REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT entered into this 30th day of October 1997
by, between and among Eurotronics Holdings Incorporated ("Eurotronics"), a Utah
corporation, Saxx Capital Holdings, Inc. ("Saxx Holdings") an Ontario, Canada
Corporation that is a wholly-owned subsidiary of Eurotronics and Saxx Capital,
Inc., an Ontario, Canada Corporation ("Saxx").
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
1. Merger. Eurotronics agrees to cause to be organized, Saxx Holdings as an
Ontario, Canada corporation and its wholly-owned subsidiary, all for the
purpose and to the extent deemed necessary by Eurotronics to permit Saxx
Holdings to execute an acceptance of the terms of this Agreement
pertaining to the merger of Saxx Holdings with and into Saxx as the
surviving corporation, and the form of plan of merger attached to this
Agreement (Exhibit "A"). At such time as Saxx Holdings has been organized
and is, in the opinion of Eurotronics, permitted by law to execute an
acceptance of this Agreement, the board of directors of Saxx Holdings
shall adopt resolutions authorizing the execution and delivery of such
acceptance and the plan of merger, and approving the transactions
contemplated thereby. On adoption of such resolutions and in consideration
of the execution and delivery of this Agreement by Saxx, Saxx Holdings
shall execute and deliver to Eurotronics duplicate copies of the
acceptance of this Agreement and plan of merger. Saxx shall survive the
merger with Saxx Holdings and become a wholly-owned subsidiary of
Eurotronics.
2. Exchange of Shares. Pursuant to this Agreement, 100% of the Saxx common
stock outstanding shall be exchanged and converted into 144,500,000 shares
of Eurotronics common stock (the "Exchanged Stock") on the date of Closing
as defined in Section (10) ( "Closing"). After Closing, the owners of the
Saxx common stock shall, on surrender to Eurotronics or its Escrow agent
of the certificate or certificates representing the Saxx common stock, be
entitled to receive a certificate or certificates evidencing shares of the
Exchanged Stock as provided herein. At Closing, all previously issued
shares of common stock of Saxx shall be canceled, and all rights in
respect thereof shall cease. The shares of Exchanged Stock issued pursuant
to this Section 2 and the merger shall be, when issued, legally issued,
fully paid, and non-assessable. The merger shall become effective at the
time articles of merger are filed with the Secretary of State of the state
of Utah and/or Ontario, Canada, and shall have the effect set forth in the
corporation law of the state of Utah and/or Ontario, Canada. As the
surviving corporation, Saxx may take any action in the name and on behalf
of either Saxx Holdings or Saxx in order to carry out and effectuate the
transactions contemplated by this Agreement.
a. The directors and officers of Saxx immediately prior to the merger will
remain the directors and officers of Saxx after the merger.
b. The Articles of Incorporation of Saxx in effect immediately prior to
the merger will remain the Articles of Incorporation after the merger,
without any modification or amendment as a result of the merger.
c. The Bylaws of Saxx in effect immediately prior to the merger will
remain the Bylaws after the merger, without any modification or
amendment as a result of the merger.
3. Warranties and Representations of Saxx In order to induce Eurotronics to
enter into the Agreement and to complete the transaction contemplated
hereby, Saxx warrants and represent to Eurotronics that:
a. Organization and Standing. Saxx is a corporation duly organized,
validly existing and in good standing under the laws of Ontario,
Canada, is qualified to do business with a foreign corporation in every
other state or jurisdiction in which it operates to the extent required
by the laws of such states and jurisdictions, and has full power and
authority to carry on its business as now conducted and to own and
operate its assets, properties and business. Attached hereto as Exhibit
"B" are true and correct copies of Saxx's Certificate of Incorporation,
Amendments thereto and all current By-laws. No changes thereto will be
made in any of the Exhibit "B" documents before Closing.
b. Capitalization. As of Closing, Saxx's entire authorized equity capital
consists of ______________ 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 Saxx is bound, calling for the issuance of any
additional shares of Common Stock of any other voting or equity
security. The Saxx Common Shares constitute 100% of the equity capital
of Saxx, which includes, inter alia, 100% of Saxx's voting power, right
to receive dividends, when, and if declared and paid, and the right to
receive the proceeds of liquidation attributable to common stock, if
any.
c. Ownership of Saxx Shares As of the date hereof, the owners of the Saxx
stock are the true owners of the Saxx Common Shares, free and clear of
all liens, encumbrances and restrictions of any nature whatsoever,
except by reason of the fact that the Saxx Common Shares will not have
been registered under the 1933 Act, or any applicable State Securities
Laws.
d. Taxes. Saxx 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 Saxx.
e. Pending Actions. There are no material legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending or threatened, against or affecting Saxx, that arise out of
their operation of Saxx, except as described in Exhibit "C" attached
hereto. Saxx is not knowingly 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.
f. Corporate Records. All of Saxx's 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.
4. Warranties and Representations of Eurotronics. In order to induce Saxx to
enter into this Agreement and to complete the transaction contemplated
hereby, Eurotronics warrants and represents to Saxx that:
a. Organization and Standing. Eurotronics is a corporation duly organized,
validly existing and in good standing under the laws of Utah, is
qualified to do business as a foreign corporation in every other state
in which it operates to the extent required by the laws of such states,
and has full power and authority to carry on its business as now
conducted and to own and operate its assets, properties and business.
b. Capitalization. Eurotronics' entire authorized equity capital consists
of 200,000,000 shares of voting Common Stock, 0.0001 par value. As of
the Closing, Eurotronics shall have a total of 25,500,000 shares of its
Common Stock issued and outstanding. After giving effect to the
144,500,000 shares of restricted stock issued to Saxx pursuant to the
Reorganization, there will be a total of 170,000,000 shares of
Eurotronics issued and outstanding. Upon such issuance, all of the
Eurotronics Common Stock will be validly issued fully paid and
non-assessable. The relative rights and preferences of Eurotronics'
equity securities are set forth in Eurotronics' Articles of
Incorporation and By-laws, as amended (Exhibit "G"). There are no
voting or equity securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which Eurotronics is bound, calling for
the issuance of any additional shares of Common Stock or any other
voting or equity security. Accordingly, as of the Closing the
144,500,000 shares being issued to Saxx will constitute approximately
85% of the total outstanding shares of Eurotronics, which includes
inter alia, that same percentage of Eurotronics' 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. Taxes. At or before Closing, Eurotronics 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. All of such returns are true and complete.
d. Pending Actions. To the best of Eurotronics' knowledge, there are no
legal actions, lawsuits, proceedings of investigations, either
administrative of judicial, pending or threatened against Eurotronics,
or against any of Eurotronics' officers or directors and arising out of
their operation of Eurotronics. Eurotronics is not an investment
company as defined in or otherwise subject to regulation under, the
Investment Company Act of 1940.
e. Corporate Records. All of Eurotronics' 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: Upon request all of
said books and records will be delivered to Saxx.
f. Financial Statements. At or before the Closing, Eurotronics will
provide Saxx with audited financial statements through year end
December 31, 1996. Such audited financial statements shall be prepared
in accordance with U.S. GAAP by independent certified public
accountants with substantial SEC experience.
g. Financial Condition. As of the Closing, Eurotronics will have no assets
or liabilities.
5. No Misleading Statements or Omissions. Neither this Agreement nor any
Exhibit, or Schedule of Documents attached hereto or presented to
Eurotronics and Saxx Holdings by Saxx or to Saxx by Eurotronics and Saxx
Holdings 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.
6. Validity of this Agreement. By Closing, all corporate and other
proceedings required to be taken by Saxx, Saxx Holdings and Eurotronics in
order to enter into and to carry out this Agreement will have been duly
and properly taken. This Agreement has been duly executed by Saxx, Saxx
Holdings and Eurotronics constitutes the valid and binding obligation of
each of them, 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 the carrying out of its purposes will not
result in the breach of any of the terms or conditions of, or constitute a
default under or violate the parties Certificate of Incorporation 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 Saxx as a
wholly-owned subsidiary of the corporation resulting from the
reorganization between Eurotronics and Saxx.
7. 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.
8. Access to Books and Records. Saxx, Saxx Holdings and Eurotronics agree to
provide full and free access to eachother's respective corporate books
during the course of this transaction prior to Closing, during regular
business hours.
9. 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 eachother 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 parties
to this Agreement.
10. Restricted Shares; Legend. All of the Eurotronics Common Shares issued to
Saxx hereunder will be "restricted securities" as defined in Rule 144
under the 1933 Act; and each stock certificate issued to Saxx hereunder
will bear the usual restrictive legend to such effect. Appropriate Stop
Transfer instructions will be given to Eurotronics' stock transfer agent.
11. 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.
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.
12. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as it they were set forth in entirety.
13. 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.
14. 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 Saxx shall have until 60 days
from the date of this Agreement to obtain the financial statements as
discussed herein. Closing shall take place at the offices of 000 Xxxx
000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 or such other date and place as
the parties hereto shall agree upon. At the Closing, all of the
documents and items referred to herein shall be exchanged.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
16. 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 parties hereto have set their hands and seals as of
the date and year above first written.
Eurotronics Holdings Incorporated Saxx Capital, Inc.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxx Xxxxx
Xxxxxx Xxxxxx, President Xxxx Xxxxx, Secretary
