AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (herein, together with all
Exhibits, "Agreement") is entered in to as of January 28, 2004 by and
between Global Digital Solutions, Inc., a Delaware corporation
("Global") and Creative Beauty Supply, Inc., a New Jersey corporation
("Creative").
This Agreement sets forth the terms and conditions upon which Global
will merge with and into Creative (the "Merger"), pursuant to an
Agreement and Plan of Merger (the "Merger Agreement") in substantially
the form attached hereto as Exhibit A, which provides, among other
things, for the conversion and exchange of all outstanding shares of
$.00001 par value common stock of Global ("Global Stock") into twenty
three million, eight hundred seventy nine thousand, eight hundred
seventeen (23,879,817) shares of voting $.001 par value common stock of
Creative ("Creative Common Stock") (together, the "Merger
Consideration").
The parties intend the merger to qualify as a tax-free reorganization
under Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code")
In consideration of the mutual promises and covenants contained
herein, Creative and Global agree as follows:
ARTICLE 1
Definitions
As used in this Agreement, the following terms (whether used in
singular or plural forms) shall have the following meanings:
"Charter Documents" shall mean the Articles or Certificate of
Incorporation and the Bylaws of the applicable corporation.
"Closing" means the delivery and execution of all monies, common
stock, agreements, consents, exhibits and any other documents to and
from all parties.
"Contract" means any written contract, mortgage, deed of trust,
bond, indenture, lease, license, note, franchise, certificate, option,
warrant, right, or other instrument, document or agreement, and any
oral obligation, right or agreement.
"GAAP" means generally accepted accounting principles, as that term
is defined by the Institute of Certified Public Accountants under the
first standard of reporting under its generally accepted accounting
standards.
"Income Tax" means any federal, state, local or foreign Tax or Taxes
(x) based upon, measured by, or calculated with respect to, net income
or net receipts, proceeds or profits, or (y) based upon, measured by,
or calculated with respect to multiple bases (including, but not
limited to, corporate franchise or occupation Taxes, if such Tax may be
based upon, measured by, or calculated with respect to one or more
bases described in (x) above.
"Income Tax Return" includes all Tax Returns relating to Income
Taxes.
"Intellectual Property" means (i) patents, patent applications and
statutory invention registrations, in each case in the United States
and all other countries, (ii) any trademarks, service marks, trade
dress, logos, trade names, corporate names, and other source
identifiers, including any registrations and applications for
registration of any of the foregoing in the United States and any
foreign country, (iii) all rights under the copyright laws of the
United States and all other countries, including, without limitations,
all copyrightable works, copyrights, and registrations and applications
for registration thereof, and (iv) all confidential and proprietary
information, including trade secrets and know-how.
"Knowledge" of Creative of or with respect to any matter means that
any of the executive officers, directors of Creative has, or after due
inquiry and investigation would have, actual awareness or knowledge of
such matter, and "Knowledge" of Global of or with respect to any matter
means that any of the executive officers, directors of Global has, or
after due inquiry and investigation would have, actual awareness or
knowledge of such matter.
"Legal Requirements" means applicable common law and any statute,
ordinance, code or other law, rule, regulation, order, technical or
other standard, requirement, judgment, or procedure enacted, adopted,
promulgated, applied or followed by any governmental authority,
including Judgments.
"Lien" means any security agreement, financing statement filed with
any governmental authority, conditional sale statement filed with any
governmental authority, conditional sale or other title retention
agreement, any lease, consignment or bailment given for purposes of
security, any lien, mortgage, indenture, pledge, option, encumbrance,
adverse interest, constructive trust or other trust, claim, attachment,
exception to or defect in title or other ownership interest (including
but not limited to reservations, rights of entry, possibilities of
reverter, encroachments, easement, rights-of-way, restrictive covenants
leases and licenses) of any kind, which otherwise constitutes an
interest in or claim against property, whether arising pursuant to any
Legal Requirement, Contract or otherwise.
"Software" of a party means all material computer software owned,
controlled or licensed by or on behalf of such party and used,
manufactured, distributed, sold, licensed or marketed by such party.
"Stockholders Group" means any affiliated group" (a defined in
Section 1504(a) of the Code without regard to the limitations contained
in Section 1504(b) of the Code) that includes the stockholders or any
predecessor of or successor to the stockholders (or another such
predecessor or successor).
"Surviving Corporation" means Creative Beauty Supply, Inc.
"Tax" (including, with correlative meaning, the terms "Taxes" and
Taxable") includes all federal, state, local and foreign income tax,
profits, franchise, gross receipts, environmental, customs duty,
capital stock, communications services, severance, stamp, payroll,
sales, employment, unemployment, disability, use, property,
withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with
all interest, penalties and additions imposed with respect to such
amounts and any interest in respect to such penalties and additions,
and includes any liability for taxes of another person by contract, as
a transferee or successor, under Treasury Regulation Section 1.1502-6
or analogous state, local, or foreign law provision, or otherwise.
"Tax Return" includes all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information
returns) required to be supplied to a Tax authority relating to Taxes.
"Treasury Regulations" means the regulations prescribed under the
Code.
ARTICLE 2
Merger
Section 2.1 Merger. Subject to the terms and conditions contained
in this Agreement, Global will be merged by statutory merger with and
into Creative pursuant to the Merger Agreement at a Closing at the
Effective Time of the Merger as defined in the Merger Agreement. In
the Merger, each share of Global outstanding immediately prior to the
effective time of the Merger will be converted into and exchanged for
one common share of Creative Common Stock.
Section 2.2 Name Change. The name of the Surviving Corporation
shall be amended to be Global Digital Solutions, Inc.
Section 2.3 The Closing.
Subject to the terms of this Agreement, the Closing of the transactions
contemplated hereby (the "Closing") shall take place at the offices of
Creative at such time and date as the parties may mutually agree (the
"Closing Date"). Notwithstanding the foregoing, for purposes of
allocating profits and/or losses of Creative only, the effective date
for change of control shall be deemed to be February 20, 2004.
Prior to Closing, all instruments and documents shall be held in escrow
with ▇▇▇▇ ▇. ▇▇▇▇▇▇, Attorney At Law as escrow agent.
At the Closing, Creative shall deliver to Global:
The Merger Consideration (as defined in Section 2.1)
Creative's Certificates referred to in Section 6.1(d);
Such other instruments and documents, in form and substance reasonably
acceptable to Global, as may be necessary to affect the Closing.
At the Closing, Global shall deliver to Creative:
Global's Certificate referred to in Section 6.2(d);
The stockholder certificates evidencing shares of the common stock of
Global;
A certified copy of the "Charter Documents" of Global, and a good
standing certificate for Creative issued by the Secretary of State of
the State of Delaware; and
Such other instruments and documents, in form and substance reasonably
acceptable to Global, as may be necessary to affect the Closing.
Section 2.4 Reverse stock split restriction. Subsequent to the
merger with Creative, the new board of directors of the Surviving
Corporation shall agree not to effectuate a reverse stock split for a
period of five (5) years from the date of Closing.
Section 2.5 Lock-Up Agreement. At the Closing, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (the "Catizones") shall enter into a Lock Up Agreement whereby
an aggregate of 1,000,000 common shares of Creative currently owned by.
Catizones shall be restricted for an additional one (1) year period
from the date of Closing.
Section 2.6 Warrants in Global. The warrant holders in Global
shall agree to exchange such Warrants and any rights attached thereto
for warrants of comparable value in Creative There are currently
Series A warrants to purchase 2,100,000 common shares at an exercise
price of $.50 per common share. The holders of Series B Warrants in
Pacific ComTel, Inc. ("Pactel") shall exchange such Warrants for Series
B Warrants in Global. Such Series B Warrant holders shall have the
right to purchase 370,000 common shares at an exercise price of $1.00
per common share.
Section 2.7 Mechanics for Closing Merger. At the Closing, each
party shall execute and deliver, or cause to be executed and delivered
to the other party, all monies, common stock, documents and
instruments, in form and substance satisfactory as reasonably required
to carry out or evidence the terms of this Agreement. Upon the
approval of the shareholders of Global and Creative, the executed
Articles of Merger shall be filed with the Delaware Secretary of State
and the New Jersey Secretary of State respectively.
Section 2.8 Certificate of Incorporation of the Surviving
Corporation. At the "Effective Date" of the Merger, the Charter
Documents of Creative as in effect immediately prior to the Effective
Date shall be the Charter Documents of the Surviving Corporation.
Section 2.9 Bylaws of the Surviving Corporation. At the Effective
Date of the Merger, the bylaws of Creative, as in effective immediately
prior to the Effective Date, shall be the bylaws of the Surviving
Corporation.
Section 2.10 Further Assurances. At or after the Closing, Global,
at the request of Creative, shall promptly execute and deliver, or
cause to be executed and delivered, to Creative all such documents and
instruments, in form and substance satisfactory to Creative, as
Creative reasonably may request in order to carry out or evidence the
terms of this Agreement
ARTICLE 3
Representations and Warranties of Global
Global represents and warrants to Creative that the statements
contained in Article 3 are true and complete and will be correct and
complete, as of the date of this Agreement and as of Closing, as
follows:
Section 3.1 Organization and Qualification of Global. Global is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to carry on its business as it is now being conducted.
Global is duly qualified to do business and is in good standing as a
foreign corporation in all jurisdictions where the nature of the
property owned or leased by it, or the nature of the business conducted
by it, makes such qualification necessary and the absence of such
qualification would, individually or in the aggregate, have a Material
Adverse Effect (as hereinafter defined). The term "Material Adverse
Effect" means any adverse change or effect that when taken individually
or together with all other adverse changes an effects, is or is
reasonably likely to be materially adverse to the business, operations,
results of operations or financial condition of Global.
Section 3.2 Authority. Global has all requisite corporate power and
authority to execute, deliver and perform this Agreement. The
execution, delivery and performance of this Agreement by Global have
been duly and validly authorized by all necessary
action on the part of Global. This Agreement has been duly and validly
executed and delivered by Global, and is a valid and binding obligation
of Global, enforceable against Global in accordance with its terms.
Section 3.3 Ownership and Number of Shares of Global Stock. The
shareholders listed on Exhibit 3.3 own all of the issued and
outstanding shares the Global Stock, beneficially and of record, free
and clear of all liens. The Global Stock is not subject to, or bound
or affected by, any proxies, voting agreements, or other restrictions
on the incidents of ownership hereof. There are not, and will not be
at Closing more than twenty three million, eight hundred seventy nine
thousand eight hundred seventeen (23,879,817) outstanding common
shares.
Section 3.4 Subsidiaries. Except as disclosed on Exhibit 3.4,
Global does not control or hold direct or indirect equity interests in,
or hold rights to control or acquire direct or indirect equity
interests in, any corporation.
Section 3.5 Capitalization of Global. The authorized capital stock
of Global consists of one hundred million (100,000,000) shares of
common stock $.00001 par value per share, of which twenty three
million, eight hundred seventy nine thousand eight hundred seventeen
(23,879,817) shares are validly issued and outstanding, fully paid and
non-assessable. There are no other authorized or outstanding
subscriptions, options, convertible securities, warrants, calls or
other rights of any kind issued or granted by, or binding upon, Global
to purchase or otherwise acquire any securities of or equity interest
in Global. All of the issued and outstanding shares of Creative were
issued in compliance with all applicable state and federal securities
laws, and shall remain free from any encumbrances or Liens.
Section 3.6 No Conflicts; Required Consents. The execution,
delivery and performance by Global of this Agreement will not:
conflict with or violate any provision of the articles or Charter
Documents of Global;
violate any Legal Requirements;
result in the creation or imposition of any Lien against or upon the
Global Stock or any of the assets or properties owned or leased by
Global; or
require any consent, approval, or authorization of, or filing of any
certificate, notice, application, report or other document with, any
governmental authority or other person.
Section 3.7 Litigation. Other than disclosed in Exhibit 3.7, there
is no litigation pending or, to Global's knowledge, threatened, by or
before any governmental authority or private arbitration tribunal,
against Global or its operations, nor, to Global's knowledge, is there
any basis for any such litigation.
Section 3.8 Compliance with Applicable Legal Requirements. Conduct
by Global of its activities as currently conducted does not violate or
infringe any Legal Requirements currently in effect, or, to the
knowledge of Global, proposed to become effective; and Global has
received no notice of any violation by Global of any Legal Requirements
applicable to Global or its activities as currently conducted; and
Global knows of no basis for the allegation of any such violation.
Section 3.9 Financial Statements. Global has delivered to Creative
the audited financial statements from inception to November 7, 2003
(the "Financial Statements"). The Financial Statements were prepared
in accordance with GAAP and present fairly the financial position of
Global as of the date indicated. Also, Global has delivered the
audited financial statements of PacTel for the year ended June 30, 2003
and unaudited financial statements for the first quarter ended
September 30, 2003.
Section 3.10 Liabilities. Global has no liabilities or obligations,
whether absolute, accrued, contingent or otherwise, that are not
reflected in the Financial Statements or non-delinquent obligations for
ordinary and recurring expenses, including in the ordinary course of
business of Global since the date of the Financial Statements.
Section 3.11 Taxes.
Except as set forth in Exhibit 3.11(a), all Tax Returns required to be
filed by or with respect to Global have been properly and timely filed
and all such Tax Returns are complete and accurate in all material
respects. Except to the extent reserved or reflected against on the
Financial Statements, all Taxes due with respect to such Tax Returns or
which are otherwise due and payable by Global have been paid in full.
All Taxes required to be withheld and paid over by Global to any
relevant Tax authority in connection with payments to employees,
independent contractors, creditors, stockholders or to third parties
have been so withheld and paid over.
Except as set forth in Exhibit 3.11(b):
no Tax authority in a jurisdiction where Global does not file Tax
Returns has made a written claim, assertion or threat that Global is or
may be subject to tax in such jurisdiction;
no deficiencies for any tax have been threatened, proposed, asserted or
assessed against Global that have not been satisfied;
no audits or examinations with respect to Global are ongoing or have
been threatened or proposed, in writing by the Internal Revenue Service
or the appropriate state, local or foreign Tax authority;
no waivers or extensions of statutes of limitation with respect to
Taxes have been given by or requested with respect to Global;
there are no Tax rulings, requests for rulings, closing agreements
relating to Global that could affect the liability for Taxes of Global
for any period (or portion of a period) after the Closing; and
no power of attorney has been granted by Global with respect to any
matter relating to Taxes of Global that is currently in force.
Global is not a party to or liable to under any tax sharing agreement
with respect to taxes of any consolidated, combined or unitary group
other than the consolidated, combined or unitary group other than the
consolidated, combined or unitary group disclosed in Exhibit 3.11(c).
Except as set forth in Exhibit 3.11(c), Global has not with respect to
any taxable period for which the applicable statute of limitations has
not run, filed a combined consolidated or unitary tax return with
respect to any jurisdictions (foreign and domestic) in which Global has
filed income tax returns for taxable periods ending on or December 31,
1996. Global will not, in the absence of a closing agreement provided
for in the Treasury Regulations under Section 1503 of the Internal
Revenue Code of 1986. (the "Code"), trigger the recapture of any dual
consolidated losses (as defined in Section 1503 of the Code) by virtue
of the transactions contemplated by this Agreement.
There are no tax liens on any assets of Global, except liens for taxes
not yet due and payable.
Section 3.12 Absence of Certain Changes or Events. Except as set
forth in Exhibit 3.12, since the date of the Financial Statements there
has not occurred:
(a) any material and adverse change in the financial condition or
operations of Global;
(b) any damage, destruction or loss to or of any of the material
assets or properties owned or leased by Global;
(c) the creation or attachment of any Lien against the capital stock
of Global;
(d) any waiver, release, discharge, transfer, or cancellation by
Global of any rights or claims of material value;
(e) any issuance by Global of any securities, or any merger or
consolidation of Global with any other Person, or any acquisition by
Global of the business of any other Person;
(f) any incurrence, assumption or guarantee by Global of any
indebtedness or liability;
(g) any declaration, setting aside or payment by Global of any
dividends on, or any other distribution with respect to, any capital
stock of Global or any repurchase, redemption, or other acquisition of
any capital stock of Global;
(h) (A) any payment of any bonus, profit sharing, pension or similar
payment or arrangement or special compensation to any employee of
Global, except in the ordinary course of the business of Global, or (B)
any material increase in the compensation payable or to become payable
to any employee of Global; or
(i) the entry by Global into any Contract to do any of the foregoing.
Section 3.13 Material Global Contracts. As of the date of this
Agreement, Global does not have except as disclosed in Exhibit 3.13:
(a) contracts evidence or evidencing or relating to any liabilities
or obligations of Global, whether absolute, accrued, contingent or
otherwise, or granting any Person a Lien or against any properties or
assets owned or leased by Global;
(b) joint venture or partnership Contracts between Global and any
other person;
(c) Contracts limiting the Global of Global to engage in or to
compete in any activity, or to use or disclose any information in its
possession;
(d) any other Contracts to which Global is a party or by which it or
the assets or properties owned or leased by it are bound or affected
that are not set forth on other Exhibits hereto, which in the aggregate
contemplate payments to or by Global exceeding $50,000 in any twelve-
month period (collectively herein as the "Material Global Contract").
Global has delivered to Global true and complete copies of each of the
Material Global Contracts, including any amendments thereto or, in the
case of oral Material Global Contracts, a written description and
representation that the contract is valid, in full force and effect and
enforceable in accordance with its terms against the parties thereto
other than Global, and Global has fulfilled when due, or has taken all
action necessary to enable it to fulfill when due, all of its
obligations thereunder);
(e) there has not occurred any default (without regard to lapse of
time, the giving of notice, or the election of any person other than
Global, or any combination thereof) by Global, nor, to the knowledge of
Global, has there occurred any default (without regard to lapse of
time, the giving of notice, or the election of Global, or any
combination thereof) by any other person, under any of the Material
Global Contracts; and
(f) to the knowledge of Global, there is no other person in arrears
in the performance or satisfaction of its obligations under any of the
Material Global Contracts, and no waiver has been granted by any of the
parties thereto.
Section 3.14 Assets and Properties.
(a) Global has good title to all of the material tangible personal
assets and properties which it purports to own (including those
reflected on the Financial Statement, except for assets and properties
sold, consumed or otherwise disposed of in the ordinary course of
business since the date of the Financial Statements, which are not
individually or in the aggregate material), free and clear of all
Encumbrances, except as set forth in Exhibit 3.14(a) and (b) liens for
taxes not yet due and payable or due but not delinquent or being
contested in good faith by appropriate proceedings. Except as set
forth in Exhibit 3.14(a), the assets owned or leased by Global
constitute all the assets used in and necessary to conduct the business
as currently conducted.
(b) All material tangible property and assets owned or utilized by
Global are in good operating condition and repair (except for ordinary
wear and tear), free from any defects (except such minor defects as do
not interfere with the use thereof in the conduct of the normal
operations), have been maintained consistent with the standards
generally followed in the industry and are sufficient to carry on the
business as presently conducted. All buildings, plants and other
structures owned or otherwise utilized by Global are in good condition
and repair (except for ordinary wear and tear) in all material
respects.
(c) Global owns no real property.
(d) Exhibit 3.14(d) sets forth a list of all real property leased by
Global (the "Leased Real Property"). Global has made available to
Global true and complete copies of all leases and subleases relating to
the Leased Real Property. With respect to the Leased Real Property:
Global has good and valid leasehold estates in the Leased Real
Property, free and clear of all Encumbrances; and all existing water,
sewer, gas, electricity, telephone and other utilities required for the
construction, use, occupancy, operation and maintenance of the Leased
Real Property are adequate in all material respects for the use,
occupancy, operation and maintenance thereof, as currently conducted or
currently exists. Except as set forth on Exhibit 3.14(d), each such
lease or sublease is legal, valid, binding and enforceable and in full
force and effect, and the consummation of the transactions contemplated
by this Agreement will not cause a material breach under any such lease
or sublease.
(e) Except as set forth on Exhibit 3.14(d):
(i) Global has not received written notice of any pending or
threatened condemnation or eminent domain proceedings or their local
equivalent with respect to the Leased Real Property;
(ii) the Leased Real Property, the use and occupancy thereof by
Global, and the conduct of the business thereon and therein does not
violate any deed restrictions, applicable law consisting of building
codes, zoning, subdivision or other land use or similar laws the
violation of which would materially adversely affect the use, value or
occupancy of any such property or the conduct of the business thereon;
Global has received, written notice of a material violation of the
restrictions or laws described in the foregoing clause (ii); and none
of the structures or improvements on any of the Leased Real Property
encroaches upon real property of another person or entity, and no
structure or improvement of another person or entity encroaches upon
any of the Leased Real Property, which would materially interfere with
the use thereof in the ordinary course of business.
Section 3.15 Books and Records. All of the books, records and
accounts of Global are in all material respects true and complete, are
maintained in accordance with good business practice and all applicable
Legal Requirements, accurately present and reflect in all material
respects all of the transactions therein described, and are reflected
accurately in the Financial Statements. Global has previously
delivered to Global the complete stock record book of Global and true
and complete copies of all of the minutes of meetings and all other
corporate actions of the stockholders, Board of Directors and
committees of the Board of Directors of Global since the date of its
incorporation.
Section 3.16 Certain Interests. None of Global or its officers,
directors, or holders of ten percent (10%) or more of Global Common
Stock, directly or indirectly is, or owns any interest in, or controls,
or is an employee, officer, director or partner of or participant in,
or consultant to, any person that is a competitor, supplier or customer
of Global.
Section 3.17 Bank Accounts. Exhibit 3.17 sets forth all bank
accounts, brokerage accounts, and safe deposit boxes of any kind
maintained by Global and, in each case, identifies the persons that are
authorized signatories for, or which are authorized to have access to,
each of them.
Section 3.18 Changes in Circumstances. Global has no knowledge of:
any current or future condition or state of facts or circumstances
which could reasonably be expected to result in a material and adverse
change in the financial condition of operations of Global; or
any Legal Requirements currently in effect from which Global
currently is, or any currently proposed Legal Requirements from which
Global would be, exempt by reason of any "grandfather" clauses or
provisions contained therein, but which would be applicable to Global
following closing.
Section 3.19 Intellectual Property.
(a) Exhibit 3.19(a) sets forth a true and complete list of all
Software, registered U.S. and foreign patents and patent applications,
registered U.S. and foreign trademark applications, registered U.S. and
foreign copyrights and copyright applications and other Intellectual
Property (as hereinafter defined), in each case owned by Global and
material to the business of Global ("Global Owned Intellectual
Property"), licenses for the Software licensed to Global or by Global
to a third party (as hereinafter defined), in each case that are
material to the business of Global ("Global Licensed Intellectual
Property"), and all Software and Intellectual Property that is
licensed by Global to a third party ("Third Party Licensed Intellectual
Property").
(b) To the knowledge of Global, the conduct of the business of Global
as currently conducted does not infringe or misappropriate the
Intellectual Property rights of any third party, and no claim has been
asserted against Global that the conduct of the business of Global as
currently conducted infringes or may infringe or misappropriate the
Intellectual Property rights of any third party.
(c) With respect to each item of Global Owned Intellectual Property,
Global is the sole owner of the entire right, title and interest in and
to such Intellectual Property and without limitation of the foregoing
is entitled to use such Intellectual Property in the continued
operation of its business.
(d) With respect to each item of Global Licensed Intellectual
Property, Global has the right to use such Global Licensed Intellectual
Property in the continued operation of its business in accordance with
the terms of the license agreement governing such Global Licensed
Intellectual Property.
(e) To the knowledge of Global, Global Owned Intellectual Property is
valid and enforceable, and has not been adjudged invalid or
unenforceable in whole or part.
(f) To the knowledge of Global, no person is engaging in any activity
that infringes upon Global Owned Intellectual Property.
(g) To the knowledge of Global, each license of Global Licensed
Intellectual Property and Third Party Licensed Intellectual Property is
valid and enforceable, is binding on all parties to such license, and
is in full force and effect.
(h) To the knowledge of Global, neither party to any license of
Global Licensed Intellectual Property nor any Third Party Licensed
Intellectual Property is in breach thereof or default thereunder.
(i) The Software of Global is free of all viruses, worms, trojan
horses and other material known contaminants, and does not contain any
bugs, errors, or problems of a material nature that disrupt its
operation or have an adverse impact on the operation of other software
programs or operating systems.
(j) No rights in the Software of Global have been transferred to any
third party except to the customers of Global to whom Global has
licensed the right to use all Software in the ordinary course of
business.
(k) Global has the right to use all software development tools,
library functions, compilers, and other third party software that is
material to the business of Global, or that is required to operate or
modify the Software of Global.
Section 3.20 Commitments.
(a) Exhibit 3.20(a) sets forth, as of the date hereof, each contract
or agreement, whether written or oral (including any and all amendments
thereto), to which Global is a party, or by which Global is bound
(collectively, the "Commitments") of the following types:
(i) Commitments for the sale of any real or personal (tangible or
intangible) properties other than in the ordinary course of business,
or for the grant of any option or preferential rights to purchase any
such properties;
(ii) Commitments for the construction, modification or repair of
any building, structure or facility or for the incurrence of any
capital expenditures or for the acquisition of fixed assets, providing
for aggregate payments in excess of $50,000.00;
(iii) Commitments relating to the acquisition by Global or a
Subsidiary of any operating business or the capital stock of any other
person or entity that have not been consummated or that have been
consummated but contain representations, covenants, guaranties,
indemnities or other obligations that remain in effect;
(iv) Commitments pursuant to which any party is required to
purchase or sell a stated portion of its requirements or output to
another party or perform a stated amount of service for, on behalf of,
or upon the referral of another party;
(v) Commitments relating to any Litigation (as defined hereinafter
in Section 3.7);
(vi) Commitments under which Global agrees to indemnify any person
or entity;
(vii) Commitments containing covenants of Global not to compete do
business in any line of business or in any geographical area or with
any person or entity, or to disclose certain information, or covenants
of any person or entity not to compete with Global in any line of
business or in any geographical area or disclose information concerning
Global;
(viii) Commitments pursuant to which Global (A) leases, subleases,
licenses or otherwise has the right to use any personal property or (B)
is the lessor of any personal property;
(ix) Commitments in respect of any joint venture, partnership or
other similar arrangement (including, without limitation, any joint
development agreement);
(x) Commitments relating to any governmental or regulatory
authority;
(xi) Commitments for the lease or sub-lease of any real property;
(xii) Commitments for the leasing of any personal property;
(xiii) Commitments relating to outstanding letters of credit or
performance bonds or creating any obligation or liability as guarantor,
surety, co-signer, endorser, co-maker, indemnitor or otherwise in
respect of the obligation of any person or entity, except as endorser
or maker of checks or letters of credit endorsed or made in the
ordinary course of business;
(xiv) Commitments that involve in excess of $50,000.00 in the
aggregate or that may not be terminated on less than ninety (90) days'
notice;
(xv) Commitments (other than those specified in any of clauses (i)
through (xiv) of this paragraph (a)) which relate to or affect the
business or any of the assets or properties of Global in any way that
are material to the business; and
(xvi) Commitments currently in negotiation by Global of a type,
which if entered into would be required to be listed on Exhibit 3.20(a)
or to be disclosed on any other Schedule hereto.
Except as set forth in Exhibit 3.20(b), all of the Commitments referred
to in the preceding paragraph (a) are valid, binding, in full force and
effect and enforceable in accordance with their terms against Global,
and to the knowledge of Global, against the respective counterparties
to such Commitments. Complete copies (or, if oral, full written
descriptions) of all Commitments required to be so listed, including
all amendments thereto, and complete copies of all standard form
Commitments used in the conduct of the Business, have been delivered to
Global. Except as set forth in Exhibit 3.20(b):
there is no breach, violation or default and no event which, with
notice or lapse of time or both, would constitute a breach, violation
or default, or give rise to any Encumbrance or right of termination,
modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration under, any Commitment listed in Exhibit
3.20(a), except for breaches, violations and defaults, or Encumbrances
or rights of termination, modification, cancellation, prepayment,
suspension, limitation, revocation or acceleration which, individually
or in the aggregate, are not material; and
neither Global nor any other party to any of the Commitments listed
in Exhibit 3.20(a) is in material arrears in respect of the performance
or satisfaction of the terms and conditions on its part to be performed
or satisfied under any of such Commitments and no material waiver or
material indulgence has been granted by any of the parties thereto.
Section 3.21 Compliance with Laws. Except as set forth in Exhibit
3.21, Global has received any written notice of any violation of any
applicable laws, rules, regulations and orders relating to the
operation, conduct or ownership of the business. Global has all
permits, licenses, certificates and authorizations of governmental and
regulatory authorities necessary for the conduct of their business as
presently conducted, except where the failure to have any such permit,
certificate, or authorization would not have a Material Adverse Effect.
Section 3.22 Employee Benefit Plans; Labor Matters.
With respect to each employee benefit plan, program, arrangement and
contract (including, without limitation, any "Employee Benefit Plan",
as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), maintained or contributed to by
Global, or with respect to which Global could incur liability under
Section 4069 or 4201(c) of ERISA (Global Benefit Plans"), Global has
made available to Global a true and correct copy of
the most recent annual report (Form 5500) filed with the Internal
Revenue Service (the "IRS"),
such Global Benefit Plan,
each trust agreement relating to such Global Benefit Plan,
the most recent summary plan described for each Global Benefit Plan
for which a summary plan described is required,
the most recent actuarial report or valuation relating to a Global
Benefit Plan subject to Title IV of ERISA, if any, and
the most recent determination letter, if any, issued by the IRS with
respect to any Global Benefit Plan qualified under Section 401 (a) of
the Code.
(b) With respect to Global Benefit Plans, no event has occurred and,
to the knowledge of Global, there exists no condition or set of
circumstances, in connection with which Global could be subject to any
liability under the terms of such Global Benefit Plans, ERISA, the Code
or any other applicable law except as would not have a Global Material
Adverse Effect. Global has no actual or contingent liability under
Title IV of ERISA (other than the payment of premiums to the Pension
Benefit Guaranty Corporation) except as would not have a Global
Material Adverse Effect.
(c) Global has made available to Global:
(i) copies of all employment agreements with officers or key
employees of Global or any of its subsidiaries;
(ii) copies of all severance agreements, programs and policies of
Global; and
(iii)copies of all plans, programs, agreements and other
arrangements of Global, which contain change in control provisions.
(d) Except as set forth in Exhibit 3.22(d), neither the execution nor
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will:
result in any material payment (including, without limitation,
severance, unemployment compensation, "golden parachute" or otherwise)
becoming due to any director, officer or employee of Global under any
Global Benefit Plan or otherwise;
materially increase any benefits otherwise payable under any Global
Benefit Plan; or
result in any acceleration of the time of payment or vesting of any
material benefits.
(e) Except as set forth in Exhibit 3.22(b) or as required by law, no
Global Benefit Plan provides retiree medical or retiree life insurance
benefits to any person.
(f) Global
(i) is in material compliance with all applicable federal, state
and local laws, rules and regulations (domestic and foreign) respecting
employment, employment practices, labor, terms and conditions of
employment and wages and hours, in each case, with respect to
employees;
(ii) has withheld all amounts required by law or by agreement to
be withheld from the wages, salaries and other payments to employees;
is not liable for any arrears of wages or any taxes or any penalty for
failure to comply with any of the foregoing; and
(iii) is not liable for any payment to any trust or other fund or
to any governmental or administrative authority, with respect to
unemployment compensation benefits, social security or other benefits
for employees.
(g) No employees are currently represented by any labor union for
purposes of collective bargaining and to the knowledge of Global, no
activities the purpose of which is to achieve such representation of
all or some of such employees are threatened or ongoing. No work
stoppage or labor strike against Global by employees is pending or to
the knowledge of Global threatened. Global is not:
(i) involved in or threatened with any labor dispute, grievance,
or litigation relating to labor matters involving any employees,
including, without limitation, violation of any federal, state or local
labor, safety or employment laws (domestic or foreign), charges of
unfair labor practices or discrimination complaints;
(ii) engaged in any unfair labor practices within the meaning of
the National Labor Relations Act or the Railway Labor Act; or
(iii) presently, nor has it been in the past a party to, or bound
by, any collective bargaining agreement or union contract with respect
to employees and no such agreement or contract is currently being
negotiated by Global or any of its affiliates.
(h) COBRA, FMLA, HIPAA, Cancer Rights. With respect to each Global
Employee Plan, Global has complied with:
(i) the applicable health care continuation and notice provisions
of the Consolidation Omnibus Budget Reconciliation Act of 1985
("COBRA") and the regulations thereunder or any state law governing
health care coverage extension or continuation;
(ii) the applicable requirements of the Family and Medical Leave
Act of 1993 ("FMLA") and the regulations thereunder;
the applicable requirements of the Health Insurance Portability and
Accountability Act of 1996 ("HIPPAA"); and
the applicable requirements of the Cancer Rights Act of 1998, except
to the extent that such failure to comply could not reasonably be
expected, individually or in the aggregate, to have Material Adverse
Effect on Global. Global has no material unsatisfied obligations to
any employees, former employees or qualified beneficiaries pursuant to
COBRA, HIPAA or any state law governing health care coverage extension
or continuation.
Section 3.23 Environmental Matters.
(a) To the knowledge of Global, it is and has at all times been in
compliance with all environmental laws governing Global and its
business, operations, properties and assets, except as would not have a
Material Adverse Effect.
(b) There are no judgments and no material non-compliance orders,
warning letters, notices of violation, claims, suits, actions,
penalties, fines, or administrative or judicial investigations of any
nature or to the knowledge of Global proceedings pending or threatened
in writing against or involving Global, any Governmental Authority or
third party with respect to any environmental laws of licenses issued
to Global, except as would not have a Material Adverse Effect.
Section 3.24 Insurance. All of the material assets of Global and
all aspects of the business that are of insurable character are covered
by insurance with reputable insurers against risks of liability,
casualty and fire and other losses and liabilities customarily obtained
to cover comparable businesses and assets in amounts, scope and
coverage which are consistent with prudent industry practice. Global
is not in default with respect to its obligations under any material
insurance policy maintained by it. Exhibit 3.24 sets forth a list of
all insurance coverage carried by Global, the carrier and the terms and
amount of coverage. All such policies and other instruments are in
full force and effect and all premiums with respect thereto have been
paid. Global has not failed to give any notice or present any claim
under any such insurance policy in due and timely fashion or as
required by any of such insurance policies, and Global has not
otherwise, through any act, omission or non-disclosure, jeopardized or
impaired full recovery of any claim under such policies, and there are
no claims by Global under any of such policies to which any insurance
company is denying liability or defending under a reservation of rights
or similar clause. Global has not received notice of any pending or
threatened termination of any of such policies or any premium increases
for the current policy period with respect to any of such policies and
the consummation of the transactions contemplated by this Agreement
will not result in any such termination or premium increase.
Section 3.25 Accuracy of Information. None of the written
information and documents which have been or will be furnished by
Global or any representatives of Global to Creative or any of the
representatives of Global in connection with the transactions
contemplated by this Agreement contains or will contain, as the case
may be, any untrue statement of a material fact, or omits or will omit
to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances in which made. To
the knowledge of Global, Global has disclosed to Creative as the
purchaser of Creative Common Stock all material information relating to
Global and its activities as currently conducted.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CREATIVE
Creative represents and warrants to Global that the statements made in
Article 4 are true and complete, as of the date of this Agreement and
will be correct and complete as of Closing, as follows:
Section 4.1 Organization and Qualification of Creative. Creative is
a corporation duly organized, validly existing, and in good standing
under the laws of the state of New Jersey, and has all requisite
corporate power and authority to own and lease the properties and
assets it currently owns and leases and to conduct its activities as
currently conducted. Creative is duly qualified to do business as a
foreign corporation in all jurisdictions in which the ownership or
leasing of the properties and assets owned or leased by it or the
nature of its activities makes such qualification necessary. Creative
has a wholly owned subsidiary, Creative Beauty of New Jersey
Corporation which is in the process of being spun off to shareholders
of record on December 31, 2003. All instruments and documents
regarding the spin off shall be held in escrow with ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Attorney At Law until completion of the spin off.
Section 4.2 Authority. Creative has all requisite corporate power
and authority to execute, deliver and perform this Agreement. The
execution, delivery, and performance of this Agreement by Creative have
been duly and validly authorized by all necessary action on the part of
Creative. This Agreement has been duly and validly executed and
delivered by Creative, and is the valid and binding obligation of
Creative, enforceable against Creative in accordance with its terms.
Section 4.3 Capitalization of Creative. The authorized capital
stock of Creative consists of one hundred million (100,000,000)
authorized shares of common stock $.001 par value per share of which
three million four hundred ninety four thousand six hundred fifty
(3,494,650) are issued and outstanding fully paid and non assessable
and ten million (10,000,000) authorized shares, of preferred shares
..001 par value per share of which none are validly issued and
outstanding. Except as listed in Exhibit 4.3, there are no other
authorized or outstanding subscriptions, options, convertible
securities, warrants, calls or other rights of any kind issued or
granted by, or binding upon, Creative to purchase or otherwise acquire
any securities of or equity interest in Creative.
Section 4.4 No Conflicts; Required Consents. The execution,
delivery and performance by Creative of this Agreement does not and
will not: (i) conflict with or violate any provisions of the Charter
Documents of Creative; (ii) violate any provision of any Legal
Requirements; or (iii) conflict with, violate, result in a breach of,
constitute a default under (without regard to requirements of notice,
lapse of time, or elections of other persons, or any combination
thereof) or accelerate or permit the acceleration of the performance
required by, any Contract or Lien to which Creative is a party or by
which Creative or the assets or properties owned or leased by it are
bound or affected; or (iv) require any consent, approval or
authorization, report or other document with, any Governmental
Authority or other person.
Section 4.5 Validity and Ownership of Creative Common Stock. The
Creative Common Stock received by the shareholders of Global at the
Closing will be validly issued and outstanding, fully paid and non-
assessable. The Creative Common Stock will not be subject to, nor
bound or affected by, any proxies, voting agreements, or other
restrictions on the ownership thereof, and shall remain free from any
encumbrances or Liens.
Section 4.6 Subsidiaries. Creative does not control or hold direct
or indirect equity interests in, or hold rights to control or acquire
direct or indirect equity interests in, any corporation other than
described in Exhibit 4.6.
Section 4.7 Litigation. Other than disclosed in Exhibit 4.7, there
is no litigation pending or, to Creative's knowledge, threatened, by or
before any governmental authority or private arbitration tribunal,
against Creative or its operations, nor, to Creative's knowledge, is
there any basis for any such litigation.
Section 4.8 Compliance with Applicable Legal Requirements. Conduct
by Creative of its activities as currently conducted does not violate
or infringe any Legal Requirements currently in effect, or, to the
knowledge of Creative, proposed to become effective; and Creative has
received no notice of any violation by Creative of any Legal
Requirements applicable to Creative or its activities as currently
conducted; and Creative knows of no basis for the allegation of any
such violation.
Section 4.9 Financial Statements. Creative has delivered to Global
the audited financial statements of Creative as of March 31, 2003 and
the unaudited interim financial statements of Creative as of December
31, 2003 (the "Creative Financial Statements"). The Financial
Statements were prepared in accordance with GAAP and present fairly the
financial position of Creative as of the date indicated.
Section 4.10 Liabilities. Creative has no liabilities or
obligations, whether absolute, accrued, contingent or otherwise, that
are not reflected in the balance sheet or non-delinquent obligations
for ordinary and recurring expenses, including in the ordinary course
of business of Creative since the date of the Financial Statements.
At Closing, Creative shall have no liabilities or obligations,
including state and federal tax liabilities.
Section 4.11 Tax Returns and Payments. Except as set forth in
Exhibit 4.11(a), all Tax Returns required to be filed by or with
respect to Creative have been properly and timely filed and all such
Tax Returns are complete and accurate in all material respects.
Except to the extent reserved or reflected against on the Financial
Statements, all Taxes due with respect to such Tax Returns or which are
otherwise due and payable by Creative have been paid in full. All
Taxes required to be withheld and paid over by Creative to any relevant
Tax authority in connection with payments to employees, independent
contractors, creditors, stockholders or to third parties have been so
withheld and paid over.
(b) Except as set forth in Exhibit 4.11(b):
(i) no Tax authority in a jurisdiction where Creative does not
file Tax Returns has made a written claim, assertion or threat that
Global is or may be subject to tax in such jurisdiction;
(ii) no deficiencies for any tax have been threatened, proposed,
asserted or assessed against Creative that have not been satisfied;
(iii) no audits or examinations with respect to Creative are
ongoing or have been threatened or proposed, in writing by the Internal
Revenue Service or the appropriate state, local or foreign Tax
authority;
(iv) no waivers or extensions of statutes of limitation with
respect to Taxes have been given by or requested with respect to
Creative;
(v) there are no Tax rulings, requests for rulings, closing
agreements relating to Creative that could affect the liability for
Taxes of Creative for any period (or portion of a period) after the
Closing; and
(iv) no power of attorney has been granted by Creative with
respect to any matter relating to Taxes of Creative that is currently
in force.
(c) Creative is not a party to or liable to under any tax sharing
agreement with respect to taxes of any consolidated, combined or
unitary group other than the consolidated, combined or unitary group
other than the consolidated, combined or unitary group disclosed in
Exhibit 4.11(c). Except as set forth in Exhibit 4.11(c), Creative has
not with respect to any taxable period for which the applicable statute
of limitations has not run, filed a combined consolidated or unitary
tax return with respect to any jurisdictions (foreign and domestic) in
which Creative has filed income tax returns for taxable periods ending
on or December 31, 1996. Creative will not, in the absence of a
closing agreement provided for in the Treasury Regulations under
Section 1503 of the Internal Revenue Code of 1986. (the "Code"),
trigger the recapture of any dual consolidated losses (as defined in
Section 1503 of the Code) by virtue of the transactions contemplated by
this Agreement.
(d) There are no tax liens on any assets of Creative, except liens
for taxes not yet due and payable.
Section 4.12 Absence of Certain Changes or Events. Since the date
of the Creative Financial Statements there has not occurred:
(a) any material and adverse change in the financial condition or
operations of Creative;
(b) any damage, destruction or loss to or of any of the material
assets or properties owned or leased by Creative;
(c) the creation or attachment of any Lien against the Common Stock
of Creative;
(d) any waiver, release, discharge, transfer, or cancellation by
Creative of any rights or claims of material value;
(e) any issuance by Creative of any securities, or any merger or
consolidation of Creative with any other Person, or any acquisition by
Creative of the business of any other Person;
(f) any incurrence, assumption or guarantee by Creative of any
indebtedness or liability;
(g) any declaration, setting aside or payment by Creative of any
dividends on, or any other distribution with respect to, any capital
stock of Creative or any repurchase, redemption, or other acquisition
of any capital stock of Creative;
(h) (A) any payment of any bonus, profit sharing, pension or
similar payment or arrangement or special compensation to any employee
of Creative, except in the ordinary course of the administration of
Creative, or (B) any increase in the compensation payable or to become
payable to any employee of Creative; or
(i) the entry by Creative into any Contract to do any of the
foregoing.
Section 4.13 Material Creative Contracts. As of the date of this
Agreement, Creative does not have except as disclosed in Exhibit 4.13:
(a) contracts evidence or evidencing or relating to any liabilities
or obligations of Creative, whether absolute, accrued, contingent or
otherwise, or granting any Person a Lien or against any properties or
assets owned or leased by Creative;
(b) joint venture or partnership Contracts between Creative and any
other person;
(c) contracts limiting the Creative to engage in or to compete in any
activity, or to use or disclose any information in its possession;
(d) any other contracts to which Creative is a party or by which it
or the assets or properties owned or leased by it are bound or affected
that are not set forth on other Exhibits hereto, which in the aggregate
contemplate payments to or by Creative exceeding $50,000 in any twelve-
month period (collectively herein as the "Material Creative Contract").
Creative has delivered to Global true and complete copies of each of
the Material Creative Contracts, including any amendments thereto (or,
in the case of oral Material Creative Contracts, a written description
and representation that the contract is valid, in full force and effect
and enforceable in accordance with its terms against the parties
thereto other than Creative, has fulfilled when due, or has taken all
action necessary to enable it to fulfill when due, all of its
obligations thereunder);
(e) there has not occurred any default (without regard to lapse of
time, the giving of notice, or the election of any person other than
Creative, or any combination thereof) by Creative, nor, to the
knowledge of Creative, has there occurred any default (without regard
to lapse of time, the giving of notice, or the election of Creative, or
any combination thereof) by any other person, under any of the Material
Creative Contracts; and
(f) neither Creative nor, to the knowledge of Creative, any other
person is in arrears in the performance or satisfaction of its
obligations under any of the Material Creative Contracts, and no waiver
has been granted by any of the parties thereto.
Section 4.14 (a) Real Property. As of the date of this Agreement,
Creative does not own any real property.
(b) Leased Property. Exhibit 4.14(b) sets forth a list of all real
property leased by Creative (the "Leased Real Property"). Creative has
made available to Creative true and complete copies of all leases and
subleases relating to the Leased Real Property. With respect to the
Leased Real Property except as set forth on Exhibit 4.14(b)
(i) Creative has not received written notice of any pending or, to
the knowledge of the Stockholders, threatened condemnation or eminent
domain proceedings or their local equivalent with respect to the Leased
Real Property;
(ii) the Leased Real Property, the use and occupancy thereof by
Creative, and the conduct of the business thereon and therein does not
violate any deed restrictions, applicable law consisting of building
codes, zoning, subdivision or other land use or similar laws the
violation of which would materially adversely affect the use, value or
occupancy of any such property or the conduct of the business thereon;
(iii) Creative has received, written notice of a material
violation of the restrictions or laws described in the foregoing clause
(ii); and
(iv) none of the structures or improvements on any of the Leased
Real Property encroaches upon real property of another person or
entity, and no structure or improvement of another person or entity
encroaches upon any of the Leased Real Property, which would materially
interfere with the use thereof in the ordinary course of business.
Section 4.15 Employees. As of the date of this Agreement, Creative
does not have any employees except as disclosed in Exhibit 4.15.
Section 4.16 Books and Records. All of the books, records and
accounts of Creative are in all material respects true and complete,
are maintained in accordance with good business practice and all
applicable Legal Requirements, accurately present and reflect in all
material respects all of the transactions therein described, and are
reflected accurately in the Financial Statements. Creative has
previously delivered to Global the complete stock record book of
Creative and true and complete copies of all of the minutes of meetings
and all other corporate actions of the stockholders, Board of Directors
and committees of the Board of Directors of Creative since the date of
its incorporation.
Section 4.17 Certain Interests. None of Creative or its officers,
directors, or holders of ten percent (10%) or more of Creative Common
Stock, directly or indirectly is, or owns any interest in, or controls,
or is an employee, officer, director or partner of or participant in,
or consultant to, any person which is a competitor, supplier or
customer of Creative.
Section 4.18 Bank Accounts. Exhibit 4.18 sets forth all bank
accounts, brokerage accounts, and safe deposit boxes of any kind
maintained by Creative and, in each case, identifies the persons that
are authorized signatories for, or which are authorized to have access
to, each of them.
Section 4.19 Changes in Circumstances. Creative has no knowledge
of:
(i) any current or future condition or state of facts or
circumstances which could reasonably be expected to result in a
material and adverse change in the financial condition of operations of
Creative; or
(ii) any Legal Requirements currently in effect from which
Creative currently is, or any currently proposed Legal Requirements
from which Creative would be, exempt by reason of any "grandfather"
clauses or provisions contained therein, but which would be applicable
to Creative following closing.
Section 4.20 Insurance. All of the material assets of Creative and
all aspects of the business that are of insurable character are covered
by insurance with reputable insurers against risks of liability,
casualty and fire and other losses and liabilities customarily obtained
to cover comparable businesses and assets in amounts, scope and
coverage which are consistent with prudent industry practice. Creative
is not in default with respect to its obligations under any material
insurance policy maintained by it. Exhibit 4.20 sets forth a list of
all insurance coverage carried by Creative, the carrier and the terms
and amount of coverage. All such policies and other instruments are in
full force and effect and all premiums with respect thereto have been
paid. Creative has not failed to give any notice or present any claim
under any such insurance policy in due and timely fashion or as
required by any of such insurance policies, and Creative has not
otherwise, through any act, omission or non-disclosure, jeopardized or
impaired full recovery of any claim under such policies, and there are
no claims by Creative under any of such policies to which any insurance
company is denying liability or defending under a reservation of rights
or similar clause. Creative has not received notice of any pending or
threatened termination of any of such policies or any premium increases
for the current policy period with respect to any of such policies and
the consummation of the transactions contemplated by this Agreement
will not result in any such termination or premium increase.
Section 4.21 Accuracy of Information. None of the written
information and documents which have been or will be furnished by
Creative or any representatives of Creative to Creative or any of the
representatives of Creative in connection with the transactions
contemplated by this Agreement contains or will contain, as the case
may be, any untrue statement of a material fact, or omits or will omit
to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances in which made. To
the knowledge of Creative, Creative has disclosed to Creative as the
purchaser of Creative Common Stock all material information relating to
Creative and its activities as currently conducted.
ARTICLE 5
Covenants of Global and Creative
Section 5.1 Affirmative Covenants of Global. Except as Global may
otherwise consent in writing, between the dates of this Agreement and
Closing, Global shall:
(a) conduct its business only in the usual, regular, and ordinary
course and in accordance with past practices:
(b) (i) duly comply with all applicable Legal Requirements;
(ii) perform all of its obligations under all Global Contracts
without default; and
(iii) maintain its books, records, and accounts on a basis
consistent with past practices.
(c) (i) give to Creative and its counsel, accountants and other
representatives reasonable access during normal business hours to the
premises of Global, all of the assets and properties owned or leased by
Global, Global's books and records, and Global's personnel;
(ii) furnish to Creative and such representatives all such
additional documents (certified by an officer of Global, if requested),
financial information and other information as Creative may from time
to time reasonably request; and
(iii) cause Global's accountants to permit Creative and its
accountants to examine the records and working papers pertaining to
Global's Financial Statements' provided that no investigation by Global
or its representatives will affect or limit the scope of any of the
representations and warranties of Global herein or in any Exhibit or
other related document.
(d) use its best efforts to obtain in writing as promptly as possible
all approvals and consents required to be obtained by Global in order
to consummate the transactions contemplated hereby and deliver to
Global copies, satisfactory in form and substance to Global, of such
approvals and consents;
(e) promptly deliver to Creative true and complete copies of all
monthly and quarterly financial statements of Global and any reports
with respect to the activities of Global which are prepared by or for
Global at any time from the date hereof until Closing; and
(f) promptly notify Creative of any circumstance, event or action, by
Global or otherwise:
(i) which, if known at the date of this Agreement, would have been
required to be disclosed in or pursuant to this Agreement; or
(ii) the existence, occurrence or taking of which would result in
any of the representations and warranties of Global in this Agreement
or any Exhibit not being true and correct in all material respects.
Section 5.2 Negative Covenants of Global. Except as Global may
otherwise consent in writing, between the dates of this Agreement and
Closing, Global shall not:
(a) change the character of its business;
(b) incur any liability or obligation or enter into any Contract
except, in each case, in the ordinary course of business consistent
with prior practices and not prohibited by any other provision hereof;
(c) incur, assume or guarantee any indebtedness or liability in
respect of borrowed money;
(d) make any capital expenditure or commitment for capital
expenditure exceeding $500,000 for a single project or $1,000,000 for
all projects, whether or not in the ordinary course of business;
(e) modify, terminate, or abrogate any Material Global Contract other
than in the ordinary course of business, or waive, lease, discharge,
transfer or cancel any rights or claims of material value;
(f) create or permit the creation or attachment of any Lien against
any of the assets or properties owned or leased by it;
(g) except as otherwise required by this Agreement, prepay any
material liabilities or obligations;
(h) issue any securities, or merge or consolidate with any other
person, or acquire any of the securities, partnership or joint venture
interests, or business of any other person;
(i) declare, set aside or pay any dividends on, or make any other
distribution with respect to, any of its capital stock, or repurchase,
redeem or otherwise acquire any of its capital stock; or
(j) enter into any transaction or permit the taking of any action
that would result in any of the representations and warranties in this
Agreement not being true and correct in all material respects at
Closing.
Section 5.3 Affirmative Covenants of Creative. Except as Global may
otherwise consent in writing, between the dates of this Agreement and
Closing, Creative shall:
(a) conduct its business only in the usual, regular, and ordinary
course and in accordance with past practices;
(b) (i) duly comply with all applicable Legal Requirements;
(ii) perform all of its obligations under all Creative Contracts
without default; and
(iii) maintain its books, records, and accounts on a basis
consistent with past practices.
(c) (i) give to Global and its counsel, accountants and other
representatives reasonable access during normal business hours to the
premises of Creative, all of the assets and properties owned or leased
by Creative, Creative's books and records, and Creative's personnel:
(ii) furnish to Global and such representatives all such
additional documents (certified by an officer of Creative, if
requested), financial information and other information as Global may
from time to time reasonably request; and cause Creative's accountants
to permit Global and its accountants to examine the records and working
papers pertaining to Creative's Financial Statements' provided that no
investigation by Global or its representatives will affect or limit the
scope of any of the representations and warranties of Creative herein
or in any Exhibit or other related document.
(d) use its best efforts to obtain in writing as promptly as possible
all approvals and consents required to be obtained by Global in order
to consummate the transactions contemplated hereby and deliver to
Global copies, satisfactory in form and substance to Global, of such
approvals and consents;
(e) promptly deliver to Global true and complete copies of all
monthly and quarterly financial statements of Creative and any reports
with respect to the activities of Creative which are prepared by or for
Creative at any time from the date hereof until Closing; and
(f) promptly notify Global of any circumstance, event or action, by
Creative or otherwise:
(i) which, if known at the date of this Agreement, would have been
required to be disclosed in or pursuant to this Agreement; or
(ii) the existence, occurrence or taking of which would result in
any of the representations and warranties of Creative in this Agreement
or in any Transaction Document not being true and correct in all
material respects.
Section 5.4 Negative Covenants of Creative. Except as Global may
otherwise consent in writing, between the dates of this Agreement and
Closing, Creative shall not:
(a) change the character of its business;
(b) incur any liability or obligation or enter into any Contract
except, in each case, in the ordinary course of business consistent
with prior practices and not prohibited by any other provision hereof;
(c) incur, assume or guarantee any indebtedness or liability in
respect of borrowed money;
(d) make any capital expenditure or commitment for capital
expenditure exceeding $5,000 for a single project or $10,000 for all
projects, whether or not in the ordinary course of business;
(e) modify, terminate, or abrogate any Material Creative Contract
other than in the ordinary course of business, or waive, lease,
discharge, transfer or cancel any rights or claims of material value;
(f) create or permit the creation or attachment of any Lien against
any of the assets or properties owned or leased by it;
(g) except as otherwise required by this Agreement, prepay any
material liabilities or obligations;
(h) issue any securities, or merge or consolidate with any other
person, or acquire any of the securities, partnership or joint venture
interests, or business of any other person;
(i) declare, set aside or pay any dividends on, or make any other
distribution with respect to, any of its capital stock, or repurchase,
redeem or otherwise acquire any of its capital stock; or
(j) enter into any transaction or permit the taking of any action
that would result in any of the representations and warranties in this
Agreement not being true and correct in all material respects at
Closing.
Section 5.5 Joint Undertakings. Each of Global and Creative shall
cooperate and exercise commercially reasonable efforts to facilitate
the consummation of the transactions contemplated by this Agreement so
as to permit Closing to take place on the date provided herein and to
cause the satisfaction of conditions to Closing set forth in Article 6.
Section 5.6 Confidentiality.
(a) Any non-public information that Creative may obtain from Global
in connection with this Agreement, including but not limited to
information concerning trade secrets, licenses, research projects,
costs, profits, markets, sales, customer lists, strategies, plans for
future development and any other information of a similar nature, shall
be deemed confidential and, unless and until Closing shall occur,
Creative shall not disclose any such information to any third party
(other than its directors, officers and employees, and persons whose
knowledge thereof is necessary to facilitate the consummation of the
transactions contemplated hereby) or use such information to the
detriment of Global; provided that
(i)Creative may use and disclose any such information once it has
been publicly disclosed (other than by Creative in breach of its
obligations under this Section) or which rightfully has come into the
possession of Creative (other than from Global); and
(ii) to the extent that Creative may become compelled by Legal
Requirements to disclose any of such information, Creative may disclose
such information if it shall have used all reasonable efforts, and
shall have afforded Global the opportunity, to obtain an appropriate
protective order, or other satisfactory assurance of confidential
treatment, for the information compelled to be disclosed. In the event
of termination of this Agreement, Creative shall use all reasonable
efforts to cause to be delivered to Global, and retain no copies of,
any documents, work papers and other materials obtained by Creative or
on its behalf from Global, whether so obtained before or after the
execution hereof.
(b) Any non-public information that Global may obtain from Creative
in connection with this Agreement, including but not limited to
information concerning trade secrets, licenses, research projects,
costs, profits, markets, sales, customer lists, strategies, plans for
future development and any other information of a similar nature, shall
be deemed confidential and, unless and until Closing shall occur,
Global shall not disclose any such information to any third party
(other than its directors, officers and employees, and persons whose
knowledge thereof is necessary to facilitate the consummation of the
transactions contemplated hereby) or use such information to the
detriment of Creative; provided that
(i) Global may use and disclose any such information once it has
been publicly disclosed (other than by Global in breach of its
obligations under this Section) or which rightfully has come into the
possession of Global (other than from Creative); and
(ii) to the extent that Global may become compelled by Legal
Requirements to disclose any of such information, Global may disclose
such information if it shall have used all reasonable efforts, and
shall have afforded Creative the opportunity, to obtain an appropriate
protective order, or other satisfactory assurance of confidential
treatment, for the information compelled to be disclosed. In the event
of termination of this Agreement, Global shall use all reasonable
efforts to cause to be delivered to Creative, and retain no copies of,
any documents, work papers and other materials obtained by Global or on
its behalf from Creative, whether so obtained before or after the
execution hereof.
Section 5.7 Publicity. Creative and Global shall each consult with
and obtain the consent of the other before issuing any press release or
making any other public disclosure concerning this Agreement or the
transactions contemplated hereby unless, in the reasonable judgment of
the disclosing party, a release or disclosure is required to discharge
its disclosure obligations under applicable Legal Requirements, in
which case it shall in good faith consult with the other party about
the form, content and timing of such release or disclosure prior to its
release or disclosure.
Section 5.8 Global's Responsibility for Taxes; Returns; Audits.
(a) Tax Returns; Filing and Payments.
(i) Global shall timely prepare (or cause to be prepared), and
shall timely file (or cause to be timely filed) all Income Tax Returns
of Global for any taxable year or period ending on or before the
Closing Date which are not required to be filed on or before the
Closing Date.
(ii) Global shall prepare (or cause to be prepared) and file (or
cause to be filed) all Income Tax Returns of Global for any Taxable
year or period commencing prior to the Closing Date and ending
subsequent to the Closing Date.
(iii) The Tax Returns referred to in this Section 5.8(a)(i) and
(ii), shall, to the extent not otherwise required by law, be prepared
in a manner consistent with Global's (as appropriate) past practice
(including any Tax elections and methods of accounting). With respect
to any Tax Return referred to in Sections 5.8(a)(i) and (ii) above, the
party preparing such return shall provide the other party a draft of
such Tax Return and Tax information (including, without limitation,
work papers and schedules) for review of such Tax Return in a timely
manner no later than thirty (30) days prior to the due date (taking
into account valid extensions) for the filing of such Tax Return. The
parties shall consult in good faith with regard to the form and content
of such Tax Returns, provided that, in the event of any disagreement,
the Tax Returns shall be filed in the form set forth by the party with
responsibility for the preparation of the Tax Return.
(b) Termination of Tax Sharing Agreements; Powers of Attorney.
(i) Any Tax Sharing Agreement to which Global is a party shall be
terminated as of the Closing Date, and Global shall have no further
obligations thereunder. For purposes of this Agreement, the term "Tax
Sharing Agreement" includes any agreement or arrangement, whether or
not written, providing for the sharing or allocation of liability for
Taxes of the parties thereto.
(ii) All powers of attorney granted by Global with respect to
Taxes shall be revoked as of the Closing Date.
Between the date of the Agreement and the Closing Date, Global will not
cause or permit Global to:
(a) make any change in Global's Tax accounting methods, any new
election with respect to Taxes or any modification or revocation of any
existing election with respect to Taxes; or
(b) settle or otherwise dispose of any Tax audit, dispute, or
other Tax proceeding, in each case without Global' express written
consent thereto.
(c) Assistance and Cooperation.
(i) From and after the Closing Date, to the extent reasonably
requested by the other party, Creative and Global shall assist and
cooperate with each other in the preparation of any Tax Return which
the other party is responsible to file pursuant to Section 5.8(a)
herein and shall assist and cooperate with the other party in preparing
for any audits or disputes relating to Taxes for which the other party
is responsible pursuant to this Agreement. From and after the Closing
Date, Creative and Global shall, pursuant to the other party's
reasonable request, make available to the other party all information,
records and documents reasonably available to that party, which are
necessary for the preparation of any Tax Return or resolution of any
audit or dispute. In all such cases, the party seeking assistance or
cooperation shall bear the expenses of the other party incurred in
connection with respect thereto.
(ii) From and after the Closing Date, Creative and Global shall
provide timely notice to the other in writing of any pending or
threatened tax audits or assessments of Global for taxable periods for
which the other is liable under this Agreement, and shall furnish the
other with copies of all correspondence received from any taxing
authority in connection with any tax audit or information request with
respect to any such taxable period.
Section 5.9 Creative's Responsibility for Taxes; Returns; Audits.
Tax Returns; Filing and Payments.
(i) Creative shall timely prepare (or cause to be prepared), and
shall timely file (or cause to be timely filed) all Income Tax Returns
of Creative for any taxable year or period ending on or before the
Closing Date which are not required to be filed on or before the
Closing Date
(ii) The Tax Returns referred to in this Section 5.9 shall, to the
extent not otherwise required by law, be prepared in a manner
consistent with Creative's (as appropriate) past practice (including
any Tax elections and methods of accounting). With respect to any Tax
Return referred to in Sections 5.9 above, between the dates of the
Agreement and the Closing Date, Global will not make any change in
Creative's Tax accounting methods, any new election with respect to
Taxes or any modification or revocation of any existing election with
respect to Taxes.
Section 5.10 Cooperation with Public Filings. Global shall
cooperate with Creative and its affiliates and advisors in the
preparation and filing of any public filings (and any related
documentation or filings) in a timely fashion and shall use its
reasonable best efforts to assist Creative in having any such
registration statement declared effective by the Securities and
Exchange Commission as promptly as practicable and in maintaining the
effectiveness of any such registration statement. If Global shall
obtain knowledge of any information pertaining to Global that would
require any amendment or supplement to any registration statement,
Global shall so advise Creative in writing and shall promptly furnish
Creative with all information as shall be required for such amendment
or supplement and shall promptly take such action as shall be required
to amend or supplement any such registration statement.
Section 5.11 Tax Reorganization. Each party to this Agreement hereby
intends and agrees to take all reasonable actions to cause the Merger
to qualify as a reorganization within the meaning of Section 368(a) of
the Code and will immediately notify each of the other parties of any
circumstance or condition of which it is or becomes aware of which
might cause the Merger to fail to so qualify. Global represents that
it has not taken any action that would cause the Merger to fail to so
qualify as reorganization within the meaning of Section 368(a) of the
Code, and is not aware of any circumstances, which would cause the
Merger to fail to so qualify.
ARTICLE 6
Conditions Precedent
Section 6.1 Conditions to Global's Obligations. The obligations of
Global to consummate the transactions contemplated by this Agreement
are subject to the following conditions:
(a) Accuracy of Representations. The representations of Creative in
this Agreement or in any Exhibit hereto shall be true and accurate in
all material respects at and as of Closing with the same effect as if
made at and as of Closing, except as affected by the transactions
contemplated hereby.
(b) Performance of Agreements. Creative shall have performed all
obligations and agreements and complied with all covenants in this
Agreement to be performed and complied with by it at or before Closing.
(c) Receipt of Creative Common Stock. Creative shall have delivered
to Global at Closing, certificates representing twenty three million,
eight hundred seventy nine thousand, eight hundred seventeen
(23,879,817) issued in the name of the shareholders of Global.
(d) Officer's Certificate. Global shall have received a certificate
executed by an executive officer of Creative, dated as of Closing,
reasonably satisfactory in form and substance to Global certifying that
the conditions stated in subparagraphs (a), (b) and (c) of this Section
have been satisfied.
(e) Legal Proceedings. There shall be no Legal Requirement, and no
judgment shall have been entered and not vacated by any governmental
authority of competent jurisdiction and no litigation shall be pending
which restrains, makes illegal or prohibits consummation of the
transactions contemplated hereby.
(f) Consents. Global shall have obtained evidence, in form and
substance satisfactory to it, that there has been obtained all
consents, approvals and authorizations required by this Agreement.
(g) Resignation of Officers and Directors. Each of the officers and
directors of Creative whose written resignation Global has requested
shall have delivered to Global effective as of the Closing.
(h) Lock Up Agreement. Global shall have received the Lock Up
Agreements executed by the Catizones whereby an aggregate of one
million (1,000,000) common shares of Creative currently owned by the
Catizones shall be restricted for an additional one (1) year period
from the date of Closing.
(i) Legal Matters Satisfactory to Global's Counsel. All actions,
proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement or incidental thereto and
all related legal matters shall be reasonably satisfactory to and
approved by Global's counsel, and such counsel shall have been
furnished with such certified copies of actions and proceedings and
such other instruments and documents as it shall have reasonably
requested.
Section 6.2 Conditions to Creative's Obligations. The obligations
of Creative to consummate the transactions contemplated by this
Agreement are subject to the following conditions:
(a) Accuracy of Representations. The representations of Global in
this Agreement or in any Exhibit hereto shall be true and accurate (in
all material respects) at and as of Closing with the same effect as if
they were made at and as of Closing, except as affected by the
transactions contemplated hereby.
(b) Performance of Agreements. Global shall have performed all
obligations and agreements and complied with all covenants in this
Agreement or in any Transaction Document to which it is a party to be
performed and complied with by it at or before Closing.
(c) Delivery of Global Stock. Global shall have delivered at
Closing, certificates representing twenty three million, eight hundred
seventy nine thousand eight hundred seventeen (23,879,817) shares of
common stock.
(d) Officer's Certificate. Creative shall have received a
certificate executed by an executive officer of Global, dated as of
Closing, reasonably satisfactory in form and substance to Creative,
certifying that the conditions stated in subparagraphs (a) and (b) of
this Section have been satisfied.
(e) Legal Proceedings. There shall be no Legal Requirement, and no
judgment shall have been entered and not created by any governmental
authority of competent jurisdiction and no litigation shall be pending
which,
(i) restrains, make illegal or prohibits consummation of the
transactions contemplated hereby, or
(ii) could have a material adverse effect upon the operations or
financial condition of Global.
(f) Consents. Creative shall have received evidence, in form and
substance satisfactory to it, that there have been obtained all
consents, approvals, and authorizations required by this Agreement.
(g) Legal Matters Satisfactory to Creative and its Representatives.
All actions, proceedings, instruments and documents required to carry
out the transactions contemplated by this Agreement or incidental
thereto and all related legal matters shall be reasonably satisfactory
to and approved by Creative's counsel, and such counsel shall have been
furnished with such certified copies of actions and proceedings and
such other instruments and documents as it shall have reasonably
requested.
ARTICLE 7
Termination
Section 7.1 Termination Events. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned:
(a) at any time, by the mutual agreement of Creative and Global;
(b) by either Creative and Global, if the other is in material breach
or default of its respective covenants, agreements or other obligations
hereunder or if any of its representations and warranties herein are
not true and accurate in all material respects when made or when
otherwise required by this Agreement to be true and accurate.
(c) by Creative, if any of the conditions to its obligations set
forth in Section 6.1 shall not have been satisfied as of Closing,
unless satisfaction shall have been frustrated or made impossible by an
act or failure to act of Global; or
(d) by Global, if any of the conditions to its obligations set forth
in Section 6.2 shall not have been satisfied as of Closing, unless
satisfaction shall have been frustrated or made impossible by an act or
failure to act of Creative; or
Section 7.2 Effect of Termination. If this Agreement shall be
terminated, all obligations of the parties hereunder shall terminate,
except for the obligations set forth in Section 5.6 and 5.7. In such
event, Global shall return any and all Creative Common Stock received
hereunder and both parties shall file the necessary documents in the
states of Delaware and New Jersey respectively, to complete the
transfer of any and all Global shares of stock received by Creative
hereunder to the Principal Shareholders.
ARTICLE 8
Miscellaneous
Section 8.1 Waiver and Modifications. Any of the provisions of this
Agreement may be waived at any; time by the party entitled to the
benefit thereof, upon the authority of the Board of Directors of such
party; provided, however, that no waiver by Global shall be authorized
after the last vote of the stockholders of Global if such waiver shall,
in the judgment of the Board of Directors of Creative, affect
materially and adversely the benefits of the Creative stockholders
under this Agreement or the Agreement of Merger. Any of the provisions
of this Agreement (including the exhibits and the Agreement of Merger)
may be modified at any time prior to and after the vote of the
stockholders of Global by agreement in writing approved by the Board of
Directors of each party and executed in the same manner (but not
necessarily by the same persons) as this Agreement, provided that such
modification, after the last vote of the stockholders of Creative shall
not, in the judgment of the Board of Directors of Global, affect
material and adversely the benefits of Global's stockholders under this
Agreement or the Agreement of Merger. To the extent permitted by law,
the powers of the Board of Directors may be delegated by the Board of
the Executive Committee of such Board or by such Board (or by the
Executive Committee to the extent any matter has been delegated to such
Committee by the Board) to any officer or officers of such party, and
any notices, consents or other action referred to in this Agreement may
be given or taken by any officer so authorized.
Section 8.2 Finder Commissions. Global represents and warrants that
no broker or finder is entitled to any brokerage or finder's fee or
other commission based on agreements, arrangements or understandings
made by it with respect to the transactions contemplated by this
Agreement or by the Agreement of Merger, other than set forth in
Exhibit 8.2.
Section 8.3 Notices. Any notice, request, instruction or other
document to be given hereunder or under the Agreement of Merger by any
party to another shall be in writing and delivered personally or sent
by registered or certified mail, postage prepaid,
if to Global, addressed to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Global Digital Solutions, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Suite ▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
With Copies To:
▇▇▇▇ ▇. Creme, Esq.
Merra, Kanakis, Creme & ▇▇▇▇▇▇, P.C.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
if to Creative, addressed to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Creative Beauty Supply, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
With copies To:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Section 8.4 Entire Agreement. This Agreement including Exhibits and
referenced documents represents the entire agreement between the
parties. Any and all other oral or written agreements concerning this
merger shall be deemed null and void.
Section 8.5 Governing Law. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the state of New
Jersey.
Section 8.6 Counterparts. In order to facilitate the filing and
recording of this Agreement the same may be executed in any number of
counterparts, each of which shall be deemed to be an original.
Section 8.7 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties hereto; provided,
however, that this Agreement may not be assigned by either party hereto
without the prior written consent of the other (except that Creative
may without the prior written consent of Global assign this Agreement
to any affiliate of Creative so long as such assignee shall execute a
counterpart of this Agreement agreeing to be bound by the provisions
hereof as "Creative," and agreeing to be jointly and severally liable
with the assignor and any other assignee for all of the obligations of
the assignor hereunder), but no such assignment of this Agreement or
any of the rights or obligations hereunder shall relieve Creative of
its obligations under this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
express or implied, is intended to confer on any person other than the
parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 8.8 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement are inserted for convenience only and
shall not be deemed to constitute part of this Agreement or to affect
the construction hereof.
Section 8.9 Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be
binding unless the same shall be in writing and duly executed by the
parties hereto, except that any of the terms or provisions of this
Agreement may be waived in writing at any time by the party which is
entitled to the benefits of such waived terms or provisions. No waiver
of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
similar). No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof.
Section 8.10 Expenses. Except as otherwise provided herein,
Creative and Global shall pay all costs and expenses incurred by them
or it or on their or its behalf in connection with this Agreement and
the transactions contemplated hereby, including, without limiting the
generality of the foregoing, fees and expenses of their respective
financial consultants, accountants and counsel.
Section 8.11 Severability. If any provision of this Agreement is
held to be void, illegal or unenforceable under present or future laws,
such provision shall be fully severable and this Agreement shall be
construed and enforced as if such void, illegal or unenforceable
provision never comprised a part hereof, and the remaining provisions
of this Agreement shall remain in full force and effect and shall not
be affected in any way by the void, illegal or unenforceable provision
or by its severance herefrom. Furthermore, in lieu of such severed
provision, there shall be added automatically as part of this Agreement
a provision as similar in its terms to such severed provision as may be
possible and be valid, legal and enforceable
IN WITNESS WHEREOF, Creative and Global, by their duly authorized
officers, have executed and delivered this Agreement effective as of
the date first above written.
Global Digital Solutions, Inc.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
Creative Beauty Supply, Inc.
By: /s/▇▇▇▇▇▇▇ Catitzone
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
EXHIBIT A
Agreement and Plan of Merger (incorporated by referenced to Form 14A,
preliminary proxy statement filed on February 4, 2004)
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