AGREEMENT AND
PLAN OF MERGER
BY AND
AMONG
HALO GROUP, INC.
GVC VENTURE CORP.
AND
GVC MERGER
CORP.
September 17,
2009
TABLE OF CONTENTS
|
|
|
Page
|
|
|
|
|
|
Article I
|
DEFINITIONS
|
1
|
|
Article II
|
MERGER
|
4
|
|
2.1
|
Effects of Merger
|
5
|
|
2.2
|
Effect on Halo Capital Stock and GVC
Merger Corp Capital Stock
|
6
|
|
2.3
|
Rights of Holders of Halo Common
Stock
|
6
|
|
2.4
|
Procedure for Exchange of Halo
Common Stock
|
6
|
|
2.5
|
Dissenting Shares
|
7
|
|
2.6
|
Directors and Officers of the
Surviving Corporation
|
8
|
|
2.7
|
Directors and Officers of
GVC
|
8
|
|
Article III
|
REPRESENTATIONS AND WARRANTIES OF
HALO
|
8
|
|
3.1
|
Organization and
Qualification
|
8
|
|
3.2
|
Authority Relative to this
Agreement; Non-Contravention
|
9
|
|
3.3
|
Capitalization
|
9
|
|
3.4
|
Litigation
|
10
|
|
3.5
|
Subsidiaries
|
10
|
|
3.6
|
Tax Matters
|
10
|
|
3.7
|
Contracts and Commitments
|
11
|
|
3.8
|
Affiliate Transactions
|
12
|
|
3.9
|
Compliance with Laws;
Permits
|
12
|
|
3.10
|
Financial Statements
|
12
|
|
3.11
|
Books and Records
|
12
|
|
3.12
|
Real Property
|
13
|
|
3.13
|
Insurance
|
13
|
|
3.14
|
No Undisclosed
Liabilities
|
13
|
|
3.15
|
Environmental Matters
|
13
|
|
3.16
|
Absence of Certain
Developments
|
13
|
|
3.17
|
Employee Benefit Plans
|
14
|
|
3.18
|
Employee Relations
|
14
|
|
3.19
|
Proprietary Information and
Inventions
|
14
|
|
3.20
|
Intellectual Property
|
15
|
|
3.21
|
Tax-Free Reorganization
|
16
|
|
3.22
|
Vote Required
|
16
|
|
3.23
|
Full Disclosure
|
16
|
|
3.24
|
No Brokers or Finders
|
16
|
|
Article IV
|
REPRESENTATIONS AND WARRANTIES OF
GVC AND GVC MERGER CORP
|
16
|
|
4.1
|
Organization and
Qualification
|
16
|
|
4.2
|
Authority Relative to this
Agreement; Non-Contravention
|
16
|
|
4.3
|
Capitalization
|
17
|
|
4.4
|
Exchange Act Reports
|
18
|
|
4.5
|
Litigation
|
18
|
|
4.6
|
Subsidiaries
|
18
|
|
4.7
|
Tax Matters
|
18
|
|
4.8
|
Contracts and Commitments
|
19
|
|
4.9
|
Affiliate Transactions
|
20
|
|
4.10
|
Compliance with Laws;
Permits
|
20
|
|
4.11
|
Validity of the GVC Preferred
Stock
|
20
|
|
4.12
|
Books and Records
|
21
|
|
4.13
|
Real Property
|
21
|
|
4.14
|
Insurance
|
21
|
|
4.15
|
No Undisclosed
Liabilities
|
21
|
|
4.16
|
Environmental Matters
|
21
|
|
4.17
|
Absence of Certain
Developments
|
21
|
|
4.18
|
Employee Benefit Plans
|
22
|
|
4.19
|
Employees
|
22
|
|
4.20
|
Proprietary Information and
Inventions
|
22
|
|
4.21
|
Intellectual Property
|
22
|
|
4.22
|
Tax Free Reorganization
|
22
|
|
4.23
|
Financial Statements
|
22
|
|
4.24
|
Full Disclosure
|
23
|
|
4.25
|
No Brokers or Finders
|
23
|
|
Article V
|
CONDUCT OF BUSINESS PENDING THE
MERGER
|
23
|
|
5.1
|
Conduct of Business by
GVC
|
23
|
|
5.2
|
Conduct of Business by
Halo
|
23
|
|
Article VI
|
ADDITIONAL COVENANTS AND
AGREEMENTS
|
24
|
|
6.1
|
Governmental Filings
|
24
|
|
6.2
|
Expenses
|
24
|
|
6.3
|
Due Diligence; Access to
Information; Confidentiality
|
24
|
|
6.4
|
Tax Treatment
|
26
|
|
6.5
|
Press Releases
|
26
|
|
6.6
|
Securities Reports
|
26
|
|
6.7
|
Private Placement
|
27
|
|
6.8
|
Amendment to Certificate of
Incorporation of GVC
|
27
|
|
6.9
|
Consent of Halo Stockholders;
Materials to Stockholders
|
27
|
|
6.10
|
No Solicitation
|
27
|
|
6.11
|
Failure to Fulfill
Conditions
|
28
|
|
6.12
|
Registration Rights
Agreement
|
28
|
|
6.13
|
Notification of Certain
Matters
|
28
|
|
Article VII
|
CONDITIONS
|
28
|
|
7.1
|
Conditions to Obligations of Each
Party
|
28
|
|
7.2
|
Additional Conditions to Obligation
of GVC and GVC Merger Corp
|
29
|
|
7.3
|
Additional Conditions to Obligation
of Halo
|
30
|
|
Article VIII
|
TERMINATION, AMENDMENT AND
WAIVER
|
31
|
|
8.1
|
Termination
|
31
|
|
Article IX
|
GENERAL PROVISIONS
|
32
|
|
9.1
|
Notices
|
32
|
|
9.2
|
No Survival
|
33
|
|
9.3
|
Interpretation
|
33
|
|
9.4
|
Severability
|
33
|
|
9.5
|
Amendment
|
33
|
|
9.6
|
Waiver
|
33
|
|
9.7
|
Miscellaneous
|
34
|
|
9.8
|
Counterparts
|
34
|
|
9.9
|
Third Party Beneficiaries
|
34
|
|
9.10
|
Governing Law
|
34
|
|
9.11
|
Jurisdiction; Service of
Process
|
34
|
|
Exhibits
|
|
|
|
|
|
|
|
Exhibit A
|
-
|
Certificate of Merger
|
|
Exhibit B
|
-
|
Series Z Certificate of
Designation
|
|
Exhibit C
|
-
|
Voting Agreement
|
|
Exhibit D
|
-
|
Registration Rights
Agreement
|
AGREEMENT AND PLAN OF
MERGER
This Agreement and Plan of Merger
(this “ Agreement ”) is entered into as of
September 17, 2009, by and among Halo Group, Inc. , a Texas
corporation (“ Halo ”), GVC Venture Corp.
, a Delaware corporation (“ GVC ”), and GVC
Merger Corp. , a Texas corporation (“ GVC Merger
Corp ”).
W I T N E S S E T H
WHEREAS, the Boards of Directors of
Halo, GVC and GVC Merger Corp have determined that it is in the
best interests of such corporations and their respective
stockholders to consummate the merger of GVC Merger Corp with and
into Halo with Halo as the surviving corporation (the “
Merger ”);
WHEREAS, GVC, as the sole
stockholder of GVC Merger Corp, has approved this Agreement, the
Merger and the transactions contemplated by this Agreement pursuant
to action taken by written consent in accordance with the
requirements of the Texas Business Organizations Code (“
TBOC ”) and the Bylaws of GVC Merger Corp;
WHEREAS, pursuant to the Merger,
among other things, the outstanding shares of common stock of Halo
shall be converted into the right to receive upon the Effective
Time (as hereinafter defined) the Merger Consideration (as
hereinafter defined);
WHEREAS, the parties to this
Agreement intend to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the “ Code ”)
and the regulations promulgated thereunder, and intend that the
Merger and the transactions contemplated by this Agreement be
undertaken pursuant to that plan; and
WHEREAS, the parties to this
Agreement intend that the Merger qualify as a
“reorganization,” within the meaning of Section 368(a)
of the Code, and that GVC, GVC Merger Corp and Halo will each be a
“party to a reorganization,” within the meaning of
Section 368(b) of the Code, with respect to the Merger.
NOW, THEREFORE, in consideration of
the representations, warranties and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms
shall have the following meanings (such meaning to be equally
applicable to both the singular and plural forms of the terms
defined):
“ Affiliate ” has
the meaning as defined in Rule 12b-2 promulgated under the Exchange
Act, as such regulation is in effect on the date hereof.
“ Certificate of Merger
” shall mean the certificate of merger in substantially the
form attached hereto as Exhibit A .
“ Closing ” shall
have the meaning as set forth in Section 2.1(c)
hereof.
“ Closing Date ”
shall have the meaning as set forth in Section 2.1(c)
hereof.
“ Code ” has the
meaning ascribed thereto in the preambles to this
Agreement.
“ Copyrights ”
has the meaning ascribed thereto in Section 3.20(a)
.
“ Dissenting Shares
” shall have the meaning as set forth in Section
2.5 hereof.
“ Effective Date
” shall have the meaning ascribed thereto in Section
2.1(c) hereof.
“ Effective Time
” shall have the meaning ascribed thereto in Section
2.1(c) hereof.
“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as amended, or
any successor law and the rules and regulations promulgated
thereunder.
“ Evaluation Material
” shall have the meaning ascribed thereto in Section
6.3(a) .
“ Exchange Act ”
shall mean the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated
thereunder.
“ Exchange Rate ”
means the quotient (to seven decimal points) resulting from
dividing (a) 1,000,000 (representing the number of authorized
shares of GVC Series Z Preferred Stock) by (b) the total number of
shares of authorized Halo Common Stock immediately prior to the
Effective Time.
“ GAAP ” shall
mean United States generally accepted accounting principles as in
effect from time to time.
“ GVC Common Stock
” shall mean the common stock, par value $.01 per share, of
GVC.
“ GVC 8-K Reports
” shall have the meaning ascribed thereto in Section
4.4 .
“ GVC Insiders ”
shall have the meaning ascribed thereto in Section 4.10
.
“ GVC Intellectual
Property ” shall have the meaning ascribed thereto in
Section 4.22 .
“ GVC Latest Balance
Sheet ” shall have the meaning ascribed thereto in
Section 4.16 .
“ GVC Permits ”
shall have the meaning ascribed thereto in Section 4.11(b)
.
“ GVC Proxy Statements
” shall have the meaning ascribed thereto in Section
4.4 .
“ GVC Returns ”
shall have the meaning ascribed thereto in Section 4.8(a)
.
“ GVC SEC Filings
” shall have the meaning ascribed thereto in Section
4.4 .
“ GVC Series Z Preferred
Stock ” shall mean the newly-designated Series Z
Convertible Preferred Stock, par value $.01 per share, of GVC, the
rights, preferences and terms of which are described in the Series
Z Certificate of Designation.
“ GVC Subsidiary” or
“GVC Subsidiaries ” shall have the meaning ascribed
thereto in Section 4.6 .
“ GVC 10-K Reports
” shall have the meaning ascribed thereto in Section
4.4 .
“ Halo Common Stock
” means the common stock, par value $.001, of
Halo.
“ Halo Financial
Statements ” shall have the meaning as set forth in
Section 3.10 hereof.
“ Halo Insiders ”
shall have the meaning as set forth in Section 3.8
hereof.
“ Halo Intellectual
Property ” shall have the meaning as set forth in
Section 3.20 hereof.
“ Halo Latest Balance
Sheet ” shall have the meaning as set forth in Section
3.14 hereof.
“ Halo Permits ”
shall have the meaning as set forth in Section 3.9(b)
hereof.
“ Halo Plans ”
shall have the meaning as set forth in Section
3.17(a) hereof.
“ Halo Preferred Stock
” shall mean, collectively, the Halo Series A Preferred
Stock, the Halo Series B Preferred Stock and the Halo Series C
Preferred Stock.
“ Halo Returns ”
shall have the meaning as set forth in Section 3.6(a)
hereof.
“ Halo Series A Preferred
Stock ” means the Series A preferred stock, par value
$.001, of Halo.
“ Halo Series B Preferred
Stock ” means the Series B preferred stock, par value
$.001, of Halo.
“ Halo Series C Preferred
Stock ” means the Series C preferred stock, par value
$.001, of Halo.
“ Intellectual Property
” has the meaning ascribed thereto in Section 3.20(a)
.
“ Know-How ” has
the meaning ascribed thereto in Section 3.20(a) .
“ Knowledge ”
means, with respect to an individual, that such individual is
actually aware of a particular fact or other matter, with no
obligation to conduct any inquiry or other investigation to
determine the accuracy of such fact or other matter. A Person other
than an individual shall be deemed to have Knowledge of a
particular fact or other matter if the officers, directors or other
management personnel of such Person have Knowledge of such fact or
other matter.
“ Material Adverse
Effect ” shall, with respect to an entity, mean a
material adverse effect on the business, operations, and results of
operations or financial condition of such entity on a consolidated
basis.
“ Merger ” shall
have the meaning ascribed thereto in the preambles of this
Agreement.
“ Merger Consideration
” means the shares of GVC Series Z Preferred Stock issuable
in connection with the Merger to the holders of Halo Common Stock,
based on the Exchange Rate.
“ Options ” shall
have the meaning as set forth in Section 2.2(f)
hereof.
“ Patents ” has
the meaning ascribed thereto in Section 3.20(a) .
“ Person ” means
any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union,
governmental authority or other entity.
“ Registration Rights
Agreement ” shall have the meaning ascribed thereto in
Section 6.12 .
“ Representatives
” shall have the meaning ascribed thereto in Section
6.3(a) .
“ Requisite Halo
Stockholder Vote ” shall have the meaning ascribed
thereto in Section 3.2 .
“ Rule 144 ”
shall have the meaning ascribed thereto in Section
2.4(c) hereof.
“ Schedule 14f-1
” shall have the meaning ascribed thereto in Section
2.7 .
“ SEC ” shall
mean the United States Securities and Exchange
Commission.
“ Securities Act
” shall mean the Securities Act of 1933, as amended,
including the rules and regulations promulgated
thereunder.
“ Series Z Certificate of
Designation ” shall mean the certificate of designation
setting forth all of the rights, preferences and other terms of the
GVC Series Z Convertible Preferred Stock in substantially the form
attached hereto as Exhibit B .
“ Stock Option Plan
” shall have the meaning as set forth in Section
2.2(f) hereof.
“ Stockholder
Questionnaire ” shall have the meaning ascribed thereto
in Section 6.7 .
“ Subsidiary ”
shall mean, with respect to any Person, (i) each Person in which
such Person owns directly or indirectly fifty percent (50%) or more
of the voting securities and (ii) any other Person which such
Person controls through management, policies, contract or
otherwise, and shall, in each case, unless otherwise indicated, be
deemed to refer to both direct and indirect subsidiaries of such
Person.
“ Surviving Company
” shall have the meaning ascribed thereto in Article
II .
“ Tax ” or
“ Taxes ” shall mean any federal, state, local
or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, property or windfall
profits taxes, environmental taxes, customs duties, capital stock,
franchise, employees’ income withholding, foreign or domestic
withholding, social security, unemployment, disability,
workers’ compensation, employment-related insurance, real
property, personal property, sales, use, transfer, value added,
alternative or add-on minimum or other governmental tax, fee,
assessment or charge of any kind whatsoever including any interest,
penalties or additions to any Tax or additional amounts in respect
of the foregoing.
“ Trademarks ”
has the meaning ascribed thereto in Section 3.20(a)
.
“ TBOC ” has the
meaning ascribed thereto in the preambles to this
Agreement.
“ Voting Agreement
” has the meaning ascribed thereto in Section 6.9(c)
.
ARTICLE II
MERGER
Subject to the satisfaction or
waiver of the conditions set forth in Article VII , at the
Effective Time, (i) GVC Merger Corp will merge with and into
Halo, and (ii) Halo will become a Subsidiary of GVC. The term
“ Surviving Company ” as used herein shall mean
Halo, as a Subsidiary of GVC after giving effect to the Merger. The
Merger will be effected pursuant to the Certificate of Merger in
accordance with the provisions of, and with the effect provided in,
Section 10.008 of the TBOC.
2.1 Effects
of Merger .
(a) From
and after the Effective Time and until further amended in
accordance with law, (i) the Certificate of Incorporation of
Halo as in effect immediately prior to the Effective Time shall be
the Certificate of Incorporation of the Surviving Company, and
(ii) the Bylaws of Halo as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving
Company.
(b) GVC,
Halo and GVC Merger Corp, respectively, shall each use its best
efforts to take all such action as may be necessary or appropriate
to effectuate the Merger in accordance with the TBOC at the
Effective Time. If at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes
of this Agreement and to vest the Surviving Company with full
right, title and possession to all properties, rights and
privileges of either Halo or GVC Merger Corp, the officers of the
Surviving Company are fully authorized in the name of Halo and GVC
Merger Corp or otherwise to take, and shall take, all such lawful
and necessary action.
(c) Subject
to the provisions of Article VII and Article VIII hereof, the closing (the “ Closing
”) of the transactions contemplated hereby shall take place
on or before September 30, 2009 (the “ Closing Date
”), at the offices of Troutman Sanders, LLP, 405 Lexington
Avenue, 9 th Floor, New York, New York, or such other
time and place as Halo and GVC mutually agree at the earliest
practicable time after the satisfaction or waiver of the conditions
in Article VII , but in no event later than ten (10)
business days after all such conditions have been satisfied or
waived, or on such other date as may be mutually agreed by the
parties hereto. On the Closing Date, or as soon thereafter as
practicable, to effect the Merger, the parties hereto will cause
the Certificate of Merger to be filed with the Texas Secretary of
State in accordance with the TBOC. The Merger shall be effective
when the Certificate of Merger is filed with the Texas Secretary of
State (the “ Effective Time ”). As used herein,
the term “ Effective Date ” shall mean the date
on which the Certificate of Merger is filed with the Texas
Secretary of State.
2.2
Effect on Halo Capital Stock and GVC Merger Corp Capital
Stock . To effectuate the Merger, and subject to the terms and
conditions of this Agreement, at the Effective Time:
(a) Each
share of Halo Common Stock issued and outstanding immediately prior
to the Effective Time (other than shares to be extinguished
pursuant to this Section 2.2 and Dissenting Shares, if any) shall
automatically be converted into and exchangeable for fully paid and
nonassessable shares of GVC Series Z Preferred Stock at the
Exchange Rate, rounded to the nearest 7th decimal place.
(b) Each
share of Halo Preferred Stock issued and outstanding immediately
prior to the Effective Time shall remain outstanding and unchanged
and convertible in accordance with its terms.
(c) All
shares of Halo Common Stock held at the Effective Time by Halo as
treasury stock, if any, will be canceled and no payment will be
made with respect to those shares.
(d) Each
share of Halo Common Stock issued and outstanding immediately prior
to the Effective Time and owned by GVC Merger Corp or GVC, if any,
shall be cancelled and extinguished without any conversion thereof
and no payment shall be made with respect thereto; and
(e) All
shares of common stock, $0.01 par value per share, of GVC Merger
Corp issued and outstanding immediately prior to the Effective Time
will be converted into and become, in the aggregate, one validly
issued, fully paid and nonassessable share of common stock of the
Surviving Company.
(f) At
the Effective Date, GVC shall assume all of Halo’s rights and
obligations under Halo’s 2007 Stock Plan, as amended (the
“ Stock Option Plan ”), as well as Halo’s
obligations under the stock options granted by Halo on or prior to
the Effective Date to purchase up to a maximum of 2,950,000 shares
of Halo Common Stock pursuant to the Stock Option Plan to the
extent such options have not, prior to the Effective Date, been
exercised, cancelled or terminated nor expired (collectively the
“ Options ”). The Options shall be assumed in
accordance with the terms and conditions of the Stock Option Plan,
except that, from and after the Effective Time: (i) all actions to
be taken under the Stock Option Plan or the Options by the Board
of
Directors of Halo or a committee
thereof shall be taken by the Board of Directors of GVC or a
committee thereof, (ii) each Option shall evidence the right to
purchase a number of whole and fractional shares of GVC Series Z
Preferred Stock (rounded to the nearest 7th decimal place) equal to
the number of shares of Halo Common Stock into which such Option is
exercisable immediately prior to the Effective Date multiplied by
the Exchange Rate, (iii) the new option price for each share of GVC
Series Z Preferred Stock issuable upon exercise of an Option shall
be determined by dividing the option exercise price immediately
prior to the Effective Date by the Exchange Rate (rounded to the
nearest cent) and (iv) all references in the Options and the Stock
Option Plan to Halo and Halo Common Stock shall be deemed to be
references to GVC and GVC Series Z Preferred Stock, respectively,
after giving effect to the adjustments pursuant to clauses (ii) and
(iii). Notwithstanding the provisions set forth in clause (iii)
above, with respect to each Option intended to be an
“incentive stock option” under Section 422 of the Code,
if the new option price calculated pursuant to clause (iii) would
cause any such Option not to satisfy the requirements of Section
424(a) of the Code and Treasury Regulation § 1.425-1(a)(1)(i),
the new exercise price with respect to that Option will be
increased to the minimum price that it could be and still satisfy
the requirements of that regulation. GVC agrees to use its best
efforts to take such other steps as are necessary to ensure that
those Options which are deemed “incentive stock
options” under Section 422 of the Code remain
“incentive stock options.”
2.3
Rights of Holders of Halo Common Stock. On and after the
Effective Date and until surrendered for exchange, each outstanding
stock certificate that immediately prior to the Effective Date
represented shares of Halo Common Stock (except Dissenting Shares
and shares cancelled or extinguished pursuant to Section 2.2
, if any) shall be deemed for all purposes, to evidence ownership
of and to represent the number of whole and fractional shares of
GVC Series Z Preferred Stock (rounded to the nearest 7th decimal
place) into which such shares of Halo Common Stock shall have been
exchanged pursuant to Section 2.2(a) above. In any matters relating to such
certificates of Halo Common Stock, GVC may rely conclusively upon
the record of stockholders maintained by Halo containing the names
and addresses of the holders of record of Halo Common Stock on the
Effective Date. Shares of GVC Series Z Preferred Stock shall have
the terms, rights and preferences substantially set forth in the
Series Z Certificate of Designation. The record holder of each such
outstanding certificate representing shares of Halo Common Stock,
shall, after the Effective Date, be entitled to vote the shares of
GVC Series Z Preferred Stock on any matters on which the holders of
record of GVC Common Stock, as of any date subsequent to the
Effective Date, shall be entitled to vote.
2.4
Procedure for Exchange of Halo Common Stock.
(a) After
the Effective Time, holders of certificates theretofore evidencing
outstanding shares of Halo Common Stock (except Dissenting Shares
and shares cancelled or extinguished pursuant to Section 2.2
, if any), upon surrender of such certificates to the Secretary of
GVC, shall be entitled to receive certificates representing the
number of shares of GVC Series Z Preferred Stock into which shares
of Halo Common Stock theretofore represented by the certificates so
surrendered are exchangeable as provided in Section
2.2(a) hereof. GVC shall
not be obligated to deliver any such shares of GVC Series Z
Preferred Stock to which any former holder of shares of Halo Common
Stock is entitled until such holder surrenders the certificate or
certificates representing such shares. Upon surrender, each
certificate evidencing Halo Common Stock shall be canceled. If
there is a transfer of Halo Common Stock ownership which is not
registered in the transfer records of Halo, a certificate
representing the proper number of shares of GVC Series Z Preferred
Stock may be issued to a person other than the person in whose name
the certificate so surrendered is registered if: (x) upon
presentation to the Secretary of GVC, such certificate shall be
properly endorsed or otherwise be in proper form for transfer, (y)
the person requesting such issuance shall pay any transfer or other
taxes required by reason of the issuance of shares of GVC Series Z
Preferred Stock to a person other than the registered holder of
such certificate or establish to the reasonable satisfaction of GVC
that such tax has been paid or is not applicable, and (z) the
issuance of such GVC Series Z Preferred Stock constitutes a valid
“private placement” under the Securities
Act.
(b) All
shares of GVC Series Z Preferred Stock issued upon the surrender
for exchange of Halo Common Stock in accordance with the above
terms and conditions shall be deemed to have been issued and paid
in full satisfaction of all rights pertaining to such shares of
Halo Common Stock.
(c) Any
shares of GVC Series Z Preferred Stock issued in the Merger will
not be transferable except (1) pursuant to an effective
registration statement under the Securities Act or (2) upon receipt
by GVC of a written opinion of counsel reasonably satisfactory to
GVC to the effect that the proposed transfer is exempt from the
registration requirements of the Securities Act and relevant state
securities laws. GVC has been a “shell company” and, as
such, pursuant to paragraph (i) of Rule 144 promulgated by the SEC
under the Securities Act (“ Rule 144 ”), shares
of GVC Series Z Preferred Stock (and shares of GVC Common Stock
into which shares of GVC Series Z Preferred Stock become
convertible) may not be sold under Rule 144 until one year has
elapsed after the later of the Effective Time and the date GVC has
filed with the SEC current “Form 10 information” (as
defined in Rule 144(i)) and provided, in any event, that, at the
time of sale, GVC remains subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and GVC has filed all
reports and other materials required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months.
Restrictive legends shall be placed on all certificates
representing shares of GVC Series Z Preferred Stock issued in the
Merger, and on all certificates representing shares of GVC Common
Stock into which shares of GVC Series Z Preferred Stock become
convertible, substantially as follows:
“NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
IN EFFECT THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR
“BLUE SKY” LAWS (SUCH FEDERAL AND STATE LAWS, THE
“SECURITIES LAWS”) OR (B) IF THE CORPORATION HAS BEEN
FURNISHED WITH AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL
SHALL BE REASONABLY SATISFACTORY TO THE CORPORATION, TO THE EFFECT
THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF THE SECURITIES
LAWS.
THE CORPORATION WILL FURNISH,
WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF WHICH
THE CORPORATION IS AUTHORIZED TO ISSUE AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY
SUCH REQUEST MAY BE MADE TO THE SECRETARY OF THE
CORPORATION.”
(d) In
the event any certificate for Halo Common Stock shall have been
lost, stolen or destroyed, GVC shall issue and pay in exchange for
such lost, stolen or destroyed certificate, promptly following its
receipt of an affidavit of that fact by the holder thereof, such
shares of the GVC Series ZPreferred Stock as may be required
pursuant to this Agreement; provided , however , that
GVC, in its discretion and as a condition precedent to the issuance
and payment thereof, may require the owner of such lost, stolen or
destroyed certificate to deliver a bond in such sum as it may
direct as indemnity against any claim that may be made against GVC
or any other party with respect to the certificate alleged to have
been lost, stolen or destroyed.
2.5
Dissenting Shares . Shares of Halo Common Stock held by
stockholders of Halo who have properly exercised and preserved
appraisal rights with respect to those shares in accordance with
Section
10.356 of the TBOC (“
Dissenting Shares ”) shall not be converted into or
represent a right to receive shares of GVC Series Z Preferred Stock
pursuant to Section 2.2 above, but the holders
thereof shall be entitled only to such rights as are granted by
Chapter 10, Subchapter H of the TBOC. Each holder of Dissenting
Shares who becomes entitled to payment for such shares pursuant to
Chapter 10, Subchapter H of the TBOC shall receive payment therefor
from the Surviving Company in accordance with such laws; provided,
however, that if any such holder of Dissenting Shares shall have
effectively withdrawn such holder’s demand for appraisal of
such shares or lost such holder’s right to appraisal and
payment of such shares under the TBOC, such holder or holders (as
the case may be) shall forfeit the right to appraisal of such
shares and each such share shall thereupon be deemed to have been
canceled, extinguished and exchanged, as of the Effective Time,
into and represent the right to receive shares of GVC Series Z
Preferred Stock from GVC as provided in Section
2.2 above. Any payments in respect of Dissenting Shares
will be deemed made by the Surviving Company.
2.6
Directors and Officers of the Surviving Corporation . From
and after the Effective Time, the directors and officers of the
Surviving Company shall be the persons who were directors and
officers of Halo immediately prior to the Effective Time,
respectively. These directors and officers of the Surviving Company
shall hold office for the term specified in, and subject to the
provisions contained in, the Certificate of Formation and Bylaws of
the Surviving Company and applicable law.
2.7
Directors and Officers of GVC . At the Closing, the Board of
Directors of GVC shall, subject to compliance with Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder, take the
following actions, to be effective upon the Effective Time: (i)
increase the size of the Board of Directors of GVC to six (6)
persons; and (ii) resign as directors, with the exception of
Bernard Zimmerman, who shall resign as Chairman of the Board of
Directors of GVC but who shall not be removed from the Board of
Directors of GVC for a period of at least one (1) year following
the Effective Date. Further, the officers of GVC immediately prior
to the Closing shall resign from their officer positions with GVC.
Immediately following such director and officer resignations,
Bernard Zimmerman (in his capacity as director of GVC) shall elect
to the Board of Directors of GVC the persons specified by Halo in
the Schedule 14f-1 distributed to GVC stockholders of record (the
“ Schedule 14f-1 ”), which election shall be
effective upon the Effective Time. Subject to applicable law, GVC
shall take all action reasonably requested by Halo, but consistent
with the Certificate of Incorporation and Bylaws of GVC, that is
reasonably necessary to effect any such election or appointment of
the designees of Halo to GVC’s Board of Directors, including
promptly hereafter mailing to GVC’s stockholders an
information statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. Halo shall supply GVC all information with respect to
it and its nominees, officers, directors and Affiliates required by
such Section 14(f) and Rule 14f-1. The provisions of this
Section 2.7 are in
addition to and shall not limit any rights which Halo or any of its
Affiliates may have as a holder or beneficial owner of shares of
capital stock of GVC as a matter of law with respect to the
election of directors or otherwise. The newly-appointed directors
and officers of GVC shall hold office for the term specified in,
and subject to the provisions contained in, the Certificate of
Incorporation and Bylaws of GVC and applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
HALO
Halo hereby represents and warrants
to GVC and GVC Merger Corp as follows (with all references in this
Article III to Halo, to include Halo’s
Subsidiaries):
3.1
Organization and Qualification . Halo is, and on the
Effective Date will be, a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas,
and has the requisite corporate power to carry on its business as
now conducted. The copies of the Certificate of Formation and
Bylaws of Halo that have been made available to GVC prior to the
date of this Agreement are correct and complete copies of such
documents as in effect as of the date hereof, and shall be in
effect on the Effective
Date. To Halo’s Knowledge,
Halo is, and on the Effective Date will be, licensed or qualified
to do business in every jurisdiction in which the nature of its
business or its ownership of property requires it to be licensed or
qualified, except where the failure to be so licensed or qualified
would not have a Material Adverse Effect on Halo or the Surviving
Company.
3.2
Authority Relative to this Agreement; Non-Contravention .
The execution and delivery of this Agreement by Halo and the
consummation by Halo of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Halo and, except
for approval of this Agreement and the Merger by the requisite vote
or consent of Halo’s stockholders (the “ Requisite
Halo Stockholder Vote ”), no other corporate proceedings
on the part of Halo are necessary to authorize the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by Halo and, assuming it is a valid and binding
obligation of GVC and GVC Merger Corp, constitutes a valid and
binding obligation of Halo enforceable in accordance with its terms
except as enforcement may be limited by general principles of
equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting
creditors’ rights and remedies generally. Halo is not subject
to, or obligated under, any provision of (a) its Certificate of
Formation or Bylaws, (b) any agreement, arrangement or
understanding, (c) any license, franchise or permit or (d) subject
to obtaining the approvals referred to in the next sentence, any
law, regulation, order, judgment or decree, which would conflict
with, be breached or violated, or in respect of which a right of
termination or acceleration or any security interest, charge or
encumbrance on any of its assets would be created, by the
execution, delivery or performance of this Agreement, or the
consummation of the transactions contemplated hereby, other than
any such conflicts, breaches, violations, rights of termination or
acceleration or security interests, charges or encumbrances which,
in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect on Halo or the Surviving Company. Except
for (x) approvals under applicable Blue Sky laws and (y) the filing
of the Certificate of Merger with the Secretary of State of Texas,
no authorization, consent or approval of, or filing with, any
public body, court or authority is necessary on the part of Halo
for the consummation by Halo of the transactions contemplated by
this Agreement, except for such authorizations, consents, approvals
and filings as to which the failure to obtain or make the same
would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect on Halo or the Surviving Company or
adversely affect the consummation of the transactions contemplated
hereby.
3.3
Capitalization.
(a) The
authorized, issued and outstanding shares of capital stock of Halo
as of the date hereof are correctly set forth on Schedule
3.3(a) , which will be updated prior to the Effective Date;
provided, however, that the number of authorized shares of Halo
Common Stock shall not be less than the number of shares of Halo
Common Stock that would be outstanding on a fully-diluted basis on
the Effective Date. The issued and outstanding shares of capital
stock of Halo are, and on the Effective Date will be, duly
authorized, validly issued, fully paid and nonassessable and not
issued in violation of any preemptive rights and, to Halo’s
Knowledge, free from any restrictions on transfer (other than
restrictions under the Securities Act or state securities laws) or
any option, lien, pledge, security interest, encumbrance or charge
of any kind. Other than as described on Schedule 3.3(a) ,
Halo has, and on the Effective Date will have, no other equity
securities or securities containing any equity features authorized,
issued or outstanding. Except as set forth in Schedule
3.3(a) hereto, there are
no agreements or other rights or arrangements existing which
provide for the sale or issuance of capital stock by Halo and there
are no rights, subscriptions, warrants, options, conversion rights
or agreements of any kind outstanding to purchase or otherwise
acquire from Halo any shares of capital stock or other securities
of Halo of any kind. Except as set forth on Schedule 3.3(a)
, there are, and on the Effective Date there will be, no agreements
or other obligations (contingent or otherwise) which may require
Halo to repurchase or otherwise acquire any shares of its capital
stock.
(b) Except
as contemplated by this Agreement, Halo is not a party to, and, to
Halo’s Knowledge, there do not exist, any voting trusts,
proxies, or other contracts with respect to the voting of shares of
capital stock of Halo.
3.4
Litigation . To Halo’s Knowledge, there are no
actions, suits, proceedings, orders or investigations pending or,
to the Knowledge of Halo, threatened against Halo, at law or in
equity, or before or by, and Halo has not received any requests
(formal or informal) for information or documents from, any
federal, state or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, other than
in the process of obtaining licenses.
3.5
Subsidiaries . Schedule 3.5 correctly sets forth the name and jurisdiction
of incorporation of each subsidiary of Halo (each a “Halo
Subsidiary ” and collectively, the “Halo
Subsidiaries ”). Except as disclosed on Schedule
3.5 , all of the issued and outstanding shares of capital stock
of each Halo Subsidiary are owned directly by Halo free and clear
of any option, lien, pledge, security interest, encumbrance or
charge of any kind. All of the outstanding shares of capital stock
of each Halo Subsidiary have been, and on the Effective Date will
be, duly and validly authorized and issued and are fully paid and
nonassessable. Except as set forth in Schedule 3.5 , Halo
does not, and on the Effective Date will not, own any stock,
partnership interest, joint venture interest or any other security
or ownership interest issued by any other Person that is not a Halo
Subsidiary.
3.6 Tax
Matters.
(a) (i)
Halo has timely filed (or has had timely filed on its behalf) all
returns, declarations, reports, estimates, information returns, and
statements, including any schedules and amendments to such
documents (“ Halo Returns ”), required to be
filed or sent by it in respect of any Taxes or required to be filed
or sent by it by any taxing authority having jurisdiction; (ii) all
such Halo Returns are complete and accurate in all material
respects; (iii) Halo has timely and properly paid (or has had paid
on its behalf) all Taxes required to be paid by it; (iv) Halo has
established on the Halo Latest Balance Sheet, in accordance with
GAAP, reserves that are adequate for the payment of any Taxes not
yet paid; and (v) Halo has complied with all applicable laws,
rules, and regulations relating to the collection or withholding of
Taxes from third parties (including without limitation employees)
and the payment thereof (including, without limitation, withholding
of Taxes under Sections 1441 and 1442 of the Code, or similar
provisions under any foreign laws).
(b) There
are no liens for Taxes upon any assets of Halo, except liens for
Taxes not yet due.
(c) No
deficiency for any Taxes has been asserted, assessed or, to
Halo’s Knowledge, proposed against Halo that has not been
resolved and paid in full or is not being contested in good faith.
No waiver, extension or comparable consent given by Halo regarding
the application of the statute of limitations with respect to any
Taxes or Returns is outstanding, nor is any request for any such
waiver or consent pending. There has been no Tax audit or other
administrative proceeding or court proceeding with regard to any
Taxes or Halo Returns, nor is any such Tax audit or other
proceeding pending, nor has there been any notice to Halo by any
Taxing authority regarding any such Tax audit or other proceeding,
or, to the Knowledge of Halo, is any such Tax audit or other
proceeding threatened with regard to any Taxes or Halo Returns.
Halo does not expect the assessment of any additional Taxes of Halo
for any period prior to the date hereof and has no Knowledge of any
unresolved questions, claims or disputes concerning the liability
for Taxes of Halo which would exceed the estimated reserves
established on its books and records.
(d) Halo
is not a party to any agreement, contract or arrangement that would
result, separately or in the aggregate, in the payment of any
“excess parachute payments” within the meaning of
Section 280G of the Code and the consummation of the transactions
contemplated by this Agreement will not
be a factor causing payments to be
made by Halo not to be deductible (in whole or in part) under
Section 280G of the Code. Halo is not liable for Taxes of any other
Person, and is not currently under any contractual obligation to
indemnify any Person with respect to Taxes, or a party to any tax
sharing agreement or any other agreement providing for payments by
Halo with respect to Taxes. Halo is not a party to any joint
venture, partnership or other arrangement or contract which could
be treated as a partnership for federal income tax purposes. Halo
has not agreed and is not required, as a result of a change in
method of accounting or otherwise, to include any adjustment under
Section 481 of the Code (or any corresponding provision of state,
local or foreign law) in taxable income. No claim has ever been
made by a taxing authority in a jurisdiction where Halo does not
currently file Halo Returns that Halo is or may be subject to
taxation by that jurisdiction. There are no advance rulings in
respect of any Tax pending or issued by any Taxing authority with
respect to any Taxes of Halo. Halo has not entered into any gain
recognition agreements under Section 367 of the Code and the
regulations promulgated thereunder. Halo is not liable with respect
to any indebtedness the interest of which is not deductible for
applicable federal, foreign, state or local income tax purposes.
Halo has not filed or been included in a combined, consolidated or
unitary Tax return (or the substantial equivalent thereof) of any
Person.
(e) Halo
has been neither a “distributing corporation” nor a
“controlled corporation” (within the meaning of Section
355 of the Code) in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code.
(f) Halo
has not requested any extension of time within which to file any
Halo Return, which return has not since been filed.
3.7
Contracts and Commitments.
(a)
Schedule 3.7 hereto
lists the following agreements, whether oral or written, to which
Halo is a party, which are currently in effect, and which relate to
the operation of Halo’s business: (i) collective bargaining
agreement or contract with any labor union; (ii) bonus, pension,
profit sharing, retirement or other form of deferred compensation
plan; (iii) hospitalization insurance or other welfare benefit plan
or practice, whether formal or informal; (iv) stock purchase,
restricted stock or stock option plan or other equity compensation
plan; (v) contract for the employment of any officer, individual
employee or other person on a full-time or consulting basis or
relating to severance pay for any such person; (vi) contract,
agreement or understanding relating to the voting of Halo Common
Stock or the election of directors of Halo, other than the Voting
Agreement; (vii) agreement or indenture relating to the borrowing
of money or to mortgaging, pledging or otherwise placing a lien on
any of the assets of Halo; (viii) guaranty of any obligation for
borrowed money or otherwise; (ix) lease or agreement under which
Halo is lessee of, or holds or operates any property, real or
personal, owned by any other party, for which the annual rental
exceeds $50,000; (x) lease or agreement under which Halo is lessor
of, or permits any third party to hold or operate, any property,
real or personal, for which the annual rental exceeds $50,000; (xi)
contract which prohibits Halo from freely engaging in business
anywhere in the world; (xii) contract or commitment for
capital expenditures in excess of $50,000; (xiii) agreement for the
sale of any capital asset; or (xiv) other agreement which is either
material to Halo’s business or was not entered into in the
ordinary course of business.
(b) To
Halo’s Knowledge, Halo has performed all obligations required
to be performed by it in connection with the contracts,
understandings, arrangements or commitments required to be
disclosed in Schedule 3.7 hereto and is not in receipt of any claim of
default under any contract, understanding, arrangement or
commitment required to be disclosed under such caption; Halo has no
present expectation or intention of not fully performing any
material obligation pursuant to any contract, understanding,
arrangement or commitment required to be disclosed under such
caption; and Halo has no Knowledge of any breach or anticipated
breach by any other party to any contract, understanding,
arrangement or commitment required to be disclosed under such
caption.
3.8
Affiliate Transactions . Except as set forth in Schedule
3.8 hereto, and other
than pursuant to this Agreement, no officer, director or employee
of Halo, or any member of the immediate family of any such officer,
director or employee, or any entity in which any of such persons
owns any beneficial interest (other than a publicly-held
corporation whose stock is traded on a national securities exchange
or in an over-the-counter market and less than five percent of
whose stock is beneficially owned by any of such persons)
(collectively “ Halo Insiders ”), has any
agreement with Halo (other than normal employment arrangements set
forth on Schedule 3.7 ) or any interest in any property,
real, personal or mixed, tangible or intangible, used in or
pertaining to the business of Halo (other than ownership of capital
stock of Halo). Except as set forth on Schedule 3.8 , Halo
is not indebted to any Halo Insider (except for amounts due as
normal salaries and bonuses and in reimbursement of ordinary
business expenses) and no Halo Insider is indebted to Halo (except
for cash advances for ordinary business expenses). None of the Halo
Insiders has any direct or indirect interest in any competitor,
supplier or customer of Halo or in any person, firm or entity from
whom or to whom Halo leases any property, or in any other person,
firm or entity with whom Halo transacts business of any nature. For
purposes of this Section 3.8 , the members of the immediate
family of an officer, director or employee shall consist of the
spouse, parents, children and siblings of such officer, director or
employee.
3.9 Compliance
with Laws; Permits.
(a) Except
for any noncompliance that would not reasonably be expected to have
a Material Adverse Effect on Halo or the Surviving Company, to
Halo’s Knowledge, Halo has complied with all applicable laws,
regulations and other requirements, including, but not limited to,
federal, state, local and foreign laws, ordinances, rules,
regulations and other requirements pertaining to equal employment
opportunity, employee retirement, affirmative action and other
hiring practices, occupational safety and health, workers’
compensation, unemployment and building and zoning codes, and no
claims have been filed against Halo, and Halo has not received any
notice, alleging a violation of any such laws, regulations or other
requirements. Halo is not relying on any exemption from or deferral
of any such applicable law, regulation or other requirement that
would not be available to GVC after it acquires Halo’s
properties, assets and business.
(b) Except
for any noncompliance that would not reasonably be expected to have
a Material Adverse Effect on Halo or the Surviving Company, Halo
has, in full force and effect, all licenses, permits and
certificates, from federal, state, local and foreign authorities
(including, without limitation, federal and state agencies
regulating occupational health and safety) necessary to conduct its
business and operate its properties (collectively, the “
Halo Permits ”), and to the Knowledge of Halo, Halo
has conducted its business in compliance with all material terms
and conditions of the Halo Permits.
3.10 Financial
Statements . Halo has made available to GVC audited balance
sheets of Halo as of December 31, 2007 and 2008, unaudited but
reviewed balance sheets of Halo as of March 31, 2009 and June 30,
2009, the related audited and unaudited statements of income of
Halo for the years, three months and six months, as applicable,
then ended, and statements of changes in stockholders’ equity
and cash flows of Halo for the years and six months, as applicable,
then ended (the “ Halo Financial Statements ”).
The Halo Financial Statements have been prepared in accordance with
GAAP consistently applied with past practice (except in each case
as described in the notes thereto) and on that basis present
fairly, in all material respects, the financial position and the
results of operations, changes in stockholders’ equity, and
cash flows of Halo and subsidiaries on a consolidated basis as of
the dates of and for the periods referred to in the Halo Financial
Statements.
3.11 Books and
Records . The books of account, minute books, stock record
books, and other records of Halo, complete copies of which have
been made available to GVC, have been properly kept and contain no
inaccuracies except for inaccuracies that would not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Halo or the Surviving Company. At the Closing,
all of Halo’s records will be in the possession of
Halo.
3.12 Real Property .
Halo does not own any real property. Schedule 3.12
contains an accurate list of all
interests of Halo in any real property, and such real property
constitutes the only real property used in Halo’s
business.
3.13 Insurance . The
insurance policies owned and maintained by Halo that are material
to Halo are in full force and effect, all premiums due and payable
thereon have been paid (other than retroactive or retrospective
premium adjustments that Halo is not currently required, but may in
the future be required, to pay with respect to any period ending
prior to the date of this Agreement), and Halo has received no
notice of cancellation or termination with respect to any such
policy that has not been replaced on substantially similar terms
prior to the date of such cancellation.
3.14 No Undisclosed
Liabilities . Except as reflected in the balance sheet of Halo
at June 30, 2009 (the “ Halo Latest Balance Sheet
”) and liabilities which have arisen after the date of the
Halo Latest Balance Sheet in the ordinary course of business (none
of which is a material uninsured liability), Halo has no
liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise).
3.15 Environmental
Matters . None of the operations of Halo involves the
generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state, local or foreign equivalent.
3.16 Absence of Certain
Developments . Except as disclosed in the Halo Financial
Statements or as otherwise contemplated by this Agreement, since
the date of the Halo Latest Balance Sheet, Halo has conducted its
business only in the ordinary course consistent with past practice
and there has not occurred or been entered into, as the case may
be: (i) any event having a Material Adverse Effect on Halo or the
Surviving Company, (ii) any event that could reasonably be expected
to prevent or materially delay the performance of Halo’s
obligations pursuant to this Agreement, (iii) any material change
by Halo in its accounting methods, principles or practices, (iv)
any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of capital stock of Halo or
any redemption, purchase or other acquisition of any of
Halo’s securities, (v) any increase in the compensation or
benefits or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or
restricted stock awards), stock purchase or other employee benefit
plan of Halo, or any other increase in the compensation payable or
to become payable to any employees, officers, consultants or
directors of Halo, (vi) other than issuances of options pursuant to
duly adopted option plans, any issuance, grants or sale of any
stock, options, warrants, notes, bonds or other securities, or
entry into any agreement with respect thereto by Halo, (vii) any
amendment to the Certificate of Formation or Bylaws of Halo, (viii)
other than in the ordinary course of business consistent with past
practice, any (w) capital expenditures by Halo, (x) purchase, sale,
assignment or transfer of any material assets by Halo, (y)
mortgage, pledge or existence of any lien, encumbrance or charge on
any material assets or properties, tangible or intangible of Halo,
except for liens for taxes not yet due and such other liens,
encumbrances or charges which do not, individually or in the
aggregate, have a Material Adverse Effect on Halo or the Surviving
Company, or (z) cancellation, compromise, release or waiver by Halo
of any rights of material value or any material debts or claims,
(ix) any incurrence by Halo of any material liability (absolute or
contingent), except for current liabilities and obligations
incurred in the ordinary course of business consistent with past
practice, (x) damage, destruction or similar loss, whether or not
covered by insurance, materially affecting the business or
properties of Halo, (xi) entry into any agreement, contract, lease
or license other than in the ordinary course of business consistent
with past practice, (xii) any acceleration, termination,
modification or cancellation of any agreement, contract, lease or
license to which Halo is a party or by which it is bound, (xiii)
entry by Halo into any loan or other transaction with any officers,
directors or employees of Halo, (xiv) any charitable or other
capital contribution by Halo or pledge therefore, (xv) entry by
Halo into any transaction of a material nature other than in the
ordinary course of business consistent with past practice, or
(xvi) any negotiation or agreement by the Halo to do any of the
things described in the preceding clauses (i) through
(xv).
3.17 Employee Benefit
Plans.
(a)
Schedule 3.17(a) lists
all (i) “employee benefit plans,” within the meaning of
Section 3(3) of ERISA, of Halo, (ii) bonus, stock option, stock
purchase, stock appreciation right, incentive, deferred
compensation, supplemental retirement, severance, and fringe
benefit plans, programs, policies or arrangements, and (iii)
employment or consulting agreements, for the benefit of, or
relating to, any current or former employee (or any beneficiary
thereof) of Halo, in the case of a plan described in (i) or (ii)
above, that is currently maintained by Halo or with respect to
which Halo has an obligation to contribute, and in the case of an
agreement described in (iii) above, that is currently in effect
(the “ Halo Plans ”). Halo has heretofore made
available to GVC true and complete copies of the Halo Plans and any
amendments thereto, any related trust, insurance contract, summary
plan description, and, to the extent required under ERISA or the
Code, the most recent annual report on Form 5500 and summaries of
material modifications.
(b) No
Halo Plan is (1) a “multiemployer plan” within the
meaning of Sections 3(37) or 4001(a)(3) of ERISA, (2) a
“multiple employer plan” within the meaning of Section
3(40) of ERISA or Section 413(c) of the Code, or (3) is subject to
Title IV of ERISA or Section 412 of the Code.
(c) There
is no proceeding pending or, to Halo’s Knowledge, threatened
against the assets of any Halo Plan or, with respect to any Halo
Plan, against Halo other th
