ACQUISITION AND REORGANIZATION AGREEMENT
This Agreement, entered into this 8th day of June 1999, between and
among Xxxx-U International, Inc., a corporation organized under the laws of
the state of Delaware (hereinafter referred to as "the Purchaser"), RGB
Technology Group, Inc., a corporation organized under the laws of the state of
Delaware (hereinafter referred to as "the Company"), and a subsidiary of
Kimrose Holdings, a Hong Kong corporation, (hereinafer referred to as
"Shareholder").
Witnesseth
WHEREAS, Purchaser wishes to acquire, and Shareholder is willing to
sell, all of the outstanding stock of the Company in exchange for common stock
of the Purchaser;
NOW, THEREFORE, in consideration of the mutual terms and covenants
set forth herein, Purchaser and Shareholder and Company approve and adopt this
Acquisition Agreement and mutually covenant and agree with each other as
follows:
ARTICLE I
Shares to be Transferred and Shares to be Issued
1.01 a. On the closing date the Shareholder shall transfer to
Purchaser certificates for the number of shares of the common stock of the
Company described in Schedule A, attached hereto and incorporated herein,
which in the aggregate shall represent all of the issued and outstanding
shares of stock of the Company. Such certificates shall be duly endorsed in
blank by Shareholder or accompanied by duly executed stock powers in blank
with signature guaranteed. Alternatively, the shareholders may assign their
rights to the shares if the shares have not been physically issued in the form
of stock certificates.
b. In exchange for the shares of the company, the Purchaser shall
issue to the shareholder 60,000,000 shares of its restricted .001 par value
common stock. The shares will not be registered with the Securities and
Exchange Commission, but will be issued pursuant to an exemption therefrom.
To qualify for the exemption, the shareholder must acquire for investment
purpose, without a view towards distribution. The shares will be restricted
and the certificates representing the shares and will bear a restrictive
legend.
1.02 The parties intend that this acquisition and exchange of shares is
to be an exchange/transaction pursuant to Section 368(a)(1)(b) of the Internal
Revenue Code of the United States.
ARTICLE II
Representations and Warranties of Shareholder
2.01 Ownership of Stock.
Shareholder, Kimrose Holdings, is the record owner and holder of the
number of paid and nonassessable shares of the Company listed in Schedule A
hereto as of the date hereof and will continue to own such shares of the stock
of the Company until the delivery thereof to the Purchaser on the closing date
and all such shares of stock are, or will be on the closing date, owned free
ad clear of all liens, encumbrances, charges and assessments of every nature
and subject to no restrictions with respect to transferability. The
Shareholder will have full power and authority to assign and transfer its
shares of the company in accordance with the terms hereof.
ARTICLE III
Representations and Warranties of the Company and the Shareholder
3.01 Capitalization.
Except for this Agreement, there are no outstanding options, contracts,
calls, commitments, agreements, or demands of any character relating to the
stock of the Company owned by Shareholder.
3.02 Organization and Authority.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of organization,
with all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted, is duly
qualified and in good standing in every jurisdiction in which the property
owned, leased or operated by it, or the nature of the business conducted by
it, makes such qualification necessary to avoid material liability or material
interference in its business operations, and is not subject to any agreement,
commitment or understanding which restricts or may restrict the conduct of its
business in any jurisdiction or location.
(b) The outstanding shares of the Company are legally and
validly issued, fully paid, and nonassessable.
(c) The minute book of the Company is available to Purchaser and
contains complete and accurate records of all meetings and other corporate
actions of the shareholder and the Board of Directors (and any committee
thereof) of the Company.
(d) The execution and delivery of this Agreement does not, and
the consummation of the transaction contemplated hereby will not violate any
provisions or the certificate/articles of the incorporation or bylaws of the
Company, or any provisions thereof, or result in the acceleration of any
obligation under, any mortgage, lien, lease, agreement, instrument, court
order, arbitration award, judgment or decree to which the Company is a party,
or by which it is bound, and will not violate any other restriction of any
kind or character to which it is subject.
(e) The authorized capital stock of the Company is 10,000,000
(ten million) shares of common stock, $0.001 par value, of which approximately
2,000,000 (two million) shares of such stock will be issued and outstanding at
the time of closing.
3.03 Financials.
(a) The Company is a new company. Audited financial statements
(hereafter "financial statements") of the Company have not been delivered to
the Purchaser as they are not available.
(b) The Company has good and marketable title to all of its
assets, business and properties including, without limitation listed in
schedule A.
(c) All currently used property and assets of the Company,
or in which it has an interest, or which it has in possession, are in good
operation condition and repair subject only to ordinary wear and tear.
3.04 Liabilities. There are no material liabilities of the
Company, whether accrued, absolute, contingent, or otherwise. As of the date
hereof, there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities.
3.05 Taxes. All federal, province, county and local income, ad
valorem, excises, profits, franchise, occupation, property, sales, use gross
receipts and other taxes (including any interest or penalties relating
thereto) and assessments which are due and payable have been duly reported,
fully paid and discharged as reported by the Company, and there are no unpaid
taxes which are, or could become a lien on the properties and assets of the
Company. All tax returns of any kind required to be filed have been filed and
the taxes paid or accrued.
3.06 Accuracy of All Statements Made by Company. No
representation or warranty by the Company and Shareholder in the Agreement,
nor any statement, certificate, schedule or exhibit hereto furnished or to be
furnished by or on behalf of the Shareholder pursuant to this Agreement, nor
any document or certificate delivered to Purchaser pursuant to this Agreement
or in connection with actions contemplated hereby, contains or shall contain
any untrue statement of material fact or omits or shall omit a material fact
necessary to make the statement contained therein no misleading.
3.07 Limitation of Subsequent Corporate Actions. It is expressly
understood and agreed that the Purchaser, and its affiliates will take all
steps necessary to insure that for a period of eighteen months all the assets
transferred into the Purchaser shall remain in place as part of the business
operations nor shall the assets of the Company be transferred, sold or in any
way disposed of. It is further acknowledged that the Purchaser may issue
additional shares for further acquisitions or to obtain capital.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser represents and warrants as follows:
4.01 Organization and Authorization.
The Purchaser is a corporation duly organized validly existing and in
good standing under the laws of the State of Delaware, with full power and
authority to enter into and perform the transactions contemplated by the
Agreement, and with all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now being
conducted, is duly qualified and in good standing in every jurisdiction in
which the property owned, leased, or operated by it, or the nature of the
business conducted by it, makes such qualification necessary to avoid material
liability or material interference in its business operations, and is not
subject to any agreement, commitment or understanding which restricts or may
restrict the conduct of its business in any jurisdiction or location. The
Purchaser is presently qualified to do business in the state of Utah.
The Purchaser is also publicly trading on the NASD OTC Bulletin Board (Symbol:
RNUI) and is a fully reporting corporation under the Securities and Exchange
Act. It is understood that the Purchaser is not current with its reporting
and the company and the Shareholder undertake to file all reports to bring the
company current.
(a) The outstanding shares of the Purchaser are legally and
validly, issued, fully paid, and nonassessable.
(b) The Purchaser does not own five percent (5%) or more
of the outstanding stock of any corporation.
(c) The minute book of the Purchaser made available to the
Company and Shareholder contains accurate records of meetings and other
corporate actions of the shareholders and the Board of Directors (and any
committee thereof) of the Purchaser.
(d) The Disclosure Statement contains a list of the officers,
directors, and shareholders of the Purchaser and copies of the articles of
incorporation and by-laws currently in effect with the Purchaser.
(e) The execution and delivery of this Agreement does not, and
the consummation of the transaction contemplated hereby, will not violate any
provision of the certificate, articles of incorporation or by-laws of the
Purchaser, or any provisions thereof, or result of the acceleration of any
obligation under, any mortgage, lien, lease, agreement, instrument, court
order, arbitration award, judgment or decree to which the Purchaser is a
party, or by which it is bound, and will not violate any other restriction of
any kind or character to which it is subject.
(f) The authorized capital stock of the Purchaser is
100,000,000 (one hundred million) shares of common stock, $0.001 par value, of
which at 69,961,241 (sixty-nine million nine hundred sixty-one thousand two
hundred and forty-one) shares of such stock will be issued and outstanding at
the time of closing (inclusive of the shares issued pursuant to the
acquisition).
4.02 Performance of this Agreement. The execution and
performance of this Agreement and the issuance of stock contemplated hereby
have been authorized by the board of directors of Purchaser.
4.03 Financials.
(a) True copies of the financial statements of the
Purchaser as of June 8, 1999 have/will be completed and delivered by the
Purchaser to the Company. Said financial statements are true and correct in
all material respects and present and accurate and completed disclosure of the
financial condition and earnings of the Purchaser for the periods covered in
accordance with generally accepted accounting principles applied on a
consistent basis.
(b) All accounts receivable, if any, (net reserves for
doubtful accounts) of the Purchaser shown on financial statement, and as
incurred in the normal course of business since that date, are collectible in
the normal course of business.
(c) The Purchaser has good and marketable title to all of
its assets, business and properties including, without limitation, all such
properties reflected in the aforementioned balance sheet, except as disposed
of in the normal course of business, free and clear of any mortgage, lien,
pledge, charge, claim or encumbrance, except as shown on said balance sheet
and, in the case of real properties, except for rights-of-way and easements
which do not adversely affect the use of such property.
4.04 Accuracy of All Statements Made by Purchaser. No
representation or warranty by the Purchaser in this Agreement, nor any
statement, certificate, schedule or exhibit hereto furnished or to be
furnished by the Purchaser pursuant to this Agreement, nor any document or
certificate delivered to the Company or the Shareholder pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statement contained therein not
misleading.
4.05 Legality of Shares to be Issued. All shares of Purchaser
to be delivered pursuant to this Agreement, when so delivered, will have been
duly and validly authorized and issued by Purchaser and will be fully paid and
nonassessable.
ARTICLE V
Covenants of Shareholder/Purchaser
5.01 Access to Information. Purchaser and its authorized
representatives shall have full access during normal business hours to all
properties, books, records, contracts and documents of the Company prior to
the Closing of this transaction, and the Company shall furnish or cause to be
furnished to Purchaser and its authorized representative all information with
respect to its affairs and businesses of the Company as Purchaser may
reasonably request. The Company and its authorized representatives shall have
full access during normal business hours to all properties, books, records,
contracts and documents of the Purchaser prior to the Closing of this
transaction, and the Purchaser shall furnish or cause to be furnished to
Company and its authorized representative all information with respect to its
affairs and business of the Purchaser as Company may reasonably request.
5.02 Actions Prior to Closing. From and after the date of this
Agreement and until the closing date, the Company and Purchaser shall not
materially alter their businesses.
ARTICLE VI
Conditions Precedent in Purchaser's Obligations
Each and every obligation or Purchaser to be performed on the closing
date shall be subject to the satisfaction of the Purchaser of the following
conditions:
6.01 Truth of Representations and Warranties. The representations
and warranties made by the Company and Shareholder in this Agreement or given
on its behalf hereunder shall be substantially accurate in all material
respects on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the closing
date.
6.02 Compliance with Covenants. The Company and Shareholder
shall have performed and complied with all obligations under this Agreement
which are to be performed or complied with by them prior to or on the closing
date, including the delivery of the closing documents specified hereafter.
6.03 Absence of Suit. No action, suit or proceedings before any court
or any governmental or regulatory authority shall have been commenced or
threatened and, no investigation by any governmental or regulatory authority
shall have been commenced against the Shareholder, the Company or any of the
affiliates, associates, officers or directors of any of them, seeking to
restrain, prevent or change the transactions contemplated hereby, or
questioning the validity or legality of any such transactions, or seeking
damages in connection with any of such transactions.
6.04 Receipt of Approvals, Etc. All approvals, consents, and/or
waivers that are necessary to effect the transactions contemplated hereby
shall have been received.
6.05 No Material Adverse Change. As of the closing date, there shall
not have occurred any material adverse change which materially impairs the
ability of the Company to conduct its business or the earning power thereof.
6.06 Proceedings and Instruments Satisfactory: Certificates. All
proceedings, corporate or otherwise, to be taken in connection with the
transactions contemplated by this Agreement shall have occurred and all
appropriate documents incidental thereto as Purchaser may request shall have
been delivered to Purchaser. The Company and the Shareholder shall have
delivered certificates in such detail as Purchaser may request as to
compliance with the conditions set forth in this Article VI.
ARTICLE VII
Conditions Precedent to Obligations
of the Company and Shareholder
Each and every obligation of the Company and Shareholder to be performed
on the closing date shall be subject to the satisfaction prior thereto of the
following conditions:
7.01 Truth of Representations and Warranties. The representations
and warranties of Purchaser contained in this Agreement shall be true at and
as of the closing date as though such representations and warranties were made
at and as of the transfer date.
7.02 Purchaser's Compliance and Covenants. Purchaser shall
have performed and complied with its obligations under this Agreement which
are to be performed or complied with by it prior to or on the closing date.
7.03 Absence of Suit. No action, suit or proceedings before any court
or any governmental or regulatory authority shall have been commenced or
threatened and, no investigation by any governmental or regulatory authority
shall have been commenced against Purchaser, or any of the affiliates,
associates, officers or directors of the Purchaser seeking to restrain,
prevent or change the transactions contemplated hereby, or questioning the
validity or legality of any such transactions, or seeking damages in
connection with any of such transactions.
7.04 Receipt of Approvals, Etc. All approvals, consents, and/or
waivers that are necessary to effect the transactions contemplated hereby
shall have been received.
7.05 No Material Adverse Change. As of the closing date, there shall
not have occurred any material adverse change which materially impairs the
ability of the Purchaser to conduct its business or the earning power thereof
on the same basis as in the past.
7.06 Accuracy of Financial Statements. The Company and the
Shareholder shall be satisfied as to the accuracy of all balance sheets,
statements of income and other financial statements of the Purchaser furnished
to the Company herewith.
7.07 Proceedings and Instruments Satisfactory: Certificates. All
proceedings, corporate or otherwise, to be taken in connection with the
transactions contemplated by this Agreement shall have occurred and all
appropriate documents incidental thereto as the Company may request shall have
been delivered to the Company. The Purchaser shall have delivered
certificates in such details the Shareholder may request as to compliance with
the conditions set forth in this Article VII.
ARTICLE VIII
Indemnifications
The Shareholder and the Company shall indemnify and hold the Purchaser
harmless from and against any loss, cost, expense or other damage (including,
without limitation to, attorney's fees and expenses) suffered by Purchaser
resulting from, arising out of, or incurred with respect to the falsity or the
breach of any representation, warranty or covenant made by the Shareholder or
the Company herein, and any claims arising from the operations of the Company
prior to the closing date. Purchaser shall indemnify and hold the Shareholder
and Company harmless from and against any loss, cost, expense or other damage
(including, without limitation to, attorney's fees and expenses) resulting
from, arising out of, or incurred with respect to, or alleged to result from,
arise out of or have been incurred with respect to, the falsity or the breach
of any representation, covenant, warranty or agreement made by Purchaser
herein.
ARTICLE IX
Security Act Provision
9.01 Restrictions on Disposition of Shares Shareholder covenants
and warrants that the shares received are acquired for its own account and not
with the present view towards the distribution thereof and will not dispose of
such shares except (i) pursuant to an effective registration statement under
the Securities Act of 1933, as amended, or (ii) in any other transaction which
in the opinion of counsel, acceptable to Purchaser, is exempt from
registration under the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. In order to
effectuate the covenants of this subsection, an appropriate endorsement will
be placed upon each of the certificates of stock of the Purchase, at the time
of distribution of such shares pursuant to this Agreement, and stop transfer
instructions shall be placed with the transfer agent for the securities.
9.02 Limited Public Market for Common Shares. The Shareholder
acknowledges that the common shares being issued pursuant to this Agreement
currently has a limited public market in which the shares may be liquidated
and there is no assurance that such public market will grow or develop.
ARTICLE X
Closing
10.01 Time The closing of this transaction ("closing") shall be
effective June 8, 1999. Such date is referred to in this Agreement as the
"closing date".
10.02 Documents to be Delivered by Shareholder. At the closing,
Shareholder shall deliver to Purchaser the following documents:
(a) Certificates or assignments for all shares of stock of the
company in the manner and form required by sub-section 1.01 hereof.
(b) A copy of the by-laws of the Company certified by its
secretary and a copy of the certificate of incorporation of the Company
certified by the secretary of state.
(c) Certificates or letters from Shareholder evidencing the
taking of the shares in accordance with the provisions of this agreement and
their understanding of the restrictions thereunder.
10.03 Documents to be Delivered by Purchaser. At the closing
Purchaser shall deliver to Shareholder the following documents:
(a) Certificates for the number of shares of stock or Purchaser
as determined in Article I hereof accompanied by stock powers.
(b) A certified copy of the duly adopted resolutions of
the board of directors or Purchaser authorizing or ratifying the execution and
performance of this Agreement and authorizing or ratifying the acts of its
officers and employees in carrying out the terms and provisions thereof.
(c) A copy of the by-laws of the Company certified by its
secretary, a copy of the certificates of incorporation of the Company
certified by the secretary of state, the corporate minute book along with all
financials.
(d) Resignation of the current Board of Directors.
ARTICLE XI
Termination and Abandonment
This Agreement may be terminated and the transaction provided for by
this Agreement may be abandoned without liability on the part of any part to
any other at any time before the closing date.
(a) By mutual consent of Purchaser and the Shareholder.
(b) By Purchaser if any of the conditions provided for in
Article VI of this Agreement have not been met and have not been waived in
writing by Purchaser.
(c) By the Company if any of the conditions provided for in
Article VII of this Agreement have not been met and have not been waived in
writing by the Company.
In the event of termination and abandonment by any party as above
provided in this Article, written notice shall forthwith be given to the other
party, and each party shall pay its own expenses incidental to preparation for
the consummation of the Agreement and the transactions contemplated hereunder.
ARTICLE XII
Miscellaneous
12.01 Notices. All notices, requests, demands, and other
communications hereunder shall be deemed to have been duly given, delivered by
hand, or mailed certified or registered mail with postage prepaid:
(a) If to the Company for the Shareholder, to:
RGB Technology Group, Inc.
0000 X. Xx Xxxxx Xxx., Xxxxx X
Xxxxxxx, Xx 00000
or to such other person and place as the Company and
Shareholder shall furnish to Purchaser in writing:
(b) If to Purchaser, to:
Xxxx-U International, Inc.
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 0X
Xxxx Xxxx Xxxx, XX 00000
or such person and place as Purchaser shall furnish to
Company or Shareholder in writing.
12.02 Announcements. Announcements concerning the
transactions provided for in this Agreement by either the Company or Purchaser
shall be subject to the approval of the other in all essential respects,
except that the approval of the Company shall not be required as to any
statements and other information which Purchaser may submit to its
shareholders.
12.03 Default. Should any party to this Agreement default in
any of the covenants, conditions, or promises contained herein, the defaulting
party shall pay all costs and expenses, including a reasonable attorney's fee,
which may arise or accrue from enforcing this Agreement, or in pursuing any
remedy provided hereunder or by the statutes of the State of Utah, or United
States of America.
12.04 Assignment. This Agreement may not be assigned in whole
or in part by the parties hereto without the prior written consent of the
other party or parties which consent shall not be unreasonably withheld.
12.05 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their successors
and assigns.
12.06 Holidays. If any obligation or act required to be
performed hereunder shall fall due on a Saturday, Sunday or other day which is
a legal holiday established by the State of Utah, such obligation or act may
be performed on the next succeeding business day with the same effect as if it
had been performed upon the day appointed.
12.07 Computation of Time. The time in which any obligation
or act provided by this Agreement is to be performed is computed by excluding
the first day and including the last, unless the last day is a holiday, in
which event such day shall also be excluded.
12.08 Governing Law and Venue. This Agreement shall be
governed by and interpreted pursuant to the laws of the State of Utah. Any
action to enforce the provisions of this Agreement shall be brought in a court
of competent jurisdiction within the State of Utah and in no other place.
12.09 Partial Invalidity. If any term, covenant, condition or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be effected thereby and each term, covenant, condition
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
12.10 No Other Agreements. This Agreement constitutes the
entire Agreement between the parties and there are and will be no oral
representations which will be binding upon any of the parties hereto.
12.11 Rights are Cumulative. The rights and remedies granted
hereunder shall be in addition to and cumulative of any other rights or
remedies provided under the laws of the State of Utah.
12.12 Waiver. No delay or failure in the exercise of any power
or right shall operate as a waiver thereof or as an acquiescence in default.
No single or partial exercise of any power or right hereunder shall preclude
any other or further exercise thereof or the exercise of any other power or
right.
12.13 Survival of Covenants, Etc. All covenants,
representations, and warranties made herein to any party or in any statement
or document delivered to any party hereto, shall survive the making of this
Agreement and shall remain in full force and effect until the obligations or
such party hereunder have been fully satisfied.
12.14 Further Action. The parties hereto agree to execute
and deliver such additional documents and to take such other and further
action as may be required to carry out fully the transaction(s) contemplated
herein.
12.15 Amendment This Agreement or any provision hereof may
not be changed, waived, terminated or discharged except by means of a written
supplemental instrument signed by the party or parties against whom
enforcement of the change, waiver, termination, or discharge is sought.
12.16 Headings. The descriptive headings of the various sections
or parts of the Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
12.17 Counterparts. This Agreement may be executed in two or
more partially or fully executed counterparts via facsimile, each of which
shall be deemed an original and shall bind the signatory, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing
Acquisition Agreement as of the day and year first above written.
PURCHASER: Xxxx-U International, Inc.
By:_________________________
President
Attest:
COMPANY: RGB Technology Group, Inc.
By:_________________________
President
Attest:
SHAREHOLDER Kimrose Holdings
By:
Attest:
SCHEDULE A
2,000,000 (two million) shares of RGB Technology Group, Inc. common
stock which represent all of its issued and outstanding stock.
Assets of RGB Technology Group, Inc. including the exclusive rights to
distribute Colormax color vision enhancement products in the United States of
America, Australia, and New Zealand with all right of first refusal to all
other counties and territories worldwide.
All proprietary technology and information of RGB Technology Group, Inc.
All trademarks and applications in process therefor to and of the above.
All software and copyrights relating to and/or owned by the above.
All business of the above.
