REVERSE ACQUISITION AGREEMENT
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
is entered into on September 29th, 1998 by and among Greenway Environmental
Systems, Inc., a Nevada corporation ("Greenway"), Travel Dynamics, Inc., a
Nevada corporation ("TDI"), and each of the persons whose signatures are set
forth at the end of this Agreement (collectively referred to herein as the
"Owners"). Xxxxxx X. Xxxxxx is a party to this Agreement for purposes of Article
III. When all of the foregoing parties are collectively referenced in this
Agreement they shall sometimes be designated as the "Parties".
R E C I T A L S :
A. The Owners own all of the issued and outstanding shares of
capital stock of TDI, with the Owners owning the number of shares of common
stock of TDI set forth opposite their respective names on Exhibit A hereto.
X. Xxxxxxxx, TDI and the Owners have determined that it is in
their respective best interests to effect a Reverse Acquisition of TDI by
Greenway in which all issued and outstanding shares of TDI will be acquired by
Greenway as its wholly owned and sole operating subsidiary, with Greenway
changing its name to TDI, assuming TDI's business and place of business as it
operations, with the election of a Board of Directors nominated herein by TDI,
and with Greenway issuing not less than sixty-two per cent (62%) of its to be
issued and outstanding shares to the Owners, ("The Reverse Acquisition").
C. The parties hereto intend that the Reverse Acquisition
shall qualify as a tax free reorganization within the meaning of the IRS Code.
D. Both Greenway and TDI represent that this Agreement, and
all provisions thereof, are presently subject to majority shareholder approval
of both Greenway and TDI. Both parties further believe that such approval can be
obtained by majority shareholder consent, without the requirement of a formal
meeting, prior notice or proxy under Nevada law.
NOW, THEREFORE, in consideration of the promises and the
mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, unless
otherwise defined herein or unless the context otherwise requires, the following
terms shall have the following meanings:
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"Agreement" means this Agreement and all Exhibits hereto and
all amendments, modifications, and supplements hereto.
"Authorized Capital Stock" has the meaning specified in
Section 3.04 hereof.
"Balance Sheet Date" is June 30, 1998
"Board of Directors" shall mean the governing body of the
corporation under Nevada law, sometimes herein simply designated as the "Board"
or the "Directors," until the closing of this Agreement, the existing Board of
the Company shall continue in office, upon closing those persons designated in
Section 2.04(d) shall become the Board.
"Balance Sheet" is the audited balance sheet of Greenway dated
June 30, 1998.
"Closing" has the meaning specified in Section 2.03 hereof.
"Closing Date" has the meaning specified in Section 2.03
hereof.
"Common Stock" means the common stock, $0.001 par value, of
Greenway.
"Company" shall mean Greenway Environmental Systems, Inc.
("Greenway" as designated prior to Closing and "Travel Dynamics, Inc" as
designated after the date of Closing of the within Reverse Acquisition.
"Effective Time" has the meaning specified in Section 2.02
hereof.
"GAAP" has the meaning specified in Section 3.12(b) hereof.
"IRS" means the Internal Revenue Service.
"Owners" means the shareholders of TDI.
"Parent Corporation" shall mean the Greenway entity both
before and after its name change to Travel Dynamics, Inc.
"Reverse Acquisition" has the meaning specified in Recital B
hereof.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" has the meaning specified in Section 4.03
hereof.
"Shares" has the meaning specified in Section 3.04 hereof.
"Subsidiary Corporation" has the meaning specified in Section
2.01 hereof.
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"Taxable Period" means any taxable year or any other period
that is treated as a taxable year with respect to which any Tax may be imposed
under any applicable statute, rule, or regulation.
"Tax Return" means any report, return, or other information
required to be supplied to a taxing authority in connection with Taxes.
"Taxes" means all taxes, charges, fees, levies, or other
assessments, including, without limitation, income, gross receipts, excise, real
and personal property, sales, use, stamp, transfer, license, payroll, franchise,
Social Security, unemployment and withholding taxes imposed or required to be
withheld by the United States or any state, local, or foreign government or
subdivision or agency thereof, and such term shall include any interest,
penalties or additions to tax.
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
ARTICLE II
THE REVERSE ACQUISITION
Section 2.01. The Reverse Acquisition. Upon the terms and
subject to the conditions of this Agreement, and in accordance with the
Corporation Law of the State of Nevada (the "Nevada Act"), at the Effective Time
(as defined below), the parties hereto shall effect the acquisition of TDI's
shares by Greenway. As a result of the acquisition of all issued and outstanding
shares of TDI by Greenway as of the effective time, as defined herein, of this
Agreement, TDI will become a wholly owned subsidiary of Greenway and its sole
operating business, ("The Subsidiary"). As part of and as a necessary term and
condition of this Reverse Acquisition, Greenway shall effect a Nineteen and
One-half to One (19.5:1) reverse split of its presently issued and outstanding
shares prior to the closing of the Reverse Acquisition. TDI will have appointed,
effective at Closing, as defined herein, a new slate of three directors for
Greenway which will have been elected by the shareholders of Greenway prior to
Closing and who will assume office at the time of and in the event of Closing.
Greenway will further have obtained majority shareholder consent to the change
of its name from Greenway to TDI and will operate the TDI subsidiary as its sole
operating business and enterprise, until otherwise determined by the Board.
Greenway will also change its principal business location and operations to the
facilities presently employed by TDI, or as otherwise designated by the Board.
Finally, as a condition to the Closing of the Reverse Acquisition, Greenway
shall have issued to the Owners two million shares of its reverse split stock
(2,000,000 shares) being not less than Sixty-Two per cent (62%) of its entire
issued and outstanding stock subsequent to the reverse split and at the time of
Closing.
Section 2.02. Effective Time. As promptly as practicable after
the satisfaction or, if permissible, waiver, of the conditions set forth in
Articles VII and VIII hereof, the parties hereto shall cause the Reverse
Acquisition to be consummated and will evidence such Closing by filing a
Certificate of Amendment (the "Certificate of Amendment") in such form as
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required by, and executed in accordance with, the relevant provisions of the
Nevada Act and take all such further actions as may be required by law to make
the Reverse Acquisition effective upon the issuance of a Certificate of
Amendment by the Nevada Secretary of State (the date and time of such issuance
being the "Effective Time").
Section 2.03. The Closing. The closing of the Reverse
Acquisition contemplated in this Agreement (the "Closing") shall take place at
the offices of Xxxxxx X. Xxxxxx, attorney at law at 000 X. Xxxxx Xxxxxx Xxxxx
000, Xxxx Xxxx Xxxx, XX 00000 at 2:00 p.m. (local time) on the date that the
Effective Time occurs (which the parties hereto intend to occur on September 29,
1998, but in all events not later than October 1, 1998), or at such other place
or at such other time or on such other date as the parties hereto may mutually
agree (the "Closing Date").
Section 2.04. Effect of Reverse Acquisition. When the Reverse
Acquisition has been effected at the Effective Time:
(a) TDI will be a wholly owned operating subsidiary of
Greenway to the extent provided in Section 2.04(f) hereof.
(b) The Certificate of Incorporation of Greenway shall be
amended to provide that Article I of the Certificate of Incorporation shall read
in its entirety as follows: "The name of the corporation is Travel Dynamics,
Inc." The Certificate of Incorporation of TDI will be amended to reflect a name
change to Travel Dynamics Operating Company, or some reasonable derivation to
distinguish the parent and subsidiary.
(c) The Bylaws of Greenway, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation.
(d) The persons nominated below shall have been elected by the
existing shareholders of Greenway as a new Board of Directors effective upon the
Closing. The Directors named below shall immediately upon appointment hold an
organizational meeting of the Board to, inter alia, appoint new officers for the
Company:
1. Xxxxx Xxxxxxx 4. Xxxx Xxxxxx
2. Xxxxx X. Service 5. Xxxxxx Xxxxxxx
3. Xxxxxx (Xxx) Xxxxxx
(e) The officers of Greenway immediately after the Effective
Time shall be appointed by the newly elected board of directors set forth in
2.04(d) above.
(f) The Board of Directors of the Company will promptly after
Closing consider the change of name of the TDI operating subsidiary to "Travel
Dynamics Operating Company", or some reasonable derivation of such name, to
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distinguish it from the parent Company. The Company will relocate all operations
to the business facilities currently operated by TDI and the Company will assume
those business operations as its current business and purpose.
Section 2.05. Effect on Capital Stock and Options.
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(a) Reverse Split. By virtue of the Reverse Acquisition,
automatically and without any action on the part of the holder thereof: (i) each
nineteen and one-half shares of Common Stock of Greenway issued and outstanding
immediately prior to the Effective Time shall become and be converted into one
share of common stock, (19.5:1) $0.001 par value, of Greenway Stock ("The
Reverse Split Stock") prior to Closing.
(b) Adjustments to Greenway Stock. The number of shares of
Greenway Stock to be issued subsequent to subsection (a) above shall be adjusted
to reflect the effect of any stock split, reverse stock split, dividend,
reorganization, recapitalization, or like change with respect to Greenway Stock
occurring after the date hereof and prior to the Effective Time. No such
adjustment is contemplated by the Parties.
(c) Fractional Shares. No fractional shares of Greenway Stock
shall be issued pursuant hereto. In lieu of the issuance of any fractional share
of Greenway Stock pursuant to Section 2.05(a) hereof, each Owner who would
otherwise be entitled to a fraction of a share of Greenway Stock shall receive
from Greenway an additional whole share of Greenway Stock.
Section 2.06. Closing Procedures. Subject to the terms and
conditions of this Agreement:
(a) At the Closing on the Closing Date, the Owners shall
deliver to Greenway share certificates in negotiable form representing all of
the TDI Shares duly endorsed in blank or accompanied by duly executed stock
powers (in blank).
(b) At the Closing on the Closing Date, TDI and the Owners
shall deliver to Greenway the certificates, and other documents and instruments
to be delivered under Article VII hereof.
(c) At the Closing on the Closing Date, Greenway shall deliver
to the Owners share certificates representing the reverse split Greenway Stock
in negotiable form which the Owners have the right to receive in respect of the
surrendered Shares pursuant to Section 2.05(a) issued in the names of the
respective Owners.
(d) At the Closing on the Closing Date, Greenway shall deliver
to TDI and the Owners the opinion, certificates, and other documents and
instruments to be delivered under Article VIII hereof.
(e) All shares to be delivered pursuant to this section shall
be "restricted securities" and may bear a customary restricted security legend.
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Section 2.07. Taking Necessary Action; Further Action. TDI and
Greenway, respectively, each shall use its reasonable efforts to take all such
action as may be necessary or appropriate to effectuate the Reverse Acquisition
under the Nevada Act at the time specified in Section 2.02 hereof. If, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Parent Corporation with
full right, title and possession to all sharehold interest in TDI, the officers
of the Parent Corporation are fully authorized in the name of TDI and Greenway,
or otherwise, to take, and shall take, all such lawful and necessary action.
Section 2.08. Expenses. Greenway, TDI and the Owners shall
each pay their respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement and all other agreements
contemplated hereby, in each case regardless of whether the Closing occurs.
Without limitation of the foregoing, all stock transfer taxes payable in
connection with the Reverse Acquisition shall be the responsibility of, and
shall be paid by, the Owners.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GREENWAY
Each of Greenway and Xxxxxx X. Xxxxxx, as its reorganization
agent, represents, warrants, and agrees as follows:
Section 3.01. Corporate Organization. Greenway is a
corporation duly organized, validly existing, and in good standing under the
laws of Nevada and has the corporate power and authority to acquire all material
governmental licenses, authorizations, permits, consents and approvals required
to own, license or lease and operate properties or to conduct business. Greenway
presently has no business.
Section 3.02. Due Qualification. Greenway is duly qualified to
do business and is in good standing under the laws of each jurisdiction in which
the nature of its business or of the properties owned or leased by it makes such
qualification necessary, except where the failure to be so qualified would not
have, either alone or together with all such failures, a material adverse effect
on the assets, business, results of operations or financial condition of
Greenway. It being further understood by the Parties that Greenway does not have
any current business, nor is it subject to registration in any jurisdiction
other than Nevada.
Section 3.03. Corporate Documentation. (a) Copies of the
articles of incorporation and by-laws (or applicable organizational documents)
and all amendments thereto, of Greenway heretofore delivered to TDI, as
existing, are complete and correct, it being understood, however, that Greenway
has only partial historical Board and Shareholder Minutes dating back to 1991;
(b) the existing minute books of Greenway are complete and reflect all
proceedings (including actions taken by written consent) of the stockholders,
partners and directors and all committees thereof of Greenway in all material
respects, subject to the limitations set-out above; and (c) the transfer records
with respect to capital stock and other equity or ownership interests are
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complete and accurately reflect all transactions in the shares of capital stock
and other equity or ownership interests of Greenway. A complete and correct copy
of resolutions to be duly adopted by the stockholders of Greenway at a meeting,
or by Majority Consent, will be provided to and approved by TDI, which
resolutions shall approve and adopt this Agreement, and approve the Reverse
Acquisition, in accordance with the provisions of the Nevada Act. Following
adoption by the stockholders of Greenway, such resolutions will not be amended,
modified, rescinded or superseded and will remain in full force and effect after
their adoption through the consummation of the transactions contemplated hereby.
Section 3.04. Capitalization of Greenway.
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(a) The entire authorized capital stock of Greenway consists
of Fifty Million Authorized Voting Common Stock, par value $0.001 (the
"Authorized Capital Stock"). Of the Authorized Capital Stock, approximately
23,400,000 pre-reverse split shares are presently validly issued and outstanding
or subscribed (the "Shares"). At the time of Closing and after giving effect to
the reverse split, but before issuance of shares to the Owners, or the 10,000
reorganization shares, Greenway will have issued and outstanding approximately
One Million Two Hundred Twenty Thousand (1,220,000) shares. No options, warrants
or other rights to redeem, acquire, sell, or issue shares of capital stock of
Greenway are outstanding, and between the date hereof and the Closing Date, no
shares of capital stock of Greenway and no such options, warrants or rights will
be issued.
(b) The Shares contemplated by this Section have been or will
be duly authorized and validly issued, are fully paid, and nonassessable, have
not been issued in violation of any preemptive rights.
Section 3.05. Authority; Binding Effect. Greenway has the
right, power, authority, and capacity to execute and deliver this Agreement and
all other agreements contemplated hereby, to perform the obligations hereunder
and thereunder on its part to be performed and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Greenway of this
Agreement and all other agreements and documents contemplated hereby and the
performance by Greenway of all obligations on its part to be performed hereunder
and thereunder have been duly approved by all necessary corporate and other
action by Greenway. This Agreement constitutes, and when duly executed and
delivered, all other agreements contemplated hereby will constitute, the legal,
valid, and binding obligation of Greenway, enforceable against Greenway in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating to or
affecting creditors' rights generally and to general equity principles (whether
such enforceability is considered in a proceeding at law or in equity).
Section 3.06. No Creation of Violation, Default, Breach or
Encumbrance. The execution, delivery and performance of this Agreement by
Greenway and the consummation by Greenway of the transactions contemplated
hereby will not: (a) violate (1) any statute, rule or regulation to which
Greenway is subject, or (2) any order, writ, injunction, decree, judgment or
ruling of any court, administrative agency or governmental body to which is
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subject, (b) conflict with or violate any provision of the articles of
incorporation or by-laws of Greenway, or (c) require the consent of any party or
constitute a default under, violate, conflict with, breach or give rise to any
right of termination, cancellation or acceleration of, or to a loss of benefit
to which Greenway is entitled, under (1) any mortgage, indenture, note or other
instrument or obligation for the payment of money or any contract, agreement,
lease or license to which Greenway is a party, or (2) any governmental licenses,
authorizations, permits, consents or approvals required for Greenway to own,
license or lease and operate its properties or to conduct its business as
presently conducted by it.
Section 3.07. No Present Default. All contracts, agreements,
leases and licenses to which Greenway is a party are valid and in full force and
effect and constitute legal, valid and binding obligations of Greenway. Greenway
has disclosed, and TDI accepts, that Greenway has no license or contract rights
or obligations, or any asset or interest of value.
Section 3.08. Compliance With Law. To the best knowledge and
belief of Greenway, its officers, directors, and agents, Greenway is not in
violation of, or since September 1, 1995 has violated, any applicable domestic
or foreign law, rule or regulation (excluding violations of traffic laws), or
any order, writ, injunction or decree of any domestic or foreign court,
administrative agency, governmental body or arbitration tribunal, to which it or
any of its properties or assets is subject.
Section 3.09. Governmental Approvals and Filings. No consent,
approval or authorization of, or notice to, declaration, filing or registration
with, any domestic or foreign governmental or regulatory authority on the part
of Greenway is required in connection with the execution, delivery and
performance of this Agreement.
Section 3.10. Real Property. Greenway owns no real property.
Section 3.11. Personal Property. Greenway is in possession of
and has good and valid title to all personal property and assets reflected on
the Balance Sheet or acquired after the Balance Sheet Date, subject to no
adverse claims or restrictions on transfer. There are no outstanding options or
rights granted by Greenway to any third person to acquire any such personal
property or any interest in them and, there are no outstanding options or rights
granted by any third party to acquire any such personal property or any interest
in them. Greenway has represented, and TDI accepts, that Greenway has no
personal property or other tangible or intangible assets or interests.
Section 3.12. Financial Statements.
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(a) Greenway will deliver to TDI, prior to closing and as a
condition to closing, the audited balance sheets of Greenway as of June 30, 1998
and the related audited statements of operations, stockholders' equity and cash
flows for the fiscal years then ended, and the notes thereto, together with the
report of Xxxxxx, Xxxxxxx & Xxxxxxx, independent certified public accountants,
thereon.
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(b) The financial statements referred to in Section 3.12(a)
above fairly and accurately present in all material respects the consolidated
financial position, results of operations, stockholders' equity and cash flows
of Greenway as of the relevant date thereof and for the period covered thereby
in accordance with generally accepted accounting principles ("GAAP"). It is
understood by the Parties, Greenway has not maintained any financial accounting
or statements for the periods from 1991 to the above Financial Statements.
(c) Except as set forth in the Balance Sheet, or in the
Schedules hereto, Greenway has no liabilities or obligations, direct or
contingent, accrued or otherwise, of a nature customarily reflected in financial
statements in accordance with GAAP.
Section 3.13. Patents, Trademarks. Service Marks. Trade Names.
Copyrights. Greenway does not own any registered patents, trademarks, service
marks, trade names or copyrights.
Section 3.14. Contracts, Agreements and Obligations. Greenway
is not a party to or is in any way obligated under or subject to:
(a) Any contract or agreement, whether written or oral, with
any officer or employee of Greenway;
(b) Any license, franchise or similar agreement, whether
written or oral;
(c) Any collective bargaining or other labor or union contract
or agreement, whether written or oral;
(d) Any note, bond, indenture or agreement, whether written or
oral, to borrow money or any agreement of guarantee or indemnification, whether
written or oral;
(e) Any agreement or outstanding purchase order, whether
written or oral, relating to capital expenditures involving total payments of
more than $1,000.00;
(f) Any agreement, whether written or oral, relating to the
sales, disposition or acquisition of materials, supplies, goods, services,
equipment or other assets;
Section 3.l5. Insurance. Greenway does not maintain any
insurance policies.
Section 3.16. Absence of Certain Changes. Since the Balance
Sheet Date, there has not been: (a) any physical damage, destruction or loss in
excess of $1,000 to any asset or property of Greenway, ordinary wear and tear
excepted; (b) any declaration, setting aside or payment of any dividend, or any
distribution, in respect of shares of capital stock or other equity or ownership
interests of Greenway, or any redemption, purchase or other acquisition of any
of such shares of capital stock or other securities of, or other equity or
ownership interests in Greenway; (c) any increase in the compensation payable or
to become payable by Greenway to any of its respective directors, officers or
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employees; (d) any change in the authorized and unissued capital stock or other
equity or ownership interest of Greenway or any grant of options, warrants or
other rights or convertible or exchangeable securities calling for the issuance
thereof; (e) any payment by Greenway direct or indirect, of any material
liability before the same becomes due in accordance with its terms or otherwise
than in the ordinary course of its business; (f) any sale or transfer of, or
agreement to sell or transfer, any assets of Greenway; (g) any change in any
accounting principle or practice of Greenway or any change in the Greenway's
business practices; (h) any event, occurrence, development, state of facts or
change in the business which has had, either alone or together with all such
events, occurrences, developments, states of facts or changes, a material
adverse effect on the assets, business, results of operations, affairs,
prospects or financial condition of Greenway; (i) any liability or obligation
incurred or created on the part of Greenway or any creation or assumption by of
Greenway any lien, claim or encumbrance on any asset of Greenway.
Section 3.17. Certain Tax Matters. As of the date hereof, or
prior to closing and as a condition to closing, the most current Tax Return
required to be filed with respect to Greenway for the Taxable Period ending on
or before the date hereof has been or will be timely filed, and the independent
auditors for Greenway will have determined that only the most current returns
need be filed due to the inactivity of Greenway over the past several years or
will subsequently prepare and file delinquent returns as required. It is
understood by the Parties that unless concurrently prepared, no historical tax
returns were filed for Greenway for the period of 1991 to the present and any
returns prior to 1991 have not been located. All currently filed Tax Returns or
Return: (a) were prepared in the manner required by applicable law; (b) are
true, correct, and complete in all respects; and (c) reflect the liability for
Taxes of Greenway. All Taxes shown to be payable on such Tax Returns, and all
assessments of Tax made against Greenway with respect to such Tax Returns, have
been paid when due. No adjustment in such Tax Returns has been proposed formally
or informally by any taxing authority and no basis exists for any such
adjustment. Except for liens for real and personal property Taxes that are not
yet due and payable, there are no liens for any Tax upon any asset of the
Company or of any Material Subsidiary.
Section 3.18. No Litigation, Proceeding or Inquiry. To the
best knowledge and belief of Greenway, its officers, directors or agents, there
is no suit, action, claim or other legal, administrative or arbitration
proceeding pending or, threatened before any court or governmental commission,
bureau or other regulatory authority, and there is no investigation or inquiry
by any administrative agency or governmental body pending or threatened, nor are
there any existing judgments, orders or decrees: (a) against Greenway; or (b)
which challenges the validity or propriety of, or seeks to prevent, alter or
delay, the transactions contemplated by this Agreement.
Section 3.19. Employee Benefit Plans; Labor Matters. Greenway
has no employees and no employee benefit plans.
Section 3.20. Brokers and Finders. No broker or finder other
than Xxxxxx Xxxxxx has acted for Greenway in connection with this Agreement and
the transactions contemplated hereby; and no broker or finder except Xx. Xxxxxx,
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who is entitled to receive 10,000 shares of the Surviving Corporation in such
capacity, is entitled to any brokerage or finder's fee or other commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by Greenway.
Section 3.21. Information Supplied by and Greenway. Neither
this Agreement nor any document referenced herein, nor any certificate,
statement or memorandum furnished pursuant to this Agreement or in connection
herewith by or on behalf of Greenway contains any untrue statement of material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
Section 3.22. SEC Filings; Financial Statements. Greenway has
delivered or will deliver prior to closing and as a condition to closing to each
Owner, in the form filed with the SEC, its Annual Report on Form 10-K for the
newly adopted fiscal year ended June 30, 0000, (xxx "Xxxxxxxx SEC Report") with
information and account brought current to such date for all historical periods
since the last filing in 1991. The Greenway SEC Report did not at the time it
was filed (or if amended or superseded by a filing prior to the date hereof,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
All parties herewith agree Greenway and its present officers
and directors will use their best efforts to insure that Greenway is reinstated
as a Reporting Company under ss.15 (D) of the Securities and Exchange Act of
1934 by the filing of required delinquent reports. It is the understanding of
all parties that Greenway will file an "omnibus" 10-KSB report on the within
transactions and all material historical events since the last filing, along
with current audited Greenway financials to June 30, 1998 and the most current
audited financials supplied by Travel Dynamics. Both parties understand and
agree that the absence of formal objection or comment by the Securities and
Exchange Commission (SEC) will be deemed to constitutes acceptance of such
filing. In the event of any objection or adverse comment of the SEC, Greenway
will employ all reasonable efforts to comply with such additional requests to
include, as necessary, filing historical reports (10-QSB and 10-KSB), or filing
a new Form 10 to become a full Reporting Company. Other than such efforts,
Greenway cannot and does not make any warranty of its future reporting status.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE OWNERS
Each of the Owners severally, and not jointly, represents,
warrants, and agrees as follows:
Section 4.01. Authority; Binding Effect. Each Owner has the
right, power, authority, and capacity to execute and deliver this Agreement and
all other agreements contemplated hereby, to perform the obligations hereunder
and thereunder on its part to be performed and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each Owner of
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this Agreement and all other agreements and documents contemplated hereby and
the performance by each Owner of all obligations on its part to be performed
hereunder and thereunder have been duly approved by all necessary corporate and
other action by each Owner. This Agreement constitutes, and when duly executed
and delivered, all other agreements contemplated hereby to be executed and
delivered by each Owner will constitute, the legal, valid, and binding
obligation of such Owner, enforceable against such Owner in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or affecting
creditors' rights generally and to general equity principles (whether such
enforceability is considered in a proceeding at law or in equity).
Section 4.02. No Creation of Violation. The execution,
delivery and performance of this Agreement by each Owner does not, and the
consummation by each Owner of the transactions contemplated hereby will not: (a)
violate (1) any statute, rule or regulation to which any Owner is subject, or
(2) any order, writ, injunction, decree, judgment or ruling of any court,
administrative agency or governmental body to which any Owner is subject, or (b)
require the consent of any party.
Section 4.03. Offering Exemptions. The Owners each understand
that the shares of Greenway Stock to be acquired hereunder as a result of the
Reverse Acquisition are being issued by Greenway without registration under the
Securities Act of 1933, as amended (the "Securities Act") and without
qualification and/or registration under other applicable securities laws, and
that the shares of Greenway Stock are being issued pursuant to specific
exemptions from registration and/or qualification contained in the Securities
Act and in applicable state securities laws. The respective Owners each
understand that the foregoing exemptions depend upon, among other things, the
bona fide nature of each such Owner's intent as expressed herein and the
accuracy of each such Owner's representations. The respective Owners each
understand that the foregoing exemptions exempt only the issuance of the
Greenway Stock by Greenway to such Owners and not any sale or disposition of
Greenway Stock, or any interest in Greenway Stock, by any Owner. The respective
Owners each understand that the shares of Greenway Stock must be held
indefinitely unless subsequently registered and/or qualified under the
Securities Act and applicable state securities laws or unless exemptions from
such registration and/or qualification are available for a proposed disposition
of Greenway Stock by such Owner. Until that time, the respective Owners each
understand that each certificate evidencing shares of Greenway Stock to be
acquired as a result of the Reverse Acquisition shall bear a legend
substantially to the effect that the shares represented by the certificate have
not been registered under the Securities Act or any state securities laws and
may not be offered or sold except in compliance therewith.
Section 4.04. Acquisition for Investment. Each respective
Owner is acquiring the shares of Greenway Stock to be acquired hereunder for
investment for such respective Owner's own account and not with a view to or
with any present intention to offer or sell in connection with any distribution
or resale thereof.
Section 4.05. Information. Experience, and Ability to Bear
Risk. Each respective Owner acknowledges receipt of all the information
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requested from Greenway and considered by such respective Owner to be necessary
or appropriate for deciding whether to acquire the shares of Greenway Stock to
be acquired hereunder, including, without limitation, the Greenway SEC Reports.
Each respective Owner is an "accredited investor" within the meaning of Rule
501(a) under the Securities Act or, alone or together with a purchaser
representative, has such knowledge and experience in financial and business
matters to enable such Owner to be capable of evaluating the merits and risks
of, and such Owner is able to bear the economic risk of, such Owner's
acquisition of such shares of Greenway Stock pursuant to this Agreement. The
respective Owners have been afforded the opportunity to ask questions and
receive answers regarding the terms and conditions of the acquisition of such
shares of Greenway Stock.
Section 4.06. Brokers and Finders. No broker or finder has
acted for the respective Owner in connection with this Agreement and the
transactions contemplated hereby; and no broker or finder is entitled to any
brokerage or finder's fee or other commission in respect thereof based in any
way on any agreement, arrangement or understanding made by the respective Owner.
Section 4.07. Information Supplied by the Owners. Neither this
Agreement nor any document referenced herein, nor any certificate, statement or
memorandum furnished pursuant to this Agreement or in connection herewith by or
on behalf of the respective Owner contains any untrue statement of material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TDI
TDI hereby represents and warrants to Greenway as follows:
Section 5.01. Corporate Organization; Corporate Documentation.
TDI is a corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada, and has the corporate power and authority and
all material governmental licenses, authorizations, permits, consents and
approvals required to own, license or lease and operate its properties and to
conduct its business as presently conducted by it.
Section 5.02. Corporate Authority: Binding Effect. TDI has the
corporate power and authority to execute and deliver this Agreement and all
other agreements contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by TDI of this Agreement and all other agreements and
documents contemplated hereby and the performance by TDI of all obligations on
its part to be performed hereunder and thereunder have been duly approved by all
necessary corporate action by TDI. This Agreement constitutes, and when duly
executed and delivered by TDI all other agreements contemplated hereby will
constitute, the legal, valid and binding obligation of TDI, enforceable against
TDI, in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
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relating to or affecting creditors' rights generally and to general equity
principles (whether such enforceability is considered in a proceeding at law or
in equity).
Section 5.03. No Creation of Violation, Default, Breach or
Encumbrance. The execution and delivery by TDI of this Agreement do not, and the
consummation by TDI of the transactions contemplated hereby will not: (a)
conflict with or violate any provision of the certificate of incorporation or
by-laws of TDI; (b) result in the breach of or constitute a default under any
material contract, agreement, lease, license, mortgage, indenture, note or other
instrument or obligation to which TDI is a party, which could adversely affect
the ability of TDI to consummate the transactions contemplated by this
Agreement; or (c) violate (1) any statute, rule or regulation to which TDI is
subject, or (2) any order, writ, injunction, decree, judgment or ruling of any
court, administrative agency or governmental body to which TDI is subject.
Section 5.04. No Litigation, Proceeding or Inquiry. There is
no suit, action, claim or other legal, administrative or arbitration proceeding
pending or, to TDI's knowledge, threatened before any court or governmental
commission, bureau or other regulatory authority, and, to TDI's knowledge, there
is no investigation or inquiry by any administrative agency or governmental body
pending or threatened, nor are there any existing judgments, orders or decrees
which challenges the validity or propriety of, or seeks to prevent, alter or
delay, the transactions contemplated by this Agreement.
Section 5.05. Governmental Approvals and Filings. No consent,
approval or authorization of, or notice to, declaration, filing or registration
with, any governmental or regulatory authority on the part of TDI is required in
connection with the execution, delivery and performance of this Agreement.
ARTICLE VI
COVENANTS OF THE PARTIES
Section 6.01. Access to Properties and Records: Confidentiality.
------------- --------------------------------------------------
(a) Between the date of this Agreement and the Closing Date,
Greenway will provide TDI and its accountants, counsel and other authorized
representatives, full access, during reasonable business hours and under
reasonable circumstances, to any and all premises, properties, contracts,
commitments, books, records and other information (including Tax Returns filed
and those in preparation and any tax related agreements) of Greenway.
(b) The parties acknowledge that paragraph 8 of the Letter of
Intent between the parties, dated August 28, 1998 (the "Letter of Intent")
contains a provision regarding confidentiality and that all access and
investigations referred to above will be conducted in accordance with and will
be governed by the terms thereof.
Section 6.02. Press Releases and 8-K. The parties shall
cooperate in the preparation of a press release with respect to the execution
and delivery of this Agreement and the transactions contemplated hereby, which
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press release shall be released and made available to the public promptly
following the date hereof. Neither TDI or Greenway shall issue any other press
release or make any other public announcement with respect to the transactions
contemplated by this Agreement without the prior consent of each of the others,
except as may be required by law in the opinion of counsel (in which event each
of the other parties shall be timely notified of the opinion of counsel that a
press release or ether public announcement is so required by law). Counsel for
Greenway will promptly prepare and file with the SEC, after the execution of
this agreement, an 8-K Report reporting this transaction and agreement,
inclusive of the Financial Statements for both entities and intent to resume
filing SEC Reports.
Section 6.03. Further Assurances. Consistent with the terms
and conditions hereof, each party hereto will execute and deliver such other
instruments and take such other action as any other party hereto may reasonably
require in order to carry out this Agreement and the transactions contemplated
hereby.
Section 6.04. Conduct of Greenway's Business Prior to the
Closing Date. Greenway agrees that it shall not conduct any business, operations
or activities outside of the ordinary course of its business.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF TDI
The obligations of TDI under this Agreement to consummate the
Reverse Acquisition and take the other actions contemplated at the Closing shall
be subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, each of which may be waived by TDI as provided herein
except as otherwise provided by law:
Section 7.01. Greenway's Certifications. The representations
and warranties of Greenway contained in this Agreement shall have been true and
correct as of the date hereof and shall be true and correct in all material
respects (except for such representations and warranties which are qualified by
their terms by reference to materiality, which representations and warranties as
so qualified shall be true and correct in all respects) as of the Closing Date
with the same effect as though made as of the Closing Date and each of the
agreements or obligations of Greenway to be performed on or before the Closing
Date pursuant to the terms hereof have been performed and complied with in all
material respects.
Section 7.02. Authorization of Transactions. All corporate
action necessary to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by
Greenway shall have been duly and validly taken in a manner reasonably
satisfactory to TDI and its counsel.
Section 7.03. No Injunctions, etc. Greenway shall not be
subject to any rule, regulation, order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the consummation of
the Reverse Acquisition, or the issuance of Greenway Stock.
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Section 7.04. No Litigation. No litigation or proceeding shall
have been instituted or, to the parties' knowledge, threatened after the date of
this Agreement by any governmental agency or other person or entity seeking to
restrain or prohibit the performance of, or to obtain damages or other relief in
conjunction with, this Agreement or any of the transactions contemplated hereby
that: (a) has a reasonable possibility of success on the merits; and (b) if
decided in favor of the agency, person or entity who instituted the same, would
have a material adverse effect on Greenway.
Section 7.05. Resignations. Greenway shall have delivered (or
caused to be delivered) written resignations to TDI, effective as of the
Closing, of all directors of Greenway from their directorships and of all
officers of Greenway from their respective as requested by TDI.
Section 7.06. Reverse Split and Cancelled Shares. Greenway
shall have completed a 19.5 to 1 reverse stock split, by Closing, such that
after the reverse split, and prior to the Reverse Acquisition shares issued to
the owners, or the 10,000 Reorganization shares, there shall be approximately
1,220,000 shares of Greenway stock outstanding. The Parties mutually stipulate
and agree that there are currently approximately 775,600 shares (39,750 reverse
split), issued pursuant to a prior cancelled reorganization in 1991 to a Xx.
Xxxxxxx Xxxx Xxxxxxx which have been cancelled of record, but not physically
returned. The Parties further stipulate and agree that the representations of
outstanding shares do not include these shares and that TDI agrees to accept all
rights, risks and liabilities which may arise as to such shares. It is further
undersood and agreed, as a condition to Closing, that an Escrow of 40,000
reverse split Greenway shares will be established in writing and funded to
secure an indemnity to TDI as to any adverse claim arising out of the "Xxxxxxx
Shares" described by this Section for a period of one year from the date of this
Agreement. A copy of the Escrow\Indemnity referenced by this Section will be
attached hereto and incorporated by this reference as Exhibit "B".
Section 7.07. Legal Opinion. TDI shall receive an opinion of
Greenway's counsel to the effect that he knows of no currently presented claims
or debts of Greenway, further does not believe such claims exist and that it
appears any historical claims which may exist, but which are not know, would
most likely be barred by an applicable statute of limitations or laches.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF GREENWAY
The obligations of Greenway under this Agreement to consummate
the Reverse Acquisition and take the other actions contemplated at the Closing
shall be subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, each of which may be waived by Greenway as provided
herein except as otherwise provided by law:
Section 8.01. Buyer's Certification. The representations and
warranties of TDI contained in this Agreement shall have been true and correct
as of the date hereof and shall be true and correct in all material respects
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(except for such representations and warranties which are qualified by their
terms by reference to materiality, which representations and warranties as so
qualified shall be true and correct in all respects) as of the Closing Date with
the same effect as though made as of the Closing Date and each of the agreements
or obligations of TDI to be performed on or before the Closing Date pursuant to
the terms hereof have been performed and complied with in all material respects.
Section 8.02. Authorization of Transactions. All corporate
action necessary to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by TDI
shall have been duly and validly taken in a manner reasonably satisfactory to
Greenway and its counsel.
Section 8.03. No Injunctions. etc. TDI shall not be subject to
any rule, regulation, order, decree or injunction of a court or agency of
competent jurisdiction which enjoins or prohibits the consummation of the
Reverse Acquisition.
Section 8.04. No Litigation. No litigation or proceeding shall
have been instituted or, to the parties' knowledge, threatened after the date of
this Agreement by any governmental agency or other person or entity seeking to
restrain or prohibit the performance of, or to obtain damages or other relief in
conjunction with, this Agreement or any of the transactions contemplated hereby
that: (a) has a reasonable possibility of success on the merits; and (b) if
decided in favor of the agency, person or entity who instituted the same, would
have a material adverse effect on Greenway or TDI.
ARTICLE IX
TERMINATION AND ABANDONMENT OF THE REVERSE ACQUISITION
Section 9.01. Termination. This Agreement may be terminated at
any time prior to the Closing: (a) by mutual consent of Greenway and TDI; (b) by
TDI at any time if results of the investigations conducted disclose any adverse
effects related to which TDI, in its discretion, determines is material to the
assets, business, financial condition, or results of operations of Greenway; (c)
by TDI if there is a material breach by Greenway of any representation,
warranty, covenant or other agreement contained in this Agreement; (d) by
Greenway if there is a material breach by TDI of any representation, warranty,
covenant or other agreement contained in this Agreement; or (e) by either
Greenway or TDI if the Reverse Acquisition shall not have been consummated on or
before November 1, 1998, for reasons other than the failure of the terminating
party to perform its obligations hereunder.
Section 9.02. Effect of Termination. If this Agreement is
terminated pursuant to this Article IX by any party hereto for any reason other
than the breach of a warranty, representation, covenant or agreement contained
herein by the other, all further obligations of the parties hereunder will
terminate without further liability of the parties.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Headings. The descriptive headings of the
Articles and Sections of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.
Section 10.02. Notices. Any notices or other communications
required or permitted hereunder shall be given in writing and shall be delivered
personally, sent by certified or registered mail, return receipt requested and
postage prepaid, or sent by nationally recognized overnight delivery service to
the address set forth below:
If to TDI or Xxx Xxxxxxx, President
the Owners: Travel Dynamics, Inc.
0000 X. Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
If to Greenway: Greenway Environmental Systems, Inc.
000 Xxxx Xxxxx Xxxxxx, #000
Xxxx Xxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
or such other address as shall be furnished in writing by such party, and any
such notice or communications shall be effective and be deemed to have been
given only upon its delivery in accordance with this Section 10.02.
Section 10.03. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs, legal representatives and
permitted assigns, but neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties.
Section 10.04. Complete Agreement. This Agreement and
paragraphs 8 and 9 of the Letter of Intent contain the entire understanding of
the parties with respect to the Reverse Acquisition and the related transactions
and supersede all prior arrangements or understandings with respect thereto, and
there are no restrictions, agreements, promises, representations, warranties,
covenants or undertakings other than those expressly set forth in this Agreement
paragraphs 8 and 9 of the Letter of Intent .
Section 10.05. Modifications' Amendments and Waivers. At any
time prior to the Closing Date: (a) the parties hereto may, by written
agreement, modify, amend or supplement any term or provision of this Agreement;
and (b) any term or provision of this Agreement may be waived by the party which
is entitled to the benefits thereof.
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Section 10.06. Counterparts and Facsimile Signatures. This
Agreement may be executed in two or more counterparts all of which shall be
considered one and the same agreement and each of which shall be deemed an
original. Facsimile signatures shall be deemed rebuttabley valid as to the
execution of this Agreement.
Section 10.07. No Third Party Beneficiary. The terms and
provisions of this Agreement are intended solely for the benefit of the parties
hereto and their respective successors or permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any other
person.
Section 10.08. Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby: (a) such
provision will be fully severable; (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; and (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance therefrom.
Section 10.09. Governing Law. This Agreement shall be governed
by the laws of the State of Nevada (regardless of the laws that might be
applicable under principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect and performance.
Section 10.10. Designation of Agent. Each of the Owners hereby
designates and appoints Xxx Xxxxxxx (the "Agent") as his or her agent and
attorney-in-fact (with full power of substitution), with full power and
authority in behalf of such Owners to do anything necessary or appropriate to
carry out or enforce any obligations or rights of the Owners under this
Agreement. The Agent shall have all of the rights of the Owners hereunder and
any action taken by, or the failure to take action by, the Agent, shall be
deemed to be the action of, or the failure to take action by, each of the
Owners. Each of the Owners is hereby deemed to have constituted and appointed
the Agent as agent for such Owner for the purpose of receiving or accepting any
notice under this Agreement and any notice or process insofar as the same
relates to or arises from any dispute or difference hereunder, and the giving or
delivery of notice to, or service of process on, the Agent shall be deemed to be
notice or service on each of the Owners. Any notice or instructions given by the
Agent under this Agreement shall be deemed to be notice and instruction from,
and in behalf of, each of the Owners and any party receiving said notice or
instruction shall be entitled to rely conclusively thereon as if such notice or
instructions had been signed and delivered by each of the Owners. Agent shall
have no liability or responsibility to the Owners for any action or failure to
act pursuant to the provisions of this Section 10.10, provided such action or
failure to act is in good faith.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
GREENWAY ENVIRONMENTAL
SYSTEMS, INC.
By:/s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
Its: President
TRAVEL DYNAMICS, INC.
By:/s/ Xxx Xxxxxxx
------------------------------
Xxx Xxxxxxx
Its: President
OWNERS:
/s/ Xxxxxxx Kasber /s/ Xxxxx Xxxxxx
------------------------------ ------------------------------
Xxxxxxx Xxxxxxx Xxxxx Xxxxxx
/s/ Xxx Xxxxxx /s/ Xxx Xxxxxx
------------------------------ ------------------------------
Xxx Xxxxxx Xxx Xxxxxx
/s/ Xxx Sheidell /s/ Xxxxxx Xxxxxxx
------------------------------ ------------------------------
Xxx Sheidell Xxxxxx Xxxxxxx
Target Mail, LLC Esteem Corporation
By:/s/ Xx. X. Xxxxxxx By: Xx. Xxx Xxxxxxx
------------------------------ ------------------------------
Xx. X. Xxxxxxx Xx. Xxx Xxxxxxx
Its Manager Its: President
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EXHIBIT A
--------------------------------------------------------------------------------
Stock Ownership of TDI
--------------------------------------------------------------------------------
Name Number of Shares
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 310,000
Xxxxx Xxxxxx 45,000
Xxx Xxxxxx 100,000
Xxx Xxxxxx 100,000
Xxx Sheidell 100,000
Esteem Corp. 130,305
Target Mail, LLC 67,695
--------------------------------------------------------------------------------
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