STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this \and among lntelius Inc., a Delaware corporation (the \
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WHEREAS, the Stockholders collectively own all of the issued and outstanding capital stock of Zaba, Inc., a Delaware corporation (the \Common Stock, $.001 par value (the \
WHEREAS, upon the terms and subject to the conditions set forth herein, the Buyer desires to acquire from the Stockholders, and such Stockholders desire to sell to the Buyer, all of the Shares as of the Closing.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS
Section 1.01 Definitions
The following terms, as used herein, have the following meanings:
\which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. As used in this definition, \common control with\direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.
\portion and (ii) the number of shares of Common Stock held by such Stockholder before giving effect to the transactions contemplated hereby.
\equivalents and marketable securities.
\of business on the Closing Date before giving effect to the transactions contemplated hereby. \
promulgated thereunder, and any reference to any particular Code section shall be interpreted to include any revision of or successor to that section regardless of how numbered or classified.
\Intellectual Property owned by the Company.
\
\compensation, profit sharing, vacation or paid-time-off, stock purchase, stock option or equity incentive plan, program, policy, agreement or arrangement, and any other employee benefit plan, program, policy, agreement or arrangement that is maintained or contributed to by the Company or any Subsidiary or with respect to which the Company' or any Subsidiary has or could reasonably be expected to have any liability.
\ \
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\obligations and commitments of such Person, including without limitation (a) under capitalized leases, (b) for any borrowed money (including specifically any outstanding loans to Lloyd I. Miller), (c) for the deferred purchase price of property or services, (d) for unpaid fees of any kind owed to any Person, (e) for wages and payroll taxes payable, (f) for accounts and credit cards payable and other current liabilities, (g) under employee benefit arrangements, employment agreements, deferred compensation or other similar arrangements which come due as a result of the transactions contemplated hereby, including any change of control, stay or transaction bonuses, (h) any Tax liabilities, (i) certain possible incremental corporate Tax liabilities estimated to be $1,300,000 (j) the portion of Notes Receivable from Nicholas J. Matzorkis and Robert Zakari repayable to other Stockholders estimated to be approximately $274,000 (k) guaranties of any of the foregoing, and (j) all accrued interest, prepayment premiums or penalties and fees on the foregoing which would be payable if such obligations were paid in full as of such date.
\Company as of the Closing Date before giving effect to the transactions contemplated hereby.
\share portion and (ii) the number of shares of Common Stock held by such Stockholder before giving effect to the transactions contemplated hereby.
\patent applications and patent disclosures; (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and copyrightable works; (iv) registrations and applications for registrations of the foregoing; (v) trade secrets, confidential information, know-how and inventions; and (vi) other intellectual property.
\and shall be limited to what the following individuals knew or would have known after due inquiry: Nicholas J. Matzorkis, Robert Zakari and Lloyd I. Miller.
\aggregate has had or would reasonably be expected to have a material adverse effect on the business, assets, results of operations or condition (financial or otherwise) of the Company , taken as a whole, except for any such effects resulting from (a) the transactions contemplated by this Agreement or the
announcement thereof, (b) changes in general economic or political conditions or the securities markets in general, (c) changes, after the date of this Agreement, in conditions generally applicable to businesses in the same industries of the Company including (i) changes in Laws generally applicable to such businesses or industry and (ii) changes in applicable Law or in GAAP or its application, or (d) national or
international hostilities, acts of terror, or acts of war, provided that in the case of the foregoing clauses (a) - (d), except to the extent such event, change, circumstance or effect disproportionately impacts the
Company taken as a whole relative to other companies in the industries in which the Company operates. \carriers', workmen's, repairmen's, statutorily imposed or other like Liens arising or incurred in the
ordinary course of business; (iii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties that are contracts entered into in connection with the Company; (iv) limitations on the rights of the Company under any Contract or real property lease that are expressly set forth in such contract or lease; (v) survey exceptions, imperfections of title, Liens or other title matters affecting any tangible asset owned by the Company that would not, individually or in the aggregate have a Material Adverse Effect; and (vi) with respect to the leased real property, zoning, building codes and other land use laws regulating the use or occupancy of such leased real property or the activities
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conducted thereon that are imposed by any governmental authority having jurisdiction over such leased real property that are not violated by the operation of the business of the Company.
\other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
\2008.
\voting power to elect a majority of the board of directors, or other persons performing similar functions, are directly or indirectly owned by the Company.
\withholding, social security, unemployment, disability, real property, ad valorem/personal property, stamp, excise, occupation, sales, use, transfer, customs duties, capital gain, severance, windfall profits, license, payroll, value added, alternative minimum, estimated or other tax, assessment, duty, fee, levy or other governmental charge (whether payable directly or by withholding and whether or not requiring the filing of a Tax Return), including any interest, penalty or addition thereto.
\return or other document (including elections, waivers, extensions, declarations, disclosures, estimates, schedules or any related or supporting information) filed or required to be filed with any Governmental Authority or other authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.
ARTICLE 2
PURCHASE AND SALE
Section 2.01 Estimated Purchase Price. On or before the fifth (5th) business day preceding the Closing Date, Buyer shall in good faith estimate, on a reasonable basis using then available financial information, the Cash Amount (such estimate is referred to as the \Payoff Amount (such estimate is referred to as the \Purchase Price\
\Amount, (D) less the Escrow Amount.
Section 2.02 Purchase and Sale of the Shares. As of the Closing, upon the terms and subject to the conditions set forth in this Agreement, each Stockholder shall sell, assign, transfer and convey to the Buyer, and the Buyer shall purchase and acquire from each such Stockholder, all of the Shares held by such Stockholder. The purchase price to be paid for the Shares held by such Stockholder shall consist of a payment at the Closing, by wire transfer of immediately available funds to the account designated by such Stockholder, of an amount of cash equal to the Estimated Purchase Price multiplied by such Stockholder's Allocation Percentage. In addition, each Stockholder shall be entitled to receive any Indebtedness owed by the Company to them. Finally, each Stockholder shall be entitled to receive the aggregate distributions, if any, to the Stockholders pursuant to and in accordance with the Escrow Agreement multiplied by such Stockholder's Allocation Percentage. Section 2.03 The Closing.
(a) The closing of the transactions contemplated by this Agreement (the \the offices of Buyer, at 2:30 p.m. on the fifth (5th) business day following full satisfaction or due waiver of all of the closing conditions set forth in Article 7 (other than those to be satisfied at the Closing) or on such other date as is mutually agreeable to the Buyer and a majority of the Stockholders. The date of the Closing is referred to herein as the \
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(b) Upon the terms and subject to the conditions set forth in this Agreement, the parties hereto shall consummate the following transactions as of the Closing:
(i) each Stockholder shall deliver to the Buyer all of the stock certificates representing the Shares held by such Stockholder duly endorsed for transfer or accompanied by duly executed stock powers or other form of assignment and transfer;
(ii) the Buyer shall deliver to each Stockholder, by wire transfer of immediately available funds to the account designated by such Stockholder, cash-in-an-amount-equal to the Estimated Purchase Price multiplied by such Stockholder's Allocation Percentage;
(iii) the Buyer shall deposit, for the benefit of the Stockholders, the Escrow Amount, which will be available to satisfy any amounts owed to the Buyer pursuant to Section 2.04 and Section 9.02(a), in an escrow account (the \agreement (the \substantially in the form of Exhibit A hereto.
(iv) the Buyer shall pay on behalf of itself or the Company, or cause the Company to repay, all Indebtedness of the Company set forth on Schedule 2.03(b)(iv) in accordance with the terms thereof; (v) the Stockholders shall deliver to the Buyer copies of the charter and bylaws of the Company, certified by an officer of the Company;
(vi) the Stockholders shall deliver to the Buyer copies of resolutions of the Company's board of directors, certified by an officer of the Company, authorizing the agreements contemplated hereby; (vii) the Stockholders shall deliver to the Buyer certificates of good standing with respect to the Company issued by such entity's jurisdiction of organization;
(viii) the Stockholders shall deliver to the Buyer copies of signed resignations (to be effective upon the Closing) from each officer and director of the Company; and
(ix) the Buyer and the Stockholders shall make such other deliveries as are required hereby. Section 2.04 Post-Closing Adjustment.
(a) Post-Closing Determination. Within 180 days after the Closing Date, the Buyer shall prepare, and deliver to the Stockholders, (i) the Buyer's determinations of the Cash Amount and the Indebtedness Payoff Amount, and (ii) the Buyer's calculation of the Actual Purchase Price (collectively, the \Computation\Payoff Amount shall be determined on a basis using the same accounting methods, policies, principles, practices and procedures, with consistent classifications, judgments and estimation methodology, as were used in preparation of the Buyer's consolidated balance sheet as of the fiscal year ended December 31, 2007 or, to the extent applicable, in accordance with any changes to such accounting methods, policies, principles, practices and procedures which are documented in the Buyer's books and records prior to the Closing, and shall not include any changes in assets or liabilities as a result of purchase or other changes arising from or resulting as a consequence of the transactions contemplated hereby. The Buyer and its auditors will make available to the Stockholders all records and work papers used in preparing the Draft Computation, and its employees and advisors, provided that such access shall be upon reasonable notice and at reasonable times so as not to interfere unduly with the business of the Buyer. If any of the
Stockholders disagrees with any aspect of the Draft Computation, such Stockholder may, on behalf of all Stockholders and within 60 days after receipt of the Draft Computation, deliver a notice (an \Notice\Indebtedness Payoff Amount and the Stockholders' calculation of the Actual Purchase Price, and
identifying the specific items and amounts of disagreement. The Stockholders will upon request make available to the Buyer and its auditors reasonable access to all records and work papers used in preparing the Objection Notice, and to its advisors, provided that such access shall be upon reasonable notice and at reasonable times. If none of the Stockholders delivers an Objection Notice to the Buyer within 60 days
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after receipt of the Draft Computation, then the parties hereto will be deemed to have agreed to the Draft Computation and the components of such Draft Computation shall be deemed to be finally determined as set forth therein. The Buyer and the Stockholders shall use reasonable efforts to resolve any
disagreements as to the Draft Computation and the Objection Notice, but if they do not obtain a final resolution within 60 days after the Buyer has received the Objection Notice, the Buyer and the
Stockholders shall jointly retain Moss Adams LLP (the \The Buyer and the Stockholders shall direct the Firm to render a determination within 30 days after its retention and the Buyer, the Stockholders and their respective agents shall cooperate with the Firm during its engagement. The Firm may consider only those items and amounts in the Draft Computation or
Objection Notice which the Buyer and the Stockholders are unable to resolve. In resolving any disputed item, the Firm may not assign a value to any item greater than the greatest value for such item claimed by either party or less than the smallest value for such item claimed by either party. The Firm's determination shall be based solely on written submissions by the Buyer and jointly by the Stockholders (i.e., not on independent review) and on the definitions included herein. The determination of the Firm shall be
conclusive and binding upon the Buyer and the Stockholders. Until the Firm makes its determination, the costs and expenses of the Firm shall be borne equally by the Buyer, on the one hand, and the Stockholders (in accordance with their respective Indemnity Allocation Percentages), on the other hand; provided that, when the Firm makes its determination, any costs and expenses (including costs and expenses previously advanced) of the Firm that are allocable to the party whose determination of the Actual Purchase Price was closest to the Firm's
determination of the same shall be paid by the other party.
The \Amount, (C) less the Indebtedness Payoff Amount, (D) less the Escrow Amount, in each case as finally determined pursuant to this section. (b) Post-Closing Adjustment.
(i) Payment by the Buyer, If the Actual Purchase Price is greater than the Estimated Purchase Price, within five (5) business days after the final determination of the Actual Purchase Price the Buyer shall pay to each Stockholder in accordance with their respective Allocation Percentages, by wire transfer or delivery of other immediately available funds, an amount equal to such difference plus simple interest thereon at a rate of twelve percent (12%) per annum from the Closing Date to the date of payment (the \
(ii) Payment by the Stockholders. If the Actual Purchase Price is less than the Estimated Purchase Price, then within five (5) business days after the final determination thereof, the Stockholders, pro rata on a several basis based on their relative Indemnity Allocation Percentages, shall pay to the Buyer an amount equal to such difference plus simple interest thereon at a rate of twelve percent (12%) per annum from the Closing Date to the date of payment.
(iii) Dispute. If, pursuant to this section, there is a dispute as to the final determination of the Actual Purchase Price, the Buyer shall promptly pay to the Stockholders, on the one hand, and the Stockholders (pro rata in accordance with their respective Allocation Percentages) shall pay to the Buyer, on the other hand, as appropriate, such amounts as are not in dispute, together with interest thereon from the Closing Date to the date of payment at an interest rate equal to twelve percent (12%) per annum, pending final determination of such dispute pursuant to this section.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder represents and warrants to the Buyer, as of the date hereof and as of the Closing, that each statement contained in this Article 3 is correct and complete, except as set forth in the Schedules
accompanying this Agreement as of the date hereof (each a \
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