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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported) DECEMBER 17, 1996
ICHOR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-82092 25-1741849
(State or other (Commission (I.R.S.Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 OXFORD DRIVE, MONROEVILLE, PENNSYLVANIA 15146
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 856-6100
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
On December 17, 1996 the registrant executed and delivered a Purchase
Agreement, dated as of December 13, 1996, by and between the registrant and
Logan International Corp., a Washington corporation ("Logan"). Logan is an
affiliate of the registrant's then controlling shareholder, Drummond Financial
Corporation. Pursuant to the Purchase Agreement, the registrant purchased all
of the outstanding capital stock of 501164 B.C. Ltd., a British Columbia
corporation ("B.C."), and assumed the liabilities of B.C. under a certain
promissory note due from B.C. to Logan having an outstanding balance of
$3,281,694. In exchange for these assets, the registrant issued to Logan: (i) a
promissory note in the amount of $1,425,000, maturing December 16, 1999,
bearing interest at the rate of 8% per annum (the "Promissory Note") and (ii)
2,500,000 shares of the registrant's common stock. The Promissory Note is
secured by a pledge by the registrant of the shares of each of its operating
subsidiaries.
At the time of the purchase, B.C. had no assets other than a loan to
Enviropur Waste Refining and Technology, Inc. ("Enviropur"). As of September
30, 1996, the principal and accrued interest due to B.C. by Enviropur exceeded
$5,200,000. Enviropur has filed for protection under Chapter 11 of the United
States Bankruptcy Code. After the closing of the Purchase Agreement on December
17, 1996, the registrant caused B.C. to assign a portion of its interest in the
Enviropur loan to a newly formed subsidiary of the registrant known as B.C.
Ventures Ltd., now known as Ortek, Inc. ("Ortek"). On December 20, 1996, Ortek
was the successful bidder for certain assets of Enviropur, including a waste
oil refining facility in McCook, Illinois, sold at an auction by the bankruptcy
court.
As a result of the issuance of the registrant's common stock to Logan,
Logan has become the controlling shareholder of the registrant, holding
approximately 50.3% of the issued and outstanding capital stock of the
registrant. Management of the registrant is not aware of any plans by Logan to
change the composition of the board of directors or management of the
registrant.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
See Item 1 above for a description of the acquisition by the registrant of
certain assets and business of Enviropur at auction from the bankruptcy court.
ITEM 3. FINANCIAL STATEMENTS AND EXHIBITS.
It is impracticable at this time for the registrant to provide the
required financial statements and pro forma financial statements with respect
to the acquisition of assets described at Item 2. Such statements will be filed
as an amendment to this Form 8-K not less than 60 days after the date this Form
8-K is filed.
Exhibits
The following exhibits are furnished in accordance with the provisions of
Item 601 of Regulation S-K:
(2)(a) Purchase Agreement, dated as of December 13, 1996 by and between ICHOR
Corporation and Logan International Corp.
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(2)(b) Order of Court of The Honorable Jack B. Schmeitterer of the United
States Bankruptcy Court of the North District of Illinois, Eastern
Division approving the sale of Assets of Enviropur Waste Refining and
Technology, Inc. to B.C. Ventures, Ltd.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ICHOR CORPORATION
(Registrant)
Date: JANUARY 2, 1997 By: /s/ JOHN M. MUSACCHIO
----------------------------
Title: President
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Exhibit (2)(a)
ICHOR CORPORATION
300 Oxford Drive
Monroeville, Pennsylvania U.S.A. 15146
December 13, 1996
LOGAN INTERNATIONAL CORP.
Suite 1250, 400 Burrard Street
Vancouver, BC
V6C 3A6
ATTENTION: PRESIDENT
Dear Sirs:
We understand that Logan International Corp. (the "Vendor") is the legal and
beneficial owner of 1,500,001 of the issued and outstanding common shares and a
promissory note of 501164 B.C. Ltd. (the "Corporation"), a corporation
incorporated under the laws of British Columbia.
All monetary amounts referred to herein are in lawful currency of the United
States of America, unless otherwise expressly stated.
1. PURCHASE OF SECURITIES OF THE CORPORATION
1.1 Subject to the terms and conditions hereof, ICHOR Corporation (the
"Purchaser") hereby offers to purchase from the Vendor and by its acceptance
hereof the Vendor agrees to sell and assign to the Purchaser:
(a) 1,500,001 common shares in the capital of the Corporation (the
"Purchased Common Shares"); and
(b) a promissory note issued by the Corporation in favour of the Vendor
dated December 16, 1996 having an outstanding amount owing calculated as of
December 1, 1996 of $3,281,694 (the "Purchased Note"), for an aggregate price
of $2,425,000 (the "Purchase Price").
The Purchased Common Shares and the Purchased Note are collectively referred to
herein as the "Purchased Securities".
1.2 The Purchase Price shall be paid by the Purchaser to the Vendor at the Time
of Closing (as hereinafter defined) as follows:
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(a) a secured promissory note in the amount of ONE MILLION FOUR HUNDRED
TWENTY FIVE THOUSAND DOLLARS ($1,425,000) (the "ICHOR Note"). The ICHOR Note
shall:
(i) mature three years after the date of issuance;
(ii) accrue interest thereon at a rate of 8% per annum compounded and
payable monthly in arrears;
(iii) be secured by a first fixed charge upon the Purchased Securities,
all of the shares of ICHOR Services, Inc. and all of the shares of B.C.
Ventures Limited, to be renamed Ortek Inc.;
(iv) contain provisions for accelerated payment in the event of any
material adverse developments, including, without limitation, any
liabilities resulting to the Purchaser in relation to its class action
law suit in the amount of $50,000 or greater; and
(v) be substantially in the form of Schedule "B" attached hereto; and
(b) TWO MILLION FIVE HUNDRED THOUSAND (2,5000,000) common shares of the
Purchaser (the "ICHOR Shares") at an issue price of $0.40 per share.
2. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE VENDOR
2.1 The Vendor, by its acceptance hereof, covenants, represents and warrants as
follows and acknowledges and confirms that the Purchaser is relying upon such
covenants, representations and warranties in connection with the purchase by
the Purchaser of the Purchased Securities:
(a) all the Purchased Securities are now, and at the Time of Closing will
be, owned by the Vendor as the sole legal and beneficial owner of record with a
good and marketable title thereto, free and clear of any mortgage, liens,
charges, restrictions, security interests, adverse claims, pledges,
encumbrances or demands whatsoever, and the Purchased Common Shares are issued
and outstanding as fully paid and non-assessable;
(b) no person, firm or corporation has any agreement or option, or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase, acquisition or transfer from
the Vendor of any of the
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Purchased Securities or any interest therein or right thereto, except the
Purchaser pursuant hereto;
(c) the Vendor does not act as nominee, agent, trustee, executor,
administrator or other legal representative on behalf of any other person, firm
or corporation in respect of the Purchased Securities;
(d) the Vendor is a validly subsisting corporation under the laws of the
State of Washington and the Vendor has all necessary corporate power and
authority to execute and deliver the agreement resulting from its acceptance
hereof (the "Agreement"), to sell the Purchased Securities to the Purchaser and
to perform its obligations hereunder;
(e) the Agreement has been duly executed and delivered by and on behalf of
the Vendor and constitutes a legal, valid and binding obligation of the Vendor
enforceable against the Vendor in accordance with its terms;
(f) the authorized and issued capital of the Corporation, including
convertible securities, warrants and options or other rights to acquire shares
of the Corporation, is as set out in Schedule "A" attached hereto;
(g) other than the Purchased Securities, there are no other shares,
options, warrants, notes or securities of the Corporation issued or issuable;
(h) the Purchased Securities are now, and at all times up to and including
the Time of Closing will continue to be, registered in the name of the Vendor
on the applicable securities registers of the Corporation;
(i) the execution and delivery of the Agreement and the completion of the
transactions contemplated hereby will not conflict with, result in a default
under, or accelerate or permit the acceleration of the performance required by,
any agreement or instrument to which the Vendor or the Corporation is a party;
(j) the Corporation has, on a timely basis, duly filed or delivered all
reports, filings, disclosures, releases and other materials required to be
filed with or delivered to any regulatory authority having jurisdiction under
applicable law;
(k) the Corporation has no assets other than a loan (the "Loan") initially
made by Drummond Financial Corporation ("Drummond") to Enviropur Waste Refining
and Technology, Inc. and
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assigned by Drummond to the Corporation pursuant to an assignment and
assumption agreement made between Drummond and the Corporation dated effective
September 1, 1995;
(l) the Loan is now, and at the Time of Closing will be, owed to the
Corporation and has not and will not be sold, assigned or transferred, and all
amounts thereunder are due and owing to the Corporation, provided that no
representation or warranty is given by the Vendor as to the collectability of
the amount outstanding under the Loan;
(m) other than administering the Loan, the Corporation has not and does
not carry on any other business;
(n) the Corporation has not had and does not have any employees who
receive any remuneration;
(o) the Corporation does not have any liabilities other than those related
to its interest in the Loan, comprised of accounts payable owed to Drummond and
others in an amount that does not exceed $350,000 as of December 1, 1996 and
liabilities that may arise with respect to the administration of the Loan,
which are currently not quantifiable, including an existing action against the
Corporation and Drummond with respect to Enviropur West Corporation;
(p) the Vendor acknowledges that the ICHOR Shares have not been registered
by the Purchaser under the Securities Act of 1933, as amended (the "1933 Act"),
that the Purchaser does not plan, and is under no obligation to provide for,
registration of the ICHOR Shares, that the ICHOR Shares are being offered and
sold in reliance upon an exemption from the registration requirements of the
1933 Act, and that they cannot be sold unless they are subsequently registered
under the 1933 Act or are sold pursuant to an exemption from the registration
requirements thereunder;
(q) the Vendor shall file and cause to be filed all forms of certification
required to be filed by the Vendor in connection with the purchase and sale of
the ICHOR Shares so that the distribution of the ICHOR Shares may lawfully
occur without the necessity of filing a prospectus or otherwise registering the
same, and the Vendor shall not request that the Purchaser provide it with an
offering memorandum or prospectus, or do anything which would require the
Purchaser to provide such an offering memorandum or prospectus to the Vendor;
(r) the ICHOR Shares are being subscribed for and any rights the Vendor
may acquire as a shareholder of the Purchaser will be
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acquired for the Vendor's own account and for investment purposes and not with
a view to a subsequent offering, sale or distribution thereof, and the Vendor
may not participate, directly or indirectly, in any plan or scheme involving
the resale or distribution of the ICHOR Shares or any interest therein;
(s) the Vendor has knowledge and experience in financial and business
affairs as to be capable of evaluating the merits and risks of the investment
and is able to bear the economic risk of loss of the investment; and
(t) the Vendor has not received or been provided with an offering
memorandum or similar document, and its decision to enter into the Agreement
and to purchase the ICHOR Shares has not been made upon any verbal or written
representation as to fact or otherwise by or on behalf of the Purchaser or any
other person and its decision to enter into the Agreement and purchase the
number of ICHOR Shares set forth herein is based entirely upon information
concerning the Purchaser which is publicly available.
3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1 The Purchaser covenants, represents and warrants as follows and hereby
acknowledges and confirms that the Vendor is relying upon such covenants,
representations and warranties in connection with the sale by it of the
Purchased Securities:
(a) the Purchaser has all necessary power and authority to execute and
deliver this offer, to purchase the Purchased Securities pursuant to the
provisions hereof and to perform its obligations hereunder;
(b) this offer has been duly executed and delivered by and on behalf of
the Purchaser and the Agreement will constitute a legal, valid and binding
obligation of the Purchaser enforceable against the Purchaser in accordance
with its terms;
(c) on the Closing Date (as herein defined), the authorized capital of the
Purchaser will consist of, inter alia, 30,000,000 shares of common stock with a
par value of $0.01 per share and 5,000,000 shares of preferred stock with a par
value of $0.01 per share;
(d) on the Closing Date, the ICHOR Shares shall be delivered to the
Purchaser free and clear of any mortgages, liens, charges, restrictions,
security interests, adverse claims, pledges, encumbrances or demands,
whatsoever and shall, upon receipt of
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payment by the Company therefor, be validly and duly authorized, created and
issued by the Company as fully paid and non-assessable;
(e) the Purchaser has good right, full corporate power and absolute
authority to enter into the Agreement and to issue, sell and assign the ICHOR
Shares and the ICHOR Note to the Vendor in the manner contemplated herein and
to perform all of the Purchaser's obligations under the Agreement;
(f) the Purchaser is a company duly incorporated and validly subsisting in
all respects under the laws of the State of Delaware and is in good standing
with respect to the filing of annual returns;
(g) the execution and delivery of the Agreement and the completion of the
transactions contemplated hereby will not conflict with, result in a default
under, or accelerate or permit the acceleration of the performance required by,
any agreement or instrument to which the Purchaser is a party;
(h) the Purchaser is a registrant under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and has, on a timely basis, duly filed or
delivered all reports, filings, disclosures, releases and other materials
required to be filed with or delivered to any regulatory authority having
jurisdiction under applicable law, including periodical or timely disclosure
filings or reports required pursuant to the Exchange Act (collectively, the
"Periodic Filings") and such Periodic Filings are true and correct in all
material respects;
(i) the Purchaser shall file and cause to be filed all forms of
certification required to be filed by the Purchaser in connection with the
purchase and sale of the ICHOR Shares and the ICHOR Note so that the
distribution of the ICHOR Shares and the ICHOR Note may lawfully occur without
the necessity of filing a prospectus or otherwise registering the same.
4. CLOSING PROCEDURE
4.1 The closing of the purchase and sale of the Purchased Securities shall take
place at 10:00 (a.m.) on December 17, 1996, at the offices of the Purchaser or
at such other time or place as may be mutually agreed upon. The date of the
closing of the purchase and sale of the Purchased Securities is referred to
herein as the "Closing Date" and the time of closing on such date is referred
to herein as the "Time of Closing".
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4.2 At the Time of Closing on the Closing Date, the Vendor agrees to deliver to
the Purchaser definitive certificates representing the Purchased Common Shares
and the original Purchased Note duly endorsed for transfer to the Purchaser, or
as the Purchaser may in writing direct, against the delivery by the Purchaser
to the Vendor, or as the Vendor may in writing direct, of:
(a) the ICHOR Note;
(b) security for the ICHOR Note;
(c) an opinion of the Purchaser's counsel; and
(d) the ICHOR Shares,
all in a form and content satisfactory to the Vendor and its counsel.
4.3 Contemporaneously with the closing of the purchase and sale of the
Purchased Securities, the certificates representing the Purchased Common Shares
and the original Purchased Note delivered by the Vendor as aforesaid shall be
tendered to the Corporation and the parties shall arrange for the immediate
delivery to the Purchaser of definitive certificates representing the Purchased
Common Shares and a promissory note in replacement of the Purchased Note duly
issued and registered in the name of the Purchaser or as it may in writing
direct.
5. CONDITIONS OF CLOSING
5.1 The obligation of the Purchaser to purchase the Purchased Securities shall
be subject to the following conditions for the exclusive benefit of the
Purchaser to be fulfilled and/or performed at or prior to the Time of Closing
on the Closing Date:
(a) no action or proceeding shall be pending or threatened by any person,
company, firm, governmental authority, securities commission, regulatory body
or agency to enjoin or prohibit the purchase and sale of the Purchased
Securities contemplated hereby or the right of the Purchaser to own the
Purchased Securities or to suspend or stop trading in securities of the
Corporation;
(b) the covenants, representations and warranties of the Vendor contained
in Article 2 hereof shall be true and correct on and as of the date of the
acceptance of this offer by the Vendor and shall also be true and correct on
and as of the Closing Date
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with the same force and effect as though such covenants, representations and
warranties had been made on and as of such date;
(c) the Vendor shall have complied with all covenants and agreements
herein agreed to be performed or caused to be performed by it; and
(d) since the date hereof, the Corporation shall not have reserved, set
aside, allotted, issued or agreed to reserve, set aside, allot or issue,
conditionally or otherwise, any shares or any securities, rights or warrants
having the right or option to acquire, directly or indirectly, through
purchase, conversion, exchange or otherwise, any shares.
In case any of the foregoing conditions has not been fulfilled and/or
performed at or before the Time of Closing to the satisfaction of the
Purchaser, the Purchaser may rescind the Agreement by notice to the Vendor and
in such event the Purchaser shall be released from all obligations hereunder;
provided that any of such conditions may be waived in whole or in part by the
Purchaser without prejudice to its rights of rescission in the event of the
non-fulfillment of any other condition or conditions.
5.2 The obligations of the Vendor to sell the Purchased Securities shall be
subject to the following conditions for the exclusive benefit of the Vendor to
be fulfilled and/or performed, on or before the close of business on December
16, 1996:
(a) the Vendor's "disinterested directors" shall have approved the terms
of the Agreement;
(b) no action or proceeding shall be pending or threatened by any person,
company, firm, governmental authority, securities commission, regulatory body
or agency to enjoin or prohibit the purchase and sale of the ICHOR Shares
contemplated hereby or the right of the Vendor to own the ICHOR Shares or to
suspend or stop trading in securities of ICHOR;
(c) the covenants, representations and warranties of the Purchaser
contained in Article 3 hereof shall be true and correct on and as of the date
of the acceptance of this offer by the Vendor and shall also be true and
correct on and as of the Closing Date with the same force and effect as though
such covenants, representations and warranties had been made on and as of such
date;
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(d) the Purchaser shall have complied with all covenants and agreements
herein agreed to be performed or caused to be performed by it; and
(e) since the date hereof, ICHOR shall not have reserved, set aside,
allotted, issued or agreed to reserve, set aside, allot or issue, conditionally
or otherwise, any shares or any securities, rights or warrants having the right
or option to acquire, directly or indirectly, through purchase, conversion,
exchange or otherwise, any shares.
In case any of the foregoing conditions has not been fulfilled and/or
performed at or before the Time of Closing to the satisfaction of the Vendor,
the Vendor may rescind the Agreement by notice to the Purchaser and in such
event the Vendor shall be released from all obligations hereunder; provided
that any of such conditions may be waived in whole or in part by the Vendor
without prejudice to its rights of rescission in the event of the
non-fulfillment of any other condition or conditions.
6. COVENANTS OF THE VENDOR
6.1 The Vendor covenants and agrees that, between the date hereof and the Time
of Closing, it will not take any step or act with respect to or in furtherance
of the sale of the Purchased Securities or any portion thereof to any person,
firm or corporation other than the Purchaser and, without limiting the
generality of the foregoing, will not negotiate with, solicit any offer from,
or have any discussion with, any other person, firm or corporation with a view
to such a sale.
7. INDEMNIFICATION
7.1 Each of the parties hereto covenants and agrees to indemnify and save
harmless the other party from and against any claims whatsoever for any
commissions or remuneration payable or alleged to be payable to any broker,
agent or other intermediary who has acted for such party in connection with the
sale or purchase of the Purchased Securities.
8. COSTS AND EXPENSES
8.1 All costs and expenses incurred in connection with the Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses.
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9. ENTIRE AGREEMENT
9.1 The agreement resulting from acceptance of this offer shall constitute the
entire agreement and understanding between the parties with respect to the
subject matter hereof and shall supersede any prior agreement, representation
or understanding with respect thereto.
10. TIME OF THE ESSENCE
10.1 Time shall be of the essence hereof.
11. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
11.1 The respective covenants, representations and warranties of the parties
contained herein shall survive the closing of the purchase and sale of the
Purchased Securities herein provided for, and, notwithstanding such closing, or
any investigation made by or on behalf of any party, shall continue in full
force and effect for the benefit of the party to whom the covenant,
representation or warranty was made.
12. NOTICES
12.1 Any notice, direction or other instrument required or permitted to be
given to either party hereto shall be in writing and may be given by delivering
or sending by facsimile the same to the Vendor at:
Logan International Corp.
Suite 1250, 400 Burrard Street
Vancouver, BC V6C 3A6 CANADA
Attention: President
Facsimile No.: 604-683-3205
and to the Purchaser at:
ICHOR Corporation
300 Oxford Drive
Monroeville, Pennsylvania
U.S.A. 15146
Attention: President
Facsimile No.: 412-856-6057
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12.2 Any such notice, direction or other instrument shall be deemed to have
been given or made on the date on which it was delivered or sent by facsimile
(or, if such day is not a business day, on the next following business day.)
13. GOVERNING LAW
13.1 The Agreement shall be constructed and enforced in accordance with, and
the respective rights and obligations of the parties shall be governed by, the
laws of the province of British Columbia and the applicable federal laws of
Canada, irrespective of the choice of laws principles of the Province of
British Columbia, and the parties hereto irrevocably attorn to the exclusive
jurisdiction of the courts of British Columbia sitting in Vancouver, provided
that nothing herein shall restrict the Vendor from enforcing its rights under
the Note and the security granted in connection therewith in the jurisdiction
of its choice.
14. CONFIDENTIALITY
14.1 The Agreement shall be kept confidential by the parties hereto and no
public announcement or press release concerning the Agreement shall be made by
either party without the consent of the other party or except as may be
required by law.
15. SUCCESSORS AND ASSIGNS
15.1 Neither party may assign its rights or obligations hereunder to any other
person, firm or corporation without the prior written consent of the other
party hereto, except that the Purchaser may assign the Agreement and its rights
hereunder in whole or in part to one or more corporations all of the shares of
which are beneficially owned by the Purchaser.
15.2 The Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
16. ACCEPTANCE OF OFFER
16.1 This offer is open for acceptance by the Vendor in the manner indicated
below until, but not after, 5 o'clock in the afternoon (Vancouver time) on
December 16, 1996, and if not accepted on or before such time on such date
shall be null and void. This offer may be accepted only by the Vendor signing
and returning the accompanying duplicate of this offer or a counterpart hereof
to the Purchase or an officer of the Purchaser or by sending by facsimile to
the Purchaser, in the manner provided in section 12.1 hereof, a
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copy of a signed counterpart hereof at or before the said time. Upon acceptance
of this offer by the Vendor as aforesaid, this offer becomes an agreement of
purchase and sale between the Vendor and the purchaser in accordance with its
terms.
Yours very truly,
ICHOR CORPORATION
By: /s/
-----------------------------------
-----------------------------------
(Name - please print)
-----------------------------------
(Title)
The foregoing offer is hereby accepted and agreed to by the undersigned in the
City of _________________ on this ____ day of December, 1996.
LOGAN INTERNATIONAL CORP.
By: /s/
-----------------------------------
-----------------------------------
(Name - please print)
-----------------------------------
(Title)
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SCHEDULE "A"
Capital as at December 1, 1996
<TABLE>
<CAPTION>
Number or Amount
Number or Beneficially Owned
Description Authorized Amount Outstanding by the Vendor
- ----------- ---------- ------------------ ------------------
<S> <C> <C> <C>
Common Shares 100,000,000 1,500,001 All
Promissory Note N/A 3,281,694 All
</TABLE>
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THIS IS SCHEDULE "B" TO THAT CERTAIN PURCHASE AGREEMENT DATED FOR REFERENCE __,
1996 AND MADE BETWEEN ICHOR CORPORATION AND LOGAN INTERNATIONAL CORP.
PROMISSORY NOTE
FOR VALUE RECEIVED ICHOR CORPORATION ("ICHOR") hereby promises to pay, on __,
1999, to LOGAN INTERNATIONAL CORP. ("Logan") the principal sum of ONE MILLION
FOUR HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($1,425,000), together with interest
at a rate of EIGHT (8%) PER CENT per annum on such principal amount or part
thereof outstanding from time to time from the date hereof and interest on
overdue interest at the same rate, as well after as before maturity and
judgment and both before and after default, until payment in full. Interest
payable hereunder shall accrue from day to day and shall be computed on the
basis of a year of 365 days and for actual days elapsed and shall be compounded
and payable monthly in arrears on the last day of each month commencing on
January 31, 1997.
The occurrence of any one or more of the following events (an "Event of
Default") shall constitute a default under this promissory note:
(a) if ICHOR defaults in the payment of any amount accruing due hereunder on
its due date and such failure shall be unremedied for five (5) days after
notice thereof to ICHOR;
(b) if ICHOR fails to observe or perform any term, covenant, condition,
agreement or obligation in favour of Logan (except for those described in
subsection (a) above) contained in that certain purchase agreement entered
into between ICHOR and Logan dated December 13, 1996 (the "Purchase
Agreement"), any security instruments delivered in connection with the
Purchase Agreement or this promissory note or any other agreement between
ICHOR and Logan and such failure shall remain unremedied for ten (10) days
after notice of such failure by Logan to ICHOR;
(c) if any representation, warranty or statement made by ICHOR or any
director, officer or employee thereof in the Purchase Agreement, any
security instrument delivered pursuant thereto or any certificate,
declaration or other instrument delivered by or on behalf of ICHOR in
connection with the Purchase Agreement proves at any time to have been
incorrect in any material respect as of the date made;
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(d) if ICHOR or any material subsidiary of ICHOR shall generally not pay its
debts as such debts become due, or shall indicate in writing its inability
to pay such debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
ICHOR seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding-up, reorganization, arrangement, adjustment, protec-
tion, relief or composition of its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver, trustee
or other similar official for it or for any part of its property or ICHOR
shall take any corporate action to authorize any of the actions set forth
above;
(e) if ICHOR or any material subsidiary of ICHOR shall fail to pay the
principal of, or premium or interest on, any debt of ICHOR which is
outstanding in an aggregate principal amount in excess of One Hundred
Thousand Dollars ($100,000) when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or
otherwise) or if any other event shall occur specified in any agreement or
instrument relating to any such debt, if the effect of such event is to
permit the acceleration of the maturity of such debt of ICHOR; or any debt
of ICHOR which is outstanding in an aggregate principal amount exceeding
One Hundred Thousand Dollars ($100,000) (or the equivalent amount in any
other currency) shall be validly declared to be due and payable prior to
the stated maturity thereof;
(f) if any judgment or order for the payment of money in excess of Fifty
Thousand ($50,000) (or the equivalent amount in any other currency) shall
be rendered against ICHOR and the same shall not be satisfied within 30
days thereof;
(g) if any property of ICHOR or any material subsidiary of ICHOR is seized
under legal process to enforce a judgment, including execution,
garnishment or attachment, or a charging order or equitable execution
affecting or relating to property of ICHOR is obtained, or a judgment
creditor delivers a writ of execution or a certificate to a sheriff under,
or a sheriff seizes or has a right to any property of ICHOR or any other
execution, sequestration, extant or other process of any court becomes
enforceable against ICHOR or a distress or an analogous process is levied
upon any property of ICHOR;
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(h) if all or any material portion of the property of ICHOR is lost,
materially damaged or destroyed by theft, fire or any other casualty and
the loss is not adequately covered by insurance and ICHOR fails to provide
security satisfactory to Logan, upon request by Logan, covering the
deficiency not covered by insurance immediately upon the deficiency
becoming known or known approximately;
(i) if it shall become illegal or unlawful for ICHOR to carry on its business
or for ICHOR to perform any of its obligations under this promissory note
or any agreement or security instrument in favor of Logan;
(j) if ICHOR fails to actively and diligently contest in good faith, by
appropriate and timely proceedings, any action, suit, litigation or other
proceeding commenced against it the result of which could be expected to
have a materially adverse effect on its financial condition or operations;
(k) if ICHOR or any material subsidiary of ICHOR knowingly at any time and in
any material respect contravenes the provisions of any applicable law,
regulation, bylaw, ordinance or work order of any governmental authority
affecting any property of ICHOR and, in the reasonable opinion of Logan,
the effect thereof could be expected to have a materially adverse effect
on the interests of Logan;
(l) if this promissory note or, any security instrument granted in connection
with or collateral to this promissory note is contested by any person
other than ICHOR or is subrogated, impaired or set aside in any manner;
(m) if, at any time, the liabilities of ICHOR exceed its assets on a
consolidated basis; or
(n) if Logan in good faith believes and has commercially reasonably grounds to
believe that there has been a material adverse change in the business of
ICHOR, including, without limitation, if Logan in good faith believes and
has commercially reasonable grounds to believe that ICHOR will incur any
liabilities resulting from a class action lawsuit filed against ICHOR in
New York under Civ. No. 95 Civ. 4954 that would equal or surpass, in
aggregate $50,000.
Upon the occurrence of an Event of Default, the entire principal amount
hereunder then outstanding and all accrued and unpaid interest thereon shall,
at the option of Logan, become immediately due and payable with interest at the
rate set out herein to the
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date of actual payment thereof, all without presentment, protest or notice of
dishonor, all of which are expressly waived by ICHOR, provided that ICHOR shall
have a reasonable time in which to repay the monies so demanded. For the
purposes of this provision, a reasonable period of time shall be five (5) days
unless Logan reasonably determines that the value of ICHOR's business or any
security held by Logan would be reduced or the ability of Logan to realize on
such security would be impaired by such delay or any part thereof. In such
event, Logan may exercise any right of recourse and/or proceed by any action,
suit, remedy or proceeding against ICHOR authorized or permitted by law for the
recovery of all indebtedness and liabilities of ICHOR to Logan hereunder and
proceed to exercise any and all rights hereunder and under any security
instruments granted by ICHOR and no such remedy for the enforcement of the
rights of Logan shall be exclusive of or dependent upon any other remedy but
any one or more of such remedies may from time or time be exercised
independently or in combination.
ICHOR agrees that if, and as often as, this promissory note is placed in the
hands of an attorney for collection or to defend or enforce any of Logan's
rights under this promissory note or any security instruments granted in
connection with or collateral thereto, or otherwise relating to the
indebtedness hereby evidenced, ICHOR will pay Logan's reasonable attorney's
fees, or court costs and all other expenses incurred by Logan in connection
therewith.
This Note shall be governed by and construed in accordance with the laws of
British Columbia. ICHOR hereby irrevocably attorns to the non-exclusive
jurisdiction of the Courts of British Columbia.
All references to "dollars" or "$" herein shall be references to United States
dollars.
ICHOR hereby waives presentment for payment, notice of dishonor, notice of
non-payment, protest, notice of protest and any and all other notices and
demands in connection with the delivery, acceptance, performance, default or
enforcement of this promissory note.
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DATED at _________, _________, the __ day of December, 1996.
THE COMMON SEAL of )
ICHOR CORPORATION )
was hereunto affixed in the )
presence of: )
- ------------------------- )
Authorized Signatory )
- ------------------------- )
Authorized Signatory )
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Exhibit (2)(b)
UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
In re ) Chapter 11
)
ENVIROPUR WASTE REFINING ) Case No. 96 B 28478
AND TECHNOLOGY, INC., )
) Judge Jack B. Schmetterer
Debtor. )
ORDER APPROVING SALE OF ASSETS
PURSUANT TO SECTION 363 OF BANKRUPTCY CODE
On December 18 and 20, 1996, a final hearing (the "Final Sale Hearing")
was held to authorize an auction (the "Auction") and sale of the assets of
Enviropur Waste Refining and Technology, Inc., ("Debtor") pursuant to Debtor's
Application for Authority to Sell Property Outside of Ordinary Course of
Business Pursuant to Section 363, to Assume and Assign Leases Pursuant to
section 365, to Approve Notice Thereof, and to Set Final hearing (the
"Application"), and the Interim Order ("Interim Order") dated December 4, 1996
granting the Application. After the Final Sale Hearing, the Court entered a
Final Order granting Application ("Final Sale Order"), in which the Court found
that proper notice of the auction and the Final Sale Hearing had been given to
all parties required or entitled to receive the same and authorized Debtor to
conduct the Auction of the Debtor's Assets, as defined in the Application, and
modified by the Final Order and any order entered approving the sale. Upon the
record of the Final Sale Hearing and the Auction, including the testimony of
Robert Wessels,
<PAGE> 2
the Chairman of the Board of Directors of Debtor, the Court makes the following
findings of fact and conclusions of law:
A. This Court has jurisdiction over this proceeding under 28 U.S.C.
Section 1334 and 157(a). The relief granted pursuant to the Application and
Interim Order constitutes a core proceeding under 28 U.S.C. Section 157(b).
B. BC Ventures Limited ("BC Ltd.") submitted a credit bid of $1,200,000
("Purchase Price") for the Assets at the Auction. No competing bids were
submitted. Accordingly, the Court determines from the Auction and from
testimonial evidence submitted at the Final Sale Hearing that the Purchase
Price is the best and highest offer Debtor has been able to obtain for the
Assets after reasonable and adequate efforts, including the Auction.
C. The Purchase Price was submitted and procured in an arm's length
transaction with Debtor, and BC Ltd. is therefore purchasing the Assets in
"good faith" within the meaning of 11 U.S.C. Section 363(m) and is entitled to
the protection afforded by that section.
D. Pursuant to section 363(k) of the Bankruptcy Code, BC Ltd. is entitled,
and is hereby authorized and directed, to offset first its superpriority and
then its secured claim against Debtor's estate against and to the extent of the
Purchase Price.
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E. The Court finds from the Auction and from the evidence presented at the
Final Sale Hearing that this approval of the sale of Debtor's Assets to BC Ltd.
is in the best interest of the creditors and Debtor's estate and that there is
a good business reason for the entry hereof.
F. With respect to any property included in the Assets that is subject to
a lien, claim or encumbrance, except those asserted liens and encumbrances set
forth in subparagraph (1) of this paragraph F, the Court finds and concludes
that such property may and shall be sold to BC Ltd. free and clear of any and
all such liens, claims and encumbrances.
(1) BC Ltd. shall take title to the Assets subject solely to (i) the
asserted mechanic's lien of H. J. Mohr & Sons Company recorded on March 9,
1995 by the Cook County Recorder of Deeds as Document No. 95159916 and
(ii) the asserted pre-petition liens that secure the Internal Revenue
Service's claim for $155,885.59 plus statutory interest against Debtor's
estate.
THEREFORE, upon the foregoing findings of fact and conclusions of law and
after due deliberation it is hereby ORDERED:
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1. The Auction and the sale of Debtor's Assets to BC Ltd. upon the terms
and conditions of this Order and of the Final Sale Order are hereby authorized
and approved in their entirety. Debtor is hereby authorized, directed and
empowered to take whatever steps as may be necessary or appropriate to convey
the Assets to BC Ltd. and to execute, deliver, implement and fully perform all
instruments and documents which may be required, reasonably necessary or
desirable to effectuate this result. Debtor's authorization to take this action
shall not require board of director approval or any other approvals.
2. The sale of the Assets to the Buyer is and shall be free and clear of
all liens, claims and encumbrances, except only (i) the asserted mechanic's
lien of H. J. Mohr & Sons Company recorded on March 9, 1995 by the Cook County
Recorder of Deeds as Document No. 95159916 and (ii) the asserted pre-petition
liens that secure the Internal Revenue Service's claim for $155,885.59 plus
statutory interest against Debtor's estate (collectively, the "Excluded
Liens").
3. This Order is and shall be effective as a determination that, upon the
closing of the sale of the Assets from Debtor to BC Ltd., all liens, claims and
encumbrances existing as to the Assets conveyed thereto, except the Excluded
Liens, have been and are hereby adjudged and declared to be unconditionally
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released, discharged and terminated, and that the conveyances described herein
have been effected free and clear of all such liens, claims and encumbrances.
4. The transfers of the Assets to BC Ltd. pursuant to this Order shall be
exempt from any transfer tax or stamp tax pursuant to section 1146(c) of the
Bankruptcy Code.
5. This Order and the Final Sale Order shall be binding upon any trustee
appointed in this case or in any subsequent proceeding.
6. Nothing contained in this Order shall be construed as releasing or
relieving BC Ltd., or any other entity, of liability, if any, to the United
States or the State of Illinois or the Metropolitan Waste Reclamation District
of Chicago (MWRD) which they may have under any environmental law and/or
governmental police and regulatory statute as the owner or operator of land,
property or assets that are being acquired as a part of the sale. Nothing in
this Order shall be construed as restricting, abridging, impairing or reducing
the power, if any, which the United States or the State of Illinois may have to
enforce applicable environmental or regulatory laws against BC Ltd. or other
purchaser of the Assets that are being acquired as a part of the sale. Nothing
in this Order shall be construed as approving the transfer of any permits,
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licenses, certifications or approvals in violation of any applicable laws
regarding such transfers.
7. Notwithstanding the provisions of the preceding paragraph, and to the
extent required by the authorities charged with the issuance and or transfer of
any permits, licenses and certifications previously issued to Debtor, BD Ltd.
or other purchaser shall promptly submit to such authorities the appropriate
applications governing the continued use or transfer thereof. Agreed by
MWRD and Illinois EPA by their counsel, BC Ltd. shall be entitled to use and
operate Debtor's tangible Assets under the existing permits, licenses and
certifications granted to Debtor by those [bodies] through and including
December 30, 1996.
8. Pursuant to paragraph 3(b) of the Final Sale Order, Debtor shall
immediately produce or make available for copying to BC Ltd., through its
counsel, copies of and originals for inspection and all of Debtor's minute
books and stock records books. Furthermore, pending further Order of Court, no
party or their officers or agents shall remove from the McCook Facility any
other corporate or business records or books of Debtor.
9. To the extent that the terms of this Order conflict with the terms of
the Interim Order or the Final Sale Order, the terms of this Order shall
control.
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10. The Court reserves jurisdiction to enforce this Order, the Final Sale
Order and any other agreements, proceedings and disputes related thereto.
[11. Parties seeking to enforce paragraph 8 hereof may serve copies of
this Order on any individuals that they believe should be bound thereby and
file proof of such service.]
Dated: December 20, 1996 ENTER:
/s/ JACK B. SCHMETTERER
------------------------------
UNITED STATES BANKRUPTCY JUDGE
Michael H. Elam
Leroy G. Inskeep
Janice L. Duban
RUDNICK & WOLFE
203 North LaSalle Street
Suite 1800
Chicago, IL 60601-1293
(312) 368-4000
7
