EXHIBIT 2.0
PLAN AND AGREEMENT OF REORGANIZATION
AGREEMENT made this 3rd day of October 1997, by and between Bioponic
International, a California corporation having its principal offices at 000
Xxxxxxx Xxx., #0, Xxx Xxxxxx, XX 00000, ("BPI"), and the following named
shareholders of MR3, Inc., a Delaware corporation, ("Shareholders"):
Name of Number of MR3
Shareholder Address Shares Owned
----------- ------- ------------
Xxxxxx X. XxXxx ...............50 Front St., Marblehead, MA 01945......................................585
Xxxxx Xxxxxx ...............841 West Mercury St., Butte, MT 59701...................................440
Xxxxxx X. Xxxx ...............4760 Arcado Rd., Lilburn, GA 30047......................................146
Xxxx Xxxx ...............5505 Central Ave., Boulder, CO 80301....................................146
Xxxxxxxx xx Xxxxxx...............2525 Arapahoe, #E-4272, Boulder, CO 80302...............................146
Xxxx Xxxxxxxx ...............903 S. Cascade, La Veta, CO 81055...................................... 37
TOTAL 1,500
RECITALS
A. BPI, and the Shareholders collectively, may each be referred to herein
as a "party", or together as the "parties" to this Agreement.
B. Shareholders are the owners of record of all of the outstanding shares
of the common stock of MR3, a Delaware corporation having its principal offices
at 00 Xxxxx Xx., Xxxxxxxxxx, XX 00000, ("MR3").
C. BPI desires to purchase, and the Shareholders desire to sell all of the
issued and outstanding shares of the common stock of MR3 on the terms and
subject to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing and other good and valuable
considerations, and subject to the terms and conditions set forth in this
Agreement, the parties agree as follows:
Section 1. Exchange of Stock. On the closing date, as fixed below, the
Shareholders shall deliver to BPI endorsed certificates representing all of the
issued and outstanding shares of the common stock of MR3. In exchange for those
certificates, BPI shall deliver to the Shareholders at the closing, certificates
representing 2,665,000 shares of the common stock of BPI at a value of $4.00 per
share ($10,660,000), as follows:
Name of Number of BPI Shares
Shareholder to be Delivered at Closing
--------------------------------------------------------------------------------
Xxxxxx X. XxXxx..................................1,040,000
Xxxxx Xxxxxx.................................... 780,000
Xxxxxx X. Xxxx.................................. 260,000
Xxxx Xxxx....................................... 260,000
Xxxxxxxx xx Xxxxxx.............................. 260,000
Xxxx Xxxxxxxx.................................. 65,000
TOTAL..................2,665,000
Section 2. Closing. The closing of the exchange shall take place on October 7,
1997, at 000 Xxxxxxx Xxx., #0, Xxx Xxxxxx, XX 00000, subject to change by mutual
agreement of the parties.
Section 3. Warranties and Covenants of Shareholders. The Shareholders jointly
and severally represent, warrant, and covenant as follows:
(a) Each of the Shareholders is the owner of record of the number of fully paid
and nonassessable shares of the common stock of MR3, set forth opposite his
name;
(b) As of the date of this Agreement, MR3 is authorized to issue 1,500 common
shares, of which all 1,500 shares are issued and outstanding. No options are
currently outstanding for the purchase of any shares of MR3's stock.
(c) MR3 is incorporated and authorized to do business under the laws of
Delaware, and is not qualified to do business in any other states.
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(d) MR3 has the power and authority to carry on its business as currently
conducted, and holds, or is licensed under, all patents, trademarks, trade
names, copyrights, licenses, processes, and formulas necessary for the operation
of its business as currently conducted, free and clear of all liens,
encumbrances, and claims of any kind whatsoever.
(e) The balance sheet and income statement of MR3, dated September 30, 1997,
attached as Exhibit A, and incorporated by reference, fully and accurately
reflect respectively the financial condition of the corporation as of September
30, 1997, and the operations of the corporation for the fiscal year then ended.
(f) No transactions, other than in the ordinary and usual course of business,
have been engaged in by MR3 from September 30, 1997, to the date of this
Agreement, and there has been no material adverse change in the financial or
operating condition of MR3 since September 30, 1997.
(g) As of the date of this Agreement, MR3 is not, and as of the closing date,
will not be, in default under any contract or agreement, or under the order or
decree of any court. To the knowledge of the shareholders there are no actions
or proceedings pending or threatened against MR3 as of the date of this
Agreement, and neither the execution and delivery of this Agreement nor the
consummation of the transaction contemplated by this Agreement will conflict
with, result in the breach of, or accelerate the performance required by any
contract or agreement to which MR3 or any of the Shareholders is now a party.
(h) There are no dividends declared and unpaid on any of the common shares of
MR3.
(i) MR3 is not a party to any contract or other agreement which materially and
adversely affects its business, property, or assets, and nor is it subject to
any other restriction which materially and adversely affects its business,
property, or assets.
(j) Attached to this Agreement as Exhibit B, and incorporated by reference, is a
complete list of the assets and properties of MR3 as of September 30, 1997.
Except as otherwise stated in Exhibit B, MR3 has good and marketable title to
all assets and properties listed in that Exhibit. All tangible property of MR3
is in good condition and repair and conforms to all applicable zoning, building,
safety, and other regulations.
(k) Attached to this Agreement as Exhibit C, and incorporated by reference, is
an accurate list of all insurance policies in effect with respect to the
business and property of MR3 as of the date of this Agreement. This insurance,
or comparable coverage, shall be kept in effect until the closing date.
(1) Attached to this Agreement as Exhibit D, and incorporated by reference, is
an accurate list of every lease to which MR3 is a party, together with the terms
of each lease.
(m) Attached to this Agreement as Exhibit E, and incorporated by reference, is
an accurate list of accounts and notes payable and receivable by MR3 as of the
date of this Agreement.
(n) Messrs. XxXxx, Xxxxxx and xx Xxxxxx each agree to enter into his respective
form of employment and non-competition agreement attached as Exhibits F-1, F-2
and F-3 hereto. Xxxxxx Xxxx, on behalf of Simpatico B.V., Ltd., agrees to enter
into the Consulting Agreement attached as Exhibit F-4. Xxxx Xxxx agrees to enter
into the Marketing Agreement attached as Exhibit F-5. Xxxx Xxxxxxxx agrees to
enter into the Finder's Agreement attached as Exhibit F-6.
Section 4. Interim Operations; Additional Covenants of Shareholders. The
Shareholders represent, warrant, and covenant that MR3 will not enter into any
transactions, prior to the closing date, other than in the ordinary course of
business, and that the Shareholders will take such action as is necessary to
insure that MR3 will not enter into any such transactions, and in particular
will not, without the prior written consent of BPI:
(a) Create or incur any indebtedness other than unsecured current liabilities
incurred in the ordinary course of business;
(b) Grant or permit to arise any mortgage, deed of trust, security interest,
lien, or encumbrance of any kind;
(c) Sell or otherwise dispose of any of its assets other than merchandise
inventories sold in the ordinary course of business;
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(d) Declare or pay any dividends, or repurchase or redeem any of its shares, or
establish a sinking fund or other reserve for such purpose;
(e) Issue, sell, or grant options for the sale of any of its shares, whether or
not previously authorized or issued;
(f) Expend any funds for capital additions or improvements other than ordinary
expenditures for maintenance, repairs, and replacements;
(g) Acquire an interest in any other business enterprise, whether for cash or in
exchange for the stock or other securities of MR3; and
(h) Increase the compensation paid to any of its officers or directors above the
level paid on the date of this Agreement, or agree to pay to any of its officers
or employees any bonus, severance pay, or pension, whether under an existing
compensation or deferred compensation plan, or otherwise.
Section 5. Warranties and Covenants of BPI. BPI represents, covenants, and
warrants as follows:
(a) As of the date of this Agreement BPI is authorized to issue, in the
aggregate, 50,000,000 shares of common stock, without par value, of
which 16,151,327 shares are issued and outstanding;
(b) Between the date of this Agreement and the closing date, BPI will not,
without the prior written consent of the Shareholders, recapitalize,
reclassify, or increase its presently authorized common stock.
(c) BPI is currently arranging for the public trading of its shares. In the
event that:
(i) the shares are not publically trading on or before October 7,
1998, or
(ii) the shares are publically trading below $4.00 per share on
October 7, 1998 and, in such event, BPI fails to comply with
its obligation under paragraph (d) below, then the
Shareholders (by majority of the Shares represented) may
rescind the Share exchange of MR3 stock for BPI stock. In such
event, all remaining protions of this Agreement, including but
not limited to, the Agreements set forth in Section 3 (n)
above, shall nevertheless remain in full force and effect,
provided that the Employment Agreements for Xxxxxx XxXxx and
Xxxxx Xxxxxx shall terminate immediately upon such share
exchange.
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(d) If the price of BPI's common stock is trading publically below $4 per
share at the end of trading on October 7, 1998, BPI will issue to
Shareholders on October 8, 1998, an additional number of shares of its
common stock so that the total value of all the shares issued hereunder
to the Shareholders as of October 8, 1998 shall equal the $10,660,000
purchase price.
(e) (i) BPI intends to register its shares with the U.S. Securities &
Exchange Commission. Within 60 days prior to such registration, BPI
will promptly give to each Shareholder written notice thereof; and
include in such registration (and any related qualification under blue
sky laws or other compliance) and in any underwriting involved therein,
up to a total of 266,500 shares of BPI common stock specified in the
written request or requests from any Shareholders, made within thirty
(30) days after receipt of such written notice from BPI by any
Shareholder.
(ii) If the registration of which BPI gives notice is for a registered
public offering involving an underwriting, BPI shall so advise the
Shareholders as a part of the written notice given pursuant to Section
5(e)(i). In such event the right of any Shareholder to registration
pursuant to Section 5(e) shall be conditioned on such Shareholder's
participation in such underwriting. All Shareholders proposing to
distribute their securities through such underwriting shall (together
with BPI and the other Shareholders distributing their securities
through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such
underwriting by BPI.
(iii) BPI shall use its best efforts to complete such registration,
provided that BPI shall have the right to terminate or withdraw any
registration initiated by it under this Section 5(e) prior to the
effectiveness of such registration should it be prudent to do so in
BPI's sole judgment, whether or not any Shareholder has elected to
include securities in such registration.
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(f) BPI agrees to enter into the agreements with the respective
Shareholders as set forth in Section 3(n) hereinabove, in the form of
the attached Exhibits F1 through F6 hereto.
(g) BPI agrees to assume and pay the Current Liabilities of MR3 set forth
in the MR3 Balance Sheet for the period ending September 30, 1997,
attached as Exhibit A, not to exceed $65,000.
(h) BPI will assume the responsibility of filing any applicable tax returns
for MR3 with any and all authorities.
Section 6. Indemnification. Each party agrees to indemnify the other party
against any and all loss, damage, cost, and expense that such other party may
sustain as a result of any inaccurate representation or the breach of any
warranty or covenant made by the indemnifying party in this Agreement.
Section 7. Conditions Precedent to Obligations of Acquiring Corporation. The
obligations of MR3 are subject to the following conditions:
(a) There shall be tendered for exchange by the Shareholders at the
closing, certificates representing at least 60% of the issued and
outstanding shares of the common stock of MR3 in a form approved by
counsel for BPI.
(b) The representations of the Shareholders contained in this Agreement
shall be true as of the closing date, and the Shareholders representing
at least 60% of the MR3 shares shall execute and deliver to BPI, a
certificate to that effect in form and substance satisfactory to
counsel for BPI.
(c) Neither the inventories nor operating assets of MR3 shall have been
substantially damaged or destroyed.
Section 8. Investment Intent. Each of the Shareholders represents that the
shares of common stock of BPI being acquired by him under this agreement are
being acquired for investment purposes only, and not with a view to reselling
the same or dividing participation in those shares with others. Each Shareholder
represents that he has no present intent to resell or otherwise dispose of all
or any part of the shares.
Section 9. Access to Records. BPI and its counsel, accountants, engineers, and
other representatives shall have the right at all times during ordinary business
hours to inspect all of the properties, books, and records of MR3, and the
Shareholders shall co-operate with and furnish to BPI and its representatives,
all such information and documents with respect to the affairs of MR3 as BPI or
its representatives may reasonably request.
Section 10. Notices. All notices required or permitted to be given under this
Agreement shall be deemed given when delivered by overnight courier, properly
addressed to the party to receive such notice, at the addresses specified in
this Agreement.
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Section 11. Entire Agreement. This agreement constitutes the entire agreement
between the parties; there are no agreements, warranties or representations,
express or implied, except those expressly set forth herein. All agreements,
representations, and warranties contained in this agreement shall apply as of
the closing date and shall survive the closing of this agreement.
Section 12. Modification. This agreement may not be amended or modified, except
by written agreement of the parties.
Section 13. Binding Effect. This agreement shall become binding and effective
upon the signing hereof by Shareholders representing at least a 60% interest in
all MR3 shares, and shall bind and inure to the benefit of the parties and their
heirs, legal representatives, successors, and assigns.
Section 14. Governing Law. This agreement shall be construed under and governed
by the laws of California.
Executed in seven duplicate original counterparts at San Rafael, California, on
the date first above written.
BIOPONIC INTERNATIONAL MR3, INC. Signatures of Shareholders:
/s/ Xxxxxxx X. Xxxx /s/ Xxxxxx X. XxXxx
------------------------- ---------------
Xxxxxxx X. Xxxx, Chairman Xxxxxx X. XxXxx
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
-------------------------- ------------
Xxxxxx X. Xxxxxx, President Xxxxx Xxxxxx
/s/ Xxxxxx Xxxx
-----------
Xxxxxx Xxxx
/s/ Xxxx Joes
---------
Xxxx Xxxx
/s/ Xxxxx xx Xxxxxx
---------------
Xxxxx xx Xxxxxx
/s/Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
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