Exhibit 99
STOCK PURCHASE AGREEMENT
by and among
TERRA SILEX HOLDINGS LTD. CO.
and
DALECO RESOURCES CORPORATION
Dated: September 20, 2001
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated September 20, 2001 by
and among Terra Silex Holdings Ltd. Co., a Pennsylvania limited
liability company whose principal address is 000 Xxxxxxxxxx
Xxxx, Xxxxxx, XX 00000 ("Terra Silex") and Daleco Resources
Corporation, a Delaware corporation whose principal address is
000 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
("DRC").
BACKGROUND
WHEREAS, DRC is a publicly owned holding company subject to
the reporting requirement of the Securities and Exchange Act of
1934, as amended ("'34 Act"); and
WHEREAS, DRC's subsidiaries own oil and gas reserves,
timber concessions mineral leases, and a patent for the
remediation of contaminated water and soils; and
WHEREAS, as of the date hereof, DRC has 4,452,574 shares of
common stock, par value $.01 issued and outstanding ("Common
Stock") and 2,017,800 shares of preferred stock, par value $.01
issued and outstanding ("Preferred Stock"); and
WHEREAS, DRC's articles authorize 20,000,000 shares of
Common Stock and 10,000,000 shares of Preferred Stock; and
WHEREAS, Terra Silex desires to acquire and DRC desires to
sell up to 1,800,000 shares of Common Stock at a price of $1.25
per share in three traunches ("Terra Silex Stock"); and
WHEREAS, In connection with the acquisition of the Terra
Silex Stock, Terra Silex desires to acquire and DRC desires to
grant to Terra Silex the right to purchase additional shares of
Common Stock if and when DRC sells to a third party, in one or
more transactions, Common Stock (or Common Stock equivalents)
which constitute greater than 5% of the issued and outstanding
Common Stock immediately after such transaction ("Dilution
Protection Rights"); and
WHEREAS, Terra Silex desires to acquire and DRC desires to
xxxxx Xxxxx Silex 500,000 shares of Common Stock at an exercise
price of $1.25 per share in consideration of its purchasing the
Terra Silex Stock for a value above the current market price
("Price Warrants"); and
WHEREAS, Terra Silex has acquired that certain Agreed
Judgment granted by DRC and its subsidiary Westlands Resources
Corporation in favor of UTI Drilling LLP (formerly known as
Southland Drilling Company, a division of Triad Drilling
Company) dated November 27, 2001 in that case captioned
Southland Corporation v. Daleco Resources Corporation, et. al.,
Case No: 98-34542, In the District Court of Xxxxxx County,
Texas, 270th Judicial District ("Southland Judgment"); and
WHEREAS, Terra Silex is willing to satisfy the Southland
Judgment in exchange for Common Stock; and
WHEREAS, DRC and Terra Silex are agreeable to the
foregoing.
NOW THEREFORE, in consideration of the mutual agreement and
covenants set forth herein and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I.
INCORPORATION BY REFERENCE
The parties incorporate the Background provisions hereof as
though same were set forth at length herein. Any conflict
between the Background provisions and the body of this Agreement
shall be resolved in favor the language in the body of this
Agreement.
ARTICLE II.
FIRST TRAUNCHE STOCK SALE AND PURCHASE
2.1 Purchase and Sale of Stock. Subject to the terms and
conditions of this Agreement and in reliance upon the
representations and warranties set forth below in Article V
hereof, Terra Silex, simultaneously with the execution and
delivery of this Agreement and on the date hereof (the "First
Traunche Closing Date"), shall purchase and accept delivery from
DRC, and DRC shall issue, sell, assign, transfer and deliver to
Terra Silex, certificates representing 400,000 shares of its
authorized but unissued Common Stock for the following
consideration:
(a) 280,000 shares in exchange for full and complete
satisfaction of the Southland Judgment; and
(b) 120,000 shares at a price of $1.25 per share, or
One Hundred Fifty Thousand Dollars ($150,000), in immediately
available funds ("First Traunche Funds").
2.2 Use of Proceeds. DRC agrees to use the First Traunche
Funds net of the expense reimbursement to be made to Terra Silex
under paragraph 2.3 below, for general corporate purposes which
shall include the satisfaction, either in whole or in part, of
DRC's franchise tax liability to the State of Delaware.
2.3 Reimbursement of Expenses. DRC shall reimburse Terra
Silex for its out-of-pocket expense incurred in connection with
its due diligence and negotiation of this Agreement up to a
maximum of $40,000 simultaneously with the closing on the First
Traunche Funds.
ARTICLE III
SECOND TRAUNCHE STOCK SALE AND PURCHASE
3.1 Purchase and Sale of Stock. Subject to the terms and
conditions set forth in this Agreement, within 45 days after the
execution of this Agreement ("Second Traunche Closing Date"),
Terra Silex agrees to purchase and accept delivery from DRC, and
DRC agrees to issue, sell, assign, transfer and deliver to Terra
Silex, certificates representing 400,000 shares of Common Stock
(the "Second Traunche Closing") for a purchase price of $1.25
per share, or Five Hundred Thousand Dollars ($500,000) in
immediately available funds ("Second Traunche Funds"). The
Second Traunche Closing Date may automatically be extended by
Terra Silex for an additional fifteen (15) days ("Second
Traunche Extended Closing Date"). Thereafter, Terra Silex may
request, in writing, that DRC extend the Second Traunche
Extended Closing Date for up to an additional thirty (30) days
for Good Reason (as that term is defined below). Any request
for an extension of the Second Traunche Extended Closing Date
must specifically set forth the reason or reasons for the
requested extension. DRC agrees that it will not unreasonably
deny Terra Silex's request for an extension of the Second
Traunche Extended Closing Date should Good Reason exist. For
the purposes of this Agreement, "Good Reason" shall be defined
to mean Terra Silex's inability to conduct or complete it due
diligence due to factors outside of Terra Silex's control to
include, but not limited to, the failure of DRC to provide Terra
Silex with access to places under DRC's control or with material
in the possession or under DRC's control on a timely basis
after reasonable and timely request therefore.
3.2 Use of Proceeds. DRC agrees to use the Second
Traunche Funds, less that amount payable to Terra Silex under
paragraph 3.3(e) below, for general corporate purposes.
3.3 Conditions to Second Traunche Closing.
(a) The results of the due diligence review
contemplated by Paragraph 3.4 hereof shall be satisfactory, in
all material respects, to Terra Silex, in its sole and absolute
discretion;
(b) The representations and warranties of DRC, set
forth in Article V hereof, shall be true and correct as if made
on the Second Traunche Closing Date;
(c) There shall have occurred no material adverse
change in the business, operations, assets, liabilities, or
revenues of DRC, including but not limited to, any material
adverse change in the status of outstanding litigation or the
quality or intrinsic value of DRC's assets from the date hereof
until the Second Traunche Closing Date;
(d) DRC shall have complied, in all material
respects, with its covenants and agreements set forth in
Paragraph 3.4 below;
(e) At the Second Traunche Closing, DRC shall
reimburse Terra Silex for its additional expenses (including
legal, due diligence, accounting and other) incurred by it in
connection with its due diligence and negotiation of this
transaction up to a maximum of an additional $110,000; and
(f) The Second Traunche Closing shall not be the
subject of any pending any action in either law or equity
commenced by a third person to hinder, delay or defeat the
purpose or intent of this Agreement.
3.4 Covenants Pending Second Traunche Closing.
(a) Between the First Traunche Closing and the Second
Traunche Closing, DRC shall provide Terra Silex with access,
during normal business hours and in a manner which shall not
unreasonably disrupt the conduct of DRC's business in the
ordinary course, to its real property, leases and other assets,
business operations, employees, providers of goods and services
(including its legal, accounting, and consulting professionals)
and customers so as to permit Terra Silex to conduct a due
diligence review of DRC and its operations. Such access shall
include, but shall not be limited to, meetings with key
personnel, a review of accounting workpapers, financial
projections, data regarding the legality of DRC's patents and to
insure that DRC's patents and technology do not infringe upon
the intellectual property of third parties, a viable market
exists for DRC's minerals, technology and patents; and, such
other information as Terra Silex may reasonably request;
provided, however, that any and all such due diligence shall be
conducted at no unreasonable cost, risk or expense to DRC except
as specifically set forth herein;
(b) From the date hereof through the Second Traunche
Closing, DRC will continue to operate its business in the
ordinary course, consistent with past practice; and
(c) DRC shall have taken such action as shall be
necessary to cause to be appointed to the board of Directors of
DRC a nominee of Terra Silex, to serve until his successor is
elected and qualified.
ARTICLE IV.
THIRD TRAUNCHE STOCK SALE AND PURCHASE
4.1 Purchase and Sale of Stock. Subject to the terms and
conditions set forth in this Agreement, within 60 days after the
date on which the Second Traunche Closing Date occurs ("Third
Traunche Closing Date"), Terra Silex agrees to purchase and
accept delivery from DRC, and DRC agrees to issue, sell, assign,
transfer and deliver to Terra Silex, certificates representing
1,000,000 shares of DRC's authorized but unissued Common Stock
(the "Third Traunche Closing") for a purchase price of $1.25 per
share, or $1,250,000 in immediately available funds ("Third
Traunche Funding"). Terra Silex may request that the Third
Traunche Closing Date be extended for up to an additional thirty
(30) days Good Reason. Any request for an extension of the
Third Traunche Closing Date shall be in writing and shall set
forth with specificity the Good Reason upon which the requested
extension is sought. DRC agrees that it will not unreasonably
deny Terra Silex's request for an extension of the Third
Traunche Closing Date should Good Reason exist.
4.2 Use of Proceeds. DRC will use the Third Traunche
Funding, net of the reimbursement of expenses required in
Paragraph 4.3 below, to fund its ongoing operations in the
ordinary course.
4.3 Conditions to Third Traunche Closing.
(a) The results of the update of Terra Silex's due
diligence review of DRC shall be satisfactory in all material
respects to Terra Silex, in its sole and absolute discretion;
The representations and warranties of DRC, set forth in Article
V hereof, shall be true and correct as if made on the Third
Traunche Closing Date;
(b) There shall have occurred no material adverse
change in the business, operations, assets, liabilities,
revenues of DRC, including but not limited to, any material
adverse change in the status of outstanding litigation or the
quality or intrinsic value of DRC's assets from the date hereof
until the Third Traunche Closing Date;
(c) DRC shall have complied, in all material
respects, with its covenants and agreements set forth in
Paragraph 4.4 below; and
(d) At Third Traunche Closing, DRC shall reimburse
Terra Silex for its additional expenses, if any, (including
legal, due diligence, accounting and other) incurred by it in
connection with its continuing due diligence and negotiation of
this transaction, up to a maximum of an additional $100,000.
(e) The Third Traunche Closing shall not be the
subject of any pending any action in either law or equity
commenced by a third party to hinder, delay or defeat the
purpose or intent of this Agreement.
(f) Simultaneous with the consummation of the Third
Traunche Closing, DRC shall take such action as shall be
necessary to cause to be appointed to the Board of Directors of
DRC a second nominee of Terra Silex, to serve until his
successor is elected and qualified.
4.4 Covenants Pending Third Traunche Closing.
(a) Between the Second Traunche Closing and the Third
Traunche Closing, DRC shall provide Terra Silex with access,
during normal business hours and in a manner which shall not
unreasonably disrupt the conduct of DRC's business in the
ordinary course, to its real property, leases and other assets,
business operations, employees, providers of goods and services
(including its legal, accounting, and consulting professionals)
and customers in order to permit Terra Silex to continue to
conduct its ongoing due diligence review of DRC and its
operations. Such access shall include, but shall not be limited
to, meetings with key personnel, a review of accounting
workpapers, financial projections, data regarding the legality
of DRC's patents and to insure that DRC's patents and technology
do not infringe upon the intellectual property of third parties,
and a viable market exists for DRC's minerals, technology and
patents; and, such other information as Terra Silex may
reasonably request; provided, however, that any and all such due
diligence shall be conducted at no unreasonable cost, risk or
expense to DRC except as specifically set forth herein;
(b) From the date hereof through the Third Traunche
Closing, DRC will continue to operate its business in the
ordinary course consistent with past practice; and
(c) From the date hereof through the Third Traunche
Closing, DRC agrees that it will not without the approval of its
Board of Directors: (i) incur, or agree to incur, except in the
ordinary course of business, any additional debt, other than
trade debt, to include, by way of example and not limitation,
equipment leases, project financing and purchase order
factoring, (ii) declare or make any dividends or other
distributions with respect to its capital stock; or (iii) issue
any debt securities.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Terra Silex.
(a)The execution, delivery and performance of this
Agreement has been duly authorized by Terra Silex in accordance
with its management agreement. Terra Silex is a validly
existing limited liability company under Pennsylvania law and
has full power to execute, deliver and perform under this
Agreement. This Agreement constitutes a valid and binding
obligation of Terra Silex, enforceable against it in accordance
with its terms, except as such enforcement may be subject to
bankruptcy and similar laws affecting creditors rights or
general principle of equity. The execution, delivery and
performance of this Agreement does not require any notice to or
consent or approval by any third person.
(b) Terra Silex is acquiring the First Traunche
Common Stock and shall acquire the Second and Third Traunche
Common Stock for its own account, for investment and not with a
present intent to resell or distribute such Common Stock.
(c) Terra Silex and its members posses such knowledge
and experience in financial affairs and in business matters that
Terra Silex and such members are capable of evaluating the
merits and risks of any investment in DRC and are able to bear
the economic risk of loss of such investment.
(d) Terra Silex has accessed the information filed by
DRC under the Securities and Exchange Act of 1934, as amended
("'34 Act") and other information which it has requested from
DRC from time to time. Terra Silex has been able to access
officers of DRC and third parties and ask questions about such
information and DRC.
(e) Terra Silex acknowledges that as a result of the
exercise of its rights hereunder it may become subject to the
reporting requirements of the '34 Act.
(f) Terra Silex has available to it from its members
all funds necessary to fund the First Traunche Funding, Second
Traunche Funding and Third Traunche Funding. Terra Silex does
not have to or intend to incur debt to fund its obligations
hereunder.
(g) Terra Silex owns the Southland Judgment and has
the unfettered right to exchange the Southland Judgment for
Common Stock consistent with paragraph 2.1 above.
5.2 Representations and Warranties of DRC.
(a) DRC's Board of Directors has duly authorized
consistent with the provisions of Section 203(a)(i) of the
General Corporation Law of the State of Delaware and DRC's
Bylaws, the execution, delivery and performance of this
Agreement and the issuance, sale and delivery of the Common
Stock, due upon exercise of the First Traunche, Second Traunche
and Third Traunche Closings, the Dilution Protection Rights and
the Price Warrants. This Agreement constitutes a valid and
binding obligation of DRC, enforceable against it in accordance
with its terms, except as such enforcement may be subject to
bankruptcy and similar laws affecting creditors rights or
general principles of equity. The execution, delivery and
performance of this Agreement does not require any notice to or
any consent or approval by and third person.
(b) For a period of five years from and after the
date hereof, upon the written request of Terra Silex advising
the Board of Directors of DRC of the terms and conditions upon
which Terra Silex intends to acquire additional shares which may
or could cause Terra Silex to be deemed an "interested
stockholder" (as such term is defined in Section 203 (c)(5) of
the General Corporation Law of the State of Delaware), DRC
agrees to take such action as maybe be possible to approve such
transaction under Section 203(a)(i) of the General Corporation
Law of the State of Delaware; provided , however, that nothing
herein shall require DRC to seek shareholder approval of the
transaction under Section 203(b) of the General Corporation Law
of the State of Delaware.
(c) As of the date of this Agreement, DRC has (i)
20,000,000 shares of authorized Common Stock, of which 4,452,574
shares are issued and outstanding, (ii) 10,000,000 shares of
preferred stock authorized, of which 2,017,800 share are issued
and outstanding, (2,001,800 of which are convertible into Common
Stock at a price equal to 85% of the five day average closing
price for DRC's Common Stock immediately preceding the
conversion date, but in no event will the conversion price be
less than $1.25, or a maximum number of shares of Common Stock
or 16,014,400 and 16,000 par value $50.00 per share convertible
into shares of Common Stock on a dollar for dollar basis at the
time of conversion), and (iii) options and warrants to acquire
4,181,349 shares of Common Stock. There are no shares of
treasury stock and other capital stock equivalents authorized,
issued or outstanding. All of the outstanding shares of capital
stock of DRC are validly issued, fully paid and non-assessable
and do not have the benefit of preemptive rights. Upon
issuance, the First Traunche Common Stock, the Second Traunche
Common Stock and the Third Traunche Common Stock will be validly
issued, fully paid and non-assessable free and clear of all
liens, claims, charges, options, preemptive rights, proxies and
voting agreements;
(d) The financial statements filed by DRC with the
Securities and Exchange Commission ("SEC") were prepared in
accordance with generally accepted accounting principles,
consistently applied, and fairly present the financial condition
and results of operations of DRC, as at the dates and for the
periods indicated. Other information filed with the SEC
substantially complies as to form and content with SEC rules and
regulations and does not contain a material misstatement of a
material fact or omit to state a fact necessary to make the
statements made not misleading under the circumstances. Except
as set forth on Schedule 5.2(d), DRC possesses no liabilities,
absolute, contingent or otherwise, other than those liabilities
disclosed in the financial statements or the notes thereof.
There have been no material adverse change in the financial
condition, results of operations or prospects of DRC since the
date of such filings not disclosed in a current report on Form
10-KSB or 10-QSB ("SEC Reports"), and there is no fact not
disclosed to Terra Silex, known by DRC, which is likely to cause
an adverse change;
(e) DRC has good title to and the unrestricted right
to use its patents and other intellectual property used by it in
its business. DRC knows of no claims of conflict or
infringement or any other reason why the use of such patents or
intellectual property in DRC's business is not technically or
financially feasible;
(f) Except as set forth in its SEC Reports and
Schedule 5.2(f), DRC is in substantial compliance with laws,
regulations and rules applicable to it and has all licenses
necessary to own and operate its business. DRC has duly filed
its federal, state and local tax returns and is not in arrears
in the payment of its taxes. DRC is presently in dispute with
the State of Delaware over the amount of Franchise Taxes due and
owing for fiscal years 1999 and 2000.
(g) Neither DRC nor anyone authorized to act on its
behalf has, either directly or indirectly, taken or allowed to
be taken any other action on behalf of DRC which would subject
the Common Stock issued pursuant to this Agreement, to include
the exercise of the Dilution Protection Right and/or Price
Warrant, to the registration and prospectus requirements of the
Securities Act of 1933, as amended (the "'33 Act").
ARTICLE VI
SECURITIES AND BOARD MEMBERSHIP
6.1 Resale of Securities.
(a) Terra Silex agrees and acknowledges that upon the
acquisition of some or all of the Common Stock of DRC to which
it is or may be entitled by reason of this Agreement, that it
will become subject to certain rules and regulations of the '34
Act, to include by way and not limitation Rule 13a and Rule 16a
and 16b. Terra Silex agrees to fully comply with the Rules and
Regulations promulgated under the '34 Act in connection with the
sale or resale of any the Common Stock or other securities to
which it is entitled by execution of this Agreement.
(b) Terra Silex agrees that it will not sell or
otherwise transfer the Common Stock, the Price Warrant or the
Common Stock issuable upon the exercise of the Price Warrant
("Securities") except pursuant to an effective registration
under the '33 Act or in a transaction which, in the opinion of
counsel (reasonably satisfactory to DRC), qualifies as an exempt
transaction under the '33 Act and the rules and regulations
promulgated thereunder.
(c) The Common Stock shall bear substantially the
following legend reflecting the foregoing restrictions on the
transfer of such securities:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("`33 ACT"), OR ANY
OTHER SECURITIES AUTHORITY. THE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE `33 ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT THE SALE
OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT."
6.2 Board Nominees. For so long as Terra Silex owns
400,000 or more shares (adjusted appropriately to reflect stock
splits, stock dividends and reclassifications) of the
outstanding shares of DRC common stock, DRC's Board of Directors
shall nominate, as a director, and shall use its best efforts to
elect (including recommending the election of such nominees to
DRC's stockholders) and to cause to remain as a director on the
Board, one (1) nominee designated by Terra Silex. On and after
the funding of the Third Traunche Funds, the one nominee
referred to in the preceding sentence shall be increased to two
nominees and the level of required ownership of Common Stock by
Terra Silex shall increase from 400,000 shares to 5% of the
issued and outstanding shares of Common Stock.
6.3 Dilution Protection Rights. At any time within the
period commencing after Terra Silex fully pays the First
Traunche Funds and prior to the fifth anniversary of this
Agreement, should DRC sell, in one or more transactions, 500,000
shares or more of Common Stock (or Common Stock equivalents)
("Block Sale"), then:
(a) DRC shall give notice of each such Block Sale and
its terms to Terra Silex;
(b) Terra Silex shall have a period of thirty (30)
days after receipt of DRC's notice of each Block Sale to elect
to purchase for the same price at which the shares subject to
the Block Sale were sold to a third party, a number of shares
equal to the difference between "x" and the number of shares
acquired by Terra Silex through the date of such election
pursuant to this Agreement ("Acquisition Shares"). The value of
"x" shall be determined as follows:
(c)
Acquisition Shares X
------------------------------ = --------------------------
Total number of issued and Total number of issued and
outstanding Common Stock outstanding shares
immediately prior to the immediately after the
Block Sale Block Sale
(d) The Common Stock issued under this paragraph 6.3
shall be, when purchased, fully paid and nonassessable and
subject to the provisions of Paragraphs 6.1(b) and (c) above.
No fractional shares of Common Stock shall be issued in
connection with Terra Silex's exercise of its rights under this
Paragraph 6.3.
6.4 Price Warrant. In consideration of Terra Silex's
efforts in organizing and structuring the transactions
contemplated herein and the execution of the Terra Silex Stock
at a price above the then prevailing market price thereto, DRC
hereby grants to Terra Silex a Warrant to purchase 500,000 newly
issued shares of Common Stock at an exercise price of $1.25 per
share ("Price Warrant") a copy of which is attached hereto as
Exhibit "A". The Price Warrant may be exercised in whole or in
part as set forth in paragraph 6.4(a) below. The securities
subject to the Price Warrant and the exercise price shall be
appropriately adjusted in the event of any stock split, stock
divided, recapitalization or other major change in the Common
Stock after the date hereof pursuant to that formula set forth
in paragraph 6.3.
(a) Price Warrant Exercise. Terra Silex may exercise
the Price Warrant as follows:
(i) After the First Traunche Closing and before
December 31, 2006, Terra Silex may exercise the Price
Warrant for up to 125,000 shares of Common Stock (in
multiples of not less than 50,000 shares).
(ii) After the Second Traunche Closing and before
December 31, 2006, Terra Silex may exercise the Price
Warrant up to a maximum of 250,000 shares in the aggregate
(in multiples of not less than 50,000 shares).
(iii) After the Third Traunche Closing and before
December 31, 2006, Terra Silex may exercise the Price
Warrant up to a maximum of 500,000 shares in the aggregate
(in multiples of not less than 50,000 shares).
(b) Should Terra Silex not have fully exercised the
Price Warrant by December 31, 2006 ("Expiration Date"), and
should the five day closing average for the Common Stock for the
five business days immediately preceding the Expiration Date
("Closing Price") be less than $1.25, then the Expiration Date
of the Price Warrant shall be extended by a period equal to:
5 years (The term of the Price Warrant) x $1.25
-------------
Closing Price
6.5 Registration Rights Registration Rights. Terra Silex
shall have registration rights for the Common Stock acquired by
Terra Silex under Articles II, III , and IV and paragraph 6.3
and that Common Stock resulting from the exercise of all or a
portion of the Price Warrant under paragraph 6.4 above as set
forth in the Registration Rights Agreement attached hereto as
Appendix "B".
6.6 Fractional Shares. Upon the exercise of the Price
Warrant or the Dilution Protection Rights, no fractional shares
will be issued. Any fractional shares will be rounded down to
the next whole share.
ARTICLE VII
MISCELLANEOUS
7.1 Termination. Notwithstanding anything to the contrary
in this Agreement, this Agreement may be terminated at anytime
prior to Closing:
(a) By mutual agreement of the parties hereto.
(b) By either party if the First Traunche Closing
shall not have been consummated on or before September 21, 2001,
unless the failure to consummate the Closing is the result of a
willful and/or material breach of this Agreement by the party
seeking to terminate this Agreement.
7.2 Entire Agreement. This Agreement represents the final
agreement between Terra Silex and DRC with respect to the
subject matter hereof and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of Terra
Silex and DRC. There are no unwritten oral agreements between
Terra Silex and DRC.
7.3 Governing Law. This Agreement shall be governed by,
and shall be construed and enforced in accordance with the laws
of the Commonwealth of Pennsylvania.
7.4 Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
7.5 Notice. All notices or other communications hereunder
shall be in writing, shall be effective upon receipt and shall
be made by hand delivery, certified mail return receipt
requested, or by overnight courier, postage prepaid addressed as
follows:
To DRC: Daleco Resources Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxx Xxxx, Chairman of the Board
and Chief Executive Officer
With a copy to: Xxxxxx, Van Denbergh & Xxxxxxx, P.C.
Xxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: C. Xxxxxx Xxxxxxx
To Terra Silex: Terra Silex Holdings Ltd. Co.
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Manager
With a copy to: Xxxxxxx & Xxx, P.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Either party may change its address for Notice by giving the
other party not less than ten (10) days notice of its new address
in accordance with this Paragraph 7.5.
7.6 Invalidity of Certain Provisions. Any term or
provision of this Agreement which is invalid or unenforceable in
any jurisdiction shall, as to such 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 terms or provisions hereof.
7.7 Multiple Counterparts. This Agreement may be executed
in one or more counterparts and be different parties hereto in
separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
7.8 Neither Party Drafter. The parties hereto agree that
this Agreement is the product of negotiation, that each has been
represented by counsel during its negotiation and that neither
party shall be deemed the drafter hereof.
7.9 Costs. Except as specifically provided elsewhere
herein, each party agrees its legal accounting and other fees
incurred in the negotiation of the transaction contemplated
hereby, the conduct of its due diligence and the preparation of
the documents, exhibits and schedules addressed and referenced
herein.
7.10 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
Confidentiality. Terra Silex shall use its reasonable best
efforts to hold in confidence and treat as confidential, all
information acquired from DRC in the course of the due diligence
review contemplated by Section 2.4, 3.4, and 4.4 above and also
cause its representatives to do so. Terra Silex shall not,
without the consent of DRC, disclose any such information to any
third party except to its representatives and except as required
by law or in connection with litigation. If the Second Traunche
Closing is not completed, Terra Silex shall promptly return all
documents and other written information obtained from DRC in the
course of such due diligence review and will not retain copies
thereof or use such information for any purpose except in
connection with litigation. The restrictions in this paragraph
shall not apply to information available from public records of
which is otherwise in the public domain, or to information which
is independently developed or acquired by Terra Silex or its
representatives.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date set forth above.
TERRA SILEX HOLDINGS LTD. CO.
By:_______________________________
Xxxxxxx Xxxxx, Manager
DALECO RESOURCES CORP.
By:_______________________________
Xxxx X. Xxxxxxxxx, President
Schedule 5.2(d)
Schedule 5.2(f)
10-QSB for the period ending December 31, 2000
10-QSB for the period ending March 31, 2001
10-QSB for the period ending June 30, 2001
