Exhibit 2.1
Execution Document
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "AGREEMENT") is entered into as
of September 20, 2006, by and among GlobalOptions Group, Inc., a Nevada
corporation having a place of business located at 00 Xxxxxxxxxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000 ("GLOBAL"), LocatePlus Holdings Corporation, a
Delaware corporation having a place of business located at 000 Xxxxxxxx Xxxxxx,
Xxxxx 000X, Xxxxxxx, XX 00000 ("LOCATEPLUS"), and LocatePlus Acquisition
Corporation, a Delaware corporation having a place of business located at 00
Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 ("LPA").
INTRODUCTION
A. The respective Boards of Directors of the parties have (i)
determined that it is in the best interests of such corporations and their
respective stockholders to consummate the merger of LPA with and into LOCATEPLUS
(the "MERGER") and (ii) approved and declared advisable this Agreement, the
Merger and the other transactions contemplated by this Agreement.
B. Global, as the sole stockholder of LPA, has approved this Agreement,
the Merger and the other transactions contemplated by this Agreement pursuant to
action taken by written consent in accordance with the requirements of the
Delaware General Corporation Law ("DGCL") and the corporate bylaws of LPA.
C. Pursuant to the Merger, among other things, the outstanding shares
of capital stock of LOCATEPLUS shall be converted into the right to receive upon
Closing (as hereinafter defined) and thereafter, the Merger Consideration (as
hereinafter defined).
D. The parties to this Agreement intend to adopt this Agreement as a
plan of reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "CODE"), and the regulations promulgated
thereunder, and intend that the Merger and the other transactions contemplated
by this Agreement be undertaken pursuant to such plan.
E. The parties intend that the Merger shall qualify as a
"reorganization," within the meaning of Code Section 368(a), and that Global,
LPA and LOCATEPLUS will each be a "party to a reorganization," within the
meaning of Code Section 368(b), with respect to the Merger.
AGREEMENT
Now, therefore, in consideration of the representations, warranties and
covenants contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following meanings
(such meaning to be equally applicable to both the singular and plural forms of
the terms defined):
"ACQUISITION PROPOSAL" means any written offer or proposal for, or any
written indication of interest in, a merger or other business combination
involving LOCATEPLUS or the acquisition of all or substantially all the assets
of LOCATEPLUS, other than the transactions contemplated by this Agreement.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person at any time during the period for which the determination of
affiliation is being made.
"Agreement Date Global FMV" shall have the meaning ascribed thereto in
Section 2.2 (b).
"CERTIFICATE OF MERGER" shall mean the certificate of merger in
substantially the form attached hereto as EXHIBIT A.
"CLOSING" shall have the meaning ascribed thereto in Section 2.1(a).
"CLOSING DATE" shall have the meaning ascribed thereto in Section
2.1(a).
"CODE" has the meaning ascribed thereto in the preambles to this
Agreement.
"DGCL" has the meaning ascribed thereto in the preambles to this
Agreement.
"DISSENTING SHARES" shall have the meaning ascribed thereto in Section
2.5
"EFFECTIVE DATE" shall have the meaning ascribed thereto in Section
2.1(a).
"EFFECTIVE TIME" shall have the meaning ascribed thereto in Section
2.1(a).
"ENVIRONMENTAL LAW" means any and all federal, state, local and foreign
laws, common laws, statutes, ordinances, rules, regulations or other legal
requirement relating to (i) the protection of the environment (including air,
water vapor, surface water, groundwater, drinking water supply, surface or
subsurface land) or (ii) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling, release
or disposal of, Hazardous Materials.
"ENVIRONMENTAL PERMIT" means, with respect to any of the parties
hereto, any permit, license, certificate, approval or authorization issued by a
Governmental Entity that is required for the operation of such party's business
or the holding of any of its material assets or properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE RATIO" shall have the meaning ascribed thereto in Section
2.2(a)
"EXCHANGE SHARES" shall have the meaning ascribed thereto in Section
2.2(a).
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time.
"GLOBAL 8-K REPORTS" has the meaning ascribed thereto in Section 4.4.
"GLOBAL 10-K REPORT" has the meaning ascribed thereto in Section 4.4.
"GLOBAL 10-Q REPORTS" has the meaning ascribed thereto in Section 4.4.
"GLOBAL COMMON STOCK" means the common stock, par value $.001 per
share, of Global.
"GLOBAL EXCHANGE SHARES" shall have the meaning ascribed thereto in
Section 2.2(a)
"GLOBAL INSIDERS" has the meaning ascribed thereto in Section 4.13.
"GLOBAL INTELLECTUAL PROPERTY" means Patents and Know-How.
"GLOBAL BALANCE SHEET" has the meaning ascribed thereto in Section 4.6.
"GLOBAL FINANCIAL STATEMENTS" has the meaning ascribed thereto in
Section 4.15
"GLOBAL PROXY STATEMENTS" has the meaning ascribed thereto in Section
4.4.
"GLOBAL RETURNS" has the meaning ascribed thereto in Section 4.10.
"GLOBAL SEC FILINGS" has the meaning ascribed thereto in Section 4.4.
"GLOBAL STOCK OPTIONS" means all options, warrant or other rights
(including subscription or preemptive rights) to purchase (i) any shares of
Global Common Stock, (ii) any other shares of capital stock of Global or (iii)
any security convertible into or exchangeable for any shares of capital stock of
Global, in each case, outstanding immediately prior to the Effective Time.
"GOVERNMENTAL ENTITY" means any federal, state, municipal, foreign or
other government, governmental department, commission, board, bureau, agency or
instrumentality, or any private or public court or tribunal, whether domestic or
foreign.
"HAZARDOUS MATERIALS" shall have the meaning ascribed thereto in
Section 3.15(a).
"HAZARDOUS MATERIALS ACTIVITIES" shall have the meaning ascribed
thereto in Section 3.15(a).
"HOLDER" means any holder of Global Common Stock who was, prior to the
Effective Time, a holder of LOCATEPLUS Common Stock.
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"INFORMATION STATEMENT" shall have the meaning ascribed thereto in
Section 5.13.
"INITIAL GLOBAL EXCHANGE SHARES" shall have the meaning ascribed
thereto in Section 2.2 (b).
"KNOW-HOW" has the meaning ascribed thereto in Section 3.20(a).
"LIENS" has the meaning ascribed thereto in Section 3.3(a).
"LOCATEPLUS COMMON STOCK" means the common stock, par value $.001 per
share, of LOCATEPLUS.
"LOCATEPLUS EXCHANGE SHARES" shall have the meaning ascribed thereto in
Section 2.2(a).
"LOCATEPLUS FINANCIAL STATEMENTS" has the meaning ascribed thereto in
Section 3.10.
"LOCATEPLUS INSIDERS" has the meaning ascribed thereto in Section 3.8.
"LOCATEPLUS INTELLECTUAL PROPERTY" has the meaning ascribed thereto in
Section 3.20(a).
"LOCATEPLUS 8-K REPORTS" has the meaning ascribed thereto in Section
3.24.
"LOCATEPLUS 10-K REPORT" has the meaning ascribed thereto in Section
3.24.
"LOCATEPLUS 10-Q REPORTS" has the meaning ascribed thereto in Section
3.24.
"LOCATEPLUS LATEST BALANCE SHEET" has the meaning ascribed thereto in
Section 3.14.
"LOCATEPLUS PLANS" has the meaning ascribed thereto in Section 3.17(a).
"LOCATEPLUS RETURNS" has the meaning ascribed thereto in Section
3.6(a).
"LOCATEPLUS STOCK" means the LOCATEPLUS Common Stock
"LOCATEPLUS STOCK OPTION" means any stock option granted, whether or
not exercisable, and not exercised or expired, to a current or former employee,
director, advisor or independent contractor of LOCATEPLUS to purchase LOCATEPLUS
Stock (or any other capital stock of LOCATEPLUS or any security convertible into
or exchangeable for any shares of capital stock of LOCATEPLUS), pursuant to any
stock option, stock bonus, stock award, or stock purchase plan, program, or
arrangement of LOCATEPLUS in each case, outstanding immediately prior to the
Effective Time.
"LOCATEPLUS WARRANT" means any warrant or other right granted, whether
or not exercisable, and not exercised or expired, to purchase LOCATEPLUS Stock
(or any other capital stock of LOCATEPLUS or any security convertible into or
exchangeable for any shares of capital stock of LOCATEPLUS), pursuant to any
contract or agreement entered into by the Company, in each case, outstanding
immediately prior to the Effective Time.
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"LOCATEPLUS STOCKHOLDER MEETING" shall have the meaning ascribed
thereto in Section 5.8(a).
"LPA COMMON STOCK" shall have the meaning ascribed thereto in Section
2.2(a).
"MATERIAL ADVERSE EFFECT" shall, with respect to any entity, mean a
material adverse effect on the business, operations, results of operations or
financial condition of such entity taken as a whole, but shall exclude any
effect resulting from or relating to (i) general economic conditions or general
effects on the industries in which such entity operates, (ii) acts of terrorism
or war (whether or not threatened, pending or declared), or (iii) the public
announcement of this Agreement or the transactions contemplated hereby.
"MERGER CONSIDERATION" means (a) the shares of Global Common Stock
issuable in connection with the Merger to the holders of LOCATEPLUS Common Stock
pursuant to Section 2.2(a), and (b) the securities to purchase Global Common
Stock issuable in connection with the Merger to the holders of securities to
purchase LOCATEPLUS Stock Options pursuant to Section 2.6.
"MERGER" shall have the meaning ascribed thereto in the introduction of
this Agreement.
"PATENTS" has the meaning ascribed thereto in Section 3.20(a).
"PERSON" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company or
partnership, joint venture, estate, trust, proprietorship, association,
organization, labor union or Governmental Entity.
"REGISTRABLE SECURITIES" shall mean all shares of Global Common Stock
issued as Merger Consideration in exchange for shares of LOCATEPLUS Common Stock
pursuant to Section 2.2(a).
"REQUISITE LOCATEPLUS STOCKHOLDER VOTE" shall have the meaning ascribed
thereto in Section 3.22.
"REQUISITE GLOBAL AND LPA STOCKHOLDER VOTES" shall have the meaning
ascribed thereto in section 4.2.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SURVIVING COMPANY" shall have the meaning ascribed thereto in Article
2.
"TAX or TAXES" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, environmental taxes,
customs duties, capital stock, franchise, employees' income withholding, foreign
or domestic withholding, social security, unemployment, disability, workers'
compensation, employment-related insurance, real property, personal property,
sales, use, transfer, value added, alternative or add-on minimum or other
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governmental tax, fee, assessment or charge of any kind whatsoever including any
interest, penalties or additions to any Tax or additional amounts in respect of
the foregoing.
ARTICLE 2
MERGER
At the Effective Time, and subject to and upon the terms and conditions
of this Agreement and the applicable provisions of the DGCL, LPA shall be merged
with and into LOCATEPLUS, the separate corporate existence of LPA shall cease,
and LOCATEPLUS shall continue as the surviving corporation and as a wholly owned
subsidiary of Global. LOCATEPLUS, as the surviving corporation after the Merger,
is hereinafter sometimes referred to as the "SURVIVING COMPANY."
2.1 EFFECTS OF MERGER.
(a) Subject to the provisions of Articles 6 and 7, the closing
of the Merger and the other transactions contemplated hereby shall take place at
the earliest practicable time after the satisfaction or waiver of the conditions
in Article 6 (the "CLOSING") at such location and on such date as LOCATEPLUS and
Global mutually agree, but in no event later than ten (10) business days after
all such conditions have been satisfied or waived, or on such other date as may
be mutually agreed by the parties hereto (the "CLOSING DATE"). On the Closing
Date, to effect the Merger the parties hereto will cause the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware in
accordance with the DGCL. The Merger shall be effective when the Certificate of
Merger is filed with the Delaware Secretary of State (the "EFFECTIVE TIME"). As
used herein, the term "EFFECTIVE DATE" shall mean the date on which the
Certificate of Merger is filed with the Secretary of State of the State of
Delaware.
(b) Each of Global, LOCATEPLUS and LPA shall use its
reasonable best efforts to take all such action as may be necessary or
appropriate to effectuate the Merger in accordance with the DGCL. If at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Company with full
right, title and possession to all properties, rights, privileges, immunities,
powers and franchises of either LOCATEPLUS or LPA, the officers of Global and
the Surviving Company are fully authorized in the name of LOCATEPLUS and LPA to
take, and shall take, all such lawful and necessary action.
(c) At the Effective Time, the certificate of incorporation of
the Surviving Company shall be the certificate of incorporation of LPA as in
effect immediately prior to the Effective Time, until thereafter amended as
provided by law and such certificate of incorporation; PROVIDED, HOWEVER, that
Article I of the certificate of incorporation of the Surviving Company shall
read as follows: "The name of the corporation is "LOCATEPLUS HOLDINGS
CORPORATION." The bylaws of LPA as in effect immediately prior to the Effective
Time shall be the bylaws of the Surviving Company at the Effective Time, until
thereafter amended as provided by law and such bylaws.
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2.2 EFFECT ON LOCATEPLUS COMMON STOCK AND LPA COMMON STOCK. To
effectuate the Merger, and subject to the terms and conditions of this
Agreement:
(a) Global Exchange Shares are shares of Global Common Stock to be
issued on the Effective Date to holders of LOCATEPLUS Exchange Shares.
LOCATEPLUS Exchange Shares are shares of LOCATEPLUS Common Stock, plus Qualified
Options and Qualified Warrants, each as defined in Section 2.6 below, issued and
outstanding immediately prior to the Effective Date. Each holder of LOCATEPLUS
Exchange Shares shall have the right to receive Global Exchange Shares equal to
the number of LOCATEPLUS Exchange Shares owned by that holder equal to the
Exchange Ratio, as determined below, rounded to the nearest whole Global
Exchange Share.
(b) The number of Initial Global Exchange Shares shall be 7,003,371
Shares (the "Initial Global Exchange Shares"). Based upon the median of the
closing trade price per share of Global Common Stock in the domestic
over-the-counter market as reported by the National Quotation Bureau
Incorporated for the 60 trading days immediately preceding the date of this
Agreement ($2.05), the total equity consideration is Fourteen Million Three
Hundred Fifty Six Thousand Nine Hundred and Eleven Dollars ($14,356,911), plus
the assumption of non-Qualified Warrants, described in Section 2.6. The number
of Initial Global Exchange Shares may be subject to adjustment on the Effective
Date to a different number as follows: The parties shall first determine the
Fair Market Value Per Share (the "Global FMV") of the Common Stock of Global
immediately prior to the Effective Date. The Global FMV shall equal the average
of the closing trade price per share of Global Common Stock in the domestic
over-the-counter market as reported by the National Quotation Bureau
Incorporated, in each such case averaged over a period of 60 trading days
immediately prior to the Effective Date.
(i) If the Global FMV is greater than or equal to $1.64 or
less than or equal to $2.46, then the number of Global Exchange Shares shall not
be adjusted but shall be the Initial Global Exchange Shares set forth above
(7,003,371);
(ii) If the Global FMV is greater than $2.46, then the number
of Global Exchange Shares shall be equal to $ 2.46 x 7,0003,371 = $17,228,293,
divided by the Global FMV.
(iii) If the Global FMV is less than $1.64, then the number of
Global Exchange Shares shall be equal to $ $1.64 x 7,003,371 = $11,485,528,
divided by the Global FMV.
(c) The Exchange Ratio, to be used in determining the number of shares
of Global Common Stock to be issued to holders of LOCATEPLUS Common Stock
(including Qualified Options and Warrants, defined in Section 2.6) shall equal
(i) the number of Global Exchange Shares, as determined above, divided by (ii)
the number of LOCATEPLUS Exchange Shares.
(d) Each share of LOCATEPLUS Stock held immediately prior to the
Effective Date by LOCATEPLUS as treasury stock will be cancelled and
extinguished without any conversion thereof and no payment will be made with
respect to such shares;
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(e) Each share of LOCATEPLUS Stock issued and outstanding immediately
prior to the Effective Date and owned by LPA or Global, if any, shall be
cancelled and extinguished without any conversion thereof and no payment shall
be made with respect thereto;
(f) Each share of LPA Common Stock issued and outstanding immediately
prior to the Effective Date will be automatically converted into one validly
issued, fully paid and nonassessable share of common stock of the Surviving
Company; and
(g) All Global Exchange Shares issued upon the cancellation of
LOCATEPLUS Exchange Shares in accordance with the above terms and conditions
shall be deemed to have been issued and paid in full satisfaction of all rights
pertaining to such LOCATEPLUS Exchange Shares.
2.3 RIGHTS OF HOLDERS OF LOCATEPLUS EXCHANGE SHARES.
(a) From and after the Effective Time and until surrendered for
exchange, each outstanding stock certificate that immediately prior to the
Effective Time represented LOCATEPLUS Exchange Shares shall be deemed for all
purposes, to evidence ownership of and to represent the number of whole Global
Exchange Shares into which such LOCATEPLUS Exchange Shares shall have been
converted pursuant to Section 2.2(a) above. The record holder of each such
outstanding certificate representing LOCATEPLUS Exchange Shares, shall, after
the Effective Time, be entitled to vote the Global Exchange Shares into which
such LOCATEPLUS Exchange Shares shall have been converted on any matters on
which the holders of record of the Global Common Stock, as of any date
subsequent to the Effective Time, shall be entitled to vote. In any matters
relating to ownership of such certificates of LOCATEPLUS Exchange Shares, Global
may rely conclusively upon the record of stockholders maintained by LOCATEPLUS
containing the names and addresses of the holders of record of LOCATEPLUS Stock
on the Effective Date.
(b) On the Effective Date, Global shall have reserved a sufficient
number of authorized but unissued shares of Global Common Stock for issuance in
connection with the issuance of the Merger Consideration upon automatic
conversion of LOCATEPLUS Exchange Shares into Global Exchange Shares at the
Effective Time.
2.4 PROCEDURE FOR EXCHANGE OF CERTIFICATES.
(a) After the Effective Time, each holder of certificate(s) theretofore
evidencing outstanding LOCATEPLUS Exchange Shares shall, upon surrender of such
certificate(s) to the registrar or transfer agent for Global Common Stock, be
entitled to receive certificates representing the number of whole Global
Exchange Shares into which such LOCATEPLUS Exchange Shares theretofore
represented by the certificates so surrendered shall have been converted as
provided in Section 2.2(a) hereof. Global shall not be obligated to deliver
certificates representing Global Exchange Shares to which any holder of
LOCATEPLUS Exchange Shares is entitled, until such holder surrenders the
certificate(s) representing such LOCATEPLUS Exchange Shares. Upon surrender,
each certificate evidencing LOCATEPLUS Exchange Shares shall be canceled. If
there is a transfer of LOCATEPLUS Exchange Share ownership which is not
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registered in the transfer records of LOCATEPLUS, a certificate representing the
proper number of shares of Global Common Stock may be issued to a Person other
than the Person in whose name the certificate so surrendered is registered if:
(x) upon presentation to the Secretary of Global, such certificate shall be
properly endorsed or otherwise be in proper form for transfer, (y) the Person
requesting such transfer shall pay any transfer or other taxes required by
reason of the issuance of shares of or certificates representing shares of
Global Common Stock to a Person other than the registered holder of such
certificate or establish to the reasonable satisfaction of Global that such tax
has been paid or is not applicable, and (z) the issuance of such shares of or
certificates representing shares of Global Common Stock shall not, in the sole
discretion of Global, violate the requirements of the Securities Act.
(b) In the event any certificate for shares of LOCATEPLUS Stock shall have been
lost, stolen or destroyed, Global shall issue in exchange for such lost, stolen
or destroyed certificate, upon the making of a sworn affidavit of that fact by
the holder thereof, one or more certificates representing such shares of Global
Common Stock as provided herein; PROVIDED, HOWEVER, that Global, in its
discretion and as a condition precedent to the issuance of such certificates,
may require the holder of the shares represented by such lost, stolen or
destroyed certificate to deliver a bond in such sum as it may direct as
indemnity against any claim that may be made against Global or any other party
with respect to the certificate alleged to have been lost, stolen or destroyed.
2.5 DISSENTING SHARES
(a) LOCATEPLUS Stock outstanding immediately prior to the Effective
Time and held by a stockholder of LOCATEPLUS who has not voted in favor of the
Merger or consented thereto in writing and who has, in a timely manner, properly
exercised and preserved appraisal rights with respect to such shares, to the
extent legally available in accordance with Section 262 of the DGCL (the
"DISSENTING SHARES") shall not be converted into or represent a right to receive
shares of Global Common Stock pursuant to Section 2.2(a) above, but the holders
thereof shall be entitled only to such rights, if any, as may be available under
Section 262 of the DGCL. Each holder of Dissenting Shares who becomes legally
entitled to payment for such shares pursuant to Section 262 of the DGCL shall
receive payment therefor from the Surviving Company in accordance with such
laws; PROVIDED, HOWEVER, that if any such holder of Dissenting Shares shall be
determined not to be legally entitled to any rights of appraisal under Section
262 or to have effectively withdrawn such holder's demand for appraisal of such
shares or lost such holder's right to appraisal and payment of such shares under
Section 262 of the DGCL, such holder or holders (as the case may be) shall have
forfeited any right to appraisal of such shares and each such share shall
thereupon be deemed to have been converted, as of the Effective Time, into and
represent the right to receive the shares of Global Common Stock as provided in
Section 2.2(a) above.
(b) Any payments in respect of Dissenting Shares shall not exceed
twenty percent (20%) of the Merger Consideration and will be made by the
Surviving Company, provided, however, any such payment required under this
Section 2.5, shall reduce the Merger Consideration by an amount equal to such
payment.
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2.6 LOCATEPLUS STOCK OPTIONS AND WARRANTS.
(a) LOCATEPLUS shall not grant any LOCATEPLUS Stock Option or any other
option, warrant or right to acquire LOCATEPLUS Common Stock or establish any
other such stock option or purchase plan on or after the date of this Agreement.
Except as to those Stock Options set forth on Schedule 2.6(a) ("Qualified
Options"), LOCATEPLUS shall terminate all LOCATEPLUS Stock Options outstanding
prior to the Effective Time. Each Qualified Option shall be entitled at the
Effective Time to receive that number of Global Exchange Shares as shall be
assigned to that Option in Schedule 2.6(a), adjusted as of the Effective Date to
reflect any adjustment in the number of Global Exchange Shares pursuant to
Section 2.2(b). The Global Exchange Shares to be issued pursuant to this Section
2.6(a) shall be included as part of the Merger Consideration (not in addition
thereto).
(b) At the Effective Time, each outstanding LOCATEPLUS Warrant listed
on Schedule 2.6(b) (a "Qualified Warrant"), and shall thereafter represent a
warrant or other right, as applicable, to purchase that number of Global
Exchange Shares as shall be assigned to that Warrant in Schedule 2.6(b),
adjusted as of the Effective Date to reflect any adjustment in the number of
Global Exchange Shares pursuant to Section 2.2(b). The Global Exchange Shares to
be issued pursuant to this Section 2.6(b) shall be included as part of the
Merger Consideration (not in addition thereto). In addition to the rights
granted above by Global, each such Qualified Warrant holder shall have the
right, prior to the Effective Date, to notify LOCATEPLUS in writing that such
holder desires to surrender such Qualified Warrant in exchange for Global
Exchange Shares allocated to such Warrant as part of the Merger Consideration.
If not so exercised by the holder, this right shall expire as of the Effective
Time. At the Effective Time, Global shall issue to each Qualified Warrant holder
who has provided notice the number of Global Exchange shares allocated to that
Warrant, in cancellation of the Warrant. Global shall, at the Effective Time,
also reserve and set aside for future issuance upon exercise such number of
Global Exchange Shares as shall be required to be issued by it upon exercise of
any Qualified Warrants for which notice has not been received by LOCATEPLUS as
required above. Such Global Exchange Shares shall be removed from, and shall
reduce, the number of Global Exchange Shares to be issued as Merger
Consideration.
(c) With respect to LOCATEPLUS Warrants which are not Qualified
Warrants and are listed in Schedule 2.6(c), LocatePlus shall either cause
Warrant holders to convert them at the Effective Time to equivalent warrants or
other rights to acquire Global Common Stock acceptable to Global, or shall make
such alternate arrangements as shall be mutually acceptable to Global and each
individual holder. In the event LocatePlus cannot arrange an alternative
arrangements with such non-Qualified Warrant holders, Global shall assume such
non-Qualified Warrants and provide such non-Qualified Warrant holders similar
terms and conditions for warrants to acquire Global Common Stock, and such
issuance of Global warrants shall not offset any value to the Merger
Consideration.
(d) Prior to the Effective Time, LOCATEPLUS shall use its best efforts
to (i) obtain any required consents from holders of LOCATEPLUS Warrants and (ii)
make any amendments to the terms of such stock option, warrant or other right or
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compensation plans or arrangements that are necessary to give effect to the
transactions contemplated by Section 2.6(a).
(e) Global shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Global Common Stock for delivery upon
exercise of all LOCATEPLUS Warrants assumed pursuant to the terms set forth in
this Section 2.6. Global shall cause the shares of Global Common Stock issuable
upon exercise of all assumed LOCATEPLUS Warrants to be registered, or to be
issued pursuant to a then-effective registration statement, no later than 90
days after the Effective Date (or such longer time as may be prescribed by
applicable law or regulation) on any appropriate form promulgated by the SEC
and shall use its best efforts to maintain the effectiveness of such
registration statement or registration statements for so long as such assumed
LOCATEPLUS Warrants remain outstanding.
2.7 DIRECTORS AND OFFICERS OF THE SURVIVING COMPANY.
(a) The directors of LOCATEPLUS immediately prior to the Effective Time
shall tender their resignations, effective as of the Effective Time, in
conformity with Section 6.2(h). As sole stockholder of the Surviving Company,
Global shall elect directors of the Surviving Company to take office at the
Effective Time in accordance with applicable law and the Certificate of
Incorporation and By-Laws of the Surviving Company.
(b) From and after the Effective Time, the officers of LOCATEPLUS
immediately prior to the Effective Time shall be the officers of the Surviving
Company, each to hold office until their respective successors are duly
appointed or such persons are removed from office in accordance with applicable
law and the certificate of incorporation and bylaws of the Surviving Company.
2.8 TAX TREATMENT. It is intended by the parties hereto that the Merger
shall constitute a reorganization within the meaning of Section 368(a) of the
Code. Each of the parties hereto adopts 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. Both prior to and after the Closing, each
party's books and records shall be maintained, and all federal, state and local
income tax returns and schedules thereto shall be filed in a manner consistent
with the Merger being qualified as a tax-free reorganization under Section
368(a) of the Code (and comparable provisions of any applicable state or local
laws).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LOCATEPLUS
LOCATEPLUS hereby represents and warrants, as of the date of this
Agreement and as of the Effective Time, as follows:
3.1 ORGANIZATION AND QUALIFICATION. LOCATEPLUS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to own, lease and
operate its assets and to carry on its business as now conducted. The copies of
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the certificate of incorporation and bylaws of LOCATEPLUS that have been made
available to Global on or prior to the date of this Agreement are correct and
complete copies of such documents as in effect as of the date hereof. LOCATEPLUS
is duly licensed or qualified to do business and is in good standing in every
jurisdiction in which the nature of its business or the ownership or leasing of
its properties requires it to be licensed or qualified, except where the failure
to be so licensed or qualified would not have a Material Adverse Effect on
LOCATEPLUS.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT; NON-CONTRAVENTION. LOCATEPLUS
has the requisite corporate power and authority to enter into this Agreement and
to carry out its obligations hereunder, including the termination of any stock
option plans and options not listed in Schedule 2.6(a) as Qualified Options, as
provided in Section 2.6 of this Agreement. The execution and delivery of this
Agreement by LOCATEPLUS and the consummation by LOCATEPLUS of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
LOCATEPLUS and, except for approval of this Agreement and the Merger by the
requisite vote of LOCATEPLUS's stockholders (the "REQUISITE LOCATEPLUS
STOCKHOLDER VOTE"), no other corporate proceedings on the part of LOCATEPLUS are
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by LOCATEPLUS and, assuming it is a valid and
binding obligation of Global and LPA, constitutes a valid and binding obligation
of LOCATEPLUS enforceable in accordance with its terms except as enforcement may
be limited by general principles of equity whether applied in a court of law or
a court of equity and by bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally. LOCATEPLUS is not subject to, or
obligated under, any provision of (a) its certificate of incorporation or
bylaws, (b) any agreement, arrangement or understanding, (c) any license,
franchise or permit or (d) subject to obtaining the approvals referred to in the
next sentence, any law, regulation, order, judgment or decree, which would
conflict with, be breached or violated, or in respect of which a right of
termination or acceleration or any security interest, charge or encumbrance on
any of its assets would be created, by the execution, delivery or performance of
this Agreement, or the consummation of the transactions contemplated hereby,
other than any such conflicts, breaches, violations, rights of termination or
acceleration or security interests, charges or encumbrances which, in the case
of clauses (b), (c) or (d), individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect on LOCATEPLUS.
Except for (a) approvals under applicable Security Act or blue sky laws (b) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware, or (c) the filings with the SEC no authorization, consent or approval
of, or filing with, any public body, court or authority is necessary on the part
of LOCATEPLUS for the consummation by LOCATEPLUS of the transactions
contemplated by this Agreement, except for such authorizations, consents,
approvals and filings as to which the failure to obtain or make the same would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on LOCATEPLUS or materially adversely affect the consummation of
the transactions contemplated hereby.
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3.3 CAPITALIZATION.
(a) The authorized, issued and outstanding shares of capital
stock of LOCATEPLUS as of the date hereof are set forth on SCHEDULE 3.3(A). All
issued and outstanding shares of LOCATEPLUS Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have not been issued in
violation of any preemptive rights, and are free from any restrictions on
transfer (other than restrictions under the Securities Act or state securities
laws) or any options, pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "LIENS"). Other than
as described on SCHEDULE 3.3(A), LOCATEPLUS has no other equity securities or
securities containing any equity features that are authorized, issued or
outstanding. Except as set forth in SCHEDULE 3.3(A), there are no agreements or
other rights or arrangements existing which provide for the sale or issuance of
capital stock by LOCATEPLUS and there are no rights, subscriptions, warrants,
options, conversion rights or agreements of any kind outstanding to purchase or
otherwise acquire from LOCATEPLUS any shares of capital stock or other
securities of LOCATEPLUS of any kind. Except as set forth on SCHEDULE 3.3(a),
there are no agreements or other obligations (contingent or otherwise) which may
require LOCATEPLUS to repurchase or otherwise acquire any shares of its capital
stock.
(b) SCHEDULE 3.3(B) contains a list of the names, addresses
and tax identification numbers of the holders of record as of September 10, 2006
of all issued and outstanding shares of LOCATEPLUS Stock and the number of
shares of LOCATEPLUS Common each of them holds. Schedules 2.6(a) and 2.6(b)
contain lists of the names, addresses and tax identification numbers of the
holders of record as of September10, 2006, of all vested Stock Options and
Warrants of LocatePlus Stock and the number of shares representing such Stock
Options and/or Warrants.
(c) LOCATEPLUS does not own, and is not a party to any
contract to acquire, any equity securities or other securities of any entity or
any direct or indirect equity or ownership interest in any other entity. To
LOCATEPLUS's knowledge, there exist no voting trusts, proxies, or other
contracts with respect to the voting of shares of capital stock of LOCATEPLUS.
3.4 LITIGATION. There are no actions, suits, proceedings, orders or
investigations pending or, to the knowledge of LOCATEPLUS, threatened against
LOCATEPLUS, at law or in equity, or before or by any federal, state or other
Governmental Entity.
3.5 NO BROKERS OR FINDERS. Other than as described on Schedule 3.5,
there are no claims for brokerage commissions, finders' fees, investment
advisory fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement, understanding,
commitment or agreement made by or on behalf of LOCATEPLUS.
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3.6 TAX MATTERS.
(a) Except as disclosed on SCHEDULE 3.6, (i) LOCATEPLUS has
timely filed (or has had timely filed on its behalf) all returns, declarations,
reports, estimates, information returns, and statements, including any schedules
and amendments to such documents (the "LOCATEPLUS RETURNS"), required to be
filed or sent by it in respect of any Taxes or required to be filed or sent by
it to any taxing authority having jurisdiction; (ii) all such LOCATEPLUS Returns
are complete and accurate in all material respects; (iii) LOCATEPLUS has timely
and properly paid (or has had paid on its behalf) all Taxes required to be paid
by it; (iv) LOCATEPLUS has established on the LOCATEPLUS Latest Balance Sheet,
in accordance with GAAP, reserves that are adequate for the payment of any Taxes
not yet due and payable; and (v) LOCATEPLUS has complied with all applicable
laws, rules, and regulations relating to the collection or withholding of Taxes
from third parties (including without limitation employees) and the payment
thereof (including, without limitation, withholding of Taxes under Sections 1441
and 1442 of the Code, or similar provisions under any foreign laws).
(b) There are no material Liens for Taxes upon any assets of
LOCATEPLUS, except Liens for Taxes not yet due.
(c) No deficiency for any Taxes has been proposed, asserted or
assessed against LOCATEPLUS that has not been resolved and paid in full or is
not being contested in good faith. Except as disclosed in SCHEDULE 3.6, no
waiver, extension or comparable consent given by LOCATEPLUS regarding the
application of the statute of limitations with respect to any Taxes or
LOCATEPLUS Returns is outstanding, nor is any request for any such waiver or
consent pending. Except as disclosed in SCHEDULE 3.6, there has been no Tax
audit or other administrative proceeding or court proceeding with regard to any
Taxes or LOCATEPLUS Returns, nor is any such Tax audit or other proceeding
pending, nor has there been any notice to LOCATEPLUS by any Taxing authority
regarding any such Tax audit or other proceeding, or, to the knowledge of
LOCATEPLUS, is any such Tax audit or other proceeding threatened with regard to
any Taxes or LOCATEPLUS Returns. LOCATEPLUS does not expect the assessment of
any additional Taxes of LOCATEPLUS for any period prior to the date hereof and
has no knowledge of any unresolved questions, claims or disputes concerning the
liability for Taxes of LOCATEPLUS which would exceed the estimated reserves
established on its books and records.
(d) Except as set forth on SCHEDULE 3.6, LOCATEPLUS is not a
party to any agreement, contract or arrangement that would result, separately or
in the aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code and the consummation of the transactions
contemplated by this Agreement will not be a factor causing payments to be made
by LOCATEPLUS not to be deductible (in whole or in part) under Section 280G of
the Code. LOCATEPLUS is not liable for Taxes of any other Person, and is not
currently under any contractual obligation to indemnify any Person with respect
to Taxes, or a party to any tax sharing agreement or any other agreement
providing for payments by LOCATEPLUS with respect to Taxes. LOCATEPLUS is not a
party to any joint venture, partnership or other arrangement or contract which
could be treated as a partnership for federal income tax purposes. LOCATEPLUS
has not agreed and is not required, as a result of a change in method of
accounting or otherwise, to include any adjustment under Section 481 of the Code
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(or any corresponding provision of state, local or foreign law) in taxable
income. SCHEDULE 3.6 contains a list of all jurisdictions in which LOCATEPLUS is
required to file any LOCATEPLUS Return and no claim has been made by a taxing
authority in a jurisdiction where LOCATEPLUS does not currently file LOCATEPLUS
Returns that LOCATEPLUS is or may be subject to taxation by that jurisdiction.
There are no advance rulings in respect of any Tax pending or issued by any
Taxing authority with respect to any Taxes of LOCATEPLUS. LOCATEPLUS has not
entered into any gain recognition agreements under Section 367 of the Code and
the regulations promulgated thereunder. LOCATEPLUS is not liable with respect to
any indebtedness the interest of which is not deductible for applicable federal,
foreign, state or local income tax purposes. LOCATEPLUS has not filed or been
included in a combined, consolidated or unitary Tax return (or the substantial
equivalent thereof) of any Person.
(e) LOCATEPLUS has been neither a "distributing corporation"
nor a "controlled corporation" (within the meaning of Section 355 of the Code)
in a distribution of stock qualifying for tax-free treatment under Section 355
of the Code.
(f) Except as set forth on SCHEDULE 3.6, LOCATEPLUS has not
requested any extension of time within which to file any LOCATEPLUS Return,
which return has not since been filed.
3.7 CONTRACTS AND COMMITMENTS.
(a) SCHEDULE 3.7 lists the following agreements, if any,
whether oral or written, to which LOCATEPLUS is a party, which are currently in
effect, and which relate to the operation of LOCATEPLUS's business: (i)
collective bargaining agreement or contract with any labor union; (ii) bonus,
pension, profit sharing, retirement or other form of deferred compensation plan;
(iii) hospitalization insurance or other welfare benefit plan or practice,
whether formal or informal; (iv) stock purchase or stock option plan; (v)
contract for the employment of any officer, individual employee or other Person
on a full-time or consulting basis or relating to severance pay for any such
Person; (vi) confidentiality agreement; (vii) contract, agreement or
understanding relating to the voting of LOCATEPLUS Stock or the election of
directors of LOCATEPLUS; (viii) agreement or indenture relating to the borrowing
of money or to mortgaging, pledging or otherwise placing a Lien on any of the
assets of LOCATEPLUS; (ix) guaranty of any obligation for borrowed money or
otherwise; (x) lease or agreement under which LOCATEPLUS is lessee of, or holds
or operates any property, real or personal, owned by any other party, for which
the annual rental exceeds $10,000; (xi) lease or agreement under which
LOCATEPLUS is lessor of, or permits any third party to hold or operate, any
property, real or personal, for which the annual rental exceeds $10,000; (xii)
contract which prohibits LOCATEPLUS from freely engaging in business anywhere in
the world; (xiii) license agreement or agreement providing for the payment or
receipt of royalties or other compensation by LOCATEPLUS in connection with the
intellectual property rights listed in SCHEDULE 3.20(B); (xiv) contract or
commitment for capital expenditures in excess of $10,000; (xv) agreement for the
sale of any capital asset; or (xvi) other agreement which is either material to
LOCATEPLUS's business or was not entered into in the ordinary course of
business.
(b) To LOCATEPLUS's knowledge, LOCATEPLUS has performed, in
all material respects, the obligations required to be performed by it in
connection with the contracts or commitments required to be disclosed in
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SCHEDULE 3.7 and is not in receipt of any claim of default under any contract or
commitment required to be disclosed under such caption; LOCATEPLUS has no
present expectation or intention of not fully performing any material obligation
pursuant to any contract or commitment required to be disclosed under such
caption; and LOCATEPLUS has no knowledge of any breach or anticipated breach by
any other party to any contract or commitment required to be disclosed under
such caption.
3.8 AFFILIATE TRANSACTIONS. Except as set forth in SCHEDULE 3.8, and
other than pursuant to this Agreement, to LOCATEPLUS's knowledge no officer,
director or employee of LOCATEPLUS, or any member of the immediate family of any
such officer, director or employee, or any entity in which any of such Persons
owns any beneficial interest in LOCATEPLUS (other than the publicly-held
LOCATEPLUS Stock) (collectively, the "LOCATEPLUS INSIDERS"), has any agreement
with LOCATEPLUS (other than normal employment arrangements) or any interest in
any property, real, personal or mixed, tangible or intangible, used in or
pertaining to the business of LOCATEPLUS (other than ownership of capital stock
of LOCATEPLUS). Except as set forth on SCHEDULE 3.8, LOCATEPLUS is not indebted
to any LOCATEPLUS Insider (except for amounts due as normal salaries and bonuses
and in reimbursement of ordinary business expenses) and no LOCATEPLUS Insider is
indebted to LOCATEPLUS (except for cash advances for ordinary business
expenses). None of the LOCATEPLUS Insiders has any direct or indirect interest
in any competitor, supplier or customer of LOCATEPLUS or in any Person from whom
or to whom LOCATEPLUS leases any property, or in any other Person with whom
LOCATEPLUS transacts business of any nature. For purposes of this SECTION 3.8,
the members of the immediate family of an officer, director or employee shall
consist of the spouse, parents, children and siblings of such officer, director
or employee.
3.9 COMPLIANCE WITH LAWS; PERMITS.
(a) Except for any noncompliance that would not reasonably be
expected to have a Material Adverse Effect on LOCATEPLUS, to LOCATEPLUS's
knowledge LOCATEPLUS and its officers, directors, agents and employees have
complied with all applicable laws, Environmental Laws, regulations and other
requirements, including, but not limited to, federal, state, local and foreign
laws, ordinances, rules, regulations and other requirements pertaining to equal
employment opportunity, employee retirement, affirmative action and other hiring
practices, occupational safety and health, workers' compensation, unemployment
and building and zoning codes, and no claims have been filed against LOCATEPLUS,
and LOCATEPLUS has not received any written notice, alleging a violation of any
such laws, Environmental Laws, regulations or other requirements. LOCATEPLUS is
not relying on any exemption from or deferral of any such applicable law,
Environmental Laws, regulation or other requirement that would not be available
to Global after it acquires LOCATEPLUS's properties, assets and business.
(b) LOCATEPLUS has no licenses, permits, Environmental Permits
or certificates, from federal, state, local and foreign authorities (including,
without limitation, federal and state agencies regulating occupational health
and safety) necessary to permit it to conduct its business and own and operate
its properties.
16
3.10 FINANCIAL STATEMENTS. LOCATEPLUS has provided Global with audited
balance sheets of LOCATEPLUS as of December 31, 2004 and December 31, 2005; the
related audited statements of income, changes in stockholders' equity and cash
flows of LOCATEPLUS for the periods then ended, and unaudited balance sheet of
LOCATEPLUS as of June 30, 2006 and related unaudited statements of income,
changes in stockholders' equity and cash flows the period then ended; and a cash
flow pro-forma for the period July 1, 2006 to December 31, 2006 (the "LOCATEPLUS
FINANCIAL STATEMENTS"). The LOCATEPLUS Financial Statements have been prepared
in a manner consistent with past practice and fairly present, in all material
respects, the financial position and the results of operations, changes in
stockholders' equity, and cash flows of LOCATEPLUS as of the date of and for the
period referred to in the LOCATEPLUS Financial Statements. The LOCATEPLUS
Financial Statements are consistent with the financial statements filed with the
LOCATEPLUS SEC Filings.
3.11 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other similar records of LOCATEPLUS, complete copies of which
have been made available to Global, have to LOCATEPLUS's knowledge, been
properly kept and contain no inaccuracies except for inaccuracies that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on LOCATEPLUS.
3.12 REAL PROPERTY. Except as set forth on SCHEDULE 3.12, LOCATEPLUS
does not own any real property. LOCATEPLUS has good and valid title to all of
its leaseholds and other interests free and clear of all Liens, except for such
Liens and encumbrances which do not detract from the value or interfere with the
present use of the property subject thereto or affected thereby. The real
property to which such leaseholds and other interests pertain constitutes all of
the real property used in LOCATEPLUS's business.
3.13 INSURANCE. The insurance policies obtained and maintained by
LOCATEPLUS that are material to LOCATEPLUS are in full force and effect, all
premiums due and payable thereon have been paid (other than retroactive or
retrospective premium adjustments that LOCATEPLUS is not currently required, but
may in the future be required, to pay with respect to any period ending prior to
the date of this Agreement), and LOCATEPLUS has received no written notice of
cancellation or termination with respect to any such policy that has not been
replaced on substantially similar terms prior to the date of such cancellation.
3.14 NO UNDISCLOSED LIABILITIES. Except as reflected in the unaudited
balance sheet of LOCATEPLUS as of June 30, 2006 or the related notes thereto
(the "LOCATEPLUS LATEST BALANCE SHEET"), LOCATEPLUS has no liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise) except (i) liabilities
which have arisen since the date of the LOCATEPLUS Latest Balance Sheet in the
ordinary course of business consistent with past practice (none of which is a
material uninsured liability for breach of contract, breach of warranty, tort,
infringement, claim or lawsuit) or (ii) liabilities under this Agreement,
including all fees and expenses associated with this transaction. In the case of
liabilities arising in the ordinary course of business consistent with past
practice, such liabilities, other than liabilities that are accrued but not yet
payable, are separately and specifically identified on SCHEDULE 3.14.
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3.15 ENVIRONMENTAL MATTERS.
(a) To its knowledge, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on
LOCATEPLUS, (i) LOCATEPLUS has not transported, handled, treated, stored, used,
manufactured, distributed, disposed of, released or exposed its employees or
others to pollutants, contaminants, hazardous wastes, or any toxic, radioactive
or otherwise hazardous materials ("HAZARDOUS MATERIALS") in violation of any
applicable law, and (ii) LOCATEPLUS has not disposed of, transported, sold,
used, released, exposed its employees or others to or manufactured any product
containing a Hazardous Material (collectively, "HAZARDOUS MATERIALS ACTIVITIES")
in violation of any applicable law, rule, regulation, treaty or statute
promulgated by any Governmental Entity in effect prior to or as of the date
hereof to prohibit, regulate or control Hazardous Materials or any Hazardous
Material Activity.
(b) No action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending, or to LOCATEPLUS's knowledge, threatened
against LOCATEPLUS concerning (i) any LOCATEPLUS Permit relating to any
environmental matter, (ii) any Hazardous Material or (iii) any Hazardous
Materials Activity of LOCATEPLUS. LOCATEPLUS is not aware of any fact or
circumstance which could involve LOCATEPLUS in any environmental litigation or
impose upon LOCATEPLUS any environmental liability.
(c) LOCATEPLUS has complied and is in compliance, in each case in all
material respects, with all applicable laws, rules, regulations, treaties and
statutes promulgated by any Governmental Entity in effect prior to or as of the
date hereof to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
3.16 ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed in the
LOCATEPLUS Financial Statements or as otherwise contemplated by this Agreement,
since December 31, 2005, LOCATEPLUS has conducted its business in all material
respects in the ordinary course consistent with past practice and, except as
permitted or contemplated by the terms of this Agreement, there has not occurred
(i) any event that, to LOCATEPLUS's knowledge, would have a Material Adverse
Effect on LOCATEPLUS, (ii) any event that, to LOCATEPLUS's knowledge, would
reasonably be expected to prevent or materially delay the performance of
LOCATEPLUS's obligations pursuant to this Agreement, (iii) any material change
by LOCATEPLUS in its accounting methods, principles or practices, (iv) any
declaration, setting aside or payment of any dividend or distribution in respect
of the shares of capital stock of LOCATEPLUS or any redemption, purchase or
other acquisition of any of LOCATEPLUS's securities, (v) any material increase
in the compensation or benefits or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan of LOCATEPLUS, or any other material
increase in the compensation payable or to become payable to any employees,
officers, consultants or directors of LOCATEPLUS, (vi) other than issuances of
options pursuant to duly adopted option plans, any issuance, grants or sale of
any stock, options, warrants, notes, bonds or other securities, or entry into
any agreement with respect thereto by LOCATEPLUS, (vii) any amendment to the
certificate of incorporation or bylaws of LOCATEPLUS, (viii) other than in the
ordinary course of business consistent with past practice, (ix) any capital
18
expenditures by LOCATEPLUS, (x) purchase, sale, assignment or transfer of any
material assets by LOCATEPLUS, (xi) mortgage, pledge or existence of any Lien on
any material assets or properties, tangible or intangible, of LOCATEPLUS, except
for Liens for taxes not yet due and such other Liens which do not, individually
or in the aggregate, have a Material Adverse Effect on LOCATEPLUS, or (xii)
cancellation, compromise, release or waiver by LOCATEPLUS of any rights of
material value or any material debts or claims, (xiii) any incurrence by
LOCATEPLUS of any material liability (absolute or contingent), except for
current liabilities and obligations incurred in the ordinary course of business
consistent with past practice, (xiv) damage, destruction or similar loss,
whether or not covered by insurance, materially affecting the business or
properties of LOCATEPLUS, (xv) entry into any agreement, contract, lease or
license other than in the ordinary course of business consistent with past
practice, (xvi) any acceleration, termination, modification or cancellation of
any agreement, contract, lease or license to which LOCATEPLUS is a party or by
which it is bound, (xvii) entry by LOCATEPLUS into any loan or other transaction
with any officers, directors or employees of LOCATEPLUS, (xviii) any charitable
or other capital contribution by LOCATEPLUS or pledge therefore, (xviv) entry by
LOCATEPLUS into any transaction of a material nature other than in the ordinary
course of business consistent with past practice, or (xx) any negotiation or
agreement by LOCATEPLUS to do any of the things described in the preceding
clauses (i) through (xviv).
3.17 EMPLOYEE BENEFIT PLANS. (a) SCHEDULE 3.17(A) lists all material
(i) "employee benefit plans," within the meaning of Section 3(3) of ERISA, of
LOCATEPLUS, (ii) bonus, stock option, stock purchase, stock appreciation right,
incentive, deferred compensation, supplemental retirement, severance, and fringe
benefit plans, programs, policies or arrangements, and (iii) employment or
consulting agreements, for the benefit of, or relating to, any current or former
employee (or any beneficiary thereof) of LOCATEPLUS, in the case of a plan
described in (i) or (ii) above, that is currently maintained by LOCATEPLUS or
with respect to which LOCATEPLUS has an obligation to contribute, and in the
case of an agreement described in (iii) above, that is currently in effect (the
"LOCATEPLUS PLANS"). LOCATEPLUS has heretofore made available to Global true and
complete copies of the LOCATEPLUS Plans and any amendments thereto, any related
trust, insurance contract, summary plan description, and, to the extent required
under ERISA or the Code, the most recent annual report on Form 5500 and
summaries of material modifications.
(b) No LOCATEPLUS Plan is (1) a "multiemployer plan" within
the meaning of Sections 3(37) or 4001(a)(3) of ERISA, (2) a "multiple employer
plan" within the meaning of Section 3(40) of ERISA or Section 413(c) of the
Code, or (3) subject to Title IV of ERISA or Section 412 of the Code.
(c) There is no proceeding pending or, to LOCATEPLUS's
knowledge, threatened against the assets of any LOCATEPLUS Plan or, with respect
to any LOCATEPLUS Plan, against LOCATEPLUS other than proceedings that would not
reasonably be expected to have a Material Adverse Effect on LOCATEPLUS, and to
LOCATEPLUS's knowledge, there is no proceeding pending or threatened in writing
against any fiduciary of any LOCATEPLUS Plan other than proceedings that would
not reasonably be expected to have a Material Adverse Effect on LOCATEPLUS.
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(d) Each of the LOCATEPLUS Plans has been operated and
administered in all material respects in accordance with its terms and
applicable law, including, but not limited to, ERISA and the Code.
(e) Each of the LOCATEPLUS Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code has received a
favorable determination, notification, or opinion letter from the IRS.
(f) Except as set forth in SCHEDULE 3.17(F), no director,
officer, or employee of LOCATEPLUS will become entitled to retirement, severance
or similar benefits or to enhanced or accelerated benefits (including any
acceleration of vesting or lapsing of restrictions with respect to equity-based
awards) under any LOCATEPLUS Plan solely as a result of consummation of the
transactions contemplated by this Agreement.
3.18 EMPLOYEES.
(a) SCHEDULE 3.18 lists the following information for each
employee and each director of LOCATEPLUS as of the date of this Agreement,
including each employee on leave of absence or layoff status: (1) name; (2) job
title; (3) current annual base salary or annualized wages; (4) bonus
compensation earned during the period in 2006; (5) vacation accrued and unused;
(6) service credited for purposes of vesting and eligibility to participate
under LOCATEPLUS Plans; and (7) the number of shares of LOCATEPLUS Common Stock
beneficially owned by each such employee. SCHEDULE 3.18 also lists the following
information for each consultant or advisory board member of LOCATEPLUS, as of
the date of this Agreement: (x) name; (y) services performed in 2006; and (z)
compensation received from LOCATEPLUS with respect to services performed in
2006.
(b) Except as otherwise set forth in SCHEDULE 3.18, or as
contemplated by this Agreement, to the knowledge of LOCATEPLUS, (i) neither any
executive employee of LOCATEPLUS nor any group of LOCATEPLUS's employees has any
plans to terminate his, her or its employment; (ii) LOCATEPLUS has no material
labor relations problem pending and its labor relations are satisfactory; (iii)
there are no workers' compensation claims pending against LOCATEPLUS nor is
LOCATEPLUS aware of any facts that would give rise to such a claim; (iv) no
employee of LOCATEPLUS is subject to any secrecy or noncompetition agreement or
any other agreement or restriction of any kind that would impede in any way the
ability of such employee to carry out fully all activities of such employee in
furtherance of the business of LOCATEPLUS; and (v) no employee or former
employee of LOCATEPLUS has any claim with respect to any intellectual property
rights of LOCATEPLUS set forth in SCHEDULE 3.20(B).
3.19 PROPRIETARY INFORMATION AND INVENTIONS. Each current LOCATEPLUS
employee, consultant, and advisory board member is a party to either a
non-disclosure agreement or an employment agreement with LOCATEPLUS containing
comparable non-disclosure provisions. To LOCATEPLUS's knowledge, no current or
former LOCATEPLUS employee, consultant or advisory board member who is a party
to a non-disclosure agreement has breached such non-disclosure agreement. To
LOCATEPLUS's knowledge, no current or former LOCATEPLUS employee, consultant or
20
advisory board member who is a party to an employment agreement with LOCATEPLUS
has breached the non-disclosure provisions of such agreement.
3.20 INTELLECTUAL PROPERTY. (a) Except as set forth in SCHEDULE
3.20(A), to its knowledge, LOCATEPLUS owns, or has valid and enforceable
licenses to use, all of the following used in or necessary to conduct its
business as currently conducted (collectively, the "LOCATEPLUS INTELLECTUAL
PROPERTY"):
(1) patents (including any registrations, continuations,
continuations in part, renewals, and any applications for any of the foregoing)
(collectively, the "PATENTS");
(2) trade secrets, confidential or proprietary technical
information, know-how, designs, processes, research in progress, inventions and
invention disclosures (whether patentable or unpatentable) (collectively, the
"KNOW-HOW"); and
(b) Set forth on SCHEDULE 3.20(B) is a complete and accurate
list of all material Patents owned or licensed by LOCATEPLUS. SCHEDULE 3.20(B)
sets forth a complete and accurate list of all Persons from which or to which
LOCATEPLUS licenses any material Intellectual Property.
(c) To its knowledge, LOCATEPLUS is the sole and exclusive
licensee of the LOCATEPLUS Intellectual Property, free and clear of all Liens,
except for such Liens which, individually or in the aggregate, would not have a
Material Adverse Effect on LOCATEPLUS, and free of all licenses except those
set forth in SCHEDULE 3.20(C) and licenses relating to off-the-shelf software
having a per-application acquisition price of less than $5,000. To LOCATEPLUS's
knowledge and except as set forth on SCHEDULE 3.20(C), no Patent set forth in
SCHEDULE 3.20(B) has lapsed, expired or been abandoned or cancelled, or is
subject to any pending or, to LOCATEPLUS's knowledge, threatened opposition or
cancellation proceeding in any country.
(d) Except as set forth in SCHEDULE 3.20(D) and except as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on LOCATEPLUS, to LOCATEPLUS's knowledge, neither the
conduct of LOCATEPLUS's business nor the manufacture, marketing, licensing,
sale, distribution or use of its products or services infringes upon the
proprietary rights of any Person. Except as set forth in SCHEDULE 3.20(A) and
SCHEDULE 3.20(C) and except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on LOCATEPLUS, there
are no claims pending or, to LOCATEPLUS's knowledge, threatened (1) alleging
that LOCATEPLUS's business as currently conducted infringes upon or constitutes
an unauthorized use or violation of the proprietary rights of any Person, (2)
alleging that the LOCATEPLUS Intellectual Property is being infringed by any
Person, or (3) challenging the ownership, validity or enforceability of the
LOCATEPLUS Intellectual Property.
(e) LOCATEPLUS has not entered into any material consent
agreement, indemnification agreement, forbearance to xxx, settlement agreement
or cross-licensing arrangement with any Person relating to the LOCATEPLUS
Intellectual Property other than as part of the license agreements listed in
SCHEDULE 3.20(B) or set forth in SCHEDULE 3.20(C).
21
(f) Except as set forth in SCHEDULE 3.20(F), LOCATEPLUS is
not, nor will it be as a result of the execution and delivery of this Agreement
or the performance of its obligations under this Agreement, in breach of any
license, sublicense or other contract relating to the LOCATEPLUS Intellectual
Property that would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on LOCATEPLUS.
3.21 TAX-FREE REORGANIZATION. Neither LOCATEPLUS nor, to LOCATEPLUS's
knowledge, any of its Affiliates has taken or agreed to take any action that
would prevent the Merger from qualifying as a reorganization under Section
368(a) of the Code.
3.22 VOTE REQUIRED. The affirmative vote of the holders of a majority
of the outstanding shares of LOCATEPLUS Common Stock (the "Requisite LOCATEPLUS
Stockholder Vote") is the only vote of the holders of any classes or series of
LOCATEPLUS capital stock necessary to approve this Agreement, the Merger and the
other transactions contemplated hereby.
3.23 FULL DISCLOSURE. To LOCATEPLUS's knowledge, the representations
and warranties of LOCATEPLUS contained in this Agreement and its SEC Filings
(and in any schedule, exhibit, certificate or other instrument to be delivered
under this Agreement) do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which such
statements were made, not misleading. There is no fact of which LOCATEPLUS has
knowledge that has not been disclosed to Global pursuant to this Agreement,
including the schedules hereto, all taken together as a whole, which has had or
would reasonably be expected to have a Material Adverse Effect on LOCATEPLUS or
materially adversely affect the ability of LOCATEPLUS to consummate in a timely
manner the transactions contemplated hereby.
3.24 EXCHANGE ACT REPORTS.
(a) The LOCATEPLUS Common Stock has been registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") and LOCATEPLUS is subject to the periodic reporting requirements of
Section 13 of the Exchange Act.
(b) LOCATEPLUS maintains disclosure controls and procedures
required by Rule 13a-15 or 15d-15 under the Exchange Act; to LOCATEPLUS's
knowledge, such controls and procedures are effective to ensure that all
material information concerning LOCATEPLUS and its subsidiaries is made known on
a timely basis to the individuals responsible for the preparation of the
LOCATEPLUS SEC Filings and other public disclosure documents. LOCATEPLUS has
delivered to Global copies of, all written descriptions of, and all policies,
manuals and other documents promulgating, such disclosure controls and
procedures. To LOCATEPLUS's knowledge, each director and executive officer
thereof has filed with the SEC on a timely basis all statements required by
Section 16(a) of the Exchange Act and the rules and regulations thereunder since
at least January 1, 1999. As used in this Section 3.24, the term "file" shall be
broadly construed to include any manner in which a document or information is
furnished, supplied or otherwise made available to the SEC.
22
(c) Prior to the date of this Agreement, LOCATEPLUS has
delivered or made available to Global complete and accurate copies of (a)
LocatePlus' Annual Report on Form 10-KSB for the year ended December 31, 2005
(the "LOCATEPLUS 10-K REPORT") as filed with the SEC, (b) all LOCATEPLUS proxy
statements and annual reports to stockholders used in connection with meetings
of LOCATEPLUS stockholders held since January 1, 2004 (the "LOCATEPLUS PROXY
STATEMENTS"); (c) LOCATEPLUS' Quarterly Reports on Form 10-QSB for the quarters
ended March 31, 2005, June 30, 2005, September 30, 2005, March 31, 2006, and
June 30, 2006 (and any other filings required) (the "LOCATEPLUS 10-Q REPORTS"),
as filed with the SEC; and (d) all current reports on Form 8-K filed with the
SEC after December 31, 2004 (the "LOCATEPLUS 8-K REPORTS,") or registration
statements (together with the LOCATEPLUS 8-K Reports, the LocatePlus 10-K
Reports, the LOCATEPLUS Proxy Statements and the LOCATEPLUS 10-Q Reports, the
"LOCATEPLUS SEC FILINGS"). As of their respective dates or as subsequently
amended prior to the date hereof, to LOCATEPLUS's knowledge, each of the
LOCATEPLUS SEC Filings (i) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading and (ii) complied in all material respects with the
Securities Act, the Exchange Act and the applicable rules and regulations of the
SEC. To LOCATEPLUS's knowledge the financial statements included in the
LOCATEPLUS SEC Filings complied when filed as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles in the United States, applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited financial statements, as permitted by
the rules and regulations of the SEC) and fairly present, subject in the case of
the unaudited financial statements, to customary year end audit adjustments, the
financial position of LOCATEPLUS as at the dates thereof and the results of its
operations and cash flows. LOCATEPLUS has filed in a timely manner all reports
required to be filed with the SEC pursuant to the Exchange Act. To LOCATEPLUS's
knowledge, each of the financial statements (including footnotes thereto)
included in or incorporated by reference in the LOCATEPLUS SEC Filings (i)
complied as to form in all material respects with the published rules and
regulations of the SEC with respect thereto, (ii) was prepared in accordance
with GAAP applied on a consistent basis during the periods involved (except as
otherwise noted therein) and (iii) fairly present, in all material respects, the
financial condition of LocatePlus as of the respective dates thereof and results
of operations and cash flows for the periods referred to therein. The principal
executive officer and the principal financial officer of LOCATEPLUS have signed,
and LocatePlus has filed with the SEC, all certifications required by Section
906 of the Xxxxxxxx-Xxxxx Act of 2002 to the extent required by the regulations
of the SEC issued pursuant thereto and such certifications contain no
qualifications or exceptions to the matters certified therein and have not been
modified or withdrawn, and neither LocatePlus nor any of its officers has
received notice from any governmental entity questioning or challenging the
accuracy, completeness, form or manner of filing of such certifications.
3.25 TRADING MATTERS. At the date hereof and at the Closing Date (i)
the LOCATEPLUS Common Stock is traded and quoted in the over-the-counter
bulletin board market maintained by The Nasdaq Stock Market, Inc. (the "OTCBB"),
(ii) LOCATEPLUS has and shall have performed or satisfied all of its
23
undertakings to, and of its obligations and requirements with, the SEC, and
(iii) to LOCATEPLUS's knowledge LOCATEPLUS has not taken, and shall not have
taken, any action that would preclude, or otherwise jeopardize, the inclusion of
the LOCATEPLUS Common Stock for quotation on the OTCBB, the Nasdaq Stock Market,
or the American Stock Exchange.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF GLOBAL AND LPA
Global and LPA hereby jointly and severally represent and warrant, as
of the date of this Agreement and as of the Effective Time, to LOCATEPLUS as
follows:
4.1 ORGANIZATION AND QUALIFICATION. Each of Global and LPA is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, and has the requisite corporate power
and authority to own, lease and operate its assets and to carry on its business
as now conducted. The copies of the certificate of incorporation and bylaws of
each of Global and LPA that have been made available to LOCATEPLUS on or prior
to the date of this Agreement are correct and complete copies of such documents
as in effect as of the date of this Agreement. Global is duly licensed or
qualified to do business and is in good standing in every jurisdiction in which
the nature of its business or the ownership or leasing of its properties
requires it to be licensed or qualified, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect on Global. Global
has no subsidiaries other than LPA and Global, Inc.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT; NON-CONTRAVENTION. Subject to
the stockholders' vote to approve the Merger, each of Global and LPA has the
requisite corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder The execution and delivery of this Agreement
by Global and LPA and the consummation by Global and LPA of the transactions
contemplated hereby have been duly authorized by the Boards of Directors of
Global and LPA and, except for approval of this Agreement and the Merger by the
requisite votes of Global' and LPA stockholders (the "REQUISITE GLOBAL AND LPA
STOCKHOLDER VOTES"), no other corporate proceedings on the part of Global or LPA
are necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Global and LPA and, assuming it is a valid and
binding obligation of LocatePlus, subject to the Requisite Global and LPA
Stockholder Votes, constitutes a valid and binding obligation of Global and LPA
enforceable in accordance with its terms except as enforcement may be limited by
general principles of equity whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally. Neither Global nor LPA is subject to, nor
obligated under, any provision of (a) their respective certificate of
incorporation or bylaws, (b) any agreement, arrangement or understanding, (c)
any license, franchise or permit, nor (d) subject to obtaining the approvals
referred to in the next sentence, any law, regulation, order, judgment or
decree, which would conflict with, be breached or violated, or in respect of
which a right of termination or acceleration or any security interest, charge or
24
encumbrance on any of its assets would be created, by the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than any such conflicts, breaches, violations, rights
of termination or acceleration or security interests, charges or encumbrances
which, in the case of clauses (b), (c) or (d), individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on Global.
Except for (a) approvals under applicable Securities Act and blue sky laws and
(b) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, no authorization, consent or approval of, or filing with, any
public body, court or authority is necessary on the part of Global or LPA for
the consummation by Global or LPA of the transactions contemplated by this
Agreement, except for such authorizations, consents, approvals and filings as to
which the failure to obtain or make the same would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Global or
LPA or materially adversely affect the consummation of the transactions
contemplated hereby.
4.3 CAPITALIZATION.
(a) The authorized, issued and outstanding shares of capital
stock of Global as of the date hereof are correctly set forth on Schedule
4.3(a). The issued and outstanding shares of capital stock of Global have been
duly authorized and validly issued, are fully paid and nonassessable, and have
not been issued in violation of any preemptive rights. Other than as described
on SCHEDULE 4.3(A), Global has no other equity securities or securities
containing any equity features that are authorized, issued or outstanding.
Except as set forth in SCHEDULE 4.3(A) hereto, there are no agreements or other
rights or arrangements existing which provide for the sale or issuance of
capital stock by Global and there are no rights, subscriptions, warrants,
options, conversion rights or agreements of any kind outstanding to purchase or
otherwise acquire from Global any shares of capital stock or other securities of
Global of any kind. Except as set forth on SCHEDULE 4.3(A), there are no
agreements or other obligations (contingent or otherwise) which may require
Global to repurchase or otherwise acquire any shares of its capital stock.
(b) Except as set forth in SCHEDULE 4.3(B), there are no
registration rights and, to Global's knowledge, there exist no voting trusts,
proxies, or other contracts with respect to the voting of shares of capital
stock of Global.
(c) To Global's knowledge, there exist no voting trusts,
proxies, or other contracts with respect to the voting of shares of capital
stock of Global.
(d) The authorized capital of LPA consists of two hundred
(200) shares of common stock, no par value, all of which are issued and
outstanding and held of record by Global as of the date hereof. The issued and
outstanding shares of capital stock of LPA are duly authorized, validly issued,
fully paid and nonassessable and have not been issued in violation of any
preemptive rights. Except as disclosed on SCHEDULE 4.3(C), there are no options,
warrants, conversion privileges or other rights, agreements, arrangements or
commitments obligating LPA to issue, sell, purchase or redeem any shares of its
capital stock or securities or obligations of any kind convertible into or
exchangeable for any shares of its capital stock
4.4 EXCHANGE ACT REPORTS.
(a) The Global Common Stock is subject to the periodic
reporting requirements of the Securities Exchange Act of 1934, as
amended.
25
(b) Global maintains disclosure controls and procedures
required by Rule 13a-15 or 15d-15 under the Exchange Act; such controls
and procedures are effective to ensure that all material information
concerning Global and its subsidiaries is made known on a timely basis
to the individuals responsible for the preparation of the Global SEC
Filings and other public disclosure documents. Global has delivered or
made available to LOCATEPLUS copies of, all written descriptions of,
and all policies, manuals and other documents promulgating, such
disclosure controls and procedures. To Global's knowledge, each
director and executive officer thereof has filed with the SEC on a
timely basis all statements required by Section 16(a) of the Exchange
Act and the rules and regulations thereunder since at least January 1,
2004. As used in this Section 4.4(b), the term "file" shall be broadly
construed to include any manner in which a document or information is
furnished, supplied or otherwise made available to the SEC.
(c) Prior to the date of this Agreement, Global has delivered
or made available to LOCATEPLUS complete and accurate copies of (a)
Global's Annual Report on Form 10-KSB for the year ended December 31,
2005 (the "GLOBAL 10-K REPORT") as filed with the SEC, (b) all Global
proxy statements and annual reports to stockholders used in connection
with meetings of Global stockholders held since January 1, 2005 (the
"GLOBAL PROXY STATEMENTS"); (c) Global's Quarterly Reports on Form
10-QSB for the quarters ended March 31, 2005, June 30, 2005, September
30, 2005, and June 30, 2006 (the "GLOBAL 10-Q REPORTS"), as filed with
the SEC; and (d) all current reports on Form 8-K filed with the SEC
after December 31, 2004 (the "GLOBAL 8-K REPORTS,") or registration
statements (together with the Global 8-K Reports, the Global 10-K
Reports, the Global Proxy Statements and the Global 10-Q Reports, the
"GLOBAL SEC FILINGS"). As of their respective dates or as subsequently
amended prior to the date hereof, each of the Global SEC Filings, to
the best of Global's knowledge (i) did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and (ii)
complied in all material respects with the Securities Act, the Exchange
Act and the applicable rules and regulations of the SEC. The financial
statements included in the Global SEC Filings complied when filed as to
form in all material respects with applicable accounting requirements
and with the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted
accounting principles in the United States, applied on a consistent
basis during the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited financial statements, as
permitted by the rules and regulations of the SEC) and fairly present,
subject in the case of the unaudited financial statements, to customary
year end audit adjustments, the financial position of Global as at the
dates thereof and the results of its operations and cash flows. Global
has filed in a timely manner all reports required to be filed with the
SEC pursuant to the Exchange Act. Each of the financial statements
(including footnotes thereto) included in or incorporated by reference
in the Global SEC Filings (i) complied as to form in all material
respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as otherwise noted
therein) and (iii) fairly present, in all material respects, the
financial condition of Global as of the respective dates thereof and
results of operations and cash flows for the periods referred to
therein. The principal executive officer and the principal financial
26
officer of Global have signed, and Global has filed with the SEC, all
certifications required by Section 906 of the Xxxxxxxx-Xxxxx Act of
2002 and such certifications contain no qualifications or exceptions to
the matters certified therein and have not been modified or withdrawn,
and neither Global nor any of its officers has received notice from any
governmental entity questioning or challenging the accuracy,
completeness, form or manner of filing of such certifications.
4.5 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth in SCHEDULE
4.5 or as disclosed in the Global SEC Filings or as otherwise contemplated by
this Agreement, since December 31, 2005, Global has conducted its business in
all material respects in the ordinary course consistent with past practice and
there has not occurred (i) any event that would have a Material Adverse Effect
on Global, (ii) any event that would reasonably be expected to prevent or
materially delay the performance of Global's obligations pursuant to this
Agreement, (iii) any material change by Global in its accounting methods,
principles or practices, (iv) any declaration, setting aside or payment of any
dividend or distribution in respect of the shares of capital stock of Global, or
any redemption, purchase or other acquisition of any of Global's securities, (v)
any material increase in the compensation or benefits or establishment of any
bonus, insurance, severance, deferred compensation, pension, retirement, profit
sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan of Global, or any other
material increase in the compensation payable or to become payable to any
employees, officers, consultants or directors of Global, (vi) other than
issuances of options pursuant to duly adopted option plans, any issuance, grants
or sale of any stock, options, warrants, notes, bonds or other securities, or
entry into any agreement with respect thereto by Global, (vii) any amendment to
the certificate of incorporation or bylaws of Global, (ix) mortgage, pledge or
existence of any Lien on any material assets or properties, tangible or
intangible, of Global, except for Liens for taxes not yet due and such other
Liens which do not, individually or in the aggregate, have a Material Adverse
Effect on Global, or (x) cancellation, compromise, release or waiver by Global
of any rights of material value or any material debts or claims (xi) any
incurrence by Global of any material liability (absolute or contingent), except
for current liabilities and obligations incurred in the ordinary course of
business consistent with past practice, (xii) damage, destruction or similar
loss, whether or not covered by insurance, materially affecting the business or
properties of Global, (xiii) entry by Global into any agreement, contract, lease
or license other than in the ordinary course of business consistent with past
practice, (xiv-) any acceleration, termination, modification or cancellation of
any agreement, contract, lease or license to which Global is a party or by which
it is bound, (xv) entry by Global into any loan or other transaction with any
officers, directors or employees of Global, (xvi) any charitable or other
capital contribution by Global or pledge therefore, (xvii) entry by Global into
any transaction of a material nature other than in the ordinary course of
business consistent with past practice, or (xviii) any negotiation or agreement
by Global to do any of the things described in the preceding clauses (i) through
(xix).
4.6 ABSENCE OF UNDISCLOSED LIABILITIES. Attached as SCHEDULE 4.6 is the
unaudited balance sheet of Global as of June 30, 2006 (the "GLOBAL BALANCE
SHEET"). Except as reflected in the Global Balance Sheet, Global has no
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
except (i) liabilities which have arisen since the date of the Global Balance
Sheet in the ordinary course of business consistent with past practice (none of
which is a material uninsured liability for breach of contract, breach of
27
warranty, tort, infringement, claim or lawsuit), (ii) liabilities under this
Agreement; or (iii) as otherwise specifically identified on SCHEDULE 4.6. In the
case of liabilities arising in the ordinary course of business consistent with
past practice, such liabilities are separately and specifically identified on
SCHEDULE 4.6.
4.7 LITIGATION. There are no actions, suits, proceedings, orders or
investigations pending or, to the knowledge of Global, threatened against
Global, at law or in equity, or before or by any federal, state or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
4.8 NO BROKERS OR FINDERS. Except as set forth on SCHEDULE 4.8, there
are no claims for brokerage commissions, finders' fees, investment advisory fees
or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement, understanding, commitment or agreement made
by or on behalf of Global.
4.9 VALIDITY OF THE GLOBAL COMMON STOCK. Global, subject to its
shareholders vote, will at the Effective Date have authorized shares of Common
Stock in a quantity sufficient to issue the Global Exchange Shares and to issue
Global Common Stock upon exercise of the Stock Options and Warrants in
accordance with this Agreement. The shares of Global Common Stock representing
the Merger Consideration will be, when issued in accordance with the terms of
this Agreement, duly authorized, validly issued, fully paid and nonassessable.
4.10 TAX MATTERS.
(a) (i) Global to the best of its knowledge has timely filed
(or has had timely filed on its behalf) all returns, declarations, reports,
estimates, information returns, and statements, including any schedules and
amendments to such documents (the "GLOBAL RETURNS"), required to be filed or
sent by it in respect of any Taxes or required to be filed or sent by it to any
taxing authority having jurisdiction; (ii) all such Global Returns are complete
and accurate in all material respects; (iii) Global has timely and properly paid
(or has had paid on its behalf) all Taxes required to be paid by it; (iv) Global
has established on the Global Balance Sheet, in accordance with GAAP, reserves
that are adequate for the payment of any Taxes not yet due and payable; and (v)
Global has complied with all applicable laws, rules, and regulations relating to
the collection or withholding of Taxes from third parties (including, without
limitation, employees) and the payment thereof (including, without limitation,
withholding of Taxes under Sections 1441 and 1442 of the Code, or similar
provisions under any foreign laws).
(b) There are no material Liens for Taxes upon any assets of
Global, except Liens for Taxes not yet due.
(c) No deficiency for any Taxes has been proposed, asserted or
assessed against Global that has not been resolved and paid in full or is not
being contested in good faith. Except as disclosed in SCHEDULE 4.10, no waiver,
extension or comparable consent given by Global regarding the application of the
statute of limitations with respect to any Taxes or Global Returns is
outstanding, nor is any request for any such waiver or consent pending. Except
as disclosed in SCHEDULE 4.10, there has been no Tax audit or other
administrative proceeding or court proceeding with regard to any Taxes or Global
Returns, nor is any such Tax audit or other proceeding pending, nor has there
28
been any notice to Global by any Taxing authority regarding any such Tax audit
or other proceeding, or, to the knowledge of Global, is any such Tax audit or
other proceeding threatened with regard to any Taxes or Global Returns. Global
does not expect the assessment of any additional Taxes of Global for any period
prior to the date hereof and has no knowledge of any unresolved questions,
claims or disputes concerning the liability for Taxes of Global which would
exceed the estimated reserves established on its books and records.
(d) Except as set forth on SCHEDULE 4.10, Global is not a
party to any agreement, contract or arrangement that would result, separately or
in the aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code and the consummation of the transactions
contemplated by this Agreement will not be a factor causing payments to be made
by Global not to be deductible (in whole or in part) under Section 280G of the
Code. Global is not liable for Taxes of any other Person nor is currently under
any contractual obligation to indemnify any Person with respect to Taxes, or a
party to any Tax sharing agreement or any other agreement providing for payments
by Global with respect to Taxes. Global is not a party to any joint venture,
partnership or other arrangement or contract which could be treated as a
partnership for federal income tax purposes. Global has not agreed and is not
required, as a result of a change in method of accounting or otherwise, to
include any adjustment under Section 481 of the Code (or any corresponding
provision of state, local or foreign law) in taxable income. SCHEDULE 4.10
contains a list of all jurisdictions in which Global is required to file any
Global Return and no claim has been made by a taxing authority in a jurisdiction
where Global does not currently file Global Returns that Global is or may be
subject to taxation by that jurisdiction. There are no advance rulings in
respect of any Tax pending or issued by any Taxing authority with respect to any
Taxes of Global. Global has not entered into any gain recognition agreements
under Section 367 of the Code and the regulations promulgated thereunder. Global
is not liable with respect to any indebtedness the interest of which is not
deductible for applicable federal, foreign, state or local income tax purposes.
(e) Global has been neither a "distributing corporation" nor a
"controlled corporation" (within the meaning of Section 355 of the Code) in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code.
(f) Except as set forth on SCHEDULE 4.10, Global has not
requested any extension of time within which to file any Global Return, which
return has not since been filed.
4.11 CONTRACTS AND COMMITMENTS.
(a) SCHEDULE 4.11 hereto lists the following agreements, if
any, whether oral or written, to which Global is a party, which are currently in
effect, and which relate to the operation of Global's business, each of which
has been filed as an exhibit to the Global SEC Filings: (i) collective
bargaining agreement or contract with any labor union; (ii) bonus, pension,
profit sharing, retirement or other form of deferred compensation plan; (iii)
hospitalization insurance or other welfare benefit plan or practice, whether
formal or informal; (iv) stock purchase or stock option plan; (v) contract for
the employment of any officer, individual employee or other Person on a
full-time or consulting basis or relating to severance pay for any such Person;
(vi) confidentiality agreement; (vii) contract, agreement or understanding
relating to the voting of Global Common Stock or the election of directors of
Global; (viii) agreement or indenture relating to the borrowing of money or to
29
mortgaging, pledging or otherwise placing a Lien on any of the assets of Global;
(ix) guaranty of any obligation for borrowed money or otherwise; (x) lease or
agreement under which Global is lessee of, or holds or operates any property,
real or personal, owned by any other party, for which the annual rental exceeds
$100,000; (xi) lease or agreement under which Global is lessor of, or permits
any third party to hold or operate, any property, real or personal, for which
the annual rental exceeds $100,000; (xii) license agreement or agreement
providing for the payment or receipt of royalties or other compensation by
Global in connection with Global Intellectual Property; (xiii) contract or
commitment for capital expenditures in excess of $100,000; (xiv) agreement for
the sale of any capital asset; or (xv) other agreement which is either material
to Global's business or was not entered into in the ordinary course of business.
(b) To Global's knowledge, Global has performed, in all
material respects, the obligations required to be performed by it in connection
with the contracts or commitments required to be disclosed in SCHEDULE 4.11
hereto and is not in receipt of any claim of default under any contract or
commitment required to be disclosed under such caption; Global has no present
expectation or intention of not fully performing any material obligation
pursuant to any contract or commitment required to be disclosed under such
caption; and Global has no knowledge of any breach or anticipated breach by any
other party to any contract or commitment required to be disclosed under such
caption.
4.12 INTELLECTUAL PROPERTY. Global owns or licenses its Intellectual
Property.
4.13 AFFILIATE TRANSACTIONS. Except as disclosed in the Global SEC
Filings, and other than pursuant to this Agreement, no officer, director or
employee of Global, or any member of the immediate family of any such officer,
director or employee, or any entity in which any of such Persons owns any
beneficial interest (other than any publicly-held corporation whose stock is
traded on a national securities exchange or in the over-the-counter market and
less than one percent of the stock of which is beneficially owned by any of such
Persons) (collectively, the "GLOBAL INSIDERS"), has any agreement with Global
(other than normal employment arrangements) or any interest in any property,
real, personal or mixed, tangible or intangible, used in or pertaining to the
business of Global (other than ownership of capital stock of Global). Global is
not indebted to any Global Insider (except for amounts due as normal salaries
and bonuses and in reimbursement of ordinary business expenses) and no Global
Insider is indebted to Global except for cash advances for ordinary business
expenses). None of the Global Insiders has any direct or indirect interest in
any competitor, supplier or customer of Global or in any Person from whom or to
whom Global leases any property, or in any other Person with whom Global
transacts business of any nature. For purposes of this SECTION 4.13, the members
of the immediate family of an officer, director or employee shall consist of the
spouse, parents, children and siblings of such officer, director or employee.
4.14 COMPLIANCE WITH LAWS; PERMITS.
(a) Except for any noncompliance that would not reasonably be
expected to have a Material Adverse Effect on Global, to the best of Global's
knowledge, Global and its officers, directors, agents and employees have
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complied with all applicable laws, Environmental Laws, regulations and other
requirements, including, but not limited to, federal, state, local and foreign
laws, ordinances, rules, regulations and other requirements pertaining to equal
employment opportunity, employee retirement, affirmative action and other hiring
practices, occupational safety and health, workers' compensation, unemployment
and building and zoning codes, and no claims have been filed against Global, and
Global has not received any written notice, alleging a violation of any such
laws, Environmental Laws, regulations or other requirements.
(b) Global has no licenses, permits, Environmental Permits or
certificates from federal, state, local and foreign authorities (including,
without limitation, federal and state agencies regulating occupational health
and safety) and no such items are necessary to permit it to conduct its business
and own and operate its properties.
4.15 FINANCIAL STATEMENTS. Global has provided LOCATEPLUS with audited
balance sheets of Global as of December 31, 2004 and December 31, 2005, and the
related audited statements of income, changes in stockholders' equity and cash
flows of Global for the periods then ended, and unaudited balance sheet of
Global as of June 30, 2006 and related unaudited statements of income, changes
in stockholders' equity and cash flows the period then ended (the "GLOBAL
FINANCIAL STATEMENTS"). The Global Financial Statements have been prepared in a
manner consistent with past practice and fairly present, in all material
respects, the financial position and the results of operations, changes in
stockholders' equity, and cash flows of Global as of the date of and for the
period referred to in the Global Financial Statements. The Global Financial
Statements are consistent with the financial statements filed with the Global
SEC Filings.
4.16 BOOKS AND RECORDS. The books of account, minute books, stock
record books, and other similar records of Global, complete copies of which have
been made available to LOCATEPLUS have been properly kept and contain no
inaccuracies except for inaccuracies that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Global.
4.17 REAL PROPERTY. Global does not own any real property. Global has
good and valid title to all of its leaseholds and other interests free and clear
of all Liens, except for such Liens which do not detract from the value or
interfere with the present use of the property subject thereto or affected
thereby. The real property to which such leaseholds and other interests pertain
constitutes all of the real property used in Global's business.
4.18 INSURANCE. The insurance policies obtained and maintained by
Global that are material to Global are in full force and effect, all premiums
due and payable thereon have been paid (other than retroactive or retrospective
premium adjustments that Global is not currently required, but may in the future
be required, to pay with respect to any period ending prior to the date of this
Agreement), and Global has received no written notice of cancellation or
termination with respect to any such policy that has not been replaced on
substantially similar terms prior to the date of such cancellation.
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4.19 ENVIRONMENTAL MATTERS.
(a) To its knowledge, except as would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect on
Global, (i) Global has not transported, handled, treated, stored, used,
manufactured, distributed, disposed of, released or exposed its employees or
others to any Hazardous Materials in violation of any applicable law, and (ii)
Global has not engaged in any Hazardous Materials Activities in violation of any
applicable law, rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date hereof to prohibit,
regulate or control Hazardous Materials or any Hazardous Material Activity.
(b) No action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or to Global's knowledge,
threatened against Global concerning (i) any Global Permit relating to any
environmental matter, (ii) any Hazardous Material or (iii) any Hazardous
Materials Activity of Global. Global is not aware of any fact or circumstance
which could involve Global in any environmental litigation or impose upon Global
any environmental liability.
(c) Global has complied and is in compliance, in each case in
all material respects, with all applicable laws, rules, regulations, treaties
and statutes promulgated by any Governmental Entity in effect prior to or as of
the date hereof to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
4.20 PROPRIETARY INFORMATION AND INVENTIONS. No current Global
employee, consultant, or advisory board member is a party to either any
non-disclosure agreement or an alternative employment agreement with Global
containing comparable non-disclosure provisions.
4.21 TAX-FREE REORGANIZATION. Neither Global nor, to Global's
knowledge, any of its Affiliates has taken or agreed to take any action that
would prevent the Merger from qualifying as a reorganization under Section
368(a) of the Code.
4.22 FULL DISCLOSURE. To its knowledge, the representations and
warranties of each of Global and LPA contained in this Agreement (and in any
schedule, exhibit, certificate or other instrument to be delivered under this
Agreement) do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which such statements
were made, not misleading. There is no fact of which Global or LPA has knowledge
that has not been disclosed to LOCATEPLUS in the Global SEC Filings or pursuant
to this Agreement, including the schedules hereto, all taken together as a
whole, which has had or would reasonably be expected to have a Material Adverse
Effect on Global or LPA, or materially adversely affect the ability of Global or
LPA to consummate in a timely manner the transactions contemplated hereby.
4.23 TRADING MATTERS. At the date hereof and at the Closing Date (i)
the Global Common Stock is traded and quoted in the over-the-counter bulletin
board market maintained by The Nasdaq Stock Market, Inc. (the "OTCBB"), (ii)
Global has and shall have performed or satisfied all of its undertakings to, and
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of its obligations and requirements with, the SEC, and (iii) Global has not
taken, and shall not have taken, any action that would preclude, or otherwise
jeopardize, the inclusion of the Global Common Stock for quotation on the OTCBB,
the Nasdaq Stock Market, or the American Stock Exchange.
4.24 VOTES REQUIRED. The affirmative votes of the holders of a majority
of the outstanding shares of Global and LPA Stock (the "Requisite Global and LPA
Stockholder Votes") are the only votes of the holders of any classes or series
of Global or LPA capital stock necessary to approve this Agreement, the Merger
and the other transactions contemplated hereby.
ARTICLE 5
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 CONDUCT OF BUSINESS. During the period from the date of this
Agreement until the Effective Time, each of Global and LOCATEPLUS shall, and
shall cause their respective subsidiaries to, carry on their respective
businesses in the ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent therewith, use all reasonable efforts to
preserve intact their current business organizations, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers, licensors, licensees, distributors and
others having business dealings with them. Global shall use its reasonable best
efforts to keep the other informed of business developments, present or
anticipated, which would be likely to have a material effect upon the progress
or timing of the Merger. Without limiting the generality of the foregoing, from
the date of this Agreement to the Effective Time, LOCATEPLUS shall, not unless
Global shall otherwise agree in writing (which consent shall not be unreasonably
withheld) or as otherwise expressly contemplated or permitted by other
provisions of this Agreement, including but not limited to this SECTION 5.1, or
set forth on SCHEDULE 5.1, directly or indirectly:
(a) (i) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned subsidiary to
its parent, (ii) split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock or (iii) purchase, redeem or
otherwise acquire any shares of capital stock or any other securities thereof or
any rights, warrants or options to acquire any such shares or other securities;
(b) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities;
(c) amend its articles or certificate of incorporation,
by-laws or other comparable charter or organizational documents;
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(d) acquire or agree to acquire (including, without
limitation, by merger, consolidation or acquisition of stock or assets) any
business, including through the acquisition of any interest in any corporation,
partnership, joint venture, association or other business organization or
division thereof;
(e) (i) mortgage or otherwise encumber or subject to any Lien
any material properties or assets, or (ii) except in the ordinary course of
business consistent with past practice and pursuant to existing contracts or
commitments, sell, lease, transfer or otherwise dispose of any material
properties or assets.
(f) make or agree to make any new capital expenditures in
excess of $250,000;
(g) make any material tax election (unless required by law) or
settle or compromise any material income-tax liability;
(h) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice and in accordance with their
terms or waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which it is a party;
(i) commence a lawsuit other than (i) for the routine
collection of bills or (ii) to enforce this Agreement or (iii) in such cases
where it in good faith determines that the failure to commence suit would result
in a material impairment of a valuable aspect of its business, provided that
LOCATEPLUS informs Global prior to filing such suit;
(j) (i) enter into or amend any employment or severance
agreement or similar arrangements, (ii) enter into any agreement pursuant to
which it will provide services for a term of more than 30 days at a fixed or
capped price or otherwise pursuant to terms that are not consistent with
agreements entered into by LOCATEPLUS or any of its subsidiaries in the ordinary
course of business, (iii) enter into any contracts or series of related
contracts in excess of $250,000, (v) make any determination as to amounts
payable under any plan, arrangement, or agreement, providing for discretionary
incentive compensation or bonus to any officer, director, employee or
independent contractor or (vi) enter into, adopt, or amend any agreement,
arrangement, or benefit plan so as to increase its liability (whether or not
contingent) in respect of compensation or benefits except as may be required by
law; or
(k) authorize any of, or commit or agree to take any of, the
foregoing actions. Global acknowledges and agrees that the terms of this Section
5.1 do not prevent LOCATEPLUS from complying with the terms of all outstanding
LOCATEPLUS Stock Options, including the issuance of LOCATEPLUS Common Stock upon
the exercise of LOCATEPLUS Stock Options in accordance with their terms on such
date.
5.2 GOVERNMENTAL FILINGS. Each party will use all reasonable efforts
and will cooperate with the other party in the preparation and filing, as soon
as practicable, of all filings, applications or other documents required under
applicable laws, including, but not limited to, the Securities Act and the
34
Exchange Act, to consummate the transactions contemplated by this Agreement.
Prior to submitting each filing, application, registration statement or other
document with the applicable regulatory authority, each party will, to the
extent practicable, provide the other party with an opportunity to review and
comment on each such filing, application, registration statement or other
document to the extent permitted by applicable law. Each party will use all
reasonable efforts and will cooperate with the other party in taking any other
actions necessary to obtain such regulatory or other approvals and consents at
the earliest practicable time, including participating in any required hearings
or proceedings. Subject to the terms and conditions herein provided, each party
will use all reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable law and regulations to consummate and make effective as promptly as
practicable the Merger and the other transactions contemplated by this
Agreement.
5.3 EXPENSES. Except as otherwise provided in this Agreement, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.
5.4 DUE DILIGENCE; ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date hereof and the Closing, LOCATEPLUS and Global
shall afford to the other party and their authorized representatives the
opportunity to conduct and complete a due diligence investigation of the other
party as described herein, for the limited purpose of reasonably verifying the
representations and warranties contained in this Agreement, PROVIDED, HOWEVER,
that the foregoing rights granted to each party shall, whether or not and
regardless of the extent to which the same are exercised, in no way affect the
nature or scope of the representations, warranties and covenants of the
respective party set forth herein.
(b) Neither Global nor LOCATEPLUS nor any of their officers, employees,
attorneys, accountants and other representatives shall disclose to third parties
or otherwise use any confidential information received from the other party in
the course of investigating, negotiating, and performing the transactions
contemplated by this Agreement. The term "confidential information" shall mean
nonpublic information revealed by or through a party (whether in writing, orally
or by another means) (a "Disclosing Party") to the other (a "Receiving Party")
including, without limitation, (a) either the fact that discussions or
negotiations are taking place concerning the Transaction or any of the terms,
conditions, or other facts with respect to the Transaction, including the status
thereof, (b) all forms and types of financial, business, scientific, technical,
economic, or engineering information including patterns, plans, compilations,
program devices, formulae, designs, prototypes, methods, techniques, processes,
procedures, programs, or codes, whether tangible or intangible, and regardless
of how stored, compiled, or memorialized, whether physically, electronically,
graphically, photographically, in writing or by some other means, (c)
information traditionally recognized as proprietary trade secrets, (d) all data
and information about the Company's customers (current, former or prospective)
and officers, directors and employees (including the customers and officers,
directors and employees of the Company's corporate parent and those of such
parent's direct and indirect subsidiaries), (e) Nonpublic Personal Information
(as defined below) and (f) all copies of any of the foregoing or any analyses,
studies or reports that contain, are based on, or reflect any of the foregoing.
As between the Company and the Recipient, Confidential Information and all
35
applicable intellectual property rights embodied in the Confidential Information
shall remain the property of the Disclosing Party, PROVIDED, HOWEVER, that the
following shall not be deemed to be confidential information:
(i) information that is known to the party receiving the
information at the time of disclosure, unless any
individual who knows the information is under an
obligation to keep that information confidential;
(ii) information that becomes publicly known or available
without the disclosure thereof by the party receiving
the information in violation of this Agreement; or
(iii) information that is received by the party receiving
the information from a third party not under an
obligation to keep that information confidential.
This provision shall not prohibit the disclosure of information
required to be made under federal or state securities laws. If any disclosure is
so required, the party making such disclosure shall consult with the other party
prior to making such disclosure, and the parties shall use all reasonable
efforts, acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties and/or a request for confidential treatment by the
agency to which it is disclosed.
5.5 TAX TREATMENT. None of Global, LPA or LOCATEPLUS, or the Surviving
Company after the Effective Time, shall knowingly take any action which could
reasonably be expected to disqualify the Merger as a "reorganization" within the
meaning of Section 368(a) of the Code.
5.6 PRESS RELEASES. LOCATEPLUS and Global shall agree with each other
as to the form and substance of any press release or public announcement related
to this Agreement or the other transactions contemplated hereby; PROVIDED,
HOWEVER, that nothing contained herein shall prohibit either party, following
notification to the other party, from making any disclosure which is required by
law or regulation. If any such press release or public announcement is so
required, the party making such disclosure shall consult with the other party
prior to making such disclosure, and the parties shall use all reasonable
efforts, acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties.
5.7 GLOBAL STOCKHOLDERS' MEETING; MATERIALS TO STOCKHOLDERS. Global
shall, in accordance with Nevada Revised Statutes, federal securities laws and
its certificate of incorporation and By-laws, duly call, give notice of, convene
and hold a special meeting of Global stockholders (the "GLOBAL STOCKHOLDER
MEETING") as promptly as practicable after the SEC makes the Registration/Proxy
Statement effective as described in Section 5.11, for the purpose of obtaining
the Requisite Global Stockholder Vote, for this Agreement, the Merger and the
other transactions contemplated hereby.
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5.8 LOCATEPLUS STOCKHOLDERS' MEETING; MATERIALS TO STOCKHOLDERS.
LOCATEPLUS shall, in accordance with Section 251 of the DGCL, federal securities
laws and its certificate of incorporation and By-laws, duly call, give notice
of, convene and hold a special meeting of LOCATEPLUS stockholders (the
"LOCATEPLUS STOCKHOLDER MEETING") as promptly as practicable after the SEC makes
the Registration/Proxy Statement effective as described in Section 5.11, for the
purpose of obtaining the Requisite LOCATEPLUS Stockholder Vote, including the
approval of this Agreement, the Merger and the other transactions contemplated
hereby.
5.9 NO SOLICITATION. Unless and until this Agreement shall have been
terminated pursuant to Section 7.1, neither LOCATEPLUS, nor its officers,
directors, Affiliates, employees, investment bankers, brokers or other agents
shall, directly or indirectly, encourage, solicit or initiate discussions or
negotiations with, or engage in negotiations or discussions with, or provide
non-public information to, any Person, other than Global, relating to an
Acquisition Proposal; PROVIDED that LOCATEPLUS may engage in such discussions or
negotiations which have been initiated prior to the execution of this Agreement
or which are in response to any unsolicited proposal from an unrelated party if
the Board of Directors of LOCATEPLUS determines, in good faith, after
consultation with counsel, that the failure to engage in such discussions would
constitute a breach of the fiduciary or legal obligations of the Board of
Directors of LOCATEPLUS. LOCATEPLUS will promptly advise Global if it receives
an Acquisition Proposal with respect to the matters described above. In the
event LOCATEPLUS either receives and accepts an Acquisition Proposal and
terminates this Agreement for that reason under Section 7.1(d) LOCATEPLUS shall
pay to Global a "termination fee" equal to Seven Hundred and Fifty Thousand
Dollars ($750,000) plus all expenses incurred by Global in connection with this
Agreement, whether or not it consummates a transaction under the Acquisition
Proposal.
5.10 FAILURE TO FULFILL CONDITIONS. In the event that any of the
parties hereto determines that a condition to its respective obligations to
consummate the transactions contemplated hereby cannot be fulfilled on or prior
to the termination of this Agreement, such party will promptly notify the other
parties hereto.
5.11 REGISTRATION OF GLOBAL COMMON STOCK. As soon as reasonably
practicable following the date of this Agreement, Global and LOCATEPLUS shall
prepare and file with the SEC the Proxy Statement/Prospectus, and Global shall
prepare and file with the SEC the Registration Statement and Proxy Statement, in
which the Proxy Statement/Prospectus will be included. Each of Global and
LOCATEPLUS shall use reasonable best efforts to have the Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing and to keep the Registration Statement effective as long as is
necessary to consummate the Merger and the other transactions contemplated
hereby. LOCATEPLUS will use reasonable best efforts to cause a timely Proxy
Statement/Prospectus to be mailed to LOCATEPLUS Stockholders as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act. Global shall also take any action (other than qualifying to do
business in any jurisdiction in which it is not now so qualified or filing a
general consent to service of process) required to be taken under any applicable
state securities laws in connection with the issuance and reservation of shares
of Global Common Stock pursuant to this Agreement and LOCATEPLUS shall furnish
all information concerning LOCATEPLUS and the holders of LOCATEPLUS Common Stock
37
as may be reasonably requested in connection with any such action. No filing of,
or amendment or supplement to, the Registration Statement or the Proxy
Statement/Prospectus will be made by Global without the prior consent of
LOCATEPLUS (which shall not be unreasonably withheld, delayed or conditioned)
and without providing LOCATEPLUS the reasonable opportunity to review and
comment thereon. Global will advise LOCATEPLUS, promptly after it receives oral
or written notice thereof, of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, the issuance of
any stop order, the suspension of the qualification of the Global Common Stock
issuable as Merger Consideration for offering or sale in any jurisdiction, or
any oral or written request by the SEC for amendment of the Proxy
Statement/Prospectus or the Registration Statement or comments thereon and
responses thereto or requests by the SEC for additional information and will
promptly provide LOCATEPLUS with copies of any written communication from the
SEC or any state securities commission. If at any time prior to the Effective
Time any information relating to Global or LOCATEPLUS or any of their respective
Affiliates, officers or directors, should be discovered by Global or LOCATEPLUS
which should be set forth in an amendment or supplement to any of the
Registration Statement or the Proxy Statement/Prospectus, so that any of such
documents would not include any misstatement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading, the
party which discovers such information shall promptly notify the other parties
hereto and an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of LOCATEPLUS.. Each of LOCATEPLUS and Global
shall use reasonable best efforts to cause to be delivered to the other party
two letters from their respective independent accountants, one dated
approximately as of the date the Registration Statement is declared effective
and one dated approximately as of the Effective Date, each addressed to the
other party, in form and substance reasonably satisfactory to the other party
and customary in scope and substance for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement.
5.12 NOTIFICATION OF CERTAIN MATTERS. At or prior to the Effective
Time, each party shall give prompt notice to the other party of (i) the
occurrence or failure to occur of any event or the discovery of any information,
which occurrence, failure or discovery would be likely to cause any
representation or warranty on its part contained in this Agreement to be untrue,
inaccurate or incomplete after the date hereof in any material respect or, in
the case of any representation or warranty given as of a specific date, would be
likely to cause any such representation or warranty on its part contained in
this Agreement to be untrue, inaccurate or incomplete in any material respect as
of such specific date, and (ii) any material failure of such party to comply
with or satisfy any covenant or agreement to be complied with or satisfied by it
hereunder.
5.13 INFORMATION STATEMENT AND/OR PROXY STATEMENT. Global and
LOCATEPLUS will jointly prepare any information statement (including but not
limited to a Proxy Statement) to be circulated in connection with any written
consent by LOCATEPLUS stockholders described in Section 5.8 (the "INFORMATION
STATEMENT") in connection with the Merger in accordance with the Securities Act
and the DGCL, and LOCATEPLUS shall provide the definitive Information Statement
as approved by the SEC to its stockholders as soon as practicable after the date
hereof. Global and LOCATEPLUS will furnish all information concerning Global and
LOCATEPLUS, respectively, as may be reasonably necessary or requested in
connection with the foregoing, including, specifically, that the Boards of
38
Directors of LOCATEPLUS and Global, respectively, within its respective
fiduciary capacity, recommend a vote "FOR" the Merger. None of the information
supplied or to be supplied by Global or LOCATEPLUS for inclusion or
incorporation by reference in the Information Statement will, at the time the
Information Statement is first published, sent or given to holders of the
LOCATEPLUS Stock, and at any time it is amended or supplemented, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. If any of the
parties hereto becomes aware prior to the Effective Time of any information
furnished by it that would cause any of the statements in the Information
Statement to be false or misleading with respect to any material fact, or to
omit to state any material fact necessary to make the statements therein not
false or misleading, it will promptly inform the other parties hereto and take
the necessary steps to correct the Information Statement.
5.14 SECURITIES LAW FILINGS. Promptly after the execution of this
Agreement, the parties hereto shall cooperate in the preparation and filing of
all filings required by applicable securities laws, including, without
limitation, current reports on Form 8-K and information required by Rule 14f-1
under the Exchange Act, Proxy Statements, and a Securities Act registration
statement.
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
of each party to effect the transactions contemplated hereby are subject to the
fulfillment or waiver at or prior to the Effective Time of the following
conditions:
(a) NO PROHIBITIVE CHANGE OF LAW. There shall have been no
law, statute, rule or regulation, domestic or foreign, enacted or promulgated
which would prohibit or make illegal the consummation of the transactions
contemplated hereby.
(b) STOCKHOLDER APPROVALS. This Agreement, the Merger and the
other transactions contemplated hereby shall have been approved by both the
Requisite LOCATEPLUS Stockholder Vote and the Requisite Global and LPA
Stockholder Votes
(c) ADVERSE PROCEEDINGS. There shall not be instituted or
pending any action or proceeding before any court or governmental authority or
agency (i) challenging or seeking to make illegal, or to delay or otherwise
directly or indirectly restrain or prohibit, the consummation of the
transactions contemplated hereby or seeking to obtain material damages in
connection with such transactions, (ii) seeking to prohibit direct or indirect
ownership or operation by Global or LPA of all or a material portion of the
business or assets of LOCATEPLUS, or to compel Global or LPA or any of their
respective subsidiaries or LOCATEPLUS to dispose of or to hold separately all or
a material portion of the business or assets of Global or of LOCATEPLUS, as a
result of the transactions contemplated hereby; (iii) seeking to invalidate or
render unenforceable any material provision of this Agreement or any of the
other agreements attached as exhibits hereto or contemplated hereby, or (iv)
otherwise relating to and materially adversely affecting the consummation of the
transactions contemplated hereby.
39
(d) GOVERNMENTAL ACTION. There shall not be any action taken,
or any statute, rule, regulation, judgment, order or injunction enacted,
entered, enforced, promulgated, issued or deemed applicable to the transactions
contemplated hereby, by any federal, state or other court, government or
governmental authority or agency, that would reasonably be expected to result,
directly or indirectly, in any of the consequences referred to in Section
6.1(c).
(e) FEDERAL TAX OPINION. LOCATEPLUS shall have received a tax
opinion from counsel to LOCATEPLUS acceptable to Global, which opinion may be
subject to customary qualifications, to the effect that for federal income tax
purposes the Merger will qualify as a reorganization under Section 368(a) of the
Code and that LOCATEPLUS, LPA and Global will each be a party to the
reorganization within the meaning of Section 368(b) of the Code. The issuance of
the opinion shall be conditioned upon the receipt by such counsel of customary
representation letters from each of LOCATEPLUS, Global and LPA in each case in
form and substance reasonably satisfactory to such counsel.
(f) COMPLIANCE WITH SECURITIES LAW REQUIREMENTS. Global shall
be in compliance in all material respects with all requirements of applicable
securities laws, including, without limitation, the filing of reports required
by Section 13 of the Exchange Act, and shall have taken all actions with respect
thereto as shall be required or reasonably requested by LOCATEPLUS in connection
therewith.
(g) UPDATED SCHEDULES. The parties shall update and deliver to
each other, as of the Effective Time, all schedules attached to this Agreement
and/or required to be delivered pursuant to it, so that such schedules are, as
of the Effective Time, accurate and complete and consistent with any previous
representations and warranties made by said party.
6.2 ADDITIONAL CONDITIONS TO OBLIGATION OF GLOBAL AND LPA. The
obligation of Global and LPA to consummate the transactions contemplated hereby
in accordance with the terms of this Agreement is also subject to the
fulfillment or waiver of the following conditions:
(a) REPRESENTATIONS AND COMPLIANCE. The representations and
warranties of LOCATEPLUS contained in this Agreement, disregarding any
materiality qualifications contained herein, shall be true and correct in all
material respects on and as of the Effective Time, with the same force and
effect as though made on and as of such date. LOCATEPLUS shall, in all material
respects, have performed each obligation and agreement and complied with each
covenant required to be performed and complied with by it hereunder at or prior
to the Effective Time.
(b) OFFICERS' CERTIFICATE. LOCATEPLUS shall have furnished to
Global a certificate executed by each of the Chief Executive Officer and the
Treasurer (or Chief Financial Officer) of LOCATEPLUS, dated as of the Effective
Date, in which each such officer shall certify that, to the best of his
knowledge, the conditions set forth in Section 6.2(a) have been fulfilled.
(c) SECRETARY'S CERTIFICATE. LOCATEPLUS shall have furnished
to Global (i) copies of the text of the resolutions by which the corporate
action on the part of LOCATEPLUS necessary to approve this Agreement, the
Certificate of Merger and the transactions contemplated hereby and thereby were
40
taken, (ii) a certificate dated as of the Effective Date executed on behalf of
LOCATEPLUS by its corporate secretary or one of its assistant corporate
secretaries certifying to Global that such copies are true, correct and complete
copies of such resolutions and that such resolutions were duly adopted and have
not been amended or rescinded, (iii) an incumbency certificate dated as of the
Effective Date executed on behalf of LOCATEPLUS by its corporate secretary or
one of its assistant corporate secretaries certifying the signature and office
of each officer of LOCATEPLUS executing this Agreement, the Certificate of
Merger or any other agreement, certificate or other instrument executed pursuant
hereto by LOCATEPLUS, and (iv) a copy of the certificate of incorporation of
LOCATEPLUS, certified by the Secretary of State of the State of Delaware, and a
certificate from the Secretary of State of the State of Delaware evidencing the
good standing of LOCATEPLUS in such jurisdiction.
(d) CONSENTS AND APPROVALS. LOCATEPLUS shall have obtained all
consents and approvals necessary to consummate the transactions contemplated by
this Agreement in order that the transactions contemplated herein not constitute
a breach or violation of, or result in a right of termination or acceleration
of, or creation of any encumbrance on any of LOCATEPLUS's assets pursuant to the
provisions of, any agreement, arrangement or undertaking of or affecting
LOCATEPLUS or any license, franchise or permit of or affecting LOCATEPLUS.
(e) DISSENTERS' RIGHTS. No more than twenty percent (20%) of
the outstanding shares of LOCATEPLUS Common Stock shall have been determined by
a court of applicable jurisdiction to be legally entitled to exercise their
appraisal rights under Section 262 of the DCCL.
(f) AUDITED FINANCIAL STATEMENTS. LOCATEPLUS shall have
furnished to Global the audited financial statements that are required to be
filed with the SEC as an exhibit to the Current Report of Global on Form 8-K, or
in connection with a Registration Statement or any other required SEC Filings
available on or before Closing. The audited financial statements shall be in
form satisfactory to Global's auditors, and LOCATEPLUS' auditors shall have
consented to the inclusion of such LOCATEPLUS financial statements in Global SEC
Filings.
(g) NO MATERIAL ADVERSE EFFECT. After the date of this
Agreement, there shall not have been any Material Adverse Effect on LOCATEPLUS.
(h) RESIGNATIONS. LOCATEPLUS's directors immediately prior to
the Effective Time shall have delivered their respective resignations from such
positions, all to be effective as of the Effective Time.
6.3 ADDITIONAL CONDITIONS TO OBLIGATION OF LOCATEPLUS. The obligation
of LOCATEPLUS to consummate the transactions contemplated hereby in accordance
with the terms of this Agreement is also subject to the fulfillment or waiver of
the following conditions:
(a) REPRESENTATIONS AND COMPLIANCE. The representations and
warranties of Global and LPA contained in this Agreement, disregarding any
materiality qualifications contained herein, shall be true and correct in all
material respects on and as of the Effective Time, with the same force and
41
effect as though made on and as of such date. Each of Global and LPA shall, in
all material respects, have performed each obligation and agreement and complied
with each covenant required to be performed and complied with by it hereunder at
or prior to the Effective Time.
(b) OFFICERS' CERTIFICATE. Global shall have furnished to
LOCATEPLUS a certificate executed by each of the Chief Executive Officer and the
Chief Financial Officer of Global, dated as of the Effective Date, in which each
such officer shall certify that, to the best of his knowledge, the conditions
set forth in Section 6.3(a) have been fulfilled.
(c) SECRETARY'S CERTIFICATE. Global shall have furnished to
LOCATEPLUS (i) copies of the text of the resolutions by which the corporate
action on the part of each of Global and LPA necessary to approve this Agreement
and the Certificate of Merger, the election of the directors of the Surviving
Company to serve following the Effective Time and the transactions contemplated
hereby and thereby were taken, which shall be accompanied by a certificate of
the corporate secretary or assistant corporate secretary of each of Global and
LPA, in each case, dated as of the Effective Date certifying to LOCATEPLUS that
such copies are true, correct and complete copies of such resolutions and that
such resolutions were duly adopted and have not been amended or rescinded, (ii)
an incumbency certificate dated as of the Effective Date executed on behalf of
each of Global and LPA by their respective corporate secretary or one of their
respective assistant corporate secretaries certifying the signature and office
of each officer of Global and LPA, as the case may be, executing this Agreement,
the Certificate of Merger or any other agreement, certificate or other
instrument executed pursuant hereto, and (iii) a copy of the certificate of
incorporation of each of Global and LPA, certified by the Secretary of State of
the State of Nevada and Delaware, respectively and certificates from the
Secretary of State of Nevada and Delaware, respectively evidencing the good
standing of each of Global and LPA in such jurisdictions.
(d) CONSENTS AND APPROVALS. Global and LPA shall have obtained
all consents and approvals necessary to consummate the transactions contemplated
by this Agreement in order that the transactions contemplated herein not
constitute a breach or violation of, or result in a right of termination or
acceleration of, or creation of any encumbrance on any of Global's or LPA's
assets pursuant to the provisions of, any agreement, arrangement or undertaking
of or affecting Global or LPA or any license, franchise or permit of or
affecting Global or LPA.
(e) NO MATERIAL ADVERSE EFFECT. After the date of this
Agreement, there shall not have been any Material Adverse Effect on Global.
(f) The SEC shall have made effective the registration
statement referred to in section 5.11
42
ARTICLE 7
TERMINATION
7.1. TERMINATION. This Agreement shall terminate at the Effective Time
and may be terminated at any time prior to the Effective Time (notwithstanding
the Requisite LOCATEPLUS Stockholder Vote and the Requisite Global and LPA
Stockholders Vote):
(a) by mutual consent of LOCATEPLUS and Global, if the Board
of Directors of each so determines by vote of a majority of the members of its
entire board;
(b) by Global, if any representation of LOCATEPLUS set forth
in this Agreement was inaccurate when made, or becomes materially inaccurate, or
any condition set forth in Section 6.2(a) could not be satisfied;
(c) by LOCATEPLUS, if any representation of Global or LPA set
forth in this Agreement was inaccurate when made, or becomes materially
inaccurate, or any condition set forth in Section 6.3(a) could not be satisfied;
(d) by LOCATEPLUS if it has received an Acquisition Proposal
as more fully described in Section 5.9.
(e) by either LOCATEPLUS or Global, if either the Requisite
LOCATEPLUS Stockholder Vote or Requisite Global and LPA Stockholders Vote shall
not have been obtained by March 31, 2007 or such later date as shall be mutually
agreed to by the parties; or
(f) by either LOCATEPLUS or Global, if the Merger and the
other transactions contemplated hereby shall not have been consummated on or
before March 31, 2007, or such later date as LOCATEPLUS and Global may mutually
agree (unless the failure to consummate the Merger by such date shall be due to
the action or failure to act of the party seeking to terminate this Agreement in
breach of such party's obligations under this Agreement).
(g) By Global if the condition set forth in Section 6.2(e)
exceeds twenty percent (20%).
Any party desiring to terminate this Agreement shall give prior written
notice of such termination and the reasons therefor to the other party.
7.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 7.1 hereof, this Agreement shall become void
and there shall be no liability on the part of any of the parties hereto, except
for the provisions of Sections 5.3, 5.4(b), 5.6, 5.9 and 7.2 and Article 8,
which shall survive any termination of this Agreement. No termination of this
Agreement shall relieve any party hereto from liability for the willful and
intentional breach of its representations, warranties, covenants or agreements
set forth in this Agreement occurring prior to such termination and, with
respect to Sections 5.3, 5.4(b), 5.6, 5.9 and 7.2 and Article 8, occurring prior
to, on or after such termination.
43
ARTICLE 8
GENERAL PROVISIONS
8.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be sufficiently given if made by hand delivery, fax, overnight
delivery service, or registered or certified mail (postage prepaid and return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by it by like notice):
IF TO LOCATEPLUS: LOCATEPLUS HOLDING CORPORATION.
000 Xxxxxxxx Xxxxxx, Xxxxx 000X
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxxxx, Chairman
WITH COPIES TO: Xxxxxxxx X. Xxxxxxxx, Esq.
00 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
IF TO GLOBAL: Global Group, Inc.
00 Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
WITH COPIES TO: Law Offices of Xxxxxx X. Xxxxxxx
0000 00xx Xxxxxx, X.X., Xxxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
All such notices and other communications shall be deemed to have been
duly given as follows: when delivered by hand, if personally delivered, when
received; if delivered by registered or certified mail (postage prepaid and
return receipt requested), when receipt acknowledged; if faxed, on the day of
transmission or, if that day is not a business day, on the next business day;
and the next day delivery after being timely delivered to a recognized overnight
delivery service.
8.2 NO SURVIVAL. The representations and warranties contained in this
Agreement and in any instrument delivered pursuant to this Agreement will
terminate at the Effective Time or on the earlier termination of this Agreement
except as provided in Section 7.2.
8.3 INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections, Articles, Exhibits or
Schedules refer to Sections of, Articles of, Exhibit to, or Schedule to, this
Agreement unless otherwise stated. Words such as "herein," "hereinafter,"
"hereof," "hereto," "hereby" and "hereunder," and words of like import, unless
the context requires otherwise, refer to this Agreement (including the Exhibits
and Schedules hereto). As used in this Agreement, the masculine, feminine and
neuter genders shall be deemed to include the others if the context requires.
44
8.4 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
shall negotiate in good faith to modify this Agreement and to preserve each
party's anticipated benefits under this Agreement.
8.5 AMENDMENT. Except as otherwise required by applicable law, this
Agreement may be amended or modified by the parties hereto only by an instrument
in writing signed on behalf of each of the parties hereto, provided that any
party being asked to approve or execute an amendment which it reasonably
concludes will materially changes the terms of the transaction in a way adverse
to its stockholders may require the a vote or consent of such stockholders prior
to approval .
8.6 WAIVER. At any time prior to the Effective Time, any party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto or (b) waive compliance with any of the
agreements of the other parties hereto or with any conditions to its own
obligations, in each case only to the extent such obligations, agreements and
conditions are intended for its benefit. Any such extension or waiver shall be
valid only if made in writing and duly executed by the party giving such
extension or waiver. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
8.7 INSURANCE
INSURANCE. For a period of three (3) years after the Effective Time,
each of Global and the Surviving Corporation shall cause to be maintained in
effect the current policies (whether through purchase of a "tail end" policy or
otherwise) of directors' and officers' and fiduciary liability insurance
maintained by LocatePlus, including with respect to Claims arising from facts or
events which occurred on or before the Effective Time (including those related
to this Agreement and the transactions contemplated hereby); provided, that
Global or the Surviving Corporation may substitute therefor policies of at least
the same coverage and amounts containing terms and conditions which are no less
advantageous to former officers and directors of LOCATEPLUS or any Subsidiary.
8.8 MISCELLANEOUS. This Agreement (together with all other documents
and instruments referred to herein) (a) constitutes the entire agreement, and
supersedes all prior agreements, understandings and undertakings, both written
and oral, among the parties with respect to the subject matter hereof; and (b)
shall be binding upon, inure to the benefit of, and be enforceable by the
parties hereto and their respective successors and assigns, PROVIDED that
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties hereto.
45
8.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
8.10 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with the laws of the State of New York (except to the extent the
DGCL applies), without regard to the conflicts of law rules of such state.
8.11 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement must be brought against any of the parties in the courts of the State
of New York, County of New York, or, if it has or can acquire jurisdiction, in
the United States District Court for the Southern District of New York, and each
of the parties consents to the jurisdiction of those courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any such action or proceeding may be
served by sending or delivering a copy of the process to the party to be served
at the address and in the manner provided for the giving of notices in Section
8.1. Nothing in this Section 8.11, however, affects the right of any party to
serve legal process in any other manner permitted by law.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK - SIGNATURE PAGE TO FOLLOW]
Execution Document
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers on the date first written above.
LOCATEPLUS HOLDINGS CORPORATION
By: /s/ Xxx X. Xxxxxxxxx
------------------------------
Name: Xxx X. Xxxxxxxxx
Title: President
GLOBALOPTIONS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx, Ph.D.
Title: Chief Executive Officer and
Chairman
LOCATEPLUS ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx, Ph.D.
Title: Chief Executive Officer and
President
Execution Document
Exhibit A
CERTIFICATE OF MERGER
OF
LOCATEPLUS ACQUISITION CORPORATION
AND
LOCATEPLUS HOLDINGS CORPORATION
In accordance with Section 251 of the General Corporation Law of the
State of Delaware, LOCATEPLUS HOLDINGS CORPORATION hereby certifies as follows:
FIRST: That the name and state of incorporation of each of the
constituent corporations of the merger is as follows:
NAME STATE OF INCORPORATION
---- ----------------------
LocatePlus Acquisition Corporation Delaware
LocatePlus Holdings Corporation Delaware
SECOND: That an Agreement and Plan of Merger has been approved,
adopted, certified, executed and acknowledged by each of the constituent
corporations in accordance with the requirements of Section 251 of the General
Corporation Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the merger is
LOCATEPLUS HOLDINGS CORPORATION.
FOURTH: The certificate of incorporation of LocatePlus Acquisition
Corporation, as amended to date, will be the certificate of incorporation of the
surviving corporation.
FIFTH: The executed Agreement and Plan of Merger is on file at an
office of the surviving corporation, the address of which is:
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
SIXTH: That a copy of the Agreement and Plan of Merger will be
furnished by the surviving corporation, on request and without cost, to any
stockholder of any constituent corporation.
The undersigned corporation has caused this certificate of merger to be
signed on ___________, 2006.
LOCATEPLUS HOLDINGS CORPORATION, INC.
By:
---------------------------------
Name:
Title: Chief Executive Officer
