EXHIBIT 10.1
AGREEMENT AND PLAN OF REORGANIZATION
INDUSTRIAL MINERALS INCORPORATED
And
PNW CAPITAL, INC.
This Agreement ("Agreement"), is entered into as of January 31, 2002, by
and between Industrial Minerals Incorporated ("Industrial"), a Nevada
corporation, PNW Capital, Inc. ("PNW"), a Delaware corporation, and certain
shareholders of Industrial ("Industrial Shareholders").
RECITALS
WHEREAS, Industrial and PNW are corporations duly organized under the laws
of the States of Nevada and Delaware, respectively; and
WHEREAS, the Industrial Shareholders are the owners of at least 90% of the
issued and outstanding common stock of Industrial (31,500,000 shares); and
WHEREAS, it is the intention that all of the issued and outstanding shares
of Industrial shall be acquired by PNW in exchange solely for PNW's voting
stock;
WHEREAS, Industrial shareholders agree to exchange issued and outstanding
stock to PNW to accomplish a tax free reorganization pursuant to Section 368 of
the Internal Revenue Code; and
WHEREAS, PNW and the Industrial Shareholders agree that 90% of the common
shares issued and outstanding of Industrial shall be exchanged with PNW for
31,500,000 shares of the common stock of PNW. (The pro rata number of PNW
shares, shall be delivered to the Industrial Shareholders in exchange for their
Industrial shares as hereinafter set forth);
NOW, THEREFORE, for good and sufficient consideration, it is agreed among
the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein on the "Effective Date" (as
herein defined), Industrial Shareholders shall exchange 90% of the outstanding
shares of Industrial for 31,500,000 shares of common PNW common stock. The
parties contemplate that closing will occur within 20 days. 1.1 Upon closing,
Industrial Shareholders shall receive pro rata shares of $.0001 par value voting
common stock of PNW on a one share for one share basis
1.2 If this Agreement is duly adopted by the holders of the requisite number of
shares of Industrial, in accordance with the applicable laws and subject to the
other provisions hereof, such documents as may be required by law to accomplish
the Agreement shall be filed as required by law to effectuate same, and it shall
become effective
ARTICLE II
Issuance and Exchange of Shares
2.1 The shares of $.0001 par value common stock of PNW shall be issued by it to
Industrial Shareholders at closing. PNW shall undertake all necessary
arrangements to issue the requisite number of shares called to by this Agreement
and shall make all necessary arrangements with its transfer agent to complete
the exchange of the shares contemplated herein.
2.2 PNW represents that no outstanding options or warrants for its unissued
shares exist.
2.3 The stock transfer books of Industrial shall be closed on February 8, 2002,
and thereafter no transfers of the stock of Industrial shall be made. Industrial
shall appoint Heritage Transfer Agent. as exchange agent ("Exchange Agent"), to
accept surrender of the certificates representing the common shares of
Industrial, and to cancel the same upon confirmation of the issuance and
delivery of PNW shares to Industrial Shareholders.
2.4 No fractional shares of PNW stock shall be issued as a result of the
Agreement. Shares shall be rounded to nearest whole share.
2.5 Each holder of a certificate or certificates representing common shares of
Industrial, upon presentation and surrender of such certificate or certificates
to the Exchange Agent, shall be entitled to receive the consideration set forth
herein. Upon such presentation, surrender, and exchange as provided in this
Section 2.5, certificates representing shares of Industrial previously held
shall be canceled. Until so presented and surrendered, each certificate or
certificates which represented issued and outstanding shares of Industrial shall
be deemed for all purposes to evidence the right to receive the consideration
set forth in Section 1.2 of this Agreement. If the certificates representing
shares of Industrial have been lost, stolen, mutilated or destroyed, the
Exchange Agent shall require the submission of an indemnity agreement and may
require the submission of a bond in lieu of such certificate.
ARTICLE III
Representations, Warranties
And Covenants of Industrial
No representations or warranties are made by any director, officer,
employee or shareholder of Industrial, as individuals, except as and to the
extent stated in this Agreement. Industrial hereby represents, warrants and
covenants to PNW as follows:
3.1 Industrial is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has the corporate ▇▇▇▇ and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of Industrial are
complete and accurate.
3.2 The aggregate number of shares which Industrial is authorized to issue is
100 millionshares of common stock with no par value.
3.3 Industrial has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
3.4 Neither the making of nor the compliance with the terms and provisions of
this Agreement and consummation of the transactions contemplated herein by
Industrial will conflict with or result in a breach or violation of the Articles
of Incorporation or Bylaws of Industrial.
3.5 The execution, delivery and performance of this Agreement has been duly
authorized and approved by Industrial's Board of Directors and Industrial has
received unanimous Shareholder approval for this Agreement.
3.6 There are no legal proceedings or regulatory proceedings pending involving
material claims, or to the knowledge of the officers of Industrial, threatened
against Industrial or affecting any of its assets or properties, and Industrial
is not in any material breach or violation of or default under any contract or
instrument to which Industrial is a party, and no event has occurred which with
the lapse of time or action by a third party could result in a material breach
or violation of or default by Industrial under any contract or other instrument
to which Industrial is a party or by which it or any of its properties may be
bound or affected, or under its respective Articles of Incorporation or Bylaws,
nor is there any court or regulatory order pending, applicable to Industrial.
3.7 Industrial has no employee benefit plan, including non-qualified stock
awards, options, and consulting fees for independent contractors.
3.8 No representation or warranty by Industrial in this Agreement or any
certificate delivered pursuant hereto contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
representation or warranty not misleading.
3.9 Industrial Assets.
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(A) Industrial is the "lessee" of lease number 364704 consisting of the
following:
All those parcels or tracts of land and land under water in the Township of
Head, ▇▇▇▇▇ and ▇▇▇▇▇, in the County of Renfrew and Province of Ontario,
containing by admeasurement 564.569 hectares, be the same more or less,
composed of those parts of lots 21, 22, 23, 24 and 25, Concessions IV and
V, and part of the bed of Mag Lake and the bed of the unnamed lake, and
lots 23, 24 and 25 and the north half of lots 21 and 22, Concession III as
shown on the plan of the geographic Township of ▇▇▇▇▇, designated as parts
1, 2, 3 and 5 on a plan and a field notes deposited in the Land Registry
Office at Pembroke as Plan 49R-11203, comprising mining claims EO 608306,
EO 608346, EO 608347, EO 608374, EO 608348, EO 608373, EO 608349, EO
608372, EO 608369, SO 998760, SO 1084577, EO 800884, EO 800880, EO 800881,
EO 608350, EO 608371, EO 608367, EO 608370, EO 608376, EO 608368, EO
608302, SO 1117797, SO 998754, SO 1117798, SO 998755, SO 1117799, SO 998756
and SO 998757.
(B) Industrial further covenants and warrants that equipment associated
with production of the described lease number 364704 in (A) above is
included in this agreement.
3.10
a. Liens. No one other than Industrial has any right, title, interest,
lien, claim, security interest, restriction or encumbrance in, on or to
Industrial's assets except as otherwise disclosed in filings with appropriate
governmental agencies reflecting security interests.
b. Material Contracts. Industrial does not have any material obligations,
contracts, agreements, leases, subleases, commitments or understanding of any
kind, nature or description, oral or written, fixed or contingent due or to
become due, existing or inchoate. Except as otherwise disclosed.
c. No Undisclosed Liabilities. Industrial does not have any material
liabilities or obligations, including, without limitation, contingent
liabilities for the performance of any obligation which have not been disclosed.
ARTICLE IV
Representations, Warranties and Covenants of PNW
No representations or warranties are made by any director, officer,
employee or shareholder of PNW as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.
PNW hereby represents, warrants and covenants to Industrial, as follows:
4.1 PNW is a corporation duly organized, validly existing and will be in good
standing under the laws of the State of Delaware at closing, and has the
corporate power and authority to own or lease its properties and to carry on its
business as it is now being conducted. The Articles of Incorporation and Bylaws
of PNW, copies of which have been delivered to Industrial, are complete and
accurate.
4.2 The aggregate number of shares which PNW is authorized to issue is
100,000,000 shares of common stock with a par value of $.0001 per share, of
which 1,000,000 shares are issued and outstanding. Upon Shareholder approval PNW
will cause 31,500,000 shares to be issued to the Industrial Shareholders
pursuant to the terms of this Agreement.
4.3 PNW has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
4.4 Neither the making of nor the compliance with the terms and provisions of
this Agreement and consummation of the transactions contemplated herein by PNW
will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of PNW.
4.5 The execution of this Agreement has been duly authorized and approved by
PNW's Board of Directors.
4.6 There are no legal proceedings or regulatory proceedings involving material
claims pending, or to the knowledge of the officers of PNW, threatened against
PNW, or affecting any of its assets, or properties, and PNW is not in any
material breach or violation of or default under any contract or other
instrument to which PNW is a party, and no event has occurred, which with the
lapse of time or action by a third party could result in a material breach or
violation of, or default by PNW under any contract or other instrument to which
PNW is party or by which it or any of its properties may be bound or affected,
or under its respective Articles of Incorporation or Bylaws, nor is there any
court or regulatory order pending, applicable to PNW.
4.7 PNW debt is less than $40,000 USD.
4.8 All liabilities to PNW have been properly provided for and are adequate to
comply with all regulatory requirements regarding the same.
ARTICLE V
Closing
5.1 The parties contemplate that closing will occur on or before February 20,
2002. The closing shall be considered complete upon (1) the surrender of all of
the outstanding shares of Industrial stock to the Exchange Agent; (2) the
issuance, transfer and delivery of PNW stock certificates to the Exchange Agent;
and (3) the cancellation of Industrial stock by the Exchange Agent and delivery
of the cancelled Industrial stock.
5.2 The cancellation of Industrial stock shall be accomplished by the Exchange
Agent writing cancelled across the face of each of the Industrial stock
certificates and surrendering them to PNW.
5.3 The parties agree that the Exchange Agent shall have authority to deal
directly with PNW's transfer agent and to distribute PNW stock to the Industrial
Shareholders as contemplated herein.
ARTICLE VI
Miscellaneous Provisions
6.1 Fax Signatures. The parties agree that signatures, which are transmitted by
facsimile, shall be valid and effective as though original signatures to this
Agreement.
6.2 Each of the signatures to this Agreement hereby warrants and represents that
to the extent he is signing this Agreement in any representative capacity, that
he is fully authorized to sign such Agreement in such capacity.
6.3 This Agreement constitutes the sole and entire agreement and understanding
of the parties with respect to the subject matter hereof. Any and all
discussions, negotiations, commitments, and understandings, whether oral or
otherwise, relating to the subject matter of this Agreement, are merged herein.
No representations, oral or otherwise, express or implied, other than those
contained in this Agreement, have been made or relied upon by any party.
6.4 This Agreement shall be interpreted under and governed by the laws of the
State of Colorado.
6.5 Further Documentation. The parties agree to execute any documents necessary
to comply with the provisions of this Agreement.
6.6 Execution In Counterparts. This Agreement may be executed in counterparts
all of which shall be deemed an original under the Federal Rules of Evidence,
provided, however, that to be effective, this Agreement must be executed by all
of the parties.
Date and sign the date first above written.
PNW CAPITAL, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, President
INDUSTRIAL MINERALS CORPORATION
By: __________________________________
___________________, President
By: ___________________________________
____________________, Shareholder
By: ___________________________________
____________________, Shareholder
By: ___________________________________
____________________, Shareholder
By: __________________________________
_____________________Shareholder
By: __________________________________
____________________, Shareholder