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Title: |
Agreement and Plan of Merger |
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Date: |
2003 |
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Preview shows 13KB of 167KB total |
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$57 |
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ID: |
#1233695 |
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PROTOSOURCE CORPORATION,
PROTOSOURCE ACQUISITION LLC,
P2I, INC.
AND
P2I NEWSPAPER, INC.
Dated as of February 12, 2003
Effective as of February [ ], 2003
<PAGE>
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I MERGER OF P2I NEWSPAPER WITH AND INTO NEWCO AND RELATED
MATTERS....................................................... 1
1.1 The Merger.................................................... 1
1.2 Conversion of Stock; Conversion of Outstanding Options........ 3
1.3 Merger Consideration.......................................... 4
1.4 Additional Rights; Taking of Necessary Action; Further Action. 5
1.5 No Further Rights or Transfers................................ 5
ARTICLE II THE CLOSING................................................... 5
2.1 Closing Date.................................................. 5
2.2 Closing Transactions.......................................... 6
ARTICLE III CERTAIN CORPORATE ACTION...................................... 8
3.1 P2i Corporate Action; Stockholder Consent..................... 8
3.2 P2i Newspaper Corporate Action; Stockholder Consent........... 8
3.3 Acquiror and Newco Corporate Action........................... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................ 9
4.1 Representations and Warranties of P2i and P2i Newspaper....... 9
4.2 Representations and Warranties of Acquiror and Newco.......... 20
ARTICLE V AGREEMENTS OF THE PARTIES..................................... 30
5.1 Access to Information......................................... 30
5.2 Confidentiality; No Solicitation.............................. 30
5.3 Interim Operations............................................ 32
5.4 Consents...................................................... 35
5.5 All Reasonable Efforts........................................ 35
5.6 Public Announcements.......................................... 36
5.7 Notification of Certain Matters............................... 36
5.8 Expenses...................................................... 36
5.9 Documents at Closing.......................................... 36
5.10 Prohibition on Trading in Acquiror Stock...................... 36
5.11 Reservation of Shares; Post-Closing Amendments to
Acquiror's, P2i's and Newco's Certificates of Incorporation... 37
5.12 Indemnification: Directors' and Officers' Insurance........... 37
5.13 Acknowledgment of Approvals; Approval of P2i Stockholders..... 38
5.14 Acquiror Board of Directors................................... 39
5.15 Employment Agreements......................................... 39
5.16 Debt Conversion............................................... 40
5.17 Production of Schedules and Exhibits.......................... 40
5.18 Additional Funding............................................ 40
i
<PAGE>
Section Page
------- ----
ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER...................... 40
6.1 Conditions to Obligations of P2i and P2i Newspaper............ 40
6.2 Conditions to Acquiror's and Newco's Obligations.............. 42
ARTICLE VII TERMINATION................................................... 43
7.1 Termination................................................... 43
7.2 Notice and Effect of Termination.............................. 44
7.3 Extension; Waiver............................................. 44
7.4 Amendment and Modification.................................... 44
ARTICLE VIII MISCELLANEOUS................................................. 44
8.1 Survival of Certain Representations and Warranties; Remedies.. 44
8.2 Notices....................................................... 45
8.3 Agreement; Assignment......................................... 45
8.4 Binding Effect; Benefit....................................... 46
8.5 Headings...................................................... 46
8.6 Counterparts.................................................. 46
8.7 Governing Law................................................. 46
8.8 Arbitration................................................... 46
8.9 Severability.................................................. 46
8.10 Certain Definitions........................................... 46
ii
<PAGE>
EXHIBITS
--------
Exhibit 1.3(d) - Form of Investment Letter
Exhibit 6.1(f) - Opinion of Counsel for Acquiror and Newco
Exhibit 6.2(f) - Opinion of Counsel for P2i and P2i Newspaper
SCHEDULES
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1.1(c)(vii) Officers and Directors of the Surviving Company
4.1(a) Articles of Incorporation and Bylaws of P2i Newspaper:
Subsidiaries
4.1(d) Capitalization and Share Ownership
4.1(f) Location of Leased Property
4.1(h) Litigation
4.1(i) Taxes
4.1(j)(i) Employee Benefit Plan
4.1(j)(ii) Employee Benefit Plan (for which P2i has obligation to
contribute)
4.1(k) Insurance Coverage
4.1(o) Intellectual Property
4.1(q) Contracts
4.1(r)(v) Strikes, grievance proceedings, arbitrations, etc.
4.1(r)(vi) Agreements, etc.
4.1(r)(vii) Employment and Benefit Arrangements
4.1(s) Suppliers and Clients
4.1(v) Absence of Certain Changes or Events
4.2(a) Certificate of Incorporation and Bylaws of Acquiror
4.2(d) Capitalization and Share Ownership
4.2(f) Property
4.2(g) No Contingent Liabilities
4.2(h) Litigation
4.2(i) Taxes
4.2(j)(i) Employee Benefit Plan
4.2(j)(ii) Employee Benefit Plan (for which P2i Newspaper has obligation to
contribute)
4.2(j)(iv) Material Employment Arrangements, Contracts, etc.
4.2(k) Insurance Coverage
4.2(o) Intellectual Property
4.2(p) Accounts Receivable
4.2(q) Contracts
4.2(r)(i) Labor Relations; Employees
4.2(r)(ii) List of Employees
4.2(r)(v) Strikes, grievance proceedings, arbitrations, etc.
4.2(r)(vii) Employment and Benefit Arrangements
4.2(t) Conflicting Interests
4.2(w) Absence of Certain Changes or Events
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement")dated as of February 12,
2003 and effective as of February [ ], 2003, by and among ProtoSource
Corporation, a California corporation ("Acquiror"), ProtoSource Acquisition LLC,
a Delaware limited liability company and wholly owned subsidiary of Acquiror
("Newco"), P2i, Inc., a Pennsylvania corporation ("P2i"), and P2i Newspaper,
Inc., a Delaware corporation ("P2i Newspaper").
Recitals
WHEREAS, Acquiror, P2i and P2i Newspaper have determined that it is in the
best interests of their respective stockholders for P2i Newspaper to merge with
and into Newco upon the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, the respective Boards of Directors of Acquiror, P2i, P2i Newspaper
and Newco have each approved this Agreement and the consummation of the
transactions contemplated hereby and approved the execution and delivery of this
Agreement; and
WHEREAS, for federal income tax purposes, it is intended that the merger
shall qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing premises and
representations, warranties and agreements contained herein, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
MERGER OF P2I NEWSPAPER WITH AND INTO NEWCO
AND RELATED MATTERS
1.1 The Merger.
(a) Upon the terms and conditions of this Agreement, at the "Effective
Time" (as defined herein), P2i Newspaper shall be merged with and into Newco
(the "Merger") in accordance with the provisions of the General Corporation Law
of the State of Delaware (the "DGCL"), the separate corporate existence of P2i
Newspaper shall cease and Newco shall continue as the surviving company (the
"Surviving Company") under the laws of the State of Delaware.
(b) The Merger shall become effective upon the filing of a certificate of
merger with the Secretary of State of the State of Delaware (the "Certificate of
Merger") in accordance with the provisions of Section 252 of the DGCL and the
confirmation by the Certificate of Merger that the Merger is effective as of
such filing date. The date and time when the Merger shall become effective is
referred to herein as the "Effective Time."
1
<PAGE>
(c) At the Effective Time:
(i) Newco shall continue its existence under the laws of the State of
Delaware as the Surviving Company;
(ii) the separate corporate existence of P2i Newspaper shall cease;
(iii) all rights, title and interests to all assets, whether tangible
or intangible and any property or property rights owned by Newco or P2i
Newspaper shall be allocated to and vested in the Surviving Company without
reversion or impairment, without further act or deed, and without any transfer
or assignment having occurred, but subject to any existing liens or other
encumbrances thereon, and all liabilities and obligations of P2i Newspaper or
Newco shall be allocated to the Surviving Company, which shall be the primary
obligor therefor and, except as otherwise provided by law or contract, no other
party to the Merger, other than the Surviving Company, shall be liable therefor;
(iv) the Certificate of Formation of the Surviving Company shall be
the Certificate of Formation of Newco as in effect immediately prior to the
consummation of the Merger;
(v) Each of Newco and P2i Newspaper shall execute and deliver, and
file or cause to be filed with the Secretary of State of the State of Delaware,
the Certificate of Merger, with such amendments thereto as the parties hereto
shall deem mutually acceptable;
(vi) the operating agreement of the Surviving Company shall be the
operating agreement of Newco as in effect immediately prior to the consummation
of the Merger, and shall continue in full force and effect until thereafter
amended as provided by law and such operating agreement; provided, however, that
Newco shall cause its name to be changed to "P2i Newspaper, LLC"; and
(vii) (A) the board of managers of the Surviving Company shall consist
of five members. Those members shall be:
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