Back to top

ACQUISITION AGREEMENT AND PLAN OF MERGER

Asset Purchase Agreement

ACQUISITION AGREEMENT AND PLAN OF MERGER | Document Parties: Gold Resource Partners, LLC | Minatura Gold Sub Co | Schedule 21 Organization | Schedule 216 Insurance | See Boatatopia Sub Co | Stoecklein Law Group You are currently viewing:
This Asset Purchase Agreement involves

Gold Resource Partners, LLC | Minatura Gold Sub Co | Schedule 21 Organization | Schedule 216 Insurance | See Boatatopia Sub Co | Stoecklein Law Group

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: ACQUISITION AGREEMENT AND PLAN OF MERGER
Governing Law: Nevada     Date: 6/23/2009

ACQUISITION AGREEMENT AND PLAN OF MERGER, Parties: gold resource partners  llc , minatura gold sub co , schedule 21 organization , schedule 216 insurance , see boatatopia sub co , stoecklein law group
50 of the Top 250 law firms use our Products every day

Exhibit 2.1
 

 

ACQUISITION AGREEMENT AND PLAN OF MERGER

 

DATED AS OF JUNE 12, 2009

 

BY AND AMONG

 

MINATURA GOLD (MGOL), a Nevada corporation,

 

BOATATOPIA Sub Co (SUB CO), a Nevada corporation

 

AND

 

GOLD RESOURCE PARTNERS, LLC (GRP), a Nevada limited liability company

 

 

 

 

 

 

 


 

 

 

TABLE OF CONTENTS

 

ARTICLE 1. The Merger

1

 

Section 1.1. The Merger

1

 

Section 1.2. Effective Time

1

 

Section 1.3. Closing of the Merger

2

 

Section 1.4. Effects of the Merger

2

 

Section 1.5. Articles of Incorporation; Bylaws

2

 

Section 1.6. Board of Directors and Officers

2

 

Section 1.7. Conversion of Membership Interest

3

 

Section 1.8. Exchange of Certificates

4

 

Section 1.9. Membership Interests Options

5

 

Section 1.10. Warrants

6

 

Section 1.11. Cancellation of MGOL Shares

6

 

Section 1.12. Taking of Necessary Action; Further Action

6

 

 

 

ARTICLE 2. Representations and Warranties of MGOL

6

 

Section 2.1. Organization and Qualification

6

 

Section 2.2. Capitalization of MGOL

7

 

Section 2.3.Authority Relative to this Agreement; Recommendations

8

 

Section 2.4. SEC Reports; Financial Statements

8

 

Section 2.5. Information Supplied

9

 

Section 2.6. Consents and Approvals; No Violations

9

 

Section 2.7. No Default

10

 

Section 2.8. No Undisclosed Liabilities; Absence of Changes

11

 

Section 2.9. Litigation

11

 

Section 2.10. Compliance with Applicable Law

11

 

Section 2.11. Employee Benefit Plans; Labor Matters

12

 

Section 2.12. Environmental Laws and Regulations

13

 

Section 2.13. Tax Matters

14

 

Section 2.14. Title To Property

15

 

Section 2.15. Intellectual Property

15

 

Section 2.16. Insurance

15

 

Section 2.17. Vote Required

15

 

Section 2.18. Tax Treatment

16

 

Section 2.19. Affiliates

16

 

Section 2.20. Certain Business Practices

16

 

Section 2.21. Insider Interests

16

 

Section 2.22. Opinion of Financial Adviser

16

 

Section 2.23. Brokers

16

 

Section 2.24. Disclosure

16

 

Section 2.25. No Existing Discussion

16

 

Section 2.26. Material Contracts

16

 

 

 

ARTICLE 3. Representations and Warranties of GRP.

18

 

Section 3.1. Organization and Qualification

18

 

Section 3.2. Capitalization of GRP

18

 

Section 3.3.Authority Relative to this Agreement; Recommenda­tion

19

 

Section 3.4. SEC Reports; Financial Statements

20

 

Section 3.5. Information Supplied

20

 

Section 3.6. Consents and Approvals; No Violations

20

 

Section 3.7. No Default

20

 

Section 3.8 No Undisclosed Liabilities; Absence of Changes

21

 

Section 3.9. Litigation

21

 

Section 3.10. Compliance with Applicable Law

21

 

Section 3.11. Employee Benefit Plans; Labor Matters

22

 

Section 3.12. Environmental Laws and Regulations

23

 

Section 3.13. Tax Matters

24

 

Section 3.14. Title to Property

24

 

Section 3.15. Intellectual Property

24

 

Section 3.16. Insurance

25

 

Section 3.17. Vote Required

25

 

Section 3.18. Tax Treatment

25

 

Section 3.19. Affiliates

25

 

Section 3.20. Certain Business Practices

25

 

Section 3.21. Insider Interests

25

 

Section 3.22. Opinion of Financial Adviser

25

 

Section 3.23. Brokers

25

 

Section 3.24. Disclosure

26

 

Section 3.25. No Existing Discussions

26

 

Section 3.26. Material Contracts

26

 

 

 

ARTICLE 4. Covenants

27

 

Section 4.1. Conduct of Business of MGOL

27

 

Section 4.2. Conduct of Business of GRP

29

 

Section 4.3. Preparation of 8-K

31

 

Section 4.4. Other Potential Acquirers

31

 

Section 4.5. Meetings of Stockholders and Members

32

 

Section 4.6. FINRA OTC:BB Listing

32

 

Section 4.7. Access to Information

32

 

Section 4.8. Additional Agreements; Reasonable Efforts

33

 

Section 4.9.Employee Benefits; Stock Option and Employee Purchase Plans

33

 

Section 4.10. Public Announcements

33

 

Section 4.11. Indemnification

33

 

Section 4.12. Notification of Certain Matters

35

 

 

 

ARTICLE 5. Conditions to Consummation of the Merger

35

 

Section 5.1. Conditions to Each Party’s Obligations to Effect the Merger

35

 

Section 5.2. Conditions to the Obligations of MGOL and SUB CO

36

 

Section 5.3. Conditions to the Obligations of GRP

37

 

 

 

ARTICLE 6. Termination; Amendment; Waiver

37

 

Section 6.1. Termination

37

 

Section 6.2. Effect of Termination

38

 

Section 6.3. Fees and Expenses

39

Section 6.4. Amendment

39

 

Section 6.5. Extension; Waiver

39

 

 

 

ARTICLE 7. Miscellaneous

39

 

Section 7.1. Non-survival of Representations and Warranties

39

 

Section 7.2. Entire Agreement; Assignment

39

 

Section 7.3. Validity

39

 

Section 7.4. Notices

39

 

Section 7.5. Governing Law

40

 

Section 7.6. Descriptive Headings

40

 

Section 7.7. Parties in Interest

41

 

Section 7.8. Certain Definitions

41

 

Section 7.9. Personal Liability

41

 

Section 7.10. Specific Performance

41

 

Section 7.11. Counterparts

42

 

Section 7.12. Conflict Waiver

42

 

 

 

 

 

Signatures

42

 

 

 

 

 

 

 


 

 

AGREEMENT AND PLAN OF MERGER

 

This Agreement and Plan of Merger (this “Agreement”), dated as of June 12, 2009, is by and among Minatura Gold, a Nevada corporation (“MGOL”); Boatatopia Sub Co, a Nevada corporation (“SUB CO”) and wholly owned subsidiary of Minatura Gold; and Gold Resource Partners, LLC, a Nevada limited liability company (“GRP”); SUB CO and GRP being the constituent entities in the Merger.

 

Whereas, the Boards of Directors of MGOL, SUB CO and GRP each have, in light of and subject to the terms and conditions set forth herein, (i) determined that the Merger (as defined below) is fair to their respective stockholders and in the best interests of such stockholders and (ii) approved the Merger in accordance with this Agreement;

 

Whereas, this Agreement constitutes the entire, final and complete agreement between MGOL, SUB CO, and GRP and supersedes and replaces all prior or existing written and oral agreements, between MGOL, SUB CO, and GRP with respect to the subject matter hereof;

 

Whereas, for Federal income tax purposes, it is intended that the Merger qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”); and

 

Whereas, MGOL, SUB CO and GRP desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger.

 

Now, therefore, in consideration of the premises and the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, MGOL, SUB CO and GRP hereby agree as follows:

 

ARTICLE I

 

The Merger

 

Section 1.1. The Merger . At the Effective Time (as defined below) and upon the terms and subject to the conditions of this Agreement and in accordance with the General Corporation Law of the State of Nevada (the “NGCL”), SUB CO shall be merged with and into GRP (the “Merger”), pursuant to NRS 92A.100. Following the Merger, GRP shall continue as the surviving entity (the “Surviving Entity”), shall continue to be governed by the laws of the jurisdiction of its incorporation or organization and the separate corporate existence of SUB CO shall cease. GRP shall continue its existence as a wholly owned subsidiary of MGOL.  The Merger is intended to qualify as a tax-free reorganization under Section 368(a) of the Code as relates to the non-cash exchange of stock referenced herein.

 

Section 1.2. Effective Time . Subject to the terms and conditions set forth in this Agreement, a Certificate of Merger (the “Merger Certificate”) shall be duly executed and acknowledged by each of GRP, SUB CO and MGOL, and thereafter the Merger Certificate reflecting the Merger shall be delivered to the Secretary of State of the State of Nevada for filing pursuant to the NGCL on the Closing Date (as defined in Section 1.3). The Merger shall become effective on August 1, 2009, as set forth in the Merger Certificate (the time at which the Merger becomes effective shall be referred to herein as the “Effective Time”)or such other earlier time as the Parties can complete the terms and conditions as set forth herein.

 

1


Section 1.3. Closing of the Merger . The closing of the Merger (the “Closing”) will take place on August 1, 2009 upon satisfaction of the conditions set forth in Article 5 (the “Closing Date”), at the offices of Stoecklein Law Group, 402 West Broadway, Suite 690, San Diego, California 92101, unless another time, date or place is agreed to in writing by the parties hereto.

 

Section 1.4. Effects of the Merger . The Merger shall have the effects set forth in the NGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers of SUB CO shall vest in the Surviving Entity, and all debts, liabilities and duties of SUB CO shall become the debts, liabilities and duties of the Surviving Entity. Concurrently, GRP shall remain a wholly owned subsidiary of MGOL.

 

Section 1.5. Articles of Incorporation and Bylaws . The Articles of Organization and Operating Agreement of GRP in the respective forms delivered by GRP to MGOL prior to the date of this Agreement will remain in full force and effect and will be the Articles of Organization and Operating Agreement of the Surviving Entity.

 

Section 1.6. Board of Directors and Officers .

 

 

(a)

Board of Directors of SUB CO . At or prior to the Effective Time, MGOL agrees to take such action as is necessary (i) to cause the number of directors comprising the full Board of Directors of SUB CO to be one (1) person and (ii) to cause Paul Dias,  (the “MGOL Designee”) to be elected as the sole director of SUB CO.

 

 

(b)

Board of Directors of MGOL . At or prior to the Effective Time, each of GRP and MGOL agrees to take such action as is necessary (i) to cause the number of directors comprising the full Board of Directors of MGOL to be at least one but possibly three (3) persons and (ii) to cause Paul Dias, and two other board members (the “GRP Designee(s)”) to be elected as directors of MGOL. If the GRP Designee(s) shall decline or be unable to serve as a director prior to the Effective Time, GRP shall nominate other persons to serve in such persons’ stead, which persons shall be subject to approval of the other party. From and after the Effective Time, and until successors are duly elected or appointed and qualified in accordance with applicable law, the managing members of the Surviving Entity, shall remain as the managing members of the Surviving Entity. Additionally, prior to the Effective Time, Stephen Causey (“Causey”), the existing Chief Executive Officer, and director of MGOL, and any other officer of MGOL, shall resign upon execution of this Agreement, and pursuant to the terms of the termination agreement (“Termination Agreement”) between Causey and MGOL. Upon the resignation of Causey, until successors are duly elected or appointed and qualified in accordance with applicable law, Paul Dias shall be Chief Executive Officer, President, Secretary and Treasurer of MGOL.

 

2


Section 1.7. Conversion of Membership Interest .

 

 

(a)

At the Effective Time, each membership interest of GRP (“Membership Interest”) (individually a "GRP Membership Interest" and collectively, the "GRP Membership Interests ") issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of GRP, MGOL, or the holder thereof, be converted into and shall become fully paid and nonassessable MGOL common shares determined by dividing (i) Ten Million Two Hundred Fifty-eight Thousand, Eight Hundred Twenty-One (10,258,821), by (ii) the total number of Membership Interests of GRP, One Hundred Twelve Million (112,000,000) outstanding Membership Interests immediately prior to the Effective Time (such quotient, the “Exchange Ratio”). The holder of one or more Membership Interests of GRP shall be entitled to receive in exchange therefore a number of shares of MGOL Common Stock equal to the product of (x) (the number of Membership Interests of GRP (112,000,000)), times (y) (the Exchange Ratio. By way of example, 10,258,821 / 112,000,000 = .0916 (the Exchange Ratio). The number of Membership Interests of GRP held by a member (assume 100,000 Membership Interests) times the Exchange Ratio of .0916 equals 9,160 shares of MGOL Shares to be issued. In the event that, subsequent to the date of this Agreement but prior to the Effective Time, the outstanding shares of MGOL Common Stock or GRP Membership Interests are changed into a different number of Membership Interests or Shares or a different class as a result of a stock split, reverse stock split, stock dividend, subdivision, reclassification, combination, exchange, recapitalization or similar transaction, the number of shares of MGOL Common Stock into which each share of GRP Common Stock will be converted as a result of the Merger will be adjusted appropriately.

 

 

(b)

GRP hereby acknowledges that (i) the MGOL Shares have not been and will not be registered under the Securities Act of 1933 (“1933 Act”) or under the securities laws of any state and, therefore, the MGOL Shares cannot be resold unless they are subsequently registered under said laws or exemptions from such registrations as are available; and (ii) the transferability of the Shares is restricted and that a legend shall be placed on the certificates representing the securities substantially to the following effect:

 

3


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION SATISFACTORY TO THE ISSUER AND ITS COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

 

(c)

At the Effective Time, each GRP Membereship Interest held in the treasury of GRP, by GRP immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of GRP, SUB CO or MGOL be canceled, retired and cease to exist and no payment shall be made with respect thereto.

 

Section 1.8. Exchange of Certificates .

 

 

(a)

Prior to the Effective Time, MGOL shall enter into an agreement with, and shall deposit with, Stoecklein Law Group or such other agent or agents as may be satisfactory to MGOL and GRP (the “Exchange Agent”), for the benefit of the holders of GRP Membership Interests, for exchange through the Exchange Agent in accordance with this Article I: certificates representing the appropriate number of MGOL Shares to be issued to holders of GRP Membership Interests issuable pursuant to Section 1.7 in exchange for outstanding GRP Membership Interests.

 

 

(b)

As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding GRP Membership Interests (the “Certificates”) whose Membership Interest were converted into the right to receive MGOL Shares pursuant to Section 1.7: (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as GRP and MGOL may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing MGOL Shares. Upon surrender of a Certificate to the Exchange Agent, together with such letter of transmittal, duly executed, and any other required documents, the holder of such Certificate shall be entitled to receive in exchange therefore a certificate representing that number of whole MGOL Shares and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of GRP Membership Interests which are not registered in the transfer records of GRP, a certificate representing the proper number of MGOL Shares may be issued to a transferee if the Certificate representing such GRP Membership Interests is presented to the Exchange Agent accompanied by all documents required by the Exchange Agent or MGOL to evidence and effect such transfer and by evidence that any applicable Membership Interest transfer or other taxes have been paid. Until surrendered as contemplated by this Section 1.8, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the certificate representing MGOL Shares as contemplated by this Section 1.8.

 

4


 

(c)

No dividends or other distributions declared or made after the Effective Time with respect to MGOL Shares with a record date after the Effective Time shall be paid to the holder of any un-surrendered Certificate with respect to the MGOL Shares represented thereby until the holder of record of such Certificate shall surrender such Certificate.

 

 

(d)

In the event that any Certificate for GRP Membership Interests or MGOL Shares shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange therefor, upon the making of an affidavit of that fact by the holder thereof such MGOL Shares and cash in lieu of fractional MGOL Shares, if any, as may be required pursuant to this Agreement; provided, however, that MGOL or the Exchange Agent, may, in its respective discretion, require the delivery of a suitable bond, opinion or indemnity.

 

 

(e)

All MGOL Shares issued upon the surrender for exchange of GRP Membership Interests in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such GRP Membership Interests. There shall be no further registration of transfers on the stock transfer books of either of GRP or MGOL of the GRP Membership Interests or MGOL Shares which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to MGOL for any reason, they shall be canceled and exchanged as provided in this Article I.

 

 

(f)

No fractional MGOL Shares shall be issued in the Merger, but in lieu thereof each holder of GRP Membership Interests otherwise entitled to a fractional MGOL Share shall, upon surrender of its, his or her Certificate or Certificates, be entitled to receive an additional share to round up to the nearest round number of shares.

 

Section 1.9. Membership Interest Options . At the Effective Time, each outstanding option to purchase GRP Membership Interests, if any (a “GRP Membership Interest Option” or collectively, “GRP Membership Interest Options”) issued pursuant to any GRP Membership Interest Option Plan or GRP Long Term Incentive Plan, if any, whether vested or unvested, shall be cancelled.

 

5


Section 1.10. Warrants . At the Effective Time, each outstanding warrant to purchase GRP Membership Interests, if any (a “GRP Warrant” or collectively, “GRP Warrants”) issued and pursuant to any GRP Warrant Agreement as disclosed in Schedule 3.2 shall convert to the right to receive replacement MGOL Warrants, adjusted to reflect the proportionate reduction in number of shares as set forth in section 1.7 above. The Exercise Price per GRP Warrant in effect at the time of the record date for the determination of Members entitled to receive Membership Interests pursuant to section 1.7 shall be adjusted so that it shall equal the price determined by multiplying such Exercise Price by a fraction, the numerator of which shall be the number of Membership Interests outstanding immediately prior to such action, and the denominator of which shall be the number of Membership Interests outstanding after giving effect to such action.  Such adjustment shall be made successively whenever any event listed above shall occur and shall become effective at the close of business on such record date or at the close of business on the date immediately preceding such effective date, as applicable.

 

Section  1.11.  Cancellation of MGOL Shares. Concurrent with the closing of the Merger, the 7,500,000 shares of restricted common stock held by Stephen Causey will be cancelled. Additionally, concurrent with closing, 1,000,000 shares of restricted common stock held by Stoecklein Law Group will be cancelled.

 

Section 1.12. Taking of Necessary Action; Further Action . If, at any time after the Effective Time, GRP or MGOL reasonably determines that any deeds, assignments, or instruments or confirmations of transfer are necessary or desirable to carry out the purposes of this Agreement and to vest MGOL with full right, title and possession to all assets, property, rights, privileges, powers and franchises of GRP, the officers and directors of MGOL and GRP are fully authorized in the name of their respective entities or otherwise to take, and will take, all such lawful and necessary or desirable action. It is anticipated by GRP and MGOL that upon completion of the Post Closing Conditions as set forth in the attached Post Closing Conditions Schedule, that GRP will maintain title to any and all entities set forth in the Post Closing Conditions Schedule, as subsidiaries of GRP.

 

ARTICLE 2

 

Representations and Warranties of MGOL

 

Except as set forth on the Disclosure Schedule delivered by MGOL and SUB CO to GRP (the “MGOL Disclosure Schedule”), MGOL and SUB CO hereby represent and warrant to GRP as follows:

 

Section 2.1. Organization and Qualification .

 

 

(a)

Each of MGOL and SUB CO is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and each has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not have a Material Adverse Effect (as defined below) on MGOL. When used in connection with MGOL, the term “Material Adverse Effect” means any change or effect (i) that is or is reasonably likely to be materially adverse to the business, results of operations, condition (financial or otherwise) or prospects of MGOL, other than any change or effect arising out of general economic conditions unrelated to any business in which MGOL is engaged, or (ii) that may impair the ability of MGOL to perform its obligations hereunder or to consummate the transactions contemplated hereby.

 

6


 

(b)

MGOL has heretofore delivered to GRP accurate and complete copies of the Articles of Incorporation and Bylaws (or similar governing documents), as currently in effect, of MGOL. Except as set forth on Schedule 2.1 of the MGOL Disclosure Schedule, MGOL is duly qualified or licensed and in good standing to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except in such jurisdictions where the failure to be so duly qualified or licensed and in good standing would not have a Material Adverse Effect on MGOL.

 

Section 2.2. Capitalization of MGOL .

 

 

(a)

The authorized capital stock of MGOL consists of: (i) One Billion (1,000,000,000) MGOL Common Shares, par value $0.001 per share, of which, as of March 31, 2009, approximately 14,000,000 MGOL Shares were issued and outstanding; and (ii) Ten Million (10,000,000) MGOL Preferred Shared, par value $0.001 per share, were authorized, of which no Preferred Shares were issued. The authorized capital stock of SUB CO consists of One Million (1,000,000) shares of common stock ("SUB CO Shares"), of which, as of the date of this Agreement, One thousand (1,000) shares were issued and outstanding.  All of the outstanding MGOL Shares and SUB CO Shares have been duly authorized and validly issued, and are fully paid, nonassessable and free of preemptive rights. Except as set forth herein, as of the date hereof, there are no outstanding (i) shares of capital stock or other voting securities of MGOL or SUB CO, (ii) securities of MGOL convertible into or exchangeable for shares of capital stock or voting securities of MGOL or SUB CO, (iii) options or other rights to acquire from MGOL or SUB CO and, except as described in the MGOL SEC Reports (as defined below), no obligations of MGOL or SUB CO to issue any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of MGOL or SUB CO, and (iv) equity equivalents, interests in the ownership or earnings of MGOL or SUB CO or other similar rights (collectively, “MGOL Securities”). As of the date hereof, except as set forth on Schedule 2.2(a) of the MGOL Disclosure Schedule there are no outstanding obligations of MGOL or its subsidiaries to repurchase, redeem or otherwise acquire any MGOL Securities or stockholder agreements, voting trusts or other agreements or understandings to which MGOL is a party or by which it is bound relating to the voting or registration of any shares of capital stock of MGOL. For purposes of this Agreement, ‘‘Lien” means, with respect to any asset (including, without limitation, any security) any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.

 

7


 

(b)

The MGOL Shares constitute the only class of equity securities of MGOL registered under the Exchange Act.

 

 

(c)

Other than its 100% ownership of SUB CO, MGOL does not own directly or indirectly more than fifty percent (50%) of the outstanding voting securities or interests (including membership interests) of any entity, other than as specifically disclosed in the disclosure documents.

 

Section 2.3. Authority Relative to this Agreement; Recommendation .

 

 

(a)

MGOL and SUB CO have all necessary corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by the Board of Directors of MGOL (the “MGOL Board”) and the Board of Directors of SUB CO and no other corporate proceedings on the part of MGOL or SUB CO are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, except, as referred to in Section 2.3(b) and Section 2.17, the approval and adoption of this Agreement by the holders of at least a majority of the then outstanding SUB CO Shares, and the adoption of this Agreement by the holders of at least a majority of the then outstanding MGOL Shares. This Agreement has been duly and validly executed and delivered by MGOL and SUB CO and constitutes a valid, legal and binding agreement of MGOL and SUB CO, enforceable against MGOL and SUB CO in accordance with its terms.

 

 

(b)

The MGOL Board has resolved to recommend that MGOL, and the sole stockholder of SUB CO, approve and adopt this Agreement. Additionally, the two stockholders holding a majority of MGOL shares have agreed to approve and adopt this Agreement, and the actions required to be taken to effectuate the terms and conditions set forth in this Agreement.

 

8


Section 2.4. SEC Reports; Financial Statements .

 

 

(a)

MGOL has filed all required forms, reports and documents with the Securities and Exchange Commission (the “SEC”) from the Company’s inception through the period ended March 31, 2009, each of which has complied in all material respects with all applicable requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act (and the rules and regulations promulgated thereunder, respectively), each as in effect on the dates such forms, reports and documents were filed. MGOL has heretofore delivered or promptly will deliver prior to the Effective Date to GRP, in the form filed with the SEC (including any amendments thereto but excluding any exhibits), (i) its Annual Report on Form 10-K for the year ended December 31, 2008, (ii) its Quarterly Report on Form 10-Q for the period ended March 31, 2009, (iii) all definitive proxy statements relating to MGOL’s meetings of stockholders (whether annual or special) held since December 31, 2007, if any, and (iv) all other reports or registration statements filed by MGOL with the SEC since December 31, 2007. None of such MGOL SEC Reports, including, without limitation, any financial statements or schedules included or incorporated by reference therein, contained, when filed, any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements of MGOL included in the MGOL SEC Reports fairly present, in conformity with generally accepted accounting principles applied on a consistent basis (except as may be indicated in the notes thereto), the financial position of MGOL as of the dates thereof and its results of operations and changes in financial position for the periods then ended. All material agreements, contracts and other documents required to be filed as exhibits to any of the MGOL SEC Reports have been so filed.

 

 

(b)

MGOL has heretofore made available or promptly will make available to GRP a complete and correct copy of any amendments or modifications which are required to be filed with the SEC but have not yet been filed with the SEC, to agreements, documents or other instruments which previously had been filed by MGOL with the SEC pursuant to the Exchange Act.

 

Section 2.5. Information Supplied . None of the information supplied or to be supplied by MGOL for inclusion or incorporation by reference in connection with the Merger will at the date filed with the SEC and made available to stockholders of MGOL, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

 

Section 2.6. Consents and Approvals; No Violations . Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Securities Act, the Exchange Act, state securities or blue sky laws, the Hart-Scott-Rodino Antitrust Improvements Act of 1916, as amended (the ‘‘HSR Act’’), the rules of the Financial Industry Regulatory Authority (“FINRA”), the filing and recordation of the Merger Certificate as required by the NGCL, and as set forth on Schedule 2.6 of the MGOL Disclosure Schedule no filing with or notice to, and no permit, authorization, consent or approval of, any court or tribunal or administrative, governmental or regulatory body, agency or authority (a “Governmental Entity”) is necessary for the execution and delivery by MGOL and SUB CO of this Agreement or the consummation by MGOL and SUB CO of the transactions contemplated hereby, except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings or give such notice would not have a Material Adverse Effect on MGOL or SUB CO.

 

9


Except as set forth in Section 2.6 of the MGOL Disclosure Schedule, neither the execution, delivery and performance of this Agreement by MGOL and SUB CO nor the consummation by MGOL or SUB CO of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the respective Articles of Incorporation or Bylaws (or similar governing documents) of MGOL or SUB CO, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration or Lien) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which MGOL is a party or by which any of its properties or assets may be bound, or (iii) violate any order, writ, injunction, decree, law, statute, rule or regulation applicable to MGOL or any of its properties or assets, except in the case of (ii) or (iii) for violations, breaches or defaults which would not have a Material Adverse Effect on MGOL or SUB CO.

 

Section 2.7. No Default . Except as set forth in Section 2.7 of the MGOL Disclosure Schedule, neither MGOL nor SUB CO is in breach, default or violation (and no event has occurred which with notice or the lapse of time or both would constitute a breach, default or violation) of any term, condition or provision of (i) its Articles of Incorporation or Bylaws (or similar governing documents), (ii) any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which MGOL is now a party or by which any of its respective properties or assets may be bound or (iii) any order, writ, injunction, decree, law, statute, rule or regulation applicable to MGOL or any of its respective properties or assets, except in the case of (ii) or (iii) for violations, breaches or defaults that would not have a Material Adverse Effect on MGOL or SUB CO. Except as set forth in Section 2.7 of the MGOL Disclosure Schedule, each note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which MGOL is now a party or by which its respective properties or assets may be bound that is material to MGOL or SUB CO and that has not expired is in full force and effect and is not subject to any material default thereunder of which MGOL or SUB CO is aware by any party obligated to MGOL thereunder.

 

10


Section 2.8. No Undisclosed Liabilities; Absence of Changes . Except as set forth in Section 2.8 of the MGOL Disclosure Schedule and except as and to the extent publicly disclosed by MGOL in the MGOL SEC Reports, as of March 31, 2009, MGOL does not have any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, that would be required by generally accepted accounting principles to be reflected on a balance sheet of MGOL (including the notes thereto) or which would have a Material Adverse Effect on MGOL. Except as publicly disclosed by MGOL, since March 31, 2009, MGOL has not incurred any liabilities of any nature, whether or not accrued, contingent or otherwise, which could reasonably be expected to have, and there have been no events, changes or effects with respect to MGOL having or which reasonably could be expected to have, a Material Adverse Effect on MGOL. Except as and to the extent publicly disclosed by MGOL in the MGOL SEC Reports and except as set forth in Section 2.8 of the MGOL Disclosure Schedule, since March 31, 2009, there has not been (i) any material change by MGOL in its accounting methods, principles or practices (other than as required after the date hereof by concurrent changes in generally accepted accounting principles), (ii) any revaluation by MGOL of any of its assets having a Material Adverse Effect on MGOL, including, without limitation, any write-down of the value of any assets other than in the ordinary course of business or (iii) any other action or event that would have required the consent of any other party hereto pursuant to Section 4.1 of this Agreement had such action or event occurred after the date of this Agreement.

 

Section 2.9. Litigation . Except as publicly disclosed by MGOL in the MGOL SEC Reports, there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of MGOL, threatened against MGOL or any of its subsidiaries or any of their respective properties or assets before any Governmental Entity which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on MGOL or could reasonably be expected to prevent or delay the consummation of the transactions contemplated by this Agreement. Except as publicly disclosed by MGOL in the MGOL SEC Reports, MGOL is not subject to any outstanding order, writ, injunction or decree which, insofar as can be reasonably foreseen in the future, could reasonably be expected to have a Material Adverse Effect on MGOL or could reasonably be expected to prevent or delay the consummation of the transactions contemplated hereby.

 

Section 2.10. Compliance with Applicable Law . Except as publicly disclosed by MGOL in the MGOL SEC Reports, MGOL and SUB CO hold all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the “MGOL Permits”), except for failures to hold such permits, licenses, variances, exemptions, orders and approvals which would not have a Material Adverse Effect on MGOL. Except as publicly disclosed by MGOL in the MGOL SEC Reports, MGOL is in compliance with the terms of the MGOL Permits, except where the failure to so comply would not have a Material Adverse Effect on MGOL. Except as publicly disclosed by MGOL in the MGOL SEC Reports, the business of MGOL is not being conducted in violation of any law, ordinance or regulation of any Governmental Entity except that no representation or warranty is made in this Section 2.10 with respect to Environmental Laws (as defined in Section 2.12 below) and except for violations or possible violations which do not, and, insofar as reasonably can be foreseen, in the future will not, have a Material Adverse Effect on MGOL. Except as publicly disclosed by MGOL in the MGOL SEC Reports, no investigation or review by any Governmental Entity with respect to MGOL is pending or, to the knowledge of MGOL, threatened, nor, to the knowledge of MGOL, has any Governmental Entity indicated an intention to conduct the same, other than, in each case, those which MGOL reasonably believes will not have a Material Adverse Effect on MGOL.

 

11


Section 2.11. Employee Benefit Plans; Labor Matters .

 

 

(a)

Except as set forth in Section 2.11(a) of the MGOL Disclosure Schedule with respect to each employee benefit plan, program, policy, arrangement and contract (including, without limitation, any “employee benefit plan,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), maintained or contributed to at any time by MGOL or any entity required to be aggregated with MGOL pursuant to Section 414 of the Code (each, a “MGOL Employee Plan”), no event has occurred and to the knowledge of MGOL, no condition or set of circumstances exists in connection with which MGOL could reasonably be expected to be subject to any liability which would have a Material Adverse Effect on MGOL.

 

 

(b)

(i) No MGOL Employee Plan is or has been subject to Title IV of ERISA or Section 412 of the Code; and (ii) each MGOL Employee Plan intended to qualify under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code is the subject of a favorable Internal Revenue Service determination letter, and nothing has occurred which could reasonably be expected to adversely affect such determination.

 

 

(c)

Section 2.11(c) of the MGOL Disclosure Schedule sets forth a true and complete list, as of the date of this Agreement, of each person who holds any MGOL Stock Options, together with the number of MGOL Shares which are subject to such option, the date of grant of such option, the extent to which such option is vested (or will become vested as a result of the Merger), the option price of such option (to the extent determined as of the date hereof), whether such option is a nonqualified stock option or is intended to qualify as an incentive stock option within the meaning of Section 422(b) of the Code, and the expiration date of such option. Section 2.11(c) of the MGOL Disclosure Schedule also sets forth the total number of such incentive stock options and such nonqualified options. MGOL has furnished GRP with complete copies of the plans pursuant to which the MGOL Stock Options were issued. Other than the automatic vesting of MGOL Stock Options that may occur without any action on the part of MGOL or its officers or directors, MGOL has not taken any action that would result in any MGOL Stock Options that are unvested becoming vested in connection with or as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

12


 

(d)

MGOL has made available to GRP (i) a description of the terms of employment and compensation arrangements of all officers of MGOL and a copy of each such agreement currently in effect; (ii) copies of all agreements with consultants who are individuals obligating MGOL to make annual cash payments in an amount exceeding $60,000; (iii) a schedule listing all officers of MGOL who have executed a non-competition agreement with MGOL and a copy of each such agreement currently in effect; (iv) copies (or descriptions) of all severance agreements, programs and policies of MGOL with or relating to its employees, except programs and policies required to be maintained by law; and (v) copies of all plans, programs, agreements and other arrangements of MGOL with or relating to its employees which contain change in control provisions all of which are set forth in Section 2.11(d) of the MGOL Disclosure Schedule.

 

 

(e)

There shall be no payment, accrual of additional benefits, acceleration of payments, or vesting in any benefit under any MGOL Employee Plan or any agreement or arrangement disclosed under this Section 2.11 solely by reason of entering into or in connection with the transactions contemplated by this Agreement.

 

 

(f)

There are no controversies pending or, to the knowledge of MGOL, threatened, between MGOL and any of their employees, which controversies have or could reasonably be expected to have a Material Adverse Effect on MGOL. Neither MGOL nor any of its subsidiaries is a party to any collective bargaining agreement or other labor union contract applicable to persons employed by MGOL or any of its subsidiaries (and neither MGOL nor any of its subsidiaries has any outstanding material liability with respect to any terminated collective bargaining agreement or labor union contract), nor does MGOL know of any activities or proceedings of any labor union to organize any of its or its subsidiaries employees. MGOL has no knowledge of any strike, slowdown, work stoppage, lockout or threat thereof, by or with respect to any of its employees.

 

Section 2.12. Environmental Laws and Regulations .

 

 

(a)

Except as publicly disclosed by MGOL in the MGOL SEC Reports, (i) MGOL is in material compliance with all applicable federal, state, local and foreign laws and regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) (collectively, “Environmental Laws”), except for non-compliance that would not have a Material Adverse Effect on MGOL, which compliance includes, but is not limited to, the possession by MGOL of all material permits and other governmental authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof; (ii) MGOL has not received written notice of, or, to the knowledge of MGOL, is the subject of, any action, cause of action, claim, investigation, demand or notice by any person or entity alleging liability under or non-compliance with any Environmental Law (an “Environmental Claim”) that could reasonably be expected to have a Material Adverse Effect on MGOL; and (iii) to the knowledge of MGOL, there are no circumstances that are reasonably likely to prevent or interfere with such material compliance in the future.

 

13


 

(b)

Except as publicly disclosed by MGOL, there are no Environmental Claims which could reasonably be expected to have a Material Adverse Effect on MGOL that are pending or, to the knowledge of MGOL, threatened against MGOL or, to the knowledge of MGOL, against any person or entity whose liability for any Environmental Claim MGOL has or may have retained or assumed either contractually or by operation of law.

 

Section 2.13. Tax Matters .

 

 

(a)

Except as set forth in Section 2.13 of the MGOL Disclosure Schedule: (i) MGOL has filed or has had filed on its behalf in a timely manner (within any applicable extension periods) with the appropriate Governmental Entity all income and other material Tax Returns (as defined herein) with respect to Taxes (as defined herein) of MGOL and all Tax Returns were in all material respects true, complete and correct; (ii) all material Taxes with respect to MGOL have been paid in full or have been provided for in accordance with GAAP on MGOL’s most recent balance sheet which is part of the MGOL SEC Documents; (iii) there are no outstanding agreements or waivers extending the statutory period of limitations applicable to any federal, state, local or foreign income or other material Tax Returns required to be filed by or with respect to MGOL; (iv) to the knowledge of MGOL none of the Tax Returns of or with respect to MGOL is currently being audited or examined by any Governmental Entity; and (v) no deficiency for any income or other material Taxes has been assessed with respect to MGOL which has not been abated or paid in full.

 

 

(b)

For purposes of this Agreement, (i) “Taxes” shall mean all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, customs duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority and (ii) “Tax Return” shall mean any report, return, documents declaration or other information or filing required to be supplied to any taxing authority or jurisdiction with respect to Taxes.

 

14


Section 2.14. Title to Property . MGOL has good and defensible title to all of its properties and assets, free and clear of all liens, charges and encumbrances except liens for taxes not yet due and payable and such liens or other imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby or which, individually or in the aggregate, would not have a Material Adverse Effect on MGOL; and, to MGOL’s knowledge, all leases pursuant to which MGOL leases from others real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, to the knowledge of MGOL, under any of such leases, any existing material default or event of default (or event which with the giving of notice or lapse of time, or both, would constitute a default and in respect of which MGOL has not taken adequate steps to prevent such a default from occurring) except where the lack of such good standing, validity and effectiveness, or the existence of such default or event, would not have a Material Adverse Effect on MGOL.

 

Section 2.15. Intellectual Property .

 

 

(a)

MGOL owns, or possesses adequate licenses or other valid rights to use, all existing United States and foreign patents, trademarks, trade names, service marks, copyrights, trade secrets and applications therefore that are material to its business as currently conducted (the “MGOL Intellectual Property Rights”).

 

 

(b)

The validity of the MGOL Intellectual Property Rights and the title thereto of MGOL is not being questioned in any litigation to which MGOL is a party.

 

 

(c)

Except as set forth in Section 2.15(c) of the MGOL Disclosure Schedule, the conduct of the business of MGOL as now conducted does not, to MGOL’s knowledge, infringe any valid patents, trademarks, trade names, service marks or copyrights of others. The consummation of the transactions completed hereby will not result in the loss or impairment of any MGOL Intellectual Property Rights.

 

 

(d)

MGOL has taken steps it believes appropriate to protect and maintain its trade secrets as such, except in cases where MGOL has elected to rely on patent or copyright protection in lieu of trade secret protection.

 

Section 2.16. Insurance . MGOL currently does not maintain general liability and other business insurance.

 

Section 2.17. Vote Required . The affirmative vote of the holders of at least a majority of the outstanding SUB CO Shares are the only vote of the holders of any class or series of SUB CO’s capital stock and MGOL necessary to approve and adopt this Agreement and the Merger.

 

15


Section 2.18. Tax Treatment . Neither MGOL or SUB CO nor, to the knowledge of MGOL or SUB CO, any of their affiliates have taken or agreed to take action that would prevent the Merger from constituting a reorganization qualifying under the provisions of Section 368(a) of the Code.

 

Section 2.19. Affiliates . Except for the directors and executive officers of MGOL, each of whom is listed in Section 2.19 of the MGOL Disclosure Schedule, there are no persons who, to the knowledge of MGOL, may be deemed to be affiliates of MGOL under Rule 1-02(b) of Regulation S-X of the SEC (the “MGOL Affiliates”).

 

Section 2.20. Certain Business Practices . None of MGOL or SUB CO or any directors, officers, agents or employees of MGOL or SUB CO has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or (iii) made any other unlawful payment.

 

Section 2.21. Insider Interests . Except as set forth in Section 2.21 of the MGOL Disclosure Schedule, no officer or director of MGOL has any interest in any material property, real or personal, tangible or intangible, including without limitation, any computer software or MGOL Intellectual Property Rights, used in or pertaining to the business of MGOL, except for the ordinary rights of a stockholder or employee stock option-holder.

 

Section 2.22. Opinion of Financial Adviser . No financial adviser has been engaged to assist MGOL in reference to this transaction, nor are there any fees or commissions obligated to any third party.

 

Section 2.23. Brokers . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of MGOL or SUB CO.

 

Section 2.24. Disclosure . No representation or warranty of MGOL or SUB CO in this Agreement or any certificate, schedule, document or other instrument furnished or to be furnished to GRP pursuant hereto or in connection herewith contains, as of the date of such representation, warranty or instrument, or will contain any untrue statement of a material fact


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more