SHARE EXCHANGEAGREEMENT
THIS SHARE EXCHANGE AGREEMENT(this "Agreement"), dated as of the13th day of February, 2014 (this"Agreement")is entered into by and among,EARTH DRAGONRESOURCES INC.,a Nevada corporation("Earth"),and the Owners ofPLASMAGENIX,INC.,aCaliforniacorporation("Owners").EarthandtheOwnersarereferredtosingularly asa "Party" and collectively as the"Parties."
WITNESSETH:
WHEREAS, the Owners own all of the issued and outstanding sharesof
PLASMAGENIX, INC.,a California corporation("PG");
WHEREAS, PG was formed on November 14, 2013, for the purposedeveloping regenerative therapeutics derived from the patient's own blood, commercialize themand facilitate access to those that suffer from chronic pain, non-healing wounds anddebilitating neurologicconditions.
WHEREAS, Earth wishes to acquire all of the issued and outstanding shares and rightsto sharesofallofthecapitalstockofPG(referredtohereinafterasthe"PGShares") withthe purpose of owning and operating PG as its wholly-owned subsidiary; and
WHEREAS, Earth and the Owners propose to enter into this Agreement whichprovides, among other things, the Owners will deliver the PG Shares to Earth in exchange for theissuance by Earth of a total of 13,800,000 (thirteen million eight hundred thousand) restrictedcommon shares of Earth's common stock as set forth in Section 2.01 of this Agreement, on the termsand conditionssetforthherein(the"ShareExchange")andsuchadditionalitemsas morefully described in thisAgreement.
NOW, THEREFORE, in consideration, of the promises and of themutual representations, warranties and agreements set forth herein, the Parties hereto agree asfollows:
ARTICLE I
DEFINITIONS
Section 1.01.Definitions. The following terms shall have the following respectivemeanings:
"Affiliate"with respect to any Party, a Person that directly orindirectly controls, is controlled by, or is under common control ofsuch Party. For the purpose of this definition,"control"means(i)ownership of more than fifty percent (50%) of the voting sharesof a Person or (ii) the right or ability to direct the managementor policies of a Person through ownership of voting shares orother securities, pursuant to a written agreement orotherwise;
"BusinessDay"aday(otherthanaSaturday)onwhichbanksinNevadaareopen
for business throughout their normal businesshours;
"Closing"the closing of the transactions contemplated by thisAgreement;
"Completion"completion of acquisition of the PG Shares by Earth in accordance with the terms and conditions of thisAgreement;
"Encumbrance"any mortgage, charge, pledge, lien, (otherwise than arising by
statute or operation oflaw), equities, hypothecation orother encumbrance, priority or security interest, preemptiveright deferred purchase, title retention, leasing, sale-and-repurchaseor sale-and-leaseback arrangement whatsoever over or inany property, assets or rights of whatsoever nature and includesany agreement for any of the same and reference to"Encumbrances" shall be construedaccordingly;
"ExchangeAct"the US Securities Exchange Act of1934;
"Person"any individual, firm, company, government, state or agency ofa state or any joint venture, association or partnership (whetheror not having separate legalpersonality);
"SecuritiesAct"the US Securities Act of1933;
"SEC"the US Securities and ExchangeCommission;
"US"United States ofAmerica;
"United StatesDollars" or"US$"
United Statesdollars;
Section 1.02.Rules of Construction.
(a) Unless the context otherwise requires, as used in this Agreement: (i)"including" means"including,withoutlimitation";(ii)wordsinthesingularincludetheplural;(iii)wordsinthe plural include the singular; (iv) words applicable to one gender shall be construed to applyto eachgender;(v) the terms"hereof,""herein,""hereby," "hereto"and derivative or similarwords refer to this entire Agreement, including the Schedules hereto; (vi) the terms"Article,""Section" and "Schedule" shall refer to the specified Article, Section or Schedule of or to this Agreement and references to paragraphs shall refer to the relevant paragraph of a specified Scheduleand
(vii) the term"day"shall refer to calendardays.
(b) Titles and headings to Articles and Sections are inserted for convenienceof reference only, and are not intended to be a part of or to affect the meaning or interpretationof thisAgreement.
ARTICLE II
THE SHARE EXCHANGE
Section2.01ShareExchange.
(a) Subject to and upon the terms and conditions of this Agreement, on theClosing Date (as defined hereafter), Earth shall acquire all of the PG Shares from the Owners with allof suchinterestsacquiredbeingfreefromallEncumbrancestogetherwithallrightsnoworhereafter attachingthereto.
(b) In exchange for the delivery of the PG Shares, Earth shall deliver to the Ownersa total of 13,800,000 (thirteen million eight hundred thousand) restricted common sharesof Earth's common stock (the "Exchange Shares");and
(c) The Share Exchange shall take place upon the terms and conditions providedfor inthisAgreementandinaccordancewithapplicablelaw.IftheClosingdoesnotoccurassetforth in Section 2.02 of this Agreement due to one Party's failure to perform, then the otherParty may terminate theAgreement.
Section 2.02.Closing Location.The Closing of the Share Exchange and the othertransactions contemplatedbythisAgreementwilloccurassoonaspossible(the"ClosingDate"),attheoffices of Plasmagenetix in Englewood, Ca.
Section 2.03.Owner's Closing Documents. At the Closing, the Owners will tender toEarth:
(a) Original certificates issued in the names of the Owners representing all of thePG SharesdulyendorsedfortransferbytheOwnersandmarked"cancelledfortransfer"orasotherwise directed by Earth or its counsel, in accordance with the laws of the State ofNevada;
Shares;
(b) | One(1)new certificate issued by PG in the name of Earth representing thePG |
(c) A certified copy of the register of shareholders of PG showing Earth asthe registered owner of thePG;
(d) A certificate executed by each Owner certifying that the conditions inSection 8.0l (a) have beensatisfied.
Section 2.04.Earth's Closing Documents. At the Closing, Earth will tender to theOwners:
(a) A certified copy(ies) of resolutions of the Board of Directors of Earth in aform satisfactory to the Owners, acting reasonably,authorizing:
(i) the execution and delivery of this Agreement by Earth;and
(ii) the issuance of the Exchange Shares to such entities and insuch allocations as set forth on Schedule A attachedhereto;
(b) Share certificates, registered in the name of the Owners representingthe Exchange Shares;and
(c) A certificate executed by a duly appointed officer of Earth certifying thatthe conditions in Section 9.0l(a) have beensatisfied.
ARTICLEIII REPRESENTATIONS ANDWARRANTIES
Section 3.01. Each Party represents and warrants to the other Party that each of the warrantiesit makes is accurate in all respects and not misleading as at the date of thisAgreement.
Section 3.02. Each Party undertakes to disclose in writing to the other Party anything whichis or may constitute a breach of or be inconsistent with any of the warranties immediately uponthe same coming to its notice at the time of and afterCompletion.
Section 3.03. Each Party agrees that each of the warranties it makes shall be construed asa separate and independent warranty and (except where expressly provided to the contrary)shall not be limited or restricted by reference to or inference from the terms of any other warrantyor any other term of thisAgreement.
Section 3.04. Each Party acknowledges that the restrictions contained in Section 11.01(Public Notices) and Section 11.10 (Confidentiality) shall continue to apply after the Completionunder this Agreement without limit intime.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EARTH
Section 4.01.Organization, Standing and Authority; Foreign Qualification.Earth isa corporationdulyorganized,validlyexistingandingoodstandingunderthelawsoftheStateofNevada and has all requisite corporate power and authority to own, lease and operateits properties and to conduct its business as presently conducted and as proposed to beconducted and is duly qualified or licensed as a foreign corporation in good standing in each jurisdiction in which the character of its properties or the nature of its business activitiesrequiresuch qualification.
Section 4.02.Corporate Authorization. The execution, delivery and performance by Earthof this Agreement and the consummation of the transactions contemplated hereby have beenduly authorized by all necessary corporate action on the part of Earth, and this Agreementconstitutes a valid and binding agreement of Earth. The Exchange Shares to be issued in accordancewith
this Agreement shall be duly authorized and, upon such issuance, will be validly issued,fully paid andnon-assessable.
Section 4.03.Capitalization. Earth's authorized capital stock, as of January 31, 2014,consists solely of 2,850,000,000 authorized shares of common stock of which approximately14,000,000 common shares are issued and outstanding, including the Exchange Shares, and nopreferred sharesareissuedand outstanding.Allof suchissuedandoutstandingsharesof Earth'scommonstock are duly authorized, validly issued, fully paid and non-assessable. There are nooutstanding options, warrants, agreements or rights to subscribe for or to purchase, or commitments toissue, shares of Earth's common stock or any other security of Earth or any plan for any of theforegoing.Earth isnot obligatedto registerthe resale of any of its common stockon behalf of any shareholder of Earth under the Securities Act.
Section 4.04.Subsidiaries. Earth does not have anysubsidiaries. Section 4.05.SECFilings.
(a) Earth has delivered to the Owners Earth's Annual Report on Form 10-K forthe fiscalyearendedMay31,2011,containingEarth'sconsolidatedbalancesheetatMay31,2011, and consolidated statements of income, changes in stockholders' deficiency and cash flowsof Earthforthe periodfrom October 23, 2007(dateof inception) tothefiscal yearended May31, 2011, alongwitha copyof theaudit report ofMichael T. Studer CPAP.C., ofFreeport, New York, independent auditors ("Earth's Reports"). To the best of Earth's knowledge and belief,Earth's Reports as of its dates(i) comply in allmaterial respects withthe requirements of the Exchange Act and the rules and regulations of the SEC thereunder, (ii) do not contain any untrue statementof a material fact, and (iii) donotomit tostate a material fact requiredto be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and
(b) All documents which Earth is responsible for filing with the SEC orany regulatory agency in connection with this Agreement will comply as to form in allmaterial respects with the requirements of applicable law, and all of the information relating to Earthin anydocumentfiledwiththeSECoranyotherregulatoryagencyinconnectionwiththisAgreement or the transactions otherwise contemplated hereby shall be true and correct in all materialrespects.
Section 4.06.Financial Statements.All consolidated financial statements included inEarth's Reports, including the related notes, fairly present, in conformity with generallyaccepted accountingprinciples("GAAP")appliedonaconsistentbasis(exceptas indicatedtherein),theconsolidatedfinancialpositionof Earth as of thedates thereofandthe consolidated results of operations and changesin shareholders'equityand cash flowsof Earth for theperiodsthen ended, subject, in the case of the interim financial statements, to normal and recurring year-end audit adjustments and except that the interim financial statements do not contain all of thenotes required by GAAP.
Section4.07.Articlesof IncorporationandBylaws.EarthhasheretoforedeliveredtotheOwnerstrue,correctandcompletecopiesofitsArticlesofIncorporation,certifiedbythe Secretary of State of the State of Nevada and Bylaws or comparable instruments, certified bythe corporate secretarythereof.
Section 4.08.No Conflict.The execution, delivery and performance of this Agreement andthe completion of the transactions contemplated herein willnot:
(a) violate any provision of the Articles of Incorporation, Bylaws or other charteror organizational document ofEarth;
(b) violate, conflict with or result in the breach of any of the terms of, result in any modification of the effect of, otherwise give any other contracting party the right to terminate,or constitute(or withnoticeor lapseoftimeorbothconstitute)adefaultunder,anycontracttowhich Earth is a party or by or to which either of its assets or properties, may be boundor subject;
(c) violate any order, judgment, injunction, award or decree of any court, arbitratoror governmental or regulatory body against, or binding upon, or any agreement with, orcondition imposed by, any governmental or regulatory body, foreign or domestic, binding upon Earthor upon the securities, assets or business ofEarth;
(d) violate any statute, law or regulation of any jurisdiction as such statute, lawor regulation relates to Earth or to the securities, properties or business of Earth;or
(e) result in the breach of any of the terms or conditions of, constitute a defaultunder, or otherwise cause an impairment of, any permit or license held byEarth.
Section 4.09.Litigation. There is no litigation, suit, proceeding, action or claim at law orin equity,pendingortoEarth'sbestknowledgethreatenedagainstoraffectingEarthorinvolvinganyofEarth'spropertyor assets, beforeany court,agency,authority or arbitration tribunal, including, without limitation, any product liability, workers' compensation or wrongful dismissal claims, or claims, actions, suits or proceedings relating to toxic materials, hazardous substances, pollution or the environment. Earth is not subject to or in default with respect to any notice, order, writ, injunction or decree of any court, agency, authority or arbitration tribunal.
Section 4.10.Compliance with Laws. To the best knowledge of Earth, it has complied withall laws, municipal bylaws, regulations, rules, orders, judgments, decrees and otherrequirements and policies imposed by any governmental authority applicable to it, its properties orthe operation of its business, except where the failure to comply will not have a materialadverse effect on the business, properties, financial condition or earnings ofEarth.
Section 4.11.Operations of Earth. Since the latest filing date of Earth's Reports, Earth has not:
(a) amended its Articles of Incorporation or Bylaws or merged with or into or consolidated with any other person or entity, subdivided or in any way reclassified any sharesof
its capital stock or changed or agreed to change in any manner the rights of itsoutstanding capital stock or the character of itsbusiness;
(b) issued, reserved for issuance, sold or redeemed, repurchased orotherwise acquired, or issued options or rights to subscribe to, or entered into any contract orcommitment toissue,sellorredeem,repurchaseor otherwiseacquire,anysharesofits capitalstockoranybonds, notes, debentures or other evidence or indebtedness;
(c) declared or paid any dividends or declared or made any other distributions ofany kind to its shareholders;or
(d) made any loan or advance to any of its shareholders or to any of itsdirectors, officers or employees, consultants, agents or other representatives, or made any other loanor advance, otherwise than in the ordinary course ofbusiness.
Section 4.12.Material Information.This Agreement, the Schedules attached hereto andall other information provided, in writing, by Earth or representatives thereof to the Owners,taken as a whole, do not contain any untrue statement of a material fact or omit to state a materialfact necessary to make any statement contained herein or therein not misleading. There are nofacts or conditions which have not been disclosed to the Owners in writing which, individually orin the aggregate, could have a material adverse effect on Earth or a material adverse effect onthe ability of Earth to perform any of its obligations pursuant to thisAgreement.
ARTICLEV
REPRESENTATIONS AND WARRANTIES OF THEOWNERS
The Owners represent to Earth asfollows:
Section 5.01.Organization, Standing and Authority; Foreign Qualification. (a) PG isa corporation duly organized, validly existing and in good standing under the laws of the Stateof California and has all requisite corporate power and authority to own, lease and operateits properties and to conduct its business as presently conducted and as proposed to beconducted and is duly qualified or licensed as a foreign corporation in good standing in each jurisdictionin whichthecharacterof itspropertiesorthenatureof itsbusinessactivitiesrequiresuchqualification.
Section 5.02.Authorization. The execution, delivery and performance by the Owners ofthis Agreement and the consummation of the transactions contemplated hereby have beenduly authorized by all necessary corporate or other action, as the case may be, on the part ofeach Owner. Each Owner has duly executed and delivered this Agreement and thisAgreement constitutes a valid and binding agreement of each Owner. The PG Shares to be transferredto Earth in accordance with this Agreement have been duly authorized and validly issued, fullypaid and non-assessable. Upon transfer of the PG Shares, no Encumbrance shall exist oneither.
Section 5.03.Capitalization.
PG' s authorized capital stock, as of January 31, 2014, consists solely of 1 million sharesof common stock, of which 59,750 common shares are issued and outstanding, and nopreferred shares are issued and outstanding. All of such issued and outstanding shares of PG' scommon stock are duly authorized, validly issued, fully paid and non-assessable. Except as describedon Schedule 4.03, there are no outstanding options, warrants, agreements or rights to subscribefor or to purchase, or commitments to issue, shares ofPG'scommon stock or any other securityof PG or any plan for any of the foregoing. PG is not obligated to register the resale of any ofits common stock on behalf of any shareholder of Earth under the SecuritiesAct.
Section 5.04.Subsidiaries. PG has no subsidiaries.
Section 5.05.Sale of Exchange Shares. Upon completion of the purchase and sale ofthe Exchange Shares, the Owners shall be the beneficial and record holder or holders ofthe Exchange Shares. Each Owner are acquiring the Exchange Shares as principal for itsown respective account to be held for investment purposes only, not for the benefit of anyother person and not with a view to the resale, distribution or other disposition of all or any ofthe Exchange Shares, and each Owner is delivering concurrently with this Agreement, acertificate in the form attached to this Agreement as ExhibitA.
Section 5.06.Restriction on Exchange Shares. Each Owner hereby consents to Earth makinga notation on its records or giving instructions to any transfer agent of the restricted sharesportion of the Exchange Shares in order to implement the restriction on transfer set forth anddescribed herein. The Owners have been independently advised as to, and are aware of, therestrictions with respect to trading in the Exchange Shares pursuant to the applicable securities lawsand further agrees that it is solely responsible for compliance with all such restrictions as set forthin ExhibitA.
Section 5.07.Investment Risk. The Owners understand that an investment in Earth includesa high degree of risk, have such knowledge and experience in financial and businessmatters, investments, securities and private placements as to be capable of evaluating the merits andrisks of their investment in the Exchange Shares, are in a financial position to hold theExchange Shares for an indefinite period of time, and are able to bear the economic risk of, and withstanda complete loss of such investment in the ExchangeShares.
Section 5.08.Cooperation.If required by applicable securities laws or order of asecurities regulatory authority, stock exchange or other regulatory authority, the Owners willexecute, deliver, file and otherwise assist Earth in filing such reports, undertakings and otherdocuments as may be required with respect to the issuance of the ExchangeShares.
Section 5.09.Tax Advice. The Owners are responsible for obtaining such legal, includingtax, advice as it considers necessary or appropriate in connection with the execution, deliveryand performance by it of this Agreement and the transactions contemplatedherein.
Section 5.10.Investment Representations. All of the acknowledgements,representations, warranties and covenants set out in Exhibit A hereto are true and correct as of the date hereofand as of the Closing Date as for eachOwner.
Section5.11.No Conflict. The execution, delivery and performance of this Agreement andthe completion of the transactions contemplated herein willnot:
(a) violate any provision of the Articles or Certificate of Incorporation, Bylawsor other charter or organizational document ofPG;
(b) violate, conflict with or result in the breach of any of the terms of, result inany modification of the effect of, otherwise give any other contracting party the right to terminate,or constitute(orwithnoticeorlapse oftimeorbothconstitute)adefaultunder,anycontracttowhichPGor anyoftheOwnersis a party or byor towhich eitherof theirassetsor properties, including the PG Shares, may be bound or subject;
(c) violate any order, judgment, injunction, award or decree of any court, arbitratoror governmental or regulatory body against, or binding upon, or any agreement with, orcondition imposed by, any governmental or regulatory body, foreign or domestic, binding upon PG orany of the Owners or upon the securities, assets or business of PG and/or any of theOwners;
(d) violate any statute, law or regulation of any jurisdiction as such statute, lawor regulation relates to PG and/or the Owners or to the securities, properties or business ofPG and/or any of the Owners;or
(e) result in the breach of any of the terms or conditions of, constitute a defaultunder, or otherwise cause an impairment of, any permit or license held by PG and/or any of theOwners.
Section 5.12.Articles of Incorporation andBylaws.
(a) The Owners have heretofore delivered to Earth true, correct and completecopies of each ofPG'srespective Articles ofOrganization.
(b) The minute books of PG accurately reflect all actions taken at all meetingsand consentsinlieuofmeetingsofitsrespectivemembersorowners,andallactionstakenatallmeetingsandconsentsinlieu ofmeetings of itsmanaging members from the date of incorporation to the date hereof.
Section 5.13.Compliance with Laws. To the best of the Owners' knowledge, neither PGnor any of the Owners are in violation of any applicable order, judgment, injunction, award ordecree nor are they in violation of any federal, state, local or foreign law, ordinance or regulation orany other requirement of any governmental or regulatory body, court or arbitrator, other thanthose violations which, in the aggregate, would not have a material adverse effect on PG or theOwners and have not received written notice that any violation is beingalleged.
Section 5.14.Material Information. This Agreement, the Schedules attached hereto andall other information provided in writing by the Owners or representatives thereof to Earth, takenas awhole,donotcontain anyuntruestatementofamaterialfactoromittostateamaterialfactnecessary to make any statement contained herein or therein not misleading. There are no facts or conditions which have not been disclosed to Earth in writing which, individually or in the aggregate, could have a material adverse effect on PG and/or the Owners or a material adverse effect on the ability of the Owners to perform any of their obligations pursuant to this Agreement.
Section 5.15.Actions and Proceedings. There are no outstanding orders,judgments, injunctions, awards or decrees of any court, governmental or regulatory body orarbitration tribunal against or involving PG or the Owners. There are no actions, suits or claims orlegal, regulatory, administrative or arbitration proceedings pending or, to the knowledge ofthe Owners, threatened against or involving PG or the X-FireShares.
Section 5.16.Operations. Except as contemplated by this Agreement, since theirrespective date of organization, PG hasnot:
(a) amended its Certificate or Articles of Organization or merged with or intoor consolidated with any other person or entity, subdivided or in any way reclassified any ofits ownership interests or changed or agreed to change in any manner the rights of itsownership interests or the character of itsbusiness;
(b) issued, reserved for issuance, sold or redeemed, repurchased orotherwise acquired, or issued options or rights to subscribe to, or entered into any contract orcommitment to issue, sell or redeem, repurchase or otherwise acquire, any ownership interests or anybonds, notes, debentures or other evidence or indebtedness;or
(c) made any loan or advance to any manager, officer, director oremployee, consultant, agent or otherrepresentative.
ARTICLEVI
COVENANTS AND AGREEMENTS OFOWNERS
Section 6.01.Conduct of Businesses in the Ordinary Course. From the date of thisAgreement totheClosingDate,theOwnersshallcause PGtoconductitsbusinesssubstantiallyinthemanner in which it is currentlyconducted.
Section 6.02.Preservation of Permits and Services. From the date of this Agreement tothe ClosingDate,theOwnersshall causeeachofPGtouseitsbesteffortstopreserveanypermitsand licenses in full force and effect and to keep available the services, and preserve thegoodwill, of its present managers, officers, employees, agents, andconsultants.
Section 6.03.Conduct Pending the Closing Date. From the date of this Agreement tothe ClosingDate:(a)theOwnersshallcauseeachofPG touseitsbesteffortstoconductitsaffairs in such a manner so that, except as otherwise contemplated or permitted by this Agreement, the
representations and warranties contained in Article V shall continue to be true and correct onand as oftheClosingDateasifmadeonandasoftheClosingDate;and(b)theOwnersshallpromptly notify Earth of any event, condition or circumstance that would constitute aviolation
or breach of this Agreement by any of theOwners.
Section 6.04.Corporate Examinations and Investigations. Prior to the Closing Date,Earthshall be entitled, through its employees and representatives, to make suchreasonableinvestigation of the assets, liabilities, properties, business and operations of PG, andsuchexaminationofthebooks,records,taxreturns,resultsofoperationsandfinancialconditionofeach. Any such investigation and examination shall be conducted at reasonable times and under reasonable circumstances and the Owners and its employees and representatives, including without limitation, their counsel and independent public accountants, shall cooperate fully with such representatives in connection with such reasonable review and examination.
ARTICLE VII
COVENANTS AND AGREEMENTS OF EARTH
Section 7.01.Conduct of Businesses in the Ordinary Course. From the date of thisAgreement to the Closing Date, Earth shall conduct its businesses substantially in the manner in which itis currentlyconducted.
Section 7.02.Preservation of Permits and Services. From the date of this Agreement tothe Closing Date, Earth shall use its best efforts to preserve any permits and licenses in full forceand effect and to keep available the services of its respective present officers, employees,consultants and agents and to preserve theirgoodwill.
Section 7.03.Litigation. From the date of this Agreement to the Closing Date, Earthshall notifytheOwnersofanyactionsorproceedingsofthetypedescribedinSection4.09thatarethreatened or commenced against Earth or against any officer, director, employee, properties or assets of Earth and of any requests for information or documentary materials by any governmental or regulatory body in connection with the transactions contemplated hereby.
Section 7.04.Conduct of Earth Pending the Closing. From the date hereof through theClosing Date:
(a) Earth shall use its best efforts to conduct its affairs in such a manner sothat, except as otherwise contemplated or permitted by this Agreement, the representationsand warranties contained in Article IV shall continue to be true and correct on and as of theClosing Date as if made on and as of the Closing Date;and
(b) Earth shall promptly notify the Owners of any event, condition or circumstance occurringfromthedatehereofthroughtheClosingDatethatwouldconstituteaviolationorbreach of this Agreement byEarth.
Section 7.05.Corporate Examinations and Investigations. Prior to the Closing Date,the Owners shall be entitled, through their employees and representatives, to make anyinvestigation
of the assets, liabilities, properties, business and operations of Earth; and such examination ofthe books,records,taxreturns,resultsofoperationsandfinancialconditionofEarth.Anysuchinvestigation and examination shall be conducted at reasonable times and underreasonable circumstances and Earth and its employees and representatives shall cooperate fully with such representatives in connection with such reasonable review and examination.
ARTICLEVIII
CONDITIONS PRECEDENT TO THE OBLIGATION OF EARTH TOCLOSE
TheobligationsofEarthtobeperformedbyitattheClosingpursuanttothisAgreementaresubject to the fulfillment on or before the Closing Date, of each of the following conditions,any one or more of which may be waived by it, to the extent permitted bylaw:
Section 8.01.Representations and Covenants.(a) The representations and warranties ofthe Owners contained in this Agreement shall be true and correct on and as of the Closing Datewith thesameforceandeffectasthoughmadeonand asoftheClosingDate,exceptthatanyofsuch representations and warrantiesthataregiven as ofa particular date and relate solely toa particular date or period shall be true as of such date or period;and
(b) The Owners shall have performed and complied with all covenantsand agreements required by this Agreement to be performed or complied with by them on orbefore the Closing Date. The Owners shall have delivered to Earth a certificate, dated the ClosingDate, and signed by each Owner to the foregoingeffect.
Section 8.02.Governmental Permits andApprovals.
(a) All approvals, authorizations, consents, permits and licenses fromgovernmental and regulatory bodies required for the transactions contemplated by this Agreement andto permit the business currently carried on by PG to continue to be carried on substantially inthe same manner immediately following the Closing Date shall have been obtained and shall bein full force and effect, and Earth shall have been furnished with appropriate evidence,reasonably satisfactorytothem,ofthegrantingof suchapprovals,authorizations,consents, permitsand licenses; and
(b) There shall not have been any action taken by any court, governmentalor regulatory body then prohibiting or making illegal on the Closing Date thetransactions contemplated by thisAgreement.
Section 8.03.Third Party Consents. All consents, permits and approvals from partiesto contracts with PG that may be required in connection with the performance by theOwners hereunder or the continuance of such contracts in full force and effect after the ClosingDate, shall have beenobtained.
Section 8.04.Litigation. No action, suit or proceeding shall have been instituted andbe continuing or be threatened by any person to restrain, modify or prevent the carrying out ofthe
transactions contemplated hereby, or to seek damages in connection with such transactions,or that has or could have a material adverse effect on PG or on the PGShares.
Section8.05Closing Documents. The Owners shall have executed and deliveredthe documents described in Section 2.03above.
ARTICLEIX
CONDITIONS PRECEDENT TO THE OBLIGATION OF THE OWNERS TOCLOSE
TheobligationsoftheOwners tobeperformedbythemattheClosingpursuanttothisAgreementaresubjectto thefulfillment,on orbefore theClosingDate, ofeachthefollowing conditions, any one or more of which may be waived by it, to the extent permitted by law:
Section 9.01.Representations and Covenants. (a) The representations and warrantiesofEarth containedinthis AgreementshallbetrueandcorrectonandasoftheClosingDatewiththe same force and effect as though made on and as of the Closing Date, except that any of such representations andwarranties that aregivenasofa particular dateandrelate solely to a particular date or period shall be true as of such date or period; and
(b) Earth shall have performed and complied with all covenants andagreements required by this Agreement to be performed or complied with by it on or before theClosing Date. Earth shall have delivered to the Owners a certificate dated the Closing Date, andsigned by an authorized signatory of Earth to the foregoingeffect.
Section 9.02.Governmental Permits and Approvals.(a) All approvals,authorizations, consents, permits and licenses from governmental and regulatory bodies required forthe transactions contemplated by this Agreement and to permit the business currently carried onby Earth to continue to be carried on substantially in the same manner immediately followingthe Closing Date shall have been obtained and shall be in full force and effect, and the Ownersshall have been furnished with appropriate evidence, reasonably satisfactory to them, of thegranting of such approvals, authorizations, consents, permits and licenses;and
(b) There shall not have been any action taken by any court, governmentalor regulatory body then prohibiting or making illegal on the Closing Date thetransactions contemplated by thisAgreement.
Section9.03.Litigation. No action, suit or proceeding shall have been instituted andbe continuing or be threatened by any person to restrain, modify or prevent the carrying out ofthe transactions contemplated hereby, or to seek damages in connection with such transactions,or that has or could have a material adverse effect onEarth.
Section 9.04.Closing Documents. Earth shall have executed and delivered thedocuments described in Section 2.04above.
Section 10.01.Termination.
ARTICLE X
TERMINATION
(a) Notwithstanding anything to the contrary in this Agreement, this Agreementmay be terminated and the Share Exchange and the other transactions contemplated bythis Agreement shall be abandoned at any time prior to theClosing:
(i) by mutual written consent of the Owners andEarth;
(ii) by either the Owners or Earth in the event that a temporaryrestraining order, preliminary or permanent injunction or other judicial order preventing theconsummation of the Share Exchange or any of the other transactions contemplated hereby shall havebecome final and non-appealable;provided,that, the party seeking to terminate this Agreementpursuant tothisclause(ii)shall haveusedallcommerciallyreasonableeffortstohavesuchorder, injunction or other order vacated;
(iii) by Earth if Earthis not then in material breach of this Agreement andif there shall have been any breach by the Owners (which has not been waived) of one or moreof its representations or warranties, covenants or agreements set forth in this Agreement,which breach or breaches (A) would give rise to the failure of a condition set forth in Article VIII,and
(B) shall not have been cured within thirty (30) days following receipt by the Owners ofwritten notice of such breach, or such longer period in the event that such breach cannot reasonablybe expectedto becuredwithinsuch 30-dayperiodandtheOwnersarediligentlypursuingsuchcure;
(v) by the Owners if the Owners are not then in material breach ofthis Agreement and if there shall have been any breach by Earth (which has not been waived) ofone or more of its representations or warranties, covenants or agreements set forth in thisAgreement, whichbreachorbreaches(A)wouldgiverisetothefailureofaconditionsetforth in ArticleIX, and (B) shall not have been cured within thirty (30) days following receipt by Earth of written notice of such breach; or
(b) If theeventofterminationbytheOwnersorEarthpursuanttothisSectionl0.01, written notice thereof shall forthwith be given to the other Party and thetransactions contemplatedbythisAgreement shallbe terminated, without furtheraction byanyParty. If the transactions contemplated by this Agreement are terminated as provided herein, the Owners shall immediately cause each of nominees appointed to the Board of Directors of Earth and/or appointed as officers of Earth to resign from all such positions.
Section10.02.EffectofTermination.If thisAgreementisterminatedandthetransactionscontemplated hereby are abandoned as described in Section 10.01, this Agreement shallbecome nullandvoidandofnofurtherforce andeffect, except for the provisions of(i)Section 10.01 and this Section 10.02; (ii) Section 11.15 relating to certain expenses; and (iii) Section 11.01 relating to publicity. Nothing in this Section 10.02 shall be deemed to release any Party from any liability for any breach by such Party of the terms, conditions, covenants and other provisions of this
Agreement or to impair the right of any Party to compel specific performance by any otherParty of its obligations under thisAgreement.
ARTICLEXI MISCELLANEOUS
Section 11.01.Public Notices. The Parties agree that all notices to third parties and allother publicity concerning the transactions contemplated by this Agreement shall be jointlyplanned and coordinated and no Party shall act unilaterally in this regard without the prior approval ofthe others, such approval not to be unreasonablywithheld.
Section11.02. Time shall be of the essencehereof.
Section11.03. Any notice or other writing required or permitted to be givenhereunder or for the purposes hereof shall be sufficiently given if delivered or faxed to the Party to whomit is given or, if mailed, by prepaid registered mail addressed to such Partyat:
if to the Owners,at:
PlasmaGenix,Inc. 455 N. PrairieAve. Inglewood, CA90301
if to Earth,at:
c/o W. Scott Lawler Attorney atLaw 1255 W. Rio Salado Parkway, Ste.215 Tempe, AZ85281
ph:480.830.2700
fx:480.830.2717
or at such other address as the Party to whom such writing is to be given shall have lastnotified to the Party giving the same in the manner provided in this article. Any notice mailed shallbe deemed to have been given and received on the fifth Business Day next following the date ofits mailingunlessatthetimeofmailingorwithinfive(5)BusinessDays thereafter there occurs a postal interruption which could have the effect of delaying the mail in the ordinary and usual course, in which case any notice shall only be effectively given if actually delivered or sent by telecopy. Any notice delivered or faxed to the Party to whomitis addressed shall be deemed to have been given and received on the Business Day next following the day it was deliveredor faxed.
Section 11.04.Governing Law; Venue; Submission to Jurisdiction. This Agreement shallbe governed by and construed and enforced in accordance with, the internal laws of the Stateof Nevada without regard to the conflict of laws principles thereof as the same apply toagreements executed solely by residents of the State of Nevada and wholly to be performed within theState of Nevada. Each of the Parties submits to the jurisdiction of any state or federal court sittingin
the State of Nevada in any action or proceeding arising out of or relating to thisAgreement, agrees that all claims in respect of the action or proceeding may be heard and determined inany such court, and agrees not to bring any action or proceeding arising out of or relating tothis Agreement in any other court. Each of the Parties waives any defense or inconvenient forumto the maintenance of any action or proceeding so brought and waives any bond, surety, orother security that might be required of any other Party with respectthereto.
Section11.05.Severability. Ifacourtofcompetentjurisdictiondeterminesthatanyoneor moreofthe provisions contained in this Agreement isinvalid,illegalorunenforceable in any respect in any jurisdiction, the validity, legality and enforceability ofsuch provision or provisions shall notinany way beaffected or impairedtherebyinanyother jurisdiction and the validity, legality and enforceability of the remainingprovisions contained herein shall notin any waybeaffectedor impairedthereby, unless in either case as a resultof suchdetermination this Agreement would fail in its essential purpose.
Section 11.06.Entire Agreement.This Agreement constitutes the entire agreement betweenthe Parties and supersedes all prior agreements and understandings, oral or written, by andbetween any of the Parties with respect to the subject matterhereof.
Section 11.07.Further Assurances.The Parties shall with reasonable diligence, do allsuch things and provide all such reasonable assurances as may be required to consummatethe transactions contemplated by this Agreement, and each Party shall provide suchfurther documents or instruments required by the other Party as may be reasonably necessaryor desirable to give effect to the purpose of this Agreement and carry out its provisionswhether before or after the ClosingDate.
Section 11.08.Assignment, Successors and Assigns.Neither Party may assign (directly,or indirectly by way of merger, amalgamation, stock sale or any similar procedure) any of itsrights or obligationshereunder.
Section 11.09.Waiver.Except as provided in this Article, no action taken or inaction pursuantto this Agreement will be deemed to constitute a waiver of compliance with anywarranties, conditions or covenants contained in this Agreement and will not operate or be construed asa waiver of any subsequent breach, whether of a similar or dissimilar nature. No waiver ofany right under this Agreement shall be binding unless executed in writing by the Party to bebound thereby.
Section 11.10.Counterparts.This Agreement may be executed in as many counterparts asmay be necessary or by facsimile and each such counterpart agreement or facsimile so executedshall be deemed to be an original and such counterparts and facsimile copies together shallconstitute one and the same instrument and shall be valid andenforceable.