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
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Section 1.2. Effective Time
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Section 1.3. Closing of the Merger
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Section 1.4. Effects of the Merger
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Section 1.5. Articles of Incorporation;
Bylaws
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Section 1.6. Board of Directors and
Officers
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Section 1.7. Conversion of Membership
Interest
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Section 1.8. Exchange of Certificates
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Section 1.9. Membership Interests
Options
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Section 1.11. Cancellation of MGOL
Shares
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Section 1.12. Taking of Necessary Action;
Further Action
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ARTICLE 2. Representations and Warranties
of MGOL
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Section 2.1. Organization and
Qualification
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Section 2.2. Capitalization of MGOL
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Section 2.3.Authority Relative to this
Agreement; Recommendations
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Section 2.4. SEC Reports; Financial
Statements
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Section 2.5. Information Supplied
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Section 2.6. Consents and Approvals; No
Violations
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Section 2.8. No Undisclosed Liabilities;
Absence of Changes
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Section 2.10. Compliance with Applicable
Law
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Section 2.11. Employee Benefit Plans;
Labor Matters
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Section 2.12. Environmental Laws and
Regulations
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Section 2.13. Tax Matters
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Section 2.14. Title To Property
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Section 2.15. Intellectual Property
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Section 2.17. Vote Required
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Section 2.18. Tax Treatment
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Section 2.20. Certain Business
Practices
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Section 2.21. Insider Interests
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Section 2.22. Opinion of Financial
Adviser
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Section 2.25. No Existing Discussion
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Section 2.26. Material Contracts
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ARTICLE 3. Representations and Warranties
of GRP.
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Section 3.1. Organization and
Qualification
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Section 3.2. Capitalization of GRP
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Section 3.3.Authority Relative to this
Agreement; Recommendation
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Section 3.4. SEC Reports; Financial
Statements
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Section 3.5. Information Supplied
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Section 3.6. Consents and Approvals; No
Violations
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Section 3.8 No Undisclosed Liabilities;
Absence of Changes
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Section 3.10. Compliance with Applicable
Law
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Section 3.11. Employee Benefit Plans;
Labor Matters
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Section 3.12. Environmental Laws and
Regulations
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Section 3.13. Tax Matters
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Section 3.14. Title to Property
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Section 3.15. Intellectual Property
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Section 3.17. Vote Required
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Section 3.18. Tax Treatment
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Section 3.20. Certain Business
Practices
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Section 3.21. Insider Interests
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Section 3.22. Opinion of Financial
Adviser
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Section 3.25. No Existing Discussions
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Section 3.26. Material Contracts
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Section 4.1. Conduct of Business of
MGOL
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Section 4.2. Conduct of Business of
GRP
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Section 4.3. Preparation of 8-K
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Section 4.4. Other Potential
Acquirers
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Section 4.5. Meetings of Stockholders and
Members
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Section 4.6. FINRA OTC:BB Listing
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Section 4.7. Access to Information
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Section 4.8. Additional Agreements;
Reasonable Efforts
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Section 4.9.Employee Benefits; Stock Option
and Employee Purchase Plans
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Section 4.10. Public Announcements
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Section 4.11. Indemnification
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Section 4.12. Notification of Certain
Matters
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ARTICLE 5. Conditions to Consummation of
the Merger
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Section 5.1. Conditions to Each Party’s
Obligations to Effect the Merger
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Section 5.2. Conditions to the
Obligations of MGOL and SUB CO
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Section 5.3. Conditions to the
Obligations of GRP
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ARTICLE 6. Termination; Amendment;
Waiver
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Section 6.2. Effect of Termination
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Section 6.3. Fees and Expenses
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Section 6.5. Extension; Waiver
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Section 7.1. Non-survival of
Representations and Warranties
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Section 7.2. Entire Agreement;
Assignment
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Section 7.5. Governing Law
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Section 7.6. Descriptive Headings
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Section 7.7. Parties in Interest
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Section 7.8. Certain Definitions
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Section 7.9. Personal Liability
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Section 7.10. Specific Performance
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Section 7.11. Counterparts
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Section 7.12. Conflict Waiver
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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.
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 .
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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.
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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.
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Section 1.7.
Conversion of Membership Interest .
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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.
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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:
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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.
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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.
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Section 1.8.
Exchange of Certificates .
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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 .
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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.
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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.
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Section 2.2.
Capitalization of MGOL .
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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.
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The MGOL Shares constitute the only class of
equity securities of MGOL registered under the Exchange Act.
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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.
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Section 2.3. Authority Relative to this
Agreement; Recommendation .
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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.
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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.
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Section 2.4. SEC
Reports; Financial Statements .
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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.
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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.
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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.
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.
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.
Section 2.11.
Employee Benefit Plans; Labor Matters .
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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.
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(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.
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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.
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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.
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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.
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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.
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Section 2.12.
Environmental Laws and Regulations .
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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.
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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.
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Section 2.13. Tax
Matters .
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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.
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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.
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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 .
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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”).
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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.
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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.
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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.
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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.
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
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