AGREEMENT OF MERGER
OF
ZAPWORLD.COM
(a California corporation)
AND
ZAP SANTA CRUZ, INC.
(a California corporation)
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THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and entered
into as of January 20, 2000 by and between Zapworld.com, a California
corporation doing business at 117 Morris Street, Sebastopol, California 95472
("Zapworld") and Zap Santa Cruz, Inc., a California corporation doing business
at 131 Center Street, #2 Santa Cruz, California 95061 ("Zap Santa Cruz").
WHEREAS, the respective Boards of Directors of Zapworld and Zap Santa
Cruz, in light of, and subject to, the terms and conditions in that certain
Agreement and Plan of Reorganization, dated January 20, 2000, between Zapworld
and Zap Santa Cruz (the "Reorganization Agreement"), deem it advisable and in
the best interests of each of such corporations and their respective
shareholders that Zap Santa Cruz be merged with and into Zapworld.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set for the herein, and intending to be legally bound hereby, Zapworld and Zap
Santa Cruz hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and California
Law, Zap Santa Cruz shall be merged with and into Zapworld. After the merger,
the separate corporate existence of Zap Santa Cruz shall cease and Zapworld
shall continue as the surviving corporation.
1.2 Effective Time. Unless this Agreement is earlier terminated
pursuant to Section 9.1, the closing of the Merger (the "Closing") will take
place as promptly as practicable, but no later than one (1) business day
following satisfaction or waiver of the conditions set forth in Article VI, at
the law offices of Evers & Hendrickson, LLP, 155 Montgomery Street, 12th Floor,
San Francisco, California 94104, unless another place or time is agreed to by
Zapworld and the Zap Santa Cruz. The date upon which the Closing actually occurs
is herein referred to as the "Closing Date." On the Closing Date, the parties
hereto shall cause the Merger to be consummated by filing an Agreement of
Merger, in substantially the form attached hereto as Exhibit A (the "Agreement
of Merger"), with the Secretary of State of the State of California, in
accordance with the relevant provisions of California Law (the time of
acceptance by the Secretary of State of California of such filing
being referred to herein as the "Effective Time"). The parties currently intend
that the Closing Date will occur on or prior to January 20, 2000.
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of California Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, all the property, rights, privileges, power and franchises of
Zap Santa Cruz shall vest in Zapworld and all debts, liabilities and duties of
Zap Santa Cruz shall become the debts, liabilities and duties of the Zapworld.
1.4 Articles of Organization; Bylaws. The Bylaws of Zapworld, as in
effect immediately prior to the Effective Time, shall be the Bylaws of the
Zapworld after the merger of Zap Santa Cruz into Zapworld.
1.5 Directors and Officers. The officers and directors of Zap Santa
Cruz shall no longer hold office immediately after the Effective Time, and the
officers and directors of Zapworld before the Effective Time shall be the
respective officers and directors of Zapworld after the Effective Time, each to
hold office in accordance with the Articles of Organization and Bylaws of
Zapworld.
1.6 Effect of Merger on Zap Santa Cruz Capital Stock. At the Effective
Time, all shares of Zap Santa Cruz Capital Stock ("Company Capital Stock") and
any right to acquire any shares of Zap Santa Cruz Capital Stock, including any
options or warrants issued and outstanding, whether or not vested, shall cease
to exist.
1.7 Effect of Merger on Zapworld Common Stock. The shares of Zapworld
outstanding immediately prior to the Effective Time shall remain issued and
outstanding immediately thereafter and shall be unaffected by the transaction
described herein.
1.8 Aggregate Shares to be Issued. As consideration for the
transactions described herein, Zapworld shall issue to the holders of Zap Santa
Cruz, shares of Zapworld Common Stock. The aggregate number of shares of Common
Stock that Zapworld shall issue to the holders of Zap Santa Cruz is 8,803 (Eight
Thousand Eight Hundred and Three).
1.9 Allocation and Fractional Shares.
(1) Allocation. The allocation of shares of Zapworld Common Stock set
forth in this Agreement shall be adjusted to reflect the effect of any stock
split, reverse split, stock dividend (including any dividend or distribution of
securities convertible into Zapworld Common Stock or Company Capital Stock),
reorganization, recapitalization or other like change with respect to Zapworld
Common Stock occurring after the date hereof and prior to the Effective Time.
(2) Fractional Shares. No fraction of a share of Zapworld Common Stock
will be issued at the Effective Time, but in lieu thereof, each holder of Zap
Santa Cruz Stock who would otherwise be entitled to a fraction of a share of
Zapworld Common Stock (after aggregating all fractional shares of Zapworld
Common Stock to be received by such holder) shall be entitled to receive from
Zapworld an amount of cash (rounded to the nearest whole
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cent) equal to the product of: (i) such fraction, multiplied by; (ii) the
average closing price of a share of Zapworld Common Stock as reported on the OTC
Bulletin Board for the 30-day period ending three days prior to the Closing Date
or, if any such day there are no sales reported, the average of the closing bid
and ask prices for Zapworld Common Stock reported on that date.
1.10 Surrender of Certificates.
(1) Exchange Agent. The Corporate Secretary of Zapworld shall serve as
the exchange agent (the "Exchange Agent") in the Merger.
(2) Zapworld to Provide Common Stock. Promptly after the Effective
Time, Zapworld shall make available to the Exchange Agent for exchange in
accordance with this Article I, a valid check in the amount of $25,000 and the
aggregate number of shares of Zapworld Common Stock issuable pursuant to Section
1.8, in exchange for all outstanding shares of Zap Santa Cruz Common Stock.
(3) Zap Santa Cruz to Deliver all Its Outstanding Stock. Promptly after
the Effective Time, Zap Santa Cruz shall deliver to the Exchange Agent all share
certificates of Zap Santa Cruz Common Stock outstanding as of the Effective
Time.
1.11 No Further Ownership Rights in Zap Santa Cruz Capital Stock. All
shares of Zap Santa Cruz Common Stock issued shall be deemed to have been issued
in full satisfaction of all rights pertaining to such shares of Zapworld Common
Stock, and after the Effective Time there shall be no further registration of
transfers on the records of the Zap Santa Cruz of shares of Zap Santa Cruz
Common Stock which were outstanding immediately prior to the Effective Time.
1.12 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any such further action is necessary or desirable to carry
out the purposes of this Agreement and to vest Zapworld with full right, title
and possession to all assets, property, rights, privileges, powers and
franchises of Zap Santa Cruz, the officers and directors of the Zapworld are
fully authorized in the name of Zap Santa Cruz to take, and will take, all such
lawful and necessary action.
ARTICLE II
MISCELLANEOUS
2.1 Termination of Agreement and Plan of Reorganization.
Notwithstanding the approval of this Agreement by the shareholders of Zapworld
and Zap Santa Cruz, this Agreement shall terminate forthwith in the event that
the Reorganization Agreement shall be terminated as therein provided.
2.2 Amendment. This Agreement shall not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
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2.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one agreement.
2.4 Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect by the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Agreement.
Zapworld.com
By: /s/ Gary Starr
-------------------------------
Name: Gary Starr
Title: President
By: /s/ William Evers
-------------------------------
Name: William Evers
Title: Assistant Secretary
Zap Santa Cruz, Inc.
By: /s/ Michael F. Sarka
-----------------------------
Name: Michael F. Sarka
Title: President
By: /s/ Rosemary Sarka
----------------------------
Name: Rosemary Sarka
Title: Secretary
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