AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
Canadexx Inc.
AND
Growtex Inc.
This Agreement is entered into as of the 10th day of
December 2002 by and between Canadexx Inc., a Florida corporation
("Canadexx"), and Growtex Inc., a Nevada corporation ("Growtex").
Canadexx and Growtex are referred to collectively herein as the
"Parties";
WHEREAS, Growtex is a company duly incorporated in the State
of Nevada, is in good standing and is a fully reporting company
under the Securities Exchange Act of 1934;
WHEREAS, Canadexx is a company duly incorporated in the
State of Florida and is in good standing;
WHEREAS, the capital stock of Growtex consists of 25,000,000
shares of Common Stock, par value $0.0001 per share, of which
2,500,000 shares are issued and outstanding and held by one
stockholder ("Growtex's Stockholder");
WHEREAS, Growtex has agreed to merge with and into Canadexx,
which will operate as the surviving entity;
WHEREAS, Growtex's sole stockholder will receive a total of
50,000 shares of Canadexx Common Stock in exchange for the
capital stock of Growtex that he holds; and
WHEREAS, the Parties expect that the Merger will further
certain of their business objectives;
NOW, THEREFORE, in consideration of these premises and the
mutual promises made herein, and in consideration of the
representations, warranties, and covenants herein, the Parties
agree as follows:
1.Definitions.
"Accredited Investor" has the meaning set forth in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as
amended ("Securities Act").
"Affiliate" has the meaning set forth in Rule 144(a) of the
regulations promulgated under the Securities Act and Rule 12b-2
of the regulations promulgated under the Securities Exchange Act
of 1934, as amended ("Exchange Act").
"Growtex Share" means any share of the Common Stock of
Growtex.
"Canadexx Common Stock" means the common stock of Canadexx,.
"Person" means an individual, a partnership, a corporation,
an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Requisite Growtex Stockholders Approval" means the
unanimous written consent of the holder of Growtex Shares in
favor of this Agreement and the Merger.
"SEC" means the U.S. Securities and Exchange Commission.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a)
mechanic's, materialmen's, and similar liens, (b) liens for taxes
not yet due and payable or for taxes that the taxpayer is
contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the
Ordinary Course of Business and not incurred in connection with
the borrowing of money.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
2.Basic Transaction.
The Merger.
Subject to the terms and conditions of this Agreement,
Growtex will merge with and into Canadexx (the "Merger") at the
Effective Date. Canadexx shall be the corporation surviving the
Merger (the "Surviving Corporation").
The Closing.
The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of
Xxxxx Xxxxxxxxx in Seattle, Washington commencing at 9:00 a.m.
local time on the first business day following the satisfaction
or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will
take at the Closing itself) or such other date as the Parties may
mutually determine (the "Closing Date").
Actions at the Closing.
At the Closing, (i) Growtex will deliver to Canadexx the
various certificates, instruments, and documents referred to in
6(a) below, (ii) Canadexx will deliver to Growtex the various
certificates, instruments, and documents referred to in 6(b)
below, (iii) Canadexx and Growtex will file with the Secretaries
of State of the States of Florida and Nevada Articles of Merger
(the "Articles of Merger"), and (iv) Canadexx will deliver to the
Growtex Stockholder, in the manner provided below in this 2, the
certificates representing the shares to be distributed to the
Growtex Stockholder.
(d)Effect of Merger.
(i)General. The Merger shall become effective on
the date (the "Effective Date") Canadexx and Growtex
file the Articles of Merger with the Secretaries of
State of the States of Florida and Nevada. The Merger
shall have the effect set forth in the laws of the
States of Florida and Nevada. The Surviving
Corporation may, at any time after the Effective Date,
take any action (including executing and delivering any
document) in the name and on behalf of either Canadexx
or Growtex in order to carry out and effectuate the
transactions contemplated by this Agreement.
(ii)Articles of Incorporation. The Articles of
Incorporation of Canadexx in effect at and as of the
Effective Date will remain the Articles of
Incorporation of the Surviving Corporation without any
modification or amendment in the Merger.
(iii)Bylaws. The Bylaws of Canadexx in effect at
and as of the Effective Date will remain the Bylaws of
the Surviving Corporation without any modification or
amendment in the Merger.
(iv)Directors and Officers. The directors and
officers of Canadexx in office at and as of the
Effective Date will become the directors and officers
of the Surviving Corporation, retaining their
respective positions and terms of office.
(v)Cancellation of Growtex Shares. At and as of
the Effective Date, each Growtex Share shall be
canceled.
(vi)Canadexx Shares. Each Canadexx Share issued
and outstanding at and as of the Effective Date will
remain issued and outstanding.
(e)Procedure for Payment.
(i) On the Effective Date, Canadexx shall deliver
certificates for 50,000 shares of Canadexx Common Stock in
the name of Xxxxxxx Xxxxx which shares shall be restricted
pursuant to Rule 144 of the Securities Act.
3. Representations and Warranties of Growtex. Growtex and
its stockholder represent and warrant to Canadexx that the
statements contained in this 3 are correct and complete as of
the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout
this 3).
(a) Organization, Qualification, and Corporate Power.
Growtex is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada. Growtex is
duly authorized to conduct business and is in good standing under
the laws of each jurisdiction where such qualification is
required. Growtex has full corporate power and authority to
carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of
Growtex consists of 25,000,000 shares of Common Stock, of which
2,500,000 Growtex Shares are issued and outstanding, as of
December 10, 2002. All of the issued and outstanding Growtex
Shares have been duly authorized and are validly issued, fully
paid, and nonassessable. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or
commitments that could require Growtex to issue, sell, or
otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with
respect to Growtex.
(c) Authorization of Transaction. Growtex has full power
and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder; provided, however, that Growtex cannot consummate the
Merger unless and until it receives the Requisite Growtex
Stockholder Approval. This Agreement constitutes the valid and
legally binding obligation of Growtex, enforceable in accordance
with its terms and conditions.
(d) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Growtex is
subject or any provision of the charter or bylaws of Growtex or
(ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument
or other arrangement to which Growtex is a party or by which it
is bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets).
Other than in connection with the provisions of Nevada law,
Growtex is not required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(e) Filings with the SEC. Prior to the Effective Date,
Growtex will have made all filings with the SEC that it has been
required to make under the Securities Exchange Act (collectively
the "Public Reports") and has received from the SEC a letter to
the effect that the SEC will have no further comment on Growtex's
Form 10-SB. None of the Public Reports, as of their respective
dates, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, not misleading. Growtex has delivered to
Canadexx a correct and complete copy of each Public Report
(together with all exhibits and schedules thereto and as amended
to date).
(f) Financial Statements. Prior to the Effective Date,
Growtex will have filed quarterly reports on Form 10-QSB for the
quarters ended June 30, 2002 and September 30, 2002 (the
September 30, 2002 report is referred to herein as "Most Recent
Fiscal Quarter End"). The financial statements included in or
incorporated by reference into these Public Reports (including
the related notes and schedules) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods
covered thereby, and present fairly the financial condition of
Growtex as of the indicated dates and the results of operations
of Growtex and its Subsidiaries for the indicated periods;
provided, however, that the interim statements are subject to
normal year-end adjustments.
(g) Events Subsequent to Most Recent Fiscal Quarter End.
Since the Most Recent Fiscal Quarter End, there has not been any
material adverse change in the business, financial condition,
operations, results of operations, or future prospects of Growtex
taken as a whole.
(h) Undisclosed Liabilities. Growtex has no liability
(whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become
due), including any liability for taxes, except for (i)
liabilities set forth on the face of the balance sheet dated as
of the Most Recent Fiscal Quarter End (rather than in any notes
thereto) and (ii) liabilities which have arisen after the Most
Recent Fiscal Quarter End in the ordinary course of business
(none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
(i) Brokers' Fees. Growtex has no liability or obligation
to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
(j) Affiliate and Accredited Investor Status. The sole
stockholder of Growtex is an Affiliate of Growtex and is an
Accredited Investor.
(k) Liens and Litigation. Growtex has no liens or
encumbrances against Growtex or Growtex's shares nor does Growtex
know of any current or intended legal claims against Growtex.
4. Representations and Warranties of Canadexx. Canadexx
represents and warrants to Growtex that the statements contained
in this 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this 4).
(a) Organization. Canadexx is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Florida.
(b) Capitalization. The entire authorized capital stock of
Canadexx consists of 10,000,000 shares of common stock and
1,000,000 shares of preferred stock of which 4,845,896 shares of
common stock were duly issued and outstanding as of December 30,
2002, held by no less than 300 persons.
(c) Authorization of Transaction. Canadexx has full power
and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally
binding obligation of Canadexx, enforceable in accordance with
its terms and conditions.
(d) Noncontravention. To the knowledge of any director or
officer of Canadexx, neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which Canadexx is subject or any provision of
the charter or bylaws of Canadexx or (ii) conflict with, result
in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other
arrangement to which Canadexx is a party or by which it is bound
or to which any of its assets is subject except where the
violation, conflict, breach, default, acceleration, termination,
modification, cancellation, or failure to give notice would not
have a material adverse effect on the ability of the Parties to
consummate the transactions contemplated by this Agreement. To
the knowledge of any director or officer of Canadexx, and other
than in connection with the provisions of Florida law, Canadexx
does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, except where the
failure to give notice, to file, or to obtain any authorization,
consent, or approval would not have a material adverse effect on
the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(e) Brokers' Fees. Canadexx does not have any liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which Growtex's stockholders could become liable or
obligated.
(f) Liens and Litigation. Canadexx has no liens or
encumbrances against it or its shares nor does Canadexx know of
any current or intended legal claims against Canadexx.
5. Covenants. The Parties agree as follows with respect to
the period from and after the execution of this Agreement.
(a) General. Each of the Parties will use its best efforts
to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth
in 6 below).
(b) Notices and Consents. Growtex will give any notices to
third parties, and will use its best efforts to obtain any third
party consents, that Canadexx reasonably may request in
connection with the matters referred to in 3(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties
will give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents,
and approvals of governments and governmental agencies in
connection with the matters referred to in 3(d) and 4(d) above.
(d) Nevada Law. Growtex will obtain the written consent of
its stockholder for the adoption of this Agreement and the
approval of the Merger in accordance with Nevada Law.
6.Conditions to Obligation to Close.
(a) Conditions to Obligation of Canadexx. The obligation
of Canadexx to consummate the transactions to be performed by it
in connection with the Closing is subject to satisfaction of the
following conditions:
(i) this Agreement and the Merger shall have been
approved by the written consent of the sole stockholder
of Growtex;
(ii) Growtex shall have procured all of the third
party consents specified in 5(b) above, if any;
(iii) the representations and warranties set
forth in 3 above shall be true and correct in all
material respects at and as of the Closing Date;
(iv) Growtex shall have performed and complied
with all of its covenants hereunder in all material
respects through the Closing;
(v) No action, suit, or proceeding shall be
pending or threatened before any court or quasi-
judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by
this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right
of the Surviving Corporation to own the former assets,
to operate the former businesses, or (D) affect
adversely the right of Growtex to own its assets and to
operate its businesses (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect);
(vi) Growtex shall have delivered to Canadexx a
certificate to the effect that each of the conditions
specified above in 6(a)(i)-(v) is satisfied in all
respects; and
(vii) all actions to be taken by Growtex in
connection with consummation of the transactions
contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably
satisfactory in form and substance to Canadexx.
Canadexx may waive any condition specified in this 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of Growtex. The obligation of
Growtex to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions:
(i) this Agreement and the Merger shall have been
approved by the Board of Directors of Canadexx;
(ii) the representations and warranties set forth
in 4 above shall be true and correct in all material
respects at and as of the Closing Date;
(iii) Canadexx shall have performed and
complied with all of its covenants hereunder in all
material respects through the Closing;
(iv) all actions to be taken by Canadexx in
connection with consummation of the transactions
contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the
transactions contemplated hereby will be satisfactory
in form and substance to Growtex.
Growtex may waive any condition specified in this 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Either of the Parties may
terminate this Agreement with the prior authorization of its
board of directors (whether before or after stockholder approval)
as provided below:
(i) the Parties may terminate this Agreement by
mutual written consent at any time prior to the
Effective Date;
(ii) Canadexx may terminate this Agreement by
giving written notice to Growtex at any time prior to
the Effective Date (A) in the event Growtex has
breached any material representation, warranty, or
covenant contained in this Agreement in any material
respect, Canadexx has notified Growtex of the breach,
and the breach has continued without cure for a period
of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before January
30, 2003, by reason of the failure of any condition
precedent under 6(a) hereof (unless the failure
results primarily from Canadexx breaching any
representation, warranty, or covenant contained in this
Agreement); or
(iii) Growtex may terminate this Agreement by
giving written notice to Canadexx at any time prior to
the Effective Date (A) in the event Canadexx has
breached any material representation, warranty, or
covenant contained in this Agreement in any material
respect, Growtex has notified Canadexx of the breach,
and the breach has continued without cure for a period
of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before January
30, 2003, by reason of the failure of any condition
precedent under 6(b) hereof (unless the failure
results primarily from Growtex breaching any
representation, warranty, or covenant contained in this
Agreement).
(b) Effect of Termination. If any Party terminates this
Agreement pursuant to 7(a) above, all rights and obligations of
the Parties hereunder shall terminate without any liability of
any Party to any other Party (except for any liability of any
Party then in breach).
8. Miscellaneous.
(a) Survival. None of the representations, warranties, and
covenants of the Parties (other than the provisions in 2 above
concerning issuance of Canadexx's Shares) will survive the
Effective Date.
(b) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
between the Parties and supersedes any prior understandings,
agreements, or representations by or between the Parties, written
or oral, to the extent they related in any way to the subject
matter hereof.
(c) Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein
and their respective successors and permitted assigns. No Party
may assign either this Agreement or any of its rights, interests,
or obligations hereunder without the prior written approval of
the other Party.
(d) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but
all of which together will constitute one and the same
instrument.
(e) Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
(f) Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be
deemed duly given if (and then two business days after) it is
sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient at the
last address give to the other party.
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the last
address given to the other party using any other means (including
personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be
deemed to have been duly given unless and until it actually is
received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of
Nevada without giving effect to any choice or conflict of law
provision or rule (whether of the State of Nevada or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Nevada.
(h) Amendments and Waivers. The Parties may mutually amend
any provision of this Agreement at any time prior to the
Effective Date with the prior authorization of their respective
boards of directors; provided, however, that any amendment
effected subsequent to stockholder approval will be subject to
the restrictions contained in the laws of the State of Nevada.
No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by both of the
Parties. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
(i) Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(j) Expenses. Each of the Parties will bear its own costs
and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby.
(k) Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless
the context otherwise requires.
(l) Recitals. All recitals shall be construed as part of
this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first written above.
CANADEXX INC. Growtex, Inc.
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxxx Xxxxx
By: Xxxxxx Xxxxxxxxx By:Xxxxxxx Xxxxx
Its: President Its: President
