EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
DATED MARCH 1, 2001,
AMONG
CHANGE TECHNOLOGY PARTNERS, INC.,
IGUANA STUDIOS I, INC.
AND
IGUANA STUDIOS, INC.
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AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated March
1, 2001, among Change Technology Partners, Inc., a Delaware corporation
("PARENT"); Iguana Studios I, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent ("SUB"); Iguana Studios, Inc., a Delaware corporation (the
"COMPANY"); those persons listed on Exhibit A (the "FOUNDER SHAREHOLDERS").
RECITALS
A. Parent, Sub and the Company intend to effect a merger of the
Company into Sub (the "MERGER") in accordance with this Agreement and the
Delaware General Corporation Law (the "DGCL"). Upon consummation of the Merger,
the Company will cease to exist and Sub will continue as a wholly-owned
subsidiary of Parent.
B. This Agreement has been approved by the respective boards of
directors of Parent, Sub and the Company.
C. The parties intend that the Merger will be treated as a tax
free reorganization as described in Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
AGREEMENT
The parties to this Agreement hereby agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, the
Company shall be merged with and into Sub at the Effective Time (as defined
below). At the Effective Time, the separate existence of the Company shall
cease, and Sub shall continue as the surviving corporation (the "SURVIVING
CORPORATION") and shall continue under the name "Iguana Studios I, Inc."
1.2 CLOSING. The closing of the Merger (the "CLOSING")
shall take place at 10:00 a.m., on the date hereof at the offices of Rosenman &
Colin LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "CLOSING DATE").
1.3 EFFECTIVE TIME OF THE MERGER. The Company shall file
a Certificate of Merger conforming to the requirements of Section 252(c) of the
DGCL (the "CERTIFICATE OF MERGER") with the Secretary of State of the State of
Delaware. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware (the
"EFFECTIVE TIME").
1.4 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in this Agreement and in the applicable provisions of the
DGCL.
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1.5 CERTIFICATE OF INCORPORATION; BY-LAWS. (a) The
certificate of incorporation of Sub, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended as provided therein or by applicable law, a
true copy thereof is attached as Exhibit B hereto.
(b) The by-laws of Sub, as in effect immediately prior
to the Effective Time, which are attached as Exhibit C hereto shall be the
by-laws of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.
1.6 DIRECTORS; OFFICERS. (a) The directors of Sub shall
be ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
(b) The officers of Sub shall be ▇▇▇▇▇▇▇ ▇▇▇▇, President,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Secretary, until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
ARTICLE II
CANCELLATION OF THE CAPITAL STOCK OF THE
COMPANY AND PAYMENT WITH RESPECT THERETO
2.1 CONSIDERATION. At the Effective Time, by virtue of
the Merger and without any action by the parties (1) all of the outstanding
shares of capital stock of the Company (the "COMPANY SHARES") shall be converted
into the right to receive, in the aggregate, $3,000,000 (the "CASH
CONSIDERATION"); 5,000,000 shares of Parent Common Stock (as defined herein)
(the aggregate number of such shares of Parent Common Stock, collectively, the
"SHARE CONSIDERATION"; and together with the Cash Consideration, collectively,
the "PURCHASE PRICE"); (2) all of the outstanding options and warrants to
purchase Company Shares, as set forth on Schedule 2.1 (the "COMPANY OPTIONS")
shall be converted into the right to receive, in the aggregate, the options to
purchase shares of Parent Common Stock (the "PARENT OPTIONS") as set forth on
Schedule 2.1 upon the terms and conditions provided therein which (subject to
the Lock-Up Agreement between Parent and the Shareholders (as defined therein),
dated as of even date herewith, a copy of which is attached as Exhibit D hereto)
do not differ materially from the terms and conditions of the Company Options
immediately prior to Closing (the aggregate number of Parent Options,
collectively, the "OPTION CONSIDERATION"); and (3) all of the outstanding shares
of Company Shares and Company Options shall cease to be outstanding, and shall
be cancelled and retired and shall cease to exist, and each holder of
certificates representing Company Shares (the "COMPANY SHARE CERTIFICATES")
shall cease to have any rights with respect thereto, except the right to receive
its pro rata portion of the Purchase Price upon the surrender of the Company
Share Certificates in accordance with this Section and each holder of Company
Options shall cease to have any rights with respect thereto, except the right to
receive those Parent Options set forth on Schedule 2.1.
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2.2 PAYMENT OF PURCHASE PRICE. At the Effective Time, the
Purchase Price shall be paid by Parent, as follows: (1) (A) $2,548,000 shall be
paid by certified or bank check pro rata, based upon the total number of the
outstanding Company Shares, as provided on Schedule 2.2 ("PRO RATA") to the
Founder Shareholders and those other shareholders of the Company listed on
Exhibit E hereto (the "NON-FOUNDER SHAREHOLDERS"; together with the Founder
Shareholders, collectively the "SHAREHOLDERS") that have delivered duly executed
Transmittal Letters, a form of which is attached as Exhibit F hereto, together
with their Company Share Certificates to the Company, which the Company has
delivered to Parent (together with any Shareholder in respect of which a
Transmittal Letter and Company Shares Certificates are subsequently delivered to
Parent, each, a "CONSENTING SHAREHOLDER"); and (B) 2,700,000 shares of Parent
Common Stock shall be issued Pro Rata to the Consenting Shareholders; and (2)
(A) the balance of the Purchase Price consisting of $150,000 (the "CASH ESCROW")
and 2,300,000 shares of Parent Common Stock (the "STOCK ESCROW"; and together
with the Cash Escrow, collectively, the "ESCROW FUND"); and (B) any other Cash
Consideration other than the Cash Escrow not distributed as provided above (the
"SPECIAL CASH ESCROW") and any Share Consideration other than the Stock Escrow
(the "SPECIAL STOCK ESCROW"; and together with the Special Cash Escrow,
collectively, the "SPECIAL ESCROW FUND") shall be delivered to Rosenman & Colin
LLP (the "ESCROW AGENT") as escrow agent for the Shareholders, which shall be
held by the Escrow Agent pursuant to the terms of the Escrow Agreement, attached
as Exhibit G hereto. The Cash Escrow shall be held for a period not to exceed 90
days after the Effective Time, and the Stock Escrow shall be held for a period
ending on a date not to exceed June 30, 2002. Notwithstanding the foregoing, if
the certificates representing the Share Consideration are delivered by Parent to
the Consenting Shareholders and the Escrow Agent as soon as reasonably
practicable after the Effective Time, they will be deemed to have been delivered
at the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE FOUNDER SHAREHOLDERS
Whenever any representation and warranties of the Founder Shareholders
set forth herein are qualified as to the "KNOWLEDGE OF SENIOR MANAGEMENT," such
term means the actual knowledge, after due inquiry, of any one or more of the
following persons: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ III. Each of the Founder Shareholders, severally, hereby
represents and warrants to Parent that except as set forth in a disclosure
letter delivered to Parent at the Closing (the "IGUANA DISCLOSURE LETTER"), a
copy of which is attached as Exhibit J hereto:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly incorporated, duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own and operate its properties and
assets, to execute and deliver this Agreement and to carry on its business as
presently conducted and as presently proposed to be conducted. The Company is
duly qualified and is authorized to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of its activities
and of its properties (both owned and leased) makes such qualification necessary
and in which failure to so qualify might reasonably be expected, individually,
or in the aggregate, to have a material adverse effect on the financial
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condition, operating results, assets or operations of the Company (a "MATERIALLY
ADVERSE EFFECT"). The Company owns no securities of any other corporation,
limited partnership, limited liability company or other entity. The Company is
not a participant in any joint venture, partnership, limited liability company
or similar arrangement.
3.2 CAPITALIZATION. (a) The authorized capital stock of
the Company, immediately prior to the Closing, will consist of 22,500,00 shares
of common stock of which 7,502,907 (the "COMPANY SHARES") are issued and
outstanding. The Company has not authorized the issuance of any other capital
stock. The Shares (A) have been duly authorized and validly issued to the
persons and in the amounts listed on Exhibits A and E hereto, (B) are fully paid
and nonassessable, and (C) were issued in compliance with all applicable state
and federal laws concerning the offer, sale and issuance of securities. There
are no authorized or outstanding subscriptions, warrants, options, contracts,
rights (pre-emptive or otherwise), calls, commitments or demands of any
character (other than the Company Options) relating to any authorized and issued
or unissued shares of the capital stock of the Company or other instruments
convertible into or exchangeable for such stock, or which obligate the Company
to seek authorization to issue additional shares of any class of stock, other
than created by virtue of this Agreement or the transactions contemplated
hereby.
(b) The Merger does not constitute and will not
constitute an event under any capital stock or convertible security or any
anti-dilution or similar provision of any agreement to which the Company is a
party or by which it is bound or affected, which shall either increase the
number of shares or units of capital stock issuable upon conversion of any
securities or upon exercise of any warrant or right to subscribe to or purchase
any stock or similar security, or decrease the consideration per share or unit
of capital stock to be received by the Company upon such conversion or exercise.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. This Agreement
constitutes the valid and binding obligations of the Company and each of the
Shareholders enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; and (ii) as
limited by general principles of equity that restrict the availability of
equitable remedies. The Merger will not be subject to any pre-emptive rights,
rights of first refusal, rights of first offer or other similar rights.
3.4 FINANCIAL STATEMENTS. The Company has delivered to
Parent its audited Statement of Operations and Balance Sheets for the fiscal
year ended December 31, 1999 and 1998 (collectively, the "AUDITED FINANCIAL
STATEMENTS") and its unaudited Statement of Operations and Balance Sheets as of
and for the 14-month period ended February 28, 2001 (collectively, the "INTERIM
FINANCIAL STATEMENTS"); and together with the Audited Financial Statements,
collectively, the "COMPANY FINANCIAL STATEMENTS"). The Company Financial
Statements are in accordance with the books and records of the Company, are
complete and correct in all material respects, and present fairly the financial
condition and position of the Company for the periods covered and as of February
28, 2001, (the "COMPANY STATEMENT DATE"), and other dates therein specified and
the results of its operations for the periods therein specified; provided, that
the Audited Financial Statements have been audited by an independent accountant,
and the Company Financial Statements are prepared in accordance with GAAP;
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provided, further, that the unaudited Interim Financial Statements are subject
to normal recurring year-end adjustments (which are not expected to be
material).
3.5 LIABILITIES. The Company has no material obligations
or liabilities that are not disclosed or reflected in the Company Financial
Statements, except current liabilities incurred, and obligations entered into,
in the ordinary course of business subsequent to the Company Statement Date.
3.6 AGREEMENTS; ACTION.
(a) There are no agreements, understandings or proposed
transactions between the Company and any of its officers or directors, or any
family member of any of its officers or directors, or any affiliate thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $25,000,
or (ii) the license of any patent, copyright, trade secret or other proprietary
right to or from the Company or (iii) provisions restricting or affecting the
development, manufacture or distribution of the Company's products or services,
or (iv) indemnification by the Company with respect to infringements of
proprietary rights.
(c) Since the Company Statement Date, the Company has
not (i) declared or paid any dividends, or authorized or made any distribution
upon or with respect to any of its capital stock, (ii) incurred any indebtedness
for money borrowed or any other liabilities (other than with respect to
indebtedness and other obligations incurred in the ordinary course of business
or as disclosed in the Company Financial Statements), (iii) made any loans or
advances to any person, other than ordinary and reasonable advances for travel
expenses, other than in the ordinary course of business, or (iv) sold, exchanged
or otherwise disposed of any of its assets or rights, other than in the ordinary
course of business.
(d) For the purposes of subsections (a) and (b) above,
all indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same person or entity
(including persons or entities the Company has reason to believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.
3.7 OBLIGATIONS TO RELATED PARTIES. There are no
obligations of the Company to officers, directors, stockholders, or employees
of the Company other than for payment of salary or other fees for services
rendered, and reimbursement for reasonable expenses incurred on behalf of the
Company.
3.8 CHANGES. Since the Company Statement Date, there has
not been:
(a) Any change in the assets, liabilities, financial
condition or operations of the Company from that reflected in the Company
Financial Statements, other than changes in the ordinary course of business,
none of which individually or in the aggregate has had or is reasonably expected
to have a Materially Adverse Effect;
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(b) Any resignation or termination of any key officers
of the Company, and the Founder Shareholders, to the best of their knowledge, do
not know of the impending resignation or termination of employment of any such
officer;
(c) Any change in the contingent obligations of the
Company by way of guaranty, endorsement, indemnity, warranty or otherwise;
(d) Any cancellation, compromise or waiver by the Company
of a valuable right or of a material debt owed to it;
(e) Any direct or indirect loans made by the Company to
any stockholder, employee, officer or director of the Company;
(f) Any change in any compensation arrangement or
agreement with any employee, officer, director or stockholder, except as
contemplated herein;
(g) Any declaration or payment of any dividend or other
distribution of the assets of the Company or any purchase or redemption of any
of its outstanding equity interests;
(h) Any debt, obligation or liability incurred, assumed
or guaranteed by the Company, except those for immaterial amounts;
(i) Any sale, transfer or lease of the assets of the
Company;
(j) Any physical damage, destruction or loss (whether
or not covered by insurance) which individually or in the aggregate has had or
is reasonably expected to have a Materially Adverse Effect;
(k) Any issuance or sale of any shares of the capital
stock or other securities of the Company or grant of any options with respect
thereto, or any modification of any of the capital stock of the Company;
(l) Any mortgage, pledge or lien incurred with respect
to any of the assets of the Company;
(m) Any discharge, satisfaction or payment of any
obligation or liability other than current liabilities reflected in the Company
Financial Statements and current liabilities incurred since the Company
Statement Date, in each case in the ordinary course of business;
(n) Any transaction entered into by the Company other
than in the ordinary course of business; or
(o) Any other event or condition of any character that,
either individually or in the aggregate, has had or is reasonably likely to have
a Materially Adverse Effect.
3.9 TITLE TO PROPERTIES AND ASSETS; LIENS. The Company
has good and marketable title to its properties and assets reflected in the most
recent balance sheet included in the Company Financial Statements, and good
title to its leasehold estates, in each case subject to
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no mortgage, pledge, lien, lease, encumbrance or charge, other than (i) those
resulting from taxes which have not yet become delinquent, (ii) liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company, and (iii)
those that have otherwise arisen in the ordinary course of business. All
facilities, machinery, equipment, fixtures, vehicles and other properties owned,
leased or used by the Company are in good operating condition and repair, are
reasonably fit and usable for the purposes for which they are being used and are
adequate and sufficient for the Company's business.
3.10 FIRPTA. The Company is not a "FOREIGN PERSON" within
the meaning of Section 1445 of the Code.
3.11 INTELLECTUAL PROPERTY The Company owns or possesses
legal rights to any and all patents, trademarks, service marks, trade names,
copyrights, trade secrets, domain names, information and other proprietary
rights and processes necessary for its business as now conducted (the
"INTELLECTUAL Property"). The Intellectual Property does not infringe any right
of any third party, including, without limitation, any rights under the laws of
patent, trademark, copyright, trade secret, or any personal, moral, privacy,
publicity, contract or other property rights. To the Knowledge of Senior
Management, the Intellectual Property has not been and is not currently being
infringed by any third party. To the Knowledge of Senior Management, the
materials created by the Company, its consultants and its contractors and
displayed on the Company's web site, or any other web site operated and managed
by the Company (collectively, the "WEB SITES"), are not obscene, libelous or
defamatory and do not violate any applicable laws. There are no outstanding
options, licenses or agreements of any kind relating to the foregoing, nor is
the Company bound by or a party to any options, licenses or agreements of any
kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity. The Company is not obligated or
under any liability whatsoever to make any payments by way of royalties, fees or
otherwise to any owner or licensee of, or other claimant to, any patent,
trademark, service ▇▇▇▇, trade name, copyright, trade secret, information or
other proprietary right, with respect to the use thereof, or in connection with
the conduct of its business or otherwise. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other person or entity. The Founder Shareholders are not aware that any of
the employees of the Company are obligated under any contract (including
licenses, covenants or commitments of any nature) or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their duties to the Company or that would conflict with the Company's business
as presently proposed to be conducted. Neither the execution, delivery or
performance of this Agreement, nor the carrying on of the Company's business by
the employees of the Company, nor the conduct of the Company's business as
presently proposed to be conducted, will conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any employee is now obligated. The
Company does not, nor shall it, utilize any inventions, trade secrets or
proprietary information of any of its employees made prior to their employment
by the Company, except for inventions, trade secrets or proprietary information
that have been legally and validly assigned to the Company. Since its
organization, the Company has taken reasonable security measures to
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protect the secrecy, confidentiality and value of its trade secrets, including
know-how, negative know-how, formulas, patterns, compilations, programs,
devices, methods, techniques, processes, inventions, designs, computer programs,
and technical data and all information that derives independent economic value,
actual or potential from not being generally known or known by competitors.
3.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not
in violation or default of any term of its Certificate of Incorporation or its
Bylaws, or of any provision of any mortgage, indenture, contract, agreement,
instrument or contract to which it is party or by which it is bound or of any
statute, rule or regulation applicable to the Company. The execution, delivery,
and performance of and compliance with this Agreement and the sale of the
Company Shares pursuant hereto will not, with or without the passage of time or
giving of notice, result in any such violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
3.13 LITIGATION. There is no action, suit, other
proceeding or investigation pending, or to the Founder Shareholders' knowledge,
threatened against the Company; nor is there any basis for the foregoing. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, other proceeding or investigation by
the Company currently pending or which the Company intends to initiate.
3.14 TAX RETURNS AND PAYMENTS. The Company has timely
filed all tax returns (federal, state and local) required to be filed by it. All
taxes shown to be due and payable on such returns, any assessments imposed, and
all other taxes due and payable by the Company on or before the Closing Date
hereof have been paid or reserved for payment prior to the time they become
delinquent. The Company has not been advised (i) that any of its returns,
federal, state or other, have been or are being audited as of the date hereof,
or (ii) of any deficiency in assessment or proposed judgment to its federal,
state or other taxes. There is no liability for any tax to be imposed upon the
Company's properties or assets as of the date of this Agreement that is not
adequately provided for. The Company has not executed any waiver of any statute
of limitations on the assessment or calculation of any tax or governmental
charge. The Company has withheld or collected from each payment made to each of
its employees the amount of all taxes required to be withheld or collected
therefrom.
The Company is an "ELIGIBLE CORPORATION" (as defined in Section
1202(e)(4) of the Code) The Company has not made any purchases of its Capital
Stock during the one-year period preceding the date hereof having an aggregate
value exceeding five percent (5%) of the aggregate value of all of its Capital
Stock as of the beginning of such period. At or prior to the Closing Date, the
Company's aggregate "GROSS ASSETS" (as defined in Section 1202(d)(2) of the
Code) has at no time exceeded, nor is expected to exceed, $50,000,000, taking
into account the assets of any Persons required to be aggregated into the
Company in accordance with Section 1202(3) of the Code.
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3.15 INVESTMENT COMPANY. The Company is not and is not
controlled by or affiliated with an "INVESTMENT COMPANY" within the meaning of
the Investment Company Act of 1940 other than solely as a result of this
Agreement.
3.16 EMPLOYEES. The Company has no collective bargaining
agreement with any of its employees. There is no labor union organizing activity
pending or, to the Founder Shareholders' knowledge, threatened with respect to
the Company. Except as set forth herein, no employee has any agreement or
contract, written or verbal, regarding such employee's continued employment by
the Company. The Company is not a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other material employee
compensation plan or agreement. To the Knowledge of Senior Management, no
employee of the Company, nor any consultant with whom the Company has
contracted, is in material violation of any term of any employment contract,
proprietary information agreement or any other agreement relating to the right
of any such individual to be employed by, or to contract with, the Company
because of the nature of the business to be conducted by the Company; and the
continued employment by the Company of its present employees, and the
performance of the Company's contracts with its independent contractors, will
not result in any such violation. The Company has not received any notice
alleging that any such violation has occurred. Except as contemplated hereby, no
employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. To the Knowledge of Senior Management, no officer or key
employee, or any group of key employees, intends to terminate their employment
with the Company, and the Company does not have a present intention to terminate
the employment of any officer, key employee or group of key employees.
3.17 OBLIGATIONS OF MANAGEMENT; EMPLOYEE EFFORTS. Each
officer of the Company with an employment agreement is currently devoting one
hundred percent (100%) of his or her business time to the conduct of the
business of the Company in accordance with the terms of such agreement. The
Founder Shareholders are not aware of any such officer or key employee of the
Company planning to work less than full business time at the Company in the
future.
3.18 REGISTRATION RIGHTS. The Company is currently not
under any obligation, and has not granted any rights, to register any of the
Company's presently outstanding securities or any of its securities that may
hereafter be issued.
3.19 COMPLIANCE WITH LAWS; PERMITS. The Company is not in
violation of any applicable statute, rule, regulation, order or restriction of
any domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties, which
alone or together with any other violations would have a Material Adverse
Effect. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations
are required to be filed in connection with the execution and delivery of this
Agreement and the Merger. The Company has all material franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, and can obtain, without undue burden
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or expense, any similar authority for the conduct of its business as presently
planned to be conducted.
3.20 HEALTH AND SAFETY LAWS. To the Knowledge of Senior
Management, the Company is not in violation of any applicable statute, law or
regulation relating to occupational health and safety.
3.21 OFFERING DOCUMENTS. Neither the Company nor any
agent, employee or representative of the Company has delivered any other
document regarding the transactions contemplated herein to any Shareholder other
than the Information Statement distributed by the Company to Shareholders, a
copy of which is attached as Exhibit H hereto and other documents listed on the
Table of Attachments thereto.
3.22 MINUTE BOOKS. The minute books of the Company
provided to Parent are complete and accurate in all material respects.
3.23 INSURANCE. There are no insurance policies maintained
by the Company out of the ordinary course of business.
3.24 EMPLOYMENT BENEFIT PLANS-ERISA. Neither the Company
nor any ERISA Affiliate (defined below) maintains, administers, contributes to
or is obligated to contribute to, nor has the Company or any ERISA Affiliate
during the six (6) year period ending on the date hereof, maintained,
administered, contributed to or been obligated to contribute to, nor do the
employees of the Company or any ERISA Affiliate receive as a condition of
employment with the Company, benefits pursuant to any employee pension benefit
plan (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), including, without limitation, any multiemployer
plan as defined in Section 3(37) of ERISA, nor does the Company maintain any
employee welfare benefit plan (as defined in Section 3(1) of ERISA); or bonus,
deferred compensation, stock purchase, stock option, severance plan, salary
continuation, vacation, sick leave, material fringe benefit, incentive,
insurance, welfare or similar compensatory arrangement. "ERISA AFFILIATE" means
all members of a controlled group of corporations and all trades and businesses
(whether or not incorporated) under common control and all other entities which,
together with the Company, are treated as a single employer under any or all of
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code on either the date
of this Agreement or at any time during the period of five (5) years ending on
the date hereof.
3.25 INTERESTED PARTY TRANSACTION. No officer, director or
stockholder of the Company has or has had, either directly or indirectly, (a) an
interest in any person which (i) furnishes or sells services or products which
are furnished or sold or are proposed to be furnished or sold by the Company, or
(ii) purchases from or sells or furnishes to the Company any goods or services,
or (b) a beneficial interest in any contract or agreement (other than employment
or similar agreements) to which the Company is a party or by which it may be
bound or affected.
3.26 ENVIRONMENTAL MATTERS.
(a) No hazardous material, hazardous substance or toxic
substance as defined in applicable environmental laws, rules and regulations
("HAZARDOUS MATERIALS") (i) has been
10
released, stored, generated, used, treated, deposited or disposed of on or under
or is located on or under any real property currently or previously owned or
leased by the Company, (ii) is presently maintained, used, generated, or
permitted to remain in place by the Company in violation of any applicable law,
(iii) is required by applicable law to be removed, treated or mitigated by the
Company, given the nature of its present condition, location, nature, material
or maintenance, or (iv) is of a type, location, material, nature or condition
which requires special notification to third parties by the Company under
applicable law.
(b) The Company has maintained its properties and assets
and conducted its business in all material respects in accordance with all
federal, state and local statutes, laws, rules and regulations pertaining to
conservation and protection of the environment and the release, treatment,
discharge, use, handling, storage, production and disposal of Hazardous
Materials.
(c) No notice, citation, summons or order has been
received by the Company and no investigation or review is pending or, to the
Knowledge of Senior Management, threatened by any governmental or other entity,
with respect to (i) any alleged violation by the Company of any environmental
statute, ordinance, rule, regulation or order of any governmental entity, or
(ii) any alleged failure by the Company to have any environmental permit,
certificate, license, approval, registration or authorization required in
connection with its business, or (iii) any use, possession, generation,
treatment, storage, recycling, transportation, release or disposal by or on
behalf of the Company of any Hazardous Material.
3.27 FULL DISCLOSURE. No representation or warranty of the
Founder Shareholders contained in this Agreement and all other documents
delivered by or on behalf of the Shareholders to Parent or Parent's attorneys or
agents in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein, in light of the
circumstances in which made, not misleading as of the date hereof or thereof.
3.28 YEAR 2000. The computer systems and software owned or
licensed by the Company are able to accurately process date data, including but
not limited to, calculating, comparing and sequencing from, into and between the
twentieth century (through year 1999), the year 2000 and the twenty-first
century, including leap year calculations.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub, jointly and severally, hereby represent and
warrant to the Founder Shareholders that except as set forth in the disclosure
letter delivered to the Founder Shareholders at Closing (the "PARENT/SUB
DISCLOSURE LETTER") and SEC Documents:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each
of Parent and Sub is a corporation duly incorporated, duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
Parent and Sub has all requisite corporate power and authority to own and
operate its properties and assets, to execute and deliver this Agreement and to
carry on its business as presently conducted and as presently proposed to be
conducted. Each of Parent and Sub is duly qualified and is authorized to do
business and is in
11
good standing as a foreign corporation in all jurisdictions in which the nature
of its activities and of its properties (both owned and leased) makes such
qualification necessary and in which failure to so qualify might reasonably be
expected, individually, or in the aggregate, to have a Materially Adverse
Effect. Each of Parent and Sub owns no securities of any other corporation,
limited partnership, limited liability company or other entity. Each of Parent
and Sub is not a participant in any joint venture, partnership, limited
liability company or similar arrangement.
4.2 CAPITALIZATION. (a) Set forth on Schedule 4.2 is the
capitalization of Parent immediately prior to the Closing Date, prior to giving
effect to the transactions contemplated by this Agreement.
(b) The Merger does not constitute and will not
constitute an event under any capital stock or convertible security or any
anti-dilution or similar provision of any agreement to which Parent or Sub is a
party or by which it is bound or affected, which shall either increase the
number of shares or units of capital stock issuable upon conversion of any
securities or upon exercise of any warrant or right to subscribe to or purchase
any stock or similar security, or decrease the consideration per share or unit
of capital stock to be received by Parent or by Sub upon such conversion or
exercise.
4.3 AUTHORIZATION; BINDING OBLIGATIONS. This Agreement
constitutes the valid and binding obligations of Parent and Sub enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; and (ii) as limited by general
principles of equity that restrict the availability of equitable remedies. The
Merger will not be subject to any pre-emptive rights, rights of first refusal,
rights of first offer or other similar rights.
4.4 SEC DOCUMENTS. As of the dates when filed and of the
Closing, each Annual Report, Quarterly Report and each other document filed with
the Securities and Exchange Commission ("SEC") pursuant to Sections 13 or 15(d)
of the Securities Exchange Act of 1934 (other than any document which is not
deemed to be filed under applicable SEC rules and regulations) (collectively,
"SEC DOCUMENTS") does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances in which they were made,
not misleading. Set forth on Schedule 4.4 is a list of all SEC Documents filed
with respect to the period commencing on January 1, 2000 and ending on the date
prior to the date hereof.
4.5 FINANCIAL STATEMENTS. The Parent has delivered to the
Founder Shareholders its audited Statement of Operations and Balance Sheets for
the fiscal year ended December 31, 1999 (the "PARENT AUDITED FINANCIAL
STATEMENTS") and its unaudited Statement of Operations and Balance Sheets for
the 9-month period ended September 30, 2000 (collectively, the "PARENT INTERIM
FINANCIAL STATEMENTS"); and together with the Audited Financial Statements,
collectively, the "PARENT FINANCIAL STATEMENTS"). The Parent Financial
Statements are in accordance with the books and records of the Parent, are
complete and correct in all material respects, and present fairly the financial
condition and position of Parent for the periods covered and as of September 30,
2000, (the "PARENT STATEMENT DATE"), and other dates therein specified and the
results of its operations for the periods therein specified; provided, that the
Parent Audited Financial Statements have been audited by an independent
accountant and the Parent
12
Financial Statements are prepared in accordance with GAAP; provided, further,
that the unaudited draft Parent Interim Financial Statements are subject to
normal recurring year-end adjustments (which are not expected to be material).
4.6 COMPLIANCE WITH OTHER INSTRUMENTS. Parent and Sub are
not in violation or default of any term of their Certificates of Incorporation
or its Bylaws, or of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is a party or by which it is bound
or of any statute, rule or regulation applicable to Parent or Sub. The
execution, delivery, and performance of and compliance with this Agreement and
the Merger pursuant hereto will not, with or without the passage of time or
giving of notice, result in any such violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Parent or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit license, authorization or approval applicable to
Parent, its business or operations or any of its assets or properties.
4.7 OFFERING VALID. Assuming due payment for the Share
Consideration, the due execution by each Shareholder of a Transmittal Letter and
the accuracy of the representations and warranties of the Founder Shareholders
contained in Section 3.21 hereof and of each Shareholder in its Representation
Letter, a form of which is attached as Exhibit I hereto, the sale of the Share
Consideration will be exempt from the registration requirements of the
Securities Act of 1933, and will have been registered or qualified (or are
exempt from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.
4.8 INVESTMENT COMPANY. Parent is not and is not
controlled by or affiliated with an "INVESTMENT COMPANY" within the meaning of
the Investment Company Act of 1940.
4.9 SUB FORMED FOR THE PURPOSE OF THIS TRANSACTION. Sub
was formed solely for the purpose of engaging in the transaction contemplated
hereby and has not engaged in any business activities or conducted any
operations other than in connection with the transaction contemplated hereby.
Any and all outstanding Sub capital stock has been validly authorized and
issued. All of the issued and outstanding shares of capital stock of Sub are
owned of record or beneficially by Parent free and clear of any liens,
mortgages, pledges or any other types of encumbrances.
4.10 TAX RETURNS AND PAYMENTS. Parent has timely filed all
tax returns (federal, state and local) required to be filed by it. All taxes
shown to be due and payable on such returns, any assessments imposed, and all
other taxes due and payable by Parent on or before the Closing Date hereof have
been paid or reserved for payment prior to the time they become delinquent.
Parent has not been advised (i) that any of its returns, federal, state or
other, have been or are being audited as of the date hereof, or (ii) of any
deficiency in assessment or proposed judgment to its federal, state or other
taxes. There is no liability for any tax to be imposed upon the Parent's
properties or assets as of the date of this Agreement that is not adequately
provided for. Parent has not executed any waiver of any statute of limitations
on the assessment or calculation of any tax or governmental charge. Parent has
withheld or collected
13
from each payment made to each of its employees the amount of all taxes required
to be withheld or collected therefrom.
4.11 COMPLIANCE WITH LAWS; PERMITS. Neither Parent nor Sub
is in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties, which alone or together with any other violations would have a
Material Adverse Effect. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained and no registrations or
declarations are required to be filed in connection with the execution and
delivery of this Agreement and the Merger. Parent and Sub have all material
franchises, permits, licenses and any similar authority necessary for the
conduct of each of their businesses as now being conducted by it, and can
obtain, without undue burden or expense, any similar authority for the conduct
of its business as presently planned to be conducted.
4.12 FULL DISCLOSURE. No representation or warranty of
Parent or Sub contained in this Agreement and all other documents delivered by
or on behalf of the Parent or Sub to the Founder Shareholders' or their
attorneys or agents in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances in which made, not misleading as of the date hereof
or thereof. Further, the information about Parent contained in the Information
Statement does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances in which made, not misleading as of the
date hereof.
4.13 ENVIRONMENTAL MATTERS. (a) No Hazardous Material (i)
has been released, stored, generated, used, treated, deposited or disposed of on
or under or is located on or under any real property currently or previously
owned or leased by the Parent or Sub, (ii) is presently maintained, used,
generated, or permitted to remain in place by Parent of Sub in violation of any
applicable law, (iii) is required by applicable law to be removed, treated or
mitigated by Parent or Sub, given the nature of its present condition, location,
nature, material or maintenance, or (iv) is of a type, location, material,
nature or condition which requires special notification to third parties by
Parent of Sub.
(b) Each of Parent and Sub has maintained its properties
and assets and conducted its business in all material respects in accordance
with all federal, state and local statutes, laws, rules and regulations
pertaining to conservation and protection of the environment and the release,
treatment, discharge, use, handling, storage, production and disposal of
Hazardous Materials.
(c) No notice, citation, summons or order has been
received by Parent or Sub and no investigation or review is pending or, to the
knowledge of Parent and Sub, threatened by any governmental or other entity,
with respect to (i) any alleged violation by the Company of any environmental
statute, ordinance, rule, regulation or order of any governmental entity, or
(ii) any alleged failure by Parent or Sub to have any environmental permit,
certificate, license, approval,
14
registration or authorization required in connection with its business, or (iii)
any use, possession, generation, treatment, storage, recycling, transportation,
release or disposal by or on behalf of Parent or Sub of any Hazardous Material.
ARTICLE V
INDEMNIFICATION
5.1 PARENT INDEMNIFICATION. Parent agrees to defend,
indemnify and save and hold harmless each of the Founder Shareholders from and
against any and all losses, costs, expenses, liabilities, claims or legal
damages (including, without limitation, reasonable fees and disbursements of
counsel and accountants and other costs and expenses incident to any actual or
threatened claim, suit, action or proceeding, whether incurred in connection
with a claim against a party or otherwise) (collectively, "CLAIMS") arising out
of or resulting from: (i) any breach of any representation, warranty or
agreement made by Parent or Sub in this Agreement; (ii) any legal,
administrative or other proceedings brought by a third party arising out of the
transactions contemplated by this Agreement other than such proceedings
attributable to the gross negligence or willful misconduct of the Founder
Shareholders; or (iii) any actual or threatened claim, suit, action or
proceeding arising out of or resulting from the conduct by Parent or Sub of its
business or operations, or Parent's or Sub's occupancy or use of its properties
or assets, prior to the Closing Date; provided that, if and to the extent that
any indemnification is unenforceable for any reason, Parent shall make the
maximum contribution to the payment and satisfaction of such indemnified
liability which shall be permissible under applicable laws.
5.2 FOUNDER SHAREHOLDERS INDEMNIFICATION. The Founder
Shareholders agree to defend, indemnify and save and hold harmless each of
Parent and Sub from and against any and all Claims arising out of or resulting
from: (i) any breach of any representation, warranty or agreement made by the
Founder Shareholders in this Agreement; (ii) any legal, administrative or other
proceedings brought by a third party arising out of the transactions
contemplated by this Agreement caused by the gross negligence or willful
misconduct of the Founder Shareholders; or (iii) any actual or threatened claim,
suit, action or proceeding arising out of or resulting from the conduct by
Company of its business or operations, or Company's occupancy or use of its
properties or assets, prior to the Closing Date that has not been disclosed in
the Disclosure Letter delivered to Parent or which arises out of or results from
the gross negligence or willful misconduct of the Founder Shareholder(s);
provided that, if and to the extent that any indemnification is unenforceable
for any reason, the Founder Shareholders shall make the maximum contribution to
the payment and satisfaction of such indemnified liability which shall be
permissible under applicable laws.
5.3 PROCEDURE. Each party entitled to be indemnified
pursuant to this Article V (each, an "INDEMNIFIED PARTY") shall notify the party
obligated to indemnify such Indemnified Party (the "INDEMNIFYING PARTY") in
writing of any claim or action against such Indemnified Party in respect of
which the Indemnifying Party is or may be obligated to provide indemnification
on account of Sections 5.1 or 5.2, promptly after the receipt of notice of the
commencement thereof. The omission of any Indemnified Party so to notify the
Indemnifying
15
Party of any such claim or action shall not relieve the Indemnifying Party from
any liability which the Indemnifying Party may have to such Indemnified Party
except to the extent the Indemnifying Party shall have been prejudiced by the
omission or delay of such Indemnified Party so to notify the Indemnifying Party
pursuant to this Section 5.3. If any such action shall be brought against any
Indemnified Party and it shall notify the Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled to participate therein and, to
the extent that the Indemnifying Party may wish to assume the defense thereof,
with counsel reasonably satisfactory to such Indemnified Party, and after notice
from the Indemnifying Party to such Indemnified Party of its election so to
assume the defense thereof, the Indemnifying Party will not be liable to such
Indemnified Party under Sections 5.1 or 5.2 for any legal or other expense
subsequently incurred by such Indemnified Party in connection with the defense
thereof nor for any settlement thereof entered into without the consent of the
Indemnifying Party; provided, however, that (i) if the Indemnifying Party shall
fail or refuse to assume the defense of such action or (ii) if the Indemnified
Party and its counsel reasonably determine (x) that there may be a conflict
between the positions of the Indemnifying Party and of the Indemnified Party in
defending such action or (y) that there may be legal defenses available to such
Indemnified Party different from or in addition to those available to the
Indemnifying Party, then one separate counsel for the Indemnified Party shall be
entitled to participate in and conduct the defense, in the case of (i) and
(ii)(x), or such different defenses, in the case of (ii)(y), and the
Indemnifying Party shall be liable for any reasonable legal or other expenses
incurred by the Indemnified Party in connection with the defense.
5.4 INDEMNIFICATION NON-EXCLUSIVE. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable or common law remedy any party may have for breach of
representation, warranty, covenant or agreement. Notwithstanding the foregoing,
Parent and Sub's claims for monetary damages shall be limited to the Escrow
Fund.
ARTICLE VI
COVENANTS
6.1 EMPLOYMENT AND OTHER AGREEMENT. The parties hereto
shall cooperate with one another to have Sub enter into Employee
Confidentiality, Non-Competition and Disclosure and Assignment of Work Product
agreements with each employee listed on Schedule 6.1 hereto. Sub will assume as
of the Effective Time, the employment agreements listed on Schedule 6.1.
6.2 ASSUMPTION OF PERSONAL GUARANTEES. Parent shall use
its commercially reasonable best efforts to assume the personal guarantees of
the Founder Shareholders set forth on Schedule 6.2 hereto (the "FOUNDER
GUARANTEE") as of the Effective Time or as soon as practicable thereafter. If,
notwithstanding such efforts, a Founder Shareholder remains liable under any
Founder Guarantee, Parent and Sub shall indemnify and hold harmless such Founder
Shareholder with respect to such Founder Guarantee.
6.3 REGISTRATION RIGHTS. As soon as reasonably
practicable after the Effective Time, Parent and Sub shall use their
commercially reasonable best efforts to enter into
16
an agreement with the Shareholders to provide demand and piggy-back registration
rights for the Shareholders under usual and customary terms for transactions of
this kind, which rights shall begin two years after the Effective Time.
ARTICLE VII
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed in
all respects by the internal substantive laws, and not the laws of conflicts, of
the State of New York.
7.2 SURVIVAL. The representations, warranties and
agreements made herein by the parties shall survive any investigation made by
the other party and the Closing for the period ending on June 30, 2002.
7.3 SUCCESSORS AND ASSIGNS. The provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the Share
Consideration from time to time.
7.4 ENTIRE AGREEMENT. This Agreement and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and no
party shall be liable or bound to any other in any manner by any
representations, warranties and agreements except as specifically set forth
herein and therein.
7.5 SEVERABILITY. If any provision of the Agreement shall
be determined to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
7.6 AMENDMENT.
This Agreement may be amended or modified only upon the
written consent of the Shareholders and Parent.
7.7 WAIVERS, DELAYS OR OMISSIONS. No delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on any party's part of any
breach, default or noncompliance under this Agreement or any waiver on such
party's part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies under this Agreement afforded to any party shall be
cumulative and not alternative.
7.8 NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified;
17
(ii) five (5) business days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iii) one (1) business day
after deposit with a nationally recognized overnight courier, specifying next
business day delivery, with written verification of receipt. All communications
shall be sent:
(a) If to Parent or Sub, to:
Change Technology Partners, Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
with a copy to:
Rosenman & Colin LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Company, to:
Iguana Studios, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to the Founder Shareholders to:
Their respective addresses set forth on Exhibit A
hereto.
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
18
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
7.9 EXPENSES. The Company shall pay all costs and
expenses that it incurs with respect to the negotiation,
execution, delivery and performance of the Agreement, except for those listed on
Schedule 7.9 which shall be paid by Parent at the Effective Time or upon the
release of Cash Escrow, as provided in Schedule 7.9. Parent shall pay the costs
and expenses that it incurs in connection with the negotiation, execution and
delivery of this Agreement.
7.10 HEADINGS. The headings of the sections and
subsections of the Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
7.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
7.12 PRONOUNS. All pronouns contained herein and any
variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the parties hereto may require.
7.13 KNOWLEDGE. The term "knowledge" shall mean, with
respect hereto, actual knowledge, after reasonable inquiry, of with respect to
either party, any independent contractors, any members of its Board of Directors
or any officer of that party with the title ranking not less than senior vice
president.
7.14 BROKER'S FEES. Except as set forth on the disclosure
schedule, each party hereto represents and warrants that no agent, broker,
investment banker, person or firm acting on behalf of or under the authority of
such party hereto is or will be entitled to any broker's or finder's fee or any
other commission directly or indirectly in connection with the transactions
contemplated herein. Each party hereto further agrees to indemnify each other
party for any claims, losses or expenses incurred by such other party as a
result of the representation in this Section 7.14 being untrue.
7.15 CONSENT TO EXCLUSIVE JURISDICTION. EACH PARTY HERETO
HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF A FEDERAL COURT LOCATED WITHIN
THE COUNTY OF NEW YORK, STATE OF NEW YORK, (OR IF THERE SHALL NOT BE FEDERAL
JURISDICTION IN SUCH COURT, A STATE COURT LOCATED WITHIN THE COUNTY OF NEW YORK,
STATE OF NEW YORK) AND IRREVOCABLY AGREES THAT ALL ACTIONS OR OTHER PROCEEDINGS
RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE TRIED ONLY IN SUCH COURT.
EACH PARTY HERETO HEREBY WAIVES TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW,
AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY
SUCH ACTION OR OTHER PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO
THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT IT IS IMMUNE FROM
EXTRATERRITORIAL INJUNCTIVE RELIEF OR OTHER INJUNCTIVE RELIEF, THAT ITS PROPERTY
IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT ANY SUCH ACTION OR OTHER
PROCEEDING
19
MAY NOT BE BROUGHT OR MAINTAINED IN ONE OF THE ABOVE-NAMED COURTS, THAT ANY SUCH
ACTION OR OTHER PROCEEDING BROUGHT OR MAINTAINED IN ONE OF THE ABOVE-NAMED
COURTS SHOULD BE DISMISSED ON THE GROUNDS OF FORUM NON CONVENIENS, SHOULD BE
TRANSFERRED TO ANY COURT OTHER THAN ONE OF THE ABOVE-NAMED COURTS, OR THAT THIS
AGREEMENT OR SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY ANY OF THE
ABOVE-NAMED COURTS. EACH OF THE PARTIES HERETO HEREBY CONSENTS TO SERVICE OF
PROCESS IN ANY SUCH ACTION OR OTHER PROCEEDING IN ANY MANNER PERMITTED BY THE
LAWS OF THE STATE OF NEW YORK, AGREES THAT SERVICE OF PROCESS BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE PERSONS AND AT THE ADDRESSES
SET FORTH IN SECTION 8.8 ABOVE, IS REASONABLY CALCULATED TO GIVE ACTUAL NOTICE,
AND WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE,
IN ANY SUCH ACTION OR OTHER PROCEEDING ANY CLAIM THAT SUCH SERVICE OF PROCESS
DOES NOT CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS.
7.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR SUBJECT MATTER HEREOF. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS
AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT.
7.17 NO PRESS RELEASES; CONFIDENTIALITY. All publicity
relating to this Agreement and the transactions contemplated hereby shall be
subject to the mutual approval of the parties hereto and, except as otherwise
may be required by applicable law, no public announcement or disclosure of the
terms or existence of this Agreement or the transactions contemplated hereby or
thereby shall be made by any party (or any of its affiliates or representatives)
without the prior written consent of the other parties, which consent shall not
be unreasonably withheld. To the extent any party is required by applicable law
to disclose publicly or to make any public announcement of the terms or
existence of this Agreement or the transactions contemplated hereby or thereby,
such party shall, to the extent possible within the applicable time constraints,
give the other parties reasonable, actual prior notice of such disclosure and
use best efforts to agree with the other parties on the form of such disclosure.
[SIGNATURE PAGE FOLLOWS]
20
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement, to be signed by their respective officers thereunto duly
authorized, all as of the date first above written.
CHANGE TECHNOLOGY PARTNERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President and CEO
IGUANA STUDIOS I, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President and CEO
IGUANA STUDIOS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
a Founder Shareholder
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
a Founder Shareholder
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
a Founder Shareholder
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
a Founder Shareholder
/s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇ ▇▇▇▇▇▇,
a Founder Shareholder
/s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇,
a Founder Shareholder
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇,
a Founder Shareholder
/s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇,
a Founder Shareholder
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇,
a Founder Shareholder
21
EXHIBIT A
---------
FOUNDER SHAREHOLDERS
--------------------
EXHIBIT B
---------
SUB CERTIFICATE OF INCORPORATION
--------------------------------
EXHIBIT C
---------
SUB BY-LAWS
-----------
EXHIBIT D
---------
LOCK-UP AGREEMENT
-----------------
EXHIBIT E
---------
SHAREHOLDERS
------------
EXHIBIT F
---------
FORM OF TRANSMITTAL LETTERS
---------------------------
[See Exhibit H - Attachment 6]
EXHIBIT G
---------
ESCROW AGREEMENT
----------------
EXHIBIT H
---------
INFORMATION STATEMENT
---------------------
EXHIBIT I
---------
REPRESENTATION LETTER
---------------------
[See Exhibit H - Attachment D]
EXHIBIT J
---------
IGUANA DISCLOSURE LETTER
------------------------
EXHIBIT K
---------
PARENT/SUB DISCLOSURE LETTER
----------------------------
[None]
SCHEDULE 2.1
------------
OPTION CONSIDERATION
--------------------
SCHEDULE 2.2
------------
MERGER CONSIDERATION
--------------------
SCHEDULE 4.2
------------
CAPITALIZATION OF PARENT
------------------------
SCHEDULE 4.4
------------
SEC DOCUMENTS
-------------
CTPI
Arinco
1/1/00 to present
SCHEDULE 6.1
------------
EMPLOYEE CONFIDENTIALITY, NON-COMPETITION AND DISCLOSURE
--------------------------------------------------------
AND ASSIGNMENT OF WORK PRODUCT AGREEMENTS AND ASSUMED AGREEMENTS
----------------------------------------------------------------
Employee Confidentiality, Non-Competition and Disclosure and Assignment
of Work Product Agreements - None
SCHEDULE 6.2
------------
FOUNDER GUARANTEES
------------------
1. With respect to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇'▇ personal guarantee, the Real Estate
lease for ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ and 11th floors, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
2. With respect to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, the
equipment leases referenced as attached Appendix 3.6(b)(2) of the Iguana
Disclosure Letter.
SCHEDULE 7.9
------------
EXCEPTIONS TO EXPENSES PAID BY PARENT
-------------------------------------