EXHIBIT 2
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT entered into this 1st day of October,
1998 between and among Oneida General Corporation ("ONXD"), a Utah corporation,
and Communitronics, Inc., an Alabama Corporation ("BEEP") (collectively ONXD and
BEEP shall be referred to as "Parties").
Recitals
WHEREAS, ONXD seeks a business entity with which to acquire and to own
as a wholly owned subsidiary.
WHEREAS, BEEP seeks to be acquired by a corporate shell company
publicly held and quoted on the National Association of Securities Dealers
("NASD") Over-The-Counter ("OTC") Bulletin Board.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
1. ACQUISITION. ONXD agrees to issue 5,500,000 shares of ONXD's
restricted common stock to the shareholders of BEEP in exchange for shares of
common stock in BEEP, which represents all of the issued and outstanding capital
stock of BEEP (the "BEEP Common Stock"). BEEP shall retain its corporate
identity and become a wholly-owned subsidiary of ONXD.
2. EXCHANGE OF SHARES. Subject to all the terms and conditions of
this Agreement, all of the BEEP common stock outstanding on the date of closing,
as defined later in this Agreement, shall be exchanged for 5,500,000 shares of
ONXD Common Stock (the "Exchanged Shares"). All owners of the BEEP common stock
(the "BEEP Common Stock") listed in Exhibit B shall tender and surrender to ONXD
certificates evidencing the BEEP Common Stock. Such certificates shall be
properly endorsed to accommodate transfer to ONXD Holdings. The Exchanged Shares
pursuant to this Section shall be, when issued, fully paid, and non-assessable.
a. As a wholly owned subsidiary of ONXD, BEEP may take any action
in the name and on behalf of BEEP in order to carry out and
effectuate the transactions contemplated by this Agreement.
b. The directors and officers of BEEP listed in Exhibit C shall
remain the directors and officers of BEEP after the Exchange
of Shares and at such time additionally replace the current
directors and officers of ONXD listed in Exhibit D.
c. The Articles of Incorporation of BEEP in effect immediately
prior to the Exchange of Shares will remain the Articles of
Incorporation after the Exchange of Shares, without any
modification or amendment as a result of the Exchange of
Shares.
d. The Bylaws of BEEP in effect immediately prior to the Exchange
of Shares will remain the Bylaws after the Exchange of Shares,
without any modification or amendment as a result of the
Exchange of Shares.
3. EXEMPTION FROM REGISTRATION. The parties hereto intend that
the Exchanged Shares shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), pursuant to Section 4(2)
of the 1933 Act and the rules and regulations promulgated thereunder and exempt
from the registration requirements of the applicable states. In furtherance
thereof, the BEEP Shareholders will execute and deliver to ONXD at Closing,
investment letters suitable to ONXD counsel, in substantially the form attached
hereto as Exhibit E.
4. NON-TAXABLE TRANSACTION. The parties intend to effect this
transaction as a non-taxable reorganization.
5. WARRANTIES AND REPRESENTATIONS OF BEEP In order to induce ONXD
to enter into this Agreement and to complete the transaction contemplated
hereby, BEEP warrants and represents to ONXD that:
a. ORGANIZATION AND STANDING. BEEP is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Alabama. It is also qualified to do
business in every other state or jurisdiction in which it
operates and to own and operate its assets, properties and
business in such states or jurisdictions. Attached hereto as
Exhibit F are true and correct copies of BEEP's Articles of
Incorporation, Amendments thereto and current By-laws. No
changes to any of the documents listed in Exhibit F shall be
effected prior to Closing.
b. CAPITALIZATION. As of Closing, BEEP's entire authorized equity
capital consists of 25,000,000 shares of Common Stock, of
which ______________ shares of Common Stock will be
outstanding as of the Closing. As of Closing, there will be no
other voting or equity securities authorized or issued, nor
any authorized or issued securities convertible into voting
stock, and no outstanding subscriptions, warrants, calls,
options, rights, commitments or agreements by which BEEP is
bound, calling for the issuance of any additional shares of
Common Stock of any other voting or equity security. The
BEEP's Common Shares constitute 100% of the equity capital of
BEEP, which includes, INTER ALIA 100% of BEEP's voting power,
right to receive dividends, when, and if declared and paid,
and the exclusive right to receive the proceeds of liquidation
attributable to BEEP Common Stock, if any. From the date
hereof, and until the Closing Date, no dividends or
distributions of capital, surplus, or profits shall be paid or
declared by BEEP in redemption of their outstanding shares or
otherwise, and except as described herein, no additional
shares shall be issued by said corporation.
c. OWNERSHIP OF BEEP SHARES As of the date hereof, the BEEP
Stockholders are the sole owners of 100% of the BEEP Common
Shares and all such securities are free and clear of all
liens, encumbrances and restrictions of any nature whatsoever,
with the sole exception being possible restrictions imposed by
the 1933 Act and applicable state Blue Sky laws due to such
securities not having been registered with any federal or
state securities commissions or authorities.
d. TAXES. Within the times and in the manner prescribed by law,
BEEP and if applicable, its subsidiaries, has filed all
federal, state and local income or other tax returns and
reports that it is required to file with all governmental
agencies and has paid or accrued for payment all taxes as
shown on such returns, such that a failure to file, pay or
accrue will not have a material adverse effect on BEEP.
No Pending ACTIONS. Except as set forth in Exhibit K, to the
best of BEEP's knowledge, after diligent inquiry, there are no
legal actions, lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened against or
affecting BEEP, its subsidiaries, or against any of the
officers or directors therewith that arise out of their
operation of BEEP and its subsidiaries, nor is BEEP or its
subsidiaries in violation of any federal or state law,
material ordinance or regulation of
any kind whatever, including, but not limited to laws, rules
and regulations governing the sale of its products, services
or securities. BEEP is not an investment company as defined in
or otherwise subject to regulation under, the Investment
Company Act of 1940.
f. OWNERSHIP OF ASSETS. BEEP and its subsidiaries has good,
marketable title, without any liens or encumbrances of any
nature whatever, to all of the following: its assets,
properties and rights of every type and description,
including, without limitation, all cash on hand and in banks,
certificates of deposit, stocks, bonds, and other securities,
goodwill, customer lists, its corporate name and all variants
thereof, trademarks and trade names, copyrights and interests
thereunder, licenses and registrations, pending licenses and
permits and applications therefor, inventions, processes,
know-how, trade secrets, real estate and interests therein
and improvements thereto, machinery, equipment, vehicles,
notes and accounts receivable, fixtures, rights under
agreements and leases, franchises, all rights and claims under
insurance policies and other contracts of whatever nature,
rights in funds of whatever nature, books and records and all
other property and rights of every kind and nature owned or
held by BEEP and its subsidiaries as of this date, and will
continue to hold such title on and after the completion of the
transactions contemplated by this Agreement; and, except in
its ordinary course of business, BEEP or its subsidiaries has
not disposed of any such asset since the date of the most
recent balance sheet described herein.
g. SUBSIDIARIES. The only subsidiary of BEEP is Crescent Paging.
h. NO INTEREST IN SUPPLIERS, CUSTOMERS, LANDLORDS OR COMPETITORS.
None of the following persons possess any ownership interest
either directly or indirectly of any nature whatsoever in any
supplier, customer, landlord or competitor of BEEP or its
subsidiaries:
BEEP Shareholder, family member of any BEEP Shareholder, or
employee of BEEP or any of its subsidiaries.
1. NO DEBT OWED BY BEEP. Except as set forth in Exhibit K,
neither BEEP nor its subsidiaries owe any money, securities, or property to any
of the following persons either directly or indirectly: BEEP Shareholder, family
member of any BEEP Shareholder, or employee of BEEP or any of its subsidiaries.
BEEP and its subsidiaries do not have any material Xxxxxx, liability or
obligation of any nature, whether accrued absolute, contingent or otherwise, and
whether due or to become due, that is not reflected in the balance sheet of BEEP
included hereto. BEEP or its subsidiaries do not currently have, nor will it
have on the Closing Date any pension plan, profit-sharing plan, or stock
purchase plan for any of its employees or certain options to proposed executive
officers. To the extent that BEEP or its subsidiaries may have any undisclosed
liability to pay any sum or property to any such persons, such liability is
hereby forever irrevocably released and discharged.
J. CORPORATE RECORDS. All of BEEP's and its subsidiaries' books
and records, including, without limitation, its books of
account, corporate records, minute book, stock certificate
books and other records are up-to-date, complete and reflect
accurately and fairly the conduct of its business in all
material respects since its date of incorporation.
k. BEEP FINANCIAL STATEMENTS. Within 30 days from the date of
this Agreement, BEEP will provide to
the approval of ONXD, audited financial statements for BEEP
and its subsidiaries for the period ended August 31, 1998
prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (or as permitted by
regulation S-X, S-B and/or the rules promulgated under the
1933 Act and the 1934 Act and audited by independent certified
public accountants with substantial SEC experience).
1. BEEP represents that it shall not materially change the normal
course of its business operations prior to Closing. BEEP shall
not amend its Articles of Incorporation, or Bylaws (except as
may be described in this Agreement), declare dividends, redeem
securities, incur additional or newly-funded liabilities
outside the ordinary course of business, acquire or dispose of
fixed assets, change employment terms, enter into any material
or long-term contract, guarantee obligations of any third
party, settle or discharge any balance sheet receivable for
less than its stated amount, pay more on any liability than
its stated amount, or enter into any other transaction without
the prior approval of ONXD. Such approval shall not to be
unreasonably withheld.
m. CORPORATE SUMMARY. Attached hereto as Exhibit M is BEEP's
business plan, which accurately describes BEEP's business,
assets, proposed operations and management of BEEP and its
subsidiaries.
6. WARRANTIES AND REPRESENTATIONS OF ONXD. In order to induce BEEP to
enter into this Agreement and to complete the transaction contemplated
herein, ONXD warrants and represents to BEEP that:
a. ORGANIZATION AND STANDING. ONXD is a corporation duly
organized, validly existing and in good standing under the
laws of Utah. It is also qualified to do business in every
other state or jurisdiction in which it operates and to own
and operate its assets, properties and business in such states
or jurisdictions. Attached hereto as Exhibit N are true and
correct copies of ONXD' 5 Articles of Incorporation,
Amendments thereto and current By-laws. No changes to any of
the documents listed in Exhibit N shall be effected prior to
Closing.
b. CAPITALIZATION. At Closing, ONXD's entire authorized equity
capital consists of 50,000,000 shares of voting common stock,
$0.01 par value and no preferred stock. By Closing, but
immediately prior to the reorganization contemplated herein,
ONXD shall have a total of 4,487,936 shares of its common
stock issued and outstanding. There are no other voting or
equity securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which ONXD is bound, calling for
the issuance of any additional shares of common stock or any
other voting or equity security. After giving effect to the
cancellation by the directors of ONXD of 3,000,000 shares and
the issuance of 5,500,000 shares of restricted stock issued to
BEEP Stockholders, pursuant to this Agreement, there will be a
total of 6,987,936 shares of ONXD's common stock issued and
outstanding. Upon such issuance, all of the ONXD common stock
will be validly issued, fully paid and non-assessable. The
relative rights and preferences of ONXD's equity securities
are set forth in ONXD's Articles of Incorporation, Amendments
thereto and current By-laws which are collectively set forth
in Exhibit N. Accordingly, as of the Closing, the 5,500,000
shares being issued to the BEEP Stockholders will constitute
approximately 79.0% of the total outstanding shares of ONXD,
which includes INTER ALIA that same percentage of ONXD's
voting power, right to receive dividends, when, as and if
declared and paid, and the right to receive the proceeds of
liquidation attributable to Common Stock, if any.
c. OWNERSHIP OF SHARES. By ONXD's issuance of the ONXD Common
Shares to the BEEP Stockholders pursuant to this Agreement,
the BEEP Stockholders will thereby acquire good and absolute
marketable title thereto, and will be subject to resale terms
under the investment letter sent forth in Exhibit E. Such
securities shall be free and clear of all liens, encumbrances
and restrictions of any nature whatsoever, with the sole
exception being possible restrictions imposed by the 1933 Act,
and applicable state Blue Sky laws due to such securities not
having been registered with any federal or state securities
commissions or authorities.
d. TAXES. Within 90 days after Closing, ONXD will have filed all
federal, state and local income or other tax returns and
reports that it is required to file with all governmental
agencies and has paid all taxes as shown on such returns. To
the best of ONXD's knowledge, All of such returns shall be
true and complete.
e. NO PENDING ACTIONS. To the best of ONXD's knowledge, after
diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened against or affecting ONXD, or
against any of ONXD's officers or directors that arise out of
their operation of ONXD, nor is ONXD in violation of any
federal or state law, material ordinance or regulation of any
kind whatever, including, but not limited to laws, rules and
regulations governing the sale of its products, services or
securities. ONXD is not an investment company as defined in or
otherwise subject to regulation under, the Investment Company
Act of 1940.
f. CORPORATE RECORDS. All of ONXD's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation. All of said books and records will be delivered
to BEEP at Closing and are available for BEEP's review at any
time.
7. NO MISLEADING STATEMENTS OR OMISSIONS. Neither this Agreement nor any
Exhibit, Schedule or Documents attached hereto or presented to ONXD by
BEEP or to BEEP by ONXD in connection herewith, contains any materially
misleading statement, or omits any fact of statement necessary to make
the other statements or facts therein set forth not materially
misleading.
8. VALIDITY OF THIS AGREEMENT. By Closing, all corporate and other
proceedings required to be taken by BEEP and ONXD in order to enter
into and to carry out this Agreement will have been duly and properly
taken. Upon execution, this Agreement shall constitute the valid and
binding obligation of BEEP, and ONXD, except to the extent limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws relating to or effecting generally the enforcement of creditors
rights. The execution and delivery of this Agreement and its stated
terms shall not result in the breach of any of the terms or conditions
of, or constitute a default under or violate the parties Articles of
Incorporation and Amendment thereto or document of undertaking, oral or
written, to which the Parties are a party to or is bound or may be
affected by, nor will such execution, delivery and carrying out violate
any order, writ, injunction, decree, law, rule or regulation of any
court, regulatory agency or other governmental body; and the business
now conducted by the Parties can continue to be so
conducted after completion of the transaction contemplated hereby, with
BEEP as a wholly-owned subsidiary of the ONXD.
9. ENFORCEABILITY OF THIS AGREEMENT. When duly executed and delivered,
this Agreement and the Exhibits hereto, which are incorporated herein
and made a part hereof, are legal, valid, and enforceable by the
Parties hereto according to their terms, except to the extent limited
by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws relating to or effecting generally the enforcement of
creditors rights.
10. ACCESS TO BOOKS AND RECORDS. During the course of the Exchange of
Shares through Closing, ONXD and BEEP agree to make available for
inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable
access to all documentation and other information concerning the
business, financial and legal conditions of each other for the purpose
of conducting a due diligence investigation thereof. Such due diligence
investigation shall be for the purpose of satisfying each party as to
the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
Reorganization. ONXD and BEEP further agree to keep confidential and
not use for their own benefit, except in accordance with this
Agreement, any information or documentation obtained in connection with
any such investigation.
11. INDEMNIFICATION. All representations, warranties, covenants and
agreements made herein and in the Exhibits attached hereto shall
survive the execution and delivery of this Agreement and payment
pursuant thereto. The officers and directors of the Parties hereto
hereby agree, jointly and severally, to indemnify, defend, and hold the
other harmless from and against any damage, loss liability, or expense
(including, without limitation, reasonable expenses of investigation
and reasonable attorney's fees)' arising out of any material breach of
any representation, warranty, covenant, or agreement made by the
officers and directors of the other parties to this Agreement.
12. RESTRICTED SHARES: LEGEND. All of the 5,500,000 ONXD Common Shares
issued to the BEEP Stockholders, will be "restricted securities" as
defined in Rule 144 under the 1933 Act; and each stock certificate
issued to the BEEP stockholders hereunder will bear the usual
restrictive legend to such effect. Appropriate Stop Transfer
instructions will be given to ONXD1s stock transfer agent.
13. NO REVERSE SPLIT. As a material term hereto and a condition to ONXD
entering into this Agreement, BEEP and the BEEP Shareholders agree that
for a period of twelve (12) months from the date of Closing, there will
be no reorganizations, recapitalization or reverse stock splits,
without the prior written consent of the existing directors of ONXD as
of the date immediately prior to the Closing of this Agreement.
14. EXPENSES. Each of the Parties shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the consummation of
this Agreement, including, without limiting the generality of the
foregoing, fees and expenses of financial consultants, accountants and
counsel and the cost of any documentary stamps, sales and excise taxes
which may be imposed upon or be payable in respect to the transaction.
15. CLOSING. The Closing of the transactions contemplated by this Agreement
("Closing") shall take place at 1:00 P.M. on the day after all Parties
have supplied the required documents and obtained the required
approvals as
discussed herein except that BEEP shall have until 30 days from the
date of this Agreement to obtain the financial statements as discussed
herein and ONXD shall have 90 days to complete and deliver past tax
returns. Closing shall take place at such place as the parties hereto
shall agree upon or by FAX and Federal Express.
16. DELIVERIES.
a. Pursuant to Section 2 herein, at Closing, the BEEP
Shareholders shall deliver properly endorsed certificates
representing the BEEP Common Stock to ONXD, and ONXD shall
deliver either certificates representing the Exchanged Shares,
duly issued to the BEEP Shareholders as listed on Exhibit B
attached hereto, or a copy of a letter from ONXD to its
transfer agent, instructing such transfer agent to issue the
certificates representing the ONXD Shares to the BEEP
Shareholders.
b. ONXD shall deliver an opinion from counsel to the satisfaction
of BEEP that:
i. ONXD does not have any liens or judgments against it.
c. BEEP shall deliver a letter to ONXD that the opinion of
counsel is to BEEP's satisfaction.
d. ONXD shall deliver appointments of officers and directors
chosen by BEEP and resignations of ONXD's current officers and
directors.
e. ONXD shall deliver a copy of all its corporate records that
are in the possession of its current management.
17. CONDITIONS PRECEDENT TO CLOSING.
a. The obligations of BEEP under this Agreement shall be and are
subject to fulfillment, prior to or at the Closing of each of
the following conditions:
i. That each of the representations and warranties of
ONXD contained herein shall be true and correct at
the time of the Closing date as if such
representations and warranties were made at such
time;
ii. That ONXD shall have performed or complied with all
agreements, terms and conditions required by this
Agreement to be performed or complied with by them
prior to or at the time of the Closing;
iii. That BEEP's representations and warranties contained
herein shall be true and correct at the time of
Closing date as if such representations and
warranties were made at such time; and
iv. That BEEP has performed or complied with all
agreements, terms and conditions required by this
Agreements to be performed or complied with by them
prior to or at the time of Closing date.
18. TERMINATION. This Agreement may be terminated at any time before or; at
Closing, by:
a. The mutual agreement of the parties;
b. Any party if:
i. Any provision of this Agreement applicable to a party
shall be materially untrue or fail to be
accomplished.
ii. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain or
prevent the consummation of this Agreement.
iii. There is a materially adverse change in the financial
condition or business operation of the other party.
c. Upon termination of this Agreement for any reason, in
accordance with the terms and conditions set forth in this
paragraph, each said party shall bear all costs and expenses
as each party has incurred and no party shall be liable to the
other.
19. EXHIBITS. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in entirety.
20. MISCELLANEOUS PROVISIONS. This Agreement is the entire agreement
between the Parties in respect of the subject matter hereof, and there
are no other agreements, written or oral, nor may this Agreement be
modified except in writing and executed by all of the Parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
22. NOTICES. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail to the
parties at the addresses first appearing herein.
23. COUNTERPARTS. This Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute on and the same binding Agreement, with one
counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, The foregoing Reorganization Agreement, having been
duly approved and adopted by the Board of Directors, and duly approved and
adopted by the stockholders of the constituent corporations as required, in the
manner provided by the laws of the State of Utah, the Chairman of the Board, the
President or the Secretary of said corporations, and the Shareholders of BEEP do
now execute this Reorganization Agreement under the respective seals of said
corporation by the authority of the directors and stockholders of each, as
required, as the act, deed and agreement of each of said corporations.
Oneida General Corporation
By: s/ Xxx Xxxxx
---------------------------
Xxx Xxxxx, President
Communitronics, Inc.
By: s/ Xxxxx Xxxxxxxx
---------------------------
Xxxxx Xxxxxxxx, President
List of Exhibits
Exhibit "B" BEEP Stockholders.
Exhibit "C" BEEP officers and directors.
Exhibit "D" ONXD officers and directors.
Exhibit "E" Investment Letter
Exhibit "F" True and correct copies of BEEP's Certificate of
Incorporation, Amendments thereto and all current By-laws.
Exhibit "G" BEEP Subsidiaries
Exhibit "K" BEEP's liabilities including pending legal actions
Exhibit "L" BEEP's financial statements.
Exhibit "M" BEEP's Corporate Summary.
Exhibit 'N" ONXD's Articles of Incorporation, Amendments thereto and all
current By-Laws.
Exhibit "P" ONXD Holdings' Articles of Incorporation, Amendments thereto
and all current ByLaws.
