AGREEMENT AND PLAN OF EXCHANGE
This Agreement and Plan of Exchange ("Agreement") is entered into by and
between Ives Health Company, Inc., an Oklahoma corporation ("Ives"),. and
Maxxon, Inc., a Nevada corporation ("Maxxon").
WHEREAS, Maxxon was formed to develop, test, improve, market and secure
government approval for a new safety syringe and other health products and
services; and
WHEREAS, Ives is in the business of manufacturing and distributing
preventive health care products, including homeopathic, holistic, nutritional,
weight loss and other preventive natural medicines; and Xx. Xxxx is the
principal shareholder, director, officer and employee of Ives; and
WHEREAS, the parties desire to provide for the terms and conditions upon
which Maxxon will issue its Common Stock to acquire all the issued and
outstanding Capital Stock of Ives in a share exchange effected pursuant to
Sections 92A.110, 92A.190 and other applicable provisions of the Nevada Revised
Statutes ("Nevada Act") and 18 Oklahoma Statutes ss.1090.1 and other applicable
provisions of the Oklahoma General Corporation Act ("Oklahoma Act"); and
WHEREAS, for federal income tax purposes, it is intended that the Exchange
qualify as a tax-free reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended ("Code").
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
THE EXCHANGE
1.01. The Exchange
(a) Agreement to Exchange. Subject to the terms and conditions of this
Agreement, at the Effective Time, as defined below, Maxxon shall issue in the
aggregate 318,182 shares of Maxxon Common Stock, par value $.001 per share, in
exchange for all the issued and outstanding Common Stock of Ives ("Ives Common
Stock") and all options, warrants, rights and entitlements outstanding for the
issuance of Ives Capital Stock ("Ives Stock Rights") to the persons and in the
number of shares set forth in Exhibit A. hereto. The constituent corporations
("Constituent Corporations") to the Exchange are Ives and Maxxon.
(b) Effective Time. The Exchange shall become effective ("Effective Time")
at the time of filing of the Articles of Exchange substantially in the form
attached as Exhibit
B ("Articles of Exchange") with the Secretary of State of the State of Nevada in
accordance with applicable provisions of the Nevada Act.
(c) Effect of the Exchange. At the Effective Time, Ives will become a
wholly-owned subsidiary of Maxxon, and all shares of Ives Common Stock and all
Ives Stock Rights shall be automatically converted into the right to receive
shares of Common Stock of Maxxon in accordance with this Agreement. All rights
of creditors of the Constituent Corporations and all liens upon property of
either Constituent Corporation shall be preserved unimpaired and shall not be
altered in any way by reason of the Exchange.
1.02. Conversion of Stock. At the Effective Time, by virtue of the Exchange
and without any action on the part of the holders thereof:
(i) Each share of Common Stock of Ives which is issued and outstanding
shall be converted automatically into 0.021212 shares of Common Stock of Maxxon
(calculated by dividing 318,182 Maxxon shares by 15,000,000 Ives shares); and
(ii) All issued and outstanding options, warrants or similar rights to
purchase Common Stock of Ives at the Effective Time shall by reason of the
Exchange and without action on the part of the holders thereof be automatically
converted into options, warrants or similar rights to purchase 0.021212 shares
of Common Stock of Maxxon upon the same terms and conditions as if such Ives
Stock Rights had been issuable by Maxxon at the exchange rate set forth herein.
(iii) Each share of Common Stock of Maxxon issued and outstanding at the
Effective Time shall remain issued and outstanding, unaffected and unimpaired by
the Exchange.
1.03. Effect of Exchange
At and after the Effective Time, the holder of each certificate of Common
Stock of Ives outstanding immediately prior to Closing shall cease to have any
rights as a stockholder of Ives. All dividends or other distributions with
respect to Ives Common Stock prior to the Effective Time shall be payable
without interest upon surrender of certificates representing Ives Common Stock.
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1.04. Certificate of Incorporation of Ives. Immediately following the
occurrence of the Effective Time, the Certificate of Incorporation of Ives shall
be its current Certificate of Incorporation until thereafter amended in
accordance with applicable law.
1.05. Bylaws of Ives. Immediately after the Effective Time, the Bylaws of
Ives from and after the Effective Time shall be its current Bylaws, until
amended in accordance with applicable law.
1.06. Directors After Closing. Automatically upon the occurrence of the
Effective Time, all the directors of Ives (except for M. Xxxxx Xxxx) immediately
prior to the Effective Time shall resign as the directors of Ives, and the
directors of Maxxon immediately prior to the Effective Time shall become
directors of Ives, until their respective successors are elected and duly
qualified. In addition, Maxxon shall elect M. Xxxxx Xxxx as a director of Maxxon
at Closing and shall nominate him as a director of Maxxon during the three years
following Closing so long as he remains an employee of Ives or Maxxon.
1.07. Officers of the Surviving Corporation. The officers of Ives
immediately prior to the Effective Time shall resign as the officers of Ives
(except for M. Xxxxx Xxxx), and the officers of Maxxon immediately prior to the
Effective Time shall become the officers of Ives (except that M. Xxxxx Xxxx
shall remain President of Ives) until their respective successors are duly
elected and qualified.
1.08. Closing. The Closing of the Exchange shall take place at the offices
of Maxxon at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxxxxx 00000 at 5:00 p.m. local
time on the date on which the last condition set forth herein is fulfilled or
waived or at such time and place as the parties agree ("Closing Date").
1.09 Events Prior to Closing.
Maxxon Loan. Maxxon agrees to loan to Ives $60,000 for the purpose of
discharging certain indebtedness of Ives and to provide Ives certain working
capital. Upon receipt thereof, Ives agrees to issue to Maxxon a convertible
debenture of Ives in the form attached as Exhibit C. The use of proceeds of this
$60,000 is as set forth in Exhibit D.
1.10 Additional Financing for Ives. Maxxon agrees to use its good faith
diligent efforts to arrange $2 million in long term financing to complement the
business plan of Ives.
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As a first installment of this additional funding, Maxxon agrees to advance to
Ives not less than $200,000 on or before July 15, l997, subject to the
consummation of the Closing on or before July 15, l997.
1.11 The Health Club. The Health Club is a multi-level market distribution
company which distributes products of Ives and others. The Health Club is owned
by M. Xxxxx Xxxx personally. Xx. Xxxx agrees to convey all his interest in The
Health Club to Maxxon or to Ives at the discretion of Maxxon at the Closing in
exchange for $10,000 and 35,000 shares of duly authorized, validly issued, fully
paid shares of Maxxon Common Stock. At Closing, Xx. Xxxx will deliver to Maxxon
a certicate containing such representations and warranties concerning The Health
Club as Maxxon shall reasonably request. The parties agree that the revenues
from gross sales and the profits from operations from The Health Club shall be
attributable to Ives for calculating whether it has met 80% of the Ives
projections contained in Exhibit F as provided for in Article VI below.
1.12 Guarantee of Xxxxx Xxxx Personally. Following the Closing, Ives will
be a wholly-owned subsidiary of Maxxon. Consequently, the representations and
warranties of Ives set forth in this Agreement will be of no effect following
Closing. As the principal shareholder, director, officer and employee of Ives,
M. Xxxxx Xxxx agrees to irrevocably and unconditionally guarantee personally all
the representations, warranties, covenants, and agreements of Ives set forth
herein for a period of 3 years following Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01. General Representations and Warranties. Each party represents to the
other that:
(i) It is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and that it is not
required to be qualified or licensed to do business as a foreign corporation in
any jurisdictions other than Oklahoma; and
(ii) The execution of this Agreement and the consummation of the Exchange
and the other transactions contemplated hereby have been duly authorized by its
Board of Directors and Shareholders, and no other corporate action on its part
is necessary in order to execute, deliver, consummate and perform its
obligations hereunder; and
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(iii) The execution, delivery, performance and consummation of the Exchange
and the transactions contemplated hereby do not violate any obligation to which
it is a party and will not create a default thereunder; and
(iv) There are no suits, actions or proceedings pending or to its knowledge
threatened which seek to enjoin the Exchange or the transactions contemplated by
this Agreement or which, if adversely decided, would have a materially adverse
effect on its business, results of operations, assets or prospects; and
(v) No statement made by it herein or in the exhibits hereto or any
document delivered by it or on its behalf pursuant to this Agreement contains an
untrue statement of material fact or omits to state all material facts necessary
to make the statements therein not misleading in any material respect; and
(vi) It has incurred no finder=s, broker=s, investment banking, financial,
advisory or other similar fee by reason of the Exchange or otherwise.
2.02 Additional Representations by Ives. Ives and M. Xxxxx Xxxx each
represents to Maxxon that its authorized capital consists of 20,000,000 shares
of Common Stock, par value $0.01 per share; that at the date hereof, 15,000,000
shares of its Common Stock are issued and outstanding; and no shares were held
in its treasury. All issued and outstanding shares of Common Stock of Ives have
been duly and validly issued and are fully paid and non-assessable shares and
have not been issued in violation of any preemptive or other rights of any other
person or any applicable laws. There are no outstanding options, warrants,
commitments, calls or other rights or agreements requiring it to issue any
shares of Ives Common Stock or securities convertible into shares of its Common
Stock to anyone for any reason whatsoever.
2.03. Additional Representations by Maxxon. Maxxon represents to the
parties that its authorized capital consists of 25,000,000 shares of Common
Stock, par value $.001 per share; at the date hereof, 8,353,000 shares of its
Common Stock are issued and outstanding to Maxxon; and no shares were held in
its treasury. All issued and outstanding shares have been validly issued and are
fully paid and non-assessable and have not been issued in violation of any
preemptive or other rights of any other person or applicable laws. There are no
outstanding options, warrants, commitments, calls or other rights or agreements
requiring it to issue any shares of Maxxon Common Stock or securities
convertible into shares of its Common Stock to any person for any reason
whatsoever, except for the 244,000 warrants exercisable at $2.00 per share.
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ARTICLE III
TRANSACTIONS PRIOR TO CLOSING
3.01. Corporate Approvals. Prior to Closing, each of the parties shall
submit this Agreement to its Board of Directors and Shareholders and obtain
approval thereof. Copies of corporate actions taken shall be provided to each
party.
3.02. Access to Information. Each party agrees to permit upon reasonable
notice the attorneys, accountants, and other representatIves of the other
parties reasonable access during normal business hours to its properties and its
books and records to make reasonable investigations with respect to its affairs,
and to make its officers and employees available to answer questions and provide
additional information as reasonably requested.
3.03. Expenses. Each party agrees to bear its own expenses in connection
with the negotiation and consummation of the Exchange and the transactions
contemplated hereby.
3.04. Covenants. Except as permitted in writing, each party agrees that it
will:
(i) Pending completion of the Exchange, conduct its business in accordance
with its ordinary, usual and normal course of business, and consistent with its
past practices and use its good faith efforts to preserve intact its business
organization, key employees, good will and business relationships; and
(ii) Use its good faith efforts to obtain all requisite licenses, permits,
consents, approvals and authorizations necessary in order to consummate the
Exchange; and
(iii) Notify the other parties upon the occurrence of any event which would
have a materially adverse effect upon the Exchange or the transactions
contemplated hereby or upon the business, assets or results of operations; and
(iv) Not enter into any material agreement not in the ordinary course of
its business and not to modify its corporate structure or otherwise act outside
the ordinary course of its business, except as necessary or advisable in order
to consummate the Exchange and the transactions contemplated hereby.
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ARTICLE IV
CONDITIONS PRECEDENT
The obligation of the parties to consummate the Exchange and the
transactions contemplated hereby are subject to the following conditions which
may be waived to the extent permitted by law:
(i) Each party must obtain the approval of its Board of Directors and
Shareholders in accordance with applicable law, and such approval shall not have
been rescinded or restricted; and
(ii) Each party shall obtain all requisite licenses, permits, consents,
authorizations and approvals required to complete the Exchange and the
transactions contemplated hereby; and
(iii) There shall be no effective injunction, writ or preliminary
restraining order or other order of a similar nature issued by any court or
governmental agency having jurisdiction directing that the Exchange or the
transactions contemplated hereby shall not be consummated; and
(iv) The representations and warranties of the parties shall be true and
correct in all material respects at the Effective Time; and
(v) M. Xxxxx Xxxx will enter into a 3 year Employment Agreement in the form
attached Exhibit E; and
(vi) Key employees of Ives as designed by Maxxon will enter into Employment
Agreements in the form attached as Exhibit E; and
(vii) Each Ives shareholder shall deliver to Maxxon its Ives Common Stock
Certificate and a Maxxon Subscription Agreement satisfactory to Maxxon.
ARTICLE V
MISCELLANEOUS
Neither party may assign this Agreement or any right or obligation of it
hereunder without the prior written consent of the other parties hereto. No
permitted assignment shall relieve a party of its obligations under this
Agreement without the separate written consent of the other parties. This
Agreement shall be binding upon and enure to the benefit of the parties and
their respective permitted successors and assigns. Each party agrees that it
will comply with all applicable laws, rules and regulations in the execution and
performance of its obligations under this Agreement. This Agreement shall be
governed by and construed
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in accordance with the laws of the State of Oklahoma. This document constitutes
a complete and entire agreement among the parties with reference to the subject
matters set forth herein. No statement or agreement, oral or written, made prior
to or at the execution hereof and no prior course of dealing or practice by
either party shall vary or modify the terms set forth herein without the prior
consent of the other parties hereto. This Agreement may be amended only by a
written document signed by the parties. Notices or other communications required
to be made in connection with this Agreement shall be delivered to the parties
at the address set forth below or at such other address as may be changed from
time to time by giving written notice to the other parties. This Agreement may
be executed in multiple counterparts, each of which shall constitute one and a
single Agreement.
ARTICLE VI
AGREEMENT TO RETAIN Ives
Maxxon agrees that it will not, without the prior written consent of M.
Xxxxx Xxxx, sell, transfer or dispose of its ownership interest in Ives for a
period of 3 years after the date hereof; provided Ives meets or exceeds 80% of
its projections attached hereto as Exhibit F, assuming Maxxon makes available to
Ives the $260,000 in interim financing in accordance with Paragraphs 1.09 and
1.10 above and additional financing of $1,740,000 within 18 months after the
Closing. During the 18 months after Closing, the exact time of the additional
$1,740,000 could effect the performance of Ives. In order for Ives to reasonably
be able to meet its performance projections in Exhibit F, the parties anticipate
that the infusion of the $1,740,000 in anticipated additional funding for Ives
should be approximately as follows: $240,000 on or about September 15, 1997; an
additional $500,000 on or about December 1, 1997; an additional $500,000 on or
about June 1,1998; and $500,000 on or about December 1, 1998.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their authorized representatIves the ____ day of June, 1997.
Ives HEALTH COMPANY, INC.
By _______________________________
M. Xxxxx Xxxx, President and CEO
Maxxon, INC.
By _______________________________
Xxxxxxx Xxxxx, Chairman, President and CEO
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---------------------------------
M. Xxxxx Xxxx, Individually and as Guarantor
ACKNOWLEDGMENTS
STATE OF OKLAHOMA )
) ss
COUNTY OF TULSA )
On the ____ day of June, 1997 before the undersigned personally appeared M.
Xxxxx Xxxx, who acknowledged that he is President of Ives Health Company, Inc.,
and is authorized to execute the above instrument in his respective capacity and
for the purposes contained herein and that the above instrument is true and
correct for all purposes.
In Witness Whereof, I set my hand and official seal.
-------------------------------
Notary Public in and for Tulsa
County, Oklahoma
[seal]
My commission expires:
---------------------
STATE OF OKLAHOMA )
) ss
COUNTY OF TULSA )
On the ____ day of June, 1997 before the undersigned personally appeared
Xxxxxxx Xxxxx, who acknowledged to me that he is Chairman, President and CEO of
Maxxon, Inc., and is authorized to execute the above instrument in his
respective capacity and for the purposes contained herein and that the above
instrument is true and correct for all purposes.
In witness, I set my hand and official seal.
-------------------------------
Notary Public in and for Tulsa
County, Oklahoma
[seal]
My commission expires:
----------------------
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----------------
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LIST OF EXHIBITS
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
Exhibit A List of Ives Shareholders
Exhibit B Articles of Exchange
Exhibit C Ives $60,000 Convertible Debenture
Exhibit D Use of $60,000 Proceeds
Exhibit E Ives Employment Agreements
Exhibit F Ives Projected Performance
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EXHIBIT A
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
List of Ives Shareholders
EXHIBIT B
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
Articles of Exchange
EXHIBIT C
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
Ives' $60,000 Convertible Debenture
EXHIBIT E
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
Ives Employment Agreements
EXHIBIT D
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
Use of $60,000 Proceeds
EXHIBIT F
TO
AGREEMENT AND PLAN OF EXCHANGE
BETWEEN
Ives HEALTH COMPANY, INC. AND Maxxon, INC.
Ives' Projected Performance
AMENDMENT NO. 1
TO THAT CERTAIN
AGREEMENT AND PLAN OF EXCHANGE
BY AND BETWEEN
IVES HEALTH COMPANY, INC.
AND
MAXXON, INC.
This Amendment No. 1 ("Amendment") to that certain Agreement and Plan of
Exchange ("Agreement") by and between Ives Health Company, Inc. ("Ives") and
Maxxon, Inc. ("Maxxon") is entered into this 18th day of August, 1997. All
defined terms in the Agreement have the same meaning in this Amendment unless
otherwise set forth herein.
1. Amendment to Agreement. The parties agree that the Agreement is amended
so that the exhibits to the Agreement are deleted and the exhibits attached
hereto are substituted therefor.
2. Ives Performance Criteria. The parties agree that the performance
criteria set forth in the exhibits to the Agreement for Ives begin to apply
January 1, 1998 subject to receipt by Ives of the $240,000 payment, the $145,000
note payment, and the $500,000 payment and the $10,000 payment to Xxxxx Xxxx
personally; and agree that so long as Ives achieves at least 75% of the stated
criteria, Ives shall remain President of Ives, unless his employment is
terminated for cause under his employment agreement.
3. Number of Shares. The parties agree that every reference to "318,182" in
the Agreement and in all exhibits thereto is changed to "621,600."
4. Gender of Pronouns. All masculine and feminine pronouns used in the
Agreement and in all exhibits thereto are intended to include all genders.
5. Agreement Remains Unchanged Except as Specifically Amended. Except as
specifically amended hereby, the Agreement remains in full force and effect.
In witness whereof, the parties have executed this Agreement with full
authority.
IVES HEALTH COMPANY, INC. MAXXON, INC.
By__________________________ By__________________________________
M. Xxxxx Xxxx, President Xxxxxxx Xxxxx, Chairman and CEO
