AGREEMENT AND PLAN OF REORGANIZATION
AND STOCK PURCHASE AGREEMENT
by and among
XXXXXXXXXXXX.XXX, INC.
as Acquiror
GENESIS SYSTEMS, INC.
as Acquiree
and
the Shareholders of
GENESIS SYSTEMS, INC.
July 23,2001
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION and STOCK PURCHASE AGREEMENT
(the "Agreement") is made and entered into this 23 day of July, 2001 by and
among XXXXXXXXXXXX.XXX, INC., an Idaho corporation (hereinafter referred to as
"Newagecities"), GENESIS SYSTEMS, INC., a Minnesota corporation (hereinafter
referred to as the "Company"), and Xxxxxxx Xxxxxx, Xxxxx Xx, and Master
Financial Group, Inc, the shareholders of the Company (hereinafter referred to
as the "Shareholders").
RECITALS:
1. The Shareholders own all of the issued and outstanding shares of the
capital stock of the Company as set forth on Exhibit A hereto.
2. Newagecities is willing to acquire all of the issued and outstanding capital
stock of the Company, making the Company a wholly-owned subsidiary of
Newagecities, and the Shareholders desire to exchange all of their shares of the
Company's capital stock for shares of Newagecities authorized but unissued
shares of Common Stock as hereinafter provided.
3. It is the intention of the parties hereto that: (i) Newagecities shall
acquire all of the issued and outstanding capital stock of the Company in
exchange solely for 10,312,500 shares of Newagecities authorized but unissued
Common Stock set forth below (the "Exchange"); (ii) the Exchange shall qualify
as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended, and related sections thereunder; and (iii) the
Exchange shall qualify as a transaction in securities exempt from registration
or qualification under the Securities Act of 1933, as amended, (the "Act") and
under the applicable securities laws of the state or jurisdiction where the
Shareholders reside.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1. EXCHANGE OF SHARES
1.1 Exchange of Shares. Newagecities and the Shareholders hereby agree
that the Shareholders shall, on the Closing Date (as hereinafter defined),
exchange all of their issued and outstanding shares of the capital stock of the
Company (the "Genesis Shares") for 10,312,500 shares of Newagecities Common
Stock, $.02 par value (the "Newagecities Shares") set forth in Exhibit A hereto.
The number of shares of capital stock owned by the Shareholders and the number
of Newagecities Shares which the Shareholders will be entitled to receive in the
Exchange is set forth in Exhibit A hereto.
1.2 Delivery of Genesis Shares. On the Closing Date, the Shareholders
will deliver to Newagecities the certificates representing the Genesis' Shares,
duly endorsed (or with executed stock powers) so as to make Newagecities the
sole owner thereof. Newagecities shall deliver to the Shareholders the
Newagecities Shares to be delivered to the Shareholders.
1.3 Tax-Free Reorganization. The Shareholders acknowledge that, in the
event that capital stock of the Company representing at least 80% in interest of
the Company is not exchanged for shares of Newagecities voting capital stock
pursuant hereto, the Exchange will not qualify as a tax-free reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
1.4 Investment Intent. The Newagecities Shares have not been registered
under the Securities Act of 1933, as Amended, and may not be resold unless the
Newagecities Shares are registered under the Act or an exemption from such
registration is available. The Shareholders represent and warrant that they are
acquiring the Newagecities Shares for their own account, for investment, and not
with a view to the sale or distribution of such Shares. Each certificate
representing the Newagecities Shares will have a legend thereon incorporating
language as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The shares have been acquired for investment and may
not be sold or transferred in the absence of an effective
Registration Statement for the shares under the Act unless in
the opinion of counsel satisfactory to the Company,
registration is not required under the Act."
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS
The Company and the Shareholders hereby represent and warrant as
follows:
2.1 Organization and Good Standing; Ownership of Shares. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota, and is entitled to own or lease its properties
and to carry on its business as and in the places where such properties are now
owned, leased or operated and such business is now conducted. The Company is
duly licensed or qualified and in good standing as a foreign corporation where
the character of the properties owned by it or the nature of the business
transacted by it make such licenses or qualifications necessary. The Company
does not have any subsidiaries. There are no outstanding subscriptions, rights,
options, warrants or other agreements obligating either the Company or the
Shareholders to issue, sell or transfer any stock or other securities of the
Company.
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2.2 Ownership of Capital Stock. The Shareholders are the owners of
record and beneficially of all of the shares of capital stock of the Company,
all of which shares are free and clear of all rights, claims, liens and
encumbrances, and have not been sold, pledged, assigned or otherwise transferred
except pursuant to this Agreement.
2.3 Financial Statements, Books and Records. There has been previously
delivered to Newagecities the unaudited balance sheet of the Company as at June
30, 2001(the "Balance Sheet"). The Balance Sheet is true and accurate and fairly
represents the financial position of the Company as at such date, and has been
prepared in accordance with generally accepted accounting principles
consistently applied.
2.4 No Material Adverse Changes. Since the date of the Balance
Sheet there has not been:
(i) any material adverse change in the assets, operations,
condition (financial or otherwise) or prospective business of the Company;
(ii) any damage, destruction or loss materially affecting the
assets, prospective business, operations or condition (financial or otherwise)
of the Company, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to any redemption or repurchase of the
Company's capital stock;
(iv) any sale of an asset (other than in the ordinary course
of business)or any mortgage or pledge by the Company of any properties or
assets; or
(v) adoption of any pension, profit sharing, retirement,
stock bonus, stock option or similar plan or arrangement.
2.5 Taxes. The Company has prepared and filed all appropriate federal,
state and local tax returns for all periods prior to and through the date hereof
for which any such returns have been required to be filed by it and has paid all
taxes shown to be due by said returns or on any assessments received by it or
has made adequate provision for the payment thereof.
2.6 Compliance with Laws. The Company has complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business
which, if not complied with, would materially and adversely affect the business
of the Company.
2.7 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
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(i) violate any provision of the Articles of Incorporation or
By-Laws of the Company;
(ii) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract or other agreement to
which the Company is a party or by or to which it or any of its assets or
properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, the Company, or upon the properties or business of the Company; or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein which could have
a materially adverse effect on the business or operations of the Company.
2.8 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving the Company. There is no action, suit
or claim or legal, administrative or arbitral proceeding or (whether or not the
defense thereof or liabilities in respect thereof are covered by insurance)
pending or threatened against or involving the Company or any of its properties
or assets. There is no fact, event or circumstances that may give rise to any
suit, action, claim, investigation or proceeding.
2.9 Brokers or Finders. No broker's or finder's fee will be payable by
the Company in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions by the Company or
the Shareholders.
2.10 Real Estate. The Company neither owns real property nor is a
party to any leasehold agreement.
2.11 Tangible Assets. The Company has full title and interest in all
machinery, equipment, furniture, leasehold improvements, fixtures, vehicles,
structures, owned or leased by the Company, any related capitalized items or
other tangible property material to the business of the Company (the "Tangible
Assets"). The Company holds all rights, title and interest in all the Tangible
Assets owned by it on the Balance Sheet or acquired by it after the date of the
Balance Sheet, free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts or any other encumbrances. All of the
Tangible Assets are in good operating condition and repair and are usable in the
ordinary course of business of the Company and conform to all applicable laws,
ordinances and governmental orders, rules and regulations relating to their
construction and operation.
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2.12 Liabilities. The Company does not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued or absolute, contingent or otherwise, including,
without limitation, any liability on account of taxes, any other governmental
charge or lawsuit (all of the foregoing collectively defined to as
"Liabilities"), which were not fully, fairly and adequately reflected on the
Balance Sheet. As of the Closing Date, the Company will not have any
Liabilities, other than Liabilities fully and adequately reflected on the
Balance Sheet, except for Liabilities incurred in the ordinary course of
business.
2.13 Operations of the Company. From the date of the Balance Sheet and
through the Closing Date hereof the Company has not and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any
distribution of any kind to any shareholder, or made any direct or indirect
redemption, retirement, purchase or other acquisition of any shares in its
capital stock;
(iii) made any loan or advance to any shareholder, officer,
director, employee, consultant, agent or other representative or made any other
loan or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred
or assumed any indebtedness or liability (whether or not currently due and
payable);
(v) disposed of any assets of the Company except in the
ordinary course of business; or
(vi) materially increased the annual rate of compensation of
any executive employee of the Company;
(vii) increased, terminated, amended or otherwise modified any
plan for the benefit of employees of the Company;
(viii) issued any equity securities or rights to acquire such
equity securities; or
(ix) except in the ordinary course of business, entered
into or modified any contract, agreement or transaction.
2.14 Capitalization. The authorized capital stock of the Company
consists of 4,125,000 shares of common stock, $.01 par value, of which
10,312,500 shares are presently issued and outstanding. Neither the Company nor
the Shareholders has granted, issued or agreed to grant, issue or make available
any warrants, options, subscription rights or any other commitments of any
character relating to the issued or unissued shares of capital stock of the
Company.
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2.15 Full Disclosure. No representation or warranty by the Company or
the Shareholders in this Agreement or in any document or schedule to be
delivered by them pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished to Newagecities pursuant hereto or in
connection with the negotiation, execution or performance of this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any fact necessary to make any statement herein or therein
not materially misleading or necessary to a complete and correct presentation of
all material aspects of the businesses of the Company.
2.16 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 2 shall be true and
complete on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF NEWAGECITIES
Newagecities hereby represents and warrants to the Company and the
Shareholders as follows:
3.1 Organization and Good Standing. Newagecities is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Idaho and is entitled to own or lease its properties and to carry on its
business as and in the places where such properties are now owned, leased, or
operated and such business is now conducted. The authorized capital stock of
Newagecities consists of 45,000,000 shares of Common Stock, of which 10,616,853
shares are presently issued and outstanding. Newagecities is duly licensed or
qualified and in good standing as a foreign corporation where the character of
the properties owned by Newagecities or the nature of the business transacted by
it make such license or qualification necessary. Newagecities does not have any
subsidiaries other than xxxxxxxxxxxx.xxx, Inc., a Florida Corporation.
3.2 The Newagecities Shares. The Newagecities Shares to be issued to
the Shareholders have been or will have been duly authorized by all necessary
corporate and stockholder actions and, when so issued in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable.
3.3 Financial Statements; Books and Records. There has been previously
delivered to the Company, the audited balance sheet of Newagecities as at
December 31,2000 and the unaudited balance sheet as at March 31, 2001 (the
"Newagecities Balance Sheet") and the related statements of operations for the
periods then ended (the "Financial Statements"). The Financial Statements are
true and accurate and fairly represent the financial position of the Company as
at such dates and the results of its operations for the periods then ended, and
have been prepared in accordance with generally accepted accounting principles
consistently applied.
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3.4 No Material Adverse Changes. Since the date of the
Newagecities Balance Sheet and except as otherwise disclosed in Newagecities
reports or filings made under the Securities Exchange Act of 1934, there has not
been:
(i) any material adverse change in the assets, operations,
condition (financial or otherwise) or prospective business of Newagecities;
(ii) any damage, destruction or loss materially affecting the
assets, prospective business, operations or condition (financial or otherwise)
of Newagecities, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to any redemption or repurchase of
Newagecities' capital stock;
(iv) any sale of an asset (other than in the ordinary course
of business)or any mortgage or pledge by Newagecities of any properties or
assets; or
(v) adoption of any pension, profit sharing, retirement,
stock bonus, stock option or similar plan or arrangement.
3.5 Taxes. Newagecities has prepared and filed all appropriate federal,
state and local tax returns of every kind and category (including, without
limitation, income taxes, estimated taxes, excise taxes, sales taxes, inventory
taxes, use taxes, gross receipt taxes, franchise taxes and property taxes) for
all periods prior to and through the date hereof for which any such returns have
been required to be filed by it or the failure to make such filings and
resulting liability would not be material relative to the results of operations
of Newagecities. Newagecities has paid all taxes shown to be due by said returns
or on any assessments received by it or has made adequate provision for the
payment thereof.
3.6 Compliance with Laws. Newagecities has complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to their businesses,
including Federal and State securities laws, which, if not complied with, would
materially and adversely affect the business of Newagecities or the trading
market for the shares of Newagecities Common Stock.
3.7 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Articles of Incorporation or
By-Laws of Newagecities;
(ii) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract or other agreement to
which Newagecities is a party or by or to which it or any of its assets or
properties may be bound or subject;
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(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, Newagecities or upon the properties or business of Newagecities; or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein which could have
a material adverse effect on the business or operations of Newagecities.
3.8 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving Newagecities. There is no action, suit
or claim or legal, administrative or arbitral proceeding or (whether or not the
defense thereof or liabilities in respect thereof are covered by insurance)
pending or threatened against or involving Newagecities or any of its properties
or assets. Except as set forth on Schedule 3.8, there is no fact, event or
circumstances that may give rise to any suit, action, claim, investigation or
proceeding.
3.9 Brokers or Finders. No broker's or finder's fee will be payable by
Newagecities in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions by Newagecities.
3.10 Liabilities. Newagecities does not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued or absolute, contingent or otherwise, including,
without limitation, any liability on account of taxes, any other governmental
charge or lawsuit (all of the foregoing collectively defined to as
"Liabilities"), which were not fully, fairly and adequately reflected on the
Balance Sheet. As of the Closing Date, Newagecities will not have any
Liabilities, other than Liabilities fully and adequately reflected on the
Newagecities Balance Sheet or Newagecities balance sheet dated March 31, 2001,
except for Liabilities incurred in the ordinary course of business.
3.11 Operations of Newagecities. Except as set forth on Schedule 3.11
or in Newagecities reports or filings made under the Securities Exchange Act of
1934, since the date of the Newagecities Balance Sheet and through the Closing
Date hereof, Newagecities has not and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any
distribution of any kind to any shareholder, or made any direct or indirect
redemption, retirement, purchase or other acquisition of any shares in its
capital stock;
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(iii) made any loan or advance to any shareholder, officer,
director, employee, consultant, agent or other representative or made any other
loan or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred
or assumed any indebtedness or liability (whether or not currently due and
payable);
(v) disposed of any assets of Newagecities except in the
ordinary course of business; or
(vi) materially increased the annual level of compensation
of any executive employee of Newagecities;
(vii) increased, terminated amended or otherwise modified any
plan for the benefit of employees of Newagecities ;
(viii)issued any equity securities or rights to acquire such
equity securities; or
(ix) except in the ordinary course of business, entered
into or modified any contract, agreement or transaction.
3.12 Authority to Execute and Perform Agreements. Newagecities has the
full legal right and power and all authority and approval required to enter
into, execute and deliver this Agreement and to perform fully their obligations
hereunder. This Agreement has been duly executed and delivered and is the valid
and binding obligation of Newagecities, enforceable in accordance with its
terms, except as may be limited by bankruptcy, moratorium, insolvency or other
similar laws generally affecting the enforcement of creditors' rights. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and the performance by Newagecities of this
Agreement, in accordance with its respective terms and conditions will not:
(i) require the approval or consent of any governmental
or regulatory body, the Stockholders of Newagecities, or the approval or consent
of any other person;
(ii) conflict with or result in any breach or violation of any
of the terms and conditions of, or constitute (or with any notice or lapse of
time or both would constitute) a default under, any order, judgment or decree
applicable to Newagecities, or any instrument, contract or other agreement to
which Newagecities is a party or by or to which Newagecities is bound or
subject; or
(iii) result in the creation of any lien or other encumbrance
on the assets or properties of Newagecities.
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3.13 Delivery of Periodic Reports; Compliance with 1934 Act.
Newagecities has provided the Company and the Shareholders with all of its
Periodic Reports filed with the Securities and Exchange Commission since January
1, 1998. Newagecities has filed all required Periodic Reports and is in
compliance with its reporting obligations under the Securities Exchange Act of
1934. All reports filed pursuant to such Act are complete and correct in all
material respects. All material contracts relative to Newagecities are included
in the Periodic Reports. All material contracts and commitments for the
provision or receipt of services or involving any obligation on the part of
Newagecities are included as exhibits to such periodic reports or are listed on
Schedule 3.13 hereto.
3.14 Capitalization. The authorized capital stock of Newagecities
consists of 45,000,000 shares of common stock, $.02 par value, of which
10,616,853 shares are presently issued and outstanding. Except as indicated in
Schedule 3.14 hereto, Newagecities has not granted, issued or agreed to grant,
issue or make available any warrants, options, subscription rights or any other
commitments of any character relating to the issued or unissued shares of
capital stock of Newagecities.
3.15 Full Disclosure. No representation or warranty by Newagecities in
this Agreement or in any document or schedule to be delivered by it pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished to the Company or the Shareholders pursuant hereto or in connection
with the execution or performance of this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state any fact
necessary to make any statement herein or therein not materially misleading or
necessary to a complete and correct presentation of all material aspects of the
business of Newagecities.
3.16 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 3 shall be true and
complete on the Closing Date with the same force and effect as through such
representations and warranties had been made on and as of the Closing Date.
SECTION 4. COVENANTS OF COMPANY AND SHAREHOLDERS
The Company and the Shareholders covenant to Newagecities as follows:
4.1 Conduct of Business. From the date hereof through the Closing Date,
the Shareholders and The Company shall cause the Company to conduct its business
in the ordinary course and, without the prior written consent of Newagecities ,
shall ensure that the Company does not undertake any of the actions specified in
Section 2.13 hereof.
4.2 Preservation of Business. From the date hereof through the Closing
Date, the Shareholders and the Company shall cause the Company to use its best
efforts to preserve its business organization intact, keep available the
services of its present employees, consultants and agents, maintain its present
suppliers and customers and preserve its goodwill.
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4.3 Litigation. The Company shall promptly notify Newagecities of any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against the Company or against any officer, director,
employee, consultant, agent, shareholder or other representative with respect to
the affairs of the Company.
4.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, the Shareholders and the Company shall
cause the Company to conduct its business in such a manner so that the
representations and warranties contained in Section 2 shall continue to be true
and correct on and as of the Closing Date and as if made on and as of the
Closing Date, and shall:
(i) promptly give notice to the Company or any event,
condition or circumstance occurring from the date hereof through the Closing
Date which would render any of the representations or warranties materially
untrue, incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that
the information contained herein is kept current, complete and accurate in all
material respects.
SECTION 5. COVENANTS OF NEWAGECITIES
Newagecities covenants to the Company and the Shareholders as follows:
5.1 Conduct of Business. From the date hereof through the Closing Date,
Newagecities shall conduct its business in the ordinary course and, without the
prior written consent of the Company, shall ensure that Newagecities does not
undertake any of the actions specified in Section 3.10 hereof.
5.2 Preservation of Business. From the date hereof through the Closing
Date, Newagecities shall preserve its business organization intact and use its
best efforts to preserve Newagecities goodwill.
5.3 Litigation. Newagecities shall promptly notify the Company of any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against Newagecities or against any officer, director,
employee, consultant, agent, or stockholder with respect to the affairs of
Newagecities.
5.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, Newagecities shall conduct its business in
such a manner so that the representations and warranties contained in Section 3
shall continue to be true and correct on and as of the Closing Date and as if
made on and as of the Closing Date, and shall:
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(i) promptly give notice to the Company of any event,
condition or circumstance occurring from the date hereof through the Closing
Date which would render any of the representations or warranties materially
untrue, incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that
the information contained herein is kept current, complete and accurate in all
material respects.
5.5 No Other Negotiations. From the date hereof until the earlier of
the termination of this Agreement or consummation of this Agreement,
Newagecities will not permit and will not authorize any officer or director of
Newagecities or any other person on its behalf to, directly or indirectly,
solicit, encourage, negotiate or accept any offer from any party concerning the
possible disposition of all or any substantial portion of the capital stock by
merger, sale or any other means or any other transaction that would involve a
change in control of Newagecities, or any transaction in which Newagecities
contemplates issuing equity or debt securities.
SECTION 6. COVENANTS
6.1 Corporate Examinations and Investigations. Prior to the Closing
Date, the parties acknowledge that they have been entitled, through their
employees and representatives, to make such investigation of the assets,
properties, business and operations,books, records and financial condition of
the other as they each may reasonably require. No investigation by a party
hereto shall, however, diminish or waive in any way any of the representations,
warranties, covenants or agreements of the other party under this Agreement.
6.2 Expenses. Each party hereto agrees to pay its own costs and
expenses incurred in negotiating this Agreement and consummating the
transactions described herein .
6.3 Further Assurances. The parties shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its best efforts to fulfill or obtain the
fulfillment of the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.
6.4 Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith for
a period of one (1) year from the date hereof; provided, however, such
obligation shall not apply to information which:
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(i) at the time of disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge
(except due to the action of the receiving party); or
(iii) the receiving party had within its possession at the
time of disclosure.
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATION OF NEWAGECITIES TO CLOSE
The obligation of Newagecities to enter into and complete the Closing
is subject, at the option of Newagecities, to the fulfillment on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by Newagecities in writing.
7.1 Representations and Covenants. The representations and warranties
of the Company and the Shareholders contained in this Agreement shall be true in
all material respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date. The Company and the
Shareholders shall have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or complied
with by the Company and the Shareholders on or prior to the Closing Date. The
Company and the Shareholders shall have delivered to Newagecities, if requested,
a certificate, dated the Closing Date, to the foregoing effect.
7.2 Governmental Permits and Approvals; Corporate Resolutions. Any and
all permits and approvals from any governmental or regulatory body required for
the lawful consummation of the Closing shall have been obtained. The Board of
Directors of the Company shall have approved the transactions contemplated by
this Agreement and the Company shall have delivered to Newagecities, if
requested by Newagecities, resolutions by its Board of Directors, certified by
the Secretary of the Company, authorizing the transactions contemplated by this
Agreement.
7.3 Third Party Consents. All consents, permits and approvals from
parties to any contracts, loan agreements or other agreements with the Company
which may be required in connection with the performance by the Company of its
obligations under such contracts or other agreements after the Closing shall
have been obtained.
7.4 Satisfactory Business Review. Newagecities shall have satisfied
itself, after Newagecities and its representatives have completed the review of
the business of the Company contemplated by this Agreement, that none of the
information revealed thereby or in the Balance Sheet has resulted in, or in the
reasonable opinion of Newagecities may result in, a material adverse change in
the assets, properties, business, operations or condition (financial or
otherwise) of the Company.
7.5 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may have,
in the reasonable opinion of Newagecities , a materially adverse effect on the
assets, properties, business, operations or condition (financial or otherwise)
of the Company.
13
7.6 Certificate of Good Standing. Newagecities shall have received a
certificate of good standing dated at or about the Closing Date to the effect
that the Company is in good standing under the laws of its jurisdictions of
incorporation.
7.7 Stock Certificates: At the Closing, the Shareholders shall have
delivered the certificates representing the Genesis Shares, duly endorsed (or
with executed stock powers) so as to make Newagecities the sole owner thereof.
7.8 Other Documents. The Company and the Shareholders shall have
delivered such other documents, instruments and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement or which
may be reasonably requested in furtherance of the provisions of this Agreement.
14
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AND
SHAREHOLDERS TO CLOSE
The obligation of the Company and the Shareholders to enter into and
complete the Closing is subject, at the option of the Company and the
Shareholders, to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived in writing by the
Company.
8.1 Representations and Covenants. The representations and warranties
of Newagecities contained in this Agreement shall be true in all material
respects on the Closing Date with the same force and effect as though made on
and as of the Closing Date. Newagecities shall have performed and complied with
all covenants and agreements required by the Agreement to be performed or
complied with by Newagecities on or prior to the Closing Date. Newagecities
shall have delivered to the Company and the Shareholders, if requested, a
certificate, dated the Closing Date and signed by an executive officer of
Newagecities, to the foregoing effect.
8.2 Governmental Permits and Approvals; Corporate Resolutions. Any and
all permits and approvals from any governmental or regulatory body required for
the lawful consummation of the Closing shall have been obtained. The Board of
Directors of Newagecities shall have approved the transactions contemplated by
this Agreement, and Newagecities shall have delivered to the Company and the
Shareholders, if requested, resolutions by their Board of Directors certified by
the Secretary of Newagecities authorizing the transactions contemplated by this
Agreement.
8.3 Third Party Consents. All consents, permits and approvals from
parties to any contracts, loan agreements or other agreements with Newagecities
which may be required in connection with the performance by Newagecities of
their obligations under such contracts or other agreements after the Closing
shall have been obtained.
8.4 Satisfactory Business Review. The Company and the Shareholders
shall have satisfied themselves, after review of the information provided hereby
or in connection herewith, or following any discussions with management or
representatives of Newagecities that none of the information revealed thereby
has resulted in or in the reasonable opinion of the Company may result in a
material adverse change in the assets, properties, business, operations or
condition (financial or otherwise) of Newagecities.
8.5 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may in the
reasonable opinion of the Company, have a materially adverse effect on the
assets, properties, business, operations or condition (financial or otherwise)
of Newagecities.
15
8.6 Stock Certificates. At the Closing, the Shareholders shall
receive certificates representing the Newagecities Shares to be received
pursuant hereto and subject to the conditions previously described.
8.7 Other Documents. Newagecities shall have delivered such other
instruments, documents and certificates, if any, as are required to be delivered
pursuant to the provisions of this Agreement or which may be reasonably
requested in furtherance of the provisions of this Agreement.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF NEWAGECITIES
Notwithstanding any right of the Company and the Shareholders fully to
investigate the affairs of Newagecities, the former shall have the right to rely
fully upon the representations, warranties, covenants and agreements of
Newagecities contained in this Agreement or in any document delivered by
Newagecities or any of its representatives, in connection with the transactions
contemplated by this Agreement. All such representations, warranties, covenants
and agreements shall survive the execution and delivery hereof and the Closing
Date hereunder for twelve (12) months following the Closing.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SHAREHOLDERS
Notwithstanding any right of Newagecities fully to investigate the
affairs of the Company, Newagecities have the right to rely fully upon the
representations, warranties, covenants and agreements of the Company and the
Shareholders contained in this Agreement or in any document delivered to
Newagecities by the latter or any of their representatives in connection with
the transactions contemplated by this Agreement. All such representations,
warranties, covenants and agreements shall survive the execution and delivery
hereof and the Closing Date hereunder for twelve (12) months following the
Closing.
SECTION 11. INDEMNIFICATION
11.1 Obligation of Newagecities to Indemnify. Subject to the
limitations on the survival of representations and warranties contained in
Section 9, Newagecities hereby agrees to indemnify, defend and hold harmless the
Company and the Shareholders from and against any losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties and reasonable
attorneys' fees and disbursements) (a "Loss") based upon, arising out of or
otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of Newagecities contained in this Agreement or
in any document or other writing delivered pursuant to this Agreement.
16
11.2 Obligation of the Company and the Shareholders to Indemnify.
Subject to the limitations on the survival of representations and warranties
contained in Section 10, the Company and the Shareholders agree to indemnify,
defend and hold harmless Newagecities from and against any Loss, based upon,
arising out of or otherwise due to any inaccuracy in or any breach of any
representation, warranty, covenant or agreement made by any of them and
contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement.
SECTION 12. THE CLOSING
The Closing shall take place not later than July 31, 2001. At the
Closing, the parties shall provide each other with such documents as may be
necessary or appropriate in order to consummate the transactions contemplated
hereby including evidence of due authorization of the Agreement and the
transactions contemplated hereby.
SECTION 13. MISCELLANEOUS
13.1 Waivers. The waiver of a breach of this Agreement or the failure
of any party hereto to exercise any right under this Agreement shall in no event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
13.2 Amendment. This Agreement may be amended or modified only by an
instrument of equal formality signed by the parties or the duly authorized
representatives of the respective parties.
13.3 Assignment. This Agreement is not assignable except by
operation of law.
13.4 Notices. Until otherwise specified in writing, the mailing
addresses of both parties of this Agreement shall be as follows:
The Company or
Shareholders: GENESIS SYSTEMS, INC.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xx. Xxxx, XX 00000
Newagecities : XXXXXXXXXXXX.XXX, INC.
0000 Xxxxxxx Xxxxx Xx.
Xxxxx 000, X-00
Xxxxxxxx, XX 00000
Any notice or statement given under this Agreement shall be deemed to have been
given if sent by registered mail addressed to the other party at the address
indicated above or at such other address which shall have been furnished in
writing to the addressor.
17
13.5 Governing Law. This Agreement shall be construed, and the legal
relations be the parties determined, in accordance with the laws of the State of
Minnesota, thereby precluding any choice of law rules which may direct the
applicable of the laws of any other jurisdiction.
13.6 Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued by either
party hereto at any time from the signing hereof without advance approval in
writing of the form and substance thereof by the other party except as required
to stay in compliance with the Newagecities reporting obligations under the
Securities Exchange Act of 1934.
13.7 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the purchase and issuance of the
Genesis' Shares and the Newagecities Shares and related transactions, and
supersede all prior agreements, written or oral, with respect thereto.
13.8 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
13.9 Severability of Provisions. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
13.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
XXXXXXXXXXXX.XXX, INC.
By:
-----------------------------------
Name:
Its:
GENESIS SYSTEMS, INC.
By:
-----------------------------------
Name:
Its: President
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SHAREHOLDERS:
-----------------------------------
-----------------------------------
-----------------------------------
19
Exhibit A
EXCHANGE WITH GENESIS SYSTEMS, INC.
Newagecities
Shares of Shares to
Name of the Company to be Received
Shareholders be Exchanged At Closing
------------ -------------- ---------------
Xxxxxxx Xxxxxx 2,000,000 5,000,000
Fugen Li 2,000,000 5,000,000
Master Financial Group, Inc 125,000 312,500
