AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
this 13th day of December, 2004, by and between Geraco, Inc., a Nevada
corporation ("Geraco"); Xxxxxx Financial Services, Inc., a Nevada corporation
("Xxxxxx"); and the persons listed in Exhibit A-1 hereof, who are the owners
of record of all the issued and outstanding stock of Xxxxxx, who execute and
deliver the Agreement ("Xxxxxx Stockholders"), based on the following:
Recitals
Geraco wishes to acquire all the issued and outstanding stock of Xxxxxx
in exchange for stock of Geraco, in a transaction intended to qualify as a
tax-free exchange pursuant to section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended. The parties intend for this Agreement to represent
the terms and conditions of such tax-free reorganization, which Agreement the
parties hereby adopt. However, neither party is seeking tax counsel or legal
or accounting opinions on whether the transaction qualifies for tax free
treatment.
Agreement
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and agreements
hereinafter set forth, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 1.07
hereof), the Xxxxxx Stockholders shall assign, transfer, and deliver to
Geraco, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or claims of any kind, nature, or description, all issued and
outstanding shares of common stock of Xxxxxx (the "Xxxxxx Shares") held by
Xxxxxx Stockholders which shares shall represent all issued and outstanding
shares of Xxxxxx common stock, and Geraco agrees to acquire such shares on
such date by issuing and delivering in exchange therefore an aggregate of
20,000,000 restricted shares of Geraco common stock, par value $0.001 per
share, (the "Geraco Common Stock"). Such shares of Geraco Common Stock shall
be issued pro rata based on the number of Xxxxxx Shares held and as set forth
opposite the Xxxxxx Stockholder's respective names in Exhibit A-1. All shares
of Geraco Common Stock to be issued and delivered pursuant to this Agreement
shall be appropriately adjusted to take into account any stock split, stock
dividend, reverse stock split, recapitalization, or similar change in the
Geraco Common Stock which may occur between the date of the execution of this
Agreement and the Closing Date.
AGREEMENT AND PLAN OF REORGANIZATION
1.02 Delivery of Certificates by Xxxxxx Stockholders. The transfer of
Xxxxxx shares by the Xxxxxx Stockholders shall be effected by the delivery to
Geraco at the Closing (as set forth in Section 1.07 hereof) of certificates
representing the transferred shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures medallion guaranteed and with
all necessary transfer taxes and other revenue stamps affixed and acquired at
the Xxxxxx Stockholders' expense.
1.03 Acquisition of Wholly-owned Subsidiary. After giving effect to
the transaction contemplated hereby, Xxxxxx will become a wholly-owned
subsidiary of Geraco through a stock-for-stock exchange.
1.04 Officers and Directors. On the Effective Date of the Closing,
the board of directors and the officers of Geraco shall consist of the members
of the board of directors and officers of Xxxxxx immediately prior to the
Closing, to serve thereafter in accordance with the bylaws of Geraco and until
their respective successors shall have been duly elected and qualified in
accordance with such bylaws and the laws of the state of Nevada.
1.05 Name Change. On or shortly after the Effective Date of the
Closing (as set forth in Section 1.07 hereof) Geraco shall change its name to
"Xxxxxx Holdings Corporation" or such other name as may be available and to
which the parties may agree.
1.06 Further Assurances. At the Closing and from time to time
thereafter, the Xxxxxx Stockholders shall execute such additional instruments
and take such other action as Geraco may reasonably request, without undue
cost to the Xxxxxx Stockholders in order to more effectively sell, transfer,
and assign clear title and ownership in the Xxxxxx Shares to Geraco .
1.07 Closing and Parties. The Closing contemplated hereby shall be
held at a mutually agreed upon time and place on or before December 5, 2004 or
on another date to be agreed to in writing by the parties (the "Closing
Date"). The Agreement may be closed at any time following approval by a
majority of the shareholders of Geraco Common Stock as set forth in Section
4.01 hereof and the Xxxxxx Stockholders as set forth in Section 5.01. The
Closing may be accomplished by wire, express mail, overnight courier,
conference telephone call or as otherwise agreed to by the respective parties
or their duly authorized representatives.
1.08 Closing Events.
(a) Geraco Deliveries. Subject to fulfillment or waiver of
the conditions set forth in Article IV, Geraco shall deliver to Xxxxxx at
Closing all the following:
(i) A certificate of good standing from the Department
of Commerce of the State of Nevada, issued as of a date within ten days prior
to the Closing Date, certifying that Geraco is in good standing as a
corporation in the State of Nevada;
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AGREEMENT AND PLAN OF REORGANIZATION
(ii) Incumbency and specimen signature certificates dated
the Closing Date with respect to the officers of Geraco executing this
Agreement and any other document delivered pursuant hereto on behalf of
Geraco;
(iii) Copies of the resolutions/consents of Geraco's board
of directors and shareholder minutes or consents authorizing the execution and
performance of this Agreement and the contemplated transactions, certified by
the secretary or an assistant secretary of Geraco as of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly
executed by the chief executive officer of Geraco;
(v) The certificate contemplated by Section 4.03, dated
the Closing Date, signed by the chief executive officer of Geraco; and
(vi) Certificates for 20,000,000 shares of Geraco Common
Stock in the names of the Xxxxxx Stockholders and in the amounts set forth in
Exhibit "A-1".
In addition to the above deliveries, Geraco shall take all steps and
actions as Xxxxxx and Xxxxxx Stockholders may reasonably request or as may
otherwise be reasonably necessary to consummate the transactions contemplated
hereby.
(b) Xxxxxx Deliveries. Subject to fulfillment or waiver of
the conditions set forth in Article V, Xxxxxx and/or Xxxxxx Stockholder's
shall deliver to Geraco at Closing all the following:
(i) A certificate of good standing from the Secretary
of State of the State of Nevada, issued as of a date within ten days prior to
the Closing Date certifying that Xxxxxx is in good standing as a corporation
in the State of Nevada;
(ii) Incumbency and specimen signature certificates dated
the Closing Date with respect to the officers of Xxxxxx executing this
Agreement and any other document delivered pursuant hereto on behalf of
Xxxxxx;
(iii) Copies of resolutions/consents of the board of
directors and of the stockholders of Xxxxxx authorizing the execution and
performance of this Agreement and the contemplated transactions, certified by
the secretary or an assistant secretary of Xxxxxx as of the Closing Date;
(iv) The certificate contemplated by Section 5.02,
executed by the chief operating officer of Xxxxxx; and
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AGREEMENT AND PLAN OF REORGANIZATION
(v) The certificate contemplated by Section 5.03, dated
the Closing Date, signed by the chief operating officer of Xxxxxx.
In addition to the above deliveries, Xxxxxx shall take all steps and
actions as Geraco may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF GERACO
As an inducement to, and to obtain the reliance of Xxxxxx, Geraco
represents and warrants as follows:
2.01 Organization.
(a) Geraco is, and will be on the Closing, a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada and has the corporate power and is and will be duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now
being conducted, and there are no other jurisdictions in which it is not so
qualified in which the character and location of the assets owned by it or the
nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or condition. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of Geraco's articles of incorporation or bylaws, or
other agreement to which it is a party or by which it is bound.
2.02 Approval of Agreement. Geraco has full power, authority, and
legal right and have taken, or will take, all action required by law, its
articles of incorporation, bylaws, and otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated. The board
of directors of Geraco has authorized and approved the execution, delivery,
and performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the Geraco shareholders and compliance with state
and federal corporate and securities laws.
2.03 Capitalization. The authorized capitalization of Geraco
consists of 50,000,000 shares of $0.001 par value common stock, and 10,000,000
shares of $0.001 preferred stock. All issued and outstanding shares of Geraco
are legally issued, fully paid, and non-assessable and not issued in violation
of the preemptive or other right of any person. There are no dividends or
other amounts due or payable with respect to any of the shares of capital
stock of Geraco.
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AGREEMENT AND PLAN OF REORGANIZATION
2.04 Financial Statements.
(a) Included in Schedule 2.04, are the audited balance sheet
of Geraco as of June 30, 2004, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the fiscal year ended June
30, 2004, including the notes thereto.
(b) The financial statements of Geraco delivered pursuant to
Section 2.04(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved as
explained in the notes to such financial statements. The Geraco financial
statements present fairly, in all material respects, as of their respective
dates, the financial position of Geraco. Geraco did not have, as of the date
of any such financial statements, except as and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected therein in accordance with generally
accepted accounting principles, and all assets reflected therein presently
fairly the assets of Geraco in accordance with generally accepted accounting
principles.
(c) Geraco has filed or will file as the Closing Date its tax
returns required to be filed for its two most recent fiscal years. All such
returns and reports are accurate and correct in all material respect. Geraco
has no material liabilities with respect to the payment of any federal, state,
county, local, or other taxes (including any deficiencies, interest, or
penalties) accrued for or applicable to the period ended on the date of the
most recent balance sheet of Geraco, except to the extent reflected on such
balance sheet and all such dates and years and periods prior thereto and for
which Geraco may at said date have been liable in its own right or as
transferee of the assets of, or as successor to, any other corporation or
entity, except for taxes accrued but not yet due and payable, and to the best
knowledge of Geraco, no deficiency assessment or proposed adjustment of any
such tax return is pending, proposed or contemplated. To the best knowledge
of Geraco, none of such income tax returns has been examined or is currently
being examined by the Internal Revenue Service and no deficiency assessment or
proposed adjustment of any such return is pending, proposed or contemplated.
Geraco has not made any election pursuant to the provisions of any applicable
tax laws (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material adverse affect on
Geraco, its financial condition, its business as presently conducted or
proposed to be conducted, or any of its respective properties or material
assets. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of Geraco.
2.05 Outstanding Warrants and Options. At closing, Geraco will have
no existing warrants, options, calls or commitments outstanding.
2.06 Information. The information concerning Geraco set forth in this
Agreement is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the
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AGREEMENT AND PLAN OF REORGANIZATION
circumstances under which they were made, not misleading. Geraco shall cause
the schedules delivered by it pursuant hereto and the instruments delivered to
Xxxxxx hereunder to be updated after the date hereof up to and including the
Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement or the schedules hereto, since the date of the most recent
Geraco balance sheet described in Section 2.04 and included in the information
referred to in Section 2.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
Geraco or (ii) any damage, destruction, or loss to Geraco (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or conditions of Geraco;
(b) Geraco has not (i) amended its articles of incorporation
or bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of Geraco; (iv) made any
material change in its method of management, operation, or accounting; (v)
entered into any other material transactions; (vi) made any accrual or
arrangement for or payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or employee;
(vii) increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in any
profit-sharing, bonus, deferred compensation, insurance, pension, retirement,
or other employee benefit plan, payment, or arrangement made to, for, or with
its officers, directors, or employees;
(c) Geraco has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Geraco balance sheet and current liabilities incurred since that date
in the ordinary course of business; (iv) sold or transferred, or agreed to
sell or transfer, any of its material assets, properties, or rights (except
assets, properties, or rights not used or useful in its business which, in the
aggregate have a value of less than $5,000 or canceled, or agreed to cancel,
any debts or claims (except debts and claims which in the aggregate are of a
value of less than $5,000); (v) made or permitted any amendment or termination
of any contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of Geraco; or
(vi) issued, delivered, or agreed to issue or deliver any stock, bonds, or
other corporate securities including debentures (whether authorized and
unissued or held as treasury stock); and
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AGREEMENT AND PLAN OF REORGANIZATION
(d) To the best knowledge of Geraco, it has not become subject
to any law or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of Geraco.
2.08 Litigation and Proceedings. There are no material actions,
suits, or administrative or other proceedings pending or, to the knowledge of
Geraco, threatened by or against Geraco or adversely affecting Geraco or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign, or before any arbitrator of any kind.
Geraco does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, award, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
2.09 Compliance With Laws and Regulations. Geraco has complied with
all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
(i) could not materially and adversely affect the business, operations,
properties, assets, or condition of Geraco or (ii) could not result in the
occurrence of any material liability for Geraco. To the best knowledge of
Geraco, the consummation of this transaction will comply with all applicable
statutes and regulations, subject to the preparation and filing of any forms
required by state and federal securities laws.
2.10 Material Contract Defaults. Geraco is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Geraco, and there is no event of default
or other event which, with notice or lapse of time or both, would constitute a
default in any material respect under any such contract, agreement, lease, or
other commitment in respect of which Geraco has not taken adequate steps to
prevent such a default from occurring.
2.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust, or other material contract, agreement, or instrument to which Geraco
is a party or to which any of its properties or operations are subject.
2.12 Subsidiary. Geraco does not own, beneficially or of record, any
equity securities in any other entity. Geraco does not have a predecessor as
that term is defined under generally accepted accounting principles or
Regulation S-X promulgated by the Securities and Exchange Commission.
2.13 Geraco Schedules. Geraco has delivered to Xxxxxx the following
schedules, which are collectively referred to as the "Geraco Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, all certified by a duly authorized officer of
Geraco as complete, true, and accurate:
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AGREEMENT AND PLAN OF REORGANIZATION
(a) A schedule including copies of the articles of
incorporation and bylaws of Geraco in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of Geraco approving this Agreement and the transactions
herein contemplated;
(c) A schedule setting forth a description of any material
adverse change in the business, operations, property, inventory, assets, or
condition of Geraco since the most recent Geraco balance sheet, required to be
provided pursuant to Section 2.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof, and
(e) A schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the Geraco
Schedules by Sections 2.01 through 2.12.
Geraco shall cause the Geraco Schedules and the instruments delivered to
Xxxxxx hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Geraco Schedules, certified in the same manner as the original
Geraco Schedules, shall be delivered prior to and as a condition precedent to
the obligation of Xxxxxx to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF XXXXXX
As an inducement to, and to obtain the reliance of Geraco, Xxxxxx
represents and warrants as follows:
3.01 Organization. Xxxxxx is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Nevada and has the corporate power and is and will be
duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all of
its properties and assets and to carry on its business in all material
respects as it is now being conducted, and there are no other jurisdictions in
which it is not so qualified in which the character and location of the assets
owned by it or the nature of the material business transacted by it requires
qualification, except where failure to do so would not have a material adverse
effect on its business, operations, properties, assets or condition of Xxxxxx.
The execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of Xxxxxx'x articles of incorporation
or bylaws, or other material agreement to which it is a party or by which it
is bound.
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AGREEMENT AND PLAN OF REORGANIZATION
3.02 Approval of Agreement. Xxxxxx has full power, authority, and
legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, or otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated. The board
of directors of Xxxxxx have authorized and approved the execution, delivery,
and performance of this Agreement and the transactions contemplated hereby;
subject to the approval of the Xxxxxx Stockholders and compliance with state
and federal corporate and securities laws.
3.03 Capitalization. The authorized shares of Xxxxxx consist of
24,000,000 shares of $.001 par value common stock and 1,000,000 shares of
$.001 par value preferred stock. All issued and outstanding shares of Xxxxxx
are legally issued, fully paid, and non-assessable and not issued in violation
of the preemptive or other right of any person. All shareholders are either
offshore, sophisticated or accredited investors and have supplied written
representation to Xxxxxx of such status. There are no dividends or other
amounts due or payable with respect to any of the shares of capital stock of
Xxxxxx.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the audited financial
statements of Xxxxxx through the year ending June 30, 2004, and the related
statements of operations, stockholders' equity (deficit), and cash flows for
the year ended June 30, 2004, including the notes thereto.
(b) The audited financial statements delivered pursuant to
Section 3.04(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved.
The financial statements of Xxxxxx present fairly, as of their respective
dates, the financial position of Xxxxxx. Xxxxxx did not have, as of the date
of any such balance sheets, except as and to the extent reflected or reserved
against therein, any liabilities or obligations (absolute or contingent) which
should be reflected in any financial statements or the notes thereto prepared
in accordance with generally accepted accounting principles, and all assets
reflected therein present fairly the assets of Xxxxxx, in accordance with
generally accepted accounting principles. The statements of revenue and
expenses and cash flows present fairly the financial position and result of
operations of Xxxxxx as of their respective dates and for the respective
periods covered thereby.
3.05 Outstanding Warrants and Options. Xxxxxx has no issued options,
calls, or commitments of any nature relating to the authorized and unissued
Xxxxxx Common Stock.
3.06 Due Diligence. Xxxxxx has completed its due diligence and is
satisfied with its investigation. The information concerning Xxxxxx set forth
in this Agreement and in the schedules delivered by Xxxxxx pursuant hereto is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading. Xxxxxx shall cause the information delivered by Xxxxxx
pursuant hereto to Geraco hereunder to be updated after the date hereof up to
and including the Closing Date.
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AGREEMENT AND PLAN OF REORGANIZATION
3.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement since the date of the most recent Xxxxxx balance sheet
described in Section 3.04 and included in the information referred to in
Section 3.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition of
Xxxxxx or (ii) any damage, destruction, or loss to Xxxxxx materially and
adversely affecting the business, operations, properties, assets, or
conditions of Xxxxxx.
(b) Xxxxxx has not (i) amended its articles of incorporation
or bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value which in the aggregate are
extraordinary and material considering the business of Xxxxxx; (iv) made any
material change in its method of accounting; (v) entered into any other
material transactions other dm those contemplated by this Agreement; (vi) made
any material accrual or material arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to any
present or former officer or employee; or (vii) made any material increase in
any profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made to,
for, or with their officers, directors, or employees;
(c) Xxxxxx has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds
or incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course of
business; (iii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the most
recent Xxxxxx balance sheet and current liabilities incurred since that date
in the ordinary course of business; (iv) sold or transferred, or agreed to
sell or transfer, any of its material assets, properties, or rights, or agreed
to cancel, any material debts or claims; (v) made or permitted any amendment
or termination of any contract, agreement, or license to which it is a party
if such amendment or termination is material, considering the business of
Xxxxxx; or (vi) issued, delivered, or agreed to issue or deliver any stock,
bonds, or other corporate securities including debentures (whether authorized
and unissued or held as treasury stock); and
(d) To the best knowledge of Xxxxxx, it has not become subject
to any law or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of Xxxxxx.
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AGREEMENT AND PLAN OF REORGANIZATION
3.08 Title and Related Matters. Except as provided herein or
disclosed in the most recent Xxxxxx balance sheet and the notes thereto,
Xxxxxx has good and marketable title to all of its properties, inventory,
interests in properties, technology, whether patented or unpatented,
including, but not limited to the Xxxxxx technology, intellectual property,
computer software, and assets, which are reflected in the most recent Xxxxxx
balance sheet or acquired after that date (except properties, interests in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all mortgages, liens, pledges,
charges, or encumbrances, except (i) statutory liens or claims not yet
delinquent; and (ii) such imperfections of title and easements as do not, and
will not, materially detract from, or interfere with, the present or proposed
use of the properties subject thereto or affected thereby or otherwise
materially impair present business operations on such properties. To the best
knowledge of Xxxxxx, its technology does not infringe on the copyright,
patent, trade secret, know-how, or other proprietary right of any other person
or entity and comprises all such rights necessary to permit the operation of
the business of Xxxxxx as now being conducted or as contemplated.
3.09 Litigation and Proceedings. There are no material actions,
suits, or proceedings pending or, to the knowledge of Xxxxxx, threatened by or
against Xxxxxx or adversely affecting Xxxxxx, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind. Xxxxxx does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality.
3.10 Material Contract Defaults. Xxxxxx is not in default in any
material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets, or condition of Xxxxxx, and there is no event of default
or other event which, with notice or lapse of time or both, would constitute a
default in any material respect under any such contract, agreement, lease, or
other commitment in respect of which Xxxxxx has not taken adequate steps to
prevent such a default from occurring.
3.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed
of trust or other material contract, agreement, or instrument to which Xxxxxx
is a party or to which any of its properties or operations are subject.
3.12 Governmental Authorizations. Xxxxxx has all licenses,
franchises, permits, and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date of this Agreement. Except for compliance with federal
and state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection
with the execution and delivery by Xxxxxx of this Agreement and the
consummation by Xxxxxx of the transactions contemplated hereby.
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AGREEMENT AND PLAN OF REORGANIZATION
3.13 Compliance With Laws and Relations. Xxxxxx has complied with all
applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations,
properties, assets, or condition of Xxxxxx or except to the extent that
noncompliance would not result in the occurrence of any material liability for
Xxxxxx. To the best knowledge of Xxxxxx, the consummation of this transaction
will comply with all applicable statutes and regulations, subject to the
preparation and filing of any forms required by state and federal security
laws.
3.14 Subsidiary. Xxxxxx does not own, beneficially or of record, any
equity securities in any other entity. Xxxxxx does not have a predecessor as
that term is defined under generally accepted accounting principles or
Regulation S-X promulgated by the Securities and Exchange Commission.
3.15 Xxxxxx Schedules. Xxxxxx has delivered to Geraco the following
schedules, which are collectively referred to as the "Xxxxxx Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, and instruments and Geraco as of such date, all
certified by the chief executive officer of Xxxxxx as complete, true, and
accurate:
(a) A schedule including copies of the articles of
incorporation and bylaws of Xxxxxx and all amendments thereto in effect as of
the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of Xxxxxx approving this Agreement and the transactions
herein contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material
adverse change in the business, operations, property, inventory, assets, or
condition of Xxxxxx since the most recent Xxxxxx balance sheet, required to be
provided pursuant to Section 3.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof, and
(e) A schedule setting forth any other information, together
with any required copies of documents, required to be disclosed in the Xxxxxx
Schedules by Sections 3.01 through 3.14.
Xxxxxx shall cause the Xxxxxx Schedules and the instruments delivered to
Geraco hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date.
Such updated Xxxxxx Schedules, certified in the same manner as the original
Xxxxxx Schedules, shall be delivered prior to and as a condition precedent to
the obligation of Geraco to close.
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AGREEMENT AND PLAN OF REORGANIZATION
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXX
The obligations of Xxxxxx under this Agreement are subject to the
following conditions:
4.01 Shareholder Approval.
(a) Geraco shall call and hold a meeting of its shareholders, or
obtain the written consent of a majority of its shareholders, to approve the
transactions contemplated by this Agreement including the acquisition of
Xxxxxx by Geraco through a stock-for-stock exchange of Geraco Common Stock for
all of the issued and outstanding Xxxxxx Shares.
(b) Xxxxxx shall call and hold a meeting of its shareholders, or
obtain the written consent of a majority of its shareholders, to approve the
transactions contemplated by this Agreement including the acquisition by
Geraco and the exchange of Geraco Common Stock for all of the issued and
outstanding Xxxxxx Shares.
4.02 Accuracy of Representations. The representations and warranties
made by Geraco in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and Geraco shall have performed or complied with
all covenants and conditions required by this Agreement to be performed or
complied with by Geraco prior to or at the Closing. Xxxxxx shall be furnished
with certificates, signed by duly authorized officers of Geraco and dated the
Closing Date, to the foregoing effect.
4.03 Officer's Certificates. Xxxxxx shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of Geraco to the effect that to such officer's best
knowledge no litigation, proceeding, investigation, or inquiry is pending or,
to the best knowledge of Geraco threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by this
Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and Geraco's own documents and
information, the certificate shall represent, to the best knowledge of the
officer, that:
(a) This Agreement has been duly approved by Geraco's board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of Geraco by its duly authorized officers pursuant to, and
in compliance with, authority granted by the board of directors of Geraco
pursuant to a unanimous consent;
(b) There have been no material adverse changes in Geraco up
to and including the date of the certificate;
(c) All conditions required by this Agreement have been met,
satisfied, or performed by Geraco;
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AGREEMENT AND PLAN OF REORGANIZATION
(d) All authorizations, consents, approvals, registrations,
and/or filings with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by Geraco have
been obtained and are in full force and effect or, if not required to have
been obtained, will be in full force and effect by such time as may be
required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against Geraco, wherein an unfavorable decision, ruling, or finding
could have an adverse effect on the financial condition of Geraco, the
operation of Geraco, or the acquisition and reorganization contemplated
herein, or any agreement or instrument by which Geraco is bound or in any way
contests the existence of Geraco.
4.04 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business, or operations of Geraco, nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause or
create any material adverse change in the financial condition, business, or
operations of Geraco.
4.05 Good Standings. Xxxxxx shall have received a certificate of good
standing from the appropriate authority, dated as of the date within five days
prior to the Closing Date, certifying that Geraco is in good standing as a
corporation in the State of Nevada.
4.06 Other Items. Xxxxxx shall have received such other documents,
certificates, or instruments relating to the transactions contemplated hereby
as Xxxxxx may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF GERACO
The obligations of Geraco under this Agreement are subject to the
following conditions:
5.01 Shareholder Approval.
(a) Geraco shall call and hold a meeting of its shareholders,
or obtain the written consent of a majority of its shareholders, to approve
the transactions contemplated by this Agreement including the acquisition of
Xxxxxx by Geraco through a stock-for-stock exchange of Geraco Common Stock for
all of the issued and outstanding Xxxxxx Shares.
(b) Xxxxxx shall call and hold a meeting of its shareholders,
or obtain the written consent of a majority of its shareholders, to approve
the transactions contemplated by this Agreement including the acquisition by
Geraco and the exchange of Geraco Common Stock for all of the issued and
outstanding Xxxxxx Shares.
14
AGREEMENT AND PLAN OF REORGANIZATION
5.02 Accuracy of Representations. The representations and warranties
made by Xxxxxx and the Xxxxxx Stockholders in this Agreement were true when
made and shall be true at the Closing Date with the same force and affect as
if such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and Xxxxxx shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Xxxxxx prior to or at the
Closing. Geraco shall be furnished with a certificate, signed by a duly
authorized officer of Xxxxxx and dated the Closing Date, to the foregoing
effect.
5.03 Officer's Certificates. Geraco shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
operating officer of Xxxxxx to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of Xxxxxx,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
based on certificates of good standing, representations of government
agencies, and Xxxxxx'x own documents, the certificate shall represent, to the
best knowledge of the officer, that:
(a) This agreement has been duly approved by Xxxxxx'x board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of Xxxxxx by its duly authorized officers pursuant to, and
in compliance with, authority granted by the board of directors of Xxxxxx
pursuant to a unanimous consent of its board of directors and a majority vote
of its stockholders;
(b) Except as provided or permitted herein, there have been no
material adverse changes in Xxxxxx up to and including the date of the
certificate.
(c) All authorizations, consents, approvals, registrations,
and/or filing with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by Xxxxxx have
been obtained and are in full force and effect or, if not required to have
been obtained will be in full force and effect by such time as may be
required; and
(d) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against Xxxxxx, wherein an unfavorable decision, ruling, or finding
would have an adverse affect on the financial condition of Xxxxxx, the
operation of Xxxxxx, or the acquisition and reorganization contemplated
herein, or any material agreement or instrument by which Xxxxxx is bound or
would in any way contest the existence of Xxxxxx.
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AGREEMENT AND PLAN OF REORGANIZATION
5.04 No Material Adverse Change. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial
condition, business or operations of Xxxxxx, nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause of create any
material adverse change in the financial condition, business, or operations of
Xxxxxx.
5.05 Good Standing. Geraco shall have received a certificate of good
standing from the appropriate authority, dated as of a date with five days
prior to the Closing Date, certifying that Xxxxxx is in good standing as a
corporation in the State of Utah.
5.06 Ownership Documentation. Geraco shall have received
documentation verifying that all rights, title and interest in and to the
trade names, technology, software, intellectual property, manufacturing
equipment, inventory and assets related to the Xxxxxx products and technology
shall be free and clear of any and all liens, encumbrances, royalties and
claims prior to Closing, other than those documents in the schedules or
financials delivered to Geraco.
5.07 Other Items. Geraco shall have received such further documents
certificates, or instruments relating to the transactions contemplated hereby
as Geraco may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of Geraco and Xxxxxx
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the respective schedules to be
delivered by Geraco and Xxxxxx pursuant hereto or as permitted or contemplated
by this Agreement, Geraco and Xxxxxx will each:
(i) Carry on its business in substantially the same
manner as it has heretofore;
(ii) Maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its
obligations under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it
business organization intact, to retain its key employees, and to maintain its
relationships with its material suppliers and customers;
16
AGREEMENT AND PLAN OF REORGANIZATION
(v) Duly and timely file for all taxable periods
ending on or prior to the Closing Date all federal, state, county, and local
tax returns required to be filed by or on behalf of such entity or for which
such entity may be held responsible and shall pay, or cause to pay, all taxes
required to be shown as due and payable on such returns, as well as all
installments of tax due and payable during the period commencing on the date
of this Agreement and ending on the Closing Date.; and
(vi) Fully comply with and perform in all material
respects all obligations and duties imposed on it by all federal and state
laws and all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From the date of this Agreement until the Closing Date,
Geraco and Xxxxxx will not:
(i) Make any change in its articles of incorporation or
bylaws;
(ii) Enter into or amend any material contract,
agreement, or other instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any contract,
agreement, or other instrument in the ordinary course of business; and
(iii) Enter into any agreement for the sale of Xxxxxx or
Geraco securities without the prior approval of the other party.
(iv) Issue or cause to be issued any press announcements
or news releases other than those required by law.
6.02 Access to Properties and Records. Until the Closing Date, Xxxxxx
and Geraco will afford to the other party's officers and authorized
representatives full access to the properties, books, and records of the other
party in order that each party may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of Xxxxxx
or Geraco and will furnish the other party with such additional financial and
other information as to the business and properties of Xxxxxx or Geraco as
each party shall from time to time reasonably request.
6.03 Indemnification by Xxxxxx. Xxxxxx will indemnify and hold
harmless Geraco, and their directors and officers, employees and agents, and
each person, if any, who controls Geraco, within the meaning of the Securities
Act, from and against any and all losses, claims, damages, expenses,
liabilities, or actions to which any of them may become subject under
applicable law (including the Securities Act and the Securities Exchange Act)
and will reimburse them for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any claims or actions,
whether or not resulting in liability, insofar as such losses, claims,
damages, expenses, liabilities, or actions arise out of or are based upon any
breach of this Agreement, or any untrue statement or alleged untrue statement
of material fact contained in any application or statement filed with a
governmental body or arising out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing by Xxxxxx expressly for use
therein. The indemnity agreement contained in this Section 6.03 shall remain
operative and in full force and effect, regardless of any investigation made
by or on behalf of Geraco and shall survive the consummation of the
transactions contemplated by this Agreement. This indemnity agreement does
not cover any acts of Geraco, its management, employees, or agents, prior to
the date of this Agreement.
17
AGREEMENT AND PLAN OF REORGANIZATION
6.04 Indemnification by Geraco. Geraco will indemnify and hold
harmless Xxxxxx, the Xxxxxx Stockholders, Xxxxxx'x directors and officers, and
each person, if any, who controls Xxxxxx within the meaning of the Securities
Act, from and against any and all losses, claims, damages, expenses,
liabilities, or actions to which any of them may become subject under
applicable law (including the Securities Act and the Securities Exchange Act)
and will reimburse them for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any claims or actions,
whether or not resulting in liability, insofar as such losses, claims,
damages, expenses, liabilities, or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in
any application or statement filed with a governmental body or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with information
furnished in writing by Geraco expressly for use therein. The indemnity
agreement contained in this Section 6.04 shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
Xxxxxx and shall survive the consummation of the transactions contemplated by
this Agreement for a period of six months.
6.05 The Acquisition of Xxxxxx Common Stock. Geraco and Xxxxxx
understand and agree that the consummation of this Agreement including the
issuance of the Geraco Common Stock to Xxxxxx in exchange for the Xxxxxx
Shares as contemplated hereby constitutes the offer and sale of securities
under the Securities Act and applicable state statutes. Geraco and Xxxxxx
agree that such transactions shall be consummated in reliance on exemptions
from the registration and prospectus delivery requirements of such statutes
that depend, among other items, on the circumstances under which such
securities are acquired.
(a) In order to provide documentation for reliance upon
exemptions from the registration and prospectus delivery requirements for such
transactions, the signing of this Agreement and the delivery of appropriate
separate representations shall constitute the parties acceptance of, and
concurrence in, the following representations and warranties:
(i) The Xxxxxx Stockholders acknowledge that neither
the SEC nor the securities commission of any state or other federal agency has
made any determination as to the merits of acquiring Geraco Common Stock, and
that this transaction involves certain risks.
(ii) The Xxxxxx Stockholders have received and read the
Agreement and understand the risks related to the consummation of the
transactions herein contemplated.
18
AGREEMENT AND PLAN OF REORGANIZATION
(iii) Xxxxxx Stockholders have such knowledge and
experience in business and financial matters that they are capable of
evaluating each business.
(iv) The Xxxxxx Stockholders have been provided with
copies of all materials and information requested by them or their
representatives, including any information requested to verify any information
furnished (to the extent such information is available or can be obtained
without unreasonable effort or expense), and- the parties have been provided
the opportunity for direct communication regarding the transactions
contemplated hereby.
(v) All information which the Xxxxxx Stockholders have
provided to Geraco or their representatives concerning their suitability and
intent to hold shares in Geraco following the transactions contemplated hereby
is complete, accurate, and correct.
(vi) The Xxxxxx Stockholders have not offered or sold
any securities of Geraco or interest in this Agreement and have no present
intention of dividing the Geraco Common Stock or Xxxxxx Shares to be received
or the rights under this Agreement with others or of reselling or otherwise
disposing of any portion of such stock or rights, either currently or after
the passage of a fixed or determinable period of time or on the occurrence or
nonoccurrence of any predetermined event or circumstance.
(vii) The Xxxxxx Stockholders understand that the Geraco
Common Stock has not been registered, but is being acquired by reason of a
specific exemption under the Securities Act as well as under certain state
statutes for transactions not involving any public offering and that any
disposition of the subject Geraco Common Stock may, under certain
circumstances, be inconsistent with this exemption and may make Xxxxxx or
Geraco an "underwriter", within the meaning of the Securities Act. It is
understood that the definition of "underwriter" focuses upon the concept of
"distribution" and that any subsequent disposition of the subject Geraco
Common Stock can only be effected in transactions which are not considered
distributions. Generally, the term "distribution" is considered synonymous
with "public offering" or any other offer or sale involving general
solicitation or general advertising. Under present law, in determining
whether a distribution occurs when securities are sold into the public market,
under certain circumstances one must consider the availability of public
information regarding the issuer, a holding period for the securities
sufficient to assure that the persons desiring to sell the securities without
registration first bear the economic risk of their investment, and a
limitation on the number of securities which the stockholder is permitted to
sell and on the manner of sale, thereby reducing the potential impact of the
sale on the trading markets. These criteria are set forth specifically in
rule 144 promulgated under the Securities Act, and, after one year after the
date the Geraco Common Stock or Xxxxxx Shares is fully paid for, as calculated
in accordance with rule 144(d), sales of securities in reliance upon rule 144
can only be made in limited amounts in accordance with the terms and
conditions of that rule. After two years from the date the securities are
fully paid for, as calculated in accordance with rule 144(d), they can
generally be sold without meeting those conditions, provided the holder is not
(and has not been for the preceding three months) an affiliate of the issuer.
19
AGREEMENT AND PLAN OF REORGANIZATION
(viii) The Xxxxxx Stockholders acknowledge that the shares of
Geraco Common Stock, must be held and may not be sold, transferred, or
otherwise disposed of for value unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. Other
than as set forth herein, Geraco is not under any obligation to register the
Geraco Common Stock under the Securities Act. If rule 144 is available after
one year and prior to two years following the date the shares are fully paid
for, only routine sales of such Geraco Common Stock in limited amounts can be
made in reliance upon rule 144 in accordance with the terms and conditions of
that rule. Geraco is not under any obligation to make rule 144 available
except as set forth in this Agreement and in the event rule 144 is not
available, compliance with Regulation A or some other disclosure exemption may
be required before Xxxxxx Stockholders can sell, transfer, or otherwise
dispose of such Geraco Common Stock without registration under the Securities
Act. Subject to compliance with federal and state securities laws, Geraco'
registrar and transfer agent will maintain a stop transfer order against the
registration of transfer of the Geraco Common Stock held by Xxxxxx
Stockholders and the certificates representing the Geraco Common Stock will
bear a legend in substantially the following form so restricting the sale of
such securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE SECURITIES ACT.
(ix) Subject to compliance with federal and state
securities laws, Geraco may refuse to register further transfers or resales of
the Geraco Common Stock in the absence of compliance with rule 144 unless the
Xxxxxx Stockholders furnish Geraco with an opinion of counsel reasonably
acceptable to Geraco stating that the transfer is proper. Further, unless
such opinion states that the shares of Geraco Common Stock are free of any
restrictions under the Securities Act, Geraco may refuse to transfer the
securities to any transferee who does not furnish in writing to Geraco the
same representations and agree to the same conditions with respect to such
Geraco Common Stock as set forth herein. Geraco may also refuse to transfer
the Geraco Common Stock if any circumstances are present reasonably indicating
that the transferee's representations are not accurate.
20
AGREEMENT AND PLAN OF REORGANIZATION
(b) In connection with the transaction contemplated by this
Agreement, Xxxxxx and Geraco shall each file, with the assistance of the other
and their respective legal counsel, such notices. applications, reports, or
other instruments as may be deemed by them to be necessary or appropriate in
an effort to document reliance on such exemptions, and the appropriate
regulatory authority in the states where the Xxxxxx Stockholders reside unless
an exemption requiring no filing is available in such jurisdictions, all to
the extent and in the manner as may be deemed by such parties to be
appropriate.
(c) In order to more fully document reliance on the exemptions
as provided herein, Xxxxxx, the Xxxxxx Stockholders, and Geraco shall execute
and deliver to the other, at or prior to the Closing, such further letters of
representation, acknowledgment, suitability, or the like as Geraco or Xxxxxx
and their respective counsel may reasonably request in connection with
reliance on exemptions from registration under such securities laws.
(d) The Xxxxxx Stockholders acknowledge that the basis for
relying on exemptions from registration or qualifications are factual,
depending on the conduct of the various parties, and that no legal opinion or
other assurance will be required or given to the effect that the transactions
contemplated hereby are in fact exempt from registration or qualification.
6.06 Geraco Liabilities. Immediately prior to the Closing Date,
Geraco shall have no material assets and no liabilities in excess of $500, and
all expenses related to this Agreement or otherwise shall have been paid.
6.07 Securities Filings. Geraco shall be responsible for the
preparation and filing of any reports required by the Securities and Exchange
Commission or any other governing organization. Geraco shall be responsible
for obtaining consolidated audited financials within 60 days from the closing
date, and will be responsible for any and all filings in any jurisdiction
where its shareholders reside which would require a filing with a governmental
agency as a result of the transactions contemplated in this Agreement.
6.08 Sales of Securities Under Rule 144, If Applicable.
(a) Geraco will use its best efforts to at all times satisfy
the current public information requirements of rule 144 promulgated under the
Securities Act so that its shareholders can sell restricted securities that
have been held for one year or more or such other restricted period as
required by rule 144 as it is from time to tune amended.
(b) Upon being informed in writing by any person holding
restricted stock of Geraco as of the date of this Agreement that such person
intends to sell any shares under rule 144 promulgated under the Securities Act
(including any rule adopted in substitution or replacement thereof), Geraco
will certify in writing to such person that it is in compliance with rule 144
current public information requirement to enable such person to sell such
person's restricted stock under rule 144, as may be applicable under the
circumstances.
21
AGREEMENT AND PLAN OF REORGANIZATION
(c) If any certificate representing any such restricted stock
is presented to Geraco's transfer agent for registration or transfer in
connection with any sales theretofore made under rule 144, provided such
certificate is duly endorsed for transfer by the appropriate person(s) or
accompanied by a separate stock power duly executed by the appropriate
person(s) in each case with reasonable assurances that such endorsements are
genuine and effective, and is accompanied by an opinion of counsel
satisfactory to Geraco and its counsel that such transfer has complied with
the requirements of rule 144, as the case may be, Geraco will promptly
instruct its transfer agent to register such transfer and to issue one or more
new certificates representing such shares to the transferee and, if
appropriate under the provisions of rule 144. As the case may be, free of any
stop transfer order or restrictive legend. The provisions of this Section
6.08 shall survive the Closing and the consummation of the transactions
contemplated by this Agreement for a period of two years.
(d) The shareholders of Geraco as of the date of this
Agreement, as well as those receiving Geraco Common Stock pursuant to this
Agreement, are intended third-party beneficiaries of this Section 6.08.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, Geraco and Xxxxxx agree that
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution, or consummation of this
Agreement other than those previously disclosed. Further, Geraco and Xxxxxx
each agree to indemnify the other against any claim by any third person for
any commission, brokerage, or finder's fee or other payment with respect to
this Agreement or the transactions contemplated hereby based on any alleged
agreement or understanding between such party and such third person, whether
express or implied, from the actions of such party. The covenants set forth
in this section shall survive the Closing Date and the consummation of the
transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of
this transaction for international, federal or state income taxation. Each
party has relied exclusively on its own legal, accounting, and other tax
adviser regarding the treatment of this transaction for federal and state
income taxes and on no representation, warranty, or assurance from any other
party or such other party's legal, accounting, or other adviser.
22
AGREEMENT AND PLAN OF REORGANIZATION
7.03 Governing Law. This Agreement shall be governed by, enforced and
construed under and in accordance with the laws of the State of Utah.
7.04 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered, if
sent by facsimile or telecopy transmission or other electronic communication
confirmed by registered or certified mail, postage prepaid, or if sent by
prepaid overnight courier addressed as follows:
If to Geraco, to: If to Xxxxxx, to:
Xxxxxx Xxxxxx Xxxxxxx Xxxx
4531 South 1880 East 00000 Xxxx Xxx
Xxxx Xxxx Xxxx, XX 00000 Xxx Xxxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered or sent by
facsimile or telecopy transmission or other electronic communication, or one
day after the date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by Geraco
or Xxxxxx such reference is to information specifically set forth in such
schedules and clearly marked to identify the section of this Agreement to
which the information relates. Whenever any representation is made to the
"knowledge" of any party, it shall be deemed to be a representation that no
officer or director of such party, after reasonable investigation, has any
knowledge of such matters.
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. This Agreement alone fully and completely expresses the
agreement of the parties relating to the subject matter hereof. There are no
other courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein.
7.08 Survival, Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of six
months from the Closing Date, unless otherwise provided herein.
7.09 Counterparts; Facsimile. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all of
which taken together shall be but a single instrument. Facsimile signatures
shall constitute original signatures, and shall be followed by delivery of
original signatures.
23
AGREEMENT AND PLAN OF REORGANIZATION
7.10 Amendment or Waiver. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and such remedies may be enforced concurrently,
and no waiver by any party of the performance of any obligation by the other
shall be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior to the
Closing Date, this Agreement may be amended by a writing signed by all parties
hereto, with respect to any of the terms contained herein, and any term or
condition of this Agreement may be waived or the time for performance thereof
may be extended by a writing signed by the party or parties for whose benefit
the provision is intended.
N WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above written.
Geraco, Inc. Xxxxxx Financial Services, Inc.
a Nevada corporation a Nevada corporation
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx Xxxx
By: ___________________________ By: ________________________________
Xxxxxx Xxxxxx, President Xxxxxxx Xxxx, President
And Sole Shareholder
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EXHIBIT A-1
Xxxxxx Financial Services, Inc.
List of Shareholders
Number of Number of Geraco
Xxxxxx Shares Shares to be Received
Name of Shareholder Owned in Exchange
------------------- ----------- ---------------
Xxxxxxx Xxxx 1,000,000 20,000,000
----------- ----------
Total Shares 1,000,000 20,000,000
=========== ==========
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