AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("the Agreement"),
dated as of the 26th day of August, 2002, by and between Gene-Cell,
Inc., a Nevada corporation ("Gene-Cell") and Energy Resource
Management, Inc., a Nevada corporation ("Energy Resource Management")
and the shareholders of Energy Resource Management, Inc.
("Shareholders"), with reference to the following:
A. Gene-Cell is a Nevada corporation organized in Nevada.
Gene-Cell has authorized capital stock of 100,000,000 shares, $.001
par value, of which 446,228 common shares are currently issued and
outstanding. The common shares of Gene-Cell are registered under
section 12(g) of the Securities Exchange Act of 1934 and are traded on
the OTCBB under the symbol GCLE.
B. Energy Resource Management, Inc., is a privately held
corporation organized under the laws of Nevada on August 13, 2002.
C. The respective Boards of Directors of Gene-Cell and Energy
Resource Management and the shareholders of Energy Resource Management
have deemed it advisable and in the best interests of the Parties that
Energy Resource Management be acquired by Gene-Cell, pursuant to the
terms and conditions set forth in this Agreement.
D. The Parties propose to enter into this Agreement which
provides among other things that all of the outstanding shares of
Energy Resource Management be acquired by Gene-Cell, in exchange for
shares of Gene-Cell and such additional items as more fully described
in the Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization under Section 368 (a)(1)(B) of the Internal Revenue
Code of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 100 common shares, which
represents all of the outstanding shares of Energy Resource
Management shall be acquired by Gene-Cell in exchange for 4,000,000
restricted common shares of Gene-Cell. The shares of Gene-Cell to be
issued in this transaction shall be issued as set forth in Exhibit A
to this Agreement.
1.02 At the Closing, Gene-Cell and Energy Resource Management
shall enter into an Escrow Agreement in a form substantially like that
attached hereto as Exhibit B, whereby the 4,000,000 common shares of
Gene-Cell shall be placed in escrow with the Escrow Agent until such
time as Energy Resource Management resolves and fully satisfies the
current debt obligations, along with any reasonably incurred late
fees, accrued interest, collection fees, etc., relating to the debt
obligations of Gene-Cell set forth in Exhibit C to this Agreement.
The party(ies) listed in Exhibit A to this Agreement shall enjoy all
rights incidental to the ownership of the 4,000,000 common shares of
Gene-Cell, including the right to vote the shares, throughout the
duration of the Escrow Agreement.
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1.03 At the Closing, the Energy Resource Management
shareholders will deliver certificates for the outstanding shares of
Energy Resource Management, duly endorsed so as to make Gene-Cell the
sole holder thereof, free and clear of all claims and encumbrances and
Gene-Cell shall deliver a transmittal letter directed to the transfer
agent of Gene-Cell directing the issuance of shares to the
shareholders of Energy Resource Management as set forth on Exhibit A
of this Agreement, which shares shall be delivered directly to the
Escrow Agent.
1.04 Following the reorganization, and the acquisition as set
forth in section D of this Agreement, there will be a total of
4,446,228 shares, $.001 par value, issued and outstanding in Gene-
Cell.
1.05 Following the reorganization, Energy Resource Management
will be a wholly owned subsidiary of Gene-Cell.
1.06 On Closing, the present directors and executive officers of
Gene-Cell shall designate the directors and executive officers
nominated by Energy Resource Management to serve in their place and
stead until the next respective annual meeting of the stockholders or
until their respective prior resignations or terminations. The
reorganized Board of Directors of Gene-Cell shall be: Xxxxxx X.
Xxxxx, Xxxxx X. Xxxxx and C. Xxxxx Xxxxx, directors; Xxxxxx X. Xxxxx
shall also be appointed as the Chairman of the Board and Chief
Executive Officer, Xxxxx X. Xxxxx as President and C. Xxxxx Xxxxx as
Secretary and Treasurer of Gene-Cell, and then, the current directors
and executive officers shall resign in seriatim.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at 000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000-X, Xxxx Xxxx Xxxx, XX 00000 on or before August 26, 2002,
(the "Closing Date") or at such other place or date and time as may be
agreed to in writing by the parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF GENE-CELL
Gene-Cell hereby represents and warrants to Energy Resource
Management as follows:
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3.01 Gene-Cell shall deliver to Energy Resource Management, on
or before Closing, each of the following:
(a) Financial Statements. Audited financial statements of
Gene-Cell including, but not limited to, balance sheets and
profit and loss statements from inception to its fiscal year
ended December 31, 2001, and unaudited financial statements for
the quarters ended March 31, 2002 and June 30, 2002, prepared in
accordance with United States generally accepted accounting
principles and which fairly present the financial condition of
Gene-Cell at the dates thereof. (Schedule A)
(b) Property. An accurate list and description of all
property, real or personal, owned by Gene-Cell of a value equal
to or greater than $1,000.00. (Schedule B.)
(c) Liens and Liabilities. A complete and accurate list of
all material liens, encumbrances, easements, security interests
or similar interests in or on any of the assets listed on
Schedule A. (Schedule C.) A complete and accurate list of all
debts, liabilities and obligations of Gene-Cell incurred or owing
as of the date of this Agreement. (Schedule C.1.)
(d) Leases and Contracts. A complete and accurate list
describing all material terms of each lease (whether of real or
personal property) and each contract, promissory note, mortgage,
license, franchise, or other written agreement to which Gene-Cell
is a party which involves or can reasonably be expected to
involve aggregate future payments or receipts by Gene-Cell
(whether by the terms of such lease, contract, promissory note,
license, franchise or other written agreement or as a result of a
guarantee of the payment of or indemnity against the failure to
pay same) of $1,000.00 or more annually during the twelve-month
period ended December 31, 2001, or any consecutive twelve-month
period thereafter, except any of said instruments which terminate
or are cancelable without penalty during such twelve-month
period. (Schedule D.)
(e) Loan Agreements. Complete and accurate copies of all
loan agreements and other documents with respect to obligations
of Gene-Cell for the repayment of borrowed money. (Schedule
E.)
(f) Consents Required. A complete list of all agreements
wherein consent to the transaction herein contemplated is
required to avoid a default thereunder; or where notice of such
transaction is required at or subsequent to closing, or where
consent to an acquisition, consolidation, or sale of all or
substantially all of the assets is required to avoid a default
thereunder. (Schedule F.)
(g) Articles and Bylaws. Complete and accurate copies of
the Certificate and Articles of Incorporation and Bylaws of
Gene-Cell together with all amendments thereto to the date
hereof. (Schedule G.)
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(h) Shareholders. A complete list of all persons or
entities holding capital stock of Gene-Cell or any rights to
subscribe for, acquire, or receive shares of the capital stock of
Gene-Cell (whether warrants, calls, options, or conversion
rights), including copies of all stock option plans whether
qualified or nonqualified, and other similar agreements.
(Schedule H.)
(i) Officers and Directors. A complete and current list
of all Officers and Directors of Gene-Cell. (Schedule I.)
(j) Salary Schedule. A complete and accurate list (in all
material respects) of the names and the current salary rate for
each present employee of Gene-Cell who received $1,000.00 or more
in aggregate compensation from Gene-Cell whether in salary, bonus
or otherwise, during the year 2001, or who is presently scheduled
to receive from Gene-Cell a salary in excess of $1,000.00 during
the year ending December 2001, including in each case the amount
of compensation received or scheduled to be received, and a
schedule of the hourly rates of all other employees listed
according to departments. (Schedule J.)
(k) Litigation. A complete and accurate list (in all
material respects) of all material civil, criminal,
administrative, arbitration or other such proceedings or
investigations (including without limitations unfair labor
practice matters, labor organization activities, environmental
matters and civil rights violations) pending or, to the knowledge
of Gene-Cell threatened, which may materially and adversely
affect Gene-Cell. (Schedule K.)
(l) Tax Returns. Accurate copies of all Federal and State
tax returns for Gene-Cell for the last fiscal year. (Schedule
L.)
(m) Agency Reports. Copies of all material reports or
filings (and a list of the categories of reports or filings made
on a regular basis) made by Gene-Cell under ERISA, EEOC, FDA and
all other governmental agencies (federal, state or local) during
the last fiscal year. (Schedule M.)
(n) Banks. A true and complete list (in all material
respects), as of the date of this Agreement, showing (1) the name
of each bank in which Gene-Cell has an account or safe deposit
box, and (2) the names and addresses of all signatories.
(Schedule N.)
(o) Jurisdictions Where Qualified. A list of all
jurisdictions wherein Gene-Cell is qualified to do business and
is in good standing. (Schedule O.)
(p) Subsidiaries. A complete list of all subsidiaries of
Gene-Cell. (Schedule P.) The term "Subsidiary" or
"Subsidiaries" shall include corporations, unincorporated
associations, partnerships, joint ventures, or similar entities
in which Gene-Cell has an interest, direct or indirect.
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(q) Union Matters. An accurate list and description (in
all material respects) of all union contracts and collective
bargaining agreements of Gene-Cell, if any. (Schedule Q.)
(r) Employee and Consultant Contracts. A complete and
accurate list of all employee and consultant contracts which
Gene-Cell may have, other than those listed in the schedule on
Union Matters. (Schedule R.)
(s) Employee Benefit Plans. Complete and accurate copies
of all salary, stock options, bonus, incentive compensation,
deferred compensation, profit sharing, retirement, pension, group
insurance, disability, death benefit or other benefit plans,
trust agreements or arrangements of Gene-Cell in effect on the
date hereof or to become effective after the date thereof,
together with copies of any determination letters issued by the
Internal Revenue Service with respect thereto. (Schedule S.)
(t) Insurance Policies. A complete and accurate list (in
all material respects) and a description of all material
insurance policies naming Gene-Cell as an insured or beneficiary
or as a loss payable payee or for which Gene-Cell has paid all
or part of the premium in force on the date hereof, specifying
any notice or other information possessed by Gene-Cell regarding
possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect naming
Gene-Cell as beneficiary covering the business activities of
Gene-Cell. (Schedule T.)
(u) Customers. A complete and accurate list (in all
material respects) of the customers of Gene-Cell, including
presently effective contracts of Gene-Cell to be assigned to
Gene-Cell, accounting for the principle revenues of Gene-Cell,
indicating the dollar amounts of gross income of each such
customer for the period ended December 31, 2001. (Schedule U.)
(v) Licenses and Permits. A complete list of all licenses,
permits and other authorizations of Gene-Cell. (Schedule V.)
3.02 Organization, Standing and Power. Gene-Cell is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada with all requisite corporate
power to own or lease its properties and carry on its businesses as
are now being conducted.
3.03 Qualification. Gene-Cell is duly qualified and is licensed
as a foreign corporation authorized to do business in each
jurisdiction wherein it conducts its business operations. Such
jurisdictions, which are the only jurisdictions in which Gene-Cell is
duly qualified and licensed as a foreign corporation, are shown in
Schedule O.
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3.04 Capitalization of Gene-Cell. The authorized capital stock
of Gene-Cell consists of 100,000,000 shares of Common Stock, $.001 par
value, of which the only shares issued and outstanding will be 446,228
common shares, which shares were or will be duly authorized, validly
issued and fully paid and nonassessable. There are no preemptive
rights with respect to the Gene-Cell stock.
3.05 Authority. The execution and delivery of this Agreement
and consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate actions, including but not
limited to duly and validly authorized action and approval by the
Board of Directors, on the part of Gene-Cell. This Agreement
constitutes the valid and binding obligation of Gene-Cell enforceable
against it in accordance with its terms, subject to the principles of
equity applicable to the availability of the remedy of specific
performance. This Agreement has been duly executed by Gene-Cell and
the execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement shall not result in
any breach of any terms or provisions of Gene-Cell's Certificate and
Articles of Incorporation or Bylaws or of any other agreement, court
order or instrument to which Gene-Cell is a party or bound by.
3.06 Absence of Undisclosed Liabilities. Gene-Cell has no
material liabilities of any nature, whether fixed, absolute,
contingent or accrued, which were not reflected on the financial
statements set forth in Schedule A or otherwise disclosed in this
Agreement or any of the Schedules or Exhibits attached hereto.
3.07 Absence of Changes. Since June 30, 2002 there has not been
any material adverse change in the condition (financial or otherwise),
assets, liabilities, earnings or business of Gene-Cell, except for
changes resulting from completion of those transactions described in
Section 5.01.
3.08 Tax Matters. All taxes and other assessments and levies
which Gene-Cell is required by law to withhold or to collect have been
duly withheld and collected, and have been paid over to the proper
government authorities or are held by Gene-Cell in separate bank
accounts for such payment or are represented by depository receipts,
and all such withholdings and collections and all other payments due
in connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid over
to the government or placed in a separate and segregated bank account
for such purpose. There are no known deficiencies in income taxes for
any periods and further, the representations and warranties as to
absence of undisclosed liabilities contained in Section 3.06
includes any and all tax liabilities of whatsoever kind or nature
(including, without limitation, all federal, state, local and
foreign income, profit, franchise, sales, use and property taxes) due
or to become due, incurred in respect of or measured by Gene-Cell
income or business prior to the Closing Date.
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3.09 Options, Warrants, etc. Except as otherwise described in
Schedule H, there are no outstanding options, warrants, calls,
commitments or agreements of any character to which Gene-Cell or its
shareholders are a party or by which Gene-Cell or its shareholders
are bound, or are a party, calling for the issuance of shares of
capital stock of Gene-Cell or any securities representing the right to
purchase or otherwise receive any such capital stock of Gene-Cell.
3.10 Title to Assets. Except for liens set forth in Schedule C,
Gene-Cell is the sole unconditional owner of, with good and marketable
title to, all assets listed in the schedules as owned by it and all
other property and assets are free and clear of all mortgages, liens,
pledges, charges or encumbrances of any nature whatsoever.
3.11 Agreements in Force and Effect. Except as set forth in
Schedules D and E, all material contracts, agreements, plans,
promissory notes, mortgages, leases, policies, licenses, franchises or
similar instruments to which Gene-Cell is a party are valid and in
full force and effect on the date hereof, and Gene-Cell has not
breached any material provision of, and is not in default in any
material respect under the terms of, any such contract, agreement,
plan, promissory note, mortgage, lease, policy, license, franchise or
similar instrument which breach or default would have a material
adverse effect upon the business, operations or financial condition of
Gene-Cell.
3.12 Legal Proceedings, Etc. Except as set forth in Schedule K,
there are no civil, criminal, administrative, arbitration or other
such proceedings or investigations pending or, to the knowledge of
either Gene-Cell or the shareholders thereof, threatened, in which,
individually or in the aggregate, an adverse determination would
materially and adversely affect the assets, properties, business or
income of Gene-Cell. Gene-Cell has substantially complied with, and
is not in default in any material respect under, any laws, ordinances,
requirements, regulations or orders applicable to its businesses.
3.13 Governmental Regulation. To the knowledge of Gene-Cell
and except as set forth in Schedule K, Gene-Cell is not in violation
of or in default with respect to any applicable law or any applicable
rule, regulation, order, writ or decree of any court or any
governmental commission, board, bureau, agency or instrumentality, or
delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality
which violation or default could have a material adverse effect upon
the business, operations or financial condition of Gene-Cell.
3.14 Accuracy of Information. No representation or warranty by
Gene-Cell contained in this Agreement and no statement contained in
any certificate or other instrument delivered or to be delivered to
Energy Resource Management pursuant hereto or in connection with the
transactions contemplated hereby (including without limitation all
Schedules and exhibits hereto) contains or will contain any untrue
statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or
therein not misleading.
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3.15 Subsidiaries. Except as listed in Schedule P, Gene-Cell
does not have any other subsidiaries or own capital stock representing
ten percent (10%) or more of the issued and outstanding stock of any
other corporation.
3.16 Consents. Except as listed in Schedule F, no consent or
approval of, or registration, qualification or filing with, any
governmental authority or other person is required to be obtained or
accomplished by Gene-Cell or any shareholder thereof in connection
with the consummation of the transactions contemplated hereby.
3.17 Improper Payments. Neither Gene-Cell, nor any person
acting on behalf of Gene-Cell has made any payment or otherwise
transmitted anything of value, directly or indirectly, to (a) any
official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of
Gene-Cell (b) any customer, supplier or competitor of Gene-Cell or
employee of such customer, supplier or competitor, for the purpose of
obtaining, retaining or directing business for Gene-Cell or (c) any
political party or any candidate for elective political office nor has
any fund or other asset of Gene-Cell been maintained that was not
fully and accurately recorded on the books of account of Gene-Cell.
3.18 Copies of Documents. Gene-Cell has made available for
inspection and copying by Energy Resource Management and its duly
authorized representatives, and will continue to do so at all times,
true and correct copies of all documents which it has filed with the
Securities and Exchange Commission and all other governmental
agencies which are material to the terms and conditions contained in
this Agreement. Furthermore, all filings by Gene-Cell with the
Securities and Exchange Commission, and all other governmental
agencies, including but not limited to the Internal Revenue Service,
have contained information which is true and correct, to the best
knowledge of the Board of Directors of Gene-Cell, in all material
respects and did not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
made therein not misleading or which could have any material adverse
effect upon the financial condition or operations of Gene-Cell or
adversely effect the objectives of this Agreement with respect to
Energy Resource Management including, but not limited to, the issuance
and subsequent trading of the shares of common stock of Gene-Cell to
be received hereby, subject to compliance by the shareholders of
Energy Resource Management with applicable law.
3.19 Amendments. Gene-Cell shall have the right, within 10 days
following signing of this Agreement, to amend any of the Exhibits or
Schedules it produces in connection with Section 3 of this Agreement.
If any such Amendment is materially different than as has been
previously represented by Gene-Cell during the negotiations of this
transaction, or would materially adversely affect the proposed
transaction and intent of the parties as set forth in this
Agreement, Energy Resource Management, in its sole discretion, shall
have the right to rescind this Agreement and return the parties to
their respective positions prior to the execution of this Agreement.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
ENERGY RESOURCE MANAGEMENT SERVICES GROUP LIMITED
Energy Resource Management hereby represents and warrants to
Gene-Cell as follows:
4.01 Energy Resource Management shall deliver to Gene-Cell, on
or before Closing, the following:
(a) Financial Statements. Audited balance sheet of Energy
Resource Management from its inception, through a current date.
(Schedule AA)
(b) Property. An accurate list and description of all
property, real or personal, including any business plans, owned
by Energy Resource Management of a value equal to or greater than
$1,000.00. (Schedule BB)
(c) Liens and Liabilities. A complete and accurate list of
all material liens, encumbrances, easements, security interests
or similar interests in or on any of the assets listed on
Schedule AA. (Schedule CC.) A complete and accurate list of all
debts, liabilities and obligations of Energy Resource Management
incurred or owing as of the date of this Agreement. (Schedule
CC.1.)
(d) Leases and Contracts. A complete and accurate list
describing all material terms of material leases (whether of real
or personal property) and each contract, promissory note,
mortgage, license, franchise, or other written agreement to which
Energy Resource Management is a party which involves or can
reasonably be expected to involve aggregate future payments or
receipts by Energy Resource Management (whether by the terms
of such lease, contract, promissory note, license, franchise
or other written agreement or as a result of a guarantee
of the payment of or indemnity against the failure to pay
same) of $1,000.00 or more annually during any consecutive
twelve-month period, except any of said instruments which
terminate or are cancelable without penalty during such
twelve-month period. (Schedule DD.)
(e) Loan Agreements. Complete and accurate copies of all
loan agreements and other documents with respect to obligations
of Energy Resource Management for the repayment of borrowed
money. (Schedule EE.)
(f) Consents Required. A complete list of all
agreements wherein consent to the transaction herein contemplated
is required to avoid a default thereunder; or where notice of
such transaction is required at or subsequent to closing, or
where consent to an acquisition, consolidation, or sale of
all or substantially all of the assets is required to avoid a
default thereunder. (Schedule FF.)
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(g) Articles and Bylaws. Complete and accurate copies of
the Articles of Incorporation and Bylaws of Energy Resource
Management, together with all amendments thereto to the date
hereof. (Schedule GG.)
(h) Shareholders. A complete list of all persons or
entities holding capital stock of Energy Resource Management or
any rights to subscribe for, acquire, or receive shares of the
capital stock of Energy Resource Management (whether warrants,
calls, options, or conversion rights), including copies of all
stock option plans whether qualified or nonqualified, and other
similar agreements. (Schedule HH.)
(i) Officers and Directors. A complete and current
list of all officers and Directors of Energy Resource Management.
(Schedule II.)
(j) Salary Schedule. A complete and accurate list (in all
material respects) of the names and the current salary rate or
each present employee of Energy Resource Management who are
scheduled to receive $1,000 or more in aggregate compensation
from Energy Resource Management whether in salary, bonus or
otherwise, during the year 2002, including in each case the
amount of compensation received or scheduled to be received, and
a schedule of the hourly rates of all other employees listed
according to departments. (Schedule JJ.)
(k) Litigation. A complete and accurate list (in all
material respects) of all material civil, criminal,
administrative, arbitration or other such proceedings or
investigations (including without limitations unfair labor
practice matters, labor organization activities, environmental
matters and civil rights violations) pending or, to the knowledge
of Energy Resource Management threatened, which may materially
and adversely affect Energy Resource Management. (Schedule KK.)
(l) Tax Returns. Accurate copies of all tax returns of
Energy Resource Management, if any. (Schedule LL.)
(m) Agency Reports. Copies of all material reports or
filings (and a list of the categories of reports or filings made
on a regular basis) made by Energy Resource Management under
ERISA, EEOC, FDA and all other governmental agencies (federal,
state or local). (Schedule MM.)
(n) A true and complete list (in all material respects), as
of the date of this Agreement, showing (1) the name of each bank
in which Energy Resource Management has an account or safe
deposit box, and (2) the names and addresses of all signatories.
(Schedule NN.)
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(o) Jurisdictions Where Qualified. A list of all
jurisdictions wherein Energy Resource Management is qualified to
do business and is in good standing. (Schedule OO.)
(p) Subsidiaries. A complete list of all subsidiaries of
Energy Resource Management. (Schedule PP.) The term
"Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures, or
similar entities in which Energy Resource Management has an
interest, direct or indirect.
(q) Union Matters. An accurate list and description (in
all material respects of union contracts and collective
bargaining agreements of Energy Resource Management, if any.
(Schedule QQ.)
(r) Employee and Consultant Contracts. A complete and
accurate list of all employee and consultant contracts which
Energy Resource Management may have, other than those listed in
the schedule on Union Matters. (Schedule RR.)
(s) Employee Benefit Plans. Complete and accurate copies
of all salary, stock option, bonus, incentive compensation,
deferred compensation, profit sharing, retirement, pension,
group insurance, disability, death benefit or other benefit
plans, trust agreements or arrangements of Energy Resource
Management in effect on the date hereof or to become effective
after the date thereof, together with copies of any determination
letters issued by the Internal Revenue Service with respect
thereto. (Schedule SS.)
(t) Insurance Policies. A complete and accurate list (in
all material respects) and description of all material insurance
policies naming Energy Resource Management as an insured or
beneficiary or as a loss payable payee or for which Energy
Resource Management has paid all or part of the premium in
force on the date hereof, specifying any notice or other
information possessed by Energy Resource Management regarding
possible claims thereunder, cancellation thereof or premium
increases thereon, including any policies now in effect
naming Energy Resource Management as beneficiary covering the
business activities of Energy Resource Management. (Schedule
TT.)
(u) Customers. A complete and accurate list (in all
material respects) of the customers of Energy Resource
Management, if any, including all presently effective contracts
of Energy Resource Management to be assigned to Energy
Resource Management, accounting for the principle revenues of
Energy Resource Management, indicating the dollar amounts of
gross revenues of each such customer. (Schedule UU.)
(v) Licenses and Permits. A complete list of all licenses,
permits and other authorizations of Energy Resource Management.
(Schedule VV.)
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4.02 Organization, Standing and Power. Energy Resource
Management is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada with all requisite
corporate power to own or lease its properties and carry on its
business as is now being conducted.
4.03 Qualification. Energy Resource Management is duly
qualified and licensed as a foreign corporation authorized to do
business in each jurisdiction wherein it conducts business operations.
Such jurisdictions, which are the only jurisdictions in which Energy
Resource Management is duly qualified and licensed as a foreign
corporation, is shown in Schedule OO.
4.04 Capitalization of Energy Resource Management. The
authorized capital stock of Energy Resource Management consists of
1,000 shares of Common Stock, of which the only shares issued and
outstanding are 100 shares issued to the shareholders listed on
Schedule HH, which shares were duly authorized, validly issued and
fully paid and nonassessable. There are no preemptive rights with
respect to the Energy Resource Management stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including but not
limited to duly and validly authorized action and approval by the
Board of Directors, on the part of Energy Resource Management. This
Agreement constitutes the valid and binding obligation of Energy
Resource Management, enforceable against it in accordance with its
terms, subject to the principles of equity applicable to the
availability of the remedy of specific performance. This Agreement
has been duly executed by Energy Resource Management and the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement shall not result in any
breach of any terms or provisions of Energy Resource Management 's
Articles of Incorporation or Bylaws or of any other agreement, court
order or instrument to which Energy Resource Management is a party or
bound.
4.06 Absence of Undisclosed Liabilities. Energy Resource
Management has no material liabilities of any nature, whether fixed,
absolute, contingent or accrued, which were not reflected on the
financial statements set forth in Schedule AA or otherwise disclosed
in this Agreement or any of the Schedules or Exhibits attached hereto.
4.07 Absence of Changes. Since the date of inception, there
has not been any material adverse change in the condition (financial
or otherwise), assets, liabilities, earnings or business of Energy
Resource Management, except for changes resulting from completion of
those transactions described in Section 5.02.
4.08 Tax Matters. All taxes and other assessments and
levies which Energy Resource Management is required by law to
withhold or to collect have been duly withheld and collected, and
have been paid over to the proper government authorities or are held
by Energy Resource Management in separate bank accounts for such
payment or are represented by depository receipts, and all such
withholdings and collections and all other payments due in
connection therewith (including, without limitation, employment
taxes, both the employee's and employer's share) have been paid
over to the government or placed in a separate and segregated bank
account for such purpose. There are no known deficiencies in
income taxes for any periods and further, the representations
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and warranties as to absence of undisclosed liabilities contained
in Section 4.06 includes any and all tax liabilities of whatsoever
kind or nature (including, without limitation, all federal,
provincial, local and foreign income, profit, franchise, sales, use
and property taxes) due or to become due, incurred in respect of or
measured by Energy Resource Management income or business prior to the
Closing Date.
4.09 Options, Warrants, etc. Except as otherwise described in
Schedule HH, there are no outstanding options, warrants, calls,
commitments or agreements of any character to which Energy Resource
Management or its shareholders are a party or by which Energy
Resource Management or its shareholders are bound, or are a party,
calling for the issuance of shares of capital stock of Energy
Resource Management or any securities representing the right to
purchase or otherwise receive any such capital stock of Energy
Resource Management.
4.10 Title to Assets. Except for liens set forth in
Schedule CC, Energy Resource Management is the sole and
unconditional owner of, with good and marketable title to, all
the assets and patents listed in the schedules as owned by them and
all other property and assets are free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever.
4.11 Agreements in Force and Effect. Except as set forth in
Schedules DD and EE, all material contracts, agreements, plans,
promissory notes, mortgages, leases, policies, licenses, franchises or
similar instruments to which Energy Resource Management is a party are
valid and in full force and effect on the date hereof, and Energy
Resource Management has not breached any material provision of, and is
not in default in any material respect under the terms of, any such
contract, agreement, plan, promissory note, mortgage, lease,
policy, license, franchise or similar instrument which breach or
default would have a material adverse effect upon the business,
operations or financial condition of Energy Resource Management.
4.12 Legal Proceedings, Etc. Except as set forth in Schedule
KK, there are no civil, criminal, administrative, arbitration or
other such proceedings or investigations pending or, to the knowledge
of Energy Resource Management, threatened, in which, individually or
in the aggregate, an adverse determination would materially and
adversely affect the assets, properties, business or income of
Energy Resource Management. Energy Resource Management has
substantially complied with, and is not in default in any material
respect under, any laws, ordinances, requirements, regulations or
orders applicable to its businesses.
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4.13 Governmental Regulation. To the knowledge of Energy
Resource Management and except as set forth in Schedule KK, Energy
Resource Management is not in violation of or in default with
respect to any applicable law or any applicable rule, regulation,
order, writ or decree of any court or any governmental commission,
board, bureau, agency or instrumentality, or delinquent with
respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality
which violation or default could have a material adverse
effect upon the business, operations or financial condition of
Energy Resource Management.
4.14 Broker and Finders. Energy Resource Management shall be
solely responsible for payment to any broker or finder retained by
Energy Resource Management for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated
herein.
4.15 Accuracy of Information. No representation or warranty
by Energy Resource Management contained in this Agreement and no
statement contained in any certificate or other instrument delivered
or to be delivered to Gene-Cell pursuant hereto or in connection with
the transactions contemplated hereby (including without limitation
all Schedules and Exhibits hereto) contains or will contain any untrue
statement of a material fact or omits or will omit to state any
material fact necessary in order to make the statements contained
herein or therein not misleading.
4.16 Subsidiaries. Except as listed in Schedule PP, Energy
Resource Management does not have any other subsidiaries or own
capital stock representing ten percent (10%) or more of the
issued and outstanding stock of any other corporation.
4.17 Consents. Except as listed in Schedule FF, no consent or
approval of, or registration, qualification or filing with, any
other governmental authority or other person is required to be
obtained or accomplished by Energy Resource Management or any
shareholder thereof, in connection with the consummation of the
transactions contemplated hereby.
4.18 Improper Payments. No person acting on behalf of Energy
Resource Management has made any payment or otherwise transmitted
anything of value, directly or indirectly, to (a) any official or any
government or agency or political subdivision thereof for the
purpose of influencing any decision affecting the business of Energy
Resource Management , or (b) any political party or any candidate
for elective political office, nor has any fund or other asset of
Energy Resource Management been maintained that was not fully and
accurately recorded on the books of account of Energy Resource
Management.
4.19 Copies of Documents. Energy Resource Management has
made available for inspection and copying by Gene-Cell and its
duly authorized representatives, and will continue to do so at all
times, true and correct copies of all documents which it has filed
with any governmental agencies which are material to the terms
and conditions contained in this Agreement. Furthermore, all filings
by Energy Resource Management with governmental agencies, including
but not limited to any taxing authority, have contained information
which is true and correct in all material respects and did not contain
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements made therein not misleading or
which could have any material adverse effect upon the
financial condition or operations of Energy Resource Management or
adversely affect the objectives of this Agreement.
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4.20 Investment Intent of Shareholders. Each shareholder of
Energy Resource Management represents and warrants to Gene-Cell that
the shares of Gene-Cell being acquired pursuant to this Agreement
are being acquired for his own account and for investment and not
with a view to the public resale or distribution of such shares
and further acknowledges that the shares being issued have
not been registered under the Securities Act and are
"restricted securities" as that term is defined in Rule 144
promulgated under the Securities Act and must be held indefinitely
unless they are subsequently registered under the Securities Act or
an exemption from such registration is available.
4.21 Amendments. Energy Resource Management shall have the
right, within 10 days following signing of this Agreement, to amend
any of the Exhibits or Schedules it produces in connection with
Section 4 of this Agreement. If any such Amendment is materially
different than as has been previously represented by Energy Management
Resource during the negotiations of this transaction, or would
materially adversely affect the proposed transaction and intent of
the parties as set forth in this Agreement, Gene-Cell, in its sole
discretion, shall have the right to rescind this Agreement and return
the parties to their respective positions prior to the execution of
this Agreement.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE ACQUISITION
5.01 Conduct and Transactions of Gene-Cell. During the period
from the date hereof to the date of Closing, Gene-Cell shall:
(a) Obtain a Lock-up/Leak-out Agreement from each of the
pre-reorganization officers and directors of Gene-Cell.
Moreover, the pre-reorganization Gene-Cell officers and
directors and the officer and director of Energy Management
Resource will use their best efforts to obtain a Lock-up/Leak-out
Agreement from each of the pre-reorganization Gene-Cell
shareholders holding more than 6,153 post-split common shares.
The Lock-up/Leak-out Agreement shall be in a form substantially
like that attached hereto as Exhibit E.
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(b) Conduct its operations in the ordinary course of
business, including but not limited to, paying all obligations as
they mature, complying with all applicable tax laws, filing all
tax returns required to be filed and paying all taxes due;
(c) Maintain its records and books of account in a
manner that fairly and correctly reflects its income,
expenses, assets and liabilities;
Gene-Cell shall not during such period, except in the
ordinary course of business, without the prior written consent of
Energy Resource Management:
(a) Except as otherwise contemplated or required by this
Agreement, sell, dispose of or encumber any of its
properties or assets;
(b) Declare or pay any dividends on shares of its
capital stock or make any other distribution of assets to the
holders thereof;
(c) Except as set forth in paragraph 5.01(c) above, issue,
reissue or sell, or issue options or rights to subscribe to,
or enter into any contract or commitment to issue, reissue
or sell, any shares of its capital stock or acquire or
agree to acquire any shares of its capital stock;
(d) Except as otherwise contemplated and required by
this Agreement, amend its Articles of Incorporation or merge or
consolidate with or into any other corporation or sell all or
substantially all of its assets or change in any manner the
rights of its capital stock or other securities;
(e) Except as contemplated or required by this
Agreement, pay or incur any obligation or liability, direct or
contingent, of more than $1,000, excluding the acquisitions
identified in Paragraph B of this Agreement;
(f) Incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise become responsible for
obligations of any other party, or make loans or advances to any
other party, excluding the acquisitions identified in Paragraph B
of this Agreement;
(g) Make any material change in its insurance
coverage;
(h) Increase in any manner the compensation, direct or
indirect, of any of its officers or executive employees; except
in accordance with existing employment contracts;
(i) Enter into any agreement or make any commitment to any
labor union or organization;
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(j) Make any capital expenditures, excluding the
acquisitions identified in Paragraph B of this Agreement.
5.02 Conduct and Transactions of Energy Resource Management.
During the period from the date hereof to the date of Closing,
Energy Resource Management shall:
(a) Obtain an investment letter from each shareholder of
Energy Resource Management in a form substantially like that
attached hereto as Exhibit D.
(b) Conduct the operations of Energy Resource Management
in the ordinary course of business.
Energy Resource Management shall not during such period,
except in the ordinary course of business, without the prior
written consent of Gene-Cell:
(a) Except as otherwise contemplated or required by
this Agreement, sell, dispose of or encumber any of the
properties or assets of Energy Resource Management;
(b) Declare or pay any dividends on shares of its
capital stock or make any other distribution of assets to the
holders thereof;
(c) Issue, reissue or sell, or issue options or rights
to subscribe to, or enter into any contract or commitment to
issue, reissue or sell, any shares of its capital stock or
acquire or agree to acquire any shares of its capital stock;
(d) Except as otherwise contemplated and required by this
Agreement, amend its Articles of Incorporation or merge or
consolidate with or into any other corporation or sell all or
substantially all of its assets or change in any manner the
rights of its capital stock or other securities;
(e) Except as otherwise contemplated and required by this
Agreement, pay or incur any obligation or liability, direct or
contingent, of more than $1,000;
(f) Incur any indebtedness for borrowed money, assume,
guarantee, endorse or otherwise become responsible for
obligations of any other party, or make loans or advances to any
other party;
(g) Make any material change in its insurance coverage;
17
(h) Increase in any manner the compensation, direct or
indirect, of any of its officers or executive employees; except
in accordance with existing employment contracts;
(i) Enter into any agreement or make any commitment to any
labor union or organization;
(j) Make any material capital expenditures.
(k) Allow any of the foregoing actions to be taken by any
subsidiary of Energy Resource Management
ARTICLE 6
RIGHTS OF INSPECTION
6.01 During the period from the date of this Agreement to the
date of Closing of the acquisition, Gene-Cell and Energy Resource
Management agree to use their best efforts to give the other party,
including its representatives and agents, full access to the
premises, books and records of each of the entities, and to
furnish the other with such financial and operating data and
other information including, but not limited to, copies of all legal
documents and instruments referred to on any schedule or exhibit
hereto, with respect to the business and properties of Gene-Cell or
Energy Resource Management, as the case may be, as the other shall
from time to time request; provided, however, if there are any such
investigations: (1) they shall be conducted in such manner as
not to unreasonably interfere with the operation of the business of
the other parties and (2) such right of inspection shall not affect
in any way whatsoever any of the representations or warranties given
by the respective parties hereunder. In the event of termination
of this Agreement, Gene-Cell and Energy Resource Management will
each return to the other all documents, work papers and other
materials obtained from the other party in connection with the
transactions contemplated hereby, and will take such other steps
necessary to protect the confidentiality of such material.
ARTICLE 7
CONDITIONS TO CLOSING
7.01 Conditions to Obligations of Energy Resource Management.
The obligation of Energy Resource Management to perform this Agreement
is subject to the satisfaction of the following conditions on or
before the Closing unless waived in writing by Energy Resource
Management.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by Gene-Cell
which in the opinion of Energy Resource Management would
materially adversely affect the proposed transaction and intent
of the parties as set forth in this Agreement. The
representations and warranties of Gene-Cell set forth in Article
3 hereof shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing as though
made on and as of the Closing, except as otherwise permitted
by this Agreement.
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(b) Performance of Obligations. Gene-Cell shall have in
all material respects performed all agreements required to be
performed by it under this Agreement and shall have performed in
all material respects any actions contemplated by this Agreement
prior to or on the Closing and Gene-Cell shall have complied in
all material respects with the course of conduct required by this
Agreement.
(c) Corporate Action. Gene-Cell shall have furnished
minutes, certified copies of corporate resolutions and/or
other documentary evidence satisfactory to counsel for Energy
Resource Management that Gene-Cell has submitted with this
Agreement and any other documents required hereby to such
parties for approval as provided by applicable law.
(d) Consents. Execution of this Agreement by the
shareholders of Energy Resource Management and any consents
necessary for or approval of any party listed on any Schedule
delivered by Gene-Cell whose consent or approval is required
pursuant thereto shall have been obtained.
(e) Financial Statements. Energy Resource Management
shall have been furnished with audited financial statements
of Gene-Cell including, but not limited to, balance sheets and
profit and loss statements from inception through the fiscal
year end December 31, 2001. Such financial statements shall
have been prepared in conformity with United States generally
accepted accounting principles on a basis consistent with those
of prior periods and fairly present the financial position of
Gene-Cell as of the periods stated.
(f) Statutory Requirements. All statutory requirements for
the valid consummation by Gene-Cell of the transactions
contemplated by this Agreement shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents,
approvals, permits and orders of all federal and state
governmental agencies required to be obtained by Gene-Cell for
consummation of the transactions contemplated by this Agreement
shall have been obtained.
(h) Changes in Financial Condition of Gene-Cell. There
shall not have occurred any material adverse change in the
financial condition or in the operations of the business of
Gene-Cell, except expenditures in furtherance of this Agreement,
excluding the acquisitions identified in Paragraph B of this
Agreement.
19
(i) Absence of Pending Litigation. Gene-Cell is not
engaged in or threatened with any suit, action, or legal,
administrative or other proceedings or governmental
investigations pertaining to this Agreement or the consummation
of the transactions contemplated hereunder.
(j) Authorization for Issuance of Stock. Energy Resource
Management shall have received in form and substance
satisfactory to counsel for Energy Resource Management a letter
instructing and authorizing the Registrar and Transfer Agent
for the shares of common stock of Gene-Cell issue stock
certificates representing ownership of Gene-Cell common stock to
Energy Resource Management shareholders in accordance with the
terms of this Agreement and a letter from said Registrar and
Transfer Agent acknowledging receipt of the letter of
instruction and stating to the effect that the Registrar and
Transfer Agent holds adequate supplies of stock certificates
necessary to comply with the letter of instruction and
the terms and conditions of this Agreement.
7.02 Conditions to Obligations of Gene-Cell. The obligation of
Gene-Cell to perform this Agreement is subject to the satisfaction of
the following conditions on or before the Closing unless waived in
writing by Gene-Cell.
(a) Representations and Warranties. There shall be no
information disclosed in the schedules delivered by Energy
Resource Management, which in the opinion of Gene-Cell, would
materially adversely affect the proposed transaction and intent
of the parties as set forth in this Agreement. The
representations and warranties of Energy Resource Management set
forth in Article 4 hereof shall be true and correct in all
material respects as of the date of this Agreement and as of the
Closing as though made on and as of the Closing, except as
otherwise permitted by this Agreement.
(b) Performance of Obligations. Energy Resource Management
shall have in all material respects performed all agreements
required to be performed by it under this Agreement and shall
have performed in all material respects any actions contemplated
by this Agreement prior to or on the Closing and Energy Resource
Management shall have complied in all respects with the course of
conduct required by this Agreement.
(c) Corporate Action. Energy Resource Management shall
have furnished minutes, certified copies of corporate
resolutions and/or other documentary evidence satisfactory to
Counsel for Gene-Cell that Energy Resource Management has
submitted with this Agreement and any other documents required
hereby to such parties for approval as provided by applicable
law.
(d) Consents. Any consents necessary for or approval of
any party listed on any Schedule delivered by Energy Resource
Management, whose consent or approval is required pursuant
thereto, shall have been obtained.
20
(e) Financial Statements. Gene-Cell shall have been
furnished with audited financial statements of Energy
Resource Management including, but not limited to, balance sheets
and profit and loss statements from inception through the fiscal
year end December 31, 2001. Such financial statements shall
have been prepared in conformity with United States generally
accepted accounting principles on a basis consistent with those
of prior periods and fairly present the financial position of
Energy Resource Management as of the periods stated.
(f) Statutory Requirements. All statutory requirements for
the valid consummation by Energy Resource Management of the
transactions contemplated by this Agreement shall have been
fulfilled.
(g) Governmental Approval. All authorizations,
consents, approvals, permits and orders of all federal and state
governmental agencies required to be obtained by Energy Resource
Management for consummation of the transactions contemplated by
this Agreement shall have been obtained.
(h) Employment Agreements. Existing Energy Resource
Management employment agreements will have been delivered to
counsel for Gene-Cell.
(i) Changes in Financial Condition of Energy
Resource Management. There shall not have occurred any material
adverse change in the financial condition or in the operations of
the business of Energy Resource Management, except expenditures
in furtherance of this Agreement.
(j) Absence of Pending Litigation. Energy Resource
Management is not engaged in or threatened with any suit,
action, or legal, administrative or other proceedings or
governmental investigations pertaining to this Agreement or the
consummation of the transactions contemplated hereunder.
(k) Shareholder Approval. The Energy Resource Management
shareholders shall have approved the Agreement and Plan of
Reorganization.
ARTICLE 8
MATTERS SUBSEQUENT TO CLOSING
8.01 Covenant of Further Assurance. The parties covenant and
agree that they shall, from time to time, execute and deliver or cause
to be executed and delivered all such further instruments of
conveyance, transfer, assignments, receipts and other instruments, and
shall take or cause to be taken such further or other actions as the
other party or parties to this Agreement may reasonably deem necessary
in order to carry out the purposes and intent of this Agreement.
21
ARTICLE 9
NATURE AND SURVIVAL OF REPRESENTATIONS
9.01 All statements contained in any written certificate,
schedule, exhibit or other written instrument delivered by Gene-Cell
or Energy Resource Management pursuant hereto, or otherwise adopted
by Gene-Cell, by its written approval, or by Energy Resource
Management by its written approval, or in connection with the
transactions contemplated hereby, shall be deemed representations and
warranties by Gene-Cell or Energy Resource Management as the case may
be. All representations, warranties and agreements made by either
party shall survive for the period of the applicable statute of
limitations and until the discovery of any claim, loss, liability or
other matter based on fraud, if longer.
ARTICLE 10
TERMINATION OF AGREEMENT AND ABANDONMENT OF REORGANIZATION
10.01 Termination. Anything herein to the contrary
notwithstanding, this Agreement and any agreement executed as required
hereunder and the acquisition contemplated hereby may be terminated at
any time before the Closing as follows:
(a) By mutual written consent of the Boards of Directors
of Gene-Cell and Energy Resource Management.
(b) By the Board of Directors of Gene-Cell if any of
the conditions set forth in Section 7.02 shall not have been
satisfied by the Closing Date.
(c) By the Board of Directors of Energy Resource
Management if any of the conditions set forth in Section 7.01
shall not have been satisfied by the Closing Date.
10.02 Termination of Obligations and Waiver of Conditions;
Payment of Expenses. In the event this Agreement and the
acquisition are terminated and abandoned pursuant to this Article 10
hereof, this Agreement shall become void and of no force and effect
and there shall be no liability on the part of any of the parties
hereto, or their respective directors, officers, shareholders
or controlling persons to each other. Energy Resource Management will
pay all costs and expenses incident to the negotiation and
preparation of this Agreement and any of the documents evidencing the
transactions contemplated hereby, including fees, expenses and
disbursements of counsel.
ARTICLE 11
EXCHANGE OF SHARES; FRACTIONAL SHARES
11.01 Exchange of Shares. At the Closing, Gene-Cell shall issue
a letter to the transfer agent of Gene-Cell with a copy of the
resolution of the Board of Directors of Gene-Cell authorizing and
directing the issuance of Gene-Cell shares as set forth on Exhibit A
to this Agreement.
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11.02 Restrictions on Shares Issued to Energy Resource
Management. Due to the fact that Energy Resource Management will
receive shares of Gene-Cell common stock in connection with the
acquisition which have not been registered under the 1933 Act by
virtue of the exemption provided in Section 4(2) of such Act, those
shares of Gene-Cell will contain the following legend:
The shares represented by this certificate have not
been registered under the Securities Act of 1933. The
shares have been acquired for investment and may not be
sold or offered for sale in the absence of an effective
Registration Statement for the shares under the
Securities Act of 1933 or an opinion of counsel to the
Corporation that such registration is required.
ARTICLE 12
MISCELLANEOUS
12.01 Construction. This Agreement shall be construed and
enforced in accordance with the laws of the State of Utah
excluding the conflicts of laws.
12.02 Notices. All notices necessary or appropriate under
this Agreement shall be effective when personally delivered or
deposited in the United States mail, postage prepaid, certified or
registered, return receipt requested, and addressed to the parties
last known address which addresses are currently as follows:
If to "Gene-Cell" If to "Energy Resource Management "
Gene-Cell Energy Resource Management
0000 Xxxxxxxxx Xxxx 0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
With copies to:
Xxxxxx X. Xxxxxxx, Esq.
Poulton & Yordan
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000-X
Xxxx Xxxx Xxxx, XX 00000
12.03 Amendment and Waiver. The parties hereby may, by
mutual agreement in writing signed by each party, amend this
Agreement in any respect. Any term or provision of this
Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof, such waiver right shall include,
but not be limited to, the right of either party to:
23
(a) Extend the time for the performance of any of the
obligations of the other;
(b) Waive any inaccuracies in representations by the other
contained in this Agreement or in any document delivered
pursuant hereto;
(c) Waive compliance by the other with any of the
covenants contained in this Agreement, and performance of any
obligations by the other; and
(d) Waive the fulfillment of any condition that is
precedent to the performance by the party so waiving of any of
its obligations under this Agreement. Any writing on the part of
a party relating to such amendment, extension or waiver as
provided in this Section 12.03 shall be valid if authorized or
ratified by the Board of Directors of such party.
12.04 Remedies not Exclusive. No remedy conferred by any of
the specific provisions of this Agreement is intended to be
exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute or otherwise. The election of any one or more remedies by
Gene-Cell or Energy Resource Management shall not constitute a waiver
of the right to pursue other available remedies.
12.05 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
12.06 Benefit. This Agreement shall be binding upon, and inure
to the benefit of, the respective successors and assigns of Gene-Cell
and Energy Resource Management and its shareholders.
12.07 Entire Agreement. This Agreement and the Schedules and
Exhibits attached hereto, represent the entire agreement of the
undersigned regarding the subject matter hereof, and supersedes all
prior written or oral understandings or agreements between the
parties.
12.08 Energy Resource Management to Bear Expense of Both Parties.
Energy Resource Management shall each bear the reasonable expenses of
both parties incurred in connection with the negotiation, execution,
closing, and performance of this Agreement, including counsel fees and
accountant fees. In the event litigation arises between the parties
hereto as a result of this Agreement or of the transaction
contemplated by this Agreement, each party shall bear the expenses of
said litigation, except as otherwise provided in this Agreement or
applicable local, state or federal law.
12.09 Captions and Section Headings. Captions and section
headings used herein are for convenience only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
24
Executed as of the date first written above.
"Gene-Cell" "Energy Resource Management "
Gene-Cell, Inc. Energy Resource Management,
Inc.
a Nevada corporation a Nevada corporation
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx
------------------------- ----------------------------
Xxxxx Xxxxx, President Xxxxxx X. Xxxxx, President
"Shareholders"
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx
25
EXHIBIT A
Name of Shareholder Number of Shares
------------------- ------------------
Xxxxxx X. Xxxxx 4,000,000
EXHIBIT B
ESCROW AGREEMENT
THIS AGREEMENT is made as of the __th day of August, 2002,
between Gene-Cell, Inc., a Nevada corporation, ("Gene-Cell") and
Energy Resource Management, Inc., a Nevada corporation, ("XXXX") and
the law firm of Poulton & Yordan located at 000 Xxxx Xxxxx Xxxxxx,
Xxxxx 0000-X, Xxxx Xxxx Xxxx, Xxxx 00000 (the "Escrow Agent").
RECITALS
1. Gene-Cell and XXXX have negotiated and propose to enter into
an Agreement and Plan of Reorganization, to which a copy of this
Escrow Agreement will be attached as Exhibit B, pursuant to which,
XXXX is to receive 4,000,000 common shares of Gene-Cell in exchange
for all of the issued and outstanding shares of XXXX.
2. Exhibit C to the Agreement and Plan of Reorganization sets
forth the names and amounts of certain current debt obligation of
Gene-Cell.
3. XXXX has agreed to satisfy the Gene-Cell obligations set
forth in Exhibit C to the Agreement and Plan of Reorganization, along
with any reasonably incurred late fees, accrued interest, collection
fees, etc., relating to these obligations prior to delivery of the
4,000,000 Gene-Cell common shares.
I. ESCROW
1.01 Appointment and Acknowledgment of Escrow Agent
a. Gene-Cell and XXXX each hereby appoint Xxxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxxxx hereby agrees to serve, as Escrow Agent
pursuant to the terms of this Agreement. Escrow Agent
acknowledges receipt of the following:
b. from Gene-Cell -- one certificate evidencing 4,000,000
common shares of Gene-Cell, Inc., a Nevada corporation, as set
forth in Exhibit A to the Agreement and Plan of Reorganization.
The documents described in Section 1.01(a), evidencing title or
ownership to assets subject to this Agreement, which assets are
referred to as the "Escrowed Property."
1.02 Operation of Escrow
The parties hereto agree that the escrow created by this
Agreement (the "Escrow") shall operate as follows:
(a) The Escrowed Property or a portion thereof from time to time,
as determined by the Escrow Agent, shall be deposited with the Escrow
Agent at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000-X, Xxxx Xxxx Xxxx, Xxxx
00000. The Escrowed Property shall be held by the Escrow Agent until
such time as XXXX produces documentation satisfactory to the Escrow
Agent and Gene-Cell that Gene-Cell's debt obligations as set forth in
Exhibit C to the Agreement and Plan of Reorganization, have been fully
resolved and satisfied. Once Gene-Cell and the Escrow Agent are
satisfied that the aforementioned debt obligations have been fully
satisfied, Escrow Agent shall distribute the Escrowed Property as
follows:
(i) The 4,000,000 restricted shares of Gene-Cell, Inc., common
stock to Xxxxxx X. Xxxxx, 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx
00000.
1.03 Further Provisions Relating to the Escrow
(a) Distribution by Escrow Agent shall operate to divest all
right, title, interest, claim, and demand, either at law or in equity,
of any party to this Agreement (other than the distributee) in and to
the Escrowed Property distributed and shall be a perpetual bar both in
law and in equity against the parties to this Agreement and against
any person claiming or attempting to claim such distributed Escrowed
Property from, through, or under such party.
(b) XXXX agrees to reimburse Escrow Agent for Escrow Agent's
reasonable fees and other expenses (including attorney's fees)
incurred by Escrow Agent in connection with its duties hereunder.
(c) The parties shall indemnify and hold harmless Escrow Agent
against and in respect of any and all claims, suits, actions,
proceedings (formal and informal), investigations, judgments,
deficiencies, damages, settlements, liabilities, and legal and other
expenses (including legal fees and expenses of attorneys chosen by
Escrow Agent) as and when incurred arising out of or based upon any
act, omission, alleged act, or alleged omission by Escrow Agent or any
other cause, in any case in connection with the acceptance of, or
performance or nonperformance by Escrow Agent of, any of Escrow
Agent's duties under this Agreement, except as a result of Escrow
Agent's bad faith or gross negligence. Escrow Agent shall be fully
protected by acting in reliance upon any notice, advice, direction,
other document, or signature believed by Escrow Agent to be genuine,
by assuming that any person purporting to give Escrow Agent any
notice, advice, direction, or other document in accordance with the
provision hereof, in connection with this Agreement, or in connection
with Escrow Agent's duties under this Agreement, has been duly
authorized so to do, or by acting or failing to act in good faith on
the advice of any counsel retained by Escrow Agent. Escrow Agent
shall not be liable for any mistake of fact or of law or any error of
judgment, or for any act or any omission, except as a result of Escrow
Agent's bad faith or gross negligence.
(d) Escrow Agent makes no representation as to the validity,
value, genuineness, or the collectability of any security or other
document or instrument held by or delivered to Escrow Agent.
(e) Escrow Agent shall have no duties or responsibilities except
those expressly set forth herein. Escrow Agent shall not be bound
by any notice of a claim, or demand with respect thereto, or any
waiver, modification, amendment, termination, cancellation, or
revision of this Agreement, unless in writing and signed by the other
parties hereto, and, if Escrow Agent's duties as Escrow Agent
hereunder are affected, unless Escrow Agent shall have given its prior
written consent thereto. Escrow Agent shall not be bound by any such
assignment by Gene-Cell or XXXX its rights hereunder unless Escrow
Agent shall have received written notice thereof from the assignor.
Escrow Agent shall perform any acts ordered by a court of competent
jurisdiction.
(f) If Escrow Agent shall be uncertain as to Escrow Agent's
duties or rights hereunder, shall receive any notice, advice,
direction, or other document from any other party with respect to the
Escrowed Property which, in Escrow Agent's opinion, is in conflict
with any of the provisions of this Agreement, or should be advised
that a dispute has arisen with respect to the payment, ownership, or
right of possession of the Escrowed Property or any part thereof (or
as to the delivery, non-delivery, or content of any notice, advice,
direction, or other document), Escrow Agent shall be entitled, without
liability to anyone, to refrain from taking any action other than to
use Escrow Agent's best efforts to keep safely the Escrowed Property
until Escrow Agent shall be directed otherwise in writing by both
other parties hereto or by an order, decree, or judgment of a court of
competent jurisdiction which has been finally affirmed on appeal or
which by lapse of time or otherwise is no longer subject to appeal,
but Escrow Agent shall be under no duty to institute or to defend any
proceeding, although Escrow Agent may, in Escrow Agent's discretion
and at the expense of XXXX provided in Section 1.03(c), institute or
defend such proceedings.
(g) If Escrow Agent shall be unable to act or shall resign as
Escrow Agent hereunder, the successor escrow agent shall be determined
by Gene-Cell and XXXX, jointly (the "Successor"). Escrow Agent may at
any time give written notice of his resignation (the "Notice") to the
other parties hereto and the Successor. Such resignation shall take
effect when the Successor accepts in writing his appointment as
successor escrow agent and receives from Escrow Agent the Escrowed
Property. If the Successor is for any reason unable or unwilling to
become successor escrow agent and to accept the Escrowed Property,
then, jointly, Gene-Cell and XXXX shall promptly appoint another
successor escrow agent. If no successor escrow agent has been
appointed and has accepted the Escrowed Property within five days
after the Notice is sent, Escrow Agent may petition any court of
competent jurisdiction for the appointment of a successor escrow
agent. Such court may thereupon appoint a successor escrow agent
after Escrow Agent deposits the Escrowed Property into court and after
such notice, if any, to the other parties hereto as the court may deem
proper and prescribe. This Agreement shall not otherwise be
assignable by Escrow Agent without the prior written consent of the
other parties hereto.
(h) The parties authorize Escrow Agent, if Escrow Agent is
threatened with litigation or is sued, to interplead all interested
parties in any court of competent jurisdiction and to deposit the
Escrowed Property with the clerk of that court.
(i) Escrow Agent's responsibilities and liabilities hereunder,
except as a result of Escrow Agent's own bad faith or gross
negligence, will terminate upon the delivery by Escrow Agent of all
the Escrowed Property under any provision of this Agreement.
1.04 Voting Rights.
(a) The party(ies) listed in Exhibit A to the Agreement and Plan
of Reorganization shall enjoy all rights incidental to the ownership
of the 3,300,000 common shares of Gene-Cell, including the right to
vote the shares, throughout the duration of the Escrow Agreement.
II. MISCELLANEOUS
2.01 Further Action
At any time and from time to time, Gene-Cell and XXXX each agree,
at their expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of
this Agreement.
2.02 Survival
Subject to Section 1.03(i), the covenants, agreements,
representations, and warranties contained in or made pursuant to this
Agreement shall survive the delivery by Escrow Agent of the Escrowed
Property, irrespective of any investigation made by or on behalf of
any party.
2.03 Modification
This Agreement sets forth the entire understanding of the parties
with respect to the subject matter hereof, supersedes all existing
agreements among them concerning such subject matter, and (subject to
Section 1.03(e)) may be modified only by a written instrument duly
executed by each party.
2.04 Notices
Any notice, advice, direction, or other document or communication
required or permitted to be given hereunder shall be in writing and
shall be mailed by certified mail, return receipt requested (or by the
most nearly comparable method if mailed from or to a location outside
of the United States), or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the
Purchase Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section
2.04) with a copy to each of the other parties hereto. Any notice,
advice, direction, or other document or communication given by
certified mail (or such comparable method) shall be deemed given at
the time of certification thereof (or comparable act), except for a
notice changing a party's address which shall be deemed given at the
time of receipt thereof.
2.05 Waiver
Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision
of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall
not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other
term of this Agreement. Any waiver must be in writing.
2.06 Binding Effect
Subject to Section 1.03(g), the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties and
their respective assigns and inure to the benefit of Escrow Agent and
Escrow Agent's successors and assigns.
2.07 No Third Party Beneficiaries
This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this
Agreement (except as provided in Section 2.06).
2.08 Jurisdiction
The parties hereby irrevocably consent to the jurisdiction of the
State of Utah in connection with any action or proceeding arising out
of or relating to this Agreement, any document or instrument delivered
pursuant to, in connection with, or simultaneously with this
Agreement, a breach of this Agreement or of any such document or
instrument, or the Escrowed Property.
2.09 Separability
This entire Agreement shall be void if any provision of this
Agreement other than the second sentence of Section 2.11 is invalid,
illegal, unenforceable, or inapplicable to any person or circumstance
to which it is intended to be applicable.
2.10 Headings
The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or
interpretation of this Agreement. The recitals shall be deemed to be
representations, warranties and covenants of the respective parties.
2.11 Counterparts; Governing Law
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. It shall be governed by
and construed in accordance with the laws of the State of Utah.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
Energy Resource Management, Inc. Gene-Cell, Inc.
_________________________________ ______________________________
Xxxxxx X. Xxxxx, President Xxxxx X. Xxxxx, President
Poulton & Yordan
By: ____________________________
Xxxxxx Xxxxxxx
EXHIBIT C
CURRENT DEBT OBLIGATIONS OF GENE-CELL, INC.
TO BE RESOLVED BY ENERGY RESOURCE MANAGEMENT, INC.,
PRIOR TO RELEASE FROM ESCROW OF THE
4,000,000 GENE-CELL COMMON SHARES
Xxxxx Fargo Payment Processing $61,250.00
Clear Lake City, W.A. 135.39
Clear Creek I.S.D. 451.59
Texas Workforce Commission 2,460.19
American Business Leasing 745.70
Southwestern Xxxx 175.44
Xxxxxx County Tax Assessor 449.00
CUSIP Service Bureau 171.00
Centerpoint Financial Services 394.90
FFC Funding Corp 192.72
Xxxxx X. Xxxxx 236.12
EXHIBIT D
INVESTMENT LETTER
TO THE BOARD OF DIRECTORS OF GENE-CELL, INC.:
The undersigned hereby represents to Gene-Cell, Inc., (the
"Company"), that (1) the shares of (Company) (the "Securities") which
are being acquired by the undersigned are being acquired for his own
account and for investment and not with a view to the public resale or
distribution thereof; (2) the undersigned will not sell, transfer or
otherwise dispose of the securities except in compliance with the
Securities Act of 1933, as amended (the "Act"); and (3) he is aware
that the Securities are "restricted securities" as that term is
defined in Rule 144 of the General Rules and Regulations under the Act
and shall bear the appropriate restrictive transfer legends as
required pursuant to the Act and applicable state and other
jurisdictional securities acts.
The undersigned acknowledges and understands that the Securities
are unregistered and must be held indefinitely unless they are
subsequently registered under the Act or an exemption from such
registration is available.
The undersigned further acknowledges that he is fully aware of
the applicable limitations on the resale of the Securities. These
restrictions for the most part are set forth in Rule 144. The Rule
permits sales of "restricted securities" upon compliance with the
requirements of such Rule. If the Rule is available to the
undersigned, the undersigned may make only routine sales of the
securities, in limited amounts, in accordance with the terms and
conditions of the Rule.
The Company is the only person which may register its Securities
under the Act and it currently is not contemplating registering any of
its Securities. Furthermore, the Company has not made any
representations, warranties or covenants to the undersigned regarding
the registration of the Securities or compliance with Regulation A or
some other exemption under the Act.
The undersigned is an "accredited investor" as defined under Rule
501 of Regulation D.
The undersigned is capable of bearing the economic risks of an
investment in the Securities. The undersigned fully understands the
speculative nature of the Securities and the possibility of such loss.
The undersigned's present financial condition is such that it is
under no present or contemplated future need to dispose of any portion
of the Securities to satisfy any existing or contemplated undertaking,
need, or indebtedness.
Any and all certificates representing the Securities, and any and
all securities issued in replacement thereof or in exchange therefore,
shall bear the following legend, which the undersigned has read and
understands:
The shares represented by this Certificate have been
acquired for investment and may not be sold or transferred unless
the same are registered under the Securities Act of 1933, or the
company receives an opinion from counsel satisfactory to it that
such registration is not required for sale or transfer or that
the shares have been legally sold in broker transactions pursuant
to Rule 144 of the Rules and Regulations of the Securities and
Exchange Commission promulgated under the Securities Act of 1933.
The undersigned further agrees that the Company shall have the
right to issue stop-transfer instructions to its transfer agent and
acknowledges that the Company has informed the undersigned of its
intention to issue such instructions.
Very truly yours,
_________________________________
(Signature)
Address:
_____________________________________
_____________________________________
_____________________________________
Social Security No.:
________________________
Date:
______________________
Number of shares to be issued:
Instructions to the transfer agent: _____ certificate(s)
EXHIBIT E
LOCK-UP/LEAK-OUT AGREEMENT
I, the Undersigned agree that none of the Gene-Cell, Inc.,
securities I currently hold or that I may acquire during the term of
this Agreement may be publicly sold by me or by any third party on my
behalf for a period of 240 days from the completion by Gene-Cell of
the Agreement and Plan of Reorganization or any "reverse"
reorganization or merger with Energy Resource Management, Inc.
Following such 240-day period, I understand and agree that I shall be
able to sell, on a cumulative basis, up to a total of five thousand
(5,000) common shares during the successive four (4) months, in
accordance with applicable state and federal securities laws.
Thereafter, this Lock-up/Leak-out Agreement shall expire and I shall
be free to sell my remaining Gene-Cell securities free of restrictions
imposed by this Agreement, in accordance with applicable state and
federal securities laws. A copy of this Agreement shall be provided
to Gene-Cell's transfer and registrar agent; the transfer books and
records of Gene-Cell shall reflect that these securities are subject
to these lock-up/leak-out provisions.
_______________________________ ________________________
(Print Name) Date
