SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
January 20, 2000
Date of Report
(Date of Earliest Event Reported)
RHOMBIC CORPORATION
(Exact Name of Registrant as
Specified in its Charter)
Suite 901, 1212 Howe Street
Vancouver, British Columbia V6Z 2M9
(Address of principal executive offices)
(604) 683-4864
(604) 683-4814 (fax)
Registrant's telephone number
EMERALD ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
(Former name and address of Registrant)
Nevada 0-28375 86-0824125
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization
(the "Acquisition Agreement") dated January 18, 2000, Rhombic
Corporation, ("Rhombic" or the "Company"), a Nevada corporation,
acquired all the outstanding shares of common stock of Emerald
Acquisition Corporation ("Emerald"), a Delaware corporation, from
the shareholders thereof in an exchange for an aggregate of 200,000
shares of common stock of Rhombic (the "Acquisition"). As a result,
Emerald became a wholly-owned subsidiary of Rhombic.
The Acquisition was approved by the unanimous consent of the
Board of Directors of Rhombic on January 18, 2000. The Acquisition
was effective on January 20, 2000. The Acquisition is intended to
qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Prior to the Acquisition, Rhombic had 33,741,100 shares of
common stock issued and outstanding and 33,941,100 shares issued and
outstanding following the Acquisition.
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and
Exchange Commission, Rhombic elected to become the successor issuer
to Emerald for reporting purposes under the Securities Exchange Act
of 1934 and elects to report under the Act effective January 20, 2000.
A copy of the Acquisition Agreement is filed as an exhibit
to this Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of Rhombic's current directors and executive officers
and those persons or entities who beneficially own more than 5% of
its common stock (giving effect to the exercise of the warrants held
by each such person or entity):
Number of shares of Percent of
Common Stock Common Stock
Name Beneficially Owned Beneficially Owned(1)
R.G. Krushnisky 4,375,000 12.9%
Chief Executive Officer, Director
Suite 901, 1212 Howe Street
Vancouver, British Columbia
Canada V6Z 2M9
William Larry Owen (2) 3,229,500 9.5%
President, Director
Suite 901, 1212 Howe Street
Vancouver, British Columbia,
Canada V6Z 2M9
Albert Golusin 225,000 *
Chief Financial Officer, Director
10641 North 44 Street,
Phoenix, Arizona 85028
Stanley Porayko 200,000 *
Director
P.O. Box 1765
Vegreville, Alberta
Canada T9C 1S8
Total shares owned by Directors 8,029,500 23.6%
and Officers of the Company
(4 persons)
Durham Technology Corporation (3) 6,000,000 17.6%
#2, Commercial Central Square
Alofi, Niue Island
New Zealand
Rockford Technology Corporation(4) 2,045,500 6.1%
4873 Delta Street
Delta, British Columbia, Canada
*Less than 1%.
(1) Based upon 33,941,100 outstanding shares of common stock.
(2) Includes 229,500 shares owned by Rarerock Explorations, Ltd.
a corporation controlled by Mr. Owen and who may be deemed
the beneficial owner of the shares held by it.
(3) A Niue Island (New Zealand overseas territory) corporation
primarily engaged in marketing of new technologies. The
Rhombic shares are held in escrow and cannot be sold or
hypothecated until Rhombic generates a net income of at
least $.01 per share in any year. Albert Golusin and R.G.
Krushnisky are each 10% shareholders of Durham Technology
Corporation.
(4) Messrs. Owen and Porayko, directors of Rhombic, are two of
the directors of Rockford Technology Corporation but do not
own controlling interest.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition
Agreement was negotiated between Emerald and Rhombic. In evaluating
the Acquisition, Emerald used criteria such as the value of assets
of Rhombic, Rhombic's ability to recognize merchantability of a
technology or invention, Rhombic's ability to compete in the
technology transfer markets, the unique nature of Rhombic's products
and developing technologies, Rhombic's current and anticipated
business operations, and Rhombic's management's experience and
reputation in the technology transfer market. In evaluating Emerald,
Rhombic placed a primary emphasis on Emerald's status as a reporting
company under Section 12(g) of the Securities Exchange Act of 1934
and Emerald's facilitation of Rhombic's becoming a reporting company
under the Act.
(b) The Company intends to strengthen its position in the
technology development and transfer line of business by researching
and developing its existing portfolio of acquired technologies to
achieve commercial viability as well as continuing to search for
innovative and commercially viable technologies throughout the
world.
BUSINESS
COMPANY
Rhombic Corporation ("Rhombic" or the "Company"), is a
development-stage company incorporated under the laws of the State
of Nevada on February 26, 1987, as the predecessor company which was
acquired by Rhombic Corporation on November 24, 1994. The Company is
currently headquartered in Vancouver, British Columbia, Canada.
The Company is in the development stage and its efforts,
since inception, have been primarily focused on research and
development of its portfolio of acquired technologies. The
Company's main objective is to research and develop both its own and
acquired technologies in order to make them commercially marketable
and capitalize on their commercial applications. The Company
contracts its development work with the University of Missouri or
joint venture partners. Other non-contract development work, such
as the Rhombic Explorer, is being self-funded by the Company.
The Company has two wholly owned subsidiaries, Rockford
Technology Associates, Inc. ("Rockford") and Nanophase Diamond
Technologies, Inc. ("Nanophase").
By assignment from the University of Illinois of September
5, 1995 filed with the Patent and Trademark Office, Rockford owns a
patent for the Inertial Electrostatic Confinement and Neutron
Monitor technology. On June 27, 1996, Rockford entered a licensing
agreement with Daimler Benz Aerospace and the University of Illinois
by which it is entitled to receive a long term royalty on all IEC
sales throughout the world including North America and may engage in
direct marketing of the technology in North America without
restriction. In return, Rockford assigned to Daimler Benz Aerospace
its right, title and interest to the Inertial Electrostatic
Confinement technology for development and commercialization by
Daimler Benz Aerospace.
Nanophase owns the Diamond Film Forced Diffusion technology.
As a technology transfer and development start-up company,
Rhombic has limited finances and requires additional funding in
order to accomplish its growth objectives and development of
products and marketing of its technologies. There is no assurance
that the Company will be able to secure any or all funding necessary
for such growth and expansion. There is also no assurance that even
if the Company obtains adequate funding to complete any contemplated
acquisition, such acquisition will succeed in enhancing the
Company's business and will not ultimately have an adverse effect on
the Company's business and operations.
The Company intends to make future acquisitions of
commercially promising technologies that fit the Company's general
technology acquisition criteria. However, currently, the Company
does not have a fixed source of capital to finance such
acquisitions. In this respect, the Company intends to accomplish
its acquisition plans by exchange of the Company stock. There is no
assurance that the Company will be able to arrange for such
acquisitions or as to the trading price or liquidity of the
Company's common stock. Low trading price or poor liquidity of the
Company's common stock may adversely affect the Company's ability to
engage in future acquisitions and to accomplish its growth objectives.
TECHNOLOGIES
Rhombic's current portfolio of technologies includes (1)
Inertial Electrostatic Confinement and Neutron Monitor, (2) Diamond
Film Forced Diffusion, (3) Nuclide Battery, (4) Diamond-reinforced
Flywheel Battery, (5) Disperse Composite Material, (6) Active Engine
("Rhombic Explorer"), (7) Ultra Violet (Excimer) Lamp, and (8)
FaxKey technology. All of these technologies have been acquired by
Rhombic in exchange for shares of its common stock from different
parties including research companies and individual inventors
throughout the world. In certain cases, as part of the acquisition
of the technology, the Company has agreed to pay royalty fees based
on sales, when and if any such sales occur.
These technologies are in the development phase. The
Company has a license agreement for development of the Inertial
Electrostatic Confinement technology but the Company is seeking
joint venture partners or others to effect commercialization of its
other technologies. There is no assurance that Company will be able
to locate a joint venturer to develop any or all of these
technologies. In addition, there is no assurance that even if a
joint venture partner is found that any of these technologies will
ever result in marketable or viable products.
1. Inertial Electrostatic Confinement ("IEC"). The IEC
device is a large, negatively charged grid ionizing the gas inside a
spherical vacuum chamber. The positive ions produced by this plasma
are attracted toward the central cathode (negative electrode). Since
the grid is mostly transparent, most of the ions will pass through
the grid toward the center of the device, rather than collide with
the grid. At the center, many of the ions will collide with each
other. If the gas consists of fusionable fuels (tritium, deuterium,
helium-3), then some of the collisions will result in fusion and
release of energy. Increasing the number of fusion reactions would
increase the energy output of a fusion reactor, or would increase
the number of valuable fusion products produced (neutrons,
helium-3). Potentially the IEC device may become a source of energy.
Currently, however, the IEC device does not produce as much energy
as is used to operate it.
A related device utilizing the principle described above is
Neutron Monitoring detector. This device monitors the speed and
frequency of passing neutrons to assess the quality of alloy. Some
practical applications of this technology may include detection of
impurities in high quality alloys, mineral quality analysis in coal,
cement and similar industries, detection contraband at airports, bus
stops, train stations, and detection of nonmetallic antipersonnel
land mines.
2. Diamond Film Forced Diffusion. Rhombic's negative type
diamond technology, referred to as "Forced Diffusion," has been
successfully created in a former Soviet Republic laboratory to
create functional integrated circuits. This technology consists of
diffusing different elements into diamond film, producing diamond
with electronic properties greatly superior to those of silicon, the
material currently used for computer chips. This technology allows
for the exponential decrease of the space required for a computer
microchip. Such diamond film is considerably more heat and
radiation resistant extending the life of the electronic circuitry.
Harder cutting tools and abrasives, diamond televison and computer
monitor screens, sensor, bearing and radar screens are among a
number of potential commercial applications of this technology.
3. The Nuclide Battery. The nuclide battery produces energy
from the breakdown of unstable isotopes of a number of basic
elements such as krypton, strontium, and cesium. The battery's
intended purpose is to provide a generation of constant energy for
both manned and unmanned space flights.
4. Diamond-reinforced Flywheel Battery. The
diamond-reinforced flywheel battery operates on a principle of using
diamond layers instead of carbon filters to increase the power
density of electro-mechanical energy storage for batteries used in
automobiles or other storage systems. This concept is based on the
rupture stress measure for present polycrystalline diamond. An
increase in storage capacity may result in the development of a
satisfactory method for storing large amounts of electrical energy
both for portable applications, such as automobiles and satellites,
and fixed appliances, such as electric power load leveling from the
individual house to the utility level.
5. Disperse Composite Material. The manufacturing of
extremely fine dispersed materials with a homogeneous interior and
an additional coating which utilizes plasma processing of high
efficiency. Plasma deposition consists of filling a working chamber
with a plasma producing gas which is excited to plasma, and
injecting of the dispersed (dusty) base material as well as the one
or other components of the coating material being in the gas or
vapor phase. A special application of this method and apparatus is
the manufacturing of coatings which leads to a conversion of long
lived radio nuclides (mostly from nuclear reactors) into stable
nuclides or the elimination of plutonium by transmutation into
uranium. The material added to the plasma for production the
coatings (on glass or similar carrier materials) is then one or in a
sequence further mentioned host metals as well as charges of the
long time radio nuclides for transmutation, preferably into the
surfaces or in interfaces. Applications of this technology may
include semiconductor and microchip industries, as well as consumer
electronics, high-tech navigational tools, etc.
6. Active Engine ("Rhombic Explorer"). This technology
consists of an Internet browser, developed by Peter Weicker, of
British Columbia, Canada. The advantages of this Internet browser
include automated and quick-paced Web searching. The search engine
supports nested statements and boolean logical operations which will
enable users to construct search statements of large size and
complexity while searching the Web.
7. Ultra Violet (Excimer) lamp. This device consists of a
microwave-driven ultra violet light source and solid-state laser.
This laser provides an efficient, compact and tunable solid-state
laser. The laser has the capability of illumination at varying
wavelengths. Excimer lamps can be used for dry cleaning and etching
in the production of semiconductors. It is also suitable for
effective ozone production. The shorter the wavelength, the higher
the energy it can generate. Potential applications of this
technology include greenhouse plant light as well as curing
semiconductor wafer boards.
8. FaxKey technology. This technology consists of a
combination of hardware and software device that offers a high level
of security in sending and receiving facsimile messages. By the
insertion of a personal key, only the intended recipient may
retrieve the faxed message.
CURRENT OPERATIONS
The competition in the technology proliferation and transfer
market is highly intense and is based on product and technology
recognition and acceptance, novelty and marketability of an
invention, price, and sales expertise. The Company has placed its
primary emphasis on product development, dependability and
commercial viability of its acquired technologies. Management is
currently determining the expenses involved to develop its existing
technologies into commercial applications. To date, the Company has
not generated any revenues from any of its acquired technologies and
is currently operating at a loss. None of the technologies have
been developed to commercialization. The Company is not able to
determine an approximate date for commercialization at this time.
No assurances can be given that any of the Company's technologies
will ever be developed to a point of usefulness or, if developed,
that any will be commercially feasible.
For the twelve months ended December 31, 1997, the Company
did not incur any development costs. The IEC technology was being
developed by Daimler Benz Aerospace at no cost to the Company during
the year. For the twelve months ended December 31, 1998, Daimler
Benz Aerospace continued developing the IEC technology at no cost to
the Company during the year. The Company spent CN$17,500 in
developing the "Active Engine " technology. For the twelve months
ended December 31, 1999, Daimler Benz Aerospace continued developing
the IEC technology at no cost to the Company during the year. The
Company spent additional CN$42,500 in developing the "Active Engine"
technology. During this time, the Company paid the University of
Missouri CN$124,500 and independent laboratories CN$7,700 for
research and development on four applications of the "Forced
Diffusion" technology.
The Company requires additional funding to achieve its
growth objectives. If the Company does not receive additional
funding, it will not be able to pursue the intended marketing plan
and, in such case, may not be able to successfully conduct its
operations. There is no assurance that the Company will be
successful in marketing any of its technologies or in generating any
meaningful revenues from operations.
MARKETING
The Company's primary business focus is placed upon the
commercialization of advanced technologies and commercial products
resulting therefrom. The Company anticipates that microchip,
computer, satellite and space industries will be the primary
markets for the Company's products and technologies. The Company has
limited experience in marketing of products and services in these
fields and intends to rely on licensing and joint venture
opportunities with multinational companies for the marketing and
sale of its technologies. The Company also has little experience
marketing products of a consumer nature. There is no assurance that
the Company will be successful in developing a market for any of its
products or that it will gain any market recognition and acceptance.
TRADEMARKS AND PATENTS
The Company has spent a total of CN$35,107 in patent
procurement costs for its technologies with CN$11,100, CN$11,507,
and CN$12,500 spent in 1997, 1998, and 1999, respectively. The
Company has filed patent applications in several jurisdictions
including Canada, Japan, Korea, and the United States. Currently,
through Nanophase, the Company holds a patent to the "Forced
Diffusion" technology, United States Patent No. 5,597,762 granted on
January 28, 1997. As part of the licensing agreement with Daimler
Benz Aerospace, Rockford transferred its patent to the IEC
technology. All other patent applications filed by the Company are
pending approval. There is no assurance that any of these patents
will be granted or if granted that the Company will be able to
defend against any infringement of such patents.
PROPERTY
As the Company is not producing any products at present, it
has no lease or physical facilities commitments. The Company's
executive office in Vancouver, British Columbia, Canada, is provided
by Owen & Associates on a month-to-month basis. The monthly rent for
this executive space is included in CN$7,500 monthly payment to Owen
& Associates.
On June 21, 1999, the Company accepted a proposal from the
University of Missouri to use its laboratory facilities, technical
equipment and personnel to develop selected projects using the
Company's "Forced Diffusion" technology.
EMPLOYEES
The Company currently has no employees.
LITIGATION
There is no current outstanding litigation in which the
Company is involved and the Company is unaware of any pending
actions or claims against it.
During November 1999, Rhombic settled a two year dispute
with the management of Rockford Technology Corporation ("Rockford").
Rhombic asserted that the management of Rockford was selling the
shares of the Company that Rockford owned in violation of Rule 144
and were not using the proceeds for the benefit of Rockford. The
dispute was settled by Rhombic purchasing 2,900,000 Rockford shares
for $300,000 and taking over control of the Board of Directors of
Rockford.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 70,000,000
shares of Common Stock, $.001 par value per share, of which
33,941,100 shares are issued and outstanding, and 1,000,000 shares
of Preferred Stock, $.001 par value per share, of which no shares
are issued and outstanding. The Company has no outstanding debt.
MARKET FOR THE COMPANY'S SECURITIES
The Company has been a non-reporting publicly traded company
with certain of its securities exempt from registration under the
Securities Act of 1933 pursuant to Rule 504 of Regulation D of the
General Rules and Regulations of the Securities and Exchange
Commission. The Company's common stock is traded on the NASD OTC
Bulletin Board under the symbol NUKE. The Nasdaq Stock Market has
implemented a change in its rules requiring all companies trading
securities on the NASD OTC Bulletin Board to become reporting
companies under the Securities Exchange Act of 1934.
Rhombic acquired all the outstanding shares of Emerald to
become successor issuer to it pursuant to Rule 12g-3 in order to
comply with the Eligibility Rule for the OTC Bulletin Board.
The following table represents the trading history of the
Company common stock:
Date Open High Low Close Volume
May 99 0.625 0.6562 0.5938 0.6406 46,600
Jun 99 0.6562 0.7031 0.5938 0.6563 141,000
Jul 99 0.625 0.6562 0.4688 0.4844 79,100
Aug 99 0.4531 0.6406 0.4531 0.5781 67,600
Sep 99 0.6406 0.7344 0.4531 0.4688 152,100
Oct 99 0.4688 0.5156 0.4688 0.50 120,600
Nov 99 0.4844 2.0312 0.4844 1.9375 535,700
Dec 99 1.9688 4 1.875 3.9062 495,700
MANAGEMENT
Name Age Title
R.G. Krushnisky 39 Chairman, Chief Executive Officer and
Director
William Larry Owen 79 President, Director
Albert Golusin 45 Chief Financial Officer, Director
Stanley Poreyko 64 Secretary, Director
R.G. KRUSHNISKY, Chief Executive Officer and Director of the
Company. Mr. Krushnisky served as past President of Rockford
Technology Corporation which owns the Diamond Film Forced Diffusion
technology. Since 1984, Mr. Krushnisky has been the President of
International Laser Games, Ltd., a British Columbia, Canada,
coin-operated arcade machinery business. Mr. Krushnisky is a
graduate of the United States International University at San Diego
with a Bachelor Science degree in Business and International
Commerce.
WILLIAM LARRY OWEN, President of the Company. In 1963, Mr.
Owen was a founder of a New World Jade Company. From 1982 to 1985,
Mr. Owen was the President of International Phasor Telecom, a
computer security firm. Mr. Owen received a Bachelor of Arts degree
from Pepperdine University of California, and Masters of Education
degree from the University of Southern California.
ALBERT GOLUSIN, Chief Financial Officer, is a Certified
Public Accountant in Phoenix, Arizona. Since 1993, Mr. Golusin has
been in private practice as an accounting consultant to public
companies. He has also served as a controller for Glenayre
Electronics, a NASDAQ company, from 1984 - 1991. From 1983 to 1984,
Mr. Golusin worked for Kenneth Leventhal & Company. From 1979 to
1981, Mr Golusin worked for the international accounting firm of
Grant Thornton & Company. Mr. Golusin graduated from Brigham Young
University in 1978.
STANLEY PORAYKO, Secretary and Director of the Company, and
a Director of the Company's wholly-owned subsidiary, Rockford
Technology Associates. Mr. Porayko is a self-employed rancher from
Alberta, Canada. He was a founder of the huge jade deposit on Ogden
Mountain, British Columbia, and a director of Yugold Mines. Mr.
Porayko graduated from Ryerson Institute of Technology in 1957.
EXECUTIVE COMPENSATION
William Larry Owen, President of the Company, is compensated
by Owen & Associates which has an agreement with the Company to
provide office and administrative support for $7,500 a month. Mr.
Owen received 3,000,000 shares of the common stock of the Company
for services rendered in 1999. The 3,000,000 shares are held in
escrow until the Company has received certain revenue amounts.
Albert Golusin, Chief Financial Officer and Director of the
Company, provides his services on a part-time basis and is
compensated primarily with shares of the Company. In 1999, Mr.
Golusin received $50,000 in cash for payment of expenses, auditing
costs of the Company and compensation. In 1998, he received $10,000
in cash as compensation. Mr. Golusin received 100,000, 50,000 and
50,000 shares of common stock at deemed values of $20,000, $7,500
and $7,500 for the services rendered in 1997, 1998 and 1999,
respectively.
R.G. Krushnisky, Chairman, Chief Executive Officer and
Director of the Company, provides his consulting services on a
part-time basis and is compensated with shares of the Company.
Stanley Porayko, Secretary and Director of the Company,
provides his consulting services on a part-time basis and is
compensated with shares of the Company. Mr. Poreyko received
100,000 shares for secretarial services rendered in 1998 at a deemed
value of $15,000.
Currently, the Company does not provide any benefits to any
of its employees. There are no current plans to pay cash or stock
dividends on the Company's stock.
RISK FACTORS
THE COMPANY HAS NO REVENUES AND IS CURRENTLY OPERATING AT A
LOSS. The Company has not received any revenues to date and is
operating at a loss. The Company will need to raise additional
capital through the placement of its securities or from debt or
equity financing. If the Company is not able to raise such
financing or obtain alternative sources of funding, management will
be required to curtail operations. There is no assurance that the
Company will be able to continue to operate if additional sales of
its securities cannot be generated or other sources of financing
located.
LIMITED HISTORY OF OPERATIONS. The Company has only a
limited history of operations. The Company operations are subject to
the risks and competition inherent in the establishment of a
relatively new business enterprise in a highly competitive field of
technology transfer. There can be no assurance that future
operations will be profitable. Revenues and profits, if any, will
depend upon various factors, including market acceptance of its
products and technologies, market awareness, its ability to promptly
and accurately recognize a marketable technology or invention,
dependability of an advertising and recruiting network, and general
economic conditions. There is no assurance that the Company will
achieve its expansion goals and the failure to achieve such goals
would have an adverse impact on it.
THE COMPANY MAY NEED ADDITIONAL FINANCING. Future events,
including the problems, delays, expenses and difficulties frequently
encountered by startup companies may lead to cost increases that
could make the Company's source of funds insufficient to fund the
Company's proposed operations. The Company may seek additional
sources of capital, including an additional offering of its equity
securities, an offering of debt securities or obtaining financing
through a bank or other entity. The Company has not established a
limit as to the amount of debt it may incur nor has it adopted a
ratio of its equity to a debt allowance. If the Company needs to
obtain additional financing, there is no assurance that financing
will be available, from any source, or that it will be available on
terms acceptable to the Company, or that any future offering of
securities will be successful. The Company could suffer adverse
consequences if it is unable to obtain additional capital when
needed.
TRADEMARK PROTECTION AND PROPRIETARY MARKS. The Company
has obtained one patent and several pending patents and trademarks
as a result of its acquisitions. There is no assurance that the
Company will be able to prevent competitors from using the same or
similar names, marks, concepts or appearances or that it will have
the financial resources necessary to protect its marks against
infringing use.
THE COMPANY'S TECHNOLOGIES AND INVENTIONS MAY BECOME
OBSOLETE. Patent review is usually a lengthy, tedious and expensive
process that may take months or, perhaps, several years to complete.
With the current rate of technology development and its
proliferation throughout the world, those inventions may become
commercially obsolete during or after the patent review. There is
no assurance that the Company's technologies, acquired or developed,
may not become obsolete and remain commercially viable.
THE COMPANY MAY FAIL TO OBTAIN PATENT PROTECTION IN VARIOUS
JURISDICTIONS. The Company has filed patent applications in several
jurisdictions, including Japan, Korea, and the United States. The
filing process is usually a costly and time-consuming undertaking
requiring proper legal counsel under the laws of the jurisdiction
where patent protection is sought. There is no assurance that those
patent protection filings were properly and timely made. There is
also no assurance that upon review, those applications may not be
rejected for lack of novelty or any other bases sufficient to reject
a pending patent application in any of those jurisdictions.
COMMERCIAL VIABILITY OF THE COMPANY'S CURRENT TECHNOLOGIES.
The Company was organized to identify, assess, acquire and
capitalize on technologies introduced and developed by scientists
throughout the world. These technologies are new and in their
research and development stage. Generally, it requires a substantial
time and resource effort to bring be able to both recognize a
commercially successful technology or invention at an early stage
and conduct a successful marketing campaign to sell this technology
or invention. There is no assurance that all or any of the Company's
research and development efforts will result in commercially viable
final products.
THE COMPANY MAY FAIL TO GENERATE SUFFICIENT INTEREST IN
ACQUIRED TECHNOLOGIES. The Company must undertake substantial
effort to educate the buying public, consumers and businesses, in
the U.S. and worldwide, as to the Company's products and
technologies. There is no assurance that the Company will be able to
generate interest in and to create and maintain steady demand for
its products over time.
RELIANCE ON FUTURE TECHNOLOGY ACQUISITIONS STRATEGY. The
Company expects to continue to rely on technology acquisitions as a
primary component of its growth strategy. It regularly engages in
evaluations of potential target candidates, including evaluations
relating to acquisitions that may be material in size and/or scope.
There is no assurance that the Company will continue to be able to
identify potentially successful companies that provide suitable
acquisition opportunities or that the Company will be able to
acquire any such companies on favorable terms. Also, acquisitions
involve a number of special risks including the diversion of
management's attention, assimilation of the personnel and operations
of the acquired companies, and possible loss of key employees. There
is no assurance that the acquired companies will be able to
successfully integrate into the Company's existing infrastructure or
to operate profitably. There is also no assurance given as to the
Company's ability to obtain adequate funding to complete any
contemplated acquisition or that any such acquisition will succeed
in enhancing the Company's business and will not ultimately have an
adverse effect on the Company's business and operations.
POSSIBLE INABILITY TO FINANCE ACQUISITIONS. In transactions
in which the Company agrees to make an acquisition for cash, it will
have to locate financing from third-party sources such as banks or
other lending sources or it will have to raise cash through the sale
of its securities. There is no assurance that such funding will be
available to the Company when required to close a transaction or if
available on terms acceptable to the Company.
TECHNOLOGIES INVOLVING SUBSTANTIAL RISK OF ENVIRONMENTAL
HAZARD. The Company's technologies involve a substantial risk of
environmental hazard in the production processes. There is no
assurance that the Company will be able to contain the environmental
hazards of the production. There is also no assurance that the
Company will have sufficient resources to meet the clean-up and
possible litigation costs that may be involved in a case of
environmental disaster.
LOSS OF THE COMPANY KEY EMPLOYEES MAY ADVERSELY AFFECT
GROWTH OBJECTIVES. The Company's success in achieving its growth
objectives depends upon the efforts of William Larry Owen, President
of the Company, and other top Company management members. Their
international experience and industry-wide contacts significantly
benefit the Company. The loss of the services of any of these
individuals may have a material adverse effect on the Company
business, financial condition and results of operations. There is no
assurance that the Company will be able to maintain and achieve its
growth objectives should it lose any or all of these individuals'
services.
FAILURE TO ATTRACT QUALIFIED PERSONNEL. A change in labor
market conditions that either further reduces the availability of
employees or increases significantly the cost of labor could have a
material adverse effect on the Company's business, financial
condition and results of operations. The Company's business growth
is dependent upon its ability to attract and retain qualified
research personnel, administrators and corporate management. There
is no assurance that the Company will be able to employ a sufficient
number of qualified training personnel in order to achieve its
growth objectives.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS SHARE VALUE.
The Certificate of Incorporation of the Company authorizes the
issuance of 70,000,000 shares of common stock and 1,000,000 shares
of preferred stock. The future issuance of all or part of the
remaining authorized common or preferred stock may result in
substantial dilution in the percentage of the Company's common stock
held by the its then existing shareholders. Moreover, any common
stock issued in the future may be valued on an arbitrary basis by
the Company. The issuance of the Company's shares for future
services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by investors, and
might have an adverse effect on any trading market for the Company's
common stock.
PENNY STOCK REGULATION. The Company's common stock is
deemed to be a penny stock. Penny stocks generally are equity
securities with a price of less than $5.00 per share other than
securities registered on certain national securities exchanges or
quoted on the Nasdaq Stock Market, provided that current price and
volume information with respect to transactions in such securities
is provided by the exchange or system. The Company's securities may
be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their spouse).
For transactions covered by these rules, the broker-dealer must make
a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the "penny stock
rules" require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission relating to the
penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information
on the limited market in penny stocks. Consequently, the "penny
stock rules" may restrict the ability of broker-dealers to sell the
Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such
securities maintain a market price of $5.00 or greater. There can be
no assurance that the price of the Company's securities will reach
or maintain such a level.
COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000. Many existing
computer programs use only two digits to identify a year in such
program's date field. These programs were designed and developed
without consideration of the impact of the change in the century for
which four digits will be required to accurately report the date.
If not corrected, many computer applications could fail or create
erroneous results by or following the year 2000 (the "Year 2000
problem"). Many of the computer programs containing such date
language problems have been corrected by the companies or
governments operating such programs. The Company's operations are
dependent upon the properly functioning computer equipment which may
fail because of such Year 2000 problems. The Company does not know
what steps, if any, have been taken by any of its business partners
in regard to the Year 2000 problems. The Company's operations will
be severally curtailed if one or more of its business partners were
to suffer Year 2000 problems. Furthermore, it is impossible to
predict if the basic utilities serving the Company will continue
uninterrupted.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, the Company
elected to become the successor issuer to Emerald for reporting
purposes under the Securities Exchange Act of 1934 and elects to
report under the Act effective January 20, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of Emerald Acquisition
Corporation resigned as an officer and director of Emerald effective
upon completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
No financials are filed herewith. The Registrant is
required to file financial statements by amendment hereto no later
than 60 days after the date that this Current Report on Form 8-K
must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.1. Agreement and Plan of Reorganization between Rhombic
Corporation and Emerald Acquisition Corporation.
*3.1. Articles of Incorporation of Rhombic Corporation.
*3.2. By-Laws of Rhombic Corporation.
*27.1. Financial Data schedule.
______
*To be filed by amendment
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Current Report on Form
8-K to be signed on its behalf by the undersigned hereunto duly
authorized.
RHOMBIC CORPORATION
By /s/ William Larry Owen
President
Date: January 21, 2000
AGREEMENT AND PLAN OF REORGANIZATION among RHOMBIC
CORPORATION, a Nevada corporation ("Rhombic"), EMERALD ACQUISITION
CORPORATION, a Delaware corporation ("Emerald") and the persons
listed in Exhibit A hereof (collectively the "Shareholders"), being
the owners of record of all of the issued and outstanding stock of
Emerald.
Whereas, Rhombic wishes to acquire and the Shareholders wish
to transfer all of the issued and outstanding securities of Emerald
in a transaction intended to qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended.
Now, therefore, Rhombic, Emerald, and the Shareholders adopt
this plan of reorganization and agree as follows:
1. EXCHANGE OF STOCK
1.1. NUMBER OF SHARES. The Shareholders agree to transfer to
Rhombic at the Closing (defined below) the number of shares of
common stock of Emerald, $0.0001 par value per share, shown opposite
their names in Exhibit A, in exchange for an aggregate of 250,000
shares of voting common stock of Rhombic, $.001 par value per share.
1.2. EXCHANGE OF CERTIFICATES. Each holder of an outstanding
certificate or certificates theretofore representing shares of
Emerald common stock shall surrender such certificate(s) for
cancellation to Rhombic, and shall receive in exchange a certificate
or certificates representing the number of full shares of Rhombic
common stock into which the shares of Emerald common stock
represented by the certificate or certificates so surrendered shall
have been converted. The transfer of Emerald shares by the
Shareholders shall be effected by the delivery to Rhombic at the
Closing of certificates representing the transferred shares endorsed
in blank or accompanied by stock powers executed in blank.
1.3. FRACTIONAL SHARES. Fractional shares of Rhombic common
stock shall not be issued, but in lieu thereof Rhombic shall round
up fractional shares to the next highest whole number.
1.4. FURTHER ASSURANCES. At the Closing and from time to time
thereafter, the Shareholders shall execute such additional
instruments and take such other action as Rhombic may request in
order more effectively to sell, transfer, and assign the transferred
stock to Rhombic and to confirm Rhombic's title thereto.
2. CLOSING.
2.1. PLACE. The Closing contemplated herein shall be held at
the offices of the Exchange Agent provided for herein unless another place
or time is agreed upon in writing by the parties without requiring the meeting
of the parties hereof. All proceedings to be taken and all
documents to be executed at the Closing shall be deemed to have been
taken, delivered and executed simultaneously, and no proceeding
shall be deemed taken nor documents deemed executed or delivered
until all have been taken, delivered and executed. The date of
Closing may be accelerated or extended by agreement of the parties.
2.2. EXECUTION OF DOCUMENTS. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission required by this Agreement or any signature required
thereon may be used in lieu of an original writing or transmission
or signature for any and all purposes for which the original could
be used, provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the entire
original writing or transmission or original signature.
3. UNEXCHANGED CERTIFICATES. Until surrendered, each
outstanding certificate that prior to the Closing represented
Emerald common stock shall be deemed for all purposes, other than
the payment of dividends or other distributions, to evidence
ownership of the number of shares of Rhombic common stock into which
it was converted. No dividend or other distribution shall be paid
to the holders of certificates of Emerald common stock until
presented for exchange at which time any outstanding dividends or
other distributions shall be paid.
4. REPRESENTATIONS AND WARRANTIES OF EMERALD
Emerald represents and warrants as follows:
4.1. CORPORATE ORGANIZATION AND GOOD STANDING. Emerald is
a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware, and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
4.2. REPORTING COMPANY STATUS. Emerald has filed with the
Securities and Exchange Commission a registration statement on Form
10-SB which became effective pursuant to the Securities Exchange Act
of 1934 and is a reporting company pursuant to Section 12(g) thereunder.
4.3. REPORTING COMPANY FILINGS. Emerald has timely filed and
is current on all reports required to be filed by it pursuant to Section 13
of the Securities Exchange Act of 1934.
4.4. CAPITALIZATION. Emerald's authorized capital stock
consists of 120,000,000 shares of Common Stock, $.0001 par value, of
which 5,000,000 shares are issued and outstanding, and 20,000,000
shares of non-designated preferred stock of which no shares are
designated or issued.
4.5. ISSUED STOCK. All the outstanding shares of its Common
Stock are duly authorized and validly issued, fully paid and
non-assessable.
4.6. STOCK RIGHTS. Except as set out by attached schedule,
there are no stock grants, options, rights, warrants or other rights
to purchase or obtain Emerald Common or Preferred Stock issued or
committed to be issued.
4.7. CORPORATE AUTHORITY. Emerald has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as it is now being conducted
and to execute, deliver, perform and conclude the transactions
contemplated by this agreement and all other agreements and
instruments related to this agreement.
4.8. AUTHORIZATION. Execution of this agreement has been
duly authorized and approved by Emerald=s board of directors.
4.9. SUBSIDIARIES. Except as set out by attached schedule,
Emerald has no subsidiaries.
4.10. FINANCIAL STATEMENTS. Emerald=s financial statements
dated October 31, 1999, copies of which will have been delivered by
Emerald to Rhombic prior to the Merger Date (the "Emerald Financial
Statements"), fairly present the financial condition of Emerald as
of the date therein and the results of its operations for the
periods then ended in conformity with generally accepted accounting
principles consistently applied.
4.11. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the Emerald Financial
Statements, Emerald did not have at that date any liabilities or
obligations (secured, unsecured, contingent, or otherwise) of a
nature customarily reflected in a corporate balance sheet prepared
in accordance with generally accepted accounting principles.
4.12. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been no material adverse change in the business,
properties, or financial condition of Emerald since the date of the
Emerald Financial Statements.
4.13. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Emerald, any pending, threatened,
or existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against
Emerald or against any of its officers.
4.14. CONTRACTS. Except as set out by attached schedule,
Emerald is not a party to any material contract not in the ordinary
course of business that is to be performed in whole or in part at or
after the date of this agreement.
4.15. TITLE. Except as set out by attached schedule, Emerald
has good and marketable title to all the real property and good and
valid title to all other property included in the Emerald Financial
Statements. Except as set out in the balance sheet thereof, the
properties of Emerald are not subject to any mortgage, encumbrance,
or lien of any kind except minor encumbrances that do not materially
interfere with the use of the property in the conduct of the
business of Emerald.
4.16. TAX RETURNS. Except as set out by attached schedule,
all required tax returns for federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly
prepared and filed by Emerald for all years for which such returns
are due unless an extension for filing any such return has been
filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all
interest, penalties and additions imposed with respect to such
amounts have been paid or provided for. The provisions for federal
and state taxes reflected in the Emerald Financial Statements are
adequate to cover any such taxes that may be assessed against
Emerald in respect of its business and its operations during the
periods covered by the Emerald Financial Statements and all prior
periods.
4.17. NO VIOLATION. Consummation of the Merger will not
constitute or result in a breach or default under any provision of
any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of
Emerald is subject or by which Emerald is bound.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, individually and separately, represent and
warrant as follows:
5.1. TITLE TO SHARES. The Shareholders, and each of them, are
the owners, free and clear of any liens and encumbrances, of the
number of Emerald shares which are listed in the attached schedule
and which they have contracted to exchange.
5.2. LITIGATION. There is no litigation or proceeding
pending, or to each Shareholder'ss knowledge threatened, against or
relating shares of Emerald held by the Shareholders.
6. REPRESENTATIONS AND WARRANTIES OF RHOMBIC
The Rhombic represents and warrants as follows:
6.1. CORPORATE ORGANIZATION AND GOOD STANDING. Rhombic is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada and is qualified to do
business as a foreign corporation in each jurisdiction, if any, in
which its property or business requires such qualification.
6.2. CAPITALIZATION. Rhombic's authorized capital stock
consists of 70,000,000 shares of Common Stock, $.001 par value, of
which 33,741,100 shares are issued and outstanding, and 1,000,000
shares of preferred stock, of which no shares are issued and
outstanding.
6.3. ISSUED STOCK. All the outstanding shares of its Common
Stock are duly authorized and validly issued, fully paid and
non-assessable.
6.4. STOCK RIGHTS. Except as set out by attached schedule,
there are no stock grants, options, rights, warrants or other rights
to purchase or obtain Rhombic Common or Preferred Stock issued or
committed to be issued.
6.5. CORPORATE AUTHORITY. Rhombic has all requisite
corporate power and authority to own, operate and lease its
properties, to carry on its business as it is now being conducted
and to execute, deliver, perform and conclude the transactions
contemplated by this Agreement and all other agreements and
instruments related to this agreement.
6.6. AUTHORIZATION. Execution of this Agreement has been
duly authorized and approved by Rhombic's board of directors.
6.7. SUBSIDIARIES. Except as set out by attached schedule,
Rhombic has no subsidiaries.
6.8. FINANCIAL STATEMENTS. Rhombic's financial statements
dated as of ___________ copies of which will have been delivered by
Rhombic to Emerald prior to the Merger Date (the "Rhombic Financial
Statements"), fairly present the financial condition of Rhombic as
of the date therein and the results of its operations for the
periods then ended in conformity with generally accepted accounting
principles consistently applied.
6.9. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the
extent reflected or reserved against in the Rhombic Financial
Statements, Rhombic did not have at that date any liabilities or
obligations (secured, unsecured, contingent, or otherwise) of a
nature customarily reflected in a corporate balance sheet prepared
in accordance with generally accepted accounting principles.
6.10. NO MATERIAL CHANGES. Except as set out by attached
schedule, there has been no material adverse change in the business,
properties, or financial condition of Rhombic since the date of the
Rhombic Financial Statements.
6.11. LITIGATION. Except as set out by attached schedule,
there is not, to the knowledge of Rhombic, any pending, threatened,
or existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against
Rhombic or against any of its officers.
6.12. CONTRACTS. Except as set out by attached schedule,
Rhombic is not a party to any material contract not in the ordinary
course of business that is to be performed in whole or in part at or
after the date of this agreement.
6.13. TITLE. Except as set out by attached schedule, Rhombic
has good and marketable title to all the real property and good and
valid title to all other property included in the Rhombic Financial
Statements. Except as set out in the balance sheet thereof, the
properties of Rhombic are not subject to any mortgage, encumbrance,
or lien of any kind except minor encumbrances that do not materially
interfere with the use of the property in the conduct of the
business of Rhombic.
6.14. TAX RETURNS. Except as set out by attached schedule,
all required tax returns for federal, state, county, municipal,
local, foreign and other taxes and assessments have been properly
prepared and filed by Rhombic for all years for which such returns
are due unless an extension for filing any such return has been
filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all
interest, penalties and additions imposed with respect to such
amounts have been paid or provided for. The provisions for federal
and state taxes reflected in the Rhombic Financial Statements are
adequate to cover any such taxes that may be assessed against
Rhombic in respect of its business and its operations during the
periods covered by the Rhombic Financial Statements and all prior
periods
6.15. NO VIOLATION. Consummation of the Merger will not
constitute or result in a breach or default under any provision of
any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of
Rhombic is subject or by which Rhombic is bound.
7. CONDUCT OF EMERALD PENDING THE MERGER DATE. Emerald
covenants that between the date of this Agreement and the Merger Date:
7.1. No change will be made in Emerald's articles of
incorporation or bylaws.
7.2. Emerald will not make any change in its authorized or
issued capital stock, declare or pay any dividend or other
distribution or issue, encumber, purchase, or otherwise acquire any
of its capital stock other than as provided herein.
7.3. Emerald will use its best efforts to maintain and
preserve its business organization, employee relationships, and
goodwill intact, and will not enter into any material commitment
except in the ordinary course of business.
8. CONDUCT PENDING THE CLOSING
Rhombic, Emerald and the Shareholders covenant that between
the date of this Agreement and the Closing as to each of them:
8.1. No change will be made in the charter documents,
by-laws, or other corporate documents of Rhombic or Emerald.
8.2. Emerald and Rhombic will use their best efforts to
maintain and preserve its business organization, employee
relationships, and goodwill intact, and will not enter into any
material commitment except in the ordinary course of business.
8.3. None of the Shareholders will sell, transfer, assign,
hypothecate, lien, or otherwise dispose or encumber the Emerald
shares of common stock owned by them.
9. CONDITIONS PRECEDENT TO OBLIGATION OF EMERALD AND THE
SHAREHOLDERS
Emerald's and the Shareholder's obligation to consummate this
exchange shall be Subject to fulfillment on or before the Closing of
each of the following conditions, unless waived in writing by
Emerald or the Shareholders as appropriate:
9.1. RHOMBIC'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Rhombic set forth herein shall be
true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
9.2. RHOMBIC'S COVENANTS. Rhombic shall have performed all
covenants required by this Agreement to be performed by it on or
before the Closing.
9.3. BOARD OF DIRECTOR APPROVAL. This Agreement shall have
been approved by the Board of Directors of Rhombic.
9.4. SUPPORTING DOCUMENTS OF RHOMBIC. Rhombic shall have
delivered to Emerald and the Shareholders supporting documents in
form and substance reasonably satisfactory to Emerald and the
Shareholders, to the effect that:
(a) Rhombic is a corporation duly organized, validly
existing, and in good standing;
(b) Rhombic's authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Rhombic authorizing the execution of this Agreement and
the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and
directors of Rhombic;
(e) Rhombic=s Financial Statements and unaudited financial
statement from the date of Rhombic's Financial Statements to close
of most recent fiscal quarter; and
(f) Any document as may be specified herein or required to
satisfy the conditions, representations and warranties enumerated
elsewhere herein.
10. CONDITIONS PRECEDENT TO OBLIGATION OF RHOMBIC
Rhombic's obligation to consummate this merger shall be
Subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing by Rhombic:
10.1. EMERALD'S AND THE SHAREHOLDER=S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of Emerald and the
Shareholders set forth herein shall be true and correct at the
Closing as though made at and as of that date, except as affected by
transactions contemplated hereby.
10.2. EMERALD'S AND THE SHAREHOLDERS' COVENANTS. Emerald and
the Shareholders shall have performed all covenants required by this
Agreement to be performed by them on or before the Closing.
10.3. BOARD OF DIRECTOR APPROVAL. This Agreement
shall have been approved by the Board of Directors of Emerald.
10.4. SHAREHOLDER EXECUTION. This Agreement shall have been
executed by the required number of shareholders of Emerald.
10.5. SUPPORTING DOCUMENTS OF EMERALD. Emerald shall have
delivered to Rhombic supporting documents in form and Substance
reasonably satisfactory to Rhombic to the effect that:
(a) Emerald is a corporation duly organized, validly
existing, and in good standing;
(b) Emerald's capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of
directors of Emerald authorizing the execution of this Agreement and
the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and
directors of Emerald;
(e) Emerald=s Financial Statements and unaudited financial
statements for the period from the date of the Emerald's Financial
Statements to the close of the most recent fiscal quarter; and
(f) Any document as may be specified herein or required to
satisfy the conditions, representations and warranties enumerated
elsewhere herein.
11. SHAREHOLDERS' REPRESENTATIVE. The Shareholders hereby
irrevocably designate and appoint Cassidy & Associates, Washington,
D.C. as their agent and attorney in fact ("Shareholders'
Representative") with full power and authority until the Closing to
execute, deliver, and receive on their behalf all notices, requests,
and other communications hereunder; to fix and alter on their behalf
the date, time, and place of the Closing; to waive, amend, or modify
any provisions of this Agreement, and to take such other action on
their behalf in connection with this Agreement, the Closing, and the
transactions contemplated hereby as such agent or agents deem
appropriate; provided, however, that no such waiver, amendment, or
modification may be made if it would decrease the number of shares
to be issued to the Shareholders hereunder or increase the extent of
their obligation to indemnify Rhombic hereunder.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties
of Emerald, the Shareholders and Rhombic set out herein shall
survive the Closing.
13. ARBITRATION
13.1. SCOPE. The parties hereby agree that any and all claims
(except only for requests for injunctive or other equitable relief)
whether existing now, in the past or in the future as to which the
parties or any affiliates may be adverse parties, and whether
arising out of this agreement or from any other cause, will be
resolved by arbitration before the American Arbitration Association
within the District of Columbia.
13.2. CONSENT TO JURISDICTION, SITUS AND JUDGEMENT. The
parties hereby irrevocably consent to the jurisdiction of the
American Arbitration Association and the situs of the arbitration
(and any requests for injunctive or other equitable relief) within
the District of Columbia. Any award in arbitration may be entered
in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
13.3. APPLICABLE LAW. The law applicable to the arbitration
and this agreement shall be that of the State of Delaware,
determined without regard to its provisions which would otherwise
apply to a question of conflict of laws.
13.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its
discretion, allow the parties to make reasonable disclosure and
discovery in regard to any matters which are the subject of the
arbitration and to compel compliance with such disclosure and
discovery order. The arbitrator may order the parties to comply
with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be
modified by the arbitrator consistent with the desire to simplify
the conduct and minimize the expense of the arbitration.
13.5. RULES OF LAW. Regardless of any practices of
arbitration to the contrary, the arbitrator will apply the rules of
contract and other law of the jurisdiction whose law applies to the
arbitration so that the decision of the arbitrator will be, as much
as possible, the same as if the dispute had been determined by a
court of competent jurisdiction.
13.6. FINALITY AND FEES. Any award or decision by the
American Arbitration Association shall be final, binding and
non-appealable except as to errors of law or the failure of the
arbitrator to adhere to the arbitration provisions contained in this
agreement. Each party to the arbitration shall pay its own costs
and counsel fees except as specifically provided otherwise in this
agreement.
13.7. MEASURE OF DAMAGES. In any adverse action, the parties
shall restrict themselves to claims for compensatory damages and\or
securities issued or to be issued and no claims shall be made by any
party or affiliate for lost profits, punitive or multiple damages.
13.8. COVENANT NOT TO SUE. The parties covenant that under no
conditions will any party or any affiliate file any action against
the other (except only requests for injunctive or other equitable
relief) in any forum other than before the American Arbitration
Association, and the parties agree that any such action, if filed,
shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the
prevailing party.
13.9. INTENTION. It is the intention of the parties and their
affiliates that all disputes of any nature between them, whenever
arising, whether in regard to this agreement or any other matter,
from whatever cause, based on whatever law, rule or regulation,
whether statutory or common law, and however characterized, be
decided by arbitration as provided herein and that no party or
affiliate be required to litigate in any other forum any disputes or
other matters except for requests for injunctive or equitable
relief. This agreement shall be interpreted in conformance with
this stated intent of the parties and their affiliates.
13.10. SURVIVAL. The provisions for arbitration
contained herein shall survive the termination of this agreement
for any reason.
14. GENERAL PROVISIONS.
14.1. FURTHER ASSURANCES. From time to time, each party will
execute such additional instruments and take such actions as may be
reasonably required to carry out the intent and purposes of this
agreement.
14.2. WAIVER. Any failure on the part of either party hereto
to comply with any of its obligations, agreements, or conditions
hereunder may be waived in writing by the party to whom such
compliance is owed.
14.3. BROKERS. Each party agrees to indemnify and hold
harmless the other party against any fee, loss, or expense arising
out of claims by brokers or finders employed or alleged to have been
employed by the indemnifying party.
14.4. NOTICES. All notices and other communications hereunder
shall be in writing
and shall be deemed to have been given if delivered in person or
sent by prepaid first-class certified mail, return receipt
requested, or recognized commercial courier service, as follows:
If to Rhombic, to:
Rhombic Corporation
1212 Howe Street, Suite 901
Vancouver, British Columbia
Canada B8Z 2M9
If to Emerald, to:
Emerald Acquisition Corporation
1504 R Street, NW
Washington, D.C. 20009
If to the Shareholders, to:
Cassidy & Associates
1504 R Street Northwest
Washington, D.C. 20009
14.5. GOVERNING LAW. This agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Delaware.
14.6. ASSIGNMENT. This agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their successors and
assigns; provided, however, that any assignment by either party of
its rights under this agreement without the written consent of the
other party shall be void.
14.7. COUNTERPARTS. This agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Signatures sent by facsimile transmission
shall be deemed to be evidence of the original execution thereof.
14.8. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent
shall be Cassidy & Associates, Washington, D.C. The Closing shall
take place upon the fulfillment by each party of all the conditions
of Closing required herein, but not later than 15 days following
execution of this agreement unless extended by mutual consent of the
parties.
14.9. REVIEW OF AGREEMENT. Each party acknowledges that it
has had time to review this agreement and, as desired, consult with
counsel. In the interpretation of this agreement, no adverse
presumption shall be made against any party on the basis that it has
prepared, or participated in the preparation of, this agreement.
14.10. SCHEDULES. All schedules attached hereto, if
any, shall be acknowledged by each party by signature or initials
thereon.
14.11. EFFECTIVE DATE. This effective date of this
agreement shall be January 18, 2000.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN RHOMBIC CORPORATION AND
EMERALD ACQUISITION CORPORATION
IN WITNESS WHEREOF, the parties have executed this agreement.
RHOMBIC CORPORATION
By___________________________________
EMERALD ACQUISITION CORPORATION
By___________________________________
