third parties, including Governmental Authorities, required for them to consummate, or as a result of their consummation of, the transactions contemplated hereby. Except as otherwise expressly set forth in this Agreement, neither the Stockholders nor the Company on the one hand, nor the Buyer on the other hand shall have any obligation to pay any material amounts or incur any material liability or obligation to any third party as a condition or inducement for obtaining any consents described on Schedule 7.01(c). Each of the Stockholders, the Company and the Buyer agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement. From time to time, as and when requested by any party hereto and at such party's expense, any other party hereto shall execute and deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other actions as such other party may reasonably deem necessary or desirable to evidence and effectuate the transactions contemplated by this Agreement.
Section 6.02 Further Cooperation. The Stockholders and the Buyer shall cooperate with each other (a) in determining whether any action by or in respect of, or filing with, Governmental Authorities is required, or any actions, consents, approvals or waivers are required to be obtained under any material contracts, in each case in connection with the consummation of the transactions contemplated by this Agreement, and (b) in taking such actions or making any such filings, in furnishing information required in connection therewith and in seeking timely to obtain any such actions, consents, approvals or waivers. Section 6.03 Public Announcements. No press release or other public announcement related to this Agreement or the transactions contemplated hereby shall be issued or made by any of the Stockholders without the joint approval of the Buyer and the Stockholders. Section 6.04 Tax Matters.
(a) The Stockholders, pro rata on a several basis based on their relative Indemnity Allocation
Percentages, shall indemnify the Buyer, the Company and any Affiliate of the foregoing for (i) all Taxes of the Company for any taxable period ending on or before the Closing Date (or the portion of any period beginning before and ending after the Closing Date (a \(ii) all Taxes of any other Person that the Company is liable for as a result of joint and several liability (including under Treasury Regulation Section 1.1502-6 or any comparable provision of state, local or foreign Tax law) or as a result of successor liability, or a contractual obligation, in each case, that is attributable to any taxable period ending on or before the Closing Date (or the portion of any Straddle Period that ends on the Closing Date), and (iii) all Taxes resulting from a breach of a representation or warranty contained in Section 3.07(h) (which shall be determined without regard to the exception stated therein) or a covenant contained in Section 5.01(m) (which shall be determined without regard to the \
attributable to any action that occurs during the period between the Closing and the end of the day on the Closing Date and that is outside the ordinary course of business and not expressly contemplated by this Agreement.
(b) For purposes of determining the Taxes that relate to periods ending on or before the Closing Date (or the portions of any Straddle Period ending on the Closing Date) for purposes of determining the Stockholders requirement to indemnify for Taxes under Section 6.04(a):
(i) Taxes in the form of interest, penalties, additions to tax or other additional amounts that relate to Taxes for any period ending on the Closing Date (or portion of any Straddle Period ending on the Closing Date) shall be treated as occurring in a period ending on the Closing Date (or the portion of the Straddle Period ending on the Closing Date) whether such items are incurred, accrued, assessed or similarly charged on, before or after the Closing Date;
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(ii) In the case of Taxes (other than transfer Taxes) that are payable with respect to any Straddle Period, the portion of any such Tax that is attributable to the portion of the Straddle Period ending on the Closing Date shall be (A) in the case of income Taxes or any other Taxes resulting from, or imposed on, sales, receipts, uses, transfers or assignments of property or other assets, payments or accruals to other persons (including, without limitation, wages), or any other similar transaction or transactions, the amount that would be payable for the portion of the Straddle Period ending on the Closing Date if the Company filed a separate Tax Return with respect to such Tax or Taxes solely for the portion of the Straddle Period ending on the Closing Date; and (B) in the case of all other Taxes, an amount equal to the amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period. For purposes of clause (A), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the affects of graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(iii) The Stockholders shall cause the Company to prepare and timely file all Tax Returns of the
Company due on or prior to the Closing Date, in accordance with existing procedures and practices with respect to the treatment of specific items on the returns.
(c) All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement, if any, shall be borne and paid by the Buyer when due, and the Buyer will, at its own expense, file all necessary Tax returns and other documentation with respect to all such Taxes and fees, and, if required by applicable law or regulation, the Buyer will execute and deliver, and will cause its Affiliates to join in the execution and delivery of, any such Tax Returns and other documentation.
(d) The Buyer shall prepare or cause to be prepared, in accordance with past practice (unless such treatment does not have sufficient legal support to avoid the imposition of penalties, fines, or similar amounts), and file or cause to be filed all Tax Returns for the Company for all periods ending prior to or including the Closing Date which are filed after the Closing Date. At least 30 days prior to the date on which each such Tax Return is filed, the Buyer shall submit such Tax Return to the Stockholders for their review and shall consider in good faith any changes reasonably requested by the Stockholders, provided that the Buyer shall not be required to make any changes to the extent such changes result in treatment which does not have sufficient legal support to avoid the imposition of penalties or fines or is not consistent with past practice. In the event the Stockholders are liable under Section 6.04(a) hereof for Taxes due in connection with any Tax Return filed after the Closing Date, the Stockholders shall pay the amount of such liability (not from the Escrow Amount) to the Company immediately upon request or at least three business days prior to the filing of such returns, whichever is later.
(e) To the extent permitted under applicable Law, the relevant party shall elect to close the period for the applicable period that includes the Closing Date as of the Closing Date such that the Company files a Tax Return for a period that ends on the Closing Date.
(f) The Buyer, the Company and the Stockholders shall provide each other with such assistances as may reasonably be requested by the others in connection with the preparation of any return or report of Taxes, any audit or other examination by any Governmental Authority, or any judicial or administrative proceedings relating to liabilities for Taxes. Such assistance shall include making employees available on a mutually convenient basis to provide additional information or explanation of material provided
hereunder and shall include providing copies of relevant tax returns and supporting material. The party requesting assistance hereunder shall reimburse the assisting party for reasonable out-of-pocket expenses incurred in providing assistance. The Buyer, the Company and the Stockholders will retain for the full
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period of any statute of limitations and provide the others with any records or information which may be relevant to such preparation, audit, examination, proceeding or determination.
(g) If any Governmental Authority issues to the Company (i) a written notice of its intent to audit, examine or conduct another proceeding with respect to Taxes or Tax Returns of the Company for periods ending prior to the Closing Date or (ii) a written notice of deficiency, a written notice of reassessment, a written proposed adjustment, a written assertion of claim or written demand concerning Taxes or Tax Returns for periods beginning on or prior to the Closing Date, the Buyer or the Company shall notify the Stockholders of its receipt of such communication from the Governmental Authority within thirty (30) business days after receiving such notice of deficiency, reassessment, adjustment or assertion of claim or demand. No failure or delay of the Buyer or the Company in the performance of the foregoing shall reduce or otherwise affect the obligations or liabilities of the Stockholders pursuant to this
Agreement, except to the extent that such failure or delay shall preclude the Company from defending against any liability or claim for Taxes that the Stockholders are obligated to pay hereunder or otherwise materially prejudice the Stockholders. A majority of the Stockholders shall control any examination, investigation, audit or other proceeding in respect of any Tax Return or Taxes of the Company (a \Contest\provided that (i) Buyer or the Company shall have the right to participate in any such Tax Contest and (ii) the Stockholders shall not settle or otherwise resolve any Tax Contest (or any issue raised in such Tax Contest) unless (A) the Buyer or the Company has consented to such settlement or resolution, (B) the Stockholders shall have paid to the Buyer or the Company, prior to entering into the settlement or other resolution, all Taxes (and other amounts) that the Stockholders are liable for under this Agreement as a result of such settlement or other resolution and (C) the settlement or other resolution could not result in the Buyer, the Company or any of their Affiliates paying any Taxes (or other amounts) that the
Stockholders are not required to fully indemnify the Buyer or the Company for under the Agreement. The Buyer shall control all other Tax Contests, but in the case of any Tax Contest that could result in an
indemnification obligation by the Stockholders, the Buyer shall act in good faith with respect thereto, and the Stockholders shall have the right to participate in any such Tax Contest at their own expense. (h) If there is any adjustment to any return or report of Taxes for the Company which creates a deficiency in any Taxes for which the Stockholders are liable under the provisions of Section 6.04(a) hereof, the Stockholders shall pay to Buyer the amount of such deficiency in Taxes. No liability of the Stockholders under this Section 6.04(h) shall be payable until the occurrence of any action by any Tax authority that is final, or, if not final, is acquiesced in by Stockholders during the course of any audit or proceeding relating to Taxes. All payments required to be made by the Stockholders pursuant to this Section 6.04(h) shall be made within ten (10) business days of the occurrence of the event described in the immediately preceding sentence.
(i) The provisions of this Section 6.04 shall not be governed by the limitations contained in
Sections 9.01 and 9.02 and to the extent of any inconsistency between this Section 6.04 and Sections 9.01 and 9.02, the provisions of this Section 6.04 shall control.
Section 6.05 Disclosures Generally. The Schedules have been arranged, for purposes of convenience only, as separately titled Schedules corresponding to the Sections of Article 3. Any information set forth in any Schedule or incorporated in any Section of this Agreement shall be considered to have been set forth in each other Schedule solely to the extent the relevance of such information to such Schedule is apparent on the face of such Schedule and shall be deemed to modify the representations and warranties in Article 3 whether or not such representations and warranties refer to such Schedule to the extent its relevance to such representations or warranties is apparent on its face. The specification of any dollar amount in the representations and warranties contained in this Agreement or the inclusion of any specific item in the Schedules is not intended to imply that such amounts, or higher or lower amounts, or the items
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so included or other items, are or are not required to be disclosed or are within or outside of the ordinary course of business, and neither party shall use the fact of the setting of such amounts or the fact of the inclusion of any such item in the Schedules in any dispute or controversy with any party as to whether any obligation, item or matter not described herein or included in a Schedule is or is not required to be disclosed (including, without limitation, whether such amounts are required to be disclosed as material) or in the ordinary course of business for the purposes of this Agreement. The information contained in the Schedules is disclosed solely for the purposes of this Agreement, and no information contained therein shall be deemed to be an admission by any party hereto to any third party of any matter whatsoever, including of any violation of law or breach of any agreement.
ARTICLE 7
CONDITIONS TO CLOSING
Section 7.01 Conditions to the Buyer's Obligations. The obligations of the Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or the Buyer's written waiver at its option) of the following conditions as of the Closing Date:
(a) the representations and warranties of the Stockholders contained in Article 3 will be true and
correct at and as of the time of the Closing (without taking into account any supplements or amendments delivered in accordance with Section 5.03) as if made on the Closing Date and the Closing Date were substituted for the date of this Agreement throughout such representations and warranties, except (i) to the extent that the failure of such representations and warranties to be true and correct does not constitute, individually or in the aggregate, a Material Adverse Effect, (ii) for changes contemplated by this Agreement, and (iii) for those representations and warranties that address matters as of any other
particular date (in which case such representations and warranties shall have been true and correct as of such particular date, subject to clause (i) of this Section 7.01(a)), it being understood that, for purposes of determining the accuracy of such representations and warranties, all \
qualifications and other qualifications based on the word \representations and warranties shall be disregarded;
(b) the Company and the Stockholders shall have performed in all material respects all of the covenants and agreements required to be performed by them under this Agreement at or prior to the Closing;
(c) all consents which are set forth on Schedule 7.01(c) attached hereto shall Have been obtained; (d) all material governmental filings, consents, authorizations and approvals that are required for the consummation of the transactions contemplated hereby and set forth on Schedule 9.01(d) attached hereto shall have been made and obtained;
(e) no Law, judgment, decree, or order shall be in effect that would, and no action or proceeding
before any court or government body shall be pending wherein an unfavorable judgment, decree or order would, prevent the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded;
(f) the Stockholders shall have delivered to the Buyer a certificate, dated the Closing Date, stating that the preconditions specified in Section 7.01(a) and Section 7.01(b), as they relate to the Company, have been satisfied;
(g) the rights of each of the individuals listed on Schedule 3.03 hereto as having outstanding rights related to acquiring the Company's securities shall have been extinguished by the Company to the
satisfaction of Buyer and each of those individuals shall have executed and delivered a confirmation of cancellation of such rights in the form of the attached Exhibit B;
(g) the Parties to the Escrow Agreement shall have executed and delivered the Escrow Agreement;
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(h) Nicholas J. Matzorkis shall have executed and delivered to the Buyer the Noncompetition Agreement in the form of the attached Exhibit C;
(i) Nicholas J. Matzorkis or an Affiliate shall have entered into an agreement to be negotiated by him and Buyer to maintain, subject to Buyer's supervision and direction, the Sites in substantially the same fashion as the Company has maintained such Sites prior to the Closing for a term of at least one year after Closing for the total annual compensation of $200,000;
(j) Robert Zakari shall have executed and delivered to the Buyer the Noncompetition Agreement in the form of the attached Exhibit D; and
(i) the Stockholders shall have executed and delivered to the Buyer the mutual release of claims in the form of the attached Exhibit E.
Section 7.02 Conditions to the Stockholders Obligations. The obligations of the Stockholders to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or the written waiver by a majority of the Stockholders) of the following conditions as of the Closing Date: (a) The representations and warranties of the Buyer contained in Article 4 hereof shall have been true and correct in all material respects as of the date of this Agreement and as of the Closing Date, except (i) for changes contemplated by this Agreement, and (ii) for those representations and warranties that address matters only as of the date of this Agreement or any other particular date (in which case such representations and warranties shall have been true and correct in all material respects as of such
particular date), it being understood that, for purposes of determining the accuracy of such representations and warranties, all qualifications based on the word \representations and warranties shall be disregarded;
(b) the Buyer shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing,
(c) all consents which are set forth on Schedule 7.01(c) attached hereto shall have been obtained; (d) all material governmental filings, consents, authorizations and approvals that are required for the consummation of the transactions contemplated hereby and set forth on Schedule 7.01(d) attached hereto shall have been made and obtained;
(e) no Law, judgment, decree, or order shall be in effect that would, and no action or proceeding
before any court or government body shall be pending wherein an unfavorable judgment, decree or order would, prevent the performance of this Agreement or the consummation of any of the transactions contemplated hereby, declare unlawful the transactions contemplated by this Agreement or cause such transactions to be rescinded;
(f) the Buyer shall have delivered to the Stockholders a certificate of the Buyer dated the Closing Date, stating that the preconditions specified in Section 7.02(a) and Section 7.02(b) as they relate to the Buyer have been satisfied;
(g) the Buyer shall have paid the Company prior to Closing the payment due for advertising services provided by the Company to the Buyer from October 15, 2008 through and including October 25, 2008; and
(h) the Buyer shall have executed and delivered to the Stockholders the mutual release of claims in the form of the attached Exhibit C.
ARTICLE 8 TERMINATION
Section 8.01 Termination. This Agreement may be terminated at any time prior to the Closing: (a) by the mutual written consent of the Buyer and a majority of the Stockholders;
(b) by the Buyer, if there has been a material breach by any Stockholder of any representation or warranty (after taking into account the modification of such representations and warranties by any supplements or amendments to the Schedules in accordance with Section 5.03), covenant or other
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