SHARE EXCHANGE AGREEMENT
by and among
DIAMOND INTERNATIONAL GROUP, INC.
a Delaware Corporation
and
ORGANETIX, INC.
Delaware Corporation
effective as of October 31, 2003
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, made and entered into this 31st day of
October, 2003 by and among Diamond International Group, Inc. a Delaware
Corporation with its principal place of business located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Diamond"); and Organetix, Inc., a
Delaware Corporation with its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Organetix") and the individuals of Organetix listed
on Exhibit "B" attached hereto and specifically incorporated herein by this
reference (the "Organetix Shareholders"), (Organetix and Organetix Shareholders
jointly referred to as the "Organetix Parties").
PREMISES
A. This Agreement provides for the acquisition of Organetix by Diamond
whereby Organetix shall become a wholly owned subsidiary of Diamond and in
connection therewith, the issuance of 64,000,000 ($ 0.001 par value per share)
shares of restricted common stock of Diamond to the Organetix Shareholders as
designated on Exhibit "A".
B. The boards of directors of Organetix and Diamond have determined,
subject to the terms and conditions set forth in this Agreement, that the
transaction contemplated hereby is desirable and in the best interests of their
stockholders, respectively. This Agreement is being entered into for the purpose
of setting forth the terms and conditions of the proposed acquisition.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
DIAMOND
As an inducement to and to obtain the reliance of Organetix, Diamond
represents and warrants as follows:
SECTION 1.1 ORGANIZATION. Diamond is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Diamond Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto of Diamond as in effect on the date hereof. The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of Diamond's articles of incorporation or bylaws.
Diamond has full power, authority and legal right and has taken all action
required by law, its articles of incorporation, its bylaws or otherwise to
authorize the execution and delivery of this Agreement.
SECTION 1.2 CAPITALIZATION. The authorized capitalization of Diamond
consists of 100,000,000 Common Shares, $0.001 par value per share, and no
Preferred Shares. As of the date hereof, Diamond has 7,472,056 common shares
issued and outstanding. Diamond is presently a public company listed on the
NASDAQ OTC Bulletin Board under the symbol "DMND".
All issued and outstanding shares are legally issued, fully paid and
nonassessable and are not issued in violation of the preemptive or other rights
of any person. Diamond has no other securities, warrants or options authorized
or issued.
SECTION 1.3 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Diamond does not
have any other subsidiaries and does not own, beneficially or of record, any
shares of any other corporation.
SECTION 1.4 OPTIONS AND WARRANTS. Notwithstanding 4,890,000 shares
reserved for issuance pursuant to various consulting agreements, there are no
existing options, warrants, calls or commitments of any character to which
Diamond is a party and by which it is bound.
SECTION 1.5 CLAIMS, LITIGATION AND ▇▇▇▇▇▇▇▇▇▇▇.▇▇ the best of Diamond's
knowledge and belief, there are no actions, suits, proceedings or investigations
pending or threatened by or against Diamond, affecting Diamond or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind
that would have a material adverse affect on the business, operations, financial
condition or income of Diamond. Diamond does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default.
SECTION 1.6 MATERIAL CONTRACT DEFAULTS. To the best of Diamond's
knowledge and belief, Diamond is not in default in any material respect under
the terms of any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties, assets or condition
of Diamond, and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of which Diamond
has not taken adequate steps to prevent such a default from occurring.
SECTION 1.7 NO CONFLICT WITH OTHER INSTRUMENTS.The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Diamond is a
party or to which any of its properties or operations are subject.
SECTION 1.8 GOVERNMENTAL AUTHORIZATIONS. To the best of Diamond's
knowledge, Diamond has all licenses, franchises, permits or other governmental
authorizations legally required to enable Diamond to conduct its business in all
material respects as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Diamond of this Agreement and the consummation of
Diamond of the transactions contemplated hereby.
SECTION 1.9 TAX MATTERS; BOOKS & RECORDS
(a) The books and records, financial and others, of Diamond are in all
material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Diamond has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including any
deficiencies, interest or penalties).
SECTION 1.10 INFORMATION. The information concerning Diamond as set
forth in this Agreement and in the Diamond Schedules is complete and accurate in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
SECTION 1.11 TITLE AND RELATED MATTERS.Diamond has no assets and no
liabilities or obligations of any nature whatsoever (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance sheet of
Diamond or in the notes thereto except accounts payable and other liabilities
incurred in the ordinary and customary course of business since October 22,
2003. The financial statements being provided to Organetix pursuant to Section
7.3 of this Agreement shall not contain any liabilities or obligations of any
kind. Except as set forth in the Diamond Schedules, Diamond owns free and clear
of any liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures, techniques, marketing
plans, business plans, methods of management or other information utilized in
connection with Diamond's business. Except as set forth in the Diamond
Schedules, no third party has any right to, and Diamond had not received any
notice of infringement of or conflict with asserted rights of others with
respect to any product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a materially adverse affect on the business, operations,
financial conditions or income of Diamond or any material portion of its
properties, assets or rights.
SECTION 1.12 CONTRACTS. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which
Diamond is a party or by which it or any of its properties are
bound;
(b) Diamond is not a party to any contract,
agreement, commitment or instrument or subject to any charter
or other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely
affects, or in the future may (as far as Diamond can now
foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of Diamond; and
(c) Diamond is not a party to any material oral or
written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement
plan, agreement or arrangement covered by Title IV of the
Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of
money or otherwise, excluding endorsements made for collection
and other guaranties of obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other similar contract with
an unexpired term of more than one year or providing for
payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) contract, agreement, or
other commitment involving payments by it for more than
$10,000 in the aggregate.
SECTION 1.13 APPROVAL OF AGREEMENT. The holders of a majority of the
Common Voting Shares outstanding of Diamond have authorized the execution and
delivery of the Agreement by Diamond and have approved the transactions
contemplated hereby.
SECTION 1.14 MATERIAL TRANSACTIONS OR AFFILIATIONS. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
Diamond and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by Diamond
to own beneficially, ten percent (10%) or more of the issued and outstanding
Common Shares of Diamond and which is to be performed in whole or in part after
the date hereof. Diamond has no commitment, whether written or oral, to lend any
funds to, borrow any money from or enter into any other material transactions
with, any such affiliated person.
SECTION 1.15 DIAMOND SCHEDULES. As soon as practicable, but in no event
later than the Closing Date, upon execution hereof, Diamond shall deliver to
Diamond the following schedules, which are collectively referred to as the
"Diamond Schedules" which shall be dated the date of this Agreement, all
certified by an officer of Diamond to be complete, true and accurate:
(a) the description of any material adverse change in
the business, operations, property, assets, or condition of
Diamond since October 22, 2003 required to be provided
pursuant to Section 1.6: and
(b) any other information, together with any required
copies of documents, required to be disclosed in the Diamond
Schedules by this Article I.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF ORGANETIX
As an inducement to, and to obtain the reliance of Diamond, Organetix
represents and warrants as follows:
SECTION 2.1 ORGANIZATION. Organetix is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign entity in the country or states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the Organetix Schedules (as hereinafter
defined) are complete and correct copies of the Articles of Incorporation of
Organetix as in effect on the date hereof. The execution and delivery of this
Agreement does not and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any provision of
Organetix's Articles of Incorporation. Organetix has full power, authority and
legal right and has taken all action required by law, its Articles of
Incorporation or otherwise to authorize the execution and delivery of this
Agreement.
SECTION 2.2 CAPITALIZATION. The authorized capitalization of Organetix
consists of 30,000,000 shares of Common Stock and no shares of Preferred Stock.
As of the date hereof there are 16,000,000 Shares issued and outstanding. All
issued and outstanding Organetix shares have been legally issued and are
nonassessable as of October 15, 2003.
SECTION 2.3 SUBSIDIARIES. Organetix does not have any other
subsidiaries and does not own, beneficially or of record, any shares of any
other corporation.
SECTION 2.4 TAX MATTERS; BOOKS & RECORDS
(a) The books and records, financial and others, of Organetix are in
all material respects complete and correct and have been maintained in
accordance with good business accounting practices; and
(b) Organetix has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including any
deficiencies, interest or penalties).
SECTION 2.5 INFORMATION. The information concerning Organetix as set
forth in this Agreement and in the Organetix Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading.
SECTION 2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the Organetix Schedules, since October 1, 2003:
(a) Organetix has not: (i) amended its Articles of
Association; (ii) waived any rights of value which in the
aggregate are extraordinary or material considering the
business of Organetix; (iii) made any material change in its
method of management, operation or accounting; or (iv) made
any accrual or arrangement for or payment of bonuses or
special compensation of any kind or any severance or
termination pay to any present or former officer or employee;
(b) Organetix has not: (i) granted or agreed to grant
any options, warrants or other rights for its certificates,
bonds or other corporate securities calling for the issuance
thereof, which option, warrant or other right has not been
canceled as of the Closing Date; (ii) borrowed or agreed to
borrow any funds or incurred or become subject to, any
material obligation or liability (absolute or contingent)
except liabilities incurred in the ordinary course of
business; and
(c) to the best knowledge of Organetix, it has not
become subject to any law or regulation which materially and
adversely affects, or in the future may adversely affect, the
business, operations, properties, assets or condition of
Organetix.
SECTION 2.7 TITLE AND RELATED MATTERS.Organetix has good and marketable
title to and is the sole and exclusive owner of all of its properties,
inventory, interests in properties and assets, real and personal (collectively,
the "Assets") which are reflected in the most recent Organetix balance sheet,
dated October 15, 2003, and the Organetix Schedules or acquired after that date
(except properties, interests in properties and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and clear
of all liens, pledges, charges or encumbrances. Except as set forth in the
Organetix Schedules, Organetix owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or limitations of any
nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
Organetix's business. Except as set forth in the Organetix Schedules, no third
party has any right to, and Organetix had not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of Organetix or any material portion of its properties,
assets or rights.
SECTION 2.8 LITIGATION AND PROCEEDINGS. There are no actions, suits or
proceedings pending or, to the best of Organetix's knowledge and belief,
threatened by or against or affecting Organetix, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind that would have a material adverse effect on
the business, operations, financial condition, income or business prospects of
Organetix. Organetix does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality.
SECTION 2.9 CONTRACTS. On the Closing Date:
(a) Organetix is not a party to any contract,
agreement, commitment or instrument or subject to any charter
or other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely
affects, or in the future may (as far as Organetix can now
foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of Organetix; and
(b) Organetix is not a party to any material oral or
written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement
plan, agreement or arrangement covered by Title IV of the
Employee Retirement Income Security Act, as amended; (iii)
agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of
money or otherwise, excluding endorsements made for collection
and other guaranties of obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other similar contract with
an unexpired term of more than one year or providing for
payments in excess of $10,000 in the aggregate; (vi)
collective bargaining agreement; (vii) contract, agreement, or
other commitment involving payments by it for more than
$10,000 in the aggregate.
SECTION 2.10 NO CONFLICT WITH OTHER INSTRUMENTS.The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Organetix is
a party or to which any of its properties or operations are subject.
SECTION 2.11 MATERIAL CONTRACT DEFAULTS. To the best of Organetix's
knowledge and belief, Organetix is not in default in any material respect under
the terms of any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties, assets or condition
of Organetix, and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of which
Organetix has not taken adequate steps to prevent such a default from occurring.
SECTION 2.12 GOVERNMENTAL AUTHORIZATIONS. To the best of Organetix's
knowledge, Organetix has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or corporation
laws, no authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is required in
connection with the execution and delivery by Organetix of the transactions
contemplated hereby.
SECTION 2.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
Organetix's knowledge and belief, Organetix has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business; operations, properties, assets or condition of
Organetix or would not result in Organetix's incurring any material liability.
SECTION 2.14 INSURANCE. To the best of our knowledge we do not possess
any insurable properties. As a result, we do not maintain any insurance policies
on any person or property.
SECTION 2.15 APPROVAL OF AGREEMENT. The holders of the majority of the
Common Voting Shares of Organetix shall, in accordance with Section 7.2 of this
Agreement, authorize the execution and delivery of the Agreement by Organetix
and have approved the transactions contemplated hereby.
SECTION 2.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. As of the Closing
Date, there will exist no material contract, agreement or arrangement between
Organetix and any person who was at the time of such contract, agreement or
arrangement an officer, director or person owning of record, or known by
Organetix to own beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of Organetix and which is to be performed in whole or
in part after the date hereof. Organetix has no commitment, whether written or
oral, to lend any funds to, borrow any money from or enter into any other
material transactions with, any such affiliated person.
SECTION 2.17 LABOR RELATIONS. Organetix has never had a work stoppage
resulting from labor problems.
SECTION 2.18 ORGANETIX SCHEDULES. At Closing Organetix shall deliver to
Diamond the following schedules, which are collectively referred to as the
"Organetix Schedules" which shall be dated the date of this Agreement, all
certified by an officer of Organetix to be complete, true and accurate:
(a) complete and correct copies of the certificate of
incorporation, bylaws and any amendments thereto of Organetix
as in effect as of the date of this Agreement;
(b) all contracts of Organetix presently in effect;
(c) the description of any material adverse change in
the business, operations, property, assets, or condition of
Organetix since October 1, 2003 required to be provided
pursuant to Section 2.5; and
(d) any other information, together with any required
copies of documents, required to be disclosed in the Organetix
Schedules by Sections 2.1 through 2.17.
Organetix shall cause the Organetix Schedules and the instruments to be
delivered to Diamond hereunder to be updated after the date hereof up to and
including the Closing Date.
SCHEDULE 2.19 NATURE OF BOOKS AND RECORDS. The books and records of
Organetix are in auditable condition. Organetix has received confirmation from
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, its independent auditor, that such books and records
are auditable and that such audit should be timely completed.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
SECTION 3.1 SHARE EXCHANGE/DELIVERY OF ORGANETIX SECURITIES. Upon due
and complete execution of the shareholders' consent referenced in Section 7.2 of
this Agreement, the Organetix Shareholders, relinquish all rights, title and
interest to and in the Organetix Common Shares held by them and authorize the
cancellation of such shares by Diamond, provided that all other conditions of
this Agreement have been satisfied. Until such time that a fully executed
shareholders' consent has been received by Diamond's counsel pursuant to Section
7.2 of this Agreement, a share certificate for sixty million (64,000,000) shares
of Diamond Common Stock in the name of Organetix, Inc. shall be kept in the
possession by Diamond's counsel. Once such fully executed consent has been
received (facsimile copy shall suffice) Diamond's counsel shall promptly deliver
such share certificate to Organetix's counsel.
SECTION 3.2 TRANSFER OF ORGANETIX COMMON SHARES. In exchange for all of
the Organetix Common Shares tendered pursuant to Section 3.1, Diamond
Shareholders shall issue an aggregate of 64,000,000 "restricted" Diamond Common
Shares to the Organetix Shareholders (ie. each Organetix Common Share shall be
exchanged for four (4) Diamond Common Shares). Such shares shall be "restricted"
in accordance with Rule 144 of the Securities Act of 1933, as amended.
SECTION 3.3 OTHER CONSIDERATION. Diamond shall receive additional
consideration of $250,000 in the following manner: $150,000.00 payable on or
about the Closing Date and an additional $100,000 within five (5) business days
of the Closing Date of this Agreement. Such funds shall be transferred by wire
transfer to Organetix's bank account pursuant to the following wire
instructions:
Organetix, Inc.
Account No. ▇▇▇-▇▇▇-▇▇▇▇
ABA #▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ United Bank
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
SECTION 3.4 EVENTS PRIOR TO CLOSING. Upon execution hereof or as soon
thereafter as practicable, management of Organetix and Diamond shall execute,
acknowledge and deliver (or shall cause to be executed, acknowledged and
delivered) any and all certificates, opinions, financial statements, schedules,
agreements, resolutions rulings or other instruments required by this Agreement
to be so delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel in order to
effectuate or evidence the transactions contemplated hereby, subject only to the
conditions to Closing referenced herein below.
SECTION 3.5 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on or about October 31, 2003 ("Closing
Date").
SECTION 3.6 TERMINATION.
(a) This Agreement may be terminated by the board of directors
or majority interest of Shareholders of either Diamond or Organetix,
respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before
any court or any governmental body which shall seek to
restrain, prohibit or invalidate the transactions contemplated
by this Agreement and which, in the judgment of such board of
directors, made in good faith and based on the advice of its
legal counsel, makes it inadvisable to proceed with the
exchange contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of this
Section 3.7, no obligation, right, or liability shall arise hereunder and each
party shall bear all of the expenses incurred by it in connection with the
negotiation, drafting and execution of this Agreement and the transactions
herein contemplated;
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of Diamond if
Organetix shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of Organetix contained herein shall be
inaccurate in any material respect, which noncompliance or inaccuracy
is not cured after 20 days written notice thereof is given to
Organetix. If this Agreement is terminated pursuant to this paragraph
(b) of this Section 3.7, this Agreement shall be of no further force or
effect and no obligation, right or liability shall arise hereunder.
SECTION 3.7 DIRECTORS OF ORGANETIX AFTER ACQUISITION. Upon the Closing,
the current Board of directors of Diamond will tender their resignation and
contemporaneously appoint L. B. (▇▇▇▇) ▇▇▇▇▇▇ to the Board of Directors of
Diamond. At Closing, each director shall hold office until his successor shall
have been duly elected and shall have qualified or until his earlier death,
resignation or removal.
SECTION 3.8 OFFICERS OF DIAMOND. Upon the Closing, the following
persons shall be appointed as the sole officer of Diamond in accordance with
procedures set forth in the Diamond bylaws:
NAME OFFICE
---- ------
L.B. (▇▇▇▇) ▇▇▇▇▇▇ Chief Executive Officer, Chief Financial
Officer and President
ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. Prior to Closing,
Organetix and Diamond will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
Organetix and Diamond as the case may be, in order that each may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of the other and each will furnish the other with such additional
financial and operating data and other information as to the business and
properties of Organetix and Diamond as the case may be, as the other shall from
time to time reasonably request.
SECTION 4.2 AVAILABILITY OF RULE 144. Each of the parties acknowledge
that the stock of Diamond to be issued pursuant to this Agreement will be
"restricted securities, " as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. Diamond is under no obligation to register such
shares under the Securities Act, or otherwise. The stockholders of Diamond
holding restricted securities of Diamond as of the date of this Agreement and
their respective heirs, administrators, personal representatives, successors and
assigns, are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 4.2 shall survive the Closing
and the consummation of the transactions herein contemplated.
SECTION 4.3 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
ORGANETIX COMMON SHARES TO BE ISSUED IN THE Exchange.The consummation of this
Agreement, including the issuance of the Diamond Common Shares to the
Shareholders of Organetix as contemplated hereby, constitutes the offer and sale
of securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, inter alia,
upon the circumstances under which the Organetix Shareholders acquire such
securities.
SECTION 4.4 THIRD PARTY CONSENTS. Organetix and Diamond agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
SECTION 4.5 ACTIONS PRIOR AND SUBSEQUENT TO CLOSING.
(a) From and after the Closing Date and except as set forth in
the Organetix Schedules or as permitted or contemplated by this
Agreement, Organetix and Diamond will each use its best efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of
good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to
casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all
federal and state laws.
(b) From and after the Closing Date, Organetix will not,
without the prior consent of Diamond:
(i) except as otherwise specifically set forth
herein, make any change in its articles of incorporation or
bylaws;
(ii) declare or pay any dividend on its outstanding
Common Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance
or similar agreements or arrangements with any directors or
officers;
(v) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date
hereof to acquire any Common Shares; or
(vi) purchase or redeem any Common Shares.
SECTION 4.6 INDEMNIFICATION.
(a) Organetix hereby agrees to indemnify Diamond and
each of the officers, agents and directors of Diamond as of
the date of execution of this Agreement including, but not
limited to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, against any loss, liability,
claim, damage or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in
investigating, preparing or defending against and litigation,
commenced or threatened or any claim whatsoever), to which it
or they may become subject to arising out of or based on any
inaccuracy appearing in or misrepresentation made in this
Agreement in addition to any shareholder action filed against
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the other Diamond officers or directors
based on this Agreement. The indemnification provided for in
this paragraph shall survive the Closing and consummation of
the transactions contemplated hereby and termination of this
Agreement; and
(b) Diamond and its officers and directors hereby
agrees to indemnify Organetix and each of the officers,
agents, directors and current shareholders of Organetix as of
the Closing Date against any loss, liability, claim, damage or
expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened or
any claim whatsoever), to which it or they may become subject
arising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement and particularly the
representation regarding no liabilities referred to in Section
2.4 (b). The indemnification provided for in this Section
shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF DIAMOND
The obligations of Diamond under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Organetix in this Agreement were true when made and shall be
true at the Closing Date with the same force and effect as if such
representations and warranties were made at the Closing Date (except for changes
therein permitted by this Agreement), and Organetix shall have performed or
compiled with all covenants and conditions required by this Agreement to be
performed or complied with by Organetix prior to or at the Closing. Diamond
shall be furnished with a certificate, signed by a duly authorized officer of
Organetix and dated the Closing Date, to the foregoing effect.
SECTION 5.2 SHAREHOLDER APPROVAL. All of the Shareholders of Organetix
shall have approved this Agreement and the transactions contemplated herein.
SECTION 5.3 OFFICER'S CERTIFICATE. Diamond shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Organetix to the effect that: (a) the representations and warranties
of Organetix set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material respects true and
correct as if made on the Effective Date; (b) Organetix has performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of this Agreement to be performed, satisfied or complied with by it
as of the Effective Date; (c) since such date and other than as previously
disclosed to Diamond and Organetix has not entered into any material transaction
other than transactions which are usual and in the ordinary course if its
business; and (d) No litigation, proceeding, investigation or inquiry is pending
or, to the best knowledge of Organetix, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or, to the extent not disclosed in the Organetix Schedules, by or
against Organetix which might result in any material adverse change in any of
the assets, properties, business or operations of Organetix.
SECTION 5.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations or Organetix.
SECTION 5.5 OPINION OF COUNSEL TO ORGANETIX. Diamond shall receive an
opinion dated the Closing Date by counsel to Organetix, in substantially the
following form:
(a) Organetix is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware and has the
corporate power and is duly authorized, qualified, franchised and
licensed under all material applicable laws, regulations, ordinances
and orders of public authorities to own all of its properties and
assets and to conduct its business as now conducted, including
qualification to do business as a foreign corporation in the states in
which the character and location of the assets owned by it or the
nature of the business transacted by it requires qualifications;
(b) To the best knowledge of such legal counsel, the execution
and delivery by Organetix of this Agreement and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not conflict with or result in the breach of any term
or provision of Organetix's certificate of incorporation or Bylaws or
violate any court order, writ, injunction or decree applicable to
Organetix, or its properties or assets;
(c) All issued and outstanding Share Certificates are legally
issued, fully paid and nonassessable. Except as set forth in the
Organetix Schedules, to the best knowledge of such legal counsel, there
are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments obligating
Organetix to issue any additional Share Certificates;
(d) This Agreement has been duly and validly authorized,
executed and delivered by Organetix; and
(e) To the best knowledge of such legal counsel, except as set
forth in the Organetix Schedules, there are no actions, suits or
proceedings pending or threatened by or against or affecting Organetix
or its properties, at laws or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or before
any arbitrator of any kind.
SECTION 5.6 1934 SECURITIES ACT FILINGS. Organetix will be required to
keep the Company current in its filing pursuant to the Securities Exchange Act
of 1934, including the filing of an 8-K within fifteen (15) days after the
Closing and amended 8-K with two years audited financial statements within sixty
days after filing of the initial 8-K.
SECTION 5.7 OTHER ITEMS. Diamond shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Diamond may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF ORGANETIX
The obligations of Organetix under this Agreement are subject to the
satisfaction, at or before the Closing date (unless otherwise indicated herein),
of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Diamond in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Diamond shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Diamond prior to or at the
Closing. Organetix shall have been furnished with a certificate, signed by a
duly authorized executive officer of Diamond and dated the Closing Date, to the
foregoing effect.
SECTION 6.2 OFFICER'S CERTIFICATE. Organetix shall be furnished with a
certificate dated the Closing date and signed by a duly authorized officer of
Diamond to the effect that: (a) the representations and warranties of Diamond
set forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Effective Date; and (b) Diamond had performed all covenants,
satisfied all conditions, and complied with all other terms and provisions of
the Agreement to be performed, satisfied or complied with by it as of the
Effective Date.
SECTION 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations or nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Diamond.
SECTION 6.4 OPINION OF COUNSEL TO DIAMOND. Organetix shall receive an
opinion dated the Closing Date of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel to Diamond, in
substantially the following form:
(a) Diamond is a corporation duly organized, validly
existing, and in good standing under the laws of the state of
Delaware and has the corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its
business in all material respects as it is now being
conducted, including qualification to do business as a foreign
corporation in the states in which the character and location
of the assets owned by it or the nature of the business
transacted by it requires qualification;
(b) To the best knowledge of such legal counsel, the
execution and delivery by Diamond of this Agreement and the
consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not
conflict with or result in the breach of any term or provision
of Diamond's articles of incorporation or bylaws or constitute
a default or give rise to a right of termination, cancellation
or acceleration under any material mortgage, indenture, deed
of trust, license agreement or other obligation or violate any
court order, writ, injunction or decree applicable to Diamond
or its properties or assets;
(c) The authorized capitalization of Diamond consists
of 100,000,000 shares of Common Stock, par value $0.001 per
share and no shares of Preferred Stock.
(d) The Diamond Common Shares to be issued to the
Organetix Shareholders pursuant to the terms of this Agreement
will be, when issued in accordance with the terms hereof,
legally issued, fully paid and non-assessable;
(e) This Agreement has been duly and validly
authorized, executed, and delivered and constitutes the legal
and binding obligation of Diamond, except as limited by
bankruptcy and insolvency laws and by other laws affecting the
rights of creditors generally;
(f) To the best knowledge of such counsel, there are
no actions, suits or proceedings pending or threatened by or
against Diamond or affecting Diamond's properties, at law or
in equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator
of any kind;
(g) Diamond has taken all actions required by the
applicable laws of the state of Delaware to permit the
issuance of the Diamond Common Shares to the Organetix
Shareholders; and
(h) The divestiture of H. Y. Applied Inter-Data
Services, Inc., a wholly-owned subsidiary of Diamond prior to
such divestiture, to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, was performed in
accordance with the applicable laws and did not result in any
additional liabilities or obligations of any nature whatsoever
(whether accrued, absolute, contingent or otherwise) Diamond's
behalf.
ARTICLE VII
CONDITIONS SUBSEQUENT TO OBLIGATIONS OF DIAMOND
SECTION 7.1 ORGANETIX AUDITED FINANCIAL STATEMENTS. As soon as
practicable, but in no event more than seventy-five calendar days from the
Closing Date, Organetix shall deliver to Diamond's counsel audited financial
statements prepared in accordance with generally accepted accounting principles.
SECTION 7.2 UNANIMOUS SHAREHOLDER APPROVAL. As soon as practicable, but
in no event later than the fifth business day following the Closing, Organetix
shall deliver to Diamond's counsel a shareholders' consent signed by all of the
Organetix Shareholders in a form acceptable to Diamond's counsel. A facsimile
copy of such shareholders' consent shall suffice for the purposes of satisfying
the time requirement under this Section 7.2.
SECTION 7.3 DIAMOND FINANCIAL STATEMENTS. As soon as practicable, but
in no event more than forty-five (45) calendar days from the Closing Date,
Diamond shall deliver to Organetix's counsel financial statements including
balance sheet, income statement, statement of cash flows and statement of
stockholders' equity prepared in accordance with generally accepted accounting
principals. Such financial statements shall reflect no material liabilities in
any form.
SECTION 7.4 ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT AGREEMENT AND TERM LOAN. At Closing,
Diamond shall provide to Organetix a letter from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ personally and
in his capacity as the President of H. Y. Applied Inter-Data Services, Inc.,
jointly and severally, indemnifying Organetix and Diamond from and against any
loss, liability, claim, damage or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating, preparing or
defending against and litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject, in connection with the
general security interest filed in Delaware on August 30, 2002 on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services, Inc. terminated ("▇▇▇▇▇▇▇ ▇▇▇▇▇
Security Interest"). Further, Diamond shall make all reasonable efforts to have
the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Security Interest terminated as promptly as possible.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 BROKERS AND FINDERS. Each party hereto hereby represents
and warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person not listed in
Schedule 8.1 for any commission, brokerage or finder's fee or other payment with
respect to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between the indemnifying party and such third
person, whether express or implied from the actions of the indemnifying party.
SECTION 8.2 LAW, FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of New York,
United States of America.
SECTION 8.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Diamond: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Organetix: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have given as of the date so delivered, mailed or telegraphed.
SECTION 8.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parities shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fee, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
SECTION 8.5 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not used such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
SECTION 8.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
SECTION 8.7 THIRD PARTY BENEFICIARIES.This contract is solely among
Organetix, Organetix Shareholders, Diamond and except as specifically provided,
no director, officer, stockholder, employee, agent, independent contractor or
any other person or entity shall be deemed to be a third party beneficiary of
this Agreement.
SECTION 8.8 ENTIRE AGREEMENT.This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except a set forth herein. This Agreement may not be amended or modified, except
by a written agreement signed by all parties hereto.
SECTION 8.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 12 months.
SECTION 8.10 COUNTERPARTS. This Agreements may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
SECTION 8.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
SECTION 8.12 INCORPORATION OF RECITALS.All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
SECTION 8.13 EXPENSES. Each party herein shall bear all of their
respective costs and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation thereof.
SECTION 8.14 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
SECTION 8.15 BENEFIT. This Agreement shall be binding upon and shall
insure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
SECTION 8.16 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
SECTION 8.17 FAILURE OF CONDITIONS; ▇▇▇▇▇▇▇▇▇▇▇.▇▇ the event of any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
SECTION 8.18 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against wither party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
SECTION 8.19 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprized of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written.
ATTEST: DIAMOND INTERNATIONAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PRESIDENT
MAJORITY SHAREHOLDER OF DIAMOND
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (4,442,481 SHARES)
ATTEST: ORGANETIX, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------- --------------------
L.B. (▇▇▇▇) ▇▇▇▇▇▇
PRESIDENT
MAJORITY SHAREHOLDER OF ORGANETIX
AMMA CORPORATION (11,550,000 SHARES)
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
L. B. (▇▇▇▇) ▇▇▇▇▇▇
PRESIDENT
EXHIBIT "A"
--------------------------------------
LIST OF ORGANETIX SHAREHOLDERS
--------------------------------------
Name # of Shares
---- -----------
