Summary of CHISTE CORP - Yahoo! Finance

Item 1.01 Entry into a Material Definitive Agreement.

On May 13, 2005, Chiste Corporation, a Nevada corporation ("Chiste"), entered into an Exchange Agreement ("Exchange Agreement") with HydroGen, LLC, an Ohio limited liability company ("HydroGen"), certain members of HydroGen owning approximately 69.7% of HydroGen's currently outstanding membership interests, and Keating Reverse Merger Fund, LLC ("KRM Fund"). Under the Exchange Agreement, Chiste will, at closing, acquire all of the outstanding membership interests of HydroGen ("Interests") from the members of HydroGen ("HydroGen Members"), and the HydroGen Members will contribute all of their Interests to Chiste. In exchange, Chiste will issue to the HydroGen Members shares of Series B Convertible Preferred Stock, par value $0.001 per share, of Chiste ("Preferred Shares"), with each Preferred Share being convertible into 185.35215 shares of Chiste's common stock ("Conversion Shares"). As a condition of the closing of the transactions under the Exchange Agreement ("Closing"), all of the current members of HydroGen must execute or join the Exchange Agreement and agree to receive Preferred Shares in exchange for their Interests. Following the Closing, HydroGen, LLC will continue as a wholly-owned subsidiary of Chiste.

Among the conditions to the Closing of the exchange transaction ("Exchange"), HydroGen will raise a minimum of $5,000,000 and a maximum of $10,000,000 in a private placement offering of Interests ("Placement") to accredited investors ("HydroGen Investors"). The holders of HydroGen's $2,000,000 of outstanding convertible bridge notes may convert their principal balances into Interests under the private placement, but any conversions will not count towards the minimum offering amount.

The HydroGen Investors will be required to execute or join the Exchange Agreement as part of their investment and, accordingly, the Interests received by the HydroGen Investors will be exchanged for Preferred Shares pursuant to the terms of the Exchange Agreement.

The consummation of the Placement is contingent on the completion of the Exchange and an additional $7,000,000 being invested in Preferred Shares of Chiste, promptly following the Exchange, by certain institutional investors ("Institutional Investors"). The proposed investment by the Institutional Investors ("Investment") will involve the purchase of Preferred Shares directly from Chiste promptly after the Exchange, and the purchase price of the Preferred Shares received by HydroGen Investors in the Placement as a result of the exchange of their Interests will be the same as the purchase price of the Preferred Shares paid by the Institutional Investors in the Investment.

Upon completion of the Exchange, the Placement and the Investment, the Preferred Shares issued by Chiste to the HydroGen Members, the HydroGen Investors and the Institutional Investors will represent in the aggregate 95.175% of Chiste's issued and outstanding shares of common stock on a fully diluted and as-converted basis (without giving effect to certain outstanding Chiste warrants that will expire June 30, 2005). Accordingly, the current stockholders of Chiste will own 4.825% of the outstanding common stock (or, 9,396,629 shares of Chiste common stock) immediately after completion of these transactions on a fully diluted and as-converted basis.

The issuance of the Preferred Shares in connection with the Exchange to the HydroGen Members and the HydroGen Investors and, upon conversion, the shares of Chiste common stock underlying the Preferred Shares, is intended to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof. The Investment is being offered pursuant to an exemption from registration contained in Regulation D, only to accredited investors. The Preferred Shares and the shares of Chiste common stock underlying the Preferred Shares may not be offered or sold in the United States unless they are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No registration statement covering these securities has been filed with the United States Securities and Exchange Commission ("Commission") or with any state securities commission in respect of this Offering. However, Chiste has agreed to register for public re-sale the common stock underlying the Preferred Stock issued in the Exchange held by certain HydroGen Members (none of which are the officers, directors or employees of HydroGen), the HydroGen Investors and the Institutional Investors.

Chiste is presently authorized under its Certificate of Incorporation to issue 65,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. Of the 10,000,000 shares of preferred stock authorized, 1,500,000 shares will be designated as Series B Convertible Preferred Stock pursuant to a certificate of designations ("Certificate of Designations"), which will be approved by Chiste's board of directors, and filed with and accepted by, the Secretary of State of the State of Nevada prior to the Closing of the Exchange. Currently, Chiste has 9,396,629 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding.

Under the terms of the Exchange Agreement, all of the outstanding Interests held by HydroGen Members and HydroGen Investors will be exchanged for Preferred Shares. Each Preferred Share will be convertible into 185.35215 shares of Chiste's common stock (the "Conversion Rate"). The Preferred Shares will immediately and automatically be converted into shares of Chiste's common stock (the "Mandatory Conversion") upon the approval by a majority of Chiste's stockholders (voting together on an as-converted-to-common-stock basis), following the Exchange and the Investment, of a 1 for 25 reverse stock split of Chiste's outstanding common stock ("Reverse Split").

The holders of shares of Series B Preferred Stock (including Institutional Investors acquiring such Preferred Shares following ht Exchange) will be entitled to vote together with the holders of the common stock, as a single class, upon all matters submitted to holders of common stock for a vote. Each share of Series B Preferred Stock will carry a number of votes equal to the number of shares of common stock issuable as if converted at the record date. As such, immediately following the Exchange and the Investment, the HydroGen Members, HydroGen Investors and the Institutional Investors will have 95.175% of the total combined voting power of all classes of Chiste stock entitled to vote.

Upon Mandatory Conversion of the Preferred Shares, and subject to an adjustment of the Conversion Rate as a result of the Reverse Split, the HydroGen Members, HydroGen Investors and the Institutional Investors will, in the aggregate, receive approximately 7,414,086 shares of Chiste's common stock, representing 95.175% of the outstanding shares of Chiste's common stock immediately following the Mandatory Conversion on a fully diluted basis (without giving effect to the Chiste warrants expiring June 30, 2005). The existing stockholders of Chiste will, following the Mandatory Conversion and Reverse Split, own approximately 375,865 shares of Chiste's common stock, representing 4.825% of the outstanding shares of common stock on a fully diluted basis.

In connection with the Reverse Split, Chiste's board of directors may, in its discretion, provide special treatment to certain Chiste stockholders to preserve round lot holders (i.e., holders owning at least 100 shares) after the Reverse Split. In the event Chiste's board determines to provide such special treatment, Chiste stockholders holding 2,500 or fewer shares of common stock but at least 100 shares of common stock will receive 100 shares of common stock after the Reverse Split, and persons holding less than 100 shares of common stock would not be affected. The terms and conditions of special treatment afforded to Chiste stockholders to preserve round lot stockholders, if any, including the record dates for determining which stockholders may be eligible for such special treatment, will be established in the discretion of Chiste's board of directors.

Effective as of the Closing of the Exchange transaction, and subject to applicable regulatory requirements, including the preparation, filing and distribution to the Chiste stockholders of a Schedule 14(f)-1 Notice to Stockholders at least ten (10) days prior to Closing, Kevin R. Keating, Chiste's current sole officer and director will resign, and the newly-appointed directors of Chiste will consist of two member of HydroGen's current management, Leo Blomen and Joshua Tosteson, two directors to be designated by Messrs. Blomen and Tosteson, and one member to be designated by KRM Fund (the "KRM Designate"). KRM Fund, certain HydroGen Members, the HydroGen Investors and the Institutional Investors, such persons in the aggregate representing more than a majority of the outstanding shares entitled to vote, have each agreed to vote their shares of Chiste's voting securities: (i) to elect the KRM Designate to Chiste's board for a period ranging from 90 days to one year following the Closing and to vote for such other persons that may be designated by Messrs. Blomen and Tosteson to fill any vacant position on the board of directors (other than KRM Designate), and (ii) to approve the Reverse Split and the change of Chiste's corporate name (collectively, the "Actions").

In connection with the Exchange Agreement, from the signing of the agreement until its termination or the consummation of the exchange transaction, KRM Fund has entered into a voting agreement with HydroGen under which (i) it agrees not to sell, pledge or otherwise dispose of any or all of its shares of common stock of Chiste or deposit them in a voting trust or enter into any other voting agreement, and it will vote or consent in favor of the adoption of the Exchange Agreement and the exchange transaction, if necessary, and against any merger, consolidation, sale of assets, recapitalization or other business combination other than the transaction with HydroGen. KRM Fund has granted to HydroGen a proxy in the event they do not take action to vote as provided above so that HydroGen may act in its stead. Nothing in the voting agreement will prevent any director of Chiste, whether an affiliate of KRM Fund or not, from exercising its fiduciary duty under Nevada law.

Additional information concerning Leo Blomen and Joshua Tosteson and the other directors to be designated by the parties will be included in the Schedule
14(f)-1 Notice to Stockholders which will be filed with the SEC and mailed to stockholders at least ten (10) days prior to the Closing of the Exchange.

At or prior to the Closing, Chiste will also enter into a certain financial advisory agreement with Keating Securities, LLC ("Keating Securities"), a registered broker-dealer, under which Keating Securities will be compensated by Chiste for its advisory services rendered to Chiste in connection with the Exchange. The transaction advisory fee will be $325,000, with the payment thereof being subject to the Closing of the Exchange.

Each of Chiste and HydroGen has agreed to continue to operate their business in the ordinary course prior to the Exchange. In addition, HydroGen is able to pursue the Placement and take the actions necessary to effect the Exchange and Chiste is able to pursue the Investment.

Under the Exchange Agreement, each of Chiste and HydroGen has agreed to do certain things, some of which are conditions to the exchange transaction. Each company is obligated to (a) obtain all necessary approvals, which includes approval by the members of HydroGen for various aspects of the transaction, (b) HydroGen is required to obtain agreements from its members to exchange their Interests and to amend all outstanding agreements to acquire Interests to substitute shares of Preferred Stock or common stock of Chiste in connection with any options, warrants and convertible securities and other agreements, (c) HydroGen must enter into agreements to eliminate any existing pre-emptive rights for Interests, (d) give the other access to the records and personnel to complete due diligence review, (e) proceed expeditiously to undertake all actions so as to be able to consummate the Exchange, (d) HydroGen must deliver audited financial statements including a balance sheet as of December 31, 2004 and statements of operations, cash flows and stockholders' equity from inception to December 31, 2004 and unaudited financial statements of HydroGen for the quarter ended prior to the Closing, and (e) neither party will solicit or initiate proposals from, provide information to or hold discussions with any party concerning any sale of assets or any material portion of any capital stock or any merger, consolidation, business combination, liquidation or similar transaction, subject to the fiduciary obligations of directors generally.

Consummation of the Exchange is conditioned upon the minimum amount of the Placement being held in escrow and available at the time of the consummation of the Exchange. Consummation of the Exchange is also contingent upon tax counsel to HydroGen issuing its opinion that the transaction will not be taxable to the holders of Interests (including the Interests sold in the Placement) pursuant to
Section 351 of the Internal Revenue Code. Hydrogen also will have entered into employment agreements with its senior executives. The management persons will have entered into a voting agreement, similar to that agreed to by the HydroGen Investors in the Placement, to vote in favor of the Actions following the Exchange and for the KRM Designate for a period of one year after the closing of the Exchange. In addition to the foregoing conditions, the Exchange is conditioned upon (i) preparation, filing and distribution to the Chiste stockholders of a Schedule 14(f)-1 Notice to Stockholders, and (ii) continued quotation of Chiste's common stock on the Over-the-Counter Bulletin Board.

Except for the representations and warranties relating to the ownership of . . .