EXHIBIT 2.3
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 31st, 2000 (the "Merger
Agreement"), between Surge Components, Inc., a New York corporation ("Surge"),
and Superus Holdings, Inc., a Delaware corporation ("Superus").
WHEREAS, Surge is a corporation duly organized and existing under the
laws of the State of New York, and as of the date hereof, Surge has authority to
issue 25,000,000 shares of Common Stock, par value $.001 per share (the "New
York Common Stock"), of which 4,972,530 shares are outstanding. Surge has
authority to issue 1,000,000 shares of Preferred Stock, of which 239,000 shares
are outstanding (the "New York Preferred Stock"). Surge has reserved 850,000
shares of New York Common Stock for issuance pursuant to Surge's stock incentive
plan under which options to purchase 716,000 shares are outstanding. In
addition, Surge has issued options to purchase 5,300,000 shares of Common Stock
to certain officers and directors of Surge (the "Orbit Options"), and warrants
to purchase 3,479,600 shares of Common Stock (the "Class A Warrants");
WHEREAS, on the date hereof Superus has authority to issue 10,000,000
shares of Preferred Stock, par value $.001 per share (the "Preferred Stock"),
15,000,000 shares of Class A Common Stock, par value $.001 per share (the "Class
A Common Stock"), none of which shares are issued and outstanding and none are
held in treasury, and 125,000,000 shares of Class B Common Stock, par value
$.001 per share (the "Class B Common Stock") (the Class A Common Stock and the
Class B Common Stock are sometimes referred to collectively as "Superus Common
Stock");
WHEREAS, The respective Boards of Directors of Surge and Superus have
determined that it is advisable and in the best interests of each of such
corporations that Surge merge with and into Superus upon the terms and subject
to the conditions set forth herein; and
WHEREAS, The respective Boards of Directors of Surge and Superus have
by resolutions duly adopted, approved this Merger Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Merger. Surge and all of its assets, including, but not
limited to, the stock of its subsidiaries shall be merged with and into Superus
(the "Merger"), and Superus shall be the surviving corporation (hereinafter
sometimes referred to as the "Surviving Corporation"). The Merger shall become
effective upon the date and time of filing the appropriate certificate of
merger, providing for the Merger, with the Secretary of State of the State of
New York and the appropriate certificate of merger, providing for the Merger,
with the Secretary of State of the State of Delaware, whichever later occurs
(the "Effective Time").
Section 2. Governing Documents. The Certificate of Incorporation of
Superus, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation without change or
amendment until thereafter amended in accordance with the provisions thereof and
applicable law. The By-Laws of Superus, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation without change
or amendment until thereafter amended in accordance with the provisions thereof,
the Certificate of Incorporation of the Surviving Corporation and applicable
law.
Section 3. Succession. At the Effective Time, the separate corporate
existence of Surge shall cease, and Superus shall succeed to all of the assets
and property (whether real, personal or mixed), rights, privileges, franchises,
immunities and powers of Surge , and Superus shall assume and be subject to all
of the duties, liabilities, obligations and restrictions of every kind and
description of Surge , including, without limitation, all outstanding
indebtedness of Surge , all in the manner and as more fully set forth in
Sections 251 and 252 of the Delaware General Corporation Law.
Section 4. Directors. The directors and the members of the various
committees of the Board of Directors of Superus immediately prior to the
Effective Time shall be the directors and members of such committees of the
Surviving Corporation at and after the Effective Time.
Section 5. Officers. The officers of Superus immediately preceding the
Effective Time shall be the officers of the Surviving Corporation at and after
the Effective Time until their successors are duly elected and qualified.
Section 6. 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 Surge such deeds and other instruments, and
there shall be taken or caused to be taken by it all such further and other
action, as shall be appropriate, advisable or necessary in order to vest,
perfect or conform, 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 Surge , and otherwise to carry
out the purposes of this Merger Agreement, and the officers and directors of the
Surviving Corporation are fully authorized, in the name and on behalf of Surge
or otherwise, to take any and all such action and to execute and deliver any and
all such deeds and other instruments.
Section 7. Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof:
(a) each share of New York Common Stock issued and outstanding
immediately prior to the Effective Time shall, except as provided in Section 8
hereof, be changed and converted into and shall be one fully paid and
non-assessable share of Class A Common Stock;
(b) each share of New York Preferred Stock issued and outstanding
immediately prior to the Effective Time shall be automatically changed and
converted into and shall be one hundred (100) fully paid and non-assessable
shares of Class B Common Stock.
Section 8. Dissenting Stockholders. Notwithstanding the provisions of
Section 7(a) hereof, any outstanding shares of New York Common stock held by a
shareholder who shall have elected to dissent from the Merger and who shall have
exercised and perfected appraisal rights with respect to such shares in
accordance with Section 623 of the New York Business Corporation Law (a
"Dissenting Stockholder") shall not be converted into shares of Class A Common
Stock as a result of the Merger, but Dissenting Stockholders shall be entitled
to receive in lieu thereof only such consideration as shall be provided in such
Section 623, except that shares of New York Common Stock outstanding immediately
prior to the Effective Time and held by a Dissenting Stockholder who shall
thereafter withdraw his election to dissent from the Merger or lose his right to
dissent from the Merger as provided in such Section 623 shall be deemed
converted, as of the Effective Time, into such number of shares of Class A
Common Stock as such holder otherwise would have been entitled to receive as a
result of the Merger.
Section 9. Employee Option and Benefit Plans. Each option or other
right to purchase or otherwise acquire shares of New York Common Stock granted
under any employee option, stock purchase or other benefit plan of Surge
(collectively, the "Plans"), which is outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become an option or right to
acquire (and Superus hereby assumes the obligation to deliver) the same number
of shares of Class A Common Stock, at the same price per share, and upon the
same terms, and subject to the same conditions, as set forth in the respective
Plan as in effect immediately prior to the Effective Time. The same number of
shares of Class A Common Stock shall be reserved for purposes of the Plans as is
equal to the number of shares of New York Common Stock so reserved immediately
prior to the Effective Time. Superus hereby assumes, as of the Effective Time,
(i) the Plans and all obligations of Surge under the Plans, including the
outstanding options, stock purchase rights or awards or portions thereof granted
pursuant to the Plans and the right to grant additional options and stock
purchase rights thereunder and (ii) all obligations of Surge under all other
benefit plans in effect as of the Effective Time with respect to which employee
rights or accrued benefits are outstanding as of the Effective Time.
Section 10. Warrants. At the Effective Time, the Class A Warrants will
be converted into and become an option or right to acquire (and Superus hereby
assumes the obligation to deliver) the same number of shares of Class B
Common Stock, at the same price per share, and upon the same terms, and subject
to the same conditions as set forth in the Class A Warrants.
Section 11. Notes. At the Effective Time, the $7 million of l2%
Convertible Promissory Notes due December 31, 2000 will be converted
automatically into shares of Class B Common Stock at a rate of $3.00 of
principal amount for each share and otherwise upon the same terms and subject to
the same conditions as set forth in the notes.
Section 12. Dividends and Distributions. In the event that any dividend
or other distribution shall hereafter be declared by the Board of Directors of
Surge in respect of the outstanding shares of New York Common Stock payable
subsequent to the Effective Time, the obligation to make payment of such
dividend or other distribution shall, by virtue of the Merger, become the
obligation of the Surviving Corporation and shall be satisfied in the manner
specified in such declaration, except that, to the extent such dividend or other
distributions shall have been declared payable in whole or in part in shares of
New York Common Stock, the Surviving Corporation shall issue, in place thereof,
to the persons entitled thereto, the identical number of shares of Class A
Common Stock.
Section 13. Condition to the Merger. The consummation of the Merger and
the other transactions herein provided is subject to receipt prior to the
Effective Time of the requisite approval of the Merger by the holders of New
York Common Stock pursuant to the New York Business Corporation Law.
Section 14. Certificates. At and after the Effective time all of the
outstanding certificates which immediately prior thereto represented shares of
New York Common Stock, New York Preferred Stock or warrants, units or other
securities of Surge shall be deemed for all purposes to evidence ownership of
and to represent the shares of Superus Common Stock or warrants, units or other
securities of Superus, as the case may be, into which the shares of New York
Common Stock, or warrants, notes, options, units or other securities of Surge
represented by such certificates have been converted as herein provided and
shall be so registered on the books and records of the Surviving Corporation or
its transfer agent. The registered owner of any such outstanding certificate
shall, until such certificate shall have been surrendered for transfer or
otherwise accounted for to the Surviving Corporation or its transfer agent, have
and be entitled to exercise any voting and other rights with respect to, and to
receive any dividends and other distributions upon, the shares of Superus Common
Stock or warrants, notes, options, units, or other securities of Superus, as the
case may be, evidenced by such outstanding certificate, as above provided.
Section 15. Amendment. The parties hereto, by mutual consent of their
respective boards of directors, may amend, modify or supplement this Merger
Agreement prior to the Effective Time; provided, however, that no amendment,
modification or supplement may be made after the adoption of this Merger
Agreement by the Shareholders of Surge which changes this Merger Agreement in a
way which, in the judgment of the Board of Directors of Surge, would have a
material adverse effect on the Shareholders of Surge, unless such amendment,
modification or supplement is approved by such Shareholders.
Section 16. Termination. This Merger Agreement may be terminated, and
the Merger and the other transactions provided for herein may be abandoned, at
any time prior to the Effective Time, whether before or after approval of this
Merger Agreement by the Shareholders of Surge, by action of the Board of
Directors of Surge if:
(a) the condition specified in Section 13 hereof shall not have been
satisfied or waived; or
(b) the Board of Directors of Surge determines for any reason, in its
sole judgment and discretion, that the consummation of the Merger would be
inadvisable or not in the best interests of Surge and its Shareholders.
Section 17. Counterparts. This Merger Agreement may be executed in one
or more counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement.
Section 18. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Merger Agreement.
Section 19. New York Appointment. The Surviving Corporation hereby
agrees that it may be served with process in the State of New York in any action
or special proceeding for enforcement of any liability or obligation of Surge,
Superus or the Surviving Corporation arising from the Merger. The Surviving
Corporation appoints the Secretary of State of the State of New York as its
agent to accept service or process of any such suit or other proceeding and a
copy of such process shall be mailed by the Secretary of State of the State of
New York to the Surviving Corporation at 0000 Xxxxx Xxxxxx, Xxxx Xxxx, Xxx Xxxx
00000.
Section 20. Governing Law. This Merger Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, Surge and Superus have caused this Merger Agreement
to be executed and delivered as of the date first above written.
SURGE COMPONENTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice-President
SUPERUS HOLDINGS, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx,
Chairman of the Board
