1
EXHIBIT 10.39
AGREEMENT
AND
PLAN OF REORGANIZATION
OF
VENTURI TECHNOLOGIES, INC.
a Texas Corporation
AND
HITEK CARPET CARE, INC.
a Nevada Corporation
This Agreement and Plan of Reorganization (this "Agreement") is made as
of the 15th day of May, 1997, by and among Venturi Technologies, Inc., a Texas
corporation ("Venturi"), and HiTek Carpet Care, Inc., a Nevada corporation
("HiTek"), for the purpose of effecting an acquisition of all of the outstanding
common and preferred stock of Venturi by HiTek in exchange for common and
preferred stock of HiTek (the "Reorganization").
The boards of directors of Venturi and HiTek deem it advisable and in
the best interests of each such corporation and their respective shareholders to
cause the merger of Venturi with and into HiTek on the terms and subject to the
conditions set forth in this Agreement.
The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
The parties, intending to be legally bound, agree as follows:
1. Identity of Shareholders. The holders of common stock of
Venturi are listed on Exhibit "A" attached hereto (the "Common
Shareholders"), the holders of Series A Preferred Stock of
Venturi are listed on Exhibit "B" attached hereto (the
"Preferred Shareholders"), and the holders of common stock of
HiTek are listed on Exhibit "C" hereto (the "HiTek Common
Shareholders"). There are not presently any shares of
preferred stock authorized or outstanding in HiTek.
2. Adoption of Plan. This Plan shall be submitted for adoption
either at special meetings of the Board of Directors and
shareholders of Venturi and HiTek called for that purpose, or
pursuant to written consent of the directors and shareholders.
This Plan shall be effective and shall be deemed to have been
adopted only upon its approval by the directors and
shareholders of Venturi and HiTek.
3. The Merger. Upon the terms and subject to the conditions set
forth herein, Venturi shall be merged with and into HiTek and
the separate existence of Venturi shall thereupon cease, and
HiTek, as the surviving corporation, shall
2
continue to exist under and be governed by Nevada law.
4. Procedure. The Merger/Reorganization will take place in two
discrete steps: (a) all of the common stock outstanding in
Venturi will be exchanged for HiTek common stock, and (b) all
of the Series A Preferred Stock outstanding in Venturi will be
exchanged for Similar Series A Preferred Stock to be created
in HiTek.
(A) In the first step in the reorganization,
common shareholders of Venturi shall sign a
Stock for Stock Agreement in the form
attached hereto as Exhibit "D," and shall
surrender their shares in Venturi to HiTek
in exchange for shares in HiTek. For each
one share of Venturi common stock owned on
the record date, a shareholder will receive
1.093585771 shares of HiTek common stock.
(B) The second step in the Reorganization shall
be accomplished as follows:
(i) HiTek shall cause its Articles of
Incorporation to be amended, or
shall file with the Secretary of
State of Nevada a designation of
preferences, creating a series of
preferred stock that is identical to
the Series A 10% Cumulative
Convertible Preferred Stock
outstanding in Venturi with the
following exceptions:
(a) The Series A
preferred stock
created in HiTek
shall be entitled
to one vote for
each one share of
such Series A
Preferred Stock;
and
(b) The Series A
Preferred Stock
shall be
convertible to
shares of common
stock of HiTek at
a ratio of
1.093585771 shares
of common stock
for each one share
of Series A
Preferred Stock.
(ii) Holders of Series A Preferred Stock
will then exchange their shares of
Series A Preferred Stock in Venturi
for the newly authorized Series A
Preferred Stock in HiTek on a 1 for
1 basis.
(iii) HiTek shall change its name to
"Venturi Technologies Enterprises,
Inc." and at some point in time
within one
-2-
3
(1) year after the execution of the
Stock for Stock Agreement Venturi
shall dissolve.
5. Supplementary Action. The parties each agree to execute and
deliver any and all documents and things necessary or proper
to accomplish the Reorganization, and to otherwise carry out
the purposes and provisions of this Agreement.
6. Options and Warrants. Upon completion of the Reorganization,
all options or warrants to purchase Venturi common stock then
outstanding, whether or not such options or warrants have been
memorialized by a written document or agreement, shall be
terminated. HiTek covenants and agrees that it shall promptly
upon completion of the Reorganization grant replacement stock
options and warrants to current holders of such Venturi stock
options and warrants.
7. No Further Transfers. Upon the completion of the
Reorganization, the stock transfer books of Venturi shall be
closed and no further transfer of shares shall thereafter be
made.
8. Representations and Warranties of Venturi and HiTek. Venturi
and HiTek hereby, jointly and severally, represent and warrant
to each other as follows:
(A) Organization. Venturi and HiTek are both corporations
duly incorporated, validly existing, and in good
standing under the laws of their respective states of
incorporation.
(B) No Conflict. Neither the execution and delivery of
this Agreement nor the performance of the
transactions contemplated herein by Venturi or HiTek
will violate, conflict or constitute a default under
any lease, contract, agreement, license or other
instrument or any order, judgment or ruling of any
governmental authority to which Venturi or HiTek are
a party.
(C) Authority. The execution and delivery of this
Agreement by the Venturi and HiTek have been duly and
validly authorized by all necessary action of the
board of directors of Venturi and HiTek,
respectively.
-3-
4
IN WITNESS WHEREOF, the parties have executed this Agreement and Plan
of Reorganization as of the date first written above.
VENTURI TECHNOLOGIES, INC.,
A Texas corporation
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Its:Chairman & CEO
------------------------------
HITEK CARPET CARE, INC.,
A Nevada corporation
By:/s/ [illegible signature]
--------------------------------
Its:President
-----------------------------
-4-
