ACQUISITION AGREEMENT AMONG PROLINK HOLDINGS CORP. as Buyer ELUMINA IBERICA, S.A., ELUMINA IBERICA UK LIMITED, GP ADS, S.L.. and GP ADS LTD as the Companies and KEVIN CLARKE and MARK SMART as the Shareholders
Exhibit 10.01
AMONG
PROLINK HOLDINGS CORP.
as Buyer
as Buyer
ELUMINA IBERICA, S.A.,
ELUMINA IBERICA UK LIMITED,
GP ADS, S.L..
and
GP ADS LTD
as the Companies
ELUMINA IBERICA UK LIMITED,
GP ADS, S.L..
and
GP ADS LTD
as the Companies
and
XXXXX XXXXXX
and
XXXX XXXXX
as the Shareholders
and
XXXX XXXXX
as the Shareholders
THIS ACQUISITION AGREEMENT (this “Agreement”) is executed and delivered as of September 14,
2007, among PROLINK HOLDINGS CORP., a Delaware corporation (“Buyer”), ELUMINA IBERICA, S.A., a
sociedad anónima organized under the laws of Spain (“Elumina Spain”), ELUMINA IBERICA UK LIMITED, a
limited company organized under the laws of the United Kingdom (“Elumina UK”), GP ADS, S.L., a
sociedad de responsabilidad limitada organized under the laws of Spain (“GP Ads”) and GP ADS LTD, a
limited company organized under the laws of the United Kingdom (“GP UK” and collectively with
Elumina Spain, Elumina UK and GP Ads, the “Companies”), and XXXXX XXXXXX and XXXX XXXXX (each a
“Shareholder” and collectively, the “Shareholders”), being the sole shareholders and owners of the
Companies.
A. Elumina Spain is the franchise owner and distributor for Europe, including the United
Kingdom, and the Middle East, of the ProLink GPS System, Elumina UK is the subsidiary of Elumina
Spain, GP Ads is the advertising arm of Elumina Spain and Elumina UK with the specific goal of
establishing a network to promote the advertising opportunities available on the ProLink GPS System
in the same regions and GP UK is a subsidiary of GP Ads (together, the “Businesses”).
B. The Shareholders in the aggregate own (i) all of the options and warrants to acquire shares
of capital stock or other equity interests of the Companies and (ii) all of the issued and
outstanding shares of capital stock and other ownership interests of the Companies (collectively,
the “Securities”).
C. Buyer desires to purchase and acquire all of the Securities from the Shareholders, and the
Shareholders desire to sell all of the Securities to Buyer in exchange for a number of Buyer
shares, as described herein.
D. The Board of Directors of Buyer deems it advisable and in the best interest of its
stockholders to enter into this Agreement and to consummate the transactions contemplated hereby on
the terms and subject to the conditions provided for in this Agreement.
ARTICLE 1
DEFINITIONS
1.1 Certain Defined Terms. Capitalized terms shall have the meanings assigned to them
in Exhibit A.
2
ARTICLE 2
SALE AND PURCHASE OF THE SECURITIES
2.1 Transfer of the Securities. Upon the terms and subject to the conditions of this
Agreement, at the Closing (as defined in Section 2.6), Buyer agrees to purchase and accept delivery
from each Shareholder, and each Shareholder agrees to sell, assign, transfer and deliver to Buyer,
all of the Securities free and clear of all Encumbrances.
2.2 Purchase Price. Subject to Sections 2.4 and 2.5, the aggregate purchase price
for the Securities being purchased by Buyer pursuant to this Agreement shall be an amount of up to
37,000,000 shares of common stock of Buyer (the “Purchase Price”), payable as follows:
2.2.1 28,000,000 shares of common stock of Buyer (the “Elumina Shares”), to be allocated as
set forth on Exhibit B, for the Securities to be delivered at Closing;
2.2.2 8,000,000 shares of common stock of Buyer (the “Net Profits Shares”) to the Escrow Agent
(as defined in Section 6.1.6), to be delivered and held pursuant to the terms and provisions of
Section 2.4;
2.2.3 2,000,000 shares of common stock of Buyer (the “Holdback Shares” and collectively with
the Elumina Shares, the Net Profits Shares and the Earn-Out Shares, the “Shares”) to be delivered
to the Escrow Agent at Closing.
2.3 Apart from the purchase price, Buyer obliges to rise 1,000,000 PROLINK’s shares for the
benefit of Elumina’s employees to be distributed when and in the way the Shareholders may decide to
its sole discretion upon completion of any legal duty or requirement
2.4 Ern-out bonus.- 5,000,000 shares of common stock of Buyer (the “Earn-Out Shares”) to be
delivered in accordance with the terms and provisions of Section 2.5; and
2.5 Holdback.
2.5.1 Escrow Agent shall retain the Holdback Shares for a period of 12 months after the
Closing (the “Holdback Period”) as security for the Companies’ and each Shareholder’s
representations, warranties and indemnification obligations to Buyer under this Agreement. If
Buyer determines that either Company or any Shareholder has breached a representation or warranty
or that Buyer is entitled to indemnification under this Agreement, then Buyer may instruct Escrow
Agent to deduct an equitable amount of shares (based on the Fair Market Value of the shares as
defined below) from the Holdback Shares for such purposes. Buyer shall not be entitled to make a
claim for any Holdback Shares until the aggregate amount of all claims for losses related to the
Companies’ and each Shareholder’s representations, warranties and indemnification obligations to
Buyer under this Agreement exceeds Twenty Five Thousand Dollars ($25,000) (the “Basket”). In the
event that the aggregate amount of such losses exceeds the Basket, then Buyer shall be entitled to
recover Holdback Shares to satisfy the amount of all such losses, including the Basket. The Escrow
Agreement shall govern the form of the notice and the procedures for resolving any dispute
regarding the amount of the Holdback Shares that Buyer proposes to retain. For the purposes of
this Agreement, the “Fair Market
3
Value” per Share shall be deemed to be the average of the closing trading prices of Buyer’s
common stock on the principal securities exchange, as determined by Buyer’s Board of Directors
acting reasonably, on which such common stock may at the time be listed, or if there have been no
sales on any such exchange on any such day, the average of the bid and ask prices at the end of
such day, or if Buyer’s common stock is not listed, the average of the high and low prices on such
day on an over-the-counter market as reported by NASDAQ or any other recognized quotation agency,
in each such case averaged over the period of 20 consecutive trading days prior to the two trading
days preceding the date as of which “Fair Market Value” is being determined; provided, however,
that in no event shall the price per Share at any given time be less than the closing price per
Share on the date of the Closing.
2.5.2 The amount of the Holdback Shares allocated to each Shareholder shall be as set forth on
Exhibit B (“Shareholder Holdback Shares”).
2.5.3 On or before the last day of the Holdback Period, Buyer shall instruct Escrow Agent to
either issue the Shareholder Holdback Shares to the Shareholders or notify each Shareholder of the
amount of shares that Buyer believes it is entitled to retain from the Holdback Shares. The Escrow
Agreement shall govern the form of the notice and the procedures for resolving any dispute
regarding the amount of the Holdback Shares that Buyer proposes to retain.
2.5.4 Buyer acknowledges and agrees that the Holdback Shares shall act as a cap on the
Companies’ and the Shareholders’ indemnification obligations and their liability for a breach of
their representations and warranties under this Agreement, provided, however, that the Holdback
Shares shall not act as a cap on any liability arising from (a) the adjustment provision of Section
2.4, (b) the representations and warranties in Sections 3.1, 3.2, 3.27, 4.1, 4.2 or 4.4, (c) any
liability with respect to any dispute or claim involving Xxx Xxxxxx, (d) any liability with respect
to any dispute or claim involving Elumina France with respect to its claim of ownership in the
Companies, (e) any liability with respect to any dispute or claim involving Xxxxx Xxxxxx’x
undertaking with the Secretary of State in 2002 or (f) fraud.
2.6 Net Profits Adjustment.
2.6.1 Escrow Agent shall retain the Net Profits Shares, pursuant to the Net Profits Escrow
Agreement (as defined in Section 6.1.6) as security for the adjustment provision set forth in this
Section 2.4. On the 30th day after Buyer’s audited financial statements for the 2008 fiscal year
are completed (the “Adjustment Date”), the Buyer shall deliver to the Shareholders a statement
showing the after-tax net profit (as determined according to Generally Accepted Accounting
Principles (“GAAP”)) derived from the Companies from January 1, 2008 through December 31, 2008 (the
“Interim Period”).
2.6.2 On the Adjustment Date, the Shareholders shall forfeit (a) one hundred percent (100%) of
the Net Profits Shares if the after-tax net profit derived from the Companies during the Interim
Period equals an amount less than $4,500,000, (b) fifty percent (50%) of the Net Profits Shares if
the after-tax net profit derived from the Companies during the Interim Period equals an amount
between $4,500,000 and $5,499,999.99, (c) twenty-five percent (25%) of the Net Profits Shares if
the after-tax net profit derived from the Companies during the Interim
4
Period equals an amount between $5,500,000 and $6,499,999.99, and (d) none of the Net Profits
Shares if the after-tax net profit derived from the Companies during the Interim Period equals an
amount of $6,500,000 or greater. If the Shareholders dispute the amount of Net Profits Shares to
be forfeited, if any, they shall have the right, upon written notice to the Buyer within 30 days of
the delivery of the profits statement, to inspect the books and records of the Companies and the
calculation of such shortfall. If, after such review, Shareholders continue to dispute the amount
of the shortfall, the Shareholders shall notify Buyer in writing of the amount to which it believes
they should pay. Buyer and the Shareholders shall work in good faith to resolve the dispute. If
they are unable to do so within 30 days of Shareholders’ written notice to Buyer, then the parties
shall follow the dispute resolution procedures set forth in the Net Profits Escrow Agreement. The
Net Profits Escrow Agreement shall govern the form of the notice and the procedures for resolving
any dispute regarding the amount of the Net Profits Shares.
2.4.3 Notwithstanding anything to the contrary set forth herein, any adjustment pursuant to
this Section 2.4 by forfeiture of the Net Profits Shares shall not occur following a Change in
Control prior to December 31, 2008. “Change in Control” as used herein shall mean (a) the
transfer, directly or indirectly, of securities of Buyer representing seventy percent (51%) or more
of the total voting power represented by Buyer’s then outstanding voting securities pursuant to a
transaction or a series of related transactions, (b) a merger or consolidation of Buyer whether or
not approved by the Board of Directors, other than a merger or consolidation which would result in
the voting securities of Buyer outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving
entity or the parent of such corporation) at least seventy percent (51%) of the total voting power
represented by the voting securities of Buyer or such surviving entity or parent of such
corporation outstanding immediately after such merger or consolidation, or (c) the sale or
disposition by Buyer of all or substantially all of Buyer’s assets in one transaction or a series
of related transactions.
2.7 Earn-Out Shares.
2.5.1 The Shareholders shall be entitled to receive an additional 5,000,000 shares of common
stock of Buyer (the “Earn-Out Shares”) if (i) during the period from January 1, 2009 to December
31, 2009 (the “Earn-Out Period”), net earnings before taxes of Buyer on a consolidated basis are at
least equal to $10,000,000, (ii) during the Earn-Out Period, the gross revenue received for
advertising by Buyer on a consolidated basis is at least equal to $15,000,000 (each of (i) and
(ii), an “Earn-Out Requirement”), or (iii) a Change in Control occurs on or after May 1, 2008 but
prior to December 31, 2009.
2.5.2 Within 90 days after the last business day of the Earn-Out Period, Buyer shall deliver
to the Shareholders a worksheet (the “Earn-Out Worksheet”) prepared by Buyer’s independent public
accountants or Buyer’s Chief Financial Officer (or his designee), setting forth Buyer’s
determination of net earnings before taxes of Buyer on a consolidated basis and the gross revenue
received for advertising by Buyer on a consolidated basis, accompanied by the Earn-Out Shares if an
Earn-Out Requirement has been met based on Buyer’s calculations. The Shareholders shall have the
right, once and at their expense, at reasonable times and upon
reasonable notice, to have one representative (the “Sellers’ Representative”) examine, the
books and records of Buyer to determine whether the Earn-Out Worksheet is accurate.
5
2.5.3 In the event that the Shareholders dispute any amounts reflected on the Earn-Out
Worksheet, Sellers’ Representative shall notify Buyer in writing, within 20 days after the delivery
of the Earn-Out Worksheet (the “Notice Period”), setting forth the amount, nature and basis of the
dispute. Within the following 10 days, the parties shall use their reasonable best efforts to
resolve in good faith such dispute. Upon their failure to do so, Sellers’ Representative and Buyer
shall within 10 days from the end of such 10 day period jointly engage an independent accountant
(the “Earn-Out Accountants”). The Earn-Out Accountants shall be engaged jointly by Buyer and
Sellers’ Representative to decide the dispute with respect to the Earn-Out Worksheet within 30 days
from its appointment; such decision to be communicated to both parties in writing. The decision of
the Earn-Out Accountants shall be final and binding upon the parties and accordingly a declaratory
judgment by a court of competent jurisdiction may be entered in accordance therewith. The fees and
expenses of such accounting firm shall be borne one-half by Buyer and one-half by Sellers’
Representative. If so determined by the Earn-Out Accountants, Buyer shall deliver the Earn-Out
Shares to the Shareholders within five business days of the Earn-Out Accountants final and binding
decision.
2.5.4 Notwithstanding anything to the contrary set forth herein, in the event that a Change in
Control occurs prior to May 1, 2008, any and all rights of the Shareholders with respect to receipt
of the Earn-Out Shares shall terminate and the Shareholders shall cease to have any claim to the
Earn-Out Shares pursuant to this Agreement.
2.8 Closing. The closing of the sale and purchase of the Securities (the “Closing”)
shall take place at a time and on a date to be specified by the parties (the date upon which the
Closing actually takes place being referred to herein as the “Closing Date”) as soon as possible
after the satisfaction or waiver of the conditions to close set forth in Article 9 and Article 10,
but, except as otherwise provided herein, no later than November 30, 2007. The Closing will be
held at the offices of the Notary of the Buyer (the “Notary”), unless another place is agreed to in
writing by the parties, and this Agreement [together with all Exhibits and Schedules] will be
incorporated in the Public Deed of Purchase and Sale. At the Closing, the parties to this Agreement
will do those things set out in the contract and grant those documents and agreements that
integrate the whole transaction, which will be deemed to happen simultaneously in a single act
(unidad de acto). The Closing shall be deemed to occur at 12:01 a.m. on the Closing Date. The
Notary’s fees will be shared equally by the Shareholders and Buyer.
2.9 Tax. The parties to this Agreement declare that the sale and purchase of the
securities hereunder constitutes a “special non monetary contribution” or “aportación no dineraria
especial” under article 94 of the Spanish Law on the Corporate Income Tax (approved by Royal
Decree-Legislative 4/2004, of March 5th). Considering the above, the parties opt,
hereby, for the application to the present “special non monetary contribution” of the special tax
regime regulated in Chapter VIII of Title VII of the Spanish Law on the Corporate Income Tax
6
The following representations and warranties shall apply to the Companies and the Subsidiaries
(as hereafter defined) as of the date of this Agreement and to each Shareholder as of the Closing
Date. The Companies represent and warrant to Buyer that the statements contained in this Article
3, except as set forth in each of the Disclosure Schedules, are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement throughout Article 3.
The Shareholders represent and warrant to Buyer that the statements contained in Article 3 and
Article 4, except as set forth in each of the Disclosure Schedules, are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing Date (as though made
then and as though the Closing Date were substituted for the date of this Agreement throughout
Article 3 and Article 4). For purposes of this Agreement, all representations and warranties of
the Companies or with respect to the Businesses shall be deemed to include the business of Elumina
UK as conducted prior to the formation of Elumina UK. The mere listing (or inclusion of a copy) of
a document or other item shall not be deemed adequate to disclose an exception to a representation
or warranty made in this Agreement unless (a) the representation or warranty has to do with the
existence of the document or other item itself or (b) the Disclosure Schedule identifies the
exception with particularity (such as with a cross-reference to a section in a disclosed agreement)
and summarizes the relevant facts in reasonable detail.
Wherever a representation or warranty in this Agreement is qualified as having been made “to
the best of the Companies’ or the Shareholders’ Knowledge,” such phrase shall mean the knowledge of
any officer or director of either Elumina Spain, Elumina UK, GP UK or GP Ads or one or both
Shareholders, after reasonable inquiry.
2.10 Due Organization and Qualification of the Companies. The Companies are duly
organized, validly existing and in good standing under the laws of their jurisdiction of
organization, and have the power and lawful authority under applicable Laws to own, lease and
operate their respective assets and properties and to carry on the Businesses. Schedule
3.l separately sets forth the names of all of the countries where the Companies transact
business. Except as set forth on Schedule 3.1, the Companies do not file any franchise,
income or other tax returns in any other jurisdiction based upon the ownership or use of property
therein or the derivation of income therefrom. The Companies do not own or lease property in any
country other than the countries set forth on Schedule 3.1. Except as set forth on
Schedule 3.1, the Companies do not have and have not conducted their respective Businesses
by or through any division or Affiliate or under any fictitious, assumed or other name other than
the names of the Companies.
2.11 Capitalization.
2.11.1 Authorized Capital Stock of Elumina Spain. Elumina Spain is authorized to
issue 63,000 shares of common stock, par value 1 Euro per share (the “Elumina Spain Common Stock”),
all of which are issued and outstanding. No other class of capital stock of Elumina Spain is
authorized or outstanding. All of the capital stock, options, warrants and/or
7
any other securities convertible or exercisable into capital stock (the “Convertible
Securities”) of Elumina Spain are held of record and beneficially owned by the Shareholders.
Immediately following the Closing, Buyer will own all of the outstanding equity of Elumina Spain.
Except as set forth on Schedule 3.2.1, all of the issued and outstanding shares of capital
stock of Elumina Spain have been duly authorized, are validly issued, fully paid, nonassessable and
have not been issued in violation of any applicable Laws. As of the Closing, all outstanding
Securities, including the Convertible Securities, of Elumina Spain shall have been purchased by
Buyer.
2.11.2 Authorized Capital Stock of Elumina UK. Elumina UK is authorized to issue 100
shares of common stock, par value £1 per share (the “Elumina UK Common Stock”), all of which are
issued and outstanding. No other class of capital stock of Elumina UK is authorized or
outstanding. All of the Convertible Securities of Elumina UK are held of record and beneficially
by the Shareholders. Immediately following the Closing, Buyer will own all of the outstanding
equity of Elumina UK. Except as set forth on Schedule 3.2.2, all of the issued and
outstanding shares of capital stock of Elumina UK have been duly authorized, are validly issued,
fully paid, nonassessable and have not been issued in violation of any applicable Laws. As of the
Closing, all outstanding Securities, including the Convertible Securities, of Elumina UK shall have
been purchased by Buyer.
2.11.3 Authorized Capital Stock of GP Ads. GP Ads is authorized to issue 501
participaciones sociales, par value 6.01 Euros per share (the “GP Ads Common Stock”). No other
class of capital stock of GP Ads is authorized or outstanding. All of the capital stock of GP Ads
is held of record and beneficially owned by the Shareholders. Immediately following the Closing,
Buyer will own all of the outstanding equity of GP Ads. All of the issued and outstanding shares
of capital stock of GP Ads have been duly authorized, are validly issued, fully paid, nonassessable
and have not been issued in violation of any applicable Laws. As of the Closing, all outstanding
Securities, including the Convertible Securities, of GP Ads shall have been purchased by Buyer.
2.11.4 Authorized Capital Stock of GP UK. GP UK is authorized to issue 2 shares of
common stock, par value £1 per share (the “GP UK Common Stock”), all of which are issued and
outstanding. No other class of capital stock of GP UK is authorized or outstanding. All of the
Convertible Securities of GP UK are held of record and beneficially by the Shareholders.
Immediately following the Closing, Buyer will own all of the outstanding equity of GP UK. Except
as set forth on Schedule 3.2.4, all of the issued and outstanding shares of capital stock
of GP UK have been duly authorized, are validly issued, fully paid, nonassessable and have not been
issued in violation of any applicable Laws. As of the Closing, all outstanding Securities,
including the Convertible Securities, of GP UK shall have been purchased by Buyer.
2.11.5 Subsidiaries. Except as set forth in Schedule 3.2.5, the Companies have
no subsidiaries or other equity interest in any other entity or any interest in any joint venture
(such subsidiaries or interests referred to herein individually as a “Subsidiary” and collectively,
as “Subsidiaries”). Each Subsidiary of the Companies is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation. Each
Subsidiary of the Companies has all requisite corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and used by it. The
Companies have delivered to Buyer true, complete and correct copies of the
8
organizational documents of each Subsidiary, each as amended to date. No Subsidiary is in
default under or in violation of any provision of its organizational documents. All of the issued
and outstanding shares of capital stock of, or other equity interests in, each Subsidiary of the
Companies are: (a) duly authorized, validly issued, fully paid and non-assessable; (b) owned by
the Companies, as applicable, free and clear of all liens, claims, security interests, pledges and
encumbrances of any kind or nature whatsoever; and (c) free of any restriction, including, without
limitation, any restriction which prevents the payment of dividends, or which otherwise restricts
the right to vote, sell or otherwise dispose of such capital stock or other ownership interest.
There are no outstanding or authorized options, warrants, rights, agreements or commitments to
which the Companies or its Subsidiaries is a party or which are binding on any of them providing
for the issuance, disposition or acquisition of any capital stock of any Subsidiary. There are no
voting trusts, proxies or other agreements or understandings with respect to the voting of any
capital stock of any Subsidiary.
2.12 Stockholder Agreements. There are no voting trusts or other agreements or
understandings with respect to the voting of the Securities to which the Shareholders or the
Companies are a party or bound.
2.13 Organizational Documents. Copies of each Company’s organizational documents and
all amendments thereto have been delivered to Buyer and are true, correct and complete. The minute
books of the Companies contain true and complete records of all meetings and consents in lieu of
meetings of the Board of Directors or similar governing bodies (and any committees thereof) and of
the stockholders of the Companies since their respective dates of incorporation and such minute
books accurately reflect all transactions referred to in such minutes and consents in lieu of
meeting. The stock books of each of the Companies are true and complete in all material respects.
Each of the Companies has complied and continues to comply with applicable legislation on keeping
the commercial books and drawing up and filing the annual accounts. These books are up to date and
are kept in the offices of each Company, and each of the Companies holds the papers supporting the
entries in its books. The current articles of association/by-laws of each of the Companies are
those attached as Schedule 3.4. No resolution has been taken to change any of the above
mentioned articles of association/by-laws. No general or special power of attorney (poderes
generales o especiales de representación) has been given by any Company, other than those listed in
Schedule 3.4. No dividend which remains outstanding has been approved by any Company.
2.14 Financial Statements.
2.14.1 Attached to Schedule 3.5.1 are the audited consolidated financial statements of
each of the Companies and the Subsidiaries for the period ending December 31, 2004, the audited
consolidated financial statements of each of the Companies for the period ending December 31, 2005,
the audited consolidated financial statements of each of the Companies for the period ending
December 31, 2006, and the financial statements of each of the Companies for the period ending June
30, 2007 (the “Interim Financial Statements”), including the balance sheets, statements of income
and retained earnings and statements of cash flows for the periods then ending, and including
related notes, if any (collectively, the “Financial Statements”). The Financial Statements are
complete and correct in all respects and fairly present the financial condition of each of the
Companies and its Subsidiaries as of the dates
thereof and the results of operations and cash flow of each of the Companies and its
Subsidiaries for the periods indicated.
9
2.14.2 Schedule 3.5.2 fairly and accurately summarizes the accounting principles used
by the Companies in the preparation of the Financial Statements, including those principles and
policies related to sales and revenue recognition, Accounts Receivable, bad debt reserves,
depreciation, capital expenses and Liabilities.
2.15 No Material Adverse Effect. Since June 30, 2007 (the “Financial Statement
Date”), there has not been any change or effect that, individually or in the aggregate, has been or
could be reasonably expected to have a Material Adverse Effect on the Businesses, assets (including
intangible assets), condition (financial or otherwise) or results of operations of either of the
Companies or their Subsidiaries, whether or not covered by insurance.
2.16 Tax Matters.
2.16.1 Except as set forth in Schedule 3.27 the Companies and the Subsidiaries have timely
filed all Tax Returns that the Companies and the Subsidiaries are required to file and have paid
all Taxes due and payable on or before the Closing Date. No penalties or other charges are, or
will become, due with respect to the late filing of any such Tax Return. The Companies and the
Subsidiaries have made all payments of estimated Taxes required to be made under any provision of
state, local or foreign Law. The unpaid Taxes of each of the Companies and Subsidiaries do not
exceed the reserve for Taxes (rather than any reserve for deferred Taxes to reflect book/tax timing
differences) set forth on the face of their respective audited consolidated financial statements
for the period ending December 31, 2006 as adjusted through the Closing Date in accordance with
past custom and practice. Since December 31, 2006, none of the Companies or Subsidiaries has
incurred any liability for Taxes arising from extraordinary gains or losses outside the ordinary
course of business in accordance with past custom and practice. None of the Companies or
Subsidiaries is the subject of any extension or waiver of the limitations period for assessment or
collection of any Taxes, which period (after giving effect to such extension or waiver) has not yet
expired.
2.16.2 Complete copies of any Tax Returns filed by the Companies and the Subsidiaries for the
years ended December 31, 2003, 2004, 2005, and 2006 have been delivered to Buyer. Prior to the
date hereof, the Companies have provided to Buyer copies of all reports and other written
assertions of deficiencies or other Liabilities for Taxes of the Companies and the Subsidiaries
with respect to past periods.
2.16.3 The Companies and the Subsidiaries have complied with all applicable Laws, rules and
regulations relating to the withholding of Taxes and have timely collected or withheld and paid
over to the proper governmental or regulatory body all amounts required to be so collected or
withheld and paid over for all periods up to (but not including) the Closing Date under all
applicable Laws to the extent such amounts are required to be paid before such date.
2.16.4 The Companies and the Subsidiaries have not received any Tax Ruling or entered into a
Tax Closing Agreement with any taxing authority that would have a continuing effect after the
Closing Date.
10
2.16.5 There are no Actions, suits, proceedings, investigations, audits, claims or assessments
presently pending or, to the best of the Companies’ or the Shareholders’ Knowledge, proposed with
regard to any Taxes that relate to the Companies or any Subsidiary. No issue has arisen in any
examination of the Companies and the Subsidiaries by any taxing authority that if raised with
respect to any other period not so examined would result in a deficiency for any other period not
so examined, if upheld. There is no unresolved claim by a taxing authority in any jurisdiction
where the Companies and the Subsidiaries do not file Tax Returns.
2.16.6 There are no liens for Taxes (other than for Taxes not yet due and payable) upon the
assets of the Companies and the Subsidiaries. The Companies and the Subsidiaries are not parties
to or bound by any Tax allocation or sharing agreement. The Companies and the Subsidiaries do not
have any liability for Taxes of any Person as a transferee or successor, by contract or otherwise.
2.17 Compliance with Laws; Permits.
2.17.1 The Companies and the Subsidiaries have complied with all federal, state, local and
foreign laws, ordinances, regulations, orders, judgments, injunctions, awards or decrees applicable
to them or their respective Businesses (collectively, “Laws,” and individually, a “Law”). The
Companies and the Subsidiaries have not made any illegal payment to officers or employees of any
governmental or regulatory body, or made any payment to customers for the sharing of fees or to
customers or suppliers for rebating of charges, or engaged in any other reciprocal practices that
violate any Laws, or made any illegal consideration to purchasing agents or other representatives
of customers in respect of sales made or to be made by the Companies and the Subsidiaries. To the
Companies’ or the Shareholders’ Knowledge, there are no facts that (with or without notice or lapse
of time, or both) could result in the Companies or any Subsidiary being in violation of any Law.
2.17.2 Except as set forth on Schedule 3.8.2, no license, permit, order or approval of
any federal, state, local or foreign governmental or regulatory body (collectively the “Permits”)
is necessary for the conduct of the Businesses. All Permits of the Companies and the Subsidiaries
are set forth on Schedule 3.8.2 and are in full force and effect, to the best of the
Companies’ or the Shareholders’ Knowledge, there are no violations in respect of any Permit and no
proceeding is pending or, to the Knowledge of the Companies or the Shareholders, threatened, to
revoke or limit any Permit and all such Permits shall continue in full force and effect following
the consummation of the transactions contemplated by this Agreement.
2.17.3 The Companies and the Subsidiaries are currently conducting the Businesses in
accordance with applicable Laws governing privacy, security and confidentiality, and have conducted
the Businesses in compliance with such Laws since the same first became applicable to them. In
particular, the Companies and the Subsidiaries have complied and continue to comply with all
applicable administrative Laws on personal data protection and the Shareholders have no outstanding
notice of any inspection or claim in respect of non-compliance with such regulations.
11
2.17.4 The Companies and the Subsidiaries have at all times complied and are currently in
compliance with any applicable privacy policies the Companies and the Subsidiaries have
established. Attached as Schedule 3.8.4 are the current forms of the Companies’ privacy
policies, and any former versions. The current privacy policies of the Companies and the
Subsidiaries are in compliance with all applicable Laws.
2.17.5 The Companies and the Subsidiaries are in compliance with all applicable Environmental
Laws and there are no written claims pursuant to any Environmental Law pending or, to the best of
the Companies’ or the Shareholders’ Knowledge, threatened, against the Companies or any Subsidiary.
There have been no releases by the Companies or any Subsidiary of any Hazardous Materials into the
environment at any facility formerly or currently operated by the Companies and the Subsidiaries.
“Environmental Laws” means any and all past, present and future Law, statute, treaty, directive,
decision, judgment, award, regulation, decree, rule, order, direction, Consent, authorization,
permit, or similar requirement, approval or standard of relevant jurisdiction(s) concerning
environmental, health or safety matters (including the clean-up standards and practices for
Hazardous Materials) in buildings, equipment, soil, sub-surface strata, air, surface water, or
ground water. “Hazardous Materials” means any and all dangerous substances, hazardous substances,
toxic substances, radioactive substances, hazardous wastes, special wastes, controlled wastes,
oils, petroleum, petroleum products, by-products or breakdown products, hazardous chemicals and any
other materials which may be harmful to human health or the environment and which are or may be at
any time prior to the Closing Date regulated or controlled under Environmental Laws applicable to
the Companies and the Subsidiaries.
2.18 No Breach. The execution, delivery and performance of this Agreement by the
Companies has been duly authorized and approved by all requisite action on the part of their board
of directors (or similar governing body) and the Shareholders. This Agreement constitutes the
valid and binding obligation of the Companies and is enforceable against the Companies in
accordance with its terms, except as may be limited by bankruptcy, moratorium, reorganization,
insolvency or other similar Laws now or hereafter in effect generally affecting the enforcement of
creditors’ rights. The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not violate, conflict with or otherwise result in the
breach or violation of any of the terms and conditions of, result in a modification of the effect
of or constitute (or with notice or lapse of time or both would constitute) a default under (a) the
organizational documents of either Company; (b) any contract or agreement to which either Company,
any Subsidiary or any Shareholder is a party or by or to which either Company, any Subsidiary or
any Shareholder or any of its assets or properties are bound or subject; (c) any statute or any
regulation, order, judgment, injunction, award or decree of any court, arbitrator or governmental
or regulatory body against, or binding upon or applicable to either Company, any Subsidiary or any
Shareholder or upon the securities, properties or Businesses; or (d) any Permit.
2.19 Litigation. Except as set forth on Schedule 3.10, there are no
outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or
regulatory body or arbitration tribunal against or involving the Companies, the Subsidiaries, the
Shareholders or the transactions contemplated hereby. Except as set forth on Schedule
3.10, neither the Companies, any Subsidiary nor the Shareholders are a party to or, to the best
of the Companies’ or the
12
Shareholders’ Knowledge, threatened with any litigation or judicial, administrative or
arbitration proceeding. Except as set forth on Schedule 3.10, to the best of the
Companies’ or the Shareholders’ Knowledge, there is no dispute with any Person under contract with
any of the Companies or any Subsidiary.
2.20 Employment Matters.
2.20.1 Schedule 3.11.1 separately sets forth all of the full time and part time
employees of each of the Companies and the Subsidiaries (each, an “Employee” and collectively, the
“Employees”), including for each such Employee: name, job title, work location, current
compensation, all wage or salary increases received since December 31, 2005, employee’s date of
hire, commission arrangements and fringe benefits. To the best of the Companies’ or the
Shareholders’ Knowledge, no Employee is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality or non-competition agreement, that in any way adversely
affects or restricts the performance of such Employee’s duties. To the best of the Companies’ or
the Shareholders’ Knowledge, no Employee intends to terminate his or her employment with either
Elumina Spain, GP Ads or Elumina UK or any Subsidiary.
2.20.2 The Companies and the Subsidiaries have complied with all applicable Laws relating to
the employment of labor, including those relating to wages, hours, collective bargaining and the
payment and withholding of Taxes, and have withheld all amounts required by Law or agreement to be
withheld from the wages or salaries of their respective employees and are not liable for any
arrears of wages or other taxes or penalties for failure to comply with any of the foregoing.
2.20.3 Schedule 3.11.3 contains a true and complete list of any and all current and
existing employment, change in control, severance, termination and other similar employment
agreements or arrangements, whether written or oral, between any of the Companies, any Subsidiary
and any Person other than at-will arrangements (each, an “Employment Agreement”).
2.21 Agreements.
2.21.1 Schedule 3.12.1 separately sets forth as of the date of this Agreement all of
the contracts and other agreements, whether written or oral, to which Elumina Spain, Elumina UK, GP
UK, GP Ads or any Subsidiary, is a party or by which Elumina Spain’s, Elumina UK’s, GP UK’s, GP
Ads’ or any Subsidiaries’ properties are bound or subject including: (a) contracts and other
agreements with any current or former officer, director, employee, consultant, agent or
shareholder; (b) contracts and other agreements for the sale or license of products or other
materials, supplies, equipment, merchandise or services; (c) contracts and other agreements for the
purchase or acquisition of materials, supplies, equipment, merchandise or services; (d) software
development contracts; (e) copyright licenses, royalty agreements or similar contracts; (f)
distributorship, representative, marketing, sales or advertising agreements; (g) contracts and
other agreements for the sale of any assets or properties other than in the ordinary course of
business or for the grant to any Person of any preferential rights to purchase any assets or
properties; (h) voting trust agreements, shareholder agreements and joint venture agreements
relating to the assets, properties or Businesses; (i) contracts or other
13
agreements under which Elumina Spain, Elumina UK, GP UK, GP Ads or any Subsidiary agrees to
indemnify any party, to share Tax liability of any party, or to refrain from competing with any
party; (j) any financing agreements; (k) contracts and other agreements containing covenants of
Elumina Spain, Elumina UK, GP UK, GP Ads or any Subsidiary not to compete in any line of business
or with any Person in any geographical area or covenants of any other Person not to compete with
the Companies or the Subsidiaries in the Businesses or in any geographical area; or (l) any other
material contract or other agreement, whether or not made in the ordinary course of business.
2.21.2 All of the contracts and other agreements required to be set forth on Schedule
3.12.1 and on other Schedules hereto have been delivered or made available to Buyer (or where a
contract or other agreement is other than in writing, Schedule 3.12.1 contains a true,
accurate and complete summary of the material terms of such contract or agreement) and are valid,
subsisting agreements, in full force and effect and binding upon the parties thereto in accordance
with their terms, and, the Companies and the Subsidiaries are not in default under any of them nor,
to the best of the Companies’ or the Shareholders’ Knowledge, is any other party to any such
contract or other agreement in default thereunder, nor does any condition exist which with notice
or lapse of time or both would constitute a default by the Companies and the Subsidiaries
thereunder or to the best of the Companies’ or the Shareholders’ Knowledge any other party thereto.
Except as separately identified on Schedule 3.12.2, no approval or Consent of any Person
is needed in order that the contracts or other agreements set forth on Schedule 3.12.1 and
other Schedules hereto continue in full force and effect without breach following the consummation
of the transactions contemplated by this Agreement.
2.22 Real Estate. Schedule 3.13 sets forth a list and includes true and
complete copies of all leases, subleases or other agreements under which either Elumina Spain,
Elumina UK, GP UK, GP Ads or any Subsidiary is lessor or lessee of any real property (collectively,
“Leases”). Such Leases are valid, subsisting agreements, in full force and effect and binding upon
the parties thereto in accordance with their terms and neither Elumina Spain, Elumina UK, GP UK, GP
Ads, any Subsidiary nor any Shareholder has received any notice of any default thereunder. The
leasehold interests are not subject to any Encumbrance and the Companies and the Subsidiaries enjoy
a right of quiet possession as against any Encumbrance on any property subject to Leases. No
Shareholder owns, directly or indirectly, any interest in any real property, building or other
structure used or occupied by either Elumina Spain, Elumina UK, GP UK, GP Ads or any Subsidiary.
2.23 Accounts Receivable. All Accounts Receivable of the Companies and the
Subsidiaries, whether reflected on the Financial Statements or subsequently created, have arisen
from bona fide transactions in the ordinary course of business and are enforceable and represent
valid obligations payable to the Companies and the Subsidiaries. To the best of the Companies’ or
the Shareholders’ Knowledge, there are no contests, claims or rights of set-off relating to the
amount or validity of any Accounts Receivable of the Companies and the Subsidiaries. The Companies
and the Subsidiaries have no reason to believe that collection of Accounts Receivable will be
materially different than what has historically been customary for the Businesses. The Companies
and the Subsidiaries have not pre-billed or received payment for products to be sold, services to
be rendered, or expenses to be incurred subsequent to the Closing Date, except in the ordinary
course of the Businesses and consistent with past practices.
14
2.24 Tangible Property. Schedule 3.16 sets forth a list and includes true and
complete copies of all leases, conditional sale contracts, franchises or licenses pursuant to which
the Companies and the Subsidiaries may hold or use any tangible property. Such leases, conditional
sale contracts, franchises and licenses are valid, subsisting agreements, in full force and effect
and binding upon the parties thereto in accordance with their terms and, there is no default or
event of default or event which with notice or lapse of time or both would constitute a default
thereunder. The tangible property of the Companies and the Subsidiaries is in good operating
condition and repair, ordinary wear and tear excepted. A true and complete list of all of the
Companies’ and the Subsidiaries’ tangible property is set forth on Schedule 3.16.
2.25 Intangible Property.
2.25.1 Schedule 3.17.1 sets forth all Intellectual Property created, owned or used by
the Companies and the Subsidiaries. In addition, Schedule 3.17.1 sets forth all
intellectual property, including all databases and software other than off-the-shelf software,
licensed to, owned by, or utilized by, the Companies and the Subsidiaries. Schedule 3.17.1
identifies for each item listed whether such item is owned by Elumina Spain, Elumina UK, GP UK, GP
Ads or a Subsidiary or, if not owned, what rights Elumina Spain, Elumina UK, GP UK, GP Ads or such
Subsidiary has in or to such item. To the extent Schedule 3.17.1 identifies any patents or
registered copyrights, trademarks, service marks or trade names, such schedule identifies for each
such item its registration number, serial number or other identification, the applicable
jurisdiction and the date of issuance or registration of each such item. The Intellectual Property
identified on Schedule 3.17.1 constitutes all of the Intellectual Property used by the
Companies and the Subsidiaries. The Companies and the Subsidiaries have adequately secured all
Intellectual Property, including trade secrets, know-how or Confidential Information.
2.25.2 To the extent any passwords are used in the conduct of the Businesses, the Shareholders
have delivered to Buyer a written list of all such passwords, indicating for each such password any
associated user identification and where and for what purpose such password is used. Such list of
passwords is accurate, true and complete.
2.25.3 To the best of the Companies’ or the Shareholders’ Knowledge, none of the Intellectual
Property contains any virus, computer instructions, circuitry or other technological means intended
to disrupt, damage or interfere with the operation of applicable software.
2.25.4 The Shareholders have delivered to Buyer written documentation evidencing the
registration and licensing of each item of third party software used by the Companies and the
Subsidiaries. The Companies and the Subsidiaries have a valid license for each copy of third-party
software used by the Companies and the Subsidiaries. Each item of third-party software used by the
Companies and the Subsidiaries (other than off-the-shelf software) has in effect associated
maintenance or support arrangements. The Shareholders have provided Buyer with copies of each of
such maintenance and support agreements. With respect to off-the-shelf software used by the
Companies and the Subsidiaries, the Shareholders have provided to Buyer in writing a list of all
customer help lines or websites and, to the extent the same exist, copies of any maintenance or
support agreements.
15
2.25.5 Schedule 3.17.5 identifies the Internet Protocol address for each file transfer
site utilized by the Companies and the Subsidiaries, along with any user identification information
or passwords needed for access thereto.
2.25.6 Schedule 3.17.6 identifies each software product used to author and compile all
software used or owned by the Companies and the Subsidiaries or that the Companies and the
Subsidiaries has a source code access license.
2.25.7 Neither the Companies, any Subsidiary nor the Shareholders are infringing upon or
otherwise acting adversely to the right or, to the best of the Companies’ or the Shareholders’
Knowledge, claimed right, of any Person under or with respect to any Intellectual Property rights.
Neither the Companies, any Subsidiary nor the Shareholders is (a) obligated pursuant to any
contract to make any payments by way of royalties, fees or otherwise with respect to any
Intellectual Property or (b) a licensor in respect of any Intellectual Property. All licensing
agreements pursuant to which the Companies or any Subsidiary is a licensee of any Intellectual
Property are valid and binding and, to the best of the Companies’ or the Shareholders’ Knowledge,
the other parties thereto, in accordance with their respective terms and are in full force and
effect, and (i) no breach or default by Elumina Spain, GP UK, GP Ads, Elumina UK or any Subsidiary
or event which, with notice or lapse of time, could constitute a breach or default by Elumina
Spain, GP UK, GP Ads, Elumina UK or any Subsidiary, exists with respect thereto, (b) no party
thereto has given notice or asserted to Elumina Spain, GP UK, GP Ads, Elumina UK, any Subsidiary or
the Shareholders that Elumina Spain, GP UK, GP Ads, Elumina UK or any Subsidiary is in breach or
default thereunder, and (c) to the best of the Companies’ or the Shareholders’ Knowledge, no other
party thereto is in breach or default thereunder.
2.25.8 To the best of the Companies’ or the Shareholders’ Knowledge, no third party is
infringing on any of the Intellectual Property used in the conduct of the Businesses.
2.25.9 The Shareholders and the Companies and the Subsidiaries are not in any way making any
unlawful or wrongful use of any Confidential Information, or trade secrets of any third party in
the conduct of the Businesses.
2.26 Customer and Supplier Lists.
2.26.1 Attached to Schedule 3.18.1 is a separate list of each customer and supplier of
Elumina Spain, Elumina UK, GP UK, GP Ads and the Subsidiaries as of the date of this Agreement.
The customer lists accurately contain the names, contract expiration dates and amount of revenues
received during the fiscal year ended December 31, 2006 and as of August 31, 2007 for each
customer. The Companies and the Subsidiaries have not licensed, sold or granted any rights to any
Person to use any of such lists. The supplier lists accurately contain the names, contract
expiration dates and amount of payments made during the fiscal year ended December 31, 2006 and as
of August 31, 2007 for each supplier.
2.26.2 Except as set forth on Schedule 3.18.2, there has been no indication that any
customer or supplier of either of the Companies and the Subsidiaries intends to terminate its
agreements with either of the Companies and the Subsidiaries, or otherwise modify
its relationship with either of the Companies and the Subsidiaries, or that the acquisition of
the Securities by Buyer will materially and adversely affect the relationships of Buyer (as
successor to the Businesses) with such customers or suppliers.
16
2.27 Title. The Companies and the Subsidiaries own outright and have good and
marketable title, or have a valid lease or license disclosed to Buyer hereunder, to all of their
respective assets and properties, free and clear of any Encumbrance other than as disclosed on
Schedule 3.19 or Permitted Liens. “Permitted Liens” means materialman’s or landlord’s lien
rights provided under applicable Law and statutory liens for current Taxes or other governmental
charges with respect to the assets of the Companies and the Subsidiaries not yet due and payable or
the amount or validity of which is being contested in good faith by appropriate proceedings by
Elumina Spain, Elumina UK, GP UK, GP Ads, any Subsidiary or the Shareholders and for which
appropriate reserves have been established.
2.28 Accounts Payable and Indebtedness. All Indebtedness reflected in the Interim
Financial Statements or which has arisen after the date of the Interim Financial Statements has
arisen in the ordinary course of business and represents valid Indebtedness of the Businesses. As
used herein, the term “Indebtedness” means all items which would be included in determining total
Liabilities as shown on the liability side of a balance sheet as at the date Indebtedness is to be
determined; provided, however, that Indebtedness does not include the long-term
portion of capital leases.
2.29 Liabilities. Neither Elumina Spain, Elumina UK, GP UK, GP Ads nor any Subsidiary
has any Indebtedness, Liability, claim, loss, damage, deficiency, obligation or responsibility,
whether direct or indirect, that is not set forth on the Financial Statements, the Interim
Financial Statements or on Schedule 3.21, except for Indebtedness, Liabilities, claims,
losses, damages, deficiencies, obligations or responsibilities incurred in the ordinary course of
business since the date of the Interim Financial Statements and in an amount not exceeding
$25,000.00.
2.30 Employee Benefit Plans.
2.30.1 Schedule 3.22 contains copies of all profit sharing, retirement, deferred
compensation, stock purchase, stock option, incentive, bonus, vacation, severance, disability,
medical insurance, dental insurance, life insurance and other employee benefit plans, programs,
policies or arrangements, maintained or contributed to by Elumina Spain, Elumina UK, GP UK, GP Ads
or any Subsidiary (the “Employee Benefit Plans”).
2.30.2 Prior to the Closing Date, each of the Companies and the Subsidiaries shall have made
all contributions required to be made to or with respect to each Employee Benefit Plan as of the
Closing Date and paid all Liabilities on account of any Employee Benefit Plan in existence or
attributable to service performed on or prior to the Closing Date, and arising or accruing on or
before the Closing Date, as of the Closing, under any such plan.
2.30.3 The Employee Benefit Plans have been established, maintained and administered in all
respects in accordance with their terms and with all provisions of applicable Law.
17
2.31 Insurance. Schedule 3.23 sets forth a list and brief description of all
policies or binders of fire, liability, product liability, workers’ compensation, vehicular or
other insurance held by or on behalf of each of the Companies and the Subsidiaries specifying the
insurer, the policy number or covering note number with respect to binders, and describing each
pending claim thereunder. Such policies and binders are valid and enforceable in accordance with
their terms, are in full force and effect, and insure against risks and Liabilities to the extent
and in the manner deemed appropriate and sufficient by the Companies and the Subsidiaries. Neither
of the Companies nor any Subsidiary is in default with respect to any provision contained in any
such policies or binders and neither has failed to give any notice or present any claim under any
such policies or binders in due and timely fashion. Except for claims set forth on Schedule
3.23, there are no outstanding unpaid claims under any such policies or binders. Neither of
the Companies nor any Subsidiary has received or given a notice of cancellation or non-renewal with
respect to any such policies or binders.
2.32 Officers and Directors. Schedule 3.24 sets forth the name, title and
total compensation of each officer and director of each of the Companies and the Subsidiaries.
2.33 Operations of the Companies. Except as set forth on Schedule 3.25, since
June 30, 2007,, neither Elumina Spain, GP UK, GP Ads, Elumina UK nor any Subsidiary has or will
have as of the Closing:
2.33.1 amended, or agreed to amend, its organizational documents; merged with or into or
consolidated with, or agreed to merge with or into or consolidate with, any other Person;
subdivided or in any way reclassified, or agreed to subdivide or in any way reclassify, any shares
of its capital stock; or changed, or agreed to change, in any manner the rights of its outstanding
capital stock or the character of its business;
2.33.2 issued or sold or purchased, or agreed to issue or sell or purchase, any options or
warrants or rights to subscribe to, or entered into, or agreed to enter into, any contracts or
commitments to issue or sell or purchase, any shares of its capital stock or any of its other
securities;
2.33.3 declared or paid, or agreed to declare or pay, any dividends; or declared or made, or
agreed to declare or make, any direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock or securities;
2.33.4 waived, or agreed to waive, any right of material value to its business;
2.33.5 made, or agreed to make, any change in its accounting methods or practices or made, or
agreed to make, any change in depreciation or amortization policies or rates adopted by it;
2.33.6 materially changed, or agreed to materially change, any of its business policies or
practices, including, without limitation, advertising, marketing, pricing, purchasing, personnel,
sales, returns, budget or product acquisition policies or practices;
18
2.33.7 made, or agreed to make, any loan or advance to any of its shareholders, officers,
directors, employees, consultants, agents or other representatives, or made, or agreed to make, any
other loan or advance other than in the ordinary course of business;
2.33.8 made, or agreed to make, any payment or commitment to pay any severance or termination
pay to any of its officers, directors, employees, consultants, agents, or other representatives,
other than to Persons not officers, directors or shareholders of the Companies and which payments
or commitments were made in the ordinary course of business;
2.33.9 other than for fair market value, sold, abandoned or made, or agreed to sell, abandon
or make, any other disposition of any of its assets or properties; granted or suffered, or agreed
to grant or suffer, any lien or other Encumbrance on any of its assets or properties; entered into
or amended, or agreed to enter into or amend, any contract or other agreement to which it is a
party or by or to which it or its assets or properties are bound or subject, or pursuant to which
it agrees to indemnify any party;
2.33.10 suffered or incurred any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting its assets, properties, business, operations or condition
(financial or otherwise);
2.33.11 terminated, or agreed to terminate, or failed to renew, or received any written threat
(that was not subsequently withdrawn) to terminate or fail to renew, any contract or other
agreement that is or was material to its assets, properties, business, operations or condition
(financial or otherwise); or
2.33.12 failed to operate its business other than in the ordinary course.
2.34 Banks, Brokers and Proxies. Schedule 3.26 sets forth (a) the name of
each bank, trust company and securities or other broker or other financial institution with which
Elumina Spain, GP Ads, GP UK, Elumina UK or any Subsidiary maintains relations; (b) the name of
each Person authorized by Elumina Spain, Elumina UK, GP Ads, GP UK, any Subsidiary or the
Shareholders to effect transactions therewith or to have access to any safe deposit box or vault;
(c) all proxies, powers of attorney or other like instruments to act on behalf of Elumina Spain, GP
Ads, GP UK, Elumina UK or any Subsidiary in matters concerning its business or affairs; and (d) all
charge accounts held in the name of Elumina Spain, GP Ads, GP UK, Elumina UK or any Subsidiary and
the name of each director, officer, employee or other Person authorized by Elumina Spain, GP Ads,
GP UK, Elumina UK or any Subsidiary to use such charge accounts. All such accounts, credit lines,
safe deposit boxes and vaults are maintained by the Companies and the Subsidiaries, as applicable,
for normal business purposes, and no such proxies, powers of attorney or other like instruments are
irrevocable.
2.35 United Kingdom Operations. By purchasing the Securities, Buyer will have full
ownership over the business and shares of the Company in GP UK and Elumina UK.
2.36 Relationships with Related Persons. Neither of the Companies, nor any
Subsidiary, nor any Shareholder has any interest in any property (whether real, personal, or mixed
and whether tangible or intangible) used in or pertaining to the Businesses. No Company,
Subsidiary or Shareholder, is, or has owned (of record or as a beneficial owner) an equity interest
19
or any other financial or profit interest in, a Person that has (a) had business dealings or a
material financial interest in any transaction with the Businesses, other than business dealings or
transactions conducted in the ordinary course of business with any of the Companies and the
Subsidiaries at substantially prevailing market prices and on substantially prevailing market
terms, or (b) engaged in competition with any of the Companies and the Subsidiaries with respect to
any line of the products or services of any of the Companies and the Subsidiaries (a “Competing
Business”) in any market presently served by any of the Companies and the Subsidiaries, except for
less than one percent (1%) of the outstanding capital stock of any Competing Business that is
publicly traded on any recognized exchange or in the over-the-counter market.
2.37 Full Disclosure. Neither this Agreement nor the Disclosure Schedules contain any
untrue statement of a material fact or do not omit to state any material fact necessary to make the
statements made, in the context in which made, not false or misleading. To each of the best of the
Companies’ or the Shareholders’ Knowledge, there is no fact which has not been disclosed to Buyer
in writing that materially adversely affects, or so far as the Shareholders can now foresee will
materially adversely affect, the assets, properties, business, prospects, operations or condition
(financial or otherwise) of any of the Companies and the Subsidiaries or the ability of the
Shareholders to perform this Agreement.
ARTICLE 3
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
3.1 Title to Securities. Each Shareholder owns beneficially and of record, free and
clear of any lien or other Encumbrance, the Securities, and, upon delivery of payment for such
Securities as herein provided, (a) Buyer will acquire good and valid title thereto, free and clear
of any lien or other Encumbrance and (b) each Shareholder shall not have any equity interest in or
right to receive monies from Elumina Spain, Elumina UK, GP Ads, GP UK or any Subsidiary in
connection with any securities (equity, debt or otherwise), except as expressly provided in this
Agreement.
3.2 Authority to Execute and Perform Agreements. Each Shareholder has the full legal
right and power and all authority and approval required to enter into, execute and deliver this
Agreement and to perform fully such Shareholder’s obligations hereunder. This Agreement has been
duly executed and delivered and is the valid and binding obligation of each Shareholder enforceable
against each Shareholder in accordance with its terms, except as may be limited by bankruptcy,
moratorium, insolvency or other similar Laws generally affecting the enforcement of creditors’
rights. The execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the performance by each Shareholder of this Agreement and any related
documents to which each Shareholder is a party in accordance with their respective terms and
conditions will not (a) require the approval or Consent of any foreign, federal, state, county,
local or other governmental or regulatory body or the approval or Consent of any other Person; (b)
conflict with or result in any breach or violation of any of the terms and conditions of, or
constitute (or with notice or lapse of time or both would constitute) a default under, any statute,
regulation, order, judgment or decree applicable to each Shareholder, or to the
20
Securities held by each Shareholder, or any instrument, contract or other agreement to which
each Shareholder is a party or by or to which each Shareholder is or the Securities held by each
Shareholder are bound or subject, or (c) result in the creation of any lien or other Encumbrance on
the Securities held by each Shareholder.
3.3 Investment Representations. Each Shareholder hereby represents and warrants that:
3.3.1 he is not a “U.S. Person” (as defined in Regulation S under the United States Securities
Act of 1933, as amended (the “Act”));
3.3.2 he understands that the Shares have not been registered under the Act or the Laws of any
foreign jurisdiction;
3.3.3 he understands that the Shares may only be offered, sold or delivered in accordance with
the provisions of Regulation S and Regulation D under the Act or pursuant to an effective
registration of the Shares under the Act or pursuant to an available exemption from the
registration requirements of the Act;
3.3.4 the purchase of the Shares is not part of a plan or scheme to evade the registration
provisions of the Act;
3.3.5 he will not offer, sell or deliver the Shares to or for the account of a U.S. Person or
for the benefit of any Person whom it knows or reasonably believes to be a U.S. Person;
3.3.6 he is acquiring the Shares for its own account and not with a view to, or for resale in
connection with, the distribution or other disposition thereof in violation of any federal, state
or foreign securities Laws;
3.3.7 he understands the nature of this investment, is fully aware of and familiar with the
business operations of Buyer, and is able to evaluate the merits and risks of an investment in the
Shares;
3.3.8 he has been given the opportunity to ask questions about Buyer and has been granted
access to all information, financial and otherwise, with respect to Buyer which has been requested,
has examined such information, and is satisfied with respect to the same;
3.3.9 he has been encouraged to rely upon the advice of its own legal counsel and accountants
or other financial advisors with respect to the tax and other considerations relating to the
Shares;
3.3.10 he has sufficient income and net worth such that it does not contemplate being required
to dispose of any portion of the investment in the Shares to satisfy any existing or expected
undertaking or indebtedness, and is able to bear the economic risks of an investment in the Shares,
including the risk of losing all or any part of the investment and probable inability to sell or
transfer the Shares for an indefinite period of time; and
21
3.3.11 he is an “accredited investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Act.
3.4 No Broker. No broker, finder, agent or similar intermediary has acted for or on
behalf of Elumina Spain, Elumina UK, GP Ads, GP UK or the Shareholders in connection with this
Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker’s, finder’s or similar fee or other commission in connection
therewith based on any agreement, arrangement or understanding with Elumina Spain, Elumina UK, GP
Ads, GP UK or the Shareholders.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants that the statements contained in this Article 5 are correct and
complete as of the date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the date of this Agreement
throughout this Article 5). The representations and warranties contained in this Article 5 are
qualified in their entirety by the information and documents disclosed or contained in any of
Buyer’s filings made with the Securities and Exchange Commission (the “SEC”), as of the date
hereof, including without limitation any reports filed on Forms 10-KSB, 10-QSB or 8-K (the
“Securities Filings”). Wherever a representation or warranty in this Agreement is qualified as
having been made “to Buyer’s Knowledge,” such phrase shall mean the actual knowledge of any
executive officer of Buyer.
4.1 Due Incorporation. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and has the corporate power and lawful authority to own
its assets and properties and to carry on its business as now conducted.
4.2 Corporate Power of Buyer. Buyer has the full legal right and corporate power and
authority and approval required to enter into, execute and deliver this Agreement and to perform
fully its obligations under this Agreement. The execution and delivery of this Agreement by Buyer
and the consummation by Buyer of the transactions contemplated hereby have been duly and validly
authorized by all necessary action, and no other proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions so contemplated. This Agreement has
been duly executed and delivered and is the valid and binding obligation of Buyer enforceable in
accordance with its terms, except as may be limited by bankruptcy, moratorium, reorganization,
insolvency or other similar Laws now or hereafter in effect generally affecting the enforcement of
creditors’ rights.
4.3 No Breach. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby and the performance by Buyer of this Agreement in accordance
with its terms and conditions will not (a) require the approval or Consent of any foreign, federal,
state, county, local or other governmental or regulatory body or the approval or Consent of any
other Person; or (b) conflict with or result in any breach or violation of any of the terms and
conditions of, or constitute (or with notice or lapse of time or both would constitute) a
default under, any certificate of incorporation, bylaw, statute, regulation, order, judgment
or decree applicable to Buyer, or any instrument, contract or other agreement to which Buyer is a
party or by or to which Buyer is bound or subject.
22
4.4 No Broker. Other than Xxxxxxxx Curhan Ford & Co., no broker, finder, agent or
similar intermediary has acted for or on behalf of Buyer in connection with this Agreement or the
transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled
to any broker’s, finder’s or similar fee or other commission in connection therewith based on any
agreement, arrangement or understanding with Buyer or any action taken by Buyer.
4.5 Securities Filings; Financial Statements. Buyer has timely filed all forms,
reports and documents required to be filed by it with the SEC since January 1, 2006, including,
without limitation, all exhibits required to be filed therewith, other than the unredacted version
of documents for which confidential treatment has been granted by the SEC or for which such
treatment has been applied and is pending. The Securities Filings: (a) at the time filed complied
(or will comply when filed, as the case may be) in all material respects with the applicable
requirements of the Act and/or the Exchange Act; and (b) did not at the time they were filed (or,
if later filed, amended or superseded, then on the date of such later filing) contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading. Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Securities Filings complied
or will comply, as the case may be, as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was or will be prepared in
accordance with GAAP applied on a consistent basis throughout the periods involved except as may
otherwise be indicated in the notes thereto or, in the case of unaudited interim financial
statements, as permitted by Form 10-Q promulgated by the SEC, and fairly presented or will fairly
present, as the case may be, in all material respects, the consolidated financial position of Buyer
and its subsidiaries as at the respective dates and the consolidated results of operations and cash
flows for the periods therein indicated, except, in the case of the unaudited interim financial
statements for the absence of footnotes and normal year-end adjustments which were not and will not
be material in amount.
4.6 No Material Adverse Effect. Since December 31, 2006, there has not been any
change or effect that, individually or in the aggregate, has been or could be reasonably expected
to have a Material Adverse Effect on Buyer (including intangible assets), condition (financial or
otherwise) or results of operations of Buyer, whether or not covered by insurance.
4.7 Authorized Capital Stock of Buyer. All of the issued and outstanding shares of
capital stock of Buyer have been duly authorized, are validly issued, fully paid, nonassessable and
have not been issued in violation of any applicable Laws.
4.8 Subsidiaries. Exhibit 21 to Buyer’s Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2005 sets forth a true, complete and correct list of each subsidiary of
Buyer that is a Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X).
23
4.9 Organizational Documents. Buyer’s organizational documents and all amendments
thereto are true, correct and complete. The minute books of Buyer contain true and complete
records of all meetings and consents in lieu of meetings of the Board of Directors (and any
committees thereof) and of the stockholders of Buyer since its date of incorporation and such
minute books accurately reflect all transactions referred to in such minutes and consents in lieu
of meeting. The stock books of Buyer are true and complete in all material respects.
4.10 Litigation. Except as set forth in the Securities Filings, there are no material
outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or
regulatory body or arbitration tribunal against or involving Buyer. Buyer is not a party to or, to
Buyer’s Knowledge, threatened with any litigation or judicial, administrative or arbitration
proceeding, which if determined against Buyer would have a material adverse effect on Buyer. To
Buyer’s Knowledge, there is no dispute with any Person under contract with Buyer.
4.11 Agreements.
4.11.1 The Securities Filings set forth all of the material contracts and other material
agreements, whether written or oral, to which Buyer is a party or by which Buyer’s properties are
bound or subject, including: (a) material contracts and other material agreements with any current
or former officer, director, employee, consultant, agent or shareholder; (b) material contracts and
other material agreements for the sale or license of products or other materials, supplies,
equipment, merchandise or services; (c) material contracts and other material agreements for the
purchase or acquisition of materials, supplies, equipment, merchandise or services; (d) material
software development contracts; (e) material copyright licenses, royalty agreements or similar
contracts; (f) material distributorship, representative, marketing, sales or advertising
agreements; (g) material contracts and other material agreements for the sale of any assets or
properties other than in the ordinary course of business or for the grant to any Person of any
preferential rights to purchase any assets or properties; (h) material voting trust agreements,
shareholder agreements and joint venture agreements relating to the assets, or properties of Buyer;
(i) material contracts or other material agreements under which Buyer agrees to indemnify any
party, to share Tax liability of any party, or to refrain from competing with any party; (j) any
material financing agreements; (k) material contracts and other material agreements containing
covenants of Buyer not to compete in any line of business or with any Person in any geographical
area or covenants of any other Person not to compete with Buyer in any geographical area; or (l)
any other material contract or other material agreement, whether or not made in the ordinary course
of business.
4.11.2 All of the material contracts and other material agreements described in Section 5.11.1
are valid, subsisting agreements, in full force and effect and binding upon Buyer and to Buyer’s
Knowledge, the other parties thereto in accordance with their terms.
4.12 Real Estate. All material leases, subleases or other agreements under which
Buyer is lessor or lessee of any real property are valid, subsisting agreements, in full force and
effect and binding upon Buyer, and to Buyer`s Knowledge, the other parties thereto in accordance
with their terms and Buyer has not received any notice of any default thereunder. The leasehold
interests under such leases, subleases or other agreements under which Buyer is lessor or lessee of
any real property are not subject to any Encumbrance and Buyer enjoys a right
of quiet possession as against any Encumbrance on any property subject to such leases,
subleases or other agreements under which Buyer is lessor or lessee of any real property.
24
4.13 Accounts Receivable. All Accounts Receivable of Buyer, whether reflected on the
Buyer´s financial statements or subsequently created, have arisen from bona fide transactions in
the ordinary course of business and are enforceable and represent valid obligations payable to
Buyer. To Buyer’s Knowledge, there are no contests, claims or rights of set-off relating to the
amount or validity of any Accounts Receivable of Buyer. Buyer has no reason to believe that
collection of Accounts Receivable will be materially different than what has historically been
customary for Buyer.
4.14 Tangible Property. All material leases, conditional sale contracts, franchises
or licenses pursuant to which Buyer may hold or use any tangible property are valid, subsisting
agreements, in full force and effect and binding upon Buyer, and to Buyer´s Knowledge, the other
parties thereto in accordance with their terms and, there is no default or event of default or
event with respect to Buyer which with notice or lapse of time or both would constitute a default
thereunder.
4.15 Intangible Property. The Securities Filings contain a list of all material
Intellectual Property created, owned or used by Buyer. To Buyer’s Knowledge, Buyer is not
infringing upon or otherwise acting adversely to the right or claimed right, of any Person under or
with respect to any Intellectual Property rights. To Buyer’s Knowledge, no third party is
infringing on any of the Intellectual Property used by Buyer. To Buyer’s Knowledge, Buyer is not
in any way making any unlawful or wrongful use of any Confidential Information, or trade secrets of
any third party in the conduct of Buyer.
4.16 Title. Buyer owns outright and has good and marketable title, or has a valid
lease or license to all of its assets and properties, free and clear of any Encumbrance, other than
as disclosed in the Securities Filings or Permitted Liens.
4.17 Accounts Payable and Indebtedness. All Indebtedness reflected in Buyer’s
financial statements set forth in the Securities Filings or which has arisen thereafter has arisen
in the ordinary course of business and represents valid Indebtedness of Buyer.
4.18 Liabilities. Buyer does not have any material Indebtedness, Liability, claim,
loss, damage, deficiency, obligation or responsibility, whether direct or indirect, that is not set
forth on the financial statements of Buyer in the Securities Filings or otherwise contained in the
Securities Filings.
4.19 Officers and Directors. The Securities Filings set forth the name, title and
total compensation of each executive officer and director of Buyer.
4.20 Operations of Buyer. Since June 30, 2007, and except as set forth in the
Securities Filings, Buyer has not:
4.20.1 amended, or agreed to amend, its organizational documents; merged with or into or
consolidated with, or agreed to merge with or into or consolidate with, any other Person;
subdivided or in any way reclassified, or agreed to subdivide or in any way reclassify,
any shares of its capital stock; or changed, or agreed to change, in any manner the rights of
its outstanding capital stock or the character of its business;
25
4.20.2 issued or sold or purchased, or agreed to issue or sell or purchase, any options or
warrants or rights to subscribe to, or entered into, or agreed to enter into, any contracts or
commitments to issue or sell or purchase, any shares of its capital stock or any of its other
securities;
4.20.3 declared or paid, or agreed to declare or pay, any dividends; or declared or made, or
agreed to declare or make, any direct or indirect redemption, retirement, purchase or other
acquisition of any shares of its capital stock or securities;
4.20.4 waived, or agreed to waive, any right of material value to its business;
4.20.5 made, or agreed to make, any change in its accounting methods or practices or made, or
agreed to make, any change in depreciation or amortization policies or rates adopted by it;
4.20.6 materially changed, or agreed to materially change, any of its business policies or
practices, including, without limitation, advertising, marketing, pricing, purchasing, personnel,
sales, returns, budget or product acquisition policies or practices;
4.20.7 made, or agreed to make, any loan or advance to any of its shareholders, officers,
directors, employees, consultants, agents or other representatives, or made, or agreed to make, any
other loan or advance other than in the ordinary course of business;
4.20.8 made, or agreed to make, any payment or commitment to pay any severance or termination
pay to any of its officers, directors, employees, consultants, agents, or other representatives,
other than to Persons not officers, directors or shareholders of Buyer and which payments or
commitments were made in the ordinary course of business;
4.20.9 other than for fair market value, sold, abandoned or made, or agreed to sell, abandon
or make, any other disposition of any of its assets or properties; granted or suffered, or agreed
to grant or suffer, any lien or other Encumbrance on any of its assets or properties; entered into
or amended, or agreed to enter into or amend, any contract or other agreement to which it is a
party or by or to which it or its assets or properties are bound or subject, or pursuant to which
it agrees to indemnify any party;
4.20.10 suffered or incurred any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting its assets, properties, business, operations or condition
(financial or otherwise);
4.20.11 terminated, or agreed to terminate, or failed to renew, or received any written threat
(that was not subsequently withdrawn) to terminate or fail to renew, any contract or other
agreement that is or was material to its assets, properties, business, operations or condition
(financial or otherwise); or
4.20.12 failed to operate its business other than in the ordinary course.
26
4.21 Full Disclosure. Neither this Agreement nor the Securities Filings contain any
untrue statement of a material fact or do not omit to state any material fact necessary to make the
statements made, in the context in which made, not false or misleading. To Buyer’s Knowledge,
there is no fact which has not been disclosed to Shareholders in writing that materially adversely
affects, or so far as Buyer can now foresee will materially adversely affect, the assets,
properties, business, prospects, operations or condition (financial or otherwise) of Buyer or the
ability of Buyer to perform this Agreement.
ARTICLE 5
DELIVERIES
5.1 Closing Deliveries of the Shareholders. The Shareholders shall deliver, or cause
to be delivered, to Buyer at the Closing the following, all duly executed where applicable:
5.1.1 Third Party Consents. All Consents, waivers, approvals, authorizations, orders
or Permits required to be obtained, and all filings required to be made, in connection with the
performance of the Shareholders’ obligations under this Agreement or the continuation of any of
Elumina Spain’s, Elumina UK’s, GP UK’s, GP Ads’ or any Subsidiaries’ Permits, contracts or
agreements after the Closing.
5.1.2 New Employment Agreements. Two-year employment agreements (containing five-year
non-compete/non-solicitation provisions) of Xxxxx Xxxxxx and Xxxx Xxxxx in a form acceptable to
Buyer and each of Xxxxx Xxxxxx and Xxxx Xxxxx appointing them as co-chief operating officers in
charge of the non-U.S. operations of Buyer (such appointments shall be subject to due diligence
investigations and background checks of such individuals).
5.1.3 Securities Powers. The Securities held by such Shareholders, properly endorsed
for transfer or accompanied by a duly executed security powers, in either case in blank or in the
name of Buyer.
5.1.4 Resignations of Officers and Directors. The resignation, effective immediately
after the Closing, of each officer and director of Elumina Spain, Elumina UK, GP UK, GP Ads and any
Subsidiary as set forth on Schedule 6.1.4, declaring and acknowledging that all claims (if any)
which they may have against the Company in which they have had the office of director are
unconditionally released or waived.
5.1.5 Company Records. All of the minute books, stock records, books of account,
corporate seals, contracts and agreements and other documents, instruments and papers of Elumina
Spain, Elumina UK, GP UK, GP Ads and the Subsidiaries. In particular, the Shareholders shall make
available to Buyer the following documents from Elumina Spain and GP Ads: deed of incorporation,
the by-laws and all the deeds modifying the by-laws together with any other public deeds (pólizas o
escrituras ) or private documents which evidence the Shareholders’ title to the Shares in order for
the Notary to record the transfer of the Shares in those public deeds.
27
5.1.6 Escrow Agreements. An (a) indemnity escrow agreement, in form and substance
reasonably satisfactory to the parties (the “Escrow Agreement”), and (b) net profits escrow
agreement, in form and substance reasonably satisfactory to the parties (the “Net Profits Escrow
Agreement”), each signed by the Shareholders and the escrow agent (the “Escrow Agent”).
5.1.7 Elumina UK Roll-Up. Reasonable evidence that all assets of the “sole trader”
business of the UK Business have been transferred to Elumina UK or GP UK (the “Elumina UK
Roll-Up”).
5.1.8 Other Documents. Such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated by this Agreement.
5.2 Closing Deliveries of Buyer. Buyer shall deliver to the Shareholders at the
Closing the following, all duly executed where applicable:
5.2.1 Closing Payment. The Purchase Price in accordance with the terms and conditions
of this Agreement.
5.2.2 Escrow Agreements. The Escrow Agreement and the Net Profits Escrow Agreement,
each signed by Buyer and the Escrow Agent.
5.2.3 New Employment Agreements. Two-year employment agreements (containing five-year
non-compete/non-solicitation provisions) of Xxxxx Xxxxxx and Xxxx Xxxxx in a form acceptable to
Buyer and each of Xxxxx Xxxxxx and Xxxx Xxxxx appointing them as co-chief operating officers in
charge of the non-U.S. operations of Buyer (such appointments shall be subject to due diligence
investigations and background checks of such individuals).
5.2.4 Other Documents. Such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS OF THE SHAREHOLDERS BEFORE CLOSING
6.1 Activities of Shareholders Before Closing. Before the Closing, the Shareholders
shall, or shall cause the Companies (or the Subsidiaries), as applicable, to:
6.1.1 hire a Chief Financial Officer mutually acceptable to Buyer and the Shareholders that
has experience (a) with United States accounting principles, including Generally Accepted
Accounting Principles, and (b) with corporate and SEC filings related to public companies;
6.1.2 develop firm operating plans that include budgets, capital requirements, forecasts and
other suitable information for the years 2007 and 2008;
28
6.1.3 grant an accounting firm mutually acceptable to Buyer and the Shareholders access to the
Companies’ and Subsidiaries’ books and records for the purpose of performing any audits that are
required by the SEC in connection with a material acquisition by Buyer;
6.1.4 maintain the assets of the Companies and the Subsidiaries in good working order and
condition, ordinary wear and tear excepted;
6.1.5 perform, or cause the Companies and the Subsidiaries to perform, all of their
obligations under any Permits, material contracts, and debt instruments;
6.1.6 keep in full force and effect the Companies’ and the Subsidiaries’ present insurance
policies, bonds, letters of credit or other insurance coverage with reputable insurers and issuers;
6.1.7 maintain good relationships with suppliers, customers and others having business
relationships with the Companies and the Subsidiaries;
6.1.8 assist Buyer in procuring the employment of key employees of the Companies and the
Subsidiaries;
6.1.9 maintain compliance by the Companies and the Subsidiaries with all applicable Laws,
including assisting Buyer in obtaining or transferring all necessary Permits;
6.1.10 convert the Companies’ and the Subsidiaries’ financial statements and accounting
principles and methodologies to GAAP as used in the United States;
6.1.11 cause the Elumina UK Roll-Up to occur as promptly as practicable; and
6.1.12 cooperate with Buyer to promptly prepare the necessary documents so that the
transactions may be closed as promptly as possible.
6.2 Prohibited Activities Before Closing. Until the Closing, the Shareholders shall
not, and shall cause the Companies and the Subsidiaries not, without the express prior written
consent of Buyer, to:
6.2.1 permit any new Encumbrance upon any asset;
6.2.2 breach, amend or terminate any material contract in any material manner or fail to
maintain the Businesses, the assets or the quality of customer service consistent with past
practice;
6.2.3 redeem any of the capital stock of either of the Companies or any Subsidiary or declare,
make or pay any dividends or distributions (whether in cash, securities or other property);
29
6.2.4 (i) make or change any Tax election; (ii) change any Tax accounting period or method;
(iii) file any amended Tax Return; (iv) enter into any Tax Closing Agreement; (v) settle any Tax
claim or assessment; (vi) surrender any right to claim a refund of Taxes; (vii) consent to any
extension or waiver of the limitations period for the assessment of any Tax; (viii) take any action
outside the ordinary course of business whose effect would be to increase present or future Tax
liability or to decrease the present or future Tax assets;
6.2.5 enter into any transaction outside the ordinary course of business or otherwise
prohibited under this Agreement; or
6.2.6 allow any other action or omission, or series of actions or omissions, that would cause
a representation or warranty of the Companies or theShareholders to be untrue on the Closing Date.
6.3 Standstill Agreement. Unless and until this Agreement is terminated pursuant to
Article 12 without the Closing having taken place, the Companies and the Shareholders shall not,
prior to November 30, 2007, directly or indirectly, solicit offers for the assets of the Companies
or the Subsidiaries, for the capital stock of the Companies or for a merger or consolidation
involving the Companies or the Subsidiaries, or respond to inquiries from, share information with,
negotiate with or in any way facilitate inquiries or offers from, third parties who express or who
have expressed an interest in acquiring the Companies or the Businesses by merger, consolidation or
other combination or by acquiring any of the capital stock or material assets of the Companies or
the Subsidiaries. The Shareholders shall not vote their stock in favor of any such transaction.
The Companies and the Shareholders shall notify Buyer immediately if any Person makes any proposal,
offer, inquiry or contact with respect to any of the foregoing.
6.4 Further Assurance. From time to time on and after the Closing and without further
consideration, the Shareholders shall deliver or cause to be delivered to Buyer, at such times and
places as shall reasonably be requested, such additional instruments as may be reasonably requested
for the purpose of carrying out this Agreement.
6.5 Transition. The Shareholders shall not take any action that is designed or
intended to have the effect of (a) discouraging any customer or business associate of any of the
Companies or the Subsidiaries from maintaining the same business relationships with the Companies
or the Subsidiaries after the Closing that such customer or business associate maintained with the
Companies or the Subsidiaries before the Closing or (b) interfering with Buyer’s operation of the
Companies or the Subsidiaries or the Businesses after the Closing.
ARTICLE 7
ADDITIONAL AGREEMENTS OF PARTIES
7.1 Public Announcements. Except to the extent that the parties consent in writing
otherwise, (a) the parties shall keep the existence and terms of this Agreement confidential, and
(b) no party shall make, or cause to be made, any press release or public announcement in respect
of this Agreement or the transactions or otherwise communicate with any media.
30
Notwithstanding the preceding sentence, however, Buyer may make such disclosure (on Form 8-K,
by press release or otherwise) regarding the terms of this Agreement and the transactions
contemplated hereby as it deems necessary to comply with applicable securities Laws, including a
press release following the execution of this Agreement.
7.2 Board Seat. Immediately after the Closing and until the Shareholders collectively
hold shares of Buyer exceeding 10% of the issued and outstanding shares of capital stock of Buyer,
the Shareholders shall have the right to nominate two individuals to serve on the Board of
Directors (the “Board”) of ProLink Holdings Corp. In the event that such individual is removed or
resigns as a director, the Shareholders shall have the right to nominate his or her successor.
7.3 Observer Rights. So long as the Shareholders collectively hold shares of Buyer
exceeding 5% of the issued and outstanding shares of capital stock of Buyer, Buyer (a) shall permit
the Shareholders (or one Shareholder if the other no longer holds shares of Buyer exceeding 2.5% of
the issued and outstanding shares of capital stock of Buyer) (i) to attend all meetings of the
Board (whether in person, telephonic or otherwise) in a non-voting, observer capacity, and (ii) to
attend all meetings of such committees of the Board (whether in person, telephonic or otherwise) in
a non-voting, observer capacity, and (b) shall provide to the Shareholders, concurrently with the
members of the Board (or the committees thereof, as applicable), and in the same manner, notice of
such meeting and a copy of all materials provided to such members (including all materials provided
to such members in connection with any action to be taken by the Board or of any committee thereof
without a meeting).
7.4 Offering of Common Stock. Following the Closing, the combined company shall use
commercially reasonable efforts to raise at least $15,000,000 in gross proceeds, with net proceeds
of at least $12,000,000, in order to fund the continued expansion of the combined company.
7.5 Piggyback Registration. For a period of one year after the Closing, if Buyer at
any time proposes to register any of its securities under the Act for sale to the public (except
with respect to registration statements on Forms X-0, X-0 or another form not available for
registering the Shares for sale to the public), each such time it will give written notice to the
Shareholders of its intention to do so. Upon the written request of the Shareholders, given within
twenty (20) days after receipt by such Shareholders of such notice, Buyer will, subject to the
limits contained in this Section 8.6, use commercially reasonable efforts to cause all the Shares
held by the Shareholders to be registered under the Act and qualified for sale under any state blue
sky law, all to the extent required to permit such sale or other disposition of said Shares;
provided, however, that if Buyer is advised in writing in good faith by any managing underwriter of
Buyer’s securities being offered in a public offering pursuant to such registration statement that
the amount to be sold by Persons other than Buyer (collectively, “Selling Shareholders”) is greater
than the amount which can be offered without adversely affecting the offering, Buyer may reduce the
amount offered for the accounts of Selling Shareholders (including the Shareholders) to a number
deemed satisfactory by such managing underwriter; and provided further, that any shares to be
excluded shall be excluded in the following order: (a) securities held by any Persons not having
any such contractual, incidental registration rights, (b) securities held by any Persons having
contractual, incidental registration rights pursuant to an agreement that is not this Agreement,
(c) Shares sought to be included by the Shareholders, and (d) any
31
other registrable securities sought to be included by other holders thereof as determined on a
pro rata basis (based upon the aggregate number of registrable securities held by such holders).
The Shareholders acknowledge and agree that the fundraising effort in Section 8.5 and the
provisions of this Section 8.6 may require the Shareholders to execute reasonably acceptable and
customary lock-up or similar agreements as a condition to the completion of any such financing.
7.6 Obligation to Register. Within one year following Closing, Buyer shall register
under the Act the resale of all of the Shares not so registered under Section 8.6 above, subject to
reasonable delays caused by the registration process with the SEC. Buyer may postpone for a period
of up to 45 days the filing of such registration if the Board of Directors of Buyer in good faith
determines that such registration would require the public disclosure of any plan, proposal or
agreement by Buyer with respect to any financing, acquisition, recapitalization, reorganization or
other material transaction, the disclosure of which would be materially adverse to Buyer, and such
determination is evidenced by a board vote included in the minutes of the meetings of Buyer’s Board
of Directors.
8.8 Assignment of Securities. Buyer will assign the Securities to Prolink Holdings
Corp. Establecimiento Permantene en España following the Closing.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS
OF THE SHAREHOLDERS
OF THE SHAREHOLDERS
The obligations of the Shareholders under this Agreement are subject to the completion,
satisfaction, or at their option, waiver, on or before the Closing Date, of the following
conditions:
8.1 Representations and Warranties. The representations and warranties of Buyer
contained in this Agreement shall be accurate on and as of the Closing Date
8.2 Covenants. Buyer shall have duly complied with or performed each of the covenants
of this Agreement to be complied with or performed by Buyer on or before the Closing Date.
8.3 No Adverse Proceeding. No Action before any Governmental Authority shall have
been instituted or threatened to restrain or prohibit the transaction.
8.4 No Adverse Change or Material Adverse Effect. No Material Adverse Effect in the
results of operations, financial condition or business of Buyer shall have occurred since its June
30, 2007 financial statements. Buyer shall have not suffered any loss or damage to any of its
assets since June 30, 2007, which loss or damage would result in a Material Adverse Effect or would
materially impair Buyer’s ability to operate the Businesses after the Closing Date.
8.5 Closing Deliveries. Buyer shall have timely delivered (if required to be
delivered before the Closing) or shall be prepared to deliver the items set forth in Section 6.2.
32
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are subject to the completion, satisfaction or,
at its option, waiver, on or before the Closing Date, of the following conditions:
9.1 Representations and Warranties. The representations and warranties of the
Companies and the Shareholders contained in this Agreement shall be accurate on and as of the
Closing Date.
9.2 Covenants. The Shareholders shall have, or shall have caused the Companies (and
their Subsidiaries) to have, duly complied with or performed each of the terms, covenants and
conditions of this Agreement to be complied with or performed by the Companies and the Shareholders
on or before the Closing Date and the Shareholders shall have delivered to Buyer a closing
certificate attesting to the facts of Sections 10.1 and 10.2.
9.3 Delivery of Disclosure Schedules. The Shareholders shall have delivered to Buyer
complete and final Disclosure Schedules and Buyer shall have determined, to its reasonable
satisfaction, such Disclosure Schedules to be acceptable.
9.4 No Adverse Proceeding. No Action shall have been instituted or threatened to
restrain or prohibit any of the transactions. No Governmental Authority shall have taken any other
action or made any request of Buyer as a result of which Buyer deems it inadvisable to proceed with
the transaction.
9.5 Corporate Approval. Buyer’s Board of Directors shall have approved the
transactions contemplated by this Agreement.
9.6 No Adverse Change or Material Adverse Effect. No Material Adverse Effect in the
results of operations, financial condition or business of either of the Companies or the
Subsidiaries shall have occurred since the Financial Statement Date. Neither Elumina Spain,
Elumina UK (or the UK Business), GP UK nor GP Ads shall have suffered any loss or damage to any of
the assets since the Financial Statement Date, which loss or damage would result in a Material
Adverse Effect or would materially impair Buyer’s ability to operate the Businesses after the
Closing Date.
9.7 Transferability of Permits. Buyer shall have determined, to its reasonable
satisfaction, that as a result of the transaction, all of the Permits required for the operation of
the Businesses remain in full force and effect or, if they must be transferred to Buyer due to a
change of control, can be so transferred without public hearing or other regulatory re-approval
process.
9.8 Consents. All necessary notices to, Consents of and filings with any Governmental
Authority or other third Person relating to the consummation of the transaction to be made or
obtained by the Shareholders or the Companies shall have been made and obtained by the Shareholders
or the Companies, and Buyer shall have determined, to its reasonable satisfaction, that Buyer has
received all the Consents it deems necessary under any material contract or Permit requiring
Consent to assignment.
33
9.9 Closing Deliveries. Shareholders shall have, or shall have caused the Companies
to have, timely delivered (if required to be delivered before the Closing) or shall be prepared to
deliver the items set forth in Section 6.1.
9.10 Governmental Approvals. All governmental approvals reasonably deemed by Buyer to
be necessary to proceed with the transactions contemplated by this Agreement shall have been
granted.
9.11 Financial Statements. The Shareholders shall have delivered to Buyer the
required audited financial statements of the Companies necessary to enable Buyer to file a proper
Form 8-K with the SEC on the Closing Date with respect to the consummation of the transactions
contemplated hereby, which, as of the date hereof means audited financial statements for the
Companies for the fiscal years ended 2005 and 2006 and reviewed reports for the period ending June
30, 2007.
9.12 Elumina UK Roll-Up. The Elumina UK Roll-Up shall have been completed to the
reasonable satisfaction of Buyer.
9.13 Loans. All interested party transactions by and among the Shareholders and the
Companies, including any loans or other advances to or between any Company and any Subsidiary and
any Shareholder, officer or director (or any affiliate of any of the foregoing) shall have been
terminated or repaid in full as applicable.
9.14 UK Business Lease. The lease for the premises located at 00x Xxxxxxxxxx Xxxx,
Xxxxxxxxx-xxxx-Xxxx, XX00 0XX, shall have been transferred from New Media 2000 to one of the
Companies, to the reasonable satisfaction of Buyer.
9.15 Domain Names. The three (3) domain names relating to the Companies currently
registered in the name of Xxxxx Xxxxxx shall have been transferred to one of the Companies, to the
reasonable satisfaction of Buyer.
9.16 Accounts Receivable. All Accounts Receivable of the Companies and due to Buyer
or any of its subsidiaries or affiliates that are due within 90 days of the shipment date shall
have been brought current.
9.17 General. All actions taken by Shareholders or the Companies in connection with
the consummation of the transactions and all certificates, opinions and other documents required to
effect the transactions, including, without limitation, any resignations of the officers and
directors of the Companies and any amendments to the by-laws or charter documents of the Companies
reasonably necessary to implement the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to Buyer.
34
ARTICLE 10
INDEMNIFICATION
10.1 Survival. All representations and warranties of the Parties shall survive the
execution and delivery hereof and the Closing for five years. All covenants and agreements
respectively made by the Shareholders and Buyer in this Agreement to be performed after the Closing
Date shall survive the Closing and will remain in full force and effect thereafter until (a) in the
case of all covenants and agreements that have specified terms or periods, until the expiration of
the terms or periods specified therein; and (b) in the case of all other covenants and agreements
that do not have specified terms or periods, until the fulfillment thereof.
10.2 Obligation of the Shareholders to Indemnify. Each Shareholder shall jointly and
severally indemnify, defend and hold Buyer and each of its directors, officers, employees,
affiliates and assigns harmless (each, a “Buyer Indemnitee”) from and against any Losses sustained
or incurred by such Buyer Indemnitee relating to, caused by or resulting from:
10.2.1 any breach of a representation or warranty of the Companies or the Shareholders
contained Article 3 or Article 4 of this Agreement, or in any other certificate or schedule,
delivered pursuant to this Agreement;
10.2.2 any misrepresentation, breach of, or failure to satisfy, any covenant or obligation of
the Shareholders in this Agreement;
10.2.3 any pending litigation relating to the period prior to the Closing, whether or not
disclosed on the Disclosure Schedules, or elsewhere;
10.2.4 the employment (including the initial hiring and all terms, conditions, and events
relating to the ongoing employment) or termination of employment (including constructive
termination) by the Companies of any individual (including without limitation any current or former
employee of the Companies) attributable to any action or inaction occurring before the Closing;
10.2.5 any claim by any current or former employee of the Companies for any type of benefits
under any Law, including, without limitation, workers’ compensation, unemployment, temporary or
permanent disability, and social security, that is based on employment by the Companies before the
Closing;
10.2.6 any Liability of the Companies for Pre-Closing Taxes;
10.2.7 any Liability related to, caused by or resulting from the termination of, or severance
obligations to, any employee or former employee of the Companies prior to the Closing Date, whether
such liability arises before, on or after the Closing Date;
10.2.8 any Liability of the Companies arising from a claim by a Shareholder in connection
with, in respect of or as a result of a Shareholder’s purchase, sale or ownership of any shares of
capital stock of the Companies ever owned by such Shareholder or to which such
Shareholder was entitled, including, without limitation, any claims for any Tax liability,
whether such liability arises on or after the Closing Date;
35
10.2.9 any Liability of the Companies arising from a claim by a customer, former customer or
Governmental Authority in connection with, in respect of or arising from any act or omission by the
Companies occurring prior to the Closing Date, including with respect to the preparation, payment
and filing of Taxes and any Liabilities for penalties and interest, whether such liability arises
on or after the Closing Date;
10.2.10 any Liability related to Xxx Xxxxxx; and
10.2.11 any Liability related to (a) Elumina France with respect to its claim of ownership in
the Companies or (b) involving Xxxxx Xxxxxx’x undertaking with the Secretary of State in 2002.
10.3 Obligation of Buyer to Indemnify. Buyer shall indemnify, defend and hold
harmless the Shareholders and their affiliates and assigns (each, a “Shareholder Indemnitee”) from
and against any Losses sustained or incurred by such Shareholder Indemnitee relating to, caused by
or resulting from:
10.3.1 any breach of a representation or warranty of the Buyer contained Article 5 of this
Agreement, or in any other certificate or schedule, delivered pursuant to this Agreement
10.3.2 any misrepresentation, breach of, or failure to satisfy, any covenant or obligation of
Buyer in this Agreement; and
10.3.3 any liability of Buyer for Taxes attributable to any action or business occurring after
the Closing and for the pre-closing Taxes.
10.4 Notice of Third Party Claims to Indemnifying Party. If any party (the
“Indemnitee”) receives notice of any claim or the commencement of any Action or proceeding from a
Person not a party to this Agreement with respect to which another party (or parties) to this
Agreement is obligated to provide indemnification (the “Indemnifying Party”) pursuant to Section
11.2 or Section 11.3, the Indemnitee shall give the Indemnifying Party notice thereof; provided,
however, the failure to give prompt notice shall relieve the Indemnifying Party from its
indemnification Such notice shall describe the claim in reasonable detail and shall indicate the
amount (estimated if necessary) of the Loss that has been or may be sustained by the Indemnitee.
The Indemnifying Party may elect to compromise or defend, at such Indemnifying Party’s own expense
and by such Indemnifying Party’s own counsel, any such matter involving the asserted liability of
the Indemnitee. If the Indemnifying Party elects to compromise or defend such asserted liability,
it shall within thirty (30) days (or sooner, if the nature of the asserted liability so requires)
notify the Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the expense of
the Indemnifying Party, in the compromise of, or defense against, any such asserted liability. In
such case the Indemnitee may participate, at its own expense, in such defense. If the Indemnifying
Party elects not to compromise or defend against the asserted liability, or fails to notify the
Indemnitee of its election as herein provided, the Indemnitee may at the Indemnifying Party’s
expense, pay, compromise or defend such asserted liability. Notwithstanding the
36
foregoing, neither the Indemnifying Party nor the Indemnitee may settle or compromise any
claim over the objection of the other; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld. If the Indemnifying Party chooses to
defend any claim, the Indemnitee shall make available to the Indemnifying Party any books, records
or other documents within its control that are necessary or appropriate for such defense.
10.5 Notice of Claims. In the case of a claim for indemnification hereunder that is
not a third party claim covered by Section 11.4 hereof, upon determination by Indemnitee that it is
entitled to indemnification or that circumstances exist that may entitle such Indemnitee to
indemnification hereunder, the Indemnitee shall deliver notice of such claim to the Indemnifying
Party, setting forth in reasonable detail the basis of such claim for indemnification (the
“Indemnification Notice”). Upon the Indemnification Notice having been given to the Indemnifying
Party, the Indemnifying Party shall have thirty (30) days in which to notify the Indemnitee in
writing (the “Dispute Notice”) that the amount of the claim for indemnification is in dispute,
setting forth in reasonable detail the basis of such dispute. In the event that a Dispute Notice
is not given to the Indemnitee within the required thirty (30) days, the Indemnifying Party shall
be obligated to pay the Indemnitee the amount set forth in the Indemnification Notice within sixty
(60) days after the date that the Indemnification Notice had been given to the Indemnifying Party.
In the event that a Dispute Notice is timely given to an Indemnitee, the parties hereto shall have
thirty (30) days to resolve any such dispute. In the event that such dispute is not resolved by
such parties within such period, the parties shall have the right to pursue all available remedies
to resolve such dispute.
10.6 Settlement. So long as the Indemnifying Party is conducting the defense of the
claim in accordance with Section 11.4, (a) the Indemnitee will not consent to the entry of any
judgment or enter into any settlement with respect to the claim without the prior consent of the
Indemnifying Party (not to be unreasonably withheld) and (b) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with respect to the claim without
the prior consent of the Indemnitee (not to be unreasonably withheld). In the event the
Indemnifying Party fails to conduct the defense of the claim in accordance with Section 11.4,
however, (i) the Indemnitee, on Notice delivered to the Indemnifying Party setting forth in
reasonable detail, the basis for its claim that the Indemnifying Party failed to conduct the
defense as aforesaid, and if the Indemnifying Party shall fail to cure such condition within ten
(10) business days following receipt of such Notice, may consent to the entry of any judgment or
enter into any settlement with respect to the claim in any manner it reasonably may deem
appropriate (and the Indemnitee need not consult with, or obtain any consent from, the Indemnifying
Party in connection therewith), subject to the right of the Indemnifying Party to contest the
determination that it failed to conduct the defense of the claim as aforesaid, in a diligent and
good faith manner, and (ii) the Indemnifying Party will remain responsible for any adverse
consequences the Indemnitee may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the claim to the fullest extent provided in this Article 11.
10.7 Collateral Sources. Notwithstanding the right to provide notice to the other
Party for a claim of indemnification under this Article 11, the Indemnified Parties agree that they
will, if commercially reasonable under the circumstances, seek recovery for all Losses from any
third party or any other source of reimbursement (including any insurance policy) prior to
attempting to collect from the Indemnifying Party.
37
10.8 Escrow Fund. The obligations of the Shareholders under Section 11.2 shall be
satisfied from the Holdback Shares held in escrow pursuant to the Escrow Agreement and shall act as
a limit on the liability of the Shareholders, except for (a) the adjustment provision of Section
2.4, (b) the representations and warranties in Sections 3.1, 3.2, 3.27, 4.1, 4.2 or 4.4, (c) any
liability with respect to any dispute or claim involving Xxx Xxxxxx, (d) any liability with respect
to any dispute or claim involving Elumina France with respect to its claim of ownership in the
Companies, (e) any liability with respect to any dispute or claim involving Xxxxx Xxxxxx’x
undertaking with the Secretary of State in 2002 or (f) fraud. The Holdback Shares shall be held by
the Escrow Agent in accordance with the terms of this Agreement and the Escrow Agreement, and the
Holdback Shares shall be (i) for the benefit of the Shareholders and (ii) security for the
Shareholders’ obligations to Buyer pursuant to this Agreement.
10.9 Tax Treatment. The Parties agree that any indemnification payments made pursuant
to this Agreement shall be treated for tax purposes, as between the parties, as an adjustment to
the Purchase Price, unless otherwise required by applicable Law or taxing authority interpretations
thereof.
ARTICLE 11
TERMINATION OF AGREEMENT
11.1 Termination by Buyer. Buyer, by notice in the manner provided in Section 15.6 on
or before the Closing Date, may terminate this Agreement if any of the conditions set forth in
Article 10 shall not have been satisfied or in the event of a breach by the Companies or the
Shareholders of any representation or warranty of the Companies or the Shareholders contained in
this Agreement or in the observance or in the due and timely performance of any of the agreements
or conditions contained in this Agreement on their part to be performed.
11.2 Termination by Shareholders. The Shareholders, by notice in the manner provided
in Section 15.6 on or before the Closing Date, may terminate this Agreement in the event of a
breach by Buyer of any representation or warranty of Buyer contained in this Agreement or in the
observance or in the due and timely performance of any of the agreements or conditions contained in
this Agreement on its part to be performed.
11.3 Termination for Failure to Close. Subject to the terms and conditions contained
in this Agreement, either Buyer or the Companies or the Shareholders, by notice in the manner
provided in Section 15.6, may terminate this Agreement if the Closing has not occurred on or before
November 30, 2007; provided, however, that no party in default under this Agreement or who is not
able to fulfill any condition to closing of the other party shall have the right to terminate
pursuant to this Section 12.3.
11.4 Termination by Mutual Consent. This Agreement may be terminated before the
Closing Date by the mutual consent of the parties hereto.
38
11.5 Effect of Termination. Termination of this Agreement pursuant to this Article 12
shall not in any way terminate, limit or restrict the rights and remedies of any party against any
other party that has breached this Agreement before termination.
ARTICLE 12
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
12.1 Nondisclosure by Shareholders. The Shareholders acknowledge that they have had
and may in the future have access to Confidential Information, that will as of the Closing be
valuable, special and unique assets of Buyer. The Shareholders agree, at all times from and after
the Closing, to, and shall cause the Companies, their Affiliates, officers, directors, employees
and agents to: (a) treat and hold as confidential (and not disclose or provide access to any
Person or to use) any Confidential Information; (b) if a Shareholder, the Companies or any such
Affiliate, officer, director, employee or agent becomes legally compelled to disclose any such
Confidential Information, provide Buyer with prompt written notice of such requirement so that
Buyer may seek a protective order or other remedy; and (c) promptly furnish (prior to, at, or as
soon as practicable after the Closing) to Buyer any and all copies (in whatever form or medium) of
all such Confidential Information then in the possession of any Shareholder, the Companies or any
such Affiliate, officer, director, employee or agent and destroy any additional copies then in
their possession of such information and of analyses, compilations, studies or other documents
prepared, in whole or in part, on the basis thereof. This Section 13.1, however, shall not apply
to any information that, at the time of disclosure, is available publicly and was not disclosed in
breach of this Agreement by the Shareholders, the Companies, or any of their Affiliates, officers,
directors, employees or agents. Each Shareholder and the Companies acknowledge and agree that
Buyer’s remedies at Law for any breach or threatened breach of this Section 13.1 are inadequate,
and that in addition to such remedies, Buyer shall be entitled to equitable relief, including
injunctive relief and specific performance, in the event of any such breach or threatened breach
without the need to demonstrate that monetary damages are inadequate.
12.2 Nondisclosure by Buyer. Buyer acknowledges that it has had and prior to the
Closing Date, will have access to certain Confidential Information. Buyer agrees, at all times
from and prior to the Closing Date, to, and shall cause its Affiliates, officers, directors,
employees and agents to: (a) treat and hold as confidential (and not disclose or provide access to
any Person to or use) any Confidential Information; and (b) if Buyer or any such Affiliate,
officer, director, employee or agent becomes legally compelled to disclose any such Confidential
Information, provide the Shareholders and Companies with prompt written notice of such requirement
so that the Shareholders or Companies may seek a protective order or other remedy. This Section
13.2, however, shall not apply to any information that, at the time of disclosure, is available
publicly and was not disclosed in breach of this Agreement by Buyer or any of its Affiliates,
officers, directors, employees or agents. Buyer acknowledges and agrees that the remedies at Law
for any breach or threatened breach of this Section 13.2 are inadequate, and that in addition to
such remedies, each Shareholder and the Companies shall be entitled to equitable relief, including
injunctive relief and specific performance, in the event of any such breach or threatened breach
without the need to demonstrate that monetary damages are inadequate.
39
ARTICLE 13
DISPUTE RESOLUTION
13.1 General. The parties agree that any disputes arising out of or related in any
way to this Agreement, including a breach of this Agreement, shall be filed exclusively with the
ICC Court of Arbitration (the “ICC”) located in New York, New York and shall be subject to the ICC
Arbitration Rules. The parties consent and agree to the jurisdiction of the ICC. Neither party
will argue or contend that it is not subject to the jurisdiction of the ICC or that venue in New
York, is improper. The parties agree to waive any right to a trial by jury in any such dispute and
that the matter will be tried solely to the court. The parties understand that they are giving up
valuable legal rights under this provision, including the right to trial by jury, and that they
voluntarily and knowingly waive those rights.
13.2 Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without giving effect to any choice or conflict of
law provision or rule that would cause the application of the Laws of any jurisdiction other than
the State of Delaware.
13.3 Attorneys’ Fees. Should any litigation be commenced under this Agreement, the
successful party in such litigation shall be entitled to recover, in addition to such other relief
as the court may award, its reasonable attorneys’ fees, expert witness fees, litigation-related
expenses, and court or other costs incurred in such litigation or proceeding. For purposes of this
clause, the term “successful party” means the net winner of the dispute, taking into account the
claims pursued, the claims on which the pursuing party was successful, the amount of money sought,
the amount of money awarded, and offsets or counterclaims pursued (successfully or unsuccessfully)
by the other party. If a written settlement offer is rejected and the judgment or award finally
obtained is equal to or more favorable to the offeror than an offer made in writing to settle, the
offeror is deemed to be the successful party from the date of the offer forward.
ARTICLE 14
GENERAL PROVISIONS
14.1 Assignment. This Agreement may not be assigned (except by operation of Law) or
otherwise transferred without the express written consent of the Shareholders and Buyer (which may
be granted or withheld in the sole and absolute discretion of the Shareholders and Buyer);
provided, however, that Buyer may assign this Agreement to an Affiliate of Buyer or any successor
of Buyer to the Businesses without the consent of the Shareholders.
14.2 Binding Effect; No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted assigns. Nothing in
this Agreement is intended to or shall confer upon any other Person, including any employee or
former employee of the Companies, any legal or equitable right, benefit or remedy of any nature
whatsoever, including any rights of employment for any specified period.
40
14.3 Amendment. This Agreement may not be amended except by a written instrument
executed by Buyer and the Shareholders.
14.4 Entire Agreement. This Agreement (together with the other agreements
contemplated by this Agreement) is the final, complete and exclusive statement of the agreement
among the parties with relation to the subject matter of this Agreement. There are no oral
representations, understandings or agreements covering the same subject matter as this Agreement.
This Agreement supersedes and cannot be varied, contradicted or supplemented by evidence of, any
prior or contemporaneous discussions, correspondence, or oral or written agreements or arrangements
of any kind.
14.5 Counterparts. This Agreement may be executed in two or more original or
facsimile counterparts, each of which shall be deemed an original and all of which together shall
constitute but one and the same instrument.
14.6 Notices. All notices or other communications required or permitted under this
Agreement shall be in writing and may be given by overnight courier, or by delivering the same in
person to such party, addressed as follows:
If to the Shareholders, addressed to them at:
Xxxxx Xxxxxx
Xxxx Xxxxx
Xxxx Xxxxx
If to Buyer, addressed to it at:
with a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Notice shall be deemed given and effective the day personally delivered or the day sent by
overnight courier, subject to signature verification. Any party may change the address for notice
by notifying the other parties of such change in accordance with this Section.
41
14.7 Waiver. At any time before the Closing, Buyer may (a) extend the time for the
performance of any of the obligations or other acts of the Companies or the Shareholders, (b) waive
any inaccuracies in the representations and warranties of the Companies or the Shareholders
contained in this Agreement or in any document delivered by the Companies or the Shareholders
pursuant hereto, or (c) waive compliance with any of the agreements or conditions of the Companies
or the Shareholders contained in this Agreement. At any time before the Closing, the Shareholders
may (a) extend the time of performance of any of the obligations or other acts of Buyer, (b) waive
any inaccuracies in the representations and warranties of Buyer contained in this Agreement or in
any document delivered by Buyer pursuant hereto, or (c) waive compliance with any of the agreements
or conditions of Buyer contained in this Agreement. No delay of or omission in the exercise of any
right, power or remedy accruing to any party as a result of any breach or default by any other
party under this Agreement shall impair any such right, power or remedy, nor shall it be construed
as a waiver of or acquiescence in any such breach or default, or of or in any similar breach or
default occurring later. No waiver of any single breach or default shall be deemed a waiver of any
other breach or default occurring before or after that waiver.
14.8 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, it shall, to the extent possible, be modified in such manner as to be valid, legal
and enforceable but so as most nearly to retain the intent of the parties. If such modification is
not possible, such provision shall be severed from this Agreement. In either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall not in any way be
affected or impaired thereby.
14.9 Construction. The headings in this Agreement are inserted for convenience only,
and shall not constitute a part of this Agreement or be used to construe or interpret any of its
provisions. The parties have participated jointly in negotiating and drafting this Agreement. If
a question of interpretation arises, this Agreement shall be construed as if drafted jointly by the
parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Agreement. Any reference to any statute shall be
deemed to refer to the statute, as amended, and to all rules and regulations promulgated
thereunder, as amended, unless the context requires otherwise. The word “include” or “including”
means include or including, without limitation. The representations, warranties and covenants in
this Agreement shall have independent significance. Accordingly, if any party has breached any
representation, warranty or covenant contained in this Agreement in any respect, the fact that
there exists another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not breached shall not
detract from or mitigate the fact the party is in breach of the first representation, warranty or
covenant.
14.10 Expenses of Transaction. Whether or not the transactions contemplated hereby
are consummated: (a) Buyer will pay the fees, expenses and disbursements of Buyer and its
representatives incurred in connection with this Agreement; (b) the Shareholders will pay the fees,
expenses and disbursements of each Shareholder, the Companies and their respective representatives
incurred in connection with this Agreement; and (c) Buyer and Shareholders will each bear one-half
of the fees of the Notary required for the Closing of the transactions contemplated hereby.
42
| BUYER: | ||||
| PROLINK HOLDINGS CORP. | ||||
| By: | /s/ Xxxxxxxx X. Xxxx | |||
| Name: | Xxxxxxxx X. Xxxx | |||
| Its: | Chief Financial Officer | |||
| COMPANIES: | ||||
| ELUMINA IBERICA, S.A. | ||||
| By: | /s/ X.X. Xxxxx | |||
| Name: | X.X. Xxxxx | |||
| Its: | Managing Director | |||
| ELUMINA IBERICA UK LIMITED | ||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Its: | Company Secretary | |||
| GP ADS, S.A. | ||||
| By: | /s/ Xxxxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxxxx Xxxxxxx | |||
| Its: | Managing Director | |||
| GP ADS LTD | ||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Its: | Company Secretary | |||
| SHAREHOLDERS: | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx | ||||
| By: | /s/ X.X. Xxxxx | |||
| Xxxx Xxxxx | ||||
43
Exhibit A
|
Definitions | |
Exhibit B
|
Distribution of Purchase Price | |
Schedule 3.1
|
Due Organization | |
Schedule 3.2.1
|
Capitalization of Elumina Spain | |
Schedule 3.2.2
|
Capitalization of Elumina UK | |
Schedule 3.2.3
|
Capitalization of GP Ads | |
Schedule 3.2.4
|
Capitalization of GP UK | |
Schedule 3.2.5
|
Subsidiaries | |
Schedule 3.4
|
Organizational Documents | |
Schedule 3.5.1
|
Financial Statements | |
Schedule 3.5.2
|
Accounting Principles | |
Schedule 3.8.2
|
Permits | |
Schedule 3.8.4
|
Privacy Policies | |
Schedule 3.10
|
Litigation | |
Schedule 3.11.1
|
Employees | |
Schedule 3.11.3
|
Employment Agreements | |
Schedule 3.12.1
|
Agreements | |
Schedule 3.12.2
|
Consents | |
Schedule 3.13
|
Real Estate | |
Schedule 3.16
|
Tangible Property | |
Schedule 3.17.1
|
Intellectual Property | |
Schedule 3.17.5
|
Internet Protocol Addresses | |
Schedule 3.17.6
|
Compiler Software | |
Schedule 3.18.1
|
Customer and Supplier List | |
Schedule 3.18.2
|
Indications from Customers or Suppliers | |
Schedule 3.19
|
Title | |
Schedule 3.21
|
Liabilities | |
Schedule 3.22
|
Employee Benefit Plans | |
Schedule 3.23
|
Insurance | |
Schedule 3.24
|
Officers and Directors | |
Schedule 3.25
|
Operations | |
Schedule 3.26
|
Banks, Brokers and Proxies | |
Schedule 3.27.
|
Tax matters |
44
EXHIBIT A
“Accounts Receivable” means all contracts, accounts receivables, notes and other
amounts receivable from customers arising from the operation of the Businesses before the Closing
Date, whether or not in the ordinary course and whether or not billed before the Closing Date,
together with any unpaid financing charges accrued thereon.
“Act” has the meaning specified in Section 4.3.1.
“Action” means any claim, action, suit, formal or informal arbitration or mediation,
inquiry, proceeding or investigation by or before any Governmental Authority or private authority.
“Adjustment Date” has the meaning specified in Section 2.4.1.
“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person.
“Agreement” means this Acquisition Agreement among Buyer, the Companies and the
Shareholders (including the Exhibits and the Disclosure Schedules).
“Bankruptcy Code” means Title 11 of the United States Code.
“Basket” has the meaning specified in Section 2.3.1.
“Board” has the meaning specified in Section 8.3.
“Businesses” has the meaning specified in Recital A.
“Buyer” has the meaning specified in the introductory paragraph of the Agreement.
“Buyer Indemnitee” has the meaning specified in Section 11.2.
“Change in Control” has the meaning specified in Section 2.4.3.
“Closing” has the meaning specified in Section 2.6.
“Closing Date” has the meaning specified in Section 2.6.
“Companies” has the meaning specified in the introductory paragraph of the Agreement.
“Confidential Information” means confidential information of Buyer, the Companies or
the Shareholders, as applicable, including customer and supplier lists, operation policies and
methods, pricing and cost policies, marketing plans, and other confidential information.
“Consents” means those authorizations, consents, waivers, orders, approvals and
clearances of Governmental Authorities and officials and other Persons which are necessary for the
sale and transfer to Buyer of the Companies and the Subsidiaries or the consummation of the
transaction (including the continuation of any material contracts) where the approval of any
other Person may be required.
A-1
“Convertible Securities” has the meaning specified in Section 3.2.1.
“Disclosure Schedules” means the disclosure schedules that shall be prepared by the
Shareholders and delivered to Buyer and attached to the Agreement.
“Dispute Notice” has the meaning specified in Section 11.5.
“Earn-Out Shares” has the meaning specified in Section 2.2.3.
“Elumina Spain” has the meaning specified in the introductory paragraph of the
Agreement.
“Elumina Spain Common Stock” has the meaning specified in Section 3.2.1.
“Elumina UK” has the meaning specified in the introductory paragraph of the Agreement.
“Elumina UK Common Stock” has the meaning specified in Section 3.2.2.
“Elumina UK Rollup” has the meaning specified in Section 6.1.7.
“Employee” and “Employees” have the meanings specified in Section
3.11.1.
“Employee Benefit Plans” has the meaning specified in Section 3.22.1.
“Employment Agreement” has the meaning specified in Section 3.11.3.
“Encumbrance” means any security interest, pledge, mortgage, deed of trust, lien
(including environmental and Tax liens), charge, judgment, encumbrance, adverse claim, claim
arising under Section 506(c) of the Bankruptcy Code, preferential arrangement, fraudulent transfer
or other avoidance claim or restriction of any kind, including any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership, and any lien,
interest, restriction or limitation arising from or relating to personal or other property tax,
sales and transaction privilege, claim of successor liability for any alleged unpaid sales or other
Tax, and any other lien or assessment of any Governmental Authority, whether or not allowable,
recorded or contingent.
“Environmental Laws” has the meaning specified in Section 3.8.5.
“Escrow Agent” has the meaning specified in Section 6.1.6.
“Escrow Agreement” has the meaning specified in Section 6.1.6.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Fair Market Value” has the meaning specified in Section 2.3.1.
A-2
“Financial Statements” has the meaning specified in Section 3.5.1.
“Financial Statement Date” has the meanings specified in Section 3.6.
“GAAP” has the meaning specified in Section 2.4.1.
“Governmental Authority” means any United States federal, state or local or any
foreign government, governmental, regulatory or administrative authority, agency or commission or
any court, tribunal, or judicial or arbitral body.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.
“GP Ads” has the meaning specified in the introductory paragraph of the Agreement.
“GP Ads Common Stock” has the meaning specified in Section 3.2.3.
“GP UK” has the meaning specified in the introductory paragraph of the Agreement.
“GP UK Common Stock” has the meaning specified in Section 3.2.4.
“Hazardous Materials” has the meaning specified in Section 3.8.5.
“Holdback Shares” has the meaning specified in Section 2.2.4.
“Holdback Period” has the meaning specified in Section 2.3.1.
“include” or “including” has the meaning specified in Section 15.9.
“Indebtedness” has the meaning specified in Section 3.20.
“Indemnification Notice” has the meaning specified in Section 11.5.
“Indemnitee” means a party seeking indemnification pursuant to Article 11.
“Indemnifying Party” means a party from whom indemnification is sought pursuant to
Article 11.
“Intellectual Property” means all the right, title and interest of the Companies, the
Subsidiaries and the Shareholders in, to and under all websites, trademarks, trade names, service
marks, copyrights, patents, inventions, designs, industrial designs, trade secrets, royalties,
secret processes, formulae, and all applications, registrations, renewals and other rights relating
to the foregoing (whether or not any registration or filing has been made with respect thereto).
“Interim Financial Statements” has the meaning specified in Section 3.5.1.
“Interim Period” has the meaning specified in Section 2.4.1.
“Law” has the meaning specified in Section 3.8.1.
A-3
“Leases” has the meaning specified in Section 3.13.
“Liabilities” means all debts, liabilities and obligations, whether legal or
equitable, accrued or fixed, absolute or contingent, matured or unmatured, known or unknown,
determined or determinable, foreseen or unforeseen, ordinary or extraordinary, patent or latent,
including those arising under any Law or Action and those arising under any contract, agreement,
arrangement, commitment or undertaking.
“Losses” means Liabilities, claims, damages, Actions, demands, assessments,
adjustments, penalties, losses, costs and expenses whatsoever (including court costs, reasonable
attorneys’ fees and expenses of investigation), whether equitable or legal, matured or contingent,
known or unknown, foreseen or unforeseen, ordinary or extraordinary, patent or latent.
“Material Adverse Effect” means any circumstance, change in, or effect on, the
Businesses that, individually or in the aggregate with any other circumstances, changes in, or
effects thereon: (i) is or could reasonably be expected to be materially adverse to the
Businesses, financial condition, assets or Liabilities (including contingent Liabilities), customer
or supplier relationships, prospects, value, results of operations or the condition (financial or
otherwise) of either of the Companies; or (ii) could reasonably be expected to materially adversely
affect the ability of Buyer to operate the Businesses in the manner in which they are currently
operated.
“Net Profits Escrow Agreement” has the meaning specified in Section 6.1.6.
“Net Profits Shares” has the meaning specified in Section 2.2.2.
“Notary” has the meaning specified in Section 2.6.
“Permits” means all permits, licenses, franchises, Consents and approvals of every
kind necessary to operate the Businesses.
“Permitted Liens” has the meaning specified in Section 3.19.
“Person” means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization, Governmental Authority or other entity.
“Pre-Closing Taxes means any Tax attributable to any taxable period, or portion
thereof, ending on or before the Closing Date. In the case of a taxable period beginning before
and ending after the Closing Date, Pre-Closing Taxes shall include: (i) in the case of Taxes
imposed on or calculated by reference to income, gain, receipts, sales, use, payment of wages, or
other identifiable transactions or events, all such Taxes that would be payable if the taxable
period ended on and included the Closing Date; and (ii) in the case of all other Taxes (including
but not limited to real, personal, or intangible property taxes, franchise taxes, or capital stock
or net worth taxes), all such Taxes for the entire taxable period multiplied by a fraction, the
numerator of which is the number of days in the taxable period ending on and including the Closing
Date, and the denominator of which is the number of days in the entire taxable period.
“Purchase Price” has the meaning specified in Section 2.2.
A-4
“Real Property” means any property leased or owned by the Companies or the
Subsidiaries.
“SEC” has the meaning specified in Article 5.
“Securities” has the meaning specified in Recital B.
“Securities Filings” has the meaning specified in Article 5.
“Selling Shareholders” has the meaning specified in Section 8.6.
“Shareholder Holdback Shares” has the meaning specified in Section 2.3.2.
“Shareholder Indemnitee” has the meaning specified in Section 11.3.
“Shareholders” has the meaning specified in the introductory paragraph of the
Agreement.
“Shares” has the meaning specified in Section 2.2.4.
“Subsidiary” or “Subsidiaries” has the meaning specified in Section
3.2.5.
“Tax” means: (i) any ad valorem, alternative or add-on minimum, capital stock,
communications, custom, disability, duty, employment, environmental, escheat, estimated, excise,
franchise, gross income, gross receipts, license, net income, occupation, payroll, premium,
profits, property, registration, sales, severance, social security, stamp, transfer, unclaimed
property, unemployment, use, utility, value-added, wage, windfall profits, withholding, and other
taxes, government fees, levies, tariffs, imposts, or other assessments of any kind whatsoever
imposed by a Governmental Authority; (ii) any interest, penalties, additions to tax, or additional
amount imposed by any Governmental Authority with respect thereto, whether disputed or not; and
(iii) any amount described in clauses (i) or (ii) for which a Person is liable as a transferee or
successor, or by contract, indemnity, or otherwise.
“Tax Closing Agreement” means a written and legally binding agreement with a taxing
authority relating to Taxes.
“Tax Returns” means all returns, declarations, reports, forms, estimates, information
returns and statements required to be filed in respect of any Taxes to be supplied to a taxing
authority in connection with any Taxes.
“Tax Ruling” means written rulings of a taxing authority relating to Taxes.
“to the best of the Companies’ or the Shareholders’ Knowledge” has the meaning
specified in Article 3.
“to Buyer’s Knowledge” has the meaning specified in Article 5.
“U.S. Person” has the meaning specified in Section 4.3.1.
A-5
EXHIBIT B
DISTRIBUTION OF PURCHASE PRICE
DISTRIBUTION OF PURCHASE PRICE
Each of Xxxxx Xxxxxx and Xxxx Xxxxx shall be allocated fifty percent (50%) of the Shares of Buyer
payable pursuant to this Agreement.
B-1
