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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 24, 1999 (this
"AGREEMENT"), by and between Interactive Radio Group, Inc., a Delaware
corporation ("INRG"), and FTM Media, Inc., a Delaware corporation ("FTM").
WITNESSETH:
WHEREAS, FTM is a wholly owned subsidiary of FTM Media, Inc., a Colorado
corporation ("FTM COLORADO") and INRG is a majority owned subsidiary of FTM
Colorado;
WHEREAS, the Boards of Directors of INRG and FTM have determined that it
is in the best interests of their respective companies and their stockholders to
consummate the business combination transaction provided for herein in which
INRG will, subject to the terms and conditions set forth herein, merge (the
"MERGER") with and into FTM, so that FTM is the surviving corporation in the
Merger;
WHEREAS, immediately prior to the Merger, FTM Colorado will reincorporate
into Delaware by merging with and into FTM, with FTM as the surviving
corporation (such merger, the "REINCORPORATION MERGER")
WHEREAS, the parties desire to make certain representations, warranties
and agreements in connection with the Merger and also to prescribe certain
conditions to the Merger; and
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"FTM" shall have the meaning set forth in the recitals to this Agreement.
"FTM BOARD" shall mean the Board of Directors of FTM.
"FTM STOCK" shall mean FTM Common Stock and FTM Preferred Stock.
"INRG BOARD" shall mean the Board of Directors of INRG.
"INRG OPTION PLAN" shall mean the 1999 Interactive Radio Group, Inc. Stock
Option Plan.
"INRG STOCK" shall mean INRG Common Stock and INRG Preferred Stock.
"PERSON" or "PERSONS" shall mean any individual, bank, corporation,
partnership, association, joint-stock company, business trust or unincorporated
organization.
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"SEC" shall mean the Securities and Exchange Commission.
"TREASURY SHARES" shall mean shares of INRG Stock held by INRG or any of
its Subsidiaries, FTM Media, Inc., a Colorado corporation ("OLD FTM"), or by FTM
or any of its Subsidiaries, in each case other than in a fiduciary capacity or
as a result of debts previously contracted in good faith.
ARTICLE II
THE MERGER; EFFECTS OF THE MERGER
2.01 THE MERGER.
(a) THE SURVIVING CORPORATION. At the Effective Time, INRG shall
merge with and into FTM (the "MERGER"), the separate corporate existence of INRG
shall cease and FTM shall survive and continue to exist as a Delaware
corporation (FTM, as the surviving corporation in the Merger, sometimes being
referred to herein as the "SURVIVING CORPORATION").
(b) EFFECTIVENESS AND EFFECTS OF THE MERGER. Subject to the
satisfaction or waiver of the conditions set forth in ARTICLE VI in accordance
with this Agreement, the Merger shall become effective upon the occurrence of
both (i) the filing in the office of the Secretary of State of Delaware of
articles of merger in accordance with Section 275 of the Delaware General
Corporation Law (the "DGCL") and (ii) the filing in the office of the Secretary
of State of the State of Delaware of a certificate of merger in accordance with
Section 252 of the DGCL, or such later date and time as may be set forth in such
articles and certificate. The Merger shall have the effects prescribed in the
DGCL.
(c) CERTIFICATE OF INCORPORATION AND BY-LAWS. The certificate of
incorporation and by-laws of the Surviving Corporation shall be those of FTM, as
in effect immediately prior to the Effective Time.
2.02 EFFECTIVE DATE AND EFFECTIVE TIME.
Subject to the satisfaction or waiver of the conditions as set forth in
ARTICLE VI in accordance with this Agreement, the parties shall cause the
effective date of the Merger (the "EFFECTIVE DATE") to occur on (i) the third
business day to occur after the last of the conditions set forth in ARTICLE VI
shall have been satisfied or waived in accordance with the terms of this
Agreement or (ii) such other date to which the parties may agree. The time on
the Effective Date when the Merger shall become effective is referred to as the
"EFFECTIVE TIME."
2.03 TAX CONSEQUENCES. It is intended that the Merger shall qualify as a
reorganization under Section 368(a) of the Code.
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ARTICLE III
MERGER CONSIDERATION; EXCHANGE PROCEDURES
3.01 MERGER CONSIDERATION. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any party or stockholder:
(a) OUTSTANDING INRG COMMON STOCK. Each share, excluding Treasury
Shares, of the common stock, par value $.0001 per share, of INRG (the "INRG
COMMON STOCK"), issued and outstanding immediately prior to the Effective Time
shall become and be converted into the right to receive 1.25 shares (the
"EXCHANGE RATIO") of the common stock, par value $.001 per share, of FTM ("FTM
COMMON STOCK").
(b) OUTSTANDING INRG PREFERRED STOCK. Each share of INRG Series A
Preferred Stock, par value $.001, (the "INRG PREFERRED STOCK"), excluding any
Treasury Shares, issued and outstanding immediately prior to the Effective Time,
shall become and be converted into one share of a new series of preferred stock
of FTM, par value $.001 ("FTM SERIES A PREFERRED STOCK") having terms
substantially similar to those of the INRG Preferred Stock.
(c) OUTSTANDING FTM COMMON STOCK. Each share of FTM Common Stock
issued and outstanding immediately prior to the Effective Time shall be
unchanged and shall remain issued and outstanding as common stock of the
Surviving Corporation.
(d) TREASURY SHARES. Each of the shares of INRG Stock held as
Treasury Shares immediately prior to the Effective Time shall be canceled and
retired at the Effective Time and no consideration shall be issued in exchange
therefor.
3.02 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS.
At the Effective Time, holders of INRG Stock shall cease to be, and shall
have no rights as, stockholders of INRG, other than to receive any dividend or
other distribution with respect to such INRG Stock with a record date occurring
prior to the Effective Time and the consideration provided under this Article
III. After the Effective Time, there shall be no transfers on the stock transfer
books of INRG or the Surviving Corporation of shares of INRG Stock.
3.03 FRACTIONAL SHARES.
Notwithstanding any other provision hereof, no fractional shares of FTM
Common Stock and no certificates or scrip therefor, or other evidence of
ownership thereof, will be issued in the Merger; instead, FTM shall pay to each
holder of INRG Common Stock who would otherwise be entitled to a fractional
share of FTM Common Stock (after taking into account all Old Certificates
delivered by such holder) an amount in cash (without interest) determined by
multiplying such fraction by the average of the last sale prices of Old FTM
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Common Stock, as reported by the OTC Bulletin Board for the five trading days
immediately preceding the Effective Date.
3.04 EXCHANGE PROCEDURES.
(a) At or prior to the Effective Time, FTM shall deposit, or shall
cause to be deposited, with a bank or trust company (the "EXCHANGE AGENT"), for
the benefit of the holders of certificates formerly representing shares of INRG
Common Stock ("OLD CERTIFICATES"), for exchange in accordance with this Article
III, certificates representing the shares of FTM Common Stock ("NEW
CERTIFICATES") and an estimated amount of cash (such cash and New Certificates,
together with any dividends or distributions with a record date occurring after
the Effective Date with respect thereto (without any interest on any such cash,
dividends or distributions), being hereinafter referred to as the "EXCHANGE
FUND") to be paid pursuant to this Article III in exchange for outstanding
shares of INRG Common Stock.
(b) As promptly as practicable after the Effective Date, FTM shall
send or cause to be sent to each former holder of record of shares (other than
Treasury Shares) of INRG Common Stock immediately prior to the Effective Time
transmittal materials for use in exchanging such stockholder's Old Certificates
for the consideration set forth in this Article III. FTM shall cause the New
Certificates into which shares of a stockholder's INRG Common Stock are
converted on the Effective Date and/or any check in respect of any fractional
share interests or dividends or distributions which such person shall be
entitled to receive to be delivered to such stockholder upon delivery to the
Exchange Agent of Old Certificates representing such shares of INRG Common Stock
(or indemnity reasonably satisfactory to FTM and the Exchange Agent, if any of
such certificates are lost, stolen or destroyed) owned by such stockholder. No
interest will be paid on any such cash to be paid in lieu of fractional share
interests or in respect of dividends or distributions which any such person
shall be entitled to receive pursuant to this Article III upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange Agent nor
any party hereto shall be liable to any former holder of INRG Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(d) No dividends or other distributions with respect to FTM Common
Stock with a record date occurring after the Effective Time shall be paid to the
holder of any unsurrendered Old Certificate representing shares of INRG Common
Stock converted in the Merger into the right to receive shares of such FTM
Common Stock until the holder thereof shall be entitled to receive New
Certificates in exchange therefor in accordance with this Article III, and no
such shares of FTM Common Stock shall be eligible to vote until the holder of
Old Certificates is entitled to receive New Certificates in accordance with this
Article III. After becoming so entitled in accordance with this Article III, the
record holder thereof also shall be entitled to receive any such dividends or
other distributions, without any interest thereon, which theretofore had become
payable with respect to shares of FTM Common Stock such holder had the right to
receive upon surrender of the Old Certificate.
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(e) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of INRG for twelve months after the Effective Time shall be paid to
FTM. Any stockholders of INRG who have not theretofore complied with this
Article III shall thereafter look only to FTM for payment of the shares of FTM
Common Stock, cash in lieu of any fractional shares and unpaid dividends and
distributions on the FTM Common Stock deliverable in respect of each share of
INRG Common Stock such stockholder holds as determined pursuant to this
Agreement, in each case, without any interest thereon.
3.05 OPTIONS.
At the Effective Time, all stock options to purchase shares of INRG Common
Stock (each, a "INRG STOCK OPTION"), which are then outstanding and unexercised,
shall cease to represent a right to acquire shares of INRG Common Stock and
shall be converted automatically into options to purchase shares of FTM Common
Stock, and FTM shall assume each such INRG Stock Option subject to the terms
thereof, (i) PROVIDED, HOWEVER, that from and after the Effective Time, (ii) the
number of shares of FTM Common Stock purchasable upon exercise of such INRG
Stock Option shall be equal to 1.25 times the number of shares of INRG Common
Stock that were purchasable under such INRG Stock Option immediately prior to
the Effective Time and there shall be no change in the aggregate exercise price
of each INRG Stock Option. The terms of each INRG Stock Option shall, in
accordance with its terms, be subject to further adjustment as appropriate to
reflect any stock split, stock dividend, recapitalization or other similar
transaction with respect to FTM Common Stock on or subsequent to the Effective
Date. Notwithstanding the foregoing, each INRG Stock Option which is intended to
be an "incentive stock option" (as defined in Section 422 of the Code) shall be
adjusted in accordance with the requirements of Section 424 of the Code.
Accordingly, with respect to any incentive stock options, fractional shares
shall be rounded down to the nearest whole number of shares and where necessary
the per share exercise price shall be rounded down to the nearest cent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01 REPRESENTATIONS AND WARRANTIES. INRG hereby represents and warrants
to FTM, and FTM hereby represents and warrants to INRG as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. Such party is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. Such party is duly qualified to do
business and is in good standing in the states of the United States and foreign
jurisdictions where its ownership or leasing of property or assets or the
conduct of its business requires it to be so qualified. It has in effect all
federal, state, local, and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its business as it is
now conducted.
(b) CORPORATE POWER. Such party and each of its Subsidiaries has the corporate
power and authority to carry on its business as it is now being conducted and to
own all its properties and assets; and it has the corporate power and authority
to execute,
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deliver and perform its obligations under this Agreement, and to consummate the
transactions contemplated hereby and thereby.
(c) CORPORATE AUTHORITY. (i) In the case of the representations and
warranties of INRG, (A) subject to receipt of the requisite approval and
adoption of this Agreement and the Merger by the holders of a majority of the
outstanding shares of INRG Common Stock entitled to vote thereon, this Agreement
and the transactions contemplated hereby and thereby have been authorized by all
necessary corporate action of INRG and the INRG Board prior to the date hereof
and (B) this Agreement is a legal, valid and binding agreement of INRG,
enforceable in accordance with its respective terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles). (ii) In the case of the representations and warranties of FTM, (A)
subject in the case of this to receipt of the requisite approval and adoption of
this Agreement and the Merger by the holders of a majority of the outstanding
shares of FTM Common Stock entitled to vote thereon, this Agreement is a legal,
valid and binding agreement of FTM, enforceable in accordance with its
respective terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles).
ARTICLE V
COVENANTS
INRG hereby covenants to and agrees with FTM, and FTM hereby covenants to
and agrees with INRG, that:
5.01 REASONABLE BEST EFFORTS.
Subject to the terms and conditions of this Agreement, it shall use its
reasonable best efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of
the Merger as promptly as practicable and otherwise to enable consummation of
the transactions contemplated hereby and shall cooperate fully with the other
party hereto to that end.
5.02 STOCKHOLDER APPROVALS.
Each of them shall take, in accordance with applicable law, and its
respective articles or certificate of incorporation and by-laws, all action
necessary to convene, respectively, (i) an appropriate meeting of stockholders
of FTM to consider and vote upon (A) the approval and adoption of this Agreement
and the Merger (including the issuance of the shares of FTM Common Stock to be
issued in the Merger pursuant to this Agreement) and (B) any other matters
required to be approved by FTM stockholders for consummation of the Merger
(including any adjournment or postponement, the "FTM MEETING"), and (ii) an
appropriate meeting of stockholders of INRG to consider and vote upon the
approval and adoption of this Agreement and the Merger and any other matters
required to be
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approved by INRG's stockholders for consummation of the Merger (including any
adjournment or postponement, the "INRG MEETING"; and each of the FTM Meeting and
the INRG Meeting, a "MEETING"), respectively, as promptly as practicable after
the Registration Statement is declared effective. The FTM Board and the INRG
Board shall recommend such approval, and each of FTM and INRG shall take all
reasonable lawful action to solicit such approval by its respective
stockholders. Notwithstanding the foregoing, the approval of the Merger by the
stockholders of FTM and INRG may take the form of action by written consent.
5.03 REGISTRATION STATEMENT. Each of FTM and INRG agrees to cooperate in
the preparation of a registration statement on Form S-4 (the "REGISTRATION
STATEMENT") to be filed by FTM with the SEC in connection with the issuance of
FTM Common Stock in the Merger (including the proxy statement and prospectus and
other proxy solicitation materials of INRG constituting a part thereof (the
"PROXY STATEMENT") and all related documents).
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
The obligations of each of the parties to consummate the Merger is
conditioned upon the satisfaction at or prior to the Effective Time of each of
the following:
6.01 STOCKHOLDER VOTE. Approval and adoption of this Agreement and the
Merger by the requisite vote of the stockholders of INRG and approval and
adoption of this Agreement and the Merger (including the issuance of shares of
FTM Common Stock to be issued in the Merger pursuant to this Agreement) by the
requisite vote of the stockholders of FTM.
6.02 REGULATORY APPROVALS. All regulatory approvals required to consummate
the transactions contemplated hereby shall have been obtained and shall remain
in full force and effect and all statutory waiting periods in respect thereof
shall have expired and no such approvals shall contain any conditions or
restrictions which either the FTM Board or the INRG Board reasonably determines
in good faith would, following the Effective Time, have a material adverse
effect on the Surviving Corporation and its Subsidiaries taken as a whole.
6.03 THIRD PARTY CONSENTS. All consents or approvals of all persons (other
than Regulatory Authorities) required for the consummation of the Merger shall
have been obtained and shall be in full force and effect, unless the failure to
obtain any such consent or approval is not reasonably likely to have,
individually or in the aggregate, a material adverse effect on INRG or FTM.
6.04 NO INJUNCTION, ETC. No order, decree or injunction of any court or
agency of competent jurisdiction shall be in effect, and no law, statute or
regulation shall have been enacted or adopted, that enjoins, prohibits or makes
illegal the consummation of any of the transactions contemplated hereby.
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6.05 EFFECTIVE REGISTRATION STATEMENT. The Registration Statement shall
have become effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the SEC or any other
Regulatory Authority.
6.06 TAX OPINION. INRG and FTM shall have received an opinion from Irell &
Xxxxxxx LLP, tax counsel, dated as of the Effective Time, substantially to the
effect that, on the basis of the facts, representations and assumptions set
forth in such opinions which are consistent with the state of facts existing at
the Effective Time, the Merger will be treated for Federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code and that
accordingly:
(i) No gain or loss will be recognized by FTM or INRG as a result of
the Merger;
(ii) No gain or loss will be recognized by the stockholders of INRG
who exchange their INRG Stock solely for FTM Stock pursuant to the Merger
(except with respect to cash received in lieu of a fractional share
interest in FTM Stock); and
(iii) The tax basis of the FTM Stock received by stockholders who
exchange all of their INRG Stock solely for FTM Stock in the Merger will
be the same as the tax basis of the INRG Stock surrendered in exchange
therefor.
In rendering such opinion, such counsel may require and rely upon
representations and covenants including those contained in certificates of
officers of FTM, INRG and others.
6.07 The Reincorporation Merger shall have been consummated.
ARTICLE VII
TERMINATION
7.01 TERMINATION. This Agreement may be terminated, and the Merger may be
abandoned at any time prior to the Effective Time (either before or after the
approval of the shareholders of either or both of FTM or INRG), by the mutual
consent of FTM and INRG.
7.02 EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to this ARTICLE VII,
no party to this Agreement shall have any liability or further obligation to any
other party hereunder.
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ARTICLE VIII
MISCELLANEOUS
8.01 SURVIVAL. All representations, warranties, agreements and covenants
contained in this Agreement shall not survive the Effective Time or termination
of this Agreement if this Agreement is terminated prior to the Effective Time.
8.02 WAIVER; AMENDMENT. Prior to the Effective Time, any provision of this
Agreement may be (i) waived by the party benefited by the provision, or (ii)
amended or modified at any time, by an agreement in writing between the parties
hereto and executed in the same manner as this Agreement.
8.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
8.04 GOVERNING LAW. This Agreement shall be governed by, and interpreted
in accordance with, the laws of the State of California, without regard to the
conflict of law principles thereof (except to the extent that mandatory
provisions of Federal law or of the corporation laws of the State of Delaware
are applicable).
8.05 NOTICES. All notices, requests and other communications hereunder to
a party shall be in writing and shall be deemed given if personally delivered,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below or such other
address as such party may specify by notice to the parties hereto.
If to INRG, to: Interactive Radio Group
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxx, Xxxxxxx 00000
If to FTM, to: FTM Media, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxx X-000
Xxxxxxxxxx, Xxxxxxx 00000
With copies to: Irell & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
8.06 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement
represents the entire understanding of the parties hereto with reference to the
transactions contemplated hereby and thereby and this Agreement supersedes any
and all other oral or written agreements (other than the INRG Option Agreement)
heretofore made. Nothing in this Agreement expressed or implied, is intended to
confer upon any person,
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other than the parties hereto or their respective successors, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
INTERACTIVE RADIO GROUP
By: /s/ Xxx Xxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxx
Title: Chief Executive Officer and President
FTM MEDIA, INC.
By: /s/ Xxx Xxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxx
Title: Chief Executive Officer and President
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