AGREEMENT AND PLAN OF MERGER
Exhibit
10
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger
(hereinafter the "Agreement") is entered into as of this 19th day of February,
2009, by and among Explorations Group, Inc., a Delaware corporation
("Explorations"), Hawk Acquisition Corp. (“MergerSub”), a Florida corporation, and Hawk
Biometric Technologies, Inc., a Florida corporation ("Hawk
Biometric").
RECITALS:
WHEREAS, the respective Boards of Directors of
Explorations, Hawk Biometric and MergerSub have each approved the merger of Hawk
Biometric with and into
MergerSub (the "Merger"), upon the terms and subject to the conditions set forth
in this Agreement, whereby each issued and outstanding share of Class A common
stock, no par value and Class B common stock, no par value, of Hawk Biometric
(collectively, the Hawk Biometric Class A
common stock and Class B common stock shall be referred to herein as the "Hawk
Biometric Common Stock"), will be converted into the right to receive two
one-hundredths (.02) of a share of Explorations Convertible Series B Preferred stock, par value $.01
per share ("Series B Preferred Stock").
WHEREAS, the respective Boards of Directors of
Explorations, Hawk Biometric and MergerSub have each determined that the Merger
and the other transactions contemplated hereby are consistent with, and in furtherance
of, their respective business strategies and goals and are in the best interests
of their respective stockholders;
WHEREAS, Explorations, Hawk Biometric and
MergerSub intend that the merger of Hawk Biometric with and into MergerSub will quality as a
tax-free reorganization pursuant to Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"); and
NOW
THEREFORE, for the mutual
consideration set out herein and other good and valuable
consideration, the legal
sufficiency of which is hereby acknowledged, the parties agree as
follows:
ARTICLE I
MERGER
1. The Merger.
Upon the terms and subject
to the conditions set forth in this Agreement, and in accordance with Chapter
607 of the Florida Statutes
(the “Florida
Law”), Hawk Biometric shall
be merged with and into MergerSub at the Effective Time (as defined in Section
4), and in connection therewith:
(a) except to the extent provided or
permitted by the Florida Law, MergerSub shall merge with and into Hawk Biometric, the separate
existence of MergerSub shall cease and terminate, and Hawk Biometric shall
continue as the surviving corporation and as a wholly-owned subsidiary of
Explorations (Hawk Biometric as the surviving corporation after the
Merger is hereinafter sometimes referred to
as the “Surviving
Corporation”);
(b) all of the rights, privileges,
immunities, powers, franchises and authority (both public and private) of Hawk
Biometric and MergerSub shall vest in the Surviving
Corporation;
(c) all of the assets and property of Hawk
Biometric and MergerSub of every kind, nature and description (real, personal
and mixed and both tangible and intangible) and every interest therein,
wheresoever located, including, without limitation, all debts or other obligations belonging or
due to Hawk Biometric or MergerSub, all claims and all causes of action, shall
be, and be deemed to be, vested, absolutely and unconditionally, in the
Surviving Corporation; and
(d) all debts and obligations of
Hawk Biometric or
MergerSub, all rights of creditors of Hawk Biometric or MergerSub and all liens
or security interests encumbering any of the property of Hawk Biometric or
MergerSub shall be vested in the Surviving Corporation and shall remain in full
force and effect without modification or
impairment and shall be, and be deemed to be, enforceable against the Surviving
Corporation and its assets and properties with the same full force and effect as
if such debts, obligations, liens or security interests had been originally incurred or created by
the Surviving Corporation in its own name and for its own
behalf. Without limiting the generality of the foregoing, Surviving
Corporation specifically assumes all continuing obligations which Hawk Biometric
or MergerSub would otherwise have to indemnify its
officers and directors, to the fullest extent currently provided in the
Surviving Corporation’s Certificate of Incorporation, By-Laws
and pursuant to the Florida Law, with respect to any and all claims arising out
of actions taken or omitted by such
officers and directors prior to the Effective Time.
2. Instruments of
Conveyance. Without limiting the
generality of the provisions of Section 1 hereof and/or the succession
provisions of applicable law, the officers and directors of Hawk Biometric last in
office shall (to the extent they, or any of them, possess and/or may exercise
the power to do so) execute, deliver and/or record such deeds and/or other
instruments of transfer and/or conveyance, and take or cause to be taken, such other and further actions,
as the case may be, as shall be reasonably requested by MergerSub or its legal
counsel, to vest, perfect, confirm, implement the transfer of, or establish in
the name, on behalf or for the account or the benefit of, title to, and/or possession of, any or
all of the assets, property, property interests, rights, privileges, immunities,
powers and franchises owned and/or exercisable by Hawk Biometric (or in which
Hawk Biometric had an interest and/or the power to exercise immediately prior to the Effective
Time) and which was vested, or intended to be vested, in MergerSub pursuant to
the provisions of this Agreement and the Merger.
2
3. Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m. on a date to be specified by the parties
(the "Closing Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Articles 4 and 5, unless
another time or date is agreed to by the parties hereto. The Closing will be held at such
location as is agreed to by the parties hereto.
4. Effective
Time. Subject to the
provisions of this Agreement, as soon as practicable on the Closing Date, the
parties shall cause the Merger to be consummated by filing a certificate of merger or other
appropriate documents (in any such case, the "Certificate of Merger") executed
in accordance with the relevant provisions of the Florida Law and shall make all
other filings or recordings required under the Florida Law. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
Florida, or at such subsequent date or time as the parties shall agree and
specify in the Certificate of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
5. Certificate of
Incorporation and By-laws of the Surviving Corporation. The Certificate of Incorporation of
Hawk Biometric, as amended and in effect prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation (the "Surviving Certificate of
Incorporation"). The By-laws of Hawk Biometric, in effect prior to the Effective
Time, shall be the By-laws of the Surviving Corporation (the
"Surviving By-laws").
6. Boards, Committees
and Officers. Prior to the Effective
Time, Explorations shall adopt resolutions in form and substance reasonably
acceptable to Hawk Biometric, establishing, among other things that, the Board
of Directors and Officers
of Explorations and Hawk Biometric from and after the Effective Time shall be
comprised solely of the nominees of Hawk Biometric.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL
STOCK
OF THE CONSTITUENT
CORPORATIONS;
EXCHANGE OF
CERTIFICATES
1. Exchange of
Shares. As of
the Effective Time, by virtue of the Merger and without any action on the part
of the holder of any shares of Hawk Biometric Common Stock:
(a) Conversion of Capital
Stock. Each
issued and outstanding share of Hawk Biometric Common Stock shall be converted into the right
to receive two-one hundredths (.02) of a validly issued, fully paid and
nonassessable share of Series B Preferred Stock (the “Merger Consideration”).
(b) All outstanding shares of Hawk Biometric
common stock shall be
deemed, after the Effective Time, to be owned by Explorations. The
holders of such certificates previously evidencing shares of Hawk Biometric
Common Stock outstanding immediately prior to the Closing Date shall cease to
have any rights with respect to such shares of Hawk Biometric Common
Stock except as otherwise provided herein or by law.
3
(c) Any shares of Hawk Biometric Common
Stock held in the treasury of Hawk Biometric immediately prior to the Closing
Date shall automatically be canceled and extinguished without any conversion
thereof and no payment shall be made with respect thereto.
(d) Delivery of
Certificates. Explorations
shall deliver to the Hawk Biometric Shareholders, stock certificates
representing the Merger Consideration. At the Closing, Hawk Biometric will use its best
efforts to cause the Hawk Biometric Stockholders to surrender for cancellation
certificates representing the Hawk Biometric Common Stock against delivery of
certificates representing the Explorations Shares. In the event that any Hawk Biometric
Shareholder's certificates have been lost, stolen or destroyed, such Hawk
Biometric shareholder will be entitled to receive the Merger Consideration only
after providing an affidavit of loss and indemnity bond, in form
reasonably satisfactory to
Explorations.
2. No Fractional
Securities. Notwithstanding any other provision of this
Agreement, no certificates or scrip for shares of capital stock representing
less than one share of Series B Preferred Stock shall be issued upon the
surrender for exchange of Hawk Biometric certificates.
3. Tax
Treatment. The Merger is
intended to constitute a reorganization under Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code, and the parties shall not report the transaction on
any tax return in a manner
or take any action inconsistent therewith.
4. Restricted
Stock. The
shares of the Series B Preferred Stock to be issued to the Hawk Biometric
shareholders shall be deemed to be “restricted securities” as defined by Rule 144(a)(3) under
the Securities Act of 1933,
as amended (the “Securities
Act”). The certificates
evidencing such shares shall bear the following restrictive
legend:
“The shares evidenced by this certificate
have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold or otherwise
transferred unless registered under the Securities Act or there is an opinion
from counsel to the company that such sale or other transfer may be made
pursuant to an exemption from the registration requirement of the Securities
Act.”
5. Other Events
Occurring at Closing. At Closing, the following
shall be accomplished:
(a) The resignation of the existing
Explorations officers and directors and appointment of new officers and
directors as directed by
Hawk Biometric;
4
ARTICLE III
REPRESENTATIONS AND
WARRANTIES
1. Representations of
Hawk Biometric. Hawk
Biometric hereby represents and warrants as follows, which warranties and
representations shall also be true as of the Closing Date and Effective Time:
(a) Immediately prior to
the Closing, the outstanding capitalization of Hawk Biometric shall
consist of no more than 30,000,000 shares of Hawk Biometric Common Stock. The
Hawk Biometric Stockholders listed on the attached Exhibit "A" are the sole record and beneficial
owners of the issued and outstanding common stock of Hawk Biometric. The shares
Hawk Biometric Common Stock are free from claims, liens, or other encumbrances,
and at the Closing Date said Hawk Biometric Stockholder will have good title and the unqualified
right to transfer and dispose of such shares Hawk Biometric Common
Stock.
(b) Hawk Biometric has no outstanding or
authorized capital stock, warrants, options or convertible securities except as
set forth on Exhibit
“A”.
(c) The Hawk Biometric audited financial
statements for the period from its inception through September 30, 2008 (the
“Hawk Biometric Audited
Financial Statements”) are
true and accurate, in accordance with the books and records of Hawk
Biometric, and present
fairly in all material respects the financial position and results of operations
of Hawk Biometric as of the times and for the periods referred to therein, in
each case in accordance with generally accepted accounting principles under
current United States accounting rules
and regulations, consistently applied (“GAAP”). All of the financial books
and records of Hawk Biometric have been made available to Explorations, and such
books and records completely and fairly record in all material respects Hawk Biometric’s financial affairs, which would
normally be recorded in financial books and records. There are no material
liabilities or obligations, either fixed or contingent, not disclosed in the
Hawk Biometric Audited Financial Statements or in any exhibit thereto or notes
thereto other than liabilities, contracts or obligations incurred in the
ordinary course of business; and no such liabilities, contracts or obligations
in the ordinary course of business constitute liens or other
liabilities which materially alter the financial
condition of Hawk Biometric as reflected in the Hawk Biometric Audited Financial
Statements. Hawk Biometric has good title to all assets shown on the Hawk
Biometric Audited Financial Statements subject only to dispositions and other transactions in the
ordinary course of business, the disclosures set forth therein and liens and
encumbrances of record.
(d) Since the date of the Hawk Biometric
Audited Financial Statements, there have not been any material
adverse changes in the
financial position of Hawk Biometric except changes arising in the ordinary
course of business, which changes will in no event materially and adversely
affect the financial position of Hawk Biometric.
5
(e) Hawk Biometric is not a party
to any material pending
litigation or, to its best knowledge, any governmental investigation or
proceeding, not reflected in the Hawk Biometric Financial Statements, and to its
best knowledge, no material litigation, claims, assessments or any governmental
proceedings are threatened against Hawk
Biometric.
(f) Hawk Biometric is in good standing in
its jurisdiction of incorporation, and is in good standing and duly qualified to
do business in each jurisdiction where required to be so qualified except
where the failure to so
qualify would have no material negative impact on Hawk
Biometric.
(g) Hawk Biometric has (or, by the Closing
Date, will have) filed all material tax, governmental and/or related forms and
reports (or extensions thereof) due or required to be filed and has (or will have)
paid or made adequate provisions for all taxes or assessments which have become
due as of the Closing Date.
(h) Hawk Biometric has not materially
breached any material agreement to which it is a party. Hawk Biometric has previously given Explorations
copies or access thereto of all material contracts, commitments and/or
agreements to which Hawk Biometric is a party including all relationships or
dealings with related parties or affiliates.
(i) Hawk Biometric has no subsidiaries.
(j) Hawk Biometric has made all material
corporate financial records, minute books, and other corporate documents and
records available for review to present management of Explorations prior to the
Closing Date, during reasonable business hours and on reasonable
notice.
(k) The execution of this Agreement does not
materially violate or breach any material agreement or contract to which Hawk
Biometric is a party and has been duly authorized by all appropriate and
necessary corporate action
under other applicable law and Hawk Biometric, to the extent required, has
obtained all necessary approvals or consents required by any agreement to which
Hawk Biometric is a party.
(l) All disclosure information provided by
Hawk Biometric which is to
be set forth in disclosure documents of Explorations or otherwise delivered to
Explorations by Hawk
Biometric for use in connection with the transaction described herein is true,
complete and accurate in all material respects.
2. Representations of
Explorations. Explorations hereby represents and warrants as
follows, each of which representations and warranties shall continue to be true
as of the Closing Date and Effective Time:
(a) As of the Closing Date,
the Series B Preferred Stock, to be issued and delivered to the Hawk
Biometric Stockholders hereunder will, when so issued and delivered, constitute,
duly authorized, validly and legally issued shares of Series B Preferred
Stock, fully-paid and
non-assessable. Each share of Series B Preferred Stock shall
be convertible into one hundred (100) shares of Explorations common stock, par
value $0.01, at any time after the completion of a 1-for-6 reverse stock split
being conducted by Explorations. The Certificate of Designation for
the Series B Preferred Stock as attached hereto as Exhibit “B”, has been duly
filed with the Secretary of State of the State of Delaware.
6
(b) Explorations
has the corporate power and
authority to enter into this Agreement and to perform its respective
obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action, including the board of directors of
Explorations. The execution and
performance of this
Agreement will not constitute a material breach of any agreement, indenture,
mortgage, license or other instrument or document to which Explorations
is a party or by which its assets
and properties are bound, and will not violate any judgment, decree, order, writ, rule, statute,
or regulation applicable to Explorations or its properties. The
execution and performance of this Agreement will not violate or conflict with
any provision of the Certificate of Incorporation or by-laws of
Explorations.
(c) Explorations has delivered to Hawk
Biometric a true and complete copy of Form 10-Q for the period ending September
30, 2008 (the " Explorations Financial Statements"). The Explorations
Financial Statements are complete, accurate and fairly present the financial condition of
Explorations as of the dates thereof and the results of its operations for the
periods then ended. There are no liabilities or obligations either
fixed or contingent not reflected therein. The Explorations Financial
Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated therein or in the notes thereto) and fairly present
the financial position of Explorations as of the dates thereof and the results of its operations and
changes in financial position for the periods then ended.
(d) Since September 30, 2008, there have not
been any material adverse changes in the financial condition of
Explorations.
(e) Explorations is not a party to or the subject of any pending
litigation, claims, decrees, orders, stipulations or governmental investigation
or proceeding not reflected in the Explorations Financial Statements or
otherwise disclosed herein, and there are no lawsuits, claims, assessments, investigations, or similar
matters, against or affecting Explorations, its management or its properties.
Explorations has complied in all material respects with all laws, statutes,
ordinances, regulations, rules, decrees or orders applicable to it.
(f) Explorations is duly organized, validly
existing and in good standing under the laws of the State of Delaware; has the
corporate power to own its property and to carry on its business as now being
conducted and is duly qualified to do business in any jurisdiction where so required
except where the failure to so qualify would have no material negative impact on
it.
(g) Explorations has filed all federal,
state, county and local income, excise, property and other tax, governmental
and/or related returns,
forms, or reports, which are due or required to be filed by it prior to the date
hereof, except where the failure to do so would have no material adverse impact
on Explorations, and has paid or made adequate provision in the Explorations
Financial Statements for the payment of all
taxes, fees, or assessments which have or may become due pursuant to such
returns or pursuant to any assessments received. Explorations is not delinquent
or obligated for any tax, penalty, interest, delinquency or charge.
7
Each such tax return or report is
correct and complete in all material respects and fully discloses and does not
understate the income, taxes, expenses, deductions and credits for the period to
which it relates. Up to and including the Closing Date, no claim has been made against
Explorations by any authority in a jurisdiction in which it does not file a
return that it is or may be subject to any taxes in that jurisdiction.
Explorations has not received notice of any actions, suits, proceedings,
investigations or claims pending or threatened
against Explorations in respect of any taxes nor are any matters relating to any
taxes under discussion with any governmental authority.
(h) Except as disclosed in
Exploration’s SEC filings, there are no
existing options, calls,
warrants, preemptive rights or commitments of any character relating to the
issued or unissued capital stock or other securities of Explorations, except as
contemplated in this Agreement and there exist no liens or other securities
interests in any assets of
Explorations.
(i) The corporate financial records, minute
books, and other documents and records of Explorations have been made available
to Hawk Biometric prior to the Closing, shall be delivered to new management of
Explorations at Closing and
are correct and accurate in all material respects and reflect all decisions made
by the Board of Directors and the shareholders of
Explorations.
(j) Explorations has not breached, nor is
there any pending, or to the knowledge of management, any threatened claim that
Explorations has breached, any of the terms or conditions of any agreements,
contracts or commitments to which it is a party or by which it or its assets are
is bound. The execution and performance hereof will not violate
any provisions of applicable law or any
agreement to which Explorations is subject. Explorations hereby represents that
it has no business operations or material assets and it is not a party to any
material contract or commitment other than appointment documents with its transfer agent, and that it
has disclosed to Explorations all relationships or dealings with related parties
or affiliates.
(k) Explorations common stock is currently
approved for quotation on the OTC Bulletin Board under the symbol
"EXGI" and there are no
stop orders in effect or contemplated with respect thereto and no facts exist
which may give rise there. Explorations has filed all reports required to be
filed by Explorations pursuant to the Securities Act of 1934, as amended.
Explorations has not been informed, and has no
reason to believe, that its common stock will be delisted or suspended by FINRA.
Explorations has fully complied will all applicable securities laws and
regulations and is not in default of any of its obligations thereunder.
(l) All information regarding Explorations
which has been provided to Hawk Biometric or otherwise disclosed in connection
with the transactions contemplated herein, is true, complete and accurate in all
material respects. Explorations has provided to Hawk Biometric all material
information regarding Explorations.
8
(m) Immediately prior to
the Closing, the outstanding capitalization of Explorations shall
consist of no more than 30,000,000 shares of common stock, without giving effect
to the Reverse Stock Split.
As of Closing, after giving effect to all matters contemplated herein including
the Merger Consideration, the outstanding capitalization of Explorations shall
consist of no more than 30,000,000 shares of common stock and 600,0000
shares of Series B Preferred Stock,
without giving effect to the Reverse Stock Split, all of which shares are or
shall be duly issued, fully paid and non-assessable and were or shall be issued
in compliance with applicable securities laws. Immediately
upon the effectuation of the Reverse Stock
Split, the outstanding capitalization of Explorations shall consist of no more
than 5,000,000 shares of common stock and 600,000 of Series B Preferred Stock
and upon the conversion of all shares of Series B Preferred Stock into shares of Explorations common
stock, the outstanding capitalization of Explorations shall consist of no more
than 65,000,000 shares of common stock.
(n) The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby will not
(a) constitute a violation (with or without the giving of notice or lapse of
time, or both) of any provision of law or any judgment, decree, order,
regulation or rule of any court or other governmental authority applicable to Explorations, (b) require any
consent, approval or authorization of, or declaration, filing or registration
with, any person, except for compliance with applicable securities laws and the
filing of all documents necessary to consummate the transaction with any governmental entity, (c)
result in a default (with or without the giving of notice or lapse of time, or
both) under, acceleration or termination of, or the creation in any party of the
right to accelerate, terminate, modify or cancel, any agreement, lease, note or other
restriction, encumbrance, obligation or liability to which Explorations is a
party or by which either is bound or to which any of their assets are subject,
(d) result in the creation of any material lien or encumbrance upon
the assets of Explorations or the funds
being delivered in connection herewith, or (e) conflict with or result in a
breach of or constitute a default under any provision of the charter documents
of Explorations.
(o) Explorations does not have any
agreements of any nature to
acquire, directly or indirectly, any shares of capital stock, or other equity or
ownership interest in, any person, firm or corporation, or its
assets.
(p) There is no requirement to make any
filing, give any notice to or obtain any license, permit, certificate,
regulation, authorization, consent or approval of, any governmental or
regulatory authorities as a condition to the lawful consummation of the
transactions contemplated by this Agreement except for the filings,
notifications, consents and approvals described in
this Agreement.
9
(q) Explorations is in compliance in all material
respects with applicable Federal, state and local laws, statutes, regulations,
orders, directives and decisions rendered by any legislature,
department, administrative
or regulatory agency (“Environmental Laws”) relating to the protection of the
environment, occupational health and safety or the use, storage, disposal,
transport, handling, remediation or corrective action of any pollutants,
contaminants, chemicals, deleterious substances or
industrial, toxic or hazardous wastes or substances (“Hazardous Substances”).
Explorations has not used or permitted
to be used, except in compliance in all material respects with all Environmental
Laws, its office space, to
store, deposit, dispose or of handle any Hazardous
Substances.
Explorations has obtained all permits,
licenses and other authorizations which are required in connection with the
conduct of its business under all applicable Environmental Laws.
Explorations has never received any
notice of any civil, criminal or administrative actions, suits, demands, claims,
hearings, notices of demand letters, requests for information, notices of
violation, investigations or proceedings pending or threatened against Explorations in connection
with the conduct of its business relating in any way to any Environmental
Laws.
(r) All disclosure information provided by
Explorations which was delivered to Hawk Biometric for use in connection with
the transaction described
herein is true, complete and accurate in all material
respects.
ARTICLE III
CONDITIONS PRECEDENT
1. Conditions Precedent
to the Obligations of Hawk Biometric. All obligations of Hawk
Biometric under this Agreement are subject to the fulfillment, prior to or as of the Closing
and/or the Closing Date, as indicated below, of each of the following
conditions:
(a) The representations and warranties by or
on behalf of Explorations contained in this Agreement or in any certificate or
document delivered pursuant
to the provisions hereof shall be true in all material respects at and as of the
Effective Time and Closing Date as though such representations and warranties
were made at and as of such time.
10
(b) Explorations shall have performed
and complied with all
covenants, agreements, and conditions set forth in, and shall have executed and
delivered all documents required by this Agreement to be performed or complied
with or executed and delivered by it prior to or at the
Closing.
(c) On or before the Closing, the board of
directors of Explorations, the board of directors of MergerSub and the
shareholders representing a majority interest of the outstanding common stock of
MergerSub, shall have approved in accordance with applicable state corporation law and Federal securities
laws (i) the execution and delivery of this Agreement and (ii) the consummation
of the transactions contemplated herein.
(d) On or before the Closing Date,
Explorations shall have delivered to Hawk Biometric certified copies of resolutions of the board
of directors of Explorations approving and authorizing the execution, delivery
and performance of this Agreement and authorizing all of the necessary and
proper action to enable Explorations to comply with the terms of this Agreement including the
election of Hawk Biometric 's nominees to the Board of Directors of Explorations
and all matters outlined herein.
(e) The Merger shall be permitted by
applicable law.
(f) As of the Closing, the existing officers
and directors of
Explorations shall have resigned in writing from all positions as directors and
officers of Explorations effective upon the election and appointment of the Hawk
Biometric nominees.
(g) At the Closing, all instruments and
documents delivered to Hawk
Biometric and Hawk Biometric Stockholders pursuant to the provisions hereof
shall be reasonably satisfactory to legal counsel for Hawk
Biometric.
(h) The shares of Series B Preferred Stock
to be issued to the Hawk Biometric Stockholders will be validly issued, nonassessable and
fully-paid under Delaware corporation law and will be issued in compliance with
all federal, state and applicable corporation and securities
laws.
2. Conditions Precedent
to the Obligations of Explorations and
MergerSub. All obligations of
Explorations under this Agreement are subject to the fulfillment, prior to or at
the Closing, of each of the following conditions:
(a) The representations and warranties by
Hawk Biometric contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material respects at and
as of the Closing as though such representations and warranties were made at and
as of such time.
(b) Hawk Biometric shall have performed
and complied with, in all
material respects, all covenants, agreements, and conditions required by this
Agreement to be performed or complied with prior to or at the
Closing;
11
3. Nature and Survival
of Representations. All representations,
warranties and covenants
made by any party in this Agreement shall survive the Closing and the
consummation of the transactions contemplated hereby for one year from the
Closing. All of the parties hereto are executing and carrying out the
provisions of this Agreement in reliance solely on the
representations, warranties and covenants and agreements contained in this
Agreement and not upon any investigation upon which it might have made or any
representation, warranty, agreement, promise or information, written or
oral, made by the other party or any other
person other than as specifically set forth herein.
ARTICLE IV
DOCUMENTS DELIVERED AT
CLOSING
1. Documents at
Closing. At the
Closing, the following documents shall be delivered:
(a) Hawk Biometric will deliver,
or will cause to be
delivered, to Explorations the following:
(i) a certificate executed by the President
and Secretary of Hawk Biometric to the effect that all representations and
warranties made by Hawk Biometric under this Agreement are true and
correct as of the Closing,
the same as though originally given to Explorations on said
date;
(ii) a certificate from the jurisdiction of
incorporation of Hawk Biometric dated at or about the Closing to the effect that
Hawk Biometric is in good standing under the laws of said
jurisdiction;
(iii) such other instruments, documents and
certificates, if any, as are required to be delivered pursuant to the provisions
of this Agreement;
(iv) certified copies of resolutions adopted
by the shareholders and
directors of Hawk Biometric authorizing this transaction;
and
(v) all other items, the delivery of which
is a condition precedent to the obligations of Hawk Biometric as set forth
herein.
(b) Explorations will deliver or cause to be
delivered to Hawk
Biometric:
(i) stock certificates representing the
Merger Consideration;
(ii) a certificate of the President of
Explorations, to the effect that all representations and warranties of
Explorations made under this Agreement are true and correct as of the Closing, the same as though
originally given to Hawk Biometric on said date;
12
(iii) certified copies of resolutions adopted
by Explorations’ board of directors authorizing the
Merger and all related matters described herein;
(iv) certificate from the jurisdiction of
incorporation of Explorations dated at or about the Closing Date that
Explorations is in good standing under the laws of said
state;
(v) such other instruments and documents as
are required to be delivered pursuant to the provisions of this
Agreement;
(vi) resignation of the existing officers and
directors of Explorations; and
(vii) all corporate and financial records of
Explorations.
ARTICLE VI
INDEMNIFICATION
1. Indemnification. For a period of one
year from the Closing,
Explorations agrees to indemnify and hold harmless Hawk Biometric and the Hawk
Biometric Shareholders, and Hawk Biometric agrees to indemnify and hold harmless
Explorations, at all times after the date of this Agreement against and in
respect of any liability, damage or
deficiency, all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses including attorney's fees incident to any of the foregoing,
resulting from any material misrepresentations made by an indemnifying party to an indemnified party, an
indemnifying party's breach of covenant or warranty or an indemnifying party's
nonfulfillment of any agreement hereunder, or from any material
misrepresentation in or omission from any certificate furnished or to
be furnished
hereunder.
ARTICLE VII
POST CLOSING
COVENANTS
1. Reverse Stock
Split. Explorations shall cause the Reverse
Stock Split to be effectuated.
2. Spin Out of
Pre-Closing Assets. Explorations shall use it
best efforts to effectuate a spin out of the Explorations Park Pro, Inc.
subsidiary to those Explorations stockholders of record as of the last trading
day prior to the Closing, at the expense of Park Pro, Inc.
13
ARTICLE VIII
MISCELLANEOUS
1. Miscellaneous.
(a) Public
Announcement. Until the Closing, Hawk Biometric shall
not make or issue, or cause to be made or issued, any announcement or written
statement concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of Explorations except as required
by law.
(b) Further
Assurances. At
any time, and from time to time, after the Closing Date, each party will execute
such additional instruments and take such action as may be reasonably requested
by the other party to
confirm or perfect title to any property transferred hereunder or otherwise to
carry out the intent and purposes of this Agreement.
(c) Waiver. Any failure on the part of
any party hereto to comply with any of its obligations, agreements or
conditions hereunder may be
waived in writing by the party to whom such compliance is
owed.
(d) Amendment. This Agreement may be
amended only in writing as agreed to by all parties hereto.
(e) Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
to have been given if delivered in person or sent by prepaid first class
registered or certified mail, return receipt requested.
(f) Headings. The section and subsection
headings in this Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
(h) Governing
Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware.
(i) Binding
Effect. This
Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors and
assigns.
(j) Entire
Agreement. This
Agreement and the attached Exhibits constitute the entire agreement of the
parties covering everything agreed upon or understood in the
transaction. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof.
(k) Severability. If any part of this
Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
14
IN WITNESS WHEREOF, the parties have
executed this Agreement the day and year first above
written.
| Explorations Group, Inc. | |
| By: /s/ Xxxx Xxxxx | |
| Title: President | |
| Hawk Acquisition Corp. | |
| By: /s/ Xxxx Xxxxx | |
| Title: President | |
| Hawk Biometric Technologies, Inc | |
| By: /s/ Xxxxx Xxxxxxx | |
| Title: President |
15
