REORGANIZATION AGREEMENT
AND
PLAN OF MERGER
THIS REORGANIZATION AGREEMENT AND PLAN OF MERGER ("Agreement") is
entered into this 30th day of September 1998 between and among HYTK
Industries, Inc., a Nevada corporation ("HYTK"), HYTK Holding Co., Inc., a
Kansas corporation wholly owned by HYTK ("HYTK Holding"), and Quest Resource
Corporation, a Kansas corporation ("Quest") (HYTK, HYTK Holding, and Quest
shall be collectively or individually as referred to as "Party" or the
"Parties").
Recitals
WHEREAS, HYTK seeks a business entity with which to merge and desires to
effect such merger through its wholly owned subsidiary HYTK Holding.
WHEREAS, Quest seeks to merge with a company subject to section 13 or
15(d) of the Securities Exchange Act of 1934.
WHEREAS, HYTK desires to have HYTK Holding merge with and into Quest and
Quest desires to merge with HYTK Holding and thereby become a wholly owned
subsidiary of HYTK.
Agreement
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the sufficiency of which is hereby expressly
acknowledged, the Parties agree as follows:
1. Merger. (a) In accordance with the provisions of this Agreement and
the Kansas General Corporation Code, HYTK Holding shall be merged with
and into Quest (the "Merger"). Quest shall be the "Surviving
Corporation" of the Merger and become a wholly owned subsidiary of HYTK.
The Merger shall be accomplished by the exchange and transfer of shares
as discussed below.
(b) Upon the Closing and effectiveness of the Merger, the separate
existence of HYTK Holding shall cease and Quest, as the Surviving
Corporation, shall:
(i) continue to possess all of its assets, rights, powers and
property as constituted immediately prior to the Closing and
effectiveness of the Merger;
(ii) become subject to HYTK Holding board of director actions
previously taken, all of HYTK Holding's debts, liabilities and
obligations as existed immediately prior to the Closing and
effectiveness of the Merger and therefore be responsible, without
other transfer, for all of the debts, liabilities and obligations
of HYTK Holding in the same manner as if Quest had itself incurred
them; and
(iii) become a wholly-owned subsidiary of HYTK.
2. Exchange of Shares. Subject to all the terms and conditions of this
Agreement, all of the 3,421,077 issued and outstanding shares of common
stock in Quest, no par value (the "Quest Common Stock"), shall be
exchanged and transferred from the owners of such stock ("Quest
Shareholders") for a corresponding number of shares of common stock in
HYTK, par value $0.001 (the "HYTK Common Stock"). The HYTK Common Stock
shall be issued to the Quest Shareholders as they appear on the books
and records of Quest as of Closing. As soon as practicable on or after
the effective date of the Merger, the Quest Shareholders or their
nominee shall surrender to Quest, as the surviving entity, the
certificates representing the Quest Common Stock. Upon delivery of the
certificates together with an assignment in blank, the Quest
Shareholders will receive a certificate for HYTK Common Stock. When
transferred to the Quest Shareholders, the HYTK Common Stock shall be
fully paid, and non-assessable. The Merger shall become effective at
the time Certificate of Merger is filed with the Secretary of State of
the state of Kansas, and shall have the effect set forth under the
General Corporate Code of the state of Kansas.
a. As the surviving corporation, Quest may take any action in the
name and on behalf of either HYTK Holding or Quest in order to
carry out and effectuate the transactions contemplated by this
Agreement.
b. The current officers and directors of Quest, listed in Exhibit C,
shall remain the officers and directors of Quest after the Merger.
Upon the effectiveness of the Certificate of Merger filed with the
Kansas Secretary of State the current officers and directors of
HYTK, listed in Exhibit D, shall resign as officers and
simultaneously appoint the officers of Quest as their respective
replacement officers and appoint the directors of Quest as
additional directors of HYTK. Once the officers and directors of
Quest have accepted these appointments, the current directors and
officers of HYTK shall resign their directorships from HYTK.
c. The Articles of Incorporation of Quest in effect immediately prior
to the Merger will remain the Articles of Incorporation of the
surviving corporation after the Merger, without any modification
or amendment as a result of the Merger.
d. The Bylaws of Quest in effect immediately prior to the Merger will
remain the Bylaws of the surviving corporation after the Merger,
without any modification or amendment as a result of the Merger.
3. Exemption from Registration. The Parties hereto intend that the
exchange of shares shall be exempt from the registration requirements of
the Securities Act of 1933, as amended (the "1933 Act"), and the rules
and regulations promulgated thereunder and exempt from the registration
requirements of the applicable states. Quest shall use its best efforts
to obtain and deliver to HYTK at Closing, investment letters in the form
attached hereto as Exhibit E.
4. Non-taxable Transaction. The Parties intend to effect this transaction
as a tax-free reorganization, as defined in the Internal Revenue Code
Section 368(a)(1)(B). The Parties agree to comply with the tax-free
requirements of this section to effect a tax-free reorganization.
5. Warranties and Representations of Quest In order to induce HYTK and
HYTK Holding to enter into this Agreement and to complete the
transaction contemplated hereby, Quest warrants and represents to HYTK
and HYTK Holding that:
a. Organization and Standing. Quest is a corporation duly organized,
validly existing and in good standing under the laws of the state
of Kansas. It is also qualified to do business in every other
state or jurisdiction in which it operates and to own and operate
its assets, properties and business in such states or
jurisdictions. Attached hereto as Exhibit F are true and correct
copies of Quest's Articles of Incorporation, Amendments thereto
and all Bylaws. No changes to any of the documents listed in
Exhibit F shall be effected prior to Closing.
b. Capitalization. As of Closing, 20,000,000 shares of Quest Common
Stock are authorized for issuance by Quest, of which 3,421,077
shares of Common Stock are issued and outstanding. No other
voting or equity securities are authorized or issued, nor are any
authorized or issued securities convertible into voting stock.
Quest does not have any outstanding subscriptions, warrants,
calls, options, rights, commitments or agreements by which Quest
is bound, calling for the issuance of any additional shares of
Common Stock or any other voting or equity security. The Quest
Common Stock constitutes 100% of the equity capital of Quest.
Such stock constitutes 100% of Quest's voting power, the exclusive
right to receive dividends, when, and if declared and paid, and
the exclusive right to receive the proceeds of liquidation
attributable to Quest Common Stock, if any. From the date hereof,
and until the Closing Date, no dividends or distributions of
capital, surplus, or profits shall be paid or declared by Quest in
redemption of their outstanding shares or otherwise. Except as
described herein no additional shares shall be issued in
connection with this Merger by Quest.
c. Ownership of Quest Common Shares As of the date hereof, the Quest
Shareholders are the owners of record of the Quest Common Stock to
best of Quest's knowledge.
d. Taxes. Within the times and in the manner prescribed by law,
Quest and its subsidiaries have filed all federal, state and local
income or other tax returns and reports required to be filed with
all governmental agencies and have paid or accrued for payment all
taxes as shown on such returns, such that a failure to file, pay
or accrue will not have a material adverse effect on Quest or its
subsidiaries.
e. No Pending Actions. To the best of Quest's knowledge, after
diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending or threatened against or affecting Quest or its
subsidiaries, or against any of the officers or directors
therewith that arise out of their operation of Quest and its
subsidiaries, nor is Quest or its subsidiaries in material
violation of any federal or state law, ordinance or regulation of
any kind whatever, including, but not limited to laws, rules and
regulations governing the sale of its products, services or
securities. Quest is not an investment company as defined in or
otherwise subject to regulation under, the Investment Company Act
of 1940.
f. Ownership of Assets. Attached hereto as Exhibit F is a list of
the assets and liabilities of Quest and its subsidiaries as of
Closing.
g. Subsidiaries. Quest owns 100% of the issued capital stock of
Quest Energy Service, Inc. and Ponderosa Gas Pipeline Company,
Inc. Quest does not own capital stock in any other entity.
h. No Interest in Suppliers, Customers, Landlords or Competitors.
Except for the ownership of Bonanza Energy Corporation of Kansas
by Xxxxxxx and Xxxxxx Xxxx and to the best of Quest's knowledge
after due inquiry, none of the following persons possess any
ownership interest of any nature whatsoever in any supplier,
customer, landlord or competitor of Quest or its subsidiaries:
Quest Shareholder, family member of any Quest Shareholder; or
employee of Quest or its subsidiaries.
i. No Debt Owed by Quest. Except as set forth in Exhibit K, neither
Quest nor its subsidiaries owe any money, securities, or property
to any of the following persons: Quest Shareholders, family
members of Quest Shareholders, or employees of Quest or its
subsidiaries either directly or indirectly. Quest and its
subsidiaries do not have any material debt, liability or
obligation of any nature, whether accrued, absolute, contingent
or otherwise, and whether due or to become due, that is not
reflected in the balance sheet of Quest included hereto as Exhibit
L. Quest and its subsidiaries do not currently have, nor will they
have on the Closing Date any pension plan, profit-sharing plan, or
stock purchase plan for any of its employees or certain options to
proposed executive officers. Quest does, however, intend on
implementing an employee stock bonus plan shortly after Closing.
j. Corporate Records. All of Quest's and its subsidiaries' books and
records, including, without limitation, its books of account,
corporate records, minute book, stock certificate books and other
records have been maintained in a reasonable manner and fairly
reflect the conduct of its business in all material respects since
its date of incorporation.
k. Quest Financial Statements. At Closing, Quest will provide to
HYTK audited financial statements for Quest and its subsidiaries
for its operations through May 31, 1998 and unaudited financial
statements for Quest and its subsidiaries for its operations
through August 31, 1998, all of which shall be prepared in
accordance with generally accepted accounting principles in the
United States ("GAAP").
l. Conduct of Business. Quest represents that it shall not
materially change the normal course of its business operations
prior to Closing. Quest shall not amend its Articles of
Incorporation or Bylaws (except as may be described in this
Agreement), declare dividends, redeem securities, incur
additional or newly-funded liabilities outside the ordinary
course of business, acquire or dispose of fixed assets, change
employment terms, enter into any material or long-term contract,
guarantee obligations of any third party, settle or discharge
any balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any
other transaction without the prior approval of HYTK, not to be
unreasonably withheld.
m. Corporate Summary. The corporate summary Quest has provided to
HYTK accurately describes, as of Closing, the business, assets,
proposed operations and management of Quest and its subsidiaries.
6. Warranties and Representations of HYTK. In order to induce Quest to
enter into this Agreement and to complete the transaction contemplated
herein, HYTK warrants and represents to Quest that:
a. Organization and Standing. HYTK is a corporation duly organized,
validly existing and in good standing under the laws of Nevada.
It is also qualified to do business in every other state or
jurisdiction in which it operates and to own and operate its
assets, properties and business in such states or jurisdictions.
Attached hereto as Exhibit F are true and correct copies of HYTK's
Certificate of Incorporation, Amendments thereto and all Bylaws.
No changes to any of the documents listed in Exhibit N shall be
effected prior to Closing. HYTK owns no subsidiary other than
HYTK Holding, which is a party hereto.
b. Capitalization. As of Closing, HYTK has authorized for issuance
950,000,000 shares of voting Common Stock, $0.001 par value and
50,000,000 shares of Preferred Stock, $0.001 par value. As of
Closing, and after giving effect to item 16(b)(vi) herein, HYTK
shall have a total of 52,266 shares of its Common Stock issued and
outstanding and no shares of Preferred Stock outstanding, which
shares are validly issued, fully paid and non-assessable. To the
best of HYTK's knowledge, all such issued and outstanding shares
were issued pursuant to a valid registration statement under the
1933 Act or pursuant to valid exemptions therefrom. Except as set
forth in Exhibit Q, there are no voting or equity securities
convertible into voting stock, and no outstanding subscriptions,
warrants, calls, options, rights, commitments or agreements by
which HYTK is bound, calling for the issuance of any additional
shares of Common Stock or any other voting or equity security.
The total number of shares of Common Stock which shall be issued
and outstanding after the consummation of the Merger and all
attendant transactions equals 4,721,077. This number includes the
following shares: those currently issued and outstanding 52,266;
the block of 1,247,734 shares to be issued to various advisors and
consultants to HYTK and Quest, which recipients are set forth in
Exhibit O; and the 3,421,077 shares of Common Stock to be issued
to the Quest Shareholders on the one-for-one basis. The relative
rights and preferences of HYTK's equity securities are set forth
in HYTK's Articles of Incorporation, Amendments thereto and all
current Bylaws, which are collectively set forth in Exhibit N.
c. Ownership of Shares. Upon the transfer of the HYTK Common Shares
from HYTK Holding to the Quest Shareholders pursuant to this
Agreement, the Quest Shareholders will thereby acquire good and
absolute marketable title thereto, and will be subject to the
resale terms under the investment letter set forth in Exhibit E.
Such securities shall be subject to restrictions imposed by the
1933 Act, and applicable state Blue Sky laws due to lack of
registration with any federal or state securities commissions or
authorities.
d. Taxes. As of Closing, HYTK and its subsidiaries will not have
filed all federal, state and local income or other tax returns and
reports that it is required to file with all governmental agencies
and has paid all taxes as shown on such returns. HYTK's current
officers and directors expressly undertake and agree to pay the
expenses associated with the filing of all such returns, which
shall be effected as soon as possible. Additionally, HYTK's
current officers and directors expressly agree to satisfy and
indemnify and hold HYTK harmless from any and all tax liabilities,
penalties and interest HYTK and its subsidiaries may currently owe
to the Internal Revenue Service or any state tax authority.
e. No Pending Actions. To the best of HYTK's knowledge, after
diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending or threatened against or affecting HYTK, or against any of
HYTK's officers or directors that arise out of their operation of
HYTK, nor is HYTK in violation of any federal or state law,
material ordinance or regulation of any kind whatever, including,
but not limited to laws, rules and regulations governing the sale
of its products, services or securities. HYTK is not an
investment company as defined in or otherwise subject to
regulation under, the Investment Company Act of 1940.
f. Filings with the Securities and Exchange Commission "SEC". To the
best of HYTK's knowledge, it has complied with all reporting
requirements of the Securities Exchange Act of 1934 (the "Exchange
Act") in that they do not contain and have not contained any
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, false or
misleading. Additionally, to the best of HYTK's knowledge, it has
not been subject to any SEC administrative proceedings,
enforcement actions or sanctions other than those disclosed to
Quest prior to Closing.
g. Corporate Records. All of HYTK's books and records, including
without limitation, its book of account, corporate records, minute
book, stock certificate books and other records are current,
complete and have been maintained in a reasonable manner and
reflect accurately and fairly the conduct of its business in all
material respects since its date of incorporation. All of said
books and records will be delivered to Quest at Closing and are
available for Quest's review at any time.
h. Authority, No Conflict. This Agreement constitutes the legal,
valid, and binding obligation of HYTK, enforceable against HYTK in
accordance with its terms. HYTK has the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this
Agreement and to perform its obligations under this Agreement.
Neither the execution or delivery of this Agreement nor the
consummation or performance of the Merger will contravene,
conflict with, or result in a violation of any HYTK organizational
document, or any external restraint, ruling, agreement or judgment
relating to HYTK.
i. HYTK Financial Statements. At Closing, HYTK will provide to Quest
audited financial statements for HYTK and its subsidiaries for its
operations through May 31, 1998 and unaudited financial statements
for HYTK and its subsidiaries for its operations through August
31, 1998 all of which shall be prepared in accordance with
generally accepted accounting principles in the United States
("GAAP").
7. Warranties and Representations of HYTK Holding. In order to induce
Quest to enter into this Agreement and to complete the transaction
contemplated herein, HYTK Holding warrants and represents to Quest that:
a. Organization and Standing. HYTK Holding is a corporation duly
organized, validly existing and in good standing under the laws of
Kansas. It is also qualified to do business in every other state
or jurisdiction in which it operates and to own and operate its
assets, properties and business in such states or jurisdictions.
Attached hereto as Exhibit P are true and correct copies of HYTK
Holding's Articles of Incorporation, Amendments thereto and all
current Bylaws. No changes thereto will be made in any of the
Exhibit P documents before Closing.
b. Capitalization. HYTK Holding has authorized for issuance 10,000
shares of voting Common Stock, no par value. As of the Closing,
but immediately prior to the reorganization contemplated herein,
HYTK Holding shall have a total of 100 shares of its Common Stock
issued and outstanding owned entirely by HYTK free and clear of
all liens, encumbrances and restrictions of any nature whatsoever,
with the sole exception being possible restrictions imposed by the
1933 Act, and applicable state Blue Sky laws due to such
securities not having been registered with any federal or state
securities commissions or authorities. The HYTK Holding shares
owned by HYTK are validly issued, fully paid and non-assessable.
The relative rights and preferences of HYTK Holding's equity
securities are set forth in HYTK Holding's Articles of
Incorporation, Amendments thereto and all current Bylaws which are
collectively set forth in Exhibit P. There shall be no other
voting or equity securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which HYTK Holding is bound, calling
for the issuance of any additional shares of Common Stock or any
other voting or equity security.
c. Taxes. At or before Closing, HYTK Holding will have filed all
federal, state and local income or other tax returns and reports
that it is required to file with all governmental agencies and has
paid all taxes as shown on such returns. All such returns are
true and complete.
d. No Pending Actions. To the best of HYTK Holding's knowledge,
after diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending or threatened against or affecting HYTK Holding, or
against any of HYTK Holding's officers or directors that have
arisen out of their association or involvement with HYTK Holding,
nor is HYTK Holding in violation of any federal or state law,
material ordinance or regulation of any kind whatever, including,
but not limited to laws, rules and regulations governing the sale
of its products, services or securities. HYTK Holding is not an
investment company as defined in or otherwise subject to
regulation under, the Investment Company Act of 1940.
e. Corporate Records. All of HYTK Holding books and records,
including without limitation, its book of account, corporate
records, minute book, stock certificate books and other records
are current, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation. All of said books and records will be delivered to
Quest at Closing.
8. No Misleading Statements or Omissions. Neither this Agreement nor any
Exhibit, Schedule or Documents attached hereto or presented to HYTK or
HYTK Holding by Quest or to Quest by HYTK or HYTK Holding in connection
with this Agreement or the Merger, contains any materially misleading
statement, or omits any fact of statement necessary to make the other
statements or facts therein set forth not materially misleading.
9. Validity of this Agreement. By Closing, all corporate and other
proceedings required to be taken by Quest, HYTK Holding and HYTK in
order to enter into and to carry out this Agreement shall have been duly
and properly taken. Upon execution, this Agreement shall constitute the
valid, binding and enforceable obligations of the Parties and shall
inure to the benefit of the heirs, executors, administrators and assigns
of the Quest Shareholders and upon the successors and assigns of HYTK
and HYTK Holding, except to the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws relating to or
effecting generally the enforcement of creditors rights. The execution
and delivery of this Agreement and its stated terms shall not result in
the breach of any of the terms or conditions of, or constitute a default
under or violate the Parties' Articles of Incorporation thereto or
document of undertaking, oral or written, to which the Parties are a
party to or is bound or may be affected by, nor will such execution,
delivery and carrying out violate any order, writ, injunction, decree,
law, rule or regulation of any court, regulatory agency or other
governmental body; and the business now conducted by the Parties can
continue to be so conducted after completion of the transaction
contemplated hereby, with Quest as a wholly-owned subsidiary of HYTK.
10. Access to Books and Records. During the course of the Merger through
Closing, HYTK and Quest agree to make available for inspection all
corporate books, records and assets, and otherwise afford to each other
and their respective representatives, reasonable access to all
documentation and other information concerning the business, financial
and legal conditions of each other for the purpose of conducting a due
diligence investigation thereof. Such due diligence investigation shall
be for the purpose of satisfying each party as to the business,
financial and legal condition of each other for the purpose of
determining the desirability of consummating the proposed Merger. The
Parties further agree to keep confidential and not use for their own
benefit, except in accordance with this Agreement and the Merger, any
information or documentation obtained in connection with any such
investigation.
11. Survival; Indemnification. All representations, warranties, covenants
and agreements made herein and in the Exhibits attached hereto shall
survive the execution and delivery of this Agreement, Closing and
payment pursuant hereto. Each of the Parties ("Indemnifying Parties")
hereby agree, jointly and severally, to indemnify, defend, and hold the
other Parties ("Indemnified Parties") harmless from and against any
damage, loss liability, or expense (including, without limitation,
reasonable expenses of investigation and reasonable attorney's fees)
arising out of any material breach of any representation, warranty,
covenant, or agreement made by the Indemnifying Parties.
12. Restricted Shares; Legend. The 3,421,077 shares of HYTK Common Stock
issued to the Quest Shareholders and the 100,000 Common Shares issued to
the Quest Advisor, as defined in Exhibit O, have been issued pursuant to
exemptions from registration and therefore are "restricted securities"
as defined in the 1933 Act; and each stock certificate issued to such
recipients hereunder will bear a restrictive legend substantially as
follows:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
the securities laws of any state and may not be sold or otherwise
transferred unless a 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 Securities Act of 1933, as
amended.
Appropriate stop transfer instructions regarding such shares shall be
given to HYTK's stock transfer agent.
13. No Reverse Split. A material term hereto and a condition to HYTK
entering into this Agreement, is that Quest and the Quest Shareholders
agree that for a period of twelve (12) months from the date of Closing,
no recapitalization or reverse stock splits will be effected without the
prior written consent of all of the directors of HYTK as of the date
immediately prior to Closing of this Agreement, which consent shall not
be unreasonably withheld. The directors of HYTK hereby acknowledge and
consent to a $3 million offering of common stock after Closing. The
consideration for such stock shall be cash or assets.
14. Expenses. Each of the Parties shall bear and pay the costs and expenses
they have allocated prior to the execution of the Agreement and that
they shall bear and pay the costs incurred by them or on their behalf in
connection with the consummation of this Agreement, including, without
limiting the generality of the foregoing, fees and expenses of financial
consultants, accountants and counsel and the cost of any documentary
stamps, sales and excise taxes which may be imposed upon or be payable
in respect to the transaction.
15. Closing. The Closing of the transactions contemplated by this Agreement
("Closing") shall take place at 1:00 P.M. on October 14, 1998 provided
all Parties have supplied the required documents and obtained the
required approvals as discussed herein. Closing shall take place at
such place as the Parties hereto shall agree upon or by facsimile
transmission and overnight delivery service.
16. Deliveries.
a. At or after Closing, each Quest Shareholder may deliver or
surrender a certificate or certificates representing all of such
shareholder's Quest Common Stock. Upon delivery of such shares,
HYTK will deliver a certificate evidencing a number of shares of
HYTK Common Stock equal to the number of Quest shares so
surrendered.
b. At or before Closing, HYTK shall deliver an opinion from counsel
to the satisfaction of Quest that:
i. Both sides have complied with the terms of the
Reorganization Agreement subject to terms requiring
performance of certain matters in the future.
ii. The shares issued in connection with the Reorganization
Agreement are, when issued, validly issued, fully paid and
non-assessable and are exempt from registration requirements
under Federal and applicable state securities laws and that
the requirements for such exemptions have been satisfied..
iii. HYTK has registered, or is preparing to register certain
shares of its common stock on Form S-8 and that such
registration is available.
iv. The transaction does not require shareholder approval from
HYTK shareholders.
v. HYTK and its subsidiaries do not have any liens, judgments
or liabilities against it.
vi. The 2,000,000 shares of common stock issued to Xxx Xxxxx on
March 5, 1998 have been canceled and that the number of
issued and outstanding shares of common stock in HYTK is
52,266.
c. At or before Closing, Quest shall deliver a letter to HYTK that
the opinion of counsel is to Quest's satisfaction.
d. At or before Closing, HYTK shall deliver an opinion from a
certified public accountant that the reorganization contemplated
herein is tax-free.
e. At or before Closing, HYTK shall deliver appointments of officers
and directors chosen by Quest and resignations of HYTK's current
officers and directors.
f. At or before Closing, HYTK shall deliver the original copies of
all its corporate records that are in the possession of its
current management.
17. Conditions Precedent to Closing. The obligations of Quest under this
Agreement shall be and are subject to fulfillment, prior to or at the
Closing of each of the following conditions:
a. That each of the representations and warranties of HYTK contained
herein shall be true and correct at the time of the Closing date
as if such representations and warranties were made at such time;
b. That HYTK shall have performed or complied with all agreements,
terms and conditions required by this Agreement to be performed or
complied with by them prior to or at the time of the Closing;
c. That Quest's representations and warranties contained herein shall
be true and correct at the time of Closing date as if such
representations and warranties were made at such time; and
d. That Quest has performed or complied with all agreements, terms
and conditions required by this Agreements to be performed or
complied with by them prior to or at the time of Closing date.
18. Termination. This Agreement may be terminated at any time before or; at
Closing, by:
a. The mutual agreement of the Parties;
b. Any party if:
i. Any provision of this Agreement applicable to a party shall
be materially untrue or fail to be accomplished.
ii. Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of this Agreement.
iii. There is a materially adverse change in the financial
condition or business operation of the other party.
c. Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each
said party shall bear all costs and expenses as each party has
incurred and no party shall be liable to the other.
19. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in entirety.
20. Miscellaneous Provisions. This Agreement is the entire agreement
between the Parties in respect of the subject matter hereof, and there
are no other agreements, written or oral, nor may this Agreement be
modified except in writing and executed by all of the Parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.
21. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of Kansas.
22. Notices. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail to the
Parties at the addresses first appearing herein:
23. Finders and Brokers. The Parties agree that the only finders or brokers
involved in bringing the Parties together or who were instrumental in
the negotiation, execution, or consummation of this Agreement were Argus
Management and Park Street Investments, Inc. Further, the Parties each
agree to indemnify the other against any claim by any third person for
any commission, brokerage, or finder's fee or other payment with respect
to this Agreement or the transaction contemplated hereby based on any
alleged agreement or understanding between such party and such third
person, whether express or implied, from the actions of such party. The
covenants set forth in this section shall survive Closing and the
consummation of the transaction herein contemplated.
24. Dissenter's Rights of Appraisal. The Parties acknowledge the existence
of possible dissenter's rights of appraisal and expressly undertake to
satisfy any such rights in a timely and judicious manner.
25. Counterparts. This Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.
26. Survival. All representations, warranties and covenants in this
Agreement or pursuant hereto shall be deemed and construed to be
continuing representations, warranties and covenants which shall survive
the Closing Date and the execution and delivery of all instruments and
documents herein provided for and any investigation at any time made on
behalf of Buyer.
IN WITNESS WHEREOF, the foregoing Agreement, having been duly approved
and adopted by the Board of Directors, and duly approved and adopted by the
stockholders of the constituent corporations, as required, in the manner
provided by the laws of the state of Kansas, the presidents of the Parties do
now execute this Reorganization Agreement under the authority of the directors
and stockholders of each.
HYTK Industries, Inc. Quest Resource Corporation
By: Xxx Xxxxx By: Xxxxxxx X. Xxxx
------------------------- -----------------------------
Xxx Xxxxx, President Xxxxxxx X. Xxxx, President
HYTK Holding Co., Inc. Attest:
By: Xxx Xxxxx By: Xxxxxxx X. Xxxxxxx
------------------------- -----------------------------
Xxx Xxxxx, President Xxxxxxx X. Xxxxxxx, Secretary
LIST OF EXHIBITS
Exhibit B Quest Shareholders
Exhibit C Quest officers and directors
Exhibit D HYTK officers and directors
Exhibit E Investment Letter
Exhibit F True and correct copies of Quest's Articles of
Incorporation, Amendments thereto and all current Bylaws
Exhibit G Quest Subsidiaries
Exhibit K Quest's liabilities including pending legal actions
Exhibit L Quest's financial statements
Exhibit N HYTK's Articles of Incorporation, Amendments thereto and all
current Bylaws
Exhibit O List of Consultants
Exhibit P HYTK Holding's Articles of Incorporation, Amendments thereto
and all current Bylaws
Exhibit Q HYTK's commitments for issuance of additional shares
