UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 1999
ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL
f/k/a
GINSITE MATERIALS, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-26609
Florida 65-0774999
- ---------------------------------- ------------------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2870 Speer Boulevard, Suite 205
Denver, Colorado 80211
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 455-3100
GINSITE MATERIALS, INC.
(Former name or former address, if changes since last report)
6781 W. Sunrise Boulevard
Plantation, FL 33313
Copy of Communications to:
Donald F. Mintmire & Peter G. Futro
Mintmire & Associates Futro & Trauernicht, LLC
265 Sunrise Avenue Alamo Plaza
Suite 204 1401 Seventeenth Street - 11th Floor
Palm Beach, FL 33480 Denver, Colorado 80202
(561) 832-5696 (303) 295-3360
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ITEM 5. OTHER EVENTS.
On August 13, 1999, Ginsite Materials, Inc. (the "Company"), a Florida
corporation, and ENVIROCON CORPORATION("ECORP"), a Nevada corporation, and the
individual holders of at least 80%(Eighty Percent) of the outstanding capital
stock of ECORP (the "Holders") consummated a re-organization(the
"Reorganization") pursuant to a certain Agreement And Plan Of Reorganization
("Agreement") of such date. Pursuant to the Agreement, the Holders tendered to
the Company at least 80% of the issued and outstanding 3,800,000 shares of
common stock of ECORP in exchange for 60% of the Shares of common stock of the
Company issued and outstanding immediately after completion of the
reorganization. Upon closing, ECORP shall become a subsidiary of Ginsite. The
reorganization is being accounted for as a reverse acquisition.
Simultaneously with the closing of the Reorganization, all of the then
officers and directors of the Company tendered their respective resignations in
accordance with the terms of the Agreement. Frank Glinton, George Anagnost,
Murray Ginsberg and Wayne Doss were elected to serve on the Board of Directors
of the newly reorganized Company (the "Board"). The fifth position on the Board
of Directors is to be filled by agreement of the new Directors. The Board
subsequently appointed Frank Glinton as the President and George Anagnost as
senior vice-president, secretary and treasurer of the newly reorganized Company.
Upon the execution of the Agreement, the Board of Directors of the newly
reorganized company is to transfer the operations and assets of Ginsite as they
existed prior to the reorganization to a wholly owned subsidiary of the newly
organized company(the "Subsidiary"), and shall appoint a five member board to
oversee the operations and management of the Subsidiary. The Subsidiary's Board
of Directors shall be made up of George Anagnost, Frank Glinton, Murray
Ginsberg, Wayne Doss and a fifth person to be mutually agreed upon by the
Subsidiary's Board of Directors.
The Company also announced it had amended its Articles of Incorporation in
order to increase the number of shares of common stock authorized to be issued
from Fifty Million (50,000,000) to One Hundred Million (100,000,000).
On September 8, 1999, the newly reorganized Company announced that it had
approved by majority consent of its shareholders, in lieu of a shareholder
meeting, a name change to ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL
("ECPI")and a five to one reverse split of its common stock.
Copies of the Agreement are filed herewith as Exhibit 2.1, and are
incorporated herein by reference. The foregoing descriptions are qualified in
their entirety by reference to the full text of such agreements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
(1) Financial statements of ENVIROCON CORPORATION, a Nevada
corporation, will be filed by amendment to this Form 8-K not later than sixty
(60) days from the filing of this report.
(b) Pro forma financial information.
(2) Pro forma financial information regarding the Reorganization will
be filed by amendment to this Form 8-K not later than sixty (60) days from the
filing of this report.
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(c) Exhibits
Exhibit 2.1 Share Exchange Agreement between GINSITE MATERIAL, INC. and
ENVIROCON CORPORATION dated August 13, 1999.
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
ENVIRONMENTAL CONSTRUCTION PRODUCTS INTERNATIONAL
(Registrant)
Date: October 7, 1999 By: /s/ Frank Glinton
--------------------------------------------
Frank Glinton, President and Director
Date: October 7, 1999 By: /s/ George Anagnost
--------------------------------------------
George Anagnost, Senior V.P., Secretary
& Treasurer
Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
GINSITE MATERIALS, INC.'S
ACQUISITION OF
ENVIROCON CORPORATION
<PAGE>
TABLE OF CONTENTS
RECITALS
AGREEMENT
1. Plan of Reorganization
1.1 Acquisition
1.2 Exchange of Shares
1.3 Amendments to Ginsite's Articles of Incorporation
1.4 Change in Management of Ginsite
1.5 Taxes
2. Closing
2.1 Delivery of Shares
2.2 Closing Requirements
3. Representations of Ginsite
3.1 Generally
3.2 Organization
3.3 Capitalization
3.4 Authority
3.5 Ginsite Stockholder(s)
3.6 Due Diligence
3.7 Approvals and Consent
3.8 Financial Statements
3.9 Undisclosed Liabilities
3.10 Assets
3.11 Litigation
3.12 Applicable Laws
3.13 Taxes
3.14 Breach of Contracts
3.15 Acquiree Disclosure
4. Representations of Envirocon
4.1 Organization
4.2 Capitalization
4.3 Authority
4.4 Due Diligence
4.5 Approvals and Consent
4.6 Litigation
4.7 Financial Statements
4.8 Employment/Consulting Contracts
4.9 Applicable Laws
4.10 Taxes
4.11 Envirocon Disclosures
4.12 Undisclosed Liabilities
4.13 Delivery of Records
5. Indemnification
6. Mutual Covenants of the Parties
7. Restrictions on Transfer of Shares
<PAGE>
8. Nature and Survival of Representations
9. Miscellaneous
9.1 Undertakings and Further Assurances
9.2 Waiver
9.3 Notices
9.4 Headings
9.5 Governing Law and Arbitration Provision
9.6 Binding Effect
9.7 Entire Agreement
9.8 Time
9.9 Expenses
9.10 Severability
9.11 Counterparts and Facsimile Signatures
SIGNATURE PAGE
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is entered
into by and between ENVIROCON CORPORATION, a Nevada corporation ("Envirocon")
and Ginsite Materials, Inc., a Florida Corporation ("Ginsite").
RECITALS
WHEREAS, Ginsite has aggregate of 21,895,273 shares of common stock
issued and outstanding, representing 100% of the ownership interest in Ginsite;
WHEREAS, Envirocon shareholders hold an aggregate of 3,800,000 shares
of common stock issued and outstanding, representing 100% of the ownership
interest in Envirocon; and
WHEREAS, Ginsite desires to acquire all of the issued and outstanding
common stock of Envirocon, and Envirocon shareholders desire to exchange all of
their shares of common stock for shares of common stock of Ginsite;
NOW, THEREFORE, for and in consideration of the mutual covenants and
representations and warranties of each other contained herein and other good and
valuable consideration, the receipt of which is hereby acknowledged, Envirocon,
by and through its shareholders, and Ginsite agree as follows:
1. Plan of Reorganization. The Plan of Reorganization is as follows:
1.1 Acquisition.
a. At the Closing, Ginsite shall acquire from Envirocon shareholders,
and Envirocon shareholders shall sell, transfer, assign and convey to Ginsite at
least 80% of the 3,800,000 shares of common stock of Envirocon, which represents
100% of all the issued and outstanding shares of common stock of Envirocon (the
"Envirocon Shares").
b. Ginsite has an aggregate of 21,895,273 shares of Ginsite common
stock currently issued and outstanding (the "Ginsite Shares"). At closing,
Envirocon shareholders shall acquire from Ginsite, and Ginsite shall issue to
Envirocon shareholders an aggregate of 32,842,909 Ginsite Shares, representing
ownership of approximately 60% of Ginsite post reorganization.
c. Upon reorganization Ginsite will have issued an aggregate of
54,738,182 shares of common stock representing 100% of all issued Ginsite
Shares. Ginsite shareholder's ownership of the balance of 21,895,273 Ginsite
Shares shall represent ownership of approximately 40% of Ginsite post
reorganization.
d. The Ginsite Shares issued shall have the rights, restrictions and
privileges set forth in Ginsite's Articles of Incorporation and in the stock
certificates therefor.
e. Upon Closing, Envirocon shall become a subsidiary of Ginsite.
1.2 Exchange of Shares. To consummate the acquisition, 32,842,909 Ginsite Shares
shall be delivered by Ginsite to Envirocon shareholders in exchange for 100% of
the Envirocon Shares.
1.3 Amendments to Ginsite's Articles of Incorporation. By executing this
Agreement, Ginsite, holding sufficient shares of the issued and outstanding
common stock of Ginsite and acting in accordance with its bylaws, articles of
incorporation and the applicable laws of the state in which it is incorporated,
hereby votes said shares to amend the Articles of Incorporation to 1) require a
five member Board of Directors, 2) require that two of the five-member Board of
Directors be appointed by Envirocon, two members of the Board of Directors be
appointed by Ginsite, and the third member be mutually agreed upon by Envirocon
and Ginsite and (3) to increase the number of shares authorized to be issued
pursuant to the articles of incorporation from fifty million (50,000,000) to one
hundred million (100,000,000).
1.4 Change in Management of Ginsite.
a. By executing this Agreement, the current directors of Ginsite hereby
and contemporaneously (i) appoint Murray Ginsberg and Wayne Doss as members of
the Board of Directors of the newly reorganized company representing the
<PAGE>
positions to be held by Ginsite representatives, (ii) appoint Frank Glinton and
George Anagnost as members of the Board of Directors of the newly reorganized
company representing the positions to be held by Envirocon representatives,
(iii) appoint Frank Glinton as president and George Anagnost as senior
vice-president, secretary and treasurer, and (iv) resign their positions as
officers and directors of Ginsite. The fifth position on the Board of Directors
shall be filled upon a convening of the newly appointed Board of Directors.
b. Upon execution of this Agreement, the Board of Directors of the
newly reorganized company shall transfer the operations and assets of Ginsite as
they existed prior to the reorganization to a wholly owned subsidiary of the
newly organized company (the "Subsidiary"), and shall appoint a five-member
board to oversee the operations and management of the Subsidiary. The
Subsidiary's Board of Directors shall be made up of George Anagnost, Frank
Glinton, Murray Ginsberg, Wayne Doss and a fifth person to be mutually agreed
upon by the Subsidiary's Board of Directors.
c. Upon execution of this agreement by all required signatories, the
Board of Directors of the newly reorganized company shall mutually agree to
execute 1-year employment contracts with Wayne Doss and Murray Ginsberg,
annually renewable upon the mutual agreement of the parties. The Board of
Directors of the Subsidiary shall mutually agree to execute 1-year employment
contracts with Audrey Max, Henry V.
Lione, and Henry Max.
d. Upon execution of this agreement the compensation of management
identified in 1.4c. shall be defined by their respective employment contracts
and conditioned upon achievement of certain performance-based criteria set forth
in the 1999-2000 budget prepared by Ginsite and approved by Envirocon. Ginsite
post-reorganization shall provide working capital to operate the company based
on the 1999-2000 budget.
e. The Board of Directors of Ginsite of the newly reorganized company
shall establish a management option plan which includes officers, directors and
other key employees.
1.5 Taxes. Each party shall be responsible for and shall pay any and all taxes,
charges or fees attributable to such party, including individual state and
federal income taxes, arising out of, or by reason of, the exchange of Ginsite
Shares for the Envirocon Shares, or otherwise in connection with the
transactions contemplated hereby. Each party hereto represents and warrants that
he has relied solely on the opinions or advice of his own professional advisors
with respect to the tax consequences of this transaction, if any, and has not
relied on the opinions or advice of the other parties or his professional
advisors in any way with respect to the tax consequences of this transaction.
2. Closing. The closing of the reorganization and the transactions contemplated
in this Agreement (the "Closing") shall be deemed to take place upon execution
of this Agreement by Envirocon Shareholders holding at least 80% of the issued
and outstanding Envirocon Shares and Ginsite hereto, whereupon such Envirocon
shareholders shall be deemed to have accepted delivery of the certificates of
the Ginsite Shares to be issued in its name, and in connection therewith, shall
make delivery of their Envirocon Shares to Ginsite.
2.1 Delivery of Shares. Upon execution of this Agreement, Envirocon shareholders
shall deliver their respective certificates representing the Envirocon Shares
duly endorsed in blank, free and clear of all claims and encumbrances, to
counsel for Ginsite, and Ginsite shall issue and deliver Ginsite Shares to
counsel for Envirocon. The Ginsite Shares shall be duly issued in the name of
the Envirocon shareholders, and shall be duly recorded on the books and records
of Ginsite.
2.2 Closing Requirements. Subsequent to Closing, each of the parties shall
execute and deliver such instruments and documents and take such other actions
as may, in the reasonable opinion of counsel for each, be required to complete
the transactions under this Agreement. It is contemplated that within ten (10)
business days after the date of this Agreement, the following documents shall
have been delivered and the following activities shall have taken place, all of
which shall be deemed to have occurred contemporaneously at the Closing:
a) the securities to be delivered pursuant to Subparagraph 2.1
have been delivered to the respective parties duly endorsed or
issued as the case may be, pursuant to Subparagraph 2.1.
<PAGE>
b) Ginsite shall permit the Envirocon members of the Board of
Directors access to corporate minute books (which shall contain
copies of the Articles of Incorporation and Bylaws, as amended to
the Closing), stock books, stock transfer books, corporate seals,
contracts, licenses and sub-licenses, non-disclosure and
confidentiality agreements, and such other corporate books and
records as may be reasonably requested.
c) copies of resolutions by Ginsite's Board of Directors
authorizing this Agreement;
d) copies of resolutions by Envirocon's Board of Directors
authorizing this Agreement;
e) the parties hereto have signed and delivered such other
instruments and documents, if any, relating to and effecting the
transactions contemplated herein; and
f) Ginsite shall have amended its articles of incorporation to
increase the number of shares of common stock authorize to be
issued from fifty million (50,000,000) to one hundred million
(100,000,000).
3. Representations of Ginsite. Ginsite hereby represents and warrants that
effective this date, the representations and warranties listed below are true
and correct:
3.1 Generally. Ginsite has provided Envirocon with a copy of its Form 10-SB
dated June 30, 1999, executed by Murray Ginsberg and Henry V. Lione, filed with
Securities and Exchange Commission and attached hereto as Exhibit A. Ginsite
represents and warrants that all information therein is accurate and true and
that except for those changes, if any, noted in Exhibit B, there have been no
material changes in the business operations and financial conditions of Ginsite
as compared to the conditions represented in such Form 10-SB.
3.2 Organization. Ginsite is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Florida with full power and
authority to own and use its properties and conduct its business as presently
conducted by it. Ginsite has furnished Envirocon with copies of the Articles of
Incorporation and the Bylaws of Ginsite, including all amendments thereto. Such
copies are true, correct and complete and contain all amendments through the
date hereof, which, together with this Agreement, are sufficient to effect the
transactions hereunder and evidence the intent of the parties hereto.
3.3 Capitalization. The authorized stock of Ginsite is fifty million shares of
common stock and ten million shares of preferred stock. Ginsite acknowledges
that it currently has insufficient authorized shares of common stock to complete
this transaction and as a condition of Closing will amend its articles of
incorporation to increase the number of shares authorized to be issued to
hundred million (100,000,000). Immediately prior to the Closing and
contemporaneous issuance of 32,842,909 Ginsite Shares from Ginsite to Envirocon,
there will be exactly 21,895,273 shares of Ginsite common stock issued and
outstanding and no shares of preferred stock issued and outstanding. At the time
of their issuance and delivery pursuant to this Agreement, all Ginsite Shares to
be issued pursuant to the terms hereof, shall be duly and validly authorized and
issued, fully paid and nonassessable.
3.4 Authority. Ginsite has the requisite corporate authority to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution and
delivery of this Agreement by Ginsite and the consummation of the transactions
contemplated hereby will not violate or conflict with any provisions of the
Articles of Incorporation, as amended, or Bylaws of Ginsite or contravene any
law, rule, regulation, court or administrative order binding on it, or result in
the breach of or constitute a default in the performance of any material
obligation, agreement, covenant or condition contained in any material contract,
lease, judgment, decree, order, award, note, loan or credit agreement or any
other material agreement or instrument to which Ginsite is a party or by which
it is bound, the default or breach of which would have a material adverse effect
on the property and assets of Ginsite, considered as a whole. Ginsite has taken
all requisite corporate action to authorize and approve the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby. Upon due execution and delivery of this Agreement, this
Agreement will constitute a valid, legal and binding obligation of Ginsite and
Ginsite enforceable against them in accordance with its terms.
<PAGE>
3.5 Ginsite Shareholders. Ginsite will deliver, upon reasonable demand of
Envirocon, any approvals, consents or other authorizations to Envirocon and said
approvals, consents and other authorizations will have been duly executed, valid
and binding.
3.6 Due Diligence. Ginsite has furnished to Envirocon copies of all documents
requested by Envirocon. No "due diligence" investigations undertaken by
Envirocon shall in any event relieve Ginsite or of its responsibilities for the
accuracy and completeness of any representation or warranty contained herein or
the performance of any covenant or agreement contained herein.
3.7 Approvals and Consent. No approval, authorization or other action by, or
filing with, any third-party, including a governmental authority is required in
connection with the execution, delivery and performance by Ginsite of its
obligations under this Agreement and its respective performance of the
transactions contemplated hereby.
3.8 Financial Statements. Ginsite represents that the financial statements
presented in Form 10-SB referenced in Paragraph 3.1 are true and accurate
representations of the company's financial condition.
3.9 Undisclosed Liabilities. Ginsite has no liabilities or obligations other
than as disclosed in Form 10- SB referenced in Paragraph 3.1.
3.10 Assets. The assets of Ginsite as set forth in Form 10-SB referenced in
Paragraph 3.1 have been acquired in bona fide transactions, fully supported by
appropriate instruments of assignment, sale, or transfer, where appropriate, and
are offset by no liabilities or contingencies, contractual or otherwise, except
as indicated in the financial statements.
3.11 Litigation. Ginsite is not involved in any pending litigation or
governmental investigation or proceeding and, to the best knowledge of Ginsite,
no litigation, claims, assessments, or governmental investigation or proceeding
is threatened against Ginsite other than as disclosed herein or in Form 10-SB
referenced in Paragraph 3.1. As of August 1999, a breach of contract claim was
filed against Ginsite and certain officers and directors in the Circuit Court of
the 17th Judicial Circuit in Broward County, Florida, alleging failure to issue
300,000 shares of Ginsite common stock for $25,000.
3.12 Applicable Laws. Ginsite has complied with all applicable laws in
connection with its formation, issuance of securities, organization,
capitalization and operations, and no contingent liabilities have been
threatened or claims made, and no basis for the same exists with respect to said
operations, formation or capitalization, including claims for violation of any
state or federal securities laws.
3.13 Taxes. Ginsite has filed all governmental, tax or related returns and
reports due or required to be filed and has paid all taxes or assessments which
have become due as of the date of this Agreement, including any employment
related taxes and withholdings, and Ginsite, to the best of its knowledge, is
not subject to a tax audit by any federal, state or local tax authority and its
properties are not subject to any tax liens.
3.14 Breach of Contracts. Ginsite has not breached, nor is there any pending or
threatened claims or any legal basis for a claim that Ginsite has breached, any
of the terms or conditions of any agreements, contracts or commitments to which
it is a party or is bound and the execution and performance hereof will not
violate any provisions of applicable law of any agreement to which Ginsite is
subject.
3.15 Ginsite Disclosure. At the date of this Agreement, Ginsite has disclosed
all events, conditions and facts materially affecting the business and prospects
of Ginsite. Ginsite has not withheld disclosure of any such events, conditions,
and facts which it, through management, has knowledge of, or has reasonable
grounds to know, which may materially affect the business and prospects of
Ginsite.
4. Representations of Envirocon. Envirocon hereby represents and warrants that
effective this date, the representations and warranties listed below are true
and correct:
4.1 Organization. Envirocon is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada with full power and
authority to own and use its properties and conduct its business as presently
conducted by it. Envirocon is duly qualified and in good standing to do business
as a foreign corporation in any other jurisdiction where failure to so qualify
would have a material adverse effect on its business or assets. Envirocon has
made available to Ginsite copies of the Articles of Incorporation
<PAGE>
and the Bylaws of Envirocon, including all amendments thereto. Such copies are
true, correct and complete and contain all amendments through the date hereof,
together with this Agreement, which are sufficient to effect the transactions
hereunder and evidence the intent of the parties hereto.
4.2 Capitalization. The authorized stock of Envirocon consists of (a) ten
million (10,000,000) shares of common stock, and (b) one million (1,000,000)
shares of preferred stock. All shares issued and outstanding are duly and
validly authorized and issued and are fully paid and nonassessable, except as
noted herein. Envirocon is currently obligated to issue 15,000 shares of common
stock and has issued options to various parties to acquire up to 25,000 shares
of common stock at $0.25 per share. Envirocon has outstanding one note with
conversion privileges that permit the holder to convert a $25,000 promissory
note to 100,000 shares of Envirocon common stock.
4.3 Authority. Envirocon has the requisite corporate authority to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby in accordance with the terms hereof. The execution and
delivery of this Agreement by Envirocon and its shareholders holding at least
80% of the common stock issued and outstanding, and the consummation of the
transactions contemplated hereby will not violate or conflict with any
provisions of the Articles of Incorporation, as amended, or Bylaws of Envirocon
or contravene any law, rule, regulation, court or administrative order binding
on it, or result in the breach of or constitute a default in the performance of
any material obligation, agreement, covenant or condition contained in any
material contract, lease, judgment, decree, order, award, note, loan or credit
agreement or any other material agreement or instrument to which Envirocon is a
party or by which it is bound, the default or breach of which would have a
material adverse effect on the property and assets of Envirocon, considered as a
whole. Envirocon has taken all requisite corporate action to authorize and
approve the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. Upon due execution and
delivery of this Agreement, this Agreement will constitute a valid, legal and
binding obligation of Envirocon enforceable against it in accordance with its
terms.
4.4 Due Diligence. Envirocon has furnished to Ginsite copies of all documents
requested by Ginsite. No "due diligence" investigations undertaken by Ginsite
shall in any event relieve Envirocon or its current officers and directors of
their responsibilities for the accuracy and completeness of any representation
or warranty of Envirocon contained herein or the performance of any covenant or
agreement of Envirocon contained herein.
4.5 Approvals and Consent. No approval, authorization or other action by, or
filing with, any third-party, including a governmental authority is required in
connection with the execution, delivery and performance by Envirocon of its
obligations under this Agreement and its performance of the transactions
contemplated hereby.
4.6 Litigation. Envirocon is not involved in any pending material litigation or
governmental investigation or proceeding and, to the best knowledge of
Envirocon, no litigation, claims, assessments, or governmental investigation or
proceeding is threatened against Envirocon.
4.7 Financial Statements. Envirocon has provided to Ginsite audited financial
statements of Envirocon prepared in accordance with the requirements of
Regulation S-B of the Securities Act of 1933, as amended (the "Act"), for the
years ended December 31, 1995 and 1996.
4.8 Employment/Consulting Contracts. Envirocon has no written or oral contracts
providing for any form of compensation whatsoever for employment, consulting or
other services, other than as set forth as agreed to in Paragraph 1.4b.
4.9 Applicable Laws. Envirocon has complied with all state, federal and local
laws in connection with its formation, issuance of securities, organization,
capitalization and operations, and no contingent liabilities have been
threatened or claims made, and no basis for the same exists with respect to said
operations, formation or capitalization, including claims for violation of any
state or federal securities laws.
4.10 Taxes. Envirocon has filed all governmental, tax or related returns and
reports due or required to be filed and have paid all taxes or assessments which
have become due as of the date of this Agreement, including any employment
related taxes and withholdings, and Envirocon, to the best of its knowledge, is
not subject to a tax audit by any federal, state or local tax authority and its
properties are not subject to any tax liens. Envirocon will cause to be filed or
prepared, as applicable, by the date of this Agreement, all federal, state,
<PAGE>
county and local income, excise, property and other tax returns, forms, or
reports, which are due or required to be filed by it prior to the date of this
Agreement.
4.11 Envirocon Disclosure. At the date of this Agreement, Envirocon has
disclosed all events, conditions and facts materially affecting the business and
prospects of Envirocon. Envirocon has not withheld disclosure of any such
events, conditions, and facts which it, through management, has knowledge of, or
has reasonable grounds to know, which may materially affect the business and
prospects of Envirocon.
4.12 Undisclosed Liabilities. Envirocon has no material liabilities or
obligations whatsoever, either accrued, absolute, contingent or otherwise,
except as disclosed on the audited financial statements heretofore provided. Any
and all undisclosed liabilities or obligations shall be deemed to be material to
the extent that they exceed $1,000 in the aggregate.
4.13 Delivery of Records. Envirocon shall provide access to all corporate
financial records, minute books, and other documents and records in their
entirety to the new management as contemplated by Subparagraph 1.4.
5. Indemnification. The parties hereby agree that for a period of two years
commencing the date hereof, and in accordance with the terms of Paragraph 8,
each party to this Agreement shall indemnify and hold harmless each other party
at all times after the date of this Agreement against and in respect of any
third-party liability, damage or deficiency, all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses, including attorney's fees,
incident to any of the foregoing, resulting from any misrepresentation, breach
of covenant or warranty or nonfulfillment of any agreement on the part of such
party under this Agreement or from any misrepresentation in or intentional
omission from any document or certificate furnished or to be furnished to a
party hereunder. Subject to the terms of this Agreement, the defaulting party
shall reimburse the other party or parties with respect to such third-party's
actions on demand, for any reasonable payment made by said parties at any time
after the Closing, in respect of any liability or claim to which the foregoing
indemnity relates, if such payment is made after reasonable notice to the other
party to defend or satisfy the same and such party failed to defend or satisfy
the same. In the event a third-party action is threatened or commenced but not
resolved within said two-year period, the parties hereby agree to extend this
indemnification through resolution of the third-party action.
In addition, each party agrees to indemnify each other party for any loss
incurred as a result of the subsequent discovery of any liability that is not
disclosed in the financial statements or schedules provided under or
incorporated into this Agreement that was known to such knowledgeable party or
parties at the time of the Closing.
6. Mutual Covenants of the Parties. Envirocon and Ginsite each covenant and
agree to execute any further documents or agreements and to take any further
acts that may be reasonably necessary to effect the transactions contemplated
hereunder, including, but not limited to, obtaining any consents or approvals of
any third-party required to be obtained to consummate the transactions
contemplated by this Agreement.
7. Restrictions on Transfer of Shares. The parties hereto acknowledge that
shares or common stock transferred and/or issued in connection with the
transactions contemplated herein are restricted as to transfer and the
certificates therefore shall bear legends to such effect and no transfer of any
shares may be effected, except pursuant to an effective registration statement
prepared and filed pursuant to the Act or pursuant to an exemption from
registration thereunder, as evidenced by an opinion of counsel or as otherwise
allowed under the laws of descent and distribution.
8. Nature and Survival of Representations. All representations, warranties and
covenants made by any party in this Agreement shall survive the Closing
hereunder and the consummation of the transactions contemplated hereby for two
(2) years from the date hereof. All of the parties hereto are executing and
carrying out the provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement or at the Closing of the transactions herein provided for and not upon
any investigation upon which it might have made or any representations,
warranty, agreement, promise or information, written or oral, made by the other
party or any other person other than as specifically set forth herein.
<PAGE>
9. Miscellaneous.
9.1 Undertakings and Further Assurances. At any time, and from time to time,
hereafter, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to carry out the intent
and purposes of this Agreement.
9.2 Waiver. Any failure on the part of any party hereto to comply with any of
its obligations, agreements or conditions hereunder may be waived in writing by
the party to whom such compliance is owed.
9.3 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given if delivered in person or sent by prepaid
first class registered or certified mail, return receipt requested, or by
Federal Express or other means of overnight delivery to the addresses below:
Envirocon: Frank Glinton
Envirocon Corporation
2870 Speer Boulevard, Suite 205
Denver, Colorado 80211
Ginsite: Murray Ginsberg
6781 West Sunrise Boulevard
Plantation, Florida 33313
9.4 Headings. The paragraph and subparagraph headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.5 Governing Law and Arbitration Provision. This Agreement shall be governed by
the laws of the State of Colorado. Any dispute arising directly or indirectly
from this Agreement shall be settled by arbitration within the State of
Colorado. Any arbitration will be conducted by the American Arbitration
Association in accordance with its Rules of Commercial Arbitration, and judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The parties hereto agree that service by certified mail to
their business addresses shall constitute sufficient service of process of any
proposed arbitration.
9.6 Binding Effect. This Agreement shall be binding upon the parties hereto and
inure to the benefit of the parties, his respective heirs, administrators,
executors, successors and assigns. This Agreement shall not be assigned by any
party hereto, except upon the consent, in writing, of the other parties hereto.
9.7 Entire Agreement. This Agreement, including the Exhibits hereto and other
documents delivered pursuant to the terms hereof, is the entire agreement of the
parties covering everything agreed upon or understood with respect to the
transactions contemplated hereby and supersedes all prior agreements, covenants,
representations or warranties, whether written or oral, by any party hereto.
There are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
9.8 Time. Time is of the essence. The parties each agree to proceed promptly and
in good faith to consummate the transactions contemplated herein.
9.9 Expenses. Each of the parties hereto shall pay its own expenses incurred in
connection with the authorization, preparation, execution and performance of
this Agreement and obtaining any necessary regulatory approvals, including,
without limitation, all fees and expenses of his respective counsel.
9.10 Severability. If any part of this Agreement is deemed to be unenforceable
the balance of the Agreement shall remain in full force and effect.
9.11 Counterparts and Facsimile Signatures. This Agreement and any Exhibits,
attachments, or documents ancillary hereto, may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. Execution and
delivery of this Agreement by exchange of facsimile copies bearing the facsimile
signature of a party hereto shall constitute a valid and binding execution and
delivery of this Agreement by such party.
Such facsimile copies shall constitute enforceable original documents.
<PAGE>
ENVIROCON CORPORATION
Date: August 13, 1999 By: /s/ Frank Glinton
-------------------
Frank Glinton
GINSITE MATERIALS, INC.
Date: August 13, 1999 By: /s/ Murray Ginsberg
-------------------
Murray Ginsberg
GINSITE "INSIDERS"
Date: August 13, 1999 By: /s/ Audrey Max
-------------------
Audrey Max
Date: August 13, 1999 By: /s/ Henry V. Lione
-------------------
Henry V. Lione
Date: August 13, 1999 By: /s/ S. Barry Grieper
-------------------
S. Barry Grieper
Date: August 13, 1999 By: /s/ Henry Max
-------------------
Henry Max
