AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this 28th day
of January, 1998, among Indwest, Inc., a Utah corporation ("Indwest");
Medi-Hut Co., Inc., a New Jersey corporation, any and all of its subsidiaries
and fictitious names (hereinafter collectively referred to as "Medi-Hut") and
its shareholders (hereinafter "Shareholders").
Indwest wishes to acquire one hundred percent (100%) of the issued and
outstanding stock of Medi-Hut for and in exchange for stock of Indwest, 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 holders of all
the issued and outstanding stock of Medi-Hut agree to assign, transfer, and
deliver to Indwest, free and clear of all liens, pledges, encumbrances,
charges, restrictions or known claims of any kind, nature or description, all
of their shares of Medi-Hut stock, and Indwest 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 Indwest's stock, par
value $0.001, in the aggregate of 4,560,000 shares, of the then issued and
outstanding shares of Indwest subject to the provisions of this Plan. Such
shares will represent at least 57% of the issued and outstanding shares of
Indwest. Subsequent to the date hereof, the Shareholders shall, upon the
surrender of the Medi-Hut certificates representing their respective
beneficial and record ownership one hundred percent (100%) of the issued and
outstanding shares of Medi-Hut to Indwest, 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 Indwest stock as provided for herein. Upon the consummation
of the transaction contemplated herein, Indwest shall merge with Medi-Hut and
become the surviving corporation.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of Indwest shares to be issued and delivered pursuant to this Plan shall be
appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in Indwest 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
Indwest at the closing provided for in Section 2 (the "Closing") the shares of
common stock of Medi-Hut listed opposite their respective names on Exhibit A
hereto (the "Medi-Hut shares") in exchange for shares of the common stock of
Indwest as outlined above in Section 1.1 hereof (the "Indwest Stock"). All of
such shares of Indwest stock shall be issued at the closing to the
Shareholders, in the numbers shown opposite their respective names in Exhibit
"A." The transfer of Medi-Hut shares by the Shareholders shall be effected by
the delivery to Indwest 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 Indwest may request in order to more
effectively sell, transfer and assign clear title and ownership in the
Medi-Hut shares to Indwest.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Xxxxxx X. Xxxxxxx, Esq. on or before February 15, 1998 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.
2.3 Mediation Arbitration. If a dispute arises out of or relates to
this Plan, or the breach thereof, and if said dispute cannot be settled
through direct discussions, the parties agree to first endeavor to settle the
dispute in an amicable manner by mediation under the Commercial Mediation
Rules of the American Arbitration Association, before resorting to
arbitration. Thereafter, any unresolved controversy or claim arising out of
or relating this Plan, or breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the Award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
Section 3
Representations, Warranties and Covenants of Indwest
Indwest represents and warrants to, and covenants with, the Shareholders
and Medi-Hut as follows:
3.1 Corporate Status. Indwest is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah. Indwest
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 Indwest 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 Indwest's Articles of Incorporation or Bylaws. Indwest 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 Indwest as of the
date hereof consists of 50,000,000 common shares, par value $0.001 and
200,000 preferred shares, par value $.001. The common shares of Indwest
issued and outstanding are fully paid, non-assessable shares. There are no
outstanding options, warrants, obligations convertible into shares of stock,
or calls or any understanding, agreements, commitments, contracts or promises
with respect to the issuance of Indwest's common stock or with regard to any
options, warrants or other contractual rights to acquire any of Indwest's
authorized but unissued common shares. There are no issued and outstanding
preferred shares. As of the Closing, Indwest shall have not more than
8,000,000 shares issued and outstanding.
3.3 Financial Statements.
(a) Indwest hereby warrants and covenants to Medi-Hut that the
audited financial statements dated August 31, 1997 and December 31, 1996,
fairly and accurately represent the financial condition of Indwest and that no
material change has occurred in the financial condition of Indwest.
(b) Indwest 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 Indwest as
submitted heretofore to Medi-Hut for examination and review.
3.4 Conduct of Business. Indwest is a development stage company and
has not engaged in any operational activities prior to the date hereof.
Indwest 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 Medi-Hut, enter into any material
commitments except in the ordinary course of business.
Indwest will conduct itself in the following manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Articles of Incorporation or Bylaws of Indwest.
(b) Capitalization, etc. Indwest 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.
3.5 Options, Warrants and Rights. Indwest has no options, warrants or
stock appreciation rights related to the authorized but unissued Indwest
common stock. There are no existing options, warrants, calls, or commitments
of any character relating to the authorized and unissued Indwest common stock,
except options, warrants, calls, or commitments, if any, to which Indwest is
not a party and by which it is not bound.
3.6 Title to Property. Indwest 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 Indwest, and the properties and
assets of Indwest are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
3.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Indwest, threatened by or against or
effecting Indwest at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Indwest 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, Indwest and its present management will (i) give to
the Shareholders and Medi-Hut, 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
Medi-Hut, or their duly authorized representatives, may inspect them; and (ii)
furnish such information concerning the properties and affairs of Indwest as
the Shareholders and Medi-Hut, or their duly authorized representatives, may
reasonably request. Any such request to inspect Indwest's books shall be
directed to Indwest's counsel, Xxxxxx X. Xxxxxxx, at the address set forth
herein under Section 10.4 Notices.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Indwest and its representatives will keep confidential any
information which they obtain from the Shareholders or from Medi-Hut
concerning its properties, assets and the proposed business operations of
Medi-Hut. 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 February 13, 1998 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, Indwest will return to Medi-Hut all written matter with regard
to Medi-Hut 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 other
material agreements or instrument to which Indwest 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 Indwest.
3.11 Corporate Authority. Indwest 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 Medi-Hut, 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. Indwest hereby warrants and represents
that the Shareholders of Indwest, being the owners of a majority of the issued
and outstanding stock of the Corporation consented in writing to the
authorization to execute this Agreement and Plan of Reorganization as between
Indwest and Medi-Hut pursuant to a stock-for-stock transaction in which
Indwest would acquire one hundred percent of the issued and outstanding shares
of Medi-Hut in exchange for the issuance of a total of 4,560,000 common shares
of Indwest and thereby Medi-Hut shall merge with and into Indwest.
3.13 Special Covenants and Representations Regarding the Exchanged
Indwest Stock. The consummation of this Plan and the transactions herein
contemplated include the issuance of the exchanged Indwest 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 Indwest a Letter(s)
of Investment Intent in the form attached hereto as Exhibit B and incorporated
herein by reference.
3.14 Undisclosed or Contingent Liabilities. Indwest hereby represents
and warrants that it has no undisclosed or contingent liabilities which have
not been disclosed to Medi-Hut in writing or in this Agreement or in any
Exhibit attached hereto.
3.15 Information. The information concerning Indwest set forth in this
Plan, and the Indwest 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 Medi-Hut in connection with this
Plan.
3.16 Title and Related Matters. Indwest 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 Indwest balance
sheets, free and clear of any and all liens and encumbrances.
3.17 Contracts or Agreements. Indwest is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
Medi-Hut in writing or in this Agreement or in any Exhibit attached hereto.
3.18 Governmental Authorizations. Indwest 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.
3.19 Compliance with Laws and Regulations. Indwest 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 Indwest or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to Medi-Hut.
3.20 Approval of Plan. The Board of Directors of Indwest has
authorized the execution and delivery of this Plan by Indwest and have
approved the Plan and the transactions contemplated hereby. Indwest has full
power, authority, and legal right to enter into this Plan and to consummate
the transactions contemplated hereby.
3.21 Investment Intent. Indwest is acquiring the Medi-Hut shares to be
transferred to it under this Plan for the purpose of merging with Medi-Hut and
not with a view to the sale or distribution thereof, and Indwest shall cancel
the Medi-Hut shares upon the completion of the merger.
3.22 Unregistered Shares and Access to Information. Indwest
understands that the offer and sale of the Medi-Hut 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 Medi-Hut or the
Medi-Hut shares. Indwest has been provided with and reviewed all information
concerning Medi-Hut, the Medi-Hut 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 Medi-Hut shares. Indwest has made
an investigation as to the merits and risks of its acquisition of the Medi-Hut
Shares and has had the opportunity to ask questions of, and has received
satisfactory answers from, the officers and directors of Medi-Hut concerning
Medi-Hut, the Medi-Hut 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 Medi-Hut shares.
3.23 Obligations. Indwest is not aware of any outstanding obligations
to any of its employees or consultants as of the Closing.
3.24 Indwest Schedules. Indwest has delivered to Medi-Hut the
following items listed below, hereafter referred to as the "Indwest
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of Indwest on or about
the date within the Plan is executed to certify that the Indwest Schedules are
true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) Financial statements;
(c) Shareholder list;
(d) Resolution of Directors approving Plan;
(e) Officers' Certificate as required under Section 6.2 of the
Plan;
(f) Opinion of counsel as required under Section 6.4 of the Plan;
(g) Certificate of Good Standing;
(h) Consent of Shareholders approving Plan.
Section 4
Representations, Warranties and Covenants of Medi-Hut
Medi-Hut represents and warrants to, and covenants with, the
Shareholders and Indwest as follows:
4.1 Corporate Status. Medi-Hut is a corporation duly organized,
validly existing and in good standing under the laws of the State of New
Jersey incorporated on November 22, 1982,. Medi-Hut 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
Medi-Hut 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 Medi-Hut's
Articles of Incorporation or Bylaws. Medi-Hut 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 Medi-Hut as of the
date hereof consists of 100 common shares. As of the date hereof all common
shares of Medi-Hut issued and outstanding are fully paid, non-assessable
shares. There are no outstanding options, warrants, obligations convertible
into shares of stock, or calls or any understanding, agreements, commitments,
contracts or promises with respect to the issuance of Medi-Hut's common stock
or with regard to any options, warrants or other contractual rights to acquire
any of Medi-Hut's authorized but unissued common shares.
4.3 Conduct of Business. Medi-Hut, Inc. private labels insulin
syringes, condoms, alcohol preps, hot & cold packs etc., and will manufacture
it own patented brand anti-stick safety syringes. The new safety syringe will
incorporate a transparent sleeve into which the needle will automatically
retract after use. The industry is moving to provide a safer working
environment both for the medical worker as well as for the patient. The most
frequently reported occupational safety problem in hospitals is accidental
needle sticks.
Medi-Hut 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 Indwest, enter into any material
commitments except in the ordinary course of business.
Medi-Hut agrees that Medi-Hut will conduct itself in the following
manner pending the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of Medi-Hut.
(b) Capitalization, etc. Medi-Hut 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.
4.4 Title to Property. Medi-Hut 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 Medi-Hut, and the properties and
assets of Medi-Hut are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
4.5 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Medi-Hut, threatened by or against or
effecting Medi-Hut at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
Medi-Hut 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.
4.6 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, Medi-Hut and its present management will (i) give
to Indwest, 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 Indwest, or their duly authorized
representatives, may inspect them; and (ii) furnish such information
concerning the properties and affairs of Medi-Hut as the Shareholders and
Medi-Hut, or their duly authorized representatives, may reasonably request.
Any such request to inspect Medi-Hut's books shall be directed to Medi-Hut's
representative, at the address set forth herein under Section 10.4 Notices.
4.7 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Medi-Hut and its representatives will keep confidential any
information which they obtain from the Shareholders or from Medi-Hut
concerning its properties, assets and the proposed business operations of
Medi-Hut. 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 February 13, 1998 or
otherwise waived or extended in writing to a date mutually agreeable to the
parties hereto, Medi-Hut will return to Indwest all written matter with regard
to Indwest obtained in connection with the negotiations or consummation of
this Plan.
4.8 Investment Intent. The Shareholders represent and covenant that
they are acquiring the unregistered and restricted common shares of Indwest 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
Indwest 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.
4.9 Unregistered Shares and Access to Information. Medi-Hut and the
Shareholders understand that the offer and sale of Indwest shares to be
exchanged for the Medi-Hut 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 Indwest or Indwest stock. Medi-Hut and the
Shareholders have been provided with and reviewed all information concerning
Indwest and Indwest shares, to be exchanged for the Medi-Hut shares as they
have considered necessary or appropriate as prudent and knowledgeable
investors to enable them to make informed investment decisions concerning the
Indwest shares, to be exchanged for the Medi-Hut shares. Medi-Hut and the
Shareholders have made an investigation as to the merits and risks of their
acquisition of the Indwest shares, to be exchanged for the Medi-Hut shares and
have had the opportunity to ask questions of, and have received satisfactory
answers from, the officers and directors of Indwest concerning Indwest shares
to be exchanged for the Medi-Hut 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 Indwest shares to be exchanged for the Medi-Hut shares.
4.10 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 Medi-Hut of whatever class or series, which
the Shareholders have contracted to exchange.
4.11 Contracts.
(a) Set forth in the Medi-Hut Schedules are copies or
descriptions of all material contracts which written or oral, all agreements,
franchises, licenses, or other commitments to which Medi-Hut is a party or by
which Medi-Hut or its properties are bound.
(b) Except as may be set forth in the Medi-Hut Schedules,
Medi-Hut 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 Medi-Hut.
(c) Except as set forth in the Medi-Hut Schedules, Medi-Hut 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 Medi-Hut, except for
adequate value and pursuant to contract. Medi-Hut has not entered into any
material transaction which is not listed in the Medi-Hut Schedules or
reflected in the Medi-Hut financial statements.
4.12 Material Contract Defaults. Medi-Hut 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 Medi-Hut, 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 Medi-Hut 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.
4.13 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 other
material agreement or instrument to which Medi-Hut 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 Medi-Hut.
4.14 Governmental Authorizations. Medi-Hut is in good standing in the
State of New Jersey. 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 Medi-Hut of this Plan and the
consummation by Medi-Hut of the transactions contemplated hereby.
4.15 Compliance with Laws and Regulations. Medi-Hut 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 Medi-Hut or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to Indwest.
4.16 Approval of Plan. The Board of Directors of Medi-Hut have
authorized the execution and delivery of this Plan by Medi-Hut and have
approved the Plan and the transactions contemplated hereby. Medi-Hut has full
power, authority, and legal right to enter into this Plan and to consummate
the transactions contemplated hereby.
4.17 Information. The information concerning Medi-Hut set forth in
this Plan, and the Medi-Hut 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 Indwest in
connection with this Plan.
4.18 Medi-Hut Schedules. Medi-Hut has delivered to Indwest the
following items listed below, hereafter referred to as the "Medi-Hut
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of Medi-Hut on or about
the date within the Plan is executed to certify that the Medi-Hut Schedules
are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements;
(c) Resolution of Board of Directors approving Plan;
(d) Consent of Shareholders approving Plan;
(e) A list of key 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 Medi-Hut has an account and the names of the
authorized persons to draw thereon or having access thereto;
(g) A schedule setting forth the shareholders, together with
the number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(h) Schedule of all material contracts;
(i) Officers' Certificate as required by Section 7.2 of the
Plan;
Section 5
Special Covenants
5.1 Medi-Hut Information Incorporated in Indwest's Reports. Medi-Hut
represents and warrants to Indwest 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. Medi-Hut agrees to indemnify and hold Indwest harmless, including
each of its Directors and Officers, and 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.
5.2 Indwest Information Incorporated in Medi-Hut's Reports. Indwest
represents and warrants to Medi-Hut 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. The current officers and directors of Indwest agree to indemnify
and hold Medi-Hut harmless, including each of its Directors and Officers, and
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
Indwest Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the Indwest shares in exchange for one
hundred percent (100%) of the issued and outstanding shares of Medi-Hut to the
Shareholders constitutes the offer and sale of securities under the Securities
Act and the applicable state statutes, which depend, inter alia, on the
circumstances under which the Shareholders acquire such securities. Indwest
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 Medi-Hut shares and the
receipt of the Indwest shares exchanged therefor, shall execute and deliver to
Indwest a letter of investment intent to indicate, among other
representations, that the Shareholder is exchanging the Medi-Hut shares for
Indwest 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) Medi-Hut and Indwest 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 Medi-Hut nor Indwest 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
Medi-Hut and the Shareholders
All obligations of Medi-Hut 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 Indwest 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, Indwest shall have performed and complied with all
aspects of this Agreement, unless waived or extended in writing by the parties
hereto. Medi-Hut shall have been furnished with a certificate, signed by a
duly authorized executive officer of Indwest and dated the Closing date, to
the foregoing effect.
6.2 Officers' Certificate. Medi-Hut and the Shareholders shall have
been furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of Indwest, to the effect that no litigation,
proceeding, investigation, claim, demand or inquiry is pending, or to the best
knowledge of Indwest, 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 Indwest, and that this Agreement has been complied
with in all material respects.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of Indwest, 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
Indwest, except as otherwise disclosed to Medi-Hut.
6.4 Opinion of Counsel of Indwest. Indwest shall furnish to Medi-Hut
and the Shareholders an opinion dated as of the Closing date and in form and
substance satisfactory to Medi-Hut and the Shareholders to the effect that:
(a) Indwest is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Utah, and with all
requisite corporate power to perform its obligations under this Plan.
(b) The business of Indwest, as presently conducted, including,
upon the consummation hereof, the ownership of all of the issued and
outstanding shares of Medi-Hut, 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 Indwest 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, and Secretary of State for
the State of Utah, all statements and reports required to be filed.
(c) The authorized and outstanding capital stock of Indwest 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 Indwest of any court or before or by
any governmental body which might materially effect the business of Indwest or
the financial condition of Indwest as a whole and no such claims, suits or
legal proceedings are contemplated by governmental authorities against
Indwest.
(e) 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 Indwest, or any
contract, agreement, indenture, mortgage, or order by which Indwest is bound.
(f) This Plan constitutes a legal, valid and binding obligation
of Indwest 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).
(g) 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 Indwest and have been duly authorized by its Board of
Directors.
(h) Indwest has not, nor will it undertake any action, the
result of which would endanger the tax-free nature of the Plan.
6.5 Good Standing. Medi-Hut shall have received a Certificate of Good
Standing from the State of Utah, dated within ninety (90) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Indwest is in good standing as a corporation in the
State of Utah.
6.6 Other Items. Medi-Hut and the Shareholders shall have received
such further documents, certifications or instruments relating to the
transactions contemplated hereby as Medi-Hut and the Shareholders may
reasonably request.
Section 7
Conditions Precedent to Obligations of Indwest
All obligations of Indwest 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 Medi-Hut 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, Indwest shall have
performed and complied with all aspects of this Agreement, unless waived or
extended in writing by the parties hereto. Indwest shall have been furnished
with a certificate, signed by a duly authorized executive officer of Medi-Hut
and dated the Closing date, to the foregoing effect.
7.2 Officers' Certificate. Indwest shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of Medi-Hut, to the effect that no litigation, proceeding,
investigation, claim, deed, or inquiry is pending, or to the best knowledge of
Medi-Hut, 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 Medi-Hut, and that this Agreement has been complied with in all
material respects.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of Indwest, 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
Medi-Hut, except as otherwise disclosed to Indwest.
7.4 Dissenters' Rights Waived. Shareholders representing at one
hundred percent (100%) of the issued and outstanding shares of Medi-Hut, and
each of them, have agreed and hereby waive any dissenters' rights, if any,
under the laws of the State of New Jersey 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 Medi-Hut.
7.5 Other Items. Indwest shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as Indwest may reasonably request.
7.6 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit B to Indwest.
Section 8
Termination
8.1 Termination by Medi-Hut or the Shareholders. This Plan may be
terminated at any time prior to the Closing date by action of Medi-Hut or the
Shareholders, if Indwest 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 Indwest. This Plan may be terminated at any time
prior to the Closing date by action of Indwest if Medi-Hut 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 Indwest, expressed by action of its Board of
Directors, Medi-Hut 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 Xxxxxx Xxxxx,
CPA, Xxxx Xxxxxx & Company, 000 Xxxx Xxxx Xxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx
00000, 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 Indwest 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 Costs and Fees. Indwest and Medi-Hut shall each bear
their own costs and expenses, including any legal and accounting fees in
connection with the negotiation, execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, Medi-Hut 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 be 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 Indwest's 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 Indwest: Indwest, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Medi-Hut: Medi-Hut Co, Inc.
0000 Xxxxxxxxxx, Xxx.
Xxxxxxxxx, Xxx Xxxxxx 00000
With a copy to: Xxxxxx Xxxxx, CPA
Xxxx Xxxxxx & Company
000 Xxxx Xxxx Xxxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 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 Indwest,
Medi-Hut 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.
Medi-Hut and Indwest 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.
INDWEST, INC.
Attest:
/s/ Xxxxxx Xxxxxxxxx
By: ____________________________
Its President
MEDI-HUT CO., INC.
Attest:
/s/ Xxxxxx Xxxxxxxxx
By: _____________________________
Its President
SHAREHOLDERS:
Attest:
/s/ 2/11/98 /s/ Xxxxxxx Xxxxxxxxx
_____________________ By________________________________________________
Attest:
_____________________ By________________________________________________
Attest:
_____________________ By________________________________________________
Schedule (e)
KEY EMPLOYEES OF MEDI-HUT CO., INC.
Name Annual Salary
Xxxxxx Xxxxxxxxx $156,000
Xxxxxxx Xxxxxxxxx $78,000
Xxxxx Xxxxxxxxx $12,000
There are no employment contracts.
Schedule (f)
NAME AND LOCATION OF MEDI-HUT CO., INC.'S
BANK ACCOUNT AND AUTHORIZED SIGNATORIES
PNC Bank
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Authorized Signatories: Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
SHAREHOLDERS OF MEDI-HUT CO, INC.
Name Shares
Xxxxxx Xxxxxxxxx 80 shares
Xxxxxxx Xxxxxxxxx 20 shares
TOTAL 100 shares
