AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT (the "Plan") is made this 24th day of December, 1997,
between Environmental Pyrogenics, Inc., a Nevada corporation ("EPI");
Versatech Manufacturing, Inc., a Texas corporation ("Versatech"); and the
persons listed in Exhibit A hereof who are the owners of record of all of the
outstanding common stock of Versatech and who execute and deliver a copy of
this Plan (the "Versatech Stockholders").
EPI wishes to acquire all of the outstanding common stock of
Versatech in exchange for common stock of EPI in a transaction qualifying as a
tax-free exchange pursuant to Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended; and
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, IT IS AGREED:
Section 1
Exchange of Stock
1.1 Number of Shares. The Versatech Stockholders agree to
transfer to EPI at the closing (the "Closing") 100% of the outstanding
securities of Versatech, which are listed in Exhibit A hereof attached hereto
and incorporated herein by reference (the "Versatech Shares"), in exchange for
3,000,000 post-split shares (as outlined below in Section 1(i) hereof) of the
one mill ($0.001) par value "unregistered" and "restricted" common voting
stock of EPI, amounting to sixty percent (60%) of EPI's post-Plan outstanding
shares (see Sections 1(ii), (iii), (iv) and (v) below [taking into account the
issuance of the shares of common stock of EPI outlined therein and the reverse
split outlined in Section 1(ii) hereof, there will be 2,000,000 pre-Plan
outstanding post-split shares of EPI]) and, to-wit:
(i) Prior to the completion of the Plan, EPI shall
reverse split its outstanding common and preferred
stock on a basis of 157.7668 for one (reducing the
common outstanding shares [7,888,334 shares] to 50,000
post-split shares and the preferred outstanding shares
[934,167 non-convertible shares having a $0.25 per
share liquidation preference and, subject to Board of
Director approval, a $0.03125 per share yearly
dividend or $29,192 in the aggregate] to 5,921 post-
split shares), while retaining their respective
current par values and authorized shares, with
appropriate adjustments in the additional paid in
capital and stated capital accounts of EPI;
(ii) EPI shall issue 450,000 post-split shares of its
"unregistered" and "restricted" common stock for non-
capital raising services rendered and pursuant to a
written compensation agreement and Rule 701 of the
Securities and Exchange Commission as follows: Xxxxxxx
X. Xxxxxxxxxx, Esq., 90,000 post-split shares; Xxxxx
X. Xxxxxxx, Esq., 90,000 post-split shares; Xxxxxxx X.
Xxxxxx, Xx., 135,000 post-split shares; and W. Xxxxx
Xxxxxxxx, 135,000 post-split shares;
(iii) EPI shall also issue 450,000 post-split shares
of its "unregistered" and "restricted" common stock to
Northport Industries, Inc. for services rendered and
to be rendered (100,000 of these shares shall be held
in escrow by Xxxxxxx X. Xxxxxxxxxx, Esq. pending
satisfaction of the performance of such services by
the Board of Directors of EPI);
(iv) Further, EPI shall issue the following
additional post-split shares of its "unregistered" and
"restricted" common stock for services rendered:
Xxxxxx X. Xxxxxxxxx, Esq., 50,000 shares; Xxxxxxx
Xxxxxxxxx, 10,000 shares; Continental Capital
Corporation, 50,000 shares (these shares shall be held
in escrow by Xxxxxxx X. Xxxxxxxxxx, Esq. pending
satisfaction of the performance of such services by
the Board of Directors of EPI); Dufo, Ltd., 20,000
shares; Aurous, Ltd., 130,000 shares; Xxxxxx Holding,
Ltd., 195,000 shares; Post Oak, Ltd., 175,000 shares;
Xxxx' Xxxxxxxxx, 20,000 shares; and Finders
Performance Escrow, 50,000 shares (these shares shall
be held in escrow by Xxxxxxx X. Xxxxxxxxxx, Esq.
pending satisfaction of the performance of such
services by the Board of Directors of EPI); and
(v) Subject to $350,000 being deposited in escrow by
the persons listed in Exhibit B prior to or
simultaneous with the execution and delivery of this
Plan, which sum shall be paid to the designees of EPI
on Closing, an additional 350,000 post-split shares of
EPI's "unregistered" and "restricted" common stock
shall be issued to the persons listed in Exhibit B.
Versatech shall have no responsibility whatsoever for
these payments.
1.2 Delivery of Certificates by Versatech Stockholders. The
transfer of the Versatech Shares by the Versatech Stockholders shall be
effected by the delivery to EPI at the Closing of stock certificate or
certificates representing the transferred shares duly endorsed in blank or
accompanied by stock powers executed in blank, with all signatures witnessed
or guaranteed to the satisfaction of EPI and with all necessary transfer taxes
and other revenue stamps affixed and acquired at the Versatech Stockholders'
expense.
1.3 Further Assurances. At the Closing and from time to time
thereafter, the Versatech Stockholders shall execute such additional
instruments and take such other action as EPI may request in order to exchange
and transfer clear title and ownership in the Versatech Shares to EPI.
1.4 Resignation of Present Directors and Executive Officers
and Designation of New Directors and Executive Officers. On Closing, the
present directors and executive officers of EPI shall resign and designate the
directors and executive officers nominated by Versatech to serve in his place
and stead, until the next respective annual meetings of the stockholders and
Board of Directors of EPI, and until their respective successors shall be
elected and qualified or until their respective prior resignations or
terminations, who shall be: Xxxxxx Xxxxxxxxx. President, Chairman of the Board
of Directors and a director; Xxx Xxxxx, Vice President, Treasurer and a
director; and Xxxx Xxxxxx, Secretary and a director.
1.5 Change of Name and Reverse Split. The Closing shall be
subject to the Certificate of Incorporation of EPI being amended to effect a
reverse split of its currently outstanding shares of common and preferred
stock as outlined in Section 1(i) above; and EPI shall change its name to
"Northport Industries, Inc."
1.6 Assets and Liabilities of EPI at Closing. EPI shall have
no material assets and no liabilities at Closing, and all costs incurred by
EPI incident to the Plan shall have been paid or satisfied.
Section 2
Closing
The Closing contemplated by Section 1.1 shall be held at the offices
of Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx 000 Xxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail
or other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of EPI
EPI represents and warrants to, and covenants with, the Versatech
Stockholders and Versatech as follows:
3.1 Corporate Status. EPI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada
and is licensed or qualified as a foreign corporation in all states in which
the nature of its business or the character or ownership of its properties
makes such licensing or qualification necessary (Nevada only.) EPI is a
publicly held company, having previously and lawfully offered and sold a
portion of its securities in accordance with applicable federal and state
securities laws, rules and regulations. There is presently no public market
for these or any other securities of EPI, though EPI has a Symbol on the OTC
Bulletin Board of "EPYR."
3.2 Capitalization. The authorized capital stock of EPI
consists of 25,000,000 shares of one mill ($0.001) par value common voting
stock, of which 7,888,334 pre-split shares are issued and outstanding, all
fully paid and non-assessable; and 12,500,000 shares of twenty-five cent
($0.25) par value preferred stock, of which 934,167 pre-split shares are
issued and outstanding. Except as otherwise provided herein, there are no
outstanding options, warrants or calls pursuant to which any person has the
right to purchase any authorized and unissued common or preferred stock of
EPI.
3.3 Financial Statements. The financial statements of EPI
furnished to the Versatech Stockholders and Versatech, consisting of audited
financial statements for the years ended December 31, 1996 and 1995 and the
period ended March 31, 1997, attached hereto as Exhibit C and incorporated
herein by reference, are correct and fairly present the financial condition of
EPI at such dates and for the periods involved; such statements were prepared
in accordance with generally accepted accounting principles consistently
applied, and no material change has occurred in the matters disclosed therein,
except as indicated in Exhibit D, which is attached hereto and incorporated
herein by reference. Such financial statements do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading.
3.4 Undisclosed Liabilities. EPI has no liabilities of any
nature except to the extent reflected or reserved against in its balance
sheets, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit D.
3.5 Interim Changes. Since the date of its balance sheets,
except as set forth in Exhibit D, there have been no (1) changes in financial
condition, assets, liabilities or business of EPI which, in the aggregate,
have been materially adverse; (2) damages, destruction or losses of or to
property of EPI, payments of any dividend or other distribution in respect of
any class of stock of EPI, or any direct or indirect redemption, purchase or
other acquisition of any class of any such stock; or (3) increases paid or
agreed to in the compensation, retirement benefits or other commitments to
employees.
3.6 Title to Property. EPI has good and marketable title to
all properties and assets, real and personal, reflected in its balance sheets,
and the properties and assets of EPI are subject to no mortgage, pledge, lien
or encumbrance, except for liens shown therein or in Exhibit D, with respect
to which no default exists.
3.7 Litigation. There is no litigation or proceeding pending,
or to the knowledge of EPI, threatened, against or relating to EPI, its
properties or business, except as set forth in Exhibit D. Further, no
officer, director or person who may be deemed to be an affiliate of EPI is
party to any material legal proceeding which could have an adverse effect on
EPI (financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to EPI.
3.8 Books and Records. From the date of this Plan to the
Closing, EPI will (1) give to the Versatech Stockholders and Versatech or
their respective representatives full access during normal business hours to
all of its offices, books, records, contracts and other corporate documents
and properties so that the Versatech Stockholders and Versatech or their
respective representatives may inspect and audit them; and (2) furnish
such information concerning the properties and affairs of EPI as the Versatech
Stockholders and Versatech or their respective representatives may reasonably
request.
3.9 Tax Returns. EPI has filed all federal and state income
or franchise tax returns required to be filed or has received currently
effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if
there is no Closing), EPI and its representatives will keep confidential any
information which they obtain from the Versatech Stockholders or from
Versatech concerning the properties, assets and business of Versatech. If the
transactions contemplated by this Plan are not consummated by December 31,
1997, EPI will return to Versatech all written matter with respect to
Versatech obtained by EPI in connection with the negotiation or consummation
of this Plan.
3.11 Investment Intent. EPI is acquiring the Versatech Shares
to be transferred to it under this Plan for investment and not with a view to
the sale or distribution thereof, and EPI has no commitment or present
intention to liquidate Versatech or to sell or otherwise dispose of the
Versatech Shares.
3.12 Corporate Authority. EPI has full corporate power and
authority to enter into this Plan and to carry out its obligations hereunder
and will deliver to the Versatech Stockholders and Versatech or their
respective representatives at the Closing a certified copy of resolutions of
its Board of Directors authorizing execution of this Plan by its officers and
performance thereunder, and the sole director adopting and delivering such
resolutions is the duly elected and incumbent director of EPI.
3.13 Due Authorization. Execution of this Plan and performance
by EPI hereunder have been duly authorized by all requisite corporate action
on the part of EPI, and this Plan constitutes a valid and binding obligation
of EPI and performance hereunder will not violate any provision of the
Articles of Incorporation, Bylaws, agreements, mortgages or other commitments
of EPI.
3.14 Environmental Matters. EPI has no knowledge of any
assertion by any governmental agency or other regulatory authority of any
environmental lien, action or proceeding, or of any cause for any such lien,
action or proceeding related to the business operations of EPI. In addition,
to the best knowledge of EPI, there are no substances or conditions which may
support a claim or cause of action against EPI or any of its current or former
officers, directors, agents or employees, whether by a governmental agency or
body, private party or individual, under any Hazardous Materials Regulations.
"Hazardous Materials" means any oil or petrochemical products, PCB's,
asbestos, urea formaldehyde, flammable explosives, radioactive materials,
solid or hazardous wastes, chemicals, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under any applicable federal or state laws
or regulations. "Hazardous Materials Regulations" means any regulations
governing the use, generation, handling, storage, treatment, disposal or
release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
3.15 Access to Information Regarding Versatech. EPI acknowledges
that it has been delivered copies of what has been represented to be
documentation containing all material information respecting Versatech and its
present and contemplated business operations, potential acquisitions,
management and other factors; that it has had a reasonable opportunity to
review such documentation and discuss it, to the extent desired, with its
legal counsel, directors and executive officers; that it has had, to the
extent desired, the opportunity to ask questions of and receive responses from
the directors and executive officers of Versatech, and with the legal and
accounting firms of Versatech, with respect to such documentation; and that to
the extent requested, all questions raised have been answered to its complete
satisfaction.
Section 4
Representations, Warranties and Covenants of Versatech
and the Versatech Stockholders
Versatech and the Versatech Stockholders represent and warrant to,
and covenant with, EPI as follows:
4.1 Versatech Shares. The Versatech Stockholders are the
record and beneficial owners of all of the Versatech Shares listed in Exhibit
A, free and clear of adverse claims of third parties; and Exhibit A correctly
sets forth the names, addresses and the number of Versatech Shares
respectively owned by the Versatech Stockholders.
4.2 Corporate Status. Versatech is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Texas and is licensed or qualified as a foreign corporation in all states
in which the nature of its business or the character or ownership of its
properties makes such licensing or qualification necessary.
4.3 Capitalization. The authorized capital stock of Versatech
consists of 1,000,000 shares of Class a common voting stock, one dollar
($1.00) par value, of which 100 shares are issued and outstanding, all fully
paid and non-assessable. There are no outstanding options, warrants or calls
pursuant to which any person has the right to purchase any authorized and
unissued capital stock of Versatech.
4.4 Financial Statements. The financial statements of
Versatech furnished to EPI, consisting of an unaudited balance sheet for the
period ended October 31, 1997, attached hereto as Exhibit E, and incorporated
herein by reference, are correct and fairly present the financial condition of
Versatech as of these dates and for the periods involved, and such statements
were prepared in accordance with generally accepted accounting principles
consistently applied, and no material change has occurred in the matters
disclosed therein, except as indicated in Exhibit F, which is attached
hereto and incorporated herein by reference. These financial statements do
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
4.5 Undisclosed Liabilities. Versatech has no material
liabilities of any nature except to the extent reflected or reserved against
in the balance sheets, whether accrued, absolute, contingent or otherwise,
including, without limitation, tax liabilities and interest due or to become
due, except as set forth in Exhibit F attached hereto and incorporated herein
by reference.
4.6 Interim Changes. Since the date of these balance sheets,
except as set forth in Exhibit F, there have been no (1) changes in the
financial condition, assets, liabilities or business of Versatech, in the
aggregate, have been materially adverse; (2) damages, destruction or loss of
or to the property of Versatech, payment of any dividend or other distribution
in respect of the capital stock of Versatech, or any direct or indirect
redemption, purchase or other acquisition of any such stock; or (3) increases
paid or agreed to in the compensation, retirement benefits or other
commitments to their employees.
4.7 Title to Property. Versatech has good and marketable
title to all properties and assets, real and personal, proprietary or
otherwise, reflected in these balance sheets, and the properties and assets of
Versatech are subject to no mortgage, pledge, lien or encumbrance, except as
reflected in the balance sheet or in Exhibit F, with respect to which no
default exists.
4.8 Litigation. There is no litigation or proceeding pending,
or to the knowledge of Versatech, threatened, against or relating to Versatech
or its properties or business, except as set forth in Exhibit F. Further, no
officer, director or person who may be deemed to be an affiliate of Versatech
is party to any material legal proceeding which could have an adverse effect
on Versatech (financial or otherwise), and none is party to any action or
proceeding wherein any has an interest adverse to Versatech.
4.9 Books and Records. From the date of this Plan to the
Closing, the Versatech Stockholders will cause Versatech to (1) give to EPI
and its representatives full access during normal business hours to all of its
offices, books, records, contracts and other corporate documents and
properties so that EPI may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Versatech as EPI may
reasonably request.
4.10 Tax Returns. Versatech has filed all federal and state
income or franchise tax returns required to be filed or has received currently
effective extensions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously if
there is no Closing), Versatech, the Versatech Stockholders and their
representatives will keep confidential any information which they obtain from
EPI concerning its properties, assets and business. If the transactions
contemplated by this Plan are not consummated by December 31, 1997, Versatech,
the Versatech Stockholders will return to EPI all written matter with respect
to EPI obtained by them in connection with the negotiation or consummation of
this Plan.
4.12 Investment Intent. The Versatech Stockholders are
acquiring the shares to be exchanged and delivered to them under this Plan for
investment and not with a view to the sale or distribution thereof, and the
Versatech Stockholders have no commitment or present intention to liquidate
the Company or to sell or otherwise dispose of the EPI shares. The Versatech
Stockholders shall execute and deliver to EPI on the Closing an Investment
Letter attached hereto as Exhibit G and incorporated herein by reference,
acknowledging the "unregistered" and "restricted" nature of the shares of EPI
being received under the Plan in exchange for the Versatech Shares, and
receipt of certain material information regarding EPI.
4.13 Corporate Authority. Versatech has full corporate power
and authority to enter into this Plan and to carry out its obligations
hereunder and will deliver to EPI or its representative at the Closing a
certified copy of resolutions of its Board of Directors authorizing execution
of this Plan by its officers and performance thereunder.
4.14 Due Authorization. Execution of this Plan and performance
by Versatech hereunder have been duly authorized by all requisite corporate
action on the part of Versatech, and this Plan constitutes a valid and binding
obligation of Versatech and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Versatech.
4.15 Environmental Matters. Versatech and the Versatech
Stockholders have no knowledge of any assertion by any governmental agency or
other regulatory authority of any environmental lien, action or proceeding, or
of any cause for any such lien, action or proceeding related to the business
operations of Versatech or its predecessors. In addition, to the best
knowledge of Versatech, there are no substances or conditions which may
support a claim or cause of action against Versatech or any of its current
or former officers, directors, agents, employees or predecessors, whether by a
governmental agency or body, private party or individual, under any Hazardous
Materials Regulations. "Hazardous Materials" means any oil or petrochemical
products, PCB's, asbestos, urea formaldehyde, flammable explosives,
radioactive materials, solid or hazardous wastes, chemicals, toxic substances
or related materials, including, without limitation, any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," or "toxic substances" under any applicable federal or
state laws or regulations. "Hazardous Materials Regulations" means any
regulations governing the use, generation, handling, storage, treatment,
disposal or release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
4.15 Access to Information Regarding EPI. Versatech and the
Versatech Stockholders acknowledge that they have been delivered copies of
what has been represented to be documentation containing all material
information respecting EPI and its present and contemplated business
operations, potential acquisitions, management and other factors;
that they have had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with their legal counsel, directors and
executive officers; that they have had, to the extent desired, the opportunity
to ask questions of and receive responses from the directors and executive
officers of EPI, and with the legal and accounting firms of EPI, with respect
to such documentation; and that to the extent requested, all questions raised
have been answered to their complete satisfaction.
Section 5
Conditions Precedent to Obligations of Versatech and the Versatech
Stockholders
All obligations of Versatech and the Versatech Stockholders under
this Plan are subject, at their option, to the fulfillment, before or at the
Closing, of each of the following conditions:
5.1 Representations and Warranties True at Closing. The
representations and warranties of EPI contained in this Plan shall be deemed
to have been made again at and as of the Closing and shall then be true in all
material respects and shall survive the Closing.
5.2 Due Performance. EPI shall have performed and complied
with all of the terms and conditions required by this Plan to be performed or
complied with by it before the Closing.
5.3 Officers' Certificate. Versatech and the Versatech
Stockholders shall have been furnished with a certificate signed by the
President of EPI, in such capacity, attached hereto as Exhibit H and
incorporated herein by reference, dated as of the Closing, certifying (1) that
all representations and warranties of EPI contained herein are true and
correct; and (2) that since the date of the financial statements (Exhibit C
hereto), there has been no material adverse change in the financial condition,
business or properties of EPI, taken as a whole.
5.4 Opinion of Counsel of EPI. Versatech and the Versatech
Stockholders shall have received an opinion of counsel for EPI, dated as of
the Closing, to the effect that (1) the representations of Sections 3.1, 3.2
and 3.12 are correct; (2) except as specified in the opinion, counsel knows of
no inaccuracy in the representations in 3.5, 3.6 or 3.7; and (3) the shares of
EPI to be issued to the Versatech Stockholders under this Plan will, when so
issued, be validly issued, fully paid and non-assessable.
5.5 Assets and Liabilities of EPI. EPI shall have no material
assets and no liabilities at Closing, and all costs, expenses and fees
incident to the Plan shall have been paid.
5.6 Resignation of Directors and Executive Officers and
Designation of New Directors and Executive Officers. The present directors
and executive officers of EPI shall resign, and shall have designated nominees
of Versatech as outlined in Section 1.4 hereof as directors and executive
officers of EPI to serve in their place and stead, until the next respective
annual meetings of the stockholders and Board of Directors of EPI, and
until their respective successors shall be elected and qualified or until
their respective prior resignations or terminations.
5.7 Reverse Split and Name Change of EPI. The requirements of
Section 1.5 hereof shall have been fully satisfied at Closing.
Section 6
Conditions Precedent to Obligations of EPI
All obligations of EPI under this Plan are subject, at its option,
to the fulfillment, before or at the Closing, of each of the following
conditions:
6.1 Representations and Warranties True at Closing. The
representations and warranties of Versatech and the Versatech Stockholders
contained in this Plan shall be deemed to have been made again at and as of
the Closing and shall then be true in all material respects and shall survive
the Closing.
6.2 Due Performance. Versatech and the Versatech Stockholders
shall have performed and complied with all of the terms and conditions
required by this Plan to be performed or complied with by them before the
Closing.
6.3 Officers' and Stockholders' Certificate. EPI shall have
been furnished with a certificate signed by the President of Versatech, in
such capacity, attached hereto as Exhibit I and incorporated herein by
reference, dated as of the Closing, certifying (1) that all representations
and warranties of Versatech and the Versatech Stockholders contained herein
are true and correct; and (2) that since the date of the financial
statements (Exhibit E), there has been no material adverse change in the
financial condition, business or properties of Versatech, taken as a whole.
6.4 Books and Records. The Versatech Stockholders or the
Board of Directors of Versatech shall have caused Versatech to make available
all books and records of Versatech, including minute books and stock transfer
records; provided, however, only to the extent requested in writing by EPI at
Closing.
6.5 Acceptance by Versatech Stockholders. The terms of this
Plan shall have been accepted by the Versatech Stockholders who own not less
than 50.1% of the outstanding Versatech Shares by their execution and delivery
of a copy of the Plan and related instruments.
6.6 Reverse Split and Stock Issuance. The reverse split
outlined in Section 1.5 hereof shall have been effected, and the
"unregistered" and "restricted" post-split shares of common stock of EPI
outlined in Sections 1(ii), (iii), (iv) and (v) hereof prior to or
simultaneous with the Closing.
6.7 Payment of $350,000. The $350,000 raised by EPI though
the issuance of certain "unregistered" and "restricted" shares of its common
stock as outlined in Section 1(v) hereof and Exhibit B hereto shall have been
deposited in escrow and be available for payment to the designees of EPI as
outlined in the Action By Unanimous Consent of Directors of EPI adopting,
ratifying and approving the Plan.
Section 7
Termination
Prior to Closing, this Plan may be terminated (1) by mutual consent
in writing; (2) by either the sole director of EPI or Versatech and the
Versatech Stockholders if there has been a material misrepresentation or
material breach of any warranty or covenant by the other party; or (3) by
either the sole director of EPI or Versatech and the Versatech Stockholders if
the Closing shall not have taken place, unless adjourned to a later date by
mutual consent in writing, by the date fixed in Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to time,
after the Closing, each party will execute such additional instruments and
take such action as may be reasonably requested by the other party to confirm
or perfect title to any property transferred hereunder or otherwise to carry
out the intent and purposes of this Plan.
8.2 Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties
hereunder that no broker or finder has acted for it in connection with this
Plan, and agrees to indemnify and hold harmless the other parties against any
fee, loss or expense arising out of claims by brokers or finders employed or
alleged to have been employed by he/she/it.
8.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first-class registered or certified mail, return
receipt requested, as follows:
If to EPI: 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
Suite 205 Hermes Building
455 East 000 Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
If to Versatech: P. O. Box 1227
Spur 239 and Xxxxxxxx Xxxx
Xxx Xxx, Xxxxx 00000
With a copy to: Xxxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to the Versatech To the Addresses listed in Exhibit A
Stockholders:
8.5 Entire Agreement. This Plan constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written, including the
Letter of Intent dated December 1, 1997, between the parties hereto relating
to the transactions contemplated herein or the subject matter hereof.
8.6 Headings. The section and subsection headings in this
Plan are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Plan.
8.7 Governing Law. This Plan shall be governed by and
construed and enforced in accordance with the laws of the State of Nevada,
except to the extent pre- empted by federal law, in which event (and to that
extent only), federal law shall govern.
8.8 Assignment. This Plan shall inure to the benefit of, and
be binding upon, the parties hereto and their successors and assigns; provided
however, that any assignment by any party of its rights under this Plan
without the prior written consent of the other parties shall be void.
8.9 Counterparts. This Plan may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization effective the day and year first above written.
ENVIRONMENTAL PYROGENICS, INC.
Date: 12/22/97. By/s/Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx., President
VERSATECH MANUFACTURING, INC.
Date: 12/24/97. By/s/Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx, President
VERSATECH STOCKHOLDERS
Date: 12/24/97. By/s/Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx
FAIRFAX INDUSTRIES, INC.
Date: 12/24/97. By/s/Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx, President
EXHIBIT A
Number of Shares of
Number of Shares EPI
Owned of to be
Name and Address Versatech Received in the Exchange
Fairfax Industries, Inc. 80 2,400,000
00000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Gecamex Industries, Inc. 12 360,000
Spur 000 & Xxxxxxxx Xxxx
Xxx Xxx, Xxxxx 00000
Xxxxxx Xxxxxxxxx 8 240,000
000 Xxxxx Xxxx Xxxxx Xxxxx
Xxx. #0000
Xxxxxxx, Xxxxxxxx 00000
Environmental Pyrogenics, Inc
c/o 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
SCHEDULE "A"
(450,000 post-split shares of its "unregistered" and "restricted" common stock
for non-capital, raising services rendered, all to be issued pursuant to Rule
701 of the Securities and Exchange Commission)
Shareholders Post Reorganization Shares
Xxxxxxxxxx, Xxxxxxx X., Esq. 90,000
Hermes Building, Suite 205
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Xxxxxxx, Xxxxx X. 90,000
X.X. Xxx 00000
Xxxxxxx, Xxxxx 00000
Xxxxxx, W.A. Jr. 135,000
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxxxx, X. Xxxxx 135,000
X.X. Xxx 00000
Xxxxxxx, XX 00000
Total Shares: 450,000
Environmental Pyrogenics, Inc
c/o 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
SCHEDULE "B"
(Unregistered and Restricted Common Stock Shares)
(Issued under an exemption from registration provided
for under Section 4(2) of the Securities Act of 1933, as
amended to Northport Industries, Inc. as the Finder)
Shareholders Post Reoreanization Shares
Northport Industries, Inc. 350,000
Xxx Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxxxxxxx, Xxxxxxx X., Esq. 100,000
Hermes Building, Suite 205
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Total Shares: 450,000
The 100,000 common stock shares will be held for benefit of Northport
Industries by the Trustee and released to Northport when earned. Earned is
defined as Northport Placement or causing the Placement of not less than
200,000 USD of the $1,000,000 Initial Financing placement to be initiated at
closing of the Reorganization and completed in not less than 180 days from
said closing date.
Environmental Pyrogenics, Inc
c/o 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
SCHEDULE "C"
(Unregistered and Restricted Common Stocks Shares)
(Issued under an exemption from registration provided for under Section 4(2)
of the Securities Act of 1933, as amended to Northport Industries, Inc. as the
Finder)
Shareholders Post Reorganization Shares
Xxxxxxxxxx, Xxxxxxx X., Esq. 50,000
Hermes Building, Suite 205
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Total Shares: 50,000
The 50,000 common stock shares will be held for benefit of Continental Capital
Corp., by the Trustee, and released to Continental Capital Corp. when earned.
Environmental Pyrogenics, Inc
c/o 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
SCHEDULE "D"
Unregistered and restricted common stocks shares issued under an exemption
from registration provided for under Section 4(2) of the Securities Act of
1933, as amended
Name & Address Post Reorganization Shares
Aurous, Ltd 110,000
X.X. Xxx 0000
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
B.W.I.
Aurous, Ltd. 20,000
X.X. Xxx 0000
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
B.W.I.
Xxxxxxxxx, Xxxx' 20,000
0000 Xxxx
Xxxxxxx, Xxxxx 00000
DUFO, Ltd.P.O. Box 2097 20,000
Grand Cayman, Cayman Islands
B.W.I.
Xxxxxx Holdings, Ltd., #1 185,000
P.O. Box 2097
Grand Cayman, Cayman Islands
B.W.I.
Xxxxxx Holdings, Ltd., #2 10,000
P.O. Box 2097
Grand Cayman, Cayman Islands
B.W.I.
Xxxxxxxxx, Xxxxxxx 10,000
9700 Leawood, #1214
Xxxxxxx, Xxxxx 00000
Post Oak, Ltd., #1 165,000
P.O. Box 2097
Grand Cayman, Cayman Islands
B.W.I.
Post Oak, Ltd., #2 10,000
P.O. Box 2097
Grand Cayman, Cayman Islands
B.W.I.
Pritchard, Thomas, Esq. 50,000
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Total: 600,000
Environmental Pyrogenics, Inc
c/o 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
SCHEDULE "E"
WORKOUT
(Unregistered and restricted common stocks shares issued under
an exemption from registration provided for under Section 4(2)
of the Securities Act of 1933, as amended)
(These shares are the 50,000 shares original1y to be held in Escrow by
Xxxxxxx Burningbam, Esq., pending satisfaction of performance)
Name & Address Post Reorganization Shares
Xxxxxx Trusts 1996 8,000
000 Xxxxx Xxxxxxxx Xxxx Xxxx.
Xxxxxxxx, Xxxxx 00000
Xxxxxx, Xxxxxxx 8,000
X.X. Xxx 000000
Xxx Xxxxxxx, Xxxxx 00000
Xxxxxx, Xxxxxx X. 6,400
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Xxxx, Inc. 500
00 Xxxxxxxx Xxxxx, #000
Xxxxxxx, Xxxxx 00000
Xxxxxxx, Xxxx III 600
X.X. Xxx 000
Xxxx, Xxx Xxxxxx 00000
Jefferson Fund 1 2,500
0000 Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Xxxxx, Xxxxx 8,000
00000 Xxx Xxxxx Xx.
Xxx Xxxxxxx, Xxxxx 00000
Xxxxx, Xxxxxx X. 10,100
0000 Xxxxxxxxx
Xxxxxxx,Xxxxx 77520-6336
Xxxxxx, Xxxxx L 500
1201 MoDuffie, #178
Xxxxxxx, Xxxxx 00000
Xxxxxxxx, Xxxxxx X. 600
14738 Cindywood
Xxxxxxx, Xxxxx 00000
Xxxxxx, Xxxx X. 4,000
c/o Nanosoft
0000 Xxxx Xxx Xxxx.
Xxxxxxx, XX 00000
Xxxxx, Xxxx X. 800
0000 Xxxxxxx Xxx.
Xxxxxxxx, Xxxxx 00000
50,000
Environmental Pyrogenics, Inc
c/o 0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
EXHTBIT "B"
PRIVATE PLACEMENT STOCKHOLDERS
(Subject to $350,000 being deposited in escrow by the persons listed prior to
or simultaneous with the execution and delivery of this Plan, which sum shall
be paid to the designees of EPI on Closing, an additional 350,000 post-split
shares of EPI's "unregistered" and "restricted" common stock shall be issued
as follows:)
Shareholders Post Reorganization Shares
Xxxxxxx X. Xxxxxxxxxx-ESCROW 21,500
000 Xxxx 000 Xxxxx, Xxxxx #000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Xxxxxxx X. Xxxxxxxxxx 7,500
000 Xxxx 000 Xxxxx, Xxxxx #000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Xxxxxx X. Xxxxxx 5,000
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Canine, Ltd. 25,000
P. O. Box 2097 GT
3rd Floor, Genesis Building
Grand Cayman, Cayman Islands B.W.I.
Xxxxxxx Management (X. Xxxxxxxx) 5,000
0000 Xxxxx
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxx 25,000
0000 Xxxxxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
DUFO, Ltd. 10,000
P. O. Box 2097
3rd Floor, Genesis Building
Grand Cayman, Cayman Islands
B.W.I.
J. Xxxxx Xxxx 5,000
00 Xxxxxxx
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxx 1,000
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxx 1,000
0000 Xxxxxxx
Xxxxxxxx, XX 00000
Franidin X. Xxxxxxx, xx. 10,000
00 Xxxxxxxx Xxxxx, #0000
Xxxxxxx, XX 00000-0000
Xxxxx & Xxxxxx Xxxxxxx 60,000
0000 Xxxxxxxxxxx Xx. 40,000
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxx 1,000
00000 Xxxxxxx Xxxxx Xx.
Xxxxxx, XX 00000
Xxxx X. LaBeilo 2,000
0000 Xxxx Xx.
Xxxxxxxx, XX 00000
Xxxxxx Xxxxx 100,000
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxx 2,000
0000 Xxxxxxxxxx
Xxxxxxxx, XX 00000
R. Xxxxx Xxxxx, M.D. 10,000
0000 Xxxxxxxx, Xxxxx 000 10,000
Xxxxxxx, XX 00000
Xxxxx X. Xxxxxxx 1,000
00000 Xxxxxxxx Xx.
Xxxxxxx, XX 00000
Xxxx X. Xxxxxxx 5,000
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxx 1,000
0000 Xxxx Xx.
Xxxxxxxx, XX 00000
TOTAL 350,000
EXHIBIT C
ENVIRONMENTAL PYROGENICS, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995 (AUDITED)
AND THE PERIOD ENDED
MARCH 31, 1997 (AUDITED)
Environmental Pyrogenics, Inc.
(A Development Stage Company)
Financial Statements
3 Months Ended March 31, 1997, the 2 Years Ended December 31, 1996 and 1995,
and the Period from December 8, 1986 (Date of Inception) Through December 31,
1994
Xxxxxx & Xxxxxx [letterhead]
May 1, 1997
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Environmental Pyrogenics, Inc.
Houston, Texas
We have audited the accompanying balance sheet of Environmental Pyrogenics,
Inc. (a Nevada corporation, and a development stage company) as of March 31,
1997, and December 31, 1996, 1995 and 1994, and the related statements of
income, stockholders' equity and cash flows for the 3 months, 2 years and the
period from December 8, 1986 (date of inception) through December 31, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Environmental Pyrogenics,
Inc. at March 31, 1997, December 31, 1996, 1995 and 1994, and results of their
operations and their cash flows for the 3 months, 2 years and the period from
December 8, 1986 (date of inception) through December 31, 1994, in conformity
with generally accepted accounting principles.
/s/Xxxxxx & Xxxxxx, PLLC
ENVIRONMENTAL PYROGENICS, INC.
(A Development Stage Company)
BALANCE SHEETS
March 31, 1997, December 31, 1996, 1995 and 1994
1997 1996 1995 1994
ASSETS
Cash $ 0 $ 0 $ 0 $ 0
Other - - - -
TOTAL ASSETS 0 0 0 0
LIABILITIES
Accounts payable $ 0 $ 0 $ 0 $ 0
STOCKHOLDERS' EQUITY
Preferred stock, $.25 par value,
12,500,000 shares authorized,
934,167 shares issued and
outstanding 233,542 233,542 233,542 233,542
Common stock, $.001 par value,
25,000,000 shares authorized,
7,888,334 shares issued and
outstanding 7,888 7,888 7,888 7,888
Deficit paid in capital (131,144) (135,380) (135,380) (135,380)
Deficit accumulated during the
development stage (110,286) (106,059) (106,050) (106,059)
TOTAL STOCKHOLDERS' EQUITY 0 0 0 0
TOTAL LIABILITIES AND EQUITY $ 0 $ 0 $ 0 $ 0
See notes to financial statements.
ENVIRONMENTAL PYROGENICS, INC.
(A Development Stage Company)
STATEMENTS OF INCOME
3 Months Ended March 31, 1997,
the 2 Years Ended December 31, 1996 and 1995, and the
Period from December 8, 1986 (Date of Inception) Through December 31, 1994
Period from
Dec. 8, 1986
(Inception)
Through
1997 1996 1995 Dec.31,1994
Revenues $ 0 $ 0 $ 0 $ 0
Selling, General and
Administrative Expenses 4,236 0 0 0
Net income from continuing
operations (4,236) 0 0 0
Net (loss) from discontinued
operations 0 0 0 (106,050)
Net (loss) $ (4,236) $ 0 $ 0 $(106,050)
See notes to financial statements.
ENVIRONMENTAL PYROGENICS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
3 Months Ended March 31, 1997, the 2 Years Ended December 31, 1996 and 1995,
and the Period from December 8, 1986 (Date of Inception) Through December 31,
1994
Period from
Dec. 22, 1986
(Inception)
Through
1997 1996 1995 Dec. 31, 1994
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (deficit) $( 4,236) $ 0 $ 0 $( 106,050)
Adjustments to reconcile
net income to net
cash provided by operating
activities:
Depreciation 11,751
Issuance of stock 4,236 65,000
NET CASH USED BY
OPERATING ACTIVITIES 0 (29,299)
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisition of fixed assets (11,751)
CASH FLOWS FROM FINANCING
ACTIVITIES
Sales of common and preferred stock
stock for cash 367,503
Less: costs of issuance (326,453)
NET CASH FROM FINANCING
ACTIVITIES 41,050
NET INCREASE IN CASH 0 0
CASH AT BEGINNING OF PERIOD 0 0 0 0
CASH AT END OF PERIOD 0 0 0 0
SUPPLEMENTAL DISCLOSURE
Noncash financing activities
Issuance of stock for merger with
Environmental Pyrogenics Services, Inc. $ 65,000
Issuance of 420,000 shares common stock
in exchange for services rendered 420
Capital contribution of corporate
expenses paid by stockholders $ 4,236
See notes to financial statements.
ENVIRONMENTAL PYROGENICS, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
3 Months Ended March 31, 1997, the 2 Years Ended December 31, 1996
and 1995, and the Period from December 8, 1986 (Date of Inception) Through
December 31, 1994
Preferred Stock Common Stock Paid in Retained
Shares Amount Shares Amount Capital (Deficit) Totals
Issuance in connection
with merger with
Environmental
Pyrogenics Services,
Inc., 1987 200,000 $50,000 6,000,000$6,000 $ 9,000 $65,000
Issuance of stock for
cash, 1987 734,167 183,542 1,468,334 1,468 182,073 367,083
Less: costs of issuance 0
Net loss, 1986 - 1988 - - - - (39,935)(39,935)
Balances, April 30,
1988 as previously
reported 934,167 233,542 7,888,334 7,468 191,073 (39,935)392,148
Prior period adjustment - - - - (326,453) (326,453)
Balances, April 30,
1988 as restated 934,167 233,542 7,888,334 7,468(135,380)(39,935) 65,695
Issuance of stock
for services, 1988 420,000 420 420
Corporate expenses
paid by stockholders,
March, 1997 4,236 4,236
Write off of
intangibles acquired
in 1988 merger (65,000)(65,000)
Net loss, May, 1988
- December, 1994 (1,115) (1,115)
Net loss, 1994 -
March 31, 1997 (4,236)
Balances,
March 31, 1997 934,167 233,542 7,888,334 7,888(131,144)(110,286) 0
See notes to financial statements.
ENVIRONMENTAL PYROGENICS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DEVELOPMENT STAGE OPERATIONS
The Company was incorporated December 8, 1986, in the state of Nevada. In
1987, the Company completed a reverse merger as follows:
Environmental Pyrogenics Services, Inc.: This entity attempted the
business of industrial and oil field waste disposal. 200,000 shares of
preferred stock and 6,000,000 shares of common stock was issued in connection
with this acquisition. This transaction was valued at $65,000.
The Company registered a public stock offering with the state of Nevada in
1987. $367,083 gross cash proceeds was raised, with $326,453 spent on the
public offering and related financing efforts. Net proceeds of $40,630 was
spent on operating activities.
The Company has been inactive since 1989. There are no liabilities, judgments
or pending legal actions. Subsequent debt forgiveness amounted to $32,060,
which offset additional losses incurred since May 1, 1988.
In March, 1997 certain shareholders of the Company paid certain registration,
legal and accounting expenses of the Company.
NOTE 2 - PRIOR PERIOD ADJUSTMENT
The Company erroneously recorded its costs of equity securities sales as an
intangible asset in its financial statements as of April 30, 1988. The correct
treatment is to record these costs as a reduction of paid-in capital.
EXHIBIT D
EXCEPTIONS TO EPI FINANCIAL STATEMENTS
None.
EXHIBIT E
VERSATECH MANUFACTURING, INC.
FINANCIAL STATEMENTS
VERSATECH MANUFACTURING, INC.
Pro-Forma Balance Sheet
10/31/97
ASSETS
Current Assets:
Cash 176,572
Accounts Receivable, Trade 281,149
Notes Receivable Northport 3,507
Accts. Receivable-TTM 60,335
Due from loving, S.A. (1,510)
Prepaids 2,863
Raw Material Inventory 101,836
finished Goods Inventory 182,114
Total Current Assets 796,866
Property & Equipment
Building Improvements -
Machinery & Equipment 382,702
Furniture & Fixtures 17,470
Less Acc Dep (26,685)
Total Property & Equipment 373,487
TOTAL ASSETS 1,170,353
LIABILITIES
Current Liabilities
Accounts Payable 196,387
Advances From Fairfax 8,475
Accrued Liabilities 7,614
Total Current Liabilities 212,476
Long Term Debt
Leases Payable
N/P Gecamex 400,000
N/P Xxx Xxxxxxxxx 39,502
N/P Associates 17,747
Total Long Term Debt 457,349
Equity
Common Stock 101,000
Additional paid in capital 502,981
Net income-Year to Date (103,453)
Total Equity 500,528
Total Liabilities And Equity 1,170,353
Prepared By Management
EXHIBIT F
EXCEPTIONS TO VERSATECH FINANCIAL STATEMENTS
None.
EXHIBIT G
Environmental Pyrogenics, Inc.
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Re: Exchange of shares of Versatech Manufacturing, Inc., a Texas
corporation ("Versatech"), for shares of Environmental Pyrogenics,
Inc., a Nevada corporation ("EPI" or the "Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Plan") between the undersigned, Versatech, the other stockholders of
Versatech and EPI, I acknowledge that I have approved this exchange; that I am
aware of all of the terms and conditions of the Plan; that I have received and
personally reviewed a copy of the Plan and any and all material documents
regarding the Company, including, but not limited to Articles of
Incorporation, Bylaws, minutes of meetings of directors and stockholders,
financial statements and the Plan and related exhibits. I represent and
warrant that no director or executive officer of the Company or any associate
of either has solicited this exchange; that I am an "accredited investor" as
that term is known under the Rules and Regulations of the Securities and
Exchange Commission (see Exhibit "A" hereto); and/or, I represent and warrant
that I have sufficient knowledge and experience to understand the nature of
the exchange and am fully capable of bearing the economic risk of the loss of
my entire cost basis.
I further understand that immediately prior to the completion of the
Plan, EPI had little, if any assets, of any measurable value, and that in
actuality, the completion of the Plan and the exchange of my shares of
Versatech for shares of EPI results in a decrease in the actual percentage of
ownership that my shares of Versatech represented in Versatech prior to the
completion of the Plan.
I understand that you have and will make books and records of your
Company available to me for my inspection in connection with the contemplated
exchange of my shares, options or warrants, and that I have been encouraged to
review the information and ask any questions I may have concerning the
information of any director or officer of the Company or of the legal and
accounting firms for the Company.
I also understand that I must bear the economic risk of ownership of
any of the EPI shares, options or warrants for a long period of time, the
minimum of which will be one (1) year, as these shares are "unregistered"
shares and may not be sold unless any subsequent offer or sale is registered
with the United States Securities and Exchange Commission or otherwise exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Act"), or other applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein and
those in the personal questionnaire (if applicable) I provided to Versatech
for use by EPI as they are made to induce you to issue me the shares of EPI
under the Plan, and I further represent (of my personal knowledge or by virtue
of my reliance on one or more personal representatives), and agree as follows,
to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered" shares and know
that they are not freely tradeable;
4. That any stock certificate issued by you to me in connection
with the shares being acquired shall be imprinted with a legend restricting
the sale, assignment, hypothecation or other disposition unless it can be made
in accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company shall
reflect that I have requested the Company not to effect any transfer of any
stock certificate representing any of the shares being acquired unless I shall
first have obtained an opinion of legal counsel to the effect that the shares
may be sold in accordance with applicable laws, rules and regulations, and I
understand that any opinion must be from legal counsel satisfactory to the
Company and, regardless of any opinion, I understand that the exemption
covered by any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares,
options or warrants being acquired except as may be pursuant to any applicable
laws, rules and regulations;
7. I fully understand that my shares which are being exchanged for
shares of the Company are "risk capital," and I am fully capable of bearing
the economic risks attendant to this investment, without qualification; and
8. I also understand that without approval of counsel for EPI, all
shares of EPI to be issued and delivered to me in exchange for my shares of
Versatech shall be represented by one certificate only and which such
certificate shall be imprinted with the following legend or a reasonable
facsimile thereof on the front and reverse sides thereof:
The shares, options or warrants of stock represented by this
certificate have not been registered under the Securities Act of
1933, as amended, and may not be sold or otherwise transferred
unless compliance with the registration provisions of such Act has
been made or unless availability of an exemption from such
registration provisions has been established, or unless sold
pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be accompanied
by a letter signed by the requesting stockholder setting forth all relevant
facts relating to the request. EPI will attempt to accommodate any
stockholders' request where EPI views the request is made for valid business
or personal reasons so long as in the sole discretion of EPI, the granting of
the request will not facilitate a "public" distribution of unregistered shares
of EPI.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
________________________________________________________
(Name(s) and Number of Shares)
________________________________________________________
(Address)
________________________________________________________
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is desired, put
the initials JTRS after your names.
Dated this ________ day of __________________________, 1997.
Very truly yours,
/s/Xxxxxx X. Xxxxxxxxx
/s/Xxxxxx X. Xxxxxxxxx
__________________________________
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Environmental Pyrogenics, Inc., a
Nevada corporation ("EPI"), represents and warrants the following as required
by the Agreement and Plan of Reorganization (the "Plan") between EPI and
Versatech Manufacturing, Inc., a Texas corporation ("Versatech"), and the
stockholders of Versatech (the "Versatech Stockholders"), to-wit:
1. That he is the President of EPI and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
Versatech and the Versatech Stockholders;
2. Based upon his personal knowledge, information, belief and
opinions of counsel for EPI regarding the Plan:
(i) All representations and warranties of EPI contained within
the Plan are true and correct;
(ii) EPI has complied with all terms and provisions required of
it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of EPI as set forth in its financial
statements for the period ended March 31, 1997, and the
years ended December 31, 1996 and 1995, except as set
forth in Exhibit D to the Plan.
ENVIRONMENTAL PYROGENICS, INC.
By_/s/Xxxxxxx X. Xxxxxx, Xx._____
Xxxxxxx X. Xxxxxx, Xx., President
EXHIBIT I
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Versatech Manufacturing, Inc., a
Texas corporation ("Versatech"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Plan") between
Versatech, its stockholders (the "Versatech Stockholders") and Environmental
Pyrogenics, Inc., a Nevada corporation ("EPI"), to-wit:
1. That he is the President of Versatech and has been authorized
and empowered by its Board of Directors to execute and deliver this
Certificate to EPI;
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Versatech contained
within the Plan are true and correct;
(ii) Versatech has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Versatech as set forth in its
Balance Sheet dated October 31, 1997, except as set forth
in Exhibit E to the Plan.
VERSATECH, INC.
By/s/Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx, President
