Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this _ day of
January, 1996, among NATURES GIFT, INC., a Utah corporation ("Natures");
MADISON YORK & ASSOCIATES, INC., a Utah corporation, any and all of its
subsidiaries (hereinafter collectively referred to as "Madison") and its
shareholders (hereinafter "Shareholders").
Natures wishes to acquire all the issued and outstanding stock of Madison
for and in exchange for stock of Natures, in a stock for stock transaction
intending to qualify as a tax-free exchange pursuant to Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended. The parties intend for this
Plan to represent the terms and conditions of such tax-free reorganization,
which Plan the parties hereby adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
TERMS OF EXCHANGE
1.1 Number of Shares. Upon the execution hereof, the Shareholders of
Madison agree to assign, transfer, and deliver to Natures, free and clear of
all liens, pledges, encumbrances, charges, restrictions or known claims of any
kind, nature or description, all of their shares of Madison stock, which
constitutes all of the issued and outstanding shares of Madison aggregating
4,100 common shares, and Natures agrees to acquire such shares on the date
thereof, or as soon as practicable thereafter, by issuing and delivering in
exchange therefore solely common shares of Natures' stock, par value $0.001,
in the aggregate of 4,100,000 post split shares, as subject to the provisions
of this Plan, which shall represent, as a result thereof, approximately 31% of
the then issued and outstanding shares of Natures. Subsequent to the date
hereof, the Shareholders shall, upon the surrender of the Madison certificates
representing their respective beneficial and record ownership of all of the
issued and outstanding shares of Madison to Natures, as soon as practicable
hereafter, and further provided an exemption from the registration provisions
of Section 5 of the Securities Act of 1933 is available for the issuance
thereof, the Shareholders shall be entitled to receive a certificate(s)
evidencing shares of the exchanged Natures stock as provided for herein. Upon
the consummation of the transaction contemplated herein, Natures shall be the
beneficial and record owner of all of the issued and outstanding stock of
Madison.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of Natures shares to be issued and delivered pursuant to this Plan, shall be
appropriate adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in Natures common
stock, which may occur between the date of the execution of this Plan and the
date of the delivery of such shares.
1.3 Delivery of Certificates. The Shareholders shall transfer to
Natures at the closing provided for in Section 2 (the "Closing") the shares of
common stock of Madison listed opposite their respective names on Exhibit A
hereto (the "Madison shares") in exchange for the post-split shares of the
common stock of Natures as outlined above in Section 1.1 hereof (the "Natures
Stock"). All of such shares of Natures common stock shall be issued at the
closing to the Shareholders, in the numbers shown opposite their respective
names in Exhibit A. The transfer of Madison shares by the Shareholders shall
be effected by the delivery to Natures at the Closing of certificates
representing the transferred shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures guaranteed by a national bank
and with all necessary transfer taxes and other revenue stamps affixed and
acquired at the Shareholders' expense.
1.4 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as Natures may request in order to more
effectively sell, transfer and assign clear title and ownership in the Madison
shares to Natures.
Section 2
CLOSING
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Fabian & Xxxxxxxxx on January 8, 1996 or at such other time
or place as may be mutually agreed upon in writing by the parties. The Closing
may also 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. In any event, the closing of
the transactions contemplated by this Plan shall be effected as soon as
practicable after all of the conditions contained herein have been satisfied.
2.2 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transaction contemplated hereby.
Section 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF NATURES
Natures represents and warrants to, and covenants with, the Shareholders
and Madison as follows:
3.1 Corporate Status. Natures is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah incorporated
on February 9, 1984. Natures has full corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business on all material respects as it is now
being conducted, and there is no jurisdiction in which the character and
location of the assets owned by it, or the nature of the business transacted
by it, requires qualification. Included in the Natures schedules (defined
below) are complete and correct copies of its Articles of Incorporation and
Bylaws as in effect on the date hereof. The execution and delivery of this
Plan does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of Natures' Articles of Incorporation or
Bylaws. Natures has taken all action required by law, its Articles of
Incorporation, its Bylaws, or otherwise, to authorize the execution and
delivery of this Plan.
3.2 Capitalization. The authorized capital stock of Natures as of the
date hereof consists of 105,000,000 common shares, par value $0.001. As of the
date hereof there are 103,156,843 common shares of Natures issued and
outstanding. The foregoing shares constitute fully paid, non-assessable
shares. There are no outstanding options, warrants, or calls or any
understanding, agreements, commitments, contracts or promises with respect to
the issuance of Natures' common stock or with regard to any options, warrants
or other contractual rights to acquire any of Natures' authorized but unissued
common shares.
3.3 Recapitalization. In conjunction with the transaction embodied in
this Plan, Natures shall change its existing capitalization by effecting a
nineteen-to-one (19 to 1) revenue split of authorized, issued and outstanding
common stock (the "post-split shares") and will increase its authorized common
stock from 5,429,308 to 40,000,000 shares, par value $0.001. As a result of
the recapitalization, Natures will have 5,429,308 post-split shares issued and
outstanding and 40,000,000 authorized post-split shares, par value $0.001.
3.4 Financial Statements.
(a) Natures hereby warrants and covenants to Madison that the
audited financial statements of the period ended July 31, 1995 and for its
year ended December 31, 1994, December 31, 1993 and 1992, fairly and
accurately represent the financial condition of Natures and that the same will
be prepared along with the period ended as of the date of Closing, for
consolidation by an independent public accountant, which shall be prepared in
accordance with generally accepted accounting principles consistently applied,
on or before the expiration of forty-five days from the date of Closing.
(b) Natures hereby warrants and represents that the audited
financial statements for the periods set forth in subparagraph (a), supra,
fairly and accurately represent the financial condition of Natures as
submitted heretofore to Madison for examination and review.
3.5 Subsidiaries. Natures has no subsidiaries.
3.6 Conduct of Business. Natures has no ongoing business.
3.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Natures, threatened by or against or
effecting Natures at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Natures does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
3.8 Books and Records. From the date hereof, and for any reasonable period
subsequent thereto, Natures and its present management will (i) give to the
Shareholders and Madison, or their duly authorized representatives, full
access, during normal business hours, to all of its books, records, contracts
and other corporate documents and properties so that the Shareholders and
Madison, or their duly authorized representatives, may inspect them; and (ii)
furnish such information concerning the properties and affairs of Natures as
the Shareholders and Madison, or their duly authorized representatives, may
reasonably request. Any such request to inspect Natures' books shall be
directed to Natures' counsel, Xxxxxx X. Xxxxxxx, at the address set forth
herein under Section 9.4 Notices.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Natures and its representatives will keep confidential any
information which they obtain from the Shareholders or from Madison concerning
its properties, assets and the proposed business operations of Madison. If the
terms and conditions of this Plan imposed on the parties hereto are not
consummated on or before 5:00 p.m. MST on March 1, 1996 or otherwise waived or
extended in writing to a date mutually agreeable to the parties hereto,
Natures will return to Madison all written matter with regard to Madison
obtained in connection with the negotiations or consummation of this Plan.
3.10 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or there
material agreements or instrument to which Natures was or is a party, or to
which any of its assets or operations are subject, and will not conflict with
any provision of the Articles of Incorporation or Bylaws of Natures.
3.11 Corporate Authority. Natures has full corporate power and
authority to enter into this Plan and to carry out its obligations hereunder
and will deliver to the Shareholders and Madison, or their respective
representatives, at the Closing, a certified copy of resolutions of its Board
of Directors authorizing execution of this Plan by its officers and
performance thereunder.
3.12 Consent of Shareholders. Natures hereby warrants and represents
that the Shareholders of Natures, being the owners of a majority of the issued
and outstanding stock of the Corporation consented in writing to the
authorization to execute an Agreement and Plan of Reorganization as between
Natures and Madison pursuant to a stock-for-stock transaction in which Natures
would acquire all of the issued and outstanding shares of Madison in exchange
for the issuance of 4,100,000 post reverse common shares of Natures.
3.13 Resignation of Directors. Upon the Closing, the current directors
of Natures shall submit their resignations.
3.14 Special Covenants and Representations Regarding the Exchanged
Natures Stock. The consummation of this Plan and the transactions herein
contemplated include the issuance of the exchanged Natures shares to the
Shareholders, which constitutes an offer and sale of securities under the
Securities Act of 1933, as amended, and applicable states' securities laws.
Such transaction shall be consummated in reliance on exemptions from the
registration and prospectus requirements of such statutes which depend
interlace on the circumstances under which the Shareholders acquire such
securities. In connection with the reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, at
the Closing, Shareholders shall cause to be delivered to Natures a Letter(s)
of Investment Intent in the form attached hereto as Exhibit B and incorporated
herein by reference.
3.15 Undisclosed or Contingent Liabilities. Natures hereby represents
and warrants that it has no undisclosed or contingent liabilities which have
not been disclosed to Madison.
3.16 Information. The information concerning Natures set forth in this
Plan, and the Natures schedules attached hereto, are complete and accurate in
all material respects and do not contain, or will not contain, when delivered,
any untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to Madison in connection with this Plan.
3.17 Title and Related Matters. Natures has good and marketable title
to all of its properties, interests in properties, and assets, real and
personal, which are reflected, or will be reflected, in the Natures balance
sheets, free and clear of any and all liens and encumbrances.
3.18 Contracts or Agreements. Natures is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
Madison.
3.19 Governmental Authorizations. Natures has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Natures shall use its best efforts to obtain as quickly as
possible a listing in Xxxxx'x OTC Industrial Manual, or some other recognized
manual, recognized by the various states as an exemption from registration
provisions of any such state for the purposes of interstate trading of
Natures' post-split stock. Except for compliance with federal and state
securities laws, no authorization, approval, consent or order of, or
registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by Natures of
this Plan and the consummation by Madison of the transactions contemplated
hereby.
3.20 Compliance with Laws and Regulations. Natures has complied with
all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of Natures or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to Madison.
3.21 Approval of Plan. The Board of Directors of Natures has authorized
the execution and delivery of this Plan by Natures and have approved the Plan
and the transactions contemplated hereby. Natures has full power, authority,
and legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
3.22 Ratification by Shareholders. This Plan will be submitted to the
Shareholders of Natures for approval and ratification; the adoption and
ratification of the Plan by a majority of the Shareholders of Natures is a
condition precedent to the consummation of the Plan.
3.23 Investment Intent. Natures is acquiring the Madison shares to be
transferred to it under this Plan for investment and no with a view to the
sale or distribution thereof, and Natures has no commitment or present
intention to liquidate Madison or to sell or otherwise dispose of the Madison
shares.
3.24 Unregistered Shares and Access to Information. Natures understands
that the offer and sale of the Madison shares have not been registered with or
reviewed by the Securities and Exchange Commission under the Securities Act of
1933, as amended, or with or by any state securities law administrator, and no
federal, state securities law administrator has reviewed or approved any
disclosure or other material concerning Madison or the Madison shares. Natures
has been provided with and reviewed all information concerning Madison, the
Madison shares as it has considered necessary or appropriate as a prudent and
knowledgeable investor to enable it to make an informed investment decision
concerning the Madison shares. Natures has made an investigation as to the
merits and risks of its acquisition of the Madison Shares and has had the
opportunity to ask questions of, and has received satisfactory answers from,
the officers and directors of Madison concerning Madison, the Madison shares
and related matters, and has had an opportunity to obtain additional
information necessary to verify the accuracy of such information and to
evaluate the merits and risks of the proposed acquisition of the Madison
shares.
3.25 Natures' Schedules. Natures has delivered to Madison the following
items listed below, hereafter referred to as the "Natures Schedules", which is
hereby incorporated by reference and made a part hereof. A certification
executed by a duly authorized officer of Natures on or about the date within
the Plan is executed to certify that the Natures Schedules are true and
correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) Natures' Prospectus;
(c) Financial statements;
(d) Shareholder list;
(e) Consent of Directors to Plan;
(f) Officer's Certificate as required under Section 6.2 of the Plan;
(g) Opinion of counsel as required under Section 6.4 of the Plan;
(h) Certificate of Good Standing;
(i) Resignations of current Board of Directors; and
(j) Consent of Shareholders approving Plan.
Section 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF MADISON
Madison represents and warrants to, and covenants with, the Shareholders
and Natures as follows:
4.1 Corporate Status. Madison is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah incorporated
on November 3, 1994. Madison has full corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business on all material respects as it is now
being conducted, and there is no jurisdiction in which the character and
location of the assets owned by it, or the nature of the business transacted
by it, requires qualification. Included in the Madison schedules (defined
below) are complete and correct copies of its Articles of Incorporation and
Bylaws as in effect on the date hereof. The execution and delivery of this
Plan does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of Madison's Articles of Incorporation or
Bylaws. Madison has taken all action required by law, its Articles of
Incorporation, its Bylaws, or otherwise, to authorize the execution and
delivery of this Plan.
4.2 Capitalization. The authorized capital stock of Madison as of the
date hereof consists of 10,000 common shares, par value $0.001. As of the date
hereof there are 4,100 common shares of Madison issued and outstanding. The
foregoing shares constitute fully paid, non-assessable shares. There are no
outstanding options, warrants, or calls or any understanding, agreements,
commitments, contracts or promises with respect to the issuance of Madison's
common stock or with regard to any options, warrants or other contractual
rights to acquire any of Madison's authorized but unissued common shares.
4.3 Financial Statements.
(a) Madison hereby warrants and covenants to Natures that the
audited financial statements of the period ended November 30, 1995, fairly and
accurately represent the financial condition of Madison and that the same will
be prepared along with the period ended as of the date of Closing, on or
before the expiration of forty-five days from the date of Closing.
(b) Madison hereby warrants and represents that the financial
statements for the periods set forth in subparagraph (a), supra, fairly and
accurately represent the financial condition of Madison submitted heretofore
to Natures for examination and review.
4.4 Subsidiaries. Madison has no subsidiaries.
4.5 Conduct of Business. Madison will use its best efforts to maintain
and preserve its business organization, employee relationships and goodwill
intact, and will not, without the prior written consent of Natures, enter into
any material commitments except in the ordinary course of business.
Madison agrees that Madison will conduct itself in the following manner
pending the Closing:
(a) Certificate of Incorporation and Bylaws. change will be made in
the Certificate of Incorporation or Bylaws of Madison.
(b) Capitalization, etc. Madison will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
4.6 Options, Warrants and Rights. Although Madison intends to enact and
put into effect various management and employee benefit plans in the near
future, as of the date hereof, Madison has no options, warrants or stock
appreciation rights related to the authorized but unissued Madison common
stock. There are no existing options, warrants, calls, or commitments of any
character relating to the authorized and unissued Madison common stock, except
options, warrants, calls, or commitments, if any, to which Madison is not a
party and by which it is not bound.
4.7 Title to Property. Madison has good and marketable title to all of
its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of Madison, and the properties and
assets of Madison are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
4.8 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Madison, threatened by or against or
effecting Madison at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Madison does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
4.9 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, Madison and its present management will (i) give to
the Shareholders and Madison, or their duly authorized representatives, full
access, during normal business hours, to all of its books, records, contracts
and other corporate documents and properties so that the Shareholders and
Madison, or their duly authorized representatives, may inspect them; and (ii)
furnish such information concerning the properties and affairs of Madison as
the Shareholders and Madison, or their duly authorized representatives, may
reasonably request. Any such request to inspect Madison's books shall be
directed to Madison's representative, Xxxxx Xxxxxxxxx, at the address set
forth herein under Section 9.4 Notices.
4.10 Confidentiality.. Until the Closing (and thereafter if there is no
Closing), Madison and its representatives will keep confidential any
information which they obtain from the Shareholders or from Madison concerning
its properties, assets and the proposed business operations of Madison. If the
terms and conditions of this Plan imposed on the parties hereto are not
consummated on or before 5:00 p.m. MST on March 1, 1996 or otherwise waived or
extended in writing to a date mutually agreeable to the parties hereto,
Madison will return to Natures all written matter with regard to Natures
obtained in connection with the negotiations or consummation of this Plan.
4.11 Investment Intent. The Shareholders represent and covenant that
they are acquiring the unregistered and restricted common shares of Natures to
be delivered to them under this Plan for investment purposes and not with a
view to the subsequent sale or distribution thereof, and as agreed, supra, the
Shareholders, their successors and assigns agree to execute and deliver to
Natures on the date of Closing or no later than the date on which the
restricted shares are issued and delivered to the Shareholders, their assigns,
or designees, an Investment Letter similar in form to that attached hereto as
Exhibit B.
4.12 Unregistered Shares and Access to Information. Madison and the
Shareholders understand that the offer and sale of Natures post-split shares
to be exchanged for the Madison shares have not been registered with or
reviewed by the securities and Exchange Commission under the Securities Act of
1933, as amended, or with or by any state securities law administrator, and no
federal or state securities law administrator has reviewed or approved any
disclosure or other material facts concerning Natures or Natures post-split
stock. Madison and the Shareholders have been provided with and reviewed all
information concerning Natures and Natures' post-split shares, to be exchanged
for the Madison shares as they have considered necessary or appropriate as
prudent and knowledgeable investors to enable them to make informed investment
decisions concerning the Natures post-split shares, to be exchanged for the
Madison shares. Madison and the Shareholders have made an investigation as to
the merits and risks of their acquisition of the Natures post-split shares, to
be exchanged for the Madison shares and have had the opportunity to ask
questions of, and have received satisfactory answers from, the officers and
directors of Natures concerning Natures post-split shares to be exchanged for
the Madison shares and related matters, and have had an opportunity to obtain
additional information necessary to verify the accuracy of such information
and to evaluate the merits and risks of the proposed acquisition of the
Natures post-split shares to be exchanged for the Madison shares.
4.13 Title to Shares. The Shareholders are the beneficial and record
owners, free and clear of any liens and encumbrances, of whatever kind or
nature, of all of the shares of Madison of whatever class or series, which the
Shareholders have contracted to exchange.
4.14 Contracts.
(a) Set forth in the Madison Schedules are copies or descriptions of
all material contracts which written or oral, all agreements, franchises,
licenses, or other commitments to which Madison is a party or by which Madison
or its properties are bound.
(b) Except as may be set forth in the Madison Schedules, Madison is
not a party to any contract, agreement, corporate restriction, or subject to
any judgment, order, writ, injunction, decree, or award, which materially and
adversely effect the business, operations, properties, assets, or conditions
of Madison.
(c) Except as set forth in the Madison Schedules, Madison is not a
party to any material oral or written (i) contract for employment of any
officer which is not terminable on 30 days (or less) notice; (ii) profit
sharing, bonus, deferred compensation, stock option, severance, or any other
retirement plan of arrangement covered by Title IV of the Employee Retirement
Income Security Act, as amended, or otherwise covered; (iii) agreement
providing for the sale, assignment or transfer of any of its rights, assets or
properties, whether tangible or intangible, except sales of its property in
the ordinary course of business with a value of less than $2,000; or (iv)
waiver of any right of any value which in the aggregate is extraordinary or
material concerning the assets or properties scheduled by Madison, except for
adequate value and pursuant to contract. Madison has not entered into any
material transaction which is not listed in the Madison Schedules or reflected
in the Madison financial statements.
4.15 Material Contract Defaults. Madison is not in default in any
material respect under the terms of any contract, agreement, lease or other
commitment which is material to the business, operations, properties or
assets, or condition of Madison, and there is no event of default or event
which, with notice of lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other
commitment in respect of which Madison has not taken adequate steps to prevent
such default from occurring, or otherwise compromised, reached a satisfaction
of, or provided for extensions of time in which to perform under any one or
more contract obligations, among others.
4.16 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or material
agreement or instrument to which Madison was or is a party, or to which any of
its assets or operations are subject, and will not conflict with any provision
of the Articles of Incorporation or Bylaws of Madison.
4.17 Governmental Authorizations. Madison has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities laws, no
authorization, approval, consent or order of, or registration, declaration, or
tiling with, any court or other governmental body is required in connection
with the execution and delivery by Madison of this Plan and the consummation
by Madison of the transactions contemplated hereby.
4.18 Compliance with Laws and Regulations. Madison has complied with
all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of Madison or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to Natures.
4.19 Approval of Plan. The Board of Directors of Madison have
authorized the execution and delivery of this Plan by Madison and have
approved the Plan and the transactions contemplated hereby. Madison has full
power, authority, and legal right to enter into this Plan and to consummate
the transactions contemplated hereby.
4.20 Information. The information concerning Madison set forth in this
Plan, and the Madison Schedules attached hereto, are complete and accurate in
all material respects and do not contain, or will not contain, when delivered,
any untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to Natures in connection with this Plan.
4.21 Madison' Schedules. Madison has delivered to Natures the following
items listed below, hereafter referred to as the "Madison Schedules", which is
hereby incorporated by reference and made a part hereof. A certification
executed by a duly authorized officer of Madison on or about the date within
the Plan is executed to certify that the Madison Schedules are true and
correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Resolution of Board of Directors approving Plan;
(c) Consent of Shareholders approving Plan;
(d) Copies of all licenses, permits and other governmental
authorizations, requests or applications therefore pursuant to which Madison
carries on or proposes to carry on its business except those which, in the
aggregate, are immaterial to the present or proposed opinion business of
Madison;
(e) A list of all employees, including current compensation, with
notation as to job description and whether or not such employee is subject to
written contract, and if subject to a contract or employment agreement, a copy
of the same;
(f) A schedule showing the name and location of each bank or other
institution with which Madison has an account and the names of the authorized
persons to draw thereon or having access thereto;
(g) Financial statements of Madison;
(h) A schedule setting forth the shareholders, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(i) Officer's Certificate as required by Section 7.2 of the Plan;
(j) Certificate of Good Standing; and
(k) Acceptance of Nominations as Directors.
Section 5
SPECIAL COVENANTS
5.1 Resignation of Directors. At the Closing, all of Natures' current
management will resign their respective positions, seriatim, as Directors.
5.2 Madison Information Incorporated in Natures' Reports. Madison
represents and warrants to Natures that all the information furnished under
this Plan shall be true and correct in all material respects and that there is
no omission of any material fact required to make the information stated not
misleading. Madison agrees to indemnify and hold Natures harmless, including
each of its Directors and Officers, a nd each person, if any, who controls
such party, under any applicable law from and against any and all losses,
claims, damages, expenses or liabilities to which any of them may become
subject under applicable law, or reimburse them for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such actions, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based on any untrue statement, alleged untrue statement, or omission of a
material fact contained in such information delivered hereunder.
5.3 Special Covenants and Representations Regarding the Exchanged
Natures Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the Natures post-split shares in
exchange for all of the issued and outstanding shares of Madison to the
Shareholders constitutes the offer and sale of securities under the Securities
Act and the applicable state statutes, which depend, inter alla, on the
circumstances under which the Shareholders acquire such securities. Natures
intends to rely on the exemption of the registration provision of Section 5 of
the Securities Act as provided for under Section 4.2 of the Securities Act of
1933, which states "transactions not involving a public offering", among
others. Each Shareholder upon submission of his Madison shares and the receipt
of the Natures post-split shares exchanged therefor, shall execute and deliver
to Natures a letter of investment invent to indicate, among other
representations, that the Shareholder is exchanging the Madison shares for
Natures post-split shares for investment purposes and not with a view to the
subsequent distribution thereof. A proposed Investment Letter is attached
hereto as Exhibit B and incorporated herein by reference for the general use
by the Shareholders, as they may determine.
5.4 Action Prior to Closing. Upon the execution hereof until the
Closing date, and the completion of the consolidated audited financials,
(a) Madison and Natures will (i) perform all of its obligations
under material contracts, leases, insurance policies and/or documents relating
to its assets and business; (ii) use its best efforts to maintain and preserve
its business organization intact, to retain its key employees, and to maintain
its relationship with existing potential customers and clients; and (iii)
fully comply with and perform in all material respects all duties and
obligations imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither Madison nor Natures will (i) make any change in its
Articles of Incorporation or Bylaws except and unless as contemplated pursuant
to Section 3 of this Plan; (ii) enter into or amend any contract, agreement,
or other instrument of the types described in the parties' schedules, except
that a party may enter into or amend any contract or other instrument in the
ordinary course of business involving the sale of goods or services, provided
that such contract does not involve obligations in excess of $10,000.
Section 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF MADISON AND THE SHAREHOLDERS
All obligations of Madison and the Shareholders under this Plan are
subject to the satisfaction, on or before the Closing date, except as
otherwise provided for herein, or waived or extended in writing by the parties
hereto, of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by Natures in this Plan were true when made and shall be true as of the
Closing date (except for changes therein permitted by this Plan) with the same
force and effect as if such representations and warranties were made at and as
of the Closing date; and, Natures shall have performed and complied with by
Natures prior to the Closing, unless waived or extended in writing by the
parties hereto. Madison shall have been furnished with a certificate, signed
by a duly authorized executive officer of Natures and dated the Closing date,
to the foregoing effect.
6.2 Officers' Certificate. Madison and the Shareholders shall have been
furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of Natures, to the effect that no litigation,
proceeding, investigation, or inquiry is pending, or to the best knowledge of
Natures, threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of Natures.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of Natures, nor shall any event have occurred which, with lapse
of time or the giving of notice or both, may cause or create any material
adverse change in the financial condition, business or operations of Natures,
except as otherwise disclosed to Madison.
6.4 Opinion of Counsel of Natures. Natures shall furnish to Madison and
the Shareholders an opinion dated as of the Closing date and in form and
substance satisfactory to Madison and the Shareholders to the effect that:
(a) Natures is a corporation duly organized, validly existing, and
in good standing. under the laws of the State of Nevada, and with all
requisite corporate power to perform its obligations under this Plan.
(b) The business of Natures, as presently conducted, including, upon
the consummation hereof, the ownership of all of the issued and outstanding
shares of Madison, does not require it to register it to do business as a
foreign corporation on any jurisdiction other than under the jurisdiction of
its Articles of Incorporation or Bylaws and Natures has complied to the best
of its knowledge in all material respects with all the laws, regulations,
licensing requirements and orders applicable to its business activities and
has filed with the proper authorities, including the Department of Commerce,
Division of Corporations, State of Utah and Secretary of State for the State
of Nevada, all statements and reports required to be filed.
(c) The authorized and outstanding capital stock of Natures as set
forth in Section 3.2 above, and all issued and outstanding shares have been
duly and validly authorized and issued and are fully paid and non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against Natures of any court or before or by any
governmental body which might materially effect the business of Natures or the
financial condition of Natures as a whole and no such claims, suits or legal
proceedings are contemplated by governmental authorities against Natures.
(e) Natures' initial public offering file declared effective by the
Utah Securities Commission on May 7, 1985, and was offered and sold in
accordance with and in compliance with the rules and regulations of the
Securities Act of 1933, as amended. Subsequent to the termination of Natures'
public offering, no stop orders suspending the effectiveness of the
distribution is or was in effect, and no proceedings since the termination
thereof for that purpose are pending before or threatened by any state or
federal agency or authority.
(f) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of Natures, or any
contract, agreement, indenture, mortgage, or order by which Natures is bound.
(g) This Plan constitutes a legal, valid and binding obligation of
Natures enforceable in accordance with its terms, subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium, or similar law effecting
creditors' rights generally and general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or law).
(h) The execution and delivery of this Plan and the consummation of the
transactions contemplated hereby have been ratified by a majority of the
Shareholders of Natures and have been duly authorized by its Board of
Directors.
6.5 Good Standing. Madison shall have received a Certificate of Good
Standing from the State of Utah, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Natures is in good standing as a corporation in the
State of Utah.
6.6 Other Items. Madison and the Shareholders shall have received such
further documents, certifications or instruments relating to the transactions
contemplated hereby as Madison and the Shareholders may reasonably request.
6.7 Resignations and Designation of New Directors. Madison and the
Shareholders shall have received duly executed resignations from all of the
directors and officers of Natures dated and effective as of the Closing, and
appointing the person or persons designated by Madison, to serve on the Board
of Directors of Natures until the next annual meeting of the stockholders and
until their successors shall be elected and qualified.
6.8 Changes in Capitalization and Cancellation of Shares, Change of
Name of Natures. All resolutions required to complete the matters outlined in
Section 1.4 hereof shall have been adopted, ratified and approved, save only
for the filing of the required and necessary documentation.
Section 7
CONDITIONS PRECEDENT TO OBLIGATIONS OF NATURES
All obligations of Natures under this Plan are subject, at its option, to
the fulfillment, before the Closing, of each of the following conditions:
7.1 Accuracy of Representations. The representations and warranties
made by Madison and the Shareholders under this Plan were true when made and
shall be true as of the Closing date (except for changes therein permitted by
this Plan) with the same force and effect as if such representations and
warranties were made at and as of the Closing date; and, Natures shall have
performed and complied with by Madison prior to the Closing, unless waived or
extended in writing by the parties hereto. Natures shall have been furnished
with a certificate, signed by a duly authorized executive officer of Madison
and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. Natures shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of Madison, to the effect that no litigation, proceeding,
investigation, or inquiry is pending, or to the best knowledge of Madison,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of Madison.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of Natures, nor shall any event have occurred which, with lapse
of time or the giving of notice or both, may cause or create any material
adverse change in the financial condition, business or operations of Madison,
except as otherwise disclosed to Natures.
7.4 Good Standing. Natures shall have received a Certificate of Good
Standing from the State of Utah, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Madison is in good standing as a corporation in the
State of Utah.
7.5 Dissenters' Rights Waived. The Shareholders of Madison, and each of
them, agree and hereby waive any dissenters' rights, if any, under the laws of
the State of Utah in regards to any objection to this Plan as outlined herein
and otherwise consent to and agree and authorize the execution and
consummation of the within Plan in accordance to the terms and conditions of
this Plan by the management of Madison.
7.6 Other Items. Natures shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as Natures may reasonably request.
7.7 Registration of Madison Shares. In connection with the exchange of
Natures shares for Madison shares, Natures agrees, if practicable, and subject
to the consent of an underwriter(s) in the event Natures undertakes to file a
Registration Statement under the Securities Act of 1933, as amended, for the
purpose of raising money from the public through the sale of its equity, to
ensure that the Natures shares issued in connection with the within Plan will
be included as part of a general Registration Statement and "piggy back" any
such offering for the purpose of registering the same for sale by the
Shareholders, as they may determine.
7.8 Execution of Investment Letter. The Shareholders shall have executed
and delivered copies of Exhibit B to Natures.
Section 8
TERMINATION
8.1 Termination by Madison or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of Madison or the
Shareholders, if Natures shall fail to comply in any material respect with any
of the covenants or agreements contained in this Plan. or if any of its
representations and warranties contained herein shall be inaccurate in any
material respect.
8.2 Termination by Natures. This Plan may be terminated at any time
prior to the Closing date by action of Natures if Madison shall fail to comply
in any material respect with any of the covenants or agreements contained in
this Plan, or if any of its representations or warranties contained herein
shall be inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of Natures, expressed by action of its Board of
Directors, Madison or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
Section 9
SHAREHOLDERS' REPRESENTATIVE
The Shareholders hereby irrevocably designate and appoint Xxxxx Xxxxxxxxx
as their agent and attorney in fact (the "Shareholders' Representative") with
full power and authority until the Closing to execute, deliver and receive on
their behalf all notices, requests and other communications hereunder; to fix
and alter on their behalf the date, time and place of the Closing; to waive,
amend or modify any provisions of this Plan and to take such other action on
their behalf in connection with this Plan, the Closing and the transactions
contemplated hereby as such agent deems appropriate; provided, however, that
no such waiver, amendment or modification may be made if it would decrease the
number of shares to be issued to the Shareholders under Section 1 hereof or
increase the extent of their obligation to Natures hereunder, unless agreed in
writing by the Shareholders.
Section 10
GENERAL PROVISIONS
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, 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 the Plan.
10.2 Payments of Estimated Costs and Fees. Natures and Madison mutually
determine and agree that Natures shall pay the estimated costs and fees
incurred in connection with the execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, Madison and the Shareholders
shall cause to have promptly prepared and disseminated a news release
concerning the execution and consummation of the Plan, such press release and
communication to he released promptly and within the time required by the
laws, rules and regulations as promulgated by the United States Securities and
Exchange Commission, and concomitant therewith to cause to be prepared a full
and complete letter to Natures' shareholders which shall contain information
required by Regulation 240.14f-1 as promulgated under Section 14(f) as
mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or permitted
hereunder shall be sufficiently given if personally delivered, sent by
registered mail, or certified mail, return receipt requested, postage prepaid,
or by facsimile transmission addressed to the following parties hereto or at
such other addresses as follows:
If to Natures: Natures Gift, Inc.
000 Xxxx 0000 Xxxxx #000
Xxxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx #0000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Madison: Madison York & Associates
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxx, Xxxx 00000
If to the Shareholders: Xxxxx Xxxxxxxxx
0000 Xxxxxxxxx Xxxxxx Xxxx. #000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between Natures,
Madison and the Shareholders with respect to the subject matter hereof, all of
which are hereby merged into this Plan, which alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
Excepting the foregoing agreement, there are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Utah, except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. Madison
and Natures acknowledge, however, that each are being represented by their own
tax advisors in connection with this transaction, and neither has made any
representations or warranties to the other with respect to treatment of such
transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all costs, including reasonable attorney fees,
incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Plan may be waived or the time for performance
thereof may be extended by a writing signed by the party or parties for whose
benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
NATURES GIFT, INC.
Attest:
By: /s/ Xxx Xxxxx
---------------------- -------------------
Its President
MADISON YORK & ASSOCIATES
Attest:
/s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
---------------------- ----------------------
Its President
SHAREHOLDERS:
Attest:
/s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
---------------------- -----------------------
Attest:
/s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxx
------------------------ ----------------------
Attest:
/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
------------------------ ----------------------
