AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("the Agreement"), dated as of
the 31st day December, 2001, by and between Amexdrug Corporation, a Nevada
corporation ("Amex") and Allied Med, Inc., an Oregon corporation doing business
as Allied Med Wholesale Drug Company, Inc., ("Allied") and the shareholders of
Allied ("Shareholders"), with reference to the following:
A. Amex is a Nevada corporation, which recently changed its domicile from
California to Nevada. Amex was organized in California in 1968. Amex has
authorized capital stock of 50,000,000 shares, $.001 par value, of which
1,052,783 shares are currently issued and outstanding.
B. Allied is a privately held corporation organized under the laws of the
State of Oregon in 1997.
C. The respective Boards of Directors of Amex and Allied have deemed it
advisable and in the best interests of Amex and Allied that Allied be acquired
by Amex, pursuant to the terms and conditions set forth in this Agreement.
D. Amex and Allied propose to enter into this Agreement which provides
among other things that all of the outstanding shares of Allied be acquired by
Amex, in exchange for shares of Amex and such additional items as more fully
described in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 50,000 common shares, which represents all
of the outstanding shares of Allied shall be acquired by Amex in exchange for
7,000,000 restricted common shares of Amex. The shares of Amex to be issued in
this transaction shall be issued as set forth in Exhibit A to this Agreement.
1.02 At the Closing, the sole Allied shareholder will deliver certificates
for the outstanding shares of Allied, duly endorsed so as to make Amex the sole
holder thereof, free and clear of all claims and encumbrances and Amex shall
deliver a transmittal letter directed to the transfer agent of Amex directing
the issuance of shares to the shareholders of Allied as set forth on Exhibit A
of this Agreement.
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1.03 Following the reorganization, and the acquisition as set forth in
section D of this Agreement, there will be a total of 8,052,783 shares, $.001
par value, issued and outstanding in Amex.
1.04 Following the reorganization, Allied will be a wholly owned subsidiary
of Amex.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place at 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 on or before December 31, 2001, (the "Closing Date") or
at such other place or date and time as may be agreed to in writing by the
parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF AMEX
Amex hereby represents and warrants to Allied as follows:
3.01 Amex shall deliver to Allied, on or before Closing, each of the
following:
(a) Financial Statements. Audited financial statements of Amex
including, but not limited to, balance sheets and profit and loss
statements from fiscal year end 2000, and unaudited financial statements of
September 30, 2001 prepared in accordance with generally accepted
accounting principles and which fairly present the financial condition of
Amex at the dates thereof. (Schedule A)
(b) Property. An accurate list and description of all property, real
or personal, owned by Amex of a value equal to or greater than $1,000.00.
(Schedule B.)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule A. (Schedule C.) A
complete and accurate list of all debts, liabilities and obligations of
Amex incurred or owing as of the date of this Agreement. (Schedule C.1.)
(d) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and
each contract, promissory note, mortgage, license, franchise, or other
written agreement to which Amex is a party which involves or can reasonably
be expected to involve aggregate future payments or receipts by Amex
(whether by the terms of such lease, contract, promissory note, license,
franchise or other written agreement or as a result of a guarantee of the
payment of or indemnity against the failure to pay same) of $1,000.00 or
more annually during the twelve-month period ended December 31, 2001, or
any consecutive twelve-month period
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thereafter, except any of said instruments which terminate or are
cancelable without penalty during such twelve-month period. (Schedule D.)
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Amex for the
repayment of borrowed money. (Schedule E.)
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a
default thereunder; or where notice of such transaction is required at or
subsequent to closing, or where consent to an acquisition, consolidation,
or sale of all or substantially all of the assets is required to avoid a
default thereunder. (Schedule F.)
(g) Articles and Bylaws. Complete and accurate copies of the
Certificate and Articles of Incorporation and Bylaws of Amex together with
all amendments thereto to the date hereof. (Schedule G.)
(h) Shareholders. A complete list of all persons or entities holding
capital stock of Amex or any rights to subscribe for, acquire, or receive
shares of the capital stock of Amex (whether warrants, calls, options, or
conversion rights), including copies of all stock option plans whether
qualified or nonqualified, and other similar agreements. (Schedule H.)
(i) Officers and Directors. A complete and current list of all
Officers and Directors of Amex. (Schedule I.)
(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate for each present
employee of Amex who received $1,000.00 or more in aggregate compensation
from Amex whether in salary, bonus or otherwise, during the year 2000, or
who is presently scheduled to receive from Amex a salary in excess of
$1,000.00 during the year ending December 2001, including in each case the
amount of compensation received or scheduled to be received, and a schedule
of the hourly rates of all other employees listed according to departments.
(Schedule J.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration or
other such proceedings or investigations (including without limitations
unfair labor practice matters, labor organization activities, environmental
matters and civil rights violations) pending or, to the knowledge of Amex
threatened, which may materially and adversely affect Amex. (Schedule K.)
(l) Tax Returns. Accurate copies of all Federal and State tax returns
for Amex for the last fiscal year. (Schedule L.)
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(m) Agency Reports. Copies of all material reports or filings (and a
list of the categories of reports or filings made on a regular basis) made
by Amex under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local) during the last fiscal year. (Schedule M.)
(n) Banks. A true and complete list (in all material respects), as of
the date of this Agreement, showing (1) the name of each bank in which Amex
has an account or safe deposit box, and (2) the names and addresses of all
signatories. (Schedule N.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions wherein
Amex is qualified to do business and is in good standing. (Schedule O.)
(p) Subsidiaries. A complete list of all subsidiaries of Amex.
(Schedule P.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which Amex has an interest, direct or indirect.
(q) Union Matters. An accurate list and description (in all material
respects) of all union contracts and collective bargaining agreements of
Amex, if any. (Schedule Q.)
(r) Employee and Consultant Contracts. A complete and accurate list of
all employee and consultant contracts which Amex may have, other than those
listed in the schedule on Union Matters. (Schedule R.)
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock options, bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance,
disability, death benefit or other benefit plans, trust agreements or
arrangements of Amex in effect on the date hereof or to become effective
after the date thereof, together with copies of any determination letters
issued by the Internal Revenue Service with respect thereto. (Schedule S.)
(t) Insurance Policies. A complete and accurate list (in all material
respects) and a description of all material insurance policies naming Amex
as an insured or beneficiary or as a loss payable payee or for which Amex
has paid all or part of the premium in force on the date hereof, specifying
any notice or other information possessed by Amex regarding possible claims
thereunder, cancellation thereof or premium increases thereon, including
any policies now in effect naming Amex as beneficiary covering the business
activities of Amex. (Schedule T.)
(u) Customers. A complete and accurate list (in all material respects)
of the customers of Amex, including presently effective contracts of Amex
to be assigned to Amex, accounting for the principle revenues of Amex,
indicating the dollar amounts of gross income of each such customer for the
period ended September 30, 2001. (Schedule U.)
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(v) Licenses and Permits. A complete list of all licenses, permits and
other authorizations of Amex. (Schedule V.)
3.02 Organization, Standing and Power. Amex is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada with all requisite corporate power to own or lease its properties and
carry on its businesses as are now being conducted.
3.03 Qualification. Amex is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
its business operations. Such jurisdictions, which are the only jurisdictions in
which Amex is duly qualified and licensed as a foreign corporation, are shown in
Schedule O.
3.04 Capitalization of Amex. The authorized capital stock of Amex consists
of 50,000,000 shares of Common Stock, $.001 par value, of which the only shares
issued and outstanding will be 1,052,783, which shares were or will be duly
authorized, validly issued and fully paid and nonassessable. There are no
preemptive rights with respect to the Amex stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate actions, including but not limited to duly and
validly authorized action and approval by the Board of Directors, on the part of
Amex. This Agreement constitutes the valid and binding obligation of Amex
enforceable against it in accordance with its terms, subject to the principles
of equity applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Amex and the execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of Amex's
Certificate and Articles of Incorporation or Bylaws or of any other agreement,
court order or instrument to which Amex is a party or bound by.
3.06 Absence of Undisclosed Liabilities. Amex has no material liabilities
of any nature, whether fixed, absolute, contingent or accrued, which were not
reflected on the financial statements set forth in Schedule A or otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached hereto.
As of the Closing, Amex shall have no assets or liabilities other than those
resulting from the acquisition of Allied and those resulting from the
acquisitions identified in Paragraph B of this Agreement.
3.07 Absence of Changes. Since September 30, 2001 there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of Amex, except for changes resulting from
completion of those transactions described in Section 5.01.
3.08 Tax Matters. All taxes and other assessments and levies which Amex is
required by law to withhold or to collect have been duly withheld and collected,
and have been paid over to the proper government authorities or are held by Amex
in separate bank accounts for such payment or are represented by depository
receipts, and all such withholdings and collections and
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all other payments due in connection therewith (including, without limitation,
employment taxes, both the employee's and employer's share) have been paid over
to the government or placed in a separate and segregated bank account for such
purpose. There are no known deficiencies in income taxes for any periods and
further, the representations and warranties as to absence of undisclosed
liabilities contained in Section 3.06 includes any and all tax liabilities of
whatsoever kind or nature (including, without limitation, all federal, state,
local and foreign income, profit, franchise, sales, use and property taxes) due
or to become due, incurred in respect of or measured by Amex income or business
prior to the Closing Date.
3.09 Options, Warrants, etc. Except as otherwise described in Schedule H,
there are no outstanding options, warrants, calls, commitments or agreements of
any character to which Amex or its shareholders are a party or by which Amex or
its shareholders are bound, or are a party, calling for the issuance of shares
of capital stock of Amex or any securities representing the right to purchase or
otherwise receive any such capital stock of Amex.
3.10 Title to Assets. Except for liens set forth in Schedule C, Amex is the
sole unconditional owner of, with good and marketable title to, all assets
listed in the schedules as owned by it and all other property and assets are
free and clear of all mortgages, liens, pledges, charges or encumbrances of any
nature whatsoever.
3.11 Agreements in Force and Effect. Except as set forth in Schedules D and
E, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which Amex is a
party are valid and in full force and effect on the date hereof, and Amex has
not breached any material provision of, and is not in default in any material
respect under the terms of, any such contract, agreement, plan, promissory note,
mortgage, lease, policy, license, franchise or similar instrument which breach
or default would have a material adverse effect upon the business, operations or
financial condition of Amex.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of either Amex or the shareholders
thereof, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the assets, properties,
business or income of Amex. Amex has substantially complied with, and is not in
default in any material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of Amex and except as set
forth in Schedule K, Amex is not in violation of or in default with respect to
any applicable law or any applicable rule, regulation, order, writ or decree of
any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of Amex.
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3.14 Brokers and Finders. Amex shall be solely responsible for payment to
any broker or finder retained by Amex for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
3.15 Accuracy of Information. No representation or warranty by Amex
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to Allied pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.16 Subsidiaries. Except as listed in Schedule P, Amex does not have any
other subsidiaries or own capital stock representing ten percent (10%) or more
of the issued and outstanding stock of any other corporation.
3.17 Consents. Except as listed in Schedule F, no consent or approval of,
or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by Amex or any
shareholder thereof in connection with the consummation of the transactions
contemplated hereby.
3.18 Improper Payments. Neither Amex, nor any person acting on behalf of
Amex has made any payment or otherwise transmitted anything of value, directly
or indirectly, to (a) any official or any government or agency or political
subdivision thereof for the purpose of influencing any decision affecting the
business of Amex (b) any customer, supplier or competitor of Amex or employee of
such customer, supplier or competitor, for the purpose of obtaining, retaining
or directing business for Amex or (c) any political party or any candidate for
elective political office nor has any fund or other asset of Amex been
maintained that was not fully and accurately recorded on the books of account of
Amex.
3.19 Copies of Documents. Amex has made available for inspection and
copying by Allied and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents which it has filed
with the Securities and Exchange Commission and all other governmental agencies
which are material to the terms and conditions contained in this Agreement.
Furthermore, all filings by Amex with the Securities and Exchange Commission,
and all other governmental agencies, including but not limited to the Internal
Revenue Service, have contained information which is true and correct, to the
best knowledge of the Board of Directors of Amex, in all material respects and
did not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the financial condition or
operations of Amex or adversely effect the objectives of this Agreement with
respect to Allied including, but not limited to, the issuance and subsequent
trading of the shares of common stock of Amex to be received hereby, subject to
compliance by the shareholders of Allied with applicable law.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
ALLIED
Allied hereby represents and warrants to Amex as follows:
4.01 Allied shall deliver to Amex, on or before Closing, the following:
(a) Financial Statements. An audited balance sheet of Allied as of its
inception, through a current date. (Schedule AA)
(b) Property. An accurate list and description of all property, real
or personal owned by Allied of a value equal to or greater than $1,000.00.
(Schedule BB)
(c) Liens and Liabilities. A complete and accurate list of all
material liens, encumbrances, easements, security interests or similar
interests in or on any of the assets listed on Schedule AA. (Schedule CC.)
A complete and accurate list of all debts, liabilities and obligations of
Allied incurred or owing as of the date of this Agreement. (Schedule CC.1.)
(d) Leases and Contracts. A complete and accurate list describing all
material terms of material leases (whether of real or personal property)
and each contract, promissory note, mortgage, license, franchise, or other
written agreement to which Allied is a party which involves or can
reasonably be expected to involve aggregate future payments or receipts by
Allied (whether by the terms of such lease, contract, promissory note,
license, franchise or other written agreement or as a result of a guarantee
of the payment of or indemnity against the failure to pay same) of
$1,000.00 or more annually during the twelve-month period ended December
31, 2001 or any consecutive twelve-month period thereafter, except any of
said instruments which terminate or are cancelable without penalty during
such twelve-month period. (Schedule DD.)
(e) Loan Agreements. Complete and accurate copies of all loan
agreements and other documents with respect to obligations of Allied for
the repayment of borrowed money. (Schedule EE.)
(f) Consents Required. A complete list of all agreements wherein
consent to the transaction herein contemplated is required to avoid a
default thereunder; or where notice of such transaction is required at or
subsequent to closing, or where consent to an acquisition, consolidation,
or sale of all or substantially all of the assets is required to avoid a
default thereunder. (Schedule FF.)
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(g) Articles and Bylaws. Complete and accurate copies of the Articles
of Incorporation and Bylaws of Allied, together with all amendments thereto
to the date hereof. (Schedule GG.)
(h) Shareholders. A complete list of all persons or entities holding
capital stock of Allied or any rights to subscribe for, acquire, or receive
shares of the capital stock of Allied (whether warrants, calls, options, or
conversion rights), including copies of all stock option plans whether
qualified or nonqualified, and other similar agreements. (Schedule HH.)
(i) Officers and Directors. A complete and current list of all
officers and Directors of Allied. (Schedule II.)
(j) Salary Schedule. A complete and accurate list (in all material
respects) of the names and the current salary rate or each present employee
of Allied who received $1,000 or more in aggregate compensation from Allied
whether in salary, bonus or otherwise, during the year 2000, or who is
presently scheduled to receive from Allied a salary in excess of $1,000.00
during the year ending December 31, 2001, including in each case the amount
of compensation received or scheduled to be received, and a schedule of the
hourly rates of all other employees listed according to departments.
(Schedule JJ.)
(k) Litigation. A complete and accurate list (in all material
respects) of all material civil, criminal, administrative, arbitration or
other such proceedings or investigations (including without limitations
unfair labor practice matters, labor organization activities, environmental
matters and civil rights violations) pending or, to the knowledge of Allied
threatened, which may materially and adversely affect Allied. (Schedule
KK.)
(l) Tax Returns. Accurate copies of all Federal and State tax returns
for Allied, if any. (Schedule LL.)
(m) Agency Reports. Copies of all material reports or filings (and a
list of the categories of reports or filings made on a regular basis) made
by Allied under ERISA, EEOC, FDA and all other governmental agencies
(federal, state or local). (Schedule MM.)
(n) A true and complete list (in all material respects), as of the
date of this Agreement, showing (1) the name of each bank in which Allied
has an account or safe deposit box, and (2) the names and addresses of all
signatories. (Schedule NN.)
(o) Jurisdictions Where Qualified. A list of all jurisdictions wherein
Allied is qualified to do business and is in good standing. (Schedule OO.)
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(p) Subsidiaries. A complete list of all subsidiaries of Allied.
(Schedule PP.) The term "Subsidiary" or "Subsidiaries" shall include
corporations, unincorporated associations, partnerships, joint ventures, or
similar entities in which Allied has an interest, direct or indirect.
(q) Union Matters. An accurate list and description (in all material
respects of union contracts and collective bargaining agreements of Allied,
if any. (Schedule QQ.)
(r) Employee and Consultant Contracts. A complete and accurate list of
all employee and consultant contracts which Allied may have, other than
those listed in the schedule on Union Matters. (Schedule RR.)
(s) Employee Benefit Plans. Complete and accurate copies of all
salary, stock option, bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance, disability, death
benefit or other benefit plans, trust agreements or arrangements of Allied
in effect on the date hereof or to become effective after the date thereof,
together with copies of any determination letters issued by the Internal
Revenue Service with respect thereto. (Schedule SS.)
(t) Insurance Policies. A complete and accurate list (in all material
respects) and description of all material insurance policies naming Allied
as an insured or beneficiary or as a loss payable payee or for which Allied
has paid all or part of the premium in force on the date hereof, specifying
any notice or other information possessed by Allied regarding possible
claims thereunder, cancellation thereof or premium increases thereon,
including any policies now in effect naming Allied as beneficiary covering
the business activities of Allied. (Schedule TT.)
(u) Customers. A complete and accurate list (in all material respects)
of the customers of Allied, including all presently effective contracts of
Allied to be assigned to Allied, accounting for the principle revenues of
Allied, indicating the dollar amounts of gross revenues of each such
customer for the period ended December 31, 2000. (Schedule UU.)
(v) Licenses and Permits. A complete list of all licenses, permits and
other authorizations of Allied. (Schedule VV.)
4.02 Organization, Standing and Power. Allied is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Oregon with all requisite corporate power to own or lease its properties and
carry on its business as is now being conducted.
4.03 Qualification. Allied is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such
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jurisdictions, which are the only jurisdictions in which Allied is duly
qualified and licensed as a foreign corporation, is shown in Schedule OO.
4.04 Capitalization of Allied. The authorized capital stock of Allied
consists of 50,000 shares of common stock, of which the only shares issued and
outstanding are 50,000 shares issued to the shareholder listed on Schedule HH,
which shares were duly authorized, validly issued and fully paid and
nonassessable. There are no preemptive rights with respect to the Allied stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action, including but not limited to duly and validly
authorized action and approval by the Board of Directors, on the part of Allied.
This Agreement constitutes the valid and binding obligation of Allied,
enforceable against it in accordance with its terms, subject to the principles
of equity applicable to the availability of the remedy of specific performance.
This Agreement has been duly executed by Allied and the execution and delivery
of this Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in any breach of any terms or provisions of Allied 's
Articles of Incorporation or Bylaws or of any other agreement, court order or
instrument to which Allied is a party or bound.
4.06 Absence of Undisclosed Liabilities. Allied has no material liabilities
of any nature, whether fixed, absolute, contingent or accrued, which were not
reflected on the financial statements set forth in Schedule AA or otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached hereto.
4.07 Absence of Changes. Since the date of inception, there has not been
any material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of Allied, except for changes resulting from
completion of those transactions described in Section 5.02.
4.08 Tax Matters. All taxes and other assessments and levies which Allied
is required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by Allied in separate bank accounts for such payment or are represented by
depository receipts, and all such withholdings and collections and all other
payments due in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over to the
government or placed in a separate and segregated bank account for such purpose.
There are no known deficiencies in income taxes for any periods and further, the
representations and warranties as to absence of undisclosed liabilities
contained in Section 4.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal, state, local and
foreign income, profit, franchise, sales, use and property taxes) due or to
become due, incurred in respect of or measured by Allied income or business
prior to the Closing Date.
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4.09 Options, Warrants, etc. Except as otherwise described in Schedule HH,
there are no outstanding options, warrants, calls, commitments or agreements of
any character to which Allied or its shareholders are a party or by which Allied
or its shareholders are bound, or are a party, calling for the issuance of
shares of capital stock of Allied or any securities representing the right to
purchase or otherwise receive any such capital stock of Allied .
4.10 Title to Assets. Except for liens set forth in Schedule CC, Allied is
the sole and unconditional owner of, with good and marketable title to, all the
assets and patents listed in the schedules as owned by them and all other
property and assets are free and clear of all mortgages, liens, pledges, charges
or encumbrances of any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes, mortgages,
leases, policies, licenses, franchises or similar instruments to which Allied is
a party are valid and in full force and effect on the date hereof, and Allied
has not breached any material provision of, and is not in default in any
material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon the
business, operations or financial condition of Allied.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule KK, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of Allied , threatened, in which,
individually or in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of Allied . Allied
has substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable to
its businesses.
4.13 Governmental Regulation. To the knowledge of Allied and except as set
forth in Schedule KK, Allied is not in violation of or in default with respect
to any applicable law or any applicable rule, regulation, order, writ or decree
of any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality which
violation or default could have a material adverse effect upon the business,
operations or financial condition of Allied. .
4.14 Broker and Finders. Allied shall be solely responsible for payment to
any broker or finder retained by Allied for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
4.15 Accuracy of Information. No representation or warranty by Allied
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to Amex pursuant hereto or in
connection with the transactions contemplated hereby (including without
limitation all Schedules and Exhibits hereto) contains or will
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contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary in order to make the statements contained herein or
therein not misleading.
4.16 Subsidiaries. Except as listed in Schedule PP, Allied does not have
any other subsidiaries or own capital stock representing ten percent (10%) or
more of the issued and outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or approval of,
or registration, qualification or filing with, any other governmental authority
or other person is required to be obtained or accomplished by Allied or any
shareholder thereof, in connection with the consummation of the transactions
contemplated hereby.
4.18 Improper Payments. No person acting on behalf of Allied has made any
payment or otherwise transmitted anything of value, directly or indirectly, to
(a) any official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of Allied, or
(b) any political party or any candidate for elective political office, nor has
any fund or other asset of Allied been maintained that was not fully and
accurately recorded on the books of account of Allied.
4.19 Copies of Documents. Allied has made available for inspection and
copying by Amex and its duly authorized representatives, and will continue to do
so at all times, true and correct copies of all documents which it has filed
with any governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by Allied with
governmental agencies, including but not limited to the Internal Revenue
Service, have contained information which is true and correct in all material
respects and did not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein not
misleading or which could have any material adverse effect upon the financial
condition or operations of Allied or adversely affect the objectives of this
Agreement.
4.20 Investment Intent of Shareholders. Each shareholder of Allied
represents and warrants to Amex that the shares of Amex being acquired pursuant
to this Agreement are being acquired for his own account and for investment and
not with a view to the public resale or distribution of such shares and further
acknowledges that the shares being issued have not been registered under the
Securities Act and are "restricted securities" as that term is defined in Rule
144 promulgated under the Securities Act and must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION
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5.01 Conduct and Transactions of Amex. During the period from the date
hereof to the date of Closing, Amex shall:
(a) Conduct its operations in the ordinary course of business,
including but not limited to, paying all obligations as they mature,
complying with all applicable tax laws, filing all tax returns required to
be filed and paying all taxes due;
(b) Maintain its records and books of account in a manner that fairly
and correctly reflects its income, expenses, assets and liabilities.
Amex shall not during such period, except in the ordinary course of
business, without the prior written consent of Allied :
(a) Except as otherwise contemplated or required by this Agreement,
sell, dispose of or encumber any of its properties or assets;
(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof;
(c) Except as set forth in paragraph 5.01(c) above, issue, reissue or
sell, or issue options or rights to subscribe to, or enter into any
contract or commitment to issue, reissue or sell, any shares of its capital
stock or acquire or agree to acquire any shares of its capital stock;
(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into
any other corporation or sell all or substantially all of its assets or
change in any manner the rights of its capital stock or other securities;
(e) Except as contemplated or required by this Agreement, pay or incur
any obligation or liability, direct or contingent, of more than $1,000,
excluding the acquisitions identified in Paragraph B of this Agreement;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party,
or make loans or advances to any other party, excluding the acquisitions
identified in Paragraph B of this Agreement;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees; except in accordance with
existing employment contracts;
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(i) Enter into any agreement or make any commitment to any labor union
or organization;
(j) Make any capital expenditures, excluding the acquisitions
identified in Paragraph B of this Agreement.
5.02 Conduct and Transactions of Allied . During the period from the date
hereof to the date of Closing, Allied shall:
(a) Obtain an investment letter from each shareholder of Allied in a
form substantially like that attached hereto as Exhibit B;
(b) Conduct the operations of Allied in the ordinary course of
business.
Allied shall not during such period, except in the ordinary course of
business, without the prior written consent of Amex:
(a) Except as otherwise contemplated or required by this Agreement,
sell, dispose of or encumber any of the properties or assets of Allied;
(b) Declare or pay any dividends on shares of its capital stock or
make any other distribution of assets to the holders thereof;
(c) Issue, reissue or sell, or issue options or rights to subscribe
to, or enter into any contract or commitment to issue, reissue or sell, any
shares of its capital stock or acquire or agree to acquire any shares of
its capital stock;
(d) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into
any other corporation or sell all or substantially all of its assets or
change in any manner the rights of its capital stock or other securities;
(e) Except as otherwise contemplated and required by this Agreement,
pay or incur any obligation or liability, direct or contingent, of more
than $1,000;
(f) Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for obligations of any other party,
or make loans or advances to any other party;
(g) Make any material change in its insurance coverage;
(h) Increase in any manner the compensation, direct or indirect, of
any of its officers or executive employees; except in accordance with
existing employment contracts;
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(i) Enter into any agreement or make any commitment to any labor union
or organization;
(j) Make any material capital expenditures.
(k) Allow any of the foregoing actions to be taken by any subsidiary
of Allied .
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the date of
Closing of the acquisition, Amex and Allied agree to use their best efforts to
give the other party, including its representatives and agents, full access to
the premises, books and records of each of the entities, and to furnish the
other with such financial and operating data and other information including,
but not limited to, copies of all legal documents and instruments referred to on
any schedule or exhibit hereto, with respect to the business and properties of
Amex or Allied, as the case may be, as the other shall from time to time
request; provided, however, if there are any such investigations: (1) they shall
be conducted in such manner as not to unreasonably interfere with the operation
of the business of the other parties and (2) such right of inspection shall not
affect in any way whatsoever any of the representations or warranties given by
the respective parties hereunder. In the event of termination of this Agreement,
Amex and Allied will each return to the other all documents, work papers and
other materials obtained from the other party in connection with the
transactions contemplated hereby, and will take such other steps necessary to
protect the confidentiality of such material.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of Allied. The obligation of Allied to
perform this Agreement is subject to the satisfaction of the following
conditions on or before the Closing unless waived in writing by Allied .
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by Amex which in the opinion of Allied
would materially adversely affect the proposed transaction and intent of
the parties as set forth in this Agreement. The representations and
warranties of Amex set forth in Article 3 hereof shall be true and correct
in all material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, except as otherwise
permitted by this Agreement.
(b) Performance of Obligations. Amex shall have in all material
respects performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement
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prior to or on the Closing and Amex shall have complied in all material
respects with the course of conduct required by this Agreement.
(c) Corporate Action. Amex shall have furnished minutes, certified
copies of corporate resolutions and/or other documentary evidence
satisfactory to counsel for Allied that Amex has submitted with this
Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.
(d) Consents. Execution of this Agreement by the shareholders of
Allied and any consents necessary for or approval of any party listed on
any Schedule delivered by Amex whose consent or approval is required
pursuant thereto shall have been obtained.
(e) Financial Statements. Allied shall have been furnished with
audited financial statements of Amex including, but not limited to, balance
sheets and profit and loss statements from fiscal year end 2000 and
unaudited financial statements of September 30, 2001. Such financial
statements shall have been prepared in conformity with generally accepted
accounting principles on a basis consistent with those of prior periods and
fairly present the financial position of Amex as of the periods stated.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by Amex of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies required
to be obtained by Amex for consummation of the transactions contemplated by
this Agreement shall have been obtained.
(h) Changes in Financial Condition of Amex. There shall not have
occurred any material adverse change in the financial condition or in the
operations of the business of Amex, except expenditures in furtherance of
this Agreement, excluding the acquisitions identified in Paragraph B of
this Agreement.
(i) Absence of Pending Litigation. Amex is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or
the consummation of the transactions contemplated hereunder.
(j) Authorization for Issuance of Stock. Allied shall have received in
form and substance satisfactory to counsel for Allied a letter instructing
and authorizing the Registrar and Transfer Agent for the shares of common
stock of Amex to issue stock certificates representing ownership of Amex
common stock to Allied shareholders in accordance with the terms of this
Agreement and a letter from said Registrar and Transfer Agent acknowledging
receipt of the letter of instruction and stating to the
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effect that the Registrar and Transfer Agent holds adequate supplies of
stock certificates necessary to comply with the letter of instruction and
the terms and conditions of this Agreement.
7.02 Conditions to Obligations of Amex. The obligation of Amex to perform
this Agreement is subject to the satisfaction of the following conditions on or
before the Closing unless waived in writing by Amex.
(a) Representations and Warranties. There shall be no information
disclosed in the schedules delivered by Allied, which in the opinion of
Amex, would materially adversely affect the proposed transaction and intent
of the parties as set forth in this Agreement. The representations and
warranties of Allied set forth in Article 4 hereof shall be true and
correct in all material respects as of the date of this Agreement and as of
the Closing as though made on and as of the Closing, except as otherwise
permitted by this Agreement.
(b) Performance of Obligations. Allied shall have in all material
respects performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and Allied shall
have complied in all respects with the course of conduct required by this
Agreement.
(c) Corporate Action. Allied shall have furnished minutes, certified
copies of corporate resolutions and/or other documentary evidence
satisfactory to Counsel for Amex that Allied has submitted with this
Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party
listed on any Schedule delivered by Allied, whose consent or approval is
required pursuant thereto, shall have been obtained.
(e) Financial Statements. Amex shall have been furnished with an
audited balance sheet of Allied as of its inception through a current date.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by Allied of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals,
permits and orders of all federal and state governmental agencies required
to be obtained by Allied for consummation of the transactions contemplated
by this Agreement shall have been obtained.
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(h) Employment Agreements. Existing Allied employment agreements will
have been delivered to counsel for Amex.
(i) Changes in Financial Condition of Allied . There shall not have
occurred any material adverse change in the financial condition or in the
operations of the business of Allied, except expenditures in furtherance of
this Agreement.
(j) Absence of Pending Litigation. Allied is not engaged in or
threatened with any suit, action, or legal, administrative or other
proceedings or governmental investigations pertaining to this Agreement or
the consummation of the transactions contemplated hereunder.
(k) Shareholder Approval. The Allied shareholders shall have approved
the Agreement and Plan of Reorganization.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such further
or other actions as the other party or parties to this Agreement may reasonably
deem necessary in order to carry out the purposes and intent of this Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate, schedule, exhibit
or other written instrument delivered by Amex or Allied pursuant hereto, or
otherwise adopted by Amex, by its written approval, or by Allied by its written
approval, or in connection with the transactions contemplated hereby, shall be
deemed representations and warranties by Amex or Allied as the case may be. All
representations, warranties and agreements made by either party shall survive
for the period of the applicable statute of limitations and until the discovery
of any claim, loss, liability or other matter based on fraud, if longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF REORGANIZATION
10.01 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the acquisition
contemplated hereby may be terminated at any time before the Closing as follows:
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(a) By mutual written consent of the Boards of Directors of Amex and
Allied.
(b) By the Board of Directors of Amex if any of the conditions set
forth in Section 7.02 shall not have been satisfied by the Closing Date.
(c) By the Board of Directors of Allied if any of the conditions set
forth in Section 7.01 shall not have been satisfied by the Closing Date.
10.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the acquisition are terminated and
abandoned pursuant to this Article 10 hereof, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and any
of the documents evidencing the transactions contemplated hereby, including
fees, expenses and disbursements of counsel.
ARTICLE 11
EXCHANGE OF SHARES; FRACTIONAL SHARES
11.01 Exchange of Shares. At the Closing, Amex shall issue a letter to the
transfer agent of Amex with a copy of the resolution of the Board of Directors
of Amex authorizing and directing the issuance of Amex shares as set forth on
Exhibit A to this Agreement.
11.02 Restrictions on Shares Issued to Allied . Due to the fact that Allied
will receive shares of Amex common stock in connection with the acquisition
which have not been registered under the 1933 Act by virtue of the exemption
provided in Section 4(2) of such Act, those shares of Amex will contain the
following legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have
been acquired for investment and may not be sold or offered
for sale in the absence of an effective Registration Statement
for the shares under the Securities Act of 1933 or an opinion
of counsel to the Corporation that such registration is
required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada excluding the conflicts of laws.
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12.02 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the United States
mail, postage prepaid, certified or registered, return receipt requested, and
addressed to the parties last known address which addresses are currently as
follows:
If to "Amex" If to "Allied "
Amexdrug Corporation Allied Med Wholesale Drug Company
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000 0000 XX Xxxxxxx Xxx Xxxx. 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 Xxxxxxxx, Xxxxxx 00000
With copies to:
Xxxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000-X
Xxxx Xxxx Xxxx, XX 00000
12.03 Amendment and Waiver. The parties hereby may, by mutual agreement in
writing signed by each party, amend this Agreement in any respect. Any term or
provision of this Agreement may be waived in writing at any time by the party
which is entitled to the benefits thereof, such waiver right shall include, but
not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations of
the other;
(b) Waive any inaccuracies in representations by the other contained
in this Agreement or in any document delivered pursuant hereto;
(c) Waive compliance by the other with any of the covenants contained
in this Agreement, and performance of any obligations by the other; and
(d) Waive the fulfillment of any condition that is precedent to the
performance by the party so waiving of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 12.03 shall be valid if
authorized or ratified by the Board of Directors of such party.
12.04 Remedies not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise. The election of any one or more remedies by Amex or
Allied shall not constitute a waiver of the right to pursue other available
remedies.
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12.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of Amex and Allied and its
shareholders.
12.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto, represent the entire agreement of the undersigned regarding the
subject matter hereof, and supersedes all prior written or oral understandings
or agreements between the parties.
12.08 Each Party to Bear its Own Expense. Amex and Allied shall each bear
their own respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement, including counsel fees
and accountant fees.
12.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
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Executed as of the date first written above.
"Amex" "Allied "
Amexdrug Corporation, Allied Med Wholesale Drug Company,
a Nevada corporation an Oregon corporation
By: /s/ Xxxx Xxxx By: /s/ Xxxx Xxxx
-------------------------- -------------------------
Xxxx Xxxx, President Xxxx Xxxx, President
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