AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this
___day of October, 2000, among Capital Growth, Inc., a Nevada corporation
("Capital Growth"); Imagenetix, Inc., a Colorado corporation ("Imagenetix"); the
Imagenetix stockholders (the "Imagenetix Stockholders"); and the warrant
holders, option holders and employee stock option holders (respectively, the
"Imagenetix Warrant Holders," the "Imagenetix Option Holders" and the
"Imagenetix Employee Stock Option Holders," collectively, the "Imagenetix
Warrant and Option Holders"), all of whom are listed on Exhibit A hereto and who
execute and deliver a copy of this Agreement.
WITNESSETH:
RECITALS
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WHEREAS, the respective Boards of Directors of Capital Growth and
Imagenetix have adopted resolutions pursuant to which Capital Growth shall
acquire and the Imagenetix Stockholders shall exchange 100% of the outstanding
common stock of Imagenetix; and
WHEREAS, the sole consideration for 100% of the outstanding common stock of
Imagenetix (6,550,000 shares) shall be the exchange of a like number of $0.001
par value common stock of Capital Growth (which shares are all "restricted
securities" as defined in Rule 144 of the Securities and Exchange Commission) as
outlined in Exhibit A; and
WHEREAS, such resolutions also provide for the exchange of outstanding
warrants (2,790,000 warrants) and options (225,000 options and 300,000 employee
stock options) by the Imagenetix Warrant and Option Holders for like warrants
and options of Capital Growth, and the adoption by Capital Growth of the
Employee Stock Option Plan of Imagenetix;
WHEREAS, the sole consideration for the exchange of the outstanding
warrants and options of Imagenetix shall be the exchange of a like number of
warrants and options of Capital Growth (which warrants and options shall be
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission) as outlined in Exhibit A; and
WHEREAS, the Imagenetix Stockholders and the Imagenetix Warrant and Option
Holders shall acquire in exchange such "restricted securities" of Capital Growth
in a reorganization within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed:
Section 1
Exchange of Stock
-----------------
1.1 Transfer and Number of Shares and Warrants and Options. The Imagenetix
Stockholders agree to transfer to Capital Growth at the closing (the "Closing")
100% of the outstanding common stock of Imagenetix listed in Exhibit A, which is
attached hereto and incorporated herein by reference (the "Imagenetix Shares"),
in exchange for 6,550,000 shares of common stock of Capital Growth, pro rata,
also as outlined in Exhibit A. The Imagenetix Warrant and Option Holders shall
exchange the 2,790,000 warrants (the "Imagenetix Warrants") and 525,000 options
(225,000 options [the "Imagenetix Options"] and 300,000 employee stock options
[the "Imagenetix Employee Stock Options"]) for like warrants and options of
Capital Growth, also as outlined in Exhibit A. The pre-Agreement outstanding
securities of Capital Growth will amount to 2,000,000 shares of common stock and
393,750 common stock purchase warrants (the "Capital Growth Warrants"), after
taking into account the cancellation of 22,500,018 of the 24,500,018 outstanding
shares of Capital Growth's common stock and 5,731,250 of the 6,125,000
outstanding Capital Growth Warrants by certain principal stockholders and others
as outlined in Section 1.4 below; accordingly, assuming all Imagenetix
Stockholders and all Imagenetix Warrant and Option Holders become party to the
Agreement, there will be 8,550,000 post-Agreement outstanding shares of common
stock of the reorganized Capital Growth; 3,183,750 outstanding warrants
(2,790,000 that were exchanged by the Imagenetix Warrant Holders and 393,750
that were retained by the Capital Growth warrant holders); and 525,000
outstanding options (225,000 options that were exchanged by the Imagenetix
Option Holders and 300,000 that were exchanged by the Imagenetix Employee Stock
Option Holders).
1.2 Delivery of Certificates and/or Warrants and Options by Imagenetix
Stockholders. The transfer of the Imagenetix Shares by the Imagenetix
Stockholders and/or the transfer of the Imagenetix Warrants, the Imagenetix
Options and the Imagenetix Employee Stock Options shall be effected by the
delivery to Capital Growth at the Closing of stock certificate or certificates
and/or warrants or options representing the transferred shares and/or warrants
and options duly endorsed in blank or accompanied by stock powers executed in
blank with all signatures witnessed or guaranteed to the satisfaction of Capital
Growth and with all necessary transfer taxes and other revenue stamps affixed
and acquired at the Imagenetix Stockholders' and the Imagenetix Warrant and
Option Holders' expense.
1.3 Further Assurances. At the Closing and from time to time thereafter,
the Imagenetix Stockholders and the Imagenetix Warrant and Options Holders shall
execute such additional instruments and take such other action as Capital Growth
may request in order to exchange and transfer clear title and ownership in the
Imagenetix Shares, the Imagenetix Warrants, the Imagenetix Options and the
Imagenetix Employee Stock Options to Capital Growth.
1.4 Cancellation of Shares and Warrants by Principal Stockholders and
Others. At or simultaneous with the Closing, 22,500,018 shares of Capital
Growth's common stock and 5,731,250 Capital Growth Warrants that are owned by
certain principal stockholders and others will be canceled in consideration of
the Agreement.
1.5 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
sole director and executive officer of Capital Growth, Xxxxx X. Xxxxxxx, shall
designate the directors and executive officers nominated by Imagenetix to serve
in his place and stead, until the next respective annual meetings of the
stockholders and the Board of Directors of Capital Growth, and until their
respective successors shall be elected and qualified or until their respective
prior resignations or terminations, who shall be: Xxxxxxx X. Xxxxxxx, Chief
Executive Officer, President and Director; Xxxxx X Xxxxxxx, Secretary, Treasurer
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and Director; Xxxxxxx X. Xxxxxxx, Ph.D., Vice President, Marketing; Xxxxx X.
Boosey, Vice President, International; Xxxxxxx X. Xxxxxxx, D.C., Director; and
Xxxxx X. Xxxxxxxx, M.D., Director; and then, the current sole director and
executive officer shall resign.
1.6 Adoptions of Imagenetix Employee Stock Option Plan. At or simultaneous
with the Closing, Capital Growth shall adopt and assume all rights and
obligations of Imagenetix under the Imagenetix Employee Stock Option Plan by
resolution of its Board of Directors and its majority stockholder.
1.7 Change of Name. At or simultaneous to the Closing of this Agreement,
the Board of Directors of Capital Growth, with the written consent of Xxxxx X.
Xxxxxxx, its majority stockholder, shall adopt the resolutions necessary to
amend Capital Growth's Articles of Incorporation to change its name to
"Imagenetix Inc."
1.8 Assets and Liabilities of Capital Growth at Closing. Capital Growth
shall have no material assets, and no material liabilities (liabilities not to
exceed $11,000), at Closing, and all costs incurred by Capital Growth incident
to the Agreement shall have been paid or satisfied.
1.9 Closing. This Agreement will be deemed to be completed on the execution
and delivery of the Agreement by Imagenetix Stockholders collectively owning not
less than 80% of the outstanding Imagenetix Shares; and the remainder of the
Imagenetix Shares shall be acquired under and pursuant to the terms and
provisions of the Agreement as soon as practicable. The Imagenetix Warrants, the
Imagenetix Options and the Imagenetix Employee Stock Options shall be exchanged
for like instruments of Capital Growth as soon as is reasonably practicable,
subject to Closing.
Section 2
Closing
-------
The Closing contemplated by Section 1 shall be held at the offices of
Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx 000 Xxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, on or before ten days following the execution and
delivery of this Agreement, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Capital Growth
------------------------------------------------
Capital Growth represents and warrants to, and covenants with, the
Imagenetix Stockholders, the Imagenetix Warrant and Option Holders and
Imagenetix as follows:
3.1 Corporate Status; Compliance with Securities Laws. Capital Growth is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and is licensed or qualified as a foreign corporation in
all states in which the nature of its business or the character or ownership of
3
its properties makes such licensing or qualification necessary (Nevada only).
Capital Growth is a publicly-held company, having previously and lawfully
offered and sold a portion of its securities in accordance with applicable
federal and state securities laws, rules and regulations. Capital Growth's
common stock is quoted on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. (the "NASD") under the symbol "CGTH," though there is
not an "established trading market" for these securities. Capital Growth is not
in violation of any federal or state securities laws.
3.2 Capitalization. The current pre-Agreement authorized capital stock of
Capital Growth consists of 50,000,000 shares of $0.001 par value common voting
stock, of which 24,500,018 shares are issued and outstanding (22,500,018 of
which will be canceled prior to Closing), all fully paid and non-assessable.
Except for the Capital Growth Warrants, consisting of 6,125,000 common stock
purchase warrants (5,731,250 of which will be canceled prior to Closing)
entitling the holders to purchase one share of common stock for each warrant
held at an exercise price of $1.00 per share until September 30, 2005, there are
no outstanding options, warrants or calls pursuant to which any person has the
right to purchase any authorized and unissued common or other securities of
Capital Growth.
3.3 Financial Statements. The financial statements of Capital Growth
furnished to the Imagenetix Stockholders, the Imagenetix Warrant and Option
Holders and Imagenetix, consisting of audited financial statements for the years
ended December 31, 1999 and 1998, and unaudited financial statements for the
period ended June 30, 2000, attached hereto as Exhibits B and B-1 and
incorporated herein by reference, are correct and fairly present the financial
condition of Capital Growth at such dates and for the periods involved; such
statements were prepared in accordance with generally accepted accounting
principles consistently applied, and no material change has occurred in the
matters disclosed therein, except as indicated in Exhibit C, which is attached
hereto and incorporated herein by reference. Such financial statements do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
3.4 Undisclosed Liabilities. Capital Growth has no liabilities of any
nature except to the extent reflected or reserved against in its balance sheets,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit C.
3.5 Interim Changes. Since the dates of its balance sheets, except as set
forth in Exhibit C, there have been no (1) changes in financial condition,
assets, liabilities or business of Capital Growth which, in the aggregate, have
been materially adverse; (2) damages, destruction or losses of or to property of
Capital Growth, payments of any dividend or other distribution in respect of any
class of stock of Capital Growth, or any direct or indirect redemption, purchase
or other acquisition of any class of any such stock; or (3) increases paid or
agreed to in the compensation, retirement benefits or other commitments to its
employees.
3.6 Title to Property. Capital Growth has good and marketable title to all
properties and assets, real and personal, reflected in its balance sheets, and
the properties and assets of Capital Growth are subject to no mortgage, pledge,
lien or encumbrance, except for liens shown therein or in Exhibit C, with
respect to which no default exists.
4
3.7 Litigation. There is no litigation or proceeding pending, or to the
knowledge of Capital Growth, threatened, against or relating to Capital Growth,
its properties or business, except as set forth in Exhibit C. Further, no
officer, director or person who may be deemed to be an "affiliate" of Capital
Growth is party to any material legal proceeding which could have an adverse
effect on Capital Growth (financial or otherwise), and none is party to any
action or proceeding wherein any has an interest adverse to Capital Growth.
3.8 Books and Records. From the date of this Agreement to the Closing,
Capital Growth will (1) give to the Imagenetix Stockholders, the Imagenetix
Warrant and Option Holders and Imagenetix or their respective representatives
full access during normal business hours to all of Capital Growth's offices,
books, records, contracts and other corporate documents and properties so that
they or their respective representatives may inspect and audit them; and (2)
furnish such information concerning the properties and affairs of Capital Growth
as they or their respective representatives may reasonably request.
3.9 Tax Returns. Capital Growth has filed all federal and state income or
franchise tax returns required to be filed or has received currently effective
extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Capital Growth and its representatives will keep confidential any
information which they obtain from the Imagenetix Stockholders, the Imagenetix
Warrant and Option Holders or from Imagenetix concerning the properties, assets
and business of Imagenetix. If the transactions contemplated by this Agreement
are not consummated by October 15, 2000, Capital Growth will return to
Imagenetix all written matter with respect to Imagenetix obtained by Capital
Growth in connection with the negotiation or consummation of this Agreement.
3.11 Corporate Authority. Capital Growth has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to the Imagenetix Stockholders, the Imagenetix
Warrant and Option Holders and Imagenetix or their respective representatives at
the Closing a certified copy of resolutions of its Board of Directors through
its sole director authorizing execution of this Agreement by Capital Growth's
officers through its sole officer and performance thereunder, and that the sole
director adopting and delivering such resolutions is the duly elected and
incumbent sole director of Capital Growth.
3.12 Due Authorization. Execution of this Agreement and performance by
Capital Growth hereunder have been duly authorized by all requisite corporate
action on the part of Capital Growth, and this Agreement constitutes a valid and
binding obligation of Capital Growth and performance hereunder will not violate
any provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Capital Growth, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application now or hereafter in effect relating to or
affecting the enforcement of creditors' right generally and the application of
general equitable principles in any action, legal or equitable.
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3.13 Environmental Matters. Capital Growth has no knowledge of any
assertion by any governmental agency or other regulatory authority of any
environmental lien, action or proceeding, or of any cause for any such lien,
action or proceeding related to the business operations of Capital Growth. In
addition, to the best knowledge of Capital Growth, there are no substances or
conditions which may support a claim or cause of action against Capital Growth
or any of Capital Growth' current or former officers, directors, agents or
employees, whether by a governmental agency or body, private party or
individual, under any Hazardous Materials Regulations. AHazardous Materials@
means any oil or petrochemical products, PCB's, asbestos, urea formaldehyde,
flammable explosives, radioactive materials, solid or hazardous wastes,
chemicals, toxic substances or related materials, including, without limitation,
any substances defined as or included in the definition of Ahazardous
substances,@ Ahazardous wastes,@ Ahazardous materials@ or Atoxic substances@
under any applicable federal or state laws or regulations. AHazardous Materials
Regulations@ means any regulations governing the use, generation, handling,
storage, treatment, disposal or release of hazardous materials, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act and the Federal Water
Pollution Control Act.
3.14 Access to Information Regarding Imagenetix. Capital Growth
acknowledges that it has been delivered copies of what has been represented to
be documentation containing all material information respecting Imagenetix and
Imagenetix's present and contemplated business operations, potential
acquisitions, management and other factors; that it has had a reasonable
opportunity to review such documentation and discuss it, to the extent desired,
with its legal counsel, directors and executive officers; that it has had, to
the extent desired, the opportunity to ask questions of and receive responses
from the directors and executive officers of Imagenetix, and with the legal and
accounting firms of Imagenetix, with respect to such documentation; and that to
the extent requested, all questions raised have been answered to Capital
Growth's complete satisfaction.
Section 4
Representations, Warranties and Covenants of Imagenetix,
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the Imagenetix Stockholders and the Imagenetix Warrant and Option Holders
-------------------------------------------------------------------------
Imagenetix, the Imagenetix Stockholders and the Imagenetix Warrant and
Option Holders represent and warrant to, and covenant with, Capital Growth as
follows (provided, however, that the Imagenetix Stockholders and the Imagenetix
Warrant and Option Holders shall make only those representations and warranties
contained in Sections 4.1, 4.11, 4.12 and 4.16):
4.1 Ownership. The Imagenetix Stockholders respectively own the Imagenetix
Shares, and the Imagenetix Warrant and Option Holders respectively own the
Imagenetix Warrants, the Imagenetix Options and the Imagenetix Employee Stock
Options, free and clear of any liens or encumbrances of any type or nature
whatsoever, and each has full right, power and authority to convey the
Imagenetix Shares or the Imagenetix Warrants, the Imagenetix Options and the
Imagenetix Employee Stock Options that are owned by each without qualification.
4.2 Corporate Status. Imagenetix is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado and is
licensed or qualified as a foreign corporation in all states or foreign
6
countries and provinces in which the nature of Imagenetix's business or the
character or ownership of Imagenetix properties makes such licensing or
qualification necessary.
4.3 Capitalization. The authorized capital stock of Imagenetix consists of
50,000,000 shares of common stock, $0.001 par value per share, of which
6,550,000 shares are or will be issued and outstanding on Closing, all fully
paid and non-assessable; and 5,000,000 shares of preferred stock, $0.001 par
value per share, of which no shares are issued or outstanding. Except for the
Imagenetix Warrants (1,090,000 exercisable at $1.00; 950,000 exercisable at
$1.10; and 750,000 exercisable at $2.00), the Imagenetix Options (225,000
granted to Xxxxxxx X. and Xxxxx X. Xxxxxxx) and the Imagenetix Employee Stock
Options (300,000 granted under the Imagenetix Employee Stock Option Plan), all
of which are exchangeable under this Agreement for like warrants and options of
Capital Growth, there are no outstanding options, warrants or calls pursuant to
which any person has the right to purchase any authorized and unissued common or
other securities of Imagenetix.
4.4 Financial Statements. The financial statements of Imagenetix furnished
to Capital Growth, consisting of audited financial statements for the years
ended March 31, 2000 and 1999, and an unaudited financial statements for the
period ended June 30, 2000, attached hereto as Exhibits D and D-1 and
incorporated herein by reference, are correct and fairly present the financial
condition of Imagenetix as of these dates and for the periods involved; such
statements were prepared in accordance with generally accepted accounting
principles consistently applied, and no material change has occurred in the
matters disclosed therein, except as indicated in Exhibit E, which is attached
hereto and incorporated herein by reference. These financial statements do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
4.5 Undisclosed Liabilities. Imagenetix has no material liabilities of any
nature except to the extent reflected or reserved against in its balance sheets,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit E attached hereto and incorporated herein by reference.
4.6 Interim Changes. Since the dates of its balance sheets, except as set
forth in Exhibit E, there have been no (1) changes in the financial condition,
assets, liabilities or business of Imagenetix, which in the aggregate, have been
materially adverse; (2) damages, destruction or loss of or to the property of
Imagenetix, payment of any dividend or other distribution in respect of the
capital stock of Imagenetix, or any direct or indirect redemption, purchase or
other acquisition of any such stock; or (3) increases paid or agreed to in the
compensation, retirement benefits or other commitments to their employees.
4.7 Title to Property. Imagenetix has good and marketable title to all
properties and assets, real and personal, proprietary or otherwise, reflected in
its balance sheets, and the properties and assets of Imagenetix are subject to
no mortgage, pledge, lien or encumbrance, except as reflected in the trial
balance sheet or in Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding pending, or to the
knowledge of Imagenetix, threatened, against or relating to Imagenetix or its
properties or business, except as set forth in Exhibit E. Further, no officer,
director or person who may be deemed to be an affiliate of Imagenetix is party
to any material legal proceeding which could have an adverse effect on
Imagenetix (financial or otherwise), and none is party to any action or
proceeding wherein any has an interest adverse to Imagenetix.
7
4.9 Books and Records. From the date of this Agreement to the Closing, the
Imagenetix Stockholders will cause Imagenetix to (1) give to Capital Growth and
its representatives full access during normal business hours to all of its
offices, books, records, contracts and other corporate documents and properties
so that Capital Growth may inspect and audit them; and (2) furnish such
information concerning the properties and affairs of Imagenetix as Capital
Growth may reasonably request.
4.10 Tax Returns. Imagenetix has filed all federal and state income or
franchise tax returns required to be filed or has received currently effective
extensions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously if there is no
Closing), Imagenetix, the Imagenetix Stockholders, the Imagenetix Warrant and
Option Holders and their representatives will keep confidential any information
which they obtain from Capital Growth concerning its properties, assets and
business. If the transactions contemplated by this Agreement are not consummated
by October 15, 2000, Imagenetix and the Imagenetix Stockholders and the
Imagenetix Warrant and Option Holders will return to Capital Growth all written
matter with respect to Capital Growth obtained by them in connection with the
negotiation or consummation of this Agreement.
4.12 Investment Intent. The Imagenetix Stockholders and the Imagenetix
Warrant and Option Holders are acquiring the securities to be exchanged and
delivered to them under this Agreement for investment and not with a view to the
sale or distribution thereof, and they have no commitment or present intention
to sell or distribute the Capital Growth securities to be received hereunder.
The Imagenetix Stockholders shall execute and deliver to Capital Growth on the
Closing an Investment Letter attached hereto as Exhibit F and incorporated
herein by reference.
4.13 Corporate Authority. Imagenetix has full corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder and will
deliver to Capital Growth or its representative at the Closing a certified copy
of resolutions of its Board of Directors authorizing execution of this Agreement
by its officers and performance thereunder.
4.14 Due Authorization. Execution of this Agreement and performance by
Imagenetix hereunder have been duly authorized by all requisite corporate action
on the part of Imagenetix, and this Agreement constitutes a valid and binding
obligation of Imagenetix and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Imagenetix, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application now or hereafter in effect relating to or affecting the
enforcement of creditors' right generally and the application of general
equitable principles in any action, legal or equitable.
4.15 Environmental Matters. Imagenetix has no knowledge of any assertion by
any governmental agency or other regulatory authority of any environmental lien,
action or proceeding, or of any cause for any such lien, action or proceeding
related to the business operations of Imagenetix or its predecessors. In
addition, to the best knowledge of Imagenetix, there are no substances or
conditions which may support a claim or cause of action against Imagenetix or
any of its current or former officers, directors, agents, employees or
predecessors, whether by a governmental agency or body, private party or
individual, under any Hazardous Materials Regulations. AHazardous Materials@
means any oil or petrochemical products, PCB's, asbestos, urea formaldehyde,
flammable explosives, radioactive materials, solid or hazardous wastes,
chemicals, toxic substances or related materials, including, without limitation,
any substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials" or "toxic substances"
under any applicable federal or state laws or regulations. "Hazardous Materials
8
Regulations" means any regulations governing the use, generation, handling,
storage, treatment, disposal or release of hazardous materials, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act and the Federal Water
Pollution Control Act.
4.16 Access to Information Regarding Capital Growth. Imagenetix, the
Imagenetix Stockholders and the Imagenetix Warrant and Option Holders
acknowledge that they have been delivered copies of what has been represented to
be documentation containing all material information respecting Capital Growth
and its present and contemplated business operations, potential acquisitions,
management and other factors, by delivery to them and/or by access to such
information in the XXXXX Archives of the Securities and Exchange Commission at
xxx.xxx.xxx; that they have had a reasonable opportunity to review such
documentation and to discuss it, to the extent desired, with their legal
counsel, directors and executive officers; that they have had, to the extent
desired, the opportunity to ask questions of and receive responses from the sole
director and executive officer of Capital Growth, and with the legal and
accounting firms of Capital Growth, with respect to such documentation; and that
to the extent requested, all questions raised have been answered to their
complete satisfaction.
Section 5
Conditions Precedent to Obligations of Imagenetix
-------------------------------------------------
and the Imagenetix Stockholders and the Imagenetix Warrant and Option Holders
-----------------------------------------------------------------------------
All obligations of Imagenetix, the Imagenetix Stockholders and the
Imagenetix Warrant and Option Holders under this Agreement are subject, at their
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
5.1 Representations and Warranties True at Closing. The representations and
warranties of Capital Growth contained in this Agreement shall be deemed to have
been made again at and as of the Closing and shall then be true in all material
respects and shall survive the Closing.
5.2 Due Performance. Capital Growth shall have performed and complied with
all of the terms and conditions required by this Agreement to be performed or
complied with by it before the Closing.
5.3 Officers' Certificate. Imagenetix shall have been furnished with a
certificate signed by the President of Capital Growth, in such capacity,
attached hereto as Exhibit G and incorporated herein by reference, dated as of
the Closing, certifying (1) that all representations and warranties of Capital
Growth contained herein are true and correct; and (2) that since the date of the
financial statements (Exhibit B hereto), there has been no material adverse
change in the financial condition, business or properties of Capital Growth,
taken as a whole.
5.4 Assets and Liabilities of Capital Growth. Unless otherwise agreed,
Capital Growth shall have no assets and no liabilities at Closing, and all
costs, expenses and fees incident to the Agreement shall have been paid.
5.5 Cancellation of Shares and Warrants by Principal Stockholders and
Others. At or simultaneous with the Closing, 22,500,018 shares of Capital
Growth's common stock and 5,731,250 Capital Growth Warrants that are owned by
certain principal stockholders and others will be canceled in consideration of
the Agreement.
5.6 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. At or simultaneous with the
Closing, corporate resolutions of Capital Growth shall have adopted all action
9
necessary to accomplish the resignation of Capital Growth's sole director and
executive officer and the designation of the nominees of Imagenetix to the Board
of Directors and to serve as officers as outlined in Section 1.5 hereof.
5.7 Change of Name. At or simultaneous to the Closing of this Agreement,
the Board of Directors of Capital Growth, with the written consent of Xxxxx X.
Xxxxxxx, its majority stockholder, shall have adopted the resolutions necessary
to amend Capital Growth's Articles of Incorporation to change its name to
"Imagenetix, Inc."
5.8 Adoptions of Imagenetix Employee Stock Option Plan. At or simultaneous
with the Closing, Capital Growth shall have adopted and assumed all rights and
obligations of Imagenetix under the Imagenetix Employee Stock Option Plan by
resolution of its Board of Directors and its majority stockholder.
5.9 Stockholders' Consent. Persons owing not less than 80% of the
outstanding Imagenetix Shares shall have executed and delivered the Agreement.
Section 6
Conditions Precedent to Obligations of Capital Growth
-----------------------------------------------------
All obligations of Capital Growth under this Agreement are subject, at
Capital Growth's option, to the fulfillment, before or at the Closing, of each
of the following conditions:
6.1 Representations and Warranties True at Closing. The representations and
warranties of Imagenetix, the Imagenetix Stockholders and the Imagenetix Warrant
and Option Holders contained in this Agreement shall be deemed to have been made
again at and as of the Closing and shall then be true in all material respects
and shall survive the Closing.
6.2 Due Performance. Imagenetix, the Imagenetix Stockholders and the
Imagenetix Warrant and Option Holders shall have performed and complied with all
of the terms and conditions required by this Agreement to be performed or
complied with by them before the Closing.
6.3 Officers' Certificate. Capital Growth shall have been furnished with a
certificate signed by the President of Imagenetix, in such capacity, attached
hereto as Exhibit H and incorporated herein by reference, dated as of the
Closing, certifying (1) that all representations and warranties of Imagenetix,
the Imagenetix Stockholders and the Imagenetix Warrant and Option Holders
contained herein are true and correct; and (2) that since the date of the
financial statements (Exhibit D), there has been no material adverse change in
the financial condition, business or properties of Imagenetix, taken as a whole.
6.4 Books and Records. The Imagenetix Stockholders or the Board of
Directors of Imagenetix shall have caused Imagenetix to make available all books
and records of Imagenetix, including minute books and stock transfer records;
provided, however, only to the extent requested in writing by Capital Growth at
Closing.
6.5 Stockholders' Consent. Persons owing not less than 80% of the
outstanding Imagenetix Shares shall have executed and delivered the Agreement.
10
Section 7
Termination
-----------
Prior to Closing, this Agreement may be terminated (1) by mutual consent in
writing; (2) by either the directors of Capital Growth or Imagenetix if there
has been a material misrepresentation or material breach of any warranty or
covenant by the other party; or (3) by either the directors of Capital Growth or
Imagenetix and the Imagenetix Stockholders if the Closing shall not have taken
place, unless adjourned to a later date by mutual consent in writing, by the
date fixed in Section 2.
Section 8
General Provisions
------------------
8.1 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
8.2 Waiver. Any failure on the part of any party hereto to comply with any
its or their obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties hereunder that no
broker or finder has acted for it in connection with this Agreement, and agrees
to indemnify and hold harmless the other parties against any fee, loss or
expense arising out of claims by brokers or finders employed or alleged to have
been employed by he/she/it.
8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
If to Capital Growth: 00 Xxxx 000 Xxxxx, #0
Xxxxx, Xxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
455 East 000 Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Imagenetix: 0000 Xxxx Xxxxxxxx Xxxxx, #000
Xxx Xxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxx X. Agron, Esq.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
8.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11
8.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada, except to the
extent pre-empted by federal law, in which event (and to that extent only),
federal law shall govern.
8.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns.
8.9 Counterparts. 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.
8.10 Default. In the event of any default hereunder, the prevailing party
in any action to enforce the terms and provisions hereof shall be entitled to
recover reasonable attorney's fees and related costs.
IN WITNESS WHEREOF, the parties have executed this Agreement and Plan of
Reorganization effective the latest date hereof.
CAPITAL GROWTH, INC.
Date:____________________. By___________________________________
Xxxxx X. Xxxxxxx, President
IMAGENETIX, INC.
Date: ____________________. By___________________________________
Xxxxxxx X. Xxxxxxx, President
12
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Agreement and Plan of
Reorganization (the "Agreement") dated as of the _____ day of October, 2000,
among Capital Growth, Inc., a Nevada corporation ("Capital Growth"); Imagenetix,
Inc., a Colorado corporation ("Imagenetix"); the Imagenetix stockholders (the
"Imagenetix Stockholders"); and the warrant holders, option holders and employee
stock option holders (respectively, the "Imagenetix Warrant Holders," the
"Imagenetix Option Holders" and the "Imagenetix Employee Stock Option Holders,"
collectively, the "Warrant and Option Holders"), who are signatories thereto, is
executed by the undersigned, an Imagenetix Stockholder or an Imagenetix Warrant
or Option Holder, as of the date first written above. The undersigned, through
execution and delivery of this Counterpart Signature page, intends to be legally
bound by the terms of the Agreement.
-----------------------------------------
Name (Please Print)
-----------------------------------------
Xxxxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxx Zip
------------------------------------------
(Signature)
------------------------------------------
(Date)
13
EXHIBIT A
--------------------------------------------------------------------------------------------------------------------------------
Name/Address Phone# Number of Number of
Securities Owned Securities Owned Empl.
of Imagenetix of Capital Growth Options
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx & Xxxxx Xxxxxxx (000) 000-0000 3,000,000 3,000,000 50,000
0000 Xxxxxx Xx. restricted stock restricted stock @ $2
Xxxxxxxxx, XX. 00000
225,000 225,000
options @ $1 options @ $1
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx & Xxxxxxxxx Xxxxxxx (000) 000-0000 255,000 255,000 25,000
0000 Xxxxxx Xx. restricted restricted @ $2
Xxxxxx, Xx. 00000 stock stock
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Boosey (000) 000-0000 115,000
00000 Xxxxxxxx Xx. @ $2
Escondido, Ca. 92026
--------------------------------------------------------------------------------------------------------------------------------
Dr. Xxxxxxx Xxxxxxx (831) 688- 2262 15,000 15,000 20,000
000 Xxxx Xx. restricted stock restricted stock @ $2
Xxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxx (000) 000-0000 15,000 15,000 20,000
0000 Xxxxx Xxx restricted stock restricted stock @ $2
Xxxxxxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx & Xxxx Xxxxx (000) 000-0000 75,000 75,000
00000 Xxxxxxx Xx. restricted stock restricted stock
Xxxxxxxx, Xx 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx (000) 000-0000 35,000
0000 Xxxxxxxxx Xxx @ $2
Xxxxxxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
XxxXxxx Xxxx (000) 000-0000 25,000
00000 Xxxxxxxx Xx. @ $2
Xxxxxxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx (000) 000-0000 10,000
0000 Xxxxxx Xxxx Xx. @ $2
Unit #1-Q
Xxx Xxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. XxXxxx (000) 000-0000 50,000 50,000
00 Xxx Xxxx Xxxxx Xxxxxxxxxx Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxx,XX 00000
Warrants Warrants
50,000@$1 50,000 @ $1
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Great Expectations, FLP (000)000-0000 05,000 25,000
00 Xxx Xxxx Xxxxx Restricted Stock Restricted Stock
Xxxxxxxxx Xxxxx, XX 00000
Warrants Warrants
25,000@$1 25,000 @ $1
--------------------------------------------------------------------------------------------------------------------------------
GJM Trading Partners,LTD (000) 000-0000 Warrants Warrants
00 Xxx Xxxx Xxxxx 400,000@$1.00 400,000 @ $1.00
Xxxxxxxxx Xxxxx, XX 00000 700,000@$1.10 700,000 @ $1.10
--------------------------------------------------------------------------------------------------------------------------------
GM/CM Family Patrners, (000) 000-0000 487,500 469,000
LTD. Restricted Shares Restricted Shares
00 Xxx Xxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000 (Returned to Treasury
18,500 shares)
--------------------------------------------------------------------------------------------------------------------------------
1st Xxxxxx (000) 000-0000 412,500 6,000
C/O Xxxxx Xxx Xxxxxx Restricted Stock Restricted Shares
0000 Xxxxxxx
Xxxx Xxxxxx , XX 00000 (Return to Treasury
Warrants 406,500 Shares)
75,000@$1
Warrants
75,000 @ $1
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx (Jr.) (000) 000-0000 412,500 412,500
0000 Xxxxxxxxx Xxxx Xx. Xxxxxxxxxx Stock Restricted Stock
Xxxxxxxxxxx, Xx. 00000
Warrants Warrants
75,000@$1 75,000 @ $1
--------------------------------------------------------------------------------------------------------------------------------
MOE & Assoc. 156,000 156,000
0000 Xxxx Xxxx Xxxxxx restricted stock restricted stock
Xxxxxxxxx, XX. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xx. Xxxx Xxxxxx (000) 000-0000 19,500 19,500
22 Blue Heron Dr. restricted stock restricted stock
Xxxxxxxxx Xxxxxxx, XX.
00000
--------------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxx (000) 000-0000 19,500 19,500
0000 Xxxxx Xxxxxxxxxx Xxxx. restricted stock restricted stock
Xxxxxxxxx Xxxxxxx, Xx.
00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxxx (000) 000-0000 30,000 30,000
0000 Xxxxxxxxx Xx. restricted stock restricted stock
Xx Xxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxx (000) 000-0000 45,000 45,000
3621 Ridgelea Country Club restricted stock restricted stock
Dr.
Xxxx Xxxxx, Xx. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx (000) 000-0000 45,000 45,000
0000 Xxxxx Xxxx Xx. restricted stock restricted stock
Wailuku, Hi. 96793
--------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx (000) 000-0000 144,375 144,375
0000 Xxxx Xxxxxxxx Xxx Restricted Stock Restricted Stock
Xxxxxxxxx, XX. 00000
Warrants Warrants
26,250@$1 26,250@$1
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxx (000) 000-0000 61,875 61,875
0000 Xxxxxxxxx Xxx #000 Restricted Stock Restricted Stock
Xxxxxxx, Xx. 00000
Warrants Warrants
11,250@$1 11,250 @$1
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxx (000) 000-0000 168,750 168,750
C/O Equitex Inc. (000) 000-0000 Restricted Stock Restricted Stock
0000 XXX Xxxx. Xxx# 000
Xxxx Xxxxx, Xxx. 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx (303) 770B7254 100,000 100,000
Agron & Associates Restricted Stock Restricted Stock
0000 XXX Xxxxxxx #000
Xxxxxxxxx, XX 00000 Warrants Warrants
50,000@$2.00 50,000@$2.00
--------------------------------------------------------------------------------------------------------------------------------
Gulfstream 1998 (000) 000-0000 37,500 37,500
Irrevocable Trust Restricted Stock Restricted Stock
C/O Equitex, Inc.
0000 XXX Xxxx. #000
Xxxx Xxxxx, XXX 00000 Warrants Warrants
37,500 @$1.00 37,500 @$1.00
--------------------------------------------------------------------------------------------------------------------------------
J Xxxx Consulting (000) 000-0000 Warrants Warrants
0000 Xxxxxxxx Xx Xx #000 250,000 @ $1.00 250,000@ $1.00
Xxxxxxxxx , XX. 00000 250,000 @ $1.10 250,000@$1.10
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Underwriters 140,000 @ $1 140,000 @ $1
NASD Members warrants warrants
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
***Private Placement All of the following private All of the following
Investors private placement people private placement people
have restricted shares of have restricted shares of
stock and warrants are stock and warrants are
exercisable at $2 exercisable at $2
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx 20,000 20,000
0 Xxx Xxx Xxxxx
Xxxxxx Xxxxxx, Xx. 00000 10,000 10,000
Xxxx Xxxxxxx warrants warrants
00000 Xxxxxxxx Xxx #000 (Xxxx)
Xxxx Xxxxxxx, Xx. (000) 000-0000
92630
--------------------------------------------------------------------------------------------------------------------------------
Multi-Nat=l Consultants Grp- (000) 000-0000 50,000 50,000
C/P Pan American Cap Grp. Inc.
(Xxxxxxx Xxxxxxx) Treas. email address 25M- warrants 25M-warrants
P.O. Box 832-2522 info@panamerican-group.
World Trade Cntr
Panama, Republic of Panama
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Family Prtnrs. Ltd. (000) 000-0000 45,000 45,000
0000 X. Xxxxx Xxx.
Xxxxxxxxx, Xx. 00000 22.5M- warrants 22.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Bus. Dev. Corp. (000) 000-0000 25,000 25,000
000 Xxxxxx Xx. Xxx #0000
Ft. Lauderdale, Fla 12.5M-warrants 12.5M-warrants
33301
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx (000) 000-0000 30,000 30,000
00 Xxxx Xxxx
Xxxxxx Xxxxxx, XX 15M-warrants 15M-warrants
10304
--------------------------------------------------------------------------------------------------------------------------------
Xx. Xxxx Xxxxxx (000) 000-0000 20,000 20,000
000 X. Xxxxxxx Xxx - Xxx# 000
Xxxxxx, XX. 00000 10M-warrants 10M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxx (000) 000-0000 10,000 10,000
000 Xxxxxxx Xx.
Xxxxxx, XX. 0X-xxxxxxxx 5M-warrants
80401
--------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx (000) 000-0000 10,000 10,000
0000 Xxxxxxxx Xx.
Xxxxxxx, XX. 00000 5M-warrants 5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx (000) 000-0000 15,000 15,000
00000 X. 0xx Xx.
Xxxxxx, XX. 00000 7.5M-warrants 7.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Fairway Capital Prtnrs. LLC (000) 000-0000 20,000 20,000
0000 Xxxxxxxxx Xxxx. Xxx #000
Xxxxxxxx, XX. 00000 10M-warrants 10M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx (000) 000-0000 15,000 15,000
0000 Xxxxxx Xxxx Xx.
Xxxxxxxx, XX. 00000 7.5M-warrants 7.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxx (000) 000-0000 20,000 20,000
0000 Xx. Xxxxxxxxxx Xxxx.
Xxxxxxxxx Xxxxxxx, XX. 00000 10M-warrants 10M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx (000) 000-0000 10,000 10,000
000 Xxxxxxx Xx. XX
Xxxxxxx, XX 5M-warrants 5M-warrants
Xxxxxx X0X 0X0
--------------------------------------------------------------------------------------------------------------------------------
Xxxx XxXxxx (000) 000-0000 150,000 150,000
GJM Trading Partners, Ltd.
14 Red Tail Dr. 75M-warrants 75M-warrants
Xxxxxxxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
Great Expectations Family (000) 000-0000 150,000 150,000
Ltd. Partnerships
00 Xxx Xxxx Xx.
Xxxxxxxxx Xxxxx, XX 00000 75M-warrants 75M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx (000) 000-0000 20,000 20,000
00000 Xxxxx Xxxxxx Xxxx.,
0xx Xxxxx 10M-warrents 10M-warrants
Xxx Xxxxxxx, XX 00000-0000
--------------------------------------------------------------------------------------------------------------------------------
Heritage Oil Company (000) 000-0000 10,000 10,000
00000 Xx. #00
Xxxx Xxxxxx, XX 00000 5M-warrants 5M-warrants
(mail sub agrmt to Xxxx
Xxxxxxx @ 000000 00xx
Xxx. Xx-Xxxx
Xxxxxxx, Xxxxxxx X0X0X0)
mail certificate to Xxxxxxx
Xxxxxxx-Xxxxx Xxxxx
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx (000) 000-0000 25,000 25,000
000 Xxxxxx Xxx.
Xxxx Xxxxxx, XX 00000 12.5M-warrants 12.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx (000) 000-0000 20,000 20,000
Xxxxxx Xxxxxxx Rev. Trust
16648 Chesterfield Manor Dr. 10M-warrants 10M-warrants
Xxxxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx (000) 000-0000 20,000 20,000
0000 X. Xxxxxxxx Xx.
Xxxxxxxxx, XX 00000-0000 10M-warrants 10M-warrants
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx & Xxxxxxx Xxxxx (000) 000-0000 10,000 10,000
0000 X. Xxxxxx Xx.
Xxxxxxxxx Xxxxxxx, XX 00000 5M-warrants 5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxx (000) 000-0000 20,000 20,000
0000 X. Xxxxxxx Xx.
Xxxxxxxxx Xxxxxxx, XX 00000 10M-warrants 10M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxx X. or Xxxxxxxxx Xxxxx (000) 000-0000 5,000 5,000
0000 X. Xxxxxxxxx Xxx
Xxxxxx, XX 00000 2.5M0-warrants 2.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Family Partners, Ltd. (000) 000-0000 100,000 100,000
00 X. Xxx Xxxxx Xxxxxx, #000
Xxxxxxxxx, XX 00000 50M-warrants 50M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. XxXxxx (000) 000-0000 100,000 100,000
00 Xxx Xxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000 50M-warrants 50M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx XxXxxxxx (000) 000-0000 10,000 10,000
000 X. Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000 5M-warrants 5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxx & Nana B. (000) 000-0000 5,000 5,000
Schov
X.X. Xxx 00
Xxxxxxxxxx, XX 00000 2.5M-warrants 2.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X'Xxxx (000) 000-0000 20,000 20,000
000-X Xxx Xxxxxxx Xxxxxxx
Xxxx 10M-warrants 10M-warrants
Xxxxxxxxxx, XX 00000-0000
--------------------------------------------------------------------------------------------------------------------------------
X. X. Xxxxxx (000) 000-0000 25,000 25,000
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000 12.5M-warrants 12.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
LTC Xxxxx X. Plaza (000) 000-0000 5,000 5,000
000 Xxxxxx Xx.
Xxxxxxx, XX 00000 2.5M-warrants 2.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxx (000) 000-0000 50,000 50,000
0000 X. Xxxxxxxx, #000
Xxxxxxxxx, XX 00000 25M-warrants 25M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx & Xxxx Xxxxxxx (000) 000-0000 45,000 45,000.00
000 Xxx X.
Xxxxxxxx, XX 00000 22.5M-warrants 22.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxx X. Xxxxxxxxx (000) 000-0000 25,000 25,000.00
000 Xxxxxxxxx Xxxx
Xxxxxx Xxx Xxx, XX 00000 12.5M-warrants 12.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Nana B. Shov (000) 000-0000 15,000 15,000.00
Xxxxxxx X. Xxxx
X.X. Xxx 00 7.5M-warrants 7.5M-warrants
Xxxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx (000) 000-0000 20,000 20,000.00
0000 Xxxxx Xxxx Xx.
Xxxxxxxxx, XX 00000 10M-warrants 10M-warrants
--------------------------------------------------------------------------------------------------------------------------------
X. X. Xxxxxx (000) 000-0000 10,000 10,000.00
000 Xxxxxx Xxxxxxxx #000
Xxxxxxxx, XX 00000 5M-warrants 5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxx (000) 000-0000 50,000 50,000.00
0000 Xxxxxxx Xxxxx Xx.
Xxxxxxx, XX 00000 25M-warrants 25M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx & Xxx Xxxxxx (000) 000-0000 15,000 15,000.00
0000 X. Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000 7.5M-warrants 7.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxxx (000) 000-0000 25,000 25,000.00
0000 Xxxxxxxxx Xx.
Xxxxxx Xxxx, XX 00000 12.5M-warrants 12.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx (000) 000-0000 155,000 155,000.00
0000 Xxx Xx.
Xxxxxxx, XX 00000 77.5M-warrants 77.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx (000) 000-0000 5,000 5,000.00
0000 X. Xxxxxx Xxx.
Xxxxxxxxx, XX 00000 2.5M-warrants 2.5M-warrants
--------------------------------------------------------------------------------------------------------------------------------
EXHIBIT A
Number of Common
Number of Common Shares of Capital Growth
Shares Owned of to be
Name Imagnetix Received in Exchange
---- ----------------- -----------------------
Number of Warrants
Number of Warrants of Capital Growth
Owned of to be
Name Imagnetix Received in Exchange
---- ------------------ -----------------------
Number of Options
Number of Options of Capital Growth
Owned of to be
Name Imagnetix Received in Exchange
---- ------------------ -----------------------
Number of
Number of Employee Stock Options
Employee Stock Options of Capital Growth
Owned of to be
Name Imagnetix Received in Exchange
---- ------------------ -----------------------
EXHIBIT B
CAPITAL GROWTH, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1999 and 1998
EXHIBIT B-1
CAPITAL GROWTH, INC.
UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
JUNE 30, 2000
EXHIBIT C
See the Consent of Directors and Letter to Stockholders regarding the
Warrant Distribution dated September 1, 2000, which is attached hereto.
See the letter from Boulder Family Partnership, dated September 13, 2000,
regarding the waiver of its warrants, which is attached hereto.
EXHIBIT D
IMAGENETIX, INC.
AUDITED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
MARCH 31, 2000 AND 1999
EXHIBIT D-1
IMAGENETIX, INC.
UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
JUNE 30, 2000
EXHIBIT E
In September 2000, Imagenetix completed the sale of 1,400,000 Units of its
securities at $1 per Unit to a limited number of "accredited investors" pursuant
to Rule 506 promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended. Each Unit consisted of one share of common
stock and one-half warrant to purchase an additional share of common stock for
$2 per share at any time until September 30, 2005.
A copy of the Confidential Private Offering Memorandum of Imagenetix dated
September 6, 2000, respecting this offering, has been previously provided to
Capital Growth and its legal counsel.
Imagenetix is subject to a counter-claim filed against it by Natural
Alternatives International, Inc. ("NAI"), which was filed in response to a civil
action brought by Imagenetix against NAI.
EXHIBIT F
Interwest Transfer Co.
0000 X. Xxxxxx-Xxxxxxxx Xx.
Xxxx Xxxx Xxxx, Xxxx 00000
Capital Growth, Inc.
00 Xxxx 000 Xxxxx
Xxxxx, Xxxx 00000
Re: Exchange of shares, warrants, options and employee stock options
of Imagenetix, Inc., a Colorado corporation ("Imagenetix"), for
shares, warrants, options and employee stock options of Capital
Growth, Inc., a Nevada corporation ("Capital Growth or "Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Agreement") between the undersigned, Imagenetix, the other stockholders,
warrant holders, option holders and employee stock option holders of Imagenetix
and Capital Growth, I acknowledge that I have approved this exchange; that I am
aware of all of the terms and conditions of the Agreement; that I have received
and personally reviewed I represent and warrant that (i) I am an "accredited
investor" or, either alone or with the aid of a "purchaser representative" am a
"sophisticated investor"; (ii) I understand the "unregistered" and "restricted"
nature of the shares, warrants or options of Capital Growth being received under
the Agreement in exchange for the Imagenetix Shares or the Imagenetix Warrants,
the Imagenetix Options and the Imagenetix Employee Stock Options; (iii) I have
received and reviewed a copy of any and all material documents regarding the
Company, including, but not limited to the Company's 10-KSB Annual Report for
the year ended December 31, 1999; and its 10-QSB Quarterly Reports for the
quarters ended September 30, 1999, March 31, 2000, and June 30 2000; (iv) I
hereby waive and compromise any pre-emptive rights relating to the prior
issuance of shares of any of the Imagenetix Shares; and (v) I hereby compromise
and/or waive any claims I have or may have against Imagenetix by reason of the
purchase of any securities of Imagenetix prior to the Closing of the Agreement.
I understand that you have and will make books and records of your Company
available to me for my inspection in connection with the contemplated exchange
of my shares, and that I have been encouraged to review the information and ask
any questions I may have concerning the information of any director or officer
of the Company or of the legal and accounting firms for the Company. I
understand that the accounting firm for Capital Growth is Xxxxxx & Co., 000 Xxxx
000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, Telephone (000) 000-0000; and that legal
counsel for Capital Growth is Xxxxxxx X. Xxxxxxxxxx, Esq., 000 Xxxx 0xx Xxxxx,
Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000, Telephone #000-000-0000.
Page 2
I also understand that I must bear the economic risk of ownership of any of
the Capital Growth shares for a long period of time, the minimum of which will
be one (1) year, as these shares are "unregistered" shares and may not be sold
unless any subsequent offer or sale is registered with the United States
Securities and Exchange Commission or otherwise exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), or other
applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein and those
in the personal questionnaire (if applicable) I provided to Imagenetix for use
by Capital Growth as they are made to induce you to issue me the shares of
Capital Growth under the Agreement, and I further represent (of my personal
knowledge or by virtue of my reliance on one or more personal representatives),
and agree as follows, to-wit:
1. That the shares being acquired are being received for investment
purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase "for
investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered shares" and know that
they are not freely tradeable;
4. That any stock certificate issued by you to me in connection with the
shares being acquired shall be imprinted with a legend restricting the sale,
assignment, hypothecation or other disposition unless it can be made in
accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company shall reflect
that I have requested the Company not to effect any transfer of any stock
certificate representing any of the shares being acquired unless I shall first
have obtained an opinion of legal counsel to the effect that the shares may be
sold in accordance with applicable laws, rules and regulations, and I understand
that any opinion must be from legal counsel satisfactory to the Company and,
regardless of any opinion, I understand that the exemption covered by any
opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign, hypothecate or
make any other disposition of any interest in the shares being acquired except
as may be pursuant to any applicable laws, rules and regulations;
7. I fully understand that my shares which are being exchanged for shares
of the Company are "risk capital," and I am fully capable of bearing the
economic risks attendant to this investment, without qualification; and
Page 3
8. I also understand that without approval of counsel for Capital Growth,
all shares of Capital Growth to be issued and delivered to me in exchange for my
shares of Imagenetix shall be represented by one stock certificate only and
which such stock certificate shall be imprinted with the following legend or a
reasonable facsimile thereof on the front and reverse sides thereof:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
sold or otherwise transferred unless compliance with the registration
provisions of such Act has been made or unless availability of an exemption
from such registration provisions has been established, or unless sold
pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be accompanied by a
letter signed by the requesting stockholder setting forth all relevant facts
relating to the request. Capital Growth will attempt to accommodate any
stockholders' request where Capital Growth views the request is made for valid
business or personal reasons so long as in the sole discretion of Capital
Growth, the granting of the request will not facilitate a "public" distribution
of unregistered shares of common voting stock of Capital Growth.
You are requested and instructed to issue a stock certificate as follows,
to-wit:
--------------------------------------------------------
(Name(s) and Number of Shares)
--------------------------------------------------------
(Address)
--------------------------------------------------------
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is desired,
put the initials JTRS after your names.
Dated this ________ day of _______________________, 2000.
Very truly yours,
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EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Capital Growth, Inc., a Nevada
corporation ("Capital Growth"), represents and warrants the following as
required by the Agreement and Plan of Reorganization (the "Agreement") between
Capital Growth and Imagenetix, Inc., a Colorado corporation ("Imagenetix"), the
stockholders of Imagenetix (the "Imagenetix Stockholders") and all of the
warrant and option holders of Imagenetix (the "Imagenetix Warrant and Option
Holders"):
1. That he is the President of Capital Growth and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
Imagenetix, the Imagenetix Stockholders and the Imagenetix Warrant and Option
Holders.
2. Based on his personal knowledge, information, belief and opinions of
counsel for Capital Growth regarding the Agreement:
(i) All representations and warranties of Capital Growth contained
within the Agreement are true and correct;
(ii) Capital Growth has complied with all terms and provisions
required of it pursuant to the Agreement; and
(iii) There have been no material adverse changes in the financial
position of Capital Growth as set forth in its financial
statements for the years ended December 31, 1999 and 1998, and
for the period ended June 30, 2000, except as set forth in
Exhibit C to the Agreement.
CAPITAL GROWTH, INC.
Date: ______________ By_________________________________
Xxxxx X. Xxxxxxx, President
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Imagenetix, Inc., a Colorado corporation
("Imagenetix"), represents and warrants the following as required by the
Agreement and Plan of Reorganization (the "Agreement") between Imagenetix, the
stockholders of Imagenetix (the "Imagenetix Stockholders") and all of the
warrant and option holders of Imagenetix (the "Imagenetix Warrant and Option
Holders") and Capital Growth, Inc., a Nevada corporation ("Capital Growth"):
1. That he is the President of Imagenetix and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
Capital Growth.
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Imagenetix contained within
the Agreement are true and correct;
(ii) Imagenetix has complied with all terms and provisions required of
it pursuant to the Agreement; and
(iii) There have been no material adverse changes in the financial
position of Imagenetix as set forth in its its financial
statements for the years ended March 31, 2000 and 1999, and for
the period ended June 30, 2000, except as set forth in Exhibit E
to the Agreement.
IMAGENETIX, INC.
Date: _________________ By_________________________________
Xxxxxxx X. Xxxxxxx, President
