AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("MERGER AGREEMENT"), is made and
entered into as of December 31, 1998, between AtWeb, Inc., a California
corporation ("ATWEB" or the "SURVIVING CORPORATION"), and Fifi Acquisition
Corporation, a California corporation ("SUB," and collectively with
AtWeb sometimes referred to herein as the "CONSTITUENT CORPORATIONS").
INTENDING TO BE LEGALLY BOUND, and in consideration of the premises and
material covenants and agreements contained herein, the Constituent Corporations
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 MERGER OF SUB WITH AND INTO ATWEB.
(a) AGREEMENT TO ACQUIRE ATWEB. Subject to the terms of this
Merger Agreement and an Agreement and Plan of Reorganization dated as of
November 10, 1998, as amended by Amendment No. 1 to the Agreement and Plan of
Reorganization dated as of December 4, 1998 (collectively, the "REORGANIZATION
AGREEMENT"), among AtWeb, Sub and Netscape Communications Corporation, a
Delaware corporation ("NETSCAPE"), AtWeb shall be acquired by Netscape through a
merger (the "MERGER") of Sub with and into AtWeb. As used herein, the term
"NETSCAPE COMMON STOCK" shall mean the Common Stock, par value $0.0001 per
share, of Netscape, and the term "CLOSING" shall mean the closing of the Merger
pursuant to the Reorganization Agreement.
(b) EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective at such time (the "EFFECTIVE TIME") as this Merger Agreement and
officers' certificates of each Constituent Corporation are filed with the
Secretary of State of the State of California pursuant to Section 1103 of the
California General Corporation Law.
(c) SURVIVING CORPORATION. At the Effective Time of the
Merger, Sub shall be merged with and into AtWeb and the separate corporate
existence of Sub shall cease. AtWeb shall be the surviving corporation in the
Merger, and all of the property, rights, privileges, powers, and franchises of
AtWeb and Sub shall vest in the Surviving Corporation and all debts, liabilities
and duties of AtWeb and Sub shall become the debts, liabilities and duties of
the Surviving Corporation and shall continue unaffected and unimpaired by the
Merger.
1.2 EFFECT OF THE MERGER; ADDITIONAL ACTIONS.
(a) EFFECTS. The Merger shall have the effects set forth in
Section 1107 of the California General Corporation Law.
(b) ADDITIONAL ACTIONS. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any further
action is necessary or desirable to carry out the purposes of the Reorganization
Agreement and to vest the Surviving Corporation with full right, title and
possession to the assets, property, rights, privileges, powers and franchises of
AtWeb and Sub, the officers and directors of AtWeb and the former officers and
directors of Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action.
ARTICLE II
THE CONSTITUENT CORPORATIONS
2.1 ORGANIZATION OF ATWEB.
(a) INCORPORATION. AtWeb was incorporated under the laws of
the State of California on July 5, 1996.
(b) AUTHORIZED STOCK. AtWeb is authorized to issue an
aggregate of Twenty Million (20,000,000) shares of Common Stock ("ATWEB COMMON
STOCK"), Three Million Five Hundred Fifty Two Thousand Nine Hundred Twenty Three
(3,552,923) shares of Preferred Stock, Five Hundred Thousand (500,000) of which
have been designated Series A Preferred Stock ("ATWEB SERIES A PREFERRED STOCK")
and Three Million Fifty-Two Thousand Nine Hundred Twenty Three (3,052,923) of
which have been designated Series B Preferred Stock ("ATWEB SERIES B PREFERRED
STOCK").
(c) OUTSTANDING STOCK. As of December 4, 1998, 8,127,708
shares of AtWeb Common Stock were outstanding, 500,000 shares of AtWeb Series A
Preferred Stock were outstanding and 3,052,923 shares of AtWeb Series B
Preferred Stock were outstanding. All shares of AtWeb Series A Preferred Stock
and AtWeb Series B Preferred Stock shall be voluntarily converted into Common
Stock immediately prior to the filing of the Merger Agreement. At the close of
business on December 4, 1998, (i) 3,373,846 shares of AtWeb Common Stock were
reserved for issuance under AtWeb's 1997 Stock Plan (the "OPTION PLAN"), of
which 27,708 shares had been exercised, 2,945,792 shares (the "ATWEB OPTIONS")
were subject to outstanding options, and 400,346 shares remained available for
future grant, and (ii) 22,000 shares of Common Stock were reserved for issuance
upon exercise of outstanding AtWeb warrants issued outside the Option Plan. As
a result of the foregoing and after the exercise of the outstanding AtWeb
warrants, as of immediately prior to the filing of this Merger Agreement, there
will be 11,702,631 shares of AtWeb Common Stock outstanding and no shares of
AtWeb Series A Preferred Stock or AtWeb Series B Preferred Stock outstanding.
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2.2 ORGANIZATION OF SUB.
(a) INCORPORATION. Sub was incorporated under the laws of
the State of California on October 19, 1998.
(b) AUTHORIZED STOCK. Sub is authorized to issue an
aggregate of 1,000 shares of Common Stock, no par value ("SUBSIDIARY STOCK").
(c) OUTSTANDING STOCK. On the date hereof, an aggregate of
1,000 shares of Subsidiary Stock are issued and outstanding.
ARTICLE III
ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION
3.1 AMENDMENT OF ATWEB'S ARTICLES OF INCORPORATION. At the Effective
Time, the Articles of Incorporation of the Surviving Corporation shall be
amended and restated in their entirety to read as set forth in EXHIBIT A hereto.
ARTICLE IV
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
4.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
AtWeb Common Stock, AtWeb Series A Preferred Stock or AtWeb Series B Preferred
Stock:
(a) CAPITAL STOCK OF SUB. Each share of Common Stock of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one share of Common Stock of the Surviving
Corporation.
(b) CANCELLATION OF NETSCAPE-OWNED AND ATWEB-OWNED STOCK.
Each share of AtWeb Common Stock, AtWeb Series A Preferred Stock or AtWeb Series
B Preferred Stock that is owned directly or indirectly by Sub, Netscape or AtWeb
or by any wholly-owned subsidiary of Netscape or AtWeb shall be canceled and
extinguished without any conversion thereof.
(c) CONVERSION OF ATWEB COMMON STOCK. Each issued and
outstanding share of AtWeb Common Stock (including all shares of AtWeb Common
Stock issued upon conversion of all AtWeb Series A Preferred Stock, AtWeb Series
B Preferred Stock and AtWeb warrants immediately prior to the Closing) issued
and outstanding immediately prior to the Effective Time (other than
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shares to be canceled pursuant to Section 4.1(b) hereof and shares, if any, held
by persons exercising dissenters' rights in accordance with Chapter 13 of the
California General Corporation Law ("DISSENTING SHARES") shall be canceled,
extinguished and be converted automatically into the right to receive
0.229637211 shares of Netscape Common Stock upon the surrender of the
certificate representing each such share of AtWeb Common Stock.
(d) STOCK OPTIONS. At the Effective Time, all options and
warrants to purchase AtWeb Common Stock (each a "ATWEB OPTION") then outstanding
shall be assumed by Netscape in accordance with provisions described below:
(i) At the Effective Time, each outstanding AtWeb
Option, whether vested or unvested, shall be, in connection with the Merger,
assumed by Netscape. Each AtWeb Option so assumed by Netscape shall continue to
have, and be subject to, the same terms and conditions set forth in the Option
Plan and/or option agreement or warrant agreement governing such AtWeb Option
immediately prior to the Effective Time, except that (A) such AtWeb Option shall
be exercisable (when vested) for that number of whole shares of Netscape Common
Stock equal to the product of the number of shares of AtWeb Common Stock that
were issuable upon exercise of such AtWeb Option immediately prior to the
Effective Time multiplied by 0.229637211, rounded down to the nearest whole
number of shares of Netscape Common Stock, and (B) the per share exercise price
for the shares of Netscape Common Stock issuable upon exercise of such assumed
AtWeb Option shall be equal to the quotient determined by dividing the exercise
price per share of AtWeb Common Stock at which such AtWeb Option was exercisable
immediately prior to the Effective Time by 0.229637211, rounded up to the
nearest whole cent.
(ii) Promptly following the Effective Time, Netscape
will issue to each holder of an outstanding AtWeb Option a document evidencing
the foregoing assumption of such AtWeb Option by Netscape.
(e) DISSENTERS' RIGHTS. If holders of AtWeb Common Stock are
entitled to dissenters' rights in connection with the Merger under Chapter 13 of
the California General Corporation Law, any Dissenting Shares shall not be
converted into Netscape 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 Chapter 13 of the California General Corporation
Law.
(f) FRACTIONAL SHARES. No fraction of a share of Netscape
Common Stock shall be issued, but in lieu thereof, each holder of shares of
AtWeb Common Stock who would otherwise be entitled to a fraction of a share of
Netscape Common Stock (after aggregating all fractional shares of Netscape
Common Stock to be received by such holder) shall be paid by Netscape an amount
of cash (rounded to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) 22.890625.
(g) ESCROW. A portion of the shares of Netscape Common Stock
otherwise issuable by Netscape in connection with the Merger shall be placed in
escrow by Netscape (the
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"ESCROW AMOUNT"), the release of which shall be contingent upon certain events
and conditions specified in the Reorganization Agreement and the related Escrow
Agreement.
4.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Closing Date, Netscape
shall designate a bank or trust company with assets of not less than
$500 million to act as exchange agent (the "EXCHANGE AGENT") in the Merger.
(b) NETSCAPE TO PROVIDE COMMON STOCK. Promptly after the
Effective Time, Netscape shall make available to the Exchange Agent for exchange
in accordance with Section 4.1 herein, the aggregate number of shares of
Netscape Common Stock issuable in exchange for outstanding shares of AtWeb
Common Stock; provided that, on behalf of the holders of AtWeb Common Stock,
Netscape shall deposit into an escrow account a number of shares of Netscape
Common Stock equal to the Escrow Amount out of the aggregate number of shares of
Netscape Common Stock otherwise issuable. The portion of the Escrow Amount
contributed on behalf of each holder of AtWeb Common Stock shall be in
proportion to the aggregate number of shares of Netscape Common Stock which such
holder would otherwise be entitled to receive by virtue of ownership of
outstanding shares of AtWeb Common Stock.
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time,
the Surviving Corporation shall cause to be mailed to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of AtWeb Common Stock (the "CERTIFICATES") and
which shares were converted into the right to receive shares of Netscape Common
Stock, (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 Exchange Agent and which shall be in such
form and have such other provisions as Netscape may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Netscape Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by Netscape, together with such letter
of transmittal, duly completed and validly executed in accordance with the
instructions thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing the number of whole
shares of Netscape Common Stock (less the number of shares of Netscape Common
Stock, if any, to be deposited in escrow on such holder's behalf), plus cash in
lieu of fractional shares, to which such holder is entitled, and the Certificate
so surrendered shall forthwith be canceled. As soon as practicable after the
Effective Time, Netscape shall cause to be distributed to the Escrow Agent a
certificate or certificates representing that number of shares of Netscape
Common Stock equal to the Escrow Amount, which certificate shall be registered
in the name of the Escrow Agent. Such shares shall be beneficially owned by the
holders on whose behalf such shares were deposited in the Escrow Fund and shall
be available to compensate Netscape for any claims, losses, liabilities,
damages, deficiencies, costs and expenses, including reasonable attorneys' fees
and expenses, and expenses of investigation and defense incurred by Netscape,
its officers, directors or affiliates (including the Surviving Corporation)
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directly or indirectly as a result of any inaccuracy or breach of a
representation or warranty of AtWeb or any contained in Article II of the
Reorganization Agreement (as modified by the AtWeb Schedules), or any failure by
AtWeb to perform or comply with any covenant contained therein. Until so
surrendered, each outstanding Certificate that, prior to the Effective Time,
represented shares of AtWeb Common Stock will be deemed from and after the
Effective Time, for all corporate purposes, other than the payment of dividends,
to evidence the ownership of the number of full shares of Netscape Common Stock
into which such shares of AtWeb Common Stock shall have been so converted and
the right to receive an amount in cash in lieu of the issuance of any fractional
shares.
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Netscape Common Stock declared
or made after the Effective Time and with a record date after the Effective Time
will be paid to the holder of any unsurrendered Certificate with respect to the
shares of Netscape Common Stock represented thereby until the holder of record
of such Certificate shall surrender such Certificate. Subject to applicable
law, following surrender of any such Certificate, there shall be paid to the
record holder of the certificates representing whole shares of Netscape Common
Stock issued in exchange therefor, without interest, at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Netscape Common Stock.
(e) TRANSFERS OF OWNERSHIP. If any certificate for shares of
Netscape Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Netscape or any agent designated by
it any transfer or other taxes required by reason of the issuance of a
certificate for shares of Netscape Common Stock in any name other than that of
the registered holder of the Certificate surrendered, or will have established
to the satisfaction of Netscape or any agent designated by it that such tax has
been paid or is not payable.
(f) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Netscape Common Stock issued upon the surrender for exchange of shares
of AtWeb Common Stock in accordance with the terms of this Section 4.2
(including any cash paid in respect thereof) shall be deemed to have been issued
in full satisfaction of all rights pertaining to such shares of AtWeb Common
Stock, and there shall be no further registration of transfers on the records of
the Surviving Corporation of shares of AtWeb Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided herein.
(g) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates evidencing shares of AtWeb Common Stock shall have been lost,
stolen or destroyed, the Exchange Agent shall issue in exchange for such lost,
stolen or destroyed Certificates, upon the making of an affidavit of that fact
by the holder thereof, such shares of Netscape Common Stock and cash for
fractional shares, if any; provided, however, that Netscape may, in its
discretion and as a condition
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precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Netscape or the Exchange
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.
ARTICLE V
TERMINATION
5.1 TERMINATION BY MUTUAL AGREEMENT. Notwithstanding the approval of
this Merger Agreement by the shareholders of AtWeb, this Merger Agreement may be
terminated at any time prior to the Effective Time by mutual agreement of the
Boards of Directors of the Constituent Corporations.
5.2 TERMINATION OF REORGANIZATION AGREEMENT. Notwithstanding the
approval of this Merger Agreement by the shareholders of AtWeb, this Merger
Agreement shall terminate forthwith if the Reorganization Agreement is
terminated as provided therein.
5.3 EFFECTS OF TERMINATION. In the event of the termination of this
Merger Agreement, this Merger Agreement shall become void and there shall be no
liability on the part of either AtWeb or Sub or their respective officers or
directors, except as otherwise provided in the Reorganization Agreement.
ARTICLE VI
GENERAL PROVISIONS
6.1 AMENDMENT. This Merger Agreement may be amended by the parties
hereto any time before or after approval hereof by the shareholders of AtWeb,
but after such approval, no amendment shall be made that by law requires the
further approval of shareholders without obtaining such approval. This Merger
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
6.2 COUNTERPARTS. This Merger Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one agreement.
6.3 GOVERNING LAW. This Merger Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the parties have duly executed this Merger Agreement
as of the date first written above.
ATWEB, INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxx
Chief Executive Officer
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Secretary
FIFI ACQUISITION CORPORATION
By: /s/ Xxxxx X.X. Xxxxxx
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Xxxxx X.X. Xxxxxx
President and Chief Financial Officer
By: /s/ Xxxx Xxxxxx
---------------------------------------
Xxxx Xxxxxx
Secretary
[MERGER AGREEMENT SIGNATURE PAGE]
EXHIBIT A
ARTICLES OF INCORPORATION
OF
ATWEB, INC.
I
The name of this corporation is "AtWeb, Inc."
II
The purpose of this corporation is to engage in any lawful activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
III
This corporation is authorized to issue only one class of shares of
stock, designated "Common Stock." The total number of shares of Common Stock
which this corporation is authorized to issue is One Thousand (1,000).
IV
1. LIMITATION OF DIRECTORS' LIABILITY. The liability of the directors
of this corporation for monetary damages shall be eliminated to the fullest
extent permissible under California law.
2. INDEMNIFICATION OF CORPORATE AGENTS. This corporation is authorized
to indemnity its agents to the fullest extent permissible under California law.
For purposes of this provision the term "agent" has the meaning set forth in
Section 317 of the California Corporations Code.
3. REPEAL OR MODIFICATION. Any repeal or modification of the foregoing
provisions of this Article V shall not adversely affect any right of
indemnification or limitation of liability of an agent of this corporation
relating to acts or omissions occurring prior to such repeal or modification.
