UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
DK INDUSTRIES, INC.
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(Name of Issuer)
Common Stock, par value $.02 per share
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(Title of Class of Securities)
232957100
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(CUSIP Number)
Harry Conger
GDC HOLDINGS CORPORATION
822 Neosho Avenue
Baton Rouge, Louisiana 70802
(504) 383-8556
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 31, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box _.
Check the following box if a fee is being paid with the statement [ X ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such shares).
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided on a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP NO. 232957100 Page 2 of 5 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Elnaggar Family Trust
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2 CHECK THE APPROPRIATE BOX IF MEMBER OF A GROUP* (a) __
(b) __
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4 OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) __
5
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CITIZENSHIP OR PLACE OR ORGANIZATION
6
United States
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7 SOLE VOTING POWER
NUMBER OF 485,298
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
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8 SHARED VOTING POWER
0
----------------------------------------
9 SOLE DISPOSITIVE POWER
485,298
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
485,298
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* _
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.4%
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14 TYPE OF REPORTING PERSON*
OO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
This Statement is being filed as a result of a merger transaction between
DK Industries, Inc., a Colorado corporation (the "Company") and GDC Holdings
Corp., a Louisiana corporation ("GDC") effective as of May 31, 1996 (the
"Merger").
Item 1. Security and Issuer.
--------------------
This statement relates to the common stock, par value $0.02 per share (the
"Common Stock"), issued by the Company whose principal executive offices are
located at 1580 Lincoln, Suite 900, Denver, Colorado 80203.
Item 2. Identity and Background.
------------------------
(a) This statement is filed by Elnaggar Family Trust (the "Trust").
(b) The principal address of the Trust is 822 Neosho Avenue, Baton Rouge,
Louisiana 70802.
(c) The Trust has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(d) The Trust has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
Effective May 31, 1996, GDC was acquired by the Company in a merger
transaction described below. Prior to the Merger, the Elnaggar Family Trust
owned 485,298 shares of GDC Stock which were acquired by the personal funds of
the Elnaggar Family Trust. Each share of GDC was then exchanged pursuant to the
Merger Agreement for one share of the Company's Stock.
Item 4. Purpose of Transaction.
-----------------------
In May 1996, the Company acquired GDC through the merger of a subsidiary of
the Company with and into GDC. Simultaneously with the Merger, the Company
effected a 1-for-20 reverse stock split of its Common Stock pursuant to which
the 12,004,226 shares of the Company's Common Stock were converted, after
rounding to eliminate fractional shares, into 600,384 shares of Common Stock.
Following the Merger, the Company became the sole stockholder of GDC, and each
share of GDC common stock issued and outstanding immediately prior to the
Merger, was converted into one share of the Company's common stock. At the
effective time of the Merger, the stockholders of GDC were issued 1,773,720
shares, comprising approximately 75% of the issued and outstanding Common Stock
of the Company. Although the Company acquired all of the issued and outstanding
GDC Stock in the Merger, the Merger will be accounted for as a reverse
acquisition, that is, as if GDC had acquired the Company.
Page 3 of 5 Pages
<PAGE>
Prior to the Merger the Company was inactive. After the Merger, the
Company's sole business operations are those of GDC, a hazardous waste
remediation service.
Item 5. Interest in Securities for the Issuer.
--------------------------------------
(a) As of the close of business on May 31, 1996 the Trust beneficially owns
485,298 shares of Common Stock (approximately 20.4% of the shares outstanding).
The percentage of shares of Common Stock reported beneficially owned is based
upon 2,374,104 shares outstanding, which is the total number of shares of Common
Stock outstanding as of May 31, 1996, the date of the Merger.
(b) Ms. Kathleen Elnaggar is the sole trustee of the Elnaggar Family Trust
and in her capacity as trustee has sole voting power and sole dispositive power
with respect to 485,298 shares of Common Stock beneficially owned by the Trust.
Ms. Elnaggar may be deemed to be the beneficial owner, under Rule 13d-3 of the
Trust's shares. Pursuant to Rule 13d-4, Ms. Elnaggar expressly disclaims
beneficial ownership of the Trust's shares.
(c) Except as described herein, the Trust has not effected any transactions
in the Common Stock in the past 60 days.
(d) The Elnaggar Family Trust is the only person known to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of the shares of Common Stock beneficially owned by her.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
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None.
Item 7. Items to be Filed as Exhibits.
------------------------------
There is filed herewith as Exhibit 1 the Merger Agreement dated May 24,
1996.
Page 4 of 5 Pages
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 11, 1996
/s/ Elnaggar Family Trust, Kathleen
Elnaggar, Trustee
------------------------------------
Elnaggar Family Trust
Kathleen Elnaggar, Trustee
Page 5 of 5 Pages
AGREEMENT
BY AND AMONG
DK INDUSTRIES, INC.
DK ACQUISITION CORP.
GDC ENVIRO SOLUTIONS, INC.
and
GDC HOLDINGS CORPORATION
Dated as of May 24, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER ...............................................1
SECTION 1.01. The Merger ...............................................1
SECTION 1.02. Effective Time ...........................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF GDC HOLDINGS ...........2
SECTION 2.01. Organization and Qualification; Subsidiaries .............2
SECTION 2.02. Articles of Incorporation and By-Laws ....................2
SECTION 2.03. Capitalization ...........................................2
SECTION 2.04. Authority ................................................3
SECTION 2.05. No Conflict; Required Filings and Consent ................4
SECTION 2.06. Permits; Compliance ......................................4
SECTION 2.07. Financial Statements .....................................4
SECTION 2.08. No Undisclosed Liabilities ...............................6
SECTION 2.09. Absence of Certain Changes or Events .....................6
SECTION 2.10. Absence of Litigation ....................................7
SECTION 2.11. Employee Benefit Plans ...................................7
SECTION 2.12. Taxes ....................................................7
SECTION 2.13. Brokers ..................................................7
SECTION 2.14. [Reserved] ...............................................7
SECTION 2.15. Environmental Laws and Regulations .......................7
SECTION 2.16. Contracts ................................................7
SECTION 2.17. Accounts Receivable ......................................9
SECTION 2.18. Intellectual Property ....................................9
SECTION 2.19. Title to Assets .........................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF DK AND NEWCO ..........10
SECTION 3.01. Organization and Qualification ..........................10
SECTION 3.02. Articles of Incorporation and By-Laws ...................11
SECTION 3.03. Capitalization ..........................................11
SECTION 3.04. Authority ...............................................11
SECTION 3.05. No Conflict; Required Filings and Consents ..............12
SECTION 3.06. Permits; Compliance .....................................12
SECTION 3.07. Reports; Financial Statements ...........................12
SECTION 3.08. Absence of Certain Changes or Events ....................13
SECTION 3.09. No Undisclosed Liabilities ..............................13
SECTION 3.10. Absence of Litigation ...................................13
SECTION 3.11. Ownership of Newco; No Prior Activities of Newco;
Prior Activities of DK...................................14
SECTION 3.12. Taxes ...................................................14
SECTION 3.13. Brokers .................................................14
SECTION 3.14. Environmental Laws and Regulations ......................14
SECTION 3.15. Contract Rights .........................................14
SECTION 3.16. Employee Benefit Plans ..................................15
SECTION 3.17. Securities Offerings ....................................15
ARTICLE IV ADDITIONAL AGREEMENTS AND PRE-CLOSING COVENANTS..........15
SECTION 4.01. Appropriate Action; Consents; Filings ...................15
SECTION 4.02. Tax Treatment ...........................................16
SECTION 4.03. Guarantee by DK of FINOVA Loan to GDC Holdings ..........16
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SECTION 4.04. Officers and Directors of DK ............................16
SECTION 4.05. Operation of Business ...................................16
SECTION 4.06. Full Access .............................................16
SECTION 4.07. Delivery of Documents ...................................16
SECTION 4.08. Notice of Developments ..................................16
SECTION 4.09. Further Assurances ......................................16
SECTION 4.10. Reverse Stock Split .....................................17
ARTICLE V CONDITIONS TO CLOSING ...................................17
SECTION 5.01. Conditions to Obligations of DK and Newco ...............17
SECTION 5.02. Conditions to Obligation of GDC Holdings and GDCESI .....18
ARTICLE VI GENERAL PROVISIONS ......................................19
SECTION 6.01. Effectiveness of Representations, Warranties and
Agreements ..............................................19
SECTION 6.02. Notices .................................................19
SECTION 6.03. Certain Definitions .....................................20
SECTION 6.04. Headings ................................................20
SECTION 6.05. Severability ............................................20
SECTION 6.06. Entire Agreement ........................................20
SECTION 6.07. Assignment ..............................................20
SECTION 6.08. Parties in Interest .....................................20
SECTION 6.09. Failure or Indulgence Not Waiver; Remedies Cumulative ...21
SECTION 6.10. Governing Law ...........................................21
SECTION 6.11. Jurisdiction ............................................21
SECTION 6.12. Counterparts ............................................21
SECTION 6.13. Amendment ...............................................21
SECTION 6.14. Termination .............................................21
SECTION 6.15. No Public Announcement ..................................22
ANNEX I Plan of Merger
ANNEX II Articles of Merger (Colorado)
ANNEX IIA Certificate of Merger (Louisiana)
ANNEX IIB Certificate of Approval of Agreement of Merger
(DK Acquisition Corp.)
ANNEX IIC Certificate of Approval of Agreement of Merger
(GDC Holdings Corporation)
EXHIBIT A Opinion of counsel to GDC Holdings
EXHIBIT B Opinion of Counsel to DK
SCHEDULES
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<PAGE>
AGREEMENT TO MERGE
AGREEMENT TO MERGE dated as of May 24, 1996 ("Agreement"), among DK
Industries, Inc., f/k/a Vetline, Inc., a Colorado corporation ("DK"), DK
ACQUISITION CORP., a Colorado corporation ("Newco"), a wholly owned subsidiary
of DK, GDC HOLDINGS CORPORATION, a Louisiana corporation (" GDC Holdings"), and
GDC Enviro Solutions, Inc., f/k/a GDC Engineering, Inc., a Louisiana corporation
("GDCESI"), a wholly owned subsidiary of GDC Holdings.
WHEREAS, upon the terms and subject to the conditions of this Agreement and
in accordance with the Colorado Business Corporation Act ("Colorado Law") and
the Louisiana Business Corporation Law ("Louisiana Law"), Newco will merge with
and into GDC Holdings (the "Merger") as a result of which the stockholders of
GDC Holdings will own together approximately 75% of the issued and outstanding
shares of the common stock, $0.02 par value, of DK, and the current holders of
warrants issued by GDC Holdings will own together 100% of the issued and
outstanding common stock purchase warrants of DK (the "DK Warrants");
WHEREAS, the Board of Directors of GDC Holdings has determined that the
Merger is fair to, and in the best interests of, GDC Holdings and its
stockholders; has approved and adopted this Agreement and the transactions
contemplated herein; and has approved the submission of this Agreement and the
transactions contemplated herein to the stockholders of GDC Holdings and
recommended the approval thereof by the stockholders;
WHEREAS, the Board of Directors of DK has determined that the Merger is in
the best interests of DK and its stockholders and has approved and adopted this
Agreement and the transactions contemplated herein;
WHEREAS, the Board of Directors of Newco has determined that the Merger is
in the best interests of Newco and its stockholder and the Board of Directors of
Newco and DK, as the sole stockholder of Newco, have approved and adopted this
Agreement and the transactions contemplated herein; and
WHEREAS, for Federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of section 368(a)(2)(E) of the
United States Internal Revenue Code of 1986, as amended (the "Code") and that
this Agreement and the Annexes hereto shall constitute a "plan of
reorganization" for the purposes of section 368 of the Code;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with Colorado Law and Louisiana Law,
at the Effective Time (as defined in Section 1.02), Newco and GDC Holdings shall
effect a merger by executing the Plan of Merger (the "Plan") in substantially
the form attached hereto as Annex I, and by executing and filing Articles of
Merger (the "Articles"), substantially in the form attached hereto as Annex II,
in the manner provided in Sections 7-111-107 and 7-111-101 to 7-111-105 of the
Colorado Business Corporation Act. Further, Newco and GDC Holdings shall execute
and file the Certificate of Merger (the "Certificate") attached hereto as Annex
IIA in the manner provided in Section 12:112.F. of the Louisiana Business
Corporation Law. Further, Newco and GDC Holdings shall each execute a separate
Certificate of Approval of Agreement of Merger, copies of each of which are
attached as Annex IIB and Annex IIC, respectively, hereto. As a result of the
Merger, the separate corporate existence of Newco shall cease and GDC Holdings
shall continue as the surviving corporation in the Merger (the " Surviving
Corporation"). The name of the Surviving Corporation shall continue to be "GDC
Holdings Corporation." Prior to the Merger, DK shall, pursuant to the terms of a
subscription agreement, issue and deliver to Newco shares of DK Stock and DK
Warrants equivalent to the number of shares of DK Stock and DK Warrants,
respectively, to be transferred pursuant to the terms and provisions of the
Plan. Further, prior to the Merger, DK shall receive, from each shareholder of
GDC Holdings who is to receive securities of DK pursuant to the Plan, an
executed subscription agreement and letter of investment intent and a
confidential purchaser questionnaire, the forms of which shall be acceptable to
counsel and to the parties hereto (the "GDC Subscription Documents").
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<PAGE>
SECTION 1.02. Effective Time. As promptly as practicable after the
execution and delivery of this Agreement by each of the parties hereto, the
parties hereto shall cause the Merger to be consummated by filing the Articles
with the Secretary of State of the State of Colorado and the Certificate with
the Secretary of State of the State of Louisiana, each in such form as required
by, and executed in accordance with the relevant provisions of, Colorado and
Louisiana Law (the date and time of the latter of such filings being the
"Effective Time").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF GDC HOLDINGS
GDC Holdings hereby represents and warrants to DK and Newco as follows:
SECTION 2.01. Organization and Qualification; Subsidiaries. Each of GDC
Holdings and GDCESI is a corporation duly organized, validly existing and in
good standing under the laws of Louisiana, has all requisite corporate or other
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of the business
conducted by it or the ownership or leasing of its properties makes such
qualification necessary. GDCESI is GDC Holdings's only directly owned
subsidiary.
SECTION 2.02. Articles of Incorporation and By-Laws. GDC Holdings has
heretofore furnished to DK complete and correct copies of the Articles of
Incorporation and the By-Laws or the equivalent organizational documents, in
each case as amended or restated, of GDC Holdings and GDCESI. Neither GDC
Holdings nor GDCESI is in violation of any of the provisions of its respective
Articles of Incorporation or By-Laws or equivalent organizational documents.
SECTION 2.03. Capitalization. (a) The authorized capital stock of GDC
Holdings consists of 10,000,000 shares of common stock, no par value ("GDC
Holdings Common Stock"). As of the date hereof 1,773,720 shares of GDC Holdings
Common Stock are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights created by statute, GDC Holdings's Articles of Incorporation or By-Laws
or any agreement to which GDC Holdings is a party or bound, other than certain
rights to participate in offerings of securities granted to FINOVA Capital
Corporation ("FINOVA") pursuant to the Loan Agreement and related instruments as
amended through the Sixth Amendment to Loan Instruments dated March 15, 1996
(the "Sixth Amendment"). GDC Holdings may issue an aggregate of up to $1,000,000
in principal amount of promissory notes (collectively, the "Notes"), the
outstanding principal and interest of which would be, under certain
circumstances, convertible into securities of GDC Holdings (as set forth in the
Notes and related documents). There are no other bonds, debentures, notes or
other indebtedness issued or outstanding having the right to vote on any matters
on which GDC Holdings's stockholders may vote, except that, pursuant to the
Notes and related documents, upon completion of a non-public offering of not
more than $3,000,000 of securities by GDC Holdings or DK, the sales agent for
such offering shall have the right to nominate a member for election to the
board of directors of GDC Holdings or DK, as the case may be, such nominee to be
subject to the consent of GDC Holdings or DK, as the case may be, which consent
may not be unreasonably withheld. Except (i) for warrants to purchase 100,000
shares of GDC Holdings Common Stock held by two of GDCESI's Directors; (ii) for
the Notes; (iii) a proposed non-public offering of securities (as to the
successful completion of which GDC Holdings and GDCESI make no representation or
warranty); (iv) the Option Agreement for Purchase of Stock dated September 25,
1995 by and between GDC Holdings and Jan Berkowitz, as amended; (v) the GDC/3E
Acquisition Agreement dated August 21, 1995 by and between GDC Holdings and 3E
Corporation; (vi) the Agreement to Purchase and Sell dated October 16, 1995 by
and between GDC Holdings and Kathleen Elnaggar; and (vii) the Reorganization
Plan dated August 21, 1995, as amended March 12, 1996, there are no options,
warrants, calls or other rights (including registration rights), agreements,
arrangements or commitments presently outstanding obligating GDC Holdings to
issue, deliver or sell shares of its capital stock or debt securities, or
obligating GDC Holdings to grant, extend or enter into any such option, warrant,
call or other such right, agreement, arrangement or commitment.
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<PAGE>
(b) All the outstanding shares of capital stock of GDCESI are duly
authorized, validly issued, fully paid and nonassessable and such shares are
owned solely by GDC Holdings free and clear of any security interests, liens,
claims, pledges, agreements, limitations on voting rights, charges or other
encumbrances of any nature whatsoever ("Encumbrances"), except for the right to
vote the shares and a security interest, which rights are granted in that
certain pledge agreement between GDC Holdings and FINOVA dated March 15, 1996,
in the shares of GDCESI common stock held by GDC Holdings. There are no options,
warrants, calls or other rights (including registration rights), agreements,
arrangements or commitments of any character to which GDC Holdings or GDCESI is
a party relating to the issued or unissued capital stock of, or other equity
interests in, GDCESI, except as described in Section 2.03(a).
SECTION 2.04. Authority. Upon the approval of this Agreement and the
transactions contemplated herein by the stockholders owning the requisite number
of shares of voting stock of GDC Holdings, GDC Holdings will have all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
herein. The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by the board of
directors of GDC Holdings and recommended by the board of directors to the
stockholders of GDC Holdings for their approval in accordance with the
provisions of Louisiana Law, and, upon the approval of this Agreement and the
transactions contemplated herein by the stockholders owning the requisite number
of shares of voting stock of GDC Holdings, no other corporate proceeding on the
part of GDC Holdings will be necessary to authorize this Agreement or to
consummate the transactions contemplated herein. This Agreement has been duly
executed and delivered by GDC Holdings and, assuming the approval of this
Agreement and the transactions contemplated herein by the stockholders owning
the requisite number of shares of voting stock of GDC Holdings and the due
authorization, execution and delivery thereof by DK and Newco, constitutes the
legal, valid and binding obligation of GDC Holdings enforceable in accordance
with its terms (i) except as limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, and without limitation, the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers and (ii) subject to the limitations imposed by general rules of equity
(regardless of whether such enforceability is considered at law or in equity).
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<PAGE>
SECTION 2.05. No Conflict; Required Filings and Consent. (a) The execution
and delivery of this Agreement by GDC Holdings does not, and upon the approval
of this Agreement and the transactions contemplated herein by the stockholders
owning the requisite number of shares of voting stock of GDC Holdings, the
performance of this Agreement by GDC Holdings will not (i) conflict with or
violate the Articles of Incorporation or By-Laws, in each case as amended or
restated, of GDC Holdings or GDCESI, (ii) conflict with or violate any federal,
state, foreign or local law, statute, ordinance, rule, regulation, order,
judgment or decree (collectively, "Laws") in effect as of the date of this
Agreement and applicable to GDC Holdings or GDCESI or by which their respective
properties are bound or subject, or (iii) provided that DK executes the
continuing guaranty described in Section 4.03, result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under, or result
in the creation of an Encumbrance on, any of the properties or assets of GDC
Holdings or GDCESI pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which GDC Holdings or GDCESI is a party or by which GDC Holdings or GDCESI or
their respective properties are bound or subject except for breaches, defaults,
events, rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or Encumbrances that would not have a material adverse
effect on the business, properties, assets, condition (financial or otherwise)
operations or prospects of GDC Holdings and GDCESI, taken as a whole ("GDC
Material Adverse Effect").
(b) Upon the approval of this Agreement and the transactions contemplated
herein by the stockholders owning the requisite number of shares of voting stock
of GDC Holdings, the execution and delivery of this Agreement by GDC Holdings
will not, and the performance of this Agreement by GDC Holdings will not,
require GDC Holdings to obtain any consent, approval, authorization or permit
of, or to make any filing with or notification to, any governmental or
regulatory authority, domestic or foreign ("Governmental Entities") based on
laws, rules, regulations and other requirements of Governmental Entities in
effect as of the date of this Agreement, except for applicable requirements, if
any, of (i) federal or state securities laws and the filing and recordation of
appropriate merger documents as required by Colorado and Louisiana Law and (ii)
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not, either individually or in
the aggregate, prevent GDC Holdings from performing its obligations under this
Agreement or have a GDC Material Adverse Effect.
SECTION 2.06. Permits; Compliance. Each of GDC Holdings and GDCESI is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "GDC Permits"), and there is no
action, proceeding or investigation pending or, to the Knowledge of GDC Holdings
, threatened, regarding suspension or cancellation of any of GDC Permits.
Neither GDC Holdings nor GDCESI is in conflict with, or in default or violation
of (a) any Law applicable to GDC Holdings or GDCESI or by which any of their
respective properties is bound or subject or (b) any of GDC Permits, except for
any such conflicts, defaults or violations which would not have a GDC Material
Adverse Effect.
SECTION 2.07. Financial Statements. (a) GDC Holdings will deliver to DK not
later than 5 business days from the date hereof, to be attached hereto as
Schedule 2.07, the text of which is hereby incorporated herein by reference, (i)
audited financial statements of GDC Holdings and its subsidiary GDCESI as of
September 30, 1995, which includes the financial statements as of November 30,
1994 and 1993, each containing a balance and the related statement of
operations, statement of shareholders' equity and statement of cash flows, in
each case for the periods then ended, and (ii) unaudited financial statements of
GDCESI as of March 31, 1996, prepared by management of GDCESI, containing the
balance sheet of GDCESI and the related statement of operations, statement of
shareholders' equity and statement of cash flows for the period then ended
(collectively, the "GDC Financial Statements"). The GDC Financial Statements
have been prepared in accordance with generally accepted accounting principles
and practices consistently followed by GDC Holdings and GDCESI throughout the
period indicated, and fairly present the financial position of GDC Holdings and
GDCESI as of the dates thereof.
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<PAGE>
(b) Since March 31, 1996, to the Knowledge of the officers and directors of
GDC and GDCESI, there has not been any GDC Material Adverse Effect, except as
disclosed in Schedule 2.07; without limiting the generality of the foregoing,
since that date, and except for matters that would not have a GDC Material
Adverse Effect, except as disclosed in Schedule 2.07:
(i) GDCESI has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, other than in the ordinary course of
business, except for sales of products to employees pursuant to company
policy;
(ii) GDCESI has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
outside the ordinary course of business, except as contemplated by this
Agreement and the transactions contemplated hereunder;
(iii) no party (including GDCESI) has accelerated, terminated,
modified, or canceled any agreement, contract, lease, or license (or series
of related agreements, contracts, leases, and licenses) to which GDCESI is
a party or by which it is bound other than in the ordinary course of
business;
(iv) GDCESI has not imposed any security interest upon any of its
assets, tangible or intangible;
(v) GDCESI has not made any capital expenditure (or series of related
capital expenditures) outside the ordinary course of business;
(vi) GDCESI has not made any capital investment in, any loan to, or
any acquisition of the securities or substantially all of the assets of,
any other person;
(vii) GDCESI has not issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed
money or capitalized lease obligation;
(viii) GDCESI has not materially delayed or postponed the payment of
accounts payable and other liabilities outside the ordinary course of
business;
(ix) GDCESI has not canceled, compromised, waived, or released any
right or claim outside the ordinary course of business;
(x) GDCESI has not granted any license or sublicense of any rights
under or with respect to any of its Intellectual Property, as defined
below;
(xi) GDCESI has not issued, sold, or otherwise disposed of any of its
capital stock, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any
of its capital stock;
(xii) GDCESI has not declared, set aside, or paid any dividend or made
any distribution of any kind or nature with respect to its capital stock
(whether in cash or in kind) or redeemed, purchased, or otherwise acquired
any of its capital stock;
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(xiii) GDCESI has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property materially in excess
of historical levels;
(xiv) GDCESI has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside the
ordinary course of business other than as contemplated hereby;
(xv) GDCESI has not entered into any written employment contract or
collective bargaining agreement or modified the terms of any existing
written contract or agreement;
(xvi) GDCESI has not granted any increase in the base compensation of
any of its directors, officers, and employees outside the ordinary course
of business;
(xvii) GDCESI has not paid any bonuses or other remuneration or
compensation, in cash or in kind, to any of its directors or officers,
other than regular salary payments outside the ordinary course of business;
(xviii) GDCESI has not paid any bonuses to any of its employees
outside the ordinary course of business;
(xix) GDCESI has not adopted, amended, modified, or terminated any
profit-sharing, severance, or other plan, contract, or commitment for the
benefit of any of its directors, officers, and employees (or taken any such
action with respect to any other employee benefit plan) outside the
ordinary course of business;
(xx) GDCESI has not made any other change in employment terms for any
of its directors, officers, and employees outside the ordinary course of
business, except as contemplated by this Agreement and the transactions
contemplated hereby;
(xxi) GDCESI has not made or pledged to make any charitable
contribution outside the ordinary course of business;
(xxii) there has not been any other occurrence, event, incident,
action, or transaction outside the ordinary course of business involving
GDCESI; and
(xxiii) GDCESI has not committed to any of the foregoing.
SECTION 2.08. No Undisclosed Liabilities. Except as disclosed in Schedule
2.07, Schedule 2.08, or Schedule 2.10 and except for the transactions described
in Section 2.03, to the Knowledge of GDC Holdings, there are no liabilities of
GDC Holdings or GDCESI of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances that could reasonably be expected
to result in such a liability, other than liabilities fully reflected or
reserved against on the GDC Financial Statements, liabilities in connection with
this Agreement and related fees and expenses, and liabilities that, individually
or in the aggregate, would not have a GDC Material Adverse Effect.
SECTION 2.09. Absence of Certain Changes or Events. To the Knowledge of GDC
Holdings, except as and to the extent disclosed herein, since September 30,
1995, there has not been any significant change by GDC Holdings or GDCESI in
their accounting methods, principles or practices or any circumstance which
would constitute a GDC Material Adverse Effect.
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SECTION 2.10. Absence of Litigation. To the Knowledge of GDC Holdings,
except as disclosed in the Sixth Amendment, there is no claim, action, suit,
litigation, proceeding, arbitration or investigation of any kind, at law or in
equity (including actions or proceedings seeking injunctive relief), pending or
threatened against GDC Holdings or GDCESI or any properties, principal
shareholders, officers, directors, or rights of GDC Holdings or GDCESI and
neither GDC Holdings nor GDCESI nor the principal shareholders, officers, and
directors of either GDC Holdings or Newco is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with, or
continuing investigation by, any Governmental Entity, or any judgment, order,
writ, injunction, decree or award of any Governmental Entity or arbitrator,
including, without limitation, cease-and-desist or other orders.
SECTION 2.11. Employee Benefit Plans.
(a) Except as disclosed in Section 2.16, neither GDC Holdings nor GDCESI
has, and neither has ever had, any employee benefit plan (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, insurance or
other plan, arrangement or understanding (whether or not legally binding).
(b) Neither GDC Holdings nor GDCESI is a party to any collective bargaining
agreement.
(c) Neither GDC Holdings nor GDCESI has any obligation for retiree health,
medical or life insurance benefits under any plan or arrangements.
SECTION 2.12. Taxes. Each of GDC Holdings and GDCESI has filed all federal,
state and local tax returns required by law, or has filed proper extensions, and
has paid all Taxes (as defined in Section 6.03 hereof), assessments and
penalties due and payable. The provisions for Taxes, if any, reflected in the
most recent balance sheet included in the GDC Financial Statements are adequate
for any and all federal, state, county and local taxes for the period ending on
the date of that balance sheet and for all prior periods, whether or not
disputed. There are no present disputes as to Taxes of any nature payable by GDC
Holdings or GDCESI.
SECTION 2.13. Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated in this Agreement based upon arrangements made by or
on behalf of GDC Holdings or GDCESI.
SECTION 2.14. [Reserved]
SECTION 2.15. Environmental Laws and Regulations. (a) GDC Holdings and
GDCESI are in material compliance with all applicable foreign, federal
(including but not limited to the Outer Continental Shelf Lands Act, the Clean
Water Act, the Oil Pollution Act, the Resource Conservation and Recovery Act,
the Clean Air Act, the Comprehensive Environmental Response Compensation and
Liability Act, the Occupational Safety and Health Act and the Hazardous
Materials Transportation Act), state and local laws and regulations and common
law relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata (collectively, "Environmental Laws")), which
compliance includes, but is not limited to, the possession by GDC Holdings and
GDCESI of all material permits and other governmental authorizations required
under applicable Environmental Laws, and compliance with the terms and
conditions thereof and compliance with notification, reporting and registration
provisions under applicable Environmental Laws; neither GDC Holdings nor GDCESI
has received notice of, or, to the Knowledge of GDC Holdings and GDCESI, is the
subject of, any action, cause of action, claim, investigation, demand or notice
by any person or entity alleging liability under or noncompliance with any
Environmental Law ("Environmental Claim") that would have a Material Adverse
Effect on GDC Holdings or GDCESI; and to the Knowledge of GDC Holdings and
GDCESI, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future, or to require material
expenditures to maintain such material compliance in the future.
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(b) There are no Environmental Claims that are pending or, to the Knowledge
of GDC Holdings and GDCESI, threatened against GDC Holdings or GDCESI, or, to
the Knowledge of GDC Holdings and GDCESI, against any person or entity whose
liability for any Environmental Claim GDC Holdings or GDCESI has or may have
retained or assumed either contractually or by operation of law that would have
a Material Adverse Effect on GDC Holdings or GDCESI.
(c) To the Knowledge of GDC Holdings and GDCESI, there are no circumstances
that could form the basis for an Environmental Claim against GDC Holdings or
GDCESI, or against any person or entity whose liability for any Environmental
Claim GDC Holdings or GDCESI has or may have retained or assumed either
contractually or by operation of law that would have a Material Adverse Effect
on GDC Holdings or GDCESI.
SECTION 2.16. Contracts. Schedule 2.16 identifies each of the following
contracts and other agreements, copies of which have been delivered to DK, to
which GDC Holdings or GDCESI is a party and the performance of which involves a
consideration in excess of $50,000 and that are not identified in the Sixth
Amendment:
(i) any agreement (or group of related agreements) for the lease of
personal property to or from any person;
(ii) any agreement for the purchase or sale of supplies, products, or
other personal property, or for the furnishing or receipt of services;
(iii) any agreement pursuant to which GDC Holdings or GDCESI is a
partner or co-venturer;
(iv) any agreement (or group of related agreements) under which GDC
Holdings or GDCESI has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation, or
under which it has imposed a security interest on any of its assets,
tangible or intangible;
(v) any agreement concerning confidentiality or noncompetition other
than as provided in or contemplated by this Agreement;
(vi) any agreement with any of the GDC Holdings or GDCESI shareholders
and their affiliates (other than GDC Holdings or GDCESI);
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers,
and employees other than employment agreements and incentive performance
agreements;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis who was paid more than
$50,000 during the 12-month period ended December 31, 1995;
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(x) any agreement under which it has advanced or loaned any amount to
any of its directors, officers, and employees; and
(xi) any other agreement.
With respect to each agreement, except as disclosed herein: (A) the
agreement is legal, valid, binding, and, in general enforceable, and in full
force and effect; (B) to the Knowledge of GDC Holdings, no party is in material
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (C) to the Knowledge of GDC Holdings, no
party has repudiated any provision of the agreement.
SECTION 2.17. Accounts Receivable. All accounts receivable of GDCESI are
reflected properly on its books and records, are current and valid receivables
and, to the Knowledge of GDC Holdings, are subject to no setoffs or
counterclaims that would have a GDC Material Adverse Effect, are collectible and
will be collected in the ordinary course of business at their recorded amounts,
subject only to the reserve for bad debts as adjusted for the passage of time
through the date of closing of this Agreement (the "Closing Date").
SECTION 2.18. Intellectual Property.
(i) Each of GDC Holdings and GDCESI owns or has the right to use
pursuant to license, sublicense, agreement, or permission, all inventions
(whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications,
and patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof,
(b) all trademarks, service marks, trade dress, logos, trade names, and
corporate names, together with all translations, adaptations, derivations,
and combinations thereof and including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith,
(c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and
all applications, registrations, and renewals in connection therewith, (e)
all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information,
and business and marketing plans and proposals), (f) all computer software
(including data and related documentation), (g) all other proprietary
rights, and (h) all copies and tangible embodiments thereof (in whatever
form or medium) (collectively, "Intellectual Property") presently used in
its respective businesses.
(ii) Neither GDCESI nor GDC Holdings has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of the directors
and officers of GDC Holdings or GDCESI has received, within the five years
prior to the date of this Agreement, any charge, complaint, claim, demand,
or notice alleging any such interference, infringement, misappropriation,
or violation (including any claim that GDCESI must license or refrain from
using any Intellectual Property rights of any third party). To the
Knowledge of the officers and directors of GDC Holdings and GDCESI, no
third party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights owned by
GDCESI.
(iii) Schedule 2.18 identifies each trade name or trademark,
registered and unregistered, owned by GDC Holdings or GDCESI in connection
with any of their respective businesses. With respect to each item of
Intellectual Property required to be identified in Schedule 2.18:
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(A) the party owning such item of Intellectual Property possesses
certain common law rights to use its marks, and its right, title, and
interest in its marks and trade names are free and clear of any
security interest, license, or other restriction, except as disclosed
in Schedule 2.18;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing, or to the Knowledge of
the officers and directors of GDC Holdings and GDCESI, investigation,
charge, complaint, claim, or demand is pending or is threatened which
challenges the legality, validity, enforceability, use, or ownership
of the item; and
(D) the party owning such item of Intellectual Property has not
agreed, within the five years prior to the date of this Agreement, to
indemnify any person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
Notwithstanding the foregoing, however, the representations and warranties
contained in this Section do not apply to Intellectual Property currently owned
by NBL Technologies, Inc. and used by GDCESI.
SECTION 2.19. Title to Assets. GDC Holdings and GDCESI have good and
marketable title to, or a valid lease, license, or other right to use its
respective properties and assets, free and clear of all security interests,
except for (i) certain security interests that have been granted to FINOVA under
the terms of the Sixth Amendment, (ii) certain security interests that have been
granted to Ally Corporation, (iii) certain security interests that have been
granted to Louisiana Seed Capital Corporation, (iv) certain security interests
that have been granted to City National Bank (Baton Rouge), (v) properties and
assets disposed of in the ordinary course of business since the date of the most
recent balance sheet included in Schedule 2.07, (vi) certain security interests
as set forth in the UCC search reports performed on behalf of FINOVA in
connection with the Sixth Amendment (the "Search Reports") and except as
otherwise disclosed in Schedule 2.19, attached hereto and incorporated herein by
this reference.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF DK AND NEWCO
DK and Newco hereby jointly and severally represent and warrant to GDC
Holdings that:
SECTION 3.01. Organization and Qualification. Each of DK and Newco is a
corporation, duly organized, validly existing and in good standing under the
laws of Colorado and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary.
SECTION 3.02. Articles of Incorporation and By-Laws. DK has heretofore
furnished to GDC Holdings a complete and correct copy of the Articles of
Incorporation and the By-Laws, as amended or restated to the date hereof, of
each of DK and Newco. Neither DK nor Newco is in violation of any of the
provisions of its Articles of Incorporation or By-Laws.
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SECTION 3.03. Capitalization. (a) The authorized capital stock of DK
consists of 30,000,000 shares of common stock, $0.02 par value (the "DK Common
Stock") and 10,000,000 shares of preferred stock, $0.10 par value (the "DK
Preferred Stock"). As of the date hereof (before giving effect to the
transactions contemplated herein) (i) 12,004,226 shares of DK Common Stock are
issued and outstanding, all of which are duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
DK's Articles of Incorporation or By-Laws or any agreement to which DK is a
party or is bound and (ii) no shares of DK Preferred Stock are outstanding.
There are no options, warrants, calls or other rights (including registration
rights), agreements, arrangements or commitments presently outstanding
obligating DK to issue, deliver, sell or register shares of its capital stock or
debt securities, or obligating DK to grant, extend or enter into any such
option, warrant, call or other such right, agreement, arrangement or commitment.
(b) The authorized capital stock of Newco consists of two thousand (2,000)
shares, divided into one thousand five hundred (1,500) shares of common stock
with a par value of $0.001 per share of which one thousand (1,000) shares are
issued and outstanding and held by DK, and five hundred (500) shares of
preferred stock with a par value of $1.00 per share of which no shares have been
issued. DK is the sole shareholder of Newco. The shares of capital stock of
Newco represented by the sole outstanding stock certificate (which is held by
DK) are duly authorized, validly issued, fully paid and nonassessable, and are
owned by DK free and clear of any Encumbrances. Except for the warrants to be
issued by DK pursuant to the Plan, there are no options, warrants, calls or
other rights (including registration rights), agreements, arrangements or
commitments of any character to which DK or Newco is a party relating to the
issued or unissued capital stock of, or other equity interests in, Newco or
obligating DK or Newco to grant, issue or sell any shares of the capital stock
of Newco; other than as contemplated in this Agreement and the Subscription
Agreement between DK and Newco.
(c) The shares of DK Stock issued to Newco and delivered pursuant to the
Merger as contemplated herein, upon issuance in accordance with this Agreement
and the Plan, will be duly authorized, validly issued, fully paid and
nonassessable and will not be subject to preemptive rights created by statute,
DK's Articles of Incorporation or By-Laws or any agreement to which DK is a
party or is bound.
(d) DK does not have any subsidiaries or own any interest in any enterprise
(whether or not such enterprise is a corporation) except for Newco.
SECTION 3.04. Authority. Each of DK and Newco has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated herein.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all necessary
corporate action and no other corporate proceeding on the part of DK or Newco
(including, without limitation, any approval by the shareholders of DK of this
Agreement or the transactions contemplated herein) is necessary to authorize
this Agreement or to consummate the transactions contemplated herein. This
Agreement has been duly executed and delivered by DK and Newco and, assuming the
due authorization, execution and delivery hereof by GDC Holdings and GDCESI,
constitutes the legal, valid and binding obligation of DK and Newco enforceable
in accordance with its terms (i) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and without limitation,
the effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers and (ii) subject to the limitations imposed by general
rules of equity (regardless of whether such enforceability is considered at law
or in equity).
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SECTION 3.05. No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by DK and Newco does not, and the performance of
this Agreement by DK and Newco will not (i) conflict with or violate the
Articles of Incorporation or By-Laws, as amended or restated, of DK or Newco,
(ii) conflict with or violate any Laws in effect as of the date of this
Agreement applicable to DK or Newco or by which any of their respective
properties is bound, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation of a lien
or Encumbrance on, any of the properties or assets of DK or Newco pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which DK or Newco is a
party or by which DK or Newco or any of their respective properties is bound or
subject except for breaches, defaults, events, rights of termination, amendment,
acceleration or cancellation, payment obligations or liens or Encumbrances that
would not have a material adverse effect on the business, properties, assets,
condition (financial or otherwise) operations or prospects of DK and Newco,
taken as a whole, or on the transactions herein contemplated ("DK Material
Adverse Effect").
(b) The execution and delivery of this Agreement by DK and Newco and the
performance of this Agreement by DK and Newco does not require DK or Newco to
obtain any consent, approval, authorization or permit of, or to make any filing
with or notification to, any Governmental Entities, except for applicable
requirements, if any, of (i) the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the securities laws of any other jurisdiction (the "Blue Sky
Laws"), the National Association of Securities Dealers, and the filing and
recordation of appropriate merger documents as required by Colorado and
Louisiana Law and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
either individually or in the aggregate, prevent DK from performing its
obligations under this Agreement or have a DK Material Adverse Effect.
SECTION 3.06. Permits; Compliance. Each of DK and Newco is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "DK Permits"), and there is no action, proceeding
or investigation pending or, to the Knowledge of DK, threatened, regarding
suspension or cancellation of any of the DK Permits. Neither DK nor Newco is in
conflict with, or in default or violation of (a) any Law applicable to DK or
Newco or by which any of their respective properties is bound or subject or (b)
any of the DK Permits, except for any such conflicts, defaults or violations
which would not have a DK Material Adverse Effect. Neither DK nor Newco has
received from any Governmental Entity any written notification with respect to
possible conflicts, defaults or violations of Laws by its officers, directors,
or principal stockholders.
SECTION 3.07. Reports; Financial Statements. (a) Except as set forth on
Schedule 3.07, (x) DK and Newco have filed (i) all forms, reports, statements
and other documents required to be filed with (A) the Securities and Exchange
Commission ("SEC"), including, without limitation (1) all Annual Reports on Form
10-K, (2) all Quarterly Reports on Form 10-Q, (3) all proxy statements relating
to meetings of stockholders (whether annual or special), (4) all Reports on Form
8-K, (5) all other reports or registration statements and (6) all amendments and
supplements to all such reports and registration statements (collectively, the
"DK SEC Reports") and (B) any applicable Blue Sky Laws and (ii) all forms,
reports, statements and other documents required to be filed with any other
applicable federal or state regulatory authorities (all such forms, reports,
statements and other documents in clauses (i) and (ii) of this Section 3.07(a)
being referred to herein, collectively, as the "DK Reports"). The DK Reports
were prepared in all material respects in accordance with the requirements of
applicable Law (including, with respect to the DK SEC Reports, the Securities
Act and Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such DK SEC Reports) and (y) did not at the time
they were filed contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
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(b) Each of the financial statements (including, in each case, any related
notes thereto) contained in the DK SEC Reports filed prior to or on the date of
this Agreement (i) have been prepared in accordance with, and complied as to
form with, the published rules and regulations of the SEC and generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein) and (ii) fairly present the
financial position of DK as of the respective dates thereof and the results of
its operations and cash flows for the periods indicated.
(c) To the best of DK's Knowledge, DK's auditors have issued no management
letters in connection with DK's financial statements.
(d) Since March 31, 1996, to the Knowledge of the officers and directors of
DK and Newco, (i) there has not been any DK Material Adverse Effect; and (ii)
neither DK nor Newco has entered into or agreed to enter into any of the types
of agreements or other matters described in Section 2.07.
SECTION 3.08. Absence of Certain Changes or Events. Except as disclosed in
Schedule 3.08, and which shall be incorporated herein by this reference and as
and to the extent disclosed in the DK SEC Reports filed prior to or on the date
of this Agreement, there has not been any significant change by DK in its
accounting methods, principles, or practices or any circumstance that would
constitute a DK Material Adverse Effect.
SECTION 3.09. No Undisclosed Liabilities. There are no liabilities of DK or
Newco of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances which could reasonably be expected to result in such a
liability, other than (a) liabilities fully reflected or reserved against on the
balance sheet contained in DK's 1995 Annual Report on Form 10-K or in the
unaudited consolidated balance sheet contained in the Quarterly Report on Form
10-Q for the fiscal quarter ending March 31, 1996; (b) liabilities under this
Agreement and fees and expenses related thereto; and (c) liabilities which,
individually or in the aggregate would not have a DK Material Adverse Effect.
SECTION 3.10. Absence of Litigation. There is no claim, action, suit,
litigation, proceeding, arbitration or, to the Knowledge of DK, investigation of
any kind, at law or in equity (including actions or proceedings seeking
injunctive relief), pending or, to the Knowledge of DK, threatened in writing
against DK or Newco or any properties, principal shareholders, officers,
directors, or rights of DK or Newco and neither DK nor Newco nor the principal
shareholders, officers, and directors of either DK or Newco is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the Knowledge of DK, continuing investigation by,
any Governmental Entity, or any judgment, order, writ, injunction, decree or
award of any Governmental Entity or arbitrator, including, without limitation,
cease and desist or other orders.
SECTION 3.11. Ownership of Newco; No Prior Activities of Newco; Prior
Activities of DK. (a) Newco was formed solely for the purpose of engaging in the
transactions contemplated in this Agreement.
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(b) Except for obligations or liabilities incurred in connection with its
incorporation or organization and the transactions contemplated in this
Agreement and any other agreements or arrangements contemplated in this
Agreement, Newco has not incurred, directly or indirectly, through any
subsidiary or affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
(c) DK has been involved in the businesses described in its Annual Report
on form 10-K for the fiscal year ended June 30, 1995, a copy of which has been
delivered to GDC Holdings. Since 1994, DK has not conducted any operations other
than seeking opportunities for business combinations such as the Merger.
SECTION 3.12. Taxes. Except for the filing of its income tax returns for
its fiscal year ended June 30, 1995, which returns are delinquent, DK has timely
filed all returns or reports required to be filed with any taxing authority with
respect to Taxes for any period ending on or before the Effective Time, taking
into account any extension of time to file granted to or obtained on behalf of
DK or Newco, all Taxes shown to be payable on such returns or reports that are
due prior to the Effective Time have been paid and, as of the date hereof, no
deficiency for any material amount of tax has been asserted or assessed by a
taxing authority against DK or Newco and all liability for Taxes of DK or Newco
that are or will become due or payable with respect to periods covered by the
financial statements referred to in Section 3.07(b) hereof have been paid or
adequately reserved for on such financial statements.
SECTION 3.13. Brokers. No broker, finder or inves tment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated in this Agreement based upon arrangements made by or
on behalf of DK or Newco.
SECTION 3.14. Environmental Laws and Regulations. (a) DK and Newco are in
material compliance with all applicable Environmental Laws, which compliance
includes, but is not limited to, the possession by DK and Newco of all material
permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof and
compliance with notification, reporting and registration provisions under
applicable Environmental Laws; neither DK nor Newco has received notice of, or,
to the Knowledge of DK or Newco, is the subject of any Environmental Claim; and
to the Knowledge of DK, there are no circumstances that are reasonably likely to
prevent or interfere with such material compliance in the future, or to require
material expenditures to maintain such material compliance in the future.
(b) There are no Environmental Claims that are pending or, to the
Knowledge of DK and Newco, threatened against DK or Newco or, to the Knowledge
of DK and Newco, against any person or entity whose liability for any
Environmental Claim DK or Newco has or may have retained or assumed either
contractually or by operation of law.
(c) To the Knowledge of DK and Newco, there are no circumstances that
could form the basis for an Environmental Claim against DK or Newco, or against
any person or entity whose liability for any Environmental Claim DK or Newco has
or may have retained or assumed either contractually or by operation of law.
SECTION 3.15. Contract Rights. Except for this Agreement and the agreements
contemplated herein or as described on Schedule 3.15, neither DK nor Newco is a
party to or bound by any contract or agreement, whether written or oral,
including, without limitation, any contract or agreement for employment,
consulting or similar services, for capital expenditures or the acquisition or
construction of fixed assets, which constitutes any note, bond, indenture or
other evidence of indebtedness or guaranty or security for indebtedness of
others, for the sale of any asset, or the grant of any right or option to
purchase such asset, which constitutes a lease, which purports to limit the
freedom of DK or any of its affiliates to compete in any line of business or in
any geographic area or to borrow money or incur indebtedness.
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SECTION 3.16. Employee Benefit Plans.
(a) DK and Newco do not have, and have not had any employee benefit plan
(including, without limitation, any "employee benefit plan," as defined in
Section 3(3) of the ERISA), or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, insurance or other plan, arrangement or understanding
(whether or not legally binding).
(b) DK and Newco are not parties to any collective bargaining agreement.
(c) DK and Newco have no obligation for retiree health, medical or life
insurance benefits under any plan or arrangement.
(d) Schedule 3.16 lists each employee of DK and Newco and the terms of
employment of each such employee.
SECTION 3.17. Securities Offerings. All public offerings of securities of
DK were bona fide offerings to the "public" as such term is used and defined in
connection with offerings of securities subject to the Securities Act in
material compliance with the Securities Act and the rules and regulations
promulgated thereunder. All securities issued in such offerings were issued in
compliance with applicable Blue Sky Laws. To the Knowledge of DK, any non-public
offerings of securities by DK were conducted in accordance with applicable
provisions of the Securities Act of 1933, as amended, and applicable Blue Sky
Laws. Schedule 3.17 is a true and correct list, as of April 30, 1996, of the
shareholders of DK. Upon the request of GDC Holdings, but no more than one time,
DK will deliver to GDC Holdings, a correct list of the shareholders of DK as of
a date subsequent to April 30, 1996. The common stock of DK is registered under
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
ARTICLE IV
ADDITIONAL AGREEMENTS AND PRE-CLOSING COVENANTS
SECTION 4.01. Appropriate Action; Consents; Filings. GDC Holdings and
DK shall each use its best efforts to (i) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated in this Agreement, (ii) obtain from any Governmental
Entities any consents, licenses, permits, waivers, approvals, authorizations or
orders required to be obtained or made by DK or GDC Holdings or any of their
subsidiaries in connection with the consummation of the transactions
contemplated herein, including, without limitation, the Merger, (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement and the Merger required under (A) the Securities Act
and the Exchange Act and the rules and regulations thereunder (in the case of
DK), and any other applicable federal or state securities laws and (B) any other
applicable Law. GDC Holdings and DK shall furnish all information required for
any application or other filing to be made pursuant to the rules and regulations
of any applicable Law in connection with the transactions contemplated in this
Agreement.
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SECTION 4.02. Tax Treatment. Each of GDC Holdings and DK shall use its best
efforts to cause the Merger to qualify, and will not take any actions which
could prevent the Merger from qualifying, as a reorganization under the
provisions of section 368(a)(2)(E) of the Code.
SECTION 4.03. Guarantee by DK of FINOVA Loan to GDC Holdings. Concurrently
with the closing of this Agreement, DK shall execute a guarantee of the
obligations of GDC pursuant to the Sixth Amendment.
SECTION 4.04. Officers and Directors of DK. There are currently three (3)
directors of DK. Concurrently with the closing of this Agreement, the three
persons constituting the board of directors of DK shall increase the number of
directors of DK in accordance with the Articles of Incorporation and By-laws of
DK and the Colorado Business Corporation Act to seven (7) and shall, in
accordance with the Articles of Incorporation and By-laws of DK and the Colorado
Business Corporation Act, appoint four (4) additional persons to the Board of
Directors of DK, which such four (4) persons shall be identified by GDC Holdings
prior to the Closing Date, effective upon the resignation of the three (3)
members of the board of directors currently in office. Immediately following the
closing hereof, the directors and officers of DK and Newco currently in office
shall tender their resignations effective immediately and the directors
identified by GDC Holdings shall be the only directors of DK, until their death,
resignation, removal from office or their successors are elected and qualified.
SECTION 4.05. Operation of Business. Until the closing of the Merger, none
of the parties hereto will take any action or enter into any transaction outside
the ordinary course of business. Without limiting the generality of the
foregoing, none of the parties hereto will (i) declare, set aside, or pay any
dividend or make any distribution with respect to its capital stock or redeem,
purchase, or otherwise acquire any of its capital stock, or (ii) otherwise
engage in any practice, take any action, or enter into any transaction of the
sort described in Section 2.07(b) above.
SECTION 4.06. Full Access. Each of the parties will permit representatives
of the other parties to have full access at all reasonable times, and in a
manner so as not to interfere with the normal business operations of the party
granting such permission, to all premises, properties, personnel, books, records
(including tax records), contracts, and documents of or pertaining to such
party.
SECTION 4.07. Delivery of Documents. GDC Holdings shall deliver to DK
copies of the Notes, the New Subordinated Notes (as defined in Schedule 2.07)
and related documents as soon as reasonably practicable following the revision
and finalization thereof, if any. GDC Holdings shall deliver to DK, as soon as
reasonably practicable following the execution of this Agreement, a copy of the
Search Reports.
SECTION 4.08. Notice of Developments. Each party will give prompt written
notice to the other parties of any material adverse development causing a breach
of any of the representations and warranties in Article II or III above, as the
case may be. Each party will give prompt written notice to the others of any
material adverse development causing a breach of any of its own representations
and warranties in Article II or III above, as the case may be.
SECTION 4.09. Further Assurances. Each of the parties hereto will use its
reasonable best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Article 5 below).
SECTION 4.10. Reverse Stock Split. DK shall effect a reverse stock split in
accordance with applicable law, pursuant to which each twenty (20) shares of
common stock of DK outstanding prior to the reverse stock split shall be
converted into one (1) share of common stock of DK following the reverse stock
split, except that, in lieu of any fractional shares created by the reverse
stock split, DK shall be authorized to issue to each holder of a fractional
share one (1) additional whole share.
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ARTICLE 5
CONDITIONS TO CLOSING
SECTION 5.01. Conditions to Obligation of DK and Newco. The obligation of
DK and Newco to consummate the transactions to be performed by then in
connection with the closing of the Merger is subject to satisfaction of the
following conditions:
(a) the representations and warranties set forth in Article II above
shall be true and correct in all material respects at and as of the Closing
Date;
(b) GDC Holdings and GDCESI shall have performed and complied with all
of their covenants hereunder in all material respects through the Closing
Date;
(c) GDC Holdings and GDCESI shall have procured all of the material
third party consents specified in Section 4.01 above;
(d) no action, suit, or proceeding shall be pending before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement, (B)
cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, (C) affect adversely the right of DK to
own the Surviving Corporation and to control the Surviving Corporation, or
(D) affect materially and adversely the right of either of GDC Holdings or
GDCESI to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect);
(e) GDC Holdings shall have delivered to DK a certificate to the
effect that each of the conditions specified above in Section 5.01(a)-(d)
is satisfied in all respects;
(f) DK shall have received from counsel to GDC Holdings an opinion in
form and substance as set forth in Exhibit A attached hereto with such
additions, deletions, or amendments as may be requested by GDC Holdings and
its counsel and consented to by DK and its counsel, addressed to DK and
dated as of the Closing Date;
(g) DK shall have completed its "due diligence" investigation of GDC
Holdings and GDCESI and shall have been satisfied with the results thereof,
in its absolute discretion; and
(h) DK shall have received from each shareholder of GDC Holdings
completed and executed GDC Subscription Documents and shall have concluded,
based upon review of such documents by DK and its counsel, that the Merger
may be consummated and that DK may issue the shares of its common stock in
exchange for the shares of GDC Holdings common stock as contemplated herein
without the requirement that the shares of common stock of DK to be issued
be registered under the Securities Act. The GDC Subscription Documents
shall contain customary representations from the persons executing such
documents, including but not limited to a representation that such person
understands and acknowledges that the securities to be acquired by her or
him are "restricted" securities, as that term is defined in Rule 144
promulgated under the Securities Act of 1933, amended, and that the
securities may not be sold, transferred, assigned, hypothecated, or
otherwise disposed of unless such securities are registered or unless an
exemption from such registration requirements is available.
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DK and Newco may waive any condition specified in this Section 5.01 if they
execute a writing so stating at or prior to the Closing.
SECTION 5.02. Conditions to Obligation of GDC Holdings and GDCESI. The
obligation of GDC Holdings and GDCESI to consummate the transactions to be
performed by them in connection with the Closing is subject to satisfaction of
the following conditions:
(a) the representations and warranties set forth in Article III above
shall be true and correct in all material respects at and as of the Closing
Date;
(b) the DK and Newco shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing
Date;
(c) no action, suit, or proceeding shall be pending before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement or
(B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(d) DK shall have delivered to GDC a certificate to the effect that
each of the conditions specified above in Section 5.02(a)-(c) is satisfied
in all respects; and
(e) GDC Holdings shall have received from counsel to the DK an opinion
in form and substance as set forth in Exhibit B attached hereto with such
additions, deletions, or amendments as may be requested by DK and its
counsel and consented to by GDC Holdings and its counsel, addressed to GDC
Holdings and GDCESI, and dated as of the Closing Date;
(f) GDC Holdings shall have completed its "due diligence"
investigation of DK and shall have been satisfied with the results thereof,
in its absolute discretion;
(g) DK shall have completed a reverse stock split pursuant to which
each twenty (20) shares of common stock of DK outstanding prior to the
reverse stock split shall be converted into one (1) share of common stock
of DK following the reverse stock split, except that, in lieu of any
fractional shares created by the reverse stock split, DK shall be
authorized to issue to each holder of a fractional share one (1) additional
whole share; and
(h) Dr. Kenneth A. Larson shall have executed a "lockup" agreement
pursuant to which he shall agree not to sell more than 5,000 shares of the
common stock of DK in each fiscal quarter, except that additional sales may
be made with the prior written consent of DK.
(i) GDC Holdings shall have received the resignations of the three
directors of DK, as set forth in Section 4.04, such resignations to become
effective as provided in Section 4.04.
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GDC Holdings and GDCESI may waive any condition specified in this Section
5.01 if they execute a writing so stating at or prior to the Closing.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Effectiveness of Representations, Warranties and Agreements.
The representations, warranties and agreements of each party hereto shall not
survive the closing of this Agreement.
SECTION 6.02. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
(a) If to DK or Newco:
DK Industries, Inc.
c/o Schlueter & Associates, P.C.
1050 Seventeenth Street, Suite 1700
Denver, Colorado 80265
Attention: Henry F. Schlueter
Telecopier No.: (303) 296-8880
Telephone No.: (303) 292-3883
(b) If to GDC Holdings :
GDC Holdings Corporation
822 Neosho Avenue
Baton Rouge, Louisiana 70802
Attention: Harry C. Conger
Telecopier No.: (504) 383-8340
Telephone No.: (504) 383-8556
With a copy to:
Robert Wiegand II, Esq.
5261 South Quebec Street
Suite 200
Greenwood Village, Colorado 80111-1805
Telecopier No.: (303) 741-6512
Telephone No.: (303) 741-6410; and
Martha Nachman, Esq.
Bearman, Talesnick & Clowdus, Professional Corporation
1200 Seventeenth Street, Suite 2600
Denver, Colorado 80202-5826
Telecopier No.: (303) 572-6511
Telephone No.: (303) 572-6500
After consummation of the Merger, notices to DK shall be sent to the
address set forth for GDC Holdings.
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SECTION 6.03. Certain Definitions. For purposes of this Agreement, the
term:
"Knowledge" or "Known" shall mean, with respect to any matter in question,
if an executive officer of GDC Holdings, GDCESI, Newco, or DK, as the case may
be, has actual knowledge of such matter as of the date as of which such matter
is represented after reasonable investigation;
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in Section 13(d) of the Exchange Act);
"Subsidiary" or "Subsidiaries" of GDC Holdings or DK or any other person,
means any corporation, limited liability company, partnership, joint venture or
other legal entity of which GDC Holdings, DK or such other person, as the case
may be (either alone or through or together with any other subsidiary), owns,
directly or indirectly, 50% or more of the capital stock or other equity
interests the holders of which are generally entitled to vote for the election
of the Board of Directors or other governing body of such corporation or other
legal entity;
"Tax" or "Taxes" shall mean any and all taxes, charges, fees or levies,
payable to any federal, state, local or foreign taxing authority or agency,
including, without limitation, (i) income, franchise, profits, gross receipts,
minimum, alternative minimum, estimated, ad valorem, value added, sales, use,
service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, excise, stamp, windfall profits,
transfer and capital gains taxes, (ii) custom duties, imposts, charges, levies
or other similar assessments of any kind, and (iii) interest, penalties and
additions to tax imposed with respect thereto.
SECTION 6.04. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 6.05. Severability. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 6.06. Entire Agreement. This Agreement (together with the Annexes,
Schedules and Exhibits hereto) constitutes the entire agreement of the parties
and supersedes all prior agreements and undertakings, both written and oral,
between the parties with respect to the subject matter hereof.
SECTION 6.07. Assignment. This Agreement shall not be assigned by operation
of law or otherwise without the prior express written consent of the other
parties hereto.
SECTION 6.08. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied (other than the provisions of Section 4.05 and Section 6.07),
is intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
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SECTION 6.09. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are in addition to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 6.10. Governing Law. It is the intention of the parties that the
internal laws, and not the laws of conflicts, of the State of Colorado shall
govern the enforceability and validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties;
provided, however, that with respect to matters of law concerning the internal
affairs of any entity that is a party to or the subject of this Agreement, the
law of the jurisdiction of organization of such entity shall govern.
SECTION 6.11. Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the District of
Colorado or any court of the State of Colorado located in the City and County of
Denver in any action, suit or proceeding arising in connection with this
Agreement or the transactions contemplated herein, and agrees that any such
action, suit or proceeding shall be brought only in such court (and waives any
objection based on forum non conveniens or any other objection to venue
therein); provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this Section 6.11 and shall not be deemed to be a general
submission to the jurisdiction of said Courts or in the State of Colorado other
than for such purpose. All parties hereby waive any right to a trial by jury in
connection with any such action, suit or proceeding; provided, however, that
matters to be resolved through arbitration as specified herein shall be resolved
only by such arbitration, and the final arbitration award may thereafter be
enforced as provided in this Section 6.11.
SECTION 6.12. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same
agreement.
SECTION 6.13. Amendment. This Agreement may be amended only by written
instrument executed by the parties hereto. This Agreement may be amended by the
boards of directors of the parties hereto subsequent to its approval by the
shareholders of GDC Holdings, provided that such amendment
shall not:
(i) alter or change the amount or kind of shares, securities, cash,
property, and/or rights to be received in exchange for or on conversion of the
shares of GDC Holdings pursuant to the Plan;
(ii) alter or change any term of the articles of incorporation of GDC
Holdings; or
(iii) adversely affect the holders of any class or series of any stock of
GDC Holdings.
SECTION 6.14. Termination. This Agreement shall terminate and be of no
further force and effect in the event that (i) GDC Holdings notifies DK; or (ii)
DK notifies GDC Holdings that the conditions to the obligations of the party
giving such notice have not been satisfied or if the transactions contemplated
hereby are not completed by July 1, 1996.
SECTION 6.15. No Public Announcement. Any announcement, notification, or
other similar communication to any person in connection with the Merger made by
DK shall be made only in accordance with all applicable Laws and, whenever time
permits, after GDC Holdings has been provided with an opportunity to review and
comment on the proposed disclosure.
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IN WITNESS WHEREOF, DK, Newco, GDCESI, and GDC Holdings have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
DK INDUSTRIES, INC.
By: /s/ KENNETH A. LARSON
-------------------------------------
Name: Kenneth A. Larson
Title: Pres.
DK ACQUISITION CORP.
By: /s/ KENNETH A. LARSON
------------------------------------
Name: Kenneth A. Larson
Title: Pres.
GDC HOLDINGS CORPORATION
By: /s/ HARRY C. CONGER
-------------------------------------
Name: Harry C. Conger
Title: President
GDC ENVIRO SOLUTIONS, INC.
By: /s/ HARRY C. CONGER
-------------------------------------
Name: Harry C. Conger
Title: CEO
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