SHARE EXCHANGE AGREEMENT

1.1

Certain Definitions. The following terms shall, when used in this Agreement, have the following meanings:

2.1  

Exchange of Shares. Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined), the Stockholders shall deliver to EMG, or its designees, their collective issued and outstanding seven million two hundred three eight hundred seventy four (7,203,874) common shares of Elevate (“Exchange Shares”) together with appropriately executed transfer documents relative to the Exchange Shares, in exchange for all of the issued and outstanding shares of iAlarm, which the Stockholders will hold and retain so that iAlarm is no longer a wholly owned subsidiary of EMG.  Each Stockholder will receive a number of IAlarm Shares based upon its proportional ownership of the Exchange Shares.

2.2  

Assets of iAlarm.  As of the Closing, the iAlarm Assets will consist of the Contracts, Intellectual Property, Tangible and Intangible Assets and Records and Documents set forth in Section 2.2(a) through (d) below:

(a)  

Contracts.  All rights and benefits of Elevate, EMG or any of its Affiliates under all agreements relating to or useful in the operation of the iAlarm Business including without limitation those set forth on Schedule 2.2(a). Contracts" means all contracts, agreements and other arrangements whether written or oral, to which Elevate, EMG or any Affiliate is a party as to which the breach, non-performance, failure to renew, or cancellation could have a material adverse effect on the iAlarm Business or iAlarm Assets

(b)  

Intellectual Property.  All rights, title and interest in and to, all United States and foreign licenses, copyrights (registered and unregistered) and copyright applications, and computer software and other rights associated with the foregoing, existing now or in the future with respect to the iAlarm Assets, including, without limitation the right to sue for past infringement thereof and all other proprietary rights that Elevate, EMG or any Affiliate owns, licenses, or possesses the right to use with respect to the iAlarm Assets (collectively, the "Intellectual Property"). The Intellectual Property is listed on Schedule 2.2 (b). "Computer Software" means all computer source codes, programs, data files, and other software (including both applications software and operating software), including all machine readable code, printed listings of code, documentation, and related property and information relating to the iAlarm Assets.

(c)  

Tangible and Intangible  Assets.  All tangible and  intangible  personal  property rights of Elevate and EMG used by or useful in the operation of the iAlarm Business (the "Tangible and Intangible Assets"), which are reflected on Schedule 2.2(c).

(d)  

Records and Documents. All books, records, files, papers, databases, and other data (whether such information is stored in print, on electronic media, or pursuant to any audio or video recording) located at Elevate’s facilities or elsewhere in Elevate's custody or control (directly or indirectly), or pertaining to the iAlarm Assets, all of which are reflected on Schedule 2.2(d), except that EMG may retain duplicate copies and computer files for the sole purpose of reference, updating and correction, but for no other purpose.

2.3  

Closing. The closing of the transactions contemplated by this Agreement and the Related Documents (“Closing”) shall take place at the offices of Stoecklein Law Group, LLP., 401 West A Street, Suite 1150, San Diego, California, 92101 or at such other location as the parties may agree on or before December 16, 2012 at 10:00 a.m., Pacific Time,. The date on which the Closing actually occurs is referred to herein as the “Closing Date.” The Closing may occur by exchange of documents and instruments, without personal attendance of representatives of the parties.

2.4  

Deliveries at Closing.

2.4.1  

By the Stockholders.  At the Closing, the Stockholders shall deliver or cause to be delivered to EMG:

(a)  

Stock certificates representing the Exchange Shares, duly endorsed and accompanied by assignments separate from certificate bearing a medallion signature guarantee; and

(b)  

The certificate required by Section 8.1; and

(c)  

Such other documents and instruments as EMG may reasonably require.

2.4.2  

By EMG and Elevate.  At the Closing Elevate and EMG shall deliver or cause to be delivered to the Stockholders and iAlarm:

(a)  

Stock certificates representing 100% of the iAlarm shares, duly endorsed for transfer to the Stockholders;

(b)  

All books and records of iAlarm, including but not limited to corporate record;

(c)  

An assignment of lease in a form acceptable to iAlarm assigning Elevate’s right to use the real property located at 180 Avenida La Pata, Suite 200, San Clemente, California;

3.1  

Organization and Qualification. iAlarm is a Utah corporation duly organized, validly existing and in good standing under the laws of Utah. iAlarm has all requisite power and authority to own, lease and use its assets as they are currently owned, leased and used and to conduct its business as it is currently conducted. iAlarm is duly qualified or licensed to do business in and is in good standing in each jurisdiction in which the character of the properties owned, leased or used by it or the nature of the activities conducted by it make such qualification necessary, except any such jurisdiction where the failure to be so qualified or licensed would not have a Material Adverse Effect on iAlarm or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Related Documents or the ability of iAlarm to perform its obligations under this Agreement or any of the Related Documents.

3.2  

Capitalization.

(a)  

As of the date hereof, iAlarm’s authorized capital stock is 10,000 shares of common stock, no par value, of which there are 10,000 shares of common stock outstanding.

(b)  

As of the Closing, the authorized, issued and outstanding Shares will be listed on Schedule 3.2(b) hereto.

 

(c)

As of the Closing, there will be no outstanding or authorized options, warrants, purchase rights, preemptive rights or other contracts or commitments that could require iAlarm to issue, sell, or otherwise cause to become outstanding any of its shares or other ownership interests (collectively “Options”).

 

(d)

As of the Closing, all of the issued and outstanding Shares of Company will be duly authorized and validly issued and outstanding, fully paid and nonassessable.  As of the Closing, the capital stock will have been issued in compliance with applicable securities laws and other applicable Legal Requirements or transfer restrictions under applicable securities laws.

 

(e)

No iAlarm Shares or Options will be issued between the date of this Agreement and the Closing.

3.3  

No Breach or Violation. Subject to obtaining the consents, approvals, authorizations, and orders of and making the registrations or filings with or giving notices to Regulatory Authorities and Persons identified herein, the execution, delivery and performance by Elevate and EMG of this Agreement and the Related Documents to which either of them is a party, and the consummation of the transactions contemplated hereby and thereby in accordance with the terms and conditions hereof and thereof, do not and will not conflict with, constitute a violation or breach of, constitute a default or give rise to any right of termination or acceleration of any right or obligation of iAlarm under, or result in the creation or imposition of any Encumbrance upon iAlarm, iAlarm Assets, iAlarm Business or iAlarm Shares.

3.4  

Intellectual Property. iAlarm has good title to or the right to use all material company intellectual property rights and all material inventions, processes, designs, formulae, trade secrets and know-how necessary for the operation of iAlarm Business without the payment of any royalty or similar payment.

3.5  

Compliance with Legal Requirements. Elevate and EMG have operated iAlarm Business in compliance with all Legal Requirements applicable to iAlarm except to the extent the failure to operate in compliance with all material Legal Requirements would not have a Material Adverse Effect on iAlarm or Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Related Documents.

3.6  

Litigation. There are no outstanding judgments or orders against or otherwise affecting or related to iAlarm, iAlarm Business or iAlarm Assets; and there is no action, suit, complaint, proceeding or investigation, judicial, administrative or otherwise, that is pending or, to Elevate and EMG’s knowledge, threatened that, if adversely determined, would have Material Adverse Effect on iAlarm or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Related Documents.

3.7  

Taxes. iAlarm has duly and timely filed in proper form all Tax Returns for all Taxes required to be filed with the appropriate Regulatory Authority, except where such failure would not have a Material Adverse Effect on iAlarm.

3.8  

Books and Records. The books and records of iAlarm accurately and fairly represent iAlarm Business and iAlarm Assets and its results of operations in all material respects. All accounts receivable and inventory of iAlarm Business are reflected properly on such books and records in all material respects.

3.9  

Brokers or Finders. No broker or finder has acted directly or indirectly for iAlarm or any of its Affiliates in connection with the transactions contemplated by this Agreement, and neither iAlarm, nor any of its Affiliates has incurred any obligation to pay any brokerage or finder’s fee or other commission in connection with the transaction contemplated by this Agreement.

3.10  

Liabilities. There are no liabilities and continuing obligations of iAlarm, as of the date of this Agreement.

3.11  

Disclosure. No representation or warranty of iAlarm in this Agreement or in the Related Documents and no statement in any certificate furnished or to be furnished by iAlarm pursuant to this Agreement contained, contains or will contain on the date such agreement or certificate was or is delivered, or on the Closing Date, any untrue statement of a material fact, or omitted, omits or will omit on such date to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

4.1  

Organization and Qualification. EMG is a limited liability company duly organized, validly existing and in good standing under the laws of Utah. Elevate is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  Each of Elevate and EMG has all requisite power and authority to own, lease and use their respective assets as they are currently owned, leased and used and to conduct its business as it is currently conducted. Each of Elevate and EMG is duly qualified or licensed to do business in and is in good standing in each jurisdiction in which the character of their respective properties owned, leased or used by it or the nature of the activities conducted by it makes such qualification necessary, except any such jurisdiction where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on EMG or a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Related Documents or the ability of Elevate or EMG to perform its obligations under this Agreement or any of the Related Documents.

4.2  

Authority and Validity. Each of Elevate and EMG has all requisite power to execute and deliver, to perform such party’s obligations under, and to consummate the transactions contemplated by, this Agreement and the Related Documents. The execution and delivery by Elevate and EMG of, the performance by them of their respective obligations under, and the consummation by Elevate and EMG of the transactions contemplated by, this Agreement and the Related Documents have been duly authorized by all requisite action of each of Elevate and EMG. This Agreement has been duly executed and delivered by each of Elevate and EMG and (assuming due execution and delivery by the Stockholders) is the legal, valid and binding obligation of Elevate and EMG, enforceable against each of them in accordance with its terms. Upon the execution and delivery by Elevate and EMG of the Related Documents to which each is a party, and assuming due execution and delivery thereof by the other parties thereto, the Related Documents will be the legal, valid and binding obligations of each such Person, as the case may be, enforceable against each of them in accordance with their respective terms.

4.3  

Consents and Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to, any Regulatory Authority or any other Person is necessary to be obtained, made or given by Elevate or EMG in connection with the execution, delivery and performance by them of this Agreement or any Related Documents or for the consummation by them of the transactions contemplated hereby or thereby, except to the extent the failure to obtain such consent, approval, authorization or order or to make such registration or filings or to give such notice would not have a Material Adverse Effect on EMG or a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Related Documents or the ability of the Stockholders, Elevate or EMG to perform their respective obligations under this Agreement or any of the Related Documents.

4.4  

Compliance with Legal Requirements. Elevate and EMG have operated their respective businesses in compliance with all material Legal Requirements applicable to them, except to the extent the failure to operate in compliance with all material Legal Requirements would not have a Material Adverse Effect on Elevate or EMG or a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Related Documents.

4.5  

Litigation. (i) There are no outstanding judgments or orders against or otherwise affecting or related to Elevate or EMG, their respective business or assets; and (ii) there is no action, suit, complaint, proceeding or investigation, judicial, administrative or otherwise, that is pending or, to the best knowledge of Elevate and EMG, threatened that, if adversely determined, would have a Material Adverse Effect on Elevate or EMG or a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Related Documents.

4.6  

Environmental Matters. Neither Elevate nor EMG has violated any Environmental Laws, each has obtained and maintains all permits, licenses or other approvals required of them under applicable Environmental Laws and each of them is not in violation of any term or condition of any such permit, license or approval, except in each case as would not, individually or in the aggregate, result in a Material Adverse Effect on their respective businesses.

4.7  

Reliance Upon Representations and Warranties of Stockholders. Each of Elevate and EMG hereby represents, warrants, acknowledges, and agrees that none of the Stockholders has made, and that neither Elevate nor EMG has relied upon, any statements made by any Stockholder or any agent of the Stockholders, except as provided in Article IV of this Agreement. Each of Elevate and EMG further represents, warrants, acknowledges, and agrees that neither of them has relied upon any information provided by any Stockholder, with the exception of information as an exhibit or schedule to this Agreement.

5.1  

Capitalization.

(a)  

Such Stockholder beneficially and of record owns the number of Elevate Shares set forth opposite their respective name on the attached Exhibit A.

(b)  

To the knowledge of such Stockholder, such Elevate Shares have been issued in compliance with applicable securities laws and all other applicable Legal Requirements.

(c)  

Such Elevate Shares to be exchanged pursuant to this Agreement have not been pledged, assigned or otherwise transferred to a third party.

5.2  

Authority and Validity. The Stockholder has all requisite power to execute and deliver, to perform its obligations under, and to consummate the transactions contemplated by, this Agreement (subject to receipt of any consents, approvals, authorizations or other matters). The execution and delivery by such Stockholder of, the performance by such Stockholders of its obligations under, and the consummation by it of the transactions contemplated by, this Agreement have been duly authorized by all requisite action of such Stockholder. This Agreement has been duly executed and delivered by such Stockholder and, as of the Closing, assuming due execution and delivery by Elevate and EMG, is the legal, valid, and binding obligation of such Stockholder, enforceable against such Party in accordance with its terms. Upon the execution and delivery of the Related Documents by each Person that is required by this Agreement to execute, or that does execute, this Agreement or any of the Related Documents, and assuming due execution and delivery thereof by EMG and Elevate, the Related Documents will be the legal, valid and binding obligations of such Stockholder, enforceable against such Party in accordance with their respective terms.

5.3  

No Breach or Violation. The execution, delivery and performance by the Stockholder of this Agreement and the Related Documents and the consummation of the transactions contemplated hereby and thereby in accordance with the terms and conditions hereof and thereof, do not and will not conflict with, constitute a violation or breach of, constitute a default or give rise to any right of termination or acceleration of any right or obligation of such Stockholder under, or result in the creation or imposition of any Encumbrance upon the Elevate Shares.

5.4  

Consents and Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to, any Regulatory Authority or any other Person is necessary to be obtained, made or given by the Stockholder in connection with the execution, delivery and performance by them of this Agreement or any Related Documents or for the consummation by it of the transactions contemplated hereby or thereby, except to the extent the failure to obtain such consent, approval, authorization or order or to make such registration or filings or to give such notice would not have a Material Adverse Effect on the Exchange Shares or  a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Related Documents or the ability of the Stockholder to perform its obligations under this Agreement or any of the Related Documents.

5.5  

Purchase for Investment.

 

(a)

The Stockholder is acquiring the iAlarm Shares for investment, for its own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Stockholder has no present intention of selling, granting any participation in, or otherwise distributing the same. The Stockholder further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of iAlarm Shares.

 

(b)

The Stockholder understands that the iAlarm Shares are not registered under the Securities Act, that iAlarm’s sale and the issuance of its securities hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) thereof, and that iAlarm’s reliance on such exemption is predicated on the Stockholder’s representations set forth herein. The Stockholder is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the Act, as such definition is amended by the Dodd-Frank Act.

5.6  

Investment Experience. The Stockholder acknowledges that it can bear the economic risk of its investment in the iAlarm Shares, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in iAlarm.

6.1  

Additional Information. Elevate and EMG shall provide to the Stockholders and their Representatives such financial, operating and other documents, data and information relating to iAlarm, iAlarm Business and iAlarm Assets and Liabilities of iAlarm, as the Stockholders may reasonably request. Such additional information to include, but not be limited to, audited financial statements of Elevate for the years ending May 31, 2012 and May 31, 2011, all prepared in conformity with US GAAP.

6.2  

Continuity and Maintenance of Operations. Elevate shall, and shall cause each of its Subsidiaries, if any, to use its commercially reasonable efforts to promote the financial success of iAlarm Business and promptly notify the Stockholders of any material adverse change in the condition (financial or otherwise) of iAlarm Business and use its commercially reasonable efforts to promote, develop and preserve its relationships with its present employees as well as the goodwill of its customers and promptly notify the Stockholders of any material adverse change in such relationships.

6.3  

Consents and Approvals. As soon as practicable after execution of this Agreement, Elevate and EMG shall use commercially reasonable efforts to obtain any necessary consent, approval, authorization or order of, make any registration or filing with or give any notice to, any Regulatory Authority or Person as is required to be obtained, made or given by Elevate and EMG to consummate the transactions contemplated by this Agreement and the Related Documents.

6.4  

Notification of Certain Matters. Elevate and EMG shall promptly notify the Stockholders of any fact, event, circumstance or action known to it that is reasonably likely to cause Elevate or EMG to be unable to perform any of its covenants contained herein or any condition precedent in ARTICLE V not to be satisfied, or that, if known on the date of this Agreement, would have been required to be disclosed to the Stockholders pursuant to this Agreement or the existence or occurrence of which would cause any of Elevate’s or EMG’s representations or warranties under this Agreement not to be correct and/or complete. Elevate and EMG shall give prompt written notice to the Stockholders of any adverse development causing a breach of any of the representations and warranties in ARTICLES III or IV as of the date made.

6.5  

Schedules and Signature Pages. Elevate and EMG shall, from time to time prior to Closing, supplement its Schedules with additional information that, if existing or known to it on the date of delivery to the Stockholders, would have been required to be included therein.  In particular, prior to the closing, Elevate and EMG will complete and update Schedules 3.2(b) and 3.2(c) to list all of iAlarm’s stockholders as of the Closing Date as of the Closing Date.

6.6  

Payment of Costs of Transaction.  If the transaction is consummated, EMG will be responsible for all the costs of the transaction contemplated by this Agreement, including the reasonable attorney’s fees of the Stockholders.

6.7  

Issuance of Additional Shares. No shares of the common stock of iAlarm shall be issued, with the exception of the shares disclosed pursuant to Section 3.2(b) of this Agreement.

6.8  

No Solicitations. From and after the date of this Agreement until the Closing or termination of this Agreement pursuant to ARTICLE XII, neither Elevate nor EMG will, nor will it authorize or permit any of its officers, directors, affiliates or employees or any investment banker, attorney or other advisor or representative retained by it, directly or indirectly, (i) solicit or initiate the making, submission or announcement of any other acquisition proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any person any non-public information with respect to any other acquisition proposal, (iii) engage in discussions with any Person with respect to any other acquisition proposal, except as to the existence of these provisions, (iv) approve, endorse or recommend any other acquisition proposal or (v) enter into any letter of intent or similar document or any contract agreement or commitment contemplating or otherwise relating to any other acquisition proposal, and other than as required to comply with their fiduciary duties.

6.9  

Elimination of Outstanding Obligations.  EMG, prior to the Closing, will take all action necessary to pay and otherwise eliminate all of its liabilities associated with iAlarm so that at the Closing, there will be no outstanding or contingent liabilities of iAlarm outstanding.  EMG will also take all such action as may be required to terminate all agreements that call for contingent or future payments of money by iAlarm, including under consulting and employment agreements as of the date of this Agreement.

7.1  

Addition Information. Each stockholder shall provide to EMG and its Representatives such documents, data and information relating to the Stockholder, the Elevate Shares as EMG and its Representative may reasonably request.

7.2  

No Solicitations. From and after the date of this Agreement until the Closing or termination of this Agreement pursuant to ARTICLE XII, the Stockholders will not nor will it authorize or permit any of its officers, directors, affiliates or employees or any investment banker, attorney or other advisor or representative retained by it, directly or indirectly, (i) solicit or initiate the making, submission or announcement of any other acquisition proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any person any non-public information with respect to any other acquisition proposal, (iii) engage in discussions with any Person with respect to any other acquisition proposal, except as to the existence of these provisions, (iv) approve, endorse or recommend any other acquisition proposal or (v) enter into any letter of intent or similar document or any contract agreement or commitment contemplating or otherwise relating to any other acquisition proposal, and other than as required to comply with their fiduciary duties.

7.3  

Consents and Approvals. As soon as practicable after execution of this Agreement, the Stockholder shall use its commercially reasonable efforts to obtain any necessary consent, approval, authorization or order of, make any registration or filing with or give notice to, any Regulatory Authority or Person as is required to be obtained, made or given by the Stockholder to consummate the transactions contemplated by this Agreement and the Related Documents.

7.4  

Notification of Certain Matters. The Stockholder shall promptly notify EMG of any fact, event, circumstance or action known to it that is reasonably likely to cause the Stockholder to be unable to perform any of its covenants contained herein or any condition precedent in ARTICLE II not to be satisfied, or that, if known on the date of this Agreement, would have been required to be disclosed to EMG pursuant to this Agreement or the existence or occurrence of which would cause any of the Stockholder’s representations or warranties under this Agreement not to be correct and/or complete. The Stockholder shall give prompt written notice to EMG of any adverse development causing a breach of any of the representations and warranties in ARTICLE V.

7.5  

The Stockholder’s Further Information. The Stockholder shall, from time to time prior to Closing, supplement the information previously supplied to EMG with additional information that, if existing or known to it on the date of this Agreement, would have been required to be included therein.

8.1  

Accuracy of Representations. All representations and warranties of the Stockholders contained in this Agreement, the Related Documents and any certificate delivered by any of the Stockholders at or prior to Closing shall be, if specifically qualified by materiality, true in all respects and, if not so qualified, shall be true in all material respects, in each case on and as of the Closing Date with the same effect as if made on and as of the Closing Date, except for representations and warranties expressly stated to be made as of the date of this Agreement or as of another date other than the Closing Date and except for changes contemplated or permitted by this Agreement. The Stockholders shall have delivered to EMG a certificate dated as of the Closing Date to the foregoing effect.

8.2  

Covenants. The Stockholders shall, in all material respects, have performed and complied with each of the covenants, obligations and agreements contained in this Agreement and the Related Documents that are to be performed or complied with by them at or prior to Closing.

8.3  

Consents and Approvals. All consents, approvals, permits, authorizations and orders required to be obtained by the Stockholders from, and all registrations, filings and notices required to be made by the Stockholders with or given to, any Regulatory Authority or Person as provided herein shall have been obtained.

8.4  

Debt Forgiveness. The Stockholders acknowledge and agree that iAlarm shall have forgiven the Revolving Grid Note in favor of Elevate in a principal amount up to $600,000, and any amounts owed thereunder from Elevate, as of the Closing Date.

8.5  

Delivery of Exchange Shares. Each Stockholder shall have delivered certificates representing its Exchange Shares together with appropriate documents or stock powers to effectuate the Exchange.

9.1  

Accuracy of Representations. All representations and warranties of Elevate and EMG contained in this Agreement and the Related Documents and any other document, instrument or certificate delivered by any of EMG and Elevate at or prior to the Closing shall be, if specifically qualified by materiality, true and correct in all respects and, if not so qualified, shall be true and correct in all material respects, in each case on and as of the Closing Date with the same effect as if made on and as of the Closing Date, except for representations and warranties expressly stated to be made as of the date of this Agreement or as of another date other than the Closing Date and except for changes contemplated or permitted by this Agreement. EMG and Elevate shall have delivered to the Stockholders a certificate dated as of the Closing Date to the foregoing effect.

9.2  

Covenants. EMG and Elevate shall, in all material respects, have performed and complied with each obligation, agreement, covenant and condition contained in this Agreement and the Related Documents and required by this Agreement and the Related Documents to be performed or complied with by EMG and Elevate at or prior to Closing. EMG and Elevate shall have delivered to the Stockholders a certificate dated the Closing Date to the foregoing effect.

9.3  

Consents and Approvals. All consents; approvals, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Regulatory Authority or Person as provided herein shall have been obtained.

9.4  

Delivery of Documents. EMG and Elevate, as applicable, shall have executed and delivered, or caused to be executed and delivered, to the Stockholders the documents required by Section 2.4.2:

10.1

Release by the Stockholders.  As a material part of the consideration for the Exchange, each Stockholder, for itself and its respective predecessors, successors, affiliates, officers, directors, principals, partners, employees, executors, beneficiaries, representatives, agents, assigns, attorneys, and all others claiming by or through them hereby release and forever discharge Elevate and EMG and their respective predecessors, successors, affiliated entities, subsidiaries, parent companies, affiliates, officers, directors, principals, partners, employees, executors, beneficiaries, representatives, agents, assigns, and attorneys from any and all claims, causes of action, suits, proceedings, debts, contracts, controversies, claims and demands of any kind, nature or description, that were alleged, or could have been alleged, related to or arising out of any event, act or omission prior to the Closing Date, including but not limited to such Stockholder’s purchase, ownership or sale of Elevate Shares, whether based upon a tort, contract or other theory of recovery, and whether for compensatory damages, punitive damages or other relief in law, equity or otherwise.

10.2

Release by the Elevate and EMG.  As a material part of the consideration for the Exchange, each of Elevate and EMG, for itself and its respective predecessors, successors, affiliates, officers, directors, principals, partners, employees, executors, beneficiaries, representatives, agents, assigns, attorneys, and all others claiming by or through them hereby release and forever discharge each Stockholder and their respective predecessors, successors, affiliated entities, subsidiaries, parent companies, affiliates, officers, directors, principals, partners, employees, executors, beneficiaries, representatives, agents, assigns, and attorneys from any and all claims, causes of action, suits, proceedings, debts, contracts, controversies, claims and demands of any kind, nature or description, that were alleged, or could have been alleged, related to or arising out of any event, act or omission prior to the Closing Date, including but not limited to such Stockholder’s purchase, ownership or sale of Elevate Shares, whether based upon a tort, contract or other theory of recovery, and whether for compensatory damages, punitive damages or other relief in law, equity or otherwise.

10.3

Mutual Release.  The releases in this Article X (this “Release”) shall resolve any and all issues, disputes and claims between Elevate and EMG, on the one hand, and each of the Stockholders, on the other hand.  Neither party shall assert any claims against the other party arising from, relating to or in connection with any event, agreement, arrangement, understanding, act or omission prior to the date hereof. In consideration of the releases provided by each party and other valuable consideration provided and benefits received under this Release, each of the parties hereby releases and forever discharges the other party, and its respective agents, servants, officers, directors, employees, shareholders, attorneys, accountants, affiliates, partners, insurers, representatives, successors and assigns, from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature, known or unknown, existing at or before the date of this Release.

10.4

Civil Code Waiver.  Each of the parties acknowledges and understands that this Release includes a release of all known and unknown claims, whether fixed or contingent, at law or in equity.  In giving this release, which includes claims that may be unknown to the parties at present, each party acknowledges that it has read and understands Section 1542 of the California Civil Code which reads as follows:

11.1

Indemnification by iAlarm. iAlarm shall indemnify, defend and hold harmless EMG and Elevate, and each of their respective directors, officers, managers, employees, agents, attorney’s and representatives, from and against any and all Losses which may be incurred or suffered by any such party and which may arise out of or result from the operations of iAlarm after the Closing Date.

11.2

Indemnification by Elevate and EMG. Each of Elevate and EMG shall indemnify, defend and hold harmless each Stockholder and iAlarm and its directors, officers, managers, employees, agents, attorney’s and representatives, from and against any and all Losses which may be incurred or suffered by any such party hereto and which may arise out of or result from (i) any breach of any representation, warranty, covenant or agreement of Elevate or EMG contained in this Agreement made as of the Closing Date, (ii) from the operation and/or assets of iAlarm prior to the Closing Date, (iii) from any claims by third parties with respect to the iAlarm Business, iAlarm Assets or iAlarm Shares arising prior to the Closing, and (iv) any Taxes imposed upon iAlarm or its business, assets or operations, including interest, penalties and costs, for any period prior to the Closing.

11.3

Indemnification by the Stockholders. Each Stockholder shall indemnify, defend and hold harmless EMG and Elevate and their respective directors, officers, managers, employees, agents, attorney’s and representatives, from and against any and all Losses which may be incurred or suffered by any such party hereto and which may arise out of or result from any breach of any representation, warranty, covenant or agreement of such Stockholder contained in this Agreement made as of the Closing Date, or from the operation and/or assets of iAlarm subsequent to the Closing Date.

11.4

Notice to Indemnifying Party. If any party (the "Indemnified Party") receives notice of any claim or other commencement of any action or proceeding with respect to which any other party (or parties) (the "Indemnifying Party") is obligated to provide indemnification pursuant to Sections 11.1, 11.2 or 11.3, the Indemnified Party shall promptly give the Indemnifying Party written notice thereof, which notice shall specify in reasonable detail, if known, the amount or an estimate of the amount of the liability arising there from and the basis of the claim. Such notice shall be a condition precedent to any liability of the Indemnifying Party for indemnification hereunder, but the failure of the Indemnified Party to give prompt notice of a claim shall not adversely affect the Indemnified Party's right to indemnification hereunder unless the defense of that claim is materially prejudiced by such failure. The Indemnified Party shall not settle or compromise any claim by a third party for which it is entitled to indemnification hereunder without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld or delayed) unless suit shall have been instituted against it and the Indemnifying Party shall not have taken control of such suit after notification thereof as provided in Section 11.4.

11.5  

Defense by Indemnifying Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a Person who is not a party to this Agreement, the Indemnifying Party at its sole cost and expense may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal proceeding (i) if it acknowledges to the Indemnified Party in writing its obligations to indemnify the Indemnified Party with respect to all elements of such claim (subject to any limitations on such liability contained in this Agreement) and (ii) if it provides assurances, reasonably satisfactory to the Indemnified Party, that it will be financially able to satisfy such claims in full if the same are decided adversely. If the Indemnifying Party assumes the defense of any such claim or legal proceeding, it may use counsel of its choice to prosecute such defense, subject to the approval of such counsel by the Indemnified Party, which approval shall not be unreasonably withheld or delayed. The Indemnified Party shall be entitled to participate in (but not control) the defense of any such action, with its counsel and at its own expense; provided, however, that if the Indemnified Party, in its sole discretion, determines that there exists a conflict of interest between the Indemnifying Party (or any constituent party thereof) and the Indemnified Party, the Indemnified Party (or any constituent party thereof) shall have the right to engage separate counsel, the reasonable costs and expenses of which shall be paid by the Indemnified Party. If the Indemnifying Party assumes the defense of any such claim or legal proceeding, the Indemnifying Party shall take all steps necessary to pursue the resolution thereof in a prompt and diligent manner. The Indemnifying Party shall be entitled to consent to a settlement of, or the stipulation of any judgment arising from, any such claim or legal proceeding, with the consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed; provided, however, that no such consent shall be required from the Indemnified Party if (i) the Indemnifying Party pays or causes to be paid all Losses arising out of such settlement or judgment concurrently with the effectiveness thereof (as well as all other Losses theretofore incurred by the Indemnified Party which then remain unpaid or unreimbursed), (ii) in the case of a settlement, the settlement is conditioned upon a complete release by the claimant of the Indemnified Party and (iii) such settlement or judgment does not require the Encumbrance of any asset of the Indemnified Party or impose any restriction upon its conduct of business.

12.1  

Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to the Closing:

 

(a)

by mutual written agreement of Parties; or

 

(b)

by either Stockholders holding a majority of the Exchange Shares or EMG upon notification to the non-terminating party by the terminating party provided that:

(i)  

the terminating party is not in material breach of its obligations under this Agreement and there has been a material breach of any representation, warranty, covenant or agreement on the part of the non-terminating party set forth in this Agreement such that the conditions precedent to such party’s obligations will not be satisfied; or

(ii)  

any court of competent jurisdiction or other competent Governmental or Regulatory Authority shall have issued an order making illegal or otherwise permanently restricting, preventing or otherwise prohibiting the Exchange and such order shall have become final and non-appealable, or

(iii)  

the transaction has not closed by December 16, 2012.

 

(c)

by the Stockholders on or before December 16, 2012, if they discover though its due diligence review of iAlarm any breach of a representation or warranty of iAlarm or a condition that is reasonably likely to prevent iAlarm from being able to meet a covenant or a condition to Closing under this Agreement, provided that to terminate this Agreement under this provision, the Stockholders must give written notice of the breach or condition to iAlarm and EMG and iAlarm will have five days in which to cure the breach or condition, which if not cured to the reasonable satisfaction of the Stockholders, the Stockholders shall then provide written notice of termination of this Agreement within two days of the end of the cure period.  If the Stockholders elects not to terminate this Agreement after serving written notice of a breach or condition, then the representation or warranty or the covenant or condition will be deemed modified to either create an exception or waiver, and the Stockholders will not be in breach or put into breach of this Agreement for any purpose thereto related.

12.2  

Effect of Termination. If this Agreement is validly terminated by either the Stockholders or EMG pursuant to Section 12.1, this Agreement will forthwith become null and void and there will be no liability or obligation on the part of the parties hereto, except that nothing contained herein shall relieve any party hereto from liability for willful breach of its representations, warranties, covenants or agreements contained in this Agreement.

13.1  

Parties Obligated and Benefited. This Agreement shall be binding upon the Parties and their respective successors by operation of law and shall inure solely to the benefit of the Parties and their respective successors by operation of law, and no other Person shall be entitled to any of the benefits conferred by this Agreement. Without the prior written consent of the other Party, no Party may assign this Agreement or the Related Documents or any of its rights or interests or delegate any of its duties under this Agreement or the Related Documents.

13.2  

Publicity. The initial press release shall be a joint press release and thereafter iAlarm and EMG each shall consult with each other prior to issuing any press releases or otherwise making public announcements with respect to the Exchange and the other transactions contemplated by this Agreement and prior to making any filings with any third party and/or any Regulatory Authorities (including any national securities interdealer quotation service) with respect thereto, except as may be required by law or by obligations pursuant to any listing agreement with or rules of any national securities interdealer quotation service.

13.3  

Notices. Any notices and other communications required or permitted hereunder shall be in writing and shall be effective upon delivery by hand or upon receipt if sent by certified or registered mail (postage prepaid and return receipt requested) or by a nationally recognized overnight courier service (appropriately marked for overnight delivery) or upon transmission if sent by telex or facsimile (with request for immediate confirmation of receipt in a manner customary for communications of such respective type and with physical delivery of the communication being made by one or the other means specified in this Section as promptly as practicable thereafter). Notices shall be addressed as follows:

13.4  

Attorneys’ Fees. In the event of any action or suit based upon or arising out of any alleged breach by any Party of any representation, warranty, covenant or agreement contained in this Agreement or the Related Documents, the prevailing Party shall be entitled to recover reasonable attorneys’ fees and other costs of such action or suit from the other Party.

13.5  

Headings. The Article and Section headings of this Agreement are for convenience only and shall not constitute a part of this Agreement or in any way affect the meaning or interpretation thereof.

13.6  

Choice of Law. This Agreement and the rights of the Parties under it shall be governed by and construed in all respects in accordance with the laws of the State of Nevada, without giving effect to any choice of law provision or rule.

13.7  

Rights Cumulative. All rights and remedies of each of the Parties under this Agreement shall be cumulative, and the exercise of one or more rights or remedies shall not preclude the exercise of any other right or remedy available under this Agreement or applicable law.

13.8  

Further Actions. The Parties shall execute and deliver to each other, from time to time at or after Closing, for no additional consideration and at no additional cost to the requesting party, such further assignments, certificates, instruments, records, or other documents, assurances or things as may be reasonably necessary to give full effect to this Agreement and to allow each party fully to enjoy and exercise the rights accorded and acquired by it under this Agreement.

13.9  

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

13.10  

Entire Agreement. This Agreement (including the Exhibits, the Schedules and any other documents, instruments and certificates referred to herein, which are incorporated in and constitute a part of this Agreement) contains the entire agreement of the Parties.

13.11  

Survival of Representations and Covenants. Notwithstanding any right of any Party fully to investigate the affairs of iAlarm or EMG, as the case may be, and notwithstanding any knowledge of facts determined or determinable by any Party pursuant to such investigation or right of investigation, each Party shall have the right to rely fully upon the representations, warranties, covenants and agreements of other Parties contained in this Agreement. Each representation, warranty, covenant and agreement of the Parties contained herein shall survive the execution and delivery of this Agreement and the Closing and shall thereafter terminate and expire on the second anniversary of the Closing Date unless, prior to such date, a Party has delivered to the other Parties a written notice of a claim with respect to such representation, warranty, covenant or agreement; provided, however, the representations of Elevate and EMG set forth in Sections 3.4 and 3.7 shall survive indefinitely .  The Parties agree that any disclosure made on one schedule will be deemed disclosure on any other schedule calling for the same information.

 

 

 

Name

# of Shares

iAlarm, Inc.

10,000

10,000

HP Hall LLC (Hall, Ryan

Greathouse Management (Wayne Greathouse)

Howell Childrens Revocable Trust (Jashin Howell)

Mackey Family LLC

Lions Breath Holdings, LLC (Brent Detelich)

Balmer, Michael and Kelly

Bear Assets (Brad Moody)

Linda Cathey Living Trust DTD May 24, 2006

Maughan, Brandt Merlin

Martin, Michael

Miner Family Trust

Mollin, Marika

Peacock, Fred

Rowley, Clint

Hall, Ryan

Gray, Steve and Joanna

Sutherland, Donald

The Norton Family Trust, John P Norton TTEE

Sutherland Trust

Perigon Group

The Cathey Family 1995 Trust DTD July 11, 1995

Stephen H Wander, DC, PA (Wander, Stephen)

Earnest, Mark

Hall, Rhett

Holley, Greg

Jolley, Doug

Cook Residential Properties (Cook, Jeffrey)

Beede, Benjamin

Burton, Robyn

Feliciano, Danilo Santos

Feliciano, Reginald

Fritzchte, Trevor

Hall, Boyd

Hansen, Sam

Harrison, Brandon

Lohrmeyer, Gerald

Matthew Reese Investments

McCue, Pamela

Perog, Michael

Thurston, Sr, Wright

Bond, Josiah

De la Rosa, JD

Fowers, Dwight

Hall, Breanna

Hansen, Doug

Lynch, Gerald

Nunley, Randy

Olympus Capital (Baxter, Robert)

Speaker, Nathan

Thurston, Robert

Tripp, Alan

Dehoff, Frank

Kennedy, Ronald

Hansen, Mike

Ball, Brian