Agreement of Merger and Plan of Reorganization - Digital Acquisition Corp. and LVL Communications Corp.
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
This Agreement of Merger and Plan of Reorganization, dated as of the 16th
day of July, 1998, is entered into by and between Digital Acquisition
Corporation ("Digital Acquisition"), a California corporation and LVL
Communications Corporation (the "Surviving Corporation"), a California
corporation.
W I T N E S S E T H:
WHEREAS, Digital Acquisition is a corporation duly organized and existing
under the laws of the State of California,
WHEREAS, the Surviving Corporation is a corporation duly organized and
existing under the laws of the State of California,
WHEREAS, Digital Acquisition has an authorized capitalization consisting
of 100,000 shares of common stock, with no par value ("Common Stock");
WHEREAS, the Surviving Corporation has an authorized capitalization
consisting of 30,000,000 shares of common stock, with no par value ("Surviving
Corporation Common Stock");
WHEREAS, the Surviving Corporation is subject to an April 16, 1998 Order
of the United States Bankruptcy Court for the Northern District of California
(the "Order") confirming a First Amended Plan of Reorganization (the "Plan of
Reorganization"), and the Board of Directors of the Surviving Corporation wish
to comply with this Order and First Amended Plan of Reorganization;
WHEREAS, the respective Boards of Directors of the Surviving Corporation
and Digital Acquisition, and a majority of the holders of the outstanding voting
shares of Digital Acquisition, have determined that it is advisable that Digital
Acquisition be merged into the Surviving Corporation on the terms and conditions
hereinafter set forth; and
WHEREAS, the respective Boards of Directors of the Surviving Corporation
and Digital Acquisition intend that this Agreement of Merger and Plan of
Reorganization shall qualify as a reorganization under Section 368(a)(1) of the
Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, it is agreed that, in
accordance with the applicable statutes of the State of California, Digital
Acquisition shall be at the effective date of the merger merged with and into
the Surviving Corporation, which shall be the surviving corporation, and that
the terms and conditions of such merger and the mode of carrying it into effect
shall be as follows:
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ARTICLE I
MERGER OF DIGITAL ACQUISITION INTO THE
SURVIVING CORPORATION; SURVIVING CORPORATION
TO SUCCEED TO PROPERTIES AND OBLIGATIONS OF DIGITAL ACQUISITION
At the effective date of the merger, Digital Acquisition shall be merged
with and into the Surviving Corporation, the separate existence of Digital
Acquisition shall cease and the Surviving Corporation shall continue in
existence as the surviving corporation, and, without other transfer or
assumption, succeed to and possess all the estate, properties, rights,
privileges, immunities and franchises, as well of a public as of a private
nature, of Digital Acquisition; and all property, real, personal and mixed, and
all debts due on whatever account, including subscriptions to shares, and all
other choses in action, and all and every other interest, of or belonging to or
due to Digital Acquisition, shall be taken and deemed to be transferred to and
vested in the Surviving Corporation without further act or deed, as provided in
Sections 1100 and 1400 of the California Corporations Code.
If at any time the Surviving Corporation shall consider or be advised
that any further assignments, conveyances or assurances in law are necessary or
desirable to carry out the provisions hereof, the proper officers and directors
of Digital Acquisition as of the effective date of the merger shall execute and
deliver any and all proper deeds, assignments and assurances in law, and do all
things necessary or proper to carry out the provisions hereof.
ARTICLE II
ARTICLES OF INCORPORATION
OF SURVIVING CORPORATION; GOVERNING LAW
From and after the effective date of the merger and until thereafter
amended as provided by law, the Articles of Incorporation and Bylaws of the
Surviving Corporation shall continue to be its Articles of Incorporation and
Bylaws, until altered or amended. The Surviving Corporation shall be governed
under the laws of the State of California. The address of the principal office
of the Surviving Corporation in the State of California shall be 480 Cowper
Street, Palo Alto, California 94301.
ARTICLE III
CONVERSION OF CAPITAL STOCK OF DIGITAL ACQUISITION
INTO THE COMMON STOCK OF THE SURVIVING CORPORATION
(a) At the effective date of the merger, each share of outstanding
Common Stock and all shares of treasury stock of Digital Acquisition and all
rights in respect thereof, shall forthwith cease to exist and be canceled,
except for the rights set forth below and except as provided by law in respect
of shares as to which the holders may exercise appraisal rights.
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(b) At the effective date of the merger, each treasury share of
Preferred Stock of the Surviving Corporation shall be canceled.
(c) At the effective date of the merger, there shall be delivered in
conversion of and exchange for one share of Digital Acquisition Common Stock
outstanding immediately prior to the merger, 300 shares of the Common Stock of
the Surviving Corporation.
(d) Each holder of a certificate or certificates representing shares
of Digital Acquisition Common Stock outstanding immediately prior to the merger
shall, upon presentation of such certificate or certificates for surrender to
the Surviving Corporation, be entitled to receive in exchange therefor a
certificate or certificates representing the shares of a fully paid and
non-assessable Surviving Corporation Common Stock to which such holder shall be
entitled upon the aforesaid basis of exchange. Until so surrendered, each
outstanding certificate which prior to the merger represented shares of Digital
Acquisition Common Stock shall be deemed, for all corporate purposes, to
evidence ownership of the number of shares of Surviving Corporation Common Stock
into which the same shall have been converted and exchanged.
(e) No scrip or fractional share certificates of Surviving Corporation
Stock will be issued, and outstanding fractional share interests will not
entitle the owner thereof to vote, to receive dividends or to any rights of a
stockholder with respect to such fractional interest.
(f) Each share of the capital stock of the Surviving Corporation
outstanding immediately prior to the merger shall continue to be outstanding and
shall be one share of capital stock of the Surviving Corporation.
ARTICLE IV
BYLAWS
When the merger becomes effective, the Bylaws of the Surviving
Corporation shall be and become the Bylaws of the Surviving Corporation.
ARTICLE V
DIRECTORS
When the merger becomes effective, the Board of Directors of the
Surviving Corporation, pursuant to Section 1400 of the California Corporations
Code, shall appoint or reaffirm the following members of the Board of Directors
to serve until their respective successors are appointed, as provided in the
Bylaws of the Surviving Corporation: Frank M. DeLape, Calbert Lai, Thomas
Schultz, and Russell Knittle, and one further director pursuant to the Order and
Plan of Reorganization.
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ARTICLE VI
SHAREHOLDERS AND BOARD OF DIRECTORS APPROVAL; EFFECTIVE DATE
This Plan and Agreement of Merger has been approved by a majority of the
holders of the outstanding voting shares of Digital Acquisition, and, pursuant
to Section 1400 of the California Corporations Code, by the Board of Directors
of the Surviving Corporation, as provided by the applicable laws of the State of
and California. If this Plan and Agreement of Merger is not abandoned pursuant
to the provisions of Article VI hereof, Articles of Merger containing this Plan
and Agreement of Merger, and of such other instruments as may be required,
respectively, by the laws of the State of California, shall be executed,
verified and delivered as soon as practicable, to the Office of the Secretary of
State California. The merger shall become effective at such time as the
Secretary of State of California have issued a certificate of merger with
respect to such merger, the date of the later of such issuances being herein
sometimes referred to as the "effective date of the merger."
ARTICLE VII
ABANDONMENT
This Plan and Agreement of Merger may be abandoned at any time before the
effective date of the merger, by action of either of the Boards of Directors of
Digital Acquisition or the Surviving Corporation.
In the event of abandonment of this Plan and Agreement of Merger by the
Board of Directors of either Digital Acquisition or the Surviving Corporation as
approved above, written notice shall forthwith be given to the other party.
ARTICLE VIII
MODIFICATION AND WAIVER
Digital Acquisition and the Surviving Corporation, by mutual consent of
their respective Boards of Directors, may amend, modify and supplement this Plan
and Agreement of Merger in such manner as may be agreed upon by them in writing
at any time before or after action thereon by the shareholders of Digital
Acquisition or by the Board of Directors of the Surviving Corporation or both;
provided, however, that no such amendment, modification or supplement shall
affect the rights of the shareholders of Digital Acquisition or the Surviving
Corporation in a manner which is materially adverse to such shareholders in the
judgment of the respective Board of Directors. Either Digital Acquisition or the
Surviving Corporation may, pursuant to action by its Board of Directors, by an
instrument in writing, extend the time for or waive the performance of any of
the obligations of the other or waive compliance by the other with any of the
covenants or conditions contained in this Plan and Agreement of Merger;
provided, however, that no such
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waiver or extension shall affect the rights of the shareholders of Digital
Acquisition or the Surviving Corporation in a manner which is materially adverse
to such shareholders in the judgment of the Board of Directors so acting.
ARTICLE IX
COUNTERPARTS
This Plan and Agreement of Merger may be executed in multiple
counterparts, each of which when so executed shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Digital Acquisition and the Surviving Corporation,
each pursuant to the approval and authority duly given by resolutions adopted by
its Board of Directors, have each caused this Plan and Agreement of Merger to be
executed by its officers thereunto duly authorized.
ATTEST DIGITAL ACQUISITION CORPORATION
By: By:
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Jeffrey W. Tomz, Secretary Frank M. DeLape, President
ATTEST LVL COMMUNICATIONS CORPORATION
By: By:
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Stephen Venuti, Secretary Calbert Lai, President
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