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EXHIBIT 2.2
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AGREEMENT AND PLAN OF MERGER
by and between
EVENTURES GROUP, INC.,
INTERNET GLOBAL SERVICES, INC.,
AND
IGS ACQUISITION CORPORATION
Dated as of March 10, 2000
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 10,
2000, by and between eVentures Group, Inc. ("eVentures"), IGS Acquisition
Corporation, a Texas corporation and a wholly owned subsidiary of eVentures
("Parent"), and Internet Global Services, Inc., a Texas corporation (the
"Company").
WHEREAS, eVentures owns all of the issued and outstanding capital stock
of Parent; and
WHEREAS, on the date hereof, Parent has consummated the purchase of
6,503,672 shares of common stock, par value $0.0005 per share (the "Company
Common Stock") of the Company, representing approximately 95.00% of the issued
and outstanding Company Common Stock, pursuant to that certain Share Exchange
Agreement, dated as of February 22, 2000, among eVentures, Parent and certain
stockholders of the Company (the "Share Exchange Agreement"); and
WHEREAS, the respective Boards of Directors of Parent and the Company
deem it advisable and in the best interests of their respective stockholders
that each of Parent and the Company combine their businesses by the merger of
the Company with and into Parent pursuant to Section 5.16 of the Texas Business
Corporation Act (the "Act") upon the terms and subject to the conditions set
forth herein (the "Merger"); and
WHEREAS, pursuant to Section 5.13 of the Share Exchange Agreement, as
promptly as reasonably possible following the closing under the Share Exchange
Agreement, eVentures and Parent are required to effect the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
two-step transaction, the first step of which shall be the exchange of shares
pursuant to the Share Exchange Agreement and the second step of which shall be
the Merger shall qualify as a "reorganization" within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as
amended;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time the Company shall be merged with and into
Parent, with Parent being the surviving corporation in the Merger (the
"Surviving Corporation") and the separate existence of the Company shall
thereupon cease. The Merger shall have the effects set forth in Article 5.06 of
the Act.
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Section 1.2 Effective Time of the Merger. The Articles of Merger with
respect to the Merger shall be filed with the Texas Secretary of State as
promptly as reasonably possible following the Closing (as defined in the Share
Exchange Agreement) and the Merger shall become effective upon the issuance by
the Texas Secretary of State of the certificate of merger (the "Effective
Time").
ARTICLE II
PARENT AND THE SURVIVING CORPORATION
Section 2.1 Articles of Incorporation of the Surviving Corporation. The
Articles of Incorporation of Parent shall be the Articles of Incorporation of
the Surviving Corporation until thereafter amended in accordance with such
Articles and applicable law.
Section 2.2 Bylaws of the Surviving Corporation. The Bylaws of Parent
as in effect at the Effective Time shall be the By-Laws of the Surviving
Corporation until thereafter amended in accordance with applicable law.
Section 2.3 Directors and Officers of the Surviving Corporation. At the
Effective Time, the directors of Parent immediately prior to the Effective Time
shall be directors of the Surviving Corporation, each of such directors to hold
office, subject to the applicable provisions of the Articles of Incorporation
and By-Laws of the Surviving Corporation, until the next annual stockholders'
meeting of the Surviving Corporation and until their respective successors shall
be duly elected or appointed and qualified. At the Effective Time, the officers
of Parent immediately prior to the Effective Time shall, subject to the
applicable provisions of the Articles of Incorporation and By-Laws of the
Surviving Corporation, be the officers of the Surviving Corporation until their
respective successors shall be duly elected or appointed and qualified.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares of Company Common
Stock owned by Parent) shall be converted at the Effective Time into the right
to receive (i) immediately following the Merger, the number of shares of common
stock, par value $0.00002 per share ("eVentures Common Stock"), of eVentures
equal to the number of shares of eVentures Common Stock that the holder of such
share of Company Common Stock would have received pursuant to Section 2.5(a) of
the Share Exchange Agreement, plus (ii) at the time of the issuance of the
Stockholder Adjustment Shares pursuant to Section 2.6 of the Share Exchange
Agreement, the number of shares of
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eVentures Common Stock equal to the number of shares of eVentures Common Stock
that the holder of such share of Company Common Stock would have received
pursuant to Section 2.6(c) of the Share Exchange Agreement, plus (iii) at the
time of the termination of the Escrow Agreement, dated as of March 10, 2000,
among eVentures, Parent, Bank One, Texas, N.A., as Escrow Agent and Xxxxx Xxxx,
as Stockholder Representative (the "Escrow Agreement"), the number of shares of
eVentures Common Stock that the holder of such share of Company Common Stock
would have received with respect to such share of Company Common Stock pursuant
to Section 18 of the Escrow Agreement, in each case calculated as if such holder
had been a Stockholder exchanging such share of Company Common Stock pursuant to
the Share Exchange Agreement, except that the number of "Shares" used in
determining the "Stockholder Adjustment Shares" shall be the number of shares of
Company Common Stock held by Persons other than Parent (the "Merger
Consideration");
(b) Each share of Company Common Stock held by Parent or held in the
treasury of the Company shall be canceled and retired and cease to exist, and no
shares of eVentures Common Stock shall be issued in exchange therefor; and
(c) Each share of common stock, par value $0.001 per share, of Parent
shall be converted into one share of common stock, par value $0.001 per share,
of the Surviving Corporation.
(d) Following the Effective Time, each certificate previously
representing shares of Company Common Stock shall represent the shares of
eVentures Common Stock into which such shares of Company Common Stock have been
converted. Certificates previously representing shares of Company Common Stock
shall be exchanged for certificates representing whole shares of eVentures
Common Stock (plus cash in lieu of the fractional shares, if any, pursuant to
Section 3.5) issued in consideration therefor upon the surrender of such
certificate in accordance with the provisions hereof.
(e) Pursuant to the consents received by Parent and the Company in
connection with the closing under the Share Exchange Agreement, following the
Effective Time, each outstanding option to purchase shares of Company Common
Stock (the "Company Options"), shall be converted into an option (the "eVentures
Options") issued under eVentures' 1999 Omnibus Securities Plan to purchase the
number of shares of eVentures Common Stock equal to the number of shares the
holder of such option would have received pursuant to Section 2.2 of the Share
Exchange Agreement if such holder had been a Stockholder exchanging the shares
of Company Common Stock underlying such option pursuant to the Share Exchange
Agreement (rounded down to the nearest whole number). The eVentures Options
shall have an exercise price of $12.00 per share of eVentures Common Stock and
shall vest in accordance with the following schedule: 1/3 of such options will
vest on September 30, 2000; 1/3 of such options will vest on the first
anniversary of the Closing Date; and 1/3 of such options will vest on the second
anniversary of the Closing Date.
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(f) Each warrant to purchase shares of Company Common Stock outstanding
at the Effective Time (the "Company Warrants"), shall be converted into warrants
to purchase eVentures Common Stock in accordance with the terms of such
warrants.
Section 3.2 Exchange of Certificates. (a) No later than the Effective
Time, eVentures shall make available, and each holder of shares of Company
Common Stock (the "Company Stockholders") will be entitled to receive, upon
surrender to the Company or its transfer agent of one or more certificates
representing shares of Company Common Stock for cancellation, certificates
representing the number of shares of eVentures Common Stock into which such
shares of Company Common Stock are converted in the Merger. The shares of
eVentures Common Stock into which such shares of Company Common Stock shall be
converted in the Merger shall be deemed to have been issued at the Effective
Time.
(b) As soon as reasonably practicable after the Effective Time, the
Surviving Corporation shall mail to each holder of record, other than Parent, of
a certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates"), (i)
a letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Surviving Corporation), and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of eVentures Common Stock. Upon surrender of a Certificate
for cancellation to the Surviving Corporation together with such letter of
transmittal, duly executed, each Company Stockholder shall be entitled to
receive in exchange therefor a certificate or certificates representing that
number of whole shares of eVentures Common Stock that such Company Stockholder
has the right to receive in respect of the shares of Company Common Stock
represented by the Certificates surrendered pursuant to the provisions of this
Section 3.2(b) (plus cash in lieu of the fractional shares, if any, pursuant to
Section 3.4).
(c) In the event that any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact and execution and
delivery of a customary indemnity by the person claiming such Certificate to be
lost, stolen or destroyed, the Surviving Corporation will issue or cause to be
issued in exchange for such lost, stolen or destroyed certificate a certificate
representing the number of shares of eVentures Common Stock which such person
has the right to receive in respect of the shares of Company Common Stock
represented by such lost, stolen or destroyed certificate (plus cash in lieu of
fractional shares, if any, pursuant to Section 3.4).
(d) At and after the Effective Time, the holders of Certificates shall
cease to have any rights as stockholders of the Company, except for the right to
surrender such Certificates in exchange for shares of eVentures Common Stock as
provided hereunder.
Section 3.3 Transfer Taxes. If any certificates for any shares of
eVentures Common Stock are 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 such exchange that the person requesting such exchange shall pay to
the Surviving Corporation any transfer or other taxes required by reason of the
issuance of certificates for such shares of eVentures Common Stock in a name
other than that
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of the registered holder of the Certificate surrendered, or shall establish to
the satisfaction of the Surviving Corporation that such tax has been paid or is
not applicable. Notwithstanding the foregoing, no party hereto shall be liable
to any Company Stockholder for any shares of eVentures Common Stock or dividends
thereon or, in accordance with Section 3.4 hereof, the cash payment for
fractional interests, delivered to a public official pursuant to applicable
escheat laws.
Section 3.4 No Fractional Securities. No certificates or scrip
representing fractional shares of eVentures Common Stock shall be issued upon
the surrender for exchange of Certificates pursuant to this Article III and no
dividend, stock split or other change in the capital structure of eVentures
shall relate to any fractional security, and such fractional interests shall not
entitle the owner thereof to vote or to any rights of a security holder. In lieu
of any such fractional securities, each Company Stockholder who would otherwise
have been entitled to a fraction of a share of eVentures Common Stock upon
surrender of Certificates for exchange pursuant to this Article III shall be
paid cash upon such surrender in an amount equal to the product of such fraction
multiplied by the Market Price. For purposes of this Agreement, "Market Price"
shall mean the average of the closing bid and ask prices for shares of Parent
Common Stock on the OTC Bulletin Board(R) (or, if the principal market for
eVentures Common Stock is another market, then the average of the closing bid
and ask prices for shares of eVentures Common Stock on such other market) for
the 30-day period ending five days prior to the Closing Date; provided, however,
if such average is less than $6.00, the Market Price shall be $6.00 and if such
average is greater than $40.00, the Market Price shall be $40.00.
Section 3.5 Dissenting Stockholders. The Parent covenants and agrees
that it will cause the Surviving Corporation to comply with the provisions of
Section 5.16 E. of the Act with respect to dissenting stockholders.
Section 3.6 Closing of Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of shares of
Company Common Stock or options shall thereafter be made. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for the Merger Consideration in accordance with
Section 3.1, subject to applicable law in the case of shares held by dissenting
stockholders. From and after the Effective Time, no shares of Company Common
Stock shall be deemed to be outstanding, and holders of Certificates shall cease
to have any rights with respect thereto except as provided herein or by law.
ARTICLE IV
GENERAL PROVISIONS
Section 4.1 Notices. All notices, objections and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered (return receipt requested) or mailed by certified mail
(return receipt requested) or by Federal Express or another nationally
recognized courier service or by facsimile transmission upon electronic
confirmation of receipt thereof during normal business hours at the following
addresses (or at such other address for a party as shall be specified by like
notice):
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If to the Company, to:
Internet Global Services, Inc.
00000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Link
Telephone: (000) 000-0000
Facsimile Number: (000) 000-0000
with a copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: C. Xxxxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile Number: (000) 000-0000
If to Parent or eVentures, to:
eVentures Group, Inc.
Xxx Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Vice President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile Number: (000) 000-0000
with a copy to:
eVentures Group, Inc.
c/o HW Partners, L.P.
4000 Thanksgiving Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxx,
Vice President and General Counsel
Telephone: (000) 000-0000
Facsimile Number: (000) 000-0000
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and to:
White & Case LLP
000 X. Xxxxxxxx Xxxx. Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxxxx X Xxxxxx
Telephone: (000) 000-0000
Facsimile Number: (000) 000-0000
Section 4.2 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only the and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 4.3 Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them, with
respect to the subject matter hereof, (b) are not intended to confer upon any
other person any rights or remedies hereunder, and (c) shall not be assigned by
operation of law or otherwise.
Section 4.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 4.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
Section 4.6 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not effect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 4.7 Third Party Beneficiaries. Nothing in this Agreement,
express or implied, is intended or shall be construed to create any third party
beneficiaries.
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed on its behalf by its officers thereunto duly authorized as of the
date first above written.
INTERNET GLOBAL SERVICES, INC.
By /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: VP/CFO
IGS ACQUISITION CORPORATION
By /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
EVENTURES GROUP, INC.
By /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President - Business
Development, Secretary and
General Counsel
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