EXHIBIT 10.12
MERGER AGREEMENT
of
USA DIGITAL, INC.
(A Nevada Corporation)
and
BLAZOON SYSTEMS INCORPORATED
(A Colorado Corporation)
This Merger Agreement, dated as of March 9, 1999, is entered into pursuant
to the provisions of Section 92A.190 of the General Corporation Law of Nevada
and of Section 0-000-000 of the Colorado Business Corporation Act, by and
between USA DIGITAL, INC., a Nevada corporation (the "Survivor"), and BLAZOON
SYSTEMS INCORPORATED, a Colorado corporation (the "Assimilated"), both
corporations being sometimes referred to herein as the "Constituent
Corporations."
RECITALS:
A. Survivor is a corporation duly organized and existing under the laws of
the State of Nevada and has an authorized capital of 60,000,000 shares, of which
50,000,000 shares are designated as common stock, par value $.001, and of which
5,000,000 shares are designated as Class A Preferred stock, $.001 par value, and
of which 5,000,000 shares are designated Class B Preferred Stock, $.001 par
value, none of which have been issued or are outstanding.
B. Assimilated is a corporation duly organized and existing under the laws
of the State of Colorado and has an authorized capital of 60,000,000 shares
without par value, of which 50,000,000 shares are designated as Common Stock and
of which 10,000,000 shares are designated as Preferred Stock. A total of
2,235,000 shares of Common Stock are issued and outstanding. A total of 625,000
shares of Series A Convertible Preferred shares are issued and outstanding.
C. The Board of Directors and Shareholders of Assimilated approved this
merger/reincorporation on June 22nd 1998, and the Board of Directors of the
Survivor approved this Agreement on March 9, 1999. (The Survivor has no
shareholders prior to the closing of this transaction.)
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, Survivor and
Assimilated hereby agree, subject to the terms and conditions hereinafter set
forth, as follows:
ARTICLE I. MERGER.
1.1 MERGER AND NAME CHANGE. In accordance with the provisions of this
Agreement, the General Corporation Law of Nevada, and the Colorado Business
Corporation Act, Assimilated shall be merged with and into Survivor (the
"Merger"), and the name of the surviving corporation shall be USA Digital, Inc.
1.2 FILING AND EFFECTIVENESS. The Merger shall become effective when the
following actions shall have been completed:
(a) This Agreement and the Merger shall have been adopted and
approved by the shareholders of each Constituent Corporation in accordance with
the respective requirements of the General Corporation Law of Nevada and the
Colorado Business Corporation Act.
(b) An executed counterpart of this Agreement shall have been
filed with the Secretary of State of the State of Nevada; and
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USA Digital/Blazoon Systems
(c) Executed Articles of Merger or other documents meeting the
requirements of the Colorado Business Corporation Act shall have been filed with
the Secretary of State of the State of Colorado.
The date and time when the Merger shall become effective, as aforesaid,
is herein called the "Effective Date."
1.3 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Survivor as in effect immediately prior to the Effective Date shall continue in
full force and effect as the Certificate of Incorporation of the Survivor until
duly amended in accordance with the provisions thereof and applicable law.
1.4 BYLAWS. The Bylaws of Survivor as in effect immediately prior to the
Effective Date shall continue in full force and effect as the Bylaws of the
Survivor without any change as a result of the Merger.
1.5 DIRECTORS AND OFFICERS. The directors and officers of Survivor in
office immediately prior to the Effective Date shall continue in office and
shall constitute the directors and officers of Survivor until their respective
successors shall have been elected and duly qualified or until otherwise
provided by law, the Certificate of Incorporation of Survivor and the Bylaws of
Survivor.
1.6 EFFECT OF MERGER. Upon the Effective Date, the separate existence of
Assimilated shall cease and the Survivor (i) shall continue to possess all of
the assets, rights, powers and property of Survivor as constituted immediately
prior to the Effective Date, shall be subject to all actions previously taken by
the Board of Directors of Assimilated and shall succeed, without other transfer,
to all of the assets, rights, powers and property of Assimilated, (ii) shall
continue to be subject to all of the debts, liabilities and obligations of
Assimilated as constituted immediately prior to the Effective Date and shall
succeed, without other transfer, to all of the debts, liabilities and
obligations of Assimilated in the same manner as if Survivor had itself incurred
them, all as more fully provided under the applicable provisions of the General
Corporation Law of Nevada and the Colorado Business Corporation Act.
ARTICLE II. MANNER OF CONVERSION OF COMMON STOCK.
2.1 ASSIMILATED COMMON STOCK. Upon the Effective Date, each share of common
stock, of Assimilated issued and outstanding immediately prior thereto shall, by
virtue of the Merger and without any action by any holder of such shares or any
other person, be converted into and exchanged for one fully paid and
nonassessable share of Common Stock, $.001 par value, of Survivor (the "Merger
Shares"); that is, each share of Assimilated common stock shall be converted
into one (1) Merger Share.
2.2 OUTSTANDING COMMON STOCK OF SURVIVOR. Upon the Effective Date, there
will be no shares of Common Stock of Survivor issued and outstanding.
2.3 EXCHANGE OF CERTIFICATES. On or after the Effective Date of the Merger:
(a) All of the outstanding certificates which prior to that
time represented the outstanding Common Shares of Assimilated shall be deemed
for all purposes to evidence ownership of and to represent the Merger Shares
into which the shares of Assimilated represented by such certificates have been
converted as herein provided. The registered owner on the books and records of
Assimilated or its transfer agent of any such outstanding stock certificate
shall, until such certificate shall have been surrendered for transfer or
conversion or otherwise accounted for to Survivor or its transfer agent, have
and be entitled to exercise any voting and other rights with respect to and to
receive any dividend and other distributions upon the Merger Shares evidenced by
such outstanding certificate as above provided.
(b) Each certificate evidencing Merger Shares issued in the
Merger shall bear the same legends, if any, with respect to the restrictions on
transferability as the certificates of Assimilated so converted and given in
exchange therefor, unless otherwise determined by the Board of Directors of
Survivor in compliance with applicable laws.
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(c) If any certificate for Merger Shares is to be issued in a
name other than that in which the certificate surrendered in exchange therefor
is registered, it shall be a condition of issuance thereof that the certificate
so surrendered shall be properly endorsed and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the person requesting
such transfer pay any transfer or other taxes payable by reason of the issuance
of such new certificate in a name other than that of the registered holder of
the certificate surrendered or establish to the satisfaction of Survivor that
such tax has been paid or is not payable.
2.4 ASSUMPTION OF BENEFIT PLANS. Upon the Effective Date, Survivor shall
assume and continue both the 1998 Compensatory Stock Option Plan and the 1998
Employee Stock Compensation Plan of Assimilated, without change other than
conforming changes in the corporate name, par value of common stock, governing
law and similar non-substantive changes. Survivor and its Board of Directors
shall have the same rights and powers in regard to such plans as Assimilated and
its Board of Directors.
ARTICLE III. MANNER OF CONVERSION OF PREFERRED STOCK.
3.1 ASSIMILATED PREFERRED STOCK. Upon the Effective Date, each share of
Preferred stock, of Assimilated issued and outstanding immediately prior thereto
shall, by virtue of the Merger and without any action by any holder of such
shares or any other person, be converted into and exchanged for one fully paid
and nonassessable share Series A Convertible Preferred Stock, with a stated
value of $4.00, of Survivor (the "Merger Shares"); that is, each share of
Assimilated common stock shall be converted into one (1) Merger Share.
3.2 OUTSTANDING PREFERRED STOCK OF SURVIVOR. Upon the Effective Date,
there will be no shares of Preferred Stock of Survivor issued and outstanding
with the exception of the Merger Shares.
3.3 EXCHANGE OF CERTIFICATES. On or after the Effective Date of the
Merger:
(a) All of the outstanding certificates which prior to that
time represented the outstanding Series A Convertible Preferred Shares of
Assimilated shall be deemed for all purposes to evidence ownership of and to
represent the Merger Shares into which the shares of Assimilated represented by
such certificates have been converted as herein provided. The registered owner
on the books and records of Assimilated or its transfer agent of any such
outstanding stock certificate shall, until such certificate shall have been
surrendered for transfer or conversion or otherwise accounted for to Survivor or
its transfer agent, have and be entitled to exercise any voting and other rights
with respect to and to receive any dividend and other distributions upon the
Merger Shares evidenced by such outstanding certificate as above provided.
(b) Each certificate evidencing Merger Shares issued in the
Merger shall bear the same legends, if any, with respect to the restrictions on
transferability as the certificates of Assimilated so converted and given in
exchange therefor, unless otherwise determined by the Board of Directors of
Survivor in compliance with applicable laws.
(c) If any certificate for Merger Shares is to be issued in a
name other than that in which the certificate surrendered in exchange therefor
is registered, it shall be a condition of issuance thereof that the certificate
so surrendered shall be properly endorsed and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the person requesting
such transfer pay any transfer or other taxes payable by reason of the issuance
of such new certificate in a name other than that of the registered holder of
the certificate surrendered or establish to the satisfaction of Survivor that
such tax has been paid or is not payable.
ARTICLE IV. GENERAL MATTERS.
4.1 COVENANTS OF SURVIVOR. Survivor covenants and agrees that it will, on
or before the Effective Date:
(a) Qualify to do business as a foreign corporation in all
states wherein its operations require it to
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USA Digital/Blazoon Systems
qualify under applicable state laws.
(b) File all documents with the franchise tax authorities of
the State of Colorado necessary to the assumption by Survivor of all of the
franchise tax liabilities of Assimilated.
(c) Take such other actions as may be required by the Colorado
Business Corporation Act or other applicable law.
4.2 ABANDONMENT. At any time before the Effective Date, this Agreement may
be terminated and the Merger abandoned for any reason whatever by the Board of
Directors of Survivor or Assimilated, or both, notwithstanding the approval of
this Agreement and Merger by the shareholders of Assimilated or Survivor or
both.
4.3 AMENDMENT. The Boards of Directors of the Constituent Corporations
may amend this Agreement at any time prior to the filing of this Agreement (or a
certificate in lieu thereof) with the Secretary of State of the State of Nevada,
provided that an amendment made subsequent to the adoption of this Agreement by
the shareholders of either Constituent Corporation shall not (i) alter or change
the amount or kind of Merger Shares to be received in exchange for or on
conversion of all or any of the shares of any class or series thereof of such
Constituent Corporation, (ii) alter or change any term of the Certificate of
Incorporation of the Survivor to be effected by the Merger, or (iii) alter or
change any of the terms and conditions of this Agreement if such alteration or
change would adversely affect the holders of any class or series thereof of such
Constituent Corporation.
4.4 EXPENSES. Survivor shall pay all costs related to the Merger and
necessary filings and actions in connection therewith.
4.5 MUTUAL COVENANTS OF CONSTITUENT CORPORATIONS. Survivor and Assimilated
each agree that, between the date hereof and the Effective Date, it will not (i)
enter into any employment contracts, (ii) grant any options, warrants or similar
rights (nor any instrument or security containing such an option, warrant or
similar right) exercisable for, exchangeable for or convertible into its common
shares or other securities, (iii) issue any stock or other securities, including
debt instruments, or (iv) declare or pay any dividends in stock or cash or make
any other distribution on or with respect to its outstanding common stock.
Either party may but need not abandon the Merger if the holders of more than 5%
of the outstanding shares of Assimilated should dissent from the Merger.
4.6 REGISTERED OFFICE. The Registered Office of the Survivor in the
State of Nevada is located at 000 Xxxx Xxxx Xxxxxx, Xxxxxx Xxxx Xxxxxx 00000,
and CSC Services of Nevada is the Resident Agent of the Survivor at such
address.
4.7 FURTHER ACTIONS. If at any time Survivor shall consider or be advised
that any further assignment or assurances in law are necessary or desirable to
vest or to perfect or confirm of record in Survivor the title to any property or
rights of Assimilated, or to otherwise carry out the provisions of this
Agreement, then the proper officers and directors of Assimilated as of the
Effective Date shall execute and deliver to Survivor any and all proper deeds,
assignments and assurances in law, and do all things necessary or proper to
vest, perfect or confirm title to such property or rights in Survivor.
4.8 GOVERNING LAW. This Agreement shall in all respects be interpreted and
enforced in accordance with and governed by the laws of the State of Colorado.
4.9 COUNTERPARTS. In order to facilitate the filing and recording of
this Agreement, it may be executed in any number of counterparts, each of which
shall be deemed to be an original.
4.10 AGREEMENT. Executed copies of this Agreement will be on file at the
principal place of business of Survivor located at 0000-0 Xxxxxxxx Xxxx,
Xxxxxxx, XX 00000-0000, and copies thereof will be furnished to any shareholder
of any Constituent Corporation upon request and without cost.
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USA Digital/Blazoon Systems
IN WITNESS WHEREOF, this Agreement, having first been approved by
resolution of the Boards of Directors Assimilated and survivor, is hereby
executed on behalf of each of such corporations and attested by their respective
officers thereto duly authorized.
USA DIGITAL, INC.
A Nevada Corporation
ATTEST: By.................................
Xxxx X. Xxxx, President
By.....................................
Xxxx X. Xxxx, Secretary
BLAZOON SYSTEMS INCORPORATED
A Colorado Corporation
ATTEST: By................................
Xxxx X. Xxxx, President
By................................
Xxxx X. Xxxx, Secretary
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USA Digital/Blazoon Systems
