AGREEMENT AND PLAN OF MERGER
OF ZAPME! DELAWARE CORPORATION
(A DELAWARE CORPORATION),
AND
ZAPME! CORPORATION
(A CALIFORNIA CORPORATION)
THIS AGREEMENT AND PLAN OF MERGER dated as of ____________, 1999 (the
"Agreement") is between ZapMe! Delaware Corporation, a Delaware corporation
("ZapMe! Delaware"), and ZapMe! Corporation, a California corporation ("ZapMe!
California"). ZapMe! Delaware and ZapMe! California are sometimes referred to
herein as the "Constituent Corporations".
RECITALS
A. ZapMe! Delaware is a corporation duly organized and existing under
the laws of the State of Delaware and has an authorized capital of
225,417,671 shares, $.01 par value, 200,000,000 of which are designated "Common
Stock", and 25,417,671 of which are designated "Preferred Stock". As of
July 31, 1999, 1,000 shares of Common Stock were issued and outstanding, all of
which are held by ZapMe! California, and no shares of Preferred Stock were
outstanding.
B. ZapMe! California is a corporation duly organized and existing
under the laws of the State of California and has an authorized capital of
70,417,671 shares, $0.01 par value per share, of which 50,000,000 are designated
"Common Stock," and 20,417,671 of which are designated "Preferred Stock." The
Preferred Stock is divided into five series, namely Series A Preferred Stock,
consisting of 9,097,171 shares, Series B Preferred Stock, consisting of 660,000
shares, Series C Preferred Stock, consisting of 600,000 shares, Series D
Preferred Stock, consisting of 8,030,000 shares and Series E Preferred Stock,
consisting of 2,030,000 shares. As of ________, 1999, ________ shares of Common
Stock and ________ shares of Series A Preferred Stock, ________ shares of
Series B Preferred Stock, ________ shares of Series C Preferred Stock, ________
shares of Series D Preferred Stock and ________ shares of Series E Preferred
were issued and outstanding. As of ________, 1999, there were (i) outstanding
options to purchase an aggregate of ________ shares of Common Stock pursuant to
the 1997 Stock Option Plan and the 1998 Stock Plan, (ii) outstanding warrants to
purchase an aggregate of _________ shares of Common Stock, (iii) outstanding
warrants to purchase an aggregate of ________ shares of Series B Preferred
Stock, (iv) outstanding warrants to purchase an aggregate of ________ shares of
Series D Preferred Stock and (v) ________ shares of Common Stock reserved for
future option grants.
C. The Board of Directors of ZapMe! California has determined that,
for the purpose of effecting the reincorporation of ZapMe! California in the
State of Delaware, it is advisable and in the best interests of ZapMe!
California and its shareholders that ZapMe! California merge with and into
ZapMe! Delaware upon the terms and conditions herein provided.
D. The respective Boards of Directors of ZapMe! Delaware and ZapMe!
California have approved this Agreement and have directed that this Agreement be
submitted to a vote of their respective shareholders and executed by the
undersigned officers.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, ZapMe! Delaware and ZapMe! California hereby agree, subject to
the terms and conditions hereinafter set forth, as follows:
I MERGER
I.1 MERGER. In accordance with the provisions of this Agreement,
the Delaware General Corporation Law and the California General Corporation
Law, ZapMe! California shall be merged with and into ZapMe! Delaware (the
"Merger"), the separate existence of ZapMe! California shall cease, and
ZapMe! Delaware shall be, and is herein sometimes referred to as, the
"Surviving Corporation," and the name of the Surviving Corporation shall be
ZapMe! Corporation.
I.2 FILING AND EFFECTIVENESS. The Merger shall become effective when
the following actions shall have been completed:
(a) This Agreement and the Merger shall have been adopted and
approved by the stockholder/shareholders of each Constituent Corporation
in accordance with the requirements of the Delaware General Corporation
Law and the California General Corporation Law;
(b) All of the conditions precedent to the consummation of the
Merger specified in this Agreement shall have been satisfied or duly
waived by the party entitled to satisfaction thereof; and
(c) An executed Certificate of Merger or an executed
counterpart of this Agreement meeting the requirements of the Delaware
General Corporation Law shall have been filed with the Secretary of State
of the State of Delaware.
The date and time when the Merger shall become effective, as aforesaid, is
herein called the "Effective Date of the Merger."
I.3 EFFECT OF THE MERGER. Upon the Effective Date of the Merger, the
separate existence of ZapMe! California shall cease, and ZapMe! Delaware, as the
Surviving Corporation, (i) shall continue to possess all of its assets, rights,
powers and property as constituted immediately prior to the Effective Date of
the Merger, (ii) shall be subject to all actions previously taken by its and
ZapMe! California's Board of Directors, (iii) shall succeed, without other
transfer, to all of the assets, rights, powers and property of ZapMe! California
in the manner as more fully set forth in Section 259 of the Delaware
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General Corporation Law, (iv) shall continue to be subject to all of its debts,
liabilities and obligations as constituted immediately prior to the Effective
Date of the Merger, and (v) shall succeed, without other transfer, to all of the
debts, liabilities and obligations of ZapMe! California in the same manner as if
ZapMe! Delaware had itself incurred them, all as more fully provided under the
applicable provisions of the Delaware General Corporation Law and the California
General Corporation Law.
II CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
II.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
ZapMe! Delaware as in effect immediately prior to the Effective Date of the
Merger shall continue in full force and effect as the Certificate of
Incorporation of the Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.
II.2 BYLAWS. The Bylaws of ZapMe! Delaware as in effect immediately
prior to the Effective Date of the Merger shall continue in full force and
effect as the Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.
II.3 DIRECTORS AND OFFICERS. The directors and officers of ZapMe!
California immediately prior to the Effective Date of the Merger shall be the
directors and officers of the Surviving Corporation until their successors shall
have been duly elected and qualified or until as otherwise provided by law, the
Certificate of Incorporation of the Surviving Corporation or the Bylaws of the
Surviving Corporation.
III MANNER OF CONVERSION OF STOCK
III.1 ZAPME! CALIFORNIA COMMON STOCK. Upon the Effective Date of the
Merger, each one (1) shares of ZapMe! California Common Stock issued and
outstanding immediately prior thereto shall, by virtue of the Merger and without
any action by the Constituent Corporations, the holder of such shares or any
other person, be converted into and exchanged for one (1) fully paid and
nonassessable share of Common Stock, $.01 par value, of the Surviving
Corporation.
III.2 ZAPME! CALIFORNIA PREFERRED STOCK. Upon the Effective Date of the
Merger, each one (1) share of each series of ZapMe! California Preferred Stock
issued and outstanding immediately prior thereto shall, by virtue of the Merger
and without any action by the Constituent Corporations, the holder of such
shares or any other person, be converted into and exchanged for one (1) fully
paid and nonassessable share of the same series of Preferred Stock, $.01 par
value, of the Surviving Corporation.
III.3 ZAPME! CALIFORNIA OPTIONS, STOCK PURCHASE RIGHTS AND CONVERTIBLE
SECURITIES. Upon the Effective Date of the Merger, the Surviving Corporation
shall assume and continue the stock option plans (including without limitation
the 1997 Stock Option Plan, the 1998 Stock Plan, and all other employee
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benefit plans of ZapMe! California. Each outstanding and unexercised option,
warrant or other right to purchase ZapMe! California Common Stock or
Preferred Stock shall become an option, warrant or right to purchase the
Surviving Corporation's Common Stock or the Surviving Corporation's Preferred
Stock, as applicable, on the basis of one (1) share of the Surviving
Corporation's Common Stock or Preferred Stock for every one (1) shares of
ZapMe! California Common Stock or Preferred Stock issuable pursuant to any
such option, warrant or right, on the same terms and conditions and at an
exercise price per share equal to the exercise price applicable to any such
ZapMe! California option, warrant or right at the Effective Date of the
Merger.
A number of shares of the Surviving Corporation's Common Stock or the
Surviving Corporation's Preferred Stock, as applicable, shall be reserved for
issuance upon the exercise of options, warrants or rights equal to the number of
shares of ZapMe! California Common Stock or Preferred Stock so reserved
immediately prior to the Effective Date of the Merger.
III.4 ZAPME! DELAWARE COMMON STOCK. Upon the Effective Date of the
Merger, each share of Common Stock, $.01 par value, of ZapMe! Delaware issued
and outstanding immediately prior thereto shall, by virtue of the Merger and
without any action by ZapMe! Delaware, the holder of such shares or any other
person, be canceled and returned to the status of authorized but unissued
shares.
III.5 EXCHANGE OF CERTIFICATES. After the Effective Date of the Merger,
each holder of an outstanding certificate representing shares of ZapMe!
California Common Stock or Preferred Stock may, at such stockholder's option,
surrender the same for cancellation to an exchange agent designated by the
Surviving Corporation (the "Exchange Agent"), and each such holder shall be
entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of the Surviving Corporation's Common Stock or
the Surviving Corporation's Preferred Stock, as applicable, into which the
surrendered shares were converted as herein provided. Until so surrendered,
each outstanding certificate previously representing shares of ZapMe! California
Common Stock or Preferred Stock shall be deemed for all purposes to represent
the number of whole shares of the Surviving Corporation's Common Stock or the
Surviving Corporation's Preferred Stock, as applicable, into which such shares
of ZapMe! California Common Stock or Preferred Stock were converted in the
Merger.
The registered owner on the books and records of the Surviving
Corporation or the Exchange Agent of any such outstanding certificate shall,
until such certificate shall have been surrendered for transfer or conversion or
otherwise accounted for to the Surviving Corporation or the Exchange Agent, have
and be entitled to exercise any voting and other rights with respect to and to
receive dividends and other distributions upon the shares of Common Stock or
Preferred Stock of the Surviving Corporation represented by such outstanding
certificate as provided above.
Each certificate representing Common Stock or Preferred Stock of the
Surviving Corporation so issued in the Merger shall bear the same legends, if
any, with respect to the restrictions on transferability as the certificates of
ZapMe! California so converted and given in exchange therefor bear, unless
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otherwise determined by the Board of Directors of the Surviving Corporation in
compliance with applicable laws.
If any certificate for shares of the Surviving Corporation's Common Stock
or Preferred Stock is to be issued in a name other than that in which the
certificate surrendered in exchange therefor is registered, it shall be a
condition of issuance thereof that the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer, that such transfer
otherwise be proper, and that the person requesting such transfer pay to the
Exchange Agent any transfer or other taxes payable by reason of the issuance of
such new certificate in a name other than that of the registered holder of the
certificate surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not payable.
IV GENERAL
IV.1 COVENANTS OF ZAPME! DELAWARE. ZapMe! Delaware covenants and
agrees that it will, on or before the Effective Date of the Merger:
(a) Qualify to do business as a foreign corporation in the
State of California and in connection therewith irrevocably appoint an
agent for service of process as required under the provisions of
Section 2105 of the California General Corporation Law;
(b) File any and all documents with the appropriate tax
authority of the State of California necessary for the assumption by
ZapMe! Delaware of all of the corporate and/or franchise tax liabilities
of ZapMe! California; and
(c) Take such other actions as may be required by the
California General Corporation Law.
IV.2 FURTHER ASSURANCES. From time to time, as and when required by
ZapMe! Delaware or by its successors or assigns, there shall be executed and
delivered on behalf of ZapMe! California such deeds and other instruments, and
there shall be taken or caused to be taken by ZapMe! Delaware and ZapMe!
California such further and other actions, as shall be appropriate or necessary
in order to vest or perfect in or conform of record or otherwise by ZapMe!
Delaware the title to and possession of all the property, interests, assets,
rights, privileges, immunities, powers, franchises and authority of ZapMe!
California and otherwise to carry out the purposes of this Agreement, and the
officers and directors of ZapMe! Delaware are fully authorized in the name and
on behalf of ZapMe! California or otherwise to take any and all such action and
to execute and deliver any and all such deeds and other instruments.
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IV.3 ABANDONMENT. At any time before the Effective Date of the Merger,
this Agreement may be terminated and the Merger may be abandoned for any reason
whatsoever by the Board of Directors of either ZapMe! California or ZapMe!
Delaware, or both, notwithstanding the approval of this Agreement by the
shareholders of ZapMe! California or by the sole stockholder of ZapMe! Delaware,
or by both.
IV.4 AMENDMENT. The Boards of Directors of the Constituent
Corporations may amend this Agreement at any time prior to the filing of this
Agreement (or certificate in lieu thereof) with the Secretaries of State of the
States of California and Delaware, provided that an amendment made subsequent to
the adoption of this Agreement by the shareholders of either Constituent
Corporation shall not: (1) alter or change the amount or kind of shares,
securities, cash, property and/or rights to be received in exchange for or on
conversion of all or any of the shares of any class or series thereof of such
Constituent Corporation, (2) alter or change any term of the Certificate of
Incorporation of the Surviving Corporation to be effected by the Merger, or
(3) alter or change any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of any class of shares
or series thereof of such Constituent Corporation.
IV.5 REGISTERED OFFICE. The registered office of the Surviving
Corporation in the County of New Castle, State of Delaware is located at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, the Corporation Trust Company is
the registered agent of the Surviving Corporation at such address.
IV.6 AGREEMENT. Executed copies of this Agreement will be on file at
the principal place of business of the Surviving Corporation at 0000 Xxxxxxxxx
Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, and copies thereof will be furnished to
any shareholder of either Constituent Corporation, upon request and without
cost.
IV.7 GOVERNING LAW. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Delaware and, so far as applicable, the merger provisions of the
California General Corporation Law.
IV.8 COUNTERPARTS. In order to facilitate the filing and recording of
this Agreement, the same may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
IV.9 FIRPTA NOTIFICATION. (a) On the Effective Date of the Merger,
ZapMe! California shall deliver to ZapMe! Delaware, as agent for the
shareholders of ZapMe! California, a properly executed statement (the
"Statement") substantially in the form attached hereto as Exhibit A. ZapMe!
Delaware shall retain the Statement for a period of not less than seven years
and shall, upon request, provide a copy thereof to any person that was a
shareholder of ZapMe! California immediately prior to the Merger. In
consequence of the approval of the Merger by the shareholders of ZapMe!
California, (i) such shareholders shall be considered to have requested that the
Statement be delivered to ZapMe! Delaware as
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their agent and (ii) ZapMe! Delaware shall be considered to have received a
copy of the Statement at therequest of the ZapMe! California shareholders for
purposes of satisfying ZapMe! Delaware's obligations under Treasury
Regulation Section 1.1445-2(c)(3).
(b) ZapMe! California shall deliver to the Internal Revenue
Service a notice regarding the Statement in accordance with the requirements of
Treasury Regulation Section 1.897-2(h)(2).
IN WITNESS WHEREOF, this Agreement, having first been approved by
resolutions of the Boards of Directors of ZapMe! Delaware and ZapMe! California,
is hereby executed on behalf of each of such two corporations and attested by
their respective officers thereunto duly authorized.
ZapMe! Delaware Corporation
a Delaware corporation
By: ____________________________________
Xxxxx Xxxxxxxxx
Chairman and Chief Executive Officer
ATTEST:
_______________________________
Xxxxx Xxxxx, Secretary
ZapMe! Corporation
a California corporation
By: ____________________________________
Xxxxx Xxxxxxxxx
Chairman and Chief Executive Officer
ATTEST:
_______________________________
Xxxxx Xxxxx, Secretary
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ZapMe! Corporation
(California Corporation)
OFFICERS' CERTIFICATE
Xxxxx Xxxxxxxxx and Xxxxx Xxxxx certify that:
1. They are the Chief Executive Officer and the Secretary,
respectively, of ZapMe! Corporation, a corporation organized under the laws of
the State of California.
2. The corporation has authorized capital of 50,000,000 shares,
$.01 par value, of "Common Stock" and 20,417,671 of "Preferred Stock". The
Preferred Stock is divided into five series, namely Series A Preferred Stock,
consisting of 9,097,671 shares, Series B Preferred Stock, consisting of
660,000 shares, Series C Preferred Stock, consisting of 600,000 shares, Series D
Preferred Stock, consisting of 8,030,000 shares and Series E Preferred Stock,
consisting of 2,030,000 shares.
3. There were ________ shares of Common Stock and 9,097,671 shares of
Series A Preferred Stock, 160,000 shares of Series B Preferred Stock,
600,000 shares of Series C Preferred Stock, 5,894,110 shares of Series D
Preferred Stock and 2,030,000 shares of Series E Preferred Stock issued and
outstanding as of the date of the shareholders' written consent which approved
the Agreement and Plan of Merger attached hereto (the "Merger Agreement").
4. The principal terms of the Merger Agreement were approved by the
Board of Directors and by the vote of a number of shares of each class of stock
which equaled or exceeded the vote required.
5. The percentage vote required was more than (i) 50% of the votes
entitled to be cast by the holders of outstanding shares of the Common Stock,
and (ii) 50% of the votes entitled to be cast by the holders of outstanding
shares of the Preferred Stock, each voting as a separate class.
6. Xxxxx Xxxxxxxxx and Xxxxx Xxxxx declare under penalty of perjury
under the laws of the State of California that each has read the foregoing
certificate and knows the contents thereof and that the same is true of their
own knowledge.
Executed in San Ramon, California on __________, 1999.
______________________________
Xxxxx Xxxxxxxxx
______________________________
Xxxxx Xxxxx
ZapMe! Corporation
(Surviving Corporation)
OFFICERS' CERTIFICATE
Xxxxx Xxxxxxxxx and Xxxxx Xxxxx certify that:
1. They are the President and the Secretary, respectively, of ZapMe!
Corporation, a corporation organized under the laws of the State of Delaware.
2. The corporation has an authorized capital of 225,417,671 shares,
$0.01 par value, of which 200,000,000 are designated "Common Stock" and
25,417,671 of which are designated "Preferred Stock". The Preferred Stock is
divided into five series, namely Series A Preferred Stock, consisting of
9,097,671 shares, Series B Preferred Stock, consisting of 660,000 shares,
Series C Preferred Stock, consisting of 600,000 shares, Series D Preferred
Stock, consisting of 8,030,000 shares and the Series E preferred Stock,
consisting of 2,030,000 shares.
3. There are 1,000 shares of Common Stock outstanding and entitled to
vote on the Agreement and Plan of Merger attached hereto (the "Merger
Agreement"). There are no shares of Preferred Stock outstanding.
4. The principal terms of the Merger Agreement were approved by the
Board of Directors and by the vote of a number of shares of each class of stock
which equaled or exceeded the vote required.
5. The percentage vote required was more than 50% of the votes
entitled to be cast by holders of outstanding shares of Common Stock.
6. Xxxxx Xxxxxxxxx and Xxxxx Xxxxx declare under penalty of perjury
under the laws of the State of Delaware that each has read the foregoing
certificate and knows the contents thereof and that the same is true of their
own knowledge.
Executed in San Ramon, California on ___________, 1999.
______________________________
Xxxxx Xxxxxxxxx
______________________________
Xxxxx Xxxxx
EXHIBIT A
___________, 1999
TO THE SHAREHOLDERS OF ZAPME! CORPORATION:
In connection with the reincorporation (the "Reincorporation") in
Delaware of ZapMe! Corporation, a California corporation (the "Company"),
pursuant to the Agreement and Plan of Merger dated as of __________ ___, 1999
between the Company and ZapMe! Delaware Corporation, a Delaware corporation and
wholly-owned subsidiary of the Company ("ZapMe! Delaware"), your shares of
Company stock will be replaced by shares of stock in ZapMe! Delaware.
In order to establish that (i) you will not be subject to tax under
Section 897 of the Internal Revenue Code of 1986, as amended (the "Code"), in
consequence of the Reincorporation, and (ii) ZapMe! Delaware will not be
required under Section 1445 of the Code to withhold taxes from the ZapMe!
Delaware stock that you will receive in connection therewith, the Company hereby
represents to you that, as of the date of this letter, shares of Company stock
do not constitute a "United States real property interest" within the meaning of
Section 897(c) of the Code and the regulations issued thereunder.
A copy of this letter will be delivered to ZapMe! Delaware pursuant to
Section IV.9 of the Agreement.
Under penalties of perjury, the undersigned officer of the Company hereby
declares that, to the best knowledge and belief of the undersigned, the facts
set forth herein are true and correct.
Sincerely,
_____________________________________
Xxxxx Xxxxxxxxx
Chairman and Chief Executive Officer
