-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IdD10br2LIQBlIGsBNT05zKz2O7Mwsn8hlnBsLzzteXgyarw5JkBjHPSFBQtuz4g VAZo19dbHhPJFLIhyaq3SA== 0001010412-99-000068.txt : 19990405 0001010412-99-000068.hdr.sgml : 19990405 ACCESSION NUMBER: 0001010412-99-000068 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19981215 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990402 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VITROSEAL INC CENTRAL INDEX KEY: 0000773603 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 002-99110-NY FILM NUMBER: 99586565 BUSINESS ADDRESS: STREET 1: 9005 COBBLE CANYON LANE CITY: SANDY STATE: UT ZIP: 84093 BUSINESS PHONE: 7184388788 MAIL ADDRESS: STREET 1: 9005 COBBLE CANYON LANE CITY: SANDY STATE: UT ZIP: 84093 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20509 FORM 8-K-A1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act December 15, 1998 Date of Report (Date of Earliest Event Reported) VITRISEAL, INC. (Exact Name of Registrant as Specified in its Charter) Nevada 2-99110-NY 11-2751537 (State or other juris- (Commission File No.) (IRS Employer diction of incorporation) I.D. No.) 12226 South 1000 East, Suite 9 Draper, Utah 84020 (Address of Principal Executive Offices) (801)553-8785 Registrant's Telephone Number A.X.R. Development Corporation, Inc. 9005 Cobble Canyon Lane Sandy, Utah 84093 (Former Address of Principal Executive Offices) Item 1. Changes in Control of Registrant. (a) On December 15, 1998, the Registrant and Dancor, Inc., a Delaware corporation ("Dancor"), executed an Agreement and Plan of Reorganization (the "Plan") as outlined in the Letter of Intent between the Registrant and Dancor dated December 14, 1998 (see the 8-K Current Report dated December 15, 1998, Item 7, which has been previously filed with the Securities and Exchange Commission and which is incorporated herein by reference), whereby the Registrant, subject to the approval of persons owning not less than 80 percent of outstanding voting securities of Dancor, would acquire a controlling interest in Dancor, and Dancor would become a majority owned subsidiary of the Registrant. The initial offer in a stock for stock exchange was made only to "accredited investors" and the first 35 non-accredited investors who executed and delivered a copy of the Plan. As of the closing on March 18, 1999, Dancor stockholders representing 16,636,464 of the 19,500,000 shares to be issued under the Plan (approximately 85% of the Dancor stockholders shares) had executed and delivered the Plan. It is the intention of management to continue to attempt to acquire 100% of the outstanding voting securities of Dancor, on the same terms and conditions afforded the Dancor stockholders who have already become party to the Plan. The Plan was also adopted, ratified and approved by the Board of Directors of the Company by unanimous written consent in accordance with the Bylaws of the Registrant and the Nevada Revised Statues. The former principal stockholders of the Registrant and their percentage of ownership of the outstanding voting securities of the Registrant prior to the completion of the Plan were: David C. Merrell, former President and Director, owned 515,217 shares of the Registrant (51.5%); Corie Merrell, former Secretary/Treasurer and Director (and wife of David C. Merrell), owned no shares of the Registrant; and Joe K. Johnson, a stockholder of the Registrant and a finder in the transaction, owned 184,783 shares of the Registrant (including the 150,000 shares registered on Form S-8 which are referred to in the following paragraph). The pre-Plan outstanding shares were 1,000,000 (including 150,000 shares registered on Form S-8 of the Securities and Exchange Commission, the issuance of which was conditioned upon the completion of the Plan; taking into account the 16,636,463 shares of "restricted securities" issued under the Plan, there are currently 17,636,464 shares of common stock of the Registrant issued and outstanding. The source of the consideration used by Dancor and the stockholders to acquire their respective interests in the Registrant was the exchange of 100% of the outstanding common stock of Dancor pursuant to the Plan. The basis of the "control" by the Dancor stockholders is stock ownership or positions held. Pursuant to the Plan, the then members of the Board of Directors and executive officers resigned, in seriatim, and the persons named in paragraph (b) below were designated to serve as directors and executive officers of the Registrant, until the next respective annual meetings of the stockholders and directors of the Registrant or until their prior resignations or terminations. (b) To the knowledge of management and based upon a review of the stock ledger maintained by the Registrant's transfer agent and registrar, the following table sets forth the beneficial ownership of persons who own more than five percent of the Registrant's common stock as of the date hereof, and the share holdings of new management, to wit: Name Shares Owned % Culley W. Davis 55,836 .003% Pinnacle Enterprises, Ltd.* 1,729,464 9.80% T-6G, Ltd. 3,173,376 17.99% Daniel L. Corbin 1,410,375 8.00% John W. Nagel --0 0% Bruce H. Haglund, 198,336 1.12% Dennis A. Repp 321,000 1.82% Officers and Directors Collectively * Culley W. Davis, as the President of Pinnacle Enterprises, Inc., has sole voting and investment power with respect to the shares owned by Pinnacle Enterprises, Ltd; Culley W. Davis personally owns 55,836 (.003%) which are not included in this number. Item 2. Acquisition or Disposition of Assets. See Item 1 of this Report. The consideration exchanged under the Plan was negotiated at "arms length" between the directors and executive officers of the Registrant and Dancor, and the members of the Board of Directors of the Registrant used criteria used in similar proposals involving the Registrant in the past, including the relative value of the assets of the Registrant; its present and past business operations; the future potential of Dancor; its management; and the potential benefit to the stockholders of the Registrant. The members of the Board of Directors determined in good faith that the consideration for the exchange was reasonable, under these circumstances. No director, executive officer or person who may be deemed to be an "affiliate" of the Registrant had any direct or indirect interest in Dancor prior to the completion of the Plan, except Joe K. Johnson, who owned 18,000 shares of Dancor, and who will receive 54,000 of the Registrant's "restricted securities" issued under the Plan. DESCRIPTION OF THE BUSINESS The Company The Company has developed, tested and patented a proprietary coating technology which it has named VitrosealTM, "The Optimal Clear Coating Process." The Company intends to engage in licensing, joint ventures and the sale of rights to this product to strategically selected coatings manufacturers. The Company plans to earn a reputation in the coatings industry for excellent clear coating technology, aggressive technology development, strong legal support and savvy business management. Through development of these qualities, the Company believes it will be in position to directly license its technology to leading manufacturers in the coatings industry. Product The Company's patented process, VitrosealTM, makes clear, protective and environmentally friendly coatings. The technology has the promise of being a major breakthrough in the industrial coatings market. Key benefits of VitrosealTM include: Exceptional Coating Performance: _ excellent surface adhesion, _ optimal hardness (4H pencil hardness), _ excellent brightness (water white), _ excellent film flexibility, _ versatile applicability to a wide variety of metals, _ chip resistance, _ low film weight, _ corrosion resistant, _ high dielectric strength, and _ thermal cycling resistance. Low Cost: _ raw material costs at 80% less than conventional coatings, _ heat cure compatible with existing equipment, _ no environmental control costs, and _ fast cure to full hardness for faster manufacturing production lines. Environmental Compliance: _ waterborne, _ no volatile organic compounds (VOCs), _ no isocyanates, _ no lead, _ no chromates, _ no cadmium, _ no chlorine or chloro-compounds, _ no formaldehyde, and _ ingredients "generally regarded as safe" by the FDA for food contact. During the past two years, the Company has expended over $1,500,000 on research and development of the characteristics, qualities and uses of its VitrosealTM technology and its others products and processes. Industry Coatings are used in virtually every manufacturing industry to protect, preserve and enhance a wide variety of products. Commonly coated products are found in the transportation, container, metals, wood and non- wood furniture, equipment, appliance, paper and machinery industries. Because the coatings industry is so vast, it is generally a profitable and financially stable industry. The U.S. OEM coatings market consists of thousands of manufacturers in the United States who buy and use hundreds of different types of coatings. Some product sectors, such as military coatings or powder coatings, contain few coatings suppliers who heavily dominate the market niche. Other product sectors, such as appliance, wood and metal coatings, have many suppliers, most of whom have small shares of the market. Du Pont, PPG Industries, Morton International, Valspar, Akzo Nobel and BASF are all companies that can be considered giants of the U.S. OEM coatings market. The coating manufacturers compete aggressively on quality, technological excellence, price and changing industry trends. Recent major market trends in the industry include the search for environmentally friendly coatings, for less expensive organic chemical raw materials and for more durable coatings. The need for more environmentally friendly coatings is an issue that the entire U.S. coatings industry must face. Many OEMs have met current environmental emissions standards by using incinerators to burn volatile organic compounds (VOCs) emitted during the application and curing of coatings. Increasing environmental regulation, however, is creating a need for products that do not emit VOCs. Many manufacturers are turning from solvent-based coatings to other technologies such as waterborne, high- solids, powder and UV-cured coatings to cope with the more stringent environmental regulations. Each of these relatively new technologies has its own unique requirements for application and curing, along with limitations, but each provides an alternative to the traditional solvent- based coatings that are coming under increased scrutiny and regulation. Rising end-product quality expectations, due to rising product prices, are driving consumers and corporate customers to expect more durable coatings from coatings manufacturers. These obstacles are forcing significant and fundamental changes in the coatings industry and every aspect of the design, manufacture and application of coatings. The recent changes in the coatings industry have created tremendous opportunities, as exemplified by the increased demand for powder coatings. Powder coatings are considered by many to be an environmentally friendly alternative. These coatings contain no solvents and emit very low VOCs while providing significant chip and mar resistance. Powder coatings have become the fastest growing finishing technology in North America, currently representing more than 10% of the total coatings market. Most of this growth has been in the last six to seven years. Powder coatings do not produce an attractive, smooth finish; and are not generally used on surfaces where appearance is highly valued. For example, the automotive industry does not use powder clear coats on the exterior of automobiles. The industry is, nevertheless, conducting a great deal of research on powder coatings to overcome the technology's inability to produce a smooth surface with an even thickness. The increased use of and research in powder coatings is an indication of the changing environment in the coatings industry, and it shows the immense opportunities present in todays market. Market Opportunities Market opportunities in the coatings industry are enormous and encompass a wide variety of areas. Recently passed environmental regulations, escalating costs of organic chemical raw materials, heightened expectations for performance and increased demand for all types of coatings have forced the industry to search for new technologies to answer the toughest question it faces - whether the industry can find a coating that simultaneously provides high performance, low cost and environmental friendliness. These external conditions acting on the industry are causing an internal industry revolution which is creating tremendous market opportunities. Because the coatings industry encompasses so many different types of customers, a variety of market opportunities exist for new market entries. The transportation segment is key to the OEM coatings market. This segment yields the highest amount of revenue and sets the pace for the rest of the industry. It has been said that where the transportation coatings segment goes, the rest of the product coatings industry follows. This segment is presently under strong pressure to make fundamental changes in the coatings it uses. Unrelenting environmental control regulations and customer expectations that climb in synch with new-car prices are driving the industry to change. The Company's ability to enter the industry will be facilitated through strategic alliances with sound companies already successfully serving as suppliers to specific market segments, i.e., wheel coaters, coatings manufacturers and "tier 1" automotive O.E.M. suppliers. The Company's markets will be continually expanded through ongoing research and development to produce additional proprietary technologies, improve application knowledge and verify by continued testing that the coatings meet user specifications. Market Analysis To gain strong industry insight, the Company has purchased and commissioned a series of market studies by Frost & Sullivan, a firm recognized for its specialization in coatings industry analysis and forecasting. Based on their findings, the Company has estimated the world OEM coatings market in 1995 to be $7.22 billion, with shipments of approximately 560 million gallons of coating product. The U.S. dominates the world market in coatings production, exporting 20 to 28 times what it imports, in revenue dollars. The five largest export markets, in descending order, are Canada, Mexico, Japan, Hong Kong and the United Kingdom. The 1995 U.S. OEM coatings market was estimated at $4.25 billion, and the market is projected to grow steadily through the year 2000 at a compound annual growth rate of 5.2%, or to $5.44 billion. The largest and fastest growing segment is transportation, which represents 38% of the U.S. market, or $1.6 billion. The segment is expected to grow at a rate of 5.5% through 2000, or to $2.1 billion. This segment also commands the highest revenue per equivalent gallon of coating sold at $21.02/gallon. Other major segments of the industry include metal and container, wood and non-wood, appliance and machinery and paper, representing 27%, 21%, 12%, and 2% of the U.S. market, respectively. The major market segments which make up the coatings industry are very broad and encompass many manufacturing processes that make only limited use of clear coats. Clear coatings, however, are generally the final appearance coating and command the highest price in the coatings market. Because each coating has unique uses, generalizations about market segments can not be used as solid quantitative bases for understanding the market potential for clear coats within the segments, and do not suggest a simple direction for introduction of a breakthrough clear coat technology. To gain stronger insight into the market for clear coat technology and to create realistic estimates of market potential, the Company has gone further into these segments to identify markets in which clear coats are heavily used in manufacturing. Based on Frost & Sullivan market data and the Company's understanding of the coatings industry, the Company has selected key markets for pursuit. The markets that the Company will concentrate on during the nest few years includes: automotive wheel, OEM automotive and specialty and metal finishers. The automotive wheel market consists of both after market and OEM wheel manufacturers. The Company will begin by targeting after market wheel coaters and makers, a market that has low barriers to entry and is actively seeking value-added technologies such as VitrosealTM. Simultaneously, the Company will work to overcome entry barriers in OEM wheels, which are higher due to the need to demonstrate that VitrosealTM meets the specifications of OEM automotive manufacturers. The Company believes that success with after market wheel manufacturers and laboratory verification of VitrosealTM compliance to OEM wheel specifications will quickly overcome barriers in the OEM wheel market and will lead to rapid adoption of the VitrosealTM process. The strategy behind the Company's choice is to initially move into a market that will generate quick cash flow for the Company, while it works to overcome barriers in larger more sophisticated market niches that will take greater time to penetrate. The Company's decision to enter the automotive wheel market now is an important strategic move because it will act as a proving ground for the Company to demonstrate the benefits of the technology, develop name recognition and establish a track record for performance, all of which will be key elements for overcoming barriers in the larger OEM automotive market. The Company has chosen to enter the transportation segment because it possesses characteristics that suggest strong opportunities for profitable licensing and business relationships. Among these key characteristics are the following: The segment is the most responsive to competitive threats; it typically leads the industry in technology adoption; and revenue per gallon of transportation coatings is the highest in the coatings industry. Research and Development In January 1997, the Company retained the services of Hamlin M. Jennings, Ph.D., a professor at Northwestern University, as an independent contractor on a month-to-month basis as a technical specialist for Dancor, to perform development work to enable VitrosealTM to be sufficiently elastomeric or flexible for commercialization, and research the properties of VitrosealTM and prior art to develop a scientific explanation of the VitrosealTM process. The Company believes Dr. Jennings research will provide the Company with additional research findings enabling the Company to more effectively market the VitrosealTM technology. Insurance The Company has obtained a general liability insurance policy and believes that the insurance in place will be adequate for the Company's anticipated immediate and near future needs. Employees At present, the Company has a full-time staff of one salaried employee and one part-time employee. None of these employees is represented by a labor union. The Company considers its relations with its employees to be excellent. Properties The Company entered into a one year lease in March 1999 for a primary business office located at 1101 Dove Street, Suite 235, Newport Beach, California, containing approximately 720 square feet with a monthly rental of $1,188. The Company believes it has a good relationship with the Landlord and can remain in the facility for the term of the lease. The Company also recently entered into a one year lease in March 1997, for a research facility located at 1801 Maple Avenue, Evanston, Illinois, containing approximately 700 square feet with a monthly rental of $1,167. Currently the Company continues to rent the space on a month to month basis. The research facility was opened to provide Dr. Jennings with necessary research space close to his home and full time work. Legal Proceedings The Company has no pending or threatened litigation. DIRECTORS, OFFICERS AND SIGNIFICANT EMPLOYEES The following individuals are the directors, nominees to become directors, officers and significant employees of the Company along with their age, capacity and terms of office: Name Title/Position Age Culley W. Davis Chairman of the Board, CEO, Director 43 Daniel L. Corbin President, Director 43 Dennis A. Repp Director 59 John W. Nagel Chief Financial Officer, Director 58 Bruce H. Haglund, Esq. Secretary, Director 47 Culley W. Davis Mr. Davis became the chairman, CEO and a director at the time of the acquisition and he has been the Chairman of the Board, the Chief Executive Officer, and a Director of Dancor since its formation in April 1992. He is also President and a Director of Pinnacle Enterprises, Inc., and the general partner of Pinnacle Enterprises, Ltd., a California Limited Partnership. Mr. Davis has specialized in real estate development and new business start-ups, acquisitions, mergers, restructuring and initial public stock offerings. He has over 17 years experience with extensive business organization, financing and leadership skills in arranging private placements, structuring transactions, conducting negotiations, organizing public relations and providing sales and management strategies for domestic and international operations. He has co-founded or founded several corporations and served as their presidents. As President and co-founder of Vencor International, Inc., he was one of the key people responsible for merging and taking the company public on the OTC market in 1987. Mr. Davis has held leadership positions and been an officer, director, or general partner in several entities. In May 1996, Mr. Davis entered into a stipulation for judgment and permanent injunction (the "Injunction") with the Department of Finance of the State of Idaho (the "State") in connection with a complaint (the "Complaint") filed by the State alleging that Mr. Davis violated provisions of the Idaho Securities Act. In accordance with the Injunction, Mr. Davis paid a $50,000 fine to the State and was permanently enjoined from violating the Idaho Securities Act, from offering or selling unregistered securities in Idaho, and from transacting securities business in Idaho without applicable securities licenses. Daniel L. Corbin Mr. Corbin became President and a director of the Company at the time of the acquisition, and has been the President and a Director of Dancor since its formation in April 1992. He was the founder, and from 1980 until 1984, the President of Snuggles Corporation, a California-based private company. He patented and developed the world's first form fitted reusable cloth infant/adult diaper with Velcro . In 1984, he merged Snuggles with Vencor International, Inc. and was one of the key individuals responsible for taking the company public on the OTC market in 1987. More recently, Mr. Corbin acquired a controlling interest in "Fins and Flippers," a privately-held California retail sales corporation. Mr. Corbin has also had extensive experience in organization and management development as the Marketing Director for Press Steel Corporation, and from 1979 to 1980, as Vice President of Sales for American Data Industries. For the last four years, Mr. Corbin has analyzed and evaluated the sales and business opportunities in the worldwide coatings industry and initiated the acquisition of the VitrosealTM technology for the Company. Dennis A. Repp Mr. Repp became a director of the Company at the time of the acquisition and has been a Director of Dancor since May 1996. He has been a business consultant and private investor since 1980. Through the years, he has also founded several companies, primarily in the computer and electronics field, and provided continuing service to these companies through board membership. Prior to 1980, Mr. Repp served as the President of Union Bank's venture capital subsidiary. He has also previously managed the venture capital investments for Allstate Insurance Company. Mr. Repp holds an M.S. degree in economics and an M.B.A. degree in finance. John W. Nagle Mr. Nagel became the CFO and a director of the Company at the time of the acquisition and has been the CFO and a director of Dancor since September 1998. From 1988 to August 1998, Mr. Nagel served as Director of Finance for WVUE Television of New Orleans, Louisiana. During the period of 1983 to 1988, he was operator and part owner of several franchised ice cream parlors. From 1980 to 1983, Mr. Nagel held positions in administration and management for The Nautilus Group, Inc., a poultry incubation equipment manufacturer and portable electronic stage lighting system manufacturer. From 1968 to 1980, Mr. Nagel worked for Arthur Anderson & Co. in numerous capacities relating to consulting for the design and implementation of computer-based management information systems. He served as an officer in the U.S. Navy Supply Corps from 1962 to 1966. Mr. Nagel was awarded his M.B.A. degree from Harvard University and his B.S. degree in accounting from Ohio State University. Bruce H. Haglund, Esq. Mr. Haglund became the Secretary and a director of the Company at the time of the acquisition and has served as the Secretary of Dancor since September 1998. Mr. Haglund has practiced law in Orange County, California since 1980. Mr. Haglund is a principal in the law firm of Gibson, Haglund & Johnson in Orange County, California, where he has been engaged in the private practice of law since 1980. He is member of the Board of Directors of Santa Barbara Restaurant Group, Inc. and the Secretary of Metalclad Corporation, a public company whose stock is traded on the NASDAQ Small Cap Market. Mr. Haglund is also the Secretary and a member of the Board of Directors of Aviation Distributors, Inc. and Renaissance Golf Products, Inc., public companies whose stock is traded on the OTC/BB. He is a graduate of the University of Utah College of Law. Item 3. Bankruptcy or Receivership. None; not applicable. Item 4. Changes in Registrant's Certifying Accountant. None; not applicable. Item 5. Other Events. On January 19, 1999, the Company filed a Certificate of Amendment to the Articles of Incorporation changing the name of the Company to "VitroSeal, Inc." On February 18, 1999, the Company filed another Certificate of Amendment to the Articles of Incorporation changing the name to "VitriSeal, Inc." Item 6. Resignations of Registrant's Directors. See Item 1. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Business Acquired. Audited financial statements of Dancor are currently being prepared, and will be filed with the Securities and Exchange Commission as an amendment to this Report on or about June 1, 1999, which is 75 days after the completion of the Plan on March 18, 1999. (b) Pro Forma Financial Information. Pro Forma financial statements, taking into account the completion of the Plan, are being prepared and will be filed on or before June 1, 1999, which is 75 days after the completion of the Plan on March 18, 1999. (c) Exhibits. 3.1 Certificate of Amendment to the Articles of Incorporation of Advanced Coating Technologies, Inc. changing the name to VitroSeal, Inc. 3.2 Certificate of Amendment to the Articles of Incorporation of VitroSeal, Inc. changing the name to VitriSeal, Inc. 10 Plan of Reorganization between VitriSeal, Inc. and Dancor, Inc. dated March 18, 1999 Exhibit A-List of Dancor Shareholders and number of VitriSeal Shares Exhibit B-Letter of Intent Exhibit C-Schedule of Option Holders Exhibit D-Schedule of Exceptions Exhibit E-Schedule of Patents Exhibit F-Bank Account Information Exhibit G-VitroSeal Exceptions Exhibit H-VitroSeal Financial Statements including 10-QSB for the Quarter ended September 30, 1998 and 10- KSB for the Year ended December 31, 1997 Exhibit I-VitriSeal Bank Accounts Exhibit J-VitriSeal Form of Power of Attorney 99 Press Release regarding same dated March 18, 1999 Item 8. Change in Fiscal Year. None; not applicable. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. VITRISEAL, INC. Date: 4/2/99 By:/s/Daniel Corbin --------- -------------------------------------- Daniel Corbin President and Director Date: 4/2/99 By:/s/John W. Nagel --------- -------------------------------------- John W. Nagel Chief Financial Officer and Director Date: 4/2/99 By:/s/Bruce H. Haglund --------- -------------------------------------- Bruce H. Haglund, Esq. Secretary and Director Date: 4/2/99 By:/s/Culley W. Davis --------- -------------------------------------- Culley W. Davis Chairman of the Board Chief Executive Officer and Director Date: 4/2/99 By:/s/Dennis A. Repp --------- -------------------------------------- Dennis A. Repp Director EX-3.1 2 CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ADVANCED COATING TECHNOLOGIES, INC. We, the undersigned, David C. Merrell, President, and Corie Merrell, Secretary, of Advanced Coating Technologies, Inc., a Nevada corporation (the "Corporation"), do hereby certify: I Pursuant to Section 78.390 of the Nevada Revised Statutes, the Articles of Incorporation of the Corporation shall be amended as follows: The name of the Corporation is "VitroSeal, Inc." II The foregoing amendment was adopted by Unanimous Consent of the Board of Directors pursuant to Section 78.315 of the Nevada Revised Statutes, and by Consent of Majority Stockholder pursuant to Section 78.320 of the Nevada Revised Statutes. III The number of shares entitled to vote on the amendment was 565,217. IV The number of shares voted in favor of the amendment was 515,217, with none opposing and none abstaining. /s/David C. Merrell _______________________________________ David C. Merrell, President /s/Corie Merrell _______________________________________ Corie Merrell, Secretary STATE OF UTAH ) ) ss COUNTY OF SALT LAKE ) On the 19th day of January, 1999, personally appeared before me, a Notary Public, David C. Merrell, who acknowledged that he is the President of Advanced Coating Technologies, Inc., and that he is authorized to and did execute the above instrument. /s/Sheryl Ross __________________________________________ NOTARY PUBLIC (Notary Seal) STATE OF UTAH ) ) ss COUNTY OF SALT LAKE ) On the 19th day of January, 1999, personally appeared before me, a Notary Public, Corie Merrell, who acknowledged that she is the Secretary of Advanced Coating Technologies, Inc., and that she is authorized to and did execute the above instrument. /s/Sheryl Ross __________________________________________ NOTARY PUBLIC (Notary Seal) EX-3.2 3 CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF VITROSEAL, INC. We, the undersigned, David C. Merrell, President, and Corie Merrell, Secretary, of VitroSeal, Inc., a Nevada corporation (the "Corporation"), do hereby certify: I Pursuant to Section 78.390 of the Nevada Revised Statutes, the Articles of Incorporation of the Corporation shall be amended as follows: The name of the Corporation is "VitriSeal, Inc." II The foregoing amendment was adopted by Unanimous Consent of the Board of Directors pursuant to Section 78.315 of the Nevada Revised Statutes, and by Consent of Majority Stockholder pursuant to Section 78.320 of the Nevada Revised Statutes. III The number of shares entitled to vote on the amendment was 665,309. IV The number of shares voted in favor of the amendment was 515,218, with none opposing and none abstaining. /S/David C. Merrell _______________________________________ David C. Merrell, President /s/Corie Merrell _______________________________________ Corie Merrell, Secretary STATE OF UTAH ) ) ss COUNTY OF SALT LAKE ) On the 17th day of February, 1999, personally appeared before me, a Notary Public, David C. Merrell, who acknowledged that he is the President of VitroSeal, Inc., and that he is authorized to and did execute the above instrument. /s/Sheryl Ross __________________________________________ NOTARY PUBLIC (Notary Seal) STATE OF UTAH ) ) ss COUNTY OF SALT LAKE ) On the 17th day of February, 1999, personally appeared before me, a Notary Public, Corie Merrell, who acknowledged that she is the Secretary of VitroSeal, Inc., and that she is authorized to and did execute the above instrument. /s/Sheryl Ross __________________________________________ NOTARY PUBLIC (Notary Seal) EX-10 4 AGREEMENT AND PLAN OF REORGANIZATION FOR THE ACQUISITION OF ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF DANCOR, INC. BY ADVANCED COATING TECHNOLOGIES, INC. THIS AGREEMENT AND PLAN OF REORGANIZATION, is executed this 23th day of December, 1998, by and among stockholders of DANCOR, INC., whose names are listed in Exhibit "A," a copy of which is attached hereto and incorporated herein by this reference (the "Stockholders"), DANCOR, INC. ("DANCOR"), a Delaware corporation, and ADVANCED COATING TECHNOLOGIES, INC. ("ACT") (formerly A.X.R. Development Corporation, Inc.), a Nevada corporation. RECITALS: A. Whereas, the Stockholders together own, beneficially and of record, all of the issued and outstanding shares of the common stock of DANCOR (hereinafter the shares of common stock are referred to as the "Exchanged Shares") as set forth in Exhibit "A," a copy of which is attached hereto and incorporated herein by this reference; and B. Whereas, ACT desires to purchase from each of the Stockholders all of the outstanding Exchanged Shares owned by them in exchange for an aggregate of nineteen million five hundred thousand (19,500,000) restricted shares (the "ACT Shares") of the common stock of ACT, and each of the Stockholders desires to exchange their Exchanged Shares for the ACT Shares, the number of the Exchanged Shares being surrendered and the number of ACT Shares being received by each of the Stockholders is as set forth in Exhibit "A" hereto; and C. Whereas, ACT, acting through DAVID C. MERRELL ("MERRELL"), its President and Chief Executive Officer, and CULLEY W. DAVIS ("DAVIS"), Chairman of the Board of Directors of DANCOR, have heretofore entered into a letter of intent as set forth in a letter dated December 10, 1998, a copy of which is attached hereto as Exhibit "B" (the "Letter Agreement"), providing for the acquisition by ACT from each of the Stockholders of all of the Exchanged Shares in exchange for the ACT Shares and on certain additional terms and conditions specified therein; and D. Whereas, the parties hereto desire to set forth the definitive terms and conditions upon which each of the Stockholders shall sell to ACT, and ACT shall purchase from each of the Stockholders, all of the Stock of DANCOR owned by each of them, as contemplated by and in furtherance of the Letter Agreement; and E. Whereas, it is intended that DANCOR, ACT, and their respective Stockholders will recognize no gain or loss for U.S. Federal income tax purposes under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder as a result of the Reorganization; NOW, THEREFORE, in consideration of the foregoing premises and the mutual representations, warranties, covenants, and agreements contained herein, and in accordance with the applicable provisions of Nevada corporate law, the parties hereto covenant and agree as follows: ARTICLE I THE REORGANIZATION 1.1 The Reorganization. As of the Closing (as defined in Section 1.2 below) of this Agreement, the Stockholders shall surrender all of their Exchanged Shares in exchange for the ACT Shares in the amounts set forth opposite the respective names of the Stockholders in Exhibit "A." The transactions contemplated hereby are intended to qualify as a tax-free reorganization under the Code, and the parties hereto agree to report them as such. 1.2 Closing. The closing of the Reorganization (the "Closing") shall take place (i) at the offices of DANCOR, located at 12226 East 1000 East, Suite 10, Draper, Utah 84020 at 10:00 a.m., local time, on January 29, 1999; or (ii) at such other time and place and on such other date as DANCOR and ACT agree (the "Closing Date"). The Closing Date shall be the effective date of the Reorganization. If the Closing fails to occur by February 16, 1998, or by such later date to which the Closing may be extended as provided herein above, this Agreement shall automatically terminate, all parties shall pay their own expenses incurred in connection herewith, and neither ACT, DANCOR, nor any of the Stockholders shall have any further obligations hereunder. The Closing shall be contingent upon the agreement of Stockholders holding a minimum of 80% of the outstanding Exchange Shares. At such time as Stockholders holding a minimum of 80% of the Exchanged Shares have entered into this Agreement, the parties shall proceed with the Closing. 1.3 Taking of Necessary Actions. DAVIS, acting as the representative of the Stockholders (the "Representative"), DANCOR, and ACT shall each take all such actions at the Closing as may be reasonably necessary or appropriate in order to effectuate the transactions contemplated hereby and to make the Reorganization effective as of the Effective Date. If at any time after the Effective Date any further action is necessary or desirable to carry out the purposes of this Agreement and to vest ACT with full title to all of the Exchanged Shares, the Representative, on behalf of the Stockholders, and the officers and directors of DANCOR and ACT, at the expense of ACT, shall take all such necessary or appropriate action. To effect the intents and purposes of this Agreement, the following actions shall be taken at the Closing, shall be deemed to occur simultaneously, and the accomplishment of which actions by the parties whose duty it is to perform such actions is duly acknowledged by the execution of this Agreement by the parties hereto: 1.3.1 Election of Directors. At the Closing, ACT shall deliver to the Representative letters of resignation of the incumbent directors of ACT and a Certificate of Secretary of ACT evidencing the adoption by the Board of Directors of ACT of resolutions electing and appointing (i) DAVIS, DANIEL CORBIN, DENNIS A. REPP, JOHN W. NAGEL, and BRUCE H. HAGLUND as the members of the Board of Directors of ACT, and (ii) DAVIS as Chairman of the Board and Chief Executive Officer, DANIEL CORBIN as President, JOHN W. NAGEL as Chief Financial Officer, and BRUCE H. HAGLUND as Secretary of ACT. 1.3.2 Stockholder Approvals. At the Closing, the Representative shall deliver a Certificate of Secretary evidencing the authorization of the execution, delivery, and performance of this Agreement by the Stockholders. 1.3.3 Delivery of Exchanged Shares to ACT; Delivery of the ACT Shares to the Common Stockholders. At the Closing, in consideration of the tender by the Stockholders of their Exchanged Shares, ACT shall deliver the ACT Shares to the Representative, on behalf of the Stockholders. 1.3.4 Assumption of Obligations to Issue Shares. At the Closing, ACT will assume the obligations of DANCOR with respect to the contingent issuance of shares pursuant to DANCOR s stock option plan and commitments to issue shares as set forth in Exhibit C, a copy of which is attached hereto and incorporated herein by this reference. 1.3.5 Legal Opinions. At the Closing, Counsel to ACT shall deliver to the Representative an opinion of counsel addressed to the Stockholders in the form reasonably satisfactory to counsel for DANCOR. At the Closing, counsel to DANCOR shall deliver to the Representative an opinion of counsel addressed to ACT in the form reasonably satisfactory to counsel for ACT. ARTICLE II EXCHANGE OF SHARES 2.1 Exchange of Shares. Subject to the terms and conditions of this Agreement, on the Closing Date, by virtue of the Reorganization and without any further action on the part of the Stockholders, DANCOR, or ACT, all of the Exchanged Shares shall be exchanged for the ACT Shares in the amounts to the Stockholders as set forth in Exhibit A. Each share of the ACT Shares shall be validly issued, fully paid, and nonassessable shares of the Common Stock of ACT as of the Closing Date. 2.2 Exchange of Certificates. At the Closing, ACT shall present and deliver to the Representative the stock certificates representing all of the ACT Shares. Upon delivery thereof, the Representative shall present and deliver to ACT all of the certificates representing the Exchanged Shares, or lost certificate affidavits in form acceptable to ACT. 2.3 Further Rights. From and after the Closing Date, holders of certificates formerly evidencing the Exchanged Shares shall cease to have any rights as stockholders of DANCOR, except as provided herein or by law. Those persons identified in Exhibit C shall have the right to the number of shares of ACT as set forth in Exhibit C. ARTICLE III REPRESENTATIONS AND WARRANTIES OF DANCOR Except as set forth in the Schedule of Exceptions attached hereto and incorporated herein by reference as Exhibit D, DANCOR represents and warrants to, and covenants with, ACT, as of the date hereof and as of the Closing Date, as follows: 3.1 Organization and Corporate Power. DANCOR is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which such qualification is required and where the failure to be so qualified would have a materially adverse effect upon DANCOR. DANCOR has all requisite corporate power and authority to conduct its business as now being conducted and to own and lease the properties which it now owns and leases. True and correct copies of the Articles of Incorporation as amended to the Closing Date, certified by the Secretary of State of Delaware, the Bylaws of DANCOR as amended to the Closing Date, the resolutions of DANCOR s directors authorizing the execution, delivery, and performance of this Agreement, the approval by the Stockholders will be delivered to ACT at the Closing, all certified by the President and the Secretary of DANCOR. 3.2 Authorization. DANCOR has full corporate power, legal capacity, and authority to enter into this Agreement, to execute all attendant documents and instruments contemplated hereby, and to perform all of its obligations hereunder. This Agreement, and each and every other agreement, document and instrument to be executed by DANCOR in connection herewith, has been effectively authorized by all necessary action on the part of DANCOR, including without limitation the approvals of DANCOR s Board of Directors (subject to approval of the Stockholders), which authorizations remain in full force and effect, have been duly executed and delivered by DANCOR. No other authorizations or proceedings on the part of DANCOR, other than approval of the Stockholders, are required to authorize this Agreement and/or the transactions contemplated hereby. This Agreement, when approved by the Stockholders, will constitute the legal, valid and binding obligation of DANCOR and each of the Stockholders and will be enforceable against each of them in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, priority, or other laws or court decisions relating to or affecting generally the enforcement of creditors rights or affecting generally the availability of equitable remedies. 3.3. No Conflicts; No Consents. Neither the execution and delivery of this Agreement, nor the consummation by DANCOR or the Stockholders of any of the transactions contemplated hereby, or compliance with any of the provisions hereof, will (i) conflict with or result in a material breach of, violation of, or default under, any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, license, lease, credit agreement or other agreement, document, instrument, permit, authorization, or obligation (including, without limitation, any of its charter documents) to which DANCOR is a party or by which it or any of its assets or properties may be bound, or (ii) violate any judgment, order, injunction, decree, statute, rule or regulation applicable to DANCOR or its assets or properties, the violation of which would have a material adverse effect upon the business, properties, or assets, or in the condition (financial or otherwise) of DANCOR. No authorization, consent, or approval of any public body or authority was or is necessary for the consummation by DANCOR or the Stockholders of the transactions contemplated by this Agreement. 3.4 Capitalization. The authorized capital stock of DANCOR consists of ten million (10,000,000) shares of common stock, par value $.0001. As of the Closing Date, there will be six million five hundred thousand (6,500,000) shares of common stock issued and outstanding. Other than as set forth in Exhibit D, there are no outstanding contracts or other rights to subscribe for or purchase, or contracts or obligations to issue or grant any rights to acquire any equity security of DANCOR. DANCOR does not have any contracts or obligations to redeem, repurchase, or otherwise reacquire any equity security of DANCOR. All of the Exchanged Shares are duly authorized, validly issued and outstanding, fully paid and nonassessable, and have been issued in conformity with all applicable laws. 3.5 No Pending Material Litigation or Proceedings. There are no actions, suits, or proceedings pending or, to the best knowledge of DANCOR, threatened against or affecting DANCOR affecting the Stockholders rights in the Exchanged Shares (including actions, suits, or proceedings where liabilities may be adequately covered by insurance) at law or in equity or before or by any Federal, state, municipal or other governmental department, commission, court, board, bureau, agency or instrumentality, domestic or foreign, or affecting any of the officers, directors of DANCOR or the Stockholders in connection with the business, operations, or affairs of either of them, which might reasonably be expected to result in any material adverse change in the business, properties or assets, or in the condition (financial or otherwise) of DANCOR, or which question or challenge the Reorganization. 3.6 Financial Statements; Absence of Undisclosed Liabilities and Certain Developments. At the Closing, the Company will deliver to ACT financial statements of DANCOR for the nine months ended September 30, 1998 (unaudited) and for the years ended December 31, 1997 (unaudited) and 1996 (unaudited), consisting of DANCOR s balance sheets as of such date (the Balance Sheets ), the related statements of profit or loss for the periods then ended, and the respective notes thereto. Such financial statements (and the notes related thereto) are herein sometimes collectively referred to as the DANCOR Financial Statements. At the Closing, DANCOR shall deliver an Officer s Certificate certifying that the DANCOR Financial Statements (i) have been derived from the books and records of DANCOR, which books and records fairly and accurately reflect, the assets and liabilities of DANCOR, (ii) fairly present the financial condition of DANCOR on the date of such statements and the results of its operations for the periods indicated, except as may be disclosed in the notes thereto, and (iii) have been prepared in all material respects in accordance with generally accepted accounting principles consistently applied throughout the periods involved. 3.7 Applicable Permits; Compliance with Laws. DANCOR (i) holds all licenses, franchises, permits, and authorizations necessary for the lawful conduct of its business as presently conducted and which the failure to so hold would have a material adverse effect upon the business, properties, or assets, or the condition (financial or otherwise) of DANCOR, and (ii) has complied in all material respects with all applicable statutes, laws, ordinances, rules, and regulations of all governmental bodies, agencies, and subdivisions having, asserting or claiming jurisdiction over it, which the failure to comply with would have a material adverse effect upon the business, properties, or assets, or the condition (financial or otherwise) of DANCOR. 3.8 Disclosure. Neither this Agreement, nor any certificate, exhibit, or other written document or statement, furnished to ACT by or on behalf of DANCOR or, to its knowledge, the Stockholders in connection with the transactions contemplated by this Agreement contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to be stated in order to make the statements contained herein or therein, when taken as a whole, not misleading. Neither DANCOR nor, to its knowledge, any of the Stockholders has any knowledge of any fact which has not been disclosed in writing to ACT which may reasonably be expected to materially and adversely affect the business, properties, or assets, or the condition (financial or otherwise) of DANCOR or title of the Stockholders to the Exchanged Shares or their ability to perform all of the obligations to be performed by them under this Agreement and/or any other agreement between DANCOR, the Stockholders, and ACT to be entered into pursuant to any provision of this Agreement. 3.9 Ownership of DANCOR. DANCOR issued each Stockholder that number of Shares set forth opposite the Stockholder s respective name on Exhibit A, which shares together constitute all of the issued and outstanding shares of common stock of DANCOR. The Shares are duly authorized, validly issued and outstanding, fully paid and nonassessable and were issued by DANCOR in conformity with all applicable laws. 3.10 Subsidiaries. DANCOR has no subsidiaries and no investments, directly or indirectly, or other financial interest in any other corporation or business organization, joint venture or partnership of any kind whatsoever except as reflected in the DANCOR Financial Statements. 3.11 Real Property. All leases of real property to which DANCOR is a party and which are material to the business of DANCOR are fully effective in accordance with their respective terms and afford DANCOR peaceful and undisturbed possession of the subject matter of the lease, and there exists no default on the part of DANCOR or termination thereof. The building and all fixtures and improvements located on such real property are in good operating condition, ordinary wear and tear excepted. To the best of its knowledge, DANCOR is not in violation of any zoning, building or safety ordinance, regulation or requirement, or other law or regulation applicable to the operation of owned or leased properties, and DANCOR has not received any notice of violation with which it has not complied. 3.12 Tangible Personal Property. DANCOR has good and marketable title to, or in the case of leased equipment a valid leasehold interest in, and is in possession of, all such items of personal property owned or leased by it, free and clear of all title defects, mortgages, pledges, security interests conditional sales agreements, liens, restrictions or encumbrances, the presence of which would result in a material adverse change in the business, properties, or assets, or the condition (financial or otherwise) of DANCOR. All leases of tangible personal property to which DANCOR is a party and which are material to the business of DANCOR are fully effective in accordance with their respective terms, and there exists no default on the part of DANCOR or termination thereof, the presence of which would result in a material adverse change in the business, properties, or assets, or the condition (financial or otherwise) of DANCOR. Each item of capital equipment which is used in the current conduct of DANCOR s business is in good operating and usable condition and repair, ordinary wear and tear excepted, and is and will be suitable for use in the ordinary course of DANCOR s business and fit for its intended purposes. 3.13 Tax Matters. DANCOR has, since its inception, duly filed all Federal, state, municipal, local, and other tax returns required to have been filed by it in those jurisdictions where the nature or conduct of its business requires such filing and where the failure to so file would be materially adverse to DANCOR. Copies of all such tax returns have been made available for inspection by ACT prior to the execution hereof. All Federal, state, municipal, local, and other taxes, including but not limited to those taxes due with respect to DANCOR s properties, income, gross receipts, excise, occupation, franchise, permit, licenses, sales, payroll, and inventory due and payable as of the date of the Closing by DANCOR have been paid or will be paid prior to the time they become delinquent. 3.14 Inventory. DANCOR has good and marketable title to all of its inventories of raw materials, work-in-process, and finished goods, including models and samples, free and clear of all security interests, liens, claims and encumbrances, the presence of which would result in a material adverse change in the business, properties, or assets, or the condition (financial or otherwise) of DANCOR. 3.15 Contracts and Commitments. DANCOR has no contract, agreement, obligation or commitment, written or oral, expressed or implied, which involves a commitment or liability of DANCOR in excess of one hundred thousand dollars ($100,000) (other than obligations which are included in accounts payable), and no union contracts, employee or consulting contracts, financing agreements, debtor or creditor arrangements, licenses, franchise, manufacturing, distributorship or dealership agreements, leases, or bonus, health or stock option plans, except as described in Exhibits C and D. 3.16 Proprietary Information. Except as disclosed in Exhibit E, DANCOR does not have any patents, applications for patents, trademarks, applications for trademarks, trade names, licenses or service marks relating to the business of DANCOR, nor does any present or former stockholder, officer, director or employee of DANCOR own any patent rights relating to any products manufactured, rented or sold by DANCOR. DANCOR has the unrestricted right to use, free and clear of any claims or rights of others, all trade secrets, customer lists, and manufacturing and secret processes reasonably necessary to the manufacture and marketing of all products made or proposed to be made by DANCOR, except for any rights the presence of which would not result in a material adverse change in the business, properties, or assets, or the condition (financial or otherwise) of DANCOR, and the continued use thereof by ACT following the Closing will not conflict with, infringe upon, or otherwise violate any rights of others. DANCOR has not used and is not making use of any confidential information or trade secrets of any present or past employee of DANCOR. 3.17 Insurance. DANCOR maintains insurance with reputable insurance companies on such of its equipment, tools, machinery, inventory, and properties as are usually insured by companies similarly situated and to the extent customarily insured, and maintains products and personal liability insurance, and such other insurance against hazards, risks and liability to persons and property as is customary for companies similarly situated. All such insurance policies currently are in full force and effect. 3.18 Arrangements with Employees; Labor Relations. No stockholder, director, officer, or employee of DANCOR is presently a party to any transaction with DANCOR, including without limitation any contract, loan or other agreement or arrangement providing for the furnishing of services by, the rental of real or personal property from or to, or otherwise requiring loans or payments to, any such stockholder, director, officer, or employee, or to any member of the family of any of the foregoing, or to any corporation, partnership, trust or other entity in which any stockholder, director, officer, or employee or any member of the family of any of them has a substantial interest or is an officer, director, trustee, partner, or employee. There are no bonus, pension, profit sharing, commission, deferred compensation or other plans or arrangements in effect as of the date of this Agreement, except as set forth in Exhibit D. DANCOR has no obligations under any collective bargaining agreement or other contract with a labor union, under any employment contract or consulting agreement, or under any executive s compensation plan, agreement or arrangement, nor is any union, labor organization or group of employees of DANCOR presently seeking the right to enter into collective bargaining with DANCOR on behalf of any of its employees. 3.19 Bank Accounts. All bank and savings accounts, and other accounts at similar financial institutions, of DANCOR existing at date of Closing are listed on Exhibit F. Exhibit F contains a list of the name of each person or entity authorized to sign on the bank accounts, borrow money, or incur or guarantee indebtedness on behalf of DANCOR. 3.20 Powers of Attorney. No valid powers of attorney from DANCOR to any person or entity exist as of the date of this Agreement, except with respect to powers of attorney granted to the Representative by the Stockholders to facilitate the Closing. 3.21 Absence of Questionable Payments. To the best of its knowledge, neither DANCOR nor any stockholder, director, officer, agent, employee, consultant, or other person associated with or acting on behalf of any of them, has (i) used any corporate funds for unlawful contributions, gifts, entertainment, or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payments to governmental officials or others from corporate funds, engaged in any payments or activity which would be deemed a violation of the Foreign Corrupt Practices Act or rules or regulations promulgated thereunder, or (iii) established or maintained any unlawful or unrecorded accounts. 3.22 Relationships with Customers and Suppliers. No present substantial customer or substantial supplier to DANCOR has indicated an intention to terminate or materially and adversely alter its existing business relationship with DANCOR, and DANCOR has no reason to believe that any of the present customers of or substantial suppliers to DANCOR intends to do so. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ACT Except as set forth in the Schedule of Exceptions attached hereto and incorporated herein by this reference as Exhibit G, ACT hereby represents and warrants to, and covenants with, each of the Stockholders and DANCOR as follows: 4.1 Organization and Corporate Power. ACT is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, and is duly qualified and in good standing to do business as a foreign corporation in each jurisdiction in which such qualification is required and where the failure to be so qualified would have a materially adverse effect upon ACT. ACT has all requisite corporate power and authority to conduct its business as now being conducted and to own and lease the properties which it now owns and leases. The Articles of Incorporation as amended to date, certified by the Secretary of State of Nevada, the Bylaws of ACT as amended to date, and the resolutions of ACT s stockholders and directors authorizing the execution, delivery, and performance of this Agreement, all certified by the President and the Secretary of ACT, which have previously been provided to DANCOR by ACT, are true and complete copies thereof as currently in effect. 4.2 Authorization. ACT has full corporate power, legal capacity, and corporate authority to enter into this Agreement, to execute all attendant documents and instruments contemplated hereby, to enter into this Reorganization, and to perform all of its obligations hereunder. This Agreement, and each and every other agreement, document and instrument to be executed by ACT in connection herewith, has been effectively authorized by all necessary action on the part of ACT, including without limitation the approvals of ACT s Board of Directors and its stockholders, which authorizations remain in full force and effect, have been duly executed and delivered by ACT, and no other authorizations or proceedings on the part of ACT, or otherwise, are required to authorize this Agreement and/or the transactions contemplated hereby. This Agreement constitutes the legal, valid, and binding obligation of ACT and is enforceable against ACT in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, priority, or other laws or court decisions relating to or affecting generally the enforcement of creditors rights or affecting generally the availability of equitable remedies. 4.3. No Conflicts; No Consents. Neither the execution and delivery of this Agreement, nor the consummation by ACT of any of the transactions contemplated hereby, or compliance with any of the provisions hereof, will (i) conflict with or result in a material breach of, violation of, or default under, any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, license, lease, credit agreement or other agreement, document, instrument, or obligation (including, without limitation, any of its charter documents) to which ACT is a party or by which it or any of its assets or properties may be bound, or (ii) violate any judgment, order, injunction, decree, statute, rule or regulation applicable to ACT or its assets or properties, the violation of which would have a material adverse effect upon the business, properties, or assets, or in the condition (financial or otherwise) of ACT. No authorization, consent, or approval of any public body or authority was or is necessary for the consummation by ACT of the transactions contemplated by this Agreement. 4.4 Capitalization. The authorized capital stock of ACT consists of one hundred million ($100,000,000) shares of common stock, par value one hundredth of one cent ($.001). As of the Closing Date, there will be one million (1,000,000) shares of common stock issued and outstanding. All of the shares of common stock issued and outstanding are validly issued, fully paid, and nonassessable. There are no outstanding contracts or other rights to subscribe for or purchase, or contracts or obligations to issue or grant any rights to acquire any equity security of ACT. ACT does not have any contracts or obligations to redeem, repurchase, or otherwise reacquire any equity security of ACT. All of the ACT Shares, when issued to the Stockholders, will be duly authorized, validly issued and outstanding, fully paid and nonassessable and were issued in conformity with all applicable laws. 4.5 Financial Statements of ACT; Absence of Undisclosed Liabilities; No Adverse Changes. Attached hereto as Exhibit H are the audited financial statements of ACT for the years ended December 31, 1997, and 1996, and the unaudited financial statements for the quarters ended March 31, 1998, June 30, 1998, and September 30, 1998, consisting of ACT s balance sheets as of such date (the Balance Sheets ), the related statements of profit or loss for the periods then ended, and the respective notes thereto. Such financial statements (and the notes related thereto) are herein sometimes collectively referred to as the ACT Financial Statements. The ACT Financial Statements (i) are derived from the books and records of ACT, which books and records have been consistently maintained in a manner which reflects, and such books and records do fairly and accurately reflect, the assets and liabilities of ACT, (ii) fairly and accurately present the financial condition of ACT on the date of such statements and the results of its operations for the periods indicated, except as may be disclosed in the notes thereto, and (iii) have been prepared in all material respects in accordance with generally accepted accounting principles consistently applied throughout the periods involved (except as otherwise disclosed in the notes thereto). Except as and to the extent reflected or reserved against in the Balance Sheets, and as to matters arising in the ordinary course of its business since the respective dates of the Balance Sheets, ACT has no liability or obligation (whether accrued, to become due, contingent or otherwise) which individually or in the aggregate could have a materially adverse effect on the business, assets, condition (financial or otherwise) or prospects of ACT. Except as set forth in Exhibit G, since the dates of the respective Balance Sheets, there has been (a) no declaration, setting aside or payment of any dividend or other distribution with respect to the common stock of ACT or redemption, purchase, or other acquisition of any of the common stock of ACT or any split-up or other recapitalization relative to any of the common stock of ACT or any action authorizing or obligating ACT to do any of the foregoing, (b) no loss, destrution, or damage to any material property or asset of ACT, whether or not insured, (c) no acquisition or disposition of assets (or any contract or arrangement therefor), or any other transaction by ACT otherwise than for fair value and in the ordinary course of business, (d) no discharge or satisfaction by ACT of any lien or encumbrance or payment of any obligation or liability (absolute or contingent) other than current liabilities shown on the Balance Sheets, or current liabilities incurred since the date thereof in the ordinary course of business, (e) no sale, assignment, or transfer by ACT of any of its tangible or intangible assets except in the ordinary course of business, cancellation by ACT of any debts, claims or obligations, or mortgage, pledge, subjection of any assets to any lien, charge, security interest or other encumbrance, or waiver by ACT of any rights of value which, in any such case, is material to the business of ACT, (f) no payment of any material bonus to or material change in the compensation of any director, officer, or employee, whether directly or by means of any bonus, pension plan, contract, or commitment, (g) no write-off or material reduction in the carrying value of any asset which is material to the business of ACT, (h) no disposition or lapse of rights as to any intangible property which is material to the business of ACT, (i) except for ordinary travel advances, no loans or extensions of credit to stockholders, officers, directors, or employees of ACT, (j) no agreement to do any of the things described in this Section 4.5, and (k) no material adverse change in the condition (financial or otherwise) of ACT or in its assets, liabilities, properties, business, or prospects. 4.6 Tax Matters. ACT has, since its inception, accurately prepared and duly filed all federal, state, county and local tax returns required to have been filed by it in those jurisdictions where the nature or conduct of its business requires such filing and where the failure to so file would be materially adverse to ACT. Copies of all such tax returns have been made available for inspection by DANCOR and the Stockholders prior to the execution hereof. All Federal, state, county, and local taxes, including but not limited to those taxes due with respect to ACT s properties, income, gross receipts, excise, occupation, franchise, permit, licenses, sales, payroll, and inventory due and payable as of the date of the Closing by ACT have been paid or will be paid prior to the time they become delinquent. The amount reflected in the Balance Sheets of ACT as liabilities or reserves for taxes which are due but not yet payable is sufficient for the payment of all accrued and unpaid taxes of the types referred to hereinabove. 4.7 No Pending Material Litigation or Proceedings. There are no actions, suits, or proceedings pending or, to the best knowledge of ACT, threatened against or affecting ACT (including actions, suits, or proceedings where liabilities may be adequately covered by insurance) at law or in equity or before or by any Federal, state, municipal or other governmental department, commission, court, board, bureau, agency or instrumentality, domestic or foreign, or affecting any of the stockholders, officers or directors of ACT in connection with the business, operations, or affairs of ACT, which might result in any material adverse change in the business, properties, or assets, or in the condition (financial or otherwise) of ACT, or which question or challenge the Reorganization. ACT is not subject to any voluntary or involuntary proceeding under applicable bankruptcy laws and has not made an assignment for the benefit of creditors. 4.8 Compliance with Laws. ACT (i) holds all licenses, franchises, permits, and authorizations necessary for the lawful conduct of its business as presently conducted and which the failure to so hold would have a material adverse effect upon the business, properties, or assets, or the condition (financial or otherwise) of ACT, and (ii) has complied with all applicable statutes, laws, ordinances, rules and regulations of all governmental bodies, agencies and subdivisions having, asserting or claiming jurisdiction over it, which the failure to comply with would have a material adverse effect upon the business, properties, or assets, or the condition (financial or otherwise) of ACT. 4.9 Disclosure. Neither this Agreement, nor any certificate, exhibit, or other written document or statement, furnished to DANCOR or the Stockholders by or on behalf of ACT in connection with the transactions contemplated by this Agreement contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to be stated in order to make the statements contained herein or therein, when taken as a whole, not misleading. ACT has no knowledge of any fact which has not been disclosed in writing to DANCOR or the Stockholders which may reasonably be expected to materially and adversely affect the business, properties, operations, and/or prospects of ACT or the ability of ACT to perform all of the obligations to be performed by ACT under this Agreement and/or any other agreement between DANCOR and ACT to be entered into pursuant to any provision of this Agreement. 4.10 Subsidiaries. ACT has no subsidiaries and no investments, directly or indirectly, or other financial interest in any other corporation or business organization, joint venture, or partnership of any kind whatsoever except as reflected in the ACT Financial Statements. 4.11 Offering. Subject to the accuracy of the Stockholders representations in Section 5.4 hereof, the offer, sale, and issuance of the ACT Shares to be issued in conformity with the terms of this Agreement and the transactions contemplated hereby, constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, and from all applicable state registration or qualification requirements. 4.12 Applicable Permits; Compliance with Laws. ACT (i) holds all licenses, franchises, permits, and authorizations necessary for the lawful conduct of its business as presently conducted and which the failure to so hold would have a material adverse effect upon the business, properties, or assets, or the condition (financial or otherwise) of ACT, and (ii) has complied with all applicable statutes, laws, ordinances, rules, and regulations of all governmental bodies, agencies, and subdivisions having, asserting or claiming jurisdiction over it, which the failure to comply with would have a material adverse effect upon the business, properties, or assets, or the condition (financial or otherwise) of ACT. 4.13 Real Property. No real property is owned by, leased to, occupied, or subleased by ACT. 4.14 Tangible Personal Property. ACT owns no tangible personal property. 4.15 Accounts Receivable. ACT has no accounts receivable. 4.16 Inventory. ACT has no inventory. 4.17 Contracts and Commitments. ACT has no contract, agreement, obligation or commitment, written or oral, expressed or implied, which involves a commitment or liability of ACT in excess of one thousand ($1,000), and no union contracts, employee or consulting contracts, financing agreements, debtor or creditor arrangements, licenses, franchise, manufacturing, distributorship or dealership agreements, leases, or bonus, health, or stock option plans. 4.18 Proprietary Information. ACT does not have any patents, applications for patents, trademarks, applications for trademarks, trade names, licenses, or service marks relating to the business of ACT, nor does any present or former stockholder, officer, director, or employee of ACT own any patent rights relating to any products manufactured, rented, or sold by ACT. 4.19 Insurance. ACT maintains insurance with reputable insurance companies on such of its equipment, tools, machinery, inventory, and properties as are usually insured by companies similarly situated and to the extent customarily insured, and maintains products and personal liability insurance, and such other insurance against hazards, risks, and liability to persons and property as is customary for companies similarly situated. 4.20 Bank Accounts. All bank and savings accounts, and other accounts at similar financial institutions, of ACT existing at date of Closing are listed on Exhibit I. Exhibit I contains a list of the name of each person or entity authorized to sign on the bank accounts, borrow money, or incur or guarantee indebtedness on behalf of ACT. 4.21 Powers of Attorney. No valid powers of attorney from ACT to any person or entity exist as of the date of this Agreement. 4.22 Absence of Questionable Payments. To the best of its knowledge, neither ACT nor any stockholder, director, officer, agent, employee, consultant, or other person associated with or acting on behalf of any of them, has (i) used any corporate funds for unlawful contributions, gifts, entertainment, or other unlawful expenses relating to political activity, (ii) made any direct or indirect unlawful payments to governmental officials or others from corporate funds, engaged in any payments or activity which would be deemed a violation of the Foreign Corrupt Practices Act or rules or regulations promulgated thereunder, or (iii) established or maintained any unlawful or unrecorded accounts. 4.23 Reporting Requirements. ACT has complied with and will maintain its compliance with all of the reporting requirements under the Act and the Securities Exchange Act of 1934, as amended. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS Each of the Stockholders, severally and not jointly, represent and warrant to and covenant with ACT, as of the date hereof, as follows: 5.1 Power of Attorney. The Stockholder has duly and irrevocably executed and delivered a power of attorney in the form of Exhibit J appointing the Representative as attorney-in-fact with full power of substitution and with full authority to take any actions as may be necessary or desirable, at the discretion of such attorneys-in-fact, to carry out the provisions of this Agreement on behalf of the Stockholders (the Power of Attorney ). 5.2 Authority. The Stockholder has full rights, power, and authority to enter into this Agreement and the Power of Attorney; the execution, delivery, and performance of this Agreement and the Power of Attorney by the Stockholder and the consummation by the Stockholder or the Stockholder s attorney-in-fact of the transactions contemplated hereby will not conflict with or result in a breach of any agreement to which the Stockholder is a party and which a conflict or breach thereof would have a material adverse effect upon the Stockholder or the Stockholder s properties or assets. 5.3 Title. The Stockholder has valid and marketable title to the number of Shares set forth opposite such Stockholder s name on Exhibit A, free and clear of any pledge, lien, security interest, or encumbrance other than pursuant to this Agreement. As of the date hereof there is, and at the Closing Date there will be, no lien, charge, mortgage, pledge, conditional sale agreement, or other encumbrance of any kind or nature recorded in the book of registry of stockholders of DANCOR with respect to any of the Exchanged Shares owned by the Stockholder and the Exchanged Shares set forth in Exhibit A are duly registered in the name of the Stockholders as set forth in Exhibit A. 5.4 Restricted Stock. The Stockholder acknowledges that the Exchanged Shares being issued to the Stockholders hereunder will be issued by ACT without registration or qualification or other filings being made under the Act, or the securities or blue sky laws of any state, in reliance upon specific exemptions therefrom, and in furtherance thereof the Stockholder represents that he is acquiring and will hold the shares to be delivered hereunder for his own account, for investment only, and not for distribution within the meaning of the U.S. Federal securities laws. The Stockholder acknowledges that a legend, substantially in the following form, shall be placed upon the face of each certificate representing any of ACT Shares being delivered to the Stockholders hereunder: THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), ARE RESTRICTED SECURITIES, AND NO OFFER, SALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE OR THE SECURITIES REPRESENTED HEREBY, OR OF ANY INTEREST HEREIN, MAY BE MADE WITHOUT SUCH REGISTRATION UNLESS, IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE. 5.5 Access to Information. The Stockholder acknowledges the receipt of ACT s Registration Statement filed on Form 10-SB and Quarterly Report on Form 10-QSB for the nine months ended September 30, 1998. The Stockholder further acknowledges that such Stockholder has had access to such information from DANCOR as such Stockholder has deemed necessary to enable such Stockholder to make an informed decision with respect to the transactions contemplated hereby. 5.6 Waiver of Claims. As a condition precedent to ACT s obligations hereunder, the Stockholder agrees to waive and compromise any and all claims against DANCOR, ACT, and any of their affiliates (as that term is defined in the Federal securities laws) as of the Closing Date, including but not limited to claims relating to the issuance of the securities of DANCOR. ARTICLE VI MISCELLANEOUS 6.1 Taxes and Expenses. 6.1.1 Except as otherwise expressly provided in 6.1.2 immediately below, each of DANCOR and ACT shall pay all of their own respective taxes, attorneys fees, and other costs and expenses payable in connection with or as a result of the transactions contemplated hereby and the performance and compliance with all agreements and conditions contained in this Agreement respectively to be performed or observed by each of them. 6.1.2 The Stockholders shall pay all income taxes, if any, which become due on account of the sale and transfer of the Exchanged Shares to ACT. 6.1.3 The representations and warranties of DANCOR, the Stockholders, and ACT contained herein and in any other document or instrument delivered by or on behalf of DANCOR and/or the Stockholders or on behalf of ACT pursuant hereto, as such may be qualified in Exhibits C, D, or G, respectively, shall survive the Closing and any investigations made by or on behalf of ACT made prior to the Closing, and shall remain in full force and effect for a period of two (2) full years from the date of the Closing the ( Warranty Period ), and thereupon expire. 6.2 Other Documents. Each of the parties hereto shall execute and deliver such other and further documents and instruments, and take such other and further actions, as may be reasonably requested of them for the implementation and consummation of this Agreement and the transactions herein contemplated. 6.3 Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties hereto, the heirs, personal representatives, successors, and assigns of ACT, the Stockholders, and DANCOR, but shall not confer, expressly or by implication, any rights or remedies upon any other party. 6.4 Governing Law. This Agreement is made and shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of Nevada. 6.5 Notices. Any notice or the delivery of any item to be delivered by a party hereto shall be delivered personally, by U.S. mail, return receipt requested, or by Federal Express, next-day delivery. Any personal delivery made shall be deemed to have been made upon the execution of a receipt for the item to be delivered by the party to whom delivery is made. Delivery by U.S. mail or Federal Express shall be deemed to have been made when delivered by Federal Express to the party to whom addressed. All such deliveries shall be made to the following addresses, or such other addresses as the parties may have instructed the others in accordance with the provisions of this Section: If to ACT: Advanced Coating Technologies, Inc. 9005 Cobble Canyon Lane Sandy, Utah 84093 Attention: President With a copy to: Leonard W. Burningham, Esq. 455 East 5th South Salt Lake City, Utah 84111-3323 If to DANCOR Dancor, Inc. or the Stockholders: 12226 South 1000 East, Suite 10 Draper, Utah 84020 Attention: Chief Executive Officer With a copy to: Bruce H. Haglund, Esq. Gibson, Haglund & Johnson 2 Park Plaza, Suite 450 Irvine, California 92614 Any party hereto may change its address by written notice to the other party given in accordance with this Section 6.5. 6.6 Entire Agreement. This Agreement and the exhibits attached hereto contains the entire agreement between the parties and supersede all prior agreements, understandings, and writings between the parties with respect to the subject matter hereof and thereof. Each party hereto acknowledges that no representations, inducements, promises or agreements, oral or otherwise, have been made by any party, or anyone acting with authority on behalf of any party, which are not embodied herein or in an exhibit hereto, and that no other agreement, statement, or promise may be relied upon or shall be valid or binding. Neither this Agreement nor any term hereof may be changed, waived, discharged, or terminated orally. This Agreement may be amended or any term hereof may be changed, waived, discharged, or terminated by an agreement in writing signed by ACT, DANCOR, and the Stockholders. 6.7 Severability. If any provision of this Agreement is determined to be invalid, illegal, or unenforceable by any court, department, official, political subdivision, agency, or other instrumentality of any government, whether state, local, or Federal, the remaining provisions of this Agreement to the extent permitted by law shall remain in full force and effect. To the extent permitted by law, the parties hereto waive any provision of law that renders any provision hereof invalid or unenforceable in any respect. 6.8 Headings. The captions and headings used herein are for convenience only and shall not be construed as a part of this Agreement. 6.9 Attorneys' Fees. In the event of any litigation between or among ACT, DANCOR, and/or the Stockholders, the prevailing party shall receive its reasonable expenses, including attorneys' fees, from the non-prevailing party in connection therewith. 6.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which taken together shall constitute but one and the same document. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day and year first above written. A.X.R. DEVELOPMENT CORPORATION, INC. a Nevada corporation By: /s/David C. Merrell David C. Merrell, Chief Executive Officer By: /s/Corie Merrell Corie Merrell, Secretary DANCOR, INC. a Delaware corporation By: /s/Culley W. Davis Culley W. Davis, Chief Executive Officer By: /s/Bruce H. Haglund Bruce H. Haglund, Secretary THIS IS THE STOCKHOLDER SIGNATURE PAGE TO THE AGREEMENT AND PLAN OF REORGANIZATION Please Sign this Page and Return it if You Wish to Participate in the Plan STOCKHOLDERS: (Signature of Stockholder-Your Signature) (Printed Name of Stockholder-Your Name) If the shares are jointly owned, the other owner(s) should also sign this Signature Page. (Signature of Stockholder-Co-Owner Signature) (Printed Name of Stockholder-Co-Owner Name) Exhibit "A" List of Dancor Stockholders DANCOR,INC Alphabetical Stockholder List # of Dancor # of ACT Shares Shares Adams, Orval Webster 111 8,056 24,168 Adams, Vaughn 1,500 4,500 Adamson, Leroy 5,000 15,000 Adamson, Rex L. 17,112 51,336 Adorable, Reynardo 8,056 24,168 Aguayo, Benjamin 8,028 24,084 Alexander, James T. & Becky 16,112 48,336 Allen, Paul George 3,021 9,063 Ames, Park 80,560 241,680 Anderson, Chad 8,056 24,168 Andrus, Bradley 14,098 42,294 Andrus, Brent 13,056 39,168 Ashton, John 32,224 96,672 Aymond, Jimmy 150,008 450,024 B.C. Warner Irrevocable Trust 16,112 48,336 Baker, Ed 8,056 24,168 Baldwin, Keith 143 429 Barbari, Allen 8,056 24,168 Barlow, Frankie 2,014 6,042 Bart C. Warner Irrevocable Trust 16,112 48,336 Barton, Russell & Sue 16,112 48,336 Bawdon, Russ 1,000 3,000 Beal, Jason 5,000 15,000 Beal, Scott 6,042 18,126 Beal, Scott & Kathy 10,000 30,000 Beckstead, Brent & Jan 4,000 12,000 Bellini, Mark 16,112 48,336 Belsito, Alphonson 8,056 24,168 Berkes, Stephen 16,112 48,336 Berlin, Marvin 3,947 11,841 Berna, Bonnie 10,062 30,186 Berna, Russel 12,062 36,186 Big Creek Family LTD. 2,500 7,500 Birmingham, Daniel 8,056 24,168 Blackburn, Richard 500 1,500 Blake, Jade 1,250 3,750 Blamires, James 18,112 54,336 Blamires, Jan & Linda 5,000 15,000 Blamires, Rex 1,000 3,000 Blaylock, Christy 2,500 7,500 Bolinder,Bruce L. 8,056 24,168 Bower Family Trust 16,112 48,336 Boyke, Dale 1,500 4,500 Boyke, Gary 1,000 3,000 Boyke, Mark & Debra 22,557 67,670 Breunig, Tom 3,222 9,667 Brewer, Mark S. 9,056 27,168 Brigham, Terry W. 16,112 48,336 Bullen, Jonathan 40,280 120,840 Burkhardt, Donna 3,914 11,742 Bustos, William 5,000 15,000 Cannon, Garff - Richmark, LTD. 16,112 48,336 Cannon, Mark 16,112 48,336 Cannon, Wilford W. 2,095 6,284 Chang-Tung, Eric 2,014 6,042 Chapman, Amber 251 754 Chapman, Brianne 251 754 Chapman, Travis & Lori 500 1,500 Chase, Duane 16,112 48,336 Christensen, Carey 5,000 15,000 Clonts, Jeff & Laurie 8,056 24,168 Collins, Fred 2,500 7,500 Collins, Rachel 3,000 9,000 Collinsworth, Leonard 1,250 3,750 Collinsworth, Leonard 3,264 9,792 C Desiree 4,028 12,084 Corbin, Daniel L. 472,625 1,417,875 Corbin, Dean 32,224 96,672 Corbin, Merlin 16,112 48,336 Cosgrove, Michael 8,056 24,168 Cozzens, Blane 3,000 9,000 Cozzens, Martin 2,500 7,500 Crocket Family Foundation 16,112 48,336 Curcie, Stephen 24,168 72,504 Dance, David 2,325 6,975 David, Mark 8,056 24,168 Davis, Culley W. 18,612 55,836 Delavan, John & Cheryl 32,224 96,672 Delgleize, Dan A. 2,000 6,O00 DeMill, Donald 4,000 12,000 Dill, Richard 8,056 24,168 DLJSC Custodian 1,000 3,O00 Dodson, Frank 8,056 24,168 Duke, Jonathon 2,500 7,500 Dykstra, Warren 2,500 7,500 Egan, Dwight 4,028 12,084 Eggers Enterprises, L.C. 16,112 48,336 Eflenfeldt, Kirk 3,000 9,000 Elfstrom, Ronald 3,000 9,000 Elizabeth A. Warner Revocable Trust 16,112 48,336 Elton, Wesley 5,000 15,000 Eyre, Candyce FL 604 1,812 Eyre, Conner M. 251 754 Eyre, Dan & Dawn 500 1,500 Eyre, Quinn Patrick 251 754 Ezell, Steven 16,112 48,336 Farley, Ernest 5,000 15,000 Farley, Steven 300 900 Featherstone, Ed & Joann 16,112 48,336 Ferguson, Marian 16,112 48,336 Ferguson, Roger 10,000 30,000 Ferguson, Wade 5,000 15,000 Finniger, Walter 4,028 12,084 Foster, Kenneth 2,014 6,042 Fredrickson, Eugene 2,500 7,500 Freeland, Bill 10,000 30,000 Freeze, J.P. 45,000 135,000 Frisbie, Nfichael 1,000 3,000 Gadd, DeMar 400 1,200 Gadd, Richard 4,028 12,084 Gadd, Rick 500 1,500 Gadd, Russ 1,000 3,000 Gadd, Vance Donald 4,000 12,000 Gengler, Jan 4,028 12,084 Gengler, Jan D. & Colleen A. 2,500 7,500 George, Leslie D. 33,334 100,002 Goodrich, David 2,014 6,042 Green, David 16,112 48,336 Greene, Kim R. 4,028 12,084 Greene, Kim/Sherry 4,028 12,084 Grenier, Marc 24,168 72,504 Griffin, Robert & Jane 8,139 24,417 Grove Limited Partnership No. II 64,448 193,344 Grove, J.F. 3,000 9,000 Grove-Samuelson, Lisa 3,000 9,000 Gunnel, Ruel 2,500 7,500 Guthrie, Jason 200 600 Hadlock, Brian 4,028 12,084 Hadlock, Jim 12,084 36,252 Hadlock, Steve 16,112 48,336 Hadlock, Steve & Becky 32,224 96,672 Hadlock. Mike 16,112 48,336 Haglund, Bruce 66,112 198,336 Hales, J. Vern & Lucille 2,325 6,975 Hall, Lance 16,112 48,336 Hamilton, J. Chad 26,112 78,336 Hammersly, Georgia & Gary 16,112 48,336 Hammersly, Georgia 4,028 12,084 Harman, John 65,341 196,023 Harr, John 6,042 18,126 Harris, Neal 8,056 24,168 Haws, David 5,021 15,063 Haws, Eric 3,021 9,063 Haws, John 2,014 6,042 Heilman, Gene 110,978 332,934 Helfrich, Cliff 5,014 15,042 Hewlett, John 36,112 108,336 Hewlett, John - Pine Valley, LTD. 16,112 48,336 Hibbert, S. Dale 5,000 15,000 Hicken, Randy 16,112 48,336 Hittner, Glen 32,224 96,672 Hoban, Brian Keith 8,056 24,168 Holmes, Phillip 1,000 3,000 Holmes, Robert 1,000 3,000 Holmes, Ryan 1,000 3,000 Holt, Daniel 8,056 24,168 Hook, Diane 8,056 24,168 Howsden, F Lester 18,334 55,002 Hunsaker, Brian 1,750 5,250 Hunsaker, Jason 500 1,500 Hunsaker, Weldon 4,000 12,000 Hurt, Ivan 1,007 3,021 jadeja, Alka 8,056 24,168 James, Mark 1,410 4,229 Jardine,Jared 201 604 Jawitz, Jack 12,084 36,252 JBAT Limited Partnership 16,112 48,336 JDS LTD. 5,000 15,000 Jensen, Ortho 5,000 15,000 Jensen, Richard 1,007 3,021 Jensen, Verl 4,500 13,500 Johnson, Joe 16,112 48,336 Johnson, Mitch 1,000 3,000 Jones, Kelly & Nancy 100 300 Jungreis, Alexander 4,028 12,084 Kallins, Marc 16,112 48,336 Keller, Scott C. 4,028 12,084 Key Investment FBO Jan Gengler 2,500 7,500 Klis, Robert & Allison 16,112 48,336 Kujanpaa, Paul 14,584 43,752 Kujanpaa, Paul & Imna 8,056 24,168 Laford, Ronald 2,500 7,500 Landry, Paul 34,224 102,672 Larsen, Nancy 16,112 48,336 Lavdas, Nicholas 3,750 11,250 Leason, J.K. & R. H. 8,056 24,168 Lieberman,Lawerence 16,112 48,336 Livingston, Terry 20,140 60,420 Llewellyn, Peter 1,250 3,750 Llewellyn, Richard 1,250 3,750 Loftin, Michael C. 5,028 15,084 Lowrance, Daniel 2,000 6,000 Lunak, Mitch 1,000 3,000 Lunt, Wendell 8,056 24,168 Luther, Michael 2,325 6,975 Lyman, Lyn & Maxian, Judith 800 2,400 Lyon, Chris & Donna 1,000 3,000 MacLearnsberry, Barbara M. 1,860 5,580 Magdamit, Christian 25 75 Magdamit, David D. 25 75 magdamit, Jususa G. 25 75 Magdamit, Mark 25 75 Mahnke, Mike 18,612 55,836 Mann, Michael 11,627 34,881 Mansell, Jeffery & Julie I. 8,056 24,168 Manuela, Ronald 4,028 12,084 Maples Bradly 16,112 48,336 Mark Ancel Corp. 8,056 24,168 Matson, JoAnn 2,500 7,500 Maxian, Lyn 800 2,400 McCord, Gilbert 71,403 214,209 McKenna Enterprises, L.C. 8,056 24,168 McLean, Marjorie 2,500 7,500 Mellor Engineering Inc. 20,140 60,420 Merrill, Roger 2,000 6,000 Miller Mark 4,028 12,084 Moss, William W. 16,112 48,336 Munroe, Taylor 515,584 1,546,752 Munroe, Zachary Taylor 32,224 96,672 Murdaugh, Kenneth 500 1,500 Murdaugh, William 500 1,500 Naduninti, Yallappa 8,056 24,168 Neyland, Dennis 16,112 48,336 Nietz, Bradley R. 16,112 48,336 Nilson, Glen 2,500 7,500 Nowak, William 24,168 72,504 Olson, Carrie 4,028 12,084 Onsager, Glenn 36,252 108,756 Onsager, Janine L. 16,112 48,336 Ormand Enterprises, Inc. 2,500 7,500 Orton, Vince 500 1,500 Ottello, Ltd. 1,500 4,500 Ovadek, Michael 4,028 12,084 Owen Enterprises, L.C. 8,056 24,168 Packard, Corinne 5,156 15,468 Palamino, Celestino 4,028 12,084 Palmer, Dean 124,728 374,184 Parker, Virginia C. 2,500 7,500 Patterson, Allen 1,933 5,800 Patterson, Marlin & Barbara 1,000 3,000 Patterson, Marlin 3,183 9,549 Paul Adams Investment Trust 2,014 6,042 Peck, Clay 2,014 6,042 Peck, Cole 2,014 6,042 Peck, David & Christina 1,000 3,000 Peck, Thomas & Sons 5,000 15,000 Peck, Tony 1,611 4,834 Peterson, Gene 5,000 15,000 Peurifoy, J. Tom 16,112 48,336 Phelps, James 1,000 3,000 Phelps, William 1,000 3,000 Pierpont, David 1,007 3,021 Pinnacle Enterprises, Inc. 832,225 2,496,674 Polson, Ivan 9,302 27,906 Porter, Layne 2,500 7,500 Poulsen,Doug 1,000 3,000 Prantel, Roger & Nancy 977 2,931 Price, Eric 1,007 3,021 Pugh, Kazell 5,528 16,584 R. Lovell Employees Pension 2,500 7,500 Rawson, Robert 4,028 12,084 Rebello, Joseph 500 1,500 Reed, Douglas 47 141 Repp, Dennis 107,000 321,000 Roberts, Derek 434 1,302 Robinson, Ann Denece 504 1,511 Robinson, Duane 4,029 12,087 Rogers, Rainey 20,226 60,678 Rollette, Nancy (Larsen) 3,021 9,063 Roney, Nedra 188,226 564,678 Roney, Rick 51,035 153,105 Rood, Susan 16,112 48,336 Rose, Gilbert Lee 8,056 24,168 Rudd, Marlon 2,500 7,500 Ruffell, Layne 600 1,800 Savage, Trent 806 2,417 Savage, Ty 403 1,208 Schiffmacher, Robert & Ively 1,000 3,000 Selgas, Tom 16,112 48,336 Seltzer, Bryan 8,056 24,168 Shashidhara, Malery 8,056 24,168 Shoe, Thomas 500 1,500 Siandatian, Alan 31,800 95,400 Sidney, Stuart 16,112 48,336 Skyline Printing 1,250 3,750 Slack, Craig 1,000 3,000 Smith, Mitch 2,014 6,042 Smoot, Steve 2,095 6,284 Sorenson, Joe & Kathleen 16,112 48,336 Southwick, J.D. 25,000 75,000 Southwick, Jay 32,224 96,672 Spoerl, Charlene 17,612 52,836 Spoerl, Frederick 33,771 101,172 Staley, Randy 1,000 3,000 Stolk, Lawrence 1,007 3,021 Stolk, Ruth Ann 1,250 3,750 Subbiondo, Robert 8,056 24,168 Sutton, Garth 10,000 30,000 T-G6 Partnership 800,000 2,400,000 Tanner Trust 2,014 6,042 Telford, Scott 5,000 15,000 Thayer, Kelly 8,056 24,168 Thomas, B.E. & Cindy 465 1,395 Thomas, Robert 2,000 6,000 Thornas, Thomas 8,056 24,168 Thon, Larry 558 1,674 Thorbahn, Dave 6,445 19,334 Tillotson, Blake 32,224 96,672 Tillotson, Craig 32,224 96,672 Tillotson, Josephine 8,056 24,168 TMB Limited Company 16,112 48,336 Transcorp/CF Robert Turner 3,500 10,500 Trumble, Ronald & Judith 2,325 6,975 Turner, Ronald M. 18,312 54,936 Valgardson, Don 1,000 3,000 Vanderham, Kenny 3,500 10,500 Vermeulen, Sinde 10,070 30,210 Viola, Vincent 8,056 24,168 Voight, Martin 465 1,395 Waldvogel, David 80,560 241,680 Wallace, Johnny 1,500 4,500 Walter, Gaud 4,028 12,084 Warner, Bart 12,438 37,314 Warner, James N. 16,112 48,336 Warner, Richard L. 16,112 48,336 Warren, Itichard & Jerry 1,000 3,000 Waters, Richard 4,028 12,084 Webb, Lois Trust 5,000 15,000 Webber, Curtis 2,500 7,500 West, Mark 500 1,500 Whaley, Preston 24,168 72,504 Williams, Red & Ann 16,112 48,336 Willis, Kelland 2,500 7,500 Willis, Tillman 1,500 4,500 Wilson, Ralph & Becky 23 69 Wiseman, Pete 2,000 6,000 Wright, Rex C. 2,000 6,000 Wright, Richard 500 1,500 Yagoda, Marvin 8,056 24,168 Yates, Cindy 21,147 63,441 Yates, Dustin 7,042 21,126 Yates, Jim 18,126 54,378 Yates, Jim Anthony 3,625 10,876 Yates, Rod 4,028 12,084 Yates, Shane 25,105 75,315 Yost Enterprises 12,500 37,500 Young, Catherine 16,112 48,336 Zimmerman, William 2,000 6,000 Zmyslo Limited Partnership 16,112 48,336 TOTAL 6,500,000 19,500,000 Exhibit "B" Dancor, Inc. 12226 South 1000 East, Suite 9 Draper, Utah 84020 801-553-8785 CONFIDENTIAL December 14, 1998 A.X.R. Development Corporation, Inc. Salt Lake City, Utah Re: Proposed Reorganization Gentlemen: This letter, upon your acceptance, will evidence our mutual intention to enter into a definitive agreement providing for a reorganization in which all of the outstanding capital stock of Dancor, Inc. ("DANCOR"), a Delaware corporation (the target company), will be acquired by A.X.R. Development Corporation, Inc. ("AXR"), a Nevada corporation (the acquiring company). The form of the transaction is contemplated to be an exchange of capital stock, between the Stockholders of DANCOR (the "DANCOR Stockholders") and AXR in a tax-free reorganization (hereinafter the anticipated transaction is referred to as the "Reorganization"), subject to the approval of the DANCOR Stockholders. This letter is also an expression of the intention of DANCOR and AXR to proceed expeditiously to negotiate, draft, and execute a definitive agreement for the Reorganization (hereinafter referred to as the "Agreement"). The Agreement, when executed, will reflect the terms of this letter and such other terms and conditions as are typical to a transaction of this nature (which shall include appropriate representations and warranties as to the business, assets, liabilities, capitalization, material contracts, proprietary rights, financial condition and other matters relevant to the business and operations of the parties), and such additional terms and conditions as shall be mutually agreed upon. The parties to the Agreement shall include AXR, the DANCOR Stockholders, and any other party who, in the opinion of AXR or DANCOR, is necessary to the transactions. 1. Certain Terms of Reorganization Agreement. The material terms and conditions of the Reorganization to be included in the Agreement are as follows: 1.1 The Agreement shall provide for the Reorganization, which shall be consummated on or about February 1, 1999 (the "Closing"). On the Closing Date, all of the issued and outstanding DANCOR capital stock shall be acquired by AXR from the DANCOR Stockholders. 1.2 At the Closing, AXR shall issue and deliver to the DANCOR Stockholders previously authorized and unissued shares of AXR common stock in an amount equal to 95% of the outstanding shares of the AXR (after giving effect to the closing of the Reorganization), calculated on a fully diluted basis. In calculating the outstanding shares of DANCOR for this purpose, it will be assumed that outstanding DANCOR options, warrants and convertible securities are exercised immediately prior to the closing, and that number of shares of AXR common stock necessary to account for DANCOR options, warrants and convertible securities will be reserved in lieu of being issued. At the Closing, AXR will substitute options, warrants and convertible securities to purchase shares of the AXR's common stock for each outstanding option, warrant and other convertible security to acquire shares of DANCOR, each such option or warrant to represent the right to purchase that number of AXR shares as if the DANCOR option, warrant or convertible security had been exercised immediately prior to the Reorganization and exercisable for the same aggregate consideration, and on substantially the same other terms and conditions, that would apply if all of such DANCOR options, warrant or convertible security had been fully exercised. 1.3 At the time of Closing, AXR shall have 1,000,000 pre- Reorganization outstanding shares, or approximately 5% of the outstanding shares of the reorganized company, to consist of approximately 565,217 shares held by current shareholders after a reverse split effected December 11, 1998, 250,000 shares to be issued pursuant to an S-8 Registration Statement before the Reorganization (150,000 of which will be issued only on and subject to the closing of the Reorganization), and 184,783 restricted shares also to be issued before the Reorganization. 1.4 Upon the Closing of the Reorganization, each of the officers, directors and 10% shareholders of AXR shall execute an agreement with DANCOR and AXR in which each of such officer, director and 10% shareholder shall release AXR from any and all claims arising as a result of any prior events (except as permitted by the Agreement) and further covenant and agree that they will not compete with AXR and DANCOR for a period of five (5) years after the Closing in any business engaged in by DANCOR as of the Closing Date including, without limitation, the coating business. 1.5 Until the Closing, each of AXR and DANCOR shall continue to operate its business in the ordinary course and shall not, without the prior written consent of the other party, do any of the following: (i) Incur any material obligations or commitments other than in the ordinary course of business; (ii) Grant any salary increases (other than as required by existing contracts or consistent with current practices), unscheduled promotions or enter into any new employment or benefit contracts; (iii) Solicit, induce or otherwise engage in discussions or negotiations relating to or proposed to lead to the acquisition or Reorganization of sale of substantially all of the assets or shares of DANCOR by or with any party other than AXR; (iv) Sell or dispose of any material assets or properties, except in the ordinary course of business or with the prior consent of the other party hereto; or, (v) Sell any additional shares of its capital stock or grant any additional rights or options to acquire its capital stock, with the except of DANCOR's current private placement offering. 1.6 DANCOR shall provide AXR, as soon as practicable after the Closing Date, with audited financial statements required in connection with the acquisition of a "significant subsidiary" by AXR as that term is defined by rules and regulations promulgated by the Securities and Exchange Commission and such other information as is required for AXR to prepare and file appropriate documents relating to the Reorganization with the Securities and Exchange Commission. Such financial statements will include, among other items, an audited balance sheet of DANCOR as of a recent date, statements of income for each of its last two fiscal years, and related statements of shareholder's equity, statements of cash flows and the appropriate notes to such financial statements, together with the report of an independent certified public accounting firm. 1.7 As a condition to the consummation of the Reorganization, there shall have been no material adverse change in the assets, business or prospects of either DANCOR or AXR except as contemplated by the Agreement. All financial statements provided by the parties to each other pursuant to the Agreement shall be represented to fairly present the financial condition of such party at the date of such financial statements and their results of operations for the periods covered thereby, and shall be prepared in accordance with generally accepted accounting principles. 1.8 AXR and DANCOR will exert their best efforts to obtain such consents or approvals, and to make such filings as in the opinion of their respective counsel may be necessary or advisable to effect the transactions contemplated herein. At the request of AXR, DANCOR shall obtain the consent of any third party which is necessary for the transfer of any asset, right or contract of DANCOR pertaining to the Reorganization contemplated herein, if any. 1.9 As a condition to the consummation of the Agreement, AXR and its counsel and DANCOR and its counsel must each be satisfied as to the validity and legality of all aspects of the Reorganization, including all activities undertaken in relation to the Agreement. Each of the parties to the Reorganization will pay their own expenses incurred in connection with the Agreement and all other events required for the Closing. 1.10 The Agreement will provide that any claims or disputes arising thereunder or as a result of the transactions contemplated therein which cannot be resolved by the parties will be referred to alternative dispute resolution by binding arbitration in the State of Utah. 2. Due Diligence. Upon the execution of this letter of intent by the parties, DANCOR and AXR, and each of their duly authorized representatives, will be provided with full access to the projections, financial records and supervisory management personnel of the other party, which shall include copies of all material agreements, corporate proceedings, access to the chief executive officer and chief financial officer, marketing, product development and manufacturing supervisors, and other records and information which each party deems of significance in an due diligence investigation of the other party hereto. The disclosure of any such information shall be subject to the provisions of Section 3 of this letter agreement. 3. Confidentiality. In connection with the foregoing matters, each party hereto has or will be furnishing to the other from time to time with oral and written information as to its proprietary products, marketing strategy and business plans, significant portions of which each of the parties considers to be proprietary and confidential information (herein called the "Confidential Information"). Each party acknowledges that "Confidential Information," as used herein, does not include any information which (i) was or becomes generally available to the public other than as a result of an improper disclosure by the other party hereto, or (ii) was or becomes information available to the other party on a non-confidential basis from a third party source that is not bound by a confidentiality obligation to either of the parties hereto. Each party agrees that Confidential Information will be used solely for the purpose of evaluating the Reorganization, investigating market information and potential markets, and for AXR to pursue due diligence and legal disclosure requirements in connection with proposed financing activities by AXR, and will not be used in the business or operations of the party to which such information has been disclosed or used in any other way, directly or indirectly, that may detrimental to the interests of the party that owns such Confidential Information. Confidential Information may be disclosed to representatives of the party receiving the same who need to know such Confidential Material for the purposes described above, it being understood that such representatives shall be informed of the confidential nature of the Confidential Information and shall be directed to treat the Confidential Information confidentially and as proprietary information of the party that owns the same. Each party shall notify the other as to the identity of such representatives. If either party receives a request, including a subpoena or similar legal inquiry, to disclose any of the Confidential Material, it shall provide the party that owns such Confidential Information with prompt notice so that the owner may seek appropriate protective relief. If the Agreement is not executed or the Closing thereunder shall fail to occur for any reason, each party shall promptly deliver and return all copies of Confidential Information to the party which owns the same, and without retaining any copy, notes or extracts thereof. Although each party understands that they will endeavor to include in the Confidential Information all materials which it believes to be relevant for the purposes of this letter agreement and the Reorganization, each party further understands that no representation or warranty as to the accuracy or completeness of the Confidential Information has or will be made except as provided by separate written agreement. 4. Press Release. Upon your acceptance and approval hereof, each of us is authorized by the other to issue a press release for the purpose of publicly announcing the transactions contemplated by this letter. AXR and DANCOR each agree to consult with the other as to the form and substance of any press release or other public disclosure of the matters covered in this letter, provided that this shall not be deemed to prohibit AXR or DANCOR from making any disclosure which its respective counsel deems necessary to comply with applicable law. 5. Survival of Certain Provisions. The provision of Sections 3, 4 and 5 of this letter agreement are for the benefit of the respective parties hereto, shall survive any termination of this letter agreement, and shall be governed by and construed in accordance with the laws of the State of Utah. This letter reflects an expression of our mutual intent only, and shall not constitute a binding legal obligation for the transactions described herein (except as expressly set forth in Sections 3, 4 and 5 above) until such time as the Agreement has been executed and the Reorganization has been approved by the Board of Directors and shareholders of AXR and the Board of Directors and Stockholders. It is our desire to move expeditiously towards the completion of these transactions on the basis of the terms and conditions contained herein. To help accomplish this goal, if you are in agreement with the foregoing, would you please indicate your approval of the contents of this letter by signing the attached copy in the space provided and returning it to us at your earliest convenience. The parties acknowledge that they were initially introduced to each other by, and currently share, two common directors and common outside corporate counsel who will have an inherent and unavoidable conflict of interest as to the Reorganization. Each of the parties agrees to engage the services of their own independent counsel for purposes of advising them in connection with this letter of intent, the Agreement, the Closing and other matters relevant to the Reorganization. Each of the parties will require approval of the Reorganization by a majority or more of their independent directors who are not affiliated with the other party. Very truly yours, DANCOR, INC. By:/S/Culley W. Davis Culley W. Davis, Chairman of the Board of Directors Accepted and Agreed to this 10th day of December 1998 A.X.R. DEVELOPMENT CORPORATION, INC. By:/S/David C. Merrell David C. Merrell, President and Chief Executive Officer Exhibit "C" Schedule of Dancor Options and Contingent Issuance of Shares NONE Options Granted to Date NONE Exhibit "D" Dancor Exceptions NONE Exhibit "E" Dancor Patents U. S. Patents: 5,205,874 5,672,390 International Patents: Country Patent No. Australia 660,587 Australia 691,794 Europe 0,585,365 (1) International Patents Pending: Country Patent No. Brazil PI9307502/2 Canada 2149919 Canada 2109629 Europe 94902326.1 Japan 513284/1994 Japan 500477/1993 Russia 95113589 Korea 703535/1993 Trademark Filing: VitroSeal (1) European Patent No. 0,585,365 designates the following countries: Austria, Belgium, Switzerland/Liechtenstein, Germany, Denmark, Spain, France, Great Britain, Greece, Italy, Luxembourg, Monaco, Netherlands, and Sweden. The patent will be enforceable in each of these countries when our European associate completes the registration process in each country. Exhibit "F" Dancor Bank Accounts Zions Bank Account No. 066-00213-0 (Signer: Culley W. Davis Pacific National Bank Account No. 1004949001 (Signer: Daniel Corbin) Exhibit "G" Advanced Coating Technologies, Inc. Exceptions NONE Exhibit "H" Advanced Coating Technologies, Inc. Financial Statements See the 10-QSB for the period ended September 30, 1998 filed with the Securities and Exchange Commission on October 15, 1998 and the 10-KSB for the year ended December 31, 1997 filed with the Securities and Exchange Commission on October 8, 1998 Exhibit "I" Advanced Coating Technologies, Inc. Bank Accounts NONE Exhibit "J" Form of Power of Attorney POWER OF ATTORNEY THE UNDERSIGNED STOCKHOLDER (the "Stockholder") of DANCOR, INC. ("DANCOR") hereby: (i) sells, assigns and transfers unto ADVANCED COATING TECHNOLOGIES, INC., a Nevada corporation ("ACT"), the number of shares of DANCOR set forth opposite Stockholder's name in Exhibit "A" (the "Shares") to that certain Agreement and Plan of Reorganization for the Acquisition of all of the Outstanding shares of Common Stock of Dancor, Inc. by Advanced Coating Technologies, Inc. dated December 23, 1998 (the "Agreement"). (ii) irrevocably constitutes and appoints CULLEY W. DAVIS ("DAVIS") as attorney-in-fact to transfer the Shares on the books of DANCOR to ACT as set forth in the Agreement, with full power of substitution in the premises; (iii) constitutes and appoints DAVIS as Stockholder's true and lawful attorney-in-fact and agent, with full power of substitution, for Stockholder and in Stockholder's name, place, and stead, in any and all capacities (until revoked in writing) to act on behalf of such Stockholder in connection with the Agreement and the exchange of the Shares for ACT shares; and (iv) grants unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises as fully to accomplish all intents and purposes of the Agreement as such Stockholder might or could do in person, hereby ratifying and confirming all that the attorney-in-fact, or his substitute, may lawfully do or cause to be done by virtue of this power of attorney. IN WITNESS WHEREOF, the undersigned has executed this power of Attorney this day of , 1999. (Signature of Stockholder) (Printed Name of Stockholder) EX-99 5 A.X.R. Development Corporation, Inc. 9005 Cobble Canyon Lane Sandy, Utah 84093 PRESS RELEASE-December 15, 1998 Sandy, Utah. A.X.R. Development Corporation, Inc. ("AXR") announced today that it has entered into a letter of intent with Dancor, Inc. ("Dancor"), based in Draper, Utah, to acquire all of the issued and outstanding shares of common stock of Dancor in a tax-free, stock-for-stock reorganization. In accordance with the terms of the letter of intent, the shareholders of Dancor will acquire 95% of the outstanding shares of AXR following the Reorganization Agreement with AXR. It is anticipated that after the closing of the transaction, the current shareholders of AXR will own approximately 1,000,000 shares and that the shareholders of Dancor will be issued approximately 19,500,000 shares, including shares reserved for issuance in accordance with outstanding Dancor stock options. The reorganization is scheduled to close on or about December 31, 1998, subject to the execution of definitive agreements by AXR, Dancor and the shareholders of Dancor. AXR has no current operations while Dancor is engaged in research and development, manufacture, marketing, sales and distribution of a proprietary coating product called Vitroseal (trademark). Pending the completion of the Reorganization, AXR's name has been changed to "Advanced Coating Technologies, Inc."; the Company effected a 23 for 1 reverse split of the outstanding stock, effective December 10, 1998; and its OTC Bulletin Board symbol has been changed to "ACTG." Dancor owns the rights to the Vitroseal process. The process is based on inorganic silicate chemistry that makes superior, bright, clear, corrosion- protective coatings on metal surfaces. Vitroseal is a waterborne coating which emits no organic vapor emissions so is environmentally friendly. Dancor is currently focused on refining Vitroseal for use in coating truck and car tire rims for protection and aesthetics. For further information, contact David Merrell, President of AXR (801- 942-0555), or John W. Nagel, Chief Financial Officer of Dancor (801-553-8753). -----END PRIVACY-ENHANCED MESSAGE-----