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EXHIBIT 2.1
AGREEMENT OF MERGER
OF
ACQUIROR
AND
TARGET
This Agreement of Merger, dated as of the 6th day of December, 1999 (the
"Merger Agreement"), between Cisco Systems, Inc., a California corporation
("Acquiror"), and V-Bits, Inc., a California corporation ("Target").
RECITALS
A. Target was incorporated in the State of California on January 24,
1997 and on the date hereof has outstanding 5,525,028 shares of Common Stock
("Target Common Stock"), and 8,336,171 shares of Preferred Stock (the "Target
Preferred Stock"). The Target Preferred Stock and the Target Common Stock are
collectively referred to herein as the "Target Shares."
B. Acquiror and Target have entered into an Agreement and Plan of
Reorganization (the "Agreement and Plan of Reorganization") providing for
certain representations, warranties, covenants and agreements in connection with
the transactions contemplated hereby. This Merger Agreement and the Agreement
and Plan of Reorganization are intended to be construed together to effectuate
their purpose.
C. The Boards of Directors of Target and Acquiror deem it advisable and
in their mutual best interests and in the best interests of the Shareholders of
Target, that Target be acquired by Acquiror through a merger ("Merger") of
Target with and into Acquiror.
D. The Boards of Directors of Acquiror and Target and the Shareholders
of Target have approved the Merger.
AGREEMENTS
The parties hereto hereby agree as follows:
1. Target shall be merged with and into Acquiror, and Acquiror shall be
the surviving corporation.
2. The Merger shall become effective at such time (the "Effective Time")
as this Merger Agreement and the officers' certificate of Target and Acquiror
are filed with the Secretary of State of the State of California pursuant to
Section 1103 of the Corporations Code of the State of California.
3. At the Effective Time of the Merger (i) all Target Shares that are
owned directly or indirectly by Target or Acquiror shall be cancelled, and no
securities of Acquiror or other consideration shall be delivered in exchange
therefor, (ii) each of the issued and outstanding shares of Target Common Stock
and Target Preferred Stock (other than shares, if any, held by persons who have
not voted such shares for approval of the Merger and with respect to which such
persons shall become entitled to exercise dissenters' rights in accordance with
the Corporations Code of the State of California, referred to hereinafter as
"Dissenting Shares") shall be converted automatically into and exchanged for
0.106033318, of a share of Acquiror Common Stock; provided, however, that no
more than 1,445,059 shares of Common Stock of Acquiror shall be issued in such
exchange (including Acquiror Common Stock reserved for issuance upon exercise of
Target options assumed by Acquiror). Those shares of Acquiror Common Stock to be
issued as a result of the Merger are referred to herein as the "Acquiror
Shares."
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4. Any Dissenting Shares shall not be converted into Acquiror Common
Stock but shall be converted into the right to receive such consideration as may
be determined to be due with respect to such Dissenting Shares pursuant to the
law of the State of California. If after the Effective Time any Dissenting
Shares shall lose their status as Dissenting Shares, then as of the occurrence
of the event which causes the loss of such status, such shares shall be
converted into Acquiror Common Stock in accordance with Section 3.
5. Notwithstanding any other term or provision hereof, no fractional
shares of Acquiror Common Stock shall be issued, but in lieu thereof each holder
of Target Shares who would otherwise, but for rounding as provided herein, be
entitled to receive a fraction of a share of Acquiror Common Stock shall receive
from Acquiror an amount of cash equal to the per share market value of Acquiror
Common Stock (deemed to be $88.84) multiplied by the fraction of a share of
Acquiror Common Stock to which such holder would otherwise be entitled. The
fractional share interests of each Target Shareholder shall be aggregated, so
that no Target Shareholder shall receive cash in an amount greater than the
value of one full share of Acquiror Common Stock.
6. The conversion of Target Common Stock and Target Preferred Stock into
Acquiror Common Stock as provided by this Merger Agreement shall occur
automatically at the Effective Time of the Merger without action by the holders
thereof. Each holder of Target Common Stock and Target Preferred Stock shall
thereupon be entitled to receive shares of Acquiror Common Stock in accordance
with the Agreement and Plan of Reorganization.
7. At the Effective Time of the Merger, the separate existence of Target
shall cease, and Acquiror shall succeed, without other transfer, to all of the
rights and properties of Target and shall be subject to all the debts and
liabilities thereof in the same manner as if Acquiror had itself incurred them.
All rights of creditors and all liens upon the property of each corporation
shall be preserved unimpaired, provided that such liens upon property of Target
shall be limited to the property affected thereby immediately prior to the
Effective Time of the Merger.
8. This Merger is intended as a plan of reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended.
9. (a) The Amended and Restated Articles of Incorporation of
Acquiror in effect immediately prior to the Effective Time shall be the Amended
and Restated Articles of Incorporation of the Surviving Corporation unless and
until thereafter amended.
(b) The Bylaws of Acquiror in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation unless and until
amended or repealed as provided by applicable law, the Articles of Incorporation
of the Surviving Corporation and such Bylaws.
(c) The directors and officers of Acquiror immediately prior to
the Effective Time shall be the directors and officers of the Surviving
Corporation.
10. (a) Notwithstanding the approval of this Merger Agreement by the
Shareholders of Target, this Merger Agreement shall terminate forthwith in the
event that the Agreement and Plan of Reorganization shall be terminated as
therein provided.
(b) In the event of the termination of this Merger Agreement as
provided above, this Merger Agreement shall forthwith become void and there
shall be no liability on the part of Target or Acquiror or their respective
officers or directors, except as otherwise provided in the Agreement and Plan of
Reorganization.
(c) This Merger Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
(d) This Merger Agreement may be amended by the parties hereto
any time before or after approval hereof by the Shareholders of Target, but,
after such approval, no amendments shall be made which by law require the
further approval of such Shareholders without obtaining such approval or as
otherwise required by this Agreement and Plan of Reorganization. This Merger
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Merger Agreement as
of the date first written above.
ACQUIROR
By: /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx, President
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, Secretary
TARGET
By: /s/ XXXXXXX XXXXX
Xxxxxxx Xxxxx, President and Chief
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Executive Officer
By: /s/ XXXXXXXX XXXXXXXXX
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Xxxxxxxx Xxxxxxxxx, Secretary
