Exhibit 2.
Stock Exchange Agreement and Plan of Reorganization between the Registrant and
Interbet, Inc., a Nevada corporation.
STOCK EXCHANGE AGREEMENT AND PLAN OF REORGANIZATION
This Agreement, made and entered into as of June 6, 1997, by and between
BioChem, Inc., a Nevada corporation, ("Bio-Chem"), and Interbet, Inc., a Nevada
corporation, ("Interbet"). The plan of reorganization following the exchange of
stock herein provided shall be a reorganization within the meaning of the
applicable provisions of the Internal Revenue Code of 1986, as amended.
Interbet, as the owner of a majority of the issued and outstanding common stock
of Bio-Chem following the exchange of stock, shall be merged into Bio-Chem
pursuant to Nevada law and Bio-Chem shall be the surviving corporation, changing
its name to Interbet. It is understood and agreed by the parties that the
transaction contemplated herein is termed a "shell transaction" or reverse
merger/acquisition, the purpose of which is to provide a public trading market
for the shares of the surviving corporation once the merger transaction is
completed. In order to consummate the exchange of stock and plan of
reorganization and in consideration of the mutual benefits to be derived
therefrom and the mutual agreements hereinafter contained, Interbet and
Bio-Chem, by their respective boards of directors approve and adopt this
Agreement effective the closing date of June 6, 1997, and mutually covenant and
agree with each other as follows:
Shares to be issued and exchanged.
On the closing date, Interbet shall issue 1,600,000 shares of its
authorized and unissued common stock ("Interbet Stock") and deliver the Interbet
Stock to Bio-Chem in exchange for 3,200,000 shares of Bio-Chem's authorized and
unissued common stock ("Bio-Chem Stock"); and, Bio-Chem shall issue and deliver
the Bio-Chem Stock to Interbet in exchange for the Interbet Stock. The Interbet
Stock and the Bio-Chem Stock shall bear a restrictive legend pursuant to the
requirements of Regulation D under the Securities Act of 1933, as amended.
Following the exchange of stock contemplated by this Agreement, the Interbet
Stock shall represent 35.83 percent of Interbet's then issued and outstanding
common stock and the BioChem Stock shall represent 74.42 percent of Bio-Chem's
then issued and outstanding common stock. On the closing date and subject to the
exchange of stock,
(i) all of Bio-Chem's directors and officers shall tender their respective
resignations ("Retiring Management");
(ii) Interbet, as the majority stockholder of Bio-Chem, shall elect directors to
fill vacancies on Bio-Chem's board of directors so created and Bio-Chem's board
of directors, then constituted, shall elect Bio-Chem's officers;
(iii) Retiring Management shall deliver all of Bio-Chem's book and records to
the newly elected officers of Bio-Chem; and,
(iv) Bio-Chem's bank accounts shall be blocked from withdrawals and checks by
the Retiring Management, with telephonic confirmation thereof, and confirmation
of the account balances, made to the newly elected officers.
As soon as practicable following the exchange of stock contemplated by this
Agreement, the respective boards of directors of Interbet and of Bio-Chem shall
approve Articles of Merger, including a Plan of Merger, and file such Articles
with the Secretary of State of the State of Nevada in accordance with the laws
thereof. The Plan of Merger shall provide for the conversion of the 2,865,200
issued and outstanding shares of Interbet common stock held by persons other
than Bio-Chem into 2,865,200 shares of common stock of the surviving
corporation, for conversion of the 1,100,000 issued and outstanding shares of
Bio-Chem common stock held by persons other than Interbet into 1,100,000 shares
of common stock of the surviving corporation, and for the cancellation and
retirement of the Bio-Chem Stock and the Interbet Stock, with the result that
the surviving corporation shall have a total of 3,965,200 of common stock issued
and outstanding immediately following the effective date of the merger
contemplated by this Agreement, and the change of the name of Bio-Chem, as the
surviving corporation, to Interbet.
REPRESENTATIONS AND WARRANTIES OF INTERBET
To the best knowledge of Interbet, no representation or warranty by
Interbet in this Agreement, nor any statement, certificate, schedule or exhibit
hereto furnished or to be furnished by or on behalf of Interbet pursuant to this
Agreement, nor any document or certificate delivered to Bio-Chem or to Capital
General Corporation pursuant to this Agreement or in connection with actions
contemplated hereby, contains or shall contain any untrue statement of material
fact or omits or shall omit a material fact necessary to make the statement
contained therein not misleading. Interbet understands and agrees that Bio-Chem
is not engaged in any business, is without substantial assets, other than
$50,000 on deposit at First Security Bank Of Utah, or liabilities and with its
public shareholders is thus defined herein as a public "shell" corporation.
Interbet understands and agrees that Bio-Chem is a "shell" corporation and
makes no claim on any assets owned by Bio-Chem, other than its bank account,
previous to the closing contemplated herein. However, Interbet acknowledges and
represents it is aware of the risks of being a public company and understands
that regulatory efforts
regarding public shell transactions similar to the transaction contemplated
herein has been and is currently being exerted by some states, the U.S.
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. (NASD).
There are no legal, administrative or other proceedings, or other claims,
judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving Interbet which are known, or which they have
reasonable grounds to know, of any basis for any such proceedings, or other
claims, judgments, injunctions or restrictions, except as attached hereto as
Exhibit A and made a part of this Agreement or otherwise disclosed herein.
Interbet understands and agrees that once the merger is completed, it, as a
constituent part of the surviving corporation, will be a public company subject
to the extensive, complex state, federal and NASD securities regulations
incumbent on public companies. In particular, the parties understand and agree
that a Form 8-K must be filed with the United States Securities and Exchange
Commission within fifteen days after closing which filing requires that audited
financial statements be filed within sixty days after the filing of the 8-K and
that such responsibility shall not be the responsibility of Capital General
Corporation, its officers, directors or employees nor of Retiring Management,
but the sole responsibility of the new officers and directors of Bio-Chem.
Interbet acknowledges that it has carefully evaluated its financial
resources and investment position and the risks associated with this transaction
and acknowledges that it is able to bear the economic risks and financial
requirements of, related to and resulting from this transaction.
Interbet represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the state of Nevada and
that the execution and performance of this Agreement and the issuance of stock
contemplated hereby have been authorized by the board of directors of Interbet.
The Interbet Stock to be delivered pursuant to this Agreement, when so
delivered, will have been duly and validly authorized and issued by Interbet and
will be fully-paid and nonassessable.
Interbet hereby further acknowledges and agrees that no representations or
warranties have been made by Bio-Chem or Capital General Corporation as to the
benefits to be derived by Interbet in completing this transaction. It is
expressly understood and agreed that neither Capital General Corporation nor
Bio-Chem or Retiring Management have made any warranty or agreement, expressed
or implied, as to the tax or securities consequences of the transactions
contemplated by this agreement or the tax or securities consequences of any
action pursuant to or growing out of this agreement.
Interbet acknowledges receipt of a copy of Bio-Chem's filings and reports
pursuant to the Securities Exchange Act of 1934, as amended, in particular the
Prospectus dated June 30, 1993, the Form 10-K for the year ended December 31,
1996 and Form 8-K filed May 1, 1997 and May 15, 1997 in which it is disclosed
that, on February 8, 1996, Xxxxx X. Xxxxxx, Secretary/Treasurer and a Director
of Bio-Chem, was charged in the U.S. District Court for the Eastern District of
Pennsylvania with conspiracy, wire fraud and fraud in the offer, purchase and
sale of securities, in violation of 18 U.S.C. xx.xx. 2, 371 and 1343, 15 U.S.C.
xx.xx. 77q(a), 77x, 78j(b) and 78ff, and 17 C.F.R. ss. 240.10b-5 (1986); and,
that, on April 16, 1997, Xx. Xxxxxx was convicted of one count of conspiracy,
five counts of wire fraud and three counts of securities fraud; and,, that,
while Xx. Xxxxxx has resigned his affiliation with Bio-Chem, Xxxxxx Enterprises
and Capital General Corporation, it is contemplated that he will provide
assistance as may be necessary for an orderly transition of their
affairs and he may continue to be deemed an affiliate of Bio-Chem by virtue of
his familial and historical relationships with Bio-Chem, its shareholders,
officers and directors; as well as such other information as Interbet deems
necessary or appropriate as a prudent sophisticated and knowledgeable investor
in evaluating the acquisition of the Bio-Chem Stock and making this Agreement.
Interbet acknowledges Bio-Chem and Capital General Corporation have made
available the opportunity to obtain additional information to verify the
accuracy of the information contained in the filings and reports and to evaluate
the merits and risks of this transaction.
Interbet acknowledges that it has had the opportunity to ask questions of
Retiring Management and Capital General Corporation and has received
satisfactory answers from Retiring Management, Capital General Corporation, or
its and their affiliates, associates and employees concerning the terms and
conditions of this transaction and the information in the filings and reports.
Interbet covenants and warrants that the Bio-Chem Stock is being acquired
for Interbet's own account and for investment in connection with the merger and
not with the present view toward the sale or distribution in the United States
thereof and will not be disposed of except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or (ii)
another transaction, which, in the opinion of counsel, is exempt from
registration under the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. In order to
effectuate the covenants of this paragraph, an appropriate endorsement will be
placed on the certificates for the Bio-Chem Stock delivered to Interbet pursuant
to this Agreement and stop transfer instructions shall be placed with the
transfer agent for the securities. Interbet is aware that the Bio-Chem Stock
will not have been registered pursuant to the Securities Act of 1933, as
amended; and, in the event the merger is not consummated, under current
interpretations and applicable rules, particularly Rule 144, it will probably
have to retain such shares for a period of at least one year and at the
expiration of such one-year period sale may be confined to brokerage
transactions of limited amounts requiring a notification filing on Form 144 with
the Securities and Exchange Commission and such disposition may be available
only if Bio-Chem is current in its filings with the Securities and Exchange
Commission and Interbet is aware of Rule 144 issued by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the other
limitations imposed thereby on its disposition of the Bio-Chem Stock.
Interbet is aware that there can be no assurance regarding the individual
tax consequences of this transaction, nor can there be any assurance that the
Internal Revenue Code or the regulation promulgated thereunder will not be
amended in such manner as to deprive Interbet of any tax benefit that might
otherwise be received. Interbet is relying upon the advice of their personal tax
advisor with respect to the tax aspects of this transaction.
Interbet acknowledges that it is its responsibility to comply with the
appropriate state and federal securities laws, as well as NASD rules and
regulations, particularly secondary trading requirements. Interbet agrees that
the surviving corporation shall be listed in either Xxxxx'x Investor Services or
Standard and Poors, exempting secondary trading of the surviving corporation's
stock in those states providing for such secondary trading exemption.
REPRESENTATIONS AND WARRANTIES OF BIO-CHEM
To the best knowledge of Bio-Chem, no representation or warranty by
Bio-Chem in this Agreement, nor any statement, certificate, schedule or exhibit
hereto furnished or to be furnished by or on behalf of Bio-Chem pursuant to this
Agreement, nor any document or certificate delivered to Interbet pursuant to
this Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statement contained therein not misleading.
Bio-Chem is current in its filings and reports required pursuant to the
Exchange Act, all of which filings and reports contain all the information
required to be contained therein and do not contain any untrue statement of
material fact or omits or shall omit a material fact necessary to make the
statement contained therein not misleading. None of such filings and reports
are, to the best knowledge of Bio-Chem, the subject of comments by the
Commission staff which have not been satisfied, nor the subject of any stop
order or other administrative proceeding.
To the knowledge of Retiring Management, Bio-Chem is not a party to nor
bound by any agreement, deed, lease, power of attorney or other instrument other
than which is disclosed in its filings and reports pursuant to the Exchange Act.
Bio-Chem has executed an Agreement with National Stock Transfer, Inc., a
transfer agency company affiliated with Capital General Corporation. A copy of
this agreement has been made available for inspection by Interbet.
There are no legal, administrative or other proceedings, or other claims,
judgments, injunctions or restrictions, either threatened, pending or
outstanding against or involving Bio-Chem which are known, or which they have
reasonable grounds to know, of any basis for any such proceedings, or other
claims, judgments, injunctions or restrictions, except as disclosed in BioChem's
filings and reports pursuant to the Exchange Act.
Bio-chem represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the state of Nevada and
that the execution and performance of this Agreement and the issuance of stock
contemplated hereby have been authorized by the board of directors of Bio-Chem.
The Bio-Chem Stock to be delivered pursuant to this agreement, when so
delivered, will have been duly and validly authorized and issued by BioChem and
will be fully-paid and nonassessable.
Bio-Chem hereby further acknowledges and agrees that no representations or
warranties have been made by Interbet as to the benefits to be derived by
BioChem in completing this transaction. It is expressly understood and agreed
that neither Interbet nor its officers or agents have made any warranty or
agreement, expressed or implied, as to the tax or securities consequences of the
transactions contemplated by this Agreement or the tax or securities
consequences of any action pursuant to or growing out of this Agreement.
Bio-Chem covenants and warrants that the Interbet Stock is being acquired for
Bio-Chem's own account and for investment in connection with the merger and not
with the present view toward the sale or distribution in the United States
thereof and will not be disposed of except:
(i) pursuant to an effective registration statement under the Securities Act of
1933, as amended, or
(ii) another transaction, which, in the opinion of counsel, is exempt from
registration under the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
In order to effectuate the covenants of this paragraph, an appropriate
endorsement will be placed on the certificates for the Interbet Stock delivered
to Bio-Chem pursuant to this Agreement and stop transfer instructions shall be
placed with the transfer agent for the securities. Bio-Chem is aware that the
Interbet Stock will not have been registered pursuant to the Securities Act of
1933, as amended; and, in the event the merger is not consummated, under current
interpretations and applicable rules, particularly Rule 144, it will probably
have to retain such shares for a period of at least one year and at the
expiration of such one-year period sale may be confined to brokerage
transactions of limited amounts requiring a notification filing on Form 144 with
the Securities and Exchange Commission and such disposition may be available
only if Interbet is current in its filings with the Securities and Exchange
Commission and Interbet is aware of Rule 144 issued by the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the other
limitations imposed thereby on its disposition of the Interbet Stock.
Bio-Chem understands that neither Interbet nor any of its securities are
registered pursuant to nor is Bio-Chem a reporting company under any federal
securities law.
Bio-Chem is aware that there can be no assurance regarding the individual
tax consequences of this transaction, nor can there be any assurance that the
Internal Revenue Code or the regulation promulgated thereunder will not be
amended in such manner as to deprive Bio-Chem or its stockholders of any tax
benefit that might otherwise be received. Bio-Chem is relying upon the advice of
their personal tax advisor with respect to the tax aspects of this transaction.
Bio-Chem represents and warrants that a "Complaint and Order Denying
Exemptions and to Cease and Desist in the Matter of Capital General Corporation,
Xxxxx Xxx Xxxxxx et al. filed by the State of New Jersey in January, 1994 was
resolved as disclosed in the Bio-Chem's Form 10-Q/A filing with the SEC dated
November 28, 1994. Bio-Chem agrees to provide any supplemental information which
may be requested by Interbet relating to any matter discussed herein.
ACTIONS PRIOR TO CLOSING
Interbet and Bio-Chem, respectively, shall duly comply with all applicable
laws as may be required for the valid and effective exchange of stock and merger
contemplated by this Agreement.
The representations and warranties made by the respective parties in this
Agreement or given on its behalf hereunder shall be substantially accurate in
all material respects on and as of the closing date with the same effect as
though such representations and warranties had been made or given on and as of
the closing date.
Interbet and Bio-Chem, respectively, shall perform and comply with all its
obligations under this Agreement which are to be performed and complied with by
it prior to or on the closing date including the delivery of its documents
specified herein.
Law governing.
It is understood and agreed that both parties are Nevada corporations. This
agreement may not be modified or terminated orally, and shall be construed and
interpreted according to the laws of the State of Nevada and enforced in its
courts.
Arbitration.
Any and all disputes and controversies of every kind and nature between the
parties hereto arising out of or relating to this Agreement relating to the
existence, construction, validity, interpretation or meaning, performance,
non-performance, enforcement, operation, breach, continuance or termination
thereof shall be subject to an arbitration mutually agreeable to the parties or,
in the absence of such mutual agreement, then subject to arbitration in
accordance with the rules of the American Arbitration Association. It is the
intent of the parties hereto and the purpose of this provision to make the
submission to arbitration of any dispute or controversy arising hereunder an
express condition precedent to any legal or equitable action or proceeding of
any nature whatsoever.
Assignment, amendment and modification.
This agreement shall not be assigned
by any party without the written consent of the other. The parties may amend,
modify and supplement this agreement in such manner as may be agreed upon by
them in writing.
Termination and abandonment.
This Agreement may be terminated and the transactions provided for by this
Agreement may be abandoned without liability on the part of any party to any
other, at any time before the closing date by mutual consent of the parties. In
the event of termination and abandonment by any party as herein provided,
written notice shall forthwith be given to the other party, and each party shall
pay its own expenses incident to preparation for the consummation of this
agreement and the transactions contemplated hereunder. In the event that this
Agreement has not been completed by the closing date or within thirty days
thereafter, this Agreement and the transactions contemplated hereby shall be
deemed to have been abandoned and neither party shall be under any further
obligation to the other.
Notices.
All notices, requests, demands and other communications hereunder shall be
deemed to have been duly given, if delivered by hand or mailed, certified or
registered mail with postage prepaid:
(a) If to Bio-Chem: 0000 X. Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000
(b) If to Interbet: Ste 110, 0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Entire agreement.
This instrument embodies the entire agreement between the parties hereto
with respect to the transactions contemplated herein, and there have been and
are no agreements, representations or warranties between the parties other than
those set forth or provided for herein. Any announcements, amendments or
modifications shall be set forth in writing and approved by the parties hereto.
This agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Further documents. The parties agree to execute any
and all other documents and to take such other action or corporate proceedings
as may be necessary or desirable to carry out the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be duly executed all as of the day and year first above written.
[SEAL]
Interbet, Inc.
Attest:
By: /s/ S.T. Deck, Jr.
S.T. Deck, Jr., President
/s/ Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxx, Secretary
[SEAL]
Bio-Chem, Inc.
Attest:
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, Secretary
