EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION DATED AS NOVEMBER 1, 2002
BY AND AMONG GALAXY INVESTMENTS, INC.,
DOLPHIN ACQUISITION CORPORATION, AND DOLPHIN ENERGY CORPORATION
AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF
NOVEMBER 1, 2002
BY AND AMONG
GALAXY INVESTMENTS, INC.,
DOLPHIN ACQUISITION CORPORATION,
AND
DOLPHIN ENERGY CORPORATION
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER 2
ARTICLE II CONVERSION OF SECURITIES 4
ARTICLE III COVENANTS OF DOLPHIN 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF DOLPHIN 14
ARTICLE V COVENANTS, REPRESENTATION AND
WARRANTIES OF GALAXY AND ACQCORP 22
ARTICLE VI APPROVAL BY HOLDERS 28
ARTICLE VII CONDITIONS OF CLOSING 29
ARTICLE VIII CLOSING OF MERGER 32
ARTICLE IX TERMINATION 33
ARTICLE X ADDITIONAL COVENANTS 34
Exhibit A Articles of Merger
Exhibit B Articles of Merger
Schedule 4.2 Dolphin Shareholder List
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "AGREEMENT") is made
and entered into by and among GALAXY INVESTMENTS, INC., a Colorado corporation
("GALAXY"), DOLPHIN ACQUISITION CORPORATION ("ACQCORP"), a Colorado corporation
and DOLPHIN ENERGY CORPORATION, a Nevada corporation ("DOLPHIN").
R E C I T A L S:
A. GALAXY is a corporation duly organized and existing under the laws
of the State of Colorado, with its principal place of business located in
Vancouver, British Columbia. GALAXY is authorized by its Articles of
Incorporation, as amended, to issue (i) 25,000,000 shares of preferred stock,
each of $.001 par value ("GALAXY PREFERRED STOCK"), none of which is issued and
outstanding, and (ii) 100,000,000 shares of common stock, each of $.001 par
value ("GALAXY COMMON STOCK"), of which as of September 30, 2002, there were
9,028,000 shares issued and outstanding.
B. AcqCorp is a company duly organized under the laws of the State of
Colorado, with its principal place of business located in Vancouver, British
Columbia. AcqCorp is authorized by its Articles of Incorporation to issue
25,000,000 shares of common stock, each of no par value ("ACQCORP COMMON
STOCK"), of which as of the date of this Agreement there were 1,000 shares
issued and outstanding. GALAXY owns beneficially and of record all of the issued
and outstanding shares of AcqCorp Common Stock.
C. DOLPHIN is a corporation duly organized and existing under the laws
of the State of Nevada, with its principal place of business located in Miami,
Florida. DOLPHIN is authorized by its Certificate of Incorporation to issue
100,000,000 shares of common stock, $.0001 par value ("DOLPHIN COMMON
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STOCK"), of which, as of September 30, 2002, there were 20,997,058 shares issued
and outstanding.
D. The parties hereto desire that AcqCorp be merged with and into
DOLPHIN (the "MERGER") pursuant to this Agreement and the Articles of Merger in
the form attached hereto as EXHIBIT A (the "ARTICLES OF MERGER").
A G R E E M E N T:
NOW, THEREFORE, in consideration of foregoing and the respective
representations, warranties, covenants, agreements and conditions set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, covenant and agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER.
(a) Pursuant to the laws of the States of Colorado and Nevada,
and subject to the terms and conditions of this Agreement, at the effective time
of the Articles of Merger (the "EFFECTIVE TIME"), DOLPHIN and AcqCorp (sometimes
referred to herein as the "MERGING ENTITIES") shall consummate the Merger
pursuant to which (a) AcqCorp shall be merged with and into DOLPHIN, and the
separate corporate existence of AcqCorp shall thereupon cease; (b) DOLPHIN shall
be the successor or surviving corporation in the Merger and shall continue to be
governed by the laws of the State of Nevada (the "SURVIVING CORPORATION"); and
(c) the separate corporate existence of DOLPHIN with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in this Article I. DOLPHIN, as the Surviving
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Corporation, shall thereupon and thereafter possess all the rights, privileges,
powers and franchises, of a public as well as a private nature, and shall be
subject to all restrictions, disabilities and duties of the Merging Entities;
and all property, real, personal and mixed and all debts due to the Merging
Entities on whatever account, including subscriptions for shares and all other
things in action or belonging to the Merging Entities shall be taken and deemed
to be vested in DOLPHIN without further act or deed. DOLPHIN shall thenceforth
be responsible for all the debts, liabilities and duties of each of the Merging
Entities and may be prosecuted to judgment as if the Merger had not taken place,
or DOLPHIN may be substituted in place of the Merging Entities and neither the
rights of creditors nor any liens upon any property of either shall be impaired
by the Merger.
(b) As of the Effective Time, the certificate of incorporation
of DOLPHIN as in effect immediately prior to the Merger shall be the certificate
of incorporation of the Surviving Corporation until thereafter amended as
provided by law and such certificate of incorporation. As of the Effective Time,
the bylaws of DOLPHIN as in effect immediately prior to the Effective Time shall
be the bylaws of the Surviving Corporation until thereafter amended as provided
by law and such bylaws of the Surviving Corporation.
1.2 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The directors
and officers of DOLPHIN at the Effective Time shall serve in their respective
positions until their successors shall have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and the bylaws of DOLPHIN.
1.3 SUBSEQUENT ACTIONS. If, at any time after the Merger, DOLPHIN shall
consider or be advised that any deeds, bills of sale, assignments, assurances,
or any other actions or things are necessary or desirable to vest, perfect, or
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confirm of record or otherwise in DOLPHIN its right, title, or interest in, to,
or under any of the rights, properties, or assets of AcqCorp acquired or to be
acquired by DOLPHIN as a result of or in connection with the Merger, or
otherwise to carry out this Agreement, the officers and directors of DOLPHIN
shall be authorized to execute and deliver all such deeds, bills of sale,
assignments, and assurances, and to make and do, in the name and on behalf of
AcqCorp or otherwise, all such other actions and things as may be necessary or
desirable to vest, perfect, or confirm any right, title, and interest in, to,
and under such rights, properties, or assets in DOLPHIN or otherwise to carry
out this Agreement.
ARTICLE II
CONVERSION OF SECURITIES
2.1 CONVERSION OF COMMON STOCK OF MERGING ENTITIES.
(a) CONVERSION OF DOLPHIN COMMON STOCK. In accordance with this
Agreement, as of the Effective Time, by virtue of the Merger and without any
further action on the part of the holders of any shares of DOLPHIN Common Stock,
each issued and outstanding share of DOLPHIN Common Stock (of which there shall
be no more than 20,997,058 shares) other than shares as to which dissenters'
rights are perfected ("DISSENTING SHARES"), and all rights in respect thereof,
shall be converted, IPSO FACTO, into the right to receive the Merger
Consideration.
As of the Effective Time, all such shares of DOLPHIN Common Stock,
shall no longer be outstanding and shall automatically be canceled and
exchanged. Each holder of a certificate representing any shares of DOLPHIN
Common Stock shall cease to have any rights with respect thereto, except the
right to receive,
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upon the surrender of any such certificates, the Merger Consideration upon the
terms and subject to the conditions set forth herein.
(b) The "MERGER CONSIDERATION" for each share of DOLPHIN Common
Stock being converted into GALAXY Common Stock shall be one duly authorized,
validly issued, fully paid and nonassessable share of GALAXY Common Stock;
PROVIDED, HOWEVER, if, prior to the Effective Time, GALAXY should split,
reclassify or combine the GALAXY Common Stock, or pay a stock dividend or other
stock distribution in GALAXY Common Stock, as of a record date prior to the
Effective Time, appropriate adjustment or adjustments (rounded to four digits to
the right of the decimal point) will be made to the Merger consideration so that
the total number of shares of GALAXY Common Stock to be issued in the
transaction will maintain the proportional interest in GALAXY Common Stock which
the shareholders of DOLPHIN would otherwise have received.
(c) GALAXY STOCK. All shares of GALAXY Common Stock that are
outstanding immediately prior to the Merger shall continue to be outstanding
after the Merger.
2.2 THE MERGING COMPANIES.
(a) ACQCORP COMMON STOCK. All shares of AcqCorp Common Stock
which are outstanding immediately prior to the DOLPHIN Merger shall continue to
be outstanding immediately after the DOLPHIN Merger as the shares of Dolphin.
(b) DOLPHIN COMMON STOCK. As of the Effective Time, each issued
and outstanding share of DOLPHIN Common Stock and all rights in respect thereof
shall no longer be outstanding and shall automatically be canceled and
exchanged, except as a right to receive the Merger Consideration.
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2.3 DISSENTING SHARES.
(a) Notwithstanding any provision of this Agreement to the
contrary, Dissenting Shares shall not be converted into or represent a right to
receive the Merger Consideration pursuant to Section 2.1 hereof, but the holder
thereof shall be entitled to only such rights as are granted by Nevada law.
(b) Notwithstanding the provisions of Section 2.3(a) above, if
any shareholder of DOLPHIN Common Stock who demands appraisal of such holder's
shares of DOLPHIN Common Stock under Nevada law effectively withdraws or loses
(through failure to perfect or otherwise) his or her right to appraisal, then as
of the Effective Time or the occurrence of such event, whichever later occurs,
such holder's shares of DOLPHIN Common Stock shall automatically be converted
into and represent only the right to receive the Merger Consideration as
provided in Section 2.1. hereof, without interest, upon surrender of the
certificate or certificates representing such shares of DOLPHIN Common Stock
pursuant to Section 2.5 hereof.
(c) DOLPHIN shall give GALAXY (i) prompt notice of any written
demands for appraisal or payment of the fair value of any shares of DOLPHIN
Common Stock and (ii) withdrawals of such demands in connection with the Merger.
Except with the prior written consent of GALAXY, DOLPHIN shall not voluntarily
make any payment with respect to any demands for appraisal, settle or offer to
settle any such demands.
2.4 EXCHANGE OF SHARES AND CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time, GALAXY shall
deposit with National Stock Transfer, Inc. or such other bank or trust company
as may be designated by GALAXY (the "EXCHANGE AGENT"), for the benefit of the
holders of shares of DOLPHIN Common Stock, for exchange in
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accordance with this Article II, through the Exchange Agent, certificates
representing the shares of GALAXY Common Stock issuable pursuant to Section 2.1.
hereof in exchange for outstanding shares of DOLPHIN Common Stock.
(b) EXCHANGE PROCEDURES; TRANSFER OF SHARES. As soon as
reasonably practicable after the Effective Time, the Exchange Agent shall mail
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time represented outstanding shares of DOLPHIN Common
Stock (the "CERTIFICATES") whose shares were converted into the right to receive
shares of GALAXY Common Stock pursuant to Section 2.1. hereof (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as GALAXY may reasonably specify and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of GALAXY Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by GALAXY, together with documents as may reasonably be required by
the Exchange Agent, the holder of such Certificate shall be entitled to receive
in exchange therefor a certificate representing that whole number of shares
which such holder has the right to receive pursuant to the provisions of this
Article II , and the Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of ownership of DOLPHIN Common Stock which is not
registered in the transfer records of DOLPHIN, a certificate representing the
proper number of shares of GALAXY Common Stock may be issued to a person other
than the person in whose name the Certificate so surrendered is registered, if
such Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or the
taxes required by reason of the issuance of shares of GALAXY Common Stock to a
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person other than the registered holder of such Certificate or establish to the
satisfaction of GALAXY that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.5, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration as contemplated by this
Section 2.5.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to GALAXY Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of GALAXY Common Stock
represented thereby, until the surrender of such Certificate in accordance with
this Article II.
(d) NO FURTHER OWNERSHIP RIGHTS IN DOLPHIN COMMON STOCK; NO
TRANSFER FOLLOWING THE CLOSING DATE. All shares of GALAXY Common Stock issued
upon the surrender for exchange of Certificates in accordance with the terms of
this Article II shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of DOLPHIN Common Stock
theretofore represented by such Certificates, and there shall be no further
registration of transfers on the stock transfer books of DOLPHIN with respect to
shares outstanding prior to the Effective Time. If, after the Effective Time,
Certificates are presented to DOLPHIN or the Exchange Agent for any reason, they
shall be canceled and exchanged as provided in this Article II, except as
otherwise provided by law.
(e) FRACTIONAL SHARES.
(i) No certificates representing fractional shares of
GALAXY Common Stock shall be issued upon the surrender for exchange of
Certificates or the cancellation of Warrants, and such fractional share
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interests shall not entitle the owner thereof to vote or to any other
rights of a stockholder of GALAXY.
(ii) Notwithstanding any other provision of this
Agreement, each person who otherwise would have been entitled to
receive a fraction of a share of GALAXY Common Stock (after taking into
account all Certificates delivered by such holder) shall have such
fraction rounded to the nearest whole share. For example, if a DOLPHIN
shareholder would be entitled to a fractional .33 share of GALAXY
Common Stock based on the application of the Exchange Ratio as adjusted
for cancelled Warrants, that fraction would be rounded down to 0, and
no additional Merger Consideration would be allowed. Alternatively, a
fraction of .5 or larger would result in rounding to 1, resulting in
one additional GALAXY share allocated to that person.
(f) NO LIABILITY. Neither DOLPHIN, AcqCorp, GALAXY nor the
Exchange Agent shall be liable to any person in respect of any shares of GALAXY
Common Stock delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificates shall not have been
surrendered prior to seven years after the Effective Time, or immediately prior
to such earlier date on which any shares of GALAXY Common Stock, or any
dividends or distributions with respect to GALAXY Common Stock in respect of
such Certificate would otherwise escheat to or become the property of any
Governmental Entity, any such shares, cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by applicable law,
become the property of DOLPHIN free and clear of all claims or interest of any
person previously entitled thereto.
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ARTICLE III
COVENANTS OF DOLPHIN
3.1 CONDUCT OF BUSINESS PENDING THE CLOSING. Except as otherwise
contemplated hereby, between the date hereof and the Effective Time, or the time
when this Agreement terminates as provided herein, DOLPHIN shall conduct its
operations and business in the usual and ordinary course of business and
consistent with past practice and will use commercially reasonable efforts to
retain for the benefit of GALAXY the continuing services of the present officers
and employees of DOLPHIN, to preserve the goodwill of customers and others
having business relations with DOLPHIN, to preserve the properties of DOLPHIN,
to preserve the benefits of all contractual relationships with others and to
keep in force at least at their present limits all policies of insurance
currently in effect. Without limiting the generality of the foregoing, and
except as otherwise specifically permitted by this Agreement, during the period
from the date hereof to the Effective Time, DOLPHIN shall not, without the prior
written authorization of GALAXY:
(a) CHANGE IN CAPITAL STOCK; ISSUANCE OF SHARES. Make any
change in authorized capital stock, or issue, agree to issue or permit DOLPHIN
to become obligated to issue any shares of their capital stock, or securities
convertible into their capital stock;
(b) OPTIONS, WARRANTS, AND RIGHTS. Grant or issue any options,
warrants or other rights, including stock appreciation rights, of any kind
relating to the purchase of shares of capital stock, or securities convertible
into capital stock;
(c) DIVIDENDS. Declare or pay any dividends or other
distributions on any shares of capital stock.
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(d) PURCHASE OF SHARES. Purchase or otherwise acquire, or agree
to acquire, any shares of stock, other than in a fiduciary capacity;
(e) BENEFIT PLANS. Except as required by law, or, with the
consent of GALAXY, to terminate any employee benefit plans or to enter into or
amend any pension, retirement, stock option, stock appreciation, profit sharing,
deferred compensation, consultant, bonus, group insurance or similar benefit
plan in respect of any of their directors, officers or other employees;
(f) CONDUCT OF BUSINESS. Except as contemplated by this
Agreement, take or omit to take any action which (i) causes DOLPHIN not to
conduct business in a manner consistent with normal business practices,
including with respect to the hydrocarbon assets of DOLPHIN, (ii) has a Material
Adverse Effect on the financial condition (present or prospective), businesses,
properties, assets or operations of DOLPHIN (the parties hereto recognize that
the operation of DOLPHIN until the Effective Time is the responsibility of
DOLPHIN and its Board of Directors and officers; nevertheless, DOLPHIN shall
keep GALAXY advised of all important changes in the financial condition (present
or prospective), business, properties, assets or operations of DOLPHIN);
(g) ACQUISITIONS AND MERGERS. Acquire or merge with any other
company or acquire any branch or other significant part of the assets of any
other company;
(h) LIENS; INDEBTEDNESS; INCREASE IN COMPENSATION, ETC. Except
in the ordinary course of business, (i) mortgage, pledge or subject to a lien or
any other encumbrance of any assets, dispose of any assets, incur or cancel any
indebtedness or claims, purchase or lease any assets having a purchase price or
lease cost, in the aggregate, of more than $10,000.00, increase any compensation
or benefits payable to officers or employees, except to pay routine merit
increases
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in accordance with past practices and costs associated with the transactions
contemplated under this Agreement.
(i) AMENDMENTS TO CHARTER, ETC. Amend its Certificate of
Incorporation or make any material amendments to Bylaws that would interfere in
any manner with the transactions contemplated by this Agreement.
3.2 INVESTIGATION; ACCESS. DOLPHIN shall diligently endeavor to (i)
take or cause to be taken all action required under this Agreement on its part
to be taken as promptly as practicable so as to permit the consummation of the
transactions contemplated by this Agreement at the earliest possible date and
cooperate fully with GALAXY and AcqCorp to that end, including, without
limitation, providing to GALAXY and AcqCorp, and their respective employees,
accountants and counsel, access to DOLPHIN's books, records, reports, tax
returns and facilities and to its employees, accountants, and counsel; PROVIDED,
however, that such investigation to be conducted by GALAXY and AcqCorp shall be
performed in such a manner which will not unreasonably interfere with the normal
operations, or customer or employee relations, of DOLPHIN and shall be in
accordance with procedures established by the parties having due regard for the
foregoing, and (ii) furnish all necessary information for inclusion in any
applications relating to the consents, approvals and permissions of regulatory
authorities referred to in Article VII.
GALAXY covenants and agrees that GALAXY and its representatives,
counsel, accountants, agents and employees will hold in strict confidence all
documents and information concerning DOLPHIN received from any of them (except
to the extent that such documents or information are a matter of public record
or require disclosure in the Proxy Statement, or any of the public information
of any applications required to be filed with any governmental or regulatory
agency to obtain the approvals and consents required to effect the
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transactions contemplated hereby), and if the transactions contemplated herein
are not consummated, such confidence shall be maintained and all such documents
shall be returned to DOLPHIN.
3.3 REGULATORY APPROVALS. DOLPHIN shall (i) use best efforts in good
faith to assist GALAXY in obtaining all necessary regulatory approvals and
taking or causing to be taken all other action required under this Agreement on
its or their part to be taken as promptly as practicable so as to permit the
consummation of the transactions contemplated by this Agreement at the earliest
possible date, and cooperate fully with GALAXY and AcqCorp to that end, and (ii)
furnish all necessary information for inclusion in any applications relating to
the consents, approvals, and permissions of regulatory authorities. DOLPHIN
shall have the right to review all applications to such regulatory authorities
before the filing thereof and to comment upon the form of such applications and
the information contained therein. DOLPHIN knows of no reasons why the
transactions contemplated by this Agreement should not be approved by any
applicable regulatory authorities.
3.4 INFORMATION FOR INFORMATION STATEMENT. Upon request by GALAXY,
DOLPHIN shall timely prepare and deliver to GALAXY, in such form required by
rules and regulations of the United States Securities and Exchange Commission
(the "SEC"), all information, descriptions, accounting reports and schedules
(including audited financial statements in the form required by Regulation S-X
of the SEC, as may be required) and other materials required for preparation and
filing of the Information Statement contemplated by this Agreement.
3.5 NOTIFICATION OF ACTIONS. DOLPHIN will immediately notify GALAXY and
AcqCorp in the event of any action or occurrence that materially affects any of
the covenants set forth in this Article III.
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3.6 CONSENTS. Within twenty (20) days from the signing of this
Agreement, DOLPHIN shall deliver to GALAXY written consents from shareholders of
DOLPHIN holding in excess of a majority of all issued and outstanding shares of
DOLPHIN Common Stock. Said proxies shall provide for a YES vote in favor of the
Merger as contemplated in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DOLPHIN
As an inducement to GALAXY and AcqCorp to enter into this Agreement,
and in addition to any representations and warranties made elsewhere in this
Agreement, DOLPHIN represents and warrants to and agrees with GALAXY and AcqCorp
as of the date of this Agreement and as of the Closing Date as follows:
4.1 ORGANIZATION, CONDUCT OF BUSINESS, ETC. DOLPHIN (i) is duly
organized and validly existing and in good standing under the laws of the State
of Nevada, (ii) has all requisite power and authority (corporate and other) to
own its properties and conduct its business as now being conducted, (iii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification necessary, except where
failure to so qualify would not have a Material Adverse Effect, as defined in
Section 10.5, below, on DOLPHIN or its businesses, operations, properties,
assets or condition (financial or otherwise), and (iv) is not transacting
business, or operating any properties owned or leased by it in violation of any
provision of federal or state law or any rule or regulation promulgated
thereunder, which violation would have a Material Adverse Effect on DOLPHIN or
its businesses, operations, properties, assets or condition (financial or
otherwise). DOLPHIN does not own any equity interest in any other business
organization and DOLPHIN is not a party to any joint venture
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or similar enterprise other than in the ordinary course of business in
connection with the exploration and development of hydrocarbon resources.
4.2 CAPITALIZATION. The authorized capital stock of DOLPHIN consists of
100,000,000 shares of DOLPHIN Common Stock. As of the date hereof, there are
20,997,058 shares of DOLPHIN Common Stock issued and outstanding. The
outstanding shares of DOLPHIN Common Stock and the holders of record thereof are
identified on Schedule 4.2 hereto. All of the outstanding shares of capital
stock of DOLPHIN have been duly authorized and are validly issued, fully paid
and nonassessable.
4.3 AUTHORIZATION; VALIDITY OF AGREEMENT. DOLPHIN has the corporate
power and authority to execute and deliver this Agreement. This Agreement has
been duly and validly approved by the Board of Directors of DOLPHIN, has been
duly executed and delivered on behalf of DOLPHIN, and, subject to approval by
the shareholders of DOLPHIN, constitutes a valid and binding agreement of
DOLPHIN, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, liquidation, receivership,
conservatorship, insolvency, moratorium or other similar laws affecting the
rights of creditors generally and by general equitable principles.
4.4 DOLPHIN FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES. DOLPHIN's
Balance Sheet and its Statement of Income and of Cash Flow for the period ended
September 30, 2002, heretofore delivered to GALAXY (hereinafter the "FINANCIAL
STATEMENTS"), were prepared in accordance with generally accepted accounting
principles consistently applied (except for such interim statement which
requires year-end adjustments) and present fairly DOLPHIN's financial condition,
results of operations and changes in cash flow as of such date.
Except as and to the extent stated in the Financial Statements
delivered or to be delivered pursuant to this Section 4.4, and except for those
liabilities
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incurred in the normal course of DOLPHIN's business or as contemplated by this
Agreement, DOLPHIN has no material liabilities or obligations, secured or
unsecured (whether accrued, absolute, contingent or otherwise), and whether due
or to become due, including but not limited to liabilities on account of taxes,
other governmental charges or lawsuits subsequently brought. Further, there are
no suits, actions or proceedings pending or, to the knowledge of DOLPHIN or any
of their directors or officers, threatened, or any contingent liability which
would give rise to any right of indemnification on the part of any director or
officer of DOLPHIN or his or her heirs, executors or administrators, as against
DOLPHIN or any successor to the business of DOLPHIN.
4.5 ENVIRONMENTAL MATTERS. For purposes of this Section 4.5, the term
"environmental laws" shall include all state and federal laws designed to
protect human health or the environment, as amended from time to time, and all
regulations promulgated thereunder, including, without limitation, the Clean Air
Act, 42 X.X.X.X.xx.xx. 7401, ET SEQ., the Comprehensive Environmental Response,
Compensation and Liability Act, 42 X.X.X.X.xx.xx. 9601, ET SEQ., the Federal
Water Pollution Control Act, 33 X.X.X.X.xx.xx. 1251, ET SEQ., the Resource
Conservation and RecoveRY Act, 42 X.X.X.X.xx.xx. 6901, ET SEQ., and the Toxic
Substances Control Act, 15 X.X.X.X.xx.xx. 2601, ET SEQ. "Hazardous substance"
shall include all petroleum products as well as any toxic or hazardous material,
hazardous waste or other hazardous or regulated substance defined in or
regulated by any environmental law, provided that hazardous substance shall not
include commercially available consumer products.
To the best knowledge of DOLPHIN after due inquiry, neither DOLPHIN,
nor any property of DOLPHIN is subject to any pending or potential claim,
liability or obligation to any person arising under any environmental law. With
respect to the real property owned or leased by DOLPHIN (including other real
estate), to the best knowledge of DOLPHIN after due inquiry:
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(a) No such property is presently contaminated by, and no such
property has ever been used or is presently being used by any person to
generate, manufacture, refine, transport, treat, store, handle or dispose of,
any hazardous substance in any regulated form or quantity.
(b) No such property has ever contained or presently contains,
or has been used or is being used by any person for storage of, asbestos,
ureaformaldehyde foam insulation, PCB's, dioxins, mercury, lead or uranium (or
other heavy metal) products or tailings, or any other hazardous substance in any
regulated form or quantity, whether contained in construction or fill materials
or used or stored thereon or therein.
(c) Neither DOLPHIN nor any other tenant or occupant of any
such property has received a summons, citation, directive, letter, notice of
violation, request for information or other communication, written or oral, from
any local, state or federal agency concerning any possible intentional or
unintentional action or omission on the part of any person which has resulted in
the possible release of any hazardous substance affecting such property or
concerning any other possible violation of any environmental law affecting the
property.
(d) To the extent any permit, approval or registration is or
has been required to be obtained or maintained under any environmental law with
respect to any such property, any improvement of or on any such property or any
activity occurring on any such property, each such permit, approval or
registration has been obtained and is in good standing. In addition, all such
permits, approvals and registrations have been disclosed to GALAXY in writing.
(e) No such property contains or has ever contained any storage
tank used or intended for use to store any hazardous substance.
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4.6 TITLE TO PROPERTIES. Except as reflected in the Financial
Statements delivered or to be delivered pursuant to Section 4.4, and except as
set forth in the documents supplied to GALAXY and its Counsel, DOLPHIN owns,
free and clear of any liens, claims, charges, options, or other encumbrances,
all of the property, real, personal or mixed, reflected in the Financial
Statements and all property acquired since such date. DOLPHIN has not received
any notice of violation of any applicable zoning regulation, ordinance or other
law, order, regulation or requirement relating to its operations or its
properties. To DOLPHIN's knowledge, there are no such violations of material
nature, and all buildings and structures used by DOLPHIN substantially conform
with all applicable ordinances, codes and regulations. In DOLPHIN's opinion, all
such properties which are material to the business or operations of DOLPHIN are
in a good state of maintenance and repair and are adequate for its current uses
and purposes. DOLPHIN has delivered to GALAXY true and correct copies of all
deeds, title insurance policies and surveys each has with respect to the real
property owned by them and copies of all leases with respect to real property
leased by them.
4.7 ABSENCE OF DEFAULTS. The execution of this Agreement and the
Articles of Merger does not and performance of the transactions contemplated by
them will not (assuming DOLPHIN stockholder approval and applicable regulatory
approval) (a) violate the provisions of the Certificate of Incorporation or
Bylaws of DOLPHIN, or (b) violate the provisions of or place DOLPHIN in default
under any agreement, indenture, mortgage, lien, lease, contract, instrument,
order, judgment, decree, ordinance, statute, or regulation to which DOLPHIN is
subject, to which any property of DOLPHIN is subject, or to which DOLPHIN is a
party, which violations or defaults would in the aggregate have a Material
Adverse Effect on the business, operations, properties, assets, or condition
(financial or otherwise) of DOLPHIN.
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4.8 ACTIONS, PROCEEDINGS AND INVESTIGATIONS. There is no litigation,
administrative or other proceeding to which DOLPHIN is a party, except for such
proceedings in which DOLPHIN may be seeking to collect on a loan or lease
transaction and no counterclaim or similar claim has been filed against DOLPHIN.
There are no actions, proceedings or investigations pending, or, to the
knowledge of the executive officers of DOLPHIN, threatened or contemplated
against or relating to DOLPHIN or any of its properties or assets (and said
officers are not aware of any facts that would give rise to any such claim),
which would have a Material Adverse Effect on the financial condition (present
or prospective), businesses, properties, assets or operations (present or
prospective) of DOLPHIN, or the ability of DOLPHIN to consummate the Merger
contemplated hereby.
4.9 ABSENCE OF BROKERAGE COMMISSIONS, ETC. All negotiations relative to
this Agreement and the transactions contemplated hereby have been carried on by
DOLPHIN directly with GALAXY and AcqCorp without the participation or
intervention of any other person, firm or corporation employed or engaged by or
on behalf of DOLPHIN in such a manner as to give rise to any valid claim against
DOLPHIN, or GALAXY or AcqCorp, for a brokerage commission, finder's fee or like
payment.
4.10 MATERIAL CONTRACTS. Except for those documents which have been
provided by DOLPHIN to GALAXY, DOLPHIN is not a party to or bound by any
commitment, agreement or other instrument which (i) is material to the business,
operations, properties, assets or financial condition of DOLPHIN; (ii) limits
the freedom of DOLPHIN to compete in any line of business or with any person; or
(iii) requires DOLPHIN to transfer funds (other than in the ordinary course of
business), to make an investment in or guarantee the debt of any entity. DOLPHIN
is not a party to any contract or agreement, including but not limited to any
lease, service contract or employment agreement which (i) provides for a
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remaining term in excess of two (2) years from and after the date hereof, and
(ii) provides for a total payment thereunder in excess of $20,000.00.
4.11 COMPLIANCE WITH LAWS; DOCUMENTATION. To the best knowledge of
DOLPHIN, after due inquiry: the conduct by DOLPHIN of its businesses does not
violate or infringe any domestic or foreign laws, statutes, ordinances, rules or
regulations, the enforcement of which, individually or in the aggregate, would
have a Material Adverse Effect on the business, operations, properties, assets
or condition (financial or otherwise) of DOLPHIN; and DOLPHIN has complied in
all material respects with every local, state or federal law or ordinance, and
every regulation or order issued thereunder, now in effect and applicable to
DOLPHIN.
4.12 EMPLOYEE BENEFITS.
(a) There is no employee benefit, compensation or welfare
benefit plan, program or agreement maintained or contributed to or required to
be contributed to by DOLPHIN (the "PLANS"). DOLPHIN has no formal plan or
commitment, whether legally binding or not, to create any additional Plan or
modify or change any existing Plan that would affect any employee or terminated
employee of DOLPHIN.
(b) Other than as supplied to GALAXY, there are no employment
agreements entered into by DOLPHIN and no other deferred compensation or salary
continuation agreements or commitments maintained or agreed to by DOLPHIN.
(c) The consummation of the transactions contemplated by this
Agreement will not (either alone or upon the occurrence of any additional acts
or events) (A) entitle any current or former employee of DOLPHIN to severance
pay, employment compensation or any other payment, benefit or award, or
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(B) accelerate or modify the time of payment or vesting, or increase the amount
of any benefit, award or compensation due any such employee.
4.13 TAXES AND TAX RETURNS. DOLPHIN has filed all federal, state and
local tax returns and forms (including but not limited to forms 1099), which are
required by law to be filed or delivered as of the date hereof and have paid all
taxes which have become due.
4.14 CONSENTS AND APPROVALS Except for (i) the filing of the Articles
of Merger with the respective Secretaries of State of Colorado and Nevada, and
(ii) the approval of its stockholders, no consents or approvals of, or filings
or registration with, any governmental entity or with any third party are
necessary in connection with (A) the execution and delivery by DOLPHIN of this
Agreement or (B) the consummation by DOLPHIN of the transactions contemplated by
this Agreement.
4.15 SECTION 280G. No payment received by any person as a result of the
transactions contemplated hereby shall constitute an "excess parachute payment"
within the meaning of section 280G of the Code.
4.16 DISCLOSURE . No representation or warranty by DOLPHIN contained in
this Agreement, nor any statement or certificate furnished or to be furnished by
DOLPHIN to GALAXY or AcqCorp or their representatives in connection herewith or
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact required to make the
statements herein or therein contained not misleading or necessary in order to
provide a prospective purchaser of the business of DOLPHIN with adequate
information as to DOLPHIN and its condition (financial or otherwise),
properties, assets, liabilities, business and prospects, and DOLPHIN have
disclosed to GALAXY and AcqCorp in writing all material adverse facts known to
them relating to same.
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ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES OF GALAXY AND ACQCORP
As an inducement to DOLPHIN to enter into this Agreement, and in
addition to any representations and warranties made elsewhere in this Agreement,
GALAXY and AcqCorp jointly and severally covenant, represent and warrant to and
agree with DOLPHIN as of the date of this Agreement and as of the Closing Date
as follows:
5.1 ORGANIZATION, CONDUCT OF BUSINESS, ETC. GALAXY and AcqCorp (i) are
each duly organized and validly existing and in good standing under the laws of
the State of Colorado, (ii) have all requisite power and authority (corporate
and other) to own their respective properties and conduct their respective
businesses as now being conducted, (iii) are each duly qualified to do business
and are in good standing in each jurisdiction in which the character of the
properties owned or leased by them therein or in which the transaction of their
respective businesses makes such qualification necessary, except when failure to
so qualify would not have a Material Adverse Effect on GALAXY and its
consolidated subsidiaries, and (iv) are not transacting business, or operating
any properties owned or leased by any of them, in violation of any provision of
federal or state law or any rule or regulation promulgated thereunder, which
violation would have a Material Adverse Effect on GALAXY and its consolidated
subsidiaries.
5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. GALAXY and AcqCorp each
have the corporate power and authority to execute and deliver this Agreement.
Within five (5) days of the date hereof, this Agreement will have been duly and
validly approved by the Board of Directors of GALAXY and AcqCorp, will have been
duly executed and delivered on their behalf, and will
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constitute a valid and binding agreement of each of GALAXY and AcqCorp,
enforceable in accordance with its terms.
5.3 GALAXY REPORTS. Since December 17, 1999, GALAXY and its
consolidated subsidiaries have filed all reports, registrations and statements,
together with any amendments required to be made with respect thereto, that were
required to be filed with (i) the SEC, including but not limited to Form 10-K,
Form 10-Q, Form 8-K and proxy statements, (ii) and other applicable state
securities authorities. All such reports and statements filed with the SEC and
other applicable state securities authorities are collectively referred to
herein as the "GALAXY REPORTS." As of their respective dates, to the best
knowledge of the officers of GALAXY, the GALAXY Reports complied in all material
respects with all the statutes, rules and regulations enforced or promulgated by
the regulatory authority with which they were filed and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading.
5.4 GALAXY FINANCIAL STATEMENTS; TAX RETURNS. GALAXY's Consolidated
Balance Sheets as of November 30, 2000 and November 30, 2001, and its
Consolidated Statements of Income and Consolidated Statements of Cash Flow for
the years then ended, heretofore delivered to DOLPHIN, were prepared in
accordance with generally accepted accounting principles consistently applied
and present fairly its consolidated financial condition, results of operations
and changes in financial position as of such dates and for such periods. GALAXY
will provide a copy of its Consolidated Balance Sheet and its Consolidated
Statement of Income and Consolidated Statement of Cash Flow as of August 31,
2002 when available. GALAXY has filed all federal, state and local tax returns
and forms (including but not limited to Forms 1099), which are required by law
to be filed or delivered as of the date hereof and have paid all taxes which
have become due.
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Where payment of such taxes is not required to be made as of the date hereof,
GALAXY has set up an adequate reserve or accrual for the payment of all taxes
required to be paid in respect of the periods covered by such returns.
Except as and to the extent stated in the GALAXY Financial Statements
provided by GALAXY to DOLPHIN and except for those liabilities incurred in the
normal course of GALAXY's or any of its subsidiaries' respective businesses,
GALAXY and its consolidated subsidiaries do not have any material liabilities or
obligations, secured or unsecured (whether accrued, absolute, contingent or
otherwise).
5.5 ABSENCE OF MATERIAL ADVERSE CHANGES. Since November 30, 2001, there
has been no change, and no development involving a reasonably foreseeable
prospective change, in or affecting the financial condition (present or
prospective), businesses, properties or operations of GALAXY and its
consolidated subsidiaries that either individually or in the aggregate has had
or is likely to have a Material Adverse Effect on GALAXY and its consolidated
subsidiaries.
5.6 ABSENCE OF DEFAULTS UNDER AGREEMENTS. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will conflict with or result in a breach of or constitute a default under
any provision of GALAXY's or AcqCorp's respective Articles of Incorporation,
Bylaws, or any agreement to which GALAXY or AcqCorp is a party or by which
either of them is bound or to which any of their respective properties is
subject, or result in the creation of any liens or encumbrances upon their
respective assets, and no consents or waivers thereunder are required to be
obtained in connection with the transactions contemplated hereby.
5.7 ACTIONS, PROCEEDINGS, AND INVESTIGATIONS. Except as set forth in
GALAXY's filings with the SEC, there are no actions, proceedings or
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investigations pending, or to the knowledge of the executive officers
of GALAXY, threatened or contemplated, against or relating to GALAXY or any of
its consolidated subsidiaries, or any of their respective properties, which
would have a Material Adverse Effect on the financial condition (present or
prospective), businesses, properties or operations of GALAXY and its
consolidated subsidiaries, or the ability of GALAXY or AcqCorp to consummate the
Merger contemplated hereby.
5.8 REGULATORY APPROVALS. GALAXY and AcqCorp shall (i) use their best
efforts in good faith to take or cause to be taken all action required under
this Agreement on their part to be taken as promptly as practicable so as to
permit the consummation of the transactions contemplated by this Agreement at
the earliest possible date, and cooperate fully with DOLPHIN to that end, and
(ii) furnish all necessary information for inclusion in any applications or
disclosures contemplated by this Agreement. GALAXY shall give DOLPHIN prompt
notice of receipt of the regulatory approvals and shall provide DOLPHIN with
copies of any written comments by any regulatory authorities regarding or
relating to the non-confidential portions of the regulatory applications filed
in connection with the transactions contemplated hereby.
5.9 GALAXY COMMON STOCK. All of the outstanding GALAXY Common Stock is
duly authorized and validly issued, fully paid and nonassessable. The GALAXY
Common Stock to be issued and delivered pursuant to the Merger, when issued as
contemplated hereby, shall be duly authorized, validly issued, fully paid and
nonassessable.
5.10 REGISTRATION OF SHARES. Following the Effective Time, GALAXY will
use its best efforts to cause a Registration Statement on Form S-3 or other
appropriate form (the "REGISTRATION STATEMENT") to be filed and declared
effective under the Securities Act of 1933, as amended (the "1933 ACT"), with
respect to all
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of the shares of GALAXY Common Stock issued and outstanding as of the date of
this Agreement, and with respect to all shares of GALAXY Common Stock to be
issued in connection with the transactions contemplated by this Agreement to
those shareholders listed on Schedule 5.10, which Registration Statement, at the
time it becomes effective, and at the Effective Time, shall in all material
respects conform to the requirements of the 1933 Act and the General Rules and
Regulations of the SEC under said Act (the "1933 RULES"), and the GALAXY Common
Stock to be issued by GALAXY in connection with the Merger shall be duly
qualified or exempted, as the case may be, under applicable state Blue Sky
securities laws in those states in which DOLPHIN has informed GALAXY that its
shareholders reside. GALAXY will furnish to DOLPHIN, its counsel, investment
banker and accountants drafts of Registration Settlement filings sufficiently in
advance of filing so as to afford a reasonable opportunity for review and
comment.
5.11 NOTIFICATION OF ACTIONS. GALAXY and AcqCorp covenant and agree to
immediately notify DOLPHIN in the event of the breach of any of the covenants
set forth in this Article V.
5.12 OTC LISTING. GALAXY shall have taken all actions necessary to
obtain ongoing bid and ask quotations for GALAXY Common Stock on the NASD Over
the Counter Bulletin Board ("OTC BB") before the signing of this Agreement and
will take all needed steps to maintain a trading market in GALAXY Common Stock
through the time until the Effective Time.
5.13 INDEMNIFICATION. GALAXY agrees that all rights to indemnification
or exculpation now existing in favor of the directors and officers of DOLPHIN as
provided in its charters, bylaws, indemnification agreements or otherwise in
effect as of the date hereof with respect to matters occurring prior to the
Effective Time shall, to the greatest extent permitted by applicable law and the
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organizational documents of GALAXY as in effect, survive the Merger and shall
continue in full force and effect for a period of three (3) years. If GALAXY or
any of its successors or assigns (i) shall consolidate with or merge into any
other corporation or entity and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) shall transfer
all or substantially all of its properties and assets to any individual,
corporation or other entity, then, and in each such case, GALAXY shall use its
commercially reasonable efforts to cause such successor and assigns of GALAXY to
assume the obligations set forth in this Section 5.12.
5.14 LIMITATIONS ON GALAXY'S CONDUCT PRIOR TO THE EFFECTIVE TIME.
Between the date hereof and the Effective Time or the time when this Agreement
terminates as provided herein, GALAXY shall not, without prior written consent
of DOLPHIN, take any action which would or is reasonably likely to (i) adversely
affect GALAXY's ability to perform its covenants and agreements under this
Agreement; or (iii) result in any of the conditions to the performance of
GALAXY's obligations hereunder not being satisfied.
5.15 ACCESS TO INFORMATION. Upon reasonable request by DOLPHIN,
GALAXY'S officers, representatives, counsel, accountants and agents to discuss
GALAXY's business, and GALAXY shall provide to DOLPHIN and its representatives,
at their request, copies of all filings made with the SEC between the date
hereof and the Closing. DOLPHIN covenants and agrees that it and its
representatives, counsel, accountants and agents will hold in strict confidence
all documents and information concerning GALAXY or any of its subsidiaries so
obtained (except to the extent that such documents or information are a matter
of public record or required to be disclosed by applicable law or administrative
rules), and if the transactions contemplated herein are not consummated, such
confidence shall be maintained and all such documents shall be returned to
GALAXY.
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5.16 BOARD POSITIONS AND EXECUTIVE OFFICER ELECTIONS. GALAXY hereby
agrees to elect six (6) members nominated by DOLPHIN to serve as members of the
Board of Directors of GALAXY for a term commencing as of the Closing Date and
upon the election of their successors. GALAXY further agrees to obtain the
resignations of the current members of its Board of Directors to be effective at
the Closing Date and following the election of the DOLPHIN nominees.
ARTICLE VI
APPROVAL BY STOCKHOLDERS AND SHAREHOLDERS
6.1 DOLPHIN APPROVAL BY WRITTEN CONSENT OF STOCKHOLDERS. This Agreement
shall be submitted to the stockholders of DOLPHIN for approval, ratification and
confirmation pursuant to an action by written consent in accordance with the
laws of the State of Nevada.
6.2 ACQCORP ACTION BY UNANIMOUS WRITTEN CONSENT. This Agreement shall
be submitted to the sole shareholder of AcqCorp for approval, ratification and
confirmation pursuant to an Action by Unanimous Written Consent in accordance
with the applicable provisions of Colorado law as promptly as practicable after
the execution of this Agreement. GALAXY owns all of the issued and outstanding
shares of AcqCorp Common Stock and will vote all of such shares in favor of this
Agreement.
6.3 GALAXY SHAREHOLDERS. Under Colorado law, GALAXY shareholder
approval is not required for the merger.
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ARTICLE VII
CONDITIONS OF CLOSING
7.1 CONDITIONS OF CLOSING FOR ALL PARTIES.
(a) NO INJUNCTION, ETC. There shall not have been instituted
any litigation, regulatory proceeding or other matter which challenges the
legality or effectiveness of the transactions contemplated hereby or seeks an
order, decree or injunction enjoining or prohibiting the consummation of the
Merger.
(b) SECTION 280G. There shall have been no payments received by
any person as a result of the transactions contemplated hereby that would
constitute an "excess parachute payment" within the meaning of Section 280G of
the Code.
7.2 CONDITIONS OF CLOSING FOR GALAXY AND ACQCORP. The obligation
of GALAXY and AcqCorp, respectively, to consummate the transactions contemplated
by this Agreement is conditioned upon the following:
(a) STOCKHOLDER APPROVAL. The stockholders of DOLPHIN shall
have approved this Agreement and the Merger contemplated hereby.
(b) DOLPHIN RESOLUTIONS; CORPORATE DOCUMENTS. DOLPHIN shall
have delivered to GALAXY (i) a certified copy of its Articles of Incorporation;
(ii) a copy of its bylaws certified by its corporate secretary, (iii) a
certificate of good standing dated as of the Closing Date, issued by the
appropriate governmental agency, (iv) certified copies of resolutions duly
adopted by its Board of Directors approving this Agreement and directing the
submission thereof to a vote of its shareholders, and (v) certified copies of
resolutions duly adopted by the shareholders of DOLPHIN approving this Agreement
and the Merger, all as contemplated hereby.
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(c) DOLPHIN REPRESENTATIONS AND WARRANTIES. Unless waived in
writing by AcqCorp and GALAXY, the representations and warranties of DOLPHIN
contained in this Agreement shall be true and correct on and as of the Closing
Date with the same effect as though made on and as of such date. Except as
otherwise contemplated by this Agreement, DOLPHIN shall have performed in all
material respects all of its obligations and agreements hereunder theretofore to
be performed by it.
(d) CONDITION OF DOLPHIN. GALAXY shall have determined, based
on an audit and review by its officers, accountants and legal counsel, conducted
prior to the execution of this Agreement and updated as of the Closing Date, as
provided below, that (i) the assets, books, records and operations of DOLPHIN
are in reasonably satisfactory condition and will not adversely impact GALAXY
after consummation of the Merger; (ii) based on the review of the assets, books,
records and operations of DOLPHIN by GALAXY, there are no liabilities (existing,
threatened or contingent) which GALAXY, in its discretion, determines to be
unacceptable, as determined by reference to this Agreement; and (iii) the assets
of DOLPHIN shall be as represented to GALAXY.
7.3 CONDITIONS OF CLOSING FOR DOLPHIN. The obligation of DOLPHIN to
consummate the transactions contemplated by this Agreement is conditioned upon
the following:
(a) GALAXY AND ACQCORP REPRESENTATIONS AND WARRANTIES. Unless
waived in writing by DOLPHIN, the representations and warranties of GALAXY and
AcqCorp contained in this Agreement shall be correct on and as of the Closing
Date with the same effect as though made on and as of such date, except for
changes which are not, in the aggregate, material and adverse to the financial
condition, businesses, properties or operations of GALAXY and its consolidated
subsidiaries, and, except as otherwise contemplated by this
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Xxxxxxxxx, XXXXXX and AcqCorp shall have performed in all material respects all
of their obligations and agreements hereunder theretofore to be performed by
them..
(b) OPINION OF GALAXY COUNSEL. Unless waived in writing by
DOLPHIN, DOLPHIN shall have received at the Closing from counsel to GALAXY, a
written opinion, dated the Closing Date, substantially in a form acceptable to
DOLPHIN.
(c) GALAXY RESOLUTIONS; CORPORATE DOCUMENTS. GALAXY shall have
delivered to DOLPHIN a certified copy of resolutions duly adopted by the Board
of Directors of GALAXY approving this Agreement, the Merger, all as contemplated
hereby. GALAXY shall deliver to DOLPHIN (i) a copy certified by the Colorado
Secretary of State's Office of GALAXY's Articles of Incorporation; (ii) a copy
of GALAXY's Bylaws certified by the Corporate Secretary, and (iii) a certificate
of good standing dated as of a recent date, issued by the Colorado Secretary of
State's office.
(d) SHAREHOLDER APPROVAL. GALAXY, as the sole shareholder of
AcqCorp, shall have approved the Agreement. The required stockholder approval by
DOLPHIN stockholders will have been obtained.
(e) NAME CHANGE. DOLPHIN shall have received acceptable
evidence that GALAXY has legally changed its name to GALAXY ENERGY CORPORATION,
and that shares of GALAXY Common Stock are trading over the counter through the
OTC BB under a symbol acceptable to DOLPHIN.
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ARTICLE VIII
CLOSING OF MERGER
8.1 CLOSING. Unless the Agreement is earlier terminated in accordance
with Article IX, below, the closing of the transactions contemplated herein (the
"CLOSING") shall take place at 10:00 a.m. on a date to be agreed upon by the
parties, and if such date is not agreed upon by the parties, the Closing shall
occur on the fifth business day after satisfaction or waiver of all of the
conditions precedent set forth in Article VII , but in no event later than
thirty (30) days after the expiration of such period (the "CLOSING DATE"), at
the offices of Xxxx X. Xxxxxxxxx, Esq., Xxxxxxxxx & Associates, 000 X. 00xx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000.
8.2 FILING OF ARTICLES OF MERGER.
(a) DOLPHIN shall execute Articles of Merger in substantially
the form attached hereto as EXHIBIT A and shall cause such Articles of Merger to
be filed with the Nevada Secretary of State's Office, on the Closing Date or as
soon thereafter as practicable.
(b) GALAXY and AcqCorp shall execute Articles of Merger in
substantially the form attached hereto as EXHIBIT B and shall cause such
articles of merger to be filed with the Colorado Secretary of State's office, on
the Closing Date or as soon thereafter as practicable.
(c) The Effective Time of the Merger shall be on such date as
the Colorado Secretary of State and the Nevada Secretary of State, under their
respective rules and regulations, deem the Merger effective.
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ARTICLE IX
TERMINATION
9.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time:
(a) by mutual consent of the Board of Directors of GALAXY and
AcqCorp, respectively, and the Board of Directors of DOLPHIN; or
(b) by the Boards of Directors of GALAXY and AcqCorp,
respectively, or the Board of Directors of DOLPHIN at any time after the
expiration of three (3) months from the date hereof, if the Merger shall not
theretofore have been consummated by the failure to satisfy the conditions to
Closing not within the control of the electing party; or
(c) by DOLPHIN, upon written notice to GALAXY and AcqCorp at
any time if any representation or warranty of GALAXY and AcqCorp contained in
this Agreement was materially incorrect when made or becomes materially
incorrect on or prior to the Closing Date, or if GALAXY or AcqCorp fail to
comply with any of their respective covenants contained in this Agreement, and
the same is not cured within thirty (30) days after notice of such inaccuracy or
noncompliance; or
(d) by GALAXY and AcqCorp upon written notice to DOLPHIN at any
time if any representation or warranty of DOLPHIN contained in this Agreement
was materially incorrect when made or becomes materially incorrect on or prior
to the Closing Date, or if DOLPHIN fails to comply with any of their covenants
contained in this Agreement, and the same is not cured within thirty (30) days
after notice of such inaccuracy or noncompliance; or
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(e) by GALAXY and AcqCorp, upon written notice to DOLPHIN at
any time if the needed approval by DOLPHIN shareholders does not take place or
if the Merger is disapproved by any governmental authority; or
9.2 EFFECT OF TERMINATION. In the event of termination and abandonment
hereof pursuant to the provisions of Section 9.1, this Agreement shall become
void and have no force or effect. Such termination shall not relieve any party
of any liability for damages arising out of its willful breach of any provision
of this Agreement for any default prior to such termination.
ARTICLE X
ADDITIONAL COVENANTS
10.1 EMPLOYEE MATTERS. No provision of this Agreement shall be
construed to prohibit DOLPHIN from having the right to terminate the employment
of any employee, with or without cause, or to amend or terminate after the
Closing Date any employee benefit plan established, maintained or contributed to
by DOLPHIN or its subsidiaries.
10.2 COSTS. Each of the parties to this Agreement shall pay its own
charges and costs incurred or to be incurred in connection with the execution
and performance of this Agreement. In the event of a willful breach of a
material agreement or covenant contained herein by DOLPHIN, on the one hand, or
GALAXY and AcqCorp, on the other, which breach either directly or indirectly
results or would result in a failure to consummate the Merger, and which breach
cannot be cured or is not cured within thirty (30) days after written notice of
such breach is given to the party committing such breach, the party causing such
breach shall be liable to the other party for damages for an amount not to
exceed $250,00,000. Either party may elect to forego the recovery of damages and
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pursue its right to the specific performance or enforcement of the terms and
provisions of this Agreement.
10.3 INSTRUMENTS OF TRANSFER, ETC. Each of the parties hereto shall
cooperate with the other parties in every way in carrying out the transactions
contemplated herein, in delivering instruments to perfect the conveyances,
assignments and transfers contemplated herein, and in delivering all documents
and instruments reasonably deemed necessary or useful by counsel for any party
hereto.
10.4 NOTICES. All notices, requests, consents and demands shall be
given to or made upon the parties at their respective addresses set forth below,
or at such other address as a party may designate in writing delivered to the
other parties. Unless otherwise agreed in this Agreement, all notices, requests,
consents and demands shall be given or made by personal delivery, by confirmed
air courier, by facsimile transmission ("FAX"), with a copy to follow by first
class mail, or by certified first class mail, return receipt requested, postage
prepaid, to the party or parties addressed as aforesaid. If sent by confirmed
air courier, such notice shall be deemed to be given upon the earlier to occur
of the date upon which it is actually received by the addressee or the business
day upon which delivery is made at such address as confirmed by the air courier
(or if the date of such confirmed delivery is not a business day, the next
succeeding business day). If mailed, such notice shall be deemed to be given
upon the earlier to occur of the date upon which it is actually received by the
addressee or the second business day following the date upon which it is
deposited in a first-class postage-prepaid envelope in the United States mail
addressed as aforesaid. If given by fax, such notice shall be deemed to be given
upon the date it is actually received by the addressee, as confirmed by the fax
activity report generated upon transmission of such fax.
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(a) IF TO GALAXY AND ACQCORP, TO:
GALAXY INVESTMENTS, INC
Xxxxx 000
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X000
Xxxxxx
Attention: Xxxx Xxxxxx, President
Fax:
WITH A COPY TO:
Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx & Associates
000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Fax: 000 000-0000
(b) IF TO DOLPHIN, TO:
DOLPHIN ENERGY CORPORATION
Suite 1708
0000 Xxxxxxxx Xxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
President
Fax:
WITH A COPY TO:
Xxxxxxx X. Xxxxxxx, Esq.
503 University Tower
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
Fax: 000 000-0000
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Each party hereto shall notify promptly the other in writing of the
occurrence of any event which will or may result in the failure to satisfy the
conditions specified in Article VII hereof. Between the date of this Agreement
and the Closing Date, each party hereto will advise the other of the
satisfaction of such conditions as they occur.
10.5 AMENDMENTS. Prior to the Effective Time, any provision of this
Agreement, may be amended or modified at any time, either before or after its
approval, if any, by the shareholders of any party to this Agreement, by an
agreement in writing between the parties hereto approved by their respective
Boards of Directors and executed in the same manner as this Agreement.
10.6 ENTIRE AGREEMENT. This Agreement and all exhibits and schedules
hereto and other documents incorporated or referred to herein, contain the
entire agreement of the parties and there are no representations, inducements or
other provisions other than those expressed in writing. No modification, waiver
or discharge of any provision of or breach of this Agreement shall (i) be
effective unless it is executed in writing by the party effecting such
modification, waiver or discharge, or (ii) affect the right of either party
hereto thereafter to enforce any other provision or to exercise any right or
remedy in the event of a breach by a party hereto, whether or not similar.
10.7 ASSIGNMENT. This Agreement may not be assigned by any party hereto
except with the prior written consent of the other parties.
10.8 COUNTERPARTS. Any number of counterparts of this Agreement may be
signed and delivered and each shall be considered an original and together they
shall constitute one agreement.
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10.9 PUBLIC STATEMENTS. No party to this Agreement shall issue any
press release or other public statement concerning the transactions contemplated
by this Agreement without first providing the other parties hereto with a
written copy of the text of such release or statement and obtaining the consent
of the other parties respecting such release or statement, which consent will
not be unreasonably withheld. The consent provided for in this Section 10.9
shall not be required if the delay necessary to obtain such consent would
preclude the timely issuance of a press release or public statement as required
by law. The provisions of this Section 10.9 shall not be construed as
prohibiting the filing of copies of this Agreement or descriptions of this
Agreement with (i) regulatory agencies as to which regulatory approvals are
contemplated by this Agreement or (ii) the SEC consistent with GALAXY's
obligations as a company whose shares are registered pursuant to the Securities
Exchange Act of 1934.
10.10 CONFIDENTIALITY. Each party shall use all information that it
obtains from the others pursuant to this Agreement solely for the effectuation
of the transactions contemplated by this Agreement or for other purposes
consistent with the intent of this Agreement and shall not use any of such
information for any other purpose, including, without limitation, the
competitive detriment of the other parties. Each party shall maintain as
strictly confidential all information it learns from the others and shall, upon
expiration or termination of this Agreement, return promptly to the other
parties all documentation (and copies thereof) provided by them or made
available by third parties. Each party may disclose such information to its
respective affiliates, counsel, accountants, tax advisors and consultants. This
provision shall not prohibit the use or disclosure of confidential information
pursuant to court order or which has otherwise become publicly available.
10.11 ALTERNATIVE STRUCTURE. Notwithstanding anything to the contrary
contained in this Agreement, prior to the Closing, the parties may mutually
agree
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to revise the structure of the Merger and related transactions provided
that each of the transactions comprising such revised structure shall (i) not
change the amount or form of consideration to be received by the holders of
DOLPHIN Common Stock, (ii) be capable of consummation in as timely a manner as
the structure contemplated herein and (iii) not otherwise be prejudicial to the
interest of the stockholders of DOLPHIN. This Agreement and any related
documents shall be appropriately amended in order to reflect any such revised
structure.
10.12 THIRD PARTIES. Except with respect to the consideration due to
each shareholder of DOLPHIN, each party hereto intends that this Agreement shall
not benefit or create any right or cause of action to any person other than
parties hereto. As used in this Agreement, the term "parties" shall refer only
to DOLPHIN, AcqCorp, or GALAXY as the context may require.
10.13 SEVERABILITY. Except to the extent that application of this
Section 10.13 would have a Material Adverse Effect on either party, any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions shall be interpreted to be only as broad as is
enforceable.
10.14 CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement.
10.15 DEFINITION OF "MATERIAL ADVERSE EFFECT". As used in this
Agreement, "Material Adverse Effect" shall mean with respect to a person, a
Material Adverse Effect upon (A) the business, financial condition, operations,
or prospects of such person, or (B) the ability of such person to timely perform
its
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obligations under the Agreement and to timely consummate the Merger;
PROVIDED, however, that in determining whether a Material Adverse Effect has
occurred there shall be excluded any effect on the referenced party the cause of
which is (i) any change in laws, rules or regulations of general applicability
or interpretations thereof by courts or governmental authorities, (ii) any
change in generally accepted accounting principles or regulatory accounting
principles applicable to companies or their holding companies generally, (iii)
any action or omission of DOLPHIN or any subsidiary taken with the prior written
consent of GALAXY, as applicable, or permitted by this Agreement, and (iv) any
changes in general economic conditions affecting natural gas companies or their
holding companies generally.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this 1st day of November, 2002.
GALAXY INVESTMENTS, INC.
By /S/ XXXX XXXXXXX
----------------------------------------
DOLPHIN ACQUISITION CORPORATION
By /S/ XXXX XXXXXXX
-----------------------------------------
DOLPHIN ENERGY CORPORATION
By /S/ XXXX X. XXXXXX
-----------------------------------------
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