Attached files
| file | filename |
|---|---|
| 10-K - 2009 10K - LOCATEPLUS HOLDINGS CORP | annualreport2009.htm |
| EX-31.2 - EXHIBIT 31.2 - LOCATEPLUS HOLDINGS CORP | cfocert.htm |
| EX-23.1 - CONSENT - LOCATEPLUS HOLDINGS CORP | consent.htm |
| EX-31.1 - EXHIBIT 31.1 - LOCATEPLUS HOLDINGS CORP | ceocert.htm |
| EX-32.1 - EXHIBIT 32.1 - LOCATEPLUS HOLDINGS CORP | soxcert.htm |
| EX-10.21 - ESCROW AGREEMENT - LOCATEPLUS HOLDINGS CORP | escrowagmt.htm |
| EX-10.18 - DUTCHESS DEBT CONVERSION AGREEMENT - LOCATEPLUS HOLDINGS CORP | debtconversionagmt.htm |
| EX-10.19 - SERIES A CONVERTIBLE STOCK PURCHASE AGREEMENT - LOCATEPLUS HOLDINGS CORP | stockpurchaseagmt.htm |
Exhibit 10.20
(a) To the Escrow Agent, certificates in the name of the Shareholder evidencing ownership of the ESP Stock, accompanied with a duly executed assignment of all the ESP Stock, by the Instruments of Transfer substantially in the form attached as Exhibit B to this Agreement.
Each of the parties hereby agrees for the benefit of the others that, other than as stated in the Disclosure Schedule, no person, firm, corporation or other entity is entitled to any brokerage commission or finder's fee in connection with any of the transactions contemplated by this Agreement, arising out of acts by him or it or his or its employees or agents. The Purchaser agrees to indemnify and hold harmless the Seller from and against any and all claims or demands for such commissions or fees based on any arrangement made by the Purchaser, and the Seller agrees to so indemnify and hold harmless the Purchaser from and against any and all claims or demands for such commissions or fees based on any arrangement made by the Seller.
PURCHASE
AND SALE AGREEMENT
BY
AND AMONG
LOCATEPLUS HOLDINGS
CORPORATION,
EMPLOYMENT
SCREENING PROFILES, INC.
d/b/a
TRUBACKGROUNDS
AND
DERRICK
A. SPATORICO
September 20,2009
PURCHASE AND SALE
AGREEMENT
BY
AND AMONG
LOCATEPLUS
HOLDINGS CORPORATION
EMPLOYMENT
SCREENING PROFILES, INC.
AND
DERRICK
A. SPATORICO
This is a
Purchase and Sale Agreement (the "Agreement') dated as of September 20,
2009 by and between LOCATEPLUS HOLDINGS CORPORATION( the
"Purchaser") a Delaware corporation, having its principal office at
100 Cummings Center Suite 235, Beverly MA 01915, EMPLOYMENT SCREENING
PROFILES, INC., d/b/a Trubackgrounds, Inc., a Florida
corporation, having its principal office at 4025 Tampa Rd., Suite 1206, Oldsmar,
FL 34677, herein called the "Company" and its shareholder, DERRICK A. SPATORICO,
ESQ. of 1 East Main Street, Rochester, NY 14614 (the "the Shareholder"). The
Company and the Shareholder are herein sometimes collectively called the
"Seller".
The
Seller has agreed to sell and the Purchaser has agreed to buy one thousand
(1,000) shares of the Common Stock, no par value, of the Company ( the “ESP
Stock” ), constituting all the outstanding shares of Common Stock of the Company
pursuant to the terms and conditions of this
Purchase and Sale Agreement.
At the
Closing described below the Seller shall sell and transfer and the Purchaser
shall acquire, for a consideration of one million seven hundred and fifty
thousand dollars ($1,750,000), consisting of nine million (9,000,000) shares of
Common Stock of the Company (the “LP Stock”) at $0.1944 per share, herein called
the “Purchase Price”, all the ESP stock (the “ESP Stock”) and associated rights
and business of the Company. The LP Stock and any Additional LP Stock as
described below are defined herein as the “Purchase Price.”
Each of
Purchaser, Company and Shareholder shall use its best efforts to cause the
Acquisition to qualify, and will not take any actions which could prevent the
Acquisition from qualifying, as a reorganization under the provisions of section
368(a) of the Code.
At and
after the successful completion of the Closing under the Purchase Agreement the
following shall occur:
(a)
The LP Stock is currently in escrow under a prior agreement (the “Prior Escrow”)
which prohibits further transfer by LP. Subject to satisfactory completion of
the Closing, at such time as the Prior Escrow terminates as to the LP Stock (but
not later than September 1, 2010), the LP Stock shall automatically transfer to
a second escrow (the “ESP Escrow”)pursuant
to an escrow agreement approved at or before the Closing by both parties (the
“ESP Escrow Agreement”) substantially in the form of Exhibit A. Under the
ESP Escrow Agreement, the Purchaser’s rights to a further transfer of the LP
Stock shall be subject to this Agreement. At and after the Closing, the
Shareholder shall have and
retain during the continuance of the ESP Escrow all the voting rights and rights
to receive dividends possessed by the LP Stock and Purchaser represents and
warrants that these rights are unencumbered by any claim of Fields and that
these voting/dividend privileges are transferable to the Seller.
(b)
The ESP Stock shall be transferred into the ESP Escrow at the Closing pursuant
to Instruments of Transfer substantially in the form of Exhibit B .
Certificates for the ESP Stock, together with the executed Instruments of
Transfer to the Purchaser shall be delivered to the Escrow Agent where they
shall remain until either (i) the LP Stock has been fully
delivered into the ESP Escrow and the ESP Escrow shall have terminated by the
terms of the ESP Escrow Agreement and the LP Stock shall have been delivered to
the Seller or (ii) the Shareholder shall have exercised his rights to terminate
the ESP Escrow as provide in paragraph 2(e) below. At and after the Closing the
Purchaser shall have and
retain during the continuance of the ESP Escrow all the voting, control and
ownership rights, including the right to receive dividends, possessed by the ESP
Stock and shall incur any and all liabilities and obligations (including tax
liabilities) associated with such ownership, subject to the successful
termination of the ESP Escrow and delivery of the
ESP Stock to the Purchaser.
(c)
During the continuance of the Escrow the Purchaser shall obtain and
include the Company, its officers and Directors in directors and officers
liability insurance coverage currently maintained by the Purchaser.
(d)
The Purchaser shall have the obligation in any case to deliver all the LP Stock
to the Shareholder on or before September 1, 2011.
(e) The Shareholder shall have the right at any time after September 1,
2010 to require the Purchaser to deliver up to four million five hundred
thousand (4,500,000) shares of the LP Stock.
(f)
The Shareholder shall be entitled to an escrow fee payable in cash on a
quarterly basis. The escrow fee shall be calculated at rate of five percent
(5.00%) per annum for the first 12 months following closing, then seven and one
half percent (7.50%) per annum for months 13 through 18 inclusive and then
twelve and one-half percent (12.5%) per annum
thereafter (multiplied by the product of the number of\shares remaining in the
Escrow Account for the benefit of the Shareholder and $0.1944). The first year's
escrow fee shall be earned in full upon a successful closing. This
fee shall be payable on a quarterly basis to the Shareholder. In the event the
Purchaser fails to make any payment to the
Shareholder when due after
not less than thirty (30) days’ notice and /or files a petition in bankruptcy
voluntarily or a creditor files an involuntary petition, absent notice to the
Shareholder and a written agreement is not in place at the time authorizing a
deferral of the payment or authorizing the payment to be made in the form of
cash and additional
shares or simply additional shares, all shares of ESP shall immediately revert
to the Shareholder at his sole option, and upon written notice sent by regular
US mail to the Purchaser at its last known address and correspondingly, any
shares of the Purchaser in the possession of the Shareholder or in
the Escrow shall be returned to the Purchaser or
otherwise canceled without further notice to the Shareholder. This
return/cancellation provision shall be limited to a maximum return or
cancellation or combination of the two to 9,000,000 shares. In the event of the
filing of a bankruptcy petition against the Purchaser by a party or entity other
than the Purchaser, the reversion referenced
above shall be deemed to have occurred 1 hour prior to the bankruptcy court
clerk's receipt of the
petition by operation of law and without the necessity of any further
notice.
1
The
Closing shall take place at the offices of the Purchaser,
100 Cummings Center Suite 235, Beverly MA 01915 , at 10:00 AM local time, on
Tuesday September 29, 2009. The Closing may also take place at such
other location and time on which the parties hereto shall mutually
agree. The date upon which
the
Closing is to take place is defined as the "Closing Date". Failure to close the
transactions contemplated herein on the Closing Date shall not in and of itself
constitute a reason for a party to terminate this Agreement, termination being
governed by Article VII, and so long as this Agreement is not so terminated, the
parties hereto shall continue as set forth in this Agreement to cause the
Closing to occur as soon as practicable.
The
Closing, which shall be subject to the satisfaction of the conditions set forth
in Sections 2.03 and 2.04 shall consist of the delivery by the Seller
of the documents to be delivered to the Escrow Agent and others pursuant to
Section 2.05, the delivery by the Purchaser of the required Purchase
Price and the documents to be delivered pursuant to
Section 2.06, the delivery of any other documents provided for hereunder The
Closing of any and all of the transactions hereby shall be deemed not to have
occurred unless and until all transactions constituting that Closing shall have
been completed and duly accepted by the parties and all such transactions shall
be deemed to have taken place simultaneously.
Consummation
by the Purchaser of the Closing is subject to the fulfillment prior to or at the
Closing Date of each of the following conditions, any one or more of
which may be waived by the Purchaser in whole or in part
:
(a)
The representations and warranties of the Seller contained in this Agreement or
in any certificate, schedule, exhibit or other agreement delivered pursuant to
the provisions of this Agreement shall be true in all material respects as of
the date when made, shall be deemed to be made again at and as of the Closing
Date and shall be true in all material
respects at and as of the Closing Date.
(b)
The Seller, in all material respects, shall have performed and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by each of them prior to or at the Closing
Date.
(c)
The Company, in all material respects, shall be in full compliance with
all the required terms and conditions of all agreements material to its
business.
(d) No
material adverse change shall have taken place in the business or financial
condition of the Company or either the Shareholder between the date
hereof and the Closing Date, other than changes occurring with the prior written
consent of the Purchaser.
(e)
All required consents of governmental authorities and contracting or other third
parties (including without limitation creditors, suppliers and the
State of Florida to the transactions
contemplated by this Agreement shall have been properly obtained and evidence
thereof provided to the Purchaser insofar as is material to consummation of
the
purchase of the Company Assets.
(f)
There shall be no judgment, decree, injunction, ruling, order or notice of
any court or governmental authority outstanding against the Seller or the
Purchaser, or any claim or proceeding or threat of any such action ( "a
Litigation Problem" ) which prohibits, restricts or delays, or could in the
reasonable opinion of counsel for the Purchaser prohibit, restrict or delay the
consummation of any of the transactions contemplated by the Agreement, provided,
however that the Purchaser may in its sole discretion waive in writing prior to
the Closing all or any part of this condition as to any particular Litigation
Problem.
(g)
Except for the filing of any required certificate amending Certificates of
Incorporation or similar documents of the Company, the Purchaser to reflect the
Closing, all consents, authorizations, orders and approvals of, and filings and
registrations with any governmental authority which are required for,
or in connection with the execution and delivery of this Agreement and the
consummation by each party hereto of the transactions contemplated hereby shall
have been obtained or made.
(h)
The execution of this Agreement and the sale and transfer
of the ESP stock shall have received any
required approval by the holders of the outstanding shares
or other equity interests of the Company entitled to vote thereon in
accordance with the provisions of the corporation and other
applicable laws of its state of incorporation and with its certificate of
incorporation or similar founding document.
(i) The
Seller has delivered to the Purchaser financial statements of the Company
for each of the two (2) most recently ended fiscal years, together with
financial statements for the period ended June 30, 2009, receipt of which is
hereby acknowledged, in form and substance acceptable to the
purchaser.
Consummation
by the Purchaser and the Seller of the Closing transactions is subject to the
fulfillment prior to or at the Closing Date of each of the following
conditions:
(a)
The representations and warranties of the Purchaser contained in this Agreement
or in any certificate, schedule, exhibit or other agreement delivered pursuant
to one or more of the provisions of this Agreement, shall be true in all
material respects as of the date when made, shall be deemed to be made again at
and as of the Closing Date and shall be true in all material respects at and as
of the Closing Date.
(b)
The Purchaser shall have complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing Date.
(c)
No material adverse change in the business or financial condition of the
Purchaser shall have occurred between the date hereof and the Closing
Date, other than changes occurring by reason of actions taken with
the prior written consent of the Seller.
(d)
All consents, authorizations, orders and approvals of, and filings and
registrations
with any governmental authority which are required for, or
in connection with the execution and delivery of this Agreement and
the consummation by each party hereto of the transactions contemplated hereby
shall have been obtained or made.
(e)
The Purchaser’s Board of Directors shall at the Closing appoint the Shareholder
to a position on the Board of Directors, effective as of the Closing Date, to
serve until his successor shall be elected and qualify. The next
annual meeting of shareholders shall occur no later than August 1, 2010 at which
time the shareholders will vote on a slate of directors. At that
meeting, the Shareholder shall have all of the privileges of share ownership
including the right to vote all the LP Stock irrespective of whether or not it
has remained in the ESP Escrow;
(f)
The Purchaser shall at the Closing sign (i) a twelve-month consulting services
agreement with the Shareholder, substantially in the form of Consulting
Agreement attached as Exhibit C providing
for compensation of fifty thousand dollars ($50,000.00) payable in equal monthly
installments in exchange for no more than twenty five (25) hours of work per
month, cumulative from month to month and (ii) a retainer agreement whereby he
may be required from time to time to provide selected legal services at an
hourly rate of three hundred dollars ($300) plus expenses.
2
It shall
be a Purchaser's Condition of Closing that the Seller shall deliver
the following at the Closing, all of which shall be satisfactory in form
and substance to the Purchaser (all documents shall be dated the Date
of Closing unless otherwise specified):
(a) To the Escrow Agent, certificates in the name of the Shareholder evidencing ownership of the ESP Stock, accompanied with a duly executed assignment of all the ESP Stock, by the Instruments of Transfer substantially in the form attached as Exhibit B to this Agreement.
(b) Executed
copy of the ESP Escrow Agreement.
(c)
Evidence satisfactory to the Purchaser as to (i) the
good standing of the Company as a corporation under the laws of its
jurisdiction of organization, (ii) the due authorization by the Company and its
shareholders and directors of this Agreement of all such transfers and other
actions taken and documents executed by the Seller and
(iii) as to such other items of a legal nature as the Purchaser shall reasonably
request to satisfy itself of the legality of the transactions contemplated by
this Agreement.
(d)
Certificate signed by the Seller updating the Disclosure Schedule delivered
pursuant to Article III and confirming the accuracy of all representations and
warranties as of the Closing date.
(e)
Executed copy of the Consulting Agreement between the Company and Derrick
Spatorico substantially in the form attached as Exhibit C to this
Agreement.
(f)
Consents
to the transactions contemplated hereby of the parties to all
material contracts,
agreements, commitments and understandings to which the Seller
is party or to which it or its assets are subject, to the extent
reasonably required to consummate the purchase of the ESP
stock
(g)
Secretary's Certificate attaching true, correct and complete copies of (a) the
by-laws, operating agreements or other similar documents of the
Company and (b) votes or consents of directors and shareholders required to
accomplish the transactions contemplated by this Agreement and
certifying that they are in full force and effect and were properly
authorized.
(h)
Assignment by the Shareholder of all his right, title and interest in and to all
software, systems, copyrights documents, records and other intellectual property
associated with and/or used or required for the operation of the business of the
Company, in form and substance acceptable to the Purchaser.
(i)
Such other documents, certificates and opinions as the Purchaser may reasonably
request for the purpose of enabling its counsel to provide opinions under this
Agreement and in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Seller.
The
Purchaser hereby covenants and agrees to use its best efforts to deliver or
cause to be delivered the following at the Closing, subject to all
the terms and conditions of this Agreement:
(a)
A certificate dated the Date of Closing and executed by an officer of the
Purchaser certifying that (i) the representations and warranties of the
Purchaser contained in this Agreement or in any exhibit, schedule, certificate
or other document delivered by the Purchaser pursuant to this Agreement are true
and correct on and as of the Date of Closing with the same effect as though such
representations and warranties had been made on and as of such date or, if not,
in what respects they are not and (ii) each and all of the agreements and
covenants of the Purchaser to be performed on or before the Date of Closing
pursuant to the terms of this Agreement have been duly performed or, if not, in
what respects they have not.
(b)
Evidence satisfactory to the Seller as to the existence of the LP Stock and the
Prior Escrow.
(c) Executed
copy of the ESP Escrow Agreement.
(d)
Such other documents, certificates and opinions as the Seller may reasonably
request for the purpose of enabling its counsel to provide opinions under this
Agreement and in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Purchaser.
Immediately
after the delivery of the items set forth in Sections 2.05 and 2.06 by the
parties thereto, the any required filings shall be made with corporate and other
authorities.
If for
any reason the Closing is not consummated after the deliveries provided for in
Sections 2.05 and 2.06, all items delivered shall be returned to the party or
parties delivering them.
3
Each of the Company and the
Shareholder, jointly and severally, represents and warrants to the Purchaser as
of the date hereof and as of the Closing Date, as follows, EXCEPT AS SET FORTH
IN THE DISCLOSURE SCHEDULE ATTACHED HERETO AS EXHIBIT
D , AS
UPDATED:
(a)
Organization. The
Company is a corporation duly organized and validly existing in good standing
under the laws of Florida and has full corporate power to own or lease its
properties and conduct its business as now being conducted. True and
accurate copies of (a) the articles of incorporation, as amended to date, (b) a
short form Certificate of Good Standing (listing all amendments,
restatements, any articles of merger or similar action affecting the articles of
incorporation) from the office of the Florida Secretary of State and
dated not more than forty five (45) business days prior to the date
of the Closing and (c) the bylaws and
any amendments thereto certified by the Secretary as being in full force and
effect without modification, have been furnished to the
Purchaser. The Company is duly qualified and in good standing to
transact business as a foreign corporation and has paid all taxes and other fees
due in each state or jurisdiction where it does business, except where the
failure to so qualify and be in good standing would not have a material adverse
effect on the business of the Company. The Company does not own, lease nor use
real or personal property nor have employees or agents located in any state or
jurisdiction outside Florida. The Company has no subsidiaries or affiliates or
equity securities of, investments in or loans or advances to any corporation,
LLC, partnership, joint venture or other business enterprise or any
agreements or commitments for such. The minute books of the Company
reflect all material actions and proceedings taken at meetings or by written
consent of the shareholders or Board of Directors and any committee thereof. The
stock records of the Company accurately reflect all
stock issuances and transfers of record.
(b)
Capitalization; Ownership Interests. All outstanding shares of
capital stock of the Company are owned by Shareholder as set forth on the
signature page of this Agreement. The ESP stock constitutes all the issued and
outstanding capital stock of the Company, is fully paid and non-assessable and
may be freely transferred by the Shareholder to the Purchaser. No
warrants, subscriptions, calls or other rights or commitments to issue or
acquire any capital stock or other securities of the Company or
rights or obligations of any kind convertible into securities of any kind or
class of the Company are authorized, outstanding or otherwise existing. Except
as described in the Disclosure Schedule there are no agreements or
understandings of any kind to which the Company is a party or by
which it is bound relating to the issuance, voting, purchase, repurchase,
redemption or transfer of stock or other equity interest
of the Company or any other securities of any Company and no agreements or other
understandings as to joint venture, profit sharing or other interests in
operations or ownership. No stock or other equity interest in the Company has
been issued or sold and delivered in violation of any preemptive or similar
right or in violation of any corporate, business organization or
securities law. No shareholder or equity owner or former shareholder
or equity owner and no shareholder of any corporation or other entity heretofore
merged or consolidated with or into the Company or its predecessors has any
claim or cause of action whatsoever against it or its shareholders or equity
owners arising out of or in any way connected with any occurrence or state of
facts in existence prior to the date of this Agreement and no such
shareholder equity owner or former shareholder or equity owner shall
come to have any claim or cause of action whatsoever against the Company or the
Seller or the Purchaser arising out of or in any way connected with any
occurrence or state of facts in existence prior to the date of this
Agreement.
(c)
Authorization.
The execution and delivery of this Agreement and the due consummation
by the Seller of the transactions contemplated by this Agreement have
been duly authorized by all necessary action on the part of the Board of
Directors and shareholders of the Company in compliance with applicable law and
this Agreement constitutes the valid and binding
agreement of the Company and the Shareholder, enforceable
against each of them in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws from time to
time in effect and to general principles of equity. The Company and
the Shareholder are duly authorized to execute this Agreement and all other
agreements or documents attached as exhibits or referred to therein and to
engage in and consummate all the transactions and other acts contemplated
thereby. Except as described in the Disclosure Schedule, the Seller knows of no
claim, law or regulatory or contract provision that would prevent or impede the
due execution and delivery of all such documents by the Seller and
the completion of all such transactions and acts.
(a)
Financial Statements. Attached as exhibits to the Disclosure
Statement are true, correct and complete copies of a
balance sheet of the Company as of December 31, 2008, plus related statements of
net income for the two (2) fiscal years then ended, together with
interim financial statements through June 30, 2009 (all of which, including the
Note thereto, together with the financial statements hereafter
delivered are referred to herein as the "Company Financials" ).
Receipt of the Company Financials is hereby acknowledged by the Purchaser.
Except as described in the Disclosure Schedule, the Company Financials are
consistent in all material respects with the books and records of the
Company taken as a whole, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered by such statements and fairly present the financial position of
the Company as of their respective dates and the results of operations of the
Company for the periods then ended.
(b)
Absence
of Undisclosed Liabilities. Except as and to the extent reflected or reserved
against in the Company Financials or expressly described in the Note
thereto or in the Disclosure Schedule, and except for trade payables and similar
liabilities and obligations arising in the ordinary course of business
since June 30, 2009 or which in the aggregate do not
exceed $10,000, the Company will have on the
Closing Date (x) no known liabilities or obligations of a type that would be
required by generally accepted accounting principles to be accrued or otherwise
reflected on a balance sheet (or the notes thereto) dated as of the Closing and
(y) no other material liability of any nature, whether accrued, absolute,
contingent or otherwise, known or unknown, arising from any state of
facts existing on or before the Closing Date. The
Purchaser acknowledges the existence of a Note of the Company in favor of the
Shareholder in the amount of one hundred and forty eight thousand dollars
($148,000).
(c)
No
Liabilities as Guarantor; Warranties. Except as set forth in the Disclosure
Schedule, neither of the Company nor any the Shareholder is directly or
indirectly liable, by guaranty, surety or otherwise with respect to any debt,
dividend or other obligation of any person, corporation, association,
partnership or other entity, except endorsements made in the ordinary course of
business in connection with the deposit of items for
collection. Except as set forth in the Disclosure Schedule and except
as provided by applicable law relating to the sale of goods and services, there
are no outstanding warranties or guaranties upon any goods or services sold by
the Company.
(d)
Absence of Certain Changes. Except as set forth in the Disclosure Schedule or as
contemplated by or disclosed in this Agreement, since June 30, 2009 , there has
not been any material adverse change in the financial condition,
assets, liabilities or business of the Company or the
Shareholder.
(e) Accounts
Receivable. Except as set forth on the Disclosure Schedule,
any and all accounts receivable of the Company as reflected in the
Company Financials, to the extent uncollected, are valid and represent moneys
due for products or services sold and delivered. The Seller knows of no reason
why each of these accounts receivable cannot be collected in the
ordinary course of business without resort to legal proceedings. Neither the
Seller nor the Company provides any guarantee of collectability of any such
account receivable. There are no refunds or other adjustments, except
discounts given in the ordinary course of business, payable
in respect of any of such accounts receivable. To the knowledge of the Seller,
there are no defenses, rights of set-off, assignments, restrictions,
encumbrances or conditions enforceable by third parties on or affecting any
thereof.
4
The
Company has properly completed and filed in correct form all federal,
state, municipal and other tax and related
reporting returns of every nature required to be filed by
it ( the "Returns" ) and no extensions of time in which to file any such returns
are in effect, except state and other returns with respect to which
the failure to file would not subject either of them to liability in excess of
$10,000 in the aggregate. Except as set forth in the Disclosure
Schedule all amounts shown as due and payable have been paid and all accrued
liabilities are properly reflected on the Financial Statements. The Company has
delivered to the Purchaser true and correct copies of the Returns for the last
three taxable years. The Company has generally paid and/or
satisfied on or before their respective due dates all income, sales and other
taxes (whether or not requiring the filing of returns), including all
deficiency assessments, additions to tax, penalties and interest of which notice
has been received, to the extent that such amounts have become due, and none of
such taxes, assessments or charges is delinquent. All taxes or other assessments
and levies which the Company is or was required by law to withhold or collect
have been duly withheld and collected, and have been paid over to the
proper governmental authorities or are held by the Company in a depository bank
account for such payment and all such withholdings and collections and all other
payments due in connection therewith are duly set forth on the books of the
Company. All taxes or other assessments and levies which the Company
is or was required by law to withhold or collect have been
duly withheld and collected, and have been paid over to the proper
governmental authorities or are held by the Company in a depository bank
account for such payment and all such withholdings and collections and all other
payments due in connection therewith are duly set forth on the books of the
Company. No tax return of any Company has been audited by any
federal, state or local tax authority. There are no outstanding
agreements or waivers extending the statutory period of limitation applicable to
any federal, state or local tax return for any period with respect to any
Company.
(a)
Ownership. The Company owns no real property except as set
forth in the Disclosure Schedule. All of the personal property, including
contract rights, patents, trademarks or names, licenses, permits and
applications therefor ( the "Assets" ) reflected on the Company Financials as
owned by any Company are owned free and clear by the Company and, except as
clearly set forth or described in the Company Financials or in the Disclosure
Schedule, none of such personal property is subject to any material
mortgage, pledge, lien, restriction, encumbrance, charge or other adverse
claim.
(b)
Leases; Subleases. The Disclosure Schedule sets forth each lease or
sublease pursuant to which the Company leases or subleases any real
or personal property, either as lessor or lessee. The Seller has
delivered to the Purchaser true and correct copies of all leases and subleases
required to be set forth in the Disclosure Schedule. The Company is
not in default in connection with any lease or sublease to which any of
them is a party or by which either is bound nor, so far as the Seller
knows is there any basis for any claim or default in any respect under any such
lease.
(c)
Documentation; Records. The products, services and systems provided
or used by the Company and included in the Seller's Assets
are documented, and any software includes
source code, manuals, operating system instructions and
backup, all software is written in standard language and can readily
be archived, accessed (subject to password) and requirements retrieved and
utilized by trained personnel without the addition of codes, keys or other
encryption or security devices not transferred or provided to the
Purchaser.
3.05 Patents; Trademarks; Trade Names, Licenses,
Etc.
(a)
Ownership. The Company owns patents, trademarks, service marks, trade
names, service names, licenses, permits applications therefor and registrations
thereof, except for the right to use its corporate name within the State of
Florida.
(b) No
Violations. To the best of the Seller's knowledge, the Company has not
violated or infringed any patent, trademark, service mark, trade
name, copyright, technology, know-how, process, license, permit, trade secret or
other rights or other intellectual properties of any third party .
(a)
Contracts. Each written or oral contract, agreement, commitment or
understanding to which the Company or any person constituting the Seller a party
or to which any of their properties is subject which is material to the
operation of the business or the Seller's Assets being transferred is listed in
the Disclosure Schedule. All such contracts, agreements, commitments
or understandings are referred to herein as "Contracts." Except as
set forth in the Disclosure Schedule neither the Company
nor is in default in connection with any Contracts nor, so
far as any of them knows, is there any basis for any material claim or default
in, any respect under any Contract; so far as any of them knows, no
other party is in material default under any of the Contracts, no act or event
(other than overdue payments not more than 60 days late) has occurred which,
with notice or lapse of time, or both, would constitute a default under any of
the Contracts and, so far as they both know, there is no basis for such; there
is no outstanding notice of cancellation or termination in
connection therewith; and to the best of the Seller's knowledge, each
of the Contracts is a valid and binding obligation of the signatory, and, so far
as they know, of the other parties thereto, which is in full force and effect in
accordance with its terms. To the extent requested by the Purchaser
in writing before the date hereof, the Seller has furnished to the Purchaser
letters or other written evidence acceptable to it from contracting parties
evidencing the due compliance by the Seller with the terms and conditions of
applicable contracts and that they are in full force and
effect.
(b)
Powers of Attorney. Except as set forth in the Disclosure
Schedule there are no persons holding powers of attorney or similar rights from
the Company or the Seller.
5
The
Disclosure Schedule sets forth a complete and accurate
schedule (including the type of policy, the policy number, the carrier, the
limits of coverage and the expiration date) of all insurance policies held by
the Company now in force. All such policies are in full
force and effect and the premiums due thereon have been timely
paid. The Company will continue to maintain such insurance coverage
in full force and effect to and including the Closing Date.
No
representation or warranty by the Seller in this Article III or in
any written exhibit, statement, certificate or agreement required to be
furnished by the Seller to the Purchaser pursuant to this
Agreement intentionally contains or will contain any untrue statement of a
material fact, or intentionally omits or will omit to state a material fact
necessary to make the statements herein or therein not
misleading.
(a)
Neither the Company nor the Shareholder is engaged in or a party to
or, to the best knowledge of either of them, threatened with any
claim, controversy, legal action, or other proceeding whether or not before any
court or administrative agency and whether by a private or public party, any
adverse determination of which might adversely affect it or its business and, so
far as either of them knows, there is no basis for such;
(b)
No governmental authority in the last five years has (i) charged the Company or
the Shareholder with the commission of a crime or (ii) given notice to the
Company or either the Shareholder that it was conducting any investigation of
which the Company or either the Shareholder was the subject.
(c)
The Company and the Shareholder has complied in all material respects
with each federal, state or other statute, law, judgment, order, decree,
regulation or rule of any court or governmental authority applicable to it,
including without limitation all trademark, copyright, antitrust and trade
regulation laws, all communications laws, and all rules and regulations
promulgated under such laws. Except as set forth in the Disclosure
Schedule, the Company holds all required licenses and permits to
conduct the business done and intended to be done by it.
The
execution and delivery of this Agreement, the consummation of the transactions
contemplated by this Agreement and the fulfillment of and compliance with the
terms and conditions of this Agreement do not and will not with the passing of
time or the giving of notice or both (a) constitute a violation of, conflict
with, constitute a breach of or default under or result in the creation or
imposition of any security interest, lien or other encumbrance, upon any of the
Assets under (i) any term or
provision of the articles of incorporation or bylaws or other similar basic
document of the Company or (ii) any agreement, commitment or
understanding to which the Company or either the Shareholder is a party or to
which any of them or any of their properties is subject; (iii) any judgment,
decree or order of any court or governmental authority or agency; or (iv) any
statute, law, regulation or rule or (b) create, or cause the acceleration
of maturity of, any debt, obligation or liability of the Company or
either the Shareholder. No consent, approval, order or authorization
of, or registration, declaration or filing with any governmental authority or
other person, corporation, firm or entity with respect to the Company or
any the Shareholder is required in connection with the execution or
delivery of or the performance under this Agreement or the consummation of the
transactions contemplated by this Agreement other than as set forth in the
Disclosure Schedule or described elsewhere herein.
The
Purchaser hereby represents and warrants to the Company and the Shareholder as
of the date of this Agreement and as of the Closing Date, as
follows:
The
Purchaser is a corporation duly incorporated, organized and existing in good
standing
under the laws of Delaware and has the corporate power and authority to own its
properties and carry on its business as contemplated by this
Agreement.
The
Purchaser has full power and authority to enter into this Agreement, and to
enter into the other transactions provided for herein, and the execution and
delivery of this Agreement and the consummation by the Purchaser of
the transactions provided for herein by the Purchaser have been duly
and validly authorized by all necessary action on the part of the Purchaser in
compliance with its organizational documents and applicable
law. This Agreement constitutes the valid and binding agreement of
the Purchaser , enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws from time to time in effect and to general principles of
equity. Subject to the restrictions described above in this Agreement, the
issuance and delivery of the LP Stock and the Additional LP Stock is within the
corporate powers of the Purchaser and has been duly and properly authorized by
proper action of the Board of Directors and officers. When issued and delivered
to the Seller the LP Stock and the Additional LP Stock will be fully paid and
non-assessable on the books of the Purchaser and free from any ownership claims
of prior shareholders or others. The voting and other rights in the LP Stock
provided to the Shareholder at the Closing by virtue of this Agreement are
freely assignable to the Shareholder.
No
representation or warranty by the Purchaser in this Article IV or in any written
exhibit, statement, certificate or agreement required to be furnished by the
Purchaser pursuant to this Agreement intentionally contains or will contain any
untrue statement of a material fact, or intentionally omits or will omit to
state a material fact necessary to make the statements herein or therein not
misleading.
6
All
representations and warranties made by the Purchaser or the Seller in this
Agreement or required by this Agreement to be made in any exhibit, schedule,
certificate, instrument or agreement delivered pursuant to this Agreement, shall
be made at and as of the date of this Agreement and at and as of the
Closing Date hereunder. The representations, warranties, covenants
and agreements made by the Purchaser and the Seller in this Agreement and in any
exhibit, schedule, certificate, instrument or agreement delivered pursuant to
this Agreement shall survive the Closing for a period of one (1) year. No
investigation made by the Purchaser or the Seller or any of their
representatives shall affect the enforceability of any such representations,
warranties, covenants, agreements or undertakings or their
survival.
The
Company and the Shareholder shall indemnify, defend and hold
harmless the Purchaser and their successors and assigns, from and
against any and all loss, liability, claim or expense
(including without limitation reasonable attorneys' fees ) incurred
or suffered as a result of a material breach of a representation or warranty by
either of them or failure to comply with this Agreement including all
exhibits. The Purchaser shall indemnify and hold harmless the Seller
from and against all loss, liability claim or expense( including
reasonable attorneys fees ) which either of them may incur or suffer as a result
of a material breach of a representation or warranty by the Purchaser
or failure by the Purchaser to comply with this Agreement including all
exhibits. The provisions of this Section 5.02
shall survive the Closing. For purposes of this section, a
loss, liability, claim or expense shall not be deemed material except to the
extent that it exceeds $15,000. No claim for indemnity may be brought
more than one (1) year after the Closing Date. This right
of indemnity shall not be deemed exclusive of other remedies provided by law or
by contract.
The
Seller agrees that after execution of this Agreement and prior to the Closing
(except upon the prior written consent of the Purchaser which will not be
unreasonably withheld ) the Company will do the
following:
(a)
Carry on its business diligently and in the ordinary course.
(b)
Not incur any additional liabilities or obligations in excess of $10,000 except
such liabilities or obligations as the Shareholder consider to be reasonable and
necessary for the business.
(c)
Not to organize or engage in any other business or to divert any business
outside the Company.
(d) Not
to increase the compensation of any employee of the Company.
(e)
Not to license, assign, sell, transfer or encumber any of the property or assets
of the Company including development rights to any new products or services,
other than in the ordinary course of business.
(f)
Not to do any act, or omit to do any act, or to permit any act or omission to
act, any of which will cause a breach of any contract, agreement, commitment or
understanding to which the Company is a party or by which it is bound
that is likely to materially and adversely affect its business or financial
condition; and
(g)
To prepare and file all required returns for taxes, and other tax reports,
filings and amendments thereof, required to be filed, and to allow Purchaser to
review all such returns, reports, filings, and amendments prior to the filing
thereof.
(a)
Inspection. The
Seller shall allow the Purchaser and its authorized employees and
representatives full access during normal business hours and prior to the
Closing Date to all of the properties and records of the Company and shall at
their own expense furnish to the Purchaser and its representatives such
information concerning the Company as they may reasonably request.
The Purchaser and its representatives shall have the right to review and copy
such records as they may deem advisable, and shall advise the Seller of those
items of which copies are made. All such investigations and copies
shall be undertaken in strictest confidence and upon request the Purchaser and,
if requested, each representative shall sign a confidentiality agreement before
being permitted to proceed. The Seller and their representatives, and if the
transactions contemplated herein are not consummated, the Purchaser and its
representatives, shall treat all information obtained from the others, and not
otherwise known to such party or already in the public domain, as confidential,
and if the transactions contemplated herein are not consummated, each party
shall return to each other party all materials and copies made of materials
belonging to the other party.
(b) Updated Financial Statements.
Without limiting the foregoing, the
Seller shall cause to be prepared and shall deliver to the Purchaser monthly as
requested, as soon as practicable after they have been prepared (but
in no event later than fifteen days after the end of each month) unaudited
monthly consolidated financial statements (including without limitation a
balance sheet and statements of income and cash flow for the month and
cumulative) of the Company as prepared in the ordinary course of
business, for periods ending after the date of the last Seller's Financials
delivered hereunder.
From the date hereof until the Closing or until this Agreement is
terminated as provided in Article VII, the Seller shall not, and will direct the
officers, directors, representatives, financial advisors and counsel of the
Seller not to solicit or enter into any discussions or negotiations with, or
furnish or cause to be furnished any information concerning, the Seller to any
person or entity (other than the Purchaser and its representatives) in
connection with any acquisition of all or any interest in the Company or product
or service developed by the Company or the Seller, whether by merger, sale or
purchase of equity interests, sale of all or substantially all of the assets or
other takeover or business
combination involving any of them.
7
6.04 Good Faith Efforts; Further Assurances;
Cooperation.
The
parties
hereto shall in good faith undertake to perform their obligations herein, to
satisfy all conditions and to cause the transactions contemplated
herein to be carried out promptly in accordance with the terms
hereof. Upon the execution of this Agreement and thereafter, each
party shall do such things as may be reasonably requested by the other parties
hereto in order more effectively to consummate or document the transactions
contemplated by this Agreement. The parties shall cooperate fully
with each other and their respective officers, directors, employees, agents,
counsel, accountants and other designees in connection with any steps required
to be taken as part of their respective obligations under this
Agreement.
6.05 Brokerage
Commissions.
Each of the parties hereby agrees for the benefit of the others that, other than as stated in the Disclosure Schedule, no person, firm, corporation or other entity is entitled to any brokerage commission or finder's fee in connection with any of the transactions contemplated by this Agreement, arising out of acts by him or it or his or its employees or agents. The Purchaser agrees to indemnify and hold harmless the Seller from and against any and all claims or demands for such commissions or fees based on any arrangement made by the Purchaser, and the Seller agrees to so indemnify and hold harmless the Purchaser from and against any and all claims or demands for such commissions or fees based on any arrangement made by the Seller.
The
Seller will make no press releases or other public announcements relative to the
transactions contemplated by this Agreement without the prior written consent of
the Purchaser. The Purchaser will furnish to the Seller any public
announcement it makes with respect to the transactions contemplated by this
Agreement, prior to its release whenever practicable.
7.01 Termination and
Abandonment.
This
Agreement may be terminated at any time prior to the
Closing:
(a)
by mutual agreement of the Seller and Purchaser;
(b)
by the Purchaser if the conditions set forth in Sections
2.03 and 2.05 shall not have been complied with or performed in any
material respect and such non-compliance or nonperformance shall not have been
cured or eliminated (or by its nature cannot be cured or eliminated) on or
before the Closing Date; provided, however, that if such non-compliance or
nonperformance can be cured or eliminated, the Purchaser shall not
so terminate unless it has given the Seller written notice that non-
compliance or non-performance has occurred, specifying the nature thereof and
the action required to cure, and (ii) such non-compliance or
non-performance shall not have been cured or eliminated within fifteen (15) days
of receipt of such notice;
(c)
by the Seller if the conditions set forth in sections 2.04 and 2.06 shall have
not been complied with or performed in any material respect and such
non-compliance or non- performance shall not have been cured or eliminated (or
by its nature cannot be cured or eliminated) on or before the Closing Date;
provided, however, if such non - compliance or non-performance can be cured or
eliminated, the Seller shall not so terminate unless and until (i) it has given
the Purchaser written notice that non- compliance or non-performance has
occurred, specifying the nature thereof and the action required to cure, and
(ii) such non-compliance or non-performance shall not have been cured or
eliminated within fifteen (15) days of receipt of such notice;
(d)
by the Purchaser or the Seller by written notice to the other, if any action or
proceeding shall have been instituted before any court or other governmental
body or by any public authority or any private person, firm, corporation or
entity to restrain or prohibit or question the validity or legality of the
transactions contemplated by this Agreement or to subject one or more of the
parties to this Agreement or the directors or officers of Purchaser or the
Seller to liability on the grounds that it or they have breached
any law or regulation or otherwise acted improperly in connection
with such transactions, other than an action, suit or proceeding instituted by a
person other than a governmental authority which, in the written opinion of
counsel to the party receiving notice of termination, does not have a
substantial likelihood of success; or
(e) by the Purchaser or the Seller if the
Closing has not occurred on or before the required Date of Closing or any agreed
upon extension
The
parties hereto each acknowledge that the rights of the others to consummate the
transactions contemplated hereby are special, unique and of extraordinary
character, and that, in the event that any party violates or fails and refuses
to perform any covenant or agreement made by it herein, the non-breaching party
may be without an adequate remedy at law. The parties each agree,
therefore, that in the event that he or it violates or fails or refuses to
perform any covenant or agreement made by him or it herein, the non breaching
party or parties may, in addition to any remedies at law for damages or other
relief, institute and prosecute an action in any court of competent jurisdiction
to enforce specific performance of such covenant or agreement or seek any other
equitable relief.
(a)
Redelivery. If this Agreement is terminated and abandoned as provided
herein, each party hereto will redeliver all documents, work papers
and other materials and information, including all copies and summaries thereof
of any other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the same,
and all information received by any party hereto with respect to the business of
any other party shall not at any time be used for the advantage of, or disclosed
to third parties by, such party to the detriment of the party furnishing such
information; provided, however, that this paragraph shall not apply to any
documents, work papers, materials, or information which are a matter of public
knowledge or which have heretofore been or are hereafter published in any
publication for public distribution or filed as public information with any
governmental authority.
(b) Survival.
The following provisions shall survive termination of this Agreement:
Sections: Article III, Article IV, Sections 5.01,5.02,6.05,Articke
VII, 8.06, 8.08.
8
All
notices, communications and deliveries hereunder shall be made in writing signed
by the party making the same, shall specify the section hereunder pursuant to
which it is given, and shall be deemed given on the date delivered if delivered
in person or on the third business day after it is mailed if mailed certified
first class mail return receipt requested (with postage and other fees prepaid)
as follows
To the
Purchaser:
LOCATEPLUS
Holdings Corporation
100 Cumming s
Center, # 235M
Beverly MA
01915
(978)
524-8887 (fax)
Att; Geoffrey
Lee, CEO
with a copy
to:
Geoffrey T.
Chalmers, Esq.
33 Broad
Street, Suite 1100
Boston, Ma
02109
(617)
227-3709 (fax)
To the
Seller:
Employment
Screening Profiles, Inc.
d/b/a
Trubackgrounds, Inc.,
4025 Tampa
Rd., Suite 1206,
Oldsmar, FL
34677
Att; Derrick
A. Spatorico, Esq.
(585) 546-2474(fax)
with a copy
to:
Derrick A.
Spatorico, Esq.
1 East Main
Street, Suite 150
Rochester, NY
14614
or to
such other representative or at such other address as a party hereto may furnish
to the other parties in writing. If notice is given of a permitted
successor or assign of a party hereto, the notice shall be given as set forth
above to such successor or assign of such party.
All
enumerated exhibits and schedules to this Agreement, and any attachments
thereto, are hereby incorporated into this Agreement and- hereby are made a part
hereof as if set out in full in the first place that reference is made thereto.
All exhibits, schedules, certificates, information and lists to be disclosed in
writing and delivered pursuant to this Agreement shall, if not attached to this
Agreement, be delivered to the appropriate party at the address indicated above,
shall indicate the section hereunder pursuant to which it was delivered or
mailed, and shall be signed or initialed by the party or parties or an
attorney-in-fact of the party or parties delivering the same.
8.03 Time of the Essence, Computation of
Time.
Time is
of the essence of each and every provision of this Agreement which, by its
terms, calls for performance by a specified date. Whenever the last
day for the exercise of any privilege or the discharge of any duty hereunder
shall fall upon Saturday, Sunday or any public or legal holiday, whether state
or federal, the party having such privilege or duty may exercise such privilege
or discharge such duty on the next succeeding regular business day.
8.04 Assignment; Successors in
Interest.
No
assignment or transfer by Purchaser or Seller of its rights and obligations
hereunder prior to the Closing shall be made except with the prior written
consent of the other party(ies). This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective legal
representatives, heirs, descendants and permitted successors and assigns, and
any reference to a party hereto shall also be a reference to a permitted
successor or assign.
9
Whenever
the context so requires, the singular number shall include the plural and the
plural shall include the singular, and the gender of any pronoun shall include
the other genders.
8.06 Controlling Law, Integration, Amendment;
Waiver.
This
Agreement shall be governed by and construed and enforced in accordance with the
laws of Massachusetts. This Agreement and the other agreements
contemplated hereby supersede all prior negotiations, agreements and
understandings between the parties with respect to the subject matter hereof,
constitute the entire agreement between the parties and may not be altered or
amended except in writing signed by Purchaser, the Purchaser and the Seller. The
failure of any party hereto at any time or times to require performance of any
provisions hereof shall in no manner affect the right to enforce the same. No
waiver by any party hereto of any condition, or of the breach of any term,
provision, warranty , representation, agreement or covenant contained in this
Agreement or the other agreements contemplated hereby, whether by conduct or
otherwise, in any one or more instances shall be deemed or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other term, provision, warranty,
representation, agreement or covenant herein or therein contained.
Each
party hereto agrees to pay its own expenses of this Agreement and the
transactions contemplated hereby.
In the
event of any controversy or claim arising out of or relating to this Agreement
or any act or omission of a party hereunder (a "dispute"), either party (by
written notice to the other) may invoke the procedures of this
section. Promptly after such notice is given, the Shareholder and
senior management of the Purchaser will meet to attempt to negotiate a
settlement of all pending disputes. If for any reason the parties
have not entered into a written settlement of the dispute(s) within 30 days
after the original notice, either party may give notice demanding
arbitration. Thereafter all pending disputes shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, or such other rules and procedures as the parties may
hereafter consent to in writing. The arbitration shall occur in
Boston, Massachusetts or such other location as is mutually acceptable to the
parties. The arbitrator (or a majority thereof, if more than one)
shall be licensed to practiced law in Massachusetts and experienced in corporate
and contract law, and the arbitrator(s) shall be required to decide each claim
in accordance with applicable law and to set forth briefly in writing the award,
the rationale of the decision, and those facts considered by the arbitrator(s)
to be material to such decision. Judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction
thereof. This agreement to arbitrate shall be enforceable under the
Uniform Arbitration Act.
This
Agreement may be signed by each party upon a separate copy and in such case one
counterpart of this Agreement shall consist of enough of such copies to reflect
the signatures of each party. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement or the terms hereof to
produce or account for more than one of such counterparts. This
Agreement shall become effective when one or more counterparts have been signed
by each of the parties and delivered to each of the other parties.
DULY
EXECUTED BY the parties hereto, under seal, as of the day and year first above
written.
Purchaser: LOCATEPLUS
HOLDINGS CORPORATION
By:
_________________
Geoffrey Lee, CEO
Seller:
EMPLOYMENT SCREENING PROFILES, INC.
By:
___________________
Derrick
A. Spatorico, President
By:____________________
Derrick
A. Spatorico, Individually
10