ACQUISITION AGREEMENT AND PLAN OF MERGER DATED AS OF JUNE 12, 2009 BY AND AMONG MINATURA GOLD (MGOL), a Nevada corporation, BOATATOPIA Sub Co (SUB CO), a Nevada corporation AND GOLD RESOURCE PARTNERS, LLC (GRP), a Nevada limited liability company
Exhibit 2.1
ACQUISITION
AGREEMENT AND PLAN OF MERGER
DATED
AS OF JUNE 12, 2009
BY
AND AMONG
MINATURA
GOLD (MGOL), a Nevada corporation,
BOATATOPIA
Sub Co (SUB CO), a Nevada corporation
AND
GOLD
RESOURCE PARTNERS, LLC (GRP), a Nevada limited liability company
TABLE
OF CONTENTS
|
ARTICLE
1. The Merger
|
1
|
|
|
Section
1.1. The Merger
|
1
|
|
|
Section
1.2. Effective Time
|
1
|
|
|
Section
1.3. Closing of the Merger
|
2
|
|
|
Section
1.4. Effects of the Merger
|
2
|
|
|
Section
1.5. Articles of Incorporation; Bylaws
|
2
|
|
|
Section
1.6. Board of Directors and Officers
|
2
|
|
|
Section
1.7. Conversion of Membership Interest
|
3
|
|
|
Section
1.8. Exchange of Certificates
|
4
|
|
|
Section
1.9. Membership Interests Options
|
5
|
|
|
Section
1.10. Warrants
|
6
|
|
|
Section
1.11. Cancellation of MGOL Shares
|
6
|
|
|
Section
1.12. Taking of Necessary Action; Further Action
|
6
|
|
|
ARTICLE
2. Representations and Warranties of MGOL
|
6
|
|
|
Section 2.1. Organization
and Qualification
|
6
|
|
|
Section 2.2. Capitalization
of MGOL
|
7
|
|
|
Section 2.3.Authority Relative to
this Agreement; Recommendations
|
8
|
|
|
Section 2.4. SEC Reports;
Financial Statements
|
8
|
|
|
Section 2.5. Information
Supplied
|
9
|
|
|
Section 2.6. Consents and
Approvals; No Violations
|
9
|
|
|
Section 2.7. No
Default
|
10
|
|
|
Section 2.8. No Undisclosed
Liabilities; Absence of Changes
|
11
|
|
|
Section
2.9. Litigation
|
11
|
|
|
Section 2.10. Compliance
with Applicable Law
|
11
|
|
|
Section 2.11. Employee
Benefit Plans; Labor Matters
|
12
|
|
|
Section 2.12. Environmental
Laws and Regulations
|
13
|
|
|
Section 2.13. Tax
Matters
|
14
|
|
|
Section 2.14. Title To
Property
|
15
|
|
|
Section 2.15. Intellectual
Property
|
15
|
|
|
Section
2.16. Insurance
|
15
|
|
|
Section 2.17. Vote
Required
|
15
|
|
|
Section 2.18. Tax
Treatment
|
16
|
|
|
Section
2.19. Affiliates
|
16
|
|
|
Section 2.20. Certain
Business Practices
|
16
|
|
|
Section 2.21. Insider
Interests
|
16
|
|
|
Section 2.22. Opinion of
Financial Adviser
|
16
|
|
|
Section
2.23. Brokers
|
16
|
|
|
Section
2.24. Disclosure
|
16
|
|
|
Section 2.25. No Existing
Discussion
|
16
|
|
|
Section 2.26. Material
Contracts
|
16
|
|
|
ARTICLE
3. Representations and Warranties of GRP.
|
18
|
|
|
Section 3.1. Organization
and Qualification
|
18
|
|
|
Section 3.2. Capitalization
of GRP
|
18
|
|
|
Section 3.3.Authority Relative to
this Agreement; Recommendation
|
19
|
|
|
Section 3.4. SEC Reports;
Financial Statements
|
20
|
|
|
Section 3.5. Information
Supplied
|
20
|
|
|
Section 3.6. Consents and
Approvals; No Violations
|
20
|
|
|
Section 3.7. No
Default
|
20
|
|
|
Section 3.8 No Undisclosed
Liabilities; Absence of Changes
|
21
|
|
|
Section
3.9. Litigation
|
21
|
|
|
Section 3.10. Compliance
with Applicable Law
|
21
|
|
|
Section 3.11. Employee
Benefit Plans; Labor Matters
|
22
|
|
|
Section 3.12. Environmental
Laws and Regulations
|
23
|
|
|
Section 3.13. Tax
Matters
|
24
|
|
|
Section 3.14. Title to
Property
|
24
|
|
|
Section 3.15. Intellectual
Property
|
24
|
|
|
Section
3.16. Insurance
|
25
|
|
|
Section 3.17. Vote
Required
|
25
|
|
|
Section 3.18. Tax
Treatment
|
25
|
|
|
Section
3.19. Affiliates
|
25
|
|
|
Section 3.20. Certain
Business Practices
|
25
|
|
|
Section 3.21. Insider
Interests
|
25
|
|
|
Section 3.22. Opinion of
Financial Adviser
|
25
|
|
|
Section
3.23. Brokers
|
25
|
|
|
Section
3.24. Disclosure
|
26
|
|
|
Section 3.25. No Existing
Discussions
|
26
|
|
|
Section 3.26. Material
Contracts
|
26
|
|
|
ARTICLE
4. Covenants
|
27
|
|
|
Section 4.1. Conduct of
Business of MGOL
|
27
|
|
|
Section 4.2. Conduct of
Business of GRP
|
29
|
|
|
Section 4.3. Preparation of
8-K
|
31
|
|
|
Section
4.4. Other Potential Acquirers
|
31
|
|
|
Section
4.5. Meetings of Stockholders and Members
|
32
|
|
|
Section
4.6. FINRA OTC:BB Listing
|
32
|
|
|
Section
4.7. Access to Information
|
32
|
|
|
Section
4.8. Additional Agreements; Reasonable Efforts
|
33
|
|
|
Section
4.9.Employee Benefits; Stock Option and Employee Purchase
Plans
|
33
|
|
|
Section
4.10. Public Announcements
|
33
|
|
|
Section
4.11. Indemnification
|
33
|
|
|
Section
4.12. Notification of Certain Matters
|
35
|
|
|
ARTICLE
5. Conditions to Consummation of the Merger
|
35
|
|
|
Section 5.1. Conditions to Each
Party’s Obligations to Effect the Merger
|
35
|
|
|
Section 5.2. Conditions to
the Obligations of MGOL and SUB CO
|
36
|
|
|
Section 5.3. Conditions to
the Obligations of GRP
|
37
|
|
|
ARTICLE
6. Termination; Amendment; Waiver
|
37
|
|
|
Section
6.1. Termination
|
37
|
|
|
Section 6.2. Effect of
Termination
|
38
|
|
|
Section 6.3. Fees and
Expenses
|
39
|
|
|
Section
6.4. Amendment
|
39
|
|
|
Section 6.5. Extension;
Waiver
|
39
|
|
|
ARTICLE
7. Miscellaneous
|
39
|
|
|
Section 7.1. Non-survival of
Representations and Warranties
|
39
|
|
|
Section 7.2. Entire
Agreement; Assignment
|
39
|
|
|
Section
7.3. Validity
|
39
|
|
|
Section
7.4. Notices
|
39
|
|
|
Section 7.5. Governing
Law
|
40
|
|
|
Section 7.6. Descriptive
Headings
|
40
|
|
|
Section 7.7. Parties in
Interest
|
41
|
|
|
Section
7.8. Certain Definitions
|
41
|
|
|
Section
7.9. Personal Liability
|
41
|
|
|
Section
7.10. Specific Performance
|
41
|
|
|
Section
7.11. Counterparts
|
42
|
|
|
Section
7.12. Conflict Waiver
|
42
|
|
|
Signatures
|
42
|
|
AGREEMENT
AND PLAN OF MERGER
This
Agreement and Plan of Merger (this “Agreement”), dated as of June 12, 2009, is
by and among Minatura Gold, a Nevada corporation (“MGOL”); Boatatopia Sub Co, a
Nevada corporation (“SUB CO”) and wholly owned subsidiary of Minatura Gold; and
Gold Resource Partners, LLC, a Nevada limited liability company (“GRP”); SUB CO
and GRP being the constituent entities in the Merger.
Whereas,
the Boards of Directors of MGOL, SUB CO and GRP each have, in light of and
subject to the terms and conditions set forth herein, (i) determined that the
Merger (as defined below) is fair to their respective stockholders and in the
best interests of such stockholders and (ii) approved the Merger in accordance
with this Agreement;
Whereas, this Agreement constitutes the
entire, final and complete agreement between MGOL, SUB CO, and GRP and
supersedes and replaces all prior or existing written and oral agreements,
between MGOL, SUB CO, and GRP with respect to the subject matter
hereof;
Whereas,
for Federal income tax purposes, it is intended that the Merger qualify as a
reorganization under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the “Code”); and
Whereas,
MGOL, SUB CO and GRP desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
Now,
therefore, in consideration of the premises and the representations, warranties,
covenants and agreements herein contained, and intending to be legally bound
hereby, MGOL, SUB CO and GRP hereby agree as follows:
ARTICLE
I
The
Merger
Section
1.1. The
Merger. At the Effective Time (as defined below) and upon the terms and
subject to the conditions of this Agreement and in accordance with the General
Corporation Law of the State of Nevada (the “NGCL”), SUB CO shall be merged with
and into GRP (the “Merger”), pursuant to NRS 92A.100. Following the Merger, GRP
shall continue as the surviving entity (the “Surviving Entity”), shall continue
to be governed by the laws of the jurisdiction of its incorporation or
organization and the separate corporate existence of SUB CO shall cease. GRP
shall continue its existence as a wholly owned subsidiary of
MGOL. The Merger is intended to qualify as a tax-free reorganization
under Section 368(a) of the Code as relates to the non-cash exchange of stock
referenced herein.
Section
1.2. Effective
Time. Subject to the terms and conditions set forth in this Agreement, a
Certificate of Merger (the “Merger Certificate”) shall be duly executed and
acknowledged by each of GRP, SUB CO and MGOL, and thereafter the Merger
Certificate reflecting the Merger shall be delivered to the Secretary of State
of the State of Nevada for filing pursuant to the NGCL on the Closing Date (as
defined in Section 1.3). The Merger shall become effective on August 1, 2009, as
set forth in the Merger Certificate (the time at which the Merger becomes
effective shall be referred to herein as the “Effective Time”)or such other
earlier time as the Parties can complete the terms and conditions as set forth
herein.
1
Section
1.3. Closing of the
Merger. The closing of the Merger (the “Closing”) will take place on
August 1, 2009 upon satisfaction of the conditions set forth in Article 5 (the
“Closing Date”), at the offices of Xxxxxxxxxx Law Group, 000 Xxxx Xxxxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, unless another time, date or place is
agreed to in writing by the parties hereto.
Section
1.4. Effects of the
Merger. The Merger shall have the effects set forth in the NGCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers of SUB CO shall vest in the
Surviving Entity, and all debts, liabilities and duties of SUB CO shall become
the debts, liabilities and duties of the Surviving Entity. Concurrently, GRP
shall remain a wholly owned subsidiary of MGOL.
Section
1.5. Articles of
Incorporation and Bylaws. The Articles of Organization and Operating
Agreement of GRP in the respective forms delivered by GRP to MGOL prior to the
date of this Agreement will remain in full force and effect and will be the
Articles of Organization and Operating Agreement of the Surviving
Entity.
Section
1.6. Board of
Directors and Officers.
|
|
(a)
|
Board of Directors of SUB
CO. At or prior to the Effective Time, MGOL agrees to take such
action as is necessary (i) to cause the number of directors comprising the
full Board of Directors of SUB CO to be one (1) person and (ii) to cause
Xxxx Xxxx, (the “MGOL Designee”) to be elected as the sole
director of SUB CO.
|
|
|
(b)
|
Board of Directors of
MGOL. At or prior to the Effective Time, each of GRP and MGOL
agrees to take such action as is necessary (i) to cause the number of
directors comprising the full Board of Directors of MGOL to be at least
one but possibly three (3) persons and (ii) to cause Xxxx Xxxx, and two
other board members (the “GRP Designee(s)”) to be elected as directors of
MGOL. If the GRP Designee(s) shall decline or be unable to serve as a
director prior to the Effective Time, GRP shall nominate other persons to
serve in such persons’ stead, which persons shall be subject to approval
of the other party. From and after the Effective Time, and until
successors are duly elected or appointed and qualified in accordance with
applicable law, the managing members of the Surviving Entity, shall remain
as the managing members of the Surviving Entity. Additionally, prior to
the Effective Time, Xxxxxxx Xxxxxx (“Xxxxxx”), the existing Chief
Executive Officer, and director of MGOL, and any other officer of MGOL,
shall resign upon execution of this Agreement, and pursuant to the terms
of the termination agreement (“Termination Agreement”) between Xxxxxx and
MGOL. Upon the resignation of Xxxxxx, until successors are duly elected or
appointed and qualified in accordance with applicable law, Xxxx Xxxx shall
be Chief Executive Officer, President, Secretary and Treasurer of
MGOL.
|
2
Section
1.7. Conversion of
Membership Interest.
|
|
(a)
|
At
the Effective Time, each membership interest of GRP (“Membership
Interest”) (individually a "GRP Membership Interest" and collectively, the
"GRP Membership Interests ") issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any action
on the part of GRP, MGOL, or the holder thereof, be converted into and
shall become fully paid and nonassessable MGOL common shares determined by
dividing (i) Ten Million Two Hundred Fifty-eight Thousand, Eight Hundred
Twenty-One (10,258,821), by (ii) the total number of Membership Interests
of GRP, One Hundred Twelve Million (112,000,000) outstanding Membership
Interests immediately prior to the Effective Time (such quotient, the
“Exchange Ratio”). The holder of one or more Membership Interests of GRP
shall be entitled to receive in exchange therefore a number of shares of
MGOL Common Stock equal to the product of (x) (the number of Membership
Interests of GRP (112,000,000)), times (y) (the Exchange Ratio. By way of
example, 10,258,821 / 112,000,000 = .0916 (the Exchange Ratio). The number
of Membership Interests of GRP held by a member (assume 100,000 Membership
Interests) times the Exchange Ratio of .0916 equals 9,160 shares of MGOL
Shares to be issued. In the event that, subsequent to the date of this
Agreement but prior to the Effective Time, the outstanding shares of MGOL
Common Stock or GRP Membership Interests are changed into a different
number of Membership Interests or Shares or a different class as a result
of a stock split, reverse stock split, stock dividend, subdivision,
reclassification, combination, exchange, recapitalization or similar
transaction, the number of shares of MGOL Common Stock into which each
share of GRP Common Stock will be converted as a result of the Merger will
be adjusted appropriately.
|
|
|
(b)
|
GRP
hereby acknowledges that (i) the MGOL Shares have not been and will not be
registered under the Securities Act of 1933 (“1933 Act”) or under the
securities laws of any state and, therefore, the MGOL Shares cannot be
resold unless they are subsequently registered under said laws or
exemptions from such registrations as are available; and (ii) the
transferability of the Shares is restricted and that a legend shall be
placed on the certificates representing the securities substantially to
the following effect:
|
3
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
WITH RESPECT TO SUCH SHARES, OR AN OPINION SATISFACTORY TO THE ISSUER AND ITS
COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE
ACT.
|
|
(c)
|
At
the Effective Time, each GRP Membereship Interest held in the treasury of
GRP, by GRP immediately prior to the Effective Time shall, by virtue of
the Merger and without any action on the part of GRP, SUB CO or MGOL be
canceled, retired and cease to exist and no payment shall be made with
respect thereto.
|
Section
1.8. Exchange of
Certificates.
|
|
(a)
|
Prior
to the Effective Time, MGOL shall enter into an agreement with, and shall
deposit with, Xxxxxxxxxx Law Group or such other agent or agents as may be
satisfactory to MGOL and GRP (the “Exchange Agent”), for the benefit of
the holders of GRP Membership Interests, for exchange through the Exchange
Agent in accordance with this Article I: certificates representing the
appropriate number of MGOL Shares to be issued to holders of GRP
Membership Interests issuable pursuant to Section 1.7 in exchange for
outstanding GRP Membership
Interests.
|
|
|
(b)
|
As
soon as reasonably practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented outstanding GRP
Membership Interests (the “Certificates”) whose Membership Interest were
converted into the right to receive MGOL Shares pursuant to Section 1.7:
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as GRP and MGOL may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing MGOL Shares. Upon
surrender of a Certificate to the Exchange Agent, together with such
letter of transmittal, duly executed, and any other required documents,
the holder of such Certificate shall be entitled to receive in exchange
therefore a certificate representing that number of whole MGOL Shares and
the Certificate so surrendered shall forthwith be canceled. In the event
of a transfer of ownership of GRP Membership Interests which are not
registered in the transfer records of GRP, a certificate representing the
proper number of MGOL Shares may be issued to a transferee if the
Certificate representing such GRP Membership Interests is presented to the
Exchange Agent accompanied by all documents required by the Exchange Agent
or MGOL to evidence and effect such transfer and by evidence that any
applicable Membership Interest transfer or other taxes have been paid.
Until surrendered as contemplated by this Section 1.8, each Certificate
shall be deemed at any time after the Effective Time to represent only the
right to receive upon such surrender the certificate representing MGOL
Shares as contemplated by this Section
1.8.
|
4
|
|
(c)
|
No
dividends or other distributions declared or made after the Effective Time
with respect to MGOL Shares with a record date after the Effective Time
shall be paid to the holder of any un-surrendered Certificate with respect
to the MGOL Shares represented thereby until the holder of record of such
Certificate shall surrender such
Certificate.
|
|
|
(d)
|
In
the event that any Certificate for GRP Membership Interests or MGOL Shares
shall have been lost, stolen or destroyed, the Exchange Agent shall issue
in exchange therefor, upon the making of an affidavit of that fact by the
holder thereof such MGOL Shares and cash in lieu of fractional MGOL
Shares, if any, as may be required pursuant to this Agreement; provided,
however, that MGOL or the Exchange Agent, may, in its respective
discretion, require the delivery of a suitable bond, opinion or
indemnity.
|
|
|
(e)
|
All
MGOL Shares issued upon the surrender for exchange of GRP Membership
Interests in accordance with the terms hereof shall be deemed to have been
issued in full satisfaction of all rights pertaining to such GRP
Membership Interests. There shall be no further registration of transfers
on the stock transfer books of either of GRP or MGOL of the GRP Membership
Interests or MGOL Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented
to MGOL for any reason, they shall be canceled and exchanged as provided
in this Article I.
|
|
|
(f)
|
No
fractional MGOL Shares shall be issued in the Merger, but in lieu thereof
each holder of GRP Membership Interests otherwise entitled to a fractional
MGOL Share shall, upon surrender of its, his or her Certificate or
Certificates, be entitled to receive an additional share to round up to
the nearest round number of shares.
|
Section
1.9. Membership
Interest Options. At the Effective Time, each outstanding option to
purchase GRP Membership Interests, if any (a “GRP Membership Interest Option” or
collectively, “GRP Membership Interest Options”) issued pursuant to any GRP
Membership Interest Option Plan or GRP Long Term Incentive Plan, if any, whether
vested or unvested, shall be cancelled.
5
Section
1.10. Warrants.
At the Effective Time, each outstanding warrant to purchase GRP Membership
Interests, if any (a “GRP Warrant” or collectively, “GRP Warrants”) issued and
pursuant to any GRP Warrant Agreement as disclosed in Schedule 3.2 shall convert
to the right to receive replacement MGOL Warrants, adjusted to reflect the
proportionate reduction in number of shares as set forth in section 1.7 above.
The Exercise Price per GRP Warrant in effect at the time of the record date for
the determination of Members entitled to receive Membership Interests pursuant
to section 1.7 shall be adjusted so that it shall equal the price determined by
multiplying such Exercise Price by a fraction, the numerator of which shall be
the number of Membership Interests outstanding immediately prior to such action,
and the denominator of which shall be the number of Membership Interests
outstanding after giving effect to such action. Such adjustment shall
be made successively whenever any event listed above shall occur and shall
become effective at the close of business on such record date or at the close of
business on the date immediately preceding such effective date, as
applicable.
Section 1.11. Cancellation
of MGOL Shares. Concurrent with the closing of the Merger, the 7,500,000 shares
of restricted common stock held by Xxxxxxx Xxxxxx will be cancelled.
Additionally, concurrent with closing, 1,000,000 shares of restricted common
stock held by Xxxxxxxxxx Law Group will be cancelled.
Section
1.12. Taking of
Necessary Action; Further Action. If, at any time after the Effective
Time, GRP or MGOL reasonably determines that any deeds, assignments, or
instruments or confirmations of transfer are necessary or desirable to carry out
the purposes of this Agreement and to vest MGOL with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
GRP, the officers and directors of MGOL and GRP are fully authorized in the name
of their respective entities or otherwise to take, and will take, all such
lawful and necessary or desirable action. It is anticipated by GRP and MGOL that
upon completion of the Post Closing Conditions as set forth in the attached Post
Closing Conditions Schedule, that GRP will maintain title to any and all
entities set forth in the Post Closing Conditions Schedule, as subsidiaries of
GRP.
ARTICLE
2
Representations
and Warranties of MGOL
Except
as set forth on the Disclosure Schedule delivered by MGOL and SUB CO to GRP (the
“MGOL Disclosure Schedule”), MGOL and SUB CO hereby represent and warrant to GRP
as follows:
Section
2.1. Organization and
Qualification.
|
|
(a)
|
Each
of MGOL and SUB CO is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization and each has all requisite power and authority to own, lease
and operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and in
good standing or to have such power and authority would not have a
Material Adverse Effect (as defined below) on MGOL. When used in
connection with MGOL, the term “Material Adverse Effect” means any change
or effect (i) that is or is reasonably likely to be materially adverse to
the business, results of operations, condition (financial or otherwise) or
prospects of MGOL, other than any change or effect arising out of general
economic conditions unrelated to any business in which MGOL is engaged, or
(ii) that may impair the ability of MGOL to perform its obligations
hereunder or to consummate the transactions contemplated
hereby.
|
6
|
|
(b)
|
MGOL
has heretofore delivered to GRP accurate and complete copies of the
Articles of Incorporation and Bylaws (or similar governing documents), as
currently in effect, of MGOL. Except as set forth on Schedule 2.1 of the
MGOL Disclosure Schedule, MGOL is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in
good standing would not have a Material Adverse Effect on
MGOL.
|
Section
2.2. Capitalization of
MGOL.
|
|
(a)
|
The
authorized capital stock of MGOL consists of: (i) One Billion
(1,000,000,000) MGOL Common Shares, par value $0.001 per share, of which,
as of March 31, 2009, approximately 14,000,000 MGOL Shares were issued and
outstanding; and (ii) Ten Million (10,000,000) MGOL Preferred Shared, par
value $0.001 per share, were authorized, of which no Preferred Shares were
issued. The authorized capital stock of SUB CO consists of One Million
(1,000,000) shares of common stock ("SUB CO Shares"), of which, as of the
date of this Agreement, One thousand (1,000) shares were issued and
outstanding. All of the outstanding MGOL Shares and SUB CO
Shares have been duly authorized and validly issued, and are fully paid,
nonassessable and free of preemptive rights. Except as set forth herein,
as of the date hereof, there are no outstanding (i) shares of capital
stock or other voting securities of MGOL or SUB CO, (ii) securities of
MGOL convertible into or exchangeable for shares of capital stock or
voting securities of MGOL or SUB CO, (iii) options or other rights to
acquire from MGOL or SUB CO and, except as described in the MGOL SEC
Reports (as defined below), no obligations of MGOL or SUB CO to issue any
capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of MGOL or SUB CO, and
(iv) equity equivalents, interests in the ownership or earnings of MGOL or
SUB CO or other similar rights (collectively, “MGOL Securities”). As of
the date hereof, except as set forth on Schedule 2.2(a) of the MGOL
Disclosure Schedule there are no outstanding obligations of MGOL or its
subsidiaries to repurchase, redeem or otherwise acquire any MGOL
Securities or stockholder agreements, voting trusts or other agreements or
understandings to which MGOL is a party or by which it is bound relating
to the voting or registration of any shares of capital stock of MGOL. For
purposes of this Agreement, ‘‘Lien” means, with respect to any asset
(including, without limitation, any security) any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset.
|
7
|
|
(b)
|
The
MGOL Shares constitute the only class of equity securities of MGOL
registered under the Exchange Act.
|
|
|
(c)
|
Other
than its 100% ownership of SUB CO, MGOL does not own directly or
indirectly more than fifty percent (50%) of the outstanding voting
securities or interests (including membership interests) of any entity,
other than as specifically disclosed in the disclosure
documents.
|
Section
2.3. Authority
Relative to this Agreement; Recommendation.
|
|
(a)
|
MGOL
and SUB CO have all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly and validly
authorized by the Board of Directors of MGOL (the “MGOL Board”) and the
Board of Directors of SUB CO and no other corporate proceedings on the
part of MGOL or SUB CO are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby, except, as referred to in
Section 2.3(b) and Section 2.17, the approval and adoption of this
Agreement by the holders of at least a majority of the then outstanding
SUB CO Shares, and the adoption of this Agreement by the holders of at
least a majority of the then outstanding MGOL Shares. This Agreement has
been duly and validly executed and delivered by MGOL and SUB CO and
constitutes a valid, legal and binding agreement of MGOL and SUB CO,
enforceable against MGOL and SUB CO in accordance with its
terms.
|
|
|
(b)
|
The
MGOL Board has resolved to recommend that MGOL, and the sole stockholder
of SUB CO, approve and adopt this Agreement. Additionally, the two
stockholders holding a majority of MGOL shares have agreed to approve and
adopt this Agreement, and the actions required to be taken to effectuate
the terms and conditions set forth in this
Agreement.
|
8
Section
2.4. SEC Reports;
Financial Statements.
|
|
(a)
|
MGOL
has filed all required forms, reports and documents with the Securities
and Exchange Commission (the “SEC”) from the Company’s inception through
the period ended March 31, 2009, each of which has complied in all
material respects with all applicable requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and the Exchange Act (and the
rules and regulations promulgated thereunder, respectively), each as in
effect on the dates such forms, reports and documents were filed. MGOL has
heretofore delivered or promptly will deliver prior to the Effective Date
to GRP, in the form filed with the SEC (including any amendments thereto
but excluding any exhibits), (i) its Annual Report on Form 10-K for the
year ended December 31, 2008, (ii) its Quarterly Report on Form 10-Q for
the period ended Xxxxx 00, 0000, (xxx) all definitive proxy statements
relating to MGOL’s meetings of stockholders (whether annual or special)
held since December 31, 2007, if any, and (iv) all other reports or
registration statements filed by MGOL with the SEC since December 31,
2007. None of such MGOL SEC Reports, including, without limitation, any
financial statements or schedules included or incorporated by reference
therein, contained, when filed, any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited financial statements of MGOL included in the MGOL SEC Reports
fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in
the notes thereto), the financial position of MGOL as of the dates thereof
and its results of operations and changes in financial position for the
periods then ended. All material agreements, contracts and other documents
required to be filed as exhibits to any of the MGOL SEC Reports have been
so filed.
|
|
|
(b)
|
MGOL
has heretofore made available or promptly will make available to GRP a
complete and correct copy of any amendments or modifications which are
required to be filed with the SEC but have not yet been filed with the
SEC, to agreements, documents or other instruments which previously had
been filed by MGOL with the SEC pursuant to the Exchange
Act.
|
Section
2.5. Information
Supplied. None of the information supplied or to be supplied by MGOL for
inclusion or incorporation by reference in connection with the Merger will at
the date filed with the SEC and made available to stockholders of MGOL, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section
2.6. Consents and
Approvals; No Violations. Except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act, state securities or blue
sky laws, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1916, as amended
(the ‘‘HSR Act’’), the rules of the Financial Industry Regulatory Authority
(“FINRA”), the filing and recordation of the Merger Certificate as required by
the NGCL, and as set forth on Schedule 2.6 of the MGOL Disclosure Schedule no
filing with or notice to, and no permit, authorization, consent or approval of,
any court or tribunal or administrative, governmental or regulatory body, agency
or authority (a “Governmental Entity”) is necessary for the execution and
delivery by MGOL and SUB CO of this Agreement or the consummation by MGOL and
SUB CO of the transactions contemplated hereby, except where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings or give such notice would not have a Material Adverse Effect on MGOL or
SUB CO.
9
Except
as set forth in Section 2.6 of the MGOL Disclosure Schedule, neither the
execution, delivery and performance of this Agreement by MGOL and SUB CO nor the
consummation by MGOL or SUB CO of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Articles of Incorporation or Bylaws (or similar governing documents) of MGOL or
SUB CO, (ii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or Lien) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which MGOL is
a party or by which any of its properties or assets may be bound, or (iii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
applicable to MGOL or any of its properties or assets, except in the case of
(ii) or (iii) for violations, breaches or defaults which would not have a
Material Adverse Effect on MGOL or SUB CO.
Section
2.7. No
Default. Except as set forth in Section 2.7 of the MGOL Disclosure
Schedule, neither MGOL nor SUB CO is in breach, default or violation (and no
event has occurred which with notice or the lapse of time or both would
constitute a breach, default or violation) of any term, condition or provision
of (i) its Articles of Incorporation or Bylaws (or similar governing documents),
(ii) any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which MGOL is now a party or by which any of
its respective properties or assets may be bound or (iii) any order, writ,
injunction, decree, law, statute, rule or regulation applicable to MGOL or any
of its respective properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults that would not have a Material Adverse Effect
on MGOL or SUB CO. Except as set forth in Section 2.7 of the MGOL Disclosure
Schedule, each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which MGOL is now a party or by
which its respective properties or assets may be bound that is material to MGOL
or SUB CO and that has not expired is in full force and effect and is not
subject to any material default thereunder of which MGOL or SUB CO is aware by
any party obligated to MGOL thereunder.
10
Section
2.8. No Undisclosed
Liabilities; Absence of Changes. Except as set forth in Section 2.8 of
the MGOL Disclosure Schedule and except as and to the extent publicly disclosed
by MGOL in the MGOL SEC Reports, as of March 31, 2009, MGOL does not have any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles to
be reflected on a balance sheet of MGOL (including the notes thereto) or which
would have a Material Adverse Effect on MGOL. Except as publicly disclosed by
MGOL, since March 31, 2009, MGOL has not incurred any liabilities of any nature,
whether or not accrued, contingent or otherwise, which could reasonably be
expected to have, and there have been no events, changes or effects with respect
to MGOL having or which reasonably could be expected to have, a Material Adverse
Effect on MGOL. Except as and to the extent publicly disclosed by MGOL in the
MGOL SEC Reports and except as set forth in Section 2.8 of the MGOL Disclosure
Schedule, since March 31, 2009, there has not been (i) any material change by
MGOL in its accounting methods, principles or practices (other than as required
after the date hereof by concurrent changes in generally accepted accounting
principles), (ii) any revaluation by MGOL of any of its assets having a Material
Adverse Effect on MGOL, including, without limitation, any write-down of the
value of any assets other than in the ordinary course of business or (iii) any
other action or event that would have required the consent of any other party
hereto pursuant to Section 4.1 of this Agreement had such action or event
occurred after the date of this Agreement.
Section
2.9. Litigation. Except as
publicly disclosed by MGOL in the MGOL SEC Reports, there is no suit, claim,
action, proceeding or investigation pending or, to the knowledge of MGOL,
threatened against MGOL or any of its subsidiaries or any of their respective
properties or assets before any Governmental Entity which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect on
MGOL or could reasonably be expected to prevent or delay the consummation of the
transactions contemplated by this Agreement. Except as publicly disclosed by
MGOL in the MGOL SEC Reports, MGOL is not subject to any outstanding order,
writ, injunction or decree which, insofar as can be reasonably foreseen in the
future, could reasonably be expected to have a Material Adverse Effect on MGOL
or could reasonably be expected to prevent or delay the consummation of the
transactions contemplated hereby.
Section
2.10. Compliance with
Applicable Law. Except as publicly disclosed by MGOL in the MGOL SEC
Reports, MGOL and SUB CO hold all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities necessary for the lawful
conduct of their respective businesses (the “MGOL Permits”), except for failures
to hold such permits, licenses, variances, exemptions, orders and approvals
which would not have a Material Adverse Effect on MGOL. Except as publicly
disclosed by MGOL in the MGOL SEC Reports, MGOL is in compliance with the terms
of the MGOL Permits, except where the failure to so comply would not have a
Material Adverse Effect on MGOL. Except as publicly disclosed by MGOL in the
MGOL SEC Reports, the business of MGOL is not being conducted in violation of
any law, ordinance or regulation of any Governmental Entity except that no
representation or warranty is made in this Section 2.10 with respect to
Environmental Laws (as defined in Section 2.12 below) and except for violations
or possible violations which do not, and, insofar as reasonably can be foreseen,
in the future will not, have a Material Adverse Effect on MGOL. Except as
publicly disclosed by MGOL in the MGOL SEC Reports, no investigation or review
by any Governmental Entity with respect to MGOL is pending or, to the knowledge
of MGOL, threatened, nor, to the knowledge of MGOL, has any Governmental Entity
indicated an intention to conduct the same, other than, in each case, those
which MGOL reasonably believes will not have a Material Adverse Effect on
MGOL.
11
Section
2.11. Employee Benefit
Plans; Labor Matters.
|
|
(a)
|
Except
as set forth in Section 2.11(a) of the MGOL Disclosure Schedule with
respect to each employee benefit plan, program, policy, 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 at any time by
MGOL or any entity required to be aggregated with MGOL pursuant to Section
414 of the Code (each, a “MGOL Employee Plan”), no event has occurred and
to the knowledge of MGOL, no condition or set of circumstances exists in
connection with which MGOL could reasonably be expected to be subject to
any liability which would have a Material Adverse Effect on
MGOL.
|
|
|
(b)
|
(i)
No MGOL Employee Plan is or has been subject to Title IV of ERISA or
Section 412 of the Code; and (ii) each MGOL Employee Plan intended to
qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred
which could reasonably be expected to adversely affect such
determination.
|
|
|
(c)
|
Section
2.11(c) of the MGOL Disclosure Schedule sets forth a true and complete
list, as of the date of this Agreement, of each person who holds any MGOL
Stock Options, together with the number of MGOL Shares which are subject
to such option, the date of grant of such option, the extent to which such
option is vested (or will become vested as a result of the Merger), the
option price of such option (to the extent determined as of the date
hereof), whether such option is a nonqualified stock option or is intended
to qualify as an incentive stock option within the meaning of Section
422(b) of the Code, and the expiration date of such option. Section
2.11(c) of the MGOL Disclosure Schedule also sets forth the total number
of such incentive stock options and such nonqualified options. MGOL has
furnished GRP with complete copies of the plans pursuant to which the MGOL
Stock Options were issued. Other than the automatic vesting of MGOL Stock
Options that may occur without any action on the part of MGOL or its
officers or directors, MGOL has not taken any action that would result in
any MGOL Stock Options that are unvested becoming vested in connection
with or as a result of the execution and delivery of this Agreement or the
consummation of the transactions contemplated
hereby.
|
12
|
|
(d)
|
MGOL
has made available to GRP (i) a description of the terms of employment and
compensation arrangements of all officers of MGOL and a copy of each such
agreement currently in effect; (ii) copies of all agreements with
consultants who are individuals obligating MGOL to make annual cash
payments in an amount exceeding $60,000; (iii) a schedule listing all
officers of MGOL who have executed a non-competition agreement with MGOL
and a copy of each such agreement currently in effect; (iv) copies (or
descriptions) of all severance agreements, programs and policies of MGOL
with or relating to its employees, except programs and policies required
to be maintained by law; and (v) copies of all plans, programs, agreements
and other arrangements of MGOL with or relating to its employees which
contain change in control provisions all of which are set forth in Section
2.11(d) of the MGOL Disclosure
Schedule.
|
|
|
(e)
|
There
shall be no payment, accrual of additional benefits, acceleration of
payments, or vesting in any benefit under any MGOL Employee Plan or any
agreement or arrangement disclosed under this Section 2.11 solely by
reason of entering into or in connection with the transactions
contemplated by this Agreement.
|
|
|
(f)
|
There
are no controversies pending or, to the knowledge of MGOL, threatened,
between MGOL and any of their employees, which controversies have or could
reasonably be expected to have a Material Adverse Effect on MGOL. Neither
MGOL nor any of its subsidiaries is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by
MGOL or any of its subsidiaries (and neither MGOL nor any of its
subsidiaries has any outstanding material liability with respect to any
terminated collective bargaining agreement or labor union contract), nor
does MGOL know of any activities or proceedings of any labor union to
organize any of its or its subsidiaries employees. MGOL has no knowledge
of any strike, slowdown, work stoppage, lockout or threat thereof, by or
with respect to any of its
employees.
|
Section
2.12. Environmental
Laws and Regulations.
|
|
(a)
|
Except
as publicly disclosed by MGOL in the MGOL SEC Reports, (i) MGOL is in
material compliance with all applicable federal, state, local and foreign
laws and regulations relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata) (collectively,
“Environmental Laws”), except for non-compliance that would not have a
Material Adverse Effect on MGOL, which compliance includes, but is not
limited to, the possession by MGOL of all material permits and other
governmental authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof; (ii) MGOL has not
received written notice of, or, to the knowledge of MGOL, is the subject
of, any action, cause of action, claim, investigation, demand or notice by
any person or entity alleging liability under or non-compliance with any
Environmental Law (an “Environmental Claim”) that could reasonably be
expected to have a Material Adverse Effect on MGOL; and (iii) to the
knowledge of MGOL, there are no circumstances that are reasonably likely
to prevent or interfere with such material compliance in the
future.
|
13
|
|
(b)
|
Except
as publicly disclosed by MGOL, there are no Environmental Claims which
could reasonably be expected to have a Material Adverse Effect on MGOL
that are pending or, to the knowledge of MGOL, threatened against MGOL or,
to the knowledge of MGOL, against any person or entity whose liability for
any Environmental Claim MGOL has or may have retained or assumed either
contractually or by operation of
law.
|
Section
2.13. Tax
Matters.
|
|
(a)
|
Except
as set forth in Section 2.13 of the MGOL Disclosure Schedule: (i) MGOL has
filed or has had filed on its behalf in a timely manner (within any
applicable extension periods) with the appropriate Governmental Entity all
income and other material Tax Returns (as defined herein) with respect to
Taxes (as defined herein) of MGOL and all Tax Returns were in all material
respects true, complete and correct; (ii) all material Taxes with respect
to MGOL have been paid in full or have been provided for in accordance
with GAAP on MGOL’s most recent balance sheet which is part of the MGOL
SEC Documents; (iii) there are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any federal,
state, local or foreign income or other material Tax Returns required to
be filed by or with respect to MGOL; (iv) to the knowledge of MGOL none of
the Tax Returns of or with respect to MGOL is currently being audited or
examined by any Governmental Entity; and (v) no deficiency for any income
or other material Taxes has been assessed with respect to MGOL which has
not been abated or paid in full.
|
|
|
(b)
|
For
purposes of this Agreement, (i) “Taxes” shall mean all taxes, charges,
fees, levies or other assessments, including, without limitation, income,
gross receipts, sales, use, ad valorem, goods and services, capital,
transfer, franchise, profits, license, withholding, payroll, employment,
employer health, excise, estimated, severance, stamp, occupation, property
or other taxes, customs duties, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by any taxing authority and (ii) “Tax
Return” shall mean any report, return, documents declaration or other
information or filing required to be supplied to any taxing authority or
jurisdiction with respect to Taxes.
|
14
Section
2.14. Title to
Property. MGOL has good and defensible title to all of its properties and
assets, free and clear of all liens, charges and encumbrances except liens for
taxes not yet due and payable and such liens or other imperfections of title, if
any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on MGOL; and, to MGOL’s
knowledge, all leases pursuant to which MGOL leases from others real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and there is not, to the knowledge of MGOL, under any of such
leases, any existing material default or event of default (or event which with
the giving of notice or lapse of time, or both, would constitute a default and
in respect of which MGOL has not taken adequate steps to prevent such a default
from occurring) except where the lack of such good standing, validity and
effectiveness, or the existence of such default or event, would not have a
Material Adverse Effect on MGOL.
Section
2.15. Intellectual
Property.
|
|
(a)
|
MGOL
owns, or possesses adequate licenses or other valid rights to use, all
existing United States and foreign patents, trademarks, trade names,
service marks, copyrights, trade secrets and applications therefore that
are material to its business as currently conducted (the “MGOL
Intellectual Property Rights”).
|
|
|
(b)
|
The
validity of the MGOL Intellectual Property Rights and the title thereto of
MGOL is not being questioned in any litigation to which MGOL is a
party.
|
|
|
(c)
|
Except
as set forth in Section 2.15(c) of the MGOL Disclosure Schedule, the
conduct of the business of MGOL as now conducted does not, to MGOL’s
knowledge, infringe any valid patents, trademarks, trade names, service
marks or copyrights of others. The consummation of the transactions
completed hereby will not result in the loss or impairment of any MGOL
Intellectual Property Rights.
|
|
|
(d)
|
MGOL
has taken steps it believes appropriate to protect and maintain its trade
secrets as such, except in cases where MGOL has elected to rely on patent
or copyright protection in lieu of trade secret
protection.
|
Section
2.16. Insurance. MGOL
currently does not maintain general liability and other business
insurance.
Section
2.17. Vote
Required. The affirmative vote of the holders of at least a majority of
the outstanding SUB CO Shares are the only vote of the holders of any class or
series of SUB CO’s capital stock and MGOL necessary to approve and adopt this
Agreement and the Merger.
15
Section
2.18. Tax
Treatment. Neither MGOL or SUB CO nor, to the knowledge of MGOL or SUB
CO, any of their affiliates have taken or agreed to take action that would
prevent the Merger from constituting a reorganization qualifying under the
provisions of Section 368(a) of the Code.
Section
2.19. Affiliates. Except
for the directors and executive officers of MGOL, each of whom is listed in
Section 2.19 of the MGOL Disclosure Schedule, there are no persons who, to the
knowledge of MGOL, may be deemed to be affiliates of MGOL under Rule 1-02(b) of
Regulation S-X of the SEC (the “MGOL Affiliates”).
Section
2.20. Certain Business
Practices. None of MGOL or SUB CO or any directors, officers, agents or
employees of MGOL or SUB CO has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended (the
“FCPA”), or (iii) made any other unlawful payment.
Section
2.21. Insider
Interests. Except as set forth in Section 2.21 of the MGOL Disclosure
Schedule, no officer or director of MGOL has any interest in any material
property, real or personal, tangible or intangible, including without
limitation, any computer software or MGOL Intellectual Property Rights, used in
or pertaining to the business of MGOL, except for the ordinary rights of a
stockholder or employee stock option-holder.
Section
2.22. Opinion of
Financial Adviser. No financial adviser has been engaged to assist MGOL
in reference to this transaction, nor are there any fees or commissions
obligated to any third party.
Section
2.23. Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of MGOL or SUB
CO.
Section
2.24. Disclosure. No
representation or warranty of MGOL or SUB CO in this Agreement or any
certificate, schedule, document or other instrument furnished or to be furnished
to GRP pursuant hereto or in connection herewith contains, as of the date of
such representation, warranty or instrument, or will contain any untrue
statement of a material fact or, at the date thereof, omits or will omit to
state a material fact necessary to make any statement herein or therein, in
light of the circumstances under which such statement is or will be made, not
misleading.
Section
2.25. No Existing
Discussions. As of the date hereof, MGOL is not engaged, directly or
indirectly, in any discussions or negotiations with any other party with respect
to any Third Party Acquisition (as defined in Section 4.4).
Section
2.26. Material
Contracts.
16
|
|
(a)
|
MGOL
and SUB CO have delivered or otherwise made available to GRP true, correct
and complete copies of all contracts and agreements (and all amendments,
modifications and supplements thereto and all side letters to which either
MGOL and SUB CO is a party affecting the obligations of any party
thereunder) to which either MGOL or SUB CO is a party or by which any of
their respective properties or assets are bound that are, material to the
business, properties or assets of MGOL or SUB CO taken as a whole,
including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or
assets of MGOL or SUB CO taken as a whole, all: (i) employment, product
design or development, personal services, consulting, non-competition,
severance, golden parachute or indemnification contracts (including,
without limitation, any contract to which MGOL is a party involving
employees of MGOL); (ii) licensing, publishing, merchandising or
distribution agreements; (iii) contracts granting rights of first refusal
or first negotiation; (iv) partnership or joint venture agreements; (v)
agreements for the acquisition, sale or lease of material properties or
assets or stock or otherwise entered into since March 31, 2009; (vi)
contracts or agreements with any Governmental Entity; and (vii) all
commitments and agreements to enter into any of the foregoing
(collectively, together with any such contracts entered into in accordance
with Section 4.1 hereof, the “MGOL Contracts”). Neither MGOL nor SUB CO is
a party to or bound by any severance, golden parachute or other agreement
with any employee or consultant pursuant to which such person would be
entitled to receive any additional compensation or an accelerated payment
of compensation as a result of the consummation of the transactions
contemplated hereby.
|
|
|
(b)
|
Each
of the MGOL Contracts is valid and enforceable in accordance with its
terms, and there is no default, other than what has been previously
disclosed in MGOL’s SEC reports, under any MGOL Contract so listed either
by MGOL or SUB CO or, to the knowledge of MGOL or SUB CO, by any other
party thereto, and no event has occurred that with the lapse of time or
the giving of notice or both would constitute a default thereunder by MGOL
or SUB CO or, to the knowledge of MGOL or SUB CO, any other party, in any
such case in which such default or event could reasonably be expected to
have a Material Adverse Effect on MGOL or SUB
CO.
|
|
|
(c)
|
No
party to any such MGOL Contract has given notice to MGOL of or made a
claim against MGOL or SUB CO with respect to any breach or default
thereunder, other than what has been previously disclosed in MGOL’s SEC
reports, in any such case in which such breach or default could reasonably
be expected to have a Material Adverse Effect on MGOL or SUB
CO.
|
17
ARTICLE
3
Representations
and Warranties of GRP
Except
as set forth on the Disclosure Schedule delivered by GRP to MGOL (the “GRP
Disclosure Schedule”), GRP hereby represents and warrants to MGOL as
follows:
Section
3.1. Organization and
Qualification.
|
|
(a)
|
GRP
is duly organized, validly existing and will be in good standing under the
laws of the jurisdiction of its organization prior to Close, and has all
requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted, except where the failure
to be so organized, existing and in good standing or to have such power
and authority would not have a Material Adverse Effect (as defined below)
on GRP. When used in connection with GRP, the term “Material Adverse
Effect’’ means any change or effect (i) that is or is reasonably likely to
be materially adverse to the business, results of operations, condition
(financial or otherwise) or prospects of GRP, taken as a whole, other than
any change or effect arising out of general economic conditions unrelated
to any business in which GRP is engaged, or (ii) that may impair the
ability of GRP to consummate the transactions contemplated
hereby.
|
|
|
(b)
|
GRP
has heretofore delivered to MGOL accurate and complete copies of the
Articles of Organization and Operating Agreement (or similar governing
documents), as currently in effect, of GRP. GRP is duly qualified or
licensed and in good standing to do business in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary except in
such jurisdictions where the failure to be so duly qualified or licensed
and in good standing would not have a Material Adverse Effect on
GRP.
|
Section
3.2. Capitalization of
GRP.
|
|
(a)
|
As
of the date of this Agreement, or prior to closing, the authorized
Membership Interest of GRP consists of, or prior to close will consist of;
One Hundred Twelve Million (112,000,000) Membership Interests, of which
One Hundred Twelve Million will be issued and outstanding at the Effective
Time. All of the outstanding GRP Membership Interests have been duly
authorized and validly issued, and are fully paid, non-assessable and free
of preemptive rights.
|
18
|
|
(b)
|
Except
as set forth in Section 3.2(b) of the GRP Disclosure Schedule, between
March 31, 2009 and the date hereof, no Membership Interests of GRP’s have
been issued and no GRP Membership Interest options have been granted.
Except as set forth in Section 3.2(a) above, as of the date hereof, there
are no outstanding (i) Membership Interest or other voting securities of
GRP, (ii) securities of GRP convertible into or exchangeable for
Membership Interest or voting securities of GRP, (iii) options or other
rights to acquire from GRP, or obligations of GRP to issue, any Membership
Interest, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of GRP, or (iv) equity equivalents,
interests in the ownership or earnings of GRP or other similar rights
(collectively, “GRP Securities”). As of the date hereof, there are no
outstanding obligations of GRP to repurchase, redeem or otherwise acquire
any GRP Securities. There are no securities agreements, voting trusts or
other agreements or understandings to which GRP is a party or by which it
is bound relating to the voting or registration of any securities of
GRP.
|
|
|
(c)
|
Except
as set forth in Section 3.2(c) of the GRP Disclosure Schedule, there are
no securities of GRP convertible into or exchangeable for, no options or
other rights to acquire from GRP, and no other contract, understanding,
arrangement or obligation (whether or not contingent) providing for the
issuance or sale, directly or indirectly, of any securities or other
ownership interests in, or any other securities of
GRP.
|
|
|
(d)
|
The
GRP Membership Interests constitute the only class of equity securities of
GRP.
|
|
|
(e)
|
Except
as set forth in Section 3.2(e) of the GRP Disclosure Schedule, GRP does
not own directly or indirectly more than fifty percent (50%) of the
outstanding voting securities or interests (including membership
interests) of any entity.
|
|
|
(f)
|
Except
as set forth in Section 3.2(f) of the GRP Disclosure Schedule, GRP does
not have any contractual rights or obligations to acquire any interest in
any entity.
|
Section
3.3. Authority
Relative to this Agreement; Recommendation.
|
|
(a)
|
GRP
has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Managing Members of GRP (the “GRP Board”), and no other corporate
proceedings on the part of GRP are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby, except, as referred
to in Section 3.17, the approval and adoption of this Agreement by the
holders of at least a majority of the then outstanding GRP Membership
Interests. This Agreement has been duly and validly executed and delivered
by GRP and constitutes a valid, legal and binding agreement of GRP,
enforceable against GRP in accordance with its
terms.
|
19
|
|
(b)
|
The
GRP Board has resolved to recommend that the stockholders of GRP approve
and adopt this Agreement.
|
Section
3.4. SEC Reports;
Financial Statements. GRP is not required to file forms, reports and
documents with the SEC.
Section
3.5. Information
Supplied. None of the information supplied or to be supplied by GRP for
inclusion or incorporation by reference to the 8-K will, at the time the 8-K is
filed with the SEC and at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Section
3.6. Consents and
Approvals; No Violations. Except as set forth in Section 3.6 of the GRP
Disclosure Schedule, and for filings, permits, authorizations, consents and
approvals as may be required under, and other applicable requirements of, the
Securities Act, the Exchange Act, state securities or blue sky laws, the HSR
Act, the rules of FINRA, and the filing and recordation of the Merger
Certificate as required by the NGCL, no filing with or notice to, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery by GRP of this Agreement or the consummation by GRP
of the transactions contemplated hereby, except where the failure to obtain such
permits, authorizations consents or approvals or to make such filings or give
such notice would not have a Material Adverse Effect on GRP.
Neither
the execution, delivery and performance of this Agreement by GRP nor the
consummation by GRP of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the Articles of Organization or
Operating Agreement (or similar governing documents) of GRP, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which GRP is a party or by which
it or any of its properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, law, statute, rule or regulation applicable to GRP or
any of its properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults which would not have a Material Adverse Effect
on GRP.
Section
3.7. No
Default. GRP is not in breach, default or violation (and no event has
occurred which with notice or the lapse of time or both would constitute a
breach, default or violation) of any term, condition or provision of (i) its
Articles of Organization or Operating Agreement (or similar governing
documents), (ii) any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which GRP is now a party or by
which it or any of its properties or assets may be bound or (iii) any order,
writ, injunction, decree, law, statute, rule or regulation applicable to GRP, or
any of its properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults that would not have a Material Adverse Effect
on GRP. Each note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which GRP is now a party or by
which it or any of its properties or assets may be bound that is material to GRP
taken as a whole and that has not expired is in full force and effect and is not
subject to any material default thereunder of which GRP is aware by any party
obligated to GRP thereunder.
20
Section
3.8. No Undisclosed
Liabilities; Absence of Changes. Except as and to the extent disclosed by
GRP, GRP has not had any liabilities or obligations of any nature, whether or
not accrued, contingent or otherwise, that would be required by generally
accepted accounting principles to be reflected on a consolidated balance sheet
of GRP (including the notes thereto) or which would have a Material Adverse
Effect on GRP. Except as disclosed by GRP, GRP has not incurred any liabilities
of any nature, whether or not accrued, contingent or otherwise, which could
reasonably be expected to have, and there have been no events, changes or
effects with respect to GRP having or which could reasonably be expected to
have, a Material Adverse Effect on GRP. Except as and to the extent disclosed by
GRP there has not been (i) any material change by GRP in its accounting methods,
principles or practices (other than as required after the date hereof by
concurrent changes in generally accepted accounting principles), (ii) any
revaluation by GRP of any of its assets having a Material Adverse Effect on GRP,
including, without limitation, any write-down of the value of any assets other
than in the ordinary course of business or (iii) any other action or event that
would have required the consent of any other party hereto pursuant to Section
4.2 of this Agreement had such action or event occurred after the date of this
Agreement.
Section
3.9. Litigation. Except as
set forth in Schedule 3.9 of the GRP Disclosure Schedule there is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of GRP,
threatened against GRP or any of its properties or assets before any
Governmental Entity which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on GRP or could reasonably be
expected to prevent or delay the consummation of the transactions contemplated
by this Agreement. Except as disclosed by GRP, GRP is not subject to any
outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen in the future, could reasonably be expected to have a
Material Adverse Effect on GRP or could reasonably be expected to prevent or
delay the consummation of the transactions contemplated hereby.
Section
3.10. Compliance with
Applicable Law. Except as disclosed by GRP, GRP holds all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities necessary for the lawful conduct of its business (the “GRP Permits”),
except for failures to hold such permits, licenses, variances, exemptions,
orders and approvals which would not have a Material Adverse Effect on GRP.
Except as disclosed by GRP, GRP is in compliance with the terms of the GRP
Permits, except where the failure so to comply would not have a Material Adverse
Effect on GRP. Except as disclosed by GRP, the businesses of GRP is not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity except that no representation or warranty is made in this Section 3.10
with respect to Environmental Laws and except for violations or possible
violations which do not, and, insofar as reasonably can be foreseen, in the
future will not, have a Material Adverse Effect on GRP. Except as disclosed by
GRP no investigation or review by any Governmental Entity with respect to GRP is
pending or, to the knowledge of GRP, threatened, nor, to the knowledge of GRP,
has any Governmental Entity indicated an intention to conduct the same, other
than, in each case, those which GRP reasonably believes will not have a Material
Adverse Effect on GRP.
21
Section
3.11. Employee Benefit
Plans; Labor Matters.
|
|
(a)
|
With
respect to each employee benefit plan, program, policy, arrangement and
contract (including, without limitation, any “employee benefit plan,” as
defined in Section 3(3) of ERISA), maintained or contributed to at any
time by GRP or any entity required to be aggregated with GRP pursuant to
Section 414 of the Code (each, a “GRP Employee Plan”), no event has
occurred and, to the knowledge of GRP, no condition or set of
circumstances exists in connection with which GRP could reasonably be
expected to be subject to any liability which would have a Material
Adverse Effect on GRP.
|
|
|
(b)
|
(i)
No GRP Employee Plan is or has been subject to Title IV of ERISA or
Section 412 of the Code; and (ii) each GRP Employee Plan intended to
qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code is the subject of a favorable
Internal Revenue Service determination letter, and nothing has occurred
which could reasonably be expected to adversely affect such
determination.
|
|
|
(c)
|
Section
3.11(c) of the GRP Disclosure Schedule sets forth a true and complete
list, as of the date of this Agreement, of each person who holds any GRP
Membership Interest Options, together with the number of GRP Membership
Interests which are subject to such option, the date of grant of such
option, the extent to which such option is vested (or will become vested
as a result of the Merger), the option price of such option (to the extent
determined as of the date hereof), whether such option is a nonqualified
stock option or is intended to qualify as an incentive stock option within
the meaning of Section 422(b) of the Code, and the expiration date of such
option. Section 3.11(c) of the GRP Disclosure Schedule also sets forth the
total number of such incentive stock options and such nonqualified
options. GRP has furnished MGOL with complete copies of the plans pursuant
to which the GRP Membership Interest Options were issued. Other than the
automatic vesting of GRP Membership Interest Options that may occur
without any action on the part of GRP or its officers or directors, GRP
has not taken any action that would result in any GRP Membership Interest
Options that are unvested becoming vested in connection with or as a
result of the execution and delivery of this Agreement or the consummation
of the transactions contemplated
hereby.
|
22
|
|
(d)
|
GRP
has made available to MGOL (i) a description of the terms of employment
and compensation arrangements of all officers of GRP and a copy of each
such agreement currently in effect; (ii) copies of all agreements with
consultants who are individuals obligating GRP to make annual cash
payments in an amount exceeding $60,000; (iii) a schedule listing all
officers of GRP who have executed a non-competition agreement with GRP and
a copy of each such agreement currently in effect; (iv) copies (or
descriptions) of all severance agreements, programs and policies of GRP
with or relating to its employees, except programs and policies required
to be maintained by law; and (v) copies of all plans, programs, agreements
and other arrangements of the GRP with or relating to its employees which
contain change in control
provisions.
|
|
|
(e)
|
Except
as disclosed in Section 3.11(e) of the GRP Disclosure Schedule there shall
be no payment, accrual of additional benefits, acceleration of payments,
or vesting in any benefit under any GRP Employee Plan or any agreement or
arrangement disclosed under this Section 3.11 solely by reason of entering
into or in connection with the transactions contemplated by this
Agreement.
|
|
|
(f)
|
There
are no controversies pending or, to the knowledge of GRP threatened,
between GRP and any of its employees, which controversies have or could
reasonably be expected to have a Material Adverse Effect on GRP. GRP is
not a party to any collective bargaining agreement or other labor union
contract applicable to persons employed by GRP (and GRP does not have any
outstanding material liability with respect to any terminated collective
bargaining agreement or labor union contract), nor does GRP know of any
activities or proceedings of any labor union to organize any of its or
employees. GRP has no knowledge of any strike, slowdown, work stoppage,
lockout or threat thereof by or with respect to any of its
employees.
|
Section
3.12. Environmental
Laws and Regulations.
|
|
(a)
|
Except
as disclosed by GRP, (i) GRP is in material compliance with all
Environmental Laws, except for non-compliance that would not have a
Material Adverse Effect on GRP, which compliance includes, but is not
limited to, the possession by GRP of all material permits and other
governmental authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof; (ii) GRP has not
received written notice of, or, to the knowledge of GRP, is the subject
of, any Environmental Claim that could reasonably be expected to have a
Material Adverse Effect on GRP; and (iii) to the knowledge of GRP, there
are no circumstances that are reasonably likely to prevent or interfere
with such material compliance in the
future.
|
23
|
|
(b)
|
Except
as disclosed by GRP, there are no Environmental Claims which could
reasonably be expected to have a Material Adverse Effect on GRP that are
pending or, to the knowledge of GRP, threatened against GRP or, to the
knowledge of GRP, against any person or entity whose liability for any
Environmental Claim GRP has or may have retained or assumed either
contractually or by operation of
law.
|
Section
3.13. Tax
Matters. Except as set forth in Section 3.13 of the GRP Disclosure
Schedule: (i) GRP has filed or has had filed, or will have had filed prior to
the Effective Time, on its behalf in a timely manner (within any applicable
extension periods) with the appropriate Governmental Entity all income and other
material Tax Returns with respect to Taxes of GRP and all Tax Returns were in
all material respects true, complete and correct; (ii) all material Taxes with
respect to GRP have been paid in full or have been provided for in accordance
with GAAP on GRP’s most recent balance sheet; (iii) there are no outstanding
agreements or waivers extending the statutory period of limitations applicable
to any federal, state, local or foreign income or other material Tax Returns
required to be filed by or with respect to GRP; (iv) to the knowledge of GRP
none of the Tax Returns of or with respect to GRP is currently being audited or
examined by any Governmental Entity; and (v) no deficiency for any income or
other material Taxes has been assessed with respect to GRP which has not been
abated or paid in full.
Section
3.14. Title to
Property. GRP has good and defensible title to all of its properties and
assets, free and clear of all liens, charges and encumbrances except liens for
taxes not yet due and payable and such liens or other imperfections of title, if
any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on GRP; and, to GRP’s
knowledge, all leases pursuant to which GRP leases from others real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and there is not, to the knowledge of GRP, under any of such
leases, any existing material default or event of default (or event which with
notice or lapse of time, or both, would constitute a material default and in
respect of which GRP has not taken adequate steps to prevent such a default from
occurring) except where the lack of such good standing, validity and
effectiveness, or the existence of such default or event of default would not
have a Material Adverse Effect on GRP.
Section
3.15. Intellectual
Property.
|
|
(a)
|
GRP
owns, or possesses adequate licenses or other valid rights to use, all
existing United States and foreign patents, trademarks, trade names,
services marks, copyrights, trade secrets, and applications therefor that
are material to its business as currently conducted (the “GRP Intellectual
Property Rights”).
|
|
|
(b)
|
Except
as set forth in Section 3.15(b) of the GRP Disclosure Schedule the
validity of the GRP Intellectual Property Rights and the title thereto of
GRP, as the case may be, is not being questioned in any litigation to
which GRP is a party.
|
24
|
|
(c)
|
The
conduct of the business of GRP as now conducted does not, to GRP’s
knowledge, infringe any valid patents, trademarks, trade-names, service
marks or copyrights of others. The consummation of the transactions
contemplated hereby will not result in the loss or impairment of any GRP
Intellectual Property Rights.
|
|
|
(d)
|
GRP
has taken steps it believes appropriate to protect and maintain its trade
secrets as such, except in cases where GRP has elected to rely on patent
or copyright protection in lieu of trade secret
protection.
|
Section
3.16. Insurance. GRP
currently does not maintain general liability and other business
insurance.
Section
3.17. Vote
Required. The affirmative vote of the holders of at least a majority of
the outstanding GRP Membership Interests is the only vote of the holders of any
class or series of GRP’s securities necessary to approve and adopt this
Agreement and the Merger.
Section
3.18. Tax
Treatment. Neither GRP nor, to the knowledge of GRP, any of its
affiliates has taken or agreed to take any action that would prevent the Merger
from constituting a reorganization qualifying under the provisions of Section
368(a) of the Code.
Section
3.19. Affiliates. Except
for the managing members of GRP, each of whom is listed in Section 3.19 of the
GRP Disclosure Schedule, there are no persons who, to the knowledge of GRP, may
be deemed to be affiliates of GRP under Rule 1-02(b) of Regulation S-X of the
SEC (the “GRP Affiliates”).
Section
3.20. Certain Business
Practices. None of GRP, or any of the GRP managing members, agents or
employees has (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the FCPA, or (iii) made any other unlawful
payment.
Section
3.21. Insider
Interests. Except as set forth in Section 3.21 of the GRP Disclosure
Schedule, no managing member of GRP has any interest in any material property,
real or personal, tangible or intangible, including without limitation, any
computer software or GRP Intellectual Property Rights, used in or pertaining to
the business of GRP, except for the ordinary rights of a stockholder or employee
stock option holder.
Section
3.22. Opinion of
Financial Adviser. No financial adviser has been engaged to assist GRP in
reference to this transaction, nor are there any fees or commissions obligated
to any third party.
Section
3.23. Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of GRP.
25
Section
3.24. Disclosure. No
representation or warranty of GRP in this Agreement or any certificate,
schedule, document or other instrument furnished or to be furnished to MGOL
pursuant hereto or in connection herewith contains, as of the date of such
representation, warranty or instrument, or will contain any untrue statement of
a material fact or, at the date thereof, omits or will omit to state a material
fact necessary to make any statement herein or therein, in light of the
circumstances under which such statement is or will be made, not
misleading.
Section
3.25. No Existing
Discussions. As of the date hereof, GRP is not engaged, directly or
indirectly, in any discussions or negotiations with any other party with respect
to any Third Party Acquisition (as defined in Section 4.4).
Section
3.26. Material
Contracts.
|
|
(a)
|
GRP
has delivered or otherwise made available to MGOL, or will make available
to MGOL, true, correct and complete copies of all contracts and agreements
(and all amendments, modifications and supplements thereto and all side
letters to which GRP is a party affecting the obligations of any party
thereunder) to which GRP is a party or by which any of its properties or
assets are bound that are, material to the business, properties or assets
of GRP taken as a whole, including, without limitation, to the extent any
of the following are, individually or in the aggregate, material to the
business, properties or assets of GRP taken as a whole, all: (i)
employment, product design or development, personal services, consulting,
non-competition, severance, golden parachute or indemnification contracts
(including, without limitation, any contract to which GRP is a party
involving employees of GRP); (ii) licensing, publishing, merchandising or
distribution agreements; (iii) contracts granting rights of first refusal
or first negotiation; (iv) partnership or joint venture agreements; (v)
agreements for the acquisition, sale or lease of material properties or
assets or stock or otherwise. (vi) contracts or agreements with any
Governmental Entity; and (vii) all commitments and agreements to enter
into any of the foregoing (collectively, together with any such contracts
entered into in accordance with Section 5.2 hereof, the “GRP Contracts”).
GRP is not a party to or bound by any severance, golden parachute or other
agreement with any employee or consultant pursuant to which such person
would be entitled to receive any additional compensation or an accelerated
payment of compensation as a result of the consummation of the
transactions contemplated hereby.
|
|
|
(b)
|
Each
of the GRP Contracts is valid and enforceable in accordance with its
terms, and there is no default under any GRP Contract so listed either by
GRP or, to the knowledge of GRP, by any other party thereto, and no event
has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder by GRP or, to the knowledge of GRP,
any other party, in any such case in which such default or event could
reasonably be expected to have a Material Adverse Effect on
GRP.
|
26
|
|
(c)
|
No
party to any such GRP Contract has given notice to GRP of or made a claim
against GRP with respect to any breach or default thereunder, in any such
case in which such breach or default could reasonably be expected to have
a Material Adverse Effect on GRP.
|
ARTICLE
4
Covenants
Section
4.1. Conduct of
Business of MGOL. Except as contemplated by this Agreement or as
described in Section 4.1 of the MGOL Disclosure Schedule, during the period from
the date hereof to the Effective Time, MGOL will conduct its operations in the
ordinary course of business consistent with past practice and, to the extent
consistent therewith, with no less diligence and effort than would be applied in
the absence of this Agreement, seek to preserve intact its current business
organization, keep available the service of its current officers and employees
and preserve its relationships with customers, suppliers and others having
business dealings with it to the end that goodwill and ongoing businesses shall
be unimpaired at the Effective Time. Without limiting the generality of the
foregoing, except as otherwise expressly provided in this Agreement or as
described in Section 4.1 of the MGOL Disclosure Schedule, prior to the Effective
Time, MGOL will not, without the prior written consent of GRP:
|
|
(a)
|
amend
its Articles of Incorporation or Bylaws (or other similar governing
instrument);
|
|
|
(b)
|
amend
the terms of any stock of any class or any other securities (except bank
loans) or equity equivalents.
|
|
|
(c)
|
split,
combine or reclassify any shares of its capital stock, declare, set aside
or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock, make
any other actual, constructive or deemed distribution in respect of its
capital stock or otherwise make any payments to stockholders in their
capacity as such, or redeem or otherwise acquire any of its securities;
except as set forth herein;
|
|
|
(d)
|
adopt
a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
MGOL (other than the Merger);
|
|
|
(e)
|
(i)
incur or assume any long-term or short-term debt or issue any debt
securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other
person; (iii) make any loans, advances or capital contributions to, or
investments in, any other person; (iv) pledge or otherwise encumber shares
of capital stock of MGOL; or (v) mortgage or pledge any of its material
assets, tangible or intangible, or create or suffer to exist any material
Lien thereupon (other than tax Liens for taxes not yet
due);
|
27
|
|
(f)
|
except
as may be required by law, enter into, adopt, amend or terminate any
bonus, profit sharing, compensation, severance, termination, stock option,
stock appreciation right, restricted stock, performance unit, stock
equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any plan and arrangement as in effect as
of the date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent MGOL from (i) entering into employment
agreements or severance agreements with employees in the ordinary course
of business and consistent with past practice or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees for fiscal 2008 in the ordinary course of year-end compensation
reviews consistent with past practice and paying bonuses to employees for
fiscal 2008 in amounts previously disclosed to GRP (to the extent that
such compensation increases and new or amended bonus arrangements do not
result in a material increase in benefits or compensation expense to
MGOL);
|
|
|
(g)
|
acquire,
sell, lease or dispose of any assets in any single transaction or series
of related transactions (other than in the ordinary course of business or
as a result of the Closing Conditions of this Merger Agreement that have
been described in the agreement);
|
|
|
(h)
|
except
as may be required as a result of a change in law or in generally accepted
accounting principles, change any of the accounting principles or
practices used by it;
|
|
|
(i)
|
revalue
in any material respect any of its assets including, without limitation,
writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of
business;
|
|
|
(j)
|
(i)
acquire (by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership or other business organization or division
thereof or any equity interest therein; (ii) enter into any contract or
agreement other than in the ordinary course of business consistent with
past practice which would be material to MGOL; (iii) authorize any new
capital expenditure or expenditures which, individually is in excess of
$1,000 or, in the aggregate, are in excess of $5,000; provided, however
that none of the foregoing shall limit any capital expenditure required
pursuant to existing contracts;
|
28
|
|
(k)
|
make
any tax election or settle or compromise any income tax liability material
to MGOL;
|
|
|
(l)
|
settle
or compromise any pending or threatened suit, action or claim which (i)
relates to the transactions contemplated hereby beyond those described as
Closing Conditions to this agreement, or (ii) the settlement or compromise
of which could have a Material Adverse Effect on
MGOL;
|
|
|
(m)
|
commence
any material research and development project or terminate any material
research and development project that is currently ongoing, in either
case, except pursuant to the terms of existing contracts or in the
ordinary course of business; or
|
|
|
(n)
|
take,
or agree in writing or otherwise to take, any of the actions described in
Sections 4.1(a) through 4.1(m) or any action which would make any of the
representations or warranties of MGOL contained in this Agreement untrue
or incorrect.
|
Section
4.2. Conduct of
Business of GRP. Except as contemplated by this Agreement or as described
in Section 4.2 of the GRP Disclosure Schedule during the period from the date
hereof to the Effective Time, GRP will conduct its operations in the ordinary
course of business consistent with past practice and, to the extent consistent
therewith, with no less diligence and effort than would be applied in the
absence of this Agreement, seek to preserve intact its current business
organization, keep available the service of its current officers and employees
and preserve its relationships with customers, suppliers and others having
business dealings with it to the end that goodwill and ongoing business shall be
unimpaired at the Effective Time. Without limiting the generality of the
foregoing, except as otherwise expressly provided in this Agreement or as
described in Section 4.2 of the GRP Disclosure Schedule, prior to the Effective
Time, GRP will not, without the prior written consent of MGOL:
|
|
(a)
|
amend
its Articles of Organization or Operating Agreement (or other similar
governing instrument);
|
|
|
(b)
|
authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any
securities of any class or any other securities (except bank loans) or
equity equivalents (including, without limitation, any stock options or
stock appreciation rights;
|
29
|
|
(c)
|
split,
combine or reclassify any securities, declare, set aside or pay any
dividend or other distribution (whether in cash, security or property or
any combination thereof) in respect of its Membership Interests, make any
other actual, constructive or deemed distribution in respect of its
Membership Interests or otherwise make any payments to Members in their
capacity as such, or redeem or otherwise acquire any of its
securities;
|
|
|
(d)
|
adopt
a plan of complete or partial liquidation, dissolution, merger
consolidation, restructuring, re-capitalization or other reorganization of
GRP (other than the Merger);
|
|
|
(e)
|
(i)
incur or assume any long-term or short-term debt or issue any debt
securities except for borrowings or issuances of letters of credit under
existing lines of credit in the ordinary course of business. (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other
person; (iii) make any loans, advances or capital contributions to or
investments in, any other person; (iv) pledge or otherwise encumber shares
of capital stock of GRP; or (v) mortgage or pledge any of its material
assets, tangible or intangible, or create or suffer to exist any material
Lien thereupon (other than tax Liens for taxes not yet
due);
|
|
|
(f)
|
except
as may be required by law, enter into, adopt, amend or terminate any
bonus, profit sharing, compensation, severance, termination, stock option,
stock appreciation right, restricted stock, performance unit stock
equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, severance or other employee benefit agreement,
trust, plan, fund or other arrangement for the benefit or welfare of any
director, officer or employee in any manner, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any plan and arrangement as in effect as
of the date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (f) shall not prevent GRP from (i) entering into employment
agreements or severance agreements with employees in the ordinary course
of business and consistent with past practice or (ii) increasing annual
compensation and/or providing for or amending bonus arrangements for
employees for fiscal 2008 in the ordinary course of year-end
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 2008 in amounts previously disclosed to MGOL (to the
extent that such compensation increases and new or amended bonus
arrangements do not result in a material increase in benefits or
compensation expense to GRP);
|
|
|
(g)
|
acquire,
sell, lease or dispose of any assets in any single transaction or series
of related transactions other than in the ordinary course of
business;
|
30
|
|
(h)
|
except
as may be required as a result of a change in law or in generally accepted
accounting principles, change any of the accounting principles or
practices used by it;
|
|
|
(i)
|
revalue
in any material respect any of its assets, including, without limitation,
writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of
business;
|
|
|
(j)
|
(i)
acquire (by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership, or other business organization or division
thereof or any equity interest therein, except as contemplated by this
Agreement and as disclosed herein; (ii) enter into any contract or
agreement other than in the ordinary course of business consistent with
past practice which would be material to GRP; (iii) authorize any new
capital expenditure or expenditures which, individually, is in excess of
$1,000 or, in the aggregate, are in excess of $5,000; provided, however
that none of the foregoing shall limit any capital expenditure required
pursuant to existing contracts;
|
|
|
(k)
|
make
any tax election or settle or compromise any income tax liability material
to GRP;
|
|
|
(l)
|
settle
or compromise any pending or threatened suit, action or claim which (i)
relates to the transactions contemplated hereby or (ii) the settlement or
compromise of which could have a Material Adverse Effect on
GRP;
|
|
|
(m)
|
commence
any material research and development project or terminate any material
research and development project that is currently ongoing, in either
case, except pursuant to the terms of existing contracts or except in the
ordinary course of business; or
|
|
|
(n)
|
take,
or agree in writing or otherwise to take, any of the actions described in
Sections 4.2(a) through 4.2(m) or any action which would make any of the
representations or warranties of GRP contained in this Agreement untrue or
incorrect.
|
Section
4.3. Preparation of
8-K. GRP and MGOL shall promptly prepare and file with the SEC a Current
Report on Form 8-K within four (4) days of the signing of this Agreement
disclosing the Merger, in addition to a Form 8-KA to be filed within four (4)
days of the Effective Time disclosing the completion of the Merger.
Section
4.4. Other Potential
Acquirers.
|
|
(a)
|
GRP
and MGOL, and their respective affiliates, officers, directors, employees,
representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore
with respect to any Third Party Acquisition, except to the extent that any
Third Party Acquisition would be completed post Merger with the Parties
herein.
|
31
Section
4.5. Meetings of
Stockholders and Members. GRP shall take all actions necessary, in
accordance with the respective General Corporation Law of its respective state
and/or country, and its respective articles of incorporation and bylaws, to duly
call, give notice of, convene and hold a meeting of its stockholders, or receive
a written majority consent of its respective stockholders, as promptly as
practicable, to consider and vote upon the adoption and approval of this
Agreement and the transactions contemplated hereby, if required by either NGCL
or the articles or bylaws of MGOL. The stockholder votes required for the
adoption and approval of the transactions contemplated by this Agreement, if
applicable, shall be the vote required by the NGCL and its charter and bylaws,
in the case of SUB CO and the General Corporation Law of its respective state,
and its articles of organization and organization agreement, in the case of GRP.
SUB CO and GRP will, through their respective Boards of Directors, recommend to
their respective stockholders and Members approval of such matters. It is not
anticipated that MGOL will require a stockholder meeting for approval of this
Agreement. It is contemplated that the Merger will be effectuate
pursuant to Section 92A.100 of the Nevada Revised Statutes, which specifically
provides that the approval of the Agreement by MGOL stockholders is not required
to consummate the transactions contemplated hereby.
Section
4.6. FINRA OTC:BB
Listing. The parties shall use all reasonable efforts to continue to
cause the MGOL Shares, subject to Rule 144, to be traded on the Over-the-Counter
Bulletin Board.
Section
4.7. Access to
Information.
|
|
(a)
|
Between
the date hereof and the Effective Time, MGOL will give GRP and its
authorized representatives, and GRP will give MGOL and its authorized
representatives, reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of itself and
its subsidiaries, will permit the other party to make such inspections as
such party may reasonably require and will cause its officers and those of
its subsidiaries to furnish the other party with such financial and
operating data and other information with respect to the business and
properties of itself and its subsidiaries as the other party may from time
to time reasonably request.
|
|
|
(b)
|
Between
the date hereof and the Effective Time, MGOL shall make available to GRP,
and GRP will make available to MGOL, within 25 business days after the end
of each quarter, quarterly statements prepared by such party (in
conformity with its past practices) as of the last day of the period then
ended.
|
32
|
|
(c)
|
Each
of the parties hereto will hold and will cause its consultants and
advisers to hold in confidence all documents and information furnished to
it in connection with the transactions contemplated by this
Agreement.
|
Section
4.8. Additional
Agreements, Reasonable Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, (i) cooperating in the
preparation and filing of the 8-K, any filings that may be required under the
HSR Act, and any amendments to any thereof; (ii) obtaining consents of all third
parties and Governmental Entities necessary, proper or advisable for the
consummation of the transactions contemplated by this Agreement; (iii)
contesting any legal proceeding relating to the Merger and (iv) the execution of
any additional instruments necessary to consummate the transactions contemplated
hereby. Subject to the terms and conditions of this Agreement, GRP, SUB CO and
MGOL agree to use all reasonable efforts to cause the Effective Time to occur as
soon as practicable after the GRP and SUB CO stockholder or Member votes with
respect to the Merger. In case at any time after the Effective Time any further
action is necessary to carry out the purposes of this Agreement, the proper
managing members, officers and directors of each party hereto shall take all
such necessary action.
Section
4.9. Employee
Benefits; Stock Option and Employee Purchase Plans. It is the parties’
present intent to provide after the Effective Time to employees of GRP employee
benefit plans (other than stock option or other plans involving the potential
issuance of securities of MGOL) which, in the aggregate, are not less favorable
than those currently provided by GRP. Notwithstanding the foregoing, nothing
contained herein shall be construed as requiring the parties to continue any
specific employee benefit plans.
Section
4.10. Public
Announcements. GRP and MGOL will consult with one another before issuing
any press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, including, without limitation, the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law or by obligations pursuant to any quotation requirements with FINRA
Over-the-Counter Bulletin Board (OTC:BB) as determined by GRP or
MGOL.
Section
4.11. Indemnification.
|
|
(a)
|
To
the extent, if any, not provided by an existing right under one of the
parties’ directors and officers liability insurance policies, from and
after the Effective Time, MGOL and SUB CO shall, to the fullest extent
permitted by applicable law, indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date hereof, or
who becomes prior to the Effective Time, a director, officer or employee
of the parties hereto or any subsidiary thereof (each an “Indemnified
Party” and, collectively, the ‘‘Indemnified Parties”) against all losses,
expenses (including reasonable attorneys’ fees and expenses), claims,
damages or liabilities or, subject to the proviso of the next succeeding
sentence, amounts paid in settlement arising out of actions or omissions
occurring at or prior to the Effective Time and whether asserted or
claimed prior to, at or after the Effective Time) that are in whole or in
part (i) based on, or arising out of the fact that such person is or was a
director, officer or employee of such party or a subsidiary of such party
or (ii) based on, arising out of or pertaining to the transactions
contemplated by this Agreement. In the event of any such loss expense,
claim, damage or liability (whether or not arising before the Effective
Time), (i) MGOL shall pay the reasonable fees and expenses of counsel
selected by the Indemnified Parties, which counsel shall be reasonably
satisfactory to MGOL, promptly after statements therefore are received and
otherwise advance to such Indemnified Party upon request reimbursement of
documented expenses reasonably incurred, in either case to the extent not
prohibited by the NGCL or its certificate of incorporation or bylaws, (ii)
MGOL will cooperate in the defense of any such matter and (iii) any
determination required to be made with respect to whether an Indemnified
Party’s conduct complies with the standards set forth under the NGCL and
MGOL’s certificate of incorporation or bylaws shall be made by independent
counsel mutually acceptable to MGOL and the Indemnified Party; provided,
however, that MGOL shall not be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld).
The Indemnified Parties as a group may retain only one law firm with
respect to each related matter except to the extent there is, in the
opinion of counsel to an Indemnified Party, under applicable standards of
professional conduct, conflict on any significant issue between positions
of any two or more Indemnified
Parties.
|
33
|
|
(b)
|
In
the event MGOL or any of its successors or assigns (i) consolidates with
or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties and assets to any
person, then and in either such case, proper provision shall be made so
that the successors and assigns of MGOL shall assume the obligations set
forth in this Section 4.11.
|
|
|
(c)
|
To
the fullest extent permitted by law, from and after the Effective Time,
all rights to indemnification now existing in favor of the employees,
agents, directors or officers of MGOL and GRP and their subsidiaries with
respect to their activities as such prior to the Effective Time, as
provided in MGOL’s and GRP’s certificate of incorporation or bylaws, or
articles of organization or operating agreement, in effect on the date
thereof or otherwise in effect on the date hereof, shall survive the
Merger and shall continue in full force and effect for a period of not
less than six years from the Effective
Time.
|
34
|
|
(d)
|
The
provisions of this Section 4.11 are intended to be for the benefit of, and
shall be enforceable by, each Indemnified Party, his or her heirs and his
or her representatives.
|
Section
4.12. Notification of
Certain Matters. The parties hereto shall give prompt notice to the other
parties, of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time, (ii) any material failure of such party to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder, (iii) any notice of, or other communication
relating to, a default or event which, with notice or lapse of time or both,
would become a default, received by such party or any of its subsidiaries
subsequent to the date of this Agreement and prior to the Effective Time, under
any contract or agreement material to the financial condition, properties,
businesses or results of operations of such party and its subsidiaries taken as
a whole to which such party or any of its subsidiaries is a party or is subject,
(iv) any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement, or (v) any material adverse change
in their respective financial condition, properties, businesses, results of
operations or prospects taken as a whole, other than changes resulting from
general economic conditions; provided, however, that the delivery of any notice
pursuant to this Section 4.12 shall not cure such breach or non-compliance or
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
ARTICLE
5
Conditions
to Consummation of the Merger
Section
5.1. Conditions to
Each Party’s Obligations to Effect the Merger. The respective obligations
of each party hereto to effect the Merger are subject to the satisfaction at or
prior to the Effective Time of the following conditions:
|
|
(a)
|
this
Agreement shall have been approved and adopted by the requisite vote of
the stockholders and Members of SUB CO and
GRP;
|
|
|
(b)
|
this
Agreement shall have been approved and adopted by the Board of Directors
of MGOL, SUB CO and managing members of
GRP;
|
|
|
(c)
|
no
statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or enforced by any United
States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the
Merger;
|
|
|
(d)
|
any
waiting period applicable to the Merger under the HSR Act shall have
terminated or expired, and any other governmental or regulatory notices or
approvals required with respect to the transactions contemplated hereby
shall have been either filed or received;
and
|
35
Section
5.2. Conditions to the
Obligations of MGOL and SUB CO. The obligation of MGOL and SUB CO to
effect the Merger is subject to the satisfaction at or prior to the Effective
Time of the following conditions:
|
|
(a)
|
the
representations of GRP contained in this Agreement or in any other
document delivered pursuant hereto shall be true and correct (except to
the extent that the breach thereof would not have a Material Adverse
Effect on GRP) at and as of the Effective Time with the same effect as if
made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case
such representations shall be true and correct as of such earlier date),
and at the Closing GRP shall have delivered to MGOL a certificate to that
effect;
|
|
|
(b)
|
each
of the covenants and obligations of GRP to be performed at or before the
Effective Time pursuant to the terms of this Agreement shall have been
duly performed in all material respects at or before the Effective Time
and at the Closing GRP shall have delivered to MGOL a certificate to that
effect;
|
|
|
(c)
|
GRP
shall have obtained the consent or approval of each person whose consent
or approval shall be required in order to permit the Merger as relates to
any obligation, right or interest of GRP under any loan or credit
agreement, note, mortgage, indenture, lease or other agreement or
instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of MGOL, individually or in
the aggregate, have a Material Adverse Effect on
GRP;
|
|
|
(d)
|
GRP
shall have obtained the cancellation of all options, warrants, or other
agreements relating to the right to receive securities of GRP, except as
such rights are set forth in the GRP schedules as attached
hereto;
|
|
|
(e)
|
GRP
shall have obtained, form all GRP Members, a signed Approval, Release, and
Acknowledgement of Accredited Investors
Status:
|
|
|
(f)
|
GRP
shall have agreed to comply with the post closing conditions (the “Post
Closing Conditions”) as set forth in the Post Closing Conditions
Schedule; and
|
|
|
(g)
|
there
shall have been no events, changes or effects with respect to GRP having
or which could reasonably be expected to have a Material Adverse Effect on
GRP.
|
36
Section
5.3. Conditions to the
Obligations of GRP. The respective obligations of GRP to effect the
Merger are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
|
|
(a)
|
the
representations of MGOL and SUB CO contained in this Agreement or in any
other document delivered pursuant hereto shall be true and correct (except
to the extent that the breach thereof would not have a Material Adverse
Effect on MGOL) at and as of the Effective Time with the same effect as if
made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case
such representations shall be true and correct as of such earlier date),
and at the Closing MGOL shall have delivered to GRP a certificate to that
effect;
|
|
|
(b)
|
each
of the covenants and obligations of MGOL to be performed at or before the
Effective Time pursuant to the terms of this Agreement shall have been
duly performed in all material respects at or before the Effective Time
and at the Closing MGOL shall have delivered to GRP a certificate to that
effect;
|
|
|
(c)
|
MGOL
shall have obtained a cancellation of 1,000,000 shares of restricted
common stock held in the name of Xxxxxxxxxx Law
Group;
|
|
|
(d)
|
MGOL
shall have obtained a written Termination Agreement from Xxxxxxx Xxxxxx,
President and CEO of MGOL, and a cancellation of 7,500,000 shares of
common stock held by Xx. Xxxxxx pursuant to the terms and conditions of
the Termination Agreement;
|
|
|
(e)
|
MGOL
shall have raised sufficient capital to operate MGOL, for a period
satisfactory to GPR, and
|
|
|
(f)
|
there
shall have been no events, changes or effects with respect to MGOL having
or which could reasonably be expected to have a Material Adverse Effect on
MGOL.
|
ARTICLE
6
Termination;
Amendment; Waiver
Section
6.1. Termination. This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time, whether before or after approval and adoption of this
Agreement by SUB CO’s or GRP’s stockholders:
|
|
(a)
|
by
mutual written consent of MGOL and
GRP;
|
|
|
(b)
|
by
GRP or MGOL if (i) any court of competent jurisdiction in the United
States or other United States Governmental Entity shall have issued a
final order, decree or ruling or taken any other final action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree,
ruling or other action is or shall have become non-appealable or (ii) the
Merger has not been consummated by August 15, 2009; provided, however,
that no party may terminate this Agreement pursuant to this clause (ii) if
such party’s failure to fulfill any of its obligations under this
Agreement shall have been the reason that the Effective Time shall not
have occurred on or before said
date;
|
37
|
|
(c)
|
by
MGOL if (i) there shall have been a breach of any representation or
warranty on the part of GRP set forth in this Agreement, or if any
representation or warranty of GRP shall have become untrue, in either case
such that the conditions set forth in Section 5.2(a) would be incapable of
being satisfied by August 1, 2009 (or as otherwise extended), (ii) there
shall have been a breach by GRP of any of their respective covenants or
agreements hereunder having a Material Adverse Effect on GRP or materially
adversely affecting (or materially delaying) the consummation of the
Merger, and GRP, as the case may be, has not cured such breach within 20
business days after notice by MGOL thereof, provided that MGOL has not
breached any of its obligations hereunder, (iii) GRP shall have failed to
acquire the cancellation of any options, warrants, except as set forth in
the disclosure schedule.
|
|
|
(d)
|
by
GRP if (i) there shall have been a breach of any representation or
warranty on the part of MGOL or SUB CO set forth in this Agreement, or if
any representation or warranty of MGOL or SUB CO shall have become untrue,
in either case such that the conditions set forth in Section 5.3(a) would
be incapable of being satisfied by August 1, 2009 (or as otherwise
extended), (ii) there shall have been a breach by MGOL or SUB CO of its
covenants or agreements hereunder having a Material Adverse Effect on MGOL
or materially adversely affecting (or materially delaying) the
consummation of the Merger, and MGOL, as the case may be, has not cured
such breach within twenty business days after notice by GRP thereof,
provided that GRP has not breached any of its obligations hereunder, (iii)
the MGOL Board shall have recommended to SUB CO’s stockholders a Superior
Proposal, (iv) the MGOL Board shall have withdrawn, modified or changed
its approval or recommendation of this Agreement or the Merger or shall
have failed to call, give notice of, convene or hold a stockholders’
meeting to vote upon the Merger, or shall have adopted any resolution to
effect any of the foregoing, (v) GRP shall have failed to obtain the
requisite vote of its Members or (vi) SUB CO shall have failed to obtain
the requisite vote of its
stockholders.
|
Section
6.2. Effect of
Termination. In the event of the termination and abandonment of this
Agreement pursuant to Section 6.1, this Agreement shall forthwith become void
and have no effect, without any liability on the part of any party hereto or its
Members, affiliates, directors, officers or stockholders, other than the
provisions of this Section 6.2 and Sections 4.7(c) and 6.3 hereof. Nothing
contained in this Section 6.2 shall relieve any party from liability for any
breach of this Agreement.
38
Section
6.3. Fees and
Expenses. Each party shall bear its own expenses in connection with this
Agreement and the transactions contemplated hereby.
Section
6.4. Amendment.
This Agreement may be amended by action taken by MGOL, SUB CO and GRP at any
time before or after approval of the Merger by the stockholders of SUB CO and
GRP (if required by applicable law) but, after any such approval, no amendment
shall be made which requires the approval of such stockholders under applicable
law without such approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
Section
6.5. Extension;
Waiver. At any time prior to the Effective Time, each party hereto may
(i) extend the time for the performance of any of the obligations or other acts
of any other party, (ii) waive any inaccuracies in the representations and
warranties of any other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (iii) waive compliance by any other
party with any of the agreements or conditions contained herein. Any agreement
on the part of any party hereto to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
ARTICLE
7
Miscellaneous
Section
7.1. Nonsurvival of
Representations and Warranties. The representations and warranties made
herein shall not survive beyond the Effective Time or a termination of this
Agreement, except to the extent that they may impact the Post Closing
Conditions. This Section 7.1 shall not limit any covenant or agreement of the
parties hereto which by its terms requires performance after the Effective
Time.
Section
7.2. Entire Agreement;
Assignment. This Agreement (a) constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
other prior agreements and understandings both written and oral, between the
parties with respect to the subject matter hereof and (b) shall not be assigned
by operation of law or otherwise.
Section
7.3. Validity.
If any provision of this Agreement, or the application thereof to any person or
circumstance, is held invalid or unenforceable, the remainder of this Agreement,
and the application of such provision to other persons or circumstances, shall
not be affected thereby, and to such end, the provisions of this Agreement are
agreed to be severable.
Section
7.4. Notices.
All notices, requests, claims, demands and other communications hereunder shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by facsimile or by registered or certified
mail (postage prepaid, return receipt requested), to each other party as
follows:
39
If to GRP
Gold Resource Partners,
LLC
Xxxx Xxxx
0000 Xxxxxxx Xxx
Xxxxxxxxxx, XX 00000
with
a copy to:
if to MGOL:
Xx. Xxxxx Xxxxxx
0000 Xxx Xx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
if to SUB CO:
Minatura Gold Sub Co
Xx. Xxx Xxx Xxxx
0000 Xxxxx Xxxxx Xxx
Xxx Xxxxx, XX 00000
with
a copy to:
Xxxxxxxxxx Law Group
Xxxxxx X. Xxxxxxxxxx, Esq.
Suite 690
000 Xxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx
00000
xxx@xxxxxxxxx.xxx
or
to such other address as the person to whom notice is given may have previously
furnished to the others in writing in the manner set forth above.
Section
7.5. Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada, without regard to the principles of conflicts
of law thereof.
Section
7.6. Descriptive
Headings. The descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
40
Section
7.7. Parties in
Interest. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and its successors and permitted assigns, and
except as provided in Sections 4.9 and 4.11, nothing in this Agreement, express
or implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
Section
7.8. Certain
Definitions. For the purposes of this Agreement, the term:
|
|
(a)
|
“affiliate”
means (except as otherwise provided in Sections 2.19 and 3.19) a person
that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, the first mentioned
person;
|
|
|
(b)
|
“business
day” means any day other than a day on which Nasdaq is
closed;
|
|
|
(c)
|
“capital
stock” means common stock, preferred stock, partnership interests, limited
liability company interests or other ownership interests entitling the
holder thereof to vote with respect to matters involving the issuer
thereof;
|
|
|
(d)
|
“knowledge’’
or “known’’ means, with respect to any matter in question, if an executive
officer of MGOL or its subsidiaries, or GRP, as the case may be, has
actual knowledge of such matter;
|
|
|
(e)
|
“person”
means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization or other legal entity;
and
|
|
|
(f)
|
“subsidiary”
or “subsidiaries” of MGOL, GRP or any other person, means any corporation,
partnership, limited liability company, association, trust, unincorporated
association or other legal entity of which MGOL, GRP or any such other
person, as the case may be (either alone or through or together with any
other subsidiary), owns, directly or indirectly, 50% or more of the
capital stock, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
|
Section
7.9. Personal
Liability. This Agreement shall not create or be deemed to create or
permit any personal liability or obligation on the part of any direct or
indirect stockholder of MGOL, GRP or any member, officer, director, employee,
agent, representative or investor of any party hereto.
Section
7.10. Specific
Performance. The parties hereby acknowledge and agree that the failure of
any party to perform its agreements and covenants hereunder, including its
failure to take all actions as are necessary on its part to the consummation of
the Merger, will cause irreparable injury to the other parties for which
damages, even if available, will not be an adequate remedy. Accordingly, each
party hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of such party’s obligations and to
the granting by any court of the remedy of specific performance of its
obligations hereunder; provided, however, that if a party hereto is entitled to
receive any payment or reimbursement of expenses pursuant to Sections 6.3, it
shall not be entitled to specific performance to compel the consummation of the
Merger.
41
Section
7.11. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
agreement.
Section
7.12. Conflict
Waiver. The parties to this Agreement acknowledge that Xxxxxxxxxx Law
Group has represented both parties to this Agreement prior to the introduction
of the parties, and continues to represent both parties with respect to the
terms and conditions of this Merger Transaction, and will continue to represent
MGOL with its securities matters post Merger. In addition Xxxxxxxxxx Law Group
has a substantial economic interest in the transaction, which has been fully
disclosed to both parties. Both parties acknowledge that a conflict does exist
in the representation of the parties by Xxxxxxxxxx Law Group, that both parties
have been provided the opportunity to obtain independent counsel or advise on
the terms and conditions of this Merger. All parties to this Merger, agree, upon
the execution hereof to waive such conflict.
In
Witness Whereof, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.
GRP:
Gold
Resource Partners, LLC
a
Nevada limited liability company
By: /S/ Xxxx Xxxx
Xxxx Xxxx, Managing Member
By:
/S/ H. Xxxxxxx Xxxxxxxx
H. Xxxxxxx Xxxxxxxx, Managing
Member
MGOL:
a
Nevada corporation
By: /S/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
President
SUB
CO:
Boatatopia
Sub Co
a
Nevada corporation
By: /S/ Xxx Xxx Xxxx
Xxx Xxx Xxxx
President
42
MGOL
DISCLOSURE SCHEDULE
|
Schedule
2.1 Organization
|
See
Amended Articles/Bylaws/Minutes
|
|
Schedule
2.2(c) Subsidiary
|
Boatatopia
Sub Co – 100% owned
|
|
Schedule
2.6 Consents & Approvals
|
None
Required – Board Approval of MGOL
|
|
Shareholder
approval of Boatatopia Sub Co
|
|
|
Schedule
2.7 No Default
|
None
Exist
|
|
Schedule
2.8 No Undisclosed Liability
|
None
Exist
|
|
Schedule
2.9 Litigation
|
None
Exist
|
|
Schedule
2.10 Compliance with Applicable Law
|
Not
Applicable
|
|
Schedule
2.11 Employee Benefit Plans
|
Section
2.11(a) Not Applicable – None Exist
|
|
Section
2.11(b) No Benefit Plans Exist
|
|
|
Section
2.11(c) No Options Exist
|
|
|
Section
2.11(d) No Agreements Exist
|
|
|
Schedule
2.12 Environmental Laws/ Regulations
|
Not
Applicable
|
|
Schedule
2.13 Tax Matters
|
None
Exist; however tax returns have not been filed.
|
|
Schedule
2.14 Title to Property
|
None
Exist
|
|
Schedule
2.15(c) Intellectual Property
|
None
Exist
|
|
Schedule
2.16 Insurance
|
None
Exist
|
|
Schedule
2.17 Vote Required
|
See
Boatatopia Sub Co Stockholder Meeting
|
|
Certificate
|
|
|
Directors
Approval of MGOL
|
|
|
Schedule
2.18 Tax Treatment
|
Not
Applicable
|
|
Schedule
2.19 Affiliates
|
Xxxxx
Xxxxxx
|
|
Schedule
2.20 Certain Business Practices
|
None
Exist
|
|
Schedule
2.21 Insider Interest
|
None
Exist
|
|
Schedule
2.22 Opinion of Financial Adviser
|
Waived
– None Exist
|
|
Schedule
2.23 Broker
|
None
Exist
|
|
Schedule
4.1 Conduct of Business
|
None
Exist
|
GRP
DISCLOSURE SCHEDULE
|
Schedule
3.2(b) Additional Outstanding
|
None
Exist
|
|
Schedule
3.2(c) Capital Stock Rights
|
None
Exist other than as in Articles
|
|
Schedule
3.2(e) Ownership Positions
|
Gold
Venture 2008, LLC – 60%
|
|
Camicol
S.A.
|
|
|
CGMWELL
JV, S.A.
|
|
|
GLOBEIT
Holdings, S.A.
|
|
|
Promocion
de Proyectos Mineros, S.A.
|
|
|
Advanced
Collective Strategies, LLC.
|
|
|
Minatura
Nevada Corp.
|
|
|
Schedule
3.2 (f) Contractual Rights to Acquire
|
Stopwell
Corp.
|
|
Schedule
3.6 Consents & Approvals
|
None
Required other than Stockholders
|
|
Schedule
3.7 No Default
|
Not
Applicable
|
|
Schedule
3.8 No Undisclosed Liability
|
None
Exist
|
|
Schedule
3.9 Litigation
|
None
Exist
|
|
Schedule
3.10 Compliance with Applicable Law
|
Not
Applicable
|
|
Schedule
3.11 Employee Benefit Plans
|
Section
3.11(c) No Options Exist
|
|
Section
3.11(e) No Agreements Exist
|
|
|
Schedule
3.12 Environmental Laws/ Regulations
|
Not
Applicable
|
|
Schedule
3.13 Tax Matters
|
None
Exist
|
|
Schedule
3.14 Title to Property
|
None
Exist
|
|
Schedule
3.15(b) Intellectual Property
|
None
Exist
|
|
Schedule
3.16 Insurance
|
None
Exist
|
|
Schedule
3.17 Vote Required
|
See
Stockholder Meeting Certificate
|
|
Schedule
3.18 Tax Treatment
|
Not
Applicable
|
|
Schedule
3.19 Affiliates
|
Xxxx
Xxxx
|
|
H.
Xxxxxxx Xxxxxxxx
|
|
|
Xxxxxxxx
X. Xxxxxx
|
|
|
Schedule
3.20 Certain Business Practices
|
None
Exist
|
|
Schedule
3.21 Insider Interest
|
None
Exist
|
|
Schedule
3.22 Opinion of Financial Adviser
|
Waived
– None Exist
|
|
Schedule
2.23 Broker
|
None
Exist
|
|
Schedule
4.2 Conduct of Business
|
GRP
is anticipated to continue with the acquisition, contribution, and/or
merger as relates to all Colombian mineral properties and assets,
including but not limited to all post closing acquisitions, contributions,
or mergers, as set forth in the Post Closing Conditions
Schedule.
|
POST
CLOSING CONDITIONS SCHEDULE
|
1.
|
The
transfer by the Members/Shareholders of Camicol SA of all rights and
incidents of ownership of Camicol SA to
GRP;
|
|
2.
|
The
transfer by the Members/Shareholders of Globiet of all rights and
incidents of ownership of Globiet to
GRP;
|
|
3.
|
The
transfer by the Members/Shareholders of Minatura Colombia of all rights
and incidents of ownership of Minatura Colombia to
GRP;
|
|
4.
|
The
transfer by the Members/Shareholders of PPM of all rights and incidents of
ownership of PPM to GRP.
|
|
5.
|
The
transfer by the Members/Shareholders of Spotwell corporation of all rights
and incidents of ownership of Spotwell to
GRP.
|
|
6.
|
The
transfer of ownership of all rights and incidents of ownership of any
related Colombian entities wherein such incidents of ownership are related
to GRP and or any of its subsidiaries, or intended
subsidiaries.
|
