AGREEMENT AND PLAN OF MERGER
by and among
CELIANT CORPORATION,
▇▇▇▇▇▇ CORPORATION
and
PTOLEMY ACQUISITION CO.
DATED AS OF FEBRUARY 18, 2002
TABLE OF CONTENTS
Page
ARTICLE I. THE MERGER....................................................1
Section 1.1. The Merger.................................................1
Section 1.2. Effective Time of the Merger...............................1
Section 1.3. Closing....................................................2
ARTICLE II. EFFECTS OF THE MERGER.........................................2
Section 2.1. Certificate of Incorporation...............................2
Section 2.2. By-Laws....................................................2
Section 2.3. Directors and Officers of Surviving Corporation............2
Section 2.4. Directors and Officers of the Company......................2
ARTICLE III. CONVERSION OF SHARES..........................................3
Section 3.1. Merger Consideration.......................................3
Section 3.2. Exchange of Merger Consideration; Procedures...............4
Section 3.3. Dividends..................................................4
Section 3.4. No Fractional Shares.......................................4
Section 3.5. Closing of Celiant Transfer Books..........................5
Section 3.6. Further Assurances.........................................5
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF CELIANT.....................5
Section 4.1. Organization and Qualification of Celiant..................5
Section 4.2. Authorization..............................................5
Section 4.3. Capitalization.............................................6
Section 4.4. Title and Condition of Assets..............................6
Section 4.5. Real Property..............................................7
Section 4.6. Contracts and Commitments..................................7
Section 4.7. Permits....................................................9
Section 4.8. No Conflict or Violation; Consents.........................9
Section 4.9. Absence of Certain Changes................................10
Section 4.10. Litigation; Etc...........................................10
Section 4.11. Undisclosed Liabilities...................................11
Section 4.12. Compliance with Law.......................................11
Section 4.13. Proprietary Rights........................................11
Section 4.14. Employees.................................................12
Section 4.15. Employee Benefit Plans....................................13
Section 4.16. Environmental Liability...................................13
Section 4.17. Tax Matters...............................................14
Section 4.18. Financial Statements......................................15
Section 4.19. Insurance.................................................16
Section 4.20. Brokers...................................................16
Section 4.21. Affiliate and Certain Other Transactions..................16
Section 4.22. Bank Accounts and Powers of Attorney......................16
Section 4.23. Disclosure................................................16
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SUB........17
Section 5.1. Organization and Qualification of the Company.............17
Section 5.2. Authorization.............................................17
Section 5.3. Capitalization............................................17
Section 5.4. Title and Condition of Assets.............................18
Section 5.5. Permits...................................................18
Section 5.6. No Conflict or Violation; Consents........................18
Section 5.7. Reports...................................................19
Section 5.8. SEC Filings; Financial Statements.........................19
Section 5.9. Absence of Certain Changes................................19
Section 5.10. Litigation; Etc...........................................20
Section 5.11. Undisclosed Liabilities...................................20
Section 5.12. Compliance with Law.......................................20
Section 5.13. Brokers...................................................20
Section 5.14. Employee Benefit Plans....................................20
Section 5.15. Environmental Liability...................................21
Section 5.16. Tax Matters...............................................21
Section 5.17. Contracts.................................................22
Section 5.18. Financing.................................................23
Section 5.19. Proprietary Rights........................................23
Section 5.20. Disclosure................................................24
ARTICLE VI. CONDUCT OF BUSINESS PENDING THE MERGER.......................24
Section 6.1. Conduct of Business by Celiant Pending the Merger.........24
Section 6.2. Conduct of Business by the Company Pending the Merger.....26
Section 6.3. Conduct of Business by Sub Pending the Merger.............27
ARTICLE VII. ADDITIONAL AGREEMENTS........................................27
Section 7.1. Access and Information....................................27
Section 7.2. No Other Negotiations.....................................27
Section 7.3. Stockholder Approval......................................29
Section 7.4. Best Efforts..............................................29
Section 7.5. Voting Agreement..........................................30
Section 7.6. Public Announcements......................................30
Section 7.7. Celiant Stock Options.....................................30
Section 7.8. Expenses..................................................30
Section 7.9. Listing Application.......................................30
Section 7.10. Supplemental Disclosure...................................30
Section 7.11. Conveyance Taxes..........................................31
Section 7.12. Celiant Employees.........................................31
Section 7.13. Celiant Tax Opinion Certificate...........................31
Section 7.14. Company Tax Opinion Certificate...........................31
Section 7.15. Other Tax-Related Certificates............................31
Section 7.16. Other Tax Matters.........................................31
ARTICLE VIII. CONDITIONS TO CONSUMMATION OF THE MERGER.....................32
Section 8.1. Conditions to Each Party's Obligation to Effect the
Merger....................................................32
Section 8.2. Conditions to Obligation of the Company and Sub to
Effect the Merger.........................................33
Section 8.3. Conditions to Obligation of Celiant to Effect the
Merger....................................................34
ARTICLE IX. TERMINATION..................................................35
Section 9.1. Termination...............................................35
Section 9.2. Effect of Termination.....................................36
ARTICLE X. GENERAL PROVISIONS...........................................37
Section 10.1. Certain Definitions.......................................37
Section 10.2. Amendment and Modification................................38
Section 10.3. Waiver....................................................38
Section 10.4. Survivability; Investigations.............................38
Section 10.5. Notices...................................................38
Section 10.6. Descriptive Headings; Interpretation......................39
Section 10.7. Entire Agreement; Assignment..............................39
Section 10.8. Governing Law.............................................39
Section 10.9. Severability..............................................39
Section 10.10. Specific Performance......................................40
Section 10.11. Counterparts..............................................40
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 18, 2002 (this
"Agreement"), by and among Celiant Corporation, a Delaware corporation
("Celiant"), ▇▇▇▇▇▇ Corporation, a Delaware corporation (the "Company") and
Ptolemy Acquisition Co., a Delaware corporation and a wholly owned subsidiary
of the Company ("Sub").
WHEREAS, the Boards of Directors of the Company and Sub and Celiant deem
it advisable and in the best interests of their respective stockholders that
Celiant merge with and into Sub pursuant to the terms and conditions of this
Agreement, and, in furtherance thereof, such Boards of Directors (and the
Company as the sole stockholder of Sub) have approved this Agreement and the
merger of Celiant with and into Sub in accordance with the terms of this
Agreement and the General Corporation Law of the State of Delaware (the
"DGCL"); and
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the Company's willingness to enter into
this Agreement, each of the stockholders of Celiant (the "Stockholders") is
entering into an agreement with the Company in the form attached hereto as
Exhibit A (the "Voting Agreement") to vote all of its shares of Celiant Common
Stock (as defined herein) and Celiant Preferred Stock (as defined herein)
according to the terms set forth in the Voting Agreement; and
WHEREAS, for federal income tax purposes, it is intended that the Merger
(as defined herein) shall qualify as a tax-free reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code") and that this Agreement constitute a plan of reorganization;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties, intending to be legally bound, agree as follows:
ARTICLE I.
THE MERGER
Section 1.1. The Merger. In accordance with the provisions of this
Agreement and the DGCL, at the Effective Time (as defined in Section 1.2),
Celiant shall be merged with and into Sub (the "Merger"), the separate
existence of Celiant shall thereupon cease, and Sub shall be the surviving
corporation in the Merger (sometimes hereinafter called the "Surviving
Corporation") and shall continue its corporate existence under the laws of the
State of Delaware as a wholly owned subsidiary of the Company. The Merger
shall have the effects set forth in Section 259 of the DGCL.
Section 1.2. Effective Time of the Merger. The Merger shall become
effective at the time of filing of a properly executed Certificate of Merger
in the form required by and executed in accordance with the provisions of the
DGCL. The parties to this Agreement shall cause such filing to be made
simultaneously with the Closing (as defined in Section 1.3). When used in this
Agreement, the term "Effective Time" shall mean the date and time at which the
Merger shall become effective.
Section 1.3. Closing. Subject to Section 9, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place
at the offices of ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ on (a) the later to occur of (i) the second business day following
the date on which all of the conditions set forth in Article VIII are
satisfied or waived or (ii) June 3, 2002, or (b) on such other date and at
such other time and place as Celiant and the Company shall agree (such date,
the "Closing Date").
ARTICLE II.
EFFECTS OF THE MERGER
Section 2.1. Certificate of Incorporation. The Certificate of
Incorporation of Sub in effect at the Effective Time shall be the Certificate
of Incorporation of the Surviving Corporation until amended in accordance with
applicable law, except that the name of the Surviving Corporation shall be
"Celiant Corporation".
Section 2.2. By-Laws. The By-Laws of Sub as in effect at the Effective
Time shall be the By-Laws of the Surviving Corporation until amended in
accordance with applicable law.
Section 2.3. Directors and Officers of Surviving Corporation.
(a) ▇▇▇▇▇ ▇. English, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall
be the initial directors of the Surviving Corporation and each shall hold
office from the Effective Time until his respective successor is duly elected
or appointed and qualified in the manner provided in the Certificate of
Incorporation or By-Laws of the Surviving Corporation or as otherwise provided
by law.
(b) The officers of Celiant at the Effective Time, who shall be as
set forth on Exhibit B, shall be the initial officers of the Surviving
Corporation and each shall hold office until his respective successor is duly
elected or appointed and qualified in the manner provided in the Certificate
of Incorporation or By-Laws of the Surviving Corporation or as otherwise
provided by law.
Section 2.4. Directors and Officers of the Company.
(a) The directors of the Company at the Effective Time shall
continue as the directors of the Company after the Effective Time; except that
the Company shall cause the number of directors serving on its board to be
increased to ten (10) and cause ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇ to be elected
to the board and each shall hold office from the period commencing one
business day after the Effective Time until his respective successor is duly
elected or appointed and qualified in the manner provided in the Certificate
of Incorporation or By-Laws of the Company or as otherwise provided by law.
(b) The officers of the Company at the Effective Time shall continue
as the officers of the Company after the Effective Time except that such
employees of Celiant as the parties may agree prior to execution of this
Agreement (including without limitation ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, who will become
President and Chief Operating Officer), will be appointed to designated
officer positions of the Company one business day after the Effective Time and
each shall hold office until his respective successor is duly elected or
appointed and qualified in the manner provided in the Certificate of
Incorporation or By-Laws of the Company or as otherwise provided by law.
ARTICLE III.
CONVERSION OF SHARES
Section 3.1. Merger Consideration.
(a) At the Effective Time and subject to the provisions of this
Article III, by virtue of the Merger and without any further action on the
part of any holder thereof, all of the issued and outstanding Celiant Common
Stock and the Celiant Preferred Stock (as defined below) shall be converted
and exchanged for the right to receive merger consideration in the aggregate
of $119,621,923 in cash and 16,278,805 shares of Common Stock of the Company,
par value $0.01 per share (the "Company Common Stock") (collectively the
"Merger Consideration").
(i) The registered holders of Common Stock of Celiant, par
value $.01 per share (the "Celiant Common Stock") issued and outstanding
immediately prior to the Effective Time (other than shares as to which
dissenters' rights shall have been duly demanded pursuant to the DGCL
("Dissenting Shares")) shall have such shares converted into the right to
receive, in the aggregate, $4.735360195 in cash to be allocated as set forth
on Schedule 3.1, payable immediately upon the surrender of the certificate (or
a lost security affidavit in form reasonably satisfactory to the Company)
formerly representing such share of Celiant Common Stock in accordance with
Section 3.2 of this Agreement;
(ii) The registered holders of Preferred Stock of Celiant, par
value $0.01 per share (the "Celiant Preferred Stock"), issued and outstanding
immediately prior to the Effective Time (including, without limitation, PIK
Shares (as defined in the Amended and Restated Certificate of Incorporation of
Celiant) corresponding to such Preferred Stock and accrued through the date
hereof but excluding Dissenting Shares) shall in the aggregate have such
shares converted into the right to receive $119,621,918 in cash and 16,278,805
shares of Company Common Stock, such portion of the Merger Consideration to be
allocated as set forth on Schedule 3.1, payable immediately upon the surrender
of the certificate formerly representing such share of Celiant Preferred Stock
(or lost security affidavit in form reasonably satisfactory to the Company) in
accordance with Section 3.2 of this Agreement;
(b) The holders of Dissenting Shares, if any, shall be entitled to
payment by the Company of the fair value of such shares in cash to the extent
permitted by and in accordance with the provisions of Section 262 of the DGCL;
provided, however, that (i) if any holder of Dissenting Shares shall deliver a
written withdrawal of such holder's demand for the fair value of such shares,
or (ii) if any holder fails to establish such holder's entitlement to rights
to payment as provided in such Section 262 of the DGCL, such holder or holders
(as the case may be) shall forfeit such right to payment for such shares and
such shares shall thereupon be deemed to have been converted into the Merger
Consideration pursuant to Section 3.1(a) and/or 3.1(b) as of the Effective
Time. The Company shall be solely responsible for, and shall pay out of its
own funds, any amounts which become due and payable to holders of Dissenting
Shares. Celiant shall notify the Company of each demand for dissenters' rights
under the DGCL promptly after such demand is received by Celiant.
Section 3.2. Exchange of Merger Consideration; Procedures. At the
Closing, each of the Stockholders will deliver the certificates representing
their shares of Celiant Common Stock and Celiant Preferred Stock (the
"Certificates") that were converted pursuant to Section 3.1 into the Merger
Consideration and the Company will deliver to each such Stockholder in
exchange therefor, the portion of the aggregate Merger Consideration set forth
opposite such Stockholder's name on Schedule 3.1, after giving effect to any
required tax withholdings, as well as cash in lieu of any fractional shares of
the Company Common Stock to which such Stockholder is entitled pursuant to
Section 3.4 and any dividends or distributions to which such Stockholder is
entitled pursuant to Section 3.3. The Certificate(s) surrendered pursuant to
this Section 3.2 shall forthwith be cancelled. Until surrendered as
contemplated by this Section 3.2, each Certificate, other than Certificates
evidencing Dissenting Shares, shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration, cash in lieu of any fractional shares of Company Common Stock
and any dividends or distributions, which may be payable pursuant to Section
3.3 hereof.
Section 3.3. Dividends. No dividends or distributions that are declared
on shares of Company Common Stock will be paid to persons entitled to receive
certificates representing shares of Company Common Stock until such persons
surrender their Certificates. Upon such surrender, there shall be paid to the
person in whose name the certificates representing such shares of Company
Common Stock shall be issued, any dividends or distributions with respect to
such shares of Company Common Stock which have a record date on or after the
Effective Time and shall have become payable between the Effective Time and
the time of such surrender. In no event shall the person entitled to receive
such dividends or distributions be entitled to receive interest on such
distribution or dividend.
Section 3.4. No Fractional Shares. No certificates or scrip representing
fractional shares of Company Common Stock shall be issued upon the surrender
for exchange of Certificates, and such fractional interests shall not entitle
the owner thereof to vote or to any rights of a security holder. In lieu of
any such fractional shares, each holder of Celiant Common Stock or Celiant
Preferred Stock who would otherwise have been entitled to a fraction of a
share of Company Common Stock upon surrender of such holder's Certificates
will be entitled to receive a cash payment (without interest) determined by
multiplying (i) the fractional interest to which such holder would otherwise
be entitled (after taking into account all shares of Company Common Stock then
held of record by such holder) and (ii) the average of the per share closing
prices for Company Common Stock on the Nasdaq National Market ("NNM") for the
25 trading days immediately preceding the date hereof.
Section 3.5. Closing of Celiant Transfer Books. At the Effective Time,
the stock transfer books of Celiant shall be closed and no transfer of shares
of Celiant Common Stock or Celiant Preferred Stock shall thereafter be made.
If, after the Effective Time, Certificates are presented to the Company, they
shall be cancelled and exchanged as provided in this Article III.
Section 3.6. Further Assurances. If, at any time after the Effective
Time, the Company shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Celiant acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, the officers of the Company shall be authorized to
execute and deliver, in the name and on behalf of Celiant or otherwise, all
such deeds, bills of sale, assignments and assurances and to take and do, in
such names and on such behalves or otherwise, all such other actions and
things as may be reasonably necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out the purposes
of this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF CELIANT
Celiant hereby represents and warrants to the Company and Sub as follows:
Section 4.1. Organization and Qualification of Celiant.
(a) Celiant is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware. Celiant has all
requisite corporate power and authority to own or lease all of its properties
and assets and to conduct its business (the "Business") as it is now being
conducted, and Celiant is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the nature of the Business or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except for those jurisdictions
where the failure to be so qualified or licensed or to be in good standing
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on Celiant. Celiant has no direct or indirect
subsidiaries and has no equity interest in any other Person. Correct and
complete copies of the Certificate of Incorporation and By-Laws of Celiant, as
currently in effect, have been provided to the Company by Celiant.
(b) The corporate minute books of Celiant accurately reflect in all
material respects all actions taken by the board of directors, including any
committees, and the stockholders of Celiant. Celiant has provided to the
Company a copy of the minute books of Celiant that is correct and complete in
all material respects.
Section 4.2. Authorization. Celiant has the requisite corporate power and
authority to execute and deliver this Agreement, and subject to Stockholder
Approval (as hereinafter defined), to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
and validly approved by the Celiant board of directors. No other corporate
proceedings on the part of Celiant are necessary to approve this Agreement or,
except for the Stockholder Approval, to consummate the transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by Celiant and constitutes the valid and binding
obligation of Celiant, enforceable against Celiant in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 4.3. Capitalization. The authorized capital stock of Celiant
consists of (a) 129,583,333 shares of Celiant Common Stock, and (b)
104,583,333 shares of Celiant Preferred Stock of which 50,416,666 shares have
been designated as "Series A-1 Convertible Participating Preferred Stock" and
54,166,667 shares have been designated as "Series A-2 Convertible
Participating Preferred Stock." As of the date hereof, (i) 1 share of Celiant
Common Stock is issued and outstanding, (ii) 36,666,666 (and assuming the
issuance of the PIK Shares on the date hereof 38,109,954) shares of Series A-1
Preferred Stock of Celiant are issued and outstanding and (iii) 41,666,667
(and assuming the issuance of the PIK Shares on the date hereof 43,461,188)
shares of Series A-2 Preferred Stock of Celiant are issued and outstanding. As
of the date hereof, 25,000,000 shares of Celiant Common Stock are reserved for
issuance pursuant to the FS Corp. 2001 Stock Option Plan (the "Celiant Stock
Option Plan"). Except as set forth on Schedule 4.3, the issued and outstanding
shares of Celiant's capital stock have been duly authorized and validly issued
and are fully paid, nonassessable and free of statutory preemptive rights and
contractual stockholder preemptive rights, with no personal liability
attaching to the ownership thereof. Except as set forth on Schedule 4.3,
Celiant does not have and is not bound by any outstanding subscriptions,
options, voting trusts, convertible securities, warrants, calls, commitments
or agreements of any character or kind calling for the purchase, issuance or
grant of any additional shares of its capital stock or restricting the
transfer of its capital stock. Schedule 4.3 contains a complete and correct
list of (i) the name of each holder of an option, warrant or right to acquire
capital stock or other securities of Celiant, (ii) the number of shares of
capital stock (or number, principal amount and type of other securities)
subject to each such option, warrant or right, (iii) the current exercise
price (per share or otherwise) of each such option, warrant or right and (iv)
a vesting schedule for such options, warrants or rights.
Section 4.4. Title and Condition of Assets. Except as set forth in
Schedule 4.4, Celiant has good and merchantable title to, or a valid leasehold
interest in, all of the assets and properties owned or licensed by Celiant or
as to which Celiant has legally enforceable rights to use, including those
assets and properties reflected on the Interim Balance Sheet (as hereinafter
defined) or acquired by Celiant after the date of the Interim Balance Sheet
(and excluding those assets or properties disposed of by Celiant (y) in the
ordinary course of Business consistent with past practice or (z) as otherwise
permitted pursuant to the provisions of this Agreement (the "Acquired
Assets"), free and clear of all Liens, except for Permitted Liens. The
Acquired Assets constitute all the assets necessary for the conduct of the
Business after the Closing by the Surviving Corporation in the manner as
presently conducted by Celiant. "Interim Balance Sheet" means the unaudited
balance sheet of Celiant as of December 31, 2001 provided to the Company.
Section 4.5. Real Property. Celiant owns no real property. Schedule 4.5
sets forth all leases, subleases and other agreements (the "Real Property
Leases") under which Celiant uses or occupies or has the right to use or
occupy or grants any other party the right to use or occupy, now or in the
future, any real property. Correct and complete copies of all the Real
Property Leases (and all amendments, supplements and modifications thereto)
have been made available to the Company. Assuming that (A) each Real Property
Lease is legal, valid, binding and enforceable as to each party thereto (other
than Celiant) and (B) each Real Property Lease is in full force and effect as
to each party thereto (other than Celiant), each Real Property Lease
constitutes the valid and legally binding obligation of Celiant, except to the
extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and is in full force and effect. To Celiant's knowledge,
each Real Property Lease is legal, valid, binding and enforceable as to each
other party thereto. All rent and other sums and charges payable by Celiant as
tenant under each Real Property Lease are current and no termination event or
condition or uncured default of a material nature on the part of Celiant or,
to Celiant's knowledge, the landlord, exists under any Real Property Lease,
and no party has given notice to Celiant of an alleged material breach or
default under such Real Property Lease. Assuming the assumptions described in
the immediately preceding clauses (A) and (B) are true and correct, Celiant
has good and valid leasehold interests in each parcel of property leased by
it, free and clear of all Liens except Permitted Liens. No party to any such
Real Property Lease has given notice to Celiant of, or made a written claim
against Celiant with respect to, any material default under such Real Property
Lease.
Section 4.6. Contracts and Commitments.
(a) Except as set forth on Schedule 4.6, Celiant is not a party to
nor is Celiant bound by any written:
(i) Contract for the employment of any officer of Celiant;
(ii) Contract under which Celiant has made advances or loans to
any Person, other than advances for business expenses made to employees in the
ordinary course of business;
(iii) Contract for borrowed money;
(iv) Contract, other than the Real Property Leases, under which
Celiant is lessee of or holds or operates any property owned by any other
Person under which the annual rental payments exceed $100,000;
(v) Contract under which Celiant is lessor of or permits any
third Person to hold or operate any material property owned or controlled by
Celiant;
(vi) sales, distribution, dealer or manufacturer's
representative or franchise Contract;
(vii) Contract (other than any Core Agreement or any
Proprietary Right Contract (as defined below)) prohibiting or restricting
Celiant from freely engaging in any business or competing anywhere in the
world;
(viii) Contract (other than any Real Property Lease, Core
Agreement or any Contract evidencing any Proprietary Right) granting a right
of first refusal or first negotiation or containing most favored
customer/nation or price redetermination or change of control provisions;
(ix) Contract with any supplier containing any provision
permitting any party other than Celiant to renegotiate the price or other
terms, or containing any pay-back, retroactive adjustment or other similar
provision, upon the occurrence of a failure by Celiant to meet its obligations
under the Contract when due or the occurrence of any other event involving
annual consideration of at least $50,000 or $100,000 in the aggregate;
(x) any capital leases which involve annual consideration in
excess of $25,000;
(xi) Contract (other than any Core Agreement or any Contract
evidencing any Proprietary Right) relating to joint ventures or agreements
involving a sharing of profits;
(xii) Contract (other than any Real Property Lease) relating to
cleanup, abatement or other actions in connection with environmental
liabilities;
(xiii) Contract (other than any Real Property Lease, Core
Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Agreement (as defined below) or other Contract
disclosed pursuant to any other provision of this Agreement, including without
limitation, this Section 4.6(a) and Sections 4.14, 4.15, 4.17, 4.19 or 4.21)
with a term of more than six months which (A) is not terminable by Celiant
upon 30 days' or less notice at any time without penalty and (B) involves a
consideration in excess of $100,000 per annum; and
(xiv) Contract (other than any Real Property Lease, Core
Agreement or any Proprietary Rights Contract), the consequences of a default,
termination, non-renewal or acceleration could reasonably be expected to have
a Material Adverse Effect on Celiant.
(b) Celiant has provided the Company a correct and complete copy of
each written Material Contract (as defined below), including, without
limitation, the Contracts identified with an asterisk on Schedule 4.6
(collectively, the "Core Agreements"). Except as set forth in Schedule 4.6,
and assuming that (A) each Material Contract is legal, valid, binding and
enforceable as to each party thereto (other than Celiant) and (B) each Consent
(as defined below) is obtained and (C) each Material Contract is in full force
and effect as to each party thereto (other than Celiant), (i) each Material
Contract, including, without limitation, the Core Agreements, is legal, valid,
binding, and enforceable in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights in general and subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law), and in full force and effect, (ii) Celiant is not, and, to Celiant's
knowledge, no other party is, in breach or default of any Material Contract
including, without limitation, the Core Agreements, and to the knowledge of
Celiant no event has occurred which would constitute a breach or default
(including any breach or default occurring upon notice or lapse of time, or
both) that would result in or permit termination, modification or acceleration
under any Material Contract including, without limitation, the Core
Agreements, and (iii) Celiant has not, and, to Celiant's knowledge, no other
party has, repudiated any provision of any Material Contract including,
without limitation, the Core Agreements. Except as set forth on Schedule 4.6,
Celiant has not received or issued any notice of termination or non-renewal of
any Material Contract, including, without limitation, the Core Agreements, and
has no knowledge that the other party thereto has an intention to terminate or
fail to renew a Material Contract, including, without limitation, the Core
Agreements. "Contract" means any written agreement, personal or real property
lease, contract, note, loan, evidence of indebtedness, purchase order, letter
of credit, franchise agreement, undertaking, covenant-not-to-compete, license,
instrument, obligation or commitment: (a) to which Celiant is a party or (b)
by which Celiant is bound. "Material Contract" means (i) the Core Agreements,
(ii) each Contract evidencing Proprietary Rights and (iii) each Contract
required to be disclosed on Schedule 4.6, provided that the mere disclosure of
any Contract on Schedule 4.6 shall not be dispositive that such Contract is
required to be disclosed on such Schedule.
Section 4.7. Permits. Celiant has all Permits required to conduct its
Business as now being conducted, except any such Permit the absence of which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on Celiant ("Material Permits"). All the Material
Permits are valid and in full force and effect. There is not now pending, nor
to the best knowledge of Celiant, threatened, any Action (as hereafter
defined) by any Person or by or before any Governmental Authority (as
hereafter defined) to revoke, cancel, rescind, modify, or refuse to renew any
of the Material Permits and, to the knowledge of Celiant, there exist no facts
or circumstances that could reasonably be expected to give rise to such
Action. "Permits" means all licenses, permits, franchises, approvals,
authorizations, certificates, registrations, consents or orders of, or filings
with, any Governmental Authority used or held for use in the operation of the
Business and all other rights and privileges granted by a Governmental
Authority necessary to allow the Business to own and operate its business
without any violation of law.
Section 4.8. No Conflict or Violation; Consents.
(a) Except as set forth on Schedule 4.8 (collectively, the
"Conflicts"), the execution, delivery and performance by Celiant of this
Agreement, the consummation of the transactions contemplated by this Agreement
and the compliance by Celiant with any of the provisions hereof or thereof,
will not (i) violate or conflict with any provision of the Certificate of
Incorporation or By-Laws of Celiant, (ii) violate, conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under, or increase the amount payable
by Celiant under, or result in the creation of any Lien upon any of the
Acquired Assets under, any of the terms, conditions or provisions of any
Material Contract, including, without limitation, the Core Agreements, or any
Material Permit (x) to which Celiant is a party or (y) by which Celiant, the
Acquired Assets or the Business are bound, or (iii) violate any statute, rule,
regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree
or award applicable to Celiant, except in all cases any such violation,
conflict, default, breach, termination, acceleration or creation of any Lien
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect on Celiant.
(b) Except in connection with or in order to comply with the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act") or as set forth in Schedule 4.8, no consent, approval or authorization
of, or withholding of objection on the part of, or filing, registration or
qualification with, or notice to (collectively, "Approvals" and, together with
the Approvals required to remedy or waive the Conflicts, the "Consents") any
court, administrative agency, commission or other governmental authority or
instrumentality, whether federal, state, local or foreign (each a
"Governmental Authority") is necessary in connection with the execution and
delivery by Celiant of this Agreement and the performance by Celiant of the
transactions contemplated by this Agreement.
Section 4.9. Absence of Certain Changes. Since September 30, 2001, no
event has occurred which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect on Celiant or the Business.
Except as set forth in Schedule 4.9, since September 30, 2001, Celiant has not
(i) declared or made any payment or distribution of cash or other property to
its stockholders with respect to its capital stock or other equity securities
or purchased or redeemed any shares of its capital stock or other equity
securities (including any warrants, options or other rights to acquire its
capital stock or other equity securities); (ii) sold, assigned or transferred
any of its tangible assets, except in the ordinary course of business
consistent with past practice, or canceled any debts or claims; or (iii) sold,
assigned or transferred any Proprietary Rights (as defined below), except in
the ordinary course of business consistent with past practice.
Section 4.10. Litigation; Etc. Except as disclosed in Schedule 4.10 and
except for Actions (as defined below) that could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect on
Celiant, there is no action, order, writ, injunction, judgment or decree
outstanding or any claim, suit, litigation, proceeding, hearing labor dispute,
arbitration action, governmental audit or investigation (collectively,
"Actions"): (i) pending, or, to Celiant's knowledge, threatened against
Celiant or (ii) pending, or, to Celiant's knowledge, threatened that seek to
delay, limit or enjoin the transactions contemplated by this Agreement. To the
knowledge of Celiant, there exists no facts or circumstances that could
reasonably be expected to give rise to an Action of the type described in
clause (i) and (ii) above. Except as set forth on Schedule 4.10 and except as
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on Celiant, Celiant is not in default with respect to,
or subject to, any judgment, order, writ, injunction or decree of any court or
Governmental Authority, and there are no unsatisfied judgments against Celiant
or the Acquired Assets. None of Celiant nor the Acquired Assets is subject to
any regulatory restriction or other restriction of a Governmental Authority
which has had, or could reasonably be expected, individually or in the
aggregate, to have, a Material Adverse Effect on Celiant.
Section 4.11. Undisclosed Liabilities. Celiant has no liabilities,
obligations or commitments of any nature (whether absolute, accrued,
contingent or otherwise and whether matured or unmatured) required by GAAP to
be reflected in a balance sheet (or reflected in the notes thereto) or which
could reasonably be expected to have a Material Adverse Effect on Celiant,
except (i) liabilities that are reflected and reserved against on the Interim
Balance Sheet which have not been paid or discharged since the date thereof,
(ii) accounts payable and accrued expenses incurred in the ordinary course of
the Business consistent with past practice, (iii) liabilities arising in the
ordinary course of business consistent with past practice, including, without
limitation, liabilities arising under Contracts or Permits to which Celiant is
a party or to which it is bound (except for liabilities resulting from,
arising out of, relating to, in the nature of, or caused by any breach of
contract, breach of warranty, tort, infringement or violation of law), and
(iv) liabilities that are otherwise specifically disclosed in this Agreement
or the Disclosure Schedules.
Section 4.12. Compliance with Law. Celiant has not violated and is in
compliance with all laws, statutes, ordinances, regulations, rules and orders
of any Governmental Authority, and any judgment, decision, decree or order of
any Governmental Authority other than where such violation could not
reasonably be expected to have a Material Adverse Effect on Celiant. Since
March 9, 2001, Celiant has not received any written notice to the effect that,
or otherwise been advised in writing that, or is aware that, Celiant is not in
such compliance with any such statutes, regulations, rules, judgments,
decrees, orders, ordinances or other laws, and Celiant has no knowledge that
any existing circumstances are reasonably likely to result in such violations
of any of the foregoing.
Section 4.13. Proprietary Rights.
(a) Schedule 4.13 identifies or refers to each patent, trademark,
service ▇▇▇▇, trade name, assumed name, copyright, trade secret, license
(other than "shrink-wrap" or downloadable licenses for commercially available
software) to or from third Persons with respect to any of the foregoing,
applications to register or registrations of any of the foregoing or other
material intellectual property rights which are owned or used by or have been
issued to Celiant, other than any of the foregoing, the absence of which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on Celiant (collectively, the "Proprietary Rights")
and all Contracts evidencing such Proprietary Rights (the "Proprietary Rights
Contracts"). Celiant has provided to the Company true, correct and complete
lists of all patents, trademarks, copyrights, registrations, permits,
agreements and applications owned by Celiant and evidencing the Proprietary
Rights. Celiant has provided to the Company true, correct and complete copies
of all US-issued patents, trademarks and applications therefor owned by
Celiant and evidencing the Proprietary Rights. Except as set forth in Schedule
4.13(a):
(i) to its knowledge, Celiant possesses all right, title and
interest in and to, or a valid and enforceable license to use, as the case may
be, the Proprietary Rights, free and clear of any Lien (other than any
Permitted Lien), except as set forth in the Core Agreements or the Proprietary
Rights Contracts;
(ii) to its knowledge, the legality, validity, enforceability,
ownership or use of the Proprietary Rights has not been nor is currently being
challenged, nor is it subject to any such challenge;
(iii) Celiant has taken all commercially reasonable action to
maintain and protect the Proprietary Rights; and
(iv) assuming all Consents in the Disclosure Schedules are
obtained, to its knowledge, except as set forth in the Core Agreements or the
Proprietary Rights Contracts, the Proprietary Rights will be owned or under
license by the Surviving Corporation from and after the Closing on identical
terms and conditions as are applicable to Celiant prior to the Closing, and
the transactions contemplated by this Agreement will have no Material Adverse
Effect on the Surviving Corporation's rights, title and interest in and to, or
the valid and enforceable license to use, as the case may be, the Proprietary
Rights.
(b) Except as set forth in Schedule 4.13(b), (i) to its knowledge,
Celiant has not infringed upon, misappropriated or otherwise come into
conflict with any intellectual property rights of any third Persons nor has
any third Person alleged or notified Celiant that Celiant has infringed upon,
misappropriated or otherwise come into conflict with any intellectual property
rights of third Persons, and (ii) to its knowledge, no third Person infringed
upon, misappropriated or otherwise come into conflict with any of the
Proprietary Rights.
Section 4.14. Employees. Celiant has provided to the Company a complete
and correct list of all individuals currently employed by the Business (the
"Business Employees") and all Persons providing material services to the
Business as independent contractors and with respect to each such Person,
their base salaries or other basis for and amount of compensation (including
any retention bonus or other compensation) and their total 2001 compensation.
Celiant has provided to the Company true, correct and complete copies of all
employment or severance or termination agreements, policies, plans,
commitments or other Contracts, whether written or oral, accruing to the
benefit of any employee or independent contractor of the Business. There are
no Actions, charges or complaints currently pending, or to the knowledge of
Celiant, threatened (and there is no basis for any actions, charges or
complaints), against Celiant, relating to alleged employment discrimination,
unfair labor practices, equal pay discrimination, affirmative action
noncompliance, occupational safety and health, breach of employment contract,
employee benefit matters, wrongful discharge or other employment-related
matters. Celiant is not a party to any Contracts with any labor union or
employee association nor has Celiant made commitments to or conducted
negotiations with any labor union or employee association with respect to any
future contracts. Celiant is not aware of any current attempts to organize or
establish any labor union or employee association with respect to any
employees of Celiant, and there is no existing or pending certification of any
such union with regard to a bargaining unit.
Section 4.15. Employee Benefit Plans.
(a) Except as set forth on Schedule 4.15, neither Celiant nor any
entity which is treated as a single employer with Celiant pursuant to Section
414(b), (c), (m) or (o) of the Code ("ERISA Affiliate") maintains, contributes
(or has an obligation to contribute) to or has any liability with respect to
(i) any "employee benefit plan" (as defined in Section 3(3) of ERISA), whether
a single employer, a multiple employer or a multiemployer plan, or (ii) any
other plan, policy, program, practice or arrangement or other Contract
providing compensation or benefits to any employee or former employee of
Celiant or ERISA Affiliate (or any dependent or other beneficiary thereof)
including, without limitation, incentive, bonus, deferred compensation,
vacation, holiday, medical, severance, disability, death, stock option, stock
purchase or other similar benefit (collectively, the "Employee Benefit
Plans"). "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
(b) Neither Celiant nor any ERISA Affiliate has ever maintained or
contributed, or had an obligation to contribute, to a defined benefit plan
subject to Title IV of ERISA or an employee benefit plan subject to the
minimum funding requirements of the Code and ERISA.
(c) With respect to the Employee Benefit Plans, no event has
occurred and, to the knowledge of Celiant, there exists no condition or set of
circumstances, in connection with which Celiant is reasonably likely to be
subject to any material liability under the terms of such Employee Benefit
Plans, ERISA, the Code or any other applicable law. Celiant has no actual or
contingent material liability under Title IV of ERISA (other than the payment
of premiums to the Pension Benefit Guaranty Corporation). None of the Employee
Benefit Plans is a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA).
Section 4.16. Environmental Liability.
(a) At all times prior to the Closing, Celiant has complied in all
material respects with all Environmental Laws. Celiant has not received any
written notice, report or information (including any written notice, report or
information that any Action of any kind is pending or threatened) regarding
any liabilities (whether accrued, absolute, contingent, unliquidated, or
otherwise), or any corrective, investigatory, or remedial obligations, arising
under Environmental Laws relating to Celiant or the occupation or use of any
of the Acquired Assets or any real properties formerly owned or leased by
Celiant. Celiant holds all Material Permits under Environmental Laws necessary
for the conduct of the Business as presently being conducted, and such
Material Permits are valid and in full force and effect. "Environmental Laws"
means any and all federal, state, county, local and foreign laws, statutes,
codes, ordinances, rules, regulations, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or
the release of any materials into the environment, including but not limited
to those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.
(b) To Celiant's knowledge, no Hazardous Materials have been, or are
currently, located at, in, or under or emanating from either the Acquired
Assets or any other property currently or previously owned or operated by
Celiant in a manner which violates in any material respect any applicable
Environmental Laws. "Hazardous Material" means any and all pollutants, toxic
or hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation,
manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or
penalized by any applicable Environmental Law (including asbestos, urea
formaldehyde foam insulation and polychlorinated biphenyls).
Section 4.17. Tax Matters.
(a) Filing of Tax Returns. Celiant has timely filed with the
appropriate taxing authorities all Returns (as defined below) in respect of
any Tax (as defined below) required to be filed through the date hereof. The
Returns and other information filed are complete and correct in all material
respects. No adjustment relating to any such Return has been proposed in
writing by any Governmental Authority, except proposed adjustments resolved
prior to the date hereof. No written claim has ever been made by any
Governmental Authority to Celiant in a jurisdiction where Celiant does not
file Returns that Celiant is, or may be, subject to taxation in that
jurisdiction. "Tax" means any federal, state, local, foreign or other tax,
including income, capital gains, estimated income, business, occupation, gross
receipts, property, payroll, personal property, sales, transfer, use,
employment, commercial rent, occupancy, franchise or withholding taxes, and
any premium, including interest, penalties and additions in connection
therewith (whether payable directly or by withholding and whether or not
requiring the filing of a Tax Return), and shall include any liability for
such amounts as a result of either being a member of a combined, consolidated,
unitary or affiliated group or having a contractual obligation to indemnify
any Person. "Returns" means any and all material returns, reports, information
returns and information statements with respect to Taxes required to be filed
with any Governmental Authority, including, without limitation, consolidated,
combined and unitary Tax Returns.
(b) Payment of Taxes. All Taxes payable by Celiant in respect of
periods beginning before the Closing Date, including all estimated taxes
required to be paid under Section 6655 of the Code or any comparable provision
of state, local or foreign law, have been timely paid, or will be timely paid
by Celiant, or an adequate reserve has been established by Celiant therefor,
as set forth in the Interim Balance Sheet, and Celiant has no material
liability for such Taxes in excess of the amounts so paid or reserves so
established, except for Taxes accruing subsequent to the date of the Interim
Balance Sheet. Celiant has withheld and paid all such Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.
(c) Audits, Investigations or Claims. There are no pending or, to
Celiant's knowledge, threatened, audits, investigations or claims for or
relating to any additional liability of Celiant in respect of Taxes, and there
are no matters under discussion between Celiant and any Governmental Authority
with respect thereto. Celiant has not waived any statute of limitations in
respect to Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency. There are no powers of attorneys of Celiant
outstanding in respect to any Tax matters.
(d) Tax Sharing Agreements. Except as set forth on Schedule 4.17(d),
Celiant is not and has never been a party to any Tax sharing or allocation
agreement, nor has Celiant ever been a member of an "affiliated group" (as
defined in Section 1504 of the Code) that files a consolidated federal income
Tax Return or a group of corporations filing a consolidated, unitary or
combined Return for state Tax purposes, a partnership, limited liability
company, or joint venture, or been the holder of a beneficial interest in any
trust during any period for which the statute of limitations for any Tax
resulting from such membership or holding has not expired (including any
waivers of such statute).
(e) Withholding of Purchase Price. Neither the Company nor any of
its subsidiaries is required under federal, state or local law to withhold any
portion of the Merger Consideration. Celiant is not, and never has been, a
United States real property holding corporation within the meaning of Section
897 of the Code. Celiant will provide any certificates necessary so that no
withholding is required pursuant to Section 1445 of the Code.
(f) Reorganization. Celiant has not taken or agreed to take any
action that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code.
(g) Collapsible Corporation. Celiant has not made an election under
Section 341(f) of the Code.
(h) Rulings. Celiant has not applied for or received a tax ruling
from the Internal Revenue Service or any foreign, state or local taxing
authority and has not entered into a closing agreement pursuant to Section
7121 of the Code or similar provision of foreign, state or local law, which
closing agreement is still in effect.
(i) Section 355. Except as set forth on Schedule 4.17(i), Celiant
has not either distributed stock of a controlled corporation pursuant to
Section 355 of the Code or had its stock distributed by another corporation
pursuant to Section 355 of the Code.
(j) Other. Except as set forth on Schedule 4.17(j), Celiant is not a
party to any agreement, Contract or other arrangement that has required, or
will require, Celiant to make any material payments that will not be
deductible under Section 280G of the Code.
Section 4.18. Financial Statements. Celiant has provided the Company with
an audited balance sheet as of September 30, 2001 and the related statements
of income, retained earnings and cash flows for the period from March 9, 2001
through September 30, 2001 (the "Audited Financials") along with its Interim
Balance Sheet and the related statements of income, retained earnings and cash
flows for the period from September 30, 2001 through December 31, 2001 (the
"Unaudited Financials" and, together with the Audited Financials, the "GAAP
Financials"). Except as set forth on Schedule 4.18, the GAAP Financials (i)
have been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved, except as
otherwise noted thereon or with respect to the Unaudited Financials, for the
lack of footnote disclosure and subject to normal year-end adjustments, none
of which were individually, or in the aggregate, material, and (ii) fairly
present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of Celiant, at the dates indicated and
fairly present the results of operations and cash flows of Celiant for the
periods indicated. Any financial statements provided by Celiant to the Company
relating to periods prior to those covered by the GAAP Financials fairly
present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of Celiant, at the dates indicated and
fairly present the results of operations and cash flows of Celiant for the
periods indicated.
Section 4.19. Insurance. Celiant has provided to the Company a complete
and correct list of all policies or binders of fire, liability, workers'
compensation, product liability and other forms of insurance (including any
self-insurance) maintained by Celiant. Such insurance provides coverage to the
extent and in the manner as may be required by law and by any and all Material
Contracts. There are no pending claims under such policies, other than routine
claims for employee benefits. Celiant is in compliance with all conditions
contained in such policies.
Section 4.20. Brokers. Except for fees owed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.,
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and disclosed to the Company, upon
consummation of the Merger, no Person will be entitled to any brokerage
commissions, finder's fees or similar compensation arising out of or due to
any act of Celiant (including its officers, directors, employees and agents)
in connection with the transactions contemplated by this Agreement. The
agreement among Celiant, the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ dated January 29, 2002
(the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Agreement") is the only agreement between Celiant and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will be entitled to any
payment in connection with the transactions contemplated by this Agreement.
Section 4.21. Affiliate and Certain Other Transactions. Schedule 4.21
lists all material Contracts between Celiant and any of Celiant's affiliates,
including any entity that is under common control with Celiant, and between
Celiant or its affiliates and any officer, director, employee of Celiant or
any Stockholder or its affiliates.
Section 4.22. Bank Accounts and Powers of Attorney. Celiant has provided
to the Company a complete and correct list of all accounts and deposit boxes
maintained by Celiant at any bank or other financial institution and the names
of the individuals authorized to effect transactions in such accounts and with
access to such boxes. There are no outstanding powers of attorney executed on
behalf of Celiant.
Section 4.23. Disclosure. No representation or warranty by Celiant
contained in this Agreement (including the Disclosure Schedules and the
exhibits referred to in this Agreement) contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make the statements herein not misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SUB
The Company and Sub represent and warrant to Celiant as follows:
Section 5.1. Organization and Qualification of the Company.
(a) Each of the Company, Sub and the Company's other subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized. Each of the Company, Sub
and the Company's other subsidiaries has all requisite corporate power and
authority to own or lease all of its properties and assets and to conduct its
respective business as it is now being conducted, and each of the Company, Sub
and the Company's other subsidiaries is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the nature of
its business or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary, except for
those jurisdictions where the failure to be so qualified or licensed or to be
in good standing individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect on the Company. Correct and
complete copies of the Certificate of Incorporation and By-Laws of the Company
and Sub, as currently in effect, have been provided to Celiant by the Company.
Sub is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Sub has not engaged in any business
(other than in connection with this Agreement and the transactions
contemplated hereby) since the date of its incorporation and has no
liabilities.
(b) All the outstanding shares of capital stock of, or other equity
interests in, each subsidiary of the Company, including, without limitation,
Sub, have been duly authorized, validly issued and are fully paid and
nonassessable. Except as disclosed in the SEC Filings, and except for its
ownership of the capital stock of Sub, the Company does not directly own any
material equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any material equity or similar interest in,
any corporation, partnership, joint venture, limited liability company, trust
or other business association or entity.
Section 5.2. Authorization. Each of the Company and Sub has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly and validly approved by the
board of directors of the Company and by the board of directors of Sub and by
the Company as the sole stockholder of Sub. No other corporate proceedings on
the part of the Company or its stockholders or Sub are necessary to approve
this Agreement or to consummate the transactions contemplated by this
Agreement. This Agreement has been duly and validly executed and delivered by
the Company and Sub and constitutes the valid and binding obligation of each
of them, enforceable against them in accordance with its terms.
Section 5.3. Capitalization.
(a) The authorized capital stock of the Company consists of
400,000,000 shares of Company Common Stock. At the close of business on
February 15, 2002, (i) 81,803,038 shares of Company Common Stock were issued
and outstanding and 20,915,172 shares were held as treasury stock. As of the
date of this Agreement, 13,112,500 shares of Company Common Stock are reserved
for issuance pursuant to the Company's Management Incentive Plans, 1,412,500
shares of Company Common Stock are reserved for issuance pursuant to the
Company's Non-Employee Director Stock Plans and 1,096,970 shares of Company
Common Stock are reserved for issuance pursuant to the Company's Employee
Stock Purchase Plan (each a "Company Stock Option Plan"). The issued and
outstanding shares of the Company's capital stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of statutory
preemptive rights and contractual stockholder preemptive rights, with no
personal liability attaching to the ownership thereof. Except pursuant to the
Company Stock Option Plans and the Company's stockholder rights plan, the
Company does not have and is not bound by any outstanding subscriptions,
options, voting trusts, convertible securities, warrants, calls, commitments
or agreements of any character or kind calling for the purchase, issuance or
grant of any additional shares of its capital stock or restricting the
transfer of its capital stock.
(b) The authorized capital stock of Sub consists of 1,000 shares of
Sub Common Stock, of which, as of the date hereof, 100 shares are issued and
outstanding, owned by the Company and are validly issued, fully paid and
nonassessable.
Section 5.4. Title and Condition of Assets. Except for Liens securing
indebtedness of less than $5,000,000 in the aggregate, the Company and its
subsidiaries have good and merchantable title to, or a valid leasehold
interest in, all of the assets and properties owned or used by the Company or
its subsidiaries, including those assets and properties reflected on the
Company's most recent balance sheet or acquired by the Company or its
subsidiaries after the date of the Company's most recent balance sheet.
Section 5.5. Permits. The Company and its subsidiaries have all material
Permits required to conduct its business as now being conducted. All such
Permits are valid and in full force and effect. There is not now pending, nor
to the best knowledge of the Company, threatened, any Action by any Person or
by or before any Governmental Authority to revoke, cancel, rescind, modify, or
refuse to renew any of such Permits and, to the knowledge of the Company,
there exist no facts or circumstances that could reasonably be expected to
give rise to such Action.
Section 5.6. No Conflict or Violation; Consents.
(a) The execution, delivery and performance by each of the Company
and Sub of this Agreement, the consummation of the transactions contemplated
by this Agreement and the compliance by the Company and Sub with any of the
provisions hereof or thereof, will not (i) violate or conflict with any
provision of the Certificate of Incorporation or By-Laws of the Company, Sub
or the Company's other subsidiaries, (ii) violate, conflict with, or result in
a breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under, or increase the amount payable
by the Company or Sub under, or result in the creation of any Lien upon any of
the material assets of the Company under, any of the terms, conditions or
provisions of any Contract or Permit (x) to which the Company, Sub or the
Company's other subsidiaries is a party or (y) by which the Company, Sub or
the Company's other subsidiaries is bound, or (iii) violate any statute, rule,
regulation, ordinance, code, order, judgment, ruling, writ, injunction, decree
or award applicable to the Company or its subsidiaries.
(b) Except in connection with, or in order to comply with, the HSR
Act, filings or approvals required under state or foreign laws relating to
takeovers, if applicable, state securities or "blue sky" laws, the By-Laws of
the National Association of Securities Dealers ("NASD"), and the filing and
recordation of the Certificate of Merger as required by the DGCL, no Approvals
or Consents of any Governmental Authority, or any other Person is necessary in
connection with the execution and delivery by the Company of this Agreement
and the performance by the Company of the transactions contemplated by this
Agreement.
Section 5.7. Reports. The Company has timely filed all reports,
registrations and statements required to be filed by it (other than securities
related filings, which are addressed in Sections 5.8) since January 1, 1997
with any Governmental Authority, and has paid all fees and assessments due and
payable in connection therewith, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect on the Company.
Section 5.8. SEC Filings; Financial Statements. The Company has timely
filed all reports required to be filed with the Securities and Exchange
Commission ("SEC") pursuant to the Securities Exchange Act of 1934 ("Exchange
Act") or the Securities Act of 1933 (the "Securities Act") since January 1,
1998 (collectively, the "SEC Filings"). Such SEC Filings, as of their
respective dates, complied in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as the case may be,
and none of such SEC Filings contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements (including the related
notes) of the Company included in the SEC Filings have been prepared in
accordance with GAAP consistently applied throughout the periods indicated
(except as otherwise noted therein or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of
unaudited statements, to normal, recurring year-end adjustments and any other
adjustments described therein) the consolidated financial position of the
Company and its consolidated subsidiaries as at the dates thereof and the
consolidated results of operations and cash flows of the Company and its
consolidated subsidiaries for the periods then ended.
Section 5.9. Absence of Certain Changes. Since December 31, 2001 (i)
neither the Company nor its subsidiaries has conducted its business and
operations other than in the ordinary course of business consistent with past
practices and (ii) there has not been any fact, event, circumstance or change
affecting or relating to the Company or its subsidiaries which has had or
could reasonably be expected to have a Material Adverse Effect on the Company.
Section 5.10. Litigation; Etc. Except for instances that could not
reasonably be expected to have a Material Adverse Effect on the Company, there
is no Action: (a) pending, or, to the Company's knowledge, threatened against
the Company or its subsidiaries or (b) pending, or, to the Company's
knowledge, threatened that seeks to delay, limit or enjoin the transactions
contemplated by this Agreement. To the knowledge of the Company or its
subsidiaries, there exists no facts or circumstances that could reasonably be
expected to give rise to an Action of the type described in subsection (a) and
(b) above. Except as could not reasonably be expected to have a Material
Adverse Effect on the Company, neither the Company nor its subsidiaries is in
default with respect to, or subject to, any judgment, order, writ, injunction
or decree of any court or Governmental Authority, and there are no unsatisfied
judgments against the Company. None of the Company, its subsidiaries, or any
of their properties or assets is subject to any regulatory restriction or
other restriction of a Governmental Authority which has had, or could
reasonably be expected to have, a Material Adverse Effect on the Company.
Neither the Company nor any of its subsidiaries is a party to or involved in a
material intellectual property dispute with Lucent Technologies Inc.
("Lucent") or any of its subsidiaries.
Section 5.11. Undisclosed Liabilities. Except for liabilities or
obligations which are accrued or reserved against in the Company's financial
statements (or reflected in the notes thereto) included in the SEC Filings or
which were incurred after December 31, 2001 in the ordinary course of business
and consistent with past practices, neither the Company nor its subsidiaries
has any liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of a nature require by GAAP to be reflected in a consolidated
balance sheet (or reflected in the notes thereto) or which could reasonably be
expected to have a Material Adverse Effect on the Company.
Section 5.12. Compliance with Law. The Company, Sub and the Company's
other subsidiaries have not violated and are in material compliance with all
laws, statutes, ordinances, regulations, rules and orders of any Governmental
Authority, and any judgment, decision, decree or order of any Governmental
Authority except to the extent that such violation could not reasonably be
expected to have a Material Adverse Effect on the Company. Since January 1,
1997, the Company has not received any written notice to the effect that, or
otherwise been advised in writing that, the Company, Sub or the Company's
other subsidiaries or their businesses is not in such compliance with any such
statutes, regulations, rules, judgments, decrees, orders, ordinances or other
laws, and the Company has no knowledge that any existing circumstances are
reasonably likely to result in such violations of any of the foregoing.
Section 5.13. Brokers. Except for Bear, ▇▇▇▇▇▇▇ & Co. Inc. and pursuant
to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Agreement, upon consummation of the Merger, no Person
will be entitled to any brokerage commissions, finder's fees or similar
compensation arising out of or due to any act of the Company or its
subsidiaries (including their respective officers, directors, employees and
agents) in connection with the transactions contemplated by this Agreement.
Section 5.14. Employee Benefit Plans.
(a) With respect to each employee benefit plan, program, arrangement
and contract (including, without limitation, any employee benefit plan, as
defined in Section 3(3) of ERISA), maintained or contributed to by the Company
or any of its subsidiaries, including, without limitation, Sub, or with
respect to which the Company or any of its subsidiaries could incur liability
under Section 4069, 4201 or 4212(c) of ERISA (the "Company Benefit Plans"),
Company has made available to Celiant a true and correct copy of (i) the most
recent annual report (Form 5500) filed with the Internal Revenue Service (the
"IRS"), (ii) such Company Benefit Plan, (iii) each trust agreement relating to
such Company Benefit Plan, (iv) the most recent summary plan description for
each Company Benefit Plan for which a summary plan description is required,
(v) the most recent actuarial report or valuation relating to a Company
Benefit Plan subject to Title IV of ERISA, if any, and (vi) the most recent
determination letter, if any, issued by the IRS with respect to any Company
Benefit Plan qualified under Section 401(a) of the Code.
(b) With respect to the Company Benefit Plans, no event has occurred
and, to the knowledge of the Company, there exists no condition or set of
circumstances, in connection with which the Company or any of its subsidiaries
is reasonably likely to be subject to any liability under the terms of such
Company Benefit Plans, ERISA, the Code or any other applicable law, except as
would not be reasonably likely to have a Material Adverse Effect on the
Company. Neither the Company nor any of its subsidiaries has any actual or
contingent material liability under Title IV of ERISA (other than the payment
of premiums to the Pension Benefit Guaranty Corporation). None of the Company
Benefit Plans is a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA).
Section 5.15. Environmental Liability.
(a) Neither the Company nor any of its subsidiaries, including,
without limitation, Sub, has received, in the past three years, any written
communication from a Governmental Authority, citizens group, employee or other
person that alleges that the Company or any of its subsidiaries is not in
compliance with all applicable Environmental Laws.
(b) To the Company's knowledge, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including
the release, emission, discharge or disposal of any materials that could be
reasonably likely to form the basis of any Environmental Claim against the
Company, Sub or any of the Company's other subsidiaries, or to the Company's
knowledge, against any person whose liability for any Environmental Claim has
or may have retained or assumed either contractually or by operation of law
except any such Environmental Claim, the existence of which could not
reasonably be expected to have a Material Adverse Effect on the Company.
(c) "Environmental Claim" means any claim, action, cause of action,
investigation or notice by any person alleging potential liability arising out
of, based on or resulting from (i) the presence, or release into the
environment, of any materials at any location, whether or not owned by the
Company or any of its subsidiaries, or (ii) circumstances forming the basis of
any violation, or alleged violation, of any Environmental Law.
Section 5.16. Tax Matters.
(a) To the knowledge of the Company, none of the Company, Sub nor
any of their affiliates has taken or agreed to take any action that would
prevent the Merger from constituting a transaction qualifying as a
reorganization under Section 368(a) of the Code. To the knowledge of the
Company, there are no agreements, plans or other circumstances that would
prevent the Merger from qualifying under Section 368(a) of the Code.
(b) Except as would not be reasonably likely to have a Material
Adverse Effect on the Company, (i) the Company and each of its subsidiaries,
including, without limitation, Sub, have timely filed all returns and reports
required to be filed by them with any taxing authority with respect to Taxes
for any period ending on or before the date hereof, taking into account any
extension of time to file granted to or obtained on behalf of the Company and
its subsidiaries, (ii) all Taxes that are due prior to the date hereof have
been paid (other than Taxes which (1) are not yet delinquent or (2) are being
contested in good faith and have not been finally determined), (iii) as of the
date of this Agreement, no deficiency for any material amount of Tax has been
asserted or assessed by a taxing authority against the Company or any of its
subsidiaries and (iv) the Company and each of its subsidiaries have provided
adequate reserves in accordance with generally accepted accounting principles
in their financial statements for any Taxes that have not been paid, whether
or not shown as being due on any returns.
(c) There are no Tax liens upon any property or assets of the
Company or any of its subsidiaries except liens for current Taxes not yet due
and except for liens which have not had and are not reasonably likely to have
a Material Adverse Effect on the Company.
(d) Neither the Company nor any of its subsidiaries, including,
without limitation, Sub, has been required to include in income any adjustment
pursuant to Section 481 of the Code by reason of a voluntary change in
accounting method initiated by the Company or any of its subsidiaries, and the
IRS has not initiated or proposed any such adjustment or change in accounting
method, in either case which adjustment or change has had or is reasonably
likely to have a Material Adverse Effect on the Company.
(e) Except as set forth in the financial statements described in
Section 5.8, neither the Company nor any of its subsidiaries has entered into
a transaction which is being accounted for under the installment method of
Section 453 of the Code, which would be reasonably likely to have a Material
Adverse Effect on the Company.
Section 5.17. Contracts.
(a) The Company has provided Celiant a correct and complete copy of
each written material Contract directly relating to the power amplifier
business of the Company and its subsidiaries. Assuming that (A) each such
material Contract is a legal, valid, binding and enforceable obligation as to
each party thereto (other than the Company) and (B) each such material
Contract is in full force and effect as to each party thereto (other than the
Company), (i) each such material Contract is legal, valid, binding and
enforceable in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general and
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and in full
force and effect, (ii) the Company is not, and, to the Company's knowledge, no
other party is, in breach or default of any such material Contract and to the
knowledge of the Company no event has occurred which would constitute a breach
or default (including any breach or default occurring upon notice or lapse of
time, or both) that would result in or permit termination, modification or
acceleration under any such material Contract and (iii) the Company has not,
and, to the Company's knowledge, no other party has, repudiated any provision
of any such material Contract.
None of the Company or any of its subsidiaries, including, without
limitation, Sub, is a party to any: (a) Contract directly relating to (or
materially affecting) its power amplifier business which grants any person the
exclusive right to any of the material assets of the Company's power amplifier
business or purports to limit in any material respect the manner in which, or
the localities in which, the Company or any of its subsidiaries is entitled to
conduct all or any material portion of the Company's power amplifier business;
(b) Contract directly relating to (or materially affecting) its power
amplifier business that requires the consent of, or terminates or becomes
terminable by, any party other than the Company or any of its subsidiaries as
a result of the transactions contemplated by this Agreement where the failure
to obtain such consent or the termination of such Contract could be reasonably
expected to have a Material Adverse Effect on the Company; or (c) Contract of
any sort directly relating to (or materially affecting) its power amplifier
business, other than in the ordinary course of business, which contemplates
any joint venture, partnership, strategic alliance or similar arrangement
extending beyond six (6) months or involving equity or investments of more
than $5,000,000. Except as contemplated hereby, the Company currently is not
in any negotiations or discussions with any Person with respect to any Power
Amp Transaction (as defined below). The Company is not a party to a
Significant Company Business Transaction (as defined below).
Section 5.18. Financing. The Company has sufficient funds available
through currently committed internal or external sources, to enable the
Company to pay and deliver at the Effective Time the entire cash portion of
the Merger Consideration and otherwise satisfy its obligations under this
Agreement, including without limitation those obligations set out in Section
7.7.
Section 5.19. Proprietary Rights.
Each patent, copyright, trade secret, license to or from third Persons
with respect to any of the foregoing, applications to register or
registrations of any of the foregoing or other material intellectual property
rights which are owned or used by or have been issued to the Company or any of
its subsidiaries, except in all cases software licenses and any of the
foregoing, the absence of which could reasonably be expected to have a
Material Adverse Effect on the power amplifier business of the Company
(collectively, the "Company Proprietary Rights") are identified or referred to
in Schedule 5.19. The Company has provided to Celiant true, correct and
complete copies of all patents, trademarks, copyrights, registrations,
permits, agreements and applications owned by the Company or any of its
subsidiaries and evidencing the Company Proprietary Rights. To its knowledge,
the Company and its subsidiaries possess all right, title and interest in and
to, or a valid and enforceable license to use, as the case may be, the Company
Proprietary Rights, free and clear of any Lien or other restriction. To the
Company's knowledge, the legality, validity, enforceability, ownership or use
of the Company Proprietary Rights has not been nor is currently being
challenged, nor is it subject to any such challenge. The Company has taken all
reasonable and necessary action to maintain and protect the Company
Proprietary Rights.
Except as would not be reasonably likely to have a Material Adverse
Effect on the Company, (i) to its knowledge, neither the Company nor any of
its subsidiaries has infringed upon, misappropriated or otherwise come into
conflict with any intellectual property rights of any third Persons nor has
any third Person alleged that the Company or any of its subsidiaries has
infringed upon, misappropriated or otherwise come into conflict with any
intellectual property rights of third Persons, and (ii) to its knowledge, no
third Person has infringed upon, misappropriated or otherwise come into
conflict with any of the Company Proprietary Rights.
Section 5.20. Disclosure. No representation or warranty by the Company or
Sub contained in this Agreement (including the Disclosure Schedules and the
exhibits referred to in this Agreement) contains or will contain any untrue
statement of a material fact, or omits or will omit to state any material fact
required to make the statements herein not misleading.
ARTICLE VI.
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1. Conduct of Business by Celiant Pending the Merger. Prior to
the Effective Time, unless the Company shall otherwise agree in writing (which
shall not be unreasonably withheld), or as set forth on Schedule 6.1 or as
otherwise expressly contemplated by this Agreement:
(a) Celiant shall conduct its business only in the ordinary and
usual course consistent with past practice except as modified by the other
provisions of Section 6.1, and Celiant shall use its commercially reasonable
efforts to preserve intact the present business organization, keep available
the services of its present officers and key employees, and preserve the
goodwill of those having business relationships with it. Celiant shall not
hire any person to any position within Celiant or as a consultant to Celiant
where the total annual compensation payable to such person, whether in cash or
otherwise, would exceed $150,000 individually or $750,000 in the aggregate;
(b) Celiant shall not, except as expressly contemplated by this
Agreement (i) amend its charter, By-Laws or other organizational documents,
(ii) split, combine or reclassify any shares of its outstanding capital stock,
(iii) declare, set aside or pay any dividend or other distribution payable in
cash, stock or property, or (iv) directly or indirectly redeem or otherwise
acquire any shares of its capital stock;
(c) Celiant shall not (i) authorize for issuance, issue or sell or
agree to issue or sell any shares of, or rights or securities of any kind to
acquire, rights or securities convertible into any shares of, its capital
stock (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), except for the
issuance of shares of Celiant Common Stock upon the exercise of Celiant Stock
Options outstanding on the date of this Agreement; (ii) merge or consolidate
with another entity (other than transactions pending as of the date hereof
that have been disclosed to the Company); (iii) acquire or purchase an equity
interest in or a substantial portion of the assets of another corporation,
partnership or other business organization or otherwise acquire any assets
outside the ordinary and usual course of business and consistent with past
practice (other than transactions pending as of the date hereof that have been
disclosed in writing to the Company) or otherwise enter into any contract,
commitment or transaction outside the ordinary and usual course of business
consistent with past practice and that involves consideration in excess of
$500,000 individually or $1,000,000 in the aggregate; (iv) sell, lease,
license, waive, release, transfer, encumber or otherwise dispose of any of its
assets outside the ordinary and usual course of business and consistent with
past practice; (v) incur, assume or prepay any material indebtedness or any
other material liabilities other than in the ordinary course of business and
consistent with past practice; (vi) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person other than in the ordinary course of
business and consistent with past practice; (vii) make any loans, advances or
capital contributions to, or investments in, any other person except for loans
to employees to cover relocation expenses, which, in the aggregate, will not
exceed $500,000; (viii) authorize or make capital expenditures in excess of
the amounts currently budgeted therefor; (ix) permit any insurance policy
naming Celiant as a beneficiary or a loss payee to be cancelled or terminated
other than in the ordinary course of business; or (x) enter into any contract,
agreement, commitment or arrangement with respect to any of the foregoing;
(d) Except as expressly contemplated by this Agreement, Celiant
shall not (i) adopt, enter into, terminate or amend (except as may be required
by applicable law) the Celiant Stock Option Plan or any other Employee Benefit
Plan or other arrangement for the current or future benefit or welfare of any
director, officer or current or former employee, (ii) increase in any manner
the compensation or fringe benefits of, or pay any bonus to, any director,
officer or employee (except for normal increases in salaried compensation in
the ordinary course of business consistent with past practice), or (iii)
except as specifically contemplated by this Agreement, take any action to fund
or in any other way secure, or to accelerate or otherwise remove restrictions
with respect to, the payment of compensation or benefits under any employee
plan, agreement, contract, arrangement under the Celiant Stock Option Plan or
any other Employee Benefit Plan;
(e) Celiant shall not take any action with respect to, or make any
material change in, its accounting policies or procedures;
(f) Celiant shall not make any Tax election or settle or compromise
any Tax liability and shall file all income Tax Returns prior to the last day
(including extensions) prescribed by law, provided, however, that all such Tax
Returns shall be subject to the Company's prior review and approval, which
review period shall not exceed five business days and which approval shall not
be unreasonably withheld or delayed (it being agreed that the failure of the
Company to so approve any such Tax Return within five business days shall
constitute an approval by the Company of the same);
(g) Anything in this Section 6.1 to the contrary notwithstanding
Celiant shall have the right at any time to (i) accrue, issue and/or
distribute the PIK Shares to the Stockholders and to take such actions as may
be reasonably necessary to effect such accrual, issuance or distribution or
(ii) pay any and all expenses or fees incurred by Celiant in connection with
this Agreement or the transaction contemplated hereby, including, without
limitations, any such fees or expenses incurred pursuant to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Agreement (as defined below).
Section 6.2. Conduct of Business by the Company Pending the Merger. Prior
to the Effective Time, unless Celiant shall otherwise agree in writing (which
shall not be unreasonably withheld), or as otherwise expressly contemplated by
this Agreement:
(a) the business of the Company shall be conducted only in the
ordinary and usual course consistent with past practice, and the Company shall
use its best efforts to preserve intact the present business organization, to
keep available the services of its present officers and key employees, and
preserve the goodwill of those having business relationships with it;
(b) the Company shall not (i) amend its charter, bylaws or other
organizational documents or (ii) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property;
(c) the Company shall not (i) split, combine or reclassify its
outstanding capital stock or (ii) except in connection with the Company Stock
Option Plans, directly or indirectly redeem or otherwise acquire shares of its
capital stock;
(d) the Company shall not take any action with respect to, or make
any material change in, its accounting policies or procedures;
(e) The Company shall not (i) authorize for issuance, issue or sell
or agree to issue or sell any shares of, or rights or securities of any kind
to acquire, or rights or securities convertible into any shares of, its
capital stock (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), except pursuant
to the Company Stock Option Plans; (ii) (A) acquire or purchase an equity
interest in or a substantial portion of the assets of another corporation,
partnership or other business organization in the power amplifier industry or
(B) otherwise acquire any assets for use in the power amplifier industry in
the case of this clause (B) outside the ordinary and usual course of business
and consistent with past practice or (C) otherwise enter into any material
contract, commitment or transaction related to the power amplifier industry
outside the ordinary and usual course of business consistent with past
practice to effect any of the foregoing described in clause (A) or clause (B)
above (collectively a "Power Amp Business Transaction"); or (iii) except for
any Power Amp Business Transaction, acquire or purchase an equity interest in
or a substantial portion of the assets of another corporation, partnership or
other business organization or otherwise acquire any assets outside the
ordinary and usual course of business and consistent with past practice or
otherwise enter into any material contract, commitment or transaction outside
the ordinary and usual course of business consistent with past practice to
effect any of the foregoing described in this clause, in each case as
described in this clause (iii), (x) involving consideration in excess of
$100,000,000, and (y) without providing prior written notice to Celiant.
Section 6.3. Conduct of Business by Sub Pending the Merger. During the
period from the date of this Agreement to the Effective Time, Sub shall not
engage in any activities of any nature except as provided in or contemplated
by this Agreement, including without limitation (a) the modification or
amendment of its certificate or incorporation or bylaws (or other
organizational documents), or (b) the entering into of any Contract or
commitment of any kind or nature.
ARTICLE VII.
ADDITIONAL AGREEMENTS
Section 7.1. Access and Information. Each of the Company and Celiant
shall (and shall cause their respective officers, directors, employees,
auditors and agents to) afford to the other and to the other's officers,
employees, financial advisors, legal counsel, accountants, consultants and
other representatives reasonable access during normal business hours
throughout the period prior to the Effective Time to all of its books and
records (other than privileged documents and subject to any confidentiality
provisions or restrictions applicable to communications between any party and
its counsel or set out in any Contract) and its properties, plants and
personnel and, during such period, each shall furnish promptly to the other a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal securities laws, provided that no
investigation pursuant to this Section 7.1 shall affect any representations or
warranties made herein or the conditions to the obligations of the respective
parties to consummate the Merger. Unless otherwise required by law, each party
agrees that it (and their respective representatives) shall hold in confidence
all non-public information so acquired in accordance with the terms of the
confidentiality agreement, dated January 16, 2002 between Celiant and the
Company (the "Confidentiality Agreement"), it being agreed that the provisions
of the Confidentiality Agreement are incorporated herein by reference.
Section 7.2. No Other Negotiations.
(a) Upon execution of this Agreement, Celiant is not engaged in, or
shall immediately terminate, any discussions with any third party concerning
an Alternative Acquisition (as defined below). From and after the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement in accordance with its terms, Celiant shall not, directly or
indirectly, (i) solicit, engage in discussions or negotiate with any person
(whether such discussions or negotiations are initiated by Celiant or the
Stockholders or otherwise) or take any other action intended or designed to
facilitate the efforts of any person, other than the Company, relating to the
possible acquisition of Celiant (whether by merger, purchase of capital stock,
purchase of assets or otherwise) or any material portion of its capital stock
or assets (with any such efforts by any such person, including a firm proposal
to make such an acquisition, to be referred to as an "Alternative
Acquisition"), (ii) provide information with respect to Celiant to any person,
other than the Company, relating to a possible Alternative Acquisition by any
person, other than the Company, (iii) enter into an agreement with any person,
other than the Company, providing for a possible Alternative Acquisition, or
(iv) make or authorize any statement, recommendation or solicitation in
support of any possible Alternative Acquisition by any person, other than by
Celiant.
(b) Notwithstanding the foregoing, the restrictions set forth in
this Agreement shall not prevent the Board of Directors of Celiant (or its
agents pursuant to its instructions) from taking any of the following actions,
but only prior to such time as Celiant receives from the Company written
notification that all of the conditions to the obligations of Celiant, the
Company and Sub to consummate the transactions contemplated by this Agreement
(other than the lapse of time and those conditions that cannot be satisfied
other than at the Closing) have been satisfied (the "Company Closing Notice")
and in fact such conditions have been so satisfied (the "Relevant Time"): (i)
furnishing information concerning Celiant and its business, properties and
assets to any third party or (ii) engaging in discussions or negotiating with
such third party concerning an Alternative Acquisition provided that all of
the following events shall have occurred: (1) such third party has made a
written proposal to the Board of Directors of Celiant (which proposal may be
conditional) to consummate an Alternative Acquisition which proposal
identifies a price or range of values to be paid for the outstanding
securities or substantially all of the assets of Celiant, and if consummated,
the Board of Directors of Celiant has determined is financially more favorable
to the Stockholders than the terms of the Merger (a "Superior Proposal"); (2)
Celiant's Board of Directors has determined, that such third party is
financially capable of consummating such Superior Proposal; and (3) the
Company shall have been notified in writing of such Superior Proposal,
including all of its terms and conditions, and shall have been given copies of
such proposal. Notwithstanding the foregoing, Celiant shall not provide any
non-public information to such third party unless (1) Celiant has prior to the
date thereof provided such information to the Company's representatives; (2)
Celiant has notified the Company in advance of any such proposed disclosure of
non-public information to any such third party, with a description of the
information proposed to be disclosed; and (3) Celiant provides such non-public
information pursuant to a nondisclosure agreement with terms which are at
least as restrictive as the Confidentiality Agreement.
Upon compliance with the foregoing and subject to Section 7.2(d) below,
Celiant shall be entitled to enter into an agreement with such third party
concerning an Alternative Acquisition provided that Celiant shall immediately
make payment in full to the Company of the Termination Fee as defined in
Section 9.2(b) below.
(c) If Celiant receives any unsolicited offer or proposal to enter
into discussions or negotiations relating to an Alternative Acquisition,
Celiant shall notify the Company thereof within twenty-four hours of Celiant's
receipt thereof, including information as to the identity of the party making
any such offer or proposal and the specific terms of such offer or proposal,
as the case may be.
(d) Prior to accepting any Superior Proposal, Celiant shall have
given the Company written notice of such offer or proposal specifying in
detail the terms and conditions, including, without limitation, the identity
of the unsolicited offeror and the amount and nature of the consideration, of
such offer or proposal (the "Superior Proposal Notice"). Celiant shall not
accept any Superior Proposal until ten business days after the Superior
Proposal Notice has been delivered to the Company.
Within five (5) business days of its receipt of the Superior Proposal
Notice, the Company shall have the right to make a counter proposal equally or
more favorable than such unsolicited offer or proposal ("Company Counter
Proposal"). In the event that the Company does make a Company Counter Proposal
within five (5) business days of its receipt of the Superior Proposal Notice,
Celiant shall promptly terminate all discussions and negotiations regarding
the Superior Proposal and shall proceed to consummate the transaction as set
forth in the Company Counter Proposal and the other terms and conditions of
this Agreement, including, without limitation, the provisions of this Section
7.2, shall continue in effect. In such event, Celiant shall not disclose to
the unsolicited offeror or any other third party the terms and conditions of
the Company Counter Proposal.
(e) Celiant shall be entitled to provide copies of this Section 7.2
to third parties who, on an entirely unsolicited basis, after the date hereof,
contact Celiant concerning an Alternative Acquisition; provided, that the
Company shall concurrently be notified of such contact and the delivery of
such copy.
(f) Notwithstanding anything in this Agreement to the contrary, on
and after the Relevant Time, Celiant shall have no right to accept any
proposal for, enter into any agreement with respect to, or consummate any
Alternative Acquisition under any circumstances.
Section 7.3. Stockholder Approval.
(a) Celiant, acting through its Board of Directors, shall, subject
to and in accordance with applicable law and its Certificate of Incorporation
and By-Laws, promptly and duly call, give notice of, convene and hold a
meeting of the Stockholders (or circulate a unanimous written consent) for the
purpose of voting to approve and adopt this Agreement and the transactions
contemplated hereby, and, prior to the receipt by Celiant of the Company
Closing Notice, subject to the existence of a Superior Proposal (i) recommend
approval and adoption of this Agreement and the transactions contemplated
hereby by the Stockholders, and (ii) take all reasonable and lawful action to
solicit and obtain such approval.
(b) At or prior to the Closing, Celiant shall deliver to the Company
a certificate of its Secretary setting forth the voting results from its
stockholder meeting.
Section 7.4. Best Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, the obtaining of all necessary waivers,
consents and approvals and the effecting of all necessary registrations and
filings. Without limiting the generality of the foregoing, as promptly as
practicable, Celiant and the Company and Sub shall make all filings and
submissions under the HSR Act as may be reasonably required to be made in
connection with this Agreement and the transactions contemplated hereby.
Subject to the Confidentiality Agreement, Celiant will furnish to the Company,
and the Company and Sub will furnish to Celiant, such information and
assistance as the other may reasonably request in connection with the
preparation of any such filings or submissions. Subject to the Confidentiality
Agreement, Celiant will provide the Company, and the Company and Sub will
provide Celiant, with copies of all material written correspondence, filings
and communications (or memoranda setting forth the substance thereof) between
such party or any of its representatives and any Governmental Entity, with
respect to the obtaining of any waivers, consent or approvals and the making
of any registrations or filings, in each case that is necessary to consummate
the Merger and the other transactions contemplated hereby. In case at any time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers or directors of the
Company or the Surviving Corporation shall take all such necessary action.
Section 7.5. Voting Agreement. Concurrently herewith, and as an essential
inducement for the Company's entering into this Agreement, the Company is
entering into the Voting Agreement of the Stockholders with respect to all
shares of Celiant Common Stock or Celiant Preferred Stock owned (beneficially
or of record) by them.
Section 7.6. Public Announcements. Each of Celiant and the Company agrees
that it will not issue any press release or otherwise make any public
statement with respect to this Agreement (including the Exhibits hereto) or
the transactions contemplated hereby or thereby without the prior consent of
the other party, which consent shall not be unreasonably withheld or delayed;
provided, however, that such disclosure can be made without obtaining such
prior consent if (i) the disclosure is required by law or by obligations
imposed pursuant to any listing agreement with the NNM or any national
securities exchange and (ii) the party making such disclosure has first used
its best efforts to consult with the other party about the form and substance
of such disclosure.
Section 7.7. Celiant Stock Options. At the Effective Time, each option to
purchase Celiant Common Stock (the "Celiant Stock Options") which is
outstanding immediately prior to the Effective Time shall be automatically
cancelled and the holder of each such Celiant Stock Option shall be entitled
to receive, in cash, net of all required withholdings, an amount equal to (i)
the difference between $4.735360195 and the exercise price of such Celiant
Stock Option, multiplied by (ii) the number of shares of Celiant Common Stock
subject to the Celiant Stock Option. The Company hereby expressly assumes the
foregoing payment obligation to the holders of Celiant Stock Options and shall
satisfy such obligation in full at the Closing by depositing sufficient funds,
net of all required withholdings, in a segregated account to be disbursed to
the holders of such Celiant Stock Options in accordance herewith at the
direction of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Section 7.8. Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement (including the
Exhibits hereto) and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
Section 7.9. Listing Application. The Company will use its reasonable
best efforts to cause the shares of Company Common Stock to be issued pursuant
to this Agreement in the Merger to be listed for quotation on the NNM.
Section 7.10. Supplemental Disclosure. Each party shall give prompt
notice to the other, of (i) the occurrence, or non-occurrence, of any event
the occurrence, or non-occurrence, of which would be likely to cause (x) any
representation or warranty contained in this Agreement to be untrue or
inaccurate or (y) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied and (ii) any failure of the
Company or Celiant, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 7.10 shall not have any effect for the purpose of determining the
satisfaction of the conditions set forth in Article VII of this Agreement or
otherwise limit or affect the remedies available hereunder to any party. In
addition, Celiant shall deliver monthly unaudited and internal financial
statements to the Company within 15 days after the end of each month.
Section 7.11. Conveyance Taxes. Celiant and the Company and Sub shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding (i) any real
property transfer gains, sales, use, transfer, value-added, stock transfer,
and stamp taxes, (ii) any recording, registration and other fees, and (iii)
any similar taxes or fees that become payable in connection with the
transactions contemplated hereby that are required or permitted to be filed on
or before the Effective Time (all the foregoing taxes being referred to as
"Conveyance Taxes"). The Company shall pay any and all Conveyance Taxes.
Section 7.12. Celiant Employees. The Company and Sub acknowledge and
agree that all employees of Celiant immediately prior to the Closing shall
automatically become employees of the Company or one of its subsidiaries.
Section 7.13. Celiant Tax Opinion Certificate. Celiant, its officers and
the Stockholders, shall execute and deliver such certificates, in form
reasonably satisfactory to the Company dated as of the Closing Date (the
"Celiant Tax Opinion Certificate") setting forth factual representations and
covenants that will serve as a basis for the tax opinions required pursuant to
Sections 8.1(g) and 8.1(h) of this Agreement.
Section 7.14. Company Tax Opinion Certificate. The Company and its
officers shall execute and deliver such certificates, in form reasonably
satisfactory to Celiant dated as of the Closing Date (the "Company Tax Opinion
Certificate") setting forth factual representations and covenants that will
serve as a basis for the tax opinions required pursuant to Sections 8.1(g) and
8.1(h) of this Agreement.
Section 7.15. Other Tax-Related Certificates. Celiant shall provide such
certificates as may be required so that no withholding of taxes is required
pursuant to Section 1445 of the Code as a result of the Merger.
Section 7.16. Other Tax Matters. This Agreement is intended to constitute
a "plan of reorganization" within the meaning of section 1.368-2(g) of the
Income Tax Regulations promulgated under the Code. Neither Celiant nor the
Company shall directly or indirectly (and each shall cause each of its
subsidiaries and affiliates not to) at any time knowingly take any action or
knowingly fail to take any action that would or would be reasonably likely to
jeopardize the intended tax treatment of the transactions contemplated hereby.
ARTICLE VIII.
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) HSR Approval. Any waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated, and no
action shall have been instituted by the Department of Justice or Federal
Trade Commission challenging or seeking to enjoin the consummation of this
transaction, which action shall have not been withdrawn or terminated.
(b) Financial Statements. The Company shall have received the
following historical financial information for Celiant and the Business:
(i) Unaudited Balance Sheet of Celiant as of December 31, 2001
and unaudited statements of income and cash flows for the three months then
ended;
(ii) Audited Balance Sheet of Celiant as of September 30, 2001
and audited statements of income, changes in stockholders' equity and cash
flows for the period from inception (March 9, 2001) through September 30,
2001;
(iii) Audited Statements of Assets Acquired and Liabilities
Assumed of the Power Amplifier product line of Lucent as of May 31, 2001 and
September 30, 2000; and
(iv) Audited Statements of Revenues and Direct Expenses of the
Power Amplifier product line of Lucent for the period from October 1, 2000 to
May 31, 2001 and for the years ended September 30, 2000 and 1999.
(c) Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the requisite vote
of the Stockholders in accordance with applicable law.
(d) NNM Listing for Quotation. The shares of Company Common Stock
issuable to the holders of Celiant Common Stock pursuant to this Agreement in
the Merger shall have been authorized for listing on the NNM, upon official
notice of issuance.
(e) No Order. No Governmental Entity (including a federal or state
court) of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which
is in effect and which materially restricts, prevents or prohibits
consummation of the Merger or any transaction contemplated by this Agreement;
provided, however, that the parties shall use their reasonable best efforts to
cause any such decree, judgment, injunction or other order to be vacated or
lifted.
(f) Approvals. Other than the filing of Merger documents in
accordance with the DGCL, all authorizations, consents, waivers, orders or
approvals of, or declarations or filings with, or expirations of waiting
periods imposed or required by, any Governmental Entity or any other Person,
the failure of which to obtain, make or occur would have a Material Adverse
Effect at or after the Effective Time on the Company of the Surviving
Corporation shall have been obtained, been filed or have occurred.
(g) Celiant Tax Opinion. Celiant shall have received an opinion of
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Tischman ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A. ("▇▇▇▇▇ Cummis") dated the
Closing Date to the effect that the Merger will constitute a reorganization
for federal income tax purposes within the meaning of Section 368(a) of the
Code, which opinion shall not have been withdrawn or modified in any material
respect. For purposes of rendering its opinion, ▇▇▇▇▇ ▇▇▇▇▇▇ may rely on the
statements and representations in this Agreement and the tax certificates
delivered pursuant to Sections 7.13 and 7.14; it being agreed that the
issuance of such opinion shall be expressly conditioned upon the receipt of
such certificates (which certificates shall be dated the date of such opinion
and shall not have been withdrawn or modified).
(h) Company Tax Opinion. The Company shall have received an opinion
of ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇") dated the Closing Date to the
effect that the Merger will constitute a reorganization for federal income tax
purposes within the meaning of Section 368(a) of the Code, which opinion shall
not have been withdrawn or modified in any material respect. For purposes of
rendering its opinion, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ may rely on the statements and
representations in this Agreement and the tax certificates delivered pursuant
to Sections 7.13 and 7.14 it being agreed that the issuance of such opinion
shall be expressly conditioned upon the receipt of such certificates (which
certificates shall be dated the date of such opinion and shall not have been
withdrawn or modified).
Section 8.2. Conditions to Obligation of the Company and Sub to Effect
the Merger. The obligations of the Company and Sub to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by the Company:
(a) Representations and Warranties. The aggregate effect of all
inaccuracies in the representations and warranties of Celiant set forth in
this Agreement as of the date hereof, and, except to the extent such
representations and warranties speak as of an earlier date, as of the
Effective Time as though made at and as of the Effective Time, does not and
could not reasonably be expected to have a Material Adverse Effect on Celiant
and the Company shall have received a certificate signed on behalf of Celiant
by the chief executive officer or the chief financial officer of Celiant to
such effect.
(b) Performance of Obligations of Celiant. Celiant shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and the Company
shall have received a certificate signed on behalf of Celiant by the chief
executive officer or the chief financial officer of Celiant to such effect.
(c) Employment Agreement. Celiant and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have
each properly executed and delivered to the Company an employment agreement
between the Company, Celiant and ▇▇▇▇▇▇ in the form of Exhibit C, effective as
of the Effective Time, naming ▇▇▇▇▇▇ as President and Chief Operating Officer
of the Company (the "Employment Agreement") which Employment Agreement shall
supercede and terminate the existing employment agreement between Celiant and
▇▇▇▇▇▇ effective as of the Effective Time.
(d) Material Adverse Effect. No fact, event or circumstance shall
have occurred that has had or is reasonably likely to have a Material Adverse
Effect with respect to Celiant.
(e) Core Agreements. The Core Agreements shall have remained in full
force and effect without modification.
(f) Celestica Agreement. Celiant and Celestica, Inc. shall have
entered into an agreement in replacement of the Celestica Agreement on terms
no less favorable to Celiant than the Celestica Agreement (other than the
absence of third-party guarantees of Celiant's obligations), which agreement
shall specifically provide, among other things, that the Surviving Corporation
will succeed to all rights of Celiant under such agreement.
(g) Proprietary Rights. Celiant shall be in possession of all right,
title and interest in and to, or a valid and enforceable license to use, as
the case may be, the Proprietary Rights, and the legality, validity,
enforceability, ownership or use of such Proprietary Rights shall not be the
subject of any pending or threatened challenge.
(h) Parachute Payments. All actions shall have been taken by Celiant
and the Stockholders necessary to insure that no material payments to be made
in connection with the Merger will not be deductible by virtue of Section 280G
of the Code.
Section 8.3. Conditions to Obligation of Celiant to Effect the Merger.
The obligation of Celiant to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following additional
conditions unless waived in writing by Celiant:
(a) Representations and Warranties. The aggregate effect of all
inaccuracies in the representations and warranties of the Company and Sub set
forth in this Agreement as of the date hereof, and, except to the extent such
representations and warranties speak as of an earlier date, as of the
Effective Time as though made at and as of the Effective Time, does not and
could not reasonably be expected to have a Material Adverse Effect on the
Company and Celiant shall have received a certificate signed on behalf of the
Company and Sub by the chief executive officer or the chief financial officer
of the Company to such effect.
(b) Performance of Obligations of the Company. The Company and Sub
shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Effective Time, and
Celiant shall have received a certificate signed on behalf of the Company and
Sub by the chief executive officer or the chief financial officer of the
Company to such effect.
(c) Employment Agreement. The Company shall have properly executed
and delivered the Employment Agreement.
(d) Registration Rights Agreement. The Company shall have entered
into a Registration Rights Agreement with the Stockholders in the form of
Exhibit D attached hereto providing, among other things, that the Company
shall, subject to the terms and conditions thereof, file and maintain the
effectiveness of a S-3 Registration Statement for a period of two years
following the Effective Time.
(e) Material Adverse Effect. No fact, event or circumstance shall
have occurred that has had or is reasonably likely to have a Material Adverse
Effect with respect to the Company or Sub.
(f) Absence of Certain Transactions. Except as contemplated hereby,
the Company shall not be in any negotiations or discussions with any Person
(and shall not have entered into with any Person) any Power Amp Transaction
(other than a Power Amp Transaction approved by Celiant pursuant to the
provisions of this Agreement) or any Significant Company Business Transaction;
and the Company shall have delivered to Celiant a certificate executed by an
officer of the Company to such effect.
ARTICLE IX.
TERMINATION
Section 9.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
Stockholders:
(a) by mutual consent of Celiant, the Company and Sub;
(b) by either Celiant or the Company, if (i) the Merger shall not
have been consummated before September 30, 2002 (unless the failure to so
consummate the Merger by such date shall be due to the action or failure to
act of the party (or its subsidiaries, if any) seeking to terminate this
Agreement, which action or failure to act constitutes a breach of this
Agreement) or (ii) a condition to the obligation of such party set out in
Article VIII shall become impossible to satisfy at any time (unless such
failure of condition is due to an action or failure to act of the party
asserting such right to terminate or its subsidiaries, if any);
(c) by either Celiant or the Company, if any permanent injunction or
action by any Governmental Entity of competent jurisdiction preventing the
consummation of the Merger shall have become final and nonappealable;
(d) by the Company, if (i) there has been a breach of any
representations or warranties of Celiant set forth herein the effect of which
is a Material Adverse Effect with respect to Celiant, (ii) there has been a
breach in any material respect of any of the covenants or agreements set forth
in this Agreement on the part of Celiant, which breach is not curable or, if
curable, is not cured within 20 days after written notice of such breach is
given by the Company to Celiant, (iii) Celiant enters into an agreement with a
third party concerning an Alternative Acquisition prohibited by Section 7.2,
or (iv) Celiant enters into an agreement with a third party concerning an
Alternative Acquisition not prohibited by Section 7.2;
(e) by Celiant, if (i) there has been a breach of any
representations or warranties of the Company or Sub set forth herein the
effect of which is a Material Adverse Effect with respect to the Company, (ii)
there has been a breach in any material respect of any of the covenants or
agreements set forth in this Agreement on the part of the Company or Sub,
which breach is not curable or, if curable, is not cured within 20 days after
written notice of such breach is given by Celiant to the Company or Sub, (iii)
such termination is necessary to allow Celiant to enter into an agreement
permitted by Section 7.2 with respect to a Superior Proposal (provided that
the termination described in this clause (iii) shall not be effective unless
and until Celiant shall have paid to the Company in full the fee described in
Section 9.2(b)(ii)), or (iv) (A) the Board of Directors of the Company makes
any recommendation with respect to any proposed acquisition of the Company or
any transaction that contemplates a change of control of the Company (whether
by merger, purchase of capital stock, purchase of assets or otherwise) (a
"Significant Company Business Transaction"), other than a recommendation to
reject such Significant Company Business Transaction, (B) a Significant
Company Business Transaction is entered into with or without any
recommendation for the same by the Board of Directors of the Company, or (C)
the Company enters into any Power Amp Transaction (other than a Power Amp
Transaction approved by Celiant pursuant to the provisions of this Agreement).
Section 9.2. Effect of Termination.
(a) In the event of termination of this Agreement pursuant to this
Article IX, the Merger shall be deemed abandoned and this Agreement shall
forthwith become void, without liability on the part of any party hereto,
except as expressly provided herein, and except that nothing herein shall
relieve any party from liability for any breach of this Agreement (other than
as set forth in Sections 9.2(b)(i), (ii) and (iii)).
(b) (i) If the Company shall have terminated this Agreement pursuant
to Section 9.1(d)(iv), or Celiant shall have terminated this Agreement
pursuant to Section 9.1(e)(iii), then in any such case, Celiant shall
promptly, but in no event more than two business days after the date of such
termination, pay the Company a termination fee of Fifty Million Dollars
($50,000,000); it being agreed by the parties that anything in this Agreement
to the contrary notwithstanding, upon payment of such amount to the Company,
all obligations and liabilities to the Company related to or arising under
this Agreement (or otherwise contemplated hereby) by Celiant or any of its
Stockholders, affiliates, successors or assigns, if any, shall automatically
be released and the Company agrees that it shall not make any claim in such
regard.
(ii) If Celiant shall have terminated this Agreement pursuant
to Section 9.1(e)(iv)(A) or (B), then the Company shall promptly, but in no
event later than two business days after the date of such termination, pay
Celiant a termination fee of Fifty Million Dollars ($50,000,000); it being
agreed by the parties that anything in this Agreement to the contrary
notwithstanding, upon payment of such amount to Celiant, all obligations and
liabilities to Celiant related to or arising under this Agreement (or
otherwise contemplated hereby) by the Company or any of its affiliates,
successors or assigns, if any, shall automatically be released and Celiant
agrees that it shall not make any claim in such regard.
(iii) If the Company shall have terminated this Agreement
pursuant to Section 9.1(d)(iii), then, if the Company so elects within five
(5) business days of such termination, Celiant shall promptly, but in no event
later than two business days after the date of such election, pay the Company
a termination fee of Fifty Million Dollars ($50,000,000), it being agreed by
the parties that anything in this Agreement to the contrary notwithstanding,
upon payment of such amount to the Company, all obligations and liabilities to
the Company related to or arising under this Agreement (or otherwise
contemplated hereby) by Celiant or any of its Stockholders, affiliates,
successors or assigns, if any, shall automatically be released and the Company
agrees that it shall not make any claim in such regard; provided, further,
that if the Company does not elect to require Celiant to pay a termination fee
pursuant to this Section 9.2(b)(iii), Celiant shall not be relieved from any
liability for any breach of this Agreement.
ARTICLE X.
GENERAL PROVISIONS
Section 10.1. Certain Definitions.
"knowledge" or "awareness" of any entity means the actual knowledge or
awareness of such entity's directors, officers and other individuals
exercising supervisory authority.
"Liens" means any claim, liens (including any tax lien), option, right of
first refusal or offer, buy-sell agreement, voting agreement or trust, pledge,
charge, mortgage, security interest, or other restriction on use, transfer,
receipt of income, or exercise of any other attribute of ownership or any
other encumbrance or right of third Persons.
"Material Adverse Effect" or "Material Adverse Change" means, with
respect to the specified Person, any effect or change that is materially
adverse to the condition (financial or otherwise), business, results of
operations, prospects, assets, liabilities or operations of such Person or to
the ability of such Person to consummate the transactions contemplated by this
Agreement, in each case taken as a whole.
"Permitted Lien" means (a) any immaterial materialmen's, mechanics',
carriers', workmen's, repairmen's or other like Liens arising in the ordinary
course of business for amounts not yet due or which are being contested in
good faith by appropriate proceedings, (b) any immaterial Liens for current
Taxes or special assessments not yet due or any Taxes being contested in good
faith by appropriate proceedings, (c) any Lien originating from the existence
(but not because of the breach of) any Contract disclosed in this Agreement or
the Disclosure Schedules or (d) any other immaterial Lien.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or
other entity. References to a person are also to its permitted successors and
assigns.
Section 10.2. Amendment and Modification. At any time prior to the
Effective Time, this Agreement may be amended, modified or supplemented only
by written agreement (referring specifically to this Agreement) of Celiant,
Sub and the Company with respect to any of the terms contained herein;
provided, however, that after any approval and adoption of this Agreement by
the Stockholders, no such amendment, modification or supplementation shall be
made which under applicable law requires the approval of such Stockholders,
without the further approval of such Stockholders.
Section 10.3. Waiver. At any time prior to the Effective Time, Celiant,
on the one hand, and the Company, on the other hand, may (i) extend the time
for the performance of any of the obligations or other acts of the other, (ii)
waive any inaccuracies in the representations and warranties of the other
contained herein or in any documents delivered pursuant hereto and (iii) waive
compliance by the other with any of the agreements or conditions contained
herein which may legally be waived. Any such extension or waiver shall be
valid only if set forth in an instrument in writing specifically referring to
this Agreement and signed on behalf of such party.
Section 10.4. Survivability; Investigations. The respective
representations and warranties of Celiant and the Company contained herein or
in any certificates or other documents delivered prior to or as of the
Effective Time (i) shall not be deemed waived or otherwise affected by any
investigation made by any party hereto and (ii) shall not survive beyond the
Effective Time.
Section 10.5. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
next-day courier or telecopied with confirmation of receipt, to the parties at
the addresses specified below (or at such other address for a party as shall
be specified by like notice; provided that notices of a change of address
shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied, or one day
after delivery to a courier for next-day delivery.
(a) If to Celiant, to:
Celiant Corp.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Cummis Radin Tischman ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
(b) if to the Company or Sub, to:
▇▇▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. English
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.6. Descriptive Headings; Interpretation. The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. References
in this Agreement to Sections, Schedules, Exhibits or Articles mean a Section,
Schedule, Exhibit or Article of this Agreement unless otherwise indicated.
References to this Agreement shall be deemed to include the Exhibits and
Schedules hereto, unless the context otherwise requires.
Section 10.7. Entire Agreement; Assignment. This Agreement (including the
Schedules and other documents and instruments referred to herein), together
with the Confidentiality Agreement, constitute the entire agreement and
supersede all other prior agreements and understandings, both written and
oral, among the parties or any of them, with respect to the subject matter
hereof. This Agreement is not intended to confer upon any person not a party
hereto any rights or remedies hereunder. This Agreement shall not be assigned
by operation of law or otherwise.
Section 10.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
Section 10.9. Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect against a party hereto, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby and such invalidity, illegality or unenforceability shall
only apply as to such party in the specific jurisdiction where such judgment
shall be made.
Section 10.10. Specific Performance. Each of the parties to this
Agreement acknowledges that the other parties would be damaged irreparably in
the event any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached. Accordingly,
each of the parties agrees that, other than as set forth in Sections
9.2(b)(i), (ii) and (iii), the other parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in addition to any other remedy to which they may be
entitled, at law or in equity.
Section 10.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, each of the Company, Sub and Celiant has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇ ▇. English
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Name: ▇▇▇▇▇ ▇. English
Title: Chairman and CEO
PTOLEMY ACQUISITION CO.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
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Name: ▇.▇. ▇▇▇▇▇▇▇▇
Title: President
CELIANT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CEO and President
02720.0001 #330250