EXHIBIT 10.1
REORGANIZATION AGREEMENT
This Reorganization Agreement (the "Agreement") is between and among The St.
Xxxxx Company, a Delaware Company ("Xxxxx") formerly known as Radiation Disposal
Systems, Inc, FUNET Radio & Communications Corp. ("FUNET"), a divided company of
the Republic of China (Taiwan), and the persons listed in Exhibit A hereof
(collectively the "Shareholders") being the owners of record of all of the
issued and outstanding capital stock of FUNET, is entered effective as of the
close of business on August 11, 2003.
RECITALS
X. Xxxxx is a public corporation The principal purpose of the Company was to
design, manufacture, sell and service equipment and systems for the treatment of
contaminated insoluble organic solid materials. Currently the Company has no
assets and no operations.
B. This Agreement contemplates a tax-free reorganization of Xxxxx pursuant to
Internal Revenue Code section 368(a)(1)(b). The Shareholders of FUNET will
receive 7,000,000 shares of restricted Common Stock of Xxxxx in exchange for all
of their capital stock in FUNET, pursuant to the terms and conditions set forth
in this Agreement.
C. FUNET will become a wholly owned subsidiary of Xxxxx.
In consideration of these premises and the mutual representations, warranties,
covenants and agreement contained in this Agreement, the parties agree as
follows:
1. Exchange of Stock and Notes.
-------------------------------
(a) The Shareholders of FUNET agree to transfer to Xxxxx, and Xxxxx agrees to
acquire from the Shareholders, all of the Shareholders' right, title and
interest in their FUNET Shares, representing 100% of the issued and outstanding
stock of FUNET (the "FUNET Stock"), free and clear of all liens, pledges,
security interests, restrictions, encumbrances, or adverse claims of any nature.
(b) At the Closing (as defined in Section 2 below), upon surrender by the
Shareholders of the certificates evidencing all of the FUNET Stock owned by them
duly endorsed for transfer to Xxxxx or accompanied by stock powers executed in
blank by the Shareholders, Xxxxx will cause 7,000,000 shares of the restricted
voting Common Stock, par value $.001 of Xxxxx (the "Xxxxx Xxxxx") to be issued
to the Shareholders of FUNET, in full satisfaction of any right or interest
which each Shareholder held in the FUNET Stock.
(c) The shares of Common Stock of Xxxxx will be issued to the Shareholders of
FUNET on a pro rata basis, in the same proportion as the percentage of their
ownership interest in the FUNET Stock, as set forth on Exhibit A. Any fractional
shares that will result due to such pro rata distribution will be rounded up to
the next highest whole number. As a result of the exchange for all of the FUNET
Stock in exchange for Xxxxx Xxxxx, FUNET will become a wholly-owned subsidiary
of Xxxxx.
2. Closing.
-----------
(a) The parties to this Agreement will hold a closing (the "Closing") on or
before September 12 2003, for the purpose of executing and exchanging all of the
documents contemplated by this Agreement and otherwise effecting the
transactions contemplated by this Agreement, subject to completion and
distribution of a Schedule 14C Information Statement to the shareholders of
Xxxxx as required by Rule 14f-1 under the Securities Exchange Act of 1934, as
amended, for its special meeting of stockholders. The Closing will be held as
soon as possible at 0000 X. Xxxx, Xxxxx Xxxxxx, Xxxxxxxxxx, unless another place
or time is mutually agreed upon in writing by the parties. All proceedings to be
taken and all documents to be executed and exchanged at the Closing will be
deemed to have been taken, delivered and executed simultaneously, and no
proceeding will be deemed taken nor documents deemed executed or delivered until
all have been taken, delivered and executed. If agreed to by the parties, the
Closing may take place through the exchange of documents by fax and/or express
courier.
(b) With the exception of any stock certificates which must be in their original
form, any copy, fax, e-mail or other reliable reproduction of the writing or
transmission required by this Agreement or any signature required thereon may be
used in lieu of an original writing or transmission or signature for any and all
purposes for which the original could be used, provided that such copy, fax,
e-mail or other reproduction is a complete reproduction of the entire original
writing or transmission or original signature, and the originals are promptly
delivered thereafter.
3. Representations and Warranties of Xxxxx.
-------------------------------------------
Xxxxx represents and warrants as follows:
(a) Xxxxx is a corporation duly organized, validly existing, and in good
standing under the laws of Delaware.
(b) The authorized capital stock of Xxxxx consists of 50,000,000 ordinary shares
of Common Stock, $.001 par value per share, of which, based on the records of
its stock transfer agent, 999,057 shares are issued and outstanding as of the
close of business on August 11, 2003, held by approximately 1,100 stockholders
of record. To the knowledge of Xxxxx, all issued and outstanding shares of
James's Common Stock are fully paid and non-assessable. When issued, the Xxxxx
Xxxxx will be duly authorized, validly and newly issued, fully paid and
non-assessable and free and clear of all liens
(c) Xxxxx has no operating subsidiary, business or assets.
(d) Execution of this Agreement and performance by Xxxxx hereunder has been duly
authorized by all requisite corporate action of the Board of Directors and
shareholders on the part of Xxxxx, and this Agreement constitutes a valid and
binding obligation of Xxxxx, and James's performance hereunder will not violate
any provision of any charter, bylaw, indenture, mortgage, lease, or agreement,
or any order, judgment, decree, or, to James's knowledge any law or regulation,
to which any property of Xxxxx is subject or by which Xxxxx is bound.
(e) Xxxxx has full corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder, and will deliver at the Closing a
copy of resolutions of its board of directors and of its shareholders
authorizing execution of this Agreement by its officers and performance
hereunder.
(f) Xxxxx has provided all financial statements and financial information in its
possession as has been requested by the Shareholders of FUNET..
(g) There is no litigation or similar proceeding pending, or to James's
knowledge threatened, against or relating to Xxxxx, its properties or business.
(h) Xxxxx is acquiring the FUNET stock to be transferred to it under this
Agreement for investment and not with a view to the sale or distribution
thereof.
(i) Xxxxx has filed in correct form all tax returns of every nature required to
be filed by it and has paid all taxes as shown on such returns and all
assessments, fees and charges received by it to the extent that such taxes,
assessments, fees and charges have become due. Xxxxx has also paid all taxes
which do not require the filing of returns and which are required to be paid by
it. To the extent that tax liabilities have accrued, but have not become
payable, they have been adequately reflected as liabilities on the books of
Xxxxx.
(j) Xxxxx and its representatives have had the opportunity to perform all due
diligence investigations of FUNET and its business as they have deemed necessary
or appropriate and to ask questions of FUNET's officers and directors and have
received satisfactory answers to all of their questions. Xxxxx and its
representatives have had access to all documents and information about FUNET and
have reviewed sufficient information to allow them to evaluate the merits and
risks of James's acquisition of the FUNET Stock.
(k) At the time of the Closing, Xxxxx shall not have any liabilities of any kind
or nature, known or unknown, continent or otherwise, in excess of $5,000 (U.S.).
(l) At the time of the Closing, Xxxxx will not have any issued or outstanding
stock options, warrants, or any other rights to acquire any Common Stock or
other securities of Xxxxx through conversion or otherwise.
(m) As soon as practicable following the execution of this Agreement, and prior
to the Closing, Xxxxx shall call a special meeting of its shareholders to
approve the following proposals:
(i) the election of Xxxx-Xxxxx Xxxxx, Tun-Xxxxx Xxxx, Xxxx-Xxx Xx, and
Ching-Chow Yang as directors of Xxxxx;
(ii) the amendment to the articles of continuance of Xxxxx to change
its name to "Funet Communications, Inc." or such other name to be
determined by FUNET;
(iv) the approval of the 2003 Stock Option, SAR and Stock Bonus Plan of
Xxxxx, attached as Exhibit B hereto; and
(v) to take such other actions as the directors may determine are
necessary or appropriate, including (if necessary) the approval of this
Agreement and the transactions contemplated herein.
4. Representations and Warranties of the Shareholders of FUNET.
---------------------------------------------------------------
The Shareholders, jointly and severally, represent and warrant as follows:
(a) FUNET is a corporation duly organized, validly existing, and in good
standing under the laws of Taiwan and is licensed or qualified as a foreign
corporation in all places in which the nature of its business or the character
or ownership of its properties makes such licensing or qualification necessary.
(b) There are no agreements purporting to restrict the transfer of the FUNET
Stock, nor any voting agreements, voting trusts or other arrangements
restricting or affecting the voting of the FUNET Shares. The FUNET Shares held
by the Shareholders are duly and validly issued, fully paid and non-assessable,
and issued in full compliance with all federal, state, and local laws, rules and
regulations. There are no subscription rights, options, warrants, convertible
securities, or other rights (contingent or otherwise) presently outstanding, for
the purchase, acquisition, or sale of the capital stock of FUNET, or any
securities convertible into or exchangeable for capital stock of FUNET or other
securities of FUNET, from or by FUNET.
(c) The Shareholders have full right, power and authority to sell, transfer and
deliver the FUNET Shares, and upon delivery of the certificates therefor as
contemplated in this Agreement, the Shareholders will transfer to Xxxxx valid
and marketable title to the FUNET Shares, including all voting and other rights
to the FUNET Shares, free and clear of all pledges, liens, security interests,
adverse claims, options, rights of any third party, or other encumbrances. Each
of the Shareholders owns and holds that the number or percentage of FUNET Shares
which are listed opposite their names on Exhibit A attached hereto.
(d) The financial statements of FUNET presented to Xxxxx are accurate consistent
with Taiwan generally accepted accounting principles.
(e) There is no litigation or proceeding pending, or to any Shareholders'
knowledge, threatened, against or relating to FUNET or to the FUNET Stock.
(f) FUNET has filed in correct form all tax returns of every nature required to
be filed by it and has paid all taxes as shown on such returns and all
assessments, fees and charges received by it to the extent that such taxes,
assessments, fees and charges have become due. FUNET has also paid all taxes
which do not require the filing of returns and which are required to be paid by
it. To the extent that tax liabilities have accrued, but have not become
payable, they have been adequately reflected as liabilities on the books of
FUNET.
(g) The current residence address or principal place of business of the FUNET
Shareholders is as listed on Exhibit A attached hereto.
(h) The FUNET Shareholders and their representatives have had the opportunity to
perform all due diligence investigations of Xxxxx and its business as they have
deemed necessary or appropriate and to ask questions of James's officers and
directors and have received satisfactory answers to all of their questions. The
have had access to all documents and information about Xxxxx and have reviewed
sufficient information to allow them to evaluate the merits and risks of their
acquisition of the Xxxxx Xxxxx.
(i) The Shareholders are acquiring the Xxxxx Xxxxx for their own account (and
not for the account of others) for investment and not with a view to the
distribution therefor. The Shareholders will not sell or otherwise dispose of
the Xxxxx Xxxxx without registration under the Securities Act of 1933, as
amended (the "Act"), or an exemption therefrom, and the certificate or
certificates representing the Xxxxx Xxxxx will bear the following restrictive
legend or similar legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES ACTS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND/OR ANY APPLICABLE STATE SECURITIES ACT
OR AN OPINION OF COUNSEL ACCEPTABLE TO XXXXX CORPORATION THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT OR ACTS.
(l) The Common Stock of Xxxxx to be acquired constitutes an investment, which is
suitable and consistent with each Shareholder's investment program, and that the
undersigned's financial situation enables him to bear the risks of this
investment. Each Shareholder has such knowledge and experience in financial and
business affairs that he is capable of evaluating the merits and risks of an
investment in the Common Stock of Xxxxx.
(m) Each Shareholder is aware that the Xxxxx xxxxx cannot be sold or otherwise
transferred for an indefinite period unless subsequently registered or qualified
under the Act and applicable state securities laws (which Xxxxx is not obligated
to do), or an opinion of counsel acceptable to Xxxxx and its legal counsel is
received stating that exemptions from such registration or qualification
requirements are available.
(n) The undersigned further understands that the exemption under Rule 144
promulgated under the Act may not be available because of the conditions and
limitations of Rule 144, and that, in the absence of the availability of Rule
144, any disposition of the undersigned's investment may require compliance with
some other exemption under the Act, and that Xxxxx is under no obligation to
take any action in furtherance of making an exemption under Rule 144 or any
other exemption so available.
(o) The undersigned is aware that Xxxxx has been and is relying upon the
representations and warranties set forth herein, in part, in determining whether
the exchange of its Common Stock meets the conditions of Section 4(2) under the
Act and under the exemptions available from the registration or qualification
requirements under applicable state securities laws.
(p) Each Shareholder confirms that, in making his decision to acquire the Common
Stock of Xxxxx, such Shareholder has relied upon independent investigations made
by him, or his representatives, including his own professional tax and other
advisers, and that he and such representatives have been given the opportunity
to examine all documents and to ask questions of, and to receive answers from
Xxxxx or any person(s) acting on its behalf concerning the terms and conditions
of this Agreement, and to obtain any additional information or documents, to the
extent Xxxxx possesses such information or can acquire it without unreasonable
effort or expense, necessary to verify the accuracy of the information provided
by Xxxxx, and that no representations have been made to the Shareholders
concerning the Common Stock of Xxxxx, its business or prospects or other
matters.
(q) Each Shareholder understands that the Common Stock is being offered and sold
under an exemption from registration provided by Section 4(2) of the Act, and
warrants and represents that any Common Stock subscribed for is being acquired
by each Shareholder solely for their own account for investment purposes only;
that he has no present agreement or other arrangement, formal or informal, with
any person to sell, transfer or pledge any part of any Common Stock subscribed
for or which would guarantee the undersigned any profit or protect the
undersigned against any loss with respect to such Common Stock; that the
undersigned has no present plans to enter into any such agreement or
arrangement; and that the undersigned is able to bear the economic risk of the
investment for an indefinite period of time.
(r) The undersigned recognizes the speculative nature and risks of loss
associated with investments in development stage companies and that the
undersigned may suffer a substantial loss of the undersigned's investment in the
Common Stock of Xxxxx. In connection therewith, the Shareholders confirm that
each understand, and has fully considered for purposes of this investment, the
risks involved in this investment; and is aware that: (i) Xxxxx has a very
limited financial and operating history in connection with its business; (ii)
this is a speculative investment which involves a high degree of risk of loss by
the undersigned of the undersigned's investment therein; and (iii) at the
present, there is a limited public market for the Common Stock and, accordingly,
it may be difficult if not impossible for him to liquidate an investment therein
for an indefinite period, even in case of emergency.
(s) The undersigned Shareholders agree that the foregoing representations and
warranties shall survive the undersigned's acquisition of the Common Stock of
Xxxxx. All of the information which the undersigned has furnished Xxxxx herein,
or previously with respect to the undersigned's financial position is current
and complete as of the date of this Agreement and, if there should be any
material change in such information, the undersigned will immediately furnish
such revised or corrected information to Xxxxx.
5. Conduct Prior to the Closing.
--------------------------------
Xxxxx, the Shareholders covenant that between the date of this Agreement and the
Closing as to each of them:
(a) No change will be made in the charter documents, by-laws, or other corporate
documents of Xxxxx or FUNET, except as may be agreed to by the parties in this
agreement or otherwise.
(b) Xxxxx and FUNET will each use their best efforts to maintain and preserve
their business organization, employee relationships, and goodwill intact, and
FUNET will not enter into any material commitments except in the ordinary course
of business.
(c) The Shareholders will not sell, transfer, assign, hypothecate, lien, or
otherwise dispose or encumber the FUNET Shares owned by them.
6. Conditions to Obligations of Shareholders.
---------------------------------------------
The Shareholders' obligations to complete the transactions contemplated herein
is subject to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by them as appropriate: (a) The
representations and warranties of Xxxxx set forth herein will be true and
correct at the Closing as though made at and as of that date, except as affected
by transactions contemplated hereby.
(b) Xxxxx will have performed all covenants required by this Agreement to be
performed by it on or before the Closing.
(c) This Agreement will have been approved by the Board of Directors and
shareholders of Xxxxx.
(d) Xxxxx will have delivered to the Shareholders the documents set forth below
upon request in form and substance reasonably satisfactory to counsel for the
Shareholders, to the effect that:
(i) Xxxxx is a corporation duly organized, validly existing, and in
good standing in the State of Delaware
(ii) James's authorized capital stock is as set forth herein;
(iii) Any further document as may be reasonably requested by counsel to
the Shareholders in order to substantiate any of the representations or
warranties of Xxxxx set forth herein.
(e) There will have occurred no material adverse change in the business,
operations or prospects of Xxxxx.
7. Conditions to Obligations of Xxxxx.
--------------------------------------
James's obligation to complete the transaction contemplated herein will be
subject to fulfillment on or before the Closing of each of the following
conditions, unless waived in writing by Xxxxx, as appropriate:
(a) The representations and warranties of the Shareholders set forth herein will
be true and correct at the Closing as though made at and as of that date, except
as affected by transactions contemplated hereby.
(b) The Shareholders will have performed all covenants required by this
Agreement to be performed by them on or before the Closing.
(c) The Shareholders will have delivered to Xxxxx the documents set forth below
in form and substance reasonably satisfactory to counsel for Xxxxx, to the
effect that:
(i) FUNET is a corporation duly organized, validly existing, and in
good standing in the Republic of China (Taiwan);
(ii) FUNET's authorized and outstanding capital stock and convertible
notes are owned as set forth herein and Exhibit A hereto; and
(iii) Any further documents as may be reasonably requested by counsel
to Xxxxx in order to substantiate any of the representations or
warranties of the Shareholders set forth herein.
(d) There will have occurred no material adverse change in the business,
operations or prospects of FUNET.
8. Additional Covenants.
------------------------
(a) Between the date of this Agreement and the Closing, the Shareholders, with
respect to FUNET, and Xxxxx, with respect to itself, will, and will cause their
respective representatives to, (i) afford the other party and its
representatives continued access to their personnel, properties, contracts,
books and records, and other documents and data, as reasonably requested by the
other party; (ii) furnish the other party and its representatives with copies of
all such contracts, books and records, and other existing documents and data as
the other may reasonably request in connection with the transaction contemplated
by this Agreement; and (iii) furnish the other party and its representatives
with such additional financial, operating, and other data and information as the
other may reasonably request. The Shareholders will cause FUNET to provide, and
Xxxxx will provide the Shareholders with, complete copies of all material
contracts and other relevant information on a timely basis in order to keep the
other party fully informed of the status of their respective business and
operations.
(b) Xxxxx and the FUNET Shareholders will cooperate with each other in the
preparation of a Form 8-K current report to be filed with the SEC describing the
transaction contemplated by this Agreement and such other items as are required
by the SEC rules and regulations.
(c) The Shareholders will deliver all of the corporate books and records of
FUNET, including all records relating to its financial statements, to Xxxxx at
Closing.
(d) The parties agree that they will not make, and the Shareholders will not
permit FUNET to make, any public announcements relating to this Agreement or the
transactions contemplated herein without the prior written consent of the other
party, except as may be required upon the written advice of counsel to comply
with applicable laws or regulatory requirements after consulting with the other
party hereto and seeking their consent to such announcement.
9. Termination.
---------------
This Agreement may be terminated (1) by mutual consent in writing; (2) by either
the Shareholders, or Xxxxx if there has been a material misrepresentation or
material breach of any warranty or covenant by any other party that is not cured
by the time of Closing; or (3) by any of the Shareholders, or Xxxxx if the
Closing has not taken place or on before September 12 2003, unless adjourned to
a later date by mutual consent in writing.
11. Expenses
------------
Whether or not the Closing is consummated, each of the parties will pay all of
his or its own legal and accounting fees and other expenses incurred in the
preparation of this Agreement and the performance of the terms and provisions of
this Agreement.
12. Waiver.
-----------
Any failure on the part of either party hereto to comply with any of its
obligations, agreements, or conditions hereunder may be waived in writing by the
party to whom such compliance is owed. No waiver by any party of any term or
condition of this Agreement, in any one or more instances, shall be deemed to be
or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.
13. Brokers.
------------
Each party agrees to indemnify and hold harmless the other party against any
fee, loss, or expense arising out of claims by brokers or finders employed or
alleged to have been employed by the indemnifying party.
14. Notices.
------------
All notices and other communications under this Agreement must be in writing and
will be deemed to have been given if delivered in person or sent by prepaid
first-class certified mail, return receipt requested, or recognized commercial
courier service, as follows:
If to Xxxxx: The St Xxxxx Company
0000 Xxxxxx Xxxxxx Xxxxxx, Xxxxx 00000 XXX
If to the Shareholders
All notices to the Shareholders shall be sent to them at their addresses listed
on Exhibit A to this Agreement.
15. General Provisions.
-----------------------
(a) This Agreement will be governed by and under the laws of the State of
California without giving effect to conflicts of law principles. If any
provision hereof is found invalid or unenforceable, that part will be amended to
achieve as nearly as possible the same effect as the original provision and the
remainder of this Agreement will remain in full force and effect.
(b) Any dispute arising under or in any way related to this Agreement will be
submitted to binding arbitration before a single arbitrator by the American
Arbitration Association in accordance with the Association's commercial rules
then in effect. The arbitration will be conducted in Los Angeles, California.
The decision of the arbitrator will set forth in reasonable detail the basis for
the decision and will be binding on the parties. The arbitration award may be
confirmed by any court of competent jurisdiction.
(c) In any adverse action, the parties will restrict themselves to claims for
compensatory damages and/or securities issued or to be issued and no claims will
be made by any party or affiliate for lost profits, punitive or multiple
damages.
(d) This Agreement constitutes the entire agreement and final understanding of
the parties with respect to the subject matter hereof and supersedes and
terminates all prior and/or contemporaneous understandings and/or discussions
between the parties, whether written or verbal, express or implied, relating in
any way to the subject matter hereof. This Agreement may not be altered,
amended, modified or otherwise changed in any way except by a written agreement,
signed by both parties.
(e) This Agreement will inure to the benefit of, and be binding upon, the
parties hereto and their successors and assigns; provided, however, that any
assignment by either party of its rights under this Agreement without the
written consent of the other party will be void.
(f) The parties agree to take any further actions and to execute any further
documents which may from time to time be necessary or appropriate to carry out
the purposes of this Agreement.
(g) The headings of the Sections, paragraphs and subparagraphs of this Agreement
are solely for convenience of reference and will not limit or otherwise affect
the meaning of any of the terms or provisions of this Agreement. The references
in this Agreement to Sections, unless otherwise indicated, are references to
sections of this Agreement.
(h) This Agreement may be executed in counterparts, each one of which will
constitute an original and all of which taken together will constitute one
document. This Agreement may be executed by delivery of a signed signature page
by fax to the other parties hereto and such fax execution and delivery will be
valid in all respects.
(i) All remedies, either under this Agreement or by law or otherwise afforded,
will be cumulative and not alternative.
EXECUTED BY:
The Saint Xxxxx Company
-----------------------
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx, Pres. & CEO
THE SHAREHOLDERS OF
FUNET RADIO & COMMUNICATION CORP.
Xxxx-Xxxxx Xxxxx
EXHIBIT A
TO
REORGANIZATION AGREEMENT
Number of post-split Xxxxx
Number of Shares Shares to be issued to
and % of Ownership the Shareholders of FUNET or
FUNET Stockholders of FUNET Stock their designees at Closing
------------------ -------------- -----------------------------
Xxxx-Xxxxx Xxxxx 434,782.61 shares 1,750,000 shares
25%
Tun-Xxxxx Xxxx 434,782.61 shares 1,750,000 shares
25%
Xxxx-Xxx Xx 434,782,61 shares 1,750,000 shares
25%
Xxxxx-Xxxx Yang 434,782,61 shares 1,750,000 shares
25%
Total 100% 7,000,000 shares
