PLAN AND AGREEMENT OF REORGANIZATION
AMONG
TELEMAX GLOBAL COMMUNICATIONS, INC.
AND
ORGANIK, INC.
AND
CERTAIN SHAREHOLDERS OF
TELEMAX GLOBAL COMMUNICATIONS, INC.
DATED NOVEMBER 16, 2001
EXHIBIT A TO FORM 13D
TABLE OF CONTENTS
Plan and Agreement of Reorganization .........................................3
Plan of Reorganization .......................................................3
Agreement .................................................................3
Section 1 - Transfer of Shares .........................................3
Section 2 - Issuance of Exchange Stock to TGCI Shareholders ............4
Section 3 - Closing ....................................................5
Section 4 - Representations and Warranties by TGCI and Certain
Shareholders................................................7
Section 5 - Representations and Warranties by Organik .................11
Section 6 - Access and Information ....................................16
Section 7 - Covenants of TGCI and Certain Shareholders ................16
Section 8 - Covenants of Organik ......................................18
Section 9 - Additional Covenants of the Parties .......................19
Section 10 - Survival of Representations, Warranties and Covenants ....20
Section 11 - Conditions Precedent to Obligations of Parties ...........20
Section 12 - Termination, Amendment, Waiver ...........................23
Section 13 - Miscellaneous ............................................25
Exhibit List ................................................................28
Schedule List ...............................................................28
2
PLAN AND AGREEMENT OF REORGANIZATION
This Plan and Agreement of Reorganization ("Agreement") is entered into
on this 16th day of November 2001 by and between ORGANIK TECHNOLOGIES, INC., a
Washington corporation ("Organik"), and TELEMAX GLOBAL COMMUNICATIONS, INC., an
Ontario, Canada, corporation ("TGCI"), and those persons listed in Exhibit A
hereto, being all of the shareholders of TGCI who own individually at least ten
percent (10%) of the outstanding stock of TGCI and together hold over fifty
percent (50%) of the outstanding stock of TGCI as of the date this Agreement is
executed.
PLAN OF REORGANIZATION
The transaction contemplated by this Agreement is intended to be a "tax
free" exchange as contemplated by the provisions of Sections 351 and
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code").
Organik will acquire up to 100% of TGCI's issued and outstanding common stock,
(no par value) in exchange for up to 9,000,000 shares of Organik's common stock,
no par value (after a 20-for-1 reverse stock split) (the "Exchange Stock"). Upon
the consummation of the exchange transaction and the issuance and transfer of
the Exchange Stock as set forth in Section 2 hereinbelow, TGCI Shareholders
would hold approximately ninety-one percent (91%) of the then-outstanding common
stock of Organik representing a controlling interest in Organik. The Exchange
Transaction will result in TGCI becoming a wholly-owned subsidiary of Organik.
Thereafter, Organik would expect to change its name to Telemax Global
Communications, Inc., or some other corporate name similar thereto.
AGREEMENT
Section 1
Transfer of Shares
1.1 All shareholders of TGCI (the "Shareholders" or the "TGCI
Shareholders"), as of the date of Closing as such term is defined in
Section 3 herein (the "Closing" or the "Closing Date"), shall transfer,
assign, convey and deliver to Organik on the Closing Date, certificates
representing one hundred percent (100%) of the TGCI Stock or such
lesser percentage as shall be acceptable to Organik, but in no event
less than ninety-five percent (95%) of the TGCI Stock. The transfer of
the TGCI Stock shall be made free and clear of all liens, mortgages,
pledges, encumbrances or charges, whether disclosed or undisclosed,
except as the TGCI Shareholders and Organik shall have otherwise agreed
in writing.
3
Section 2
Issuance of Exchange Stock to TGCI Shareholders
2.1 As consideration for the transfer, assignment, conveyance and delivery
of the TGCI Stock hereunder, Organik shall, at the Closing issue to the
TGCI Shareholders, pro rata in accordance with each Shareholder's
percentage ownership of TGCI immediately prior to the Closing,
certificates representing up to 9,000,000 shares of Organik Common
Stock. The parties intend that the Exchange Shares being issued will be
used to acquire all outstanding TGCI Shares. To the extent that less
than 100% of the TGCI Stock is acquired, the number of shares issuable
to those TGCI Shareholders who have elected to participate in the
exchange described in this Agreement (the "Exchange") shall increase
proportionately.
2.2 The issuance of the Exchange Stock shall be made free and clear of all
liens, mortgages, pledges, encumbrances or charges, whether disclosed
or undisclosed, except as the TGCI Shareholders and Organik shall have
otherwise agreed in writing. As provided herein, and immediately prior
to the Closing, but after the twenty-to-one (20:1) reverse stock split,
Organik shall have issued and outstanding: (i) not more than 900,000
shares of Common Stock; and (ii) shall not have more than 11,500 shares
of preferred stock issued and outstanding.
2.3 None of the Exchange Stock issued to the TGCI Shareholders, nor any of
the TGCI Stock transferred to Organik hereunder shall, at the time of
Closing, be registered under federal securities laws but, rather, shall
be issued pursuant to an exemption therefrom and be considered
"restricted stock" within the meaning of Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Act"). All of such shares
shall bear a legend worded substantially as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are 'restricted securities' as that term is defined in Rule
144 under the Act. The shares may not be offered for sale,
sold or otherwise transferred except pursuant to an exemption
from registration under the Act, the availability of which is
to be established to the satisfaction of the Company."
The respective transfer agents of Organik and TGCI shall annotate their
records to reflect the restrictions on transfer embodied in the legend
set forth above. There shall be no requirement that Organik register
the Exchange Stock under the Act, nor shall TGCI or the Shareholders be
required to register any TGCI Shares under the Act.
4
Section 3
Closing
3.1 Closing of Transaction. Subject to the fulfillment or waiver of the
-----------------------
conditions precedent set forth in Section 11 hereof, the Closing shall
take place on the Closing Date at the offices of Xxxxxxxxx Genshlea
Chediak Xxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxxxx Floor, Sacramento,
California, at 1:00 PM local time, or at such other time on the Closing
Date as TGCI and Organik may mutually agree in writing.
3.2 Closing Date. The Closing Date of the Exchange shall take place on a
-------------
date chosen by mutual agreement of TGCI and Organik within forty-five
(45) days from the date of this Agreement, or such later date upon
which TGCI and Organik may mutually agree in writing, or as extended
pursuant to subsection 12.1(b) hereinbelow.
3.3 Deliveries at Closing.
---------------------
(a) TGCI shall deliver or cause to be delivered to Organik at
Closing:
(1) certificates representing all shares, or an amount of
shares acceptable to Organik, of the TGCI Stock as
described in Section 1, each endorsed in blank by the
registered owner;
(2) an agreement from each Shareholder surrendering his
or her shares agreeing to a restriction on the
transfer of the Exchange Stock as described in
Section 2 hereof;
(3) a copy of a consent of TGCI's board of directors
authorizing TGCI to take the necessary steps toward
Closing the transaction described by this Agreement
in the form set forth in Exhibit B;
(4) a copy of a Certificate of Good Standing for TGCI
issued not more than thirty (30) days prior to
Closing by the Ontario, Canada, Secretary of State;
(5) an opinion of Xxxxxxxxx Genshlea, Chediak, Sproul,
counsel to TGCI, dated the Closing Date, in a form
deemed acceptable by Organik and its counsel;
(6) Articles of Incorporation and Bylaws of TGCI
certified as of the Closing Date by the President and
Secretary of TGCI;
(7) such other documents, instruments or certificates as
shall be reasonably requested by Organik or its
counsel.
5
(b) Organik shall deliver or cause to be delivered to TGCI at
Closing:
(1) a copy of a consent of Organik's board of directors
authorizing Organik to take the necessary steps
toward Closing the transaction described by this
Agreement in the form set forth in Exhibit C;
(2) a Secretary's Certification that the Agreement was
approved by the Organik shareholders at a Special
Shareholders Meeting duly held;
(3) a copy of a Certificate of Good Standing for Organik
issued not more than ten (10) days prior to Closing
by the Secretary of State of Washington;
(4) all of Organik's corporate records;
(5) executed bank forms for Organik bank accounts
reflecting a change in management and signatories to
said bank accounts;
(6) stock certificate(s) or a computer listing from
Organik's transfer agent representing the Exchange
Stock to be newly issued by Organik under this
Agreement, which certificates shall be in the names
of the appropriate TGCI Shareholders, each in the
appropriate denomination as described in Section 2;
(7) an opinion of Xxxxxxx X. Xxxxxxx, Esq., special
counsel to Organik, dated the Closing Date, in a form
deemed acceptable by TGCI and its counsel;
(8) Articles of Incorporation and Bylaws of Organik
certified as of the Closing Date by the President and
Secretary of Organik;
(9) written resignations of all officers and directors of
Organik to take effect after new directors, approved
by TGCI, are elected or appointed; and
(10) such other documents, instruments or certificates as
shall be reasonably requested by TGCI or its counsel.
3.4 Filings; Cooperation.
--------------------
(a) Prior to the Closing, the parties shall proceed with due
diligence and in good faith to make such filings and take such
other actions as may be necessary to satisfy the conditions
precedent set forth in Section 11 below.
(b) On and after the Closing Date, Organik, TGCI and the
Shareholders set forth in Exhibit A shall, on request and
6
without further consideration, cooperate with one another by
furnishing or using their best efforts to cause others to
furnish any additional information and/or executing and
delivering or using their best efforts to cause others to
execute and deliver any additional documents and/or
instruments, and doing or using their best efforts to cause
others to do any and all such other things as may be
reasonably required by the parties or their counsel to
consummate or otherwise implement the transactions
contemplated by this Agreement.
Section 4
Representations and Warranties by TGCI and Certain Shareholders
4.1 Subject to the schedule of exceptions, attached hereto and incorporated
herein by this reference, (which schedules shall be acceptable to
Organik), TGCI and those Shareholders listed on Exhibit A represent and
warrant to Organik as follows:
(a) Organization and Good Standing of TGCI. The Articles of
------------------------------------------
Incorporation of TGCI and all Amendments thereto as presently
in effect, certified by the Secretary of Ontario, Canada, and
the Bylaws of TGCI as presently in effect, certified by the
President and Secretary of TGCI, have been delivered to
Organik and are complete and correct and since the date of
such delivery, there has been no amendment, modification or
other change thereto.
(b) Capitalization. TGCI's authorized capital stock is unlimited
--------------
shares of Preferred Stock, no par value, none of which are
issued and outstanding prior to the Closing Date, and
unlimited shares of Common stock (defined as "TGCI Common
Stock"), of which 1,000,000 shares are issued and outstanding
prior to the Closing Date, and held of record by approximately
five (5) persons, who are currently residents of Ontario,
Canada. All of such outstanding shares are validly issued,
fully paid and non-assessable. There are no outstanding
options and warrants for TGCI Common Stock. All securities
issued by TGCI as of the date of this Agreement have been
issued in compliance with all applicable state, federal, or
Canadian laws. Except as set forth in Schedule 4.1(b), no
other equity securities or debt obligations of TGCI are
authorized, issued or outstanding.
(c) Subsidiaries. Other than Parsecom, Inc., and Telemax
------------
Communications, Inc., TGCI has no subsidiaries and no other
investments, directly or indirectly, or other financial
interest in any other corporation or business organization,
joint venture or partnership of any kind whatsoever.
7
(d) Financial Statements. TGCI will deliver to Organik, prior to
--------------------
Closing, a copy of TGCI's unaudited financial statements for
the year ended June 30, 2001, and for the three (3) months
ended September 30, 2001, which will be true and complete and
will have been prepared in conformity with generally accepted
accounting principles. Other than changes in the usual and
ordinary conduct of the business since September 30, 2001,
there have been and, at the Closing Date, there will be no
material adverse changes in such financial statements.
(e) Absence of Undisclosed Liabilities. TGCI has no liabilities
------------------------------------
which are not adequately reflected or reserved against in the
TGCI Financial Statements or otherwise reflected in this
Agreement and TGCI shall not have as of the Closing Date, any
liabilities (secured or unsecured and whether accrued,
absolute, direct, indirect or otherwise) which were incurred
after September 30, 2001, and would be individually or in the
aggregate, material to the results of operations or financial
condition of TGCI as of the Closing Date.
(f) Litigation. Except as disclosed in Schedule 4.1(f), there are
----------
no outstanding orders, judgments, injunctions, awards or
decrees of any court, governmental or regulatory body or
arbitration tribunal against TGCI or its properties. Except as
disclosed in Schedule 4.1(f), there are no actions, suits or
proceedings pending, or, to the knowledge of TGCI, threatened
against or affecting TGCI or its affiliated companies, any of
its officers or directors relating to their positions as such,
or any of its properties, at law or in equity, or before or by
any federal, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, in connection with the
business, operations or affairs of TGCI or its affiliated
companies which might result in any material adverse change in
the operations or financial condition of TGCI, or which might
prevent or materially impede the consummation of the
transactions under this Agreement.
(g) Compliance with Laws. To the best of its knowledge, the
----------------------
operations and affairs of TGCI do not violate any law,
ordinance, rule or regulation currently in effect, or any
order, writ, injunction or decree of any court or governmental
agency, the violation of which would substantially and
adversely affect the business, financial conditions or
operations of TGCI.
(h) Absence of Certain Changes. Except as set forth in Schedule
---------------------------
4.1(h), or otherwise disclosed in writing to Organik, since
September 30, 2001,
8
(i) TGCI has not entered into any material transaction;
(ii) there has been no change in the condition (financial
or otherwise), business, property, prospects, assets
or liabilities of TGCI as shown on the TGCI Financial
Statement, other than changes that both individually
and in the aggregate do not have a consequence that
is materially adverse to such condition, business,
property, prospects, assets or liabilities;
(iii) there has been no damage to, destruction of or loss
of any of the properties or assets of TGCI (whether
or not covered by insurance) materially and adversely
affecting the condition (financial or otherwise),
business, property, prospects, assets or liabilities
of TGCI;
(iv) TGCI has not declared, or paid any dividend or made
any distribution on its capital stock, redeemed,
purchased or otherwise acquired any of its capital
stock, granted any options to purchase shares of its
stock, or issued any shares of its capital stock
except in conjunction with the private placement
described in Schedule 4.1(h);
(v) there has been no material change, except in the
ordinary course of business, in the contingent
obligations of TGCI by way of guaranty, endorsement,
indemnity, warranty or otherwise;
(vi) there have been no loans made by TGCI to its
employees, officers or directors;
(vii) there has been no waiver or compromise by TGCI of a
valuable right or of a material debt owed to it;
(viii) there has been no extraordinary increase in the
compensation of any of TGCI's employees;
(ix) there has been no agreement or commitment by TGCI to
do or perform any of the acts described in this
Section 4.1(h); and
(x) there has been no other event or condition of any
character which might reasonably be expected either
to result in a material and adverse change in the
condition (financial or otherwise), business,
property, prospects, assets or liabilities of TGCI or
to impair materially the ability of TGCI to conduct
the business now being conducted.
(i) Employees. There are, except as disclosed in Schedule 4.1(i),
---------
no collective bargaining, bonus, profit sharing, compensation,
or other plans, agreements or arrangements between TGCI and
any of its directors, officers or employees and there is no
employment, consulting, severance or indemnification
arrangements, agreements or understandings between TGCI on the
one hand, and any current or former directors, officers or
employees of TGCI on the other hand.
9
(j) Assets. All of the assets reflected on the September 30, 2001,
------
TGCI Financial Statements or acquired and held as of the
Closing Date, will be owned by TGCI on the Closing Date.
Except as set forth in Schedule 4.1(j), TGCI owns outright and
has good and marketable title, or holds valid and enforceable
leases, to all of such assets. None of TGCI's equipment used
by TGCI in connection with its business has any material
defects and all of them are in all material respects in good
operating condition and repair, and are adequate for the uses
to which they are being put; none of TGCI's equipment is in
need of maintenance or repairs, except for ordinary, routine
maintenance and repair. TGCI represents that, except to the
extent disclosed in Schedule 4.1(j) to this Agreement or
reserved against on its balance sheet as of September 30,
2001, it is not aware of any accounts and contracts receivable
existing that in its judgment would be uncollectible.
(k) Tax Matters. All federal, foreign, state and local tax
------------
returns, reports and information statements required to be
filed by or with respect to the activities of TGCI have been
timely filed. Since September 30, 2001, TGCI has not incurred
any liability with respect to any federal, foreign, state or
local taxes except in the ordinary and regular course of
business. Such returns, reports and information statements are
true and correct in all material respects insofar as they
relate to the activities of TGCI. On the date of this
Agreement, TGCI is not delinquent in the payment of any such
tax or assessment, and no deficiencies for any amount of such
tax have been proposed or assessed.
(l) Operating Authorities. To the best knowledge of TGCI, TGCI has
---------------------
all material operating authorities, governmental certificates
and licenses, permits, authorizations and approvals
("Permits") required to conduct its business as presently
conducted. Such Permits are set forth on Schedule 4.1(l).
Since TGCI's inception, there has not been any notice or
adverse development regarding such Permits; such Permits are
in full force and effect; no material violations are or have
been recorded in respect of any permit; and no proceeding is
pending or threatened to revoke or limit any Permit.
(m) Continuation of Key Management. To the best knowledge of TGCI,
------------------------------
all key management personnel of TGCI intend to continue their
employment with TGCI after the Closing. For purposes of this
subsection 4.1(m), "key management personnel" shall include
Xxxx Xxxxxx, Manu Missaghie, Xxx XxXxxxxx, and Xxxx Missaghie.
(n) Books and Records. The books and records of TGCI are complete
-----------------
and correct, are maintained in accordance with good business
practice and accurately present and reflect, in all material
10
respects, all of the transactions therein described, and there
have been no transactions involving TGCI which properly should
have been set forth therein and which have not been accurately
so set forth.
(o) Authority to Execute Agreement. The Board of Directors of
--------------------------------
TGCI, pursuant to the power and authority legally vested in
it, has duly authorized the execution and delivery by TGCI of
this Agreement, and has duly authorized each of the
transactions hereby contemplated. TGCI has the power and
authority to execute and deliver this Agreement, to consummate
the transactions hereby contemplated and to take all other
actions required to be taken by it pursuant to the provisions
hereof. TGCI has taken all actions required by law, its
Articles of Incorporation, as amended, or otherwise to
authorize the execution and delivery of this Agreement. This
Agreement is valid and binding upon TGCI and those
Shareholders listed in Exhibit A hereto in accordance with its
terms. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby
will constitute a violation or breach of the Articles of
Incorporation, as amended, or the Bylaws, as amended, of TGCI,
or any agreement, stipulation, order, writ, injunction,
decree, law, rule or regulation applicable to TGCI.
(p) Finder's Fees. TGCI is not, and on the Closing Date will not
--------------
be liable or obligated to pay any finder's, agent's or
broker's fee arising out of or in connection with this
Agreement or the transactions contemplated by this Agreement.
4.2 Disclosure. At the date of this Agreement, TGCI and those Shareholders
----------
listed in Exhibit A have, and at the Closing Date they will have,
disclosed all events, conditions and facts materially affecting the
business and prospects of TGCI. TGCI and such Shareholders have not now
and will not have at the Closing Date, withheld knowledge of any such
events, conditions or facts which they know, or have reasonable grounds
to know, may materially affect TGCI's business and prospects. Neither
this Agreement nor any certificate, exhibit, schedule or other written
document or statement, furnished to Organik by TGCI and/or by such
Shareholders in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to be
stated in order to make the statements contained herein or therein not
misleading.
Section 5
Representations and Warranties by Organik
5.1 Subject to the schedule of exceptions, attached hereto and incorporated
herein by this reference, (which schedules shall be acceptable to
11
TGCI), Organik represents and warrants to TGCI and those Shareholders
listed in Exhibit A as follows:
(a) Organization and Good Standing. Organik is currently a
---------------------------------
corporation duly organized, validly existing and in good
standing under the laws of the State of Washington and has
full corporate power and authority to own or lease its
properties and to carry on its business as now being conducted
and as proposed to be conducted. Prior to the Closing Date
Organik shall reincorporate in the State of Nevada. Organik is
qualified to conduct business as a foreign corporation in no
other jurisdiction, and the failure to so qualify in any other
jurisdiction does not materially, adversely affect the ability
of Organik to carry on its business as most recently
conducted. The Articles of Incorporation of Organik and all
amendments thereto as presently in effect, certified by the
Secretary of State of Washington, and the Bylaws of Organik as
presently in effect, certified by the President and Secretary
of Organik, have been delivered to TGCI and are complete and
correct and since the date of such delivery, there has been no
amendment, modification or other change thereto.
(b) Capitalization. Organik's authorized capital stock consists of
--------------
50,000,000 shares of no par value Common stock (defined above
as "Organik Common Stock"), approximately 17,400,000 of which
are issued and outstanding, prior to a reverse stock split and
prior to Closing Date and held of record by approximately 750
shareholders, and 10,000,000 shares of Preferred Stock, no par
value, of which 11,500 shares are issued and outstanding. All
authorized and/or outstanding options and warrants are set
forth on Schedule 5.1(b). Except as set forth in Schedule
5.1(b), no other equity securities or debt obligations of
Organik are authorized, issued or outstanding and as of the
Closing, there will be no other outstanding options, warrants,
agreements, contracts, calls, commitments or demands of any
character, preemptive or otherwise, other than this Agreement,
relating to any of the Organik Common Stock, and there will be
no outstanding security of any kind convertible into Organik
Common Stock. The shares of Organik Common Stock are free and
clear of all liens, charges, claims, pledges, restrictions and
encumbrances whatsoever of any kind or nature that would
inhibit, prevent or otherwise interfere with the transactions
contemplated hereby. All of the outstanding Organik Common
Stock are validly issued, fully paid and nonassessable and
there are no voting trust agreements or other contracts,
agreements or arrangements restricting or affecting voting or
dividend rights or transferability with respect to the
outstanding shares of Organik Common Stock.
(c) Issuance of Exchange Stock. All of the Organik Common Stock to
--------------------------
be issued to or transferred to TGCI Shareholders pursuant to
this Agreement, when issued, transferred and delivered as
12
provided herein, will be duly authorized, validly issued,
fully paid and nonassessable, and will be free and clear of
all liens, charges, claims, pledges, restrictions and
encumbrances whatsoever of any kind or nature, except those
restrictions imposed by State or Federal corporate and
securities regulations.
(d) Shareholder Approval. Organik will use its best efforts to
---------------------
forthwith obtain any approval of the transaction set forth in
this Agreement by its outstanding shares required by the
General Corporation Law of Washington.
(e) No Violation. Neither the execution and delivery of this
-------------
Agreement nor the consummation of the transactions
contemplated hereby nor compliance by Organik with any of the
provisions hereof will:
(1) violate or conflict with, or result in a breach of
any provisions of, or constitute a default ( or an
event which, with notice or lapse of time or both,
would constitute a default) under, any of the terms,
conditions or provisions of the Articles of
Incorporation or Bylaws of Organik or any note, bond,
mortgage, indenture, deed of trust, license,
agreement or other instrument to which Organik is a
party, or by which it or its properties or assets may
be bound or affected; or
(2) violate any order, writ, injunction or decree, or any
statute, rule, permit, or regulation applicable to
Organik or any of its properties or assets.
(f) Subsidiaries. Organik has no subsidiaries and no investments,
------------
directly or indirectly, or other financial interest in any
other corporation or business organization, joint venture or
partnership of any kind whatsoever.
(g) Financial Statements. Organik will deliver to TGCI prior to
---------------------
Closing, copies of all of Organik's audited and unaudited
financial statements through September 30, 2001, all of which
are true and complete and have been prepared in accordance
with generally accepted accounting principles.
(h) SEC Filings. Organik will deliver to TGCI prior to Closing,
------------
copies of all of Organik's filings made during the year 2001
with the Securities and Exchange Commission ("SEC") including
Forms 10-KSB and 10-QSB and any proxy material.
13
(i) Absence of Certain Changes. Organik is engaged in no business
--------------------------
and conducts no operations except the identification and
investigation of potential candidates for a business
combination. Since September 30, 2001 there has been no
material change in Organik's financial conditions, assets or
liabilities, except as set forth in Schedule 5.1(i).
(j) Absence of Undisclosed Liabilities. Except as disclosed in
------------------------------------
Organik's Financial Statements, Organik did not have, as of
the Closing Date, any liabilities (secured or unsecured and
whether accrued, absolute, direct, indirect or otherwise)
which were incurred after September 30, 2001, and would be
individually or in the aggregate, material to the results of
operation or financial condition of Organik.
(k) Litigation. There are no outstanding orders, judgments,
----------
injunctions, awards or decrees of any court, governmental or
regulatory body or arbitration tribunal against Organik or its
properties. There are no actions, suits or proceedings
pending, or, to the knowledge of Organik, threatened against
or relating to Organik. Organik is not, and on the Closing
Date will not be, in default under or with respect to any
judgment, order, writ, injunction or decree of any court or of
any federal, state, municipal or other governmental authority,
department, commission, board, agency or other
instrumentality; and Organik has, and on the Closing Date will
have, complied in all material respects with all laws, rules,
regulations and orders applicable to it, if any.
(l) Contracts. Organik is not a party to any contract, nor is
---------
Organik a party to any written or oral commitment for capital
expenditures except as contemplated by this Agreement. Organik
is not a party to, nor is its property bound by any written or
oral, express or implied, agreement, contract or other
contractual obligation including, without limitation, any real
or personal property leases, any employment agreements, any
consulting agreements, any personal services agreements or any
other agreements that require Organik to pay any money or
deliver any assets or services. Organik has in all material
respects performed all obligations required to be performed by
it to date and is not in default in any material respect under
any agreements or other documents to which it was a party.
(m) Tax Matters. Except as set forth in Schedule 5.1(l), all
------------
federal, foreign, state and local tax returns, reports and
information statements required to be filed by or with respect
to the activities of Organik have been filed for all the years
and periods for which such returns and statements were due,
including extensions thereof. Since September 30, 2001,
Organik has not incurred any liability with respect to any
14
federal, foreign, state or local taxes except in the ordinary
and regular course of business. Such returns, reports and
information statements are true and correct in all material
respects insofar as they relate to the activities of Organik.
On the date of this Agreement, Organik is not delinquent in
the payment of any such tax or assessment, and no deficiencies
for any amount of such tax have been proposed or assessed. Any
tax sharing agreement among or between Organik and any
affiliate thereof shall be terminated as of the Closing Date.
(n) Authority to Execute Agreement. The Board of Directors of
--------------------------------
Organik, pursuant to the power and authority legally vested in
it, has duly authorized the execution and delivery by Organik
of this Agreement and the Exchange Stock, and has duly
authorized each of the transactions hereby contemplated.
Organik has the power and authority to execute and deliver
this Agreement, to consummate the transactions hereby
contemplated and to take all other actions required to be
taken by it pursuant to the provisions hereof. Organik has
taken all the actions required by law, its Certificate of
Incorporation, as amended, its Bylaws, as amended, applicable
state law or otherwise to authorize the execution and delivery
of the Exchange Stock pursuant to the provisions hereof. This
Agreement is valid and binding upon Organik in accordance with
its terms.
(o) Finder's Fees. Other than 250,000 (post-split) shares issuable
-------------
to Crosspointe and 250,000 (post-split) shares issuable to
Xxxx Pharmaceutical, Organik is not, and on the Closing Date,
will not be liable or obligated to pay any finder's, agent's
or broker's fee arising out of or in connection with this
Agreement or the transactions contemplated by this Agreement.
(p) Books and Records. The books and records of Organik are
------------------
complete and correct, are maintained in accordance with good
business practice and accurately present and reflect in all
material respects, all of the transactions therein described
and there have been no transactions involving Organik which
properly should have been set forth therein and which have not
been accurately so set forth.
5.2 Disclosure. Organik has and at the Closing Date it will have, disclosed
----------
all events, conditions and facts materially affecting the business and
prospects of Organik. Organik has not now and will not have at the
Closing Date, withheld knowledge of any such events, conditions and
facts which it knows, or has reasonable grounds to know, may materially
affect Organik's business and prospects. Neither this Agreement, nor
any certificate, exhibit, schedule or other written document or
statement, furnished to TGCI or the TGCI Shareholders by Organik in
connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact or
15
omits or will omit to state a material fact necessary to be stated in
order to make the statements contained herein or therein not
misleading.
Section 6
Access and Information
6.1 As to TGCI. Subject to the protections provided by subsection 9.4
----------
herein, TGCI shall give to Organik and to Organik's counsel,
accountants and other representatives full access during normal
business hours throughout the period prior to the Closing, to all of
TGCI's properties, books, contracts, commitments, and records,
including information concerning products and customer base, and
patents held by, or assigned to, TGCI, and furnish Organik during such
period with all such information concerning TGCI's affairs as Organik
reasonably may request.
6.2 As to Organik. Subject to the protections provided by subsection 9.4
-------------
herein, Organik shall give to TGCI, the TGCI Shareholders and their
counsel, accountants and other representatives, full access, during
normal business hours throughout the period prior to the Closing, to
all of Organik's properties, books, contracts, commitments, and
records, if any, and shall furnish TGCI and the TGCI Shareholders
during such period with all such information concerning Organik's
affairs as TGCI and the TGCI Shareholders reasonably may request.
Section 7
Covenants of TGCI and Certain Shareholders
7.1 No Solicitation. For a period of forty-five (45) days from the date of
---------------
this Agreement, TGCI and those Shareholders listed on Exhibit A, to the
extent within each Shareholder's control, will use their best efforts
to cause its officers, employees, agents and representatives not,
directly or indirectly, to solicit, encourage, or initiate any
discussions with, or indirectly to solicit, encourage, or initiate any
discussions with or to any person or entity other than Organik and its
officers, employees, and agents, concerning any merger, sale of
substantial assets, or similar transaction involving TGCI, or any sale
of any of its capital stock or of the capital stock held by such
Shareholders in excess of fifty percent (50%) of such Shareholder's
current stock holdings except as otherwise disclosed in this Agreement.
TGCI will notify Organik immediately upon receipt of an inquiry, offer,
or proposal relating to any of the foregoing. None of the foregoing
shall prohibit providing information to others in a manner in keeping
with the ordinary conduct of TGCI's business, or providing information
to government authorities.
7.2 Conduct of Business Pending the Transaction. TGCI and those
---------------------------------------------------
Shareholders listed on Exhibit A, to the extent within each
16
Shareholder's control, covenant and agree with Organik that, prior to
the consummation of the transaction called for by this Agreement, and
Closing, or the termination of this Agreement pursuant to its terms,
unless Organik shall otherwise consent in writing, and except as
otherwise contemplated by this Agreement, TGCI and those Shareholders
listed on Exhibit A, to the extent within each Shareholder's control,
will comply with each of the following:
(a) Its business shall be conducted only in the ordinary and usual
course. TGCI shall use reasonable efforts to keep intact its
business organization and good will, keep available the
services of its respective officers and employees, and
maintain good relations with suppliers, creditors, employees,
customers, and others having business or financial
relationships with it, and it shall immediately notify Organik
of any event or occurrence which is material to, and not in
the ordinary and usual course of business of, TGCI.
(b) It shall not (i) amend its Articles of Incorporation or Bylaws
or (ii) split, combine, or reclassify any of its outstanding
securities, or declare, set aside, or pay any dividend or
other distribution on, or make or agree or commit to make any
exchange for or redemption of any such securities payable in
cash, stock or property.
(c) It shall not, except as described in the next sentence, (i)
issue or agree to issue any additional shares of, or rights of
any kind to acquire any shares of, its capital stock of any
class, or (ii) enter into any contract, agreement, commitment,
or arrangement with respect to any of the foregoing, except as
set forth in this Agreement. TGCI has committed to issue
500,000 (post-split) shares of Organik common stock to
Xxxxxxxxx Financial Communications, Inc., in conjunction with
the rendering of investor relations services to TGCI.
(d) It shall not create, incur, or assume any long-term or
short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, except in
the ordinary course of business and consistent with past
practice.
(e) It shall not (i) adopt, enter into, or amend any bonus, profit
sharing, compensation, stock option, warrant, pension,
retirement, deferred compensation, employment, severance,
termination or other employee benefit plan, agreement, trust
fund, or arrangement for the benefit or welfare of any
officer, director, or employee, or (ii) agree to any material
(in relation to historical compensation) increase in the
compensation payable or to become payable to, or any increase
in the contractual term of employment of, any officer,
director or employee except, with respect to employees who are
not officers or directors, in the ordinary course of business
in accordance with past practice, or with the written approval
of Organik.
17
(f) It shall not sell lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets or
properties except for: (i) sales, encumbrances, and other
dispositions or grants in the ordinary course of business and
consistent with past practice; (ii) liens for taxes not yet
due; (iii) liens or encumbrances that are not material in
amount or effect and do not impair the use of the property, or
(iv) as specifically provided for or permitted in this
Agreement.
(g) It shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect
to any of the matters referred to in subparagraphs (a) through
(f) above.
(h) It will continue properly and promptly to file when due all
federal, state, local, foreign, and other tax returns,
reports, and declarations required to be filed by it, and will
pay, or make full and adequate provision for the payment of,
all taxes and governmental charges due from or payable by it.
(i) It will comply with all laws and regulations applicable to it
and its operations.
(j) TGCI agrees, immediately following the Closing of this
Agreement, to use its best efforts to amend Organik's
Certificate of Incorporation to change Organik's name to
"Telemax Global Communications, Inc.," or to a name that is
substantially similar.
Section 8
Covenants of Organik
8.1 No Solicitation. For a period of forty-five (45) days from the date of
---------------
this Agreement, Organik will not discuss or negotiate with any other
corporation, firm or other person or entertain or consider any
inquiries or proposals relating to the possible disposition of its
shares of capital stock, or its assets, and will conduct business only
in the ordinary course. Notwithstanding the foregoing, Organik shall be
free to engage in activities mentioned in the preceding sentence which
are designed to further the mutual interests of the parties to this
Agreement.
8.2 Conduct of Organik Pending Closing. Organik covenants and agrees with
----------------------------------
TGIC that, prior to the consummation of the transactions called for by
this Agreement, and Closing, or the termination of this Agreement
pursuant to its terms, unless TGIC shall otherwise consent in writing,
and except as otherwise contemplated by this Agreement, Organik will
comply with each of the following.
(a) No change will be made in Organik's Certificate of
Incorporation or Bylaws or in Organik's authorized or issued
18
shares of stock, except as contemplated in this Agreement or
as may be first approved in writing by TGIC.
(b) No dividends shall be declared, no stock options granted and
no employment agreements shall be entered into with officers
or directors in Organik, except as may be first approved in
writing by TGIC.
(c) Organik will use its best efforts to resolve any and all
liabilities, obligations or commitments such that as of the
Closing Date Organik shall have no liabilities, contingent or
otherwise, then existing.
8.3 Organik Filings Under the Exchange Act. Organik will prepare and file
---------------------------------------
all forms and documents required to bring itself current with its
obligations under the Exchange Act. Organik will use its best efforts
to ascertain and fully comply with all requests and/or requirements of
the SEC staff in order to properly reestablish Organik's filing status
with the SEC. Organik will also use its best efforts to (i) obtain SEC
staff confirmation that such filings referred to above are acceptable
in form to the SEC staff and (ii) obtain assurances that no enforcement
action or other adverse action is contemplated by the SEC staff against
Organik as a result of its Exchange Act filing delinquencies.
Section 9
Additional Covenants of the Parties
9.1 Cooperation. Both TGCI and Organik will cooperate with each other and
-----------
their respective counsel, accountants and agents in carrying out the
transaction contemplated by this Agreement, and in preparing and
delivering all documents and instruments deemed reasonably necessary or
useful by the other party.
9.2 Expenses. Each of the parties hereto shall pay all of its respective
--------
costs and expenses (including attorneys' and accountants' fees, costs
and expenses) incurred in connection with this Agreement and the
consummation of the transactions contemplated herein.
9.3 Publicity. Prior to the Closing, any written news releases or public
---------
disclosure by either party pertaining to this Agreement shall be
submitted to the other party for its review and approval prior to such
release or disclosure, provided, however, that (a) such approval shall
not be unreasonably withheld, and (b) such review and approval shall
not be required of disclosures required to comply, in the judgment of
counsel, with federal or state securities or corporate laws or
policies.
9.4 Confidentiality. While each party is obligated to provide access to and
---------------
furnish information in accordance with Sections 6 herein, it is
19
understood and agreed that such disclosure and information subsequently
obtained as a result of such disclosures are proprietary and
confidential in nature. Each party agrees to hold such information in
confidence and not to reveal any such information to any person who is
not a party to this Agreement, or an officer, director or key employee
thereof, and not to use the information obtained for any purpose other
than assisting in its due diligence inquiry in conjunction with the
transactions contemplated by this Agreement. Upon request of any party,
a confidentiality agreement, acceptable to the disclosing party, will
be executed by any person selected to receive such proprietary
information, prior to receipt of such information.
Section 10
Survival of Representations, Warranties and Covenants
10.1 The representations, warranties and covenants of TGIC and those
Shareholders listed in Exhibit A contained herein shall survive the
execution and delivery of this Agreement, the Closing and the
consummation of the transactions called for by this Agreement. The
representations, warranties and covenants of Organik contained herein
shall survive the execution and delivery of this Agreement, the Closing
and the consummation of the transactions called for by this Agreement.
Section 11
Conditions Precedent to Obligations of Parties
11.1 Conditions to Obligations of the Parties. The obligations of Organik,
----------------------------------------
TGCI and those Shareholders listed in Exhibit A under this Agreement
shall be subject to the fulfillment, on or prior to the Closing, of all
conditions elsewhere herein set forth, including, but not limited to,
receipt by the appropriate party of all deliveries required by Sections
4 and 5 herein, and fulfillment, prior to Closing, of each of the
following conditions:
(a) All representations and warranties made by TGCI Shareholders
listed in Exhibit A and Organik in this Agreement shall be
true and correct in all material respects on and as of the
Closing Date with the same effect as if such representations
and warranties had been made on and as of the Closing Date.
(b) TGCI Shareholders listed in Exhibit A and Organik shall have
performed or complied with all covenants, agreements and
conditions contained in this Agreement on their part required
to be performed or complied with at or prior to the Closing.
(c) All material authorizations, consents or approvals of any and
all governmental regulatory authorities necessary in
connection with the consummation of the transactions
contemplated by this Agreement shall have been obtained and be
in full force and effect.
20
(d) The Closing shall not violate any permit or order, decree or
judgment of any court or governmental body having competent
jurisdiction and there shall not have been instituted any
legal or administrative action or proceeding to enjoin the
transaction contemplated hereby or seeking damages from any
party with respect thereto.
(e) Each party shall have received favorable opinions from the
other party's counsel on such matters in connection with the
transactions contemplated by this Agreement as are reasonable.
(f) Each party shall have satisfied itself that since the date of
this Agreement the business of the other party has been
conducted in the ordinary course. In addition, each party
shall have satisfied itself that no withdrawals of cash or
other assets have been made and no indebtedness has been
incurred since the date of this Agreement, except in the
ordinary course of business or with respect to services
rendered or expenses incurred in connection with the Closing
of this Agreement, unless said withdrawals or indebtedness
were either authorized by the terms of this Agreement or
subsequently consented to in writing by the parties.
(g) Each party covenants that, to the best of its knowledge, it
has complied in all material respects with all applicable
laws, orders and regulations of federal, state, municipal
and/or other governments and/or any instrumentality thereof,
domestic or foreign, applicable to their assets, to the
business conducted by them and to the transactions
contemplated by this Agreement.
(h) Each party shall have granted to the other party (acting
through its management personnel, counsel, accountants or
other representatives designated by it) full opportunity to
examine its books and records, properties, plants and
equipment, proprietary rights and other instruments, rights
and papers of all kinds in accordance with Section 6 hereof,
and each party shall be satisfied to proceed with the
transactions contemplated by this Agreement upon completion of
such examination and investigation.
(i) Organik shall have obtained all necessary Blue Sky and
Canadian approvals or exemptions for the issuance of the
Exchange Stock required prior to the Closing Date.
(j) Organik and TGCI shall agree to indemnify each other party
against any liability to any broker or finder to which that
party may become obligated.
(k) The Exchange shall be approved by the Boards of Directors of
both TGCI and Organik.
(l) Organik and TGCI and their respective legal counsel shall have
received copies of all such certificates, opinions and other
documents and instruments as each party or its legal counsel
21
may reasonably request pursuant to this Agreement or otherwise
in connection with the consummation of the transactions
contemplated hereby, and all such certificates, opinions and
other documents and instruments received by each party shall
be reasonably satisfactory, in form and substance, to each
party and its legal counsel.
(m) Both TGCI and Organik shall have the right to waive any or all
of the conditions precedent to its obligations hereunder not
otherwise legally required; provided, however, that no waiver
by a party of any condition precedent to its obligations
hereunder shall constitute a waiver by such party of any other
condition.
(n) Both TGCI and Organik shall have made best efforts to
structure the Exchange to qualify as a tax-free reorganization
under Section 368(a)(1)(B) of the Code.
11.2 Conditions to Obligations of Organik. The obligations of Organik to
--------------------------------------
consummate the transactions contemplated herein are subject to
satisfaction (or waiver by it) of the following conditions:
(a) Each TGCI Shareholder acquiring Exchange Stock will be
required, at Closing, to submit an agreement confirming that
all the Exchange Stock received will be acquired for
investment and not with a view to, or for sale in connection
with, any distribution thereof, and agreeing not to transfer
any of the Exchange Stock for a period of two years from the
date of the Closing, except for those transfers falling within
an exemption from registration under the Securities Act of
1933 and any applicable state securities laws, which transfers
do not constitute a public distribution of securities, and in
which the transferees execute an investment letter in form and
substance satisfactory to counsel for Organik. The foregoing
provision shall not prohibit the registration of those shares
at any time following the Closing. Each TGCI Shareholder
acquiring Exchange Stock will be required to transfer to
Organik at the Closing his/her respective TGCI Shares, free
and clear of all liens, mortgages, pledges, encumbrances or
changes, whether disclosed or undisclosed.
(b) All schedules prepared by TGCI shall be current or updated as
necessary as of the Closing Date.
(c) TGCI shall have provided, as of a date within thirty (30) days
of Closing, an update on any material change in the
aforementioned financial statements.
(d) If Shareholders, who in the aggregate own five percent (5%) or
more of the TGCI Shares, dissent from the proposed share
exchange, or are unable or for any reason refuse to transfer
any or all of their TGCI Shares to Organik in accordance with
Section 1 of this Agreement, Organik, at its option, may
terminate this Agreement.
22
11.3 Conditions to Obligation of TGCI and the TGCI Shareholders. The
-----------------------------------------------------------------
obligations of TGCI and the TGCI Shareholders listed in Exhibit A to
consummate the transactions contemplated herein are subject to
satisfaction (or waiver by them) of the following conditions:
(a) Organik shall have provided to TGCI through September 30,
2001, all unaudited financial statements prepared in
accordance with generally accepted accounting principles by
independent accountants of Organik and such financial
statements shall show no outstanding liabilities.
(b) The Exchange shall be approved by the shareholders of Organik,
if deemed necessary or appropriate by counsel for the same,
within thirty (30) days following execution of this Agreement.
If such a meeting is deemed necessary, the management of
Organik agree to recommend approval to their respective
Shareholders and to solicit proxies in support of the same.
Any disclosure material to be provided to the Organik
Shareholders shall be prepared and filed with the SEC as
required by the SEC Proxy Rules and Regulations.
(c) Organik shall have completed, prior to the Closing, a
twenty-for-one (20:1) reverse stock split of all outstanding
Organik common stock.
(d) Subject to the Closing, shareholders of Organik shall have
approved a name change to "Telemax Global Communications,
Inc.," or to a name that is substantially similar.
Section 12
Termination, Amendment, Waiver
12.1 This Agreement may be terminated at any time prior to the Closing, and
the contemplated transactions abandoned, without liability to either
party, except with respect to the obligations of Organik, TGCI and
those Shareholders listed in Exhibit A, under Section 9.4 hereof:
(a) By mutual agreement of Organik and TGCI;
(b) If the Closing (as defined in Section 3) shall not have taken
place on or prior to December 15, 2001, this Agreement can be
terminated upon written notice given by Organik or TGCI which
is not in material default;
(c) By Organik, if in its reasonable believe there has been a
material misrepresentation or breach of warranty on the part
of any Shareholder listed in Exhibit A in the representations
and warranties set forth in the Agreement.
(d) By TGCI or a majority of those Shareholders listed in Exhibit
A (as measured by their equity interest) if, in the reasonable
belief of TGCI or any such Shareholders, there has been a
material misrepresentation or breach of warranty on the part
of Organik in the representations and warranties set forth in
the Agreement;
23
(e) By Organik if, in its opinion or that of its counsel, the
Exchange does not qualify for exemption from registration
under applicable federal and state securities laws, or
qualification, if obtainable, cannot be accomplished in
Organik's opinion or that of its counsel, without unreasonable
expense or effort;
(f) By Organik or by a majority of those Shareholders listed in
Exhibit A (as measured by their equity interest) if either
party shall determine in its sole discretion that the Exchange
has become inadvisable or impracticable by reason of the
institution or threat by state, local or federal governmental
authorities or by any other person of material litigation or
proceedings against any party [it being understood and agreed
that a written request by a governmental authority for
information with respect to the Exchange, which information
could be used in connection with such litigation or
proceedings, may be deemed to be a threat of material
litigation or proceedings regardless of whether such request
is received before or after the signing of this Agreement];
(g) By Organik if the business or assets or financial condition of
TGCI, taken as a whole, have been materially and adversely
affected, whether by the institution of litigation or by
reason of changes or developments or in operations in the
ordinary course of business or otherwise; or, by a majority of
those Shareholders listed in Exhibit A (as measured by their
equity interest) if the business or assets or financial
condition of Organik, taken as a whole, have been materially
and adversely affected, whether by the institution of
litigation or by reason of changes or developments or in
operations in the ordinary course of business or otherwise;
(h) By Organik if holders of five percent (5%) or more of the TGCI
Shares fail to tender their stock at the Closing of the
Exchange;
(i) By Organik or TGCI if, in the opinion of Organik's independent
accountants, it should appear that the combined entity will
not be auditable to SEC accounting standards;
(j) By TGCI if Organik fails to perform material conditions set
forth in Subsections 11.1 and 11.3 herein;
(k) By TGCI if examination of Organik's books and records pursuant
to Section 5 herein uncovers a material deficiency;
(l) By Organik if TGCI fails to perform material conditions set
forth in Subsections 11.1 and 11.2 herein; and
(m) By Organik if examination of TGCI's books and records pursuant
to Section 4 herein uncovers a material deficiency.
24
12.2 No modification or amendment of any provision of this Agreement shall
be effective unless specifically made in writing and duly signed by the
party to be bound thereby.
12.3 Neither this Agreement nor any provision herein may be waived except by
an instrument in writing signed by all parties hereto. No action taken
by any party after the date hereof, including without limitation any
investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance by
any other party with any representations, warranties, covenants or
agreements contained in this Agreement.
Section 13
Miscellaneous
13.1 Entire Agreement. This Agreement (including the Exhibits and Schedules
----------------
hereto) contains the entire agreement between the parties with respect
to the transactions contemplated hereby, and supersedes all
negotiations, representations, warranties, commitments, offers,
contracts, and writings prior to the date hereof.
13.2 Binding Agreement.
-----------------
(a) This Agreement shall become binding upon the parties when, but
only when, it shall have been signed on behalf of all parties.
(b) Subject to the condition stated in subsection (a), above, this
Agreement shall be binding upon, and inure to the benefit of,
the respective parties and their legal representatives,
successors and assigns. This Agreement, in all of its
particulars, shall be enforceable by the means set forth in
subsection 13.9 for the recovery of damages or by way of
specific performance and the terms and conditions of this
Agreement shall remain in full force and effect subsequent to
Closing and shall not be deemed to be merged into any
documents conveyed and delivered at the time of Closing. In
the event that subsection 13.9 is found to be unenforceable as
to any party for any reason or is not invoked by any party,
and any person is required to initiate any action at law or in
equity for the enforcement of this Agreement, the prevailing
party in such litigation shall be entitled to recover from the
party determined to be in default, all of its reasonable costs
incurred in said litigation, including attorneys' fees.
13.3 Shareholders Owning at Least Ten Percent (10%) of the Outstanding
-----------------------------------------------------------------------
Common Stock of TGCI. The Shareholders owning at least 10% of the
---------------------
outstanding common stock of TGCI (see Exhibit A hereto) are only
executing this Agreement with respect to Sections 3.4, 4, 7, 9.4, 10,
11.1 and 11.3, 12.1(d and f ), 13.2, 13.3, 13.4, 13.8, and 13.9.
25
13.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which may be deemed an original, but all of which
together, shall constitute one and the same instrument.
13.5 Severability. If any provisions hereof shall be held invalid or
------------
unenforceable by any court of competent jurisdiction or as a result of
future legislative action, such holding or action shall be strictly
construed and shall not affect the validity or effect or any other
provision hereof.
13.6 Assignability. This Agreement shall be binding upon and inure to the
-------------
benefit of the successors and assigns of the parties hereto; provided,
that neither this Agreement nor any right hereunder shall be assignable
by TGCI or Organik without prior written consent of the other party.
13.7 Captions. The captions of the various Sections of this Agreement have
--------
been inserted only for convenience of reference and shall not be deemed
to modify, explain, enlarge or restrict any of the provisions of this
Agreement.
13.8 Governing Law. The validity, interpretation and effect of this
--------------
Agreement shall be governed exclusively by the laws of the State of
California.
13.9 Arbitration. Any dispute regarding the validity or terms of this
-----------
Agreement, and any other disputes between these parties shall be
resolved by a judicial arbitrator selected in accordance with the
procedures of the American Arbitration Association in Los Angeles
County, California, as the exclusive remedy for any such dispute.
13.10 Attorneys' Fees. If any party hereto commences proceedings to enforce
---------------
the terms of this Agreement, then the party that prevails in such
proceedings shall be entitled to recover its reasonable costs,
including actual attorneys' fees, from the other.
13.11 Notices. All notices, requests, demands and other communications under
-------
this Agreement shall be in writing and delivered in person or sent by
certified mail, postage prepaid and properly addressed as follows:
To TGCI:
Xxxx Xxxxxx, President
000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
26
With a Copy to:
Xxxxxxxxx Genshlea Chediak Xxxxxx
000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx, Esq.
To Organik:
X.X. Xxxxxxx, President
00 Xxxxxx Xxxx
Xxxxx, XX 00000
With a Copy to:
Xxxxxxx X. Xxxxxxx, Esq.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Any party may from time to time change its address for the purpose of
notices to that party by a similar notice specifying a new address, but
no such change shall be deemed to have been given until it is actually
received by the respective party hereto.
All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section 13.10 if
delivered personally, shall be effective upon delivery; and, if
delivered by mail, shall be effective three days following deposit in
the United States mail, postage prepaid.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ORGANIK TECHNOLOGIES, INC.
By: s/s X.X. Xxxxxxx
------------------------
X.X. Xxxxxxx, President
TELEMAX GLOBAL COMMUNICATIONS, INC.
By: s/s Xxxx Xxxxxx
------------------------
Xxxx Xxxxxx, President
27
PRINCIPAL SHAREHOLDERS OF
TELEMAX GLOBAL COMMUNICATIONS, INC.
S/S XXX XXXXXX
---------------------------
XXX XXXXXX
S/S XXXXXXXX MISSAGHIE
---------------------------
MANUCHER MISSAGHIE
S/S XXXX XXXXXX
---------------------------
PARSECOM INC. - PER: X. XXXXXX, PRESIDENT
---------------------------
1483354 ONTARIO INC. - PER: X. XXXXX-PRESIDENT
Exhibit List
Exhibit A: Ten Percent Shareholders of Telemax Global
Communications, Inc.
Exhibit B: Consent of Board of Directors of Telemax Global
Communications, Inc.
Exhibit C: Consent of Board of Directors of Organik Technologies, Inc.
Schedule List
Schedule 4.1(b): Telemax Global Communications, Inc., Common Stock, Options
and Warrants Outstanding
Schedule 4.1(f): Litigation Involving Telemax Global Communications, Inc.
Schedule 4.1(h): Absence of Certain Changes - Telemax Global Communications,
Inc.
Schedule 4.1(i): Telemax Global Communications, Inc. Employee Benefit Plans
Schedule 4.1(j): Asset Ownership Exceptions
Schedule 4.1(l): Operating Permits/Licenses
Schedule 5.1(b): Organik Technologies, Inc., Common Stock, Options and
Warrants Outstanding
Schedule 5.1(l): Organik Technologies, Inc., Tax Matters
28
EXHIBIT A
Ten Percent Shareholders of Telemax Global Communications, Inc.
Shareholder Number Percentage
of Shares
---------------------- --------- ----------
Xxx Xxxxxx 290,325 29.03%
Manucher Missaghie 213,300 21.33%
Parsecom, Inc. 285,000 28.50%
1483354 Ontario, Inc. 122,500 12.25%
29
EXHIBIT B
Consent of Directors of Telemax Global Communications, Inc.
A special meeting of the Directors of Telemax Global Communications,
Inc. (the "Corporation"), an Ontario, Canada, corporation, was held by consent
and without an actual meeting. The undersigned, being all of the Directors, do
hereby waive notice of the time, place and purpose of this meeting of the
Directors of the Corporation and, in lieu thereof, hereby agree and consent to
the adoption of the following corporate actions.
WHEREAS, the Corporation entered into a letter of intent as of August
3, 2001, with Organik, Inc. ("Organik"), whereby the Corporation's shareholders
would exchange all of the issued and outstanding capital stock of the
Corporation for nine million (9,000,000) shares of Organik common stock, which
will represent approximately ninety-one percent (91%) of the then-outstanding
shares of Organik; and
WHEREAS, the Corporation's legal counsel has reviewed a formal
agreement consistent with the terms of the negotiations, which "Plan and
Agreement of Reorganization" is attached hereto; and
WHEREAS, it is in the Corporation's best interests to approve the terms
and execution of the Plan and Agreement of Reorganization on behalf of the
Corporation;
NOW, THEREFORE, BE IT RESOLVED, that the terms and conditions of the
exchange as set forth in the Plan and Agreement of Reorganization be, and the
same hereby are, ratified and confirmed, and the President and Secretary of the
Corporation are authorized to execute the same on behalf of the Corporation.
General Authorization
BE IT RESOLVED that the President and Secretary of the
Corporation be, and they hereby are, authorized, directed and empowered
to prepare or cause to be prepared, execute and deliver all such
documents and instruments and to undertake all such actions as they
deem necessary or advisable in order to carry out and perform any or
all of the matters contemplated by the Plan and Agreement of
Reorganization and as authorized in the foregoing resolution.
IN WITNESS WHEREOF, each of the undersigned has executed this written
consent, which shall be effective as of November 14, 2001.
s/s Ali Akali s/s Manucher Missaghie
------------------------------------ ------------------------------------
Ali Akali Manucher Missaghie
s/s Xxxx Xxxxxx
------------------------------------ ------------------------------------
Parsecom, Inc. Per: Xxxx Xxxxxx 1483354 Ontario Inc. Per: Xxxx Xxxxx
30
EXHIBIT C
Consent of Directors of Organik Technologies, Inc.
A special meeting of the Directors of Organik Technologies, Inc., (the
"Corporation"), a Washington corporation, was held by consent and without an
actual meeting. The undersigned, being all of the Directors, do hereby waive
notice of the time, place and purpose of this meeting of the Directors of the
Corporation and, in lieu thereof, hereby agree and consent to the adoption of
the following corporate actions.
WHEREAS, the Corporation entered into a letter of intent as of August
3, 2001, with Telemax Global Communications, Inc. ("TGCI") whereby the
Corporation intends to purchase all the issued and outstanding capital stock of
TGCI in exchange for nine million (9,000,000) shares of the Corporation's common
stock; and
WHEREAS, the Corporation's legal counsel has prepared a formal
agreement consistent with the terms of the letter of intent, which "Plan and
Agreement of Reorganization" is attached hereto as Exhibit A; and
WHEREAS, it is in the Corporation's best interests to approve the terms
and execution of the Plan and Agreement of Reorganization on behalf of the
Corporation;
NOW, THEREFORE, BE IT RESOLVED that the terms and conditions of the
exchange as set forth in the Plan and Agreement of Reorganization be, and the
same hereby are, ratified and confirmed, and the President of the Corporation is
authorized to execute the same on behalf of the Corporation.
General Authorization
BE IT RESOLVED that the President and Secretary of the
Corporation be, and they hereby are, authorized, directed and empowered
to prepare or cause to be prepared, execute and deliver all such
documents and instruments and to undertake all such actions as they
deem necessary or advisable in order to carry out and perform any or
all of the matters contemplated by the Plan and Agreement of
Reorganization and is authorized in the foregoing resolution.
IN WITNESS WHEREOF, each of the undersigned has executed this written
consent, which shall be effective as of ______________________, 2001.
31
Schedule 4.1(b)
Telemax Global Communications, Inc., Common Stock,
Options and Warrants Outstanding
None.
32
Schedule 4.1(f)
Litigation Involving Telemax Global Communications, Inc.
None.
33
Schedule 4.1(h)
Absence of Certain Changes - Telemax Global Communications, Inc.
34
Schedule 4.1(i)
Telemax Global Communications, Inc. Employee Benefit Plans
None.
35
Schedule 4.1(j)
Asset Ownership Exceptions
1. No exceptions to legal ownership or use of all corporate assets. No
exceptions to equipment being in good working
condition.
36
Schedule 4.1(l)
Operating Permits/Licenses
None.
37
Schedule 5.1(b)
Organik Technologies, Inc., Common stock, Options and Warrants Outstanding
None.
38
Schedule 5.1(i)
Organik Technologies, Inc., Absence of Certain Changes
Not Applicable.
39
Schedule 5.1(l)
Organik Technologies, Inc., Tax Matters
None.
40
AMENDMENT
TO
PLAN AND AGREEMENT OF REORGANIZATION
AMONG
TELEMAX GLOBAL COMMUNICATIONS, INC,
ORGANIK TECHNOLOGIES, INC.
AND
CERTAIN SHAREHOLDERS OF TELEMAX GLOBAL COMMUNICATIONS, INC.
Organik Technologies, Inc., a Washington corporation ("Organik"),
Telemax Global Communications, Inc., an Ontario, Canada corporation ("TGCI") and
certain shareholders of Telemax (the "Shareholders") entered into a Plan and
Agreement of Reorganization on November 16, 2001, (the "Agreement"). The parties
now wish to amend certain parts of the Agreement by this Amendment. All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in the Agreement. Effective February 16, 2002 (the "Effective
Date") the parties agree as follows:
1. Section 2.1 is hereby amended to provide for the issuance of
9,230,000 shares of Organik common stock as the consideration for
the acquisition of all the TGCI stock outstanding. The increase of
230,000 shares is in recognition of additional shares issued prior
to closing, additional transaction costs paid by Telemax and the
assumption of certain accounts payable.
2. Section 11.3(a) is hereby amended to provide that Organik shall
not have more than $ 66,000 of liabilities existing as of the
Closing Date and none of such liabilities shall have been incurred
within the last four years.
3. Section 5.1(b) is hereby amended to reflect that not more than
20,000,000 shares of Organik stock shall be outstanding prior to
the 1-for-20 reverse stock split and that no preferred shares
shall be outstanding as of the Closing Date.
Except as expressly amended hereby, the terms and provisions of the
Agreement shall be unchanged and shall remain in full force and effect.
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
This Amendment shall be governed by and construed under the laws of the
State of California, without regard to conflict of law principles.
1
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the Effective Date.
TELEMAX GLOBAL ORGANIK
COMMUNICATIONS, INC. TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxx By: s/s X.X. Xxxxxxx
--------------------------------- ------------------------
Xxxx Xxxxxx, President X.X.Xxxxxxx, President
PRINCIPAL SHAREHOLDERS OF
TELEMAX GLOBAL COMMUNICATIONS, INC.
s/s Xxx Xxxxxx
-------------------------------------------------
Xxx Xxxxxx
s/s Manucher Missaghie
-------------------------------------------------
Manucher Missaghie
s/s Xxxx Xxxxxx
-------------------------------------------------
Xxxx Xxxxxx
2
