SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 8-K-A1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
December 15, 1998
Date of Report
(Date of Earliest Event Reported)
VITRISEAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 2-99110-NY 11-2751537
(State or other juris- (Commission File No.) (IRS Employer
diction of incorporation) I.D. No.)
12226 South 1000 East, Suite 9
Draper, Utah 84020
(Address of Principal Executive Offices)
(801)553-8785
Registrant's Telephone Number
A.X.R. Development Corporation, Inc.
9005 Cobble Canyon Lane
Sandy, Utah 84093
(Former Address of Principal Executive Offices)
Item 1. Changes in Control of Registrant.
(a) On December 15, 1998, the Registrant and Dancor, Inc., a Delaware
corporation ("Dancor"), executed an Agreement and Plan of Reorganization (the
"Plan") as outlined in the Letter of Intent between the Registrant and Dancor
dated December 14, 1998 (see the 8-K Current Report dated December 15, 1998,
Item 7, which has been previously filed with the Securities and Exchange
Commission and which is incorporated herein by reference), whereby the
Registrant, subject to the approval of persons owning not less than 80 percent
of outstanding voting securities of Dancor, would acquire a controlling
interest in Dancor, and Dancor would become a majority owned subsidiary of the
Registrant.
The initial offer in a stock for stock exchange was made only to
"accredited investors" and the first 35 non-accredited investors who executed
and delivered a copy of the Plan. As of the closing on March 18, 1999,
Dancor stockholders representing 16,636,464 of the 19,500,000 shares to be
issued under the Plan (approximately 85% of the Dancor stockholders shares)
had executed and delivered the Plan. It is the intention of management to
continue to attempt to acquire 100% of the outstanding voting securities of
Dancor, on the same terms and conditions afforded the Dancor stockholders
who have already become party to the Plan.
The Plan was also adopted, ratified and approved by the Board of
Directors of the Company by unanimous written consent in accordance with
the Bylaws of the Registrant and the Nevada Revised Statues.
The former principal stockholders of the Registrant and their
percentage of ownership of the outstanding voting securities of the Registrant
prior to the completion of the Plan were: David C. Merrell, former President
and Director, owned 515,217 shares of the Registrant (51.5%); Corie
Merrell, former Secretary/Treasurer and Director (and wife of David C.
Merrell), owned no shares of the Registrant; and Joe K. Johnson, a stockholder
of the Registrant and a finder in the transaction, owned 184,783 shares of
the Registrant (including the 150,000 shares registered on Form S-8 which
are referred to in the following paragraph).
The pre-Plan outstanding shares were 1,000,000 (including 150,000
shares registered on Form S-8 of the Securities and Exchange Commission,
the issuance of which was conditioned upon the completion of the Plan;
taking into account the 16,636,463 shares of "restricted securities"
issued under the Plan, there are currently 17,636,464 shares of
common stock of the Registrant issued and outstanding.
The source of the consideration used by Dancor and the
stockholders to acquire their respective interests in the Registrant was the
exchange of 100% of the outstanding common stock of Dancor pursuant to the
Plan.
The basis of the "control" by the Dancor stockholders is stock
ownership or positions held. Pursuant to the Plan, the then members of the
Board of Directors and executive officers resigned, in seriatim, and the
persons named in paragraph (b) below were designated to serve as directors and
executive officers of the Registrant, until the next respective annual
meetings of the stockholders and directors of the Registrant or until their
prior resignations or terminations.
(b) To the knowledge of management and based upon a review of the
stock ledger maintained by the Registrant's transfer agent and registrar, the
following table sets forth the beneficial ownership of persons who own more
than five percent of the Registrant's common stock as of the date hereof, and
the share holdings of new management, to wit:
Name Shares Owned %
Culley W. Davis 55,836 .003%
Pinnacle Enterprises, Ltd.* 1,729,464 9.80%
T-6G, Ltd. 3,173,376 17.99%
Daniel L. Corbin 1,410,375 8.00%
John W. Nagel --0 0%
Bruce H. Haglund, 198,336 1.12%
Dennis A. Repp 321,000 1.82%
Officers and Directors
Collectively
* Culley W. Davis, as the President of Pinnacle Enterprises,
Inc., has sole voting and investment power with respect to the
shares owned by Pinnacle Enterprises, Ltd; Culley W. Davis personally
owns 55,836 (.003%) which are not included in this number.
Item 2. Acquisition or Disposition of Assets.
See Item 1 of this Report. The consideration exchanged under the
Plan was negotiated at "arms length" between the directors and executive
officers of the Registrant and Dancor, and the members of the Board
of Directors of the Registrant used criteria used in similar proposals
involving the Registrant in the past, including the relative value of the
assets of the Registrant; its present and past business operations; the future
potential of Dancor; its management; and the potential benefit to the
stockholders of the Registrant. The members of the Board of Directors
determined in good faith that the consideration for the exchange was
reasonable, under these circumstances.
No director, executive officer or person who may be deemed to be an
"affiliate" of the Registrant had any direct or indirect interest in Dancor
prior to the completion of the Plan, except Joe K. Johnson, who owned
18,000 shares of Dancor, and who will receive 54,000 of the Registrant's
"restricted securities" issued under the Plan.
DESCRIPTION OF THE BUSINESS
The Company
The Company has developed, tested and patented a proprietary
coating technology which it has named VitrosealTM, "The Optimal Clear Coating
Process."
The Company intends to engage in licensing, joint ventures and the
sale of rights to this product to strategically selected coatings
manufacturers. The Company plans to earn a reputation in the coatings
industry for excellent clear coating technology, aggressive technology
development, strong legal support and savvy business management. Through
development of these qualities, the Company believes it will be in position to
directly license its technology to leading manufacturers in the coatings
industry.
Product
The Company's patented process, VitrosealTM, makes clear, protective
and environmentally friendly coatings. The technology has the promise of
being a major breakthrough in the industrial coatings market. Key benefits of
VitrosealTM include:
Exceptional Coating Performance:
_ excellent surface adhesion,
_ optimal hardness (4H pencil hardness),
_ excellent brightness (water white),
_ excellent film flexibility,
_ versatile applicability to a wide variety of metals,
_ chip resistance,
_ low film weight,
_ corrosion resistant,
_ high dielectric strength, and
_ thermal cycling resistance.
Low Cost:
_ raw material costs at 80% less than conventional coatings,
_ heat cure compatible with existing equipment,
_ no environmental control costs, and
_ fast cure to full hardness for faster manufacturing production
lines.
Environmental Compliance:
_ waterborne,
_ no volatile organic compounds (VOCs),
_ no isocyanates,
_ no lead,
_ no chromates,
_ no cadmium,
_ no chlorine or chloro-compounds,
_ no formaldehyde, and
_ ingredients "generally regarded as safe" by the FDA for food
contact.
During the past two years, the Company has expended over $1,500,000
on research and development of the characteristics, qualities and uses of its
VitrosealTM technology and its others products and processes.
Industry
Coatings are used in virtually every manufacturing industry to
protect, preserve and enhance a wide variety of products. Commonly coated
products are found in the transportation, container, metals, wood and non-
wood furniture, equipment, appliance, paper and machinery industries.
Because the coatings industry is so vast, it is generally a profitable and
financially stable industry.
The U.S. OEM coatings market consists of thousands of manufacturers
in the United States who buy and use hundreds of different types of coatings.
Some product sectors, such as military coatings or powder coatings, contain
few coatings suppliers who heavily dominate the market niche. Other product
sectors, such as appliance, wood and metal coatings, have many suppliers,
most of whom have small shares of the market. Du Pont, PPG Industries,
Morton International, Valspar, Akzo Nobel and BASF are all companies that
can be considered giants of the U.S. OEM coatings market. The coating
manufacturers compete aggressively on quality, technological excellence,
price and changing industry trends. Recent major market trends in the
industry include the search for environmentally friendly coatings, for less
expensive organic chemical raw materials and for more durable coatings.
The need for more environmentally friendly coatings is an issue that
the entire U.S. coatings industry must face. Many OEMs have met current
environmental emissions standards by using incinerators to burn volatile
organic compounds (VOCs) emitted during the application and curing of
coatings. Increasing environmental regulation, however, is creating a need
for products that do not emit VOCs. Many manufacturers are turning from
solvent-based coatings to other technologies such as waterborne, high-
solids, powder and UV-cured coatings to cope with the more stringent
environmental regulations. Each of these relatively new technologies has
its own unique requirements for application and curing, along with
limitations, but each provides an alternative to the traditional solvent-
based coatings that are coming under increased scrutiny and regulation.
Rising end-product quality expectations, due to rising product
prices, are driving consumers and corporate customers to expect more durable
coatings from coatings manufacturers. These obstacles are forcing
significant and fundamental changes in the coatings industry and every
aspect of the design, manufacture and application of coatings.
The recent changes in the coatings industry have created tremendous
opportunities, as exemplified by the increased demand for powder coatings.
Powder coatings are considered by many to be an environmentally friendly
alternative. These coatings contain no solvents and emit very low VOCs
while providing significant chip and mar resistance. Powder coatings have
become the fastest growing finishing technology in North America, currently
representing more than 10% of the total coatings market. Most of this growth
has been in the last six to seven years.
Powder coatings do not produce an attractive, smooth finish; and are
not generally used on surfaces where appearance is highly valued. For
example, the automotive industry does not use powder clear coats on the
exterior of automobiles. The industry is, nevertheless, conducting a great
deal of research on powder coatings to overcome the technology's inability to
produce a smooth surface with an even thickness. The increased use of and
research in powder coatings is an indication of the changing environment in
the coatings industry, and it shows the immense opportunities present in
todays market.
Market Opportunities
Market opportunities in the coatings industry are enormous and
encompass a wide variety of areas. Recently passed environmental
regulations, escalating costs of organic chemical raw materials, heightened
expectations for performance and increased demand for all types of coatings
have forced the industry to search for new technologies to answer the
toughest question it faces - whether the industry can find a coating that
simultaneously provides high performance, low cost and environmental
friendliness. These external conditions acting on the industry are causing
an internal industry revolution which is creating tremendous market
opportunities.
Because the coatings industry encompasses so many different types of
customers, a variety of market opportunities exist for new market entries.
The transportation segment is key to the OEM coatings market. This segment
yields the highest amount of revenue and sets the pace for the rest of the
industry. It has been said that where the transportation coatings segment
goes, the rest of the product coatings industry follows. This segment is
presently under strong pressure to make fundamental changes in the coatings
it uses. Unrelenting environmental control regulations and customer
expectations that climb in synch with new-car prices are driving the
industry to change.
The Company's ability to enter the industry will be facilitated
through strategic alliances with sound companies already successfully
serving as suppliers to specific market segments, i.e., wheel coaters,
coatings manufacturers and "tier 1" automotive O.E.M. suppliers. The
Company's markets will be continually expanded through ongoing research and
development to produce additional proprietary technologies, improve
application knowledge and verify by continued testing that the coatings
meet user specifications.
Market Analysis
To gain strong industry insight, the Company has purchased and
commissioned a series of market studies by Frost & Sullivan, a firm
recognized for its specialization in coatings industry analysis and
forecasting. Based on their findings, the Company has estimated the world
OEM coatings market in 1995 to be $7.22 billion, with shipments of
approximately 560 million gallons of coating product. The U.S. dominates
the world market in coatings production, exporting 20 to 28 times what it
imports, in revenue dollars. The five largest export markets, in descending
order, are Canada, Mexico, Japan, Hong Kong and the United Kingdom.
The 1995 U.S. OEM coatings market was estimated at $4.25 billion,
and the market is projected to grow steadily through the year 2000 at a
compound annual growth rate of 5.2%, or to $5.44 billion. The largest and
fastest growing segment is transportation, which represents 38% of the U.S.
market, or $1.6 billion. The segment is expected to grow at a rate of 5.5%
through 2000, or to $2.1 billion. This segment also commands the highest
revenue per equivalent gallon of coating sold at $21.02/gallon. Other major
segments of the industry include metal and container, wood and non-wood,
appliance and machinery and paper, representing 27%, 21%, 12%, and 2% of
the U.S. market, respectively.
The major market segments which make up the coatings industry are
very broad and encompass many manufacturing processes that make only limited
use of clear coats. Clear coatings, however, are generally the final
appearance coating and command the highest price in the coatings market.
Because each coating has unique uses, generalizations about market segments
can not be used as solid quantitative bases for understanding the market
potential for clear coats within the segments, and do not suggest a simple
direction for introduction of a breakthrough clear coat technology. To gain
stronger insight into the market for clear coat technology and to create
realistic estimates of market potential, the Company has gone further into
these segments to identify markets in which clear coats are heavily used in
manufacturing. Based on Frost & Sullivan market data and the Company's
understanding of the coatings industry, the Company has selected key markets
for pursuit. The markets that the Company will concentrate on during the
nest few years includes: automotive wheel, OEM automotive and specialty and
metal finishers.
The automotive wheel market consists of both after market and OEM
wheel manufacturers. The Company will begin by targeting after market wheel
coaters and makers, a market that has low barriers to entry and is actively
seeking value-added technologies such as VitrosealTM. Simultaneously, the
Company will work to overcome entry barriers in OEM wheels, which are higher
due to the need to demonstrate that VitrosealTM meets the specifications of
OEM automotive manufacturers. The Company believes that success with after
market wheel manufacturers and laboratory verification of
VitrosealTM compliance to OEM wheel specifications will quickly overcome
barriers in the OEM wheel market and will lead to rapid adoption of the
VitrosealTM process. The strategy behind the Company's choice is to initially
move into a market that will generate quick cash flow for the Company, while
it works to overcome barriers in larger more sophisticated market niches that
will take greater time to penetrate.
The Company's decision to enter the automotive wheel market now is
an important strategic move because it will act as a proving ground for the
Company to demonstrate the benefits of the technology, develop name
recognition and establish a track record for performance, all of which will
be key elements for overcoming barriers in the larger OEM automotive market.
The Company has chosen to enter the transportation segment because it
possesses characteristics that suggest strong opportunities for profitable
licensing and business relationships. Among these key characteristics are
the following: The segment is the most responsive to competitive threats;
it typically leads the industry in technology adoption; and revenue per gallon
of transportation coatings is the highest in the coatings industry.
Research and Development
In January 1997, the Company retained the services of Hamlin M.
Jennings, Ph.D., a professor at Northwestern University, as an independent
contractor on a month-to-month basis as a technical specialist for Dancor,
to perform development work to enable VitrosealTM to be sufficiently
elastomeric or flexible for commercialization, and research the properties
of VitrosealTM and prior art to develop a scientific explanation of the
VitrosealTM process. The Company believes Dr. Jennings research will
provide the Company with additional research findings enabling the Company
to more effectively market the VitrosealTM technology.
Insurance
The Company has obtained a general liability insurance policy and
believes that the insurance in place will be adequate for the Company's
anticipated immediate and near future needs.
Employees
At present, the Company has a full-time staff of one salaried
employee and one part-time employee. None of these employees is
represented by a labor union. The Company considers its relations with
its employees to be excellent.
Properties
The Company entered into a one year lease in March 1999 for a
primary business office located at 1101 Dove Street, Suite 235, Newport
Beach, California, containing approximately 720 square feet with a
monthly rental of $1,188. The Company believes it has a good relationship
with the Landlord and can remain in the facility for the term of the lease.
The Company also recently entered into a one year lease in March
1997, for a research facility located at 1801 Maple Avenue, Evanston,
Illinois, containing approximately 700 square feet with a monthly rental
of $1,167. Currently the Company continues to rent the space on a month to
month basis. The research facility was opened to provide Dr. Jennings with
necessary research space close to his home and full time work.
Legal Proceedings
The Company has no pending or threatened litigation.
DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES
The following individuals are the directors, nominees to become
directors, officers and significant employees of the Company along with
their age, capacity and terms of office:
Name Title/Position Age
Culley W. Davis Chairman of the Board, CEO, Director 43
Daniel L. Corbin President, Director 43
Dennis A. Repp Director 59
John W. Nagel Chief Financial Officer, Director 58
Bruce H. Haglund, Esq. Secretary, Director 47
Culley W. Davis
Mr. Davis became the chairman, CEO and a director at the time of the
acquisition and he has been the Chairman of the Board, the Chief Executive
Officer, and a Director of Dancor since its formation in April 1992. He
is also President and a Director of Pinnacle Enterprises, Inc., and the
general partner of Pinnacle Enterprises, Ltd., a California Limited
Partnership. Mr. Davis has specialized in real estate development and
new business start-ups, acquisitions, mergers, restructuring and initial
public stock offerings. He has over 17 years experience with extensive
business organization, financing and leadership skills in arranging
private placements, structuring transactions, conducting negotiations,
organizing public relations and providing sales and management strategies
for domestic and international operations. He has co-founded or founded
several corporations and served as their presidents. As President and
co-founder of Vencor International, Inc., he was one of the key people
responsible for merging and taking the company public on the OTC market
in 1987. Mr. Davis has held leadership positions and been an officer,
director, or general partner in several entities.
In May 1996, Mr. Davis entered into a stipulation for judgment and
permanent injunction (the "Injunction") with the Department of Finance of
the State of Idaho (the "State") in connection with a complaint (the
"Complaint") filed by the State alleging that Mr. Davis violated
provisions of the Idaho Securities Act. In accordance with the
Injunction, Mr. Davis paid a $50,000 fine to the State and was
permanently enjoined from violating the Idaho Securities Act, from
offering or selling unregistered securities in Idaho, and from
transacting securities business in Idaho without applicable securities
licenses.
Daniel L. Corbin
Mr. Corbin became President and a director of the Company at the
time of the acquisition, and has been the President and a Director of Dancor
since its formation in April 1992. He was the founder, and from 1980 until
1984, the President of Snuggles Corporation, a California-based private
company. He patented and developed the world's first form fitted
reusable cloth infant/adult diaper with Velcro . In 1984, he merged
Snuggles with Vencor International, Inc. and was one of the key
individuals responsible for taking the company public on the OTC market
in 1987. More recently, Mr. Corbin acquired a controlling interest in
"Fins and Flippers," a privately-held California retail sales corporation.
Mr. Corbin has also had extensive experience in organization and
management development as the Marketing Director for Press Steel
Corporation, and from 1979 to 1980, as Vice President of Sales for American
Data Industries. For the last four years, Mr. Corbin has analyzed and
evaluated the sales and business opportunities in the worldwide coatings
industry and initiated the acquisition of the VitrosealTM technology for
the Company.
Dennis A. Repp
Mr. Repp became a director of the Company at the time of the
acquisition and has been a Director of Dancor since May 1996. He has been
a business consultant and private investor since 1980. Through the years,
he has also founded several companies, primarily in the computer and
electronics field, and provided continuing service to these companies
through board membership. Prior to 1980, Mr. Repp served as the
President of Union Bank's venture capital subsidiary. He has also
previously managed the venture capital investments for Allstate Insurance
Company. Mr. Repp holds an M.S. degree in economics and an M.B.A. degree
in finance.
John W. Nagle
Mr. Nagel became the CFO and a director of the Company at the time
of the acquisition and has been the CFO and a director of Dancor since
September 1998. From 1988 to August 1998, Mr. Nagel served as Director of
Finance for WVUE Television of New Orleans, Louisiana. During the period of
1983 to 1988, he was operator and part owner of several franchised ice cream
parlors. From 1980 to 1983, Mr. Nagel held positions in administration
and management for The Nautilus Group, Inc., a poultry incubation
equipment manufacturer and portable electronic stage lighting system
manufacturer. From 1968 to 1980, Mr. Nagel worked for Arthur Anderson
& Co. in numerous capacities relating to consulting for the design and
implementation of computer-based management information systems. He
served as an officer in the U.S. Navy Supply Corps from 1962 to 1966.
Mr. Nagel was awarded his M.B.A. degree from Harvard University and his
B.S. degree in accounting from Ohio State University.
Bruce H. Haglund, Esq.
Mr. Haglund became the Secretary and a director of the Company at
the time of the acquisition and has served as the Secretary of Dancor since
September 1998. Mr. Haglund has practiced law in Orange County, California
since 1980. Mr. Haglund is a principal in the law firm of Gibson, Haglund &
Johnson in Orange County, California, where he has been engaged in the private
practice of law since 1980. He is member of the Board of Directors of Santa
Barbara Restaurant Group, Inc. and the Secretary of Metalclad Corporation, a
public company whose stock is traded on the NASDAQ Small Cap Market. Mr.
Haglund is also the Secretary and a member of the Board of Directors of
Aviation Distributors, Inc. and Renaissance Golf Products, Inc., public
companies whose stock is traded on the OTC/BB. He is a graduate of the
University of Utah College of Law.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
On January 19, 1999, the Company filed a Certificate of
Amendment to the Articles of Incorporation changing the name of the
Company to "VitroSeal, Inc." On February 18, 1999, the Company filed
another Certificate of Amendment to the Articles of Incorporation
changing the name to "VitriSeal, Inc."
Item 6. Resignations of Registrant's Directors.
See Item 1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Audited financial statements of Dancor are currently being prepared,
and will be filed with the Securities and Exchange Commission as an
amendment to this Report on or about June 1, 1999, which is 75 days
after the completion of the Plan on March 18, 1999.
(b) Pro Forma Financial Information.
Pro Forma financial statements, taking into account the completion
of the Plan, are being prepared and will be filed on or before June
1, 1999, which is 75 days after the completion of the Plan on March
18, 1999.
(c) Exhibits.
3.1 Certificate of Amendment to the Articles of
Incorporation of Advanced Coating Technologies,
Inc. changing the name to VitroSeal, Inc.
3.2 Certificate of Amendment to the Articles of
Incorporation of VitroSeal, Inc. changing the
name to VitriSeal, Inc.
10 Plan of Reorganization between VitriSeal, Inc.
and Dancor, Inc. dated March 18, 1999
Exhibit A-List of Dancor Shareholders and
number of VitriSeal Shares
Exhibit B-Letter of Intent
Exhibit C-Schedule of Option Holders
Exhibit D-Schedule of Exceptions
Exhibit E-Schedule of Patents
Exhibit F-Bank Account Information
Exhibit G-VitroSeal Exceptions
Exhibit H-VitroSeal Financial Statements
including 10-QSB for the Quarter
ended September 30, 1998 and 10-
KSB for the Year ended December
31, 1997
Exhibit I-VitriSeal Bank Accounts
Exhibit J-VitriSeal Form of Power of
Attorney
99 Press Release regarding same dated March 18,
1999
Item 8. Change in Fiscal Year.
None; not applicable.
SIGNATURES
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 hereunto duly authorized.
VITRISEAL, INC.
Date: 4/2/99 By:/s/Daniel Corbin
--------- --------------------------------------
Daniel Corbin
President and Director
Date: 4/2/99 By:/s/John W. Nagel
--------- --------------------------------------
John W. Nagel
Chief Financial Officer and Director
Date: 4/2/99 By:/s/Bruce H. Haglund
--------- --------------------------------------
Bruce H. Haglund, Esq.
Secretary and Director
Date: 4/2/99 By:/s/Culley W. Davis
--------- --------------------------------------
Culley W. Davis
Chairman of the Board
Chief Executive Officer and Director
Date: 4/2/99 By:/s/Dennis A. Repp
--------- --------------------------------------
Dennis A. Repp
Director
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
ADVANCED COATING TECHNOLOGIES, INC.
We, the undersigned, David C. Merrell, President, and Corie
Merrell, Secretary, of Advanced Coating Technologies, Inc., a Nevada
corporation (the "Corporation"), do hereby certify:
I
Pursuant to Section 78.390 of the Nevada Revised Statutes, the
Articles of Incorporation of the Corporation shall be amended as follows:
The name of the Corporation is "VitroSeal, Inc."
II
The foregoing amendment was adopted by Unanimous Consent of the
Board of Directors pursuant to Section 78.315 of the Nevada Revised Statutes,
and by Consent of Majority Stockholder pursuant to Section 78.320 of the
Nevada Revised Statutes.
III
The number of shares entitled to vote on the amendment was
565,217.
IV
The number of shares voted in favor of the amendment was 515,217,
with none opposing and none abstaining.
/s/David C. Merrell
_______________________________________
David C. Merrell, President
/s/Corie Merrell
_______________________________________
Corie Merrell, Secretary
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On the 19th day of January, 1999, personally appeared before me, a
Notary Public, David C. Merrell, who acknowledged that he is the President of
Advanced Coating Technologies, Inc., and that he is authorized to and did
execute the above instrument.
/s/Sheryl Ross
__________________________________________
NOTARY PUBLIC
(Notary Seal)
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On the 19th day of January, 1999, personally appeared before me, a
Notary Public, Corie Merrell, who acknowledged that she is the Secretary of
Advanced Coating Technologies, Inc., and that she is authorized to and did
execute the above instrument.
/s/Sheryl Ross
__________________________________________
NOTARY PUBLIC
(Notary Seal)
CERTIFICATE OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
VITROSEAL, INC.
We, the undersigned, David C. Merrell, President, and Corie
Merrell, Secretary, of VitroSeal, Inc., a Nevada corporation (the
"Corporation"), do hereby certify:
I
Pursuant to Section 78.390 of the Nevada Revised Statutes, the
Articles of Incorporation of the Corporation shall be amended as follows:
The name of the Corporation is "VitriSeal, Inc."
II
The foregoing amendment was adopted by Unanimous Consent of the
Board of Directors pursuant to Section 78.315 of the Nevada Revised Statutes,
and by Consent of Majority Stockholder pursuant to Section 78.320 of the
Nevada Revised Statutes.
III
The number of shares entitled to vote on the amendment was
665,309.
IV
The number of shares voted in favor of the amendment was 515,218,
with none opposing and none abstaining.
/S/David C. Merrell
_______________________________________
David C. Merrell, President
/s/Corie Merrell
_______________________________________
Corie Merrell, Secretary
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On the 17th day of February, 1999, personally appeared before me,
a Notary Public, David C. Merrell, who acknowledged that he is the President
of VitroSeal, Inc., and that he is authorized to and did execute the above
instrument.
/s/Sheryl Ross
__________________________________________
NOTARY PUBLIC
(Notary Seal)
STATE OF UTAH )
) ss
COUNTY OF SALT LAKE )
On the 17th day of February, 1999, personally appeared before me,
a Notary Public, Corie Merrell, who acknowledged that she is the Secretary of
VitroSeal, Inc., and that she is authorized to and did execute the above
instrument.
/s/Sheryl Ross
__________________________________________
NOTARY PUBLIC
(Notary Seal)
AGREEMENT AND PLAN OF REORGANIZATION
FOR THE ACQUISITION OF ALL OF THE OUTSTANDING
SHARES OF COMMON STOCK OF
DANCOR, INC.
BY ADVANCED COATING TECHNOLOGIES, INC.
THIS AGREEMENT AND PLAN OF REORGANIZATION, is executed this 23th day of
December, 1998, by and among stockholders of DANCOR, INC., whose names are
listed in Exhibit "A," a copy of which is attached hereto and incorporated
herein by this reference (the "Stockholders"), DANCOR, INC. ("DANCOR"), a
Delaware corporation, and ADVANCED COATING TECHNOLOGIES, INC. ("ACT")
(formerly A.X.R. Development Corporation, Inc.), a Nevada corporation.
RECITALS:
A. Whereas, the Stockholders together own, beneficially and of
record, all of the issued and outstanding shares of the common stock of
DANCOR (hereinafter the shares of common stock are referred to as the
"Exchanged Shares") as set forth in Exhibit "A," a copy of which is attached
hereto and incorporated herein by this reference; and
B. Whereas, ACT desires to purchase from each of the Stockholders
all of the outstanding Exchanged Shares owned by them in exchange for an
aggregate of nineteen million five hundred thousand (19,500,000) restricted
shares (the "ACT Shares") of the common stock of ACT, and each of the
Stockholders desires to exchange their Exchanged Shares for the ACT Shares,
the number of the Exchanged Shares being surrendered and the number of ACT
Shares being received by each of the Stockholders is as set forth in Exhibit
"A" hereto; and
C. Whereas, ACT, acting through DAVID C. MERRELL ("MERRELL"), its
President and Chief Executive Officer, and CULLEY W. DAVIS ("DAVIS"),
Chairman of the Board of Directors of DANCOR, have heretofore entered into a
letter of intent as set forth in a letter dated December 10, 1998, a copy of
which is attached hereto as Exhibit "B" (the "Letter Agreement"), providing
for the acquisition by ACT from each of the Stockholders of all of the
Exchanged Shares in exchange for the ACT Shares and on certain additional
terms and conditions specified therein; and
D. Whereas, the parties hereto desire to set forth the definitive
terms and conditions upon which each of the Stockholders shall sell to ACT,
and ACT shall purchase from each of the Stockholders, all of the Stock of
DANCOR owned by each of them, as contemplated by and in furtherance of
the Letter Agreement; and
E. Whereas, it is intended that DANCOR, ACT, and their respective
Stockholders will recognize no gain or loss for U.S. Federal income tax
purposes under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated thereunder as a result
of the Reorganization;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual representations, warranties, covenants, and agreements contained
herein, and in accordance with the applicable provisions of Nevada corporate
law, the parties hereto covenant and agree as follows:
ARTICLE I
THE REORGANIZATION
1.1 The Reorganization. As of the Closing (as defined in Section
1.2 below) of this Agreement, the Stockholders shall surrender all of their
Exchanged Shares in exchange for the ACT Shares in the amounts set forth
opposite the respective names of the Stockholders in Exhibit "A." The
transactions contemplated hereby are intended to qualify as a tax-free
reorganization under the Code, and the parties hereto agree to report them as
such.
1.2 Closing. The closing of the Reorganization (the "Closing")
shall take place (i) at the offices of DANCOR, located at 12226 East 1000
East, Suite 10, Draper, Utah 84020 at 10:00 a.m., local time, on January 29,
1999; or (ii) at such other time and place and on such other date as DANCOR
and ACT agree (the "Closing Date"). The Closing Date shall be the effective
date of the Reorganization. If the Closing fails to occur by February 16,
1998, or by such later date to which the Closing may be extended as provided
herein above, this Agreement shall automatically terminate, all parties shall
pay their own expenses incurred in connection herewith, and neither ACT,
DANCOR, nor any of the Stockholders shall have any further obligations
hereunder. The Closing shall be contingent upon the agreement of Stockholders
holding a minimum of 80% of the outstanding Exchange Shares. At such time as
Stockholders holding a minimum of 80% of the Exchanged Shares have entered
into this Agreement, the parties shall proceed with the Closing.
1.3 Taking of Necessary Actions. DAVIS, acting as the
representative of the Stockholders (the "Representative"), DANCOR, and ACT
shall each take all such actions at the Closing as may be reasonably necessary
or appropriate in order to effectuate the transactions contemplated hereby and
to make the Reorganization effective as of the Effective Date. If at any time
after the Effective Date any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest ACT with full title to all of
the Exchanged Shares, the Representative, on behalf of the Stockholders, and
the officers and directors of DANCOR and ACT, at the expense of ACT, shall
take all such necessary or appropriate action. To effect the intents and
purposes of this Agreement, the following actions shall be taken at the
Closing, shall be deemed to occur simultaneously, and the accomplishment of
which actions by the parties whose duty it is to perform such actions is duly
acknowledged by the execution of this Agreement by the parties hereto:
1.3.1 Election of Directors. At the Closing, ACT shall deliver
to the Representative letters of resignation of the incumbent directors of ACT
and a Certificate of Secretary of ACT evidencing the adoption by the Board of
Directors of ACT of resolutions electing and appointing (i) DAVIS, DANIEL
CORBIN, DENNIS A. REPP, JOHN W. NAGEL, and BRUCE H. HAGLUND as the members of
the Board of Directors of ACT, and (ii) DAVIS as Chairman of the Board and
Chief Executive Officer, DANIEL CORBIN as President, JOHN W. NAGEL as Chief
Financial Officer, and BRUCE H. HAGLUND as Secretary of ACT.
1.3.2 Stockholder Approvals. At the Closing, the Representative
shall deliver a Certificate of Secretary evidencing the authorization of the
execution, delivery, and performance of this Agreement by the Stockholders.
1.3.3 Delivery of Exchanged Shares to ACT; Delivery of the ACT
Shares to the Common Stockholders. At the Closing, in consideration of the
tender by the Stockholders of their Exchanged Shares, ACT shall deliver the
ACT Shares to the Representative, on behalf of the Stockholders.
1.3.4 Assumption of Obligations to Issue Shares. At the
Closing, ACT will assume the obligations of DANCOR with respect to the
contingent issuance of shares pursuant to DANCOR s stock option plan and
commitments to issue shares as set forth in Exhibit C, a copy of which is
attached hereto and incorporated herein by this reference.
1.3.5 Legal Opinions. At the Closing, Counsel to ACT shall
deliver to the Representative an opinion of counsel addressed to the
Stockholders in the form reasonably satisfactory to counsel for DANCOR. At
the Closing, counsel to DANCOR shall deliver to the Representative an opinion
of counsel addressed to ACT in the form reasonably satisfactory to counsel for
ACT.
ARTICLE II
EXCHANGE OF SHARES
2.1 Exchange of Shares. Subject to the terms and conditions of this
Agreement, on the Closing Date, by virtue of the Reorganization and without
any further action on the part of the Stockholders, DANCOR, or ACT, all of the
Exchanged Shares shall be exchanged for the ACT Shares in the amounts to the
Stockholders as set forth in Exhibit A. Each share of the ACT Shares shall
be validly issued, fully paid, and nonassessable shares of the Common Stock of
ACT as of the Closing Date.
2.2 Exchange of Certificates. At the Closing, ACT shall present and
deliver to the Representative the stock certificates representing all of the
ACT Shares. Upon delivery thereof, the Representative shall present and
deliver to ACT all of the certificates representing the Exchanged Shares, or
lost certificate affidavits in form acceptable to ACT.
2.3 Further Rights. From and after the Closing Date, holders of
certificates formerly evidencing the Exchanged Shares shall cease to have any
rights as stockholders of DANCOR, except as provided herein or by law. Those
persons identified in Exhibit C shall have the right to the number of shares
of ACT as set forth in Exhibit C.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF DANCOR
Except as set forth in the Schedule of Exceptions attached hereto and
incorporated herein by reference as Exhibit D, DANCOR represents and
warrants to, and covenants with, ACT, as of the date hereof and as of the
Closing Date, as follows:
3.1 Organization and Corporate Power. DANCOR is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and is duly qualified and in good standing to do business as a
foreign corporation in each jurisdiction in which such qualification is
required and where the failure to be so qualified would have a materially
adverse effect upon DANCOR. DANCOR has all requisite corporate power and
authority to conduct its business as now being conducted and to own and lease
the properties which it now owns and leases. True and correct copies of the
Articles of Incorporation as amended to the Closing Date, certified by the
Secretary of State of Delaware, the Bylaws of DANCOR as amended to the Closing
Date, the resolutions of DANCOR s directors authorizing the execution,
delivery, and performance of this Agreement, the approval by the Stockholders
will be delivered to ACT at the Closing, all certified by the President and
the Secretary of DANCOR.
3.2 Authorization. DANCOR has full corporate power, legal capacity,
and authority to enter into this Agreement, to execute all attendant documents
and instruments contemplated hereby, and to perform all of its obligations
hereunder. This Agreement, and each and every other agreement, document and
instrument to be executed by DANCOR in connection herewith, has been
effectively authorized by all necessary action on the part of DANCOR,
including without limitation the approvals of DANCOR s Board of Directors
(subject to approval of the Stockholders), which authorizations remain in full
force and effect, have been duly executed and delivered by DANCOR. No other
authorizations or proceedings on the part of DANCOR, other than approval of
the Stockholders, are required to authorize this Agreement and/or the
transactions contemplated hereby. This Agreement, when approved by the
Stockholders, will constitute the legal, valid and binding obligation of
DANCOR and each of the Stockholders and will be enforceable against each of
them in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, priority, or other laws or court
decisions relating to or affecting generally the enforcement of creditors
rights or affecting generally the availability of equitable remedies.
3.3. No Conflicts; No Consents. Neither the execution and
delivery of this Agreement, nor the consummation by DANCOR or the Stockholders
of any of the transactions contemplated hereby, or compliance with any of the
provisions hereof, will (i) conflict with or result in a material breach of,
violation of, or default under, any of the terms, conditions or provisions of
any material note, bond, mortgage, indenture, license, lease, credit agreement
or other agreement, document, instrument, permit, authorization, or obligation
(including, without limitation, any of its charter documents) to which DANCOR
is a party or by which it or any of its assets or properties may be bound, or
(ii) violate any judgment, order, injunction, decree, statute, rule or
regulation applicable to DANCOR or its assets or properties, the violation of
which would have a material adverse effect upon the business, properties, or
assets, or in the condition (financial or otherwise) of DANCOR. No
authorization, consent, or approval of any public body or authority was or is
necessary for the consummation by DANCOR or the Stockholders of the
transactions contemplated by this Agreement.
3.4 Capitalization. The authorized capital stock of DANCOR consists
of ten million (10,000,000) shares of common stock, par value $.0001. As of
the Closing Date, there will be six million five hundred thousand (6,500,000)
shares of common stock issued and outstanding. Other than as set forth in
Exhibit D, there are no outstanding contracts or other rights to subscribe
for or purchase, or contracts or obligations to issue or grant any rights to
acquire any equity security of DANCOR. DANCOR does not have any contracts or
obligations to redeem, repurchase, or otherwise reacquire any equity security
of DANCOR. All of the Exchanged Shares are duly authorized, validly issued
and outstanding, fully paid and nonassessable, and have been issued in
conformity with all applicable laws.
3.5 No Pending Material Litigation or Proceedings. There are no
actions, suits, or proceedings pending or, to the best knowledge of DANCOR,
threatened against or affecting DANCOR affecting the Stockholders rights in
the Exchanged Shares (including actions, suits, or proceedings where
liabilities may be adequately covered by insurance) at law or in equity or
before or by any Federal, state, municipal or other governmental department,
commission, court, board, bureau, agency or instrumentality, domestic or
foreign, or affecting any of the officers, directors of DANCOR or the
Stockholders in connection with the business, operations, or affairs of either
of them, which might reasonably be expected to result in any material adverse
change in the business, properties or assets, or in the condition (financial
or otherwise) of DANCOR, or which question or challenge the Reorganization.
3.6 Financial Statements; Absence of Undisclosed Liabilities and
Certain Developments. At the Closing, the Company will deliver to ACT
financial statements of DANCOR for the nine months ended September 30, 1998
(unaudited) and for the years ended December 31, 1997 (unaudited) and 1996
(unaudited), consisting of DANCOR s balance sheets as of such date (the
Balance Sheets ), the related statements of profit or loss for the periods
then ended, and the respective notes thereto. Such financial statements (and
the notes related thereto) are herein sometimes collectively referred to as
the DANCOR Financial Statements. At the Closing, DANCOR shall deliver an
Officer s Certificate certifying that the DANCOR Financial Statements (i) have
been derived from the books and records of DANCOR, which books and records
fairly and accurately reflect, the assets and liabilities of DANCOR, (ii)
fairly present the financial condition of DANCOR on the date of such
statements and the results of its operations for the periods indicated, except
as may be disclosed in the notes thereto, and (iii) have been prepared in all
material respects in accordance with generally accepted accounting principles
consistently applied throughout the periods involved.
3.7 Applicable Permits; Compliance with Laws. DANCOR (i) holds all
licenses, franchises, permits, and authorizations necessary for the lawful
conduct of its business as presently conducted and which the failure to so
hold would have a material adverse effect upon the business, properties, or
assets, or the condition (financial or otherwise) of DANCOR, and (ii) has
complied in all material respects with all applicable statutes, laws,
ordinances, rules, and regulations of all governmental bodies, agencies, and
subdivisions having, asserting or claiming jurisdiction over it, which the
failure to comply with would have a material adverse effect upon the business,
properties, or assets, or the condition (financial or otherwise) of DANCOR.
3.8 Disclosure. Neither this Agreement, nor any certificate, exhibit,
or other written document or statement, furnished to ACT by or on behalf of
DANCOR or, to its knowledge, the Stockholders in connection with the
transactions contemplated by this Agreement contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to be stated in order to make the statements contained herein or
therein, when taken as a whole, not misleading. Neither DANCOR nor, to its
knowledge, any of the Stockholders has any knowledge of any fact which has not
been disclosed in writing to ACT which may reasonably be expected to
materially and adversely affect the business, properties, or assets, or the
condition (financial or otherwise) of DANCOR or title of the Stockholders to
the Exchanged Shares or their ability to perform all of the obligations to be
performed by them under this Agreement and/or any other agreement between
DANCOR, the Stockholders, and ACT to be entered into pursuant to any provision
of this Agreement.
3.9 Ownership of DANCOR. DANCOR issued each Stockholder that number
of Shares set forth opposite the Stockholder s respective name on Exhibit A,
which shares together constitute all of the issued and outstanding shares of
common stock of DANCOR. The Shares are duly authorized, validly issued and
outstanding, fully paid and nonassessable and were issued by DANCOR in
conformity with all applicable laws.
3.10 Subsidiaries. DANCOR has no subsidiaries and no investments,
directly or indirectly, or other financial interest in any other corporation
or business organization, joint venture or partnership of any kind whatsoever
except as reflected in the DANCOR Financial Statements.
3.11 Real Property. All leases of real property to which DANCOR is a
party and which are material to the business of DANCOR are fully effective in
accordance with their respective terms and afford DANCOR peaceful and
undisturbed possession of the subject matter of the lease, and there exists no
default on the part of DANCOR or termination thereof. The building and all
fixtures and improvements located on such real property are in good operating
condition, ordinary wear and tear excepted. To the best of its knowledge,
DANCOR is not in violation of any zoning, building or safety ordinance,
regulation or requirement, or other law or regulation applicable to the
operation of owned or leased properties, and DANCOR has not received any
notice of violation with which it has not complied.
3.12 Tangible Personal Property. DANCOR has good and marketable title
to, or in the case of leased equipment a valid leasehold interest in, and is
in possession of, all such items of personal property owned or leased by it,
free and clear of all title defects, mortgages, pledges, security interests
conditional sales agreements, liens, restrictions or encumbrances, the
presence of which would result in a material adverse change in the business,
properties, or assets, or the condition (financial or otherwise) of DANCOR.
All leases of tangible personal property to which DANCOR is a party and which
are material to the business of DANCOR are fully effective in accordance with
their respective terms, and there exists no default on the part of DANCOR or
termination thereof, the presence of which would result in a material adverse
change in the business, properties, or assets, or the condition (financial or
otherwise) of DANCOR. Each item of capital equipment which is used in the
current conduct of DANCOR s business is in good operating and usable condition
and repair, ordinary wear and tear excepted, and is and will be suitable for
use in the ordinary course of DANCOR s business and fit for its intended
purposes.
3.13 Tax Matters. DANCOR has, since its inception, duly filed all
Federal, state, municipal, local, and other tax returns required to have been
filed by it in those jurisdictions where the nature or conduct of its business
requires such filing and where the failure to so file would be materially
adverse to DANCOR. Copies of all such tax returns have been made available
for inspection by ACT prior to the execution hereof. All Federal, state,
municipal, local, and other taxes, including but not limited to those taxes
due with respect to DANCOR s properties, income, gross receipts, excise,
occupation, franchise, permit, licenses, sales, payroll, and inventory due and
payable as of the date of the Closing by DANCOR have been paid or will be paid
prior to the time they become delinquent.
3.14 Inventory. DANCOR has good and marketable title to all of its
inventories of raw materials, work-in-process, and finished goods, including
models and samples, free and clear of all security interests, liens, claims
and encumbrances, the presence of which would result in a material adverse
change in the business, properties, or assets, or the condition (financial or
otherwise) of DANCOR.
3.15 Contracts and Commitments. DANCOR has no contract, agreement,
obligation or commitment, written or oral, expressed or implied, which
involves a commitment or liability of DANCOR in excess of one hundred thousand
dollars ($100,000) (other than obligations which are included in accounts
payable), and no union contracts, employee or consulting contracts, financing
agreements, debtor or creditor arrangements, licenses, franchise,
manufacturing, distributorship or dealership agreements, leases, or bonus,
health or stock option plans, except as described in Exhibits C and D.
3.16 Proprietary Information. Except as disclosed in Exhibit E,
DANCOR does not have any patents, applications for patents, trademarks,
applications for trademarks, trade names, licenses or service marks relating
to the business of DANCOR, nor does any present or former stockholder,
officer, director or employee of DANCOR own any patent rights relating to any
products manufactured, rented or sold by DANCOR. DANCOR has the unrestricted
right to use, free and clear of any claims or rights of others, all trade
secrets, customer lists, and manufacturing and secret processes reasonably
necessary to the manufacture and marketing of all products made or proposed to
be made by DANCOR, except for any rights the presence of which would not
result in a material adverse change in the business, properties, or assets, or
the condition (financial or otherwise) of DANCOR, and the continued use
thereof by ACT following the Closing will not conflict with, infringe upon, or
otherwise violate any rights of others. DANCOR has not used and is not making
use of any confidential information or trade secrets of any present or past
employee of DANCOR.
3.17 Insurance. DANCOR maintains insurance with reputable insurance
companies on such of its equipment, tools, machinery, inventory, and
properties as are usually insured by companies similarly situated and to the
extent customarily insured, and maintains products and personal liability
insurance, and such other insurance against hazards, risks and liability to
persons and property as is customary for companies similarly situated. All
such insurance policies currently are in full force and effect.
3.18 Arrangements with Employees; Labor Relations. No stockholder,
director, officer, or employee of DANCOR is presently a party to any
transaction with DANCOR, including without limitation any contract, loan or
other agreement or arrangement providing for the furnishing of services by,
the rental of real or personal property from or to, or otherwise requiring
loans or payments to, any such stockholder, director, officer, or employee, or
to any member of the family of any of the foregoing, or to any corporation,
partnership, trust or other entity in which any stockholder, director,
officer, or employee or any member of the family of any of them has a
substantial interest or is an officer, director, trustee, partner, or
employee. There are no bonus, pension, profit sharing, commission, deferred
compensation or other plans or arrangements in effect as of the date of this
Agreement, except as set forth in Exhibit D. DANCOR has no obligations
under any collective bargaining agreement or other contract with a labor
union, under any employment contract or consulting agreement, or under any
executive s compensation plan, agreement or arrangement, nor is any union,
labor organization or group of employees of DANCOR presently seeking the right
to enter into collective bargaining with DANCOR on behalf of any of its
employees.
3.19 Bank Accounts. All bank and savings accounts, and other accounts
at similar financial institutions, of DANCOR existing at date of Closing are
listed on Exhibit F. Exhibit F contains a list of the name of each person
or entity authorized to sign on the bank accounts, borrow money, or incur or
guarantee indebtedness on behalf of DANCOR.
3.20 Powers of Attorney. No valid powers of attorney from DANCOR to
any person or entity exist as of the date of this Agreement, except with
respect to powers of attorney granted to the Representative by the
Stockholders to facilitate the Closing.
3.21 Absence of Questionable Payments. To the best of its knowledge,
neither DANCOR nor any stockholder, director, officer, agent, employee,
consultant, or other person associated with or acting on behalf of any of
them, has (i) used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity, (ii)
made any direct or indirect unlawful payments to governmental officials or
others from corporate funds, engaged in any payments or activity which would
be deemed a violation of the Foreign Corrupt Practices Act or rules or
regulations promulgated thereunder, or (iii) established or maintained any
unlawful or unrecorded accounts.
3.22 Relationships with Customers and Suppliers. No present
substantial customer or substantial supplier to DANCOR has indicated an
intention to terminate or materially and adversely alter its existing business
relationship with DANCOR, and DANCOR has no reason to believe that any of the
present customers of or substantial suppliers to DANCOR intends to do so.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ACT
Except as set forth in the Schedule of Exceptions attached hereto and
incorporated herein by this reference as Exhibit G, ACT hereby represents
and warrants to, and covenants with, each of the Stockholders and DANCOR as
follows:
4.1 Organization and Corporate Power. ACT is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada, and is duly qualified and in good standing to do business as a
foreign corporation in each jurisdiction in which such qualification is
required and where the failure to be so qualified would have a materially
adverse effect upon ACT. ACT has all requisite corporate power and authority
to conduct its business as now being conducted and to own and lease the
properties which it now owns and leases. The Articles of Incorporation as
amended to date, certified by the Secretary of State of Nevada, the Bylaws of
ACT as amended to date, and the resolutions of ACT s stockholders and
directors authorizing the execution, delivery, and performance of this
Agreement, all certified by the President and the Secretary of ACT, which have
previously been provided to DANCOR by ACT, are true and complete copies
thereof as currently in effect.
4.2 Authorization. ACT has full corporate power, legal capacity, and
corporate authority to enter into this Agreement, to execute all attendant
documents and instruments contemplated hereby, to enter into this
Reorganization, and to perform all of its obligations hereunder. This
Agreement, and each and every other agreement, document and instrument to be
executed by ACT in connection herewith, has been effectively authorized by all
necessary action on the part of ACT, including without limitation the
approvals of ACT s Board of Directors and its stockholders, which
authorizations remain in full force and effect, have been duly executed and
delivered by ACT, and no other authorizations or proceedings on the part of
ACT, or otherwise, are required to authorize this Agreement and/or the
transactions contemplated hereby. This Agreement constitutes the legal,
valid, and binding obligation of ACT and is enforceable against ACT in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, priority, or other laws or court decisions
relating to or affecting generally the enforcement of creditors rights or
affecting generally the availability of equitable remedies.
4.3. No Conflicts; No Consents. Neither the execution and
delivery of this Agreement, nor the consummation by ACT of any of the
transactions contemplated hereby, or compliance with any of the provisions
hereof, will (i) conflict with or result in a material breach of, violation
of, or default under, any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, license, lease, credit agreement or
other agreement, document, instrument, or obligation (including, without
limitation, any of its charter documents) to which ACT is a party or by which
it or any of its assets or properties may be bound, or (ii) violate any
judgment, order, injunction, decree, statute, rule or regulation applicable to
ACT or its assets or properties, the violation of which would have a material
adverse effect upon the business, properties, or assets, or in the condition
(financial or otherwise) of ACT. No authorization, consent, or approval of
any public body or authority was or is necessary for the consummation by ACT
of the transactions contemplated by this Agreement.
4.4 Capitalization. The authorized capital stock of ACT consists of
one hundred million ($100,000,000) shares of common stock, par value one
hundredth of one cent ($.001). As of the Closing Date, there will be one
million (1,000,000) shares of common stock issued and outstanding. All of the
shares of common stock issued and outstanding are validly issued, fully paid,
and nonassessable. There are no outstanding contracts or other rights to
subscribe for or purchase, or contracts or obligations to issue or grant any
rights to acquire any equity security of ACT. ACT does not have any contracts
or obligations to redeem, repurchase, or otherwise reacquire any equity
security of ACT. All of the ACT Shares, when issued to the Stockholders, will
be duly authorized, validly issued and outstanding, fully paid and
nonassessable and were issued in conformity with all applicable laws.
4.5 Financial Statements of ACT; Absence of Undisclosed Liabilities;
No Adverse Changes. Attached hereto as Exhibit H are the audited financial
statements of ACT for the years ended December 31, 1997, and 1996, and the
unaudited financial statements for the quarters ended March 31, 1998, June 30,
1998, and September 30, 1998, consisting of ACT s balance sheets as of such
date (the Balance Sheets ), the related statements of profit or loss for the
periods then ended, and the respective notes thereto. Such financial
statements (and the notes related thereto) are herein sometimes collectively
referred to as the ACT Financial Statements. The ACT Financial Statements
(i) are derived from the books and records of ACT, which books and records
have been consistently maintained in a manner which reflects, and such books
and records do fairly and accurately reflect, the assets and liabilities of
ACT, (ii) fairly and accurately present the financial condition of ACT on the
date of such statements and the results of its operations for the periods
indicated, except as may be disclosed in the notes thereto, and (iii) have
been prepared in all material respects in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise disclosed in the notes thereto). Except as and to the
extent reflected or reserved against in the Balance Sheets, and as to matters
arising in the ordinary course of its business since the respective dates of
the Balance Sheets, ACT has no liability or obligation (whether accrued, to
become due, contingent or otherwise) which individually or in the aggregate
could have a materially adverse effect on the business, assets, condition
(financial or otherwise) or prospects of ACT. Except as set forth in Exhibit
G, since the dates of the respective Balance Sheets, there has been (a) no
declaration, setting aside or payment of any dividend or other distribution
with respect to the common stock of ACT or redemption, purchase, or other
acquisition of any of the common stock of ACT or any split-up or other
recapitalization relative to any of the common stock of ACT or any action
authorizing or obligating ACT to do any of the foregoing, (b) no loss,
destrution, or damage to any material property or asset of ACT, whether or not
insured, (c) no acquisition or disposition of assets (or any contract or
arrangement therefor), or any other transaction by ACT otherwise than for fair
value and in the ordinary course of business, (d) no discharge or satisfaction
by ACT of any lien or encumbrance or payment of any obligation or liability
(absolute or contingent) other than current liabilities shown on the Balance
Sheets, or current liabilities incurred since the date thereof in the ordinary
course of business, (e) no sale, assignment, or transfer by ACT of any of its
tangible or intangible assets except in the ordinary course of business,
cancellation by ACT of any debts, claims or obligations, or mortgage, pledge,
subjection of any assets to any lien, charge, security interest or other
encumbrance, or waiver by ACT of any rights of value which, in any such case,
is material to the business of ACT, (f) no payment of any material bonus to or
material change in the compensation of any director, officer, or employee,
whether directly or by means of any bonus, pension plan, contract, or
commitment, (g) no write-off or material reduction in the carrying value of
any asset which is material to the business of ACT, (h) no disposition or
lapse of rights as to any intangible property which is material to the
business of ACT, (i) except for ordinary travel advances, no loans or
extensions of credit to stockholders, officers, directors, or employees of
ACT, (j) no agreement to do any of the things described in this Section 4.5,
and (k) no material adverse change in the condition (financial or otherwise)
of ACT or in its assets, liabilities, properties, business, or prospects.
4.6 Tax Matters. ACT has, since its inception, accurately prepared
and duly filed all federal, state, county and local tax returns required to
have been filed by it in those jurisdictions where the nature or conduct of
its business requires such filing and where the failure to so file would be
materially adverse to ACT. Copies of all such tax returns have been made
available for inspection by DANCOR and the Stockholders prior to the execution
hereof. All Federal, state, county, and local taxes, including but not
limited to those taxes due with respect to ACT s properties, income, gross
receipts, excise, occupation, franchise, permit, licenses, sales, payroll, and
inventory due and payable as of the date of the Closing by ACT have been paid
or will be paid prior to the time they become delinquent. The amount
reflected in the Balance Sheets of ACT as liabilities or reserves for taxes
which are due but not yet payable is sufficient for the payment of all accrued
and unpaid taxes of the types referred to hereinabove.
4.7 No Pending Material Litigation or Proceedings. There are no
actions, suits, or proceedings pending or, to the best knowledge of ACT,
threatened against or affecting ACT (including actions, suits, or proceedings
where liabilities may be adequately covered by insurance) at law or in equity
or before or by any Federal, state, municipal or other governmental
department, commission, court, board, bureau, agency or instrumentality,
domestic or foreign, or affecting any of the stockholders, officers or
directors of ACT in connection with the business, operations, or affairs of
ACT, which might result in any material adverse change in the business,
properties, or assets, or in the condition (financial or otherwise) of ACT, or
which question or challenge the Reorganization. ACT is not subject to any
voluntary or involuntary proceeding under applicable bankruptcy laws and has
not made an assignment for the benefit of creditors.
4.8 Compliance with Laws. ACT (i) holds all licenses, franchises,
permits, and authorizations necessary for the lawful conduct of its business
as presently conducted and which the failure to so hold would have a material
adverse effect upon the business, properties, or assets, or the condition
(financial or otherwise) of ACT, and (ii) has complied with all applicable
statutes, laws, ordinances, rules and regulations of all governmental bodies,
agencies and subdivisions having, asserting or claiming jurisdiction over it,
which the failure to comply with would have a material adverse effect upon the
business, properties, or assets, or the condition (financial or otherwise) of
ACT.
4.9 Disclosure. Neither this Agreement, nor any certificate, exhibit,
or other written document or statement, furnished to DANCOR or the
Stockholders by or on behalf of ACT in connection with the transactions
contemplated by this Agreement contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to be
stated in order to make the statements contained herein or therein, when taken
as a whole, not misleading. ACT has no knowledge of any fact which has not
been disclosed in writing to DANCOR or the Stockholders which may reasonably
be expected to materially and adversely affect the business, properties,
operations, and/or prospects of ACT or the ability of ACT to perform all of
the obligations to be performed by ACT under this Agreement and/or any other
agreement between DANCOR and ACT to be entered into pursuant to any provision
of this Agreement.
4.10 Subsidiaries. ACT has no subsidiaries and no investments,
directly or indirectly, or other financial interest in any other corporation
or business organization, joint venture, or partnership of any kind whatsoever
except as reflected in the ACT Financial Statements.
4.11 Offering. Subject to the accuracy of the Stockholders
representations in Section 5.4 hereof, the offer, sale, and issuance of the
ACT Shares to be issued in conformity with the terms of this Agreement and the
transactions contemplated hereby, constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, and from all applicable state registration or qualification
requirements.
4.12 Applicable Permits; Compliance with Laws. ACT (i) holds all
licenses, franchises, permits, and authorizations necessary for the lawful
conduct of its business as presently conducted and which the failure to so
hold would have a material adverse effect upon the business, properties, or
assets, or the condition (financial or otherwise) of ACT, and (ii) has
complied with all applicable statutes, laws, ordinances, rules, and
regulations of all governmental bodies, agencies, and subdivisions having,
asserting or claiming jurisdiction over it, which the failure to comply with
would have a material adverse effect upon the business, properties, or assets,
or the condition (financial or otherwise) of ACT.
4.13 Real Property. No real property is owned by, leased to, occupied,
or subleased by ACT.
4.14 Tangible Personal Property. ACT owns no tangible personal
property.
4.15 Accounts Receivable. ACT has no accounts receivable.
4.16 Inventory. ACT has no inventory.
4.17 Contracts and Commitments. ACT has no contract, agreement,
obligation or commitment, written or oral, expressed or implied, which
involves a commitment or liability of ACT in excess of one thousand ($1,000),
and no union contracts, employee or consulting contracts, financing
agreements, debtor or creditor arrangements, licenses, franchise,
manufacturing, distributorship or dealership agreements, leases, or bonus,
health, or stock option plans.
4.18 Proprietary Information. ACT does not have any patents,
applications for patents, trademarks, applications for trademarks, trade
names, licenses, or service marks relating to the business of ACT, nor does
any present or former stockholder, officer, director, or employee of ACT own
any patent rights relating to any products manufactured, rented, or sold by
ACT.
4.19 Insurance. ACT maintains insurance with reputable insurance
companies on such of its equipment, tools, machinery, inventory, and
properties as are usually insured by companies similarly situated and to the
extent customarily insured, and maintains products and personal liability
insurance, and such other insurance against hazards, risks, and liability to
persons and property as is customary for companies similarly situated.
4.20 Bank Accounts. All bank and savings accounts, and other accounts
at similar financial institutions, of ACT existing at date of Closing are
listed on Exhibit I. Exhibit I contains a list of the name of each person
or entity authorized to sign on the bank accounts, borrow money, or incur or
guarantee indebtedness on behalf of ACT.
4.21 Powers of Attorney. No valid powers of attorney from ACT to any
person or entity exist as of the date of this Agreement.
4.22 Absence of Questionable Payments. To the best of its knowledge,
neither ACT nor any stockholder, director, officer, agent, employee,
consultant, or other person associated with or acting on behalf of any of
them, has (i) used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity, (ii)
made any direct or indirect unlawful payments to governmental officials or
others from corporate funds, engaged in any payments or activity which would
be deemed a violation of the Foreign Corrupt Practices Act or rules or
regulations promulgated thereunder, or (iii) established or maintained any
unlawful or unrecorded accounts.
4.23 Reporting Requirements. ACT has complied with and will maintain
its compliance with all of the reporting requirements under the Act and the
Securities Exchange Act of 1934, as amended.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each of the Stockholders, severally and not jointly, represent and
warrant to and covenant with ACT, as of the date hereof, as follows:
5.1 Power of Attorney. The Stockholder has duly and irrevocably
executed and delivered a power of attorney in the form of Exhibit J
appointing the Representative as attorney-in-fact with full power of
substitution and with full authority to take any actions as may be necessary
or desirable, at the discretion of such attorneys-in-fact, to carry out the
provisions of this Agreement on behalf of the Stockholders (the Power of
Attorney ).
5.2 Authority. The Stockholder has full rights, power, and authority
to enter into this Agreement and the Power of Attorney; the execution,
delivery, and performance of this Agreement and the Power of Attorney by the
Stockholder and the consummation by the Stockholder or the Stockholder s
attorney-in-fact of the transactions contemplated hereby will not conflict
with or result in a breach of any agreement to which the Stockholder is a
party and which a conflict or breach thereof would have a material adverse
effect upon the Stockholder or the Stockholder s properties or assets.
5.3 Title. The Stockholder has valid and marketable title to the
number of Shares set forth opposite such Stockholder s name on Exhibit A,
free and clear of any pledge, lien, security interest, or encumbrance other
than pursuant to this Agreement. As of the date hereof there is, and at the
Closing Date there will be, no lien, charge, mortgage, pledge, conditional
sale agreement, or other encumbrance of any kind or nature recorded in the
book of registry of stockholders of DANCOR with respect to any of the
Exchanged Shares owned by the Stockholder and the Exchanged Shares set forth
in Exhibit A are duly registered in the name of the Stockholders as set
forth in Exhibit A.
5.4 Restricted Stock. The Stockholder acknowledges that the Exchanged
Shares being issued to the Stockholders hereunder will be issued by ACT
without registration or qualification or other filings being made under the
Act, or the securities or blue sky laws of any state, in reliance upon
specific exemptions therefrom, and in furtherance thereof the Stockholder
represents that he is acquiring and will hold the shares to be delivered
hereunder for his own account, for investment only, and not for distribution
within the meaning of the U.S. Federal securities laws. The Stockholder
acknowledges that a legend, substantially in the following form, shall be
placed upon the face of each certificate representing any of ACT Shares being
delivered to the Stockholders hereunder:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), ARE RESTRICTED SECURITIES, AND NO OFFER, SALE, TRANSFER OR
OTHER DISPOSITION OF THIS CERTIFICATE OR THE SECURITIES
REPRESENTED HEREBY, OR OF ANY INTEREST HEREIN, MAY BE MADE WITHOUT
SUCH REGISTRATION UNLESS, IN THE OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY, AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.
5.5 Access to Information. The Stockholder acknowledges the receipt
of ACT s Registration Statement filed on Form 10-SB and Quarterly Report on
Form 10-QSB for the nine months ended September 30, 1998. The Stockholder
further acknowledges that such Stockholder has had access to such information
from DANCOR as such Stockholder has deemed necessary to enable such
Stockholder to make an informed decision with respect to the transactions
contemplated hereby.
5.6 Waiver of Claims. As a condition precedent to ACT s obligations
hereunder, the Stockholder agrees to waive and compromise any and all claims
against DANCOR, ACT, and any of their affiliates (as that term is defined in
the Federal securities laws) as of the Closing Date, including but not limited
to claims relating to the issuance of the securities of DANCOR.
ARTICLE VI
MISCELLANEOUS
6.1 Taxes and Expenses.
6.1.1 Except as otherwise expressly provided in 6.1.2 immediately
below, each of DANCOR and ACT shall pay all of their own respective taxes,
attorneys fees, and other costs and expenses payable in connection with or as
a result of the transactions contemplated hereby and the performance and
compliance with all agreements and conditions contained in this Agreement
respectively to be performed or observed by each of them.
6.1.2 The Stockholders shall pay all income taxes, if any, which
become due on account of the sale and transfer of the Exchanged Shares to ACT.
6.1.3 The representations and warranties of DANCOR, the
Stockholders, and ACT contained herein and in any other document or instrument
delivered by or on behalf of DANCOR and/or the Stockholders or on behalf of
ACT pursuant hereto, as such may be qualified in Exhibits C, D, or G,
respectively, shall survive the Closing and any investigations made by or on
behalf of ACT made prior to the Closing, and shall remain in full force and
effect for a period of two (2) full years from the date of the Closing the
( Warranty Period ), and thereupon expire.
6.2 Other Documents. Each of the parties hereto shall execute and
deliver such other and further documents and instruments, and take such other
and further actions, as may be reasonably requested of them for the
implementation and consummation of this Agreement and the transactions herein
contemplated.
6.3 Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, the heirs, personal
representatives, successors, and assigns of ACT, the Stockholders, and DANCOR,
but shall not confer, expressly or by implication, any rights or remedies upon
any other party.
6.4 Governing Law. This Agreement is made and shall be governed in
all respects, including validity, interpretation and effect, by the laws of
the State of Nevada.
6.5 Notices. Any notice or the delivery of any item to be delivered
by a party hereto shall be delivered personally, by U.S. mail, return receipt
requested, or by Federal Express, next-day delivery. Any personal delivery
made shall be deemed to have been made upon the execution of a receipt for the
item to be delivered by the party to whom delivery is made. Delivery by U.S.
mail or Federal Express shall be deemed to have been made when delivered by
Federal Express to the party to whom addressed. All such deliveries shall be
made to the following addresses, or such other addresses as the parties may
have instructed the others in accordance with the provisions of this Section:
If to ACT: Advanced Coating Technologies, Inc.
9005 Cobble Canyon Lane
Sandy, Utah 84093
Attention: President
With a copy to: Leonard W. Burningham, Esq.
455 East 5th South
Salt Lake City, Utah 84111-3323
If to DANCOR Dancor, Inc.
or the Stockholders: 12226 South 1000 East, Suite 10
Draper, Utah 84020
Attention: Chief Executive Officer
With a copy to: Bruce H. Haglund, Esq.
Gibson, Haglund & Johnson
2 Park Plaza, Suite 450
Irvine, California 92614
Any party hereto may change its address by written notice to the other party
given in accordance with this Section 6.5.
6.6 Entire Agreement. This Agreement and the exhibits attached hereto
contains the entire agreement between the parties and supersede all prior
agreements, understandings, and writings between the parties with respect to
the subject matter hereof and thereof. Each party hereto acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting with authority on behalf of any
party, which are not embodied herein or in an exhibit hereto, and that no
other agreement, statement, or promise may be relied upon or shall be valid or
binding. Neither this Agreement nor any term hereof may be changed, waived,
discharged, or terminated orally. This Agreement may be amended or any term
hereof may be changed, waived, discharged, or terminated by an agreement in
writing signed by ACT, DANCOR, and the Stockholders.
6.7 Severability. If any provision of this Agreement is determined to
be invalid, illegal, or unenforceable by any court, department, official,
political subdivision, agency, or other instrumentality of any government,
whether state, local, or Federal, the remaining provisions of this Agreement
to the extent permitted by law shall remain in full force and effect. To the
extent permitted by law, the parties hereto waive any provision of law that
renders any provision hereof invalid or unenforceable in any respect.
6.8 Headings. The captions and headings used herein are for
convenience only and shall not be construed as a part of this Agreement.
6.9 Attorneys' Fees. In the event of any litigation between or among
ACT, DANCOR, and/or the Stockholders, the prevailing party shall receive its
reasonable expenses, including attorneys' fees, from the non-prevailing party
in connection therewith.
6.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which taken together
shall constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.
A.X.R. DEVELOPMENT CORPORATION, INC.
a Nevada corporation
By: /s/David C. Merrell
David C. Merrell, Chief Executive Officer
By: /s/Corie Merrell
Corie Merrell, Secretary
DANCOR, INC.
a Delaware corporation
By: /s/Culley W. Davis
Culley W. Davis, Chief Executive Officer
By: /s/Bruce H. Haglund
Bruce H. Haglund, Secretary
<PAGE>
THIS IS THE STOCKHOLDER SIGNATURE PAGE TO THE
AGREEMENT AND PLAN OF REORGANIZATION
Please Sign this Page and Return it if You Wish to Participate in the Plan
STOCKHOLDERS:
(Signature of Stockholder-Your Signature)
(Printed Name of Stockholder-Your Name)
If the shares are jointly owned, the other owner(s) should also sign this
Signature Page.
(Signature of Stockholder-Co-Owner Signature)
(Printed Name of Stockholder-Co-Owner Name)
<PAGE>
Exhibit "A"
List of Dancor Stockholders
DANCOR,INC
Alphabetical Stockholder List
# of Dancor # of ACT
Shares Shares
Adams, Orval Webster 111 8,056 24,168
Adams, Vaughn 1,500 4,500
Adamson, Leroy 5,000 15,000
Adamson, Rex L. 17,112 51,336
Adorable, Reynardo 8,056 24,168
Aguayo, Benjamin 8,028 24,084
Alexander, James T. & Becky 16,112 48,336
Allen, Paul George 3,021 9,063
Ames, Park 80,560 241,680
Anderson, Chad 8,056 24,168
Andrus, Bradley 14,098 42,294
Andrus, Brent 13,056 39,168
Ashton, John 32,224 96,672
Aymond, Jimmy 150,008 450,024
B.C. Warner Irrevocable Trust 16,112 48,336
Baker, Ed 8,056 24,168
Baldwin, Keith 143 429
Barbari, Allen 8,056 24,168
Barlow, Frankie 2,014 6,042
Bart C. Warner Irrevocable Trust 16,112 48,336
Barton, Russell & Sue 16,112 48,336
Bawdon, Russ 1,000 3,000
Beal, Jason 5,000 15,000
Beal, Scott 6,042 18,126
Beal, Scott & Kathy 10,000 30,000
Beckstead, Brent & Jan 4,000 12,000
Bellini, Mark 16,112 48,336
Belsito, Alphonson 8,056 24,168
Berkes, Stephen 16,112 48,336
Berlin, Marvin 3,947 11,841
Berna, Bonnie 10,062 30,186
Berna, Russel 12,062 36,186
Big Creek Family LTD. 2,500 7,500
Birmingham, Daniel 8,056 24,168
Blackburn, Richard 500 1,500
Blake, Jade 1,250 3,750
Blamires, James 18,112 54,336
Blamires, Jan & Linda 5,000 15,000
Blamires, Rex 1,000 3,000
Blaylock, Christy 2,500 7,500
Bolinder,Bruce L. 8,056 24,168
Bower Family Trust 16,112 48,336
Boyke, Dale 1,500 4,500
Boyke, Gary 1,000 3,000
Boyke, Mark & Debra 22,557 67,670
Breunig, Tom 3,222 9,667
Brewer, Mark S. 9,056 27,168
Brigham, Terry W. 16,112 48,336
Bullen, Jonathan 40,280 120,840
Burkhardt, Donna 3,914 11,742
Bustos, William 5,000 15,000
Cannon, Garff - Richmark, LTD. 16,112 48,336
Cannon, Mark 16,112 48,336
Cannon, Wilford W. 2,095 6,284
Chang-Tung, Eric 2,014 6,042
Chapman, Amber 251 754
Chapman, Brianne 251 754
Chapman, Travis & Lori 500 1,500
Chase, Duane 16,112 48,336
Christensen, Carey 5,000 15,000
Clonts, Jeff & Laurie 8,056 24,168
Collins, Fred 2,500 7,500
Collins, Rachel 3,000 9,000
Collinsworth, Leonard 1,250 3,750
Collinsworth, Leonard 3,264 9,792
C Desiree 4,028 12,084
Corbin, Daniel L. 472,625 1,417,875
Corbin, Dean 32,224 96,672
Corbin, Merlin 16,112 48,336
Cosgrove, Michael 8,056 24,168
Cozzens, Blane 3,000 9,000
Cozzens, Martin 2,500 7,500
Crocket Family Foundation 16,112 48,336
Curcie, Stephen 24,168 72,504
Dance, David 2,325 6,975
David, Mark 8,056 24,168
Davis, Culley W. 18,612 55,836
Delavan, John & Cheryl 32,224 96,672
Delgleize, Dan A. 2,000 6,O00
DeMill, Donald 4,000 12,000
Dill, Richard 8,056 24,168
DLJSC Custodian 1,000 3,O00
Dodson, Frank 8,056 24,168
Duke, Jonathon 2,500 7,500
Dykstra, Warren 2,500 7,500
Egan, Dwight 4,028 12,084
Eggers Enterprises, L.C. 16,112 48,336
Eflenfeldt, Kirk 3,000 9,000
Elfstrom, Ronald 3,000 9,000
Elizabeth A. Warner Revocable Trust 16,112 48,336
Elton, Wesley 5,000 15,000
Eyre, Candyce FL 604 1,812
Eyre, Conner M. 251 754
Eyre, Dan & Dawn 500 1,500
Eyre, Quinn Patrick 251 754
Ezell, Steven 16,112 48,336
Farley, Ernest 5,000 15,000
Farley, Steven 300 900
Featherstone, Ed & Joann 16,112 48,336
Ferguson, Marian 16,112 48,336
Ferguson, Roger 10,000 30,000
Ferguson, Wade 5,000 15,000
Finniger, Walter 4,028 12,084
Foster, Kenneth 2,014 6,042
Fredrickson, Eugene 2,500 7,500
Freeland, Bill 10,000 30,000
Freeze, J.P. 45,000 135,000
Frisbie, Nfichael 1,000 3,000
Gadd, DeMar 400 1,200
Gadd, Richard 4,028 12,084
Gadd, Rick 500 1,500
Gadd, Russ 1,000 3,000
Gadd, Vance Donald 4,000 12,000
Gengler, Jan 4,028 12,084
Gengler, Jan D. & Colleen A. 2,500 7,500
George, Leslie D. 33,334 100,002
Goodrich, David 2,014 6,042
Green, David 16,112 48,336
Greene, Kim R. 4,028 12,084
Greene, Kim/Sherry 4,028 12,084
Grenier, Marc 24,168 72,504
Griffin, Robert & Jane 8,139 24,417
Grove Limited Partnership No. II 64,448 193,344
Grove, J.F. 3,000 9,000
Grove-Samuelson, Lisa 3,000 9,000
Gunnel, Ruel 2,500 7,500
Guthrie, Jason 200 600
Hadlock, Brian 4,028 12,084
Hadlock, Jim 12,084 36,252
Hadlock, Steve 16,112 48,336
Hadlock, Steve & Becky 32,224 96,672
Hadlock. Mike 16,112 48,336
Haglund, Bruce 66,112 198,336
Hales, J. Vern & Lucille 2,325 6,975
Hall, Lance 16,112 48,336
Hamilton, J. Chad 26,112 78,336
Hammersly, Georgia & Gary 16,112 48,336
Hammersly, Georgia 4,028 12,084
Harman, John 65,341 196,023
Harr, John 6,042 18,126
Harris, Neal 8,056 24,168
Haws, David 5,021 15,063
Haws, Eric 3,021 9,063
Haws, John 2,014 6,042
Heilman, Gene 110,978 332,934
Helfrich, Cliff 5,014 15,042
Hewlett, John 36,112 108,336
Hewlett, John - Pine Valley, LTD. 16,112 48,336
Hibbert, S. Dale 5,000 15,000
Hicken, Randy 16,112 48,336
Hittner, Glen 32,224 96,672
Hoban, Brian Keith 8,056 24,168
Holmes, Phillip 1,000 3,000
Holmes, Robert 1,000 3,000
Holmes, Ryan 1,000 3,000
Holt, Daniel 8,056 24,168
Hook, Diane 8,056 24,168
Howsden, F Lester 18,334 55,002
Hunsaker, Brian 1,750 5,250
Hunsaker, Jason 500 1,500
Hunsaker, Weldon 4,000 12,000
Hurt, Ivan 1,007 3,021
jadeja, Alka 8,056 24,168
James, Mark 1,410 4,229
Jardine,Jared 201 604
Jawitz, Jack 12,084 36,252
JBAT Limited Partnership 16,112 48,336
JDS LTD. 5,000 15,000
Jensen, Ortho 5,000 15,000
Jensen, Richard 1,007 3,021
Jensen, Verl 4,500 13,500
Johnson, Joe 16,112 48,336
Johnson, Mitch 1,000 3,000
Jones, Kelly & Nancy 100 300
Jungreis, Alexander 4,028 12,084
Kallins, Marc 16,112 48,336
Keller, Scott C. 4,028 12,084
Key Investment FBO Jan Gengler 2,500 7,500
Klis, Robert & Allison 16,112 48,336
Kujanpaa, Paul 14,584 43,752
Kujanpaa, Paul & Imna 8,056 24,168
Laford, Ronald 2,500 7,500
Landry, Paul 34,224 102,672
Larsen, Nancy 16,112 48,336
Lavdas, Nicholas 3,750 11,250
Leason, J.K. & R. H. 8,056 24,168
Lieberman,Lawerence 16,112 48,336
Livingston, Terry 20,140 60,420
Llewellyn, Peter 1,250 3,750
Llewellyn, Richard 1,250 3,750
Loftin, Michael C. 5,028 15,084
Lowrance, Daniel 2,000 6,000
Lunak, Mitch 1,000 3,000
Lunt, Wendell 8,056 24,168
Luther, Michael 2,325 6,975
Lyman, Lyn & Maxian, Judith 800 2,400
Lyon, Chris & Donna 1,000 3,000
MacLearnsberry, Barbara M. 1,860 5,580
Magdamit, Christian 25 75
Magdamit, David D. 25 75
magdamit, Jususa G. 25 75
Magdamit, Mark 25 75
Mahnke, Mike 18,612 55,836
Mann, Michael 11,627 34,881
Mansell, Jeffery & Julie I. 8,056 24,168
Manuela, Ronald 4,028 12,084
Maples Bradly 16,112 48,336
Mark Ancel Corp. 8,056 24,168
Matson, JoAnn 2,500 7,500
Maxian, Lyn 800 2,400
McCord, Gilbert 71,403 214,209
McKenna Enterprises, L.C. 8,056 24,168
McLean, Marjorie 2,500 7,500
Mellor Engineering Inc. 20,140 60,420
Merrill, Roger 2,000 6,000
Miller Mark 4,028 12,084
Moss, William W. 16,112 48,336
Munroe, Taylor 515,584 1,546,752
Munroe, Zachary Taylor 32,224 96,672
Murdaugh, Kenneth 500 1,500
Murdaugh, William 500 1,500
Naduninti, Yallappa 8,056 24,168
Neyland, Dennis 16,112 48,336
Nietz, Bradley R. 16,112 48,336
Nilson, Glen 2,500 7,500
Nowak, William 24,168 72,504
Olson, Carrie 4,028 12,084
Onsager, Glenn 36,252 108,756
Onsager, Janine L. 16,112 48,336
Ormand Enterprises, Inc. 2,500 7,500
Orton, Vince 500 1,500
Ottello, Ltd. 1,500 4,500
Ovadek, Michael 4,028 12,084
Owen Enterprises, L.C. 8,056 24,168
Packard, Corinne 5,156 15,468
Palamino, Celestino 4,028 12,084
Palmer, Dean 124,728 374,184
Parker, Virginia C. 2,500 7,500
Patterson, Allen 1,933 5,800
Patterson, Marlin & Barbara 1,000 3,000
Patterson, Marlin 3,183 9,549
Paul Adams Investment Trust 2,014 6,042
Peck, Clay 2,014 6,042
Peck, Cole 2,014 6,042
Peck, David & Christina 1,000 3,000
Peck, Thomas & Sons 5,000 15,000
Peck, Tony 1,611 4,834
Peterson, Gene 5,000 15,000
Peurifoy, J. Tom 16,112 48,336
Phelps, James 1,000 3,000
Phelps, William 1,000 3,000
Pierpont, David 1,007 3,021
Pinnacle Enterprises, Inc. 832,225 2,496,674
Polson, Ivan 9,302 27,906
Porter, Layne 2,500 7,500
Poulsen,Doug 1,000 3,000
Prantel, Roger & Nancy 977 2,931
Price, Eric 1,007 3,021
Pugh, Kazell 5,528 16,584
R. Lovell Employees Pension 2,500 7,500
Rawson, Robert 4,028 12,084
Rebello, Joseph 500 1,500
Reed, Douglas 47 141
Repp, Dennis 107,000 321,000
Roberts, Derek 434 1,302
Robinson, Ann Denece 504 1,511
Robinson, Duane 4,029 12,087
Rogers, Rainey 20,226 60,678
Rollette, Nancy (Larsen) 3,021 9,063
Roney, Nedra 188,226 564,678
Roney, Rick 51,035 153,105
Rood, Susan 16,112 48,336
Rose, Gilbert Lee 8,056 24,168
Rudd, Marlon 2,500 7,500
Ruffell, Layne 600 1,800
Savage, Trent 806 2,417
Savage, Ty 403 1,208
Schiffmacher, Robert & Ively 1,000 3,000
Selgas, Tom 16,112 48,336
Seltzer, Bryan 8,056 24,168
Shashidhara, Malery 8,056 24,168
Shoe, Thomas 500 1,500
Siandatian, Alan 31,800 95,400
Sidney, Stuart 16,112 48,336
Skyline Printing 1,250 3,750
Slack, Craig 1,000 3,000
Smith, Mitch 2,014 6,042
Smoot, Steve 2,095 6,284
Sorenson, Joe & Kathleen 16,112 48,336
Southwick, J.D. 25,000 75,000
Southwick, Jay 32,224 96,672
Spoerl, Charlene 17,612 52,836
Spoerl, Frederick 33,771 101,172
Staley, Randy 1,000 3,000
Stolk, Lawrence 1,007 3,021
Stolk, Ruth Ann 1,250 3,750
Subbiondo, Robert 8,056 24,168
Sutton, Garth 10,000 30,000
T-G6 Partnership 800,000 2,400,000
Tanner Trust 2,014 6,042
Telford, Scott 5,000 15,000
Thayer, Kelly 8,056 24,168
Thomas, B.E. & Cindy 465 1,395
Thomas, Robert 2,000 6,000
Thornas, Thomas 8,056 24,168
Thon, Larry 558 1,674
Thorbahn, Dave 6,445 19,334
Tillotson, Blake 32,224 96,672
Tillotson, Craig 32,224 96,672
Tillotson, Josephine 8,056 24,168
TMB Limited Company 16,112 48,336
Transcorp/CF Robert Turner 3,500 10,500
Trumble, Ronald & Judith 2,325 6,975
Turner, Ronald M. 18,312 54,936
Valgardson, Don 1,000 3,000
Vanderham, Kenny 3,500 10,500
Vermeulen, Sinde 10,070 30,210
Viola, Vincent 8,056 24,168
Voight, Martin 465 1,395
Waldvogel, David 80,560 241,680
Wallace, Johnny 1,500 4,500
Walter, Gaud 4,028 12,084
Warner, Bart 12,438 37,314
Warner, James N. 16,112 48,336
Warner, Richard L. 16,112 48,336
Warren, Itichard & Jerry 1,000 3,000
Waters, Richard 4,028 12,084
Webb, Lois Trust 5,000 15,000
Webber, Curtis 2,500 7,500
West, Mark 500 1,500
Whaley, Preston 24,168 72,504
Williams, Red & Ann 16,112 48,336
Willis, Kelland 2,500 7,500
Willis, Tillman 1,500 4,500
Wilson, Ralph & Becky 23 69
Wiseman, Pete 2,000 6,000
Wright, Rex C. 2,000 6,000
Wright, Richard 500 1,500
Yagoda, Marvin 8,056 24,168
Yates, Cindy 21,147 63,441
Yates, Dustin 7,042 21,126
Yates, Jim 18,126 54,378
Yates, Jim Anthony 3,625 10,876
Yates, Rod 4,028 12,084
Yates, Shane 25,105 75,315
Yost Enterprises 12,500 37,500
Young, Catherine 16,112 48,336
Zimmerman, William 2,000 6,000
Zmyslo Limited Partnership 16,112 48,336
TOTAL 6,500,000 19,500,000
<PAGE>
Exhibit "B"
Dancor, Inc.
12226 South 1000 East, Suite 9
Draper, Utah 84020
801-553-8785
CONFIDENTIAL
December 14, 1998
A.X.R. Development Corporation, Inc.
Salt Lake City, Utah
Re: Proposed Reorganization
Gentlemen:
This letter, upon your acceptance, will evidence our mutual intention
to enter into a definitive agreement providing for a reorganization in which
all of the outstanding capital stock of Dancor, Inc. ("DANCOR"), a Delaware
corporation (the target company), will be acquired by A.X.R. Development
Corporation, Inc. ("AXR"), a Nevada corporation (the acquiring company).
The form of the transaction is contemplated to be an exchange of
capital stock, between the Stockholders of DANCOR (the "DANCOR Stockholders")
and AXR in a tax-free reorganization (hereinafter the anticipated transaction
is referred to as the "Reorganization"), subject to the approval of the DANCOR
Stockholders.
This letter is also an expression of the intention of DANCOR and AXR
to proceed expeditiously to negotiate, draft, and execute a definitive
agreement for the Reorganization (hereinafter referred to as the "Agreement").
The Agreement, when executed, will reflect the terms of this letter and such
other terms and conditions as are typical to a transaction of this nature
(which shall include appropriate representations and warranties as to the
business, assets, liabilities, capitalization, material contracts, proprietary
rights, financial condition and other matters relevant to the business and
operations of the parties), and such additional terms and conditions as shall
be mutually agreed upon. The parties to the Agreement shall include AXR, the
DANCOR Stockholders, and any other party who, in the opinion of AXR or DANCOR,
is necessary to the transactions.
1. Certain Terms of Reorganization Agreement. The material terms
and conditions of the Reorganization to be included in the Agreement are as
follows:
1.1 The Agreement shall provide for the Reorganization, which
shall be consummated on or about February 1, 1999 (the "Closing"). On the
Closing Date, all of the issued and outstanding DANCOR capital stock shall be
acquired by AXR from the DANCOR Stockholders.
1.2 At the Closing, AXR shall issue and deliver to the DANCOR
Stockholders previously authorized and unissued shares of AXR common stock in
an amount equal to 95% of the outstanding shares of the AXR (after giving
effect to the closing of the Reorganization), calculated on a fully diluted
basis. In calculating the outstanding shares of DANCOR for this purpose, it
will be assumed that outstanding DANCOR options, warrants and convertible
securities are exercised immediately prior to the closing, and that number of
shares of AXR common stock necessary to account for DANCOR options, warrants
and convertible securities will be reserved in lieu of being issued. At the
Closing, AXR will substitute options, warrants and convertible securities to
purchase shares of the AXR's common stock for each outstanding option, warrant
and other convertible security to acquire shares of DANCOR, each such option
or warrant to represent the right to purchase that number of AXR shares as if
the DANCOR option, warrant or convertible security had been exercised
immediately prior to the Reorganization and exercisable for the same aggregate
consideration, and on substantially the same other terms and conditions, that
would apply if all of such DANCOR options, warrant or convertible security had
been fully exercised.
1.3 At the time of Closing, AXR shall have 1,000,000 pre-
Reorganization outstanding shares, or approximately 5% of the outstanding
shares of the reorganized company, to consist of approximately 565,217 shares
held by current shareholders after a reverse split effected December 11, 1998,
250,000 shares to be issued pursuant to an S-8 Registration Statement before
the Reorganization (150,000 of which will be issued only on and subject to the
closing of the Reorganization), and 184,783 restricted shares also to be
issued before the Reorganization.
1.4 Upon the Closing of the Reorganization, each of the
officers, directors and 10% shareholders of AXR shall execute an agreement
with DANCOR and AXR in which each of such officer, director and 10%
shareholder shall release AXR from any and all claims arising as a result of
any prior events (except as permitted by the Agreement) and further covenant
and agree that they will not compete with AXR and DANCOR for a period of five
(5) years after the Closing in any business engaged in by DANCOR as of the
Closing Date including, without limitation, the coating business.
1.5 Until the Closing, each of AXR and DANCOR shall continue to
operate its business in the ordinary course and shall not, without the prior
written consent of the other party, do any of the following:
(i) Incur any material obligations or commitments
other than in the ordinary course of business;
(ii) Grant any salary increases (other than as
required by existing contracts or consistent
with current practices), unscheduled promotions
or enter into any new employment or benefit
contracts;
(iii) Solicit, induce or otherwise engage in
discussions or negotiations relating to or
proposed to lead to the acquisition or
Reorganization of sale of substantially all of
the assets or shares of DANCOR by or with any
party other than AXR;
(iv) Sell or dispose of any material assets or
properties, except in the ordinary course of
business or with the prior consent of the other
party hereto; or,
(v) Sell any additional shares of its capital stock
or grant any additional rights or options to
acquire its capital stock, with the except of
DANCOR's current private placement offering.
1.6 DANCOR shall provide AXR, as soon as practicable after the
Closing Date, with audited financial statements required in connection with
the acquisition of a "significant subsidiary" by AXR as that term is defined
by rules and regulations promulgated by the Securities and Exchange Commission
and such other information as is required for AXR to prepare and file
appropriate documents relating to the Reorganization with the Securities and
Exchange Commission. Such financial statements will include, among other
items, an audited balance sheet of DANCOR as of a recent date, statements of
income for each of its last two fiscal years, and related statements of
shareholder's equity, statements of cash flows and the appropriate notes to
such financial statements, together with the report of an independent
certified public accounting firm.
1.7 As a condition to the consummation of the Reorganization,
there shall have been no material adverse change in the assets, business or
prospects of either DANCOR or AXR except as contemplated by the Agreement.
All financial statements provided by the parties to each other pursuant to the
Agreement shall be represented to fairly present the financial condition of
such party at the date of such financial statements and their results of
operations for the periods covered thereby, and shall be prepared in
accordance with generally accepted accounting principles.
1.8 AXR and DANCOR will exert their best efforts to obtain such
consents or approvals, and to make such filings as in the opinion of their
respective counsel may be necessary or advisable to effect the transactions
contemplated herein. At the request of AXR, DANCOR shall obtain the consent of
any third party which is necessary for the transfer of any asset, right or
contract of DANCOR pertaining to the Reorganization contemplated herein, if
any.
1.9 As a condition to the consummation of the Agreement, AXR
and its counsel and DANCOR and its counsel must each be satisfied as to the
validity and legality of all aspects of the Reorganization, including all
activities undertaken in relation to the Agreement. Each of the parties to the
Reorganization will pay their own expenses incurred in connection with the
Agreement and all other events required for the Closing.
1.10 The Agreement will provide that any claims or disputes
arising thereunder or as a result of the transactions contemplated therein
which cannot be resolved by the parties will be referred to alternative
dispute resolution by binding arbitration in the State of Utah.
2. Due Diligence. Upon the execution of this letter of intent by
the parties, DANCOR and AXR, and each of their duly authorized
representatives, will be provided with full access to the projections,
financial records and supervisory management personnel of the other party,
which shall include copies of all material agreements, corporate proceedings,
access to the chief executive officer and chief financial officer, marketing,
product development and manufacturing supervisors, and other records and
information which each party deems of significance in an due diligence
investigation of the other party hereto. The disclosure of any such
information shall be subject to the provisions of Section 3 of this letter
agreement.
3. Confidentiality. In connection with the foregoing matters, each
party hereto has or will be furnishing to the other from time to time with
oral and written information as to its proprietary products, marketing
strategy and business plans, significant portions of which each of the parties
considers to be proprietary and confidential information (herein called the
"Confidential Information"). Each party acknowledges that "Confidential
Information," as used herein, does not include any information which (i) was
or becomes generally available to the public other than as a result of an
improper disclosure by the other party hereto, or (ii) was or becomes
information available to the other party on a non-confidential basis from a
third party source that is not bound by a confidentiality obligation to either
of the parties hereto.
Each party agrees that Confidential Information will be used
solely for the purpose of evaluating the Reorganization, investigating market
information and potential markets, and for AXR to pursue due diligence and
legal disclosure requirements in connection with proposed financing activities
by AXR, and will not be used in the business or operations of the party to
which such information has been disclosed or used in any other way, directly
or indirectly, that may detrimental to the interests of the party that owns
such Confidential Information. Confidential Information may be disclosed to
representatives of the party receiving the same who need to know such
Confidential Material for the purposes described above, it being understood
that such representatives shall be informed of the confidential nature of the
Confidential Information and shall be directed to treat the Confidential
Information confidentially and as proprietary information of the party that
owns the same. Each party shall notify the other as to the identity of such
representatives. If either party receives a request, including a subpoena or
similar legal inquiry, to disclose any of the Confidential Material, it shall
provide the party that owns such Confidential Information with prompt notice
so that the owner may seek appropriate protective relief.
If the Agreement is not executed or the Closing thereunder shall fail
to occur for any reason, each party shall promptly deliver and return all
copies of Confidential Information to the party which owns the same, and
without retaining any copy, notes or extracts thereof.
Although each party understands that they will endeavor to include in
the Confidential Information all materials which it believes to be relevant
for the purposes of this letter agreement and the Reorganization, each party
further understands that no representation or warranty as to the accuracy or
completeness of the Confidential Information has or will be made except as
provided by separate written agreement.
4. Press Release. Upon your acceptance and approval hereof, each of
us is authorized by the other to issue a press release for the purpose of
publicly announcing the transactions contemplated by this letter. AXR and
DANCOR each agree to consult with the other as to the form and substance of
any press release or other public disclosure of the matters covered in this
letter, provided that this shall not be deemed to prohibit AXR or DANCOR from
making any disclosure which its respective counsel deems necessary to comply
with applicable law.
5. Survival of Certain Provisions. The provision of Sections 3, 4
and 5 of this letter agreement are for the benefit of the respective parties
hereto, shall survive any termination of this letter agreement, and shall be
governed by and construed in accordance with the laws of the State of Utah.
This letter reflects an expression of our mutual intent only, and
shall not constitute a binding legal obligation for the transactions described
herein (except as expressly set forth in Sections 3, 4 and 5 above) until such
time as the Agreement has been executed and the Reorganization has been
approved by the Board of Directors and shareholders of AXR and the Board of
Directors and Stockholders. It is our desire to move expeditiously towards the
completion of these transactions on the basis of the terms and conditions
contained herein. To help accomplish this goal, if you are in agreement with
the foregoing, would you please indicate your approval of the contents of this
letter by signing the attached copy in the space provided and returning it to
us at your earliest convenience.
The parties acknowledge that they were initially introduced to each
other by, and currently share, two common directors and common outside
corporate counsel who will have an inherent and unavoidable conflict of
interest as to the Reorganization. Each of the parties agrees to engage the
services of their own independent counsel for purposes of advising them in
connection with this letter of intent, the Agreement, the Closing and other
matters relevant to the Reorganization. Each of the parties will require
approval of the Reorganization by a majority or more of their independent
directors who are not affiliated with the other party.
Very truly yours,
DANCOR, INC.
By:/S/Culley W. Davis
Culley W. Davis,
Chairman of the Board of Directors
Accepted and Agreed to this
10th day of December 1998
A.X.R. DEVELOPMENT CORPORATION, INC.
By:/S/David C. Merrell
David C. Merrell,
President and Chief Executive Officer
<PAGE>
Exhibit "C"
Schedule of Dancor Options and Contingent Issuance of Shares
NONE
Options Granted to Date
NONE
<PAGE>
Exhibit "D"
Dancor Exceptions
NONE
<PAGE>
Exhibit "E"
Dancor Patents
U. S. Patents:
5,205,874
5,672,390
International Patents:
Country Patent No.
Australia 660,587
Australia 691,794
Europe 0,585,365 (1)
International Patents Pending:
Country Patent No.
Brazil PI9307502/2
Canada 2149919
Canada 2109629
Europe 94902326.1
Japan 513284/1994
Japan 500477/1993
Russia 95113589
Korea 703535/1993
Trademark Filing:
VitroSeal
(1) European Patent No. 0,585,365 designates the following countries:
Austria, Belgium, Switzerland/Liechtenstein, Germany, Denmark, Spain, France,
Great Britain, Greece, Italy, Luxembourg, Monaco, Netherlands, and Sweden.
The patent will be enforceable in each of these countries when our European
associate completes the registration process in each country.
<PAGE>
Exhibit "F"
Dancor Bank Accounts
Zions Bank Account No. 066-00213-0
(Signer: Culley W. Davis
Pacific National Bank Account No. 1004949001
(Signer: Daniel Corbin)
<PAGE>
Exhibit "G"
Advanced Coating Technologies, Inc.
Exceptions
NONE
<PAGE>
Exhibit "H"
Advanced Coating Technologies, Inc.
Financial Statements
See the 10-QSB for the period ended September 30, 1998
filed with the Securities and Exchange Commission on
October 15, 1998
and the
10-KSB for the year ended December 31, 1997
filed with the Securities and Exchange Commission on
October 8, 1998
<PAGE>
Exhibit "I"
Advanced Coating Technologies, Inc.
Bank Accounts
NONE
<PAGE>
Exhibit "J"
Form of Power of Attorney
POWER OF ATTORNEY
THE UNDERSIGNED STOCKHOLDER (the "Stockholder") of DANCOR, INC.
("DANCOR") hereby:
(i) sells, assigns and transfers unto ADVANCED COATING
TECHNOLOGIES, INC., a Nevada corporation ("ACT"), the number of shares
of DANCOR set forth opposite Stockholder's name in Exhibit "A" (the
"Shares") to that certain Agreement and Plan of Reorganization for the
Acquisition of all of the Outstanding shares of Common Stock of Dancor,
Inc. by Advanced Coating Technologies, Inc. dated December 23, 1998 (the
"Agreement").
(ii) irrevocably constitutes and appoints CULLEY W. DAVIS
("DAVIS") as attorney-in-fact to transfer the Shares on the books of
DANCOR to ACT as set forth in the Agreement, with full power of
substitution in the premises;
(iii) constitutes and appoints DAVIS as Stockholder's true
and lawful attorney-in-fact and agent, with full power of substitution,
for Stockholder and in Stockholder's name, place, and stead, in any and
all capacities (until revoked in writing) to act on behalf of such
Stockholder in connection with the Agreement and the exchange of the
Shares for ACT shares; and
(iv) grants unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises as fully to accomplish
all intents and purposes of the Agreement as such Stockholder might or
could do in person, hereby ratifying and confirming all that the
attorney-in-fact, or his substitute, may lawfully do or cause to be done
by virtue of this power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this power of
Attorney this day of , 1999.
(Signature of Stockholder)
(Printed Name of Stockholder)
A.X.R. Development Corporation, Inc.
9005 Cobble Canyon Lane
Sandy, Utah 84093
PRESS RELEASE-December 15, 1998
Sandy, Utah. A.X.R. Development Corporation, Inc. ("AXR") announced
today that it has entered into a letter of intent with Dancor, Inc.
("Dancor"), based in Draper, Utah, to acquire all of the issued and
outstanding shares of common stock of Dancor in a tax-free, stock-for-stock
reorganization. In accordance with the terms of the letter of intent, the
shareholders of Dancor will acquire 95% of the outstanding shares of AXR
following the Reorganization Agreement with AXR. It is anticipated that after
the closing of the transaction, the current shareholders of AXR will own
approximately 1,000,000 shares and that the shareholders of Dancor will be
issued approximately 19,500,000 shares, including shares reserved for issuance
in accordance with outstanding Dancor stock options. The reorganization is
scheduled to close on or about December 31, 1998, subject to the execution of
definitive agreements by AXR, Dancor and the shareholders of Dancor. AXR has
no current operations while Dancor is engaged in research and development,
manufacture, marketing, sales and distribution of a proprietary coating
product called Vitroseal (trademark).
Pending the completion of the Reorganization, AXR's name has been changed
to "Advanced Coating Technologies, Inc."; the Company effected a 23 for 1
reverse split of the outstanding stock, effective December 10, 1998; and its
OTC Bulletin Board symbol has been changed to "ACTG."
Dancor owns the rights to the Vitroseal process. The process is based
on inorganic silicate chemistry that makes superior, bright, clear, corrosion-
protective coatings on metal surfaces. Vitroseal is a waterborne coating
which emits no organic vapor emissions so is environmentally friendly. Dancor
is currently focused on refining Vitroseal for use in coating truck and car
tire rims for protection and aesthetics.
For further information, contact David Merrell, President of AXR (801-
942-0555), or John W. Nagel, Chief Financial Officer of Dancor (801-553-8753).
