AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
RECONVERSION TECHNOLOGIES, INC., ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
AND ▇▇▇▇ ▇▇▇▇▇▇▇▇
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered into
this 10th of March, 2000, by and among RECONVERSION TECHNOLOGIES, INC. , a
Delaware corporation (hereinafter referred to as "Buyer"); and ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ or their assigns (hereinafter
collectively referred to as "Seller"), being all of the shareholders of
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORP., a New York corporation (hereafter referred to as
"Company").
WHEREAS, Seller is the owner of record and beneficially owns Four Million
(4,000,000) shares of the issued and outstanding shares of Common Stock of the
Company (the "Shares"); and
WHEREAS, the Shares represent 100% of all the issued and outstanding shares
of the Company; and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth herein;
WHEREAS, the parties intend that the exchange of Shares for shares of
Buyer's common stock, as contemplated herein, qualify as a tax free transaction
under Section 368 of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and subject to the
accuracy of the representations and warranties of the parties, the parties
hereto agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
-------------------------------
1.1 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
------------------
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Shares listed in Exhibit "A", attached hereto, which together constitute
100% of the issued and outstanding Shares of Common Stock of the Company.
1.2 CLOSING. The purchase shall be consummated at a closing
-------
("Closing") to take place at 10:00 o'clock a.m., at the offices of Buyer's
counsel on March 10, 2000 ("Closing Date").
1.3 PURCHASE PRICE. The aggregate purchase price ("Purchase Price")
---------------
for the Shares shall be Four Million Five Hundred Thousand (4,000,000) shares of
common stock of the Buyer ("Buyer Shares"). The purchase price shall be paid
at Closing by issuance and delivery of Buyer's Shares to Seller against receipt
of certificates representing the Shares, duly endorsed for transfer to Buyer.
1.4 ALLOCATION OF SHARES. All shares of stock of Buyer to be
----------------------
issued to Seller pursuant to this
Agreement shall be issued to the respective Sellers in proportion to their
respective ownership of stock of the Company as described in Exhibit "A" hereto.
II.
-12-
REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Each Seller represents
------------------------------------------
and warrants to Buyer as follows:
(a) TITLE TO THE SHARES. At Closing, Seller shall own of record
---------------------
and beneficially the number of the Shares listed in Exhibit "A", of the
Company, free and clear of all liens, encumbrances, pledges, claims, options,
charges and assessments of any nature whatsoever, with full right and lawful
authority to transfer the Shares to Buyer. No person has any preemptive rights
or rights of first refusal with respect to any of the Shares. There exists no
voting agreement, voting trust, or outstanding proxy with respect to any of the
Shares. There are no outstanding rights, options, warrants, calls, commitments,
or any other agreements of any character, whether oral or written, with respect
to the Shares.
(b) AUTHORITY. Seller has full power and lawful authority to
----------
execute and deliver the Basic
Agreements and to consummate and perform the Transactions contemplated thereby.
The Basic Agreements constitute (or shall, upon execution, constitute) valid and
legally binding obligations upon Seller, enforceable in accordance with their
terms. Neither the execution and delivery of the Basic Agreements by Seller,
nor the consummation and performance of the Transactions contemplated thereby,
conflicts with, requires the consent, waiver or approval of, results in a breach
of or default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Seller is a party or by which Seller or any of his respective properties or
assets are bound or affected.
(c) INVESTMENT INTENT. Seller is acquiring the Buyer Shares for
-------------------
his own account, for investment purposes only, and not with a view to the sale
or distribution of any part thereof, and Seller has no present intention of
selling, granting participation in, or otherwise distributing the same. Seller
understands the specific risks related to an investment in the Buyer Shares,
especially as it relates to the financial performance of the Company.
2.1 REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents
------------------------------------------
and warrants
to Buyer as follows:
(a) ORGANIZATION. The Company is a corporation duly incorporated,
------------
validly existing and in good standing under the laws of the state of New York.
The Company has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Company is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where its ownership of property or operation of its business requires
qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of
--------------------------
the Company consists of _______ Million (____________) shares of Common Stock,
$.____ par value, of which Four Million (4,000,000) shares have been issued and
are outstanding. The Shares have been duly authorized, validly issued, are
fully paid and nonassessable with no personal liability attaching to the
ownership thereof and were offered, issued, sold and delivered by the Company in
compliance with all applicable state and federal laws. The Company does not
have any outstanding rights, options, warrants, calls, commitments, conversion
or any other agreements of any character, whether oral or written, obligating it
to issue any shares of its capital stock, whether authorized or not. The
Company is not a party to and is not bound by any agreement, contract,
arrangement or understanding, whether oral or written, giving any person or
entity any interest in, or any right to share, participate in or receive any
portion of, the Company's income, profits or assets, or obligating the Company
to distribute any portion of its income, profits or assets.
(c) AUTHORITY. The Company has full power and lawful authority
----------
to execute and deliver the
-2-
Basic Agreements and to consummate and perform the Transactions contemplated
thereby. The Basic Agreements constitute (or shall, upon execution, constitute)
valid and legally binding obligations upon the Company, enforceable in
accordance with their terms. Neither the execution and delivery of the Basic
Agreements by the Company, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the consent, waiver
or approval of, results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or with
respect to, any agreement by which the Company is a party or by which the
Company or any of its properties or assets are bound or affected.
(d) COMPANY FINANCIAL STATEMENTS. The Company Financial
------------------------------
Statements are complete in all material respects, were prepared in accordance
with generally accepted accounting principles applied on a basis consistent with
prior periods and fairly present the financial position of the Company as of
December 31, 1999.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the
----------------------------
Company Financial Statements previously delivered to Buyer and as set forth on
Exhibit "B", Seller is not aware of any liabilities for which the Company is
liable or will become liable in the future.
(f) TAXES. The Company has filed all federal, state, local tax
-----
and other returns and reports which were required to be filed with respect to
all taxes, levies, imposts, duties, licenses and registration fees, charges or
withholdings of every nature whatsoever ("Taxes"), and their exists a
substantial basis in law and fact for all positions taken in such reports. No
waivers of periods of limitation are in effect with respect to any taxes arising
from and attributable to the ownership of properties or operations of the
business of the Company.
(g) PROPERTIES. The Company has good and marketable title to all
----------
its personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets (except for items leased or
licensed to the Company), including all property reflected in the Company
Financial Statements (except for assets reflected therein which have been sold
in the normal course of its business where the proceeds from such sale or other
disposition have been properly accounted for in the financial statements of the
Company), in each case free and clear of all liens, claims and encumbrances of
every kind and character, except as set forth in Exhibit "C". The Company has
no ownership interest in any real property. The assets and properties owned,
operated or leased by the Company and used in its business are in good operating
condition in all material respects, reasonable wear and tear excepted, and
suitable for the uses for which intended.
(h) BOOKS AND RECORDS. The books and records of the Company are
-------------------
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all material
respects the business, financial condition and results of operations of the
Company as set forth in the Company Financial Statements.
(i) INSURANCE. Exhibit "D" contains an accurate and complete list
---------
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers compensation,
products liability, property, and other forms of insurance or indemnity bonds
held by the Company. The Company is not in default with respect to any
provisions of any such policy or indemnity bond and has not failed to give any
notice or present any claim thereunder in due and timely fashion. All policies
of insurance and bonds are: (1) in full force and effect; (2) are sufficient
for compliance by the Company with all requirements of law and of all agreements
and instruments to which the Company is a party; (3) are valid, outstanding and
enforceable; (4) provide adequate insurance coverage for the assets, business
and operations of the Company in amounts at least equal to customary coverage in
the Company's industry; (5) will remain in full force and effect through the
Closing; and (6) will not be affected by, and will not terminate or lapse by
reason of, the transactions contemplated by this Agreement.
-3-
(j) MATERIAL CONTRACTS. Except as set forth in Exhibit "E", the
-------------------
Company has no purchase, sale, commitment, or other contract, the breach or
termination of which would have a materially adverse effect on the business,
financial condition, results of operations, assets, liabilities, or prospects of
the Company.
(k) AUTHORIZATIONS. The Company has no licenses, permits,
--------------
approvals and other authorizations from any governmental agencies and any other
entities that are necessary for the conduct of its business, except as set forth
in Exhibit "F" which contains a list of all licenses, permits, approvals, and
other authorizations, as well as a list of all copyrights, patents, trademarks,
tradenames, servicemarks, franchises, licenses and other permits, each of which
is valid and in full force and effect.
(l) NO POWERS OF ATTORNEY. The Company has no powers of attorney
----------------------
or similar authorizations outstanding.
(m) COMPLIANCE WITH LAWS. The Company is not in violation of any
---------------------
federal, state, local or other law, ordinance, rule or regulation applicable to
its business, and have not received any actual or threatened complaint, citation
or notice of violation or investigation from any governmental authority.
(n) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in
-------------------------------------
compliance with all applicable pollution control and environmental laws, rules
and regulations. The Company has no environmental licenses, permits and other
authorizations held by the Company relative to compliance with environmental
laws, rules and regulations.
(o) NO LITIGATION. There are no material actions, suits, claims,
--------------
complaints or proceedings pending or threatened against the Company, at law or
in equity, or before or by any governmental department, commission, court,
board, bureau, agency or instrumentality; and there are no facts which would
provide a valid basis for any such action, suit or proceeding. There are no
orders, judgments or decrees of any governmental authority outstanding which
specifically apply to the Company or any of its assets.
(p) VALIDITY. All contracts, agreements, leases and licenses to
--------
which the Company is a party or by which it or any of its properties or assets
are bound or affected, are valid and in full force and effect; and no breach or
default exists, or upon the giving of notice or lapse of time, or both, would
exist, on the part of the Company or by any other party thereto.
(q) NO ADVERSE CHANGES. Since December 31, 1999, there have been
-------------------
no actual or threatened developments of a nature that is materially adverse to
or involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
(s) FULL DISCLOSURE. All statements of Company contained in the
----------------
Basic Agreements and in any other written documents delivered by or on behalf of
the Company to Buyer are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made. There are
no facts known to Company which could have a materially adversely affect upon
the business, financial condition, results of operations, assets, liabilities,
or prospects of the Company, which have not been disclosed to Buyer in the Basic
Agreements.
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
-------------------------------------------
warrants to Seller and Company as follows:
-4-
(a) ORGANIZATION. The Buyer is a corporation duly incorporated,
------------
validly existing and in good standing under the laws of the state of Delaware.
The Buyer has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Buyer is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where its ownership of property or operation of its business requires
qualification.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization of
--------------------------
the Buyer at Closing will consist of Sixty Million (60,000,000) shares of Common
Stock, $.0001 par value, of which Eighteen Million Four Hundred and Sixty-Two
Thousand Five Hundred and Fifty-Three (18,462,553) shares will be issued and
outstanding. All shares have been duly authorized, validly issued, are fully
paid and nonassessable with no personal liability attaching to the ownership
thereof and were offered, issued, sold and delivered by the Buyer in compliance
with all applicable state and federal laws. Buyer is not a party to and is not
bound by any agreement, contract, arrangement or understanding, whether oral or
written, giving any person or entity any interest in, or any right to share,
participate in or receive any portion of, the Buyer's income, profits or assets,
or obligating the Buyer to distribute any portion of its income, profits or
assets.
(c) AUTHORITY. Buyer has full power and lawful authority to
---------
execute and deliver the Basic Agreements and to consummate and perform the
Transactions contemplated thereby. The Basic Agreements constitute (or shall,
upon execution, constitute) valid and legally binding obligations upon Buyer,
enforceable in accordance with their terms. Neither the execution and delivery
of the Basic Agreements by Buyer, nor the consummation and performance of the
Transactions contemplated thereby, conflicts with, requires the consent, waiver
or approval of, results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or with
respect to, any agreement by which Buyer is a party or by which Buyer or any of
its respective properties or assets are bound or affected.
(d) BUYER'S FINANCIAL STATEMENTS. The Buyer's Financial
------------------------------
Statements are complete, were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods and
fairly present the financial position of the Buyer as of September 30, 1999.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in the
----------------------------
Buyer's Financial Statements previously delivered to Seller and as set forth on
Exhibit "G", Buyer is not aware of any material liabilities for which the Buyer
is liable or will become liable in the future.
(f) TAXES. Except as set forth in Exhibit "H", the Buyer has
-----
filed all federal, state, local tax and other returns and reports which were
required to be filed with respect to all taxes, levies, imposts, duties,
licenses and registration fees, charges or withholdings of every nature
whatsoever ("Taxes"), and their exists a substantial basis in law and fact for
all positions taken in such reports. No waivers of periods of limitation are in
effect with respect to any taxes arising from and attributable to the ownership
of properties or operations of the business of the Company.
(g) PROPERTIES. The Buyer has good and marketable title to all
----------
its personal property, equipment, processes, patents, copyrights, trademarks,
franchises, licenses and other properties and assets (except for items leased or
licensed to the Buyer), including all property reflected in the Buyer's
Financial Statements (except for assets reflected therein which have been sold
in the normal course of its business where the proceeds from such sale or other
disposition have been properly accounted for in the financial statements of the
Buyer), in each case free and clear of all liens, claims and encumbrances of
every kind and character, except as set forth in Exhibit "I". The Buyer has no
ownership interest in any real property. The assets and properties owned,
operated or leased by the Buyer and used in its business are in good operating
condition, reasonable wear and tear excepted, and suitable for the uses for
which intended.
(h) BOOKS AND RECORDS. The books and records of the Buyer are
-------------------
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all material
respects the business, financial condition and results of operations of the
Buyer as set forth in the Buyer's Financial Statements.
-5-
(i) INSURANCE. Exhibit "J" contains an accurate and complete list
---------
and brief description of all performance bonds and policies of insurance,
including fire and extended coverage, general liability, workers compensation,
products liability, property, and other forms of insurance or indemnity bonds
held by the Buyer. The Buyer is not in default with respect to any provisions
of any such policy or indemnity bond and has not failed to give any notice or
present any claim thereunder in due and timely fashion. All policies of
insurance and bonds are: (1) in full force and effect; (2) are sufficient for
compliance by the Buyer with all requirements of law and of all agreements and
instruments to which the Buyer is a party; (3) are valid, outstanding and
enforceable; (4) provide adequate insurance coverage for the assets, business
and operations of the Buyer in amounts at least equal to customary coverage in
the Buyer's industry; (5) will remain in full force and effect through the
Closing; and (6) will not be affected by, and will not terminate or lapse by
reason of, the transactions contemplated by this Agreement.
(j) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in
------------------------------------
Exhibit "K", the Buyer has no outstanding agreement, understanding, contract,
lease, commitment, loan or other arrangement with any officer, director or 10%
shareholder of the Buyer or any Affiliate (as defined herein) of any such
person. For purposes of this Agreement, the term "Affiliate" shall be defined
as follows: An Affiliate of a specified Person is (i) any Person that directly
or indirectly through one or more intermediaries controls or is controlled by or
is under common control with such specified person, (ii) any Person which is an
officer, director, partner or trustee of, or serves in a similar capacity with
respect to, such specified Person, (iii) any Person which is directly or
indirectly the owner of more than ten percent (10%) of any class of equity
securities of such specified Person and (iv) the parents, siblings, children or
spouse of such specified Person. Additionally, for purposes of this Agreement,
the term "Person" shall mean: Any individual, corporation, business trust,
estate, trust, partnership, limited partnership, association, joint venture,
limited liability company, governmental subdivision, agency or instrumentality
or any other legal or commercial entity."
(k) MATERIAL CONTRACTS. The Buyer has no purchase, sale,
-------------------
commitment, or other contract, the breach or termination of which would have a
materially adverse effect on the business, financial condition, results of
operations, assets, liabilities, or prospects of the Buyer.
(l) AUTHORIZATIONS. The Buyer has no licenses, permits, approvals
--------------
and other authorizations from any governmental agencies and any other entities
that are necessary for the conduct of its business, except as set forth in
Exhibit "L" which contains a list of all licenses, permits, approvals, and other
authorizations, as well as a list of all copyrights, patents, trademarks,
tradenames, servicemarks, franchises, licenses and other permits, each of which
is valid and in full force and effect.
(m) NO POWERS OF ATTORNEY. The Buyer has no powers of attorney or
---------------------
similar authorizations outstanding.
(n) COMPLIANCE WITH LAWS. The Buyer is not, and as a result of
----------------------
the transactions contemplated hereby, will not be, in violation of any federal,
state, local or other law, ordinance, rule or regulation applicable to its
business, and has not received any actual or threatened complaint, citation or
notice of violation or investigation from any governmental authority, including
the Securities and Exchange Commission.
(o) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Buyer is in
-------------------------------------
compliance with all applicable pollution control and environmental laws, rules
and regulations. The Buyer has no environmental licenses, permits and other
authorizations held by the Buyer relative to compliance with environmental laws,
rules and regulations.
-6-
(p) LITIGATION. Except as disclosed in Exhibit "M", there are no
----------
material actions, suits, claims, complaints or proceedings pending or threatened
against the Buyer, at law or in equity, or before or by any governmental
department, commission, court, board, bureau, agency or instrumentality; and
there are no facts which would provide a valid basis for any such action, suit
or proceeding. There are no orders, judgments or decrees of any governmental
authority outstanding which specifically apply to the Company or any of its
assets.
(q) VALIDITY. All contracts, agreements, leases and licenses to
--------
which the Buyer is a party or by which it or any of its properties or assets are
bound or affected, are valid and in full force and effect; and no breach or
default exists, or upon the giving of notice or lapse of time, or both, would
exist, on the part of the Buyer or by any other party thereto.
(r) FINANCIAL CONDITION. At Closing, the Buyer's assets shall
--------------------
consist of $5,000,000 in cash, a note receivable in the amount of $720,000 and
an agreement to acquire to Logisoft Corp, and the Buyer's accrued but unpaid
liabilities shall not exceed $1,000 at Closing.
(s) FULL DISCLOSURE. All statements of Buyer contained in the
----------------
Basic Agreements and in any other written documents delivered by or on behalf of
the Buyer to Seller are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made. There are
no facts known to Buyer which could have a materially adversely affect upon the
business, financial condition, results of operations, assets, liabilities, or
prospects of the Buyer, which have not been disclosed to Buyer in the Basic
Agreements.
III.
COVENANTS
---------
3.1 COVENANTS OF COMPANY. Company covenants and agrees that from the
----------------------
date hereof to the Closing without the prior written consent of Buyer:
(a) ORDINARY COURSE OF BUSINESS. Company will operate the
------------------------------
business of the Company only in the ordinary course and will use their best
efforts to preserve the Company's business, organization, goodwill and
relationships with persons having business dealings with them.
(b) MAINTAIN PROPERTIES. Company will maintain its properties
--------------------
in good working order, repair and condition (reasonable wear and use excepted)
and cause the Company to take all steps reasonably necessary to maintain in full
force and effect its patents, trademarks, servicemarks, trade names, brand
names, copyrights and other intangible assets.
(c) COMPENSATION. Company will not (1) enter into or alter any
------------
employment agreements; (2) grant any increase in compensation other than normal
merit increases consistent with the Company's general prevailing practices to
any officer or employee; or (3) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
(d) NO INDEBTEDNESS. Company will not create, incur, assume,
----------------
guarantee or otherwise become liable with respect to any obligation for borrowed
money, indebtedness, capitalized lease or similar obligation, except in the
ordinary course of business consistent with past practices where the entire net
proceeds thereof are deposited with and used by and in connection with the
business of the Company.
(e) MAINTAIN BOOKS. Company will maintain its books, accounts and
--------------
records in the usual, regular ordinary and sound business manner and in
accordance with generally accepted accounting principles applied on a basis
consistent with past practices.
-7-
(f) NO AMENDMENTS. Company will not amend its corporate charter
--------------
or bylaws (or similar documents) without prior consent of Buyer and Company
will maintain their corporate existence, licenses, permits, powers and rights in
full force and effect.
(g) TAXES AND ACCOUNTING MATTERS. Company will file when due all
-----------------------------
federal, state and local tax returns and reports which shall be accurate and
complete, including but not limited to income, franchise, excise, ad valorem,
and other taxes with respect to its business and properties, and to pay as they
become due all taxes or assessments, except for taxes for which adequate
reserves are established and which are being contested in good faith by
appropriate proceedings. Company will not change their accounting methods or
practices or any depreciation, amortization or inventory valuation policies or
practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course
------------------------------
of business consistent with past practice. Company will not (1) dispose of or
encumber any of its properties and assets, (2) discharge or satisfy any lien or
encumbrance or pay any obligation or liability (fixed or contingent) except for
previously scheduled repayment of debt, (3) cancel or compromise any debt or
claim, (4) transfer or grant any rights under any concessions, leases, licenses,
agreements, patents, inventions, proprietary technology or process, trademarks,
servicemarks or copyrights, or with respect to any know-how, or (5) enter into
or modify in any material respect or terminate any existing license, lease, or
contract.
(i) INSURANCE. Company will maintain in effect all its current
---------
insurance policies.
(j) NO SECURITIES ISSUANCES. Company will not issue any shares of
-----------------------
any class of capital stock, or enter into any contract, option, warrant or right
calling for the issuance of any such shares of capital stock, or create or issue
any securities convertible into any securities of the Company except for the
transactions contemplated herein.
(k) NO DIVIDENDS. Company will not declare, set aside or pay any
-------------
dividends or other distributions of any nature whatsoever.
(l) CONTRACTS. Company will not enter into or assume any
---------
contract, agreement, obligation, lease, license, or commitment except in the
ordinary course of business consistent with past practice or as contemplated by
this Agreement.
(m) NO BREACH. Company will not do any act or omit to do any act
----------
which would cause a breach of any contract, commitment or obligation of the
Company.
(n) DUE COMPLIANCE. Company will not comply with all laws,
---------------
regulations, rules and ordinances applicable to it and to the conduct of its
business.
(o) NO WAIVERS OF RIGHTS. Company will not amend, terminate or
-----------------------
waive any material right whether or not in the ordinary course of business.
(p) CAPITAL COMMITMENTS. Company will not make or commit to make
-------------------
any capital expenditure, capital addition or capital improvement.
(q) NO RELATED PARTY TRANSACTIONS. Company will not make any
--------------------------------
loans to, or enter into any transaction, agreement, arrangement or understanding
or any other nature with, any officer, director or employee of the Company.
(r) NOTICE OF CHANGE. Company will promptly advise Buyer in
------------------
writing of any material adverse change, or the occurrence of any event which
involves any substantial possibility of a material adverse change, in the
business, financial condition, results of operations, assets, liabilities or
prospects of the Company.
-8-
(s) CONSENTS. Company will use its, best good faith efforts to
--------
obtain the consent or approval of each person or entity whose consent or
approval is required for the consummation of the Transactions contemplated
hereby and to do all things necessary to consummate the Transactions
contemplated by the Basic Agreements.
3.2 COVENANTS OF BUYER. Buyer covenants and agrees that from the date
--------------------
hereof to the Closing without the prior written consent of Seller:
(a) ORDINARY COURSE OF BUSINESS. Buyer will operate the business
----------------------------
in the ordinary course and will use their best efforts to preserve the Company's
business, organization, goodwill and relationships with persons having business
dealings with them.
(b) MAINTAIN PROPERTIES. Buyer will maintain all of its
--------------------
properties in good working order, repair and condition (reasonable wear and use
excepted) and cause all steps reasonably necessary to maintain in full force and
effect its patents, trademarks, servicemarks, trade names, brand names,
copyrights and other intangible assets.
(c) COMPENSATION. Buyer will not (1) enter into or alter any
------------
employment agreements; (2) grant any increase in compensation other than normal
merit increases consistent with the Company's general prevailing practices to
any officer or employee; or (3) enter into or alter any labor or collective
bargaining agreement or any bonus or other employee fringe benefit.
(d) NO INDEBTEDNESS. Buyer will not create, incur, assume,
----------------
guarantee or otherwise become liable with respect to any obligation for borrowed
money, indebtedness, capitalized lease or similar obligation, except in the
ordinary course of business consistent with past practices where the entire net
proceeds thereof are deposited with and used by and in connection with the
business of the Company.
(e) MAINTAIN BOOKS. Buyer will maintain its books, accounts and
---------------
records in the usual, regular ordinary and sound business manner and in
accordance with generally accepted accounting principles applied on a basis
consistent with past practices.
(f) NO AMENDMENTS. Buyer will not amend its corporate charter or
--------------
bylaws (or similar documents) without prior consent of Seller and will cause the
Company to maintain its corporate existence, licenses, permits, powers and
rights in full force and effect.
(g) TAXES AND ACCOUNTING MATTERS. Buyer will file when due all
-------------------------------
federal, state and local tax returns and reports which shall be accurate and
complete, including but not limited to income, franchise, excise, ad valorem,
and other taxes with respect to its business and properties, and to pay as they
become due all taxes or assessments, except for taxes for which adequate
reserves are established and which are being contested in good faith by
appropriate proceedings. Buyer will not permit the Company to change their
accounting methods or practices or any depreciation, amortization or inventory
valuation policies or practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course
------------------------------
of business consistent with past practice, Buyer will not (1) dispose of or
encumber any of its properties and assets, (2) discharge or satisfy any lien or
encumbrance or pay any obligation or liability (fixed or contingent) except for
previously scheduled repayment of debt, (3) cancel or compromise any debt or
claim, (4) transfer or grant any rights under any concessions, leases, licenses,
agreements, patents, inventions, proprietary technology or process, trademarks,
servicemarks or copyrights, or with respect to any know-how, or (5) enter into
or modify in any material respect or terminate any existing license, lease, or
contract.
(i) INSURANCE. Buyer will maintain in effect all its current
---------
insurance policies.
-9-
(j) NO DIVIDENDS. Buyer will not declare, set aside or pay any
-------------
dividends or other distributions of any nature whatsoever.
(k) CONTRACTS. Buyer will not enter into or assume any contract,
---------
agreement, obligation, lease, license, or commitment except in the ordinary
course of business consistent with past practice or as contemplated by this
Agreement.
(l) NO BREACH. Buyer will not do any act or omit to do any act
----------
which would cause a breach of any contract, commitment or obligation.
(m) DUE COMPLIANCE. Buyer will comply with all laws, regulations,
--------------
rules and ordinances applicable to it and to the conduct of its business.
(n) CAPITAL COMMITMENTS. Buyer will not make or commit to make
--------------------
any capital expenditure, capital addition or capital improvement.
(o) NOTICE OF CHANGE. Buyer will promptly advise Seller in
------------------
writing of any material adverse change, or the occurrence of any event which
involves any substantial possibility of a material adverse change, in the
business, financial condition, results of operations, assets, liabilities or
prospects of the Buyer.
(p) CONSENTS. Buyer will use its best good faith efforts to
--------
obtain the consent or approval of each person or entity whose consent or
approval is required for the consummation of the Transactions contemplated
hereby and to do all things necessary to consummate the Transactions
contemplated by the Basic Agreements.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
-----------------------------
The obligation of Buyer to close the Transactions contemplated hereby is
subject to the fulfillment by Seller prior to Closing of each of the following
conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
-------------------------------------------------------------
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct as of the Closing
with the same force and effect as if made at the Closing. Seller shall have
performed all agreements, covenants and conditions required to be performed by
Seller prior to the Closing.
4.2 NO ADVERSE CHANGE. There shall have been no event which has had or
-----------------
may have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Company.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
----------------------
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered
-------------------------------------
the following documents:
(a) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or accompanied by duly executed stock powers,
copies of which are attached as Exhibit "A".
-10-
(b) A copy of (i) the Certificate of Incorporation of the Company,
certified as correct by the Company; and (ii) the Bylaws of the Company
certified as correct by the Company; and (iii) a certificate of the New York
Tax Commission, Franchise Tax Division, to the effect that the Company is in
good standing and has paid all franchise taxes in such state, all as attached
hereto as Exhibit "N";
(c) All corporate and other records of or applicable to the
Company included but not limited to, current and up-to-date minute books, stock
transfer books and registers, books of accounts, leases and material contracts.
(d) Such other documents or certificates as shall be reasonably
required by Buyer or its counsel in order to close and consummate this
Agreement.
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
------------------------------
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
-------------------------------------------------------------
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
----------------------
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3. DOCUMENTS TO BE DELIVERED BY BUYER.
----------------------------------------
(a) A copy of (i) the Articles of Incorporation of the Buyer,
certified as correct by the
Buyer; and (ii) the Bylaws of the Buyer certified as correct by the Buyer; and
(iii) a certificate of the
Delaware Tax Commission, Franchise Tax Division, to the effect that the Buyer is
in good standing and has paid all franchise taxes in such state.
(b) All corporate and other records of or applicable to the Buyer
included but not limited to,
current and up-to-date minute books, stock transfer books and registers, books
of accounts, leases and material contracts.
(c) Such other documents or certificates as shall be reasonably
required by Buyer or its counsel
in order to close and consummate this Agreement.
5.4 PAYMENTS. Seller shall have received from Buyer all Common Stock
--------
to be issued at the Closing by Buyer.
5.5 NO ADVERSE CHANGE. There shall have been no event which has had or
------------------
may have a material adverse
effect upon the business, financial condition, results of operation, assets,
liabilities or prospects of the Buyer.
-11-
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
------------
6.1 MODIFICATION. Buyer and Seller may amend, modify or supplement
------------
this Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer and Seller may in writing extend the time for or
-------
waive compliance by the other with any of the covenants or conditions of the
other contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
----------------------------
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller set
forth herein shall not be accurate, or the conditions precedent set forth in
Article IV shall have not have been satisfied, in all material respects; or
(c) By Seller, if the representations and warranties of Buyer set
forth herein shall not be accurate, or the conditions precedent set forth in
Article V shall not have been satisfied in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VII.
MISCELLANEOUS
-------------
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
---------------------------------------------
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
----------------------------------------
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The
terms and conditions of the Basic Agreements shall inure to the benefit of and
be binding upon the respective heirs, legal representatives, successor and
assigns of the parties hereto. Nothing in the Basic Agreements, expressed or
implied, confers any rights or remedies upon any party other than the parties
hereto and their respective heirs, legal representatives and assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and
---------------
will be construed under, the laws of the State of New York.
7.4 NOTICES. All notices, requests, demands and other communications
-------
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇
-12-
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORP.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Buyer, to:
▇▇. ▇▇▇▇ ▇▇▇▇
Reconversion Technologies, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Mr. G. ▇▇▇▇▇ ▇▇▇▇▇▇
G. ▇▇▇▇▇ ▇▇▇▇▇▇ & Associates, P.C.
One Memorial Place
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
These addresses may be changed from time to time by written notice to the
other parties.
7.5 HEADINGS. The headings contained in this Agreement are for
--------
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.6 COUNTERPARTS. This Agreement may be executed in counterparts, each
------------
of which will be deemed an original and all of which together will constitute
one instrument.
7.7 SEVERABILITY. If any one or more of the provisions of this
------------
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
--------------------
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.9 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
-------------------------------
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.10 EXPENSES. Each party shall pay all fees and expenses incurred by
--------
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
-13-
7.11 INTEGRATION. This Agreement and all documents and instruments
-----------
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
RECONVERSION TECHNOLOGIES, INC.
BY: /S/ ▇▇▇▇ ▇▇▇▇
------------------
▇▇▇▇ ▇▇▇▇, PRESIDENT
"COMPANY"
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ CORP.
BY: /S/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇, PRESIDENT
"SELLER"
/S/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------
▇▇▇▇▇▇ ▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------
▇▇▇▇▇▇▇ ▇▇▇▇
-14-
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇▇▇
------------------
▇▇▇▇▇▇ ▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇
------------------
▇▇▇▇▇ ▇▇▇
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
-15-
EXHIBIT "A"
SELLERS' SHARES
SHAREHOLDER NUMBER OF SHARES
---------------- ----------------
▇▇▇▇▇▇ ▇▇▇▇ 1,126,000
---------------- ----------------
▇▇▇▇▇▇▇ ▇▇▇▇ 846,000
---------------- ----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 273,250
---------------- ----------------
▇▇▇▇▇▇ ▇▇▇ 200,000
---------------- ----------------
▇▇▇▇▇ ▇▇▇▇▇ 10,000
---------------- ----------------
▇▇▇▇▇ ▇▇▇▇▇ 468,750
---------------- ----------------
▇▇▇▇▇ ▇▇▇ 776,000
---------------- ----------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 270,000
---------------- ----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 25,000
---------------- ----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000
---------------- ----------------
-▇▇-
▇▇▇▇▇▇▇ "▇"
▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇ "▇"
▇▇▇▇
-18-
EXHIBIT "I"
NONE
-19-
EXHIBIT "J"
INSURANCE
ON FILE WITH COMPANY.
-20-
EXHIBIT "K"
TRANSACTIONS WITH CERTAIN PERSONS
RECONVERSION TECHNOLOGIES, INC. ("RETK") HAS ENTERED INTO AN AGREEMENT TO SELL
KEYSTONE LABORATORIES, INC. TO ▇▇▇▇ ▇. ▇▇▇▇ FOR $720,000. THIS TRANSACTION IS
TO BE APPROVED BY THE DISINTERESTED DIRECTORS OF RETK AND RATIFIED BY THE NEW
BOARD OF DIRECTORS UPON COMPLETION OF THIS AGREEMENT.
-21-
EXHIBIT "L"
NONE
-22-
EXHIBIT "M"
NONE
-23-