53
EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
between
REALITY WIRELESS NETWORKS, INC
and
GENESIS ELECTRONICS, INC.
Dated as of November 10, 2004
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
...................................................... 4
SECTION 1.01
Certain Defined Terms ............................. 4
ARTICLE II THE MERGER
...................................................... 8
SECTION 2.01
The Merger
........................................ 8
SECTION 2.02
Closing ........................................... 8
SECTION 2.03
Effective Time .................................... 9
SECTION 2.04
Effect of the Merger .............................. 9
SECTION 2.05
Certificate of Incorporation; Bylaws; Directors and
Officers of Surviving Corporation ................. 9
ARTICLE III CONVERSION OF SECURITIES;
EXCHANGE OF CERTIFICATES
SECTION 3.01
Conversion of Securities .......................... 10
SECTION 3.02
Exchange of Securities Other than Treasury Shares . 10
SECTION 3.03
Stock Transfer Books .............................. 12
SECTION 3.04
No Fractional Share Certificates .................. 13
SECTION 3.05
Options to Purchase Company Common Stock .......... 13
SECTION 3.06
Unvested Stock .................................... 14
SECTION 3.07
Certain Adjustments ............................... 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF GENESIS ....................... 15
SECTION 4.01
Organization and Qualification; Subsidiaries ...... 15
SECTION 4.02
Certificate of Incorporation and Bylaws ........... 15
SECTION 4.03
Capitalization .................................... 15
SECTION 4.04
Authority Relative to This Agreement .............. 16
SECTION 4.05
No Conflict; Required Filings and Consents ........ 17
SECTION 4.06
Permits; Compliance with Laws ..................... 17
SECTION 4.07
Financial Statements .............................. 18
SECTION 4.08
Absence of Certain Changes or Events .............. 18
SECTION 4.09
Employee Benefit Plans; Labor Matters ............. 18
SECTION 4.10
Certain Tax Matters ............................... 20
SECTION 4.11
Contracts ......................................... 20
SECTION 4.12
Litigation ........................................ 20
<PAGE>
SECTION 4.13
Purposely Left Blank .............................. 20
SECTION 4.14
Intellectual Property ............................. 20
SECTION 4.15
Taxes ............................................. 22
SECTION 4.16
Insurance ......................................... 23
SECTION 4.17
Properties ........................................ 23
SECTION 4.18
Business Activity Restriction ..................... 23
SECTION
4.19
Certain Business Practices ........................ 24
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
REALITY WIRELESS
SECTION 5.01
Organization and Qualification; Subsidiaries ...... 24
SECTION 5.02
Certificate of Incorporation and Bylaws ........... 24
SECTION 5.03
Capitalization .................................... 25
SECTION 5.04
Authority Relative to this Agreement .............. 25
SECTION 5.05
No Conflict; Required Filings and Consents ........ 26
SECTION 5.06
Permits; Compliance with Laws ..................... 26
SECTION 5.07
SEC Filings; Financial Statements ................. 27
SECTION 5.08
Absence of Certain Changes of Events .............. 28
SECTION 5.09
Employee Benefits; Labor Markets .................. 28
SECTION 5.10
Certain Tax Matters ............................... 29
SECTION 5.11
Contracts ......................................... 30
SECTION 5.12
Litigation ........................................ 30
SECTION 5.13
Purposely Left Blank .............................. 30
SECTION 5.14
Intellectual Property ............................. 30
SECTION 5.15
Taxes ............................................. 32
SECTION 5.16
Insurance ......................................... 32
SECTION 5.17
Properties ........................................ 33
SECTION 5.18
Business Activity Restriction ..................... 33
SECTION 5.19
Certain Business Practices ........................ 33
ARTICLE VI COVENANTS
.......................................................
34
SECTION 6.01
Conduct of Business by Company Pending the Closing 34
SECTION 6.02
Notices of Certain Events ......................... 36
SECTION 6.03
Access to Information; Confidentiality ............ 36
SECTION 6.04
No Solicitation of Transactions ................... 38
SECTION 6.05
Tax-Free Transaction .............................. 39
SECTION 6.06
Control of Operations ............................. 39
SECTION 6.07
Further Action; Consents; Filings ................. 39
SECTION 6.08
Additional Reports ................................ 40
SECTION 6.09
Purposely Left
Blank ................................... 40
SECTION 6.10
Conduct of
Business by Reality Wireless ................ 40
ARTICLE VII ADDITIONAL AGREEMENTS
.......................................... 42
SECTION 7.01
Board and Stockholders' Meetings .................. 42
SECTION 7.02
Certain Settlements ............................... 43
SECTION 7.03
Completion of Certain Schedules ................... 43
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SECTION 7.04
Completion of Genesis Reports ..................... 44
SECTION 7.05
Public Announcements .............................. 44
SECTION 7.06
OTCBB Listing ..................................... 45
SECTION 7.07
Blue Sky .......................................... 45
ARTICLE VIII CONDITIONS TO THE MERGER
...................................... 45
SECTION 8.01
Conditions to the Obligations of Each Party to
Consummate the Merger ............................. 45
SECTION 8.02
Conditions to the Obligations of Company .......... 46
SECTION 8.03
Conditions to the Obligations of Reality Wireless . 47
ARTICLE IX POST-CLOSING COVENANTS
.......................................... 48
SECTION 9.01
Audited Financials of Genesis ..................... 48
ARTICLE X TERMINATION, AMENDMENT AND WAIVER
................................ 48
SECTION 10.01
Termination ....................................... 48
SECTION 10.02
Effect of
Termination ............................. 49
SECTION 10.03
Amendment ......................................... 49
SECTION 10.04
Waiver ............................................ 50
SECTION 10.05
Expenses .......................................... 50
ARTICLE X GENERAL PROVISIONS
............................................... 50
SECTION 11.01
Non-Survival of Representations and Warranties .... 50
SECTION 11.02
Notices ........................................... 50
SECTION 11.03
Severability ...................................... 51
SECTION 11.04
Assignment; Binding Effect; Benefit ............... 51
SECTION 11.05
Incorporation of Exhibits ......................... 52
SECTION 11.06
Governing Law ..................................... 52
SECTION 11.07
Waiver of Jury Trial .............................. 52
SECTION 11.08
Headings; Interpretation .......................... 52
SECTION 11.09
Counterparts ...................................... 53
SECTION 11.10
Entire Agreement .................................. 53
SCHEDULES AND EXHIBITS
EXHIBITS
SCHEDULES
SCHEDULE
Reality Wireless Disclosure Schedule
SCHEDULE
Genesis Disclosure Schedule
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (as amended, supplemented or otherwise
modified from time to time, this "Agreement"), dated as of November 10, 2004
(the "Execution Date"), among Reality Wireless Networks, Inc., a Nevada
corporation ("Reality Wireless") and GENESIS ELECTRONICS, INC., a Delaware
corporation ("Genesis"):
W I T N E S S E T H:
WHEREAS, the boards of
directors of Reality Wireless and Genesis
have determined that it is advisable and in the best interests of their
respective companies and stockholders to enter into a
business combination
by
means of the merger of Genesis into Reality
Wireless (the "Merger") and have
approved and adopted this Agreement;
WHEREAS, upon the
terms and subject to the conditions of this
Agreement and in accordance with the Nevada
Revised Statutes (the "NRS") and the
Corporations Code of the State of Delaware
(the "DE Code"),
Reality Wireless
will acquire all of the common
stock of Genesis
through statutory merger of
Genesis into Reality Wireless;
WHEREAS, for
United States Federal income tax purposes, it is
intended that the Merger shall qualify as a tax-free reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended
(together with
the rules and regulations promulgated thereunder, the "Code"), and that this
Agreement shall be, and hereby is, adopted as a plan of reorganization for
purposes of Section 368 of the Code;
NOW, THEREFORE,
in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally
bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms
Unless the context
otherwise requires,
the following terms,
when
used in this Agreement, shall have the
respective meanings specified below (such
meanings to be equally applicable to the singular and
plural forms of the terms
defined):
"Affiliate" shall mean, with respect to any person, any other
person
that controls, is controlled by or is under common control with the first
person.
"Blue Sky Laws" shall mean state securities or "blue sky" laws.
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"Business day" shall mean any day on which the principal
offices of
the SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized by law or executive
order to close in New York.
"Competing
Transaction" shall
mean any of the following involving
Genesis or Reality Wireless, as the case
may be (other than the Merger):
(i) any merger, consolidation, share exchange, business
combination or other similar
transaction;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 20% or more of the assets of such party and its
subsidiaries, taken as a whole, in a single transaction or series of
transactions;
(iii) any license, joint venture or other arrangement pursuant
to which Genesis provides or permits access
to all or a majority of its data (on
a value basis) to a third party;
(iv) any tender offer or exchange offer for 80% or more of the
outstanding voting securities of such party or the filing of a registration
statement under the Securities Act in
connection therewith;
(v) any
person having
acquired beneficial ownership or the
right to acquire beneficial ownership of, or any "group" (as such term is
defined under Section 13(d) of the Exchange Act) having been formed that
beneficially owns or has the right to acquire
beneficial
ownership of, 80%
or
more of the outstanding voting securities
of such party;
(vi) any solicitation
in opposition to the approval of
this
Agreement by the stockholders of such
party; or
(vii) any
public announcement of a proposal, plan or intention
to do any of the foregoing or any agreement
to engage in any of the foregoing.
"Confidential
Information" shall mean information regarding each party
and its business, including the whole or a portion
of the knowledge or know-how
regarding the specifications, methods, standards, processes and operating
procedures of the party, which is hereby acknowledged as proprietary to each
party, and shall include all discussions and correspondence regarding the
business relationship created between the parties in connection with this
Agreement (including but not limited to strategies
and plans regarding such
business relationship).
"$" shall mean United States Dollars.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" shall
mean the Securities
Exchange Act of 1934,
as
amended, together with the rules and
regulations promulgated thereunder.
"Expenses" shall
mean, with respect to any party hereto, all
documented out-of-pocket expenses
(including, without
limitation, all fees
and
expenses of counsel, accountants,
investment bankers, experts and consultants to
a party hereto and its affiliates) incurred by such party or on its
behalf in
connection with or related to the authorization, preparation, negotiation,
execution and performance of its
obligations pursuant
to this Agreement and the
consummation of the Merger, the
preparation, printing, filing and mailing of the
Registration Statement and the Joint Proxy Statement, the solicitation of
stockholder approvals, the filing of HSR Act notice
("HSR Act" shall mean
the
Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, together with
the rules and regulations promulgated thereunder.), if any, and all other
matters related to the transactions
contemplated
hereby and the closing
of the
Merger.
"Genesis Disclosure
Schedule" shall mean the disclosure schedule
delivered by Genesis to Reality
Wireless prior to the
Closing of this Agreement
and forming a part hereof.
"Genesis Intellectual
Property" shall mean
all patents (including,
without limitation, all U.S. and foreign patents,
patent applications,
patent
disclosures, and any and all divisions,
continuations,
continuations-in-part,
reissues, re-examinations and extensions
thereof), design
rights,
trademarks,
trade names and service marks (whether or
not registered), trade dress, Internet
domain names, copyrights (whether or not registered) and
any copyright renewal
rights, sui generis database rights,
statistical models, technology, inventions,
supplier lists, trade secrets, know-how, computer software programs or
applications in both source and object code form, databases, technical
documentation of such software programs ("Technical Documentation"),
registrations and applications for any of the
foregoing and all other tangible
or intangible proprietary information or materials that were material to
Genesis's business or are currently used in
Genesis's business in
any product,
technology or process (i) currently being
or formerly manufactured, published or
marketed by Genesis or (ii) previously or currently under development for
possible future manufacturing, publication,
marketing or other use by Genesis.
"Genesis Material Adverse Effect" shall mean any change in or
effect
on the business of Genesis that,
individually or in the
aggregate (taking
into
account all other such changes or effects),
is, or is reasonably
likely to be,
materially adverse to the business, assets,
liabilities, financial
condition or
results of operations of Genesis,
taken as a whole,
except to the extent
that
any such change in or effect results from (i) changes in general economic
conditions or changes affecting the
industry generally in which Genesis operates
(provided that such changes do not affect Genesis in a materially
disproportionate manner), and (ii) any litigation or loss of customers or
revenues that Genesis successfully bears the burden of proving arose from
Genesis entering into this Agreement.
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<PAGE>
"Genesis Stock Plans" shall mean Genesis's Stock Option Plan.
"Governmental Entity" shall mean any United States Federal, state
or
local or any foreign governmental, regulatory or administrative authority,
agency or commission or any court, tribunal
or arbitral body.
"Governmental
Order" shall
mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by
or with any
Governmental Entity.
"IRS" shall mean the United States Internal Revenue Service.
"Law" shall mean any Federal, state, foreign or local statute, law,
ordinance, regulation, rule, code, order,
judgment, decree, other requirement or
rule of law of the United States or any other jurisdiction, and any other
similar act or law.
"Person" shall mean an individual, corporation, partnership, limited
partnership, limited liability company, limited liability partnership,
syndicate, person (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act),
trust, association,
entity or government
or political subdivision, agency or
instrumentality of a government.
"Reality Wireless
Disclosure
Schedule" shall mean the disclosure
schedule delivered by Reality Wireless to
Genesis prior to the execution of this
Agreement and forming a part hereof.
"Reality Wireless
Material Adverse Effect" shall mean any change in or
effect on the business of Reality Wireless
and the Reality Wireless Subsidiaries
that, individually or in the aggregate (taking into account all other such
changes or effects), is, or is reasonably likely to be,
materially
adverse to
the business, assets, liabilities,
financial condition or
results of operations
of Reality Wireless and the Reality
Wireless Subsidiaries, taken as a whole,
except to the extent that any such change
in or effect results
from (i) changes
in general economic conditions or changes affecting the industry
generally in
which Reality Wireless operates (provided that such changes do not affect
Reality Wireless in a materially disproportionate
manner) and (ii) any
litigation or loss of customers or revenues
that Reality Wireless
successfully
bears the burden of proving arose from Reality Wireless entering into this
Agreement; provided, however, that in no event shall a
decrease in the trading
price of Reality Wireless Common Stock or litigation relating thereto be
considered an Reality Wireless Material
Adverse Effect.
"Reality Wireless Stock Plans" shall mean Reality Wireless's 2003
Stock
Plan.
"Securities Act" shall
mean the Securities
Act of 1933,
as amended,
together with the rules and regulations
promulgated thereunder.
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<PAGE>
"Subsidiary" shall
mean, with respect to any person, any corporation,
partnership, limited partnership, limited liability company, limited
liability
partnership, joint venture or other legal entity of
which such person
(either
alone or through or together with any other subsidiary of such person) owns,
directly or indirectly, a majority of the stock or other
equity interests,
the
holders of which are generally entitled to
vote for the election of the board of
directors or other governing body of such
corporation or other legal entity.
"Tax" shall mean (i) any and all taxes, fees, levies, duties,
tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional
amounts imposed with respect thereto)
imposed by any Governmental Entity or taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts,
property, sales, use,
capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer,
value-added or gains
taxes; license,
registration and documentation fees; and
customers' duties,
tariffs and similar
charges; (ii) any liability for the payment
of any amounts of the type described
in (i) as a result of being a member of an
affiliated, combined, consolidated or
unitary group for any taxable period; and
(iii) any liability for the payment of
amounts of the type described in (i) or (ii) as a result of
being a transferee
of, or a successor in interest to, any Person or as a result of
an express or
implied obligation to indemnify any
person.
"Tax Return"
shall mean any
return, statement or form (including,
without limitation, any estimated tax
reports or return, withholding tax reports
or return and information report or return)
required to be filed with respect to
any Taxes.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger
Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the NRS
and the DE Code, at the Effective Time
(as defined in Section 2.03), Genesis shall be merged with and into Reality
Wireless. As a result of the Merge the
separate corporate
existence of Genesis
shall cease and Reality shall continue as the surviving corporation of the
Merger (the "Surviving Corporation").
SECTION 2.02 Closing
Unless this Agreement
shall have been terminated and the Merger herein
contemplated shall have been abandoned
pursuant to Section 10.01, and subject to
the satisfaction or waiver of the conditions set forth in Article VIII,
the
consummation of the Merger shall take place as
promptly as practicable (and in
any event within three business days) after satisfaction or waiver of the
conditions set forth in Article VIII, at a
closing (the "Closing") to be held at
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the offices of The Otto Law Group, PLLC,
900 Fourth Avenue, Suite 3140, Seattle,
Washington 98164, unless another date, time or place is agreed to by
Reality
Wireless and Genesis.
SECTION 2.03 Effective Time
At and after the time
of the Closing,
the parties shall cause the
Merger to be consummated by filing a
certificate of merger (the "Certificate of
Merger") with the Secretary of State of the State of Nevada in such form as
required by, and executed in accordance
with the relevant
provisions of the NRS
and the DE Code (the date and time of such
filing, or such later date and time
as may be set forth therein, being the
"Effective Time").
SECTION 2.04 Effect of the Merger
At the Effective Time, the effect of the Merger shall be as
provided in
the applicable provisions of the NRS and the DE Code.
Without limiting the
generality of the foregoing, and subject
thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of Genesis and Reality
Wireless shall vest in Reality as the
Surviving Corporation, and all debts,
liabilities and duties of Genesis and Reality shall become the debts,
liabilities and duties of Reality as the
Surviving Corporation.
SECTION 2.05
Certificate
of Incorporation; Bylaws; Directors and
Officers
Unless otherwise
agreed by Reality
Wireless and Genesis before the
Effective Time, at the Effective Time:
(a) the officers of Genesis immediately prior to the Effective Time
shall be the officers of the Surviving Corporation (defined herein) from and
after the Effective Time, in each case until their
successors
are elected or
appointed and qualified or until their
resignation or removal; and
(b) the Directors of Genesis immediately prior to the Effective
Time
shall be the Directors of the Surviving
Corporation from and after the Effective
Time, in each case until their successors
are elected or appointed and qualified
or until their resignation or removal and,
immediately
prior to the
Effective
Time, all Directors of Reality Wireless
shall resign their positions.
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ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 Conversion of Securities
At the Effective
Time, by virtue of the Merger, and without any
action on the part of Reality Wireless or Genesis or the holders of any
of the
following securities:
(a) all the shares
of Common Stock of Genesis ("Genesis Common
Stock") issued and outstanding immediately before the Effective
Time (excluding
those held in the treasury of Genesis or
owned by any wholly owned subsidiary of
Genesis) and all rights in respect thereof,
shall, forthwith cease
to exist and
be converted into and become exchangeable for ninety-seven percent (97%) of
issued shares (the "Common Exchange Ratio")
of common stock, $.001 par value, of
Reality Wireless ("Reality Wireless Common
Stock");
(b) each share of
Genesis Common
Stock held in the treasury of
Genesis immediately prior to the Effective
Time shall be canceled
and retired
and, with respect to the retired shares,
no shares of stock or
other securities
of Reality Wireless, the Surviving
Corporation or any other corporation shall be
issuable, and no payment or other
consideration shall be made; and
(c) shares of Reality Common Stock exchanged or issued in
connection
with this Section 3.01 shall bear restrictive legends limited sale to third
parties, subject to: (1) the provisions of Rule 144 of the
Securities
Act of
1933, (2) a "reoffer prospectus" in compliance with Form S-8, or (3) a valid
registration statement. The parties hereby represent and warrant that
shareholders in connection this Section
3.01 shall not sell the Shares expect as
provided in (1), (2) and/or (3) of this
Section or an otherwise valid exception
to the Securities Act.
SECTION 3.02 Exchange of Securities Other than Treasury Shares
(a) Exchange Agent.
Prior to the Effective Time, Reality Wireless
shall enter into an agreement with its
transfer agent,
Pacific Stock
Transfer,
Inc., to act as exchange agent for the Merger (the
"Exchange Agent") and the
Exchange Agent, as Genesis hereby
acknowledges.
(b) Reality Wireless to Provide Stock. Promptly after the Effective
Time, Reality Wireless shall make available to the Exchange Agent for the
benefit of the holder of Genesis Common Stock and Genesis Preferred Stock,
certificates of Reality Wireless Common Stock and Reality
Wireless Preferred
Stock ("Reality Wireless Certificates")
representing the
number of whole shares
of Reality Wireless Common Stock and
Reality Wireless
Preferred Stock
issuable
pursuant to Section 3.01(a) and (b) in exchange for shares of Genesis Common
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Stock and Genesis Preferred Stock
outstanding immediately prior to the Effective
Time.
(c) Exchange
Procedures.
The Exchange Agent shall mail to each
holder of record of certificates of Genesis Common Stock and Preferred
Stock
("Genesis Certificates"), whose shares were converted into
the right to receive
shares of Reality Wireless Common Stock and Preferred Stock
promptly after the
Effective Time (and in any event no later
than three
business days after the
Effective Time): (i) a letter of
transmittal (which
shall specify that delivery
shall be effected, and risk of loss and title to the
Genesis Certificates shall
pass, only upon receipt of the Genesis
Certificates by the
Exchange Agent,
and
shall be in such form and have such other
provisions
as Reality
Wireless may
reasonably specify); and (ii) instructions
for use in effecting the surrender of
the Genesis Certificates in exchange for
Reality Wireless
Certificates.
Upon
surrender of a Genesis Certificate for cancellation to
the Exchange Agent or to
such other agent or agents as may be
appointed by Reality Wireless, together
with such letter of transmittal,
duly completed and
validly executed, and
such
other documents as may be reasonably
required by the
Exchange Agent, the holder
of such Genesis Certificate shall be entitled to
receive in exchange therefor a
Reality Wireless Certificate representing the number of whole
shares of Reality
Wireless Common Stock and Preferred Stock that such holder has the right to
receive pursuant to this Article III, and
the Genesis Certificate so surrendered
shall forthwith be canceled. Until so surrendered, each outstanding Genesis
Certificate that, prior to the Effective Time,
represented
shares of Genesis
Common Stock and Preferred Stock will be deemed from and
after the
Effective
Time, for all corporate purposes other than the payment of dividends and
distributions, to evidence the ownership of
the number of full shares of Reality
Wireless Common Stock and Preferred Stock into which such shares of Genesis
Common Stock and Preferred Stock shall have
been so converted.
(d) Lost, Stolen or
Destroyed Genesis
Certificates. In the
event
any Genesis Certificates shall have been
lost, stolen or destroyed, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Genesis
Certificates, upon the making of an affidavit of that fact by the holder
thereof, an Reality Wireless Certificate representing such shares of Reality
Wireless Common Stock and Preferred
Stock as may be
required pursuant to
this
Article III; provided, however, that
Reality Wireless may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed Genesis Certificates to indemnify
Reality Wireless
against any claim that may be made
against Reality Wireless, the Surviving
Corporation or the Exchange Agent with respect to the Genesis Certificates
alleged to have been lost, stolen or
destroyed.
(e) Distributions With Respect to unexchanged shares. No dividends
or other distributions with respect to Reality Wireless Common Stock and
Preferred Stock with a record date after the
Effective Time will be paid to the
holder of any unsurrendered Genesis Certificate with respect to the
shares of
Reality Wireless Common Stock and Preferred
Stock represented
thereby until the
holder of record of such Genesis Certificate shall surrender such Genesis
Certificate. Subject to the effect of applicable escheat or similar laws,
following surrender of any such Genesis
Certificate, there
shall be paid to the
record holder of the Reality Wireless
Certificates issued in
exchange therefor,
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without interest, at the time of such surrender, the amount of any such
dividends or other distributions with a record date after the
Effective Time
theretofore payable (but for the provisions of this Section 3.02(e)) with
respect to such shares of Reality Wireless
Common Stock and Preferred Stock.
(f) Transfer of Ownership. If any Reality Wireless
Certificate is
to be issued in a name other than that in which the Genesis Certificate
surrendered in exchange therefor is registered, it will be a condition of the
issuance thereof that the Genesis
Certificate so
surrendered will be
properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Reality Wireless or any agent
designated by it any transfer or other
taxes required by
reason of the issuance
of a Reality Wireless Certificate for shares of Reality
Wireless Common
Stock
and Preferred Stock in any name other than
that of the registered
holder of the
Genesis Certificate surrendered, or established to the satisfaction
of Reality
Wireless or any agent designated by it that such tax has been paid
or is not
payable.
(g) Termination of
Exchange Agent
Funding. Any Reality
Wireless
Certificates held by the Exchange Agent
which have not been delivered to holders
of Genesis Certificates pursuant to this
Article III within six (6) months after
the Effective Time shall promptly be paid or delivered, as appropriate, to
Reality Wireless, and thereafter holders of Genesis Certificates who have not
theretofore complied with the exchange
procedures outlined in
and contemplated
by this Section 3.02 shall thereafter look
only to Reality Wireless (subject to
abandoned property, escheat and similar laws) only as
general creditors thereof
for their claim for shares of Reality
Wireless Common Stock, any cash in lieu of
fractional shares of Reality Wireless Common Stock and
Preferred Stock and any
dividends or distributions (with a record date after the
Effective Time)
with
respect to Reality Wireless Common Stock and Preferred Stock
to which they are
entitled.
(h) No Liability.
Notwithstanding anything to the contrary in this
Section 3.02, none of the Exchange Agent,
the Surviving Corporation or any party
hereto shall be liable to any person in respect of any shares of Reality
Wireless Common Stock and Preferred Stock
or cash delivered to a public official
pursuant to any applicable abandoned
property, escheat or similar law.
SECTION 3.03 Stock Transfer Books
(a) At the Effective Time, the stock transfer books of Genesis
shall
each be closed, and there shall be no further registration of transfers of
shares of Genesis Common and Preferred Stock thereafter on the records of
any
such stock transfer books. In the event of a transfer
of ownership of shares of
Genesis Common and Preferred Stock that is not registered in
the stock transfer
records of Genesis at the Effective Time, a certificate or certificates
representing the number of full shares of
Reality Wireless Common and Preferred
Stock into which such shares of Genesis
Common and
Preferred Stock shall have
been converted shall be issued to the
transferee in accordance with Section 3.04
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hereof if the certificate or certificates
representing
such shares of
Genesis
Common and Preferred Stock is or are surrendered as
provided in Section 3.02(c)
hereof, accompanied by all documents required to evidence and effect such
transfer and by evidence of payment of any
applicable stock transfer tax.
SECTION 3.04 No Fractional Share Certificates
(a) No scrip or fractional share Reality Wireless Certificate shall
be issued upon the surrender for exchange of Genesis Certificates, but such
fractional share shall be rounded up to the
nearest whole share.
SECTION 3.05 Options and Warrants to Purchase Genesis Common
Stock
At the Effective Time,
each option or warrant granted by Genesis to
purchase shares of Genesis Common Stock
("Genesis Stock Options and Warrants"),
which is outstanding and unexercised immediately prior to the Effective Time
shall be assumed by Reality Wireless, and
the Genesis Stock Options and Warrants
shall be converted into an option or warrant,
as the case may be, to
purchase
shares of Reality Wireless Common Stock in such number and at such exercise
price as provided below and otherwise
having the same terms and conditions as in
effect immediately prior to the Effective Time
(except to the extent that such
terms, conditions and restrictions may be
altered in accordance with their terms
as a result of the Merger contemplated hereby and except
that all references in
each such Genesis Stock Option to Genesis shall be deemed to refer to
Reality
Wireless):
(a) the number of
shares of Reality
Wireless Common Stock to be
subject to the new option or warrant,
as the case may be,
shall be equal to the
product of (x) the number of shares of Genesis Common Stock for which the
Genesis option or warrant provided divided by the number of issued and
outstanding shares of Genesis Common Stock
immediately
prior to the
Effective
Time (including that pursuant to such option or
warrant) and (y)
ninety-seven
one hundredths (0.97) of the issued and
outstanding
common stock in Reality
Wireless immediately following the Closing (the
conversion product referred to
as the "Exchange Ratio")
(b) the exercise price
per share of Reality
Wireless Common
Stock
under the new option or warrant shall be equal to (x) the
exercise price per
share of Genesis Common Stock in effect
under the original
Genesis Stock Option
immediately prior to the Effective Time
divided by (y) the Exchange Ratio; and
(c) in
effecting such
assumption
and conversion, the aggregate
number of shares of Reality Wireless Common Stock to be
subject to each assumed
Genesis Stock Option and Warrant will be
rounded down, if necessary, to the next
whole share and the aggregate exercise price shall be rounded
up, if necessary,
to the next whole cent (for the purpose of
providing that the intrinsic value of
such Genesis Stock Options and Warrants shall be preserved at the
Effective
Time).
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(d) the adjustments
provided herein with respect to any options
that
are "incentive stock options" (as defined in
Section 422 of the Code) shall be
effected in a manner consistent with the requirements of Section 424(a) of
the
Code so as to retain their character as
incentive stock options. The assumption
of the outstanding Genesis Stock Options and Warrants in the
Merger and their
conversion into options for Reality
Wireless Common Stock will not result in any
accelerated vesting of those options or the
shares purchasable
thereunder other
than as contemplated in presently existing
agreements to which
the Genesis is a
party, copies of which agreements have
been provided to Reality Wireless, and
the vesting schedule in effect for each
Genesis Stock Option
immediately prior
to the Effective Time shall remain in full
force after the assumption thereof by
Reality Wireless.
SECTION 3.06 Unvested Stock
At the Effective Time,
any unvested shares of
Genesis Common Stock
awarded to employees, directors or consultants pursuant to any of Genesis's
plans or arrangements and outstanding immediately prior to the Effective Time
shall be converted into unvested shares of Reality Wireless Common Stock in
accordance with the Exchange Ratio and shall remain subject to
the same terms,
restrictions and vesting schedule as in effect immediately prior to the
Effective Time, except to the extent by their
terms such
unvested shares of
Genesis Common Stock vest at the Effective Time and copies of the relevant
agreements governing such vesting have been
provided to Reality
Wireless. All
outstanding rights which Genesis may hold immediately prior to the Effective
Time to repurchase unvested shares of Genesis Common
Stock shall be assigned to
Reality Wireless in the Merger and shall
thereafter be
exercisable by
Reality
Wireless upon the same terms and conditions
in effect immediately
prior to the
Effective Time, except that the shares
purchasable
pursuant to such
rights and
the purchase price payable per share shall be
adjusted to reflect the Exchange
Ratio.
SECTION 3.07 Certain Adjustments
If between
the Execution Date and the Effective Time, the
outstanding shares of Reality Wireless Common Stock or Genesis Common Stock
shall be changed into a different number of shares by reason of any
reclassification, recapitalization,
split-up, combination or exchange of shares,
or any dividend payable in stock or other
securities shall be
declared thereon
with a record date within such period, or
the number of shares of Genesis Common
Stock on a fully diluted basis is in excess of that
specified in Section
4.03
and disclosed in Section 4.03 of the
Genesis Disclosure Schedule (regardless of
whether such excess is a result of an
additional issuance of
capital stock or a
correction to such Sections), then the Exchange Ratio
established
pursuant to
the provisions of Section 3.01 shall be
adjusted accordingly
to provide to each
of Reality Wireless, on the one hand, and
the holders of Genesis Common Stock in
the aggregate, on the other hand, the same
economic effect as
contemplated by
this Agreement prior to such reclassification, recapitalization, split-up,
combination, exchange, dividend or
increase.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GENESIS
Genesis hereby represents and warrants to Reality Wireless,
subject
to the exceptions specifically disclosed in writing in the
Genesis Disclosure
Schedule, of which all such exceptions are referenced to a specific
representation set forth in this Article IV or
are otherwise clearly applicable
to representations hereof not specifically referenced, that at the time of
Closing:
SECTION 4.01 Organization and Qualification; Subsidiaries
(a) Genesis and each
directly and
indirectly owned
subsidiary of
Genesis (the "Genesis Subsidiaries") has been duly organized and is validly
existing and in good standing (to the
extent applicable)
under the laws of
the
jurisdiction of its incorporation or organization,
as the case may be,
and has
the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it
is now being
conducted. Genesis
and each Genesis Subsidiary is duly
qualified or licensed to do business, and is
in good standing (to the extent
applicable),
in each jurisdiction where the
character of the properties owned, leased
or operated by it or the nature of its
business makes such qualification or
licensing necessary.
(b) Section 4.01 of the Genesis Disclosure Schedule sets forth, as
of the Execution Date, a true and complete list of each Genesis Subsidiary,
together with (i) the jurisdiction of incorporation or organization of each
Genesis Subsidiary and the percentage of
each Genesis
Subsidiary's
outstanding
capital stock or other equity interests owned by Genesis or another
Genesis
Subsidiary and (ii) an indication of whether each Genesis Subsidiary is a
"Significant Subsidiary" as defined in Regulation
S-X under the Exchange
Act.
Except as set forth in Section 4.01 of the
Genesis Disclosure Schedule, neither
Genesis owns an equity interest in any
partnership or joint venture arrangement
or other business entity.
SECTION 4.02 Certificate of Incorporation and Bylaws
The copies of
Genesis's certificate
of incorporation and bylaws
previously provided to Reality Wireless by Genesis are true, complete and
correct copies thereof. Such certificate of
incorporation and bylaws are in full
force and effect. Genesis is not in violation of any
of the provisions
of its
certificate of incorporation or bylaws.
SECTION 4.03 Capitalization
The authorized
capital stock of Genesis consists of 20,000,000
shares of Genesis Common Stock and zero shares of
preferred stock ("Genesis
Preferred Stock"). As of the date hereof,
(i) 7,458,789 shares of Genesis Common
Stock are issued and outstanding, all of which are validly issued,
fully paid
and nonassessable, (ii) zero shares of Genesis Common Stock are held in the
treasury of Genesis, (iii) zero shares of Genesis Common Stock are held by
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<PAGE>
Genesis Subsidiaries, (iv) 1,338,055 shares
of Genesis Common Stock are reserved
for future issuance pursuant to Genesis Stock Options, (v) zero shares of
Genesis Common Stock are reserved for future issuance pursuant to Genesis
Warrants, and (vi) zero shares of Genesis
Preferred Stock are outstanding. The
name of each holder of a Genesis Stock
Option and/or Warrant,
the grant date of
each Genesis Stock Option, and the number of shares of
Genesis Common Stock for
which each Genesis Stock Option and Warrant is exercisable and the exercise
price of each Genesis Stock Option are set forth in
Section 4.03 of the Genesis
Disclosure Schedule. Except for shares of
Genesis Common Stock issuable pursuant
to Genesis Stock Plans, there are no options, warrants or other rights,
agreements, arrangements or commitments of any
character obligating
Genesis to
issue or sell any shares of capital stock of, or other equity interests in,
Genesis. All shares of Genesis Common Stock subject to issuance as
aforesaid,
upon issuance prior to the Effective Time
on the terms and conditions specified
in the instruments pursuant to which they
are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of Genesis to
repurchase, redeem or
otherwise acquire
any shares of Genesis Common Stock or any capital stock of any Genesis
Subsidiary. Each outstanding share of capital
stock of each Genesis
Subsidiary
is duly authorized, validly issued, fully paid and nonassessable and
each such
share owned by Genesis or another
Genesis Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first
refusal,
agreements, limitations on Genesis's or such
other Genesis
Subsidiary's voting
rights, charges and other encumbrances of
any nature whatsoever.
There are no
material outstanding contractual obligations of Genesis
to provide funds to, or
make any material investment (in the form of a loan,
capital contribution or
otherwise) in, any Genesis Subsidiary or
any other person.
SECTION 4.04 Authority Relative to This Agreement
Genesis has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery
of
this Agreement by Genesis and the
consummation
by Genesis of the
transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate
proceedings on the
part of Genesis are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Genesis and, assuming the due
authorization, execution and delivery by the other
parties hereto, constitute legal, valid and binding obligations of Genesis,
enforceable against Genesis in accordance with their terms, subject to the
effect of any applicable bankruptcy,
moratorium,
insolvency,
reorganization or
other similar law affecting the
enforceability
of creditors'
rights generally
and to the effect of general principles of equity which may limit the
availability of remedies (whether in a
proceeding at law or in equity).
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<PAGE>
SECTION 4.05 No Conflict; Required Filings and Consents
(a) The execution
and delivery of this Agreement by Genesis does
not, and the performance by Genesis of its obligations hereunder and the
consummation of the Merger will not, (i)
conflict with or violate any provision
of the certificate of incorporation or bylaws of Genesis or any equivalent
organizational documents of any Genesis Subsidiary, (ii) assuming that all
filings and notifications described in Section 4.05(b) have
been made, conflict
with or violate any Law applicable to Genesis or by which
any property or asset
of Genesis is bound or affected
or (iii) result in any material breach of or
constitute a material default (or an event which with the giving
of notice or
lapse of time or both could reasonably be expected to become a
default) under,
or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation
of a lien or other encumbrance on any
material property or asset of Genesis
pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease,
license, permit, franchise or
other instrument or obligation.
(b) Except as may
arise solely by virtue
of the nature of
Reality
Wireless's business, the execution and delivery of this Agreement by Genesis
does not, and the performance by Genesis of its
obligations
hereunder and the
consummation of the Merger will not, require any consent, approval,
authorization or permit of, or filing by
Genesis with or notification by Genesis
to, any Governmental Entity, except pursuant to applicable
requirements of
the
Exchange Act, the Securities Act, Blue Sky Laws, state takeover laws, and the
filing and recordation of the Certificate of Merger as required
by the NRS and
the DE Code.
SECTION 4.06 Permits; Compliance with Laws
Genesis is in possession of all franchises, grants, authorizations,
licenses, establishment registrations, product listings, permits, easements,
variances, exceptions, consents, certificates,
identification and
registration
numbers, approvals and orders of any
Governmental Entity
materially
necessary
for Genesis to own, lease and operate its properties
or to offer or perform its
services or to develop, produce, store, distribute and market its products
or
otherwise to carry on its business as it is
now being conducted
(collectively,
the "Genesis Permits"), and, as of the Execution Date, none of the Genesis
Permits has been suspended or cancelled nor is any such suspension or
cancellation pending or, to the knowledge of Genesis, threatened. Neither
Genesis is in conflict with, or in default or violation of, (i) any Law
applicable to Genesis or by which any
property or asset of
Genesis is bound or
affected or (ii) any material Genesis Permits. Section 4.06 of the Genesis
Disclosure Schedule sets forth, as of the Execution Date, all actions,
proceedings, investigations or surveys pending
or, to the knowledge of Genesis,
threatened against Genesis that could reasonably be expected to result
in the
suspension or cancellation of any other
material Genesis Permit. Genesis has not
received from any Governmental Entity any written notification with respect to
possible material conflicts, defaults or
violations of Laws.
17
<PAGE>
SECTION 4.07 Financial Statements
(a) Genesis has timely
filed all forms,
reports, statements and
documents required to be filed by it with
any Governmental Entities. Each form,
report, statement and document referred to
in this paragraph was prepared in all
material respects in accordance
with the requirements of applicable Law. No
Genesis Subsidiary is subject to the periodic
reporting requirements of the
Exchange Act or required to file any form,
report or other
document with the
SEC, any stock exchange or any other
comparable Governmental Entity.
(b) When presented
to Reality Wireless within 45 days from the
Execution Date, the Genesis Reports
(defined in Section 7.04 below) will present
fairly, in all material respects, the financial position of Genesis as at the
respective dates thereof and for the respective periods indicated therein,
except as otherwise noted therein (subject,
in the case of unaudited statements,
to normal and recurring immaterial year-end
adjustments).
SECTION 4.08 Absence of Certain Changes or Events
Since September 15, 2004, Genesis has conducted their
businesses in
all material respects only in the ordinary
course consistent with past practice
and, since such date, there has not been (i) any
material changes in or
effect
on the business, assets, liabilities, financial condition or results of
operations of Genesis or the Genesis
Subsidiaries,
(ii) any event (other
than
events within the scope of Section
4.10) that could
reasonably be expected
to
prevent or materially delay the performance
of Genesis's obligations pursuant to
this Agreement and the consummation of the
Merger by Genesis, (iii) any material
change by Genesis in its accounting
methods, principles or
practices, (iv)
any
issuance or sale of any stock, notes, bonds or other securities other than
pursuant to the exercise of outstanding securities, or entering into any
agreement with respect thereto, or the issuances of options under
the Genesis
Stock Plans, (v) any amendment to Genesis's
certificate
of incorporation or
bylaws, (vi) other than in the ordinary
course of business consistent with past
practice, any (1) purchase, sale,
assignment or transfer of any material assets,
(2) mortgage, pledge or existence of any lien,
encumbrance
or charge on any
material assets or properties, tangible or
intangible except for liens for Taxes
not yet delinquent, or (3) waiver of any rights of material value or
cancellation or any material debts or claims, (vii) any incurrence of any
material liability (absolute or
contingent), except
for current liabilities and
obligations incurred in the ordinary
course of business
consistent
with past
practice, (viii) any incurrence of any damage, destruction or similar loss,
whether or not covered by insurance, materially affecting the business or
properties of Genesis, or (ix) any entering into any
transaction of a
material
nature other than in the ordinary course of business, consistent with past
practice.
SECTION 4.09 Employee Benefit Plans; Labor Matters
(a) Genesis Disclosure
Schedule lists each
employee benefit
fund,
plan, program, arrangement and contract
(including,
without limitation, any
"pension" plan, fund or program,
as defined in Section
3(2) of ERISA, and
any
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"employee benefit plan", as defined in Section 3(3) of ERISA and any plan,
program, arrangement or contract
providing for
severance; medical,
dental or
vision benefits; life insurance or death
benefits; disability benefits, sick pay
or other wage replacement; vacation, holiday or sabbatical; pension or
profit-sharing benefits; stock options or other equity
compensation; bonus
or
incentive pay or other material fringe
benefits) ("Benefit Plans"), maintained,
sponsored or contributed to or required to be contributed to by Genesis (the
"Genesis Benefit Plans"). With respect to
each Genesis Benefit Plan, Genesis has
delivered or made available to Reality Wireless a true, complete and correct
copy of (i) such Genesis Benefit Plan (of,
if not written, a
written summary of
its material terms) and the most recent summary plan description, if any,
related to such Genesis Benefit Plan, (ii)
each trust agreement or other funding
arrangement relating to such Genesis Benefit
Plan, (iii) the most recent annual
report filed with the IRS with respect to
such Genesis Benefit
Plan, (iv) the
most recent actuarial report or financial statement relating to such Genesis
Benefit Plan and (v) the most recent
determination letter, if any, issued by the
IRS with respect to such Genesis Benefit
Plan and any pending request for such a
determination letter. Neither Genesis nor, to the knowledge of Genesis, any
other person or entity, has any express
commitment, whether
legally enforceable
or not, to modify, change or terminate any
Genesis Benefit Plan, other than with
respect to a modification, change or
termination required by ERISA or the Code.
(b) Genesis has made available to Reality Wireless true, complete
and correct copies of (i) all employment agreements with officers and all
consulting agreements of Genesis and each
Genesis Subsidiary, (ii) all severance
plans, agreements, programs and policies of Genesis
and each Genesis Subsidiary
with or relating to their respective
employees,
directors or
consultants, and
(iii) all plans, programs, agreements and
other arrangements of Genesis and each
Genesis Subsidiary with or relating to
their respective employees, directors or
consultants which contain "change of
control" provisions.
No payment or benefit
which may be required to be made by Genesis
or which otherwise
may be required
to be made under the terms of any Genesis
Benefit Plan or other arrangement will
constitute a parachute payment under Code Section 280(G)(1), and the
consummation of the transactions
contemplated by this
Agreement will not, alone
or in conjunction with any other possible event (including termination of
employment), (i) entitle any current or former employee or other service
provider of Genesis to severance benefits
or any other payment,
compensation or
benefit (including forgiveness of
indebtedness), except as expressly provided by
this Agreement, or (ii) accelerate the time of
payment or vesting, or
increase
the amount of compensation or benefit due
any such employee or service provider.
(c) Neither Genesis is a party to, or has any obligations under or
with respect to, any collective bargaining or other labor union contract
applicable to persons employed by Genesis
and no collective bargaining agreement
is being negotiated by Genesis or any
person or entity that may obligate Genesis
thereunder. As of the Execution Date, there is
no labor dispute,
strike, union
organizing activity or work stoppage against Genesis pending or, to the
knowledge of Genesis, threatened which may substantially interfere with the
respective business activities of Genesis.
As of the Execution Date, to the
19
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knowledge of Genesis, none of Genesis, any Genesis
Subsidiary, or any of
their
respective representatives or employees has
committed any unfair labor practice
in connection with the operation of the
respective businesses
of Genesis, and
there is no charge or complaint
filed against Genesis by or with the
National
Labor Relations Board or any comparable Governmental Entity pending or
threatened in writing.
SECTION 4.10 Certain Tax Matters
To
Genesis's knowledge, neither Genesis, nor to Genesis's
knowledge,
any of its affiliates, has taken or agreed to take any action (other than
actions contemplated by this Agreement) that could be expected
to prevent the
Merger from constituting a "reorganization" under Section 368 of the Code.
Genesis is not aware of any agreement or plan to which Genesis or any of its
affiliates is a party or other circumstances relating to Genesis or any of
its
affiliates that could reasonably be expected to prevent the Merger from
qualifying as a reorganization under
Section 368 of the Code.
SECTION 4.11 Contracts
Section 4.11 of the Genesis Disclosure Schedule sets forth a list
of
each contract or agreement that is material to the business, assets,
liabilities, financial condition or results
of operations of Genesis and Genesis
Subsidiaries, taken as a whole (each, a
"Material Contract"). Neither Genesis is
in material violation of or in default
under (nor does there exist any condition
which with the passage of time or the giving of notice
could reasonably be
expected to cause such a material
violation of or
material default
under) any
Material Contract. Each Material Contract is in full
force and effect and is a
legal, valid and binding obligation of Genesis or a Genesis
Subsidiary and, to
the knowledge of Genesis, each of the other parties thereto, enforceable in
accordance with its terms.
SECTION 4.12 Litigation
With the exception of
the those items listed in Section 4.12 of the
Genesis Disclosure Schedule, there is no material suit, claim, action,
proceeding or investigation pending or, to
the knowledge of Genesis, threatened
against Genesis, and, to the knowledge of Genesis,
there are no existing
facts
or circumstances that could reasonably be expected to result in such a
suit,
claim, action, proceeding or investigation.
Genesis is not aware of any facts or
circumstances which could reasonably be expected to result in the denial
of
insurance coverage under policies issued to
Genesis and Genesis
Subsidiaries in
respect of such material suits, claims,
actions, proceedings and investigations.
Neither Genesis is subject to any material
outstanding order,
writ, injunction
or decree or any material outstanding
order, writ, injunction or decree.
SECTION 4.13 Purposely Left Blank
SECTION 4.14 Intellectual Property
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<PAGE>
(a) Section 4.14(a) of the Genesis Disclosure Schedule contains a
true and complete list of Genesis's
patents, patent applications, registered
trademarks, trademark applications, trade names, registered service marks,
service mark applications, Internet domain names, Internet domain name
applications, copyright registrations and applications and other filings
and
formal actions made or taken pursuant to
Federal, state, local
and foreign laws
by Genesis to protect its interests in Genesis Intellectual Property, and
includes details of all due dates for
further filings, maintenance, payments or
other actions falling due in respect of Genesis
Intellectual
Property within
twelve (12) months of the Effective Time. All of Genesis's patents, patent
applications, registered trademarks, and
trademark applications, and registered
copyrights remain in good standing with all
fees and filings due as of the date
hereof. Genesis has previously provided Reality Wireless with a list of all
other trademarks and service marks which
are material to Genesis's business.
(b) Genesis has made all registrations that Genesis (including any
of its subsidiaries) is required to have made in
relation to the processing of
data, and is in good standing with respect
to such registrations
with all fees
due as of the Effective Time duly made.
(c) Genesis
Intellectual
Property contains only those items and
rights which are: (i) owned by Genesis; (ii) in the public domain; or (iii)
rightfully used by Genesis pursuant to a
valid and enforceable
license or other
agreement (the "Genesis Licensed
Intellectual
Property"),
the parties,
date,
term and subject matter of each such license or other agreement (each, a
"License Agreement") being set forth on Section 4.14(c) of the Genesis
Disclosure Schedule. Genesis has all rights in Genesis
Intellectual
Property
necessary to carry out Genesis's current activities and, to the knowledge of
Genesis, Genesis's future activities to the extent such
future activities
are
already planned, including without limitation,
to the extent required
to carry
out such activities, rights to make, use, reproduce, modify, adopt, create
derivative works based on, translate, distribute (directly and indirectly),
transmit, display and perform publicly,
license, rent and
lease and, other than
with respect to Genesis Licensed
Intellectual Property, assign and sell, Genesis
Intellectual Property.
(d) The reproduction, manufacturing, distribution, licensing,
sublicensing, sale or any other exercise of
rights in any Genesis
Intellectual
Property, product, work, technology or process as now used or offered or
proposed for use, licensing or sale by Genesis does
not infringe on any patent,
design right, trademark, trade name, service mark, trade
dress, Internet domain
name, copyright, database, statistical model, technology,
invention,
supplier
list, trade secret, know-how, computer software program or application of
any
person, anywhere in the World. Genesis has
not received notice of any claims (i)
challenging the validity, effectiveness or, other than with respect to
Genesis
Licensed Intellectual Property, ownership
by Genesis of any Genesis Intellectual
Property, or (ii) to the effect that the use, distribution, licensing,
sublicensing, sale or any other exercise of rights in any product, work,
technology or process as now used or offered
or proposed
for use, licensing,
sublicensing or sale by Genesis or its
agents or use by its customers infringes
or will infringe on any intellectual
property or other
proprietary or
personal
21
<PAGE>
right of any person. To the knowledge of Genesis, no such claims have been
threatened by any person, nor are there any valid
grounds for any bona fide
claim of any such kind. All of the rights
within Genesis
Intellectual
Property
are enforceable and subsisting. To the know