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53 EXHIBIT 2.2 AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

53   EXHIBIT 2.2   AGREEMENT AND PLAN OF MERGER | Document Parties: REALITY WIRELESS NETWORKS, INC | GENESIS ELECTRONICS, INC. You are currently viewing:
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Title: 53 EXHIBIT 2.2 AGREEMENT AND PLAN OF MERGER
Governing Law: Washington     Date: 11/12/2004
Industry: Software and Programming     Law Firm: The Otto Law Group, PLLC     Sector: Technology

53   EXHIBIT 2.2   AGREEMENT AND PLAN OF MERGER, Parties: reality wireless networks  inc , genesis electronics  inc.
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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

 

 

                                       2

<PAGE>

 

     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

 

 

                                       3

<PAGE>

 

                          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.

 

 

                                       4

<PAGE>

 

             "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.

 

 

                                       5

<PAGE>

 

            "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.

 

 

                                       6

<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.

 

 

                                       7

<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

 

 

                                       8

<PAGE>

 

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.

 

 

 

                                        9

<PAGE>

 

                                   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

 

 

                                       10

<PAGE>

 

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,

 

 

                                       11

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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

 

 

                                       12

<PAGE>

 

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).

 

 

                                        13

<PAGE>

 

         (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.

 

 

                                       14

<PAGE>

 

                                   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

 

 

                                       15

<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).

 

 

                                       16

<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

 

 

                                       18

<PAGE>

 

"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

<PAGE>

 

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

 

 

                                       20

<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


 
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