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SHARE
EXCHANGE AGREEMENT
This
SHARE
EXCHANGE AGREEMENT,
dated
as of February 18, 2008, is made by and among GENESIS HOLDINGS, INC., a Nevada
corporation (the "Acquiror
Company"),
BIOAUTHORIZE, INC., a Colorado corporation ("Bioauthorize"),
and
each of the persons listed on Exhibit A as a Bioauthorize Shareholder
(collectively, the "Bioauthorize
Shareholders,"
and
individually a "Bioauthorize
Shareholder").
BACKGROUND
The
Bioauthorize Shareholders have agreed to transfer to the Acquiror Company,
and
the Acquiror Company has agreed to acquire from the Bioauthorize Shareholders,
all of the issued and outstanding shares of Bioauthorize (the "Bioauthorize
Shares"),
in
exchange for 20,000,000 shares of the Acquiror Company's Common Stock (the
"Exchange
Shares"),
which
Exchange Shares shall constitute 80% of the issued and outstanding shares of
Acquiror Company's Common Stock immediately after the closing of the
transactions contemplated herein, in each case, on the terms and conditions
as
set forth herein.
ARTICLE
I.
DEFINITIONS
Section
1.1 Unless
the context otherwise requires, the terms defined in this Article
1
will
have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
"Acquiror
Company Balance Sheet"
means
the Acquiror Company's unaudited condensed consolidated balance sheet at
September 30, 2007.
"Acquiror
Company Board"
means
the Board of Directors of the Acquiror Company.
"Acquiror
Company Common Stock"
means
the Acquiror Company's common stock, par value $0.001 per share.
"Acquiror
Company Controlling Persons"
means
Jason Pratte and Larry Don Bankston.
"Acquiror
Company Subsidiary"
means
Genesis Land, Inc., a Nevada corporation that is wholly owned by the Acquiror
Company.
"Affiliate"
means
any Person that directly or indirectly controls, is controlled by or is under
common control with the indicated Person.
"Agreement"
means
this Share Exchange Agreement, including all Schedules and Exhibits hereto,
as
this Share Exchange Agreement may be from time to time amended, modified or
supplemented by agreement of the parties.
"Bioauthorize
Board"
means
the Board of Directors of Bioauthorize.
"Bioauthorize
Indemnifying Shareholders"
means
Yada Schneider, Gerald Van Wie and Neil Van Wie.
"Bioauthorize
Shares"
means
the 115,856 issued and outstanding shares of common stock of Bioauthorize,
and
the 16,279 issued and outstanding shares of Class A preferred stock of
Bioauthorize, all of which are held of record by the Bioauthorize
Shareholders.
"Closing
Date"
has the
meaning set forth in Article
III.
"Code"
means
the United States Internal Revenue Code of 1986, as amended.
"Commission"
means
the United States Securities and Exchange Commission or any other federal agency
then administering the Securities Act or any successor statute.
"Company
Indemnified Party"
has the
meaning set forth in Section
11.2.
"Contract"
means
any agreement, contract, obligation, promise, or undertaking (whether written
or
oral and whether express or implied) that is legally binding.
"Damages"
means
the actual losses, damages, liabilities, penalties, Taxes, interest and expenses
(including reasonable attorneys' fees and disbursements and other out-of-pocket
expenses and costs incurred in connection with mitigating the Loss and
investigating, preparing, settling or defending any pending or threatened
action, claim or proceeding (including those brought by third
Persons)).
"Disclosure
Schedule"
means
the several schedules referred to and identified herein, setting forth certain
disclosures, exceptions and other information, data and documents referred
to at
various places throughout this Agreement.
"Environmental
Laws"
means
any Law or other requirement relating to the environment, natural resources,
or
public or employee health and safety.
"Environmental
Permit"
means
all licenses, permits, authorizations, approvals, franchises and rights required
under any applicable Environmental Law or Order.
"Equity
Security"
means
any stock or similar security, including, without limitation, securities
containing equity features and securities containing profit participation
features, or any security convertible into or exchangeable for, with or without
consideration, any stock or similar security, or any security carrying any
warrant, right or option to subscribe to or purchase any shares of capital
stock, or any such warrant or right.
"ERISA"
means
the United States Employee Retirement Income Security Act of 1974, as
amended.
"Exchange"
has the
meaning set forth in Section
2.1.
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended, or any similar federal statute,
and the rules and regulations of the Commission thereunder, all as the same
are
in effect from time to time.
"Exchange
Shares"
means
the shares of Acquiror Company Common Stock being issued to the Bioauthorize
Shareholders pursuant hereto.
"Exhibits"
means
the several exhibits referred to and identified in this Agreement.
"GAAP"
means,
with respect to any Person, United States generally accepted accounting
principles applied on a consistent basis with such Person's past
practices.
2
"Governmental
Authority"
means
any federal or national, state or provincial, municipal or local government
governmental authority, regulatory or administrative agency, governmental
commission, department, board, bureau, agency or instrumentality, political
subdivision, commission, court, tribunal, official, arbitrator or arbitral
body,
in each case whether United States or non-United States with jurisdiction over
any party hereto.
"Indebtedness"
means
any obligation, contingent or otherwise. Any obligation secured by a Lien on,
or
payable out of the proceeds of, or production from, property of the relevant
party will be deemed to be Indebtedness.
"Intellectual
Property"
means
all industrial and intellectual property, including, without limitation, all
United States and non-United States patents, patent applications, patent rights,
trademarks, trademark applications, common law trademarks, Internet domain
names, trade names, service marks, service mark applications, common law service
marks, and the goodwill associated therewith, copyrights, in both published
and
unpublished works, whether registered or unregistered, copyright applications,
franchises, licenses, know-how, trade secrets, technical data, designs, customer
lists, confidential and proprietary information, processes and formulae, all
computer software programs or applications, layouts, inventions, development
tools and all documentation and media constituting, describing or relating
to
the above, including manuals, memoranda, and records, whether such intellectual
property has been created, applied for or obtained anywhere throughout the
world.
"Intellectual
Property Assets"
has the
meaning set forth in Section
5.17
below.
"Laws"
means,
with respect to any Person, any United States or non-United States federal,
national, state, provincial, local, municipal, international, multilateral
or
other law (including common law), constitution, statute, code, ordinance, rule,
regulation or treaty applicable to such Person.
"Lien"
means
any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind, including, without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of
any jurisdiction and including any lien or charge arising by Law.
"Material
Acquiror Company Contract"
means
any and all agreements, contracts, arrangements, leases, commitments or
otherwise, of the Acquiror Company, of the type and nature that the Acquiror
Company is required to file with the Commission.
"Material
Adverse Effect"
means,
when used with respect to the Acquiror Company or Bioauthorize, as the case
may
be, any change, effect or circumstance which, individually or in the aggregate,
would reasonably be expected to (a) have a material adverse effect on the
business, assets, financial condition or results of operations of the Acquiror
Company or Bioauthorize, as the case may be, in each case taken as a whole
or
(b) materially impair the ability of the Acquiror Company or Bioauthorize (or
the Bioauthorize Shareholders), as the case may be, to perform its (or their)
obligations under this Agreement, excluding any change, effect or circumstance
resulting from (i) the announcement, pendency or consummation of the
transactions contemplated by this Agreement, (ii) changes in the United States
securities markets generally, or (iii) changes in general economic, currency
exchange rate, political or regulatory conditions in industries in which the
Acquiror Company or Bioauthorize, as the case may be, operate.
3
"Order"
means
any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any Governmental Authority.
"Ordinary
Course of Business"
means
an action taken by a Person will be deemed to have been taken in the
"Ordinary
Course of Business"
only
if:
(a)
such
action is consistent with the past practices of such Person and is taken in
the
ordinary course of the normal day-to-day operations of such Person;
(b) such
action is not required to be authorized by the board of directors of such Person
(or by any Person or group of Persons exercising similar authority);
and
(c) such
action is similar in nature and magnitude to actions customarily taken, without
any authorization by the board of directors (or by any Person or group of
Persons exercising similar authority); in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business
as
such Person.
"Organizational
Documents"
means
(a) the articles or certificate of incorporation and the bylaws of a
corporation; (b) the partnership agreement and any statement of partnership
of a
general partnership; (c) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (d) the articles or certificate
of formation and operating agreement of a limited liability company; (e) any
other document performing a similar function to the documents specified in
clauses (a), (b), (c) and (d) adopted or filed in connection with the creation,
formation or organization of a Person; and (f) any and all amendments to any
of
the foregoing.
"Permitted
Liens"
means
(a) Liens for Taxes not yet payable or in respect of which the validity thereof
is being contested in good faith by appropriate proceedings and for the payment
of which the relevant Person has made adequate reserves; (b) Liens in respect
of
pledges or deposits under workmen's compensation laws or similar Laws, carriers,
warehousemen, mechanics, laborers and materialmen and similar Liens, if the
obligations secured by such Liens are not then delinquent or are being contested
in good faith by appropriate proceedings conducted and for the payment of which
the relevant Person has made adequate reserves; (c) statutory Liens incidental
to the conduct of the business of the relevant Person which were not incurred
in
connection with the borrowing of money or the obtaining of advances or credits
and that do not in the aggregate materially detract from the value of its
property or materially impair the use thereof in the operation of its business;
and (d) Liens that would not have a Material Adverse Effect.
"Person"
means
all natural persons, corporations, business trusts, associations, companies,
general partnerships, limited partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political
subdivisions.
"Proceeding"
means
any action, arbitration, audit, hearing, investigation, litigation, or suit
(whether civil, criminal, administrative or investigative) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Authority.
"Related
Person"
means,
with respect to a particular individual:
(a) each
other member of such individual's Family;
4
(b) any
Person that is directly or indirectly controlled by such individual or one
or
more members of such individual's Family;
(c) any
Person in which such individual or members of such individual's Family hold
(individually or in the aggregate) a Material Interest; and
(d) any
Person with respect to which such individual or one or more members of such
individual's Family serves as a director, officer, partner, executor, or trustee
(or in a similar capacity).
With
respect to a specified Person other than an individual:
(a) any
Person that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with such
specified Person;
(b) any
Person that holds a Material Interest in such specified Person;
(c) each
Person that serves as a director, officer, partner, executor, or trustee of
such
specified Person (or in a similar capacity);
(d) any
Person in which such specified Person holds a Material Interest;
(e) any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and
(f) any
Related Person of any individual described in clause (b) or (c).
For
purposes of this definition, (a) the "Family"
of an
individual includes (i) the individual, (ii) the individual's spouse and former
spouses, (iii) any other natural person who is related to the individual or
the
individual's spouse within the second degree, and (iv) any other natural person
who resides with such individual, and (b) "Material
Interest"
means
direct or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of voting securities or other voting interests
representing at least 5% of the outstanding voting power of a Person or equity
securities or other equity interests representing at least 5% of the outstanding
equity securities or equity interests in a Person.
"Rule
144"
means
Rule 144 under the Securities Act, as the same may be amended from time to
time,
or any similar or successor rule or regulation hereafter adopted by the
Commission.
“Schedule
14F Filing”
means
an information statement to be filed by the Acquiror Company on Schedule 14F
under the Exchange Act following the Closing.
"SEC
Documents"
has the
meaning set forth in Section
6.26.
"Section
4(2)"
means
Section 4(2) of the Securities Act, as the same may be amended from time to
time, or any successor statute.
"Securities
Act"
means
the Securities Act of 1933, as amended, or any similar or successor federal
statute, and the rules and regulations of the Commission thereunder, all as
the
same will be in effect at the time.
"Subsidiary"
means,
with respect to any Person, any other Person of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the
total
combined voting power of all classes of voting securities of such Person, (ii)
the total combined equity interests, or (iii) the capital or profit interests
of
such Person; or (b) otherwise has the power to control such Person.
5
"Survival
Period"
has the
meaning set forth in Section
11.1.
"Tax"
or
"Taxes"
means
all United
States, other
applicable federal, state or local taxes, charges, fees, levies, imposts, duties
and other assessments, as applicable, including, but not limited to, any income,
alternative minimum or add-on, estimated, gross income, gross receipts, sales,
use, transfer, transactions, intangibles, ad valorem, value-added, franchise,
registration, title, license, capital, paid-up capital, profits, withholding,
payroll, employment, unemployment, excise, severance, stamp, occupation,
premium, real property, recording, personal property, federal highway use,
commercial rent, environmental (including, but not limited to, taxes under
Section 59A of the Code) or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, penalties or additions to tax with respect to any
of
the foregoing.
"Tax
Group"
means
any United States and other applicable federal, state, local or foreign
consolidated, affiliated, combined, unitary or other similar group of which
the
Acquiror Company is now or was formerly a member.
"Tax
Return"
means
any return, declaration, report, claim for refund or credit, information return,
statement or other similar document filed with any Governmental Authority with
respect to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
"Transaction
Documents"
means,
collectively, all agreements, instruments and other documents to be executed
and
delivered in connection with the transactions contemplated by this
Agreement.
"United
States"
means
the United States of America.
"United
States Dollars"
or
"US
$"
or
"$"
means
the currency of the United States of America.
ARTICLE
II.
EXCHANGE
OF BIOAUTHORIZE SHARES AND SHARE CONSIDERATION
Section
2.1 Share
Exchange.
At the
Closing, each Bioauthorize Shareholder shall transfer to the Acquiror Company
the number of Bioauthorize Shares set forth opposite each such Bioauthorize
Shareholder's name on Exhibit
A,
and, in
consideration therefor, the Acquiror Company shall issue to such Bioauthorize
Shareholder the number of Exchange Shares set forth opposite each Bioauthorize
Shareholder's name on Exhibit
A
(the
"Exchange"),
which
issuance by the Acquiror Company shall be effected by delivery of stock
certificates representing the Exchange Shares to the Bioauthorize Shareholders
within seven (7) days following the Closing.
Section
2.2 Tax
Withholding.
The
Acquiror Company shall be entitled to deduct and withhold from the Exchange
Shares otherwise deliverable to the Bioauthorize Shareholders pursuant to this
Agreement such amounts as the Acquiror Company is required to deduct and
withhold with respect to the making of such payment under the Code or any
provision of state, local, or foreign Tax Law. To the extent that amounts are
so
withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Bioauthorize Shareholder in respect of
which such deduction and withholding was made.
6
Section
2.3 Section
368 Reorganization.
For
United States federal income tax purposes, the Exchange is intended to
constitute a "reorganization" within the meaning of Section 368(a)(1)(B) of
the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan
of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of
the
United States Treasury Regulations. Notwithstanding the foregoing or anything
else to the contrary contained in this Agreement, the parties acknowledge and
agree that no party is making any representation or warranty as to the
qualification of the Exchange as a reorganization under Section 368 of the
Code
or as to the effect, if any, that any transaction consummated prior to the
Closing Date has or may have on any such reorganization status. The parties
acknowledge and agree that each (i) has had the opportunity to obtain
independent legal and tax advice with respect to the transaction contemplated
by
this Agreement, and (ii) is responsible for paying its own Taxes, including
without limitation, any adverse Tax consequences that may result if the
transaction contemplated by this Agreement is not determined to qualify as
a
reorganization under Section 368 of the Code.
Section
2.4 Directors
and Officers of the Acquiror Company at the Closing Date.
Effective as of the Closing Date, one director of the Acquiror Company shall
resign and the remaining two directors of the Acquiror Company shall appoint
Yada Schneider as a member of the Acquiror Company Board. Also effective as
of
the Closing Date, the directors of the Acquiror Company shall appoint the
following officers of the Acquiror Company - Yada Schneider, President and
CEO,
G. Neil Van Wie, Vice President and CFO, and Gerald B. Van Wie, Vice President
and COO, and all current officers of the Acquiror Company shall
resign.
ARTICLE
III.
CLOSING
DATE
The
closing of the Exchange will occur on February 18, 2008 or at such later or
earlier date as all of the closing conditions set forth in Articles
VIII and IX
have
been satisfied or waived and as the parties have unanimously agreed (the
"Closing
Date").
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF THE BIOAUTHORIZE
SHAREHOLDERS
Each
Bioauthorize Shareholder, severally and not jointly, hereby represents and
warrants to the Acquiror Company that the statements contained in this
Article
IV
are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this
Article
IV),
except
as set forth in the Disclosure Schedule accompanying this Agreement and
initialed by the parties (the "Disclosure
Schedule").
The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Article
IV.
7
Section
4.1 Authority.
Such
Bioauthorize Shareholder has the right, power, authority and capacity to execute
and deliver this Agreement and each of the Transaction Documents to which such
Bioauthorize Shareholder is a party, to consummate the transactions contemplated
by this Agreement and each of the Transaction Documents to which such
Bioauthorize Shareholder is a party, and to perform such Bioauthorize
Shareholder's obligations under this Agreement and each of the Transaction
Documents to which such Bioauthorize Shareholder is a party. This Agreement
has
been, and each of the Transaction Documents to which such Bioauthorize
Shareholder is a party will be, duly and validly authorized and approved,
executed and delivered by such Bioauthorize Shareholder. Assuming this Agreement
and the Transaction Documents have been duly and validly authorized, executed
and delivered by the parties thereto other than such Bioauthorize Shareholder,
this Agreement is, and each of the Transaction Documents to which such
Bioauthorize Shareholder is a party have been, duly authorized, executed and
delivered by such Bioauthorize Shareholder and constitutes the legal, valid
and
binding obligation of such Bioauthorize Shareholder, enforceable against such
Bioauthorize Shareholder in accordance with their respective terms, except
as
such enforcement is limited by general equitable principles, or by bankruptcy,
insolvency and other similar Laws affecting the enforcement of creditors rights
generally.
Section
4.2 No
Conflict.
Neither
the execution or delivery by such Bioauthorize Shareholder of this Agreement
or
any Transaction Document to which such Bioauthorize Shareholder is a party,
nor
the consummation or performance by such Bioauthorize Shareholder of the
transactions contemplated hereby or thereby will, directly or indirectly,
contravene, conflict with, constitute a default (or an event or condition which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination or acceleration of, any agreement or instrument to
which such Bioauthorize Shareholder is a party or by which the properties or
assets of such Bioauthorize Shareholder are bound; or (c) contravene, conflict
with, or result in a violation of, any Law or Order to which such Bioauthorize
Shareholder, or any of the properties or assets of such Bioauthorize
Shareholder, may be subject.
Section
4.3 Ownership
of Bioauthorize Shares.
Such
Bioauthorize Shareholder owns, of record and beneficially, and has good, valid
and indefeasible title to and the right to transfer to the Acquiror Company
pursuant to this Agreement, such Bioauthorize Shareholder's Bioauthorize Shares
free and clear of any and all Liens. There are no options, rights, voting
trusts, shareholder agreements or any other contracts or understandings to
which
such Bioauthorize Shareholder is a party or by which such Bioauthorize
Shareholder or such Bioauthorize Shareholder's Bioauthorize Shares are bound
with respect to the issuance, sale, transfer, voting or registration of such
Bioauthorize Shareholder's Bioauthorize Shares except
for that certain Shareholder Agreement dated May 10, 2007 and subsequently
amended (the “Shareholder
Agreement”)
to
which the BioAuthorize Shareholders Yada Schneider, Gerald B. Van Wie, G. Neil
Van Wie and MOFI
are each
a party. To the extent that the provisions of the Shareholder Agreement apply
to
the transfer of the BioAuthorize Shares held by the BioAuthorize Shareholders
Yada Schneider, Gerald B. Van Wie, G. Neil Van Wie and Members Only Financial,
Inc., an Arizona corporation (collectively, the “Consenting
Shareholders”),
in
the Exchange, the Consenting Shareholders hereby waive application of the
Shareholder Agreement to the Exchange and consent to the transfer of the
BioAuthorize Shares by each of the Consenting Shareholders. At the Closing
Date,
the Acquiror Company will acquire good, valid and marketable title to such
Bioauthorize Shareholder's Bioauthorize Shares free and clear of any and all
Liens.
Section
4.4 Litigation.
There
is no pending Proceeding against such Bioauthorize Shareholder that challenges,
or may have the effect of preventing, delaying or making illegal, or otherwise
interfering with, any of the transactions contemplated by this Agreement and,
to
the knowledge of such Bioauthorize Shareholder, no such Proceeding has been
threatened, and no event or circumstance exists that is reasonably likely to
give rise to or serve as a basis for the commencement of any such
Proceeding.
8
Section
4.5 No
Brokers or Finders.
Except
as disclosed in Schedule
4.5,
no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against such Bioauthorize Shareholder for any
commission, fee or other compensation as a finder or broker, or in any similar
capacity.
Section
4.6 Investment
Representations.
(a) Unregistered
Shares.
Each
Bioauthorize Shareholder understands and agrees that the Exchange Shares to
be
issued pursuant to this Agreement have not been registered under the Securities
Act or the securities laws of any state of the United States or any foreign
country and that the issuance of the Exchange Shares is being effected in
reliance upon an exemption from registration afforded under Section 4(2) of
the
Securities Act for transactions by an issuer not involving a public offering.
(b) Stock
Legends.
Each
Bioauthorize Shareholder hereby agrees with the Acquiror Company to the
inclusion, as applicable of the following legends, or legends substantially
similar, on the certificates for the Exchange Shares and any other legend
required under any applicable Law, including, without limitation, any United
States state corporate and state securities law, or contract:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR
ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES LAWS,
IN
WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE ISSUER AN
OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO
THE
ISSUER, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE
SECURITIES LAWS.
(c) Opinion.
No
Bioauthorize Shareholder will transfer any or all of the Exchange Shares absent
an effective registration statement under the Securities Act and applicable
state securities laws covering the disposition of such Bioauthorize
Shareholder's Exchange Shares, without first providing the Acquiror Company
with
an opinion of counsel (which counsel and opinion are reasonably satisfactory
to
the Acquiror Company) to the effect that such transfer will be exempt from
the
registration and the prospectus delivery requirements of the Securities Act
and
the registration or qualification requirements of any applicable United States
state securities laws.
9
(d) Consent.
Each
Bioauthorize Shareholder understands and acknowledges that the Acquiror Company
may refuse to transfer the Exchange Shares, unless such Bioauthorize Shareholder
complies with this Section
4.6.
Each
Bioauthorize Shareholder consents to the Acquiror Company making a notation
on
its records or giving instructions to any transfer agent of the Acquiror
Company's Common Stock in order to implement the restrictions on transfer of
the
Exchange Shares.
ARTICLE
V.
REPRESENTATIONS
AND WARRANTIES OF BIOAUTHORIZE AND THE
BIOAUTHORIZE INDEMNIFYING SHAREHOLDERS
BIOAUTHORIZE INDEMNIFYING SHAREHOLDERS
Bioauthorize
and the Bioauthorize Indemnifying Shareholders, jointly and severally, represent
and warrant to the Acquiror Company and the Acquiror Company Controlling Persons
that the statements contained in this Article
V
are
correct and complete as of the date of this Agreement and will be correct and
complete (as though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Article
V),
except
as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article
V.
10
Section
5.1 Organization
and Qualification.
Bioauthorize is duly organized and validly existing under the laws of the state
of Colorado, has all requisite authority and power (corporate and other),
governmental licenses, authorizations, consents and approvals to carry on its
business as presently conducted and as contemplated to be conducted, to own,
hold and operate its properties and assets as now owned, held and operated
by
it, to enter into this Agreement, to carry out the provisions hereof except
where the failure to be so organized, existing and, if applicable, in good
standing or to have such authority or power will not, in the aggregate, either
(i) have a Material Adverse Effect on Bioauthorize or (ii) materially impair
the
ability of the Bioauthorize Shareholders each to perform their material
obligations under this Agreement. Bioauthorize is duly qualified, licensed
or
domesticated as a foreign corporation in good standing in each jurisdiction
wherein the nature of its activities or its properties owned or leased makes
such qualification, licensing or domestication necessary, except where the
failure to be so qualified, licensed or domesticated will not have a Material
Adverse Effect. Set forth on Schedule
5.1
is a
list of those jurisdictions in which Bioauthorize presently conducts its
business or owns, holds and operates its properties and assets.
Section
5.2 Subsidiaries.
Bioauthorize does not own directly or indirectly, any equity or other ownership
interest in any Person.
Section
5.3 Articles
of Incorporation and Bylaws.
True,
correct and complete copies of the Organizational Documents of Bioauthorize
have
been delivered to the Acquiror Company prior to the execution of this Agreement,
and no action has been taken to amend or repeal such Organizational Documents.
Bioauthorize is not in violation or breach of any of the provisions of its
Organizational Documents, except for such violations or breaches as would not
have a Material Adverse Effect.
Section
5.4 Authorization
and Validity of this Agreement and the Transaction Documents.
The
recording of the transfer of the Bioauthorize Shares and the delivery of new
certificates representing the Bioauthorize Shares registered in the name of
Acquiror Company are within Bioauthorize's corporate powers, have been duly
authorized by all necessary corporate action, do not require from the
Bioauthorize Board or Bioauthorize Shareholders any consent or approval that
has
not been validly and lawfully obtained, and require no authorization, consent,
approval, license, exemption of or filing or registration with any Governmental
Authority, as the case may be, except for those that, if not obtained or made
would not have a Material Adverse Effect.
Section
5.5 No
Violations.
None of
the execution, delivery or performance by Bioauthorize of this Agreement or
any
Transaction Document to which Bioauthorize is a party, nor the consummation
by
Bioauthorize of the transactions contemplated hereby violates any provision
of
its Organizational Documents, or violates or conflicts with, or constitutes
a
default (or an event or condition which, with notice or lapse of time or both,
would constitute a default) under, or results in the termination or acceleration
of, or results in the creation of imposition of any Lien under, any agreement
or
instrument to which Bioauthorize is a party or by which Bioauthorize is or
will
be bound or subject, or violates any Laws.
Section
5.6 Binding
Obligations.
Assuming this Agreement has been duly and validly authorized, executed and
delivered by the Acquiror Company and the Bioauthorize Shareholders, this
Agreement is and all agreements or instruments contemplated hereby to which
Bioauthorize is a party, will be, duly authorized, executed and delivered by
Bioauthorize and are the legal, valid and binding Agreement of Bioauthorize
and
are enforceable against Bioauthorize in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors rights generally.
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