STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (this “Agreement”)
is
made and entered into as of May 12, 2008 (the “Effective
Date”)
by and
between g8wave Holdings, Inc., a Delaware corporation (“Holdings”
or
the
“Seller”),
and
Xxxxxxx X. Xxxxxxx, an individual (the “Purchaser”).
PMCG
Management Company, LLC (“PMCG”)
is
also a party to this Agreement solely for the purposes of Article
VIII
hereof.
WHEREAS,
the Seller is the sole record and beneficial holder of all of the issued and
outstanding shares of common stock (the “Shares”)
of
g8wave, Inc., a Delaware corporation (the “Corporation”);
WHEREAS,
the Purchaser is the sole record and beneficial holder of 9,457,500 shares
of
common stock of Holdings (the “Holdings
Shares”);
and
WHEREAS,
pursuant to the terms of this Agreement, the Seller desires to sell, and the
Purchaser desires to buy, all of the Shares upon the terms and conditions set
forth below;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, and intending to be legally bound by the terms
and conditions of this Agreement, the parties hereto hereby agree as
follows:
ARTICLE
I
PURCHASE
AND SALE OF SHARES AND ASSUMPTION OF LIABILITIES
SECTION
1.01 Purchase
and Sale of Shares.
Subject
to the terms and conditions of this Agreement, at the Closing (as defined in
Section
2.01),
the
Seller shall sell, convey, transfer, assign and deliver to the Purchaser, and
the Purchaser shall purchase, acquire and accept from the Seller, all right,
title and interest in and to the Shares, free and clear of any and all liens,
claims, security interests, mortgages, restrictions, pledges, options, purchase
rights, or obligations of any kind, other than restrictions on transfer under
federal and applicable state securities laws (collectively, “Liens”).
SECTION
1.02 Purchase
Price.
Upon
the terms and conditions set forth in this Agreement, in consideration of the
sale, conveyance, transfer, assignment and delivery of the Shares pursuant
to
Section
1.01,
at the
Closing the Purchaser shall:
(a) pay
to
the Seller the amount of Thirty Thousand Dollars ($30,000) in immediately
available funds (the “Cash
Payment”);
(b)
sell,
convey,
transfer, assign and deliver to the Seller all right, title and interest in
and
to the Holdings Shares, free and clear of any and all Liens;
(c) assume
and agree to discharge the Assumed Liabilities (as defined in Section
1.03
hereof);
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(d) assume
and agree to pay the Compliance Costs (as defined in Article VIII),
to the
extent provided in, and at the times required by, Article
VIII
hereof;
and
(e) at
the
Purchaser’s expense, obtain the Insurance Endorsement (as defined in
Section
6.01
hereof).
SECTION
1.03 Assumed
Liabilities.
At the
Closing, the Purchaser shall assume and agree to pay, discharge and perform
promptly when due all
Liabilities (as defined below) of the Seller to the extent such Liabilities
are
known as of the Closing Date, including, but not limited to, those Liabilities
set forth on Schedule
I
hereto
(but excluding all Liabilities related to the Seller’s outstanding securities,
which shall remain the liability of the Seller) (collectively, the “Assumed
Liabilities”).
As
used herein, the term “Liabilities”
means
any liability or obligation of any kind, character or description, absolute
or
contingent, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise and whether or not the same
is
required to be accrued or reflected on financial statements prepared in
accordance with generally accepted accounting principles. Anything in this
Agreement to the contrary notwithstanding, the Seller shall be responsible
for
all Liabilities and obligations not expressly assumed by the Purchaser under
this Agreement, and the Purchaser shall not be liable or responsible in any
way
for, or take subject to, any Liabilities not so expressly assumed.
SECTION
1.04 Disclaimer
of Warranties.
The
Purchaser expressly acknowledges and agrees that it has performed such due
diligence on the Corporation and its subsidiaries as the Purchaser has deemed
necessary in order to enter into this Agreement and consummate the transaction
contemplated hereby. Except as expressly set forth in Article
III
hereof,
the Seller makes no representation or warranty of any kind or nature with
respect to the Shares, the Corporation (including its subsidiaries) or the
business thereof, and assets of the Corporation (including its subsidiaries)
are
transferred with the Shares on an “AS IS, WHERE IS AND WITH ALL FAULTS AND
NONCOMPLIANCE WITH LAWS” WITH NO WARRANTY OF HABITABILITY OR FITNESS FOR
HABITATION, with respect to real property, land, buildings, improvements and
any
real property which is the subject of any leases, and WITH NO WARRANTIES,
INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR
A PARTICULAR PURPOSE, with respect to the physical condition of personal
property and inventory, any and all of which warranties (both express and
implied) the Seller hereby expressly disclaims. All of the foregoing real and
personal property shall be further subject to normal wear and tear on the land,
buildings, improvements and equipment and normal and customary use of the
inventory and supplies in the ordinary course of business up to the Closing
Date.
ARTICLE
II
THE
CLOSING
SECTION
2.01 Time
and Place of Closing.
Upon
the terms and conditions set forth in this Agreement, the closing of the
transactions contemplated by this Agreement (the “Closing”)
shall
take place at the offices of Xxxxxx, XxXxxxxxx & Fish, LLP, World Trade
Center West, 000 Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such
other place, time or date as may be mutually agreed upon in writing by the
parties, at 9:00 A.M. Eastern Time on the day (the “Closing
Date”)
immediately following the date on which all conditions precedent and other
matters required to be completed as of the Closing have been completed or waived
in writing by the party entitled to the satisfaction or performance
thereof.
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SECTION
2.02 Deliveries
by the Seller.
At the
Closing, the Seller shall deliver to the Purchaser the following, all of which
shall be reasonably acceptable to the Purchaser in both form and
substance:
(a) Stock
certificates representing all of the Shares, which shall be accompanied by
duly
endorsed blank stock powers, and all documents, instruments, and certificates
necessary to transfer and assign all right, title, and interest in and to the
Shares to the Purchaser.
(b) The
corporate seal, corporate record books, stock books and stock ledgers of the
Corporation.
(c) The
resignations of Xxxxxxx Xxxx and Xxxxx Xxxxxx as trustees of the Corporation’s
401(k) plan.
(d) The
Assignment and Assumption Agreement in the form attached hereto as Exhibit
A (the
“Assignment
and Assumption Agreement”),
duly
executed by the Seller.
(e) A
certificate, duly executed by the Seller, certifying that the Seller’s
representations and warranties set forth in this Agreement are true and correct
as of the Closing Date, and all covenants required to be performed by the Seller
under this Agreement prior to the Closing Date have, in all material respects,
been performed.
(f) All
other
documents, instruments and writings required to be delivered by the Seller
at or
prior to the Closing pursuant to this Agreement or otherwise in connection
with
the transactions contemplated hereby.
SECTION
2.03 Deliveries
by the Purchaser.
At the
Closing, the Purchaser shall deliver to the Seller the following, all of which
shall be reasonably acceptable to the Seller in both form and
substance:
(a) Stock
certificates representing all of the Holdings Shares, which shall be duly
endorsed for transfer to the Seller, and all documents, instruments, and
certificates necessary to transfer and assign all right, title, and interest
in
and to the Holdings Shares to the Seller.
(b) The
Cash
Payment payable pursuant to Section
1.02(a),
by wire
transfer or by other immediately available funds to an account designated by
the
Seller.
(c) The
Assignment and Assumption Agreement, duly executed by the
Purchaser.
(d) A
certificate, duly executed by the Purchaser, certifying that the Purchaser’s
representations and warranties set forth in this Agreement are true and correct
as of the Closing Date, and that all covenants required to be performed by
the
Purchaser under this Agreement prior to the Closing Date have, in all material
respects, been performed.
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(e) All
other
documents, instruments and writings required to be delivered by the Purchaser
at
or prior to the Closing pursuant to this Agreement or otherwise in connection
with the transactions contemplated hereby.
SECTION
2.04 Cancellation
of Holding Shares.
Effective immediately following the Closing, the Seller shall be deemed to
have
cancelled and retired the Holding Shares without any further action required
by
the Seller, the Purchaser, or any other party.
SECTION
2.05 Termination
of Mindich Employment Agreement.
Effective concurrently with the Closing, that certain Employment Agreement,
dated April 21, 2006, between the Corporation and Xxxxxxx Xxxxxxx (which
agreement subsequently was assumed by the Seller), as amended by that certain
Amendment to Employment Agreement, dated January 25, 2008, between the Seller
and Xx. Xxxxxxx, shall terminate and no longer have any force or effect, and
neither party shall have any further Liability to the other
thereunder.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
The
Seller represents and warrants to the Purchaser that the following
representations and warranties are true and correct as of the Effective
Date:
SECTION
3.01 Corporate
Power and Authority.
The
Seller has all necessary corporate power and authority to execute and deliver
this Agreement and any agreement or instrument entered into by the Seller in
connection herewith (collectively, the “Transaction
Documents”)
and to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Subject to the receipt of the
Required Stockholder Approval (as defined in Section
5.01
below),
the execution and delivery of the Transaction Documents by the Seller and the
consummation by the Seller of the transactions contemplated thereby have been
duly and validly authorized by all necessary corporate action on the part of
the
Seller, and no other corporate proceedings on the part of the Seller are
necessary to authorize the Transaction Documents or to consummate the
transactions contemplated thereby. The Transaction Documents to which the Seller
is a party have been duly and validly executed and delivered by the Seller
and,
assuming the Transaction Documents have been duly and validly executed and
delivered by the counterparties thereto, constitute the legal, valid and binding
obligations of the Seller enforceable against the Seller in accordance with
their respective terms, except as enforceability thereof may be limited by
(a)
the application of bankruptcy, reorganization, insolvency and other laws
affecting creditors’ rights generally and (b) equitable principles being applied
at the discretion of a court before which any proceeding may be
brought.
SECTION
3.02 No
Conflict.
The
execution and delivery of the Transaction Documents by the Seller does not,
and
the performance of the Transaction Documents by the Seller will not, (a)
conflict with or violate the charter or bylaws of the Seller, or (b) conflict
with or violate, in any material respect, any law, rule, regulation, order,
judgment or decree applicable to the Seller and will not conflict with or result
in any default under any material contract, obligation or commitment of the
Seller.
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SECTION
3.03 Required
Filings and Consents.
The
execution and delivery of the Transaction Documents by the Seller does not,
and
the performance of the Transaction Documents by the Seller will not, require
any
consent, approval, authorization or permit of, or pre-Closing filing with or
notification to, any national, federal, state, provincial or local governmental,
regulatory or administrative authority, agency, commission, court, tribunal,
arbitral body or self-regulated entity, domestic or foreign, subject to
applicable requirements, if any, of the Securities Act of 1933, as amended,
and
the rules and regulations promulgated thereunder (the “Securities
Act”),
the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
and
state securities laws (“Blue
Sky Laws”).
SECTION
3.04 Capitalization.
On the
date hereof, the authorized capital stock of the Corporation consists of 3,000
shares of common stock, par value $0.001 per share, of which one (1) share
is
issued and outstanding. All of the issued and outstanding shares of capital
stock of the Corporation are validly issued, fully paid and nonassessable and
are owned by Holdings.
SECTION
3.05 Title
to the Shares.
The
Seller is the sole beneficial and record owner of, and has all right, title,
and
interest in and to, the Shares, and has good, valid, and marketable title to
the
Shares, free and clear of all Liens, and upon delivery of the Shares pursuant
hereto, the Purchaser will acquire all right, title, and interest in, and good
and valid title to, the Shares, free and clear of all Liens.
SECTION
3.06 Actions
by Officers and Directors.
Other
than in the ordinary course of the business of the Corporation, no officer,
director, employee or agent of Holdings who is also an officer, director,
employee or agent of the Corporation, other than the Purchaser, has made any
material binding commitment, or incurred any material liability, on behalf
of
the Corporation without the approval of the board of directors of the
Corporation.
SECTION
3.07 Liabilities.
To the
knowledge of the Seller, the Liabilities set forth on Schedule I hereto are
the
only Liabilities of the Seller.
SECTION
3.08 Brokers.
Neither
Holdings nor the Corporation has incurred or become liable for any broker’s
commission or finder’s fee related to or in connection with the transactions
contemplated by this Agreement.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The
Purchaser represents and warrants to the Seller that the following
representations and warranties are true and correct as of the Effective
Date:
SECTION
4.01 Authorization.
The
Purchaser has the legal capacity and authority to execute and deliver this
Agreement and each Transaction Document to which the Purchaser is a party and
to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The Transaction Documents to
which
the Purchaser is a party are valid and binding obligations of the Purchaser
enforceable in accordance with their respective terms except as enforceability
thereof may be limited by (a) the application of bankruptcy, reorganization,
insolvency and other laws affecting creditors’ rights generally and (b)
equitable principles being applied at the discretion of a court before which
any
proceeding may be brought.
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SECTION
4.02 No
Conflict.
The
execution and delivery of the Transaction Documents by the Purchaser does not,
and the performance of the Transaction Documents by the Purchaser will not,
conflict with or violate, in any material respect, any law, rule, regulation,
order, judgment or decree applicable to the Purchaser and, subject to obtaining
the requisite waivers (the “Lock-Up
Waivers”)
of the
transfer restrictions set forth in that certain Lock-Up Letter Agreement
executed by the Purchaser (and other officers and directors of Holdings) in
favor of the purchasers of shares of Holdings sold in the PIPE (as defined
therein), will not conflict with or result in any default under any material
contract, obligation or commitment of the Purchaser.
SECTION
4.03 Required
Filings and Consents.
The
execution and delivery of the Transaction Documents by the Purchaser does not,
and the performance of the Transaction Documents by the Purchaser will not,
require any consent, approval, authorization or permit of, or pre-Closing filing
with or notification to, any national, federal, state, provincial or local
governmental, regulatory or administrative authority, agency, commission, court,
tribunal, arbitral body or self-regulated entity, domestic or foreign, except
for applicable requirements, if any, of the Securities Act, the Exchange Act
and
Blue Sky Laws.
SECTION
4.04 Title
to the Holdings Shares.
The
Purchaser is the sole beneficial and record owner of, and has all right, title,
and interest in and to, the Holding Shares, and has good, valid, and marketable
title to the Holdings Shares, free and clear of all Liens, and upon delivery
of
the Holdings Shares pursuant hereto, the Seller will acquire all right, title,
and interest in, and good and valid title to, the Holdings Shares, free and
clear of all Liens. No party has any preemptive rights or rights of first
refusal in or to the Holdings Shares.
SECTION
4.05 Brokers.
The
Purchaser has not incurred or become liable for any broker’s commission or
finder’s fee related to or in connection with the transactions contemplated by
this Agreement.
SECTION
4.06 Purchase
Entirely for Own Account.
The
Purchaser is purchasing the Shares solely for the Purchaser’s own account for
investment and not with a view to or for sale in connection with any
distribution of the Shares or any portion thereof (within the meaning of Section
2(11) of the Securities Act). The Purchaser either (a) has a pre-existing
business or personal relationship with the Corporation or any of its officers,
directors or controlling persons, or (b) by reason of the Purchaser’s business
or financial experience or the business or financial experience of the
Purchaser’s professional advisors who are unaffiliated with and who are not
directly or indirectly compensated by the Seller, the Corporation or any
affiliate or selling agent of the Seller or the Corporation, could reasonably
be
assumed to have the capacity to evaluate the merits and risks of an investment
in the Shares and to protect the Purchaser’s own interests in connection with
this transaction. The Purchaser is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act.
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SECTION
4.07 Shares
Not Registered.
The
Purchaser understands that the Shares have not been registered under the
Securities Act by reason of a specific exemption therefrom, and that the Shares
must be held indefinitely, unless they are subsequently registered under the
Securities Act or the Purchaser obtains an opinion of counsel, in form and
substance satisfactory to the Corporation, that such registration is not
required. The Purchaser further acknowledges and understands that the
Corporation is not under any obligation to register the Shares.
ARTICLE
V
PRE-CLOSING
COVENANTS OF THE SELLER
SECTION
5.01 Required
Stockholder Approval.
The
Seller will, in accordance with applicable law, as soon as practicable, and
in
any event within twenty (20) days, following the execution of this Agreement,
use commercially reasonable efforts to obtain the written consent of (i) holders
of a majority of the Seller’s outstanding capital stock (the “Stockholders’
Consent”),
and
(ii) holders of a majority of the Seller’s outstanding capital stock, excluding
the Holding Shares (the “Disinterested
Stockholders’ Consent”
and,
together with the Stockholders’ Consent, the “Required
Stockholder Approval”),
which
consents shall approve the transactions contemplated by this Agreement and
the
other Transaction Documents. The Purchaser hereby agrees to execute the
Stockholders’ Consent.
SECTION
5.02 Required
Approvals.
As
promptly as practicable after the date of this Agreement, the Seller will make
all such filings as may be required by any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute,
or
treaty, if any, including without limitation any filings required under the
Exchange Act, to be made by the Seller in order to consummate the transactions
contemplated by this Agreement.
SECTION
5.03 Reserved.
SECTION
5.04 Assumed
Liabilities.
The
Seller shall use commercially reasonable efforts to negotiate and/or settle
the
Assumed Liabilities prior to the Closing (subject to the Purchaser’s reasonable
approval).
SECTION
5.05 Suspension
of Registration Statement.
The
Seller shall notify the holders of shares that are currently registered under
effective registration statements that the Seller is exercising its suspension
rights with respect to such registration statements.
SECTION
5.06 Notice
for Warrant.
The
Seller shall, as soon as practicable, notify its warrant holders of the pending
closing of the transactions contemplated hereby.
SECTION
5.07 Negative
Covenants.
Subject
to the right of the Seller to terminate the Agreement in accordance with the
provisions of Section 12.01(b) hereof, during the period from the Effective
Date
and continuing until the Closing Date, the Seller shall not take, or direct
any
officer, director, employee or agent of the Seller or the Corporation to take,
any action (a) that causes the business of the Seller or the Corporation to
be
conducted other than in the ordinary course of business consistent with past
practice, (b) that results in the issuance of any shares of capital stock of
any
class, or any options, warrants or other convertible or exchangeable securities
or other rights of any kind to acquire shares of capital stock of any class,
or
any other ownership interest in, the Corporation, or (c) that causes the Seller
or the Corporation to become subject to any material binding commitment, or
to
incur any material liability, without the approval of the board of directors
of
the Corporation.
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ARTICLE
VI
PRE-CLOSING
COVENANT OF THE PURCHASER
SECTION
6.01 Insurance
Endorsement.
Prior
to the Closing, the Purchaser
shall obtain, or arrange at the Purchaser’s
expense for the Seller to obtain, an extended reporting period endorsement,
effective as of the Closing Date, under the Seller’s existing officers’ and
directors’ liability insurance coverage for
the
directors and officers of the Seller with respect to possible claims arising
from the business of the Seller conducted prior to and through the Closing
Date,
but not with respect to any undertakings of the Seller after the Closing,
(the “Insurance
Endorsement”),
in a
form reasonably acceptable to the Seller, which endorsement shall provide such
directors and officers with coverage in an amount recommended by the Seller’s
insurance agent and reasonably acceptable to the Purchaser, for
three
(3) years following the Closing; provided,
however,
that,
if the cost of such coverage exceeds One Hundred Fifty Thousand Dollars
($150,000) (the “Maximum
D&O Tail Premium”),
the
Purchaser shall obtain (or arrange at its expense for the Seller to obtain)
such
an endorsement with the greatest coverage and for the longest period available
for the foregoing claims at a cost not exceeding the Maximum D&O Tail
Premium.
SECTION
6.02 Lock-Up
Waivers.
The
Purchaser shall, as soon as practicable and in any event within twenty (20)
days
following the execution of this Agreement, use commercially reasonable efforts
to obtain the Lock-Up Waivers.
SECTION
6.03 Lock-Up.
During
the period from the date of this Agreement and continuing until the Closing
Date, the Purchaser shall not, directly or indirectly, (a) offer for sale,
sell,
pledge (or create any Lien), or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result
in
the disposition by any person of, or the creation of any Lien on) any of the
Holding Shares or (b) enter into any swap or other derivatives transaction
that
transfers to another, in whole or in part, any of the economic benefits or
risks
of ownership of the Holding Shares.
SECTION
6.04 Corporation
and Subsidiary Consents.
The
Purchaser shall obtain all third-party consents and approvals with respect
to
agreements and Liabilities of the Corporation and its subsidiaries that are
necessary or required in order for the parties to consummate the transactions
contemplated by this Agreement, and the Seller shall have no liability of any
kind or nature therefor.
ARTICLE
VII
POST-CLOSING
COVENANTS OF THE SELLER
Promptly
after the Closing, the Seller shall change its corporate name, and shall not
thereafter use, and shall not permit its affiliates to use, the name g8wave
or
any names reasonably similar thereto in connection with its
business.
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ARTICLE
VIII
POST-CLOSING
COVENANT OF THE PURCHASER
From
time
to time during the twelve (12) months immediately following the Closing (the
“Compliance
Period”),
the
Purchaser and PMCG, jointly and severally, shall pay to the Seller, no later
than five (5) business days after the submission of invoices therefor, the
amount which is reasonably necessary for the Seller to continue its existence
and remain in compliance during the Compliance Period with applicable laws
and
the rules and regulations of the SEC and state securities regulators (the
“Compliance
Costs”);
provided,
however,
that
the amount payable under this Article
VIII
shall in
no event exceed One Hundred Twenty-Five Thousand Dollars ($125,000). The Cash
Payment payable by the Purchaser to the Seller pursuant to Section
1.02
hereof
shall be credited toward such payment obligation and shall be applied by the
Seller to the first Thirty Thousand Dollars ($30,000) incurred by the Seller
for
the expenses contemplated by this Article
VIII.
Notwithstanding the foregoing, the Purchaser shall have no further obligations
to the Seller under this Article when Holdings ceases to be a shell company
(as
defined in the rules under the Exchange Act); it being understood that the
term
Compliance Costs shall not include any costs or expenses related to any
transaction(s) or proposed transaction(s) pursuant to which Holdings ceases
(or,
if consummated would cease) to be a shell company, including but not limited
to
the costs and expenses of documenting such transaction(s) or proposed
transaction(s) and completion of any filings, excluding required periodic
filings (e.g., Annual Report on Form 10-KSB, Quarterly Report on Form 10-QSB,
etc.), required to be made in connection with the same.
ARTICLE
IX
CONDITIONS
TO CLOSING
SECTION
9.01 Conditions
to Obligations of each Party.
The
respective obligations of the Seller and the Purchaser to close the transactions
contemplated by this Agreement and the other Transaction Documents shall be
subject to the satisfaction of each of the following conditions on or prior
to
the Closing Date:
(a) Required
Stockholder Approval.
The
Seller shall have obtained the Required Stockholder Approval.
(b) Unfavorable
Action or Proceeding.
On the
Closing Date, no orders, decrees, judgments or injunctions of any court or
governmental body shall be in effect, and no claims, actions, suits,
proceedings, arbitrations or investigations shall be pending or threatened,
which (i) challenge or seek to challenge, or which could prevent or cause the
rescission of, the consummation of the transactions contemplated by the
Transaction Documents, or (ii) would reasonably be expected to have a material
adverse effect on the right of the Purchaser to own and acquire all right,
title, and interest in the Shares, or the Seller to own and acquire all right,
title, and interest in the Holding Shares, in each case, free of any Liens.
SECTION
9.02 Conditions
to Obligations of the Seller.
The
Seller's obligation to sell the Shares and to close the transactions
contemplated by this Agreement and the other Transaction Documents shall be
subject to the satisfaction of each of the following conditions on or prior
to
the Closing Date unless specifically waived in writing by the Seller in whole
or
in part at or prior to the Closing:
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(a) Signing
and Delivery of Instruments.
The
Purchaser shall have executed and delivered all agreements, documents,
instruments and certificates required to be executed and/or delivered by it
pursuant to the provisions of this Agreement.
(b) Performance
of Covenants.
The
Purchaser shall have in all material respects performed or complied with each
and all of the obligations, covenants, agreements and conditions required to
be
performed or complied with by the Purchaser on or prior to the Closing
Date.
(c) Governmental
Authorizations.
The
Purchaser shall have obtained all material consents, approvals, and/or
authorizations from governmental agencies or governmental bodies that are
necessary or required for the performance of this Agreement and the other
Transaction Documents by the Purchaser.
(d) Consents.
The
Purchaser shall have received requisite consents and approvals from all third
parties whose consent or approval is required in order for the Purchaser to
consummate the transactions contemplated by this Agreement and the other
Transaction Documents, in form and substance reasonably satisfactory to the
Seller, including, but not limited to, the Lock-Up Waivers (a copy of which
shall be delivered to the Seller).
(e) Warranties
True and Correct. The
representations and warranties made by the Purchaser and set forth in this
Agreement and in the exhibits and schedules attached hereto shall be true and
correct in all material respects (except to the extent limited or qualified
by
materiality, in which event such applicable representation and warranty shall
be
true and accurate in all respects in accordance with the terms of the applicable
representation and warranty) as of the Closing Date.
(f) Notice
Period.
At
least ten (10) days shall have elapsed following the later to occur of (i)
the
date on which the Seller first publicly disclosed the transactions contemplated
by this Agreement in a filing with the Securities and Exchange Commission and
(ii) the date on which the Seller notified its warrant holders of the pending
closing of the transactions contemplated hereby.
(g) Insurance
Endorsement.
The
Purchaser shall have delivered a copy of the Insurance Endorsement to the
Seller.
(h) Mindich
Resignation.
Xxxxxxx
Xxxxxxx shall have delivered to the Seller his written resignation as an
officer, director, and employee of the Seller, which resignation shall be
effective concurrently with the Closing.
(i) Xxxxxxxxx
Resignation.
Xxxx
Xxxxxxxxx shall have delivered to the Seller his written resignation as an
employee and officer of the Seller, which resignation shall be effective
concurrently with the Closing.
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(j) OTCBB
Status.
The
Seller shall have filed with the Securities and Exchange Commission its Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2007 and its
Quarterly Report on 10-QSB for the fiscal quarter ended March 31, 2008, and
shall otherwise be current in all regulatory filings and in compliance with
the
requirements of the Over-the Counter Bulletin Board for its securities to be
quoted on the Over-the Counter Bulletin Board.
SECTION
9.03 Conditions
to Obligations of the Purchaser.
The
Purchaser’s obligation to purchase the Shares and to close the transactions as
contemplated by this Agreement and the other Transaction Documents shall be
subject to the satisfaction of each of the following conditions on or prior
to
the Closing Date unless specifically waived in writing by the Purchaser in
whole
or in part at or prior to the Closing:
(a) Signing
and Delivery of Instruments.
The
Seller shall have executed and/or delivered all agreements, documents,
instruments and certificates required to be executed and/or delivered pursuant
to all of the provisions of this Agreement.
(b) Performance
of Covenants.
The
Seller shall have in all material respects performed or complied with each
and
all of the obligations, covenants, agreements and conditions required to be
performed or complied with by the Seller on or prior to the Closing Date.
(c) Governmental
Authorizations.
The
Seller shall have obtained all material consents, approvals, and/or
authorizations from governmental agencies or governmental bodies that are
necessary or required for completion of the transactions contemplated by this
Agreement.
(d) Consents.
The
Seller shall have received requisite consents and approvals from all third
parties whose consent or approval is required in order for the Seller to
consummate the transactions contemplated by this Agreement and the other
Transaction Documents, in form and substance reasonably satisfactory to the
Purchaser.
(e) Warranties
True and Correct. The
representations and warranties made by the Seller and set forth in this
Agreement and in the exhibits and schedules attached hereto shall be true and
correct in all material respects (except to the extent limited or qualified
by
materiality, in which event such applicable representation and warranty shall
be
true and accurate in all respects in accordance with the terms of the applicable
representation and warranty) as of the Closing Date.
(f) Schedule
I.
Any
material Liabilities added to Schedule I between the date of this Agreement
and
the Closing Date shall be acceptable to the Purchaser in its sole
discretion.
ARTICLE
X
INDEMNIFICATION
SECTION
10.01 Generally.
The
Purchaser shall indemnify, defend and hold harmless the Seller and each of
its
Affiliates (as such term is defined in Rule 501 promulgated by the U.S.
Securities and Exchange Commission), officers, directors, employees,
representatives and agents (each, a “Seller
Indemnified Party”)
from
and against any and all losses, claims, damages or liabilities of any kind
or
nature (“Claims”)
to
which any Seller Indemnified Party may become subject to the extent such Claims
(or actions in respect thereof) arise out of, or are based upon, (a) the Assumed
Liabilities or (b) the Liabilities of the Corporation, and further agrees to
reimburse such Seller Indemnified Party for any legal or other expenses
reasonably incurred by such Seller Indemnified Party in connection with
investigating or defending any such Claim as such expenses are
incurred.
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SECTION
10.02 Procedures.
Promptly after receipt by a Seller Indemnified Party under this Articles
X
of
written notice of the commencement of any action relating to any Claim, such
Seller Indemnified Party shall, if a claim in respect thereof is to be made
against the Purchaser under this Article
X,
notify
the Purchaser in writing of the commencement thereof; provided,
however,
that
the omission to notify the Purchaser shall not relieve the Purchaser from any
liability which it may have to any Seller Indemnified Party under this
Article
X,
except
to the extent, and only to the extent, that such omission results in material
prejudice to the Purchaser. If any such Claim is brought against any Seller
Indemnified Party and such Seller Indemnified Party notifies the Purchaser
pursuant to this Article
X
of the
commencement thereof, the Purchaser shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to each Seller Indemnified Party.
The Purchaser shall have the right to defend, compromise or otherwise dispose
of
such claim, provided,
that
the Purchaser shall not, without the written consent of the Seller Indemnified
Party, which consent shall not be unreasonably withheld or delayed, effect
the
settlement or compromise of any pending or threatened Claim in respect of which
indemnification may be sought hereunder if the terms thereof include any
statement as to, or an admission of, fault, culpability or a failure to act,
by
or on behalf of any Seller Indemnified Party or do not contain an unconditional
release of the Seller Indemnified Party for any and all liability in connection
with such Claim.
ARTICLE
XI
FURTHER
ASSURANCES
From
time
to time after the Closing, (a) at the Purchaser’s request and without further
consideration, the Seller will execute and deliver such other and further
instruments of conveyance, assignment, transfer and consent, and take such
other
action, as the Purchaser may reasonably request for the more effective
conveyance and transfer of the Shares; and (b) at the Sellers’s request and
without further consideration, the Purchaser will execute and deliver such
other
and further instruments of conveyance, assignment, transfer and consent, and
take such other action, as the Seller may reasonably request for the more
effective conveyance and transfer of the Holdings Shares and the assumption
by
the Purchaser of the Assumed Liabilities.
ARTICLE
XII
TERMINATION
SECTION
12.01 Termination.
This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned:
(a) at
any
time by the mutual consent of the Seller and the Purchaser in a written
instrument; and
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(b) by
the
Seller if, at any time after the date of this Agreement and prior to obtaining
the Disinterested Stockholder Approval, the Seller’s board of directors obtains
and elects to pursue a bona fide acquisition proposal or financing proposal
(an
“Acquisition
Proposal”)
from a
third party that the Seller determines in good faith is superior to the
transactions provided for herein. For the avoidance of doubt, an Acquisition
Proposal shall not be deemed to be superior if, among other things, it does
not
provide sufficient funds to permit the Seller to pay the Break-Up Fee (as
defined in Section
12.02)
or
prevents the Seller from granting the Technology License (as defined in
Section
12.02
hereof).
SECTION
12.02 Break-Up
Fee.
In the
event the Seller exercises it right to terminate this Agreement pursuant to
the
provisions of Section
12.01(b)
hereof,
or if the Closing does not otherwise occur by June 7, 2008 (the “Termination
Date”)
for
any reason other than the Purchaser’s breach of this Agreement or the failure of
the conditions set forth in Sections
9.01
or
9.02
to be
satisfied, the Seller agrees to pay to the Purchaser, promptly upon the
Purchaser’s written request, an amount equal to one hundred twenty percent
(120%) of (i) any funds advanced by the Purchaser or an affiliate of the
Purchaser to the Corporation from the date hereof to the date of termination
or
the Termination Date, as the case may be, for the operation of the Corporation’s
business, less any and all amounts required to be paid by the Corporation
pursuant to that certain Revolving Credit and Security Agreement, dated April
22, 2008, between the Corporation and PMCG, and (ii) any out-of-pocket expenses
incurred by the Purchaser in connection with the transactions contemplated
by
this Agreement (the “Break-Up
Fee”).
In
addition, the Seller shall grant to the Purchaser for a period of twenty (20)
months following such date, without the payment of further consideration by
the
Purchaser, a non-exclusive right and license (or, where applicable, a
sublicense) to use or have used for the benefit of the Purchaser in the business
of the Purchaser or the business of any affiliate of the Purchaser, the
technology and other assets of the Seller necessary in the reasonable judgment
of the Purchaser to permit the Purchaser to fulfill the Purchaser’s and its
affiliates’ customers’ mobile technology campaigns on a continuing basis
(the “Technology
License”).
SECTION
12.03 Survival.
In the
event this Agreement is terminated pursuant to this Article
XII,
it
shall no longer have any force or effect, except that the following provisions
shall survive: Sections
12
and
13.
ARTICLE
XIII
MISCELLANEOUS
PROVISIONS
SECTION
13.01 Successors
and Assigns.
The
provisions of this Agreement shall be binding on and inure to the benefit of
the
respective successors and permitted assigns of the parties hereto. Neither
this
Agreement nor any rights hereunder may be assigned or pledged by either party
without the prior written consent of the other party, except that the Purchaser
may assign this Agreement and his rights hereunder to any limited liability
company wholly-owned by him without the consent of the Seller. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, as third party beneficiary or otherwise.
SECTION
13.02 Entire
Agreement.
This
Agreement and the other Transaction Documents contain the entire agreement
and
understanding of the parties hereto, and supersede any prior agreements or
understandings between or among them, with respect to the subject matter
hereof.
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SECTION
13.03 Counterparts.
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. This Agreement may be delivered by facsimile or electronic
signature.
SECTION
13.04 Governing
Law; Jurisdiction.
This
Agreement shall be governed by and interpreted and construed in accordance
with
the laws of the Commonwealth of Massachusetts. Any legal actions prosecuted
or
instituted by any party under this Agreement shall be brought in a court of
competent jurisdiction in the Commonwealth of Massachusetts and each party
hereby consents to the jurisdiction and venue of such courts for such purposes.
SECTION
13.05 Expenses.
Each
party hereto shall bear all expenses incurred by it in connection with this
Agreement and the transactions contemplated hereby, provided, however, that
the
Purchaser hereby assumes and agrees to pay the reasonable expenses incurred
by
the Seller in connection therewith.
SECTION
13.06 Exhibits
and Schedules.
All
exhibits and schedules referred to in this Agreement shall be attached hereto
and are incorporated by reference herein. From the Effective Date until the
Closing Date, the Seller may update Schedule I as necessary to reflect
additional Liabilities that become known to the Seller after the Effective
Date
and that are to be Assumed Liabilities.
SECTION
13.07 Amendment.
This
Agreement shall not be modified or amended except pursuant to an instrument
in
writing executed and delivered on behalf of each party against whom such
modification or amendment is sought to be enforced.
SECTION
13.08 Notices.
All
notices required or permitted to be given hereunder shall be in writing and
may
be delivered by hand, by facsimile, or by internationally recognized overnight
private courier (for overnight delivery). Notices given by hand shall be deemed
given when received. Notices delivered by nationally recognized overnight
private courier shall be deemed given when received if confirmed by written
verification of receipt. Notices delivered by facsimile shall be deemed given
upon the sender’s receipt of confirmation of successful transmission. All
notices shall be addressed to a recipient’s address as set forth below or to
such other address and/or addressees as may be designated by notice given in
accordance with this Section 12.08.
If
to the
Seller:
000
Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attn:
Chief Executive Officer
Fax:
(000) 000-0000
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If
to the
Purchaser:
Xxxxxxx
X. Xxxxxxx
000
Xxxxxxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Fax:
(000) 000-0000
SECTION
13.09 No
Waiver.
The
failure in any one or more instances of a party to insist upon performance
of
any of the terms, covenants or conditions of this Agreement, to exercise any
right or privilege in this Agreement conferred, or the waiver by such party
of
any breach of any of the terms, covenants or conditions of this Agreement,
shall
not be construed as a subsequent waiver of any such terms, covenants,
conditions, rights or privileges, but the same shall continue and remain in
full
force and effect as if no such forbearance or waiver had occurred. No waiver
shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.
SECTION
13.10 Severability.
The
invalidity of any provision of this Agreement or portion of a provision shall
not affect the validity of any other provision of this Agreement or the
remaining portion of the applicable provision, which remaining portion and
other
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way and shall be construed in accordance with
the
purposes and tenor and effect of this Agreement.
[Signature
page follows]
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first written above.
SELLER:
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By:
/s/ Xxxxx
Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: President & CEO
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PURCHASER:
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/s/
Xxxxxxx X.
Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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For
purposes of Article
VIII only:
PMCG
MANAGEMENT COMPANY, LLC
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By:
/s/ Xxxxxxx X.
Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Manager
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