Agreement and Plan of Merger - IMGIS Inc. and AdForce Inc.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "MERGER AGREEMENT") is entered
into as of March __, 1999, by and between Imgis, Inc., a California corporation
("IMGIS"), and AdForce, Inc., a Delaware corporation ("ADFORCE"). Imgis and
AdForce are hereinafter sometimes collectively referred to as the "CONSTITUENT
CORPORATIONS."
R E C I T A L S
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A. Imgis was incorporated on January 16, 1996. Its current
authorized capital stock consists of: (i) 25,000,000 shares of Common Stock,
no par value ("IMGIS COMMON STOCK"), of which 5,033,986 shares are issued and
outstanding; and (ii) 6,238,163 shares of Preferred Stock, no par value
("IMGIS PREFERRED STOCK"), of which 602,000 shares have been designated
Series A Preferred Stock, 1,100,000 shares have been designated Series B1
Preferred Stock, 1,725,000 shares have been designated Series C Preferred
Stock, 786,500 shares have been designated Series D Preferred Stock, 786,500
shares have been designated Series D1 Preferred Stock and 1,238,163 shares
have been designated Series E Preferred Stock. There are issued and
outstanding 600,457 shares of Series A Preferred Stock, 1,027,318 shares of
Series B1 Preferred Stock, 1,646,948 shares of Series C Preferred Stock,
730,503 shares of Series D Preferred Stock, no shares of Series D1 Preferred
Stock and 728,332 shares of Series E Preferred Stock.
B. AdForce was incorporated on August 20, 1998. Its authorized
capital stock consists of 1,000 shares of Common Stock, with a par value of
$0.001 per share ("ADFORCE COMMON STOCK"), of which 1,000 shares are issued
and outstanding.
C. The respective Boards of Directors of Imgis and AdForce deem
it advisable and to the advantage of each of the Constituent Corporations
that Imgis merge with and into AdForce upon the terms and subject to the
conditions set forth in this Merger Agreement for the purpose of effecting a
change of the state of incorporation of Imgis from California to Delaware.
D. The Boards of Directors of each of the Constituent
Corporations have approved this Merger Agreement.
NOW, THEREFORE, the parties do hereby adopt the plan of
reorganization set forth in this Merger Agreement and do hereby agree that
Imgis shall merge with and into AdForce on the following terms, conditions
and other provisions:
1. MERGER AND EFFECTIVE TIME. At the Effective Time (as defined
below), Imgis shall be merged with and into AdForce (the "MERGER"), and
AdForce shall be the surviving corporation of the Merger (the "SURVIVING
CORPORATION"). The Merger shall become effective upon the close of business
on the date when a duly executed copy of this Merger Agreement, along with
all required officers' certificates, is filed with the Secretary of State of
the State of
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California, or upon the close of business on the date when a duly executed
copy of this Merger Agreement, along with all required officers'
certificates, is filed with the Secretary of State of the State of Delaware,
whichever later occurs (the "EFFECTIVE TIME").
2. EFFECT OF MERGER. At the Effective Time, the separate corporate
existence of Imgis shall cease; the corporate identity, existence, powers,
rights and immunities of AdForce as the Surviving Corporation shall continue
unimpaired by the Merger; and AdForce shall succeed to and shall possess all the
assets, properties, rights, privileges, powers, franchises, immunities and
purposes, and be subject to all the debts, liabilities, obligations,
restrictions and duties of Imgis, all without further act or deed.
3. GOVERNING DOCUMENTS. At the Effective Time, (i) the Certificate
of Incorporation of AdForce in effect immediately prior to the Effective Time
shall be amended and restated by virtue of the Merger to read as set forth in
full in ATTACHMENT 1 hereto (the "FIRST RESTATED CERTIFICATE"), and (ii) the
Bylaws of AdForce in effect immediately prior to the Effective Time shall be
amended and restated by virtue of the Merger as approved by the Board of
Directors of AdForce.
4. DIRECTORS AND OFFICERS. At the Effective Time, the directors of
AdForce shall be and become the directors of the Surviving Corporation, and the
officers of AdForce shall be and become the officers (holding the same offices)
of the Surviving Corporation, and after the Effective Time shall serve in
accordance with the First Restated Certificate and Bylaws of the Surviving
Corporation.
5. CONVERSION OF SHARES OF IMGIS. At the Effective Time, by
virtue of the Merger and without any further action on the part of the
Constituent Corporations or their shareholders, (i) each share of Imgis
Common Stock issued and outstanding immediately prior thereto shall be
converted into one fully paid and nonassessable share of AdForce Common
Stock, (ii) each share of Imgis Series A Preferred Stock outstanding
immediately prior thereto shall be automatically changed and converted into
one fully paid and nonassessable, issued and outstanding share of AdForce
Series A Preferred Stock, (ii) each share of Imgis Series B1 Preferred Stock
outstanding immediately prior thereto shall be automatically changed and
converted into one fully paid and nonassessable, issued and outstanding share
of AdForce Series B Preferred Stock, (iii) each share of Imgis Series C
Preferred Stock outstanding immediately prior thereto shall be automatically
changed and converted into one fully paid and nonassessable, issued and
outstanding share of AdForce Series C Preferred Stock, (iv) each share of
Imgis Series D Preferred Stock outstanding immediately prior thereto shall be
automatically changed and converted into one fully paid and nonassessable,
issued and outstanding share of AdForce Series D Preferred Stock, and (v)
each share of Imgis Series E Preferred Stock outstanding immediately prior
thereto shall be automatically changed and converted into one fully paid and
nonassessable, issued and outstanding share of AdForce Series E Preferred
Stock. Shares of AdForce Common Stock and Preferred Stock issued in the
Merger upon conversion of shares of Imgis Common Stock or Preferred Stock,
respectively, shall, by virtue of the Merger, continue to be subject to the
same contractual restrictions on transfer, rights of repurchase, vesting and
other provisions, if any, to the same extent as were applicable immediately
prior to the Effective Time
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to the shares of Imgis Common Stock or Preferred Stock so converted.
Continuous employment with Imgis will be credited to holders of AdForce Common
Stock for purposes of determining the vesting of shares of AdForce Common
Stock subject to exercise under a converted Imgis option at the Effective
Time.
6. CANCELLATION OF SHARES OF ADFORCE. At the Effective Time, by
virtue of the Merger and without any further action on the part of the
Constituent Corporations or their shareholders, all of the previously issued and
outstanding shares of AdForce Common Stock that were issued and outstanding
immediately prior to the Effective Time shall be automatically canceled and
returned to the status of authorized but unissued shares.
7. STOCK CERTIFICATES. At and after the Effective Time, all of the
outstanding certificates that, prior to that date, represented shares of Imgis
Common Stock shall be deemed for all purposes to evidence ownership of and to
represent the number of shares of AdForce Common Stock into which such shares of
Imgis Common Stock are converted as provided herein. At and after the Effective
Time, all of the outstanding certificates that, prior to that date, represented
shares of a series of Imgis Preferred Stock shall be deemed for all purposes to
evidence ownership of and to represent the number of shares of the series of
AdForce Preferred Stock into which such shares of Imgis Preferred Stock are
converted as provided herein. The registered owner on the books and records of
Imgis of any such outstanding stock certificate for Imgis Common Stock or Imgis
Preferred Stock shall, until such certificate is surrendered for transfer or
otherwise accounted for to AdForce or its transfer agent, be entitled to
exercise any voting and other rights with respect to, and to receive any
dividend and other distributions upon, the shares of AdForce Common Stock or
AdForce Preferred Stock evidenced by such outstanding certificate as provided
above.
8. ASSUMPTION OF OPTIONS AND WARRANTS. At the Effective Time, all
outstanding and unexercised portions of all options to purchase Imgis Common
Stock under the Imgis 1997 Stock Plan or under the StarPoint 1996 Stock Plan
(the "EXISTING PLANS"), and all other outstanding options to purchase Imgis
Common Stock, shall be assumed by AdForce and become options to purchase the
same number of shares of AdForce Common Stock at the same exercise price per
share but otherwise shall, to the extent permitted by law and otherwise
reasonably practicable, have the same term, exercisability, vesting schedule,
status as an "incentive stock option" under Section 422 of the Internal Revenue
Code of 1986, as amended (the "CODE"), if applicable, and all other material
terms and conditions (including but not limited to the terms and conditions
applicable to such options by virtue of the Existing Plans). Continuous
employment with Imgis will be credited to an optionee for purposes of
determining the vesting of the number of shares of AdForce Common Stock subject
to exercise under an assumed Imgis option at the Effective Time. At the
Effective Time, AdForce shall adopt and assume the Existing Plans.
Additionally, at the Effective Time, all outstanding and unexercised portions of
(i) all warrants to purchase or acquire Imgis Common Stock shall be assumed by
AdForce and become warrants to purchase or acquire the same number of shares of
AdForce Common Stock, (ii) all warrants to purchase or acquire Imgis Series A
Preferred Stock shall be assumed by AdForce and become warrants to purchase or
acquire the same number of shares of AdForce Series A Preferred Stock, (iii) all
warrants to purchase or acquire Imgis Series B1
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Preferred Stock shall be assumed by AdForce and become warrants to purchase
or acquire the same number of shares of AdForce Series B Preferred Stock,
(iv) all warrants to purchase or acquire Imgis Series C Preferred Stock shall
be assumed by AdForce and become warrants to purchase or acquire the same
number of shares of AdForce Series C Preferred Stock, (v) all warrants to
purchase or acquire Imgis Series D Preferred Stock shall be assumed by
AdForce and become warrants to purchase or acquire the same number of shares
of AdForce Series D Preferred Stock, (vi) all warrants to purchase or acquire
Imgis Series E Preferred Stock shall be assumed by AdForce and become
warrants to purchase or acquire the same number of shares of AdForce Series E
Preferred Stock, in each case at the same exercise price per share but
otherwise with the same term, exercisability, and all other material terms
and conditions.
9. FRACTIONAL SHARES. No fractional shares of AdForce Common Stock
or AdForce Preferred Stock will be issued in connection with the Merger.
10. EMPLOYEE BENEFIT PLANS. At the Effective Time, the obligations
of Imgis under or with respect to every plan, trust, program and benefit then in
effect or administered by Imgis for the benefit of the directors, officers and
employees of Imgis or any of its subsidiaries shall become the lawful
obligations of AdForce and shall be implemented and administered in the same
manner and without interruption until the same are amended or otherwise lawfully
altered or terminated. Effective at the Effective Time, AdForce hereby
expressly adopts and assumes all obligations of Imgis under such employee
benefit plans.
11. FURTHER ASSURANCES. From time to time, as and when required by
the Surviving Corporation or by its successors or assigns, there shall be
executed and delivered on behalf of Imgis such deeds, assignments and other
instruments, and there shall be taken or caused to be taken by it all such
further action, as shall be appropriate, advisable or necessary in order to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation
the title to and possession of all property, interests, assets, rights,
privileges, immunities, powers, franchises and authority of Imgis, and otherwise
to carry out the purposes of this Merger Agreement. The officers and directors
of the Surviving Corporation are fully authorized in the name of and on behalf
of Imgis, or otherwise, to take any and all such actions and to execute and
deliver any and all such deeds and other instruments as may be necessary or
appropriate to accomplish the foregoing.
12. CONDITION. The consummation of the Merger is subject to the
approval of this Merger Agreement and the Merger contemplated hereby by the
shareholders of Imgis and by the sole stockholder of AdForce, prior to or at the
Effective Time.
13. ABANDONMENT. At any time before the Effective Time, this Merger
Agreement may be terminated and the Merger abandoned by the Board of Directors
of Imgis or AdForce, notwithstanding approval of this Merger Agreement by the
shareholders of Imgis and the sole stockholder of AdForce.
14. AMENDMENT. At any time before the Effective Time, this Merger
Agreement may be amended, modified or supplemented by the Boards of Directors of
the Constituent Corporations, notwithstanding approval of this Merger Agreement
by the
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shareholders of Imgis and the sole stockholder of AdForce; provided, however,
that any amendment made subsequent to the adoption of this Merger Agreement
by the shareholders of Imgis or the sole stockholder of AdForce shall not:
(i) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or upon conversion of any shares
of any class or series of Imgis; (ii) alter or change of any of the terms of
the Certificate of Incorporation of the Surviving Corporation to be effected
by the Merger; or (iii) alter or change any of the terms or conditions of
this Merger Agreement if such alteration or change would adversely affect the
holders of any shares of any class or series of Imgis or AdForce.
15. TAX-FREE REORGANIZATION. The Merger is intended to be a tax-free
plan of reorganization within the meaning of Section 368(a)(1)(F) of the Code.
16. GOVERNING LAW. This Merger Agreement shall be governed by and
construed under the internal laws of the State of California as applied to
agreements among California residents entered into and to be performed entirely
within California, without reference to the principles of conflicts of law or
choice of laws, except to the extent that the laws of the State of Delaware
would apply in matters relating to the internal affairs of AdForce and the
Merger.
17. COUNTERPARTS. In order to facilitate the filing and recording of
this Merger Agreement, it may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this the parties hereto have caused this Merger
Agreement to be duly executed on the date and year first above written.
IMGIS, INC. ADFORCE, INC.
By: By:
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Charles W. Berger, Chairman Charles W. Berger, Chairman
By: By:
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Rex S. Jackson, Secretary Rex S. Jackson, Secretary
[Signature Page to Agreement and Plan of Merger]
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ATTACHMENT 1
FIRST AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION