EXHIBIT 10.1

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

American Teleconferencing Services, Ltd.,

 

Premiere Global Services, Inc.,

 

Alpine Acquisition Corp.,

 

ACT Teleconferencing, Inc.,

 

the Company Shareholders party hereto

 

and

 

Dolphin Direct Equity Partners, LP,

as Shareholders’ Representative

 

Dated as of September 4, 2013

 

 

 

 

AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as
of September 4, 2013, by and among American Teleconferencing Services, Ltd., a
Missouri corporation (“ATS”) and subsidiary of Premiere Global Services, Inc., a
Georgia corporation (“PGi”), PGi, Alpine Acquisition Corp., a Delaware
corporation and wholly-owned subsidiary of ATS (“Merger Sub”), and ACT
Teleconferencing, Inc., a Colorado corporation (“Company”), each Company
Shareholder listed on the signature page hereto (the “Selling Shareholders”),
and Dolphin Direct Equity Partners, LP, in its capacity as the Shareholders’
Representative. Certain capitalized terms used herein and not otherwise defined
within the text of this Agreement shall have the meanings set forth in Section
15.1.

 

RECITALS

 

WHEREAS, ATS, Merger Sub and Company intend to effect the merger of Merger Sub
with and into Company (the “Merger”) on the terms and subject to the conditions
set forth in this Agreement, and upon consummation of the Merger, Merger Sub
will cease to exist and Company will become a wholly owned subsidiary of ATS;

 

WHEREAS, the Board of Directors of Company has unanimously approved this
Agreement and declared its advisability; and

 

WHEREAS, Company, PGi, ATS and Merger Sub desire to make certain
representations, warranties, covenants and other agreements in connection with
the Merger and also to prescribe various conditions to the Merger.

 

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:

 

1.            THE MERGER

 

1.1          The Merger. At the Effective Time (as defined in Section 3.2), upon
the terms and subject to the conditions of this Agreement and in accordance with
the applicable provisions of the Colorado Code and the DGCL, Merger Sub shall be
merged with and into Company, the separate corporate existence of Merger Sub
shall cease and Company shall continue as the surviving corporation and as a
wholly owned subsidiary of ATS. Company as the surviving corporation after the
Merger is hereinafter sometimes referred to as the “Surviving Corporation.”

 

1.2          Effects of the Merger. The Merger shall have the effects set forth
in Section 7-90-204 of the Colorado Code.

 

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1.3          Certificate of Incorporation and Bylaws of the Surviving
Corporation.

 

(a)          At the Effective Time, the Amended and Restated Articles of
Incorporation of Company, as in effect immediately prior to the Effective Time,
shall be amended and restated in their entirety to be identical to the
Certificate of Incorporation of Merger Sub (except that all references to Merger
Sub in the Certificate of Incorporation of the Surviving Corporation shall be
changed to “ACT Teleconferencing, Inc.”) (the “Second Amended and Restated
Articles of Incorporation”), and, as so amended, such Second Amended and
Restated Articles of Incorporation shall be the Second Amended and Restated
Articles of Incorporation of the Surviving Corporation until thereafter amended
as provided therein or by applicable Legal Requirements.

 

(b)          At the Effective Time, the Amended and Restated Bylaws of Company,
as in effect immediately prior to the Effective Time, shall be amended and
restated in their entirety to be identical to the Bylaws of Merger Sub (except
that all references to Merger Sub in the Bylaws of the Surviving Corporation
shall be changed to “ACT Teleconferencing, Inc.”) (the “Second Amended and
Restated Bylaws”), and, as so amended, such Second Amended and Restated Bylaws
shall be the Second Amended and Restated Bylaws of the Surviving Corporation
until thereafter amended as provided by applicable Legal Requirements, and as
provided in the Second Amended and Restated Articles of Incorporation of the
Surviving Corporation and such Second Amended and Restated Bylaws.

 

1.4          Directors and Officers of the Surviving Corporation.

 

(a)          The directors of Merger Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation as of the Effective Time,
each to hold office in accordance with the Second Amended and Restated Articles
of Incorporation and Second Amended and Restated Bylaws of the Surviving
Corporation.

 

(b)          The officers of Merger Sub immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation as of the Effective
Time, each to hold office in accordance with the Second Amended and Restated
Bylaws of the Surviving Corporation.

 

2.            MERGER CONSIDERATION AND CONVERSION AND EXCHANGE OF SECURITIES

 

2.1          Merger Consideration. The aggregate merger consideration shall be
an amount in cash equal to $53,000,000, subject to adjustment pursuant to
Section 2.2 and to indemnification claims under Article 11 (the “Aggregate
Merger Consideration”).

 

2.2          Net Monetary Assets Adjustments. The Aggregate Merger Consideration
shall be subject to adjustment as follows:

 

(a)          At least five (5) days prior to the Closing Date, Company will
deliver to ATS a statement (the “Preliminary Adjustment Statement”), consistent
with the guidelines and sample calculation set forth in Exhibit A, reflecting
the estimated Net Monetary Assets (the “Estimated Closing Date Net Monetary
Assets”) as of the Closing Date. If the Estimated Closing Date Net Monetary
Assets are less than the Target Net Monetary Assets, the amount of such
deficiency shall be deducted from the Aggregate Merger Consideration. If the
Estimated Closing Date Net Monetary Assets are greater than the Target Net
Monetary Assets, the amount of such excess shall be added to the Aggregate
Merger Consideration. The Aggregate Merger Consideration as adjusted pursuant to
this Section 2.2(a) shall be deemed to be the “Closing Date Aggregate Merger
Consideration.”

 

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(b)          Within five (5) days following the Collection Calculation Date, ATS
will deliver to the Shareholders’ Representative a statement (the “Final
Adjustment Statement”), consistent with the guidelines and sample calculation
set forth in Exhibit A and the provisions of Section 2.2(c), reflecting the
final calculation of the Net Monetary Assets (the “Closing Date Net Monetary
Assets”) as of the Closing Date. If the Closing Date Net Monetary Assets are
less than the Estimated Closing Date Net Monetary Assets, the Aggregate Merger
Consideration shall be decreased (the “Downward Adjustment”), on a dollar for
dollar basis, by the amount of such deficiencies (the “Downward Adjustment
Amount”, which shall exclusively be effected by a payment to ATS from the Escrow
pursuant to Section 2.2(e) absent fraud or intentional misrepresentation). If
the Closing Date Net Monetary Assets are greater than the Estimated Closing Date
Net Monetary Assets, the Aggregate Merger Consideration shall be increased (the
“Upward Adjustment”), on a dollar for dollar basis, by the amount of such excess
(the “Upward Adjustment Amount”, which shall be effected by a payment by ATS in
cash to the Shareholders’ Representative pursuant to Section 2.2(e)).

 

(c)          For purposes of preparing the Final Adjustment Statement, ATS will
reflect in the calculation of the Closing Date Net Monetary Assets only those
Accounts Receivable that existed on the Closing Date for which cash has been
received by the Company during the period following the Closing Date through the
Collection Calculation Date, less any reasonable and necessary third party costs
incurred by the Company in collection of such amounts. For avoidance of doubt,
collections of Accounts Receivable that existed on the Closing Date, but not
partially or fully reflected in the Estimated Adjustment Statement due to
application of the Company's account receivable write off or write down policies
prior to the Closing Date, shall count towards the determination of collections
and no reserve for doubtful accounts would apply to the collected balances. The
applications of receipts from customers to particular Accounts Receivable shall
be determined as directed by customers or as otherwise ascertainable from the
Company's records. From and after the Closing, the Company shall use, and ATS
shall insure that the Company uses, commercially reasonable efforts, consistent
with ATS’s practices applicable to ATS’s other receivable collections, in
pursuing the collection of all Accounts Receivable that existed on the Closing
Date.

 

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(d)          The Shareholders’ Representative will review the Final Adjustment
Statement and the calculation of the Closing Date Net Monetary Assets. If
Shareholders’ Representative disputes the calculation of the Closing Date Net
Monetary Assets, within thirty (30) days of receipt of the Final Adjustment
Statement, Shareholders’ Representative shall notify ATS in writing (the
“Dispute Notice”) of the disputed amount, Shareholders’ Representative’s
calculation of the Closing Date Net Monetary Assets and the nature and basis of
such dispute. If Shareholders’ Representative does not deliver a Dispute Notice
within the prescribed period, the calculation of the Closing Date Net Monetary
Assets as reflected on the Final Adjustment Statement shall be final and
conclusive. If Shareholders’ Representative delivers a Dispute Notice within the
prescribed period, ATS shall have thirty (30) days from the receipt of the
Dispute Notice to dispute Shareholders’ Representative’s calculation of the
Closing Date Net Monetary Assets. If ATS fails to dispute such calculation, then
Shareholders’ Representative’s calculation of the Closing Date Net Monetary
Assets shall be final and conclusive. In the event of a dispute concerning items
set forth in the Dispute Notice, ATS and Shareholders’ Representative shall
first use their diligent good faith efforts to resolve such dispute between
themselves. In the event ATS and Shareholders’ Representative are unable to
resolve a disagreement with respect to any of the specific items set forth in
the Dispute Notice utilized in calculating the Closing Date Net Monetary Assets
within thirty (30) days following the date of Shareholders’ Representative’s
objection (or such longer period as Shareholders’ Representative and ATS may
jointly agree), the specific items set forth in the Dispute Notice which are the
subject of disagreement shall be determined by an independent national firm of
certified public accountants mutually agreeable to ATS and Shareholders’
Representative (the “Accountants”). If Dispute Notice items are submitted to the
Accountants for resolution, (i) each party shall furnish to the Accountants such
work papers and other documents and information relating to the disputed issues
as the Accountants may request and are available to that party, and shall be
afforded the opportunity to present to the Accountants any material relating to
the determination and to discuss the determination with the Accountants, (ii)
the determination by the Accountants of the Closing Date Net Monetary Assets as
set forth in a notice delivered to both parties by the Accountants in accordance
herewith, will be binding and conclusive on the parties, and (iii) the fees and
expenses of the Accountants for such determination shall be paid, in its
entirety, by the party (the Shareholders’ Representative, on the one hand, or
ATS, on the other hand) whose calculation of Closing Date Net Monetary Assets
(as set forth in the Dispute Notice, in the case of the Shareholders’
Representative, or as set forth in the Final Adjustment Statement, in the case
of ATS) is furthest away from the amount finally determined by the Accountants
as the Final Closing Date Net Monetary Assets. For the avoidance of doubt, the
Accountants shall only resolve specific issues in dispute between the parties as
set forth in the Dispute Notice in determining the Closing Date Net Monetary
Assets. The Closing Date Net Monetary Assets as agreed to by the parties or
determined by the Accountants, as the case may be, shall be the “Final Closing
Date Net Monetary Assets.”

 

(e)          Payments on Account of Adjustments. In the case of a Downward
Adjustment, ATS and the Shareholders’ Representative shall promptly direct the
Escrow Agent to pay the Downward Adjustment Amount to ATS from the Escrow (as
defined in Section 3.3(a)) in accordance with the terms of the Escrow Agreement
(as defined in Section 3.3(a)). In the case of an Upward Adjustment, ATS shall
immediately pay the Upward Adjustment Amount in cash to Shareholders’
Representative, and such additional amount, if any, shall be deemed to be part
of the Payment Fund and, along with the Escrow, subject to distributions by the
Shareholders’ Representative pursuant to the Exchange Agreement.

 

(f)          For purposes of complying with the terms of this Section 2.2:
(i) ATS and the Surviving Corporation shall make available to Shareholders’
Representative and its representatives during normal business hours (A) all
working papers relating to the preparation of the Final Adjustment Statement and
any supporting schedules, supporting analyses and other supporting documentation
relating to the preparation of the Final Adjustment Statement and (B) provide
access to such personnel as may be reasonably requested; provided, however, the
availability of the foregoing to Shareholders’ Representative and its
representatives shall be subject to their execution and delivery of a customary
confidentiality agreement in form and substance reasonably acceptable to ATS and
the Surviving Corporation; and (ii) the Shareholders’ Representative shall make
available to ATS and the Surviving Corporation and their representatives during
normal business hours (A) all working papers relating to the preparation of the
Dispute Notice and any supporting schedules, supporting analyses and other
supporting documentation relating to the preparation of the Dispute Notice and
(B) provide access to such personnel as may be reasonably requested; provided,
however, the availability of the foregoing to ATS and the Surviving Corporation
and their representatives shall be subject to their execution and delivery of a
customary confidentiality agreement in form and substance reasonably acceptable
to the Shareholders’ Representative.

 

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2.3          Conversion of Company Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Capital Stock:

 

(a)          Subject to Sections 2.10 and 3.3: (i) each issued and outstanding
share of Company Capital Stock (excluding any shares to be canceled pursuant to
Section 2.3(b)) shall be converted into that portion of the Aggregate Merger
Consideration to which the holder is entitled in the event of a “Liquidation
Event” pursuant to Section 7 of Annex I of the Amended and Restated Articles of
Incorporation of the Company. The holders of outstanding shares of Series AA
Preferred Stock shall be entitled to receive in such conversion such
preferential portion of the Aggregate Merger Consideration as may be determined
in accordance with the provisions of Section 7 of Annex I of the Amended and
Restated Articles of Incorporation of the Company. The holders of outstanding
shares of the Common Stock shall be entitled to receive in such conversion such
residual portion of the Aggregate Merger Consideration, if any, as may be
determined in accordance with the provisions of the Amended and Restated
Articles of Incorporation of the Company and subject to Section 7 of Annex I of
the Amended and Restated Articles of Incorporation of the Company. A schedule
setting forth the allocation of the Aggregate Merger Consideration among the
Company Shareholders is attached to this Agreement as Annex A is attached to
this Agreement as Annex A; provided that the Shareholders’ Representative may
amend Annex A by providing notice of such amendment to the other parties hereto
at any time prior to the Closing Date as necessary to reflect the allocation
described in this Section 2.3(a).

 

(b)          Each share of Company Capital Stock held in Company’s treasury
immediately prior to the Effective Time, each share of Company Capital Stock of
any class or series which is not being converted into the Aggregate Merger
Consideration pursuant to Section 2.3(a) and Annex A hereto, and each share of
Company Capital Stock owned beneficially or of record by ATS or Merger Sub,
shall automatically be cancelled and retired without payment therefor, and all
rights in respect thereto shall cease to exist.

 

2.4          Conversion of Merger Sub Shares. As of the Effective Time, each
issued and outstanding share of common stock of Merger Sub shall, by virtue of
the Merger and without any action on the part of any holder thereof,
automatically be converted into and thereafter evidence one validly issued,
fully paid and nonassessable share of common stock of the Surviving Corporation.
Each stock certificate of Merger Sub evidencing ownership of any such shares of
common stock of Merger Sub shall, as of the Effective Time, evidence ownership
of such shares of common stock of the Surviving Corporation.

 

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2.5          Treatment of Company Options. Each outstanding and unexercised
Company Option heretofore granted by the Company, whether or not then vested or
exercisable, shall, at the Effective Time, be cancelled. All Company Option
Plans and any other option or equity incentive plan, other than the Value
Participation Plan, shall terminate as of the Effective Time. After the date
hereof, the Company will not issue any Options.

 

2.6          Dissenters’ Rights. Each issued and outstanding share of Company
Capital Stock (excluding any shares to be canceled pursuant to Section 2.3(b))
shall be converted as of the Effective Time into a portion of the Adjusted
Aggregate Merger Consideration as provided in Section 2.3(a), notwithstanding
that certain holders of shares of Company Capital Stock are entitled to demand
payment for their shares pursuant to the provisions of Title 7, Article 113 of
the Colorado Code (“Article 113”); provided that if any holder of shares of
Company Capital Stock is entitled to demand and properly demands payment for
such shares (“Dissenting Shares”) pursuant to, and complies in all respects
with, the provisions of Article 113, then the right of such holder to receive
the consideration for its Dissenting Shares as provided in Section 2.3(a) shall
cease and such holder shall instead be entitled to payment of the fair value of
such Dissenting Shares in accordance with the provisions of Article 113. Any
Dissenting Shares shall be deemed to have been canceled at the Effective Time,
and each holder of Dissenting Shares shall have no rights with respect thereto,
except the right to receive the fair value of such shares in accordance with the
provisions of Article 113. Notwithstanding the foregoing, if any such holder
shall fail to perfect or otherwise shall waive, withdraw or lose the right to
dissent under Article 113, or a court of competent jurisdiction shall determine
that such holder is not entitled to the relief provided by Article 113, then the
right of such holder to be paid the fair value of such holder’s Dissenting
Shares under Article 113 shall cease and such Dissenting Shares shall be deemed
to have been converted at the Effective Time into, and shall have become, the
right to receive the consideration as provided in Section 2.3(a), without
interest on the payment, and such holders shall be subject to the provisions of
Sections 2.7, 3.3 and 11.2(a)(v) hereof, upon surrender of the certificate
representing such shares. Company shall give ATS (i) prompt notice of any
written demands for dissenters’ rights or appraisal of any shares of Company
Capital Stock, withdrawals of such demands, and any other instruments served
pursuant to the Colorado Code (including instruments concerning appraisal or
dissenters’ rights) and received by Company and (ii) the opportunity to
participate in all negotiations and proceedings with respect to such demands.
Neither Company nor ATS shall, prior to Closing, except with the prior written
Consent of the other party, and the Shareholders’ Representative shall not,
after Closing, voluntarily make any payment with respect to any demands for
dissenters’ rights or the appraisal of any shares of Company Capital Stock or
offer to settle or settle any such demands until such Company Shareholder
exercising dissenters’ rights or appraisal rights has properly demanded payment
for its Dissenting Shares in accordance with the Colorado Code. Notwithstanding
the foregoing, to the extent that ATS or Company (i) makes any payment or
payments after the Effective Time in respect of any Dissenting Shares in excess
of the consideration that otherwise would have been payable in respect of such
shares in accordance with this Agreement or (ii) incurs any Damages in respect
of any Dissenting Shares (excluding payments for such shares) (together, the
“Dissenting Share Payments”), ATS shall be entitled to recover under the terms
of Article 11 hereof the amount of such Dissenting Share Payments.

 

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2.7          Closing of Stock Transfer Books. At the Effective Time, holders of
certificates representing shares of Company Capital Stock that were outstanding
immediately prior to the Effective Time shall cease to have any rights as
shareholders of Company, and the stock transfer books of Company shall be closed
with respect to all shares of such capital stock outstanding immediately prior
to the Effective Time. No further transfer of any such shares of Company Capital
Stock shall be made on such stock transfer books after the Effective Time. If,
after such time, any such certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
Sections 2.3, 3.3 and 3.7, as applicable.

 

2.8          No Liability. Neither ATS nor Company shall be liable to any
Company Shareholder in respect of any monies properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar Legal
Requirement.

 

2.9          Further Action. If at any time after the Effective Time, any
further action is determined by ATS to be necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving Corporation or ATS with
full right, title and possession of and to all rights, properties and assets of
Merger Sub and Company, the officers and directors of the Surviving Corporation
and ATS shall be fully authorized (in the name of Merger Sub, in the name of
Company or otherwise) to take such action.

 

2.10        Withholding Rights. Each of ATS and the Surviving Corporation shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any Company Shareholder such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code, or any other applicable Legal Requirement. To the extent that amounts
are so withheld by ATS or the Surviving Corporation, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the Company Shareholder in respect of which such deduction and
withholding was made by ATS or the Surviving Corporation, as the case may be.

 

3.           CLOSING

 

3.1          Closing. The closing of the Merger (the “Closing”) will take place
at 10:00 a.m. Atlanta, Georgia time, on September 3, 2013 at the offices of
Nelson Mullins Riley & Scarborough LLP, 201 17th Street NW, Suite 1700, Atlanta,
Georgia 30363, unless another time, date or place is agreed to in writing by ATS
and Company; provided, however, that if all the conditions set forth in Articles
9 and 10 (other than those that by their terms are to be satisfied or waived at
the Closing) shall not have been satisfied or waived on such date, then the
Closing shall take place on the first Business Day thereafter on which all such
conditions shall have been satisfied or waived. The date on which the Closing
occurs is referred to in this Agreement as the “Closing Date.”

 

3.2          Effective Time of the Merger. Upon the terms and subject to the
conditions set forth in this Agreement, as soon as practicable on or after the
Closing Date, the parties shall (i) file a statement of merger in the form
attached hereto as Exhibit B (the “Colorado Certificate of Merger”) with the
Secretary of State of the State of Colorado in accordance with the relevant
provisions of the Colorado Code, (ii) file a certificate of merger in the form
attached hereto as Exhibit C (the “Delaware Certificate of Merger”) with the
Secretary of State of the State of Delaware in accordance with the relevant
provisions of the DGCL and (iii) make all other filings or recordings required
under the Colorado Code to effect the Merger (the time that such Colorado
Certificate of Merger is duly filed with the Secretary of State of the State of
Colorado being referred to herein as the “Effective Time”).

 

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3.3          Escrow and Payment Procedures.

 

(a)          Subject to fulfillment or waiver of the conditions set forth in
Article 9, at the Closing, ATS shall:

 

(i)          enter into the Exchange Agreement with the Shareholders’
Representative pursuant to which, and in accordance with the terms of this
Agreement, the Shareholders’ Representative will distribute the Aggregate Merger
Consideration (including the Payment Fund and the Escrow) in accordance with
Annex A;

 

(ii)         enter into the Escrow Agreement with the Shareholders’
Representative and the Escrow Agent; and

 

(iii)        deposit:

 

(1)         the Escrow Amount, for purposes of satisfying any payment
obligations under Section 2.2 and to secure the performance of the Selling
Shareholders’ post-Closing obligations under this Agreement (which shall be the
“Escrow”), to the Escrow Agent; and

 

(2)         the Payment Fund with the Shareholders’ Representative, for purposes
of satisfying any payments obligations under Section 3.3(b) or (c).

 

Shareholders’ Representative and Escrow Agent shall hold and pay or distribute
the Escrow and the Payment Fund and any interest or other income earned thereon,
in accordance with the terms of this Agreement, the Exchange Agreement and the
Escrow Agreement, as applicable.

 

(b)          As soon as reasonably practicable after the Effective Time, but in
no event later than ten days after the Effective Time, Shareholders’
Representative shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Capital Stock (each a “Certificate” and
collectively, the “Certificates”) whose shares were converted into the right to
receive consideration pursuant to Section 2.3 (but who did not surrender such
Certificates to Company or Shareholders’ Representative for delivery at Closing
as contemplated by Section 3.7(c)), (i) the Information Statement in accordance
with Section 8.1, (ii) 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 Shareholders’ Representative
and shall be in a form reasonably acceptable to ATS) (the “Letter of
Transmittal”) and (iii) instructions for use in effecting the surrender of the
Certificates to the Shareholders’ Representative in exchange for the applicable
consideration payable pursuant to Article 2. As soon as reasonably practicable
prior to the Effective Time, ATS shall make available to the Shareholders’
Representative as many copies of such Letter of Transmittal and instructions as
the Shareholders’ Representative shall request in writing.

 

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(c)          Upon surrender of a Certificate for cancellation to the
Shareholders’ Representative or an affidavit that such Certificate has been
lost, stolen or destroyed (which such affidavit shall contain an indemnity and
signature guaranty and shall otherwise be in a form reasonably satisfactory to
ATS), together with such Letter of Transmittal, duly executed, the Company
Shareholder surrendering such Certificate shall be entitled to receive in
exchange for each share of Company Capital Stock formerly represented by such
Certificate, promptly upon surrender of such Certificate, such portion of the
Payment Fund as set forth on Annex A hereto. The Shareholders’ Representative
shall deliver such surrendered Certificates or affidavits that any such
Certificate has been lost, stolen or destroyed and duly executed Letters of
Transmittal to ATS within three days of receipt thereof.

 

3.4          ATS’s Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article 9, in addition to delivering the Adjusted
Aggregate Merger Consideration pursuant to Section 3.3, to be paid to the
Company Shareholders surrendering their Certificates at the Closing as set forth
on Annex A by wire transfer in accordance with written instructions previously
provided by such Company Shareholders, on the Closing Date ATS shall deliver to
the Shareholders’ Representative all of the following:

 

(a)          a certificate of the Secretary or an Assistant Secretary of ATS,
dated the Closing Date, in form and substance reasonably satisfactory to the
Company, as to (i) the resolutions of the Board of Directors of ATS authorizing
the execution and performance of this Agreement and the Contemplated
Transactions (as defined in Section 4.2); (ii) the Bylaws of ATS; (iii) the
certificate of incorporation of ATS; and (iv) the incumbency and signatures of
the officers of ATS executing this Agreement and any agreement, document or
instrument delivered hereunder (the “ATS Secretary’s Certificate”);

 

(b)          a certificate of the Secretary or an Assistant Secretary of PGi,
dated the Closing Date, in form and substance reasonably satisfactory to the
Company, as to (i) the resolutions of the Board of Directors of PGi authorizing
the execution and performance of this Agreement and the Contemplated
Transactions (as defined in Section 4.2); (ii) the Bylaws of PGi; (iii) the
certificate of incorporation of PGi; and (iv) the incumbency and signatures of
the officers of PGi executing this Agreement and any agreement, document or
instrument delivered hereunder (the “PGi Secretary’s Certificate”);

 

(c)          the Escrow Agreement, duly executed by ATS;

 

(d)          the Exchange Agreement, duly executed by ATS;

 

(e)          the Amendment to Accounting Function Service Agreement, in the form
of Exhibit F, duly executed by ATS;

 

(f)          certificates of good standing of each of PGi and ATS, issued within
7 days of the Closing Date by the Secretary of State of Georgia and Missouri,
respectively;

 

(g)          the certificate contemplated by Section 10.1, duly executed by
officers of PGi, ATS and Merger Sub; and

 

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(h)          a certificate, validly executed by the President or Chief Executive
Officer of each of PGi and Merger Sub for and on its behalf, to the effect that,
as of the Closing, each and every one of the conditions to the obligations of
the Company set forth in Section 10 have been satisfied (unless otherwise waived
in accordance with the terms thereof).

 

3.5          Merger Sub’s Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article 9, on the Closing Date Merger Sub shall deliver
to the Shareholders’ Representative all of the following:

 

(a)          a copy of the Certificate of Incorporation of Merger Sub, issued
within 7 days of the Closing Date by the Secretary of State of the State of
Delaware;

 

(b)          a long form certificate of good standing of Merger Sub, issued as
of a recent date by the Secretary of State of the State of Delaware;

 

(c)          a certificate of the Secretary or an Assistant Secretary of Merger
Sub, dated the Closing Date, in form and substance reasonably satisfactory to
the Shareholders’ Representative, as to: (i) the Certificate of Incorporation of
Merger Sub; (ii) the Bylaws of Merger Sub; (iii) the resolutions of the Board of
Directors of Merger Sub authorizing the execution and performance of this
Agreement and the Contemplated Transactions; and (iv) the incumbency and
signatures of the officers of Merger Sub executing this Agreement and any other
Transaction Document to which it is a party (the “Merger Sub Secretary’s
Certificate”); and

 

3.6          Company’s Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article 10, on the Closing Date Company shall deliver to
ATS all of the following:

 

(a)          a copy of an Amendment to the Amended and Restated Articles of
Incorporation of Company, in form and substance reasonably satisfactory to ATS,
amending the Certificate of Designations, Preferences and Rights of Series AA
Convertible Preferred Stock of the Company (the “Certificate of Designations”)
to extinguish the rights of the holders of the Company Preferred Stock under
Section 4(a) of the Certificate of Designations, filed with the Secretary of
State of the State of Colorado prior to the date hereof;

 

(b)          a short form certificate of good standing of Company and its U.S.
Subsidiary, issued within 7 days of the Closing Date by the Secretary of State
of the State of Colorado;

 

(c)          a certificate of the Secretary or an Assistant Secretary of
Company, dated the Closing Date, in form and substance reasonably satisfactory
to ATS, as to: (i) the Amended and Restated Articles of Incorporation of
Company; (ii) the Amended and Restated Bylaws of Company; (iii) the
Organizational Documents of each Subsidiary of the Company as in effect as of
the Closing Date, attaching such Organizational Documents thereto; (iv) the
resolutions of the Board of Directors of the Company and Company Shareholders,
including all of the independent directors and holders of a majority of the
voting interests of the Series AA Preferred Stock voting as a separate class and
holders representing a majority of the voting interests of the Series AA
Preferred Stock and Common Stock voting together as a single class as required
by applicable law, authorizing the execution and performance of this Agreement
and the Contemplated Transactions; and (v) the incumbency and signatures of the
officers of Company executing this Agreement and any agreement, document or
instrument delivered hereunder (the “Company Secretary’s Certificate”);

 

11

 

 

(d)          the certificate contemplated by Section 9.1, duly executed by the
President or Chief Executive Officer of Company;

 

(e)          a certificate, validly executed by the President or Chief Executive
Officer of Company for and on its behalf, to the effect that, as of the Closing,
each and every one of the conditions to the obligations of ATS and Merger Sub
set forth in Section 9 have been satisfied (unless otherwise waived in
accordance with the terms thereof);

 

(f)          the resignation letters contemplated by Section 8.4, duly executed
by such Persons;

 

(g)         certificates of status of foreign corporation or similar
certificates regarding the Company issued by the Secretary of State of each
state listed in Schedule 4.1(a) of the Disclosure Memorandum, in each case dated
within a reasonable period prior to the Closing certifying as to the good
standing of the Company in the states disclosed on Schedule 4.1(a) of the
Disclosure Memorandum;

 

(h)          a certificate stating that Company is not, and has not been during
the relevant testing period, a United States real property holding corporation
within the meaning of Section 897 of the Code, sufficient to comply with
Treasury Regulation § 1.897-2(h); and

 

(i)           the Amendment to Accounting Function Service Agreement, duly
executed by Dolphin Management Shared Services, Inc. and the Company.

 

3.7          Shareholders’ Representative Deliveries. Subject to fulfillment or
waiver of the conditions set forth in Article 10, on the Closing Date the
Shareholders’ Representative shall deliver to ATS the following:

 

(a)          the Escrow Agreement, duly executed by the Shareholders’
Representative on behalf of the Company Shareholders;

 

(b)          the Exchange Agreement, duly executed by the Shareholders’
Representative on behalf of the Company Shareholders; and

 

(c)          any Certificates (together with duly executed Letter of
Transmittals) tendered by Company Shareholders to the Shareholders’
Representative for delivery at the Closing.

 

12

 

 

4.            REPRESENTATIONS AND WARRANTIES OF COMPANY

 

As an inducement to ATS and Merger Sub to enter into this Agreement and to
consummate the Contemplated Transactions, Company represents and warrants to ATS
and Merger Sub as follows:

 

4.1          Organization, Corporate Power and Good Standing.

 

(a)          Each of Company and its Subsidiaries is a corporation, limited
liability company or other legal Entity duly organized, validly existing, and in
good standing under the laws of the state of its incorporation or formation, as
applicable, with full corporate or limited liability company, as applicable,
power and authority to conduct its business as now being conducted, to own or
use the respective properties and assets that it purports to own or use. Each of
Company and its Subsidiaries are duly qualified to do business as a foreign
corporation and are in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties and assets
owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except for such failures to be qualified and in good
standing, if any, that when taken together with all such other failures would
not be reasonably likely to have a Material Adverse Effect. All such
jurisdictions in the United States in which Company and/or its Subsidiaries is
so qualified are set forth on Schedule 4.1(a) of the Disclosure Memorandum.

 

(b)          Schedule 4.1(b) of the Disclosure Memorandum lists all Subsidiaries
of Company and indicates as to each and to Company its jurisdiction of
organization and its directors and officers. Other than as set forth on Schedule
4.1(b) of the Disclosure Memorandum, neither the Company nor any Subsidiary
owns, directly or indirectly, any equity, partnership, membership or similar
interest in, or any interest convertible into, exercisable for the purchase of
or exchangeable for any such equity, partnership, membership or similar
interest, and is not under any current or prospective obligation to form or
participate in, provide funds to, make any loan, capital contribution or other
investment in, or assume any Liability or obligation of, any Person. Except as
set forth on Schedule 4.1(b) of the Disclosure Memorandum, Company has delivered
to ATS correct and complete copies of, the Organizational Documents of the
Company and each Subsidiary of Company, as currently in effect on the date
hereof.

 

4.2          Authority; No Conflict.

 

(a)          Company has all necessary corporate power and authority to execute
and deliver this Agreement and the other Transaction Documents to which it is a
party, to perform its obligations hereunder and thereunder and to consummate the
Merger and the other transactions contemplated hereby and thereby (collectively,
the “Contemplated Transactions”). The execution and delivery of this Agreement
by Company and the consummation by Company of the Contemplated Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Company are necessary to authorize the
execution and delivery of this Agreement or to consummate the Contemplated
Transactions (other than, with respect to the Merger, the filing of appropriate
merger documents as required by the Colorado Code). The Board of Directors of
Company, at a meeting duly called and held at which all directors of Company,
including the independent directors of Company, were present, duly and
unanimously adopted resolutions approving and declaring advisable the Merger,
this Agreement and the Contemplated Transactions. The only approvals of the
holders of any class or series of Company Capital Stock necessary to approve or
adopt this Agreement or the consummation of the Contemplated Transactions were
the approval of this Agreement by holders of a majority of the shares of Series
AA Preferred Stock voting as a separate class and the approval of this Agreement
by holders representing a majority of the voting interests of the Series AA
Preferred Stock and Common Stock voting together as a single class
(collectively, the “Required Shareholder Approval”). Prior to the date hereof,
the Selling Shareholders executed an irrevocable written Consent (the “Selling
Shareholder Consent”), which: (i) constituted the Required Shareholder Approval
of this Agreement and (ii) approved the Merger and the other Contemplated
Transactions, all in accordance with the Colorado Code and Company’s
Organizational Documents. This Agreement has been duly and validly executed and
delivered by Company and (assuming the due authorization, execution and delivery
by the other parties hereto) constitutes a legal, valid and binding obligation
of Company, enforceable against Company in accordance with its terms, except as
such enforcement may be limited by any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other Legal Requirements (whether statutory,
regulatory or decisional), now or hereafter in effect, relating to or affecting
the rights of creditors generally or by equitable principles (regardless of
whether considered in a proceeding at law or in equity).

 

13

 

 

(b)          Neither the execution and delivery of this Agreement nor the
consummation of any of the Contemplated Transactions, directly or indirectly
(with or without notice or lapse of time or both):

 

(i)          contravenes, conflicts with, or results in a violation or breach of
any provision of the Organizational Documents of Company or its Subsidiaries;

 

(ii)         contravenes, conflicts with, or results in a violation or breach
of, or give any Governmental Body or other Person the right to challenge any of
the Contemplated Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which Company, or any of the assets
owned or used by Company, is or may be subject (other than pursuant to any
dissenters’ rights or appraisal rights granted under the Colorado Code);

 

(iii)        contravenes, conflicts with, or results in a violation of any of
the terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization
that is held by Company, or that is required by the business of, or any of the
properties and assets owned or used by, Company;

 

(iv)        except as disclosed on Schedule 4.2(b)(iv) of the Disclosure
Memorandum, contravene, conflict with, or result in a violation or breach of any
provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Contract;

 

(v)         other than as disclosed on Schedule 4.2(b)(v) of the Disclosure
Memorandum, require a Consent from any Person; or

 

(vi)        result in the imposition or creation of any Encumbrance (other than
Permitted Encumbrances) upon or with respect to any of the properties and assets
owned or used by Company or any of its Subsidiaries;

 

14

 

 

except, in the case of the foregoing clauses (iii) and (vi), as would not be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.

 

4.3          Capitalization.

 

(a)          The authorized capital stock of Company consists of: (i) Two
Hundred Fifty Million (250,000,000) shares of Common Stock; (ii) One Hundred
Sixty Nine Thousand (169,000) shares of Series AA Preferred Stock and (iii) One
Million Eight Hundred Thirty One Thousand (1,831,000) shares of Non-Voting
Preferred Stock. As of the date hereof: (i) Seventeen Million Two Hundred Eleven
Thousand Six Hundred Thirty Two (17,211,632) shares of Common Stock are issued
and outstanding, all of which are duly authorized, validly issued, fully paid
and nonassessable; (ii) One Hundred Forty One Thousand One Hundred Eighty Nine
(141,189) shares of Series AA Preferred Stock are issued and outstanding, all of
which are duly authorized, validly issued, fully paid and nonassessable; (iii)
no shares of the Non-Voting Preferred Stock are issued and outstanding; (iv)
Eighty One Thousand Nine Hundred (81,900) shares of Common Stock are held in the
treasury of Company; (v) no shares of Series AA Preferred Stock are held in the
treasury of the Company; and (vi) no shares of the Non-Voting Preferred Stock
are held in the treasury of the Company. No Subsidiary of the Company owns any
Company Capital Stock. All equity interests of Company have been issued in
accordance with applicable Legal Requirements.

 

(b)          As of the date hereof, the Company Capital Stock is held of record
by the Persons, with the addresses of record and in the amounts as set forth in
Schedule 4.3(b) of the Disclosure Memorandum. Except as set forth on Schedule
4.3(b)(ii) of the Disclosure Memorandum, there are no (A) bonds, debentures,
notes or other Indebtedness of Company, and (B) securities or other instruments
or obligations of Company, in each case, the value of which is in any way based
upon or derived from any capital or voting stock of Company or which has or
which by its terms may have at any time (whether actual or contingent) the right
to vote (or which is convertible into, or exchangeable for, securities having
the right to vote) on any matters on which the shareholders of Company may vote.
Except as contemplated hereby, or as set forth in Schedule 4.3(b) of the
Disclosure Memorandum, there are no voting trusts, proxies, shareholder
agreements or other Contracts with respect to the voting stock of Company. As of
the Closing Date, the Company Shareholders will have been properly given, or
shall have properly waived, any required notice prior to the Merger.

 

(c)          Set forth in Schedule 4.3(c) of the Disclosure Memorandum is a
true, correct and complete list of the following for each Subsidiary of the
Company: (i) the authorized equity interests (the “Subsidiary Equity Interests”)
of such Subsidiary and (ii) the number of issued and outstanding shares of such
Subsidiary Equity Interests and the holders of such Subsidiary Equity Interests.
All of the Subsidiary Equity Interests are duly authorized, validly issued,
fully paid and nonassessable and constitute all of the issued and outstanding
Subsidiary Equity Interests of each Subsidiary of the Company. Except as set
forth in Schedule 4.3(c) of the Disclosure Memorandum, there are no: (i) Options
or Contracts relating to the issued or unissued capital stock or other
securities of any Subsidiary, or obligating any Subsidiary to issue, grant,
deliver, sell, repurchase or redeem, or cause to be issued, granted, delivered,
sold, repurchased or redeemed, any shares of capital stock of, or other equity
interests in, or securities convertible into equity interests in, such
Subsidiary, or obligating such Subsidiary to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into any such Option
or Contract; (ii) outstanding or authorized stock appreciation, phantom stock,
profit participation, or other equity-based compensation awards or similar
rights (whether payable in cash or otherwise) with respect to such Subsidiary,
nor are there any commitments to issue any such awards or rights; or (iii) any
(A) bonds, debentures, notes or other Indebtedness of any Subsidiary, and (B)
except as set forth above, securities or other instruments or obligations of any
Subsidiary, in each case, the value of which is in any way based upon or derived
from any capital or voting stock of any Subsidiary or which has or which by its
terms may have at any time (whether actual or contingent) the right to vote (or
which is convertible into, or exchangeable for, securities having the right to
vote) on any matters on which the shareholders of such Subsidiary may vote.
There are no voting trusts, proxies, shareholder agreements or other Contracts
with respect to the voting stock of any Subsidiary. All Subsidiary Equity
Interests have been issued in accordance with applicable Legal Requirements.

 

15

 

 

(d)          Except as set forth on Schedule 4.3(d), neither Company nor any
Subsidiary of Company is obligated pursuant to any Contract to repurchase,
redeem or otherwise acquire any shares of any capital stock of any Subsidiary of
Company, or make any investment (in the form of a loan, capital contribution or
otherwise) in any other Person. Neither Company nor any Subsidiary owns, or has
any Contract or other obligation to acquire, any equity securities or other
securities of any other Person or any direct or indirect equity or ownership
interest in any other business. Neither Company nor any Subsidiary is, nor has
it ever been, a general partner of any general or limited partnership.

 

4.4          No Adverse Change. Except as disclosed on Schedule 4.4 of the
Disclosure Memorandum, since the Balance Sheet Date, the Business has been
operated only in the Ordinary Course of Business and there has not been any: (a)
material loss or damage or other adverse change to any of Company’s or Company’s
Subsidiary’s properties or assets (whether or not covered by insurance); (b)
sale, transfer or disposition of any of Company’s or Subsidiary’s properties or
assets material to the operations of the Business; (c) any incurrence of any
debt or any Encumbrance (other than Permitted Encumbrances) placed on any of
Company’s or Subsidiary’s properties or assets; (d) change in the accounting
systems, tax elections, policies or practices of Company or any Subsidiary
related to the Business; (e) material Contract entered into by Company or any
Subsidiary other than in the Ordinary Course of Business; (f) notice of any
actual or threatened labor trouble, strike, walk out, picketing, boycott or
other similar occurrence; (g) cancellation, without fair consideration, of any
Liability due with respect to the Business; (h) modification, cancellation or
termination of any material Contract; (i) any declaration, setting aside or
payments of any dividend or other distribution, or any other payment on or with
respect to any of the capital stock or other equity interests of the Company or
any of its Subsidiaries; (j) any sale, assignment, transfer or grant of any
Intellectual Property, entry into any settlement regarding the breach or
infringement of any Intellectual Property, or any action taken (or to the
knowledge of Company, the failure of any action) that has resulted in, or would
reasonably be likely to result in, the loss, lapse, abandonment, invalidity or
enforceability of any material Intellectual Property; (k) any purchase,
redemption or other acquisition, or the entry into any commitment or agreement
to purchase, redeem or otherwise acquire, any outstanding capital stock; (l)
change or revocation of any material Tax election, election or change of any
material method of accounting for Tax purposes, settlement of any Proceeding in
respect of Taxes or entered into any Contract in respect of Taxes with any
Governmental Body; or (m) any other event that has had a Material Adverse
Effect.

 

16

 

 

4.5          Title to and Condition of Assets.

 

(a)          Company and its Subsidiaries have good and marketable title to, or
a valid leasehold interest in, the properties and assets used by it in the
Business, including the properties and assets reflected in the Financial
Statements or acquired after the date thereof, free and clear of all
Encumbrances other than Permitted Encumbrances (except as disclosed on Schedule
4.5 of the Disclosure Memorandum), except for properties and assets disposed of
in the Ordinary Course of Business since the date of the most recent balance
sheet (the “Balance Sheet Date”) included in the Financial Statements.

 

(b)          With respect to Bridge Equipment, Schedule 4.5(b) of the Disclosure
Memorandum sets forth (i) each item's location, (ii) the Bridge Equipment
hardware description, (iii) significant operating system software description
and version of same and (iv) whether such Bridge Equipment and software is
covered by an effective maintenance Contract, and if so, the status (including
expiration date) of such Contract. All such Bridge Equipment uses operating
systems and other software appropriate to operate the Business as currently
conducted, and employs usable versions of such software.

 

4.6          Financial Statements.

 

(a)          True, correct and complete copies of the Financial Statements have
been made available to ATS prior to the date hereof. The Financial Statements
(i) have been prepared in accordance with GAAP consistently applied, and (ii)
fairly present, in all material respects, the financial condition of Company and
its Subsidiaries, on a consolidated basis, and the results of operations and
cash flows of Company and its Subsidiaries, on a consolidated basis, as of the
dates thereof and the periods then ended, except (i) as otherwise indicated in
the Financial Statements and (ii) in the case of unaudited financial statements,
for normal recurring year-end adjustments (which are not expected, to be
material) and the lack of footnotes thereto. The Financial Statements have been
prepared, in all material resects, consistently with the books and records of
Company and its Subsidiaries and do not reflect any transactions that are not
bona fide.

 

(b)          The respective minute and corporate or company books of the Company
and each of its Subsidiaries, as previously made available to ATS and its
representatives, contain, in all material respects, accurate records of all
meetings of, and corporate or company action taken by (including action taken by
written Consent) the respective shareholders (or other equity owners) and Boards
of Directors (or other governing bodies) of the Company and each Subsidiary. The
books of account and other business records of the Company, all of which are in
the possession of the Company and each of its Subsidiaries and have been made
available to ATS, have been maintained in accordance with commercially
reasonable business practices, consistently applied, including the maintenance
of an adequate system of internal controls, and fairly and accurately provide,
in all material respects, the basis for the consolidated financial position and
results of operation of the Company and each of its Subsidiaries as set forth in
the Financial Statements. Except as set forth on Schedule 4.6(b), neither the
Company nor any of its Subsidiaries has any of its records, systems, controls,
data or information recorded, stored, maintained, operated or otherwise wholly
or partly dependent on or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company or such Subsidiary.

 

17

 

 

(c)          Neither Company nor any of its Subsidiaries has any Liability
except for (i) Liabilities set forth in the most recent balance sheet delivered
as part of the Financial Statements, (ii) Permitted Encumbrances, and (iii)
Liabilities that have arisen after the most recent balance sheet delivered as
part of the Financial Statements in the Ordinary Course of Business (which do
not exceed $25,000, in the aggregate, and none of which results from, arises out
of, relates to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement, or violation of law).

 

4.7          [RESERVED]

 

4.8          Regulatory Payments. All Regulatory Payments of Company, including
USF Payments, have been properly determined in all material respects in
accordance with all applicable Legal Requirements and have been timely paid in
full if due and if not due have been reserved for and will be timely paid when
due and all Regulatory Payments that Company is required by Legal Requirements
to withhold or collect, including USF Payments, have been duly withheld or
collected and, to the extent required, have been paid over to the property
Governmental Body.

 

4.9          Agreements.

 

(a)          Schedule 4.9(a) of the Disclosure Memorandum sets forth an accurate
and complete list of the following Contracts (the “Material Contracts”):

 

(i)          vendor Contracts relating to the Business that involve the payment
of over $25,000 by the Company in the most recent 12-month period;

 

(ii)         all Contracts that provide for the indemnification by the Company
of any environmental or other Liability of any Person;

 

(iii)        forms or samples of broker, distributor, dealer, manufacturer’s
representative, franchise, agency, reseller, sales promotion, market research,
marketing consulting and advertising Contracts to which the Company is a party;

 

(iv)        all Contracts with any labor union or association representing any
employees of the Company or any Subsidiary;

 

(v)         all Contracts with any Governmental Body to which the Company is a
party;

 

(vi)        any Contracts to which the Company is a party that provide for any
joint venture, partnership or similar arrangement by the Company;

 

18

 

 

(vii)       all Contracts, entered into in the preceding three years, relating
to the acquisition or disposition by the Company or any Subsidiary of (A) any
business or business segment (whether by merger, consolidation or other business
combination, sale of assets or otherwise) or the capital stock of any Person,
(B) any of the assets of the Company or any Subsidiary (other than sales of
inventory or the disposition of obsolete equipment, in each case in the Ordinary
Course of Business) for consideration in excess of $250,000;

 

(viii)      all Contracts relating to the incurrence, assumption or guarantee of
indebtedness, or the making of any loans or advances, including Capital Leases,
in each case involving amounts in excess of $50,000;

 

(ix)         all Contracts that are not terminable upon 30 days’ or less notice
(excluding Contracts terminable upon a payment of less than $25,000), including
all Customer Service Contracts, debts, loans, security agreements, equipment and
other leases;

 

(x)          all employment, separation, severance, consultant or independent
contractor Contracts and employee, consultant or independent contractor
non-competition, non-solicitation, or confidentiality Contracts currently in
effect relating to the Business in each case, with employees, consultants or
independent contractors of Company or its Subsidiaries whose base salary or base
rate of compensation exceeds $125,000 per year;

 

(xi)         all Contracts which limit or restrict where the Company may conduct
the Business or the type or line of business in which the Company may engage;

 

(xii)        all Contracts between or among the Company on the one hand and any
Company Shareholder or any Affiliate of any Company Shareholder (other than the
Company) on the other hand;

 

(xiii)       all Contracts that require the Company to purchase its total
requirements of any products or service from a third party or that contain “take
or pay” provisions;

 

(xiv)      all Customer Service Contracts that involve revenues of more than
$25,000 by the Company or a Subsidiary in the most recent 12-month period;

 

(xv)       all Contracts not made in the Ordinary Course of Business; and

 

(xvi)      any other Contract that is material to the Company and not previously
disclosed pursuant to this Section 4.9.

 

Company has delivered or made available to ATS true and complete copies of each
Material Contract. Except as set forth on Schedule 4.9(a), each such Material
Contract is in full force and effect and a legal and binding obligation of
Company or its Subsidiary, enforceable in accordance with its terms against
Company or its Subsidiary and, to the Company’s knowledge, the other party
thereto, except as such enforcement may be limited by any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other Legal
Requirements (whether statutory, regulatory or decisional), now or hereafter in
effect, relating to or affecting the rights of creditors generally or by
equitable principles (regardless of whether considered in a proceeding at law or
in equity).

 

19

 

 

(b)          Except as set forth on Schedule 4.9(b) of the Disclosure Memorandum
no Customer Service Contract contains “most favored nation” or similar pricing
provisions.

 

(c)          Except as set forth on Schedule 4.9(c) of the Disclosure Memorandum
no Contract to which the Company or any of its Subsidiaries is a party subject
the Company or any of its Subsidiaries to a lump sum payment in excess of
$25,000 at the end of the term of such Contract.

 

(d)          Neither the Company nor any of the Subsidiaries has received any
written notice or otherwise has knowledge of any default or event that with
notice or lapse of time, or both, would constitute a default by the Company or
any Subsidiary under any Material Contract. To the knowledge of Company, no
other party obligated to the Company or any Subsidiary pursuant to a Material
Contract has breached, violated or defaulted in any material respect under such
Contract.

 

(e)          Except for Material Contracts in respect of any Indebtedness being
satisfied at Closing, all of the Material Contracts to which the Company or any
Subsidiary is a party or by which any of them is bound were entered into on
arms-length terms, and are in full force and effect in accordance with their
respective terms, and are, and following the Closing will continue to be, legal,
valid, binding, enforceable and in full force and effect on identical terms.

 

4.10        Permits. Company and its Subsidiaries hold the Permits described on
Schedule 4.10 of the Disclosure Memorandum (each of which is in full force and
effect) and no other Permits are necessary for the lawful operation of the
Business by Company or any of its Subsidiaries or such Person’s ownership of its
properties and assets, except for such Permits, individually or in the
aggregate, for which the failure to obtain or maintain in full force and effect
would not be reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect. Neither Company nor any of its Subsidiaries has
received notice of termination, non-renewal, revocation or modification of any
Permit and is not delinquent in the payment of any Taxes or fees with respect to
any Permits except for such Permits, individually or in the aggregate, for which
the failure to maintain would not be reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect. Company has delivered true, correct
and complete copies of each Permit described on Schedule 4.10 to ATS.

 

4.11        Litigation. Except as set forth on Schedule 4.11 or Proceedings
which are not reasonably likely to result in liability to material Company or
its Subsidiaries, there are no Proceedings pending or, to the Company’s
knowledge, threatened against Company or its Subsidiary in the last three years.
Neither Company nor any of its Subsidiaries is subject to any Order prohibiting
or restraining the Contemplated Transactions. Schedule 4.11 of the Disclosure
Memorandum sets forth and describes all Proceedings relating to the Business in
the three (3) years prior to the date hereof.

 

20

 

 

4.12        Customers.

 

(a)          Schedule 4.12(a) of the Disclosure Memorandum lists the top fifty
(50) customers of the Business along with the gross revenue from such customer
during the twelve (12) months ended June 30, 2013. Except as set forth in
Schedule 4.12(a) of the Disclosure Memorandum, since July 1, 2013, no customer
of the Business that was one of the top fifty (50) customers of the Business as
measured by revenues from that customer during the twelve months ended June 30,
2013 has discontinued or materially limited its purchases from or dealings with
Company or any of its Subsidiaries, and, to the knowledge of Company, no such
customer intends to terminate or materially reduce its purchases from or
dealings with the Business in the future.

 

(b)          Schedule 4.12(b) of the Disclosure Memorandum sets forth all
current customers of the Business who have more than $100,000 in gross revenue
for the 12 month period ended June 30, 2013 who are not parties to written
Customer Service Contracts with either Company or any of its Subsidiaries that
are currently in effect.

 

4.13        Accounts Receivable; Deferred Revenue. All of the accounts
receivable of the Business are owned by and in the name of Company or its
Subsidiaries, and Schedule 4.13 of the Disclosure Memorandum sets forth all
accounts receivable of the Company and its Subsidiaries outstanding as of July
31, 2013, presented on an aged basis, and separately identifies the name of each
account debtor and the total amount of each related account receivable. All of
Company’s and its Subsidiary’s accounts receivable represent bona fide amounts
owed for products previously delivered or services previously rendered and none
of such accounts receivable represent a billing for products not yet delivered
or services not yet performed. Neither Company nor any of its Subsidiaries has
accepted any prepayment or other payment for products to be delivered or
services to be performed on or after the Closing Date.

 

4.14        Insurance. Schedule 4.14 of the Disclosure Memorandum sets forth a
list of all insurance policies carried by Company and/or its Subsidiaries, and
also sets forth an accurate list of all insurance loss runs and worker’s
compensation claims received for the most recently ended three (3) policy years.
True, complete, and correct copies of all insurance policies carried by Company
and/or its Subsidiaries that are presently in effect have been provided to ATS
and are in full force and effect.

 

4.15        Intellectual Property.

 

(a)          Schedule 4.15 of the Disclosure Memorandum sets forth a complete
and correct list of (i) the Intellectual Property that is registered, issued or
subject to a pending application for registration or issuance with an applicable
Governmental Body in the name of the Company or any of its Subsidiaries and (ii)
each Contract (A) granting to the Company or any of its Subsidiaries any right
in any Intellectual Property owned by any third party (other than licenses for
“off-the-shelf” shrinkwrap, clickwrap or other similar commercially available
non-custom software on generally standard terms and conditions) and (B) pursuant
to which Company or any of its Subsidiaries has granted to a third party any
right in any Intellectual Property owned by Company or any of its Subsidiaries
(other than Customer Service Contracts and any other Contracts made in the
Ordinary Course of Business). Company and its Subsidiaries own and possess all
right, title and interest in and to, or have a valid and enforceable license to
use, the Intellectual Property used in the Business, except where the failure to
own or possess such rights would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. No claim by any
third party contesting the validity, enforceability, use or ownership of any of
the Intellectual Property owned by Company or any of its Subsidiaries has been
made, is currently outstanding or, to the Company’s knowledge, is threatened.
Except as set forth in Schedule 4.15(a)(iii), neither Company nor any Subsidiary
has received any notices of or is aware of any facts that indicate a likelihood
that Company or any of its Subsidiaries infringe or misappropriate, or conflict
with, the rights of any third parties in any Intellectual Property, including
any demand or request that Company or any of its Subsidiaries license any such
rights from, or make royalty payments in connection with the use of such rights
and neither Company nor any of its Subsidiaries has infringed, misappropriated
or otherwise conflicted with any rights of any third parties in any Intellectual
Property, except as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

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(b)          Each of Company and its Subsidiaries has taken commercially
reasonable actions, measures and precautions to maintain, safeguard and protect
all of the Intellectual Property owned by Company or any of its Subsidiaries and
the trade secrets related to the Business, and each of Company and its
Subsidiaries has taken all steps required by any applicable Legal Requirement
necessary to protect and secure the trade secrets related to the Business to the
fullest extent permissible pursuant to such Legal Requirement.

 

(c)          The Company and each of its Subsidiaries have taken reasonable
measures to ensure that all personnel, including employees, agents, consultants
and contractors, who have contributed to or participated in the conception and
development of any Intellectual Property on behalf of Company or any of its
Subsidiaries either (i) have been party to a “work-for-hire” arrangement or
agreement with Company or its Subsidiaries, in accordance with applicable Legal
Requirements, that has accorded Company or such Subsidiary full, effective,
exclusive and original ownership of all tangible and intangible property thereby
arising, (ii) have executed appropriate instruments of assignment in favor of
Company or such Subsidiary as assignee that have conveyed to Company or such
Subsidiary full, effective and exclusive ownership of all tangible and
intangible property thereby arising or (iii) otherwise validly assign to Company
or an applicable Subsidiary any and all right, title and interest in and to any
such tangible and intangible property thereby arising.

 

(d)          Schedule 4.15(d) of the Disclosure Memorandum accurately identifies
and describes (i) each item of Open Source Code that is contained in, or
distributed with, or used in the development of the Company Product or from
which any part of any Company Product is derived, (ii) the type of open source
license for each such item of Open Source Code, and (iii) the Company Product to
which each such item of Open Source Code relates. Except as set forth on
Schedule 4.15(d) of the Disclosure Memorandum, no Company Product contains, is
derived from, is distributed with, or is being or was developed using Open
Source Code that is licensed under any terms that (i) impose a requirement or
condition that any Company Product or part thereof (A) be disclosed or
distributed in source code form, (B) be licensed for the purpose of making
modifications or derivative works, or (C) be redistributable at no charge, or
(ii) otherwise impose any other limitation, restriction, or condition on the
right or ability of the Company to use or distribute any Company Product except
as would not reasonably be expected to have a Material Adverse Effect.

 

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4.16        Environmental Matters. Except as set forth on Schedule 4.16, with
respect to the Business: (a) neither Company nor any of its Subsidiaries has
received any notice of any noncompliance with any Environmental and Safety
Requirement or any Liability, or remedial or corrective obligation thereunder or
any investigation or Proceeding relating thereto; and (b) to the Company’s
knowledge, no asbestos-containing materials, polychlorinated biphenyls, other
pollutants or underground storage tanks have been shipped from, used at,
disposed of on, or are otherwise located at or under the Company’s or any of its
Subsidiary’s properties used in the Business.

 

4.17        Employment Matters.

 

(a)          Schedule 4.17(a) of the Disclosure Memorandum sets forth, as of the
date hereof, (i) all present employees and directors employed by the Company and
each of its Subsidiaries; (ii) including for each such employee or director, his
or her base salary or base wage rate; (iii) any special benefits offered to
executives or directors that are not offered to other employees; and (iv) the
entity which employs or engages such employee or director. Schedule 4.17(a) of
the Disclosure Memorandum also sets forth any employee who is absent from work
due to a work-related injury or a disability, is receiving workers’
compensation, is receiving disability compensation, is on secondment, is on
statutory leave, maternity leave or other long term leave of absence. Except as
would not be material, as of the date hereof, there are no unpaid salaries,
wages, employment benefits, entitlements, allowances, bonuses or commissions or
compensation of any kind owed by Company or any Subsidiary to any employee,
director, dependent contractor, or independent contractor of Company or any
Subsidiary (other than those not yet due and that have been accrued in the
financial books and records of Company or such Subsidiary and that, to the
extent unpaid as of the Closing Date, will be reflected as accrued expenses on
the Closing Date Balance Sheet).

 

(b)          As of the date hereof, no outstanding offer of employment has been
made by Company or any of its Subsidiaries to any person who would be an officer
of Company or its Subsidiaries nor has any such person accepted such an offer of
employment made by Company or any of its Subsidiaries but who has not yet
commenced such employment.

 

(c)          No employees of Company or its Subsidiaries are covered by a
collective bargaining agreement, and to the knowledge of the Company, no
employee organizing efforts are pending with respect to employees of Company or
its Subsidiaries. Neither Company nor any Subsidiary has, within the three years
preceding the date hereof, experienced any organized slowdown, organized work
interruption, strike or work stoppage by employees, nor to the knowledge of
Company is any such slowdown, interruption, strike or stoppage threatened.

 

(d)          There are no unfair labor practice claims or charges pending or, to
the knowledge of Company, threatened, involving Company or any of its
Subsidiaries with respect to the employees of Company or its Subsidiaries. Each
of Company and its Subsidiaries is in material compliance with all Legal
Requirements concerning the employer-employee relationship, including, without
limitation, terms and conditions of employment, orders and awards, codes of
conduct, employment standards, pay equity collective agreements, applicable
anti-discrimination laws, employee leave laws, employee whistleblower laws,
employer wage and hour laws, workers’ compensation laws, occupational safety
laws, unemployment laws, employment laws, social security laws, superannuation,
pension or equivalent laws.

 

23

 

 

(e)          Except as set forth in Schedule 4.11 of the Disclosure Memorandum
or as would not be material, as of the date hereof, there is not pending or, to
the knowledge of Company, threatened, any Proceeding against Company or its
Subsidiaries pursuant to any Law relating to employees, including but not
limited to employment standards, human rights, labor relations, occupational
health and safety, workers’ compensation, pay equity or employment equity, and,
to the knowledge of Company, no event has occurred or circumstances exist which
might give rise to or serve as a valid basis for the commencement of any such
Proceeding.

 

(f)          Any notice required under the federal Worker Adjustment and
Retraining Notification Act or any similar state or provincial law regarding
advance notice of layoffs, that is, has been, since January 1, 2012, or will be
required of Company or any of its Subsidiaries to its employees or former
employees by reason of its acts prior to the Closing or by reason of the
consummation of the Closing (without taking into account any actions by ATS or
its Affiliates on or after the Closing), has been given by Company or the
applicable Subsidiary.

 

(g)          No employee’s terms and conditions of employment were changed in
connection with any “relevant transfer” (as defined in the Transfer of
Undertakings (Protection of Employment) Regulations 2006, as amended (or the
relevant provisions of the Transfer of Undertakings (Protection of Employment)
Regulations 1981)).

 

4.18        Compliance with Laws. Except for violations the existence of which
would not have a Material Adverse Effect, Company and each of its Subsidiaries
has complied with all Legal Requirements applicable to it, the Business, and
Company’s or such Subsidiary’s properties and assets and no Proceedings have
been filed against Company or any Subsidiary alleging a violation of any such
Legal Requirements. Neither Company, any Subsidiary, nor any of Company's or any
Subsidiary's directors, officers, other members, agents, employees, managers, or
any other Person acting for or on behalf of Company or any Subsidiary has,
directly or indirectly: (a) offered or given on its behalf, anything of value or
made any contribution, gift, bribe, rebate, payoff, influence payment, kickback
or other payment to any official of a Governmental Body, any political party or
official thereof or any candidate for political office; any customer or member
of any Governmental Body; or any other Person, regardless of form, whether in
money, property or services: (i) to influence any action or decision of such
Person, in such Person’s official capacity, including a decision to fail to
perform such Person’s official function (ii) to obtain favorable treatment in
securing business; (iii) to pay for favorable treatment for business secured;
(iv) to obtain concessions or for special concessions already obtained, for or
in respect of Company or any of its Subsidiaries; or (v) in violation of any
law; (b) established or maintained any fund or asset that has not been recorded
in the books and records; or (c) violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the U.K. Bribery
Act 2010, as amended and the rules and regulations thereunder. Except for
marketing-related promotions given to actual customers valued individually at
less than $1,000 in each instance, neither Company nor any of its Subsidiaries
has given or agreed to give any money, gift or similar benefit to any actual or
potential customer, supplier, government employee, insider or any other Person
in a position to assist or hinder a seller in connection with any actual or
proposed transaction. As of the Closing Date, the Company and its Subsidiaries
are in compliance with applicable Payment Card Industry Data Security Standards
with respect to the acceptance, storage and transmission of customer credit and
debit card and account data.

 

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4.19        Employee Benefits.

 

(a)           Schedule 4.19(a) of the Disclosure Memorandum lists, as of the
date hereof, each “employee benefit plan” (as defined in Section 3(3) of ERISA)
and any other material plan, agreement, policy, fund or arrangement providing
bonuses, profit sharing benefits, pension benefits, compensation, deferred
compensation, stock options, phantom stock, stock appreciation rights, stock
purchase rights, fringe benefits, severance payments, long service payments,
post-retirement benefits, scholarships, disability benefits, sick leave pay,
vacation pay, commissions, payroll practices, retention payments, superannuation
or other benefits, in each case, that Company and any of its Subsidiaries
sponsor or have Liability with respect to, or have any obligation to contribute
to, for the benefit of current or former directors, independent contractors or
employees of Company or any of its Subsidiaries or any of their beneficiaries
(collectively, the “Company Benefit Plans”), but with respect to any employment
agreement or individual equity award agreement that are in standard form
agreements, the form, rather than each individual agreement, has been listed on
Schedule 4.19(a) of the Disclosure Memorandum. Company Benefit Plans shall
include any statutory non-United States plans with respect to which Company or
any of its Subsidiaries is obligated to make contributions or comply with under
applicable Legal Requirements; provided, however, that such plans are not listed
on Schedule 4.19(a) of the Disclosure Memorandum. Except as set forth on
Schedule 4.19(a) of the Disclosure Memorandum, Company has made available to ATS
true, correct and complete copies of (i) each Company Benefit Plan or written
summary of each Company Benefit Plan (provided, that for any employment
agreements or equity award agreements that are in standard form agreements, the
form, rather than each individual agreement, has been made available to ATS),
(ii) the annual reports on IRS Forms 5500 (with schedules attached) and any
other required filings for each applicable Company Benefit Plan and any related
trust for the preceding two (2) years, (iii) the most recent summary plan
description for each Company Benefit Plan for which a summary plan description
is required, (iv) each trust agreement and insurance or group annuity Contract
relating to any Company Benefit Plan, to the extent applicable, (v) the most
recent actuarial valuation for each Company Benefit Plan for which an actuarial
valuation is required, (vi) each written communication within the twelve (12)
months immediately preceding the date hereof, involving a Company Benefit Plan
or any related trust, to or from the IRS, Department of Labor (“DOL”), Pension
Benefit Guaranty Corporation (“PBGC”) or any other Governmental Body, and
(vii) the most recent determination letter or advisory letter (as applicable)
received from the IRS pertaining to any Company Benefit Plan that is a Company
Pension Plan (as defined below).

 

25

 

 

(b)          Except as set forth on Schedule 4.19(b) of the Disclosure
Memorandum, each Company Benefit Plan has been administered in all material
respects in accordance with its terms and is in compliance in all material
respects with the applicable provisions of ERISA, the Code (including the rules
and regulations thereunder) and all other applicable Legal Requirements. Each
Company Benefit Plan that is an “employee pension benefit plan” (as defined in
Section 3(2) of ERISA) and that is intended to be tax qualified under Section
401(a) of the Code (each, a “Company Pension Plan”) has received a favorable IRS
determination letter as to its qualification or is a volume submitter plan that
is subject of a favorable advisory letter from the IRS, and no event has
occurred since the date of the most recent determination letter or advisory
letter (as applicable) that would adversely affect the qualification of such
Company Pension Plan. As of the date hereof, no Proceeding (other than routine
benefit claims) instituted, or to the knowledge of Company, has been threatened
against any Company Benefit Plan, any trustee or fiduciaries thereof, or Company
or any of its Subsidiaries, except for any such Proceeding that could not result
in a material liability to Company.

 

(c)          Neither Company nor any of its Subsidiaries has any indemnity
obligations for any taxes imposed under Section 409A of the Code.

 

(d)          All material contributions, premiums and benefit payments under or
in connection with the Company Benefit Plans that are required to have been made
as of the date hereof in accordance with the terms of the Company Benefit Plans
and applicable Legal Requirements have been timely made or have been reflected
on the Reference Balance Sheet. No Company Pension Plan has an “accumulated
funding deficiency” (as such term is defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived. All administrative costs attributable
to the Company Benefit Plans have been paid when due.

 

(e)          No Company Benefit Plan is a “single-employer plan” (within the
meaning of Section 4001(a)(15) of ERISA) or a “multiemployer plan” (within the
meaning of Section 3(37) of ERISA) . To the knowledge of the Company, no event
has occurred and no condition exists with respect to any employee benefit plan
or arrangement currently or previously maintained by any ERISA Affiliate that
could subject Company or any of its Subsidiaries to a material liability under
Code Sections 412, 430 4980B or Title IV of ERISA.

 

(f)          Except as set forth on Schedule 4.19(f) of the Disclosure
Memorandum, the consummation of the transactions contemplated by this Agreement
will not (i) give rise to any payment (including any severance pay, unemployment
compensation, or termination pay) becoming due to any current or former
employee, independent contractor or director of Company or any of its
Subsidiaries, (ii) accelerate the time of payment or vesting of any benefits
under any Company Benefit Plan, or (iii) increase the amount of compensation or
benefits due under any Company Benefit Plan. No payment or series of payments
that would constitute a “parachute payment” (within the meaning of Section 280G
of the Code) has been made or will be made by Company or its Subsidiaries,
directly or indirectly, to any employee in connection with the execution of this
Agreement or as a result of the transactions contemplated hereby.

 

(g)          No Company Benefit Plan provides health, life insurance or other
welfare benefits to retirees or other terminated employees of Company or its
Subsidiaries, other than continuation coverage required by Section 4980B of the
Code or Section 601-608 of ERISA or similar Legal Requirements.

 

4.20        Adequacy of Technology Assets. Each of Company’s and its
Subsidiaries’ properties and assets include the source code, system
documentation, statements of principles of operation and schematics for all
Technology Assets, as well as any pertinent commentary or explanation that may
be necessary to render such materials understandable and usable by a trained
computer programmer. The Documentation also includes any programs owned or
licensed by Company or any Subsidiary including software code compilers,
software workbenches, development tools and proprietary development languages
used for the development, maintenance and implementation of the Technology
Assets.

 

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4.21        Third-Party Components in Software Programs. Each of Company and its
Subsidiaries has validly and effectively obtained the right and license to the
third-party software contained in the Technology Assets and Documentation
pursuant to the Contracts. The Technology Assets and Documentation contain no
other programming or materials in which any third party may claim superior,
joint or common ownership.

 

4.22        Third-Party Interests or Marketing Rights in Software Programs.
Except as set forth on Schedule 4.22 of the Disclosure Memorandum, neither
Company nor any of its Subsidiaries has granted, transferred or assigned any
right or interest in the Technology Assets, the Documentation or the
Intellectual Property to any Person, other than non-exclusive rights or
interests pursuant to Customer Service Contracts. There are no contracts,
agreements, licenses and other commitments and arrangements in effect with
respect to the marketing, distribution, licensing or promotion of the Technology
Assets, the Documentation or Intellectual Property by any salesperson,
distributor. sublicensor or other remarketer or sales organization.

 

4.23        Banking Facilities. Schedule 4.23 of the Disclosure Memorandum sets
forth a true, correct and complete list of each bank, savings and loan or
similar financial institution with which the Company has an account or safety
deposit box or other arrangement, and any numbers or other identifying codes of
such accounts, safety deposit boxes or such other arrangements maintained by the
Company thereat.

 

4.24        Transactions with Related Parties. No employee, officer, director,
shareholder (or immediate family member of any of the foregoing) or Affiliate of
Company or any of its Subsidiaries (“Related Party”) has any interest in any
property or asset (whether real, personal or mixed and whether tangible or
intangible) used in or pertaining to the Business. Except as set forth on
Schedule 4.24 of the Disclosure Memorandum, no Related Party owns, of record or
as a beneficial owner, an equity interest or any other financial or profit
interest in any Person that has (i) had business dealings or a material
financial interest in any transaction with Company or any of its Subsidiaries or
(ii) engaged in competition with Company or any Subsidiary with respect to any
line of the products or services of Company or any such Subsidiary in any market
presently served by Company or any such Subsidiary, except for ownership of less
than five percent (5%) of the outstanding capital stock of any such business
that is publicly traded. Except as set forth on Schedule 4.25 of the Disclosure
Memorandum, no Related Party is a party to any Contract with, or has any claim
or right against, Company or any of its Subsidiaries.

 

4.25        Brokers. Neither Company nor any of its Subsidiaries has incurred
any Liability for brokerage or finders’ fees or agents’ commission or other
similar payment in connection with the Contemplated Transactions.

 

27

 

 

5.           REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS

 

Each Selling Shareholder hereto represents, solely as to itself, to ATS as
follows:

 

5.1          Authorization of Agreement. Such Selling Shareholder has all
requisite power and authority to execute and deliver this Agreement and each
Transaction Document to which it is a party and to consummate the Contemplated
Transactions and perform its obligations contemplated thereby. This Agreement
has been, and each other Transaction Document to which it is a party will be at
or prior to the Closing, duly and validly executed and delivered by such Selling
Shareholder, and (assuming the due authorization, execution and delivery by the
other parties hereto) this Agreement constitutes, and each other Transaction
Document to which it is a party, when so executed and delivered at the Closing
will constitute, a legal, valid and binding obligation of such Selling
Shareholder, enforceable against such Selling Shareholder in accordance with its
terms, except as such enforcement may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other Legal Requirements
(whether statutory, regulatory or decisional), now or hereafter in effect,
relating to or affecting the rights of creditors generally or by equitable
principles (regardless of whether considered in a proceeding at law or in
equity).

 

5.2          Conflicts; Consents of Third Parties.

 

(a)          None of the execution, delivery and performance by such Selling
Shareholder of the Transaction Document to which it is a party, the consummation
of the transactions contemplated hereby or thereby, or compliance by such
Selling Shareholder with any of the provisions hereof or thereof will: (i) cause
such Selling Shareholder to breach any Legal Requirement or Order of any
Governmental Body that is applicable to such Selling Shareholder; or (ii)
conflict with or result in a breach or termination of any of the terms,
conditions or provisions of, or constitute a default under, accelerate any
oblations arising under, trigger any payment under, or result in the creation of
any Encumbrance (other than Permitted Encumbrances) pursuant to, or otherwise
adversely affect, in any material respect, of any of the terms, conditions or
provisions of any material agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder (or such Selling
Shareholder’s assets) may be bound, or constitute a default thereunder.

 

(b)          No Consent, waiver, approval or authorization of, or declaration or
filing with, or notification to, any Person (including any spousal Consent or
Consent of the beneficiary of any trust) or Governmental Body is required on the
part of such Selling Shareholder in connection with the execution and delivery
of the Transaction Documents to which such Selling Shareholder is a party, or
the compliance by such Selling Shareholder with any of the provisions thereof,
or the consummation of the transactions contemplated thereby.

 

5.3          Ownership and Transfer of Shares. Such Selling Shareholder is the
sole record and beneficial owner of the shares of Company Capital Stock
identified opposite its name on Schedule 4.3(b), free and clear of any and all
Encumbrances (other than Permitted Encumbrances). Such Selling Shareholder has
the power and authority to sell, transfer, assign and deliver such shares of
Company Capital Stock as provided in this Agreement, and such delivery will vest
in ATS good and valid title to such Company Capital Stock, free and clear of any
and all Encumbrances (other than Permitted Encumbrances). Such Selling
Shareholder is not a party to any voting trust or other Contract with respect to
the voting, redemption, sale, transfer or other disposition of the Company
Capital Stock.

 

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5.4          Litigation. There are no Proceedings pending, or to the knowledge
of such Selling Shareholder threatened, that are reasonably likely to prohibit
or restrain the ability of such Selling Shareholder to enter into this Agreement
or timely to consummate the transactions contemplated hereby.

 

5.5          Brokers. No Person has acted, directly or indirectly, as a broker,
finder, agent, Representative or similar intermediary for such Selling
Shareholders in connection with this Agreement and the Contemplated Transactions
and no other Person is entitled to any fee or commission or like payment in
respect thereof.

 

6.           REPRESENTATIONS AND WARRANTIES OF ATS AND MERGER SUB

 

As an inducement to Company to enter into this Agreement and to consummate the
Contemplated Transactions, each of PGi, ATS and Merger Sub represents and
warrants, severally and not jointly, to Company and Selling Shareholders as
follows:

 

6.1          Organization and Good Standing. PGi is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Georgia; ATS is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Missouri; and Merger Sub is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.

 

6.2          Due Authorization. Each of PGi, ATS and Merger Sub has the
requisite corporate power and authority to execute and deliver this Agreement
and each Transaction Document to which it is a party, to consummate the
Contemplated Transactions and to perform its obligations contemplated hereby.
The execution, delivery and performance of this Agreement by PGi, ATS and Merger
Sub have been duly authorized by all necessary corporate action on the part of
PGi, ATS and Merger Sub. This Agreement has been, and each Transaction Document
to which PGi, ATS or Merger Sub is a party will be at or prior to the Closing,
duly executed and delivered by PGi, ATS and Merger Sub and constitutes a legal,
valid and binding obligation of them enforceable in accordance with its terms,
except as such enforcement may be limited by any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other Legal Requirements
(whether statutory, regulatory or decisional), now or hereafter in effect,
relating to or affecting the rights of creditors generally or by equitable
principles (regardless of whether considered in a proceeding at law or in
equity). No notice to, filing with, authorization of, exemption by or Consent of
any Person, Governmental Body or Entity is required in order for PGi, ATS and
Merger Sub to consummate the transactions contemplated hereby, except as shall
have been obtained on or prior to the Closing Date.

 

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6.3          Conflicts; Consents of Third Parties.

 

(a)          None of the execution, delivery and performance by PGi, ATS and
Merger Sub of the Transaction Documents to which such Person is a party, the
consummation of the transactions contemplated hereby or thereby, or compliance
by PGi, ATS and Merger Sub with any of the provisions hereof or thereof will:
(i) cause PGi, ATS or Merger Sub to breach any Legal Requirement or Order of any
Governmental Body that is applicable to PGi, ATS or Merger Sub; or (ii) conflict
with or result in a breach or termination of any of the terms, conditions or
provisions of, or constitute a default under, accelerate any oblations arising
under, trigger any payment under, or result in the creation of any Encumbrance
pursuant to, or otherwise adversely affect, in any material respect, of any of
the terms, conditions or provisions of any material agreement or instrument to
which PGi, ATS or Merger Sub is a party or by which PGi, ATS or Merger Sub (or
such Person’s assets) may be bound, or constitute a default thereunder.

 

(b)          No Consent, waiver, approval or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of PGi, ATS or Merger Sub in connection with the execution and delivery
of the Transaction Documents or the compliance by PGi, ATS or Merger Sub with
any of the provisions thereof, or the consummation of the Contemplated
Transactions.

 

6.4          Litigation. There are no Proceedings pending, or to the knowledge
of such Person threatened, that are reasonably likely to prohibit or restrain
the ability of PGi, ATS or Merger Sub to enter into this Agreement or timely to
consummate the Contemplated Transactions. None of PGi, ATS or Merger Sub or any
of their Affiliates is named in any Order that affects or may affect the ability
of such Person to consummate the Contemplated Transactions.

 

6.5          Financial Capability.   PGi has, and will cause ATS to have, prior
to and at the Closing, sufficient funds to pay the Adjusted Aggregate Merger
Consideration contemplated by this Agreement, and to pay all related fees and
expenses, including any Transfer Taxes, for which it is responsible and to
perform all other obligations of ATS and Merger Sub contemplated by this
Agreement.

 

6.6          Brokers. None of PGi, ATS or Merger Sub has incurred any Liability
for brokerage or finders’ fees or agents’ commission or similar payment in
connection with the Contemplated Transactions.

 

7.           CONDUCT PRIOR TO THE EFFECTIVE TIME

 

7.1          Access and Investigation. During the period from the date of this
Agreement through the earlier to occur of the Effective Time or the termination
of this Agreement (the “Pre-Closing Period”), Company shall, and shall cause the
respective Representatives of Company and each of its Subsidiaries, to provide
ATS and ATS’s Representatives with reasonable access, during normal business
hours and upon reasonable advance notice from Representatives of ATS, to
Company’s and each of its Subsidiary’s Representatives, the personnel listed on
Schedule 7.1 of the Disclosure Memorandum and to all existing books, records,
Tax Returns, work papers and other documents, and with such additional
financial, operating and other data and information regarding Company or such
Subsidiary as ATS may reasonably request; provided that such access is not
disruptive to the Business. Without limiting the generality of the foregoing,
during the Pre-Closing Period, Company shall promptly provide ATS with copies
of: (i) all material operating and financial reports prepared by Company or any
of its Subsidiaries for Company’s senior management, including copies of the
unaudited monthly consolidated financial statements; (ii) any written materials
or communications sent by or on behalf of Company to its shareholders; (iii) any
notice, report or other document filed with or sent to any Governmental Body in
connection with the Merger or any of the other transactions contemplated by this
Agreement; and (iv) any material notice of alleged violations or legal
non-compliance received by Company or any of its Subsidiaries from any
Governmental Body. All information obtained by ATS and its Representatives
pursuant to this Section 7.1 and otherwise obtained in connection with the
Contemplated Transactions shall be kept confidential in accordance with the
existing Confidentiality Agreement between ATS and Company (the “Confidentiality
Agreement”).

 

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7.2          Operation of the Business.

 

(a)          During the Pre-Closing Period (except with the prior written
Consent of ATS) Company shall (and shall cause its Subsidiaries to) cause the
Business to be operated only in the Ordinary Course of Business, in compliance
with all applicable Legal Requirements and all Contracts. From the period
beginning on the Closing Date, all revenue and trade payables arising out of or
related to the Business shall be for ATS’s account. During the Pre-Closing
Period, Company will use (and will cause each of its Subsidiaries to use) its
commercially reasonable efforts to (i) preserve intact the Business and the
business organization of such Person, (ii) keep available the services of its
current officers and employees, (iii) maintain in effect all approvals from
Governmental Bodies which are necessary or desirable for the operation and
management of the Business, (iv) maintain, preserve and keep all of Company’s
and each Subsidiary’s assets in reasonable condition and repair (ordinary wear
and tear excepted), (v) preserve the goodwill of its material suppliers,
customers, licensors, and lessors, (vi) keep in full force all insurance
policies listed on Schedule 4.14 of the Disclosure Memorandum and (vii) (A)
timely file, in accordance with applicable Legal Requirements, all Federal,
state and local, domestic and foreign, income and franchise Tax Returns and
reports and all other material Tax Returns and reports due on or prior to the
Closing Date, except for Tax Returns with respect to which the Company has
received an extension of time in which to file any such Tax Return or report. In
each case as set forth on Schedule 4.7 of the Disclosure Memorandum
(“Post-Signing Returns”) required to be filed by Company or any of its
Subsidiaries (after taking into account any extensions), which shall be complete
and correct, except for failures to file or be true and correct that
individually or in the aggregate are not reasonably likely to result in a
material Liability for Company or any Subsidiary; (B) timely pay all Taxes due
and payable in respect of such Post-Signing Returns that are so filed, other
than Taxes being contested in good faith; (C) accrue a reserve in its books and
records and financial statements in accordance with past practice for Taxes
payable by Company or any of its Subsidiaries for which no Post-Signing Return
is due prior to the Effective Time; (D) notify ATS of any Proceeding pending
against or with respect to the Company or any of its Subsidiaries in respect of
any material Tax and not settle or compromise any such Legal Proceeding relating
to any material Tax without ATS’s prior written Consent, which shall not be
unreasonably withheld or delayed; and (E) not make or revoke any material Tax
election without ATS’s Consent.

 

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(b)          Except set forth on Schedule 7.2(b) as otherwise permitted or
required by this Agreement, or as otherwise consented to or approved by ATS in
writing, neither Company nor any of its Subsidiaries shall:

 

(i)          amend its Organizational Documents or take any corporate or limited
liability company or other action if any such amendment or action would have an
adverse effect on the ability of Company to consummate the transactions
contemplated by this Agreement;

 

(ii)         (A) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property) in respect of, any of its
capital stock or other equity or voting interests, (B) split, combine or
reclassify any of its capital stock or other equity or voting interests, or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or other equity or voting
interests, (C) purchase, redeem or otherwise acquire any shares of capital stock
or any other of its securities or any options, warrants, calls or rights to
acquire any such shares or other securities or (D) take any action that would
result in any amendment, modification or change of any term (including any
conversion price thereof) of any debt;

 

(iii)        issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other equity or voting interests or any securities
convertible into, or exchangeable for, or any options, warrants, calls or rights
to acquire or receive, any such shares, interests or securities or any stock
appreciation rights, phantom stock awards or other rights that are linked in any
way to the price of any Company Capital Stock or the value of Company or any
part thereof (other than (A) the issuance of shares of Common Stock upon the
exercise of Company Options, (B) the issuance of shares of Common Stock
immediately prior to the Merger, as required by the Company’s Amended and
Restated Articles of Incorporation, in effect as of the date hereof and (C)
conversions of Series AA Preferred Stock);

 

(iv)        enter into, acquire or agree to acquire by merging or consolidating
with, or by purchasing all or a substantial portion of the assets of, or by
purchasing all or a substantial equity or voting interest in, or by any other
manner, any business or any Person;

 

(v)         create or incur any material Encumbrance against any material asset
of the Business, other than Permitted Encumbrances;

 

(vi)        enter into, amend, in any material respect, or terminate any
material Contract or default in any material respect (or take or omit to take
any action that, with or without the giving of notice or passage of time or
both, would constitute a material default) in any of its obligations under any
material Contract;

 

(vii)       enter into any material lease or sublease of real property (whether
as a lessor, sublessor, lessee or sublessee) or modify, amend, terminate or fail
to exercise any right to renew any material lease or sublease of real property;

 

32

 

 

(viii)      acquire or agree to acquire or license any material assets other
than in the Ordinary Course of Business or incur or commit to incur any capital
expenditures, or any obligations or liabilities in connection therewith, except
pursuant to existing Contracts or that, in the aggregate, would not exceed
$100,000 during any fiscal quarter;

 

(ix)         dispose of or permit to lapse any material rights to the use of any
material Intellectual Property or disclose any material Intellectual Property
not a matter of public knowledge, other than as required by Legal Requirements
or contractual obligations existing on the date hereof;

 

(x)          dispose of any material assets or properties outside of the
Ordinary Course of Business;

 

(xi)         repurchase, prepay or incur any indebtedness for borrowed money or
guarantee any indebtedness for borrowed money of another Person, in each case,
exceeding $100,000 or issue or sell any debt securities or options, warrants,
calls or other rights to acquire any debt securities of Company, guarantee any
debt securities of another Person, enter into any “keep well” or other agreement
to maintain any financial statement condition of another Person or enter into
any arrangement having the economic effect of any of the foregoing;

 

(xii)        make any loans, advances or capital contributions to, or
investments in, any other Person, except for commission, or similar travel
advances to employees made in the Ordinary Course of Business;

 

(xiii)       (A) pay, discharge, settle or satisfy any material claims
(including claims of shareholders and any shareholder litigation relating to
this Agreement, the Merger or any other transaction contemplated by this
Agreement or otherwise), liabilities or obligations (whether absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the Ordinary Course of Business or as required by
their terms as in effect on the date of this Agreement of claims, liabilities or
obligations reflected or reserved against in the June 30, 2013 Balance Sheet
(for amounts not in excess of such reserves) or incurred since the in the
Ordinary Course of Business, or (B) commence any Proceeding other than in the
Ordinary Course of Business;

 

(xiv)      enter into any material Contract if consummation of the transactions
contemplated by this Agreement or compliance by Company with the provisions of
this Agreement will conflict with, or result in any violation or breach, in any
material respect, of, or default, in any material respect, (with or without
notice or lapse of time or both) under, or give rise to a right of, or result
in, termination, cancellation or acceleration of any obligation or to a loss of
a material benefit under, or result in the creation of any Encumbrance (other
than Permitted Encumbrances) in or upon any of the properties or assets of
Company under, or give rise to any increased, additional, accelerated or
guaranteed rights or entitlements under, any provision of such Contract;

 

(xv)       enter into any material Contract, other than in the Ordinary Course
of Business, containing any restriction on the ability of Company to assign, all
or any portion of its rights, interests or obligations thereunder, unless such
restriction expressly excludes any assignment to ATS or its Subsidiaries or
current or future Affiliates of the Company in connection with or following the
consummation of the Merger and the other transactions contemplated by this
Agreement;

 

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(xvi)      except as required by applicable Legal Requirements, adopt or enter
into any collective bargaining agreement or other labor union Contract
applicable to the employees of Company or any of its Subsidiaries or terminate
without cause the employment of any employee of Company that has an employment,
severance or similar agreement or arrangement with Company which provides for
severance or termination payments in excess of $125,000;

 

(xvii)     (A) hire any new employee with an annual base salary in excess of
$125,000 or promote any employee to a position with an annual base salary in
excess of $125,000, except, in each case, in order to fill a position vacated
after the date of this Agreement, or (B) engage any consultant or independent
contractor for a period exceeding thirty (30) days whose annual compensation
would exceed $125,000;

 

(xviii)    increase in any manner the compensation or benefits of, or pay any
bonus to, any employee, officer, director or independent contractor of Company,
except (A) in the Ordinary Course of Business with respect to any employee,
officer, director or independent contractor of the Company with an annual base
salary or rate of compensation less than $125,000, (B) as required to comply
with applicable Legal Requirements, or (C) as required by any Contract or
Company Benefit Plan in effect on the date of this Agreement;

 

(xix)       except as required to comply with applicable Legal Requirements or
any Contract or Company Benefit Plan in effect on the date of this Agreement,
(A) grant any equity or equity based awards under any Company Benefit Plan
(including the grant of Company Options, stock appreciation rights, stock based
or stock related awards, performance units or restricted stock), (B) take any
action to accelerate the vesting or payment of any compensation or benefit under
any Contract or Company Benefit Plan, except with respect to the acceleration of
vesting and termination of any Company Options pursuant to Section 2.5 of this
Agreement and the Value Participation Plan Payments pursuant to Section 8.10, or
(C) adopt, enter into or materially amend any Company Benefit Plan other than
offer letters entered into with new employees in the Ordinary Course of
Business;

 

(xx)        change its fiscal year, revalue any of its material assets or make
any changes in financial or tax accounting methods, principles or practices;

 

(xxi)       change or rescind any material Tax election, amend any material Tax
Return or take any position on any Tax Return, take any action, omit to take any
action or enter into any other transaction that would have the effect of
increasing the Tax liability or reducing any Tax asset of Company in respect of
any post-Closing Tax period;

 

(xxii)      except for changes in the Ordinary Course of Business, change any of
its pricing policies, service policies, personnel policies or other business
policies, in any material respect;

 

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(xxiii)     fail to comply, in all material respects, with all applicable Legal
Requirements governing or relating to the Business, including, without
limitation, all approvals from Governmental Bodies if such failure would have a
Material Adverse Effect; or

 

(xxiv)    authorize any of, or commit or agree to take any of, the foregoing
actions.

 

(c)          During the Pre-Closing Period, Company shall promptly notify ATS in
writing of:

 

(i)          the discovery by Company of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes a material inaccuracy in any representation or
warranty made by Company in this Agreement;

 

(ii)         any incurable material breach of any covenant of Company;

 

(iii)        any event, condition, fact or circumstance that would make the
timely satisfaction of any of the conditions set forth in Section 9 or Section
10 impossible or unlikely or that has had or could reasonably be expected to
have a Material Adverse Effect; and

 

(iv)        (A) any notice or other communication from any Person alleging that
the Consent of such Person is or may be required in connection with the
Contemplated Transactions, and (B) any Legal Proceeding or material claim
threatened, commenced or asserted against or with respect to Company or the
Contemplated Transactions.

 

Subject to Section 7.4, no notification given to ATS pursuant to this Section
7.2(c) shall limit or otherwise affect any of the representations, warranties,
covenants or obligations of Company contained in this Agreement.

 

7.3          No Solicitation.

 

(a)          Company shall not (and shall cause its Subsidiaries not to)
directly or indirectly, authorize or permit any Representative of Company or any
of its Subsidiaries, directly or indirectly, to, (i) solicit, initiate,
encourage, induce or facilitate the making, submission or announcement of any
Acquisition Proposal, (ii) furnish any information regarding Company or any
Subsidiary to any Person in connection with or in response to an Acquisition
Proposal or an inquiry or indication of interest that could reasonably be
expected to lead to an Acquisition Proposal, (iii) engage in discussions or
negotiations with any Person with respect to any Acquisition Proposal, (iv)
approve, endorse or recommend any Acquisition Proposal, or (v) enter into any
letter of intent or similar document or any Contract contemplating or otherwise
relating to any Acquisition Transaction, except, in each instance, if the Board
of Directors of the Company or a special committee of the Board of Directors of
the Company formed to evaluate Acquisition Proposals concludes in good faith and
upon the advice of its outside legal counsel, that the failure to take any such
action would breach its fiduciary obligations to the shareholders of the Company
under the Colorado Code (in which case the Company shall promptly provide
written notice to ATS of the Company’s receipt of such advice).

 

35

 

 

(b)          Company shall promptly (and in no event later than 48 hours after
receipt of any Acquisition Proposal, any inquiry or indication of interest that
would reasonably be expected to lead to an Acquisition Proposal) advise ATS
orally and in writing of any Acquisition Proposal, any inquiry or indication of
interest that could lead to an Acquisition Proposal relating to Company or any
of its Subsidiaries (including the identity of the Person making or submitting
such Acquisition Proposal, inquiry, indication of interest or request, and the
terms thereof) that is made or submitted by any Person during the Pre-Closing
Period and shall provide ATS copies all written materials received by Company or
any of its Subsidiaries related thereto. Company shall keep ATS fully informed
with respect to the status of any such Acquisition Proposal, inquiry, indication
of interest or request and any modification or proposed modification thereto.

 

(c)          Company agrees not to release or permit the release of any Person
from, or to waive or permit the waiver of any provision of, any confidentiality,
“standstill” or similar agreement to which Company is a party, and will use its
commercially reasonable efforts to enforce or cause to be enforced each such
agreement at the request of ATS.

 

8.           ADDITIONAL AGREEMENTS

 

8.1          Company Information Statement.

 

(a)          Following the consummation of the Closing, Company shall prepare,
with the cooperation of ATS, a written information statement (the “Information
Statement”) in accordance with the Colorado Code informing the Company
Shareholders who did not execute the Selling Shareholder Consent of the approval
of the Contemplated Transactions by Company Shareholders and their dissenters’
rights pursuant to Article 113 (and including a copy of Article 113 and a copy
or summary of this Agreement). Anything to the contrary contained herein
notwithstanding, Company shall not include in the Information Statement any
information with respect to ATS or its Affiliates, the form and content of which
information shall not have been approved by ATS prior to such inclusion, which
approval shall not be unreasonably withheld.

 

(b)          Company shall ensure that, the Information Statement (other than
information about PGi, ATS and Merger Sub furnished by PGi, ATS or Merger Sub or
their respective Representatives for inclusion in the Information Statement)
shall not, on the date the Information Statement is first mailed to the Company
Shareholders or at the time of any amendment supplement thereof, contain any
statement which, at such time, is false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they are
made, not false or misleading.

 

(c)          PGi, ATS and Merger Sub shall ensure, and PGI shall cause ATS and
Merger Sub to ensure, that the information with respect to PGi, ATS or Merger
Sub that PGi, ATS or Merger Sub or any of their respective Representatives
furnish to the Company for use in the Information Statement does not, on the
date the Information Statement is first mailed to the Company Shareholders or at
the time of any amendment or supplement thereof, contain any statement which, at
such time is false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they are made, not false or misleading.

 

36

 

 

(d)          Each Selling Shareholder hereby waives, to the full extent of any
applicable Legal Requirements, any dissenters’ rights pursuant to the Colorado
Code with respect to the Company Capital Stock held by such shareholder.

 

8.2          Commercially Reasonable Efforts; Required Approvals.

 

(a)          Prior to the consummation of the Closing, Company, PGi, ATS and
Merger Sub shall use commercially reasonable efforts to take, or cause to be
taken, all actions necessary to consummate the Merger and to cause the
conditions in Articles 9 and 10 to be satisfied. Without limiting the generality
of the foregoing, Company: (i) shall give all notices (if any) required to be
made and given by Company in connection with the Merger or any of the other
Contemplated Transactions, and shall submit promptly any additional information
reasonably requested in connection with such notices; (ii) shall use
commercially reasonable efforts to obtain each Consent required to be obtained
(pursuant to any applicable Legal Requirement or Contract, or otherwise) by
Company in connection with the Merger or any of the other Contemplated
Transactions; provided, that this Section 8.2(a) shall not require the Company
to expend any funds to obtain such Consent or to incur any obligation; and (iii)
shall use commercially reasonable efforts to oppose or to lift, as the case may
be, any Order or other legal bar to the Merger or any of the other Contemplated
Transactions. Company shall promptly deliver to ATS a copy of each such notice
given and each such Consent obtained by the Company during the Pre-Closing
Period.

 

(b)          Each of Company and ATS shall: (i) give the other party prompt
notice of the commencement or threat of commencement of any Proceeding by or
before any Governmental Body with respect to the Merger or any of the other
transactions contemplated by this Agreement: and (ii) keep the other party
informed as to the status of any such Proceeding or threat.

 

8.3          Press Releases and Announcements. Except for the press release in
the form attached hereto as Exhibit G and disclosures required by applicable
Legal Requirements, none of Company, PGi, ATS, Merger Sub or any of their
respective officers, directors, employees, agents or Affiliates shall make any
press release or other direct or indirect public announcement or disclosure
regarding or relating to this Agreement or any transaction contemplated hereby.
Notwithstanding the foregoing, the parties may mutually agree upon a press
release or other public announcement relating to this Agreement or any
transaction contemplated hereby.

 

8.4          Resignation of Officers and Directors. Company shall obtain and
deliver to ATS prior to the Effective Time (to be effective as of the Effective
Time) the resignation of each executive officer and director of each of the
Company and any Subsidiary (in each case, in their capacities as executive
officers and directors, and not as employees), as ATS shall specify not less
than five (5) days prior to the Closing Date.

 

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8.5           Takeover Statutes. If any Takeover Statute is or may become
applicable to the Contemplated Transactions, the Board of Directors of Company
will grant such approvals and take such actions as are necessary so that the
Contemplated Transactions may be consummated as promptly as practicable on the
terms contemplated hereby and otherwise act to eliminate the effects of or
comply with any Takeover Statute on any of the Contemplated Transactions.

 

8.6           [RESERVED]

 

8.7           401(k) Plans. Company, by action of its Board of Directors (or
committee thereof that is responsible for and is authorized to make employee
benefit actions), shall authorize the termination of the Company 401(k) Plan,
effective as of immediately prior to the Effective Time.

 

8.8           D&O Tail Policy. Prior to the consummation of the Closing, the
Company shall procure a “tail policy”, in form and substance satisfactory to
Company and ATS, with respect to the Company's pre-Closing directors’ and
officers’ liability insurance which provides for a six- year period from the
Closing Date to report claims which occurred prior to the Closing Date, with
coverage levels at least as great as those in effect immediately prior to the
Closing Date and covering those persons who were directors and officers of the
Company or its Subsidiaries immediately prior to the Closing (the “D&O Tail
Policy”). The Company shall deliver a copy of the D&O Tail Policy to ATS prior
to Closing. Following the Closing, ATS, upon written instructions from the
Shareholders’ Representative, shall cause Company to promptly pay all premiums
due the insurance carriers with respect to the D&O Tail Policy. For the
avoidance of doubt, all premiums paid for the D&O Tail Policy shall constitute
Transaction Expenses.

 

8.9           Director and Officer Indemnification. At all times following the
Merger, ATS will indemnify all present and former officers and directors of the
Company and its Subsidiaries (“D&O Indemnified Parties”) against any Damages
incurred in connection with any claim or Proceeding arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent permitted by law, to the extent such Damages have not been paid for by
insurance, and shall, in connection with defending against any action for which
indemnification is available hereunder, promptly reimburse such D&O Indemnified
Parties from time to time for any reasonable costs and expenses reasonably
incurred by such D&O Indemnified Parties; provided that such reimbursement shall
be conditioned upon such D&O Indemnified Parties’ agreement promptly to return
such amounts if a court of competent jurisdiction shall ultimately determine
that indemnification of such D&O Indemnified Parties is prohibited by applicable
law. The foregoing rights shall be in addition to any rights to which any D&O
Indemnified Party may be entitled by reason of the Organizational Documents of
the Company or any of its Subsidiaries, any contract and/or any applicable law.
For a period of four years after the Closing, ATS will not, and will not permit
the Company or any of its Subsidiaries to, amend, repeal or modify any provision
in the Company’s or any of its Subsidiaries’ Organizational Documents relating
to the exculpation, indemnification or advancement of expenses of any D&O
Indemnified Parties (unless required by law), it being the intent of the parties
that all D&O Indemnified Parties will continue to be entitled to such
exculpation, indemnification and advancement of expenses to the full extent of
the law and as may be set forth in any agreement with any D&O Indemnified Party
relating to indemnification and advancement of expenses.

 

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8.10         Value Participation Plan Payments. As soon as practicable following
the Closing, Company shall pay any amounts due under the Value Participation
Plan to those individuals set forth on Schedule 8.10 (“Value Participation Plan
Payments”) in accordance with Schedule 8.10. For purposes of the Preliminary
Adjustment Statement, the amount of any Value Participation Plan Payments will
either be reflected as a reduction of cash or accrued as a Liability.

 

ARTICLE 8A

 

8A.1         Tax Covenant. After the Closing, for any Pre-Closing Tax Period or
any Straddle Tax Period, other than with respect to any Excluded Taxes, ATS
shall not, and shall not cause or permit any of its Affiliates (including the
Company and its Subsidiaries) to, without the prior written consent of
Shareholders’ Representative, which consent shall not be unreasonably
conditioned, withheld or delayed, (i) make or change any material Tax election,
amend any Tax Return, take any Tax position on any Tax Return, or compromise or
settle any Tax liability, in each case if such action could have the effect of
materially increasing the Tax liability or materially reducing any Tax asset of
the Selling Shareholders or any Affiliate of the Selling Shareholders or any
indemnification obligation of the Selling Shareholders under Section 8A.4, or
(ii) agree to the waiver or any extension, other than an extension relating to
an ongoing audit, of the statute of limitations relating to any Taxes of the
Company.

 

8A.2       Preparation and Filing of Tax Returns for Pre-Closing Tax Periods.

 

(a)          ATS shall prepare and file, or cause to be prepared and filed, all
Tax Returns required to be filed by the Company or any of its Subsidiaries with
respect to any Tax period that ends on or before the Closing Date or Straddle
Tax Period for which Tax Returns are not yet due as of the Closing Date. ATS
shall submit a draft of any such Tax Return (other than a Tax Return related to
any Excluded Tax) to Shareholders’ Representative prior to the due date for
filing such Tax Return for Shareholders’ Representative’s review and comment.
Shareholder’s Representative shall provide any comments within a reasonable time
prior to the due date for filing such Tax Return. All such Tax Returns shall be
prepared in a manner that does not accelerate income or defer deductions unless
otherwise required by applicable Legal Requirements. ATS shall incorporate any
comments to such Tax Returns except to the extent such comments are inconsistent
with applicable Legal Requirements.

 

(b)          Any amount payable on a Tax Return filed on or after the Closing
Date that is attributable to Pre-Closing Tax Periods (exclusive of any Excluded
Tax) which exceeds the amount of such Taxes paid prior to the Closing shall be
reflected as a Liability in the calculation of the Closing Date Net Monetary
Assets.

 

(c)          In the case of any Taxes that are payable for a Straddle Tax Period
that is not treated as ending on the Closing Date, the portions of such Tax
related to the Pre-Closing Tax Period shall be deemed to be (i) in the case of
any Tax other than Income Taxes or Taxes based on sales, receipts or purchases,
the amount of such Tax for the Straddle Tax Period multiplied by a fraction the
numerator of which is the number of days in the Straddle Tax Period on or prior
to the Closing Date and the denominator of which is the number of days in the
entire Straddle Tax Period, and (ii) in the case of any Income Tax or Tax based
on sales, receipts or purchases, the amount which would be payable if the
relevant Tax period had ended on the Closing Date. The remainder of the Taxes
payable for the Straddle Tax Period shall be allocable to the Post-Closing Tax
Period.

 

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(d)          In the event of a Tax Claim by any Governmental Authority of any
Tax Return with respect to any Tax period that ends on or before the Closing
Date or Straddle Tax Period for which Tax Returns are not yet due as of the
Closing Date, Selling Shareholders hereby agree to pay and indemnify ATS and its
Affiliates (including, after the Closing, the Company and its Subsidiaries) on a
Net After-Tax Basis against any Taxes, other than any Excluded Tax, to the
extent the amount of such Taxes exceeds the amount of such Taxes reflected as a
liability in the Closing Date Net Monetary Assets. The obligations of the
Selling Shareholders under this section shall be several and not joint, pro rata
based on their Relative Proportionate Percentages.

 

8A.3       Indemnification by Selling Shareholders; Limitation.

 

(a)          Selling Shareholders hereby agree to pay and indemnify ATS and its
Affiliates (including, after the Closing, the Company and its Subsidiaries) on a
Net After-Tax Basis against any Taxes (other than any Excluded Tax) imposed on
or with respect to the Company or any of its Subsidiaries with respect to
Pre-Closing Tax Periods for which Tax Returns are due prior to the Closing Date
(including, without limitation, any Taxes due and owing as a result of the
disallowance of any net operating loss of the Company or its Subsidiary that was
used to offset Taxable income), to the extent the amount of such Taxes exceed
the amount of such Taxes reflected as a liability in the Closing Date Net
Monetary Assets The obligations of the Selling Shareholders under this section
shall be several and not joint, pro rata based on their Relative Proportionate
Percentages.

 

(b)          Notwithstanding anything contained in this Section 8A.3, no Selling
Shareholder shall be liable for any Tax Liability to the extent attributable to
or resulting from (i) a breach by ATS or an Affiliate of ATS of any covenant
described in Section 8A.1, (ii) any Proceeding with respect to which ATS did not
satisfy its obligations under Section 8A.5 or in which Shareholders’
Representative was not afforded the opportunity to participate as provided by
Section 8A.5, or (iii) any Excluded Tax.

 

8A.4       Indemnification by ATS.

 

(a)           ATS hereby agrees to pay and to indemnify Selling Shareholders and
their respective Affiliates on a Net After-Tax Basis against (i) any Taxes
imposed on or with respect to the Company or any of its Subsidiaries for any
Post-Closing Tax Period, (ii) any Taxes resulting from a breach of Section 8A.1
by ATS or any Affiliate of ATS, and (iii) any Excluded Taxes.

 

(b)          Notwithstanding anything to the contrary contained in this Section
8A.4, ATS shall not be liable under this Section 8A.4 for any liability to the
extent attributable to or resulting from any Tax Claim (defined below) with
respect to which Selling Shareholders or Shareholders’ Representative did not
(x) satisfy its obligations under Section 8A.5, or (y) afford ATS the
opportunity to participate as provided by Section 8A.5.

 

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8A.5       Disputed Tax Liabilities; Contests.

 

(a)          If Shareholders’ Representative objects to any item on any Tax
Return or notice of adjustment from any Governmental Authority attributable to
any Tax period that ends on or before the Closing Date or a Straddle Tax Period
and results in a Tax Liability (other than any Excluded Tax) it shall, within
twenty (20) days after receipt of the applicable Tax Return or notice of
adjustment, unless earlier required by applicable Legal Requirements, notify ATS
in writing that it so objects, specifying with particularity any such item and
stating the specific factual or legal basis for any such objection. If a notice
of objection shall be duly delivered, ATS and Shareholders’ Representative shall
negotiate in good faith and use their best efforts to resolve such items. If ATS
and Shareholders’ Representative are unable to reach such agreement within five
(5) days after receipt by ATS of notice of a disputed item, the amount of the
disputed items shall be submitted to a nationally recognized accounting firm
(the “Referee”), chosen by and mutually acceptable to both ATS and Shareholders’
Representative within five (5) days for a decision within ten (10) days. The
costs, fees and expenses of the Referee shall be shared equally by ATS and
Shareholders’ Representative. If a disputed issue is not resolved by the due
date for the Tax Return (taking into account all available extensions), the Tax
Return shall be filed as prepared by ATS, and an amended Tax Return shall be
filed if necessary to reflect the Referee’s decision.

 

(b)          Each party entitled to an indemnity payment pursuant to Section
8A.3 or 8A.4 (a “Tax Indemnified Party”), agrees to give written notice to the
indemnifying party (the “Tax Indemnitor”) of any written notice received by the
Tax Indemnified Party or an Affiliate of such Tax Indemnified Party (including,
in the case where ATS is the Tax Indemnified Party, the Company or any of its
Subsidiaries or if a Selling Shareholder is the Tax Indemnified Party,
Shareholders’ Representative) which involves the assertion of any claim, or the
commencement of any audit, examination, protest, assessment, suit, action or
proceeding (collectively, a “Tax Claim”) in respect of which indemnity may be
sought (an “Indemnifiable Tax”) within ten (10) days of such receipt or such
earlier time as would allow the Tax Indemnitor to timely respond to such Tax
Claim. The Tax Indemnified Party shall give the Tax Indemnitor such information
with respect to the Tax Claim as the Tax Indemnitor may reasonably request.

 

(c)          The Tax Indemnitor may, at its own expense, participate in and,
upon notice to the Tax Indemnified Party, assume control of the defense of any
such Tax Claim. If the Tax Indemnitor assumes control, it shall have the power
to contest or settle the Tax Claim and determine the manner in which the contest
or settlement occurs. The Tax Indemnified Party shall cooperate, at the sole
expense of the Tax Indemnitor, in the defense of any such Tax Claim. The Tax
Indemnitor shall reasonably and in good faith consult with the Tax Indemnified
Party with respect to each aspect of the defense against, or compromise or
settlement of, any such Tax Claim. Without limiting the generality of the
foregoing, the Tax Indemnified Party shall be permitted, at its expense, to be
represented at each conference, hearing or meeting with representatives of the
pertinent taxing authority (and shall be notified reasonably in advance
thereof). The Tax Indemnitor shall promptly notify the Tax Indemnified Party in
writing after it settles, compromises or abandons any Tax Claim related to an
Indemnifiable Tax. With respect to any Tax Claim that could materially adversely
affect the Company, ATS and their affiliates with respect to any Post-Closing
Tax Period, the Shareholders’ Representative shall not settle, compromise or
abandon any matter related to an Indemnifiable Tax without obtaining the prior
written consent of ATS, which consent shall not be unreasonably conditioned,
withheld or delayed; provided, however, that utilization of Company’s net
operating losses from any Pre-Closing Tax Period will not be considered to
adversely affect Company in any Post-Closing Tax Period. If the Tax Indemnitor
does not assume control of the defense of any such Tax Claim, the Tax
Indemnified Party may pay, compromise or contest such Indemnifiable Tax in any
reasonable manner it deems appropriate and the Tax Indemnitor shall remain fully
liable for such Indemnifiable Tax. In no case shall a Tax Indemnified Party
settle or otherwise compromise a Tax Claim without the Tax Indemnitor’s prior
written consent, which consent shall not be unreasonably conditioned, withheld
or delayed.

 

41

 

 

(d)          If a Tax Claim potentially involves Taxes for a Pre-Closing Tax
Period for which Selling Shareholders would be required to indemnify ATS
pursuant to Section 8A.3 and Taxes for a Post-Closing Tax Period for which ATS
would be required to indemnify Selling Shareholders pursuant to Section 8A.4,
the parties shall attempt in good faith to bifurcate such Tax Claim and in the
event that such a Tax Claim cannot be so bifurcated, the parties shall jointly
control the Tax Claim and neither party shall settle or otherwise compromise
such Tax Claim without the prior written consent of the other party.

 

(e)          The Tax Indemnitor may discharge, at any time, its indemnity
obligations by paying the Tax Indemnified Party the amount of the applicable
loss (including interest, penalties and attorney fees), calculated on the date
of such payment.

 

8A.6       Other Tax Matters.

 

(a)          Notwithstanding anything to the contrary in this Agreement, this
Article 8A shall be the exclusive provision for indemnification for Taxes.

 

(b)          Any indemnity payment under this Agreement shall be treated as an
adjustment to the Aggregate Merger Consideration for Tax purposes, unless
otherwise required pursuant to a final determination of any Governmental
Authority.

 

(c)          The indemnity obligations under this Article 8A shall survive until
the earlier of (i) the ninetieth (90th) day after expiration of the applicable
statute of limitations, and (ii) the Claim Expiration Date.

 

(d)          For avoidance of doubt, any indemnifications obligations of Selling
Shareholders pursuant to this Article 8A shall be subject to Section 11.2(d) and
any indemnification payments to Selling Shareholders pursuant to this Article 8A
shall be subject to Section 11.3(c).

 

(e)          Any indemnification obligations of Selling Shareholders under this
Article 8A shall be subject to Sections 11.2(b)(ii) and (iii), but is not
subject to Section 11.2(b)(i).

 

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8A.7       Cooperation.

 

(a)          ATS and Shareholders’ Representative shall furnish or cause to be
furnished to each other, upon request, in a timely manner, such information
(including access to books and records) and assistance relating to the Company
as is reasonably necessary for the filing of any Tax Return, for the preparation
of any Tax Claim, and for the prosecution or defense of any Tax Claim relating
to any proposed adjustment. Such cooperation and information shall include (i)
the retention and (upon the other party's request) the provision of records and
information that are reasonably relevant to any such Tax Return, claim for
refund, audit, litigation or other proceeding, (ii) making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder and (iii) providing copies of all relevant
portions of relevant Tax Returns, together with relevant accompanying schedules
and relevant work papers, relevant documents relating to rulings and other
determinations by taxing authorities, and relevant records concerning the
ownership and Tax basis of property, which any such party may possess. Each
party shall retain all Tax Returns, schedules, work papers, and all material
records and other documents relating to Tax matters, of the Company and its
Subsidiaries for any taxable period ending after the Closing Date and for all
taxable periods prior to the Closing Date until the expiration of the applicable
statute of limitations (and, to the extent notice is provided with respect
thereto, any extensions thereof) and to abide by all record retention agreements
entered into with any taxing authority. Each party agrees to give the other
party reasonable written notice prior to transferring, destroying or discarding
any such books and records and, if the other party so requests, Company and its
Subsidiaries or Selling Shareholders, as the case may be, shall allow the other
party to take possession of such books and records.

 

(b)          ATS and Shareholders’ Representative shall cooperate with each
other in the conduct of any Tax Claim involving the Company for any Tax purposes
and each shall execute and deliver such powers of attorney and other documents
as are necessary to carry out the intent of this Section 8A.7.

 

8A.8         Transfer Taxes. All Transfer Taxes and related amounts incurred in
connection with the transactions contemplated by this Agreement shall be borne
(i) 50% by the Selling Shareholders, severally and not jointly, pro rata based
on their Relative Proportionate Percentages, satisfied solely from the Escrow
and (ii) 50% by ATS. ATS and Shareholders’ Representative shall cooperate to
timely prepare, and ATS shall file, all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes, including any claim for
exemption or exclusion from the application or imposition of any Transfer Taxes.
ATS shall promptly provide Shareholders’ Representative with a copy of such
return or other filing and a copy of a receipt showing payment of any such
Transfer Tax. ATS and Shareholders’ Representative each agree to timely sign and
deliver (or to cause to be timely signed and delivered) such certificates or
forms as may be necessary or appropriate and otherwise to cooperate to establish
any available exemption from (or otherwise reduce) such Transfer Taxes.

 

8A.9 Refunds. The amount of any net refund of Taxes and interest thereon
received by, or credited against the tax liability of, ATS, any Affiliate of ATS
or the Company or any of its Subsidiaries with respect to a Pre-Closing Tax
Period within five (5) days after receipt thereof (including any credit against
a tax liability) by ATS, the Company or any of their respective Affiliates shall
be deposited in the Escrow and subject to the Escrow Agreement, other than any
refund or credit (i) relating to Excluded Taxes and Tax Returns filed after the
Closing Date or (ii) resulting from a carry back of items from a Post-Closing
Tax Period, to the extent such refund exceeds the amount reflected as an asset
in determining Closing Date Net Monetary Assets.

 

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9.            CONDITIONS PRECEDENT TO THE OBLIGATIONS OF ATS AND MERGER SUB

 

The obligations of ATS and Merger Sub to consummate the Merger and the other
Contemplated Transactions shall be subject to the satisfaction at or prior to
the Closing of each of the following conditions, any of which may be waived, in
writing, exclusively by ATS:

 

9.1           Representations and Warranties. The representations and warranties
of the Company and the Selling Shareholders, respectively, set forth in Section
4.1, Section 4.2(a), Section 4.2(b)(i), (ii) and (iii), Section 4.3(a), (b) and
(c), Section 5.1 and Section 5.2(a)(i): (I) that are limited or qualified by the
word “Material Adverse Effect” or “materiality” shall be true and correct in all
respects as of the Closing Date, and (II) that are not limited or qualified by
the word “Material Adverse Effect” or materiality shall be true and correct
(except for de minimis inaccuracies) as of the Closing Date, in each case, as
though made on and as of the Closing Date (except to the extent any such
representation and warranty is expressly made as of an earlier date, in which
case such representation and warranty need only be true and correct, or true and
correct (except for de minimis inaccuracies), respectively, as of such earlier
date). The other representations and warranties of the Company and the Selling
Shareholders set forth in Article 4 and Article 5 shall be true and correct
(without giving effect to any limitation or qualification on any representation
or warranty indicated by the words “Material Adverse Effect” or “material,”
except for the term “Material Contract”) as of the Closing Date, as though made
on and as of the Closing Date (except to the extent that any representation and
warranty is expressly made as of an earlier date, in which case such
representation and warranty need only be so true and correct as of such earlier
date), except in each case where the failure of any such representations and
warranties to be so true and correct, individually and in the aggregate, have
not had and are not reasonably likely to have a Material Adverse Effect. ATS
shall have received a certificate of the President or Chief Executive Officer of
Company to the foregoing effect.

 

9.2           Agreements and Covenants. Each of the covenants and obligations
that Company is required to comply with or to perform at or prior to the Closing
Date shall have been complied with or performed in all material respects.

 

9.3           No Proceedings. No party hereto shall be subject to any Order
restraining or prohibiting the consummation of the transactions contemplated
hereby or by the other Transaction Documents.

 

9.4           Consents. All Consents set forth on Schedule 9.4 of the Disclosure
Memorandum shall have been obtained, made or given and shall be in full force
and effect.

 

9.5           Release of Encumbrances. ATS shall have received from Company duly
and validly executed copies of all Contracts, instruments, certificates and
other documents, in form and substance reasonably satisfactory to ATS, that are
necessary or appropriate to evidence the release of all Encumbrances set forth
in Schedule 9.5 of the Disclosure Memorandum.

 

9.6           Certificates and Other Deliverables. ATS shall have received
Company’s and Shareholders’ Representative’s closing deliverables described in
Sections 3.6 and 3.7.

 

9.7           401(k) Plan. Except as otherwise agreed by the parties, Company
shall have terminated the Company 401(k) Plan pursuant to Section 8.7.

 

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9.8           Amendment to Accounting Function Service Agreement. ATS shall have
received the Amendment to Accounting Function Service Agreement executed by each
party thereto (other than ATS).

 

9.9           No Warrants/Other Securities. The Company shall have provided ATS
with evidence reasonably satisfactory to ATS as to the termination of all: (a)
warrants; (b) other rights to purchase shares of Company Capital Stock; and (c)
securities convertible into shares of Company Capital Stock (other than the
Series AA Preferred Stock).

 

9.10         Termination of Investor Rights Agreement. The Investor Rights
Agreement shall have been terminated as of the Effective Time.

 

10.           CONDITIONS PRECEDENT TO THE OBLIGATIONS OF COMPANY

 

The obligations of Company to consummate the Merger and the other Contemplated
Transactions shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions, any of which may be waived, in writing,
exclusively by Company:

 

10.1         Representations and Warranties. The representations and warranties
of ATS and Merger Sub set forth in Section 6.1, Section 6.2 and Section
6.3(a)(i) and (b): (I) that are qualified by the word “material adverse effect”
or “materiality” shall be true and correct in all respects as of the Closing
Date, and (II) that are not qualified by the word “material adverse effect” or
materiality shall be true and correct as of the Closing Date, in each case, as
though made on and as of the Closing Date (except to the extent any such
representation and warranty is expressly made as of an earlier date, in which
case such representation and warranty need only be true and correct, or true and
correct, respectively, as of such earlier date). The other representations and
warranties of ATS and Merger Sub set forth in Article 6 shall be true and
correct (without giving effect to any limitation or qualification on any
representation or warranty indicated by the words “material adverse effect” or
“material”) as of the Closing Date, as though made on and as of the Closing Date
(except to the extent that any representation and warranty is expressly made as
of an earlier date, in which case such representation and warranty need only be
so true and correct as of such earlier date), except in each case where the
failure of any such representations and warranties to be so true and correct,
individually and in the aggregate, have not had and are not reasonably likely to
have a material adverse effect on the ability of ATS and Merger Sub to
consummate the Contemplated Transactions. The Company shall have received a
certificate of the President or Chief Executive Officer of PGi to the foregoing
effect.

 

10.2         Agreements and Covenants. Each of the covenants and obligations
that PGi, ATS or Merger Sub, as applicable, is required to comply with or
perform at or prior to the Closing Date shall have been complied with or
performed in all material respects.

 

10.3         No Proceedings. No party hereto shall be subject to any Order
restraining or prohibiting the consummation of the transactions contemplated
hereby or by the other Transaction Documents.

 

10.4         Certificates and Deliverables. Company shall have received the
closing deliverables of PGi, ATS and Merger Sub described in Sections 3.4 and
3.5.

 

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10.5         Merger Consideration. ATS shall have delivered the Adjusted
Aggregate Merger Consideration in accordance with Section 3.3(a).

 

10.6         Amendment to Accounting Function Service Agreement. Company shall
have received the Amendment to Accounting Function Service Agreement executed by
each party thereto (other than Company).

 

11.         SURVIVAL; INDEMNIFICATION AND INSURANCE

 

11.1         Survival. With the exception of the representations and warranties
contained in: (a) Sections 4.1(a), 4.2(a), 4.2(b)(i)-(iii), 4.3(a)-(c), 4.25,
5.1, 5.2(a)(i) and 5.5, which shall survive the Closing until the Claim
Expiration Date (the “Company Fundamental Representations”); and (b) Sections
6.1, 6.2, 6.3(a)(i), 6.3(b), and 6.6, which shall survive the Closing
indefinitely, the representations and warranties of the parties contained in
this Agreement, shall survive Closing for a period of two (2) years, after which
the indemnification obligation of a party contained herein shall terminate
(unless a party has made a written claim for indemnification in respect of the
facts underlying such claim prior to such expiration date (in which case the
relevant survival period shall be extended automatically to include any time
period necessary until all claims with respect to such underlying facts shall
have been finally settled, decided or adjudicated)).

 

11.2         Indemnification by Selling Shareholders.

 

(a)          The Selling Shareholders, severally and not jointly, pro rata based
on their Relative Proportionate Percentages, shall indemnify and defend ATS and
its Affiliates and their respective officers, directors, agents, employees and
stockholders (the “ATS Indemnified Parties”) against, and shall hold them
harmless from, any Damages incurred or suffered by any of the ATS Indemnified
Parties relating to or arising out of any of the following:

 

(i)          other than with respect to Tax liability which is governed by
Article 8A, any breach of or inaccuracy in any representation or warranty made
by Company pursuant to this Agreement, the Disclosure Memorandum, or any other
Transaction Document to which Company or Selling Shareholder is a party;

 

(ii)         any breach of or failure by Company to perform any covenant or
obligation of Company set out in this Agreement or of the Selling Shareholders
in any Transaction Document to which Selling Shareholders are party;

 

(iii)        any claim by a Company Shareholder or former Company Shareholder,
or any other Person, seeking to assert, or based upon: (a) ownership or rights
to ownership of any shares of Company Capital Stock or Options; (b) any rights
of a shareholder (other than the right to receive consideration pursuant to
Article 2 of this Agreement or dissenters’ rights under the applicable
provisions of the Colorado Code), including any Option, preemptive rights or
rights to notice or to vote; (c) any rights under the Amended and Restated
Articles of Incorporation or Amended and Restated Bylaws of Company; or (d) any
claim that his, her or its shares of Company Capital Stock were wrongfully
repurchased by Company;

 

46

 

  

(iv)        any Transaction Expenses to the extent such expenses are not accrued
for or reserved against (as a current liability) in the calculation of the
Closing Date Net Monetary Assets;

 

(v)         any Dissenting Share Payments;

 

(vi)        any amounts in respect of any Indebtedness;

 

(vii)       50% of all Transfer Taxes;

 

(viii)      any claim by a Company Shareholder or a former Company Shareholder
relating to or arising out of the Contemplated Transaction or any other
transaction between the Company and the Selling Shareholders;

 

(ix)         any expenses or payments made to D&O Indemnified Parties for claims
or Proceedings arising out of or pertaining to matters existing or occurring at
or prior to the Effective Time in accordance with Section 8.8; and

 

(x)          any claim against Company or its Subsidiaries related to the
matters set forth on Schedule 11.2(a)(x).

 

(b)          Subject to Section 11.6, notwithstanding anything to the contrary
contained herein, (i) other than for fraud or intentional misrepresentation or
with respect to inaccuracies in or breaches of the Company’s representations
made in Section 4.19 and the Company Fundamental Representations, the Selling
Shareholders shall not be responsible for any Damages under Section 11.2(a)(i)
until the cumulative aggregate amount of all such Damages exceeds $530,000 (the
“Deductible”), in which event the Selling Shareholders shall only be required to
pay or be liable for such Damages in excess of the Deductible; (ii) other than
for fraud or intentional misrepresentation or with respect to inaccuracies in or
breaches of the Company Fundamental Representations, the cumulative aggregate
indemnity obligation of the Selling Shareholders under this Section 11.2 and all
other obligations of the Selling Shareholders under this Agreement (including,
without limitation, under Section 2.2(e) and Article 8A) shall in no event
exceed $5,730,000 and be solely limited to the funds held in the Escrow, and
(iii) other than for fraud or intentional misrepresentation, the cumulative
aggregate indemnity obligation of the Selling Shareholders under this Section
11.2 and all other obligations of the Selling Shareholders under this Agreement
(including, without limitation, under Section 2.2(e) and Article 8A) shall in no
event exceed $13,250,000.

 

(c)          Subject to Section 11.1, notwithstanding anything to the contrary
contained herein, the Selling Shareholders shall not be responsible for any
Damages under this Section 11.2 or with respect to any other obligations of any
nature under this Agreement (including, without limitation, under Section 2.2(e)
or Article 8A) unless notice of the relevant claim is delivered to the Selling
Shareholders prior to the Claim Expiration Date.

 

(d)          Notwithstanding anything to the contrary contained herein, any
Liability or obligation of any nature of the Selling Shareholders shall be
several and not joint and shall be limited in the case of each Selling
Shareholder to such Selling Shareholder’s Relative Proportionate Percentage.

 

47

 

  

(e)          Notwithstanding anything to the contrary provided herein, any
obligations of Selling Shareholders in this Agreement (including, without
limitation, under Section 2.2(e), Article 8A and Article 11), shall in all cases
be satisfied first out of the Escrow. Subject to the limitations provided in
Section 11.2(b)(ii) and (iii), in the event that Selling Shareholders
obligations hereunder exceed amounts then available in the Escrow, such amounts
shall then be satisfied out of the other assets of the Selling Shareholders.

 

(f)          For purposes of determining the amount of Damages based on any
inaccuracy in or breach of any representation or warranty, the parties hereto
shall disregard any materiality, Material Adverse Effect or other similar
qualification contained in or otherwise applicable to such representation or
warranty.

 

11.3         Indemnification by ATS and PGi.

 

(a)          ATS and PGi, jointly and severally, shall indemnify and defend the
Company Shareholders and the Shareholders’ Representative and their respective
Affiliates, officers, directors, agents, employees and Stockholders
(collectively, “Seller Indemnified Parties”) against, and shall hold them
harmless from, any Damages incurred or suffered by them relating to or arising
out of any of the following:

 

(i)          any breach of or any inaccuracy in any representation or warranty
made by PGi, ATS or Merger Sub pursuant to this Agreement or any other
Transaction Document to which any of PGi, ATS or Merger Sub is a party;

 

(ii)         any breach of or failure by ATS to perform any covenant or
obligation of ATS set out in this Agreement;

 

(iii)        any third party expenses incurred by ATS or Merger Sub in
connection with this Agreement and the Contemplated Transactions (except for any
such expenses for which the ATS Indemnified Party would be entitled to
indemnification under Section 11.2);

 

(iv)        Liabilities or obligations arising solely from the post-Merger
operations of the Business; or

 

(v)         any Dissenting Share Payments made without the Consent of the
Shareholders’ Representative.

 

(b)          Following the Closing, Company shall not have any Liability to any
Selling Shareholder or any other Person as a result of any inaccuracy or
misrepresentation in or breach of the representations and warranties made by, or
a breach of any covenant of Company in this Agreement. No Selling Shareholder
shall have any right of indemnification or contribution against Company on
account of any event or condition or occurring or existing prior to or on the
date of the Closing. In furtherance of the foregoing, effective as of the
Closing, each Selling Shareholder hereby forever releases and discharges Company
and its officers and directors from any and all promises, agreements or
Liabilities of any nature whatsoever, which such Selling Shareholder now has,
has had, or may hereafter claim to have had against such Person by reason of any
matter, act, omission, cause, or event that has occurred through the Closing
Date.

 

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(c)          Notwithstanding anything to the contrary provided herein, any
payments due to Company Shareholders in respect of indemnification obligations
of ATS and PGi hereunder shall be paid to such Company Shareholders pro rata
based on such Company’s Shareholder’s Relative Proportionate Percentage.

 

11.4         Notice of Claims; Assumption of Defense; Settlement or Compromise.
To seek indemnification under this Article 11, the indemnified party shall give
prompt notice to the indemnifying party (or, in the event one or more Selling
Shareholders is the indemnifying party, the Shareholders’ Representative), in
accordance with the terms of Section 14.3, of the assertion of any claim, or the
commencement of any suit, action or Proceeding in respect of which indemnity may
be sought hereunder, specifying with reasonable particularity the basis therefor
and giving the indemnifying party (or, in the event one or more Selling
Shareholders is the indemnifying party, the Shareholders’ Representative) such
information with respect thereto as the indemnifying party (or, in the event one
or more Selling Shareholders is the indemnifying party, the Shareholders’
Representative) may reasonably request (but the giving of such notice shall not
be a condition precedent to indemnification hereunder). If the indemnifying
party (or, in the event one or more Selling Shareholders are the indemnifying
party, the Shareholders’ Representative) confirms in writing to the indemnified
party within 15 days after receipt of a notice of a claim commenced by a third
party (a “Third Party Claim”) the indemnifying party’s responsibility to
indemnify and hold harmless the indemnified party therefor the indemnifying
party (or, in the event one or more Selling Shareholders are the indemnifying
party, the Shareholders’ Representative) may elect to assume control over the
compromise or defense of such Third Party Claim at the expense of the
indemnifying party and by counsel selected by the indemnifying party (or, in the
event one or more Selling Shareholders are the indemnifying party, by counsel
selected by the Shareholders’ Representative), which counsel will be reasonably
satisfactory to the indemnified party. If the indemnifying party (or, in the
event one or more Selling Shareholders are the indemnifying party, the
Shareholders’ Representative) so elects to assume control over the compromise
and defense of such Third Party Claim, the indemnifying party (or, in the event
one or more Selling Shareholders are the indemnifying party, the Shareholders’
Representative) shall within such 15 days (or sooner, if the nature of the
asserted Third Party Claim so requires) notify the indemnified party of the
agreement of the indemnifying party (or, in the event one or more Selling
Shareholders are the indemnifying party, of the agreement of the Shareholders’
Representative) to do so, and the indemnified party shall cooperate, at the
expense of the indemnifying party, in the compromise of, or defense against,
such Third Party Claim; provided, however, that: (i) the indemnified party may,
if such indemnified party so desires, employ counsel at such indemnified party’s
own expense to assist in the handling (but not control the defense) of any Third
Party Claim; (ii) the indemnifying party (or, in the event one or more Selling
Shareholders are the indemnifying party, the Shareholders’ Representative) shall
keep the indemnified party advised of all material events with respect to any
Third Party Claim; (iii) the indemnifying party (or, in the event one or more
Selling Shareholders are the indemnifying party, the Shareholders’
Representative) shall obtain the prior written approval of the indemnified party
before ceasing to defend against any Third Party Claim or entering into any
settlement, adjustment or compromise of such Third Party Claim involving
injunctive or similar equitable relief being asserted against any indemnified
party or any of its or his Affiliates; and (iv) no indemnifying party will (or,
in the event one or more Selling Shareholders are the indemnifying party, the
Shareholders’ Representative will not), without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened Third Party Claim in respect of which
indemnification may be sought hereunder (whether or not any such indemnified
party is a party to such action), unless such settlement, compromise or consent
by its terms obligates the indemnifying party to pay the full amount of the
liability in connection with such Third Party Claim and includes an
unconditional release of all such indemnified parties from all liability arising
out of such Third Party Claim.

 

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11.5         Tax Matters. Notwithstanding anything to the contrary in this
Article 11, Article 8A shall be the sole remedy to any claim for indemnity with
respect to Tax Matters.

 

11.6         Double Claims. No ATS Indemnified Party and no Seller Indemnified
Party shall be entitled to recover from any indemnifying party under this
Article 11 or under any Transaction Document more than once in respect of the
same Damage (notwithstanding that such Damage may result from breaches of
multiple provisions of this Agreement). Notwithstanding anything herein to the
contrary, no ATS Indemnified Party shall be entitled to indemnification for any
Liability to the extent included in the calculation of Closing Date Net Monetary
Assets.

 

11.7         Tax Treatment of Indemnification. All indemnification payments made
under this Agreement shall be treated by the parties as an adjustment to the
Aggregate Merger Consideration for Tax purposes, unless otherwise required by
Law.

 

11.8         Mitigation of Losses. ATS, PGi and each of the other ATS
Indemnified Parties shall, and shall cause the Company to, procure that all
reasonable steps are taken and all reasonable assistance is given (including the
taking of any actions reasonably requested by an indemnifying party) to avoid or
mitigate any Damages for which any ATS Indemnified Party seeks indemnification
under this Article 11 and, in the event that any ATS Indemnified Party fails to
so mitigate an indemnifiable Damage, the indemnifying parties shall have no
liability for any portion of such Damage that could reasonably be avoided;
provided, however, that any failure or alleged failure to avoid or mitigate any
Damages shall not preclude the ATS Indemnified Parties from making any indemnity
claim.

 

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12.         SHAREHOLDERS’ REPRESENTATIVE

 

12.1         Authority. From and after the Effective Time, each Company
Shareholder shall be deemed to have appointed Dolphin Direct Equity Partners LP
(the “Shareholders’ Representative”) to serve as the sole and exclusive
representative of the Company Shareholders, and their respective successors,
under this Agreement and the other Transaction Documents and as attorney-in-fact
and agent for and on behalf of each Company Shareholder. ATS shall be entitled
to rely on written notice from Dolphin Direct Equity Partners LP in its capacity
as Shareholders’ Representative. From and after the Effective Time, the
Shareholders’ Representative shall have the full power and authority to
represent, and shall take all action for and on behalf of, the Company
Shareholders, and their respective successors, with respect to all matters
arising under this Agreement and the other Transaction Documents, including,
with respect to (i) the determination of the merger consideration pursuant to
Article 2, (ii) the indemnification obligations of the Selling Shareholders
under Article 11, including the defense or settlement of any claims and the
making of payments with respect thereto, (iii) giving or receiving all notices
required to be given by or to any Company Shareholder under this Agreement, the
Exchange Agreement or the Escrow Agreement, (iv) all action necessary in
connection with any amendment, extension, waiver or assignment of this Agreement
or any other Transaction Document, (v) the execution of this Agreement and the
other Transaction Documents for and on behalf of the Company Shareholders, and
their respective successors, and (vi) any and all additional action as is
contemplated to be taken by or on behalf of the Company Shareholders by the
Shareholders’ Representative pursuant to this Agreement or any other Transaction
Document. The appointment and agency created hereby is irrevocable, and shall be
deemed to be coupled with an interest. Execution of this Agreement by the
Selling Shareholders, representing at least a majority of the shares of Series
AA Preferred Stock and Company Stock, voting together as a single class, shall
constitute agreement by the Company Shareholders to be bound by the actions of
the Shareholders’ Representative taken hereunder and under any other Transaction
Document. In addition, the Shareholders’ Representative shall have all such
incidental powers as may be necessary or desirable to carry into effect the
provisions of this Section 12.1, including, at the expense of the Company
Shareholders, to retain attorneys, accountants and other advisors to assist it
in the performance of its duties hereunder and to satisfy indemnity obligations,
if any, of a Selling Shareholder in excess of amounts payable from the Escrow.

 

12.2         Successors. If Dolphin Direct Equity Partners LP resigns from its
position as Shareholders’ Representative, otherwise becomes unable to serve as
Shareholders’ Representative, then the Company Shareholders holding greater than
50% of Company Capital Stock shall select another Shareholders’ Representative
to fill such vacancy, unless Dolphin Direct Equity Partners LP has appointed its
successor to such position. Any such successor Shareholders’ Representative
shall be deemed to be a Shareholders’ Representative for all purposes of this
Agreement, the Exchange Agreement and the Escrow Agreement.

 

12.3         Actions; Indemnification. All decisions and actions by the
Shareholders’ Representative, including without limitation any agreement between
the Shareholders’ Representative and ATS or the Escrow Agent relating to
indemnification obligations of the Selling Shareholders under Article 11,
including the defense or settlement of any claims and the making of payments
with respect hereto, shall be binding upon all of the Company Shareholders, and
their respective successors, and no Company Shareholders, or any of their
respective successors, shall have the right to object, dissent, protest or
otherwise contest the same. The Shareholders’ Representative shall incur no
Liability to the Company Shareholders, or any of their respective successors,
with respect to any action taken or suffered by the Shareholders’ Representative
in reliance upon any notice, direction, instruction, Consent, statement or other
documents believed by the Shareholders’ Representative to be genuinely and duly
authorized, nor for any other action or inaction with respect to the
indemnification obligations of the Selling Shareholders under Article 11,
including the defense or settlement of any claims and the making of payments
with respect thereto, except to the extent resulting from the Shareholders’
Representative’s own willful misconduct or gross negligence. The Shareholders’
Representative may, in all questions arising under this Agreement or any other
Transaction Document, rely on the advice of counsel, and shall not be liable to
the Company Shareholders, or any of their respective successors, for anything
done, omitted or suffered in good faith by the Shareholders’ Representative. The
Company Shareholders shall indemnify the Shareholders’ Representative and hold
the Shareholders’ Representative harmless against any loss, Liability or expense
incurred without gross negligence or bad faith on the part of the Shareholders’
Representative and arising out of or in connection with the acceptance or
administration of the Shareholders’ Representative’s duties under this Agreement
or any other Transaction Document. ATS and the Escrow Agent shall be able to
rely conclusively on the instructions and decisions of the Shareholders’
Representative with respect to the indemnification obligations of the Selling
Shareholders under Article 11, including the defense or settlement of any claims
or the making of payments with respect thereto, or as to any other actions
required or permitted to be taken by the Shareholders’ Representative under this
Agreement or any other Transaction Document, and no party hereunder shall have
any cause of action against ATS or the Escrow Agent to the extent ATS or the
Escrow Agent has relied upon the instructions or decisions of the Shareholders’
Representative.

 

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12.4         Shareholders’ Representative Fees and Expenses. The Shareholders’
Representative may incur out-of-pocket costs and expenses on behalf of the
Company Shareholders in its capacity as the Shareholders’ Representative,
including with respect to the determination of the merger consideration pursuant
to Article 2 and the indemnification obligations of the Selling Shareholders
under Article 11 (“Shareholders’ Representative Expenses”). The Shareholders’
Representative Expenses, if any, shall be paid severally and not jointly by the
Company Shareholders according to their Ratable Portion of such Shareholders’
Representative Expenses.

 

12.5         Access. Upon reasonable notice and subject to a confidentiality
undertaking in form and substance satisfactory to ATS, during normal business
hours during the period after the Effective Time, the Surviving Corporation
shall (and shall cause its Subsidiaries to) afford to the Shareholders’
Representative reasonable access to such personnel and records (other than
privileged documents) as the Shareholders’ Representative may reasonably request
in connection with the discharge of its duties hereunder.

 

13.         TERMINATION

 

13.1         Termination. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time of the Merger, whether before
or after approval of the Merger by the Company Shareholders:

 

(a)          by mutual written Consent of ATS and Company;

 

(b)          by either ATS or Company if the Effective Time has not occurred by
September 30, 2013 (provided that the right to terminate this Agreement under
this Section 13.1(b) shall not be available to any party whose failure to
fulfill any obligation hereunder has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date);

 

(c)          by either ATS or Company if: (i) a court of competent jurisdiction
or other Governmental Body shall have issued a final and nonappealable Order or
shall have taken any other action, having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger; or (ii) there shall be any Legal
Requirement or Order enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Body that would make consummation of the Merger
illegal;

 

52

 

 

(d)          by ATS: (i) if any of the Company’s representations and warranties
shall have been materially inaccurate as of the date of this Agreement, such
that the condition set forth in Section 8.1 would not be satisfied; or (ii) (A)
if any of Company’s representations and warranties become materially inaccurate
as of a date subsequent to the date of this Agreement, such that the condition
set forth in Section 9.1 would not be satisfied and (B) such inaccuracy has not
been cured by Company within ten (10) days after its receipt of written notice
thereof and remains uncured at the time notice of termination is given; or (iii)
any of Company’s covenants contained in this Agreement shall have been
materially breached, such that the condition set forth in Section 9.2 would not
be satisfied;

 

(e)          by Company: (i) if any of the representations and warranties of
PGi, ATS or Merger Sub shall have been materially inaccurate as of the date of
this Agreement, such that the condition set forth in Section 10.1 would not be
satisfied; or (ii) if (A) any of the representations and warranties of PGi, ATS
or Merger Sub shall have become materially inaccurate as of a date subsequent to
the date of this Agreement (as if made on such subsequent date), such that the
condition set forth in Section 10.1 would not be satisfied and (B) such
inaccuracy has not been cured by PGi, ATS or Merger Sub within ten (10) days
after its receipt of written notice thereof and remains uncured at the time
notice of termination is given; or (iii) if any of the covenants of PGi, ATS or
Merger Sub contained in this Agreement shall have been materially breached such
that the condition set forth in Section 10.2 would not be satisfied; or

 

(f)          by ATS if, since the date of this Agreement, there shall have
occurred any Material Adverse Effect, or there shall have occurred any event or
circumstance that, in combination with any other events or circumstances, could
reasonably be expected to have a Material Adverse Effect, and such Material
Adverse Effect, or such event or circumstance that could reasonably be expected
to have a Material Adverse Effect is not cured within ten (10) days after the
Company’s receipt of written notice thereof and remains uncured at the time the
notice of termination is given.

 

If ATS or Company shall terminate this Agreement pursuant to the provisions
hereof, such termination shall be effected by notice to the other parties
specifying the provision hereof pursuant to which such termination is made
(“Termination Notice”).

 

13.2         Effect of Termination. In the event of the termination of this
Agreement as provided in Section 13.1, this Agreement shall be of no further
force or effect and each party shall pay all of its own expenses incurred in
connection herewith, without any liability on the part of any other party, or
its partners, directors, officers or shareholders; provided, however, that: (a)
the last sentence of Section 7.1, this Section 13.2, Section 13.3 and Article 14
shall survive the termination of this Agreement and shall remain in full force
and effect; and (b) the termination of this Agreement shall not relieve any
party from any Liability for any inaccuracy in or breach of any representation
or any breach of any warranty, covenant or other provision contained in this
Agreement prior to such termination.

 

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13.3         Expenses. Except as otherwise set forth in Article 12, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement, including all legal, accounting, financial
advisory, consulting and all other fees and expenses of third parties shall be
paid by the party incurring such expenses, regardless of whether the Merger is
consummated.

 

14.         GENERAL PROVISIONS

 

14.1         Amendment. This Agreement may be amended only by an instrument in
writing signed by Company, the Shareholders’ Representative, Merger Sub and ATS
at any time (whether before or after adoption of this Agreement by the Company
Shareholders); provided, however, that: (a) each amendment shall have been duly
authorized by the respective boards of directors of Company and Merger Sub; (b)
after adoption of this Agreement by the Company Shareholders, no amendment shall
be made which by applicable Legal Requirement requires further approval of the
Company Shareholders without the further approval of such shareholders; and (c)
notwithstanding the foregoing, Annex A may be amended by the Shareholders’
Representative at any time prior to the Closing Date in accordance with
Section 2.3(a). For purposes of this Section 14.1, the Company Shareholders
agree that any amendment of this Agreement signed by the Shareholders’
Representative shall be binding upon and effective against the Company
Shareholders regardless of whether they have signed such amendment.

 

14.2         Extension; Waiver. At any time prior to the Effective Time, ATS and
Merger Sub, on the one hand, and Company, on the other, may, to the extent
legally allowed: (a) extend the time for the performance of any of the
obligations of the other party hereto; (b) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto; and (c) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.

 

14.3         Notices. All notices and other communications hereunder shall be in
writing, shall be effective when received, and shall in any event be deemed to
have been received: (a) when delivered, if delivered personally or by commercial
delivery service; (b) three (3) Business Days after deposit with U.S. Mail, if
mailed by registered or certified mail (return receipt requested); (c) one (1)
Business Day after the Business Day of deposit with Federal Express or similar
overnight courier for next day delivery (or two (2) Business Days after such
deposit if deposited for second Business Day delivery), if delivered by such
means; or (d) one (1) Business Day after delivery by facsimile transmission with
copy by U.S. Mail, if sent via facsimile plus mail copy (with acknowledgment of
complete transmission), to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):

 

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(a)if to ATS or Merger Sub, to:

 

L. Scott Askins Leonard, Esq.

Premiere Global Services, Inc.

3280 Peachtree Road, NE Suite 1000

Atlanta, GA 30305

 

Telephone:(404) 262-8502

Facsimile:(404) 345-2705

 

with a copy to:

 

Nelson Mullins Riley & Scarborough LLP

201 17th Street, Suite 1700

Atlanta, GA 30363

Facsimile: (404) 322-6050

Attention: Jeffrey Allred

 

(b)If to Company prior to Closing, to:

 

Peter Salas

CEO and Chairman of the Board

ACT Teleconferencing, Inc.

1526 Cole Boulevard, Suite 300

Lakewood, Colorado 80401

 

with a copy to:

 

Hughes Hubbard & Reed LLP

One Battery Park Plaza

New York, NY 10004

Attention: Michael Weinsier and Gary J. Simon

Telephone No.: (212) 837-6690; (212) 837-6770

Facsimile No.: (212) 422-4726

 

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(c)If to the Shareholders’ Representative, to:

 

Dolphin Direct Equity Partners, LP

PO Box 16867

Fernandina Beach, FL 32035

Attention: Peter Salas

 

with a copy to:

 

Hughes Hubbard & Reed LLP

One Battery Park Plaza

New York, NY 10004

Attention: Michael Weinsier and Gary J. Simon

Telephone No.: (212) 837-6690; (212) 837-6770

Facsimile No.: (212) 422-4726

 

(d)If to Company post-Closing, to:

 

L. Scott Askins Leonard, Esq.

Premiere Global Services, Inc.

3280 Peachtree Road, NE Suite 1000

Atlanta, GA 30305

Telephone:(404) 262-8502

Facsimile:(404) 345-2705

 

with a copy to:

 

Nelson Mullins Riley & Scarborough LLP

201 17th Street, Suite 1700

Atlanta, GA 30363

Facsimile: (404) 322-6050

Attention: Jeffrey Allred

 

14.4         Execution of Agreements; Counterparts; Electronic Signatures.

 

(a)          This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the
same instrument, and shall become effective when counterparts have been signed
by each of the parties and delivered to the other parties; it being understood
that all parties need not sign the same counterpart.

 

(b)          The exchange of copies of this Agreement and of signature pages by
facsimile transmission (whether directly from one facsimile device to another by
means of a dial-up connection or whether mediated by the worldwide web), by
electronic mail in “portable document format” (“.pdf”) form, or by any other
electronic means intended to preserve the original graphic and pictorial
appearance of a document, or by combination of such means, shall constitute
effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
parties transmitted by facsimile shall be deemed to be their original signatures
for all purposes.

 

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14.5         Entire Agreement. This Agreement, the other Transaction Documents
and the Confidentiality Agreement constitute the entire agreement among the
parties to this Agreement and supersede all other prior agreements and
understandings (including, without limitation, the Letter Agreement, dated
May 29, 2013, between PGi and Company), both written and oral, among or between
any of the parties with respect to the subject matter hereof and thereof.

 

14.6         Severability. If any provision of this Agreement is held or
declared by a court of competent jurisdiction to be illegal, invalid or
unenforceable under any present or future Legal Requirement, and if the rights
or obligations of any party hereto under this Agreement will not be materially
and adversely affected thereby: (a) such provision will be fully severable; (b)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof (c) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom; and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.

 

14.7         Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.

 

14.8         Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by, and construed in accordance with, the laws of the State of
Delaware, without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of Delaware.

 

14.9         Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, without the necessity of proving the
inadequacy of money Damages as a remedy and without the necessity of posting any
bond or other security, this being in addition to any other remedy to which they
are entitled at law (subject to Section 14.10) or in equity.

 

14.10      Submission to Jurisdiction; Consent to Service of Process.

 

(a)          The parties hereto hereby irrevocably submit to the exclusive
jurisdiction of any federal or state court located within the State of Delaware
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all claims in respect of such dispute or any suit, action or Proceeding related
thereto shall be heard and determined solely in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

 

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(b)          Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action or Proceeding by delivery of
a copy thereof in accordance with the provisions of Section 14.3.

 

(c)          The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. Accordingly the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement, in addition to any other remedy to which they are entitled at law or
in equity.

 

14.11         Assignment. This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns. Neither this Agreement nor any rights
hereunder may be assigned without the prior written Consent of ATS, with respect
to the Company or the Company, with respect to ATS, except that the obligations
of Merger Sub may be assigned to any other wholly-owned subsidiary of ATS. Any
attempted assignment of this Agreement or of any such rights without such
Consent shall be void and of no effect.

 

14.12         Absence of Third Party Beneficiary Rights. Except as set forth in
Section 8.8, nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person (other than the parties hereto and the Seller
Indemnified Parties) any right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.

 

14.13         Further Assurances; Post-Closing Cooperation. At any time or from
time to time after the Closing, the parties shall execute and deliver to the
other party such other documents and instruments, provide such materials and
information and take such other actions as the other party may reasonably
request to carry out the purposes of the Contemplated Transactions.

 

15.         CERTAIN DEFINITIONS; INTERPRETATION

 

15.1         Certain Definitions. For purposes of this Agreement, the following
capitalized terms will have the meanings specified below (all terms used in this
Agreement which are not defined in this Section 15.1 but defined elsewhere in
this Agreement, will have for purposes of this Agreement the meanings set forth
elsewhere in this Agreement):

 

“Accountants” has the meaning set forth in Section 2.2.

 

“Accounts Receivable” means all receivables for services rendered or products
sold by the Company and any of its Subsidiaries to bona fide third party
customers prior to the Closing Date and reflected in an invoice rendered to such
customers prior to the Closing Date or within a reasonable time following the
Closing Date in the Ordinary Course of Business of the Company consistent with
historical practices of the Company, less, solely for purposes of the
Preliminary Adjustment Statement, a sufficient reserve for doubtful accounts
determined in accordance with GAAP based on the historical practices of the
Company.

 

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“Acquisition Proposal” means any bona fide offer, proposal, inquiry or
indication of interest (other than an offer, proposal, inquiry or indication of
interest by ATS) contemplating or otherwise relating to any Acquisition
Transaction.

 

“Acquisition Transaction” means any transaction involving a merger of Company or
any Subsidiary of Company (other than with another Subsidiary of Company), the
sale of a material number of the shares Company Capital Stock or any Subsidiary
of Company (to a Person other than Company), the sale of all or substantially
all of the assets of Company or any Subsidiary of Company or any business
combination involving Company or any Subsidiary of Company (other than with
another Subsidiary of Company).

 

“Adjusted Aggregate Merger Consideration” means the Aggregate Merger
Consideration as adjusted pursuant to Section 2.2.

 

“Affiliate” means, as applied to any Person, each other Person directly or
indirectly controlling, controlled by or under common control with, that Person.
For the purposes of this definition, “control” (including with correlative
meanings, the terms “controlling”, “controlled by”, and “under common control
with”) as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through ownership of voting securities or by Contract or
otherwise.

 

“Amendment to Accounting Function Service Agreement” means an amendment to that
certain Accounting Function Service Agreement, dated as of November 6, 2012, by
and between ACT Teleconferencing Services, Inc. and Dolphin Mgmt Shared
Services, Inc, in the form of Exhibit F, between ACT Teleconferencing Services,
Inc. and Dolphin Mgmt Shared Services, Inc., dated as of the date hereof.

 

“Article 113” has the meaning set forth in Section 2.6.

 

“ATS Indemnified Parties” has the meaning set forth in Section 11.2.

 

“ATS Secretary's Certificate” has the meaning set forth in Section 3.4.

 

“Balance Sheet Date” has the meaning set forth in Section 4.5.

 

“Bridge Equipment” means media servers, conferencing bridge equipment, switches
and routers used by the Business.

 

“Business” means the web, video, data and audio conferencing and webcasting
business of Company and its Subsidiaries.

 

“Business Day” means a day other than Saturday, Sunday or any day on which banks
located in Atlanta, Georgia or Lakewood, Colorado are authorized or obligated to
close.

 

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“Capital Lease” means any lease that is required to be recorded on the
consolidated balance sheet of the Company and the Subsidiaries in accordance
with GAAP.

 

“Cash” means cash and cash equivalents of the Company, in all cases, calculated
in accordance with GAAP, consistently applied.

 

“Certificate of Designations” has the meaning set forth in Section 3.6.

 

“Certificates” has the meaning set forth in Section 3.3.

 

“Claim Expiration Date” means the fourth (4th) anniversary of the date of this
Agreement.

 

“Closing” has the meaning set forth in Section 3.1.

 

“Closing Date” shall mean the date on which the Closing occurs.

 

“Closing Date Aggregate Merger Consideration” has the meaning set forth in
Section 2.2(a).

 

“Closing Date Net Monetary Assets” has the meaning set forth in Section 2.2.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

 

“Collection Calculation Date” shall be the date that is two hundred (200) days
following the Closing Date.

 

“Colorado Code” means the Colorado Business Corporation Act and/or the Colorado
Corporations and Associations Act, as applicable.

 

“Common Stock” means the Company’s Common Stock, no par value.

 

“Company 401(k) Plan” means the ACT Teleconferencing, Inc. 401(k) Plan.

 

“Company Benefit Plan” shall have the meaning set forth in Section 4.19(a).

 

“Company Capital Stock” means the Common Stock and the Series AA Preferred
Stock.

 

“Company Fundamental Representations” has the meaning set forth in Section 11.1.

 

“Company Option” means all outstanding options to acquire Common Stock or any
other equity interest in the Company (or “phantom” equity), whether granted
under any Company Option Plan or otherwise.

 

“Company Option Plan” means the ACT Teleconferencing, Inc. 2004 Equity Incentive
Plan.

 

“Company Pension Plan” has the meaning set forth in Section 4.19(b).

 

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“Company Product” means any product or service designed, developed,
manufactured, marketed, distributed, provided, licensed, supported, or sold, in
each case, currently or in the last thirty-six (36) months by the Company.

 

“Company Shareholder” means a holder of Company Capital Stock.

 

“Confidentiality Agreement” has the meaning set forth in Section 7.1.

 

“Consent” means any approval, consent, ratification, permission, waiver or
authorization (including any Governmental Authorization).

 

“Contract” means any written, oral or other agreement, contract, subcontract,
lease, understanding, instrument, note, Option, warranty, purchase order,
license, sublicense, insurance policy, benefit plan or legally binding
commitment or undertaking of any nature.

 

“Customer Service Contract” means any Contract, whether written or oral,
pursuant to which Company provides web event conferencing, webcasting solutions,
web-based events, reservationless conferencing, audio/video streaming,
simulcasts, presentations, meetings, training or ancillary services such as
production support, event management and archiving/hosting to any Person.

 

“D&O Indemnified Parties” has the meaning set forth in Section 8.9.

 

“D&O Tail Policy” has the meaning set forth in Section 8.8.

 

“Damages” means any and all debts, obligations and other liabilities (whether
absolute, accrued, contingent, fixed or otherwise, or whether known or unknown,
or due or to become due or otherwise), monetary damages, fines, penalties,
interest obligations, deficiencies, losses and reasonable fees and expenses
(including without limitation amounts paid in settlement, interest, court costs,
reasonable costs of investigators, reasonable fees and expenses of attorneys,
accountants, financial advisors and other experts, and other reasonable expenses
of litigation). Notwithstanding anything to the contrary contained in this
Agreement: (a) Damages shall not include lost profits or consequential,
incidental, special, indirect or punitive damages and no “multiple of profits”
or “multiple of cash flow” or similar valuation methodology shall be used in
calculating the amount of any Damages unless such Damages are awarded in a
third-party claim; and (b) the amount of any Damages under Article 11 shall be
determined: (i) on a Net After-Tax Basis; and (ii) net of any amounts recovered
or recoverable by the indemnified party under any Contract with a third party or
under any insurance policies, indemnities or other reimbursement arrangements
with respect to such Damages.

 

“Deductible” has the meaning set forth in Section 11.2.

 

“DGCL” means Delaware General Corporation Law.

 

“Disclosure Memorandum” means the disclosure memorandum, dated as of the date of
this Agreement, delivered to ATS and Merger Sub contemporaneously with the
execution and delivery of this Agreement, which sets forth certain information
regarding the Company.

 

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“Dispute Notice” has the meaning set forth in Section 2.2.

 

“Dissenting Share Payment” has the meaning set forth in Section 2.6.

 

“Dissenting Shares” has the meaning set forth in Section 2.6.

 

“Documentation” means all technical and descriptive materials relating to the
acquisition, design, development, use or maintenance of computer code and
program documentation and materials used or held for use in the Business.

 

“DOL” has the meaning set forth in Section 4.19(a).

 

“Dolphin Funds” means Dolphin Direct Equity Partners LP and Dolphin Offshore
Partners LP.

 

“Downward Adjustment” has the meaning set forth in Section 2.2.

 

“Downward Adjustment Amount” has the meaning set forth in Section 2.2.

 

“Effective Time” has the meaning set forth in Section 3.2.

 

“Encumbrance” means any mortgage, pledge, hypothecation, assessment, security
interest, tease, lien, easement, license, covenant, condition, restriction,
levy, charge, option, equity, claim, infringement, interference, right of first
refusal, preemptive right, community property interest, or restriction or other
encumbrance of any kind (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset, any restriction
on the use of any asset and any restriction on the possession, exercise or
transfer of any other attribute of ownership of any asset), or any conditional
sale Contract, title retention Contract or other Contract to give any of the
foregoing.

 

“Entity” means any corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any company limited by shares, limited
liability company or joint stock company), firm, society or other enterprise,
association, organization or Entity.

 

“Environmental and Safety Requirements” means, as in effect prior to, on or
after the Closing Date, all Legal Requirements, Orders, and all contractual
obligations concerning public health and safety, worker health and safety,
pollution, or protection of the environment, including all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous or otherwise
regulated materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or radiation, each as
amended.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder.

 

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“ERISA Affiliate” means any trade or business, whether or not incorporated, that
is or at any relevant time was treated pursuant to Section 400l(a)(14) of ER1SA
or Section 414 of the Code as a single employer with the Company or any of the
Subsidiaries.

 

“Escrow” has the meaning set forth in Section 3.3.

 

“Escrow Agent” means Regions Bank, an Alabama banking corporation.

 

“Escrow Agreement” means an Escrow Agreement, by and between ATS, the
Shareholders’ Representative and the Escrow Agent, substantially in the form of
Exhibit E.

 

“Escrow Amount” means $5,730,000.

 

“Estimated Closing Date Net Monetary Assets” has the meaning set forth in
Section 2.2.

 

“Exchange Agreement” means a Cash Exchange Agreement, by and between ATS and the
Shareholders’ Representative, substantially in the form of Exhibit D.

 

“Excluded Tax(es)” means the Taxes set forth on Exhibit H.

 

“Final Adjustment Statement” has the meaning set forth in Section 2.2.

 

“Financial Statements” means the audited income statements, balance sheets and
statements of cash flow of Company as of and for the twelve (12) months ended
December 31, 2011 and December 31, 2012 and the unaudited income statements,
balance sheets and statements of cash flow of Company as of and for the six (6)
months ended June 30, 2013.

 

“GAAP” means generally accepted accounting principles in the United States, as
in effect from time to time.

 

“Governmental Authorization” means any: (i) permit, license, certificate,
franchise, permission, variance, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal Requirement; or (ii)
right under any Contract with any Governmental Body.

 

“Governmental Body” means any: (i) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign or other government; or (iii)
governmental or quasi-governmental authority of any nature.

 

“Income Tax” means any income, franchise, gains or similar Tax imposed on or
measured by net income, profits, gains or similar items (including Federal
Income Tax) and any interest, additional amounts, additions to tax, penalties or
similar items with respect thereto.

 

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“Indebtedness” of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the Ordinary Course of Business),
(iv) under Capital Leases with respect to which such Person is liable,
contingently or otherwise, as obligor or otherwise, or with respect to which
obligations such Person assures a creditor against loss, (v) any contingent
reimbursement obligation with respect to any letters of credit, (vi) any Capital
Leases or leases for equipment regardless of whether treated as Capital Leases
on such Person’s financial statements, (vii) in the nature of guarantees of the
obligations described in clauses (i) through (v) above of any other Person; and
(viii) all interest, premiums, penalties, charges, fees, expenses and other
amounts due in connection with the payment and satisfaction in flail of the
obligations described in the foregoing clauses (i) through (vi) of this
definition.

 

“Information Statement” has the meaning set forth in Section 8.1.

 

“Intellectual Property” means all trademarks and trademark rights, trade names
and trade name rights, service marks and service mark rights, service names and
service name rights, social media and other web-based accounts (Twitter,
Google+, Facebook, YouTube, and other similar accounts), including login names
and passwords related thereto, patents and patent rights, utility models and
utility model rights, copyrights, mask work rights, brand names, trade dress,
product designs, product packaging, business and product names, logos, slogans,
rights of publicity, trade secrets, inventions (whether patentable or not),
invention disclosures, improvements, processes, formulae, industrial models,
processes, designs, specifications, technology, methodologies, computer software
(including all source code and object code), firmware, development tools, flow
charts, annotations, all Web addresses, sites and domain names, all data bases
and data collections and all rights therein, any other confidential and
proprietary right or information, whether or not subject to statutory
registration, and all related technical information, manufacturing, engineering
and technical drawings, know-how and all pending applications for and
registrations of patents, utility models, trademarks, service marks and
copyrights, and the right to sue for past infringement, if any, in connection
with any of the foregoing, and all documents, disks, records, files and other
media on which any of the foregoing is stored.

 

“Investor Rights Agreement” means the Investor Rights Agreement, dated August
19, 2005, by and among ACT Teleconferencing, Inc., Dolphin Direct Equity
Partners, LP, and the other parties thereto.

 

“Legal Requirements” means any law, statute, constitution, principle of common
law, resolution, ordinance, code, edict, Order, Consent decree, judgment, rule,
regulation, ruling, stock exchange requirement or requirement issued, enacted,
adopted, promulgated, implemented or otherwise put into effect by or under the
authority of any Governmental Body.

 

“Letter of Transmittal” has the meaning set forth in Section 3.3.

 

“Liability” means any liability or obligation of whatever kind or nature
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for Taxes.

 

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“Material Adverse Effect” means any state of facts, change, development, effect
or occurrence (any such item, an “Effect”) that has a material adverse effect
on: (i) the Business, assets, liabilities, operations, results of operations,
properties (including intangible properties), regulatory status or condition
(financial or otherwise) of Company and its Subsidiaries, taken as a whole; (ii)
the legality, validity, binding effect or enforceability of this Agreement; or
(iii) the ability of Company to perform its obligations under this Agreement.

 

“Merger” has the meaning set forth in the recitals.

 

“Net After-Tax Basis” means, with respect to the calculation of any
indemnification payment owed to any party pursuant to this Agreement,
calculation thereof in a manner taking into account any Taxes owing by the
indemnified party or its Affiliates as a result of receipt or accrual of the
indemnity payment and any savings in Taxes realized or reasonably realizable by
the indemnified party or its Affiliates as a result of the indemnified
liability.

 

“Net Monetary Assets” means the sum of (a) consolidated Cash of the Company;
plus (b) the consolidated utilizable pre-paid expenses and assets of the Company
of the type reflected on Exhibit A and determined in accordance with GAAP; plus
(c) Accounts Receivable; less (d) all monetary liabilities of the Company or any
of its Subsidiaries of the type reflected on Exhibit A (specifically including
any off balance sheet Liabilities, leases for equipment, and any other
Indebtedness of the Company or any of its Subsidiaries); and less (e)
Transaction Expenses.

 

“Non-Voting Preferred Stock” means the Company’s Non-Voting Preferred Stock, no
par value.

 

“Open Source Code” means any software code that is distributed as “free
software” or “open source software” or is otherwise distributed publicly in
source code form under terms that permit modification and redistribution of such
software. Open Source Code includes software code that is licensed under the GNU
General Public License, GNU Lesser General Public License, Mozilla License,
Common Public License, Apache License, BSD License, Artistic License, or Sun
Community Source License.

 

“Option” means, with respect to any Person, any security, right, subscription,
warrant, option, “phantom” stock right or other Contract that gives the right to
(i) purchase or otherwise receive or be issued any shares of capital stock or
other equity interests of such Person or any security of any kind convertible
into or exchangeable or exercisable for any shares of capital stock or other
equity interests of such Person or (ii) receive any benefits or rights similar
to any rights enjoyed by or accruing to the holder of shares of capital stock or
other equity interests of such Person, including any rights to participate in
the equity, income or election of directors or officers of such Person.

 

“Optionholder” means a holder of Company Options.

 

“Order” means any award, decision, ruling, verdict, writ, judgment, decree,
injunction or similar order entered, issued, made, or rendered by any
Governmental Body or by any arbitrator (in each such case whether preliminary or
final).

 

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“Ordinary Course of Business” means an action taken by a Person will be deemed
to have been taken in the “Ordinary Course of Business” only if: (i) such action
is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person; (ii) such
action is not required to be authorized by the board of directors of such Person
(or by any Person or group of Persons exercising similar authority); and (iii)
such action is similar in nature and magnitude to actions customarily taken,
without any authorization by the board of directors (or by any Person or group
of Persons exercising similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business as
such Person.

 

“Organizational Documents” means: (i) the articles or certificate of
incorporation and the bylaws of a corporation; (ii) the partnership agreement
and any statement of partnership of a general partnership; (iii) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (iv) the articles of organization or certificate of formation and
operating agreement of a limited liability company; (v) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of an Entity; (vi) any certificate of designations (or similar
document) governing the rights of the equity securities of any Entity; and (vii)
any amendment to or restatement of any of the foregoing.

 

“Payment Fund” means the Closing Date Aggregate Merger Consideration less the
Escrow Amount.

 

“PBGC” has the meaning set forth in Section 4.19(a).

 

“Permit” means licenses, permits, orders, consents, approvals, registrations,
authorizations, qualifications and filings which are required to be made with or
required under applicable Legal Requirements.

 

“Permitted Encumbrances” means (i) mechanics’, materialmen’s, warehousemen’s,
carriers’, workers’, or repairmen’s liens or other similar common law or
statutory Encumbrances arising or incurred in the Ordinary Course of Business
with respect to amounts not yet due and payable or being contested in good faith
by appropriate Proceedings with respect to which a reserve has been made,
including such amounts in respect of Closing Date Net Monetary Assets (or, prior
to the determination of Final Closing Date Net Monetary Assets (as finally
determined pursuant to Section 2.2(c)), Closing Date Net Monetary Assets), (ii)
liens for Taxes, assessments and other governmental charges not yet due and
payable or being contested in good faith by appropriate Proceedings (so long as
reserves have been provided in conformity with applicable Law and the accounting
principles applicable to the Financial Statements) and reflected in Final
Closing Date Net Monetary Assets (or, prior to the determination of Final
Closing Date Net Monetary Assets (as finally determined pursuant to Section
2.2(c)), Estimated Closing Date Net Monetary Assets), (iii) Encumbrances
described on Section 4.5 of the Disclosure Memorandum, and (iv) Encumbrances
securing no more than USD$ 439,000 of capital lease obligations.

 

“Person” means any individual, Entity or Governmental Body.

 

“PGi Secretary's Certificate” has the meaning set forth in Section 3.4.

 

“Post-Closing Tax Period” means any tax period (or portion thereof) beginning on
or after the Closing Date.

 

“Post-Signing Returns” has the meaning set forth in Section 7.2.

 

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“Pre-Closing Tax Period” means any tax period (or portion thereof) ending before
the Closing Date.

 

“Preferred Stock” means the Series AA Preferred Stock and the Non-Voting
Preferred Stock of the Company.

 

“Preliminary Adjustment Statement” has the meaning set forth in Section 2.2.

 

“Proceeding” means any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate
proceeding), hearing, inquiry, audit, examination or investigation commenced,
brought, conducted or heard by or before, or otherwise involving, any court or
tribunal or other Governmental Body or any arbitrator or arbitration panel.

 

“Ratable Portion” means, with respect to each Company Shareholder, its ratable
share of applicable distribution, payment or other amount, determined by
dividing: (a) the amount of the Aggregate Merger Consideration allocated to such
Company Shareholder, as set forth on Annex A; by (b) the Aggregate Merger
Consideration.

 

“Regulatory Payments” means any and all payments, fees, charges, contributions
or assessments required by or assessed under the rules, regulations or orders of
the Federal Communications Commission, including contributions to the federal
Universal Service Fund pursuant to 47 CFR §§ 54.706 through 54.713,
contributions to the cost of establishing numbering administration pursuant to
47 CFR § 52.32, contributions to the federal Telecommunications Relay Service
Fund pursuant to 47 CFR § 64.604, and regulatory fees assessed pursuant to 47
CFR § 1.1151 through 1.1167, in each case, as provided by such regulations at
any time and from time to time prior to the Closing; any and all similar
payments, fees, charges, contributions or assessments required by any
Governmental Body pursuant to any federal or state Legal Requirements or
regulation; and any and all interest or penalties resulting from the nonpayment
or late payment of any such payment, fee, charge, contribution or assessment or
any failure to file or delay in any filing associated therewith.

 

“Related Party” has the meaning set forth in Section 4.24.

 

“Relative Proportionate Percentage” means, with respect to a Selling
Stockholder, the “Relative Proportionate Percentage” specified in Annex A
opposite the name of such Selling Stockholder; provided that no Selling
Shareholder shall be liable for the breaches or inaccuracy of representations,
warranties and covenants of a Selling Shareholder other than itself.

 

“Representative” means, with respect to a particular Person, any director,
officer, employee, Affiliate, agent, consultant, advisor or other representative
of such Person, including attorneys, accountants, financial advisors, or any of
their respective Associates.

 

“Required Shareholder Approval” has the meaning set forth in Section 4.2(a).

 

“Second Amended and Restated Articles of Incorporation” has the meaning set
forth in Section 1.3.

 

“Second Amended and Restated Bylaws” has the meaning set forth in Section 1.3.

 

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“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Selling Shareholders” has the meaning set forth in the introduction.

 

“Selling Shareholder Consent” has the meaning set forth in Section 4.2(a).

 

“Series AA Preferred Stock” means the Company’s Series AA Convertible Preferred
Stock, no par value.

 

“Shareholders’ Representative” has the meaning set forth in Section 12.1.

 

“Shareholders’ Representatives Expenses” has the meaning set forth in Section
12.4.

 

“Straddle Tax Period” means any complete Tax period that includes but does not
end on the Closing Date.

 

“Subsidiary” means any Person in which Company or ATS, as the context requires,
directly or indirectly through Subsidiaries or otherwise, owns, beneficially or
of record, (i) an amount of voting securities of other interests in such Entity
that is sufficient to enable such Person to elect at least a majority of the
members of such Entity’s board of directors or other governing body, or (ii) at
least 50% of the outstanding equity or financial interests of such Entity.

 

“Subsidiary Equity Interest” has the meaning set forth in Section 4.3.

 

“Surviving Corporation” has the meaning set forth in Section 1.1.

 

“Takeover Statute” means a “fair price,” “moratorium,” “control share
acquisition” or other similar anti-takeover statute or regulation enacted under
state or federal laws in the United States.

 

“Target Net Monetary Assets” shall mean $14,948,000.

 

“Tax” or “Taxes” means any (i) tax (including any taxes based upon or measured
by capital gains, gross receipts, income, profits, sales, use and occupation,
and alternative or add-on minimum, telecommunications, value added, surcharge,
ad valorem, transfer, windfall or license profits, recording, franchise,
withholding, payroll, recapture, employment, excise, stamp, business license,
occupation, premium and property taxes, and any estimated taxes relating to any
of the foregoing), levy, assessment, tariff, duty (including any customs duty),
deficiency or fee, and any related charge or amount (together with any interest,
penalties, fines and additions imposed with respect to such amounts), imposed,
assessed or collected by or under the authority of any Governmental Body, (ii)
Liability for the payment of any amounts of the type described in clause (i) as
a result of being a member of an affiliated, consolidated, combined or unitary
group for any period, and (iii) Liability for the payment of any amounts of the
type described in clause (i) or (ii) as a result of any express or implied
obligation to indemnify any other Person or as a result of any obligations under
any agreements or arrangements with any other Person with respect to such
amounts and including any Liability for taxes of a predecessor Entity.

 

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“Tax Return” means any return (including any information return), report,
statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information filed with or submitted
to, or required to be filed with or submitted to, any Governmental Body,
including any schedule or attachment thereto, and including any amendment
thereof,  in connection with the determination, assessment, collection or
payment of any Tax or in connection with the administration, implementation or
enforcement of or compliance with any Legal Requirement relating to any Tax.

 

“Technology Assets” means: (i) all computer equipment, conferencing and
conferencing related equipment, devices, messaging and messaging related
equipment (and all lease rights associated with any such equipment to the extent
legally assignable without the Consent of any Person), including data processing
hardware and related telecommunications equipment, media and tools, and any
equipment subject to an operating lease (to the extent legally assignable
without the Consent of any Person), in each case that is used or useable in
connection with the Business; (ii) all co-location and related rights, if any,
related to the Business; (iii) all Intellectual Property owned by or licensed to
(to the extent legally assignable without the Consent of any Person) Company or
any of its Subsidiaries; (iv) the Documentation; (v) all data and information,
in any medium, including proprietary information, technical information, source
code and object code relating to any of Company’s or any of its Subsidiary’s s
properties or assets; and (vi) all books, records, files, papers or software
including all software related to frill-service and self-service audio
conference calling, on-demand reservationless automated audio conference
calling, operator-assisted conferencing and web conferencing, and all delivery
platforms, gateways, “on ramp” connections, access points, client satisfaction
software, and financial record maintenance and management software, whether in
hard copy or computer format, used or held for use in the Business.

 

“Transaction Document” means this Agreement, the Escrow Agreement, the Exchange
Agreement, the Amendment to Accounting Function Service Agreement, and the other
agreements, instruments, certificates and documents contemplated hereby and
thereby, including each exhibit and schedule hereto and thereto.

 

“Transaction Expenses” mean (i) all costs and expenses paid or payable by the
Company or any of its Subsidiaries to third parties in connection with or
otherwise triggered by the transactions contemplated by this Agreement,
including legal counsel, accountants, brokers and tax, investment and other
advisors, any consent payments, severance payments, change of control payments
or retention payments, any payments due under the Second Amended and Restated
ACT Teleconferencing, Inc. 2008 Value Participation Plan, any payments made by
the Company to any Optionholders in connection with the termination of such
Options pursuant to Section 2.5 and any costs or expenses associated with
obtaining the D&O Tail Policy, (ii) to the extent not otherwise reflected in the
calculation of Net Monetary Assets, and in all cases (iii) regardless of whether
such costs and expenses were required to be reflected on the Company’s balance
sheet as of the Closing Date in accordance with GAAP.

 

“Transfer Tax” or “Transfer Taxes” means any federal, state, county, local,
foreign and other sales, use, transfer, conveyance, documentary transfer,
recording or other similar tax, fee or charge imposed upon the sale, transfer or
assignment of property or any interest therein or the recording thereof, and any
penalty, addition to tax or interest with respect thereto.

 

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“Upward Adjustment” has the meaning set forth in Section 2.2.

 

“Upward Adjustment Amount” has the meaning set forth in Section 2.2.

 

“USF Payments” means those payments required to be deposited into the Universal
Service Fund, as required by the Telecommunications Act of 1996, or similar
payments, charges or fees, whether payable to the Federal Communications
Commission, any state public service or utility commission (or any other
governmental or regulatory authority), or any telecommunications carrier or
provider.

 

“Value Participation Plan” means the ACT Teleconferencing, Inc. 2008 Value
Participation Plan restated effective August 30, 2013.

 

“Value Participation Plan Payment” has the meaning set forth in Section 8.10.

 

15.2         Interpretation.

 

(a)          In interpreting this Agreement, the following rules of construction
shall apply:

 

(i)          the headings of particular provisions of this Agreement are
inserted for convenience only and will not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement;

 

(ii)         where the context requires, the use of the singular form in this
Agreement will include the plural, the use of the plural will include the
singular, and the use of any gender will include any and all genders;

 

(iii)        the word “including” (and, with correlative meaning, the word
“include”) means that the generality of any description preceding such word is
not limited, and the words “shall” and “will” are used interchangeably and have
the same meaning;

 

(iv)        references in this Agreement to “Articles”, “Sections”, or
“Exhibits” shall be to Articles, Sections or Exhibits of or to this Agreement
unless otherwise specifically provided;

 

(v)         references to any Contract are to such Contract as amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof;

 

(vi)        references to any Legal Requirement shall include any amendments of
the same and any successor Legal Requirement;

 

(vii)       references to any Person include the successors and permitted
assigns of such Person;

 

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(viii)      references “from” or “through” any date mean, unless otherwise
specified, “from and including” or “through and including”, respectively;

 

(ix)         the terms “hereof” “herein,” “hereby” and derivative or similar
words refer to this entire Agreement as a whole and not to any particular
Article, Section or other subdivision; and

 

(x)          unless otherwise specified in this Agreement, all accounting terms
used herein and not expressly defined herein shall be interpreted in accordance
with GAAP.

 

(b)          When used herein, the phrase “to the knowledge of” any Person, “to
the best knowledge of” any Person, “known to” any Person or any similar phrase,
means, with respect to Company, the actual knowledge of the indviduals set forth
on Schedule 15.2(b) after making due inquiry of the matter in question.

 

(c)          This Agreement was negotiated by the parties with the benefit of
legal representation and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against any party shall
not apply to any construction or interpretation hereof.

 

[Signatures Follow on Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.

 

  PGi:       PREMIERE GLOBAL SERVICES, INC.         By: /s/ L. Scott Askins
Leonard   Name: L. Scott Askins Leonard   Title: EVP – Legal, General Counsel
and Secretary         ATS:       AMERICAN TELECONFERENCING SERVICES, LTD.      
  By: /s/ S. Scott Askins Leonard   Name: L. Scott Askins Leonard   Title: EVP –
Legal         MERGER SUB:       Alpine Acquisition Corp.         By: /s/ L.
Scott Askins Leonard   Name: L. Scott Askins Leonard   Title: EVP – Legal

 

[Agreement and Plan of Merger]

 

 

 

 

  COMPANY:       ACT TELECONFERENCING, INC.         By: /s/ Peter E. Salas  
Name: Peter E. Salas   Title: CEO         SELLING SHAREHOLDERS:       DOLPHIN
DIRECT EQUITY PARTNERS LP         By: /s/ Peter E. Salas   Name: Peter E. Salas
  Title: Authorized Person         DOLPHIN OFFSHORE PARTNERS LP         By: /s/
Peter E. Salas   Name: Peter E. Salas   Title: Authorized Person        
SHAREHOLDERS’ REPRESENTATIVE:       DOLPHIN DIRECT EQUITY PARTNERS LP,   as
Shareholders’ Representative         By: /s/ Peter E. Salas   Name: Peter E.
Salas   Title: Authorized Person

 

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