AGREEMENT AND PLAN OF SHARE EXCHANGE
THIS AGREEMENT AND PLAN OF SHARE EXCHANGE entered into this 6th day of
May, 2008, by and among Xxxxxxxxx.xxx, Inc., a Nevada Publicly Traded
Corporation, ("PRICESTER"), Genesis Electronics, Inc., a Delaware
Corporation ("Genesis"), Xxxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxx Xxxxxx
("Xxxxxx") and any other person or entity executing this Agreement
(individually, a "GENESIS Stockholder" and collectively, the "Genesis
Stockholders").
WITNESSETH:
WHEREAS, PRICESTER desires to acquire GENESIS by issuing shares of its
common stock, par value $.001 per share ("PRICESTER Common Stock"), in
exchange for the issued and outstanding common stock of GENESIS (the
"GENESIS Stock" in an acquisition that will result in GENESIS becoming
a subsidiary of PRICESTER, upon the terms and subject to the conditions
set forth herein (the "Exchange");
WHEREAS, the GENESIS Stock owned by Unnold and Xxxxxx constitutes in
excess of sixty percent (60%) of the issued and outstanding GENESIS
Stock, and Unnold and Xxxxxx and any of the other GENESIS Stockholders
executing this Agreement desire to exchange their shares of GENESIS
Stock for shares of PRICESTER Common Stock; and
WHEREAS, the Board of Directors of GENESIS believes the Exchange is in
the best interests of the GENESIS Stockholders; and
WHEREAS, the Boar of Directors of PRICESTER believes the Exchange is in
the best interests of the PRICESTER Stockholders; and
WHEREAS, PRICESTER is a publicly traded company whose common stock,
$.001 par value per share (the "PRICESTER") Common Stock") is quoted on
the NASDAQ Over the Counter Bulletin Board under the symbol "PRCC";
WHEREAS, following the Closing, Pricester will own in excess of sixty
percent (60%) of GENESIS;
WHEREAS, the Parties intend that the transaction contemplated herein
(the "Transaction") contemplated hereby, qualify s a reorganization and
tax free exchange under Section 368(a) of the Internal Revenue Code of
1986, as amended;
NOW THEREFORE, on the stated premises and for and in consideration of
the foregoing recitals which are hereby incorporated by reference, the
mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from and for other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1.
EXCHANGE OF SHARES
1.1 Exchange. Upon the terms and subject to the conditions set forth
in this Agreement, at the Closing provided for in Section 1.2 hereof,
each of Xxxxxx, Xxxxxx and the other GENESIS Stockholders executing
this Agreement shall sell, assign, transfer, convey and deliver to
PRICESTER, and PRICESTER shall purchase, all right, title and interest
in and to all of such GENESIS Stockholder's shares of GENESIS Stock,
free an clear of all liens, security interests, charges, encumbrances
and rights of others. In consideration for the shares of GENESIS Stock
so acquired by PRICESTER, PRICESTER shall issue and deliver .1294739
common shares of PRICESTER for each share of GENESIS Stock, but in no
event more than a total of 2,000,000 common shares. PRICESTER will
allow GENESIS Stockholder's to deliver their shares to PRICESTER to be
acquired until June 15, 2008.
1.2 Closing. Consummation of the transactions contemplated by this
Agreement (the "Closing"), shall take place at the officers of
PR$ICESTER, commencing at 10:00 a.m., local time, as soon as
practicable after the last to be fulfilled or waived of the conditions
set forth in Articles6 or at such other place, time and date as shall
be fixed by mutual agreement among PRICESTER, and GENESIS. The day on
which the Closing shall occur shall be referred to herein as the
"Closing Date." Each party will use its reasonable best efforts to
cause to be prepared, executed and delivered at the Closing the
documents to be delivered pursuant to Article 6 and all other
appropriate and customary documents as any party or its counsel may
reasonably request for the purpose of consummating the transactions
contemplated by this Agreement. All actions taken at the Closing shall
be deemed to have been taken simultaneously at the time the last of any
such actions is taken or completed.
ARTICLE 2.
REPRESENTATIOSN AND WARRANTIES OF GENESIS
GENESIS hereby represents and warrants to PRICESTER that, except as
otherwise set forth on the GENESIS Disclosure Schedule (herein so
called) attached hereto:
2.1 Organization and Good Standing. GENESIS is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. GENESIS has no subsidiaries and does not own any
equity, profit sharing, participation or other ownership interest
(including any general partnership interest, limited partnership
interest or membership interest) in any corporation, partnership,
limited partnership, limited liability company or other entity.
2.2 Foreign Qualification. GENESIS is duly qualified or licensed to
do business and is in good standing as a foreign corporation in each
jurisdiction where the failure so to qualify would have a material
adverse effect on (a) the current business, operations, assets,
condition (financial or otherwise) or prospects of GENESIS, or (b) the
validity or enforceability of, or the ability of GENESIS to perform its
obligations under this Agreement (each being hereinafter referred to as
an "GENESIS Material Adverse Effect").
2.3 Corporate Power and Authority. GENESIS has the full legal right
and corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as currently being
conducted. GENESIS has the full legal right and the corporate power
and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement. The execution, delivery and
performance by GENESIS of this Agreement and any Ancillary Agreements
has been duly authorized by all necessary corporate action.
2.4 Binding Effect. This Agreement has been duly executed and
delivered by GENESIS and is the legal, valid and binding obligation of
GENESIS enforceable in accordance with its terms, except that:
(a) enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(c) rights to indemnification may be limited by considerations of
public policy.
2.5 Absence of Restrictions and Conflicts. The execution, delivery
and performance of this Agreement and the consummation of the Exchange
and the fulfillment of and compliance with the terms and conditions of
this Agreement do not and will not, with the passing of time or the
giving of notice or both, violate or conflict with, constitute a breach
of or default under, result in the loss of any material benefit under,
or permit the acceleration of any obligation under (i) any term or
provision of the Certificate of incorporation or By-Laws of GENESIS,
(ii) any ENESIS Material Contract (as defined in Section 2.11), (iii)
any judgment decree or order of any court or governmental authority or
agency to which GENESIS or by which GENESIS or any of its respective
properties is bound, (iv) any statute, law, regulation or rule
applicable to GENESIS. No consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental
agency or public or regulatory unit, agency, body or authority with
respect to GENESIS are required in connection with the execution,
delivery or performance of this Agreement by GENESIS.
2.6 Capitalization of GENESIS
(a) The authorized capital stock of GENESIS consists of 50,000,000
shares of GENESIS Common Stock and 10,000,000 shares of Preferred
Stock. As of the date hereof, there are 15,447,133 shares of GENESIS
Common Stock issued and outstanding and the Genesis Stockholders own
all of the GENESIS Common Stock, and, except as set forth in Section
2.6(a) of the GENESIS Disclosure Schedule, there are no other warrants,
options or preferred shares outstanding. The GENESIS Capitalization
Table is attached as Section 2.6(a) of the GENESIS Disclosure Schedule,
there are no other warrants, options or preferred shares outstanding.
The GENESIS Capitalization Table is attached as Section 2.6(a) of the
GENESIS Disclosure Schedule and is part and parcel of this Agreement.
(b) All of the issued and outstanding shares of GENESIS Stock have
been duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights.
(c) To GENESIS's knowledge, there are no voting trusts, stockholder
agreements or other voting arrangements, charges, liens or encumbrances
on shares issued by GENESIS that have been granted by the GENESIS
Stockholders, except as set forth on Section 2.6(c) of the GENESIS
Disclosure Schedule.
(d) There is no outstanding subscription, contract, convertible or
exchangeable security, option, warrant, call or other right obligating
GENESIS to issue, sell, exchange, or otherwise dispose of, or to
purchase, redeem or otherwise acquire, shares of, or securities
convertible into or exchangable into or exchangeable for, GENESIS
Stock, except as set forth in Section 2.6(d) of the GENESIS Disclosure
Schedule.
2.7 FINANCIAL STATEMENTS GENESIS has delivered to PRICESTER copies of
the balance sheets of GENESIS as of December 31, 2007 and 2006 and the
related statements of operations and retained earnings and cash flows
of GENESIS for the years then ended (such statement, including the
related notes and schedules thereto, are referred to herein as the
("GENESIS Financial Statements"). Each of the GENESIS Financial
Statements is complete and correct in all material respects, has been
prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods presented (except
the unaudited statements omit notes and are subject to year end
adjustments), and presents fairly the financial position, results of
operations, cash flows and stockholders' equity of GENESIS as at the
dates and for the periods indicated.
2.8 Absence of Certain Changes. Except as set forth on Section 2.8 of
the GENESIS Disclosure Schedule, since December 31, 2007, GENESIS has
not:
(a) suffered any adverse change in its business, operations,
assets, or condition (financial or otherwise), except as
reflected on the GENESIS Financial Statements;
(b) suffered any material damage or destruction to or loss of
the assets of GENESIS, whether or not covered by insurance, which
property or assets are material to the operations or business of
GENESIS taken as a whole;
(c) settled, forgiven, compromised, canceled, released, waived
or permitted to lapse any material rights or claims, other than
in the ordinary course of business;
(d) entered into or terminated any material agreement,
commitment or transaction, or agreed to or made any changes in
material leases or agreements, other than renewals or extensions
thereof and leases, agreements, transactions and commitments
entered into or terminated in the ordinary course of business;
(e) written up, written down or written off the book value of any
material amount of assets, other than in the ordinary course of
business;
(f) declared, paid or set aside for payment any dividend or
distribution with respect to the GENESIS Stock;
(g)redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any shares of GENESIS
Stock or securities or any rights to acquire such capital stock or
securities, or agreed to changes in the terms and conditions of any
such rights outstanding as of the date of this Agreement;
(h) entered into any collective bargaining agreement or trade union
recognition agreement with any person or group;
(i) entered into, adopted or amended any employee benefit plan or
share option scheme or agreement; or
(j) entered into any agreement to do any of the foregoing.
2.9 No Material Undisclosed Liabilities. Except as set forth on
Section 2.9 of the GENESIS Disclosure Schedule, there are no
liabilities or obligations of GENESIS of any nature, whether absolute,
accrued, contingent, or otherwise, other than liabilities and
obligations:
(a) in the aggregate adequately provided for in the GENESIS Financial
Statements;
(b) incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in the
GENESIS Financial Statements;
(c) incurred since December 31, 2007, in the ordinary course of
business; or
(d) incurred in connection with this Agreement.
2.10 Tax Returns: Taxes. Except as set forth in Section 2.10 of the
GENESIS Disclosure Schedule, GENESIS (a) has duly filed all U.S.
federal and material state, county, local and foreign tax returns and
reports required to be filed by it, including those with respect to
income, payroll, property, withholding, social security, unemployment,
franchise, excise and sales taxes and all such returns and reports are
correct in all material respects; (b) has either paid in full all taxes
that have become due as reflected on any return or report and any
interest and penalties with respect thereto or has fully accrued on its
books or has established adequate reserves for all taxes that have
become due as reflected on any return or report and any interest and
penalties with respect thereto or has fully accrued on its books or has
established adequate reserves for all taxes payable but not yet due;
and (c) has made required cash deposits with appropriate governmental
authorities representing estimated payments of taxes, including income
taxes and employee withholding tax obligations. No extension or waiver
of any statute of limitations or time within which to file any return
has been granted to or requested by GENESIS with respect to any tax.
No unsatisfied deficiency, delinquency or default for any tx,
assessment or governmental charge has been claimed, proposed or
assessed against GENESIS, nor has GENESIS received notice of any such
deficiency, delinquency or default. GENESIS has no material tax
liabilities, other than those arising in the ordinary course of
business since December 31, 2007.
2.11 Material Contracts. GENESIS has furnished or made available to
PRICESTER accurate and complete copies of the GENESIS Material
Contracts applicable to GENESIS. Except as set forth on Section 2.11
of the GENESIS Disclosure Schedule, there is not under any of the
GENESIS Material Contracts any existing breach, default or event of
default by GENESIS nor event that with notice or lapse of time or both
would constitute a breach, default or event of default by GENESIS, nor
does GENESIS know of, and GENESIS has not received notice of, or made a
claim with respect to, any breach or default by any other party
thereto. As used herein, the term "GENESIS Material Contracts" shall
mean all (i) contracts, licenses, leases, instruments, mortgages and
deeds of trust involving obligations of GENESIS in excess of $10,000;
(ii) employee benefit plans, or arrangements or understandings with, or
for the benefit of the employees of GENESIS; and (iii) insurance
policies, but shall exclude contracts with customers entered into in
the ordinary course of business.
2.12 Litigation and Government Claims. There is no pending suit,
claim, action or litigation, or administrative, arbitration or other
proceeding or governmental investigation or inquiry against GENESIS to
which its businesses or assets is subject, and to the knowledge of
GENESIS, there are no such proceedings threatened or contemplated.
GENESIS is not subject to any judgment, decree, injunction, rule or
order of any court, or, to the knowledge of GENESIS, there are no such
proceedings threatened or contemplated. GENESIS is not subject to any
judgment, decree, injunction, rule or order of any court, or, to the
knowledge of GENESIS, any governmental restriction applicable to
GENESIS that is reasonably likely to cause a material limitation on
PRICESTER's ability to own and operate the business of GENESIS (as it
is currently operate) after the Closing. There is no basis for any
person to assert a claim against GENESIS based upon GENESIS entering
into this Agreement or any Ancillary Agreement or consummating any of
the transactions contemplated by this Agreement or any Ancillary
Agreement.
2.13 Compliance With Laws. GENESIS has all material authorizations,
approvals, licenses and orders to carry on its business as it is now
being conducted, to own or hold under lease the properties and assets
it owns o holds under lease and to perform all of its obligations under
the agreements to which it is a party. GENESIS has been and is, to the
knowledge of GENESIS, in compliance with all applicable laws,
regulations and administrative orders of any country, state or
municipality or of any subdivision of any thereof to which its
business, ownership of assets and its employment of labor or its use or
occupancy of properties or any part thereof are subject.
2.14 Pension and Profit Sharing Plans. GENESIS does not currently
have in effect any employee pension or profit sharing plans.
2.15 Employee Benefit Agreements. Section 2.15 of the GENESIS
Disclosure Schedule sets forth a complete and accurate list of all
material employee benefit plans, agreements and arrangements to which
GENESIS is a party, including without limitation (i) all severance,
employment, consulting or similar contracts, (ii) all material
agreements and contracts with "change of control" provisions or similar
provisions and (iii) all indemnification agreements or arrangements
with directors or officers not included in its organizational documents
or provided by law.
2.16 Intellectual Property. Except as described on Section 2.16 of
the GENESIS Disclosure Schedule, GENESIS owns or has valid binding and
enforceable rights to use all material patents, trademarks, trade
names, service marks, service names, copyrights, applications therefore
and licenses or other rights in respect thereof ("GENESIS Intellectual
Property") used or held of use in connection with the business of
GENESIS without any known conflict with the rights of others, except
for such conflicts as do not have a GENESIS Material Adverse Effect.
GENESIS has not received any notice from any other person pertaining to
or challenging the right of GENESIS to use any GENESIS Intellectual
Property or any trade secrets, proprietary information, inventions,
know-how, processes and procedures owned or used by GENESIS, or
licensed to GENESIS, except with respect to rights the loss of which,
individually or in the aggregate, would not have a GENESIS Material
Adverse Effect. The GENESIS Intellectual Property represents all of
the proprietary rights necessary to operate the business of GENESIS.
2.17 Title to Properties and Related Matters. Except as set forth on
Section 2.17 of the GENESIS Disclosure Schedule, GENESIS has good and
valid title to or valid license or leasehold interests in its
properties (other than personal properties sold or otherwise disposed
of in the ordinary course of business), and all of such properties and
all assets purchased by GENESIS are free and clear of any lien, claim
or encumbrance, except for:
(a) liens for taxes, assessments or other governmental charges
not yet due and payable or the validity of which are being
contested in good faith by appropriate proceedings;
(b) statutory liens incurred in the ordinary course of
business that are not yet due and payable or the validity of
which is being contested in good faith by appropriate
proceedings;
(c) landlord liens contained in leases entered into in the
ordinary course of business; and
(d) other liens, claims or encumbrances that, in the aggregate,
do not materially subtract from the value of, or materially
interfere with, the present use of any real property owned or
used by GENESIS.
All properties and assets material to the present operations of GENESIS
are owned or leased by GENESIS in the manner and to the extent required
by applicable law.
2.18 Brokers. GENESIS has not incurred any liability for brokerage
fees, finders fees, agents commission or other similar forms of
compensation in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE GENESIS STOCKHOLDERS
Each of the Xxxxxx, Xxxxxx and the other GENESIS Stockholders executing
this Agreement hereby severally represent and warrant that:
3.1 Power and Authority. Such GENESIS Stockholder has the full legal
right and authority to execute and deliver this Agreement and to
perform his, her or its obligations under this Agreement.
3.2 Binding Effect. This Agreement has been duly executed and
delivered by such GENESIS Stockholder and is the legal, valid and
binding obligation of such GENESIS Stockholder enforceable in
accordance with its terms, except that:
(a) enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(c) rights to indemnification may be limited by considerations
of public policy.
3.3 No Consents. No consent, approval, order or authorization of, or
registration, or filing with, any governmental agency or public or
regulatory unit, agency, body or authority with respect to such GENESIS
Stockholder are required in connection with the execution, delivery or
performance of this Agreement by such GENESIS Stockholder.
3.4 Title to GENESIS Stock. Such GENESIS Stockholder has good and
valid title to the shares of GENESIS Stock owned by such GENESIS
Stockholder, free and clear of any lien, claim or encumbrance.
Each of Unnold and Xxxxxx hereby severally represent and warrant that:
3.5 Litigation and Government Claims. To the best of his knowledge
there is no pending suit, claim, action or litigation, or
administrative, arbitration or other proceeding or governmental
investigation or inquiry against GENESIS to which its businesses or
assets is subject, and GENESIS is not subject to any judgment, decree,
injunction, rule or order of any court, or, any governmental
restriction applicable to GENESIS that is reasonably likely to cause a
material limitation on PRICESTER's ability to own and operate the
business of GENESIS (as it is currently operated) after the Closing.
There is no basis for any person to assert a claim against GENESIS
based upon GENESIS entering into this Agreement or any Ancillary
Agreement or consummating any of the transactions contemplated by this
Agreement or any Ancillary Agreement.
3.6 Intellectual Property. Except as described on Section 2.16 of the
GENESIS Disclosure Schedule, to the best of his knowledge, GENESIS owns
or has valid binding and enforceable rights to use all material
patents, trademarks, trade names, service marks, service names,
copyrights, applications therefore and licenses or other rights in
respect thereof ("GENESIS Intellectual Property") used or held for use
in connection with the business of GENESIS without any known conflict
with the rights of others, except for such conflicts as do not have a
GENESIS Material Adverse Effect. GENESIS has not received any notice
from any other person pertaining to or challenging the right of GENESIS
to use any GENESIS Intellectual Property or any trade secrets,
proprietary information, investigations, know-how, processes and
procedures owned or used by GENESIS, or licensed to GENESIS, except
with respect to rights the loss of which, individually or in the
aggregate, would not have a GENESIS Material Adverse Effect. The
GENESIS Intellectual Property represents all of the proprietary rights
necessary to operate the business of GENESIS.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PRICESTER
PRICESTER hereby represents and warrants that, except as otherwise set
forth in the PRICESTER DISCLOSURE Schedule (herein so called) attached
hereto:
4.1 Organization and Good Standing. PRICESTER is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Except as set forth in Section 4.1 of the PRICESTER
Disclosure Schedule, PRICESTER has no subsidiaries and no equity,
profit sharing, participation or other ownership interest (including
any general partnership interest, limited partnership interest or
membership interest) in any corporation, partnership, limited
partnership, limited liability company or other entity.
4.2 Foreign Qualification. PRICESTER is duly qualified or licensed to
do business and is in good standing as a foreign corporation in each
jurisdiction where the failure so to qualify would have a material
adverse effect on (a) the current business, operations, assets,
condition (financial or otherwise) or prospects of PRICESTER, or (b)
the validity or enforceability of, or the ability of PRICESTER to
perform its obligations under this Agreement (each being hereinafter
referred to as an "PRICESTER Material Adverse Effect").
4.3 Corporate Power and Authority. PRICESTER has the corporate power
and authority and all material licenses and permits to own, lease and
operate its properties and assets and to carry on its business as
currently being conducted. PRICESTER has the corporate power and
authority to execute and deliver this Agreement and to perform its
obligations under this Agreement and to consummate the Exchange. The
execution, delivery and performance by PRICESTER of this Agreement has
been duly authorized by all necessary corporate action.
4.4 Binding Effect. This Agreement has been duly executed and
delivered by PRICESTER and is the legal valid and binding obligation of
PRICESTER, enforceable in accordance with its terms, except that:
(a) enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability; and
(c) rights ot indemnification may be limited by considerations of
public policy.
4.5 Absence of Restrictions and Conflicts. The execution, delivery an
performance of this Agreement and the consummation of the Exchange and
the fulfillment of and compliance with the terms and conditions of this
Agreement do not and will not, with the passing of time or the giving
of notice or both, violate or conflict with, constitute a breach of or
default under, result in the loss of any material benefit under, or
permit the acceleration of any obligation under, (i) any term or
provision of the Certificate of Incorporation or By-Laws of PRICESTER,
(ii) any PRICESTER Material Contract (as defined in Section 4.11
below), (iii) any judgment, decree or order of any court or
governmental authority or agency to which PRICESTER is a party or by
which PRICESTER or any of its properties is bound, or (iv) any statute,
law, regulation or rule applicable to PRICESTER. No consent, approval,
order or authorization of, or registration, declaration or filing with,
any governmental agency or public regulatory unit, agency, body or
authority with respect to PRICESTSER is required in connection with the
execution, delivery or performance of this Agreement by PRICESTER or
the Exchange.
4.6 Capitalization of PRICESTER.
(a) The authorized capital stock of PRICESTER consists of 50,000,000
shares of PRICESTER Common Stock. As of the date hereof, there are
40,598,456 shares of PRICESTER common stock outstanding.
(B) All of the issued and outstanding shares of PRICESTER Common
Stock have been duly authorized and validly issued and fully paid,
nonassessable and free of preemptive rights. The PRICESTER Common
Stock to be issued to the GENESIS Stockholders pursuant to the Exchange
will, when issued as specified herein, be validly issued and
outstanding, fully paid and non-assessable, and not issued in violation
of the preemptive rights.
(d To PRICESTER's knowledge, there are no voting trusts, stockholder
agreements or other voting arrangements that have been entered into
among the stockholders of PRICESTER, or charges, liens or encumbrances
on issued shares of PRICESTER Common Stock.
(d) There is no outstanding subscriptions, contract, convertible or
exchangeable security, option, warrant, call or other right obligating
PRICESTER to issue, sell, exchange, or otherwise dispose of, or to
purchase, redeem or otherwise acquire, shares of, securities
convertible into or exchangeable for, capital stock of PRICESTER ,
except as set forth in Section 4.6 of the PRICESTER Disclosure
Schedule.
4.7 Financial Statements. PRICESTER has delivered to the GENESIS
Stockholders copies of the balance sheets of PRICESTER as of December
31, 2007 and 2006 and the related statements of operations of PRICESTER
for the years then ended. Each of the PRICESTER Financial Statements
is complete and correct in all material respects, has been prepared in
accordance with GAAP consistently applied throughout the periods
presented, and presents fairly the financial position, results of
operations, cash flows and stockholders' equity of PRICESTER as at the
dates and for the periods indicated (subject, in the case of unaudited
statements, to normal, recurring audit adjustments which will not be
material in amount or significance) and do not include or omit to state
any fact which renders the PRICESTER Financial Statements misleading.
There has been no change in PRICESTER accounting policies, except as
described in the notes to the PRICESTER Financial Statements.
4.8 Absence of Certain Changes. Except as otherwise set forth in
Section 4.8 of the PRICESTER Disclosure Schedule, since December 31,
2007 PRICESTER has not:
(a) suffered any adverse change in its business, operations,
assets, or financial condition, except as reflected on the
PRICESTER Financial Statements;
(b) suffered any material damage or destruction to or loss of
the assets of PRICESTER, whether or not covered by insurance,
which property or assets are material to the operations or
business of PRICESTER taken as a whole;
(c) settle, forgiven, compromised, canceled, released, waived
or permitted to lapse any material rights or claims other than in
the ordinary course of business;
(d) entered into or terminated any material agreement,
commitment or transaction, or agreed to or made any changes in
material leases or agreements, other than renewals or extensions
thereof and leases, agreements, transactions and commitments
entered into or terminated in the ordinary course of business;
(e) written up, written down or written off the book value of
any material amount of assets, other than in the ordinary course
of business;
(f) declared, paid or set aside for payment any dividend or
distribution with respect to PRICESTER's capital stock;
(g) redeemed, purchased or otherwise acquired, or sold, granted
or otherwise disposed of, directly or indirectly, any of
PRICESTER's capital stock or securities or any rights to acquire
such capital stock or securities, or agreed to changes in the
terms and conditions of any such rights outstanding as of the
date of this Agreement;
(h) increased the compensation of or paid any bonuses to any
employees or contributed to any employee benefit plan, other than
in the ordinary course of business and consistent with
established policies, practices or requirements;
(i) entered into any employment, consulting or compensation
agreement with any person or group;
(j) entered into any collective bargaining agreement or trade
union recognition agreement with any person or group;
(k) entered into, adopted or amended any employee benefit plan
or share option scheme or agreement; or
(l) entered into any agreement to do any of the foregoing.
4.9 No Material Undisclosed Liabilities. Except as set forth in
Schedule 4.9 of the PRICESTER Disclosure Schedule, there are no
liabilities or obligations of PRICESTER of any nature, whether
absolute, accrued, contingent, or otherwise, other than;
(a) in the aggregate adequately provided for in the balance
sheet of PRICESTER (the "Last PRICESTER Balance Sheet");
(b) incurred in the ordinary course of business and not
required under generally accepted accounting principles to be
reflected on the last PRICESTER Balance Sheet; or
(c) incurred in connection with this Agreement.
4.10. Tax Returns; Taxes. PRICESTER (a) has duly filed all U.S.
federal material state, county, local and foreign tax returns and
reports required to be filed by it, including those with respect to
income, payroll, property, withholding, social security, unemployment,
franchise, excise and sales taxes and all such returns and reports are
correct in all material respects; (b) has either paid in full all taxes
that have become due as reflected on any return or report and any
interest and penalties with respect thereto or has fully accrued on its
books or has established adequate reserves for all taxes payable but
not yet due; and (c) has made required cash deposits with appropriate
governmental authorities representing estimated payments of taxes,
including income taxes and employee withholding tax obligations. No
extension or waiver of any statute of limitations or time within which
to file any return has been granted to or requested by PRICESTER with
respect to any tax. No unsatisfied deficiency, delinquency r default
for any tax, assessment or governmental charge has been claimed,
proposed or assessed against PRICESTER, nor has PRICESTER received
notice of any such deficiency, delinquency or default. PRICESTER has
no material tax liabilities, other than those arising in the ordinary
course of business since January, 2008.
4.11. Material Contracts. PRICESTER has furnished or made available
to GENESIS accurate and complete copies of the PRICESTER Material
Contracts applicable to PRICESTER. Except as set forth in Section 4.11
of the PRICESTER Disclosure Schedule, there is not under any of the
PRICESTER Material Contracts any existing breach, default or event of
default by PRICESTER nor event that with notice or lapse of time or
both would constitute a breach, default or event of default by
PRICESTER, nor does PRICESTER know of, and PRICESTER has not received
notice of, or made a claim with respect to, any breach or default by
any other party thereto. As used herein, the term "PRICESTER Material
Contracts" shall mean all (i) contracts, licenses, leases, instruments,
mortgages, deeds of trust; (ii) employee benefit plans, or arrangements
or understandings with, or for the benefit of the employees of
PRICESTER; and (iii) insurance policies.
4.13. Compliance with Laws. PRICESTER has all material authorizations
approvals, licenses and orders to carry on its businesses as it is now
being conducted, to own or hold under lease the properties or assets it
owns or holds under lease and to perform all of its obligations under
the agreements to which it is a party. PRICESTER has been and is, to
the knowledge of PRICESTER, in compliance with all applicable laws,
regulations and administrative orders of any country, state or
municipality or any subdivision of any thereof to which its businesses,
ownership of assets and its employment of labor or its use or occupancy
of properties or any part thereof are subject.
4.14 Employee Pension and Profit Sharing Plans. PRICESTER does not
currently have in effect any employee pension or profit sharing plans.
4.15. Employee Benefit Agreements. Section 4.15 of the PRICESTER
Disclosure Schedule sets forth a complete and accurate list of all
material employee benefit or compensation plans, agreements and
arrangements to which PRICESTER is a party, including without
limitation (i) all severance, employment, consulting or similar
contracts, (ii) all material agreements and contracts with "change of
control" provisions or similar provisions and (iii) all indemnification
agreements or arrangements with directors or officers not including in
its organizational documents or provided by law.
4.16 Intellectual Property. PRICESTER owns or has valid, binding and
enforceable rights to use all material patents, trademarks, trade
names, service marks, service names, copyrights, applications therefore
and licenses or other rights in respect thereof ("PRICESTER
Intellectual Property") used or held for use in connection with
business of PRICESTER, without any known conflict with the rights of
others. PRICESTER has not received any notice from any other person
pertaining to or challenging the right of PRICESTER to use any
PRICESTER Intellectual Property or any trade secrets, proprietary
information, inventions, know-how, processes and procedures owned or
used or licensed to PRICESTER, except with respect to rights the loss
of which, individually or in the aggregate, would not have an material
adverse effect on PRICESTER. The PRICESTER Intellectual Property
represents all of the proprietary rights necessary to operate
PRICESTER's business.
4.17. Title to Properties and Related Matters. PRICESTER has good and
marketable title to or valid leasehold interests in its properties
(other than personal properties sold or otherwise disposed of in the
ordinary course of business), and all of such properties and all assets
purchased by PRICESTER are free and clear of any lien, claim or
encumbrance and except for:
(a) liens for taxes, assessments or other governmental charges
not yet due and payable or the validity of which are being
contested in good faith by appropriate proceedings;
(b) statutory liens incurred in the ordinary course of business
that are not yet due and payable r validity of which are being
contested in good faith by appropriate proceedings;
(c) other liens, claims or encumbrances that, in the aggregate,
do not materially subtract from the value of, or materially
interfere with, the present use of, any real property owned or
used by PRICESTER,.
All properties and assets material to the present operations of
PRICESTER are owned or leased by PRICESTER in the manner and to the
extent required by applicable law.
4.18 Brokers. PRICESTER has not incurred any liability for brokerage
fees, finders fees, agents commission or other similar forms of
compensation in connection with this Agreement or any transaction
contemplated hereby.
ARTICLE 5.
CERTAIN COVENANTS AND AGREEMENTS
5.1 Conduct of Business by GENESIS From the date hereof to the
Closing Date, GENESIS will, except as required in connection with the
Exchange and except as otherwise disclosed on the GENESIS Disclosure
Schedule or consented to in writing by PRICESTER:
(a) carry on its business in the ordinary and regular course
in substantially the same manner as heretofore conducted and not
engage in any new line of business or enter into any material
agreement, transaction or activity or make any material
commitment except those in the ordinary and regular course of
business and not otherwise prohibited under this Section 5.1;
(b) neither change nor amend its Certificate of Incorporation
or By-Laws;
(c) not issue or sell or register the transfer of shares of
securities or capital stock of GENESIS or issue, sell or grant
options, warrants or rights to purchase or subscribe to, or enter
into any arrangements or contract with respect to the issuance or
sale of any of the securities of GENESIS or rights or obligations
convertible into or exchangeable for any securities of GENESIS
and not alter the terms of any presently outstanding warrants or
options or make any changes (by split-up, combination,
reorganization or otherwise) in the capital structure of GENESIS,
except as set forth in Section 2.6(d) of the GENESIS Disclosure
Schedule;
(d) not declare, pay or set aside for payment any dividend or
other distribution in respect of the capital stock or other
securities of GENESIS and not redeem, purchase or otherwise
acquire any shares of the capital stock or other securities of
GENESIS or rights or obligations convertible into or exchangeable
for any shares of the capital stock or other securities of
GENESIS or obligations convertible into such, or any options,
warrants or other rights to purchase or subscribe to any of the
foregoing;
(e) not acquire or enter into any agreements to acquire, by
merger, consolidation or purchase of securities or assets, any
business or entity or any material part of the same;
(f) use its reasonable efforts to preserve intact the corporate
existence, goodwill and business organization of GENESIS, to keep
the officers and employees of GENESIS available to GENESIS and to
preserve the relationships of GENESIS with suppliers, customers
and others having business relations with any of them;
(g) not (i) create, incur or assume any debt or create, incur
or assume any short-term debt for borrowed money, (ii) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations
of any other person, other than endorsements of negotiable
instruments in the ordinary course of business, (iii) make any
loans or advances to any other person, or (iv) make any capital
contributions to, or investments in, any person;
(h) not (i) enter into, modify or extend in any manner the
terms of any employment, severance or similar agreements with
officers and directors, (ii) grant any increase in the
compensation of officers or directors, whether now or hereafter
payable or (iii) grant any increase in the compensation of any
other employees except for compensation increases in the ordinary
course of business and consistent with past practice (it being
understood by the parties hereto that for the purposes of (ii)
and (iii) above increases in compensation shall include any
increase pursuant to any option, bonus, stock purchase, pension,
profit-sharing, deferred compensation, retirement or other plan,
arrangement, contract for commitment.
(i) not make or incur (other than in the ordinary course of
business) any individual capital expenditure in excess of $20,000
or capital expenditures in the aggregate in excess of $100,000
without the prior approval of PRICESTER (as used herein, "capital
expenditure" shall mean all payments in respect of the cost of
any fixed asset or improvement or replacement, substitution or
addition thereto that has a useful life of more than one year,
including those costs arising in connection with the acquisition
of such assets by way of increased product or service charges or
offset items or in connection with capital leases);
(j) perform all of its material obligations under all GENESIS
Material Contracts (except those being contested in good faith)
and not enter into, assume or amend any contract or commitment
that would be an GENESIS Material Contract other than contracts
to provide services entered into in the ordinary course of
business; and
(k) prepare and file all returns for taxes and other tax
reports, filings and amendments thereto required to be filed by
it, and allow PRICESTER, at its request, to review all such
returns, reports, filings and amendments tat GENESIS' offices
prior to the filing thereof, which review shall not interfere
with the timely filing of such returns.
5.2 Conduct of Business by PRICESTER From the date hereof to the
Closing Date, PRICESTER will, except as required in connection with the
Exchange and except as otherwise disclosed in the PRICESTER Disclosure
Schedule or as consented to in writing by GENESIS:
(a) carry on its businesses in the ordinary and regular course
in substantially the same manner as heretofore conducted and not
engage in any new line of business or enter into any agreement,
transaction or activity or make any commitment except in the
ordinary and regular course of business and not otherwise
prohibited under this Section 5.2;
(b) neither change nor amend its Certificate of Incorporation
or By-Laws;
(c) not issue or sell any securities of PRICESTER or issue,
sell or grant options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with
respect to the issuance or sale of any of the securities of
PRICESTER or rights or obligations convertible into or
exchangeable for any securities of PRICESTER and not alter the
terms of any warrants or options, or make any changes (by split-
up, combination, reorganization or otherwise) in the capital
structure of PRICESTER, except as set forth in Section 4.6(d) of
the PRICESTER Disclosure Schedule;
(d) not declare, pay or set aside for payment any dividend or
other distribution in respect of the capital stock or other
equity securities of PRICESTER and not redeem, purchase or
otherwise acquire any shares of the capital stock or other
securities, or rights or obligations convertible into or
exchangeable for any shares of the capital stock or other
securities of PRICESTER or obligations convertible into such, or
any options, warrants or other rights to purchase or subscribe to
any of the foregoing;
(e) not acquire or enter into any agreement to acquire, by
merger, consolidation or purchase of securities or assets, any
business or entity or any material part thereof;
(f) use its reasonable efforts to preserve intact the
corporate existence, goodwill and business organization of
PRICESTER, to keep the officers and employees of PRICESTER
available to PRICESTER and to preserve the relationships of
PRICESTER with suppliers, customers and others having business
relations with any of them;
(g) not (i) create, incur or assume any debt or create, incur
or assume any short-term debt for borrowed money, (ii) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations
of any other person, other than endorsements of negotiable
instruments in the ordinary course of business, or (iii) make any
loans or advances to any other person, (iv) make any capital
contributions to, investments in, any person;
(h) not (i) enter into, modify or extend in any manner the
terms of any employment, severance or similar agreements with
officers and directors, (ii) grant any increase in the
compensation of officers or directors, whether now or hereafter
payable or (iii) grant any increase in the compensation of any
other employees except for compensation increases in the ordinary
course of business and consistent with past practice (it being
understood by the parties hereto that for the purposes (ii) and
(iii) above increases in compensation shall include any increase
pursuant to any option, bonus, stock purchase, pension, profit-
sharing, deferred compensation, retirement or other plan,
arrangement, contract or commitment);
(i) not make or incur (other than in the ordinary course of
business) any individual capital expenditure in excess of $20,000
or capital expenditures in the aggregate in excess of $100,000
without the prior approval of GENESIS (as used herein, "capital
expenditure") shall mean all payments in respect of the cost of
any fixed asset or improvement or replacement, substitution or
addition thereto which ahs a useful life of more than one year,
including those costs arising in connection with the acquisition
of such assets by way of increased product or service charges or
offset items or in connection with capital leases);
(j) perform all of its obligations under all PRICESTER Material
Contracts (except those being contested in good faith) and not
enter into, assume or amend any contract or commitment that would
be a PRICESTER Material Contract other than contracts to provide
services entered into in the ordinary course of business; and
(k) prepare and file all federal, state, local and foreign
returns for taxes and other tax reports, filings and amendments
thereto required to be filed by it, and allow GENESIS, at its
request, to review all such returns, reports, filings and
amendments at PRICESTER's offices prior to the filing thereof,
which review shall not interfere with the timely filing of such
returns.
5.3 Notice of any Material Change. Each party shall, promptly after
the first notice or occurrence thereof but not later than the Closing
Date, advise the other parties I writing of any event or the existence
of any state of facts that (i) would make any of his, her or its
representations and warranties in this Agreement untrue in any material
respect, or (ii) would constitute a breach of any provisions of this
Article 5.
5.4 Reasonable Efforts; Further Assurances; Cooperation. Subject to
the other provisions of this Agreement, the parties hereto shall use
all reasonable efforts to perform their obligations herein and to take,
or cause to be taken, or do, or cause to be done, all things reasonably
necessary, proper or advisable under applicable law to obtain all
regulatory approvals and satisfy all conditions to the obligations of
the parties under this Agreement and to cause the Exchange and the
other transactions contemplated herein to be carried out promptly in
accordance with the terms hereof and shall cooperate fully with each
other and their respective officers, directors, employees, agents,
counsel, accountants and other designees in connection with any steps
required to be taken as a part of their respective obligations under
this Agreement, including without limitation:
(a) Each of GENESIS, the GENESIS Stockholders and PRICESTER
shall promptly take, or cause to be taken, all actions and do, or
cause to be taken, all actions and do, or cause to be done, all
things reasonably necessary, proper or advisable to obtain any
required approval of any federal, state or local governmental
agency or regulatory body with jurisdiction over the transactions
contemplated by this Agreement.
(b) In the vent any claim, action, suit, investigation or other
proceeding by any governmental body or other person is commenced
that questions the validity or legality of the Exchange or any of
the other transactions contemplated hereby or seeks damages in
connection therewith, the parties agree to cooperate and use all
reasonable efforts to defend against such claim, action, suit,
investigation or other proceeding and, if an injunction or other
order is issued in any such action, suit or other proceeding, to
use all reasonable efforts to have such injunction or other order
lifted, and to cooperate reasonably regarding any other
impediment to the consummation of the transactions contemplated
by this Agreement.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS OF PRICESTER
Except as may be waived by PRICESTER, the obligations of PRICESTER to
consummate the Exchange shall e subject to the satisfaction, on or
before the Closing Date, of each of the following conditions:
6.1 Compliance. GENESIS and the GENESIS Stockholders shall have, or
shall have caused to be, satisfied or complied with and performed in
all material respects all terms, covenants, and conditions of this
Agreement to be complied with or performed by him, her or it on or
before the Closing Date.
6.2 Representations and Warranties. All of the representations and
warranties made by GENESIS and the GENESIS Stockholders in this
Agreement shall be true and correct in all material respects at and as
of the Closing Date with the same force and effect as if such
representations and warranties had been made at and as of the Closing
Date, except for changes permitted or contemplated by this Agreement;
provided, however, that notwithstanding anything herein to the
contrary, this Section 6.2 shall be deemed to have been satisfied even
if such representations or warranties are not true and correct, unless
the failure of any of the representations or warranties to be so true
and correct would have or would be reasonably likely to have a material
adverse effect on the business, financial condition or prospects of
GENESIS (a "GENESIS Material Adverse Change").
6.3 Material Adverse Changes. Except as set forth in this Agreement
or on the schedules hereto.
6.4 GENESIS Officer's Certificate. GENESIS shall have delivered to
PRICESTER a Certificate of President of GENESIS, dated the Closing
Date, certifying that the conditions specified in Sections 6.1 and 6.2
have been satisfied.
6.5 GENESIS Secretary's Certificate. GENESIS shall have delivered to
PRICESTER a certificate of the Secretary of GENESIS certifying as to
its Certificate of Incorporation, By-Laws, incumbency, and certain
resolutions attached thereto and any other corporate proceedings
relating to the authorization, execution and delivery of this Agreement
and the Exchange.
6.6 GENESIS Share Certificates. The GENESIS Stockholders executing
this Agreement shall have delivered to PRICESTER one or more
certificates representing the shares of GENESIS Stock to be exchange
for PRICESTER Common Stock.
6.7 Exchange by Requisite GENESIS Stockholders. GENESIS Stockholders
owning in excess of fifty percent (50%) of the GENESIS Stock shall have
exchanged their shares of GENESIS Stock for shares of PRICESTER Common
Stock as contemplated by this Agreement.
6.8 Proceedings and Documents. All the corporate and other
proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such
transactions shall be satisfactory to PRICESTER and its counsel, and
PRICESTER and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may
reasonably request.
ARTICLE 7.
MISCELLANEOUS
7.1 Termination Subject to Section 7.3, this Agreement and the
transactions contemplated hereby and the provisions herein may be
terminated at any time on or before the Closing Date:
(a) by mutual consent of GENESIS and PRICESTER.
(b) by PRICESTER or GENESIS if the Exchange has not been or is
incapable of being consummated by May 10, 2008, as extended (the
"Termination Date"), unless such failure of consummation is due
to the failure of the terminating party to perform or observe the
covenants, agreements, and conditions hereof to be performed or
observed the covenants, agreements and conditions hereof shall
not be terminated; or
(c) by GENESIS, or PRICESTER if the transactions contemplated
hereby violate any non-appealable final order, decree, or
judgment of any court or governmental body or agency having
competent jurisdiction.
7.2 Entire Agreement. This Agreement, including the schedules and
exhibits hereto, contain the complete agreement among the parties with
respect to the transactions contemplated hereby and supersede all prior
agreements and understandings among the parties with respect to such
transactions. Section and other headings are for reference purposes
only and shall not affect the interpretation or construction of this
Agreement. The parties hereto have not made any representation or
warranty except as expressly set forth in this Agreement or in any
certificate or schedule delivered pursuant hereto. The disclosure
schedules hereto shall be read as a whole and information on any
particular section thereto shall be deemed to be responsive to other
appropriate sections of the same disclosure schedule. The obligations
of any party under any agreement executed pursuant to this Agreement
shall not be affected by this section.
7.3 Survival and Limitation on Liability. The representations and
warranties of each party contained herein or in any exhibit,
certificate, document or instrument delivered pursuant to this
Agreement shall survive the Closing for a period of one year following
the Closing. No party to this Agreement shall have any liability to
any other party hereto for any claim(s) based upon the representations,
warranties, covenants, agreements and obligations under this Agreement
unless such claim(s) is asserted within such one year survival period
and only if damages resulting from such claim(s) exceed in the
aggregate $25,000, in which event liability shall be for the entire
amount of damages. Unnold and Xxxxxx'x liability shall be limited to
the value of the shares they receive in the Exchange.
7.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute
only one original.
7.5 Notices. All notices, demands, requests, or other communications
that may be or are required to be given, served, or sent by any party
to any other party pursuant to this Agreememt shall be in writing and
shall be sent by facsimile transmission, nationally recognized
overnight courier, or mailed by first-class, registered or certified
mail, return receipt requested, postage prepaid, or transmitted by hand
delivery, addressed as follows:
If to GENESIS:
Xx. Xxxxxx X Xxxxxx
Genesis Electronics, Inc.
00 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
If to each GENESIS
Stockholder: At the address listed on the signature page hereof.
If to PRICESTER:
Xx. Xx Xxxxxx
Xxxxxxxxx.xxx, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx #000
Xxxxxxxxx, Xxxxxxx 00000
Each party may designate by notice in writing a new address to which
any notice, demand, request, or communication may thereafter be so
given, served, or sent. Each notice, demand, request, or communication
that is mailed, delivered, or transmitted in the manner described above
shall be deemed sufficiently given, served, sent, and received for all
purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt or the affidavit of messenger
being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
7.6 Successors; Assignments. This Agreement and the rights,
interests, and obligations hereunder shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and assigns. Neither this Agreement nor nay of the rights,
interest or obligations hereunder shall be assigned, by operation of
law or otherwise, by any of the parties hereto without the prior
written consent of the other.
7.7 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the state of Delaware (except the choice of
law rules thereof).
7.8 Waiver and Other Action. This Agreement may be amended, modified,
or supplemented only by a written instrument executed by the parties
against which enforcement of the amendment, modification or supplement
is sought.
7.9 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully
severable, and this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision were never a part
hereof; the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance; and in lieu of such
illegal, invalid, or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its
terms to such illegal, invalid, or unforceable provision as may be
possible and be legal, valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXXXXX.XXX, INC. GENESIS ELECTRONICS, INC.
By: /s/Xxxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: CEO/President Title: CEO
GENESIS STOCKHOLDERS Number of Share Owned
/s/Xxxxxx X. Xxxxxx
Address: 00 Xxxxxx Xx
Xxxxxxxx, XX 00000 5,551,572
/s/Xxxx Xxxxxx
Address: 0X Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000 3,016,660
/s/TLGG, LLC
By: XX Xxxxxx
Agent
Address: 00000 Xxxxxxxxxx Xxxxxxx, #000
Xxxxxxxxx, XX 00000-0000 1,544,710
GENESIS Disclosure Schedule
Section 2.6(a)
1. See attached GENESIS Capitalization Table dated May 5, 2008
Section 2.6(e)
None
Section 2.6(d)
1. 8% Convertible Note Dated November 16, 2005 in the principal amount
of $100,000 from GENESIS to TLGG, LLC
2. Options listed on the GENESIS Capitalization Table dated May 5,
2008
2.8
None
Section 2.9
None
Section 2.10
1. GENESIS owes the State of California taxes in the amount of $906.01
for 2007 and penalties and interest in the amount of $484.00 for 2006.
Section 2.11
1. See Sections 2.6(d) and 2.17 of this GENESIS Disclosure Schedule.
2. Note dated March 31, 2004 from GENESIS to RMU Management, Inc.
3. Note dated January 31, 2007 from GENESIS to Xxxx Xxxxxx.
Section 2.15
None
Section 2.16
1. GENESIS needs to file a maintenance renewal form and pay
approximately $2,100 as a maintenance fee for its patent
Section 2.17
1. RMU Management, Inc. has a security interest on all of the assets
of GENESIS in connection with that certain Security Agreement dated
March 31, 2004 by and between GENESIS and RMU Management, Inc.
Xxxxxxxxx.xxx, Inc. Disclosure Schedule
Section 4.1. None.
Section 4.8. None.
Section 4.9. None.
Section 4.11 None.
Section 41.15. 2007 Stock Awards Plan, Xxxxxx Xxxxxx Employment
Agreement, Xxx Xxxxxx Employment Agreement.
Section 4.16(c). None.
