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Agreement and Plan of Reorganization

 

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Title:

Agreement and Plan of Reorganization

Entities:

Equitex, Inc.; Imagenetix, Inc.; Natural Alternatives International Inc.

Date:

2000

Size:

Preview shows 9KB of 90KB total

Price:

$54

ID:

#943595

 

 

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<SEQUENCE>2

<FILENAME>0002.txt
<DESCRIPTION>AGREEMENT AND PLAN OF REORGANIZATION
<TEXT>


AGREEMENT AND PLAN OF REORGANIZATION


THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this
___day of October, 2000, among Capital Growth, Inc., a Nevada corporation
("Capital Growth"); Imagenetix, Inc., a Colorado corporation ("Imagenetix"); the
Imagenetix stockholders (the "Imagenetix Stockholders"); and the warrant
holders, option holders and employee stock option holders (respectively, the
"Imagenetix Warrant Holders," the "Imagenetix Option Holders" and the
"Imagenetix Employee Stock Option Holders," collectively, the "Imagenetix
Warrant and Option Holders"), all of whom are listed on Exhibit A hereto and who
execute and deliver a copy of this Agreement.

WITNESSETH:

RECITALS
--------

WHEREAS, the respective Boards of Directors of Capital Growth and
Imagenetix have adopted resolutions pursuant to which Capital Growth shall
acquire and the Imagenetix Stockholders shall exchange 100% of the outstanding
common stock of Imagenetix; and

WHEREAS, the sole consideration for 100% of the outstanding common stock of
Imagenetix (6,550,000 shares) shall be the exchange of a like number of $0.001
par value common stock of Capital Growth (which shares are all "restricted
securities" as defined in Rule 144 of the Securities and Exchange Commission) as
outlined in Exhibit A; and

WHEREAS, such resolutions also provide for the exchange of outstanding
warrants (2,790,000 warrants) and options (225,000 options and 300,000 employee
stock options) by the Imagenetix Warrant and Option Holders for like warrants
and options of Capital Growth, and the adoption by Capital Growth of the
Employee Stock Option Plan of Imagenetix;

WHEREAS, the sole consideration for the exchange of the outstanding
warrants and options of Imagenetix shall be the exchange of a like number of
warrants and options of Capital Growth (which warrants and options shall be
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission) as outlined in Exhibit A; and

WHEREAS, the Imagenetix Stockholders and the Imagenetix Warrant and Option
Holders shall acquire in exchange such "restricted securities" of Capital Growth
in a reorganization within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended;

NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed:

Section 1

Exchange of Stock
-----------------

1.1 Transfer and Number of Shares and Warrants and Options. The Imagenetix
Stockholders agree to transfer to Capital Growth at the closing (the "Closing")
100% of the outstanding common stock of Imagenetix listed in Exhibit A, which is
attached hereto and incorporated herein by reference (the "Imagenetix Shares"),

<PAGE>


in exchange for 6,550,000 shares of common stock of Capital Growth, pro rata,
also as outlined in Exhibit A. The Imagenetix Warrant and Option Holders shall
exchange the 2,790,000 warrants (the "Imagenetix Warrants") and 525,000 options
(225,000 options [the "Imagenetix Options"] and 300,000 employee stock options
[the "Imagenetix Employee Stock Options"]) for like warrants and options of
Capital Growth, also as outlined in Exhibit A. The pre-Agreement outstanding
securities of Capital Growth will amount to 2,000,000 shares of common stock and
393,750 common stock purchase warrants (the "Capital Growth Warrants"), after
taking into account the cancellation of 22,500,018 of the 24,500,018 outstanding
shares of Capital Growth's common stock and 5,731,250 of the 6,125,000
outstanding Capital Growth Warrants by certain principal stockholders and others
as outlined in Section 1.4 below; accordingly, assuming all Imagenetix
Stockholders and all Imagenetix Warrant and Option Holders become party to the
Agreement, there will be 8,550,000 post-Agreement outstanding shares of common
stock of the reorganized Capital Growth; 3,183,750 outstanding warrants
(2,790,000 that were exchanged by the Imagenetix Warrant Holders and 393,750
that were retained by the Capital Growth warrant holders); and 525,000
outstanding options (225,000 options that were exchanged by the Imagenetix
Option Holders and 300,000 that were exchanged by the Imagenetix Employee Stock
Option Holders).

1.2 Delivery of Certificates and/or Warrants and Options by Imagenetix
Stockholders. The transfer of the Imagenetix Shares by the Imagenetix
Stockholders and/or the transfer of the Imagenetix Warrants, the Imagenetix
Options and the Imagenetix Employee Stock Options shall be effected by the
delivery to Capital Growth at the Closing of stock certificate or certificates
and/or warrants or options representing the transferred shares and/or warrants
and options duly endorsed in blank or accompanied by stock powers executed in
blank with all signatures witnessed or guaranteed to the satisfaction of Capital
Growth and with all necessary transfer taxes and other revenue stamps affixed
and acquired at the Imagenetix Stockholders' and the Imagenetix Warrant and
Option Holders' expense.

1.3 Further Assurances. At the Closing and from time to time thereafter,
the Imagenetix Stockholders and the Imagenetix Warrant and Options Holders shall
execute such additional instruments and take such other action as Capital Growth
may request in order to exchange and transfer clear title and ownership in the
Imagenetix Shares, the Imagenetix Warrants, the Imagenetix Options and the
Imagenetix Employee Stock Options to Capital Growth.

1.4 Cancellation of Shares and Warrants by Principal Stockholders and
Others. At or simultaneous with the Closing, 22,500,018 shares of Capital
Growth's common stock and 5,731,250 Capital Growth Warrants that are owned by
certain principal stockholders and others will be canceled in consideration of
the Agreement.

1.5 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
sole director and executive officer of Capital Growth, David N. Nemelka, shall
designate the directors and executive officers nominated by Imagenetix to serve
in his place and stead, until the next respective annual meetings of the
stockholders and the Board of Directors of Capital Growth, and until their
respective successors shall be elected and qualified or until their respective
prior resignations or terminations, who shall be: William P. Spencer, Chief
Executive Officer, President and Director; Debra L Spencer, Secretary, Treasurer

2

<PAGE>


and Director; Patrick S. Millsap, Ph.D., Vice President, Marketing; Derek C.
Boosey, Vice President, International; Charles L. Cochran, D.C., Director; and
Peter H. Antoniou, M.D., Director; and then, the current sole director and
executive officer shall resign.

1.6 Adoptions of Imagenetix Employee Stock Option Plan. At or simultaneous
with the Closing, Capital Growth shall adopt and assume all rights and
obligations of Imagenetix under the Imagenetix Employee Stock Option Plan by
resolution of its Board of Directors and its majority stockholder.

1.7 Change of Name. At or simultaneous to the Closing of this Agreement,
the Board of Directors of Capital Growth, with the written consent of David N.
Nemelka, its majority stockholder, shall adopt the resolutions necessary to
amend Capital Growth's Articles of Incorporation to change its name to
"Imagenetix Inc."

1.8 Assets and Liabilities of Capital Growth at Closing. Capital Growth
shall have no material assets, and no material liabilities (liabilities not to
exceed $11,000), at Closing, and all costs incurred by Capital Growth incident
to the Agreement shall have been paid or satisfied.

1.9 Closing. This Agreement will be deemed to be completed on the execution
and delivery of the Agreement by Imagenetix Stockholders collectively owning not
less than 80% of the outstanding Imagenetix Shares; and the remainder of the

 

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