxxxxx,Xxxxx X. 8,056 24,168
Xxxxx Family Trust 16,112 48,336
Xxxxx, Xxxx 1,500 4,500
Xxxxx, Xxxx 1,000 3,000
Xxxxx, Xxxx & Xxxxx 22,557 67,670
Xxxxxxx, Xxx 3,222 9,667
Xxxxxx, Xxxx X. 9,056 27,168
Xxxxxxx, Xxxxx X. 16,112 48,336
Xxxxxx, Xxxxxxxx 40,280 120,840
Xxxxxxxxx, Xxxxx 3,914 11,742
Xxxxxx, Xxxxxxx 5,000 15,000
Cannon, Garff - Richmark, LTD. 16,112 48,336
Xxxxxx, Xxxx 16,112 48,336
Xxxxxx, Xxxxxxx X. 2,095 6,284
Xxxxx-Xxxx, Xxxx 2,014 6,042
Xxxxxxx, Xxxxx 251 754
Xxxxxxx, Xxxxxxx 251 754
Xxxxxxx, Xxxxxx & Xxxx 500 1,500
Xxxxx, Xxxxx 16,112 48,336
Xxxxxxxxxxx, Xxxxx 5,000 15,000
Xxxxxx, Xxxx & Xxxxxx 8,056 24,168
Xxxxxxx, Xxxx 2,500 7,500
Xxxxxxx, Xxxxxx 3,000 9,000
Xxxxxxxxxxxx, Xxxxxxx 1,250 3,750
Xxxxxxxxxxxx, Xxxxxxx 3,264 9,792
C Xxxxxxx 4,028 12,084
Xxxxxx, Xxxxxx X. 472,625 1,417,875
Xxxxxx, Xxxx 32,224 96,672
Xxxxxx, Xxxxxx 16,112 48,336
Xxxxxxxx, Xxxxxxx 8,056 24,168
Xxxxxxx, Xxxxx 3,000 9,000
Xxxxxxx, Xxxxxx 2,500 7,500
Xxxxxxx Family Foundation 16,112 48,336
Xxxxxx, Xxxxxxx 24,168 72,504
Dance, Xxxxx 2,325 6,975
David, Mark 8,056 24,168
Xxxxx, Xxxxxx X. 18,612 55,836
Xxxxxxx, Xxxx & Xxxxxx 32,224 96,672
Xxxxxxxxx, Xxx X. 2,000 6,O00
XxXxxx, Xxxxxx 4,000 12,000
Xxxx, Xxxxxxx 8,056 24,168
DLJSC Custodian 1,000 3,O00
Xxxxxx, Xxxxx 8,056 24,168
Xxxx, Xxxxxxxx 2,500 7,500
Xxxxxxx, Xxxxxx 2,500 7,500
Xxxx, Xxxxxx 4,028 12,084
Xxxxxx Enterprises, L.C. 16,112 48,336
Eflenfeldt, Xxxx 3,000 9,000
Xxxxxxxx, Xxxxxx 3,000 9,000
Xxxxxxxxx X. Xxxxxx Revocable Trust 16,112 48,336
Xxxxx, Xxxxxx 5,000 15,000
Xxxx, Xxxxxxx FL 604 1,812
Eyre, Xxxxxx M. 251 754
Xxxx, Xxx & Xxxx 500 1,500
Eyre, Xxxxx Xxxxxxx 251 754
Xxxxx, Xxxxxx 16,112 48,336
Xxxxxx, Xxxxxx 5,000 15,000
Xxxxxx, Xxxxxx 300 900
Xxxxxxxxxxxx, Xx & Joann 16,112 48,336
Xxxxxxxx, Xxxxxx 16,112 48,336
Xxxxxxxx, Xxxxx 10,000 30,000
Xxxxxxxx, Xxxx 5,000 15,000
Xxxxxxxx, Xxxxxx 4,028 12,084
Xxxxxx, Xxxxxxx 2,014 6,042
Xxxxxxxxxxx, Xxxxxx 2,500 7,500
Xxxxxxxx, Xxxx 10,000 30,000
Freeze, J.P. 45,000 135,000
Xxxxxxx, Nfichael 1,000 3,000
Xxxx, XxXxx 400 1,200
Xxxx, Xxxxxxx 4,028 12,084
Xxxx, Xxxx 500 1,500
Xxxx, Xxxx 1,000 3,000
Xxxx, Xxxxx Xxxxxx 4,000 12,000
Xxxxxxx, Xxx 4,028 12,084
Xxxxxxx, Xxx X. & Xxxxxxx X. 2,500 7,500
Xxxxxx, Xxxxxx X. 33,334 100,002
Xxxxxxxx, Xxxxx 2,014 6,042
Xxxxx, Xxxxx 16,112 48,336
Xxxxxx, Xxx X. 4,028 12,084
Xxxxxx, Xxx/Xxxxxx 4,028 12,084
Xxxxxxx, Xxxx 24,168 72,504
Xxxxxxx, Xxxxxx & Xxxx 8,139 24,417
Grove Limited Partnership No. II 64,448 193,344
Xxxxx, X.X. 3,000 9,000
Xxxxx-Xxxxxxxxx, Xxxx 3,000 9,000
Xxxxxx, Xxxx 2,500 7,500
Xxxxxxx, Xxxxx 200 600
Xxxxxxx, Xxxxx 4,028 12,084
Xxxxxxx, Xxx 12,084 36,252
Xxxxxxx, Xxxxx 16,112 48,336
Xxxxxxx, Xxxxx & Xxxxx 32,224 96,672
Xxxxxxx. Xxxx 16,112 48,336
Xxxxxxx, Xxxxx 66,112 198,336
Xxxxx, J. Xxxx & Xxxxxxx 2,325 6,975
Xxxx, Xxxxx 16,112 48,336
Xxxxxxxx, J. Xxxx 26,112 78,336
Hammersly, Georgia & Xxxx 16,112 48,336
Hammersly, Georgia 4,028 12,084
Xxxxxx, Xxxx 65,341 196,023
Xxxx, Xxxx 6,042 18,126
Xxxxxx, Xxxx 8,056 24,168
Xxxx, Xxxxx 5,021 15,063
Xxxx, Xxxx 3,021 9,063
Xxxx, Xxxx 2,014 6,042
Xxxxxxx, Xxxx 110,978 332,934
Xxxxxxxx, Xxxxx 5,014 15,042
Xxxxxxx, Xxxx 36,112 108,336
Xxxxxxx, Xxxx - Pine Valley, LTD. 16,112 48,336
Xxxxxxx, X. Xxxx 5,000 15,000
Xxxxxx, Xxxxx 16,112 48,336
Xxxxxxx, Xxxx 32,224 96,672
Xxxxx, Xxxxx Xxxxx 8,056 24,168
Xxxxxx, Xxxxxxx 1,000 3,000
Xxxxxx, Xxxxxx 1,000 3,000
Xxxxxx, Xxxx 1,000 3,000
Xxxx, Xxxxxx 8,056 24,168
Xxxx, Xxxxx 8,056 24,168
Xxxxxxx, F Xxxxxx 18,334 55,002
Xxxxxxxx, Xxxxx 1,750 5,250
Xxxxxxxx, Xxxxx 500 1,500
Xxxxxxxx, Xxxxxx 4,000 12,000
Xxxx, Xxxx 1,007 3,021
xxxxxx, Xxxx 8,056 24,168
Xxxxx, Xxxx 1,410 4,229
Xxxxxxx,Xxxxx 201 604
Xxxxxx, Xxxx 12,084 36,252
JBAT Limited Partnership 16,112 48,336
JDS LTD. 5,000 15,000
Xxxxxx, Ortho 5,000 15,000
Xxxxxx, Xxxxxxx 1,007 3,021
Xxxxxx, Xxxx 4,500 13,500
Xxxxxxx, Xxx 16,112 48,336
Xxxxxxx, Xxxxx 1,000 3,000
Xxxxx, Xxxxx & Xxxxx 100 300
Xxxxxxxx, Xxxxxxxxx 4,028 12,084
Xxxxxxx, Xxxx 16,112 48,336
Xxxxxx, Xxxxx X. 4,028 12,084
Key Investment FBO Xxx Xxxxxxx 2,500 7,500
Xxxx, Xxxxxx & Xxxxxxx 16,112 48,336
Xxxxxxxx, Xxxx 14,584 43,752
Xxxxxxxx, Xxxx & Imna 8,056 24,168
Xxxxxx, Xxxxxx 2,500 7,500
Xxxxxx, Xxxx 34,224 102,672
Xxxxxx, Xxxxx 16,112 48,336
Xxxxxx, Xxxxxxxx 3,750 11,250
Xxxxxx, X.X. & R. H. 8,056 24,168
Xxxxxxxxx,Xxxxxxxxx 16,112 48,336
Xxxxxxxxxx, Xxxxx 20,140 60,420
Xxxxxxxxx, Xxxxx 1,250 3,750
Xxxxxxxxx, Xxxxxxx 1,250 3,750
Xxxxxx, Xxxxxxx X. 5,028 15,084
Xxxxxxxx, Xxxxxx 2,000 6,000
Xxxxx, Xxxxx 1,000 3,000
Xxxx, Xxxxxxx 8,056 24,168
Xxxxxx, Xxxxxxx 2,325 6,975
Xxxxx, Xxx & Xxxxxx, Xxxxxx 800 2,400
Xxxx, Xxxxx & Xxxxx 1,000 3,000
XxxXxxxxxxxxxx, Xxxxxxx X. 1,860 5,580
Magdamit, Christian 25 75
Magdamit, Xxxxx X. 25 75
magdamit, Jususa G. 25 75
Xxxxxxxx, Xxxx 25 75
Xxxxxx, Xxxx 18,612 55,836
Xxxx, Xxxxxxx 11,627 34,881
Xxxxxxx, Xxxxxxx & Xxxxx X. 8,056 24,168
Xxxxxxx, Xxxxxx 4,028 12,084
Xxxxxx Xxxxxx 16,112 48,336
Xxxx Xxxxx Corp. 8,056 24,168
Xxxxxx, XxXxx 2,500 7,500
Xxxxxx, Xxx 800 2,400
XxXxxx, Xxxxxxx 71,403 214,209
XxXxxxx Enterprises, L.C. 8,056 24,168
XxXxxx, Xxxxxxxx 2,500 7,500
Xxxxxx Engineering Inc. 20,140 60,420
Xxxxxxx, Xxxxx 2,000 6,000
Xxxxxx Xxxx 4,028 12,084
Xxxx, Xxxxxxx X. 16,112 48,336
Xxxxxx, Xxxxxx 515,584 1,546,752
Xxxxxx, Xxxxxxx Xxxxxx 32,224 96,672
Xxxxxxxx, Xxxxxxx 500 1,500
Xxxxxxxx, Xxxxxxx 500 1,500
Naduninti, Xxxxxxxx 8,056 24,168
Xxxxxxx, Xxxxxx 16,112 48,336
Xxxxx, Xxxxxxx X. 16,112 48,336
Xxxxxx, Xxxx 2,500 7,500
Xxxxx, Xxxxxxx 24,168 72,504
Xxxxx, Xxxxxx 4,028 12,084
Xxxxxxx, Xxxxx 36,252 108,756
Xxxxxxx, Xxxxxx X. 16,112 48,336
Xxxxxx Enterprises, Inc. 2,500 7,500
Xxxxx, Xxxxx 500 1,500
Ottello, Ltd. 1,500 4,500
Xxxxxx, Xxxxxxx 4,028 12,084
Xxxx Enterprises, L.C. 8,056 24,168
Xxxxxxx, Xxxxxxx 5,156 15,468
Xxxxxxxx, Xxxxxxxxx 4,028 12,084
Xxxxxx, Xxxx 124,728 374,184
Xxxxxx, Xxxxxxxx X. 2,500 7,500
Xxxxxxxxx, Xxxxx 1,933 5,800
Xxxxxxxxx, Xxxxxx & Xxxxxxx 1,000 3,000
Xxxxxxxxx, Xxxxxx 3,183 9,549
Xxxx Xxxxx Investment Trust 2,014 6,042
Xxxx, Xxxx 2,014 6,042
Xxxx, Xxxx 2,014 6,042
Xxxx, Xxxxx & Xxxxxxxxx 1,000 3,000
Xxxx, Xxxxxx & Sons 5,000 15,000
Xxxx, Xxxx 1,611 4,834
Xxxxxxxx, Xxxx 5,000 15,000
Xxxxxxxx, J. Xxx 16,112 48,336
Xxxxxx, Xxxxx 1,000 3,000
Xxxxxx, Xxxxxxx 1,000 3,000
Xxxxxxxx, Xxxxx 1,007 3,021
Pinnacle Enterprises, Inc. 832,225 2,496,674
Xxxxxx, Xxxx 9,302 27,906
Xxxxxx, Xxxxx 2,500 7,500
Xxxxxxx,Xxxx 1,000 3,000
Xxxxxxx, Xxxxx & Xxxxx 977 2,931
Xxxxx, Xxxx 1,007 3,021
Xxxx, Xxxxxx 5,528 16,584
X. Xxxxxx Employees Pension 2,500 7,500
Xxxxxx, Xxxxxx 4,028 12,084
Xxxxxxx, Xxxxxx 500 1,500
Xxxx, Xxxxxxx 47 141
Xxxx, Xxxxxx 107,000 321,000
Xxxxxxx, Xxxxx 434 1,302
Xxxxxxxx, Xxx Xxxxxx 504 1,511
Xxxxxxxx, Xxxxx 4,029 12,087
Xxxxxx, Xxxxxx 20,226 60,678
Xxxxxxxx, Xxxxx (Xxxxxx) 3,021 9,063
Xxxxx, Xxxxx 188,226 564,678
Xxxxx, Xxxx 51,035 153,105
Xxxx, Xxxxx 16,112 48,336
Rose, Xxxxxxx Xxx 8,056 24,168
Xxxx, Xxxxxx 2,500 7,500
Xxxxxxx, Xxxxx 600 1,800
Xxxxxx, Xxxxx 806 2,417
Xxxxxx, Xx 403 1,208
Xxxxxxxxxxxx, Xxxxxx & Ively 1,000 3,000
Xxxxxx, Xxx 16,112 48,336
Xxxxxxx, Xxxxx 8,056 24,168
Xxxxxxxxxxx, Xxxxxx 8,056 24,168
Shoe, Xxxxxx 500 1,500
Siandatian, Xxxx 31,800 95,400
Sidney, Stuart 16,112 48,336
Skyline Printing 1,250 3,750
Xxxxx, Xxxxx 1,000 3,000
Xxxxx, Xxxxx 2,014 6,042
Xxxxx, Xxxxx 2,095 6,284
Xxxxxxxx, Xxx & Xxxxxxxx 16,112 48,336
Xxxxxxxxx, X.X. 25,000 75,000
Xxxxxxxxx, Xxx 32,224 96,672
Xxxxxx, Xxxxxxxx 17,612 52,836
Xxxxxx, Xxxxxxxxx 33,771 101,172
Xxxxxx, Xxxxx 1,000 3,000
Xxxxx, Xxxxxxxx 1,007 3,021
Xxxxx, Xxxx Xxx 1,250 3,750
Xxxxxxxxx, Xxxxxx 8,056 24,168
Xxxxxx, Xxxxx 10,000 30,000
T-G6 Partnership 800,000 2,400,000
Xxxxxx Trust 2,014 6,042
Xxxxxxx, Xxxxx 5,000 15,000
Xxxxxx, Xxxxx 8,056 24,168
Xxxxxx, B.E. & Xxxxx 465 1,395
Xxxxxx, Xxxxxx 2,000 6,000
Xxxxxxx, Xxxxxx 8,056 24,168
Xxxx, Xxxxx 558 1,674
Xxxxxxxx, Xxxx 6,445 19,334
Xxxxxxxxx, Xxxxx 32,224 96,672
Xxxxxxxxx, Xxxxx 32,224 96,672
Xxxxxxxxx, Xxxxxxxxx 8,056 24,168
TMB Limited Company 16,112 48,336
Transcorp/CF Xxxxxx Xxxxxx 3,500 10,500
Xxxxxxx, Xxxxxx & Xxxxxx 2,325 6,975
Xxxxxx, Xxxxxx X. 18,312 54,936
Xxxxxxxxxx, Xxx 1,000 3,000
Xxxxxxxxx, Xxxxx 3,500 10,500
Xxxxxxxxx, Xxxxx 10,070 30,210
Xxxxx, Xxxxxxx 8,056 24,168
Xxxxxx, Xxxxxx 465 1,395
Xxxxxxxxx, Xxxxx 80,560 241,680
Xxxxxxx, Xxxxxx 1,500 4,500
Xxxxxx, Xxxx 4,028 12,084
Xxxxxx, Xxxx 12,438 37,314
Xxxxxx, Xxxxx X. 16,112 48,336
Xxxxxx, Xxxxxxx X. 16,112 48,336
Xxxxxx, Itichard & Xxxxx 1,000 3,000
Xxxxxx, Xxxxxxx 4,028 12,084
Xxxx, Xxxx Trust 5,000 15,000
Xxxxxx, Xxxxxx 2,500 7,500
Xxxx, Xxxx 500 1,500
Xxxxxx, Xxxxxxx 24,168 72,504
Xxxxxxxx, Red & Xxx 16,112 48,336
Xxxxxx, Xxxxxxx 2,500 7,500
Xxxxxx, Xxxxxxx 1,500 4,500
Xxxxxx, Xxxxx & Xxxxx 23 69
Xxxxxxx, Xxxx 2,000 6,000
Xxxxxx, Xxx X. 2,000 6,000
Xxxxxx, Xxxxxxx 500 1,500
Xxxxxx, Xxxxxx 8,056 24,168
Xxxxx, Xxxxx 21,147 63,441
Xxxxx, Xxxxxx 7,042 21,126
Xxxxx, Xxx 18,126 54,378
Xxxxx, Xxx Xxxxxxx 3,625 10,876
Xxxxx, Xxx 4,028 12,084
Xxxxx, Xxxxx 25,105 75,315
Xxxx Enterprises 12,500 37,500
Xxxxx, Xxxxxxxxx 16,112 48,336
Xxxxxxxxx, Xxxxxxx 2,000 6,000
Xxxxxx Limited Partnership 16,112 48,336
TOTAL 6,500,000 19,500,000
Exhibit "B"
Dancor, Inc.
00000 Xxxxx 0000 Xxxx, Xxxxx 0
Xxxxxx, Xxxx 00000
000-000-0000
CONFIDENTIAL
December 14, 1998
A.X.R. Development Corporation, Inc.
Salt Lake City, Utah
Re: Proposed Reorganization
Gentlemen:
This letter, upon your acceptance, will evidence our mutual intention
to enter into a definitive agreement providing for a reorganization in which
all of the outstanding capital stock of Dancor, Inc. ("DANCOR"), a Delaware
corporation (the target company), will be acquired by A.X.R. Development
Corporation, Inc. ("AXR"), a Nevada corporation (the acquiring company).
The form of the transaction is contemplated to be an exchange of
capital stock, between the Stockholders of DANCOR (the "DANCOR Stockholders")
and AXR in a tax-free reorganization (hereinafter the anticipated transaction
is referred to as the "Reorganization"), subject to the approval of the DANCOR
Stockholders.
This letter is also an expression of the intention of DANCOR and AXR
to proceed expeditiously to negotiate, draft, and execute a definitive
agreement for the Reorganization (hereinafter referred to as the "Agreement").
The Agreement, when executed, will reflect the terms of this letter and such
other terms and conditions as are typical to a transaction of this nature
(which shall include appropriate representations and warranties as to the
business, assets, liabilities, capitalization, material contracts, proprietary
rights, financial condition and other matters relevant to the business and
operations of the parties), and such additional terms and conditions as shall
be mutually agreed upon. The parties to the Agreement shall include AXR, the
DANCOR Stockholders, and any other party who, in the opinion of AXR or DANCOR,
is necessary to the transactions.
1. Certain Terms of Reorganization Agreement. The material terms
and conditions of the Reorganization to be included in the Agreement are as
follows:
1.1 The Agreement shall provide for the Reorganization, which
shall be consummated on or about February 1, 1999 (the "Closing"). On the
Closing Date, all of the issued and outstanding DANCOR capital stock shall be
acquired by AXR from the DANCOR Stockholders.
1.2 At the Closing, AXR shall issue and deliver to the DANCOR
Stockholders previously authorized and unissued shares of AXR common stock in
an amount equal to 95% of the outstanding shares of the AXR (after giving
effect to the closing of the Reorganization), calculated on a fully diluted
basis. In calculating the outstanding shares of DANCOR for this purpose, it
will be assumed that outstanding DANCOR options, warrants and convertible
securities are exercised immediately prior to the closing, and that number of
shares of AXR common stock necessary to account for DANCOR options, warrants
and convertible securities will be reserved in lieu of being issued. At the
Closing, AXR will substitute options, warrants and convertible securities to
purchase shares of the AXR's common stock for each outstanding option, warrant
and other convertible security to acquire shares of DANCOR, each such option
or warrant to represent the right to purchase that number of AXR shares as if
the DANCOR option, warrant or convertible security had been exercised
immediately prior to the Reorganization and exercisable for the same aggregate
consideration, and on substantially the same other terms and conditions, that
would apply if all of such DANCOR options, warrant or convertible security had
been fully exercised.
1.3 At the time of Closing, AXR shall have 1,000,000 pre-
Reorganization outstanding shares, or approximately 5% of the outstanding
shares of the reorganized company, to consist of approximately 565,217 shares
held by current shareholders after a reverse split effected December 11, 1998,
250,000 shares to be issued pursuant to an S-8 Registration Statement before
the Reorganization (150,000 of which will be issued only on and subject to the
closing of the Reorganization), and 184,783 restricted shares also to be
issued before the Reorganization.
1.4 Upon the Closing of the Reorganization, each of the
officers, directors and 10% shareholders of AXR shall execute an agreement
with DANCOR and AXR in which each of such officer, director and 10%
shareholder shall release AXR from any and all claims arising as a result of
any prior events (except as permitted by the Agreement) and further covenant
and agree that they will not compete with AXR and DANCOR for a period of five
(5) years after the Closing in any business engaged in by DANCOR as of the
Closing Date including, without limitation, the coating business.
1.5 Until the Closing, each of AXR and DANCOR shall continue to
operate its business in the ordinary course and shall not, without the prior
written consent of the other party, do any of the following:
(i) Incur any material obligations or commitments
other than in the ordinary course of business;
(ii) Grant any salary increases (other than as
required by existing contracts or consistent
with current practices), unscheduled promotions
or enter into any new employment or benefit
contracts;
(iii) Solicit, induce or otherwise engage in
discussions or negotiations relating to or
proposed to lead to the acquisition or
Reorganization of sale of substantially all of
the assets or shares of DANCOR by or with any
party other than AXR;
(iv) Sell or dispose of any material assets or
properties, except in the ordinary course of
business or with the prior consent of the other
party hereto; or,
(v) Sell any additional shares of its capital stock
or grant any additional rights or options to
acquire its capital stock, with the except of
DANCOR's current private placement offering.
1.6 DANCOR shall provide AXR, as soon as practicable after the
Closing Date, with audited financial statements required in connection with
the acquisition of a "significant subsidiary" by AXR as that term is defined
by rules and regulations promulgated by the Securities and Exchange Commission
and such other information as is required for AXR to prepare and file
appropriate documents relating to the Reorganization with the Securities and
Exchange Commission. Such financial statements will include, among other
items, an audited balance sheet of DANCOR as of a recent date, statements of
income for each of its last two fiscal years, and related statements of
shareholder's equity, statements of cash flows and the appropriate notes to
such financial statements, together with the report of an independent
certified public accounting firm.
1.7 As a condition to the consummation of the Reorganization,
there shall have been no material adverse change in the assets, business or
prospects of either DANCOR or AXR except as contemplated by the Agreement.
All financial statements provided by the parties to each other pursuant to the
Agreement shall be represented to fairly present the financial condition of
such party at the date of such financial statements and their results of
operations for the periods covered thereby, and shall be prepared in
accordance with generally accepted accounting principles.
1.8 AXR and DANCOR will exert their best efforts to obtain such
consents or approvals, and to make such filings as in the opinion of their
respective counsel may be necessary or advisable to effect the transactions
contemplated herein. At the request of AXR, DANCOR shall obtain the consent of
any third party which is necessary for the transfer of any asset, right or
contract of DANCOR pertaining to the Reorganization contemplated herein, if
any.
1.9 As a condition to the consummation of the Agreement, AXR
and its counsel and DANCOR and its counsel must each be satisfied as to the
validity and legality of all aspects of the Reorganization, including all
activities undertaken in relation to the Agreement. Each of the parties to the
Reorganization will pay their own expenses incurred in connection with the
Agreement and all other events required for the Closing.
1.10 The Agreement will provide that any claims or disputes
arising thereunder or as a result of the transactions contemplated therein
which cannot be resolved by the parties will be referred to alternative
dispute resolution by binding arbitration in the State of Utah.
2. Due Diligence. Upon the execution of this letter of intent by
the parties, DANCOR and AXR, and each of their duly authorized
representatives, will be provided with full access to the projections,
financial records and supervisory management personnel of the other party,
which shall include copies of all material agreements, corporate proceedings,
access to the chief executive officer and chief financial officer, marketing,
product development and manufacturing supervisors, and other records and
information which each party deems of significance in an due diligence
investigation of the other party hereto. The disclosure of any such
information shall be subject to the provisions of Section 3 of this letter
agreement.
3. Confidentiality. In connection with the foregoing matters, each
party hereto has or will be furnishing to the other from time to time with
oral and written information as to its proprietary products, marketing
strategy and business plans, significant portions of which each of the parties
considers to be proprietary and confidential information (herein called the
"Confidential Information"). Each party acknowledges that "Confidential
Information," as used herein, does not include any information which (i) was
or becomes generally available to the public other than as a result of an
improper disclosure by the other party hereto, or (ii) was or becomes
information available to the other party on a non-confidential basis from a
third party source that is not bound by a confidentiality obligation to either
of the parties hereto.
Each party agrees that Confidential Information will be used
solely for the purpose of evaluating the Reorganization, investigating market
information and potential markets, and for AXR to pursue due diligence and
legal disclosure requirements in connection with proposed financing activities
by AXR, and will not be used in the business or operations of the party to
which such information has been disclosed or used in any other way, directly
or indirectly, that may detrimental to the interests of the party that owns
such Confidential Information. Confidential Information may be disclosed to
representatives of the party receiving the same who need to know such
Confidential Material for the purposes described above, it being understood
that such representatives shall be informed of the confidential nature of the
Confidential Information and shall be directed to treat the Confidential
Information confidentially and as proprietary information of the party that
owns the same. Each party shall notify the other as to the identity of such
representatives. If either party receives a request, including a subpoena or
similar legal inquiry, to disclose any of the Confidential Material, it shall
provide the party that owns such Confidential Information with prompt notice
so that the owner may seek appropriate protective relief.
If the Agreement is not executed or the Closing thereunder shall fail
to occur for any reason, each party shall promptly deliver and return all
copies of Confidential Information to the party which owns the same, and
without retaining any copy, notes or extracts thereof.
Although each party understands that they will endeavor to include in
the Confidential Information all materials which it believes to be relevant
for the purposes of this letter agreement and the Reorganization, each party
further understands that no representation or warranty as to the accuracy or
completeness of the Confidential Information has or will be made except as
provided by separate written agreement.
4. Press Release. Upon your acceptance and approval hereof, each of
us is authorized by the other to issue a press release for the purpose of
publicly announcing the transactions contemplated by this letter. AXR and
DANCOR each agree to consult with the other as to the form and substance of
any press release or other public disclosure of the matters covered in this
letter, provided that this shall not be deemed to prohibit AXR or DANCOR from
making any disclosure which its respective counsel deems necessary to comply
with applicable law.
5. Survival of Certain Provisions. The provision of Sections 3, 4
and 5 of this letter agreement are for the benefit of the respective parties
hereto, shall survive any termination of this letter agreement, and shall be
governed by and construed in accordance with the laws of the State of Utah.
This letter reflects an expression of our mutual intent only, and
shall not constitute a binding legal obligation for the transactions described
herein (except as expressly set forth in Sections 3, 4 and 5 above) until such
time as the Agreement has been executed and the Reorganization has been
approved by the Board of Directors and shareholders of AXR and the Board of
Directors and Stockholders. It is our desire to move expeditiously towards the
completion of these transactions on the basis of the terms and conditions
contained herein. To help accomplish this goal, if you are in agreement with
the foregoing, would you please indicate your approval of the contents of this
letter by signing the attached copy in the space provided and returning it to
us at your earliest convenience.
The parties acknowledge that they were initially introduced to each
other by, and currently share, two common directors and common outside
corporate counsel who will have an inherent and unavoidable conflict of
interest as to the Reorganization. Each of the parties agrees to engage the
services of their own independent counsel for purposes of advising them in
connection with this letter of intent, the Agreement, the Closing and other
matters relevant to the Reorganization. Each of the parties will require
approval of the Reorganization by a majority or more of their independent
directors who are not affiliated with the other party.
Very truly yours,
DANCOR, INC.
By:/S/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx,
Chairman of the Board of Directors
Accepted and Agreed to this
10th day of December 1998
A.X.R. DEVELOPMENT CORPORATION, INC.
By:/S/Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx,
President and Chief Executive Officer
Exhibit "C"
Schedule of Dancor Options and Contingent Issuance of Shares
NONE
Options Granted to Date
NONE
Exhibit "D"
Dancor Exceptions
NONE
Exhibit "E"
Dancor Patents
U. S. Patents:
5,205,874
5,672,390
International Patents:
Country Patent No.
Australia 660,587
Australia 691,794
Europe 0,585,365 (1)
International Patents Pending:
Country Patent No.
Brazil PI9307502/2
Canada 2149919
Canada 2109629
Europe 00000000.1
Xxxxx 000000/0000
Xxxxx 500477/1993
Russia 95113589
Korea 703535/1993
Trademark Filing:
VitroSeal
(1) European Patent No. 0,585,365 designates the following countries:
Austria, Belgium, Switzerland/Liechtenstein, Germany, Denmark, Spain, France,
Great Britain, Greece, Italy, Luxembourg, Monaco, Netherlands, and Sweden.
The patent will be enforceable in each of these countries when our European
associate completes the registration process in each country.
Exhibit "F"
Dancor Bank Accounts
Zions Bank Account No. 000-00000-0
(Signer: Xxxxxx X. Xxxxx
Pacific National Bank Account No. 1004949001
(Signer: Xxxxxx Xxxxxx)
Exhibit "G"
Advanced Coating Technologies, Inc.
Exceptions
NONE
Exhibit "H"
Advanced Coating Technologies, Inc.
Financial Statements
See the 10-QSB for the period ended September 30, 1998
filed with the Securities and Exchange Commission on
October 15, 1998
and the
10-KSB for the year ended December 31, 1997
filed with the Securities and Exchange Commission on
October 8, 1998
Exhibit "I"
Advanced Coating Technologies, Inc.
Bank Accounts
NONE
Exhibit "J"
Form of Power of Attorney
POWER OF ATTORNEY
THE UNDERSIGNED STOCKHOLDER (the "Stockholder") of DANCOR, INC.
("DANCOR") hereby:
(i) sells, assigns and transfers unto ADVANCED COATING
TECHNOLOGIES, INC., a Nevada corporation ("ACT"), the number of shares
of DANCOR set forth opposite Stockholder's name in Exhibit "A" (the
"Shares") to that certain Agreement and Plan of Reorganization for the
Acquisition of all of the Outstanding shares of Common Stock of Dancor,
Inc. by Advanced Coating Technologies, Inc. dated December 23, 1998 (the
"Agreement").
(ii) irrevocably constitutes and appoints XXXXXX X. XXXXX
("XXXXX") as attorney-in-fact to transfer the Shares on the books of
DANCOR to ACT as set forth in the Agreement, with full power of
substitution in the premises;
(iii) constitutes and appoints XXXXX as Stockholder's true
and lawful attorney-in-fact and agent, with full power of substitution,
for Stockholder and in Stockholder's name, place, and stead, in any and
all capacities (until revoked in writing) to act on behalf of such
Stockholder in connection with the Agreement and the exchange of the
Shares for ACT shares; and
(iv) grants unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises as fully to accomplish
all intents and purposes of the Agreement as such Stockholder might or
could do in person, hereby ratifying and confirming all that the
attorney-in-fact, or his substitute, may lawfully do or cause to be done
by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of
Attorney this day of , 1999.
(Signature of Stockholder)
(Printed Name of Stockholder)
