AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
by and among
XXXXXXXXXXXX.XXX, INC.
as Acquiror
SHANGHAI G-CHOICE SCIENCE & TECHNOLOGY COMPANY LTD
as Acquiree
and
the Shareholders of
SHANGHAI G-CHOICE SCIENCE & TECHNOLOGY COMPANY LTD
June 30,2002
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (the "Agreement")
is made and entered into this 30 day of June, 2002 by and among
XXXXXXXXXXXX.XXX, INC., a Delaware corporation (hereinafter referred to as
"NETD"), SHANGHAI G-CHOICE SCIENCE & TECHNOLOGY COMPANY LTD., a business entity
existing under the laws of China (hereinafter referred to as the "Company"), and
Genesis Technology Group and Xxxx Xxxx and Xxxxx Xxxx, the shareholders of the
Company (hereinafter referred to as the "Shareholders").
RECITALS:
1. The Shareholders own all (100%) of the issued and outstanding shares
of the capital stock of the Company as set forth on Exhibit A hereto.
2. NETD is willing to acquire all of the issued and outstanding capital stock of
the Company, making the Company a wholly-owned subsidiary of NETD, and the
Shareholders desire to exchange all of their shares of the Company's capital
stock for shares of NETD authorized but unissued shares of Common Stock as
hereinafter provided.
3. It is the intention of the parties hereto that: (i) NETD shall acquire all of
the issued and outstanding capital stock of the Company in exchange solely for
9,178,949 shares (post a 1-for-19 reverse split, effective May 31, 2002) of NETD
authorized but unissued Common Stock set forth below (the "Exchange"); (ii) 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. NETD 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
"G-Choice Shares") for 9,178,949 shares (post a 1-for-19 reverse split,
effective May 31, 2002) of NETD Common Stock, $.001 par value (the "NETD
Shares") set forth in Exhibit A hereto. The number of shares of capital stock
owned by the Shareholders and the number of NETD Shares which the Shareholders
will be entitled to receive in the Exchange is set forth in Exhibit A hereto.
1.2 Delivery of G-Choice Shares. On the Closing Date, the Shareholders
will deliver to NETD the certificates representing the G-Choice Shares, duly
endorsed (or with executed stock powers) so as to make NETD the sole owner
thereof. NETD shall deliver to the Shareholders the NETD Shares to be delivered
to the Shareholders.
1.3 Investment Intent. The NETD Shares have not been registered under
the Securities Act of 1933, as Amended, and may not be resold unless the NETD
Shares are registered under the Act or an exemption from such registration is
available. The Shareholders represent and warrant that they are acquiring the
NETD Shares for their own account, for investment, and not with a view to the
sale or distribution of such Shares. Each certificate representing the NETD
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 all
appropriate local, provincial and national laws 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.
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.
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 NETD the unaudited balance sheet of the Company as at March 31
2002, (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:
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(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 local,
provincial and national 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 required
national 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
2.7 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 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.
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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.
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 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 NETD 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.
2.15 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 NETD
NETD hereby represents and warrants to the Company and the Shareholders
as follows:
3.1 Organization and Good Standing. NETD is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware 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
NETD consists of 50,000,000 shares of Common Stock, of which 1,368,421 post
split shares (see Exhibit "B" attached hereto) are presently issued and
outstanding. NETD is duly licensed or qualified and in good standing as a
foreign corporation where the character of the properties owned by NETD or the
nature of the business transacted by it make such license or qualification
necessary. NETD does not have any subsidiaries.
3.2 The NETD Shares. The NETD 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 NETD as at May 31, 2001
and the unaudited balance sheet as at February 28, 2002 (the "NETD 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.
It is acknowledged by all parties that a Consulting Agreement dated March 25,
2002 (including Addendum) and Letter Agreement dated March 28, 2002 between
Genesis Systems Inc. and xxxXXXxxxxxx.xxx, Inc. (NETD) including but not limited
to, a 1 for 19 reverse stock split effectuated May 31, 2002, sale of
intellectual properties, change of officers and board of directors at closing,
issuance of common shares for liabilities, etc., shall be in full force and
effect at closing.
3.4 No Material Adverse Changes. Since the date of the NETD
Balance Sheet and except as otherwise disclosed in NETD 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 NETD;
(ii) any damage, destruction or loss materially affecting the
assets, prospective business, operations or condition (financial or otherwise)
of NETD, 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 NETD'
capital stock;
(iv) any sale of an asset (other than in the ordinary course
of business) or any mortgage or pledge by NETD 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. NETD has not prepared and filed all appropriate federal tax
returns, but have prepared 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 or the failure to make such filings and resulting liability would
not be material relative to the results of operations of NETD. NETD 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. NETD represents that since
its audited financials indicate an accounting and tax loss, that no Federal tax
liabilities are due and payable.
3.6 Compliance with Laws. NETD 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 NETD or the trading market for the shares of
NETD 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 NETD ;
(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 NETD 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, NETD or upon the properties or business of NETD; 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 NETD.
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 NETD. 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 NETD 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
NETD in connection with the transactions contemplated by this Agreement, nor
will any such fee be incurred as a result of any actions by NETD.
3.10 Liabilities. NETD 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, NETD will not have any Liabilities, other
than Liabilities fully and adequately reflected on the NETD Balance Sheet or
NETD balance sheet dated February 28, 2008, except for Liabilities incurred in
the ordinary course of business.
3.11 Operations of NETD. Except as set forth on Schedule 3.11 or in
NETD reports or filings made under the Securities Exchange Act of 1934, since
the date of the NETD Balance Sheet and through the Closing Date hereof, NETD 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 NETD as referenced in paragraph
3.3 except in the ordinary course of business; or
(vi) materially increased the annual level of compensation of
any executive employee of NETD;
(vii) increased, terminated amended or otherwise modified any
plan for the benefit of employees of NETD ;
(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. NETD 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 NETD, 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 NETD 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 NETD, 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 NETD, or any instrument, contract or other agreement to which NETD
is a party or by or to which NETD is bound or subject; or
(iii) result in the creation of any lien or other encumbrance
on the assets or properties of NETD.
3.13 Delivery of Periodic Reports; Compliance with 1934 Act. NETD has
provided the Company and the Shareholders with all of its Periodic Reports filed
with the Securities and Exchange Commission since January 1, 1998. NETD 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 NETD 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 NETD are included as exhibits to such
periodic reports or are listed on Schedule 3.13 hereto.
3.14 Capitalization. The authorized capital stock of NETD consists of
50,000,000 shares of common stock, $.001 par value, of which 1,368,421 shares
are presently issued and outstanding. Except as indicated in Schedule 3.14
hereto, NETD 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 NETD.
Additionally, NETD has authorized preferred shares but none outstanding.
3.15 Full Disclosure. No representation or warranty by NETD 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 NETD.
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 NETD 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 NETD, 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.
4.3 Litigation. The Company shall promptly notify NETD 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 NETD
NETD covenants to the Company and the Shareholders as follows:
5.1 Conduct of Business. From the date hereof through the Closing Date,
NETD shall conduct its business in the ordinary course and, without the prior
written consent of the Company, shall ensure that NETD 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, NETD shall preserve its business organization intact and use its best
efforts to preserve NETD goodwill.
5.3 Litigation. NETD shall promptly notify the Company of any lawsuits,
claims, proceedings or investigations which after the date hereof are threatened
or commenced against NETD or against any officer, director, employee,
consultant, agent, or stockholder with respect to the affairs of NETD.
5.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, NETD 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:
(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, NETD will
not permit and will not authorize any officer or director of NETD 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 NETD, or any
transaction in which NETD 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:
(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 NETD TO CLOSE
The obligation of NETD to enter into and complete the Closing is
subject, at the option of NETD, to the fulfillment on or prior to the Closing
Date of the following conditions, any one or more of which may be waived by NETD
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 NETD, 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 NETD, if requested by
NETD, 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. NETD shall have satisfied itself,
after NETD 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 NETD 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 NETD , a materially adverse effect on the assets,
properties, business, operations or condition (financial or otherwise) of the
Company.
7.6 Certificate of Good Standing. NETD is in the process of receiving 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 NETD 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.
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 NETD 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. NETD shall have performed and complied with all covenants and
agreements required by the Agreement to be performed or complied with by NETD on
or prior to the Closing Date. NETD shall have delivered to the Company and the
Shareholders, if requested, a certificate, dated the Closing Date and signed by
an executive officer of NETD, 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 NETD shall have approved the transactions contemplated by this
Agreement, and NETD shall have delivered to the Company and the Shareholders, if
requested, resolutions by their Board of Directors certified by the Secretary of
NETD 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 NETD which
may be required in connection with the performance by NETD 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 NETD 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 NETD.
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 NETD.
8.6 Stock Certificates. At the Closing, the Shareholders shall
receive certificates representing the NETD Shares to be received pursuant
hereto and subject to the conditions previously described.
8.7 Other Documents. NETD 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 NETD
Notwithstanding any right of the Company and the Shareholders fully to
investigate the affairs of NETD, the former shall have the right to rely fully
upon the representations, warranties, covenants and agreements of NETD contained
in this Agreement or in any document delivered by NETD 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 NETD fully to investigate the affairs of
the Company, NETD 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 NETD 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 NETD to Indemnify. Subject to the limitations on the
survival of representations and warranties contained in Section 9, NETD 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 NETD contained in this Agreement or in any document or other
writing delivered pursuant to this Agreement. In the event of any Loss, the
Shareholders shall have the right to have the Company issue additional shares of
common stock to them, to the exclusion of the existing shareholders of the
Company, to compensate the Shareholders for any such Loss.
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 NETD 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 June 30, 2002. 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: G-Choice Science and Technology Development
Company, Limited
X0-00X, XxxXxx Xxxxx 0000
XxxXx Xxxx, Xxxxxxxx Xxxxx
NETD : XXXXXXXXXXXX.XXX, INC
0000 Xxxx Xxxxxxx Xxxx Xxxx.
Xxxx Xxxxxxxxxx, XX 00000
Attn.: Xxxxxx Xxxxxxxxx
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.
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
Florida, 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 NETD 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 NETD 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: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Its: President
G-Choice Science and Technology Development Company, Limited
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Its: President
SHAREHOLDERS:
/s/ Xxxx Xxxx
Xxxx Xxxx
/s/ Xxxxx Xxxx
Xxxxx Xxxx
For Genesis Technology Group, Inc. (a shareholder)
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Its: President & CEO
Exhibit A
EXCHANGE WITH G-Choice Science and Technology Development Company, Limited
NETD
Shares to
Name of be Received
Shareholders At Closing
------------ ---------------
Xxxx Xxxx 3,262,190
Xxxxx Xxxx 3,262,190
Xxxxxxx Xxxx 815,547
Xxxxxxx Xxxx 815,547
Genesis Technology Group 1,023,475
EXHIBIT "B"
NetDigest Liablity Conversion
As Of May 31, 2002
1-for-19 Reverse
Liability Shares Split Shares
Shares Outstanding at 2/28/02 13,814,242 727,065
Accounts Payable Converted at $0.03125/Share
To Be Paid in Cash (Genesis) $ 22,381.66 716,213 37,695
2+2 Advertising 27,500.00 880,000 46,315
Chesterbrook Partners Inc. 11,250.00 360,000 18,947
CSC 693.00 22,176 1,167
DJV Capital, Inc. 9,375.00 300,000 15,789
Xxx X. Xxxxxxxx, Xx. 11,400.00 364,800 19,200
LDV Corporation 6,250.00 200,000 10,526
National Media Technologies, Inc. 1,304.40 41,741 2,196
Xxxxxx Xxxxxxxxx 5,000.00 160,000 8,421
Xxxxx Xxxxxxx 8,437.50 270,000 14,210
Xxx X. Xxxxxxxx, Xx. 1,245.00 39,840 2,096
Xxxxxxxx XxXxxx 5,000.00 160,000 8,421
Other Accounts Payable 26,862.24 859,592 45,241
Accounts Payable to be Converted Total $136,698.80 4,374,362 230,224
Accrued Expenses Converted at $0.0625/Share
Xxxxxx Xxxxxxxxx $56,000.00 896,000 47,157
Xxxxxx Xxxxxxx 26,500.00 424,000 22,315
Xxxxxxxx Xxxxxx 15,500.00 248,000 13,052
Xxxxx Xxxxxxx 15,500.00 248,000 13,052
Xxxxxx Xxxxxx 15,000.00 240,000 12,631
Xxx X. Xxxxxxxx, Xx. 10,000.00 160,000 8,421
Xxxxxxxxxxx Xxxxxx 4,000.00 64,000 3,368
Additional Accrued Expenses 522.87 8,366 440
Total Accrued Expenses $143,022.87 2,288,366 120,436
Other Liabilities Converted at $0.03125/Share
A.U.W., Inc. $52,818.67 1,690,197 88,957
Xxxx Xxxxxxxxx 8,500.00 272,000 14,315
Xxxxxx Xxxxxxxxx 6,470.47 207,055 10,897
Xxx X. Xxxxxxxx, Xx. 105.57 3,378 177
Total Other Liabilites $67,894.71 2,172,631 114,346
Notes Payable Converted at $0.015625/Share
A.U.W., Inc. $58,600.00 3,750,400 197,389
Totals at 5/31/02 $406,216.38 26,400,000 1,389,460
AUW Purchase of Company Assets at Closing 400,000 21,052
Totals at Closing 26,000,000 1,368,408
Share Round Down Error 13
Shares Including Round 1,368,421
