CORRECTION AGREEMENT
This Correction Agreement (this "Correction Agreement") is entered into as
of this 11th day of June, 1999 by and between XxXxxxxx.xxx, a Nevada corporation
("GoProfit"), the undersigned shareholders of GoProfit (collectively, the
"Shareholders"), and Diamond Equities, Inc., a Nevada corporation ("Diamond
Equities).
RECITALS
A. GoProfit, the Shareholders and Diamond Equities are parties to that
certain Stock Purchase Agreement, dated April 5, 1999 (the "Stock Purchase
Agreement"), pursuant to which all of the Shareholders exchanged their shares of
GoProfit for 600 shares of non-voting Class B Preferred Stock (the "Preferred
Stock") of Diamond Equities.
B. The 600 shares of Preferred Stock are convertible into 600,000 shares of
common stock of Diamond Equities.
C. The Stock Purchase Agreement explicitly states, and it has at all times
been the intention of all parties to the Stock Purchase Agreement, that the
exchange by the Shareholders of their shares of GoProfit for shares of Class B
Preferred Stock of Diamond Equities was to be a tax-free reorganization.
D. Since the date of the Stock Purchase Agreement, the parties have
determined that one of the requirements of a tax-free reorganization is that the
shares issued in such and exchange consist solely of voting shares of the
acquiring corporation.
E. Diamond Equities mistakenly issued non-voting share of Preferred Stock
to the undersigned Shareholders, which issuance will cause the transaction to be
in violation of one of the requirements of the tax-free reorganization
provisions of the Internal Revenue Code.
F. As a result of the mistake made by the parties to the Stock Purchase
Agreement, the parties to the Stock Purchase Agreement now desire to correct the
Stock Purchase Agreement and the transaction effected thereby, effective as of
the original date of the Stock purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties, and
agreements made herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GoProfit, the
Shareholders and Diamond Equities hereby agree as follows:
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1. Correction of Stock Purchase Agreement. The parties hereto agree that
the Stock Purchase Agreement is hereby corrected and amended, effective as of
April 5, 1999, to change to 600 shares of Preferred Stock received by the
Shareholders from Diamond Equities pursuant to the Stock Purchase Agreement to
600,000 shares of voting common stock of Diamond Equities. Each of the parties
hereto further agrees to hereafter treat the exchange effected under the Stock
Purchase Agreement, for all purposes, including tax reporting purposes,
financial accounting purposes, and SEC and OTC Bulleting Board reporting and
public disclosure purposes, as an exchange of GoProfit common stock for common
stock of Diamond Equities. In addition, the parties hereto agree to promptly
take all steps necessary and proper to correct the transaction effected by the
Stock Purchase Agreement, including without limitation, the following: (A) The
Shareholders agree to return all certificates of Preferred Stock received by
each of them under the Stock Purchase Agreement to Diamond Equities for
cancellation; (B) Diamond Equities agrees to (I) execute, deliver and/or file
any and all instruments, documents, notices or other agreements that reflect or
evidence the correction of the Stock Purchase Agreement, (ii) issue new
certificates to the Shareholders representing 600,000 shares of Diamond Equities
common stock, which certificates shall be dated as of Xxxxx 0, 0000, (xxx)
notify its transfer agent, and any other appropriate organization or agency, of
the correction of the Stock Purchase Agreement.
2. GoProfit and Shareholder Representation and Warranties. Each of the
Shareholders hereby severally represents and warrants to Diamond Equities as to
itself, that it still is the owner of all the shares of Preferred Stock that it
received pursuant to the Stock Purchase Agreement, and that such Shareholder has
not sold, transferred or pledged any of the shares of such Preferred Stock since
April 5, 1999.
3. Diamond Representations and Warranties. Diamond Equities represents and
warrants to each of GoProfit and the Shareholders as follows:
a. Corporate Existence and Power. Diamond Equities is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Nevada and has corporate power and authority to enter into this
Correction Agreement and the other documents to which it is a party and to
consummate the transactions contemplated hereby and thereby.
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b. Corporate Authorization of Diamond Equities. The execution,
delivery and performance by Diamond Equities of this correction Agreement and
any other documents delivered in connection with this correction Agreement, and
the consummation by Diamond Equities of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action. This
Correction Agreement, and each of the other transaction documents to which
Diamond Equities is a party, have been duly and validly executed by Diamond
Equities and constitutes the legal, valid and binding agreement of Diamond
Equities, enforceable against each Diamond Equities in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally.
c. Non-Contravention. The execution, delivery and performance by
Diamond Equities of this Correction Agreement and the other transaction
documents to which Diamond Equities is a party, and consummation of the
transactions contemplated hereby and thereby, do not and will not (a) contravene
or conflict with the certificate of incorporation or bylaws of Diamond Equities,
or (b) contravene or conflict with or constitute a violation of any material
provision of any applicable law binding upon or applicable to Diamond Equities.
d. Governmental Authorization. The execution, delivery and performance
by diamond Equities of this Correction Agreement and any of the other
transaction documents requires no action by, consent or approval of, or filing
with, any governmental authority.
e. Stock Issuance. All of the 600,000 shares of Diamond Equities'
common stock issued to the Shareholders pursuant to the Stock Purchase
Agreement, as corrected, are validly issued, outstanding, fully paid and
nonassessable shares of Diamond Equities common stock.
4. Public Announcements. Each party hereto agrees that, without the consent
of the other party, it will not, except as may be required by applicable law,
issue any press release or make any public statement with respect to this
Correction Agreement or the transactions contemplated hereby. The parties hereto
acknowledge that Diamond Equities is a public company and, accordingly, that it
may have to issue a press release regarding the Correction Agreement. In the
event that Diamond Equities does issue such a press release, Diamond Equities
hereby agrees to provide GoProfit with a copy of any such press release prior to
its issuance and, in good faith, to take into account any comments GoProfit may
reasonably have regarding the disclosure made in any such press release.
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5. Specific Performance. The parties hereto recognize and agree that in the
event of a breach by one party hereto of this Correction Agreement, money
damages would not be an adequate remedy to the other party for such breach and,
even if money damages were adequate, it would be impossible to ascertain or
measure with any degree of accuracy the damages sustained by the non-breaching
party therefrom. Accordingly, if there should be a breach or threatened breach
by one party of provisions of this Correction Agreement, the non-breaching party
or parties shall be entitled to an injunction restraining the breaching party
from any breach without showing or proving actual damage sustained by the
non-breaching party.
6. Further Assurances. Subject to the terms and conditions of this
Correction Agreement, each party will use all reasonable good faith efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or reasonably desirable under applicable law to consummate the
transactions contemplated by this Correction Agreement. The parties agree to
execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonably necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Correction Agreement.
7. Counterparts. This Correction Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
8. Cumulative Remedies. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
9. Third Party Beneficiaries. No provision of this Correction Agreement
shall create any third party beneficiary rights in any person, other than the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Correction
Agreement to be duly executed by them or by their respective authorized officers
as of the day and year first above written.
GP: Diamond:
GOPROFIT DIAMOND EQUITIES, INC.
a Nevada corporation a Nevada corporation
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------- ----------------------------------
Xxxxx Xxxxxxxxx, President Xxxxx X. Xxxxxxxx, President & CEO
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Xxxxx Xxxxxx, Secretary/Treasurer Xxxx X. Xxxxxxxx, Secretary/Treasurer
Page 12 of 18
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Seller:
SHAREHOLDERS OF GOPROFIT
By: /s/ By: /s/ Xxxxx Xxxxxxxxx
------------------------------- --------------------------------
GlobalVest Financial, Inc. (400,000) Xxxxx Xxxxxxxxx (400,000)
For and on behalf of
By: /s/ XXXXXXX LIMITED-Director By: /s/ Xxxx Xxxxxx
------------------------------- --------------------------------
Xxxx Development LTD (400,000) Xxxx Xxxxxx (400,000)
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxxx
------------------------------- --------------------------------
Xxxxx Xxxxxx (400,000) Xxxxx Xxxxxxxxx (400,000)
By: /s/
-------------------------------
For and on behalf of
XXXXXXXX LIMITED-Director
