EXHIBIT 2.2
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AGREEMENT OF MERGER
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THIS AGREEMENT OF MERGER (this "Agreement of Merger") dated as of
November 22, 1999, is entered into by and among Breakthrough Electronics, Inc.,
a Nevada corporation ("BEI"), Digital DJ Subsidiary, Inc., a Nevada corporation
("Merger Sub"), and Digital DJ, Inc., a California corporation ("DDJ").
1. DDJ is a California corporation organized on December 5, 1991 and
has approximately 16,000,000 shares of Common Stock (the "DDJ Common Stock")
outstanding.
2. Merger Sub is a Nevada corporation organized on October 13, 1999 and
has one share of Common Stock (the "Merger Sub Common Stock") outstanding.
3. Merger Sub is a wholly-owned subsidiary of BEI.
4. Merger Sub shall be merged with and into DDJ and DDJ shall be the
surviving corporation (the "Merger").
5. The Merger shall become effective on the later of November 22, 1999
or at the time of the filing of this Agreement of Merger with the Secretary of
State of the State of California (the "Effective Time").
6. The Merger shall have the effect set forth in Section 1107 of the
California General Corporation Law (the "California Law"). Without limiting the
generality of the foregoing, at the Effective Time, the separate existence of
Merger Sub shall cease and DDJ shall succeed, without other transfer, to all
rights and property of Merger Sub and shall be subject to all the debts and
liabilities of Merger Sub in the same manner as if DDJ had itself incurred them.
All rights of creditors and all liens upon the property of Merger Sub and DDJ
shall thereafter be preserved unimpaired, provided that such liens upon property
of Merger Sub shall be limited to the property affected thereby immediately
prior to the time the Merger is effective.
7. The Articles of Incorporation of DDJ are not amended by the Merger.
8. Each share of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted at the Effective Time into and become one
share of common stock of DDJ.
9. Subject to Section 13, each share of DDJ Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted at the
Effective Time into one share of BEI Common Stock (the "BEI Stock").
10.Promptly after the Effective Time, each DDJ shareholder who has
surrendered a certificate for DDJ Common Stock (a "DDJ Certificate") to BEI,
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together with such documents as BEI shall reasonably request, shall be entitled
to receive in exchange therefor certificates representing that number of shares
(rounded down to the nearest whole number) of BEI Stock which such Shareholder
has the right to receive pursuant to Section 9 (together with any cash in lieu
of fractional shares of BEI Stock pursuant to Section 13). Accordingly,
certificates for shares of BEI Stock shall be immediately delivered to the
Shareholders of DDJ. Each DDJ Certificate so surrendered shall forthwith be
cancelled. Until surrendered as contemplated by this Section 10, each DDJ
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender (i) the certificates representing
shares of BEI as contemplated by this Section 10, (ii) a cash payment in lieu of
any fractional shares of BEI Stock as contemplated by Section 13, and (iii) any
dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to BEI Stock as contemplated by Section
11.
11. Dividends and other distributions declared or made after the
Effective Time with respect to BEI Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered DDJ Certificate with
respect to the BEI Stock represented thereby.
12. All shares of BEI Stock issued upon the surrender for exchange of
shares of BEI Common Stock in accordance with the terms hereof (including any
cash paid pursuant to Section 11 or 13) shall be deemed to have been issued in
full satisfaction of all rights pertaining to such shares of DDJ Common Stock,
and, at and after the Effective Time, there shall be no further registration of
transfers on the stock transfer books of DDJ of the shares of DDJ Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, DDJ Certificates are presented to DDJ for any reason, they shall
be cancelled and exchanged as herein provided.
13. No certificates or scrip representing fractional shares of BEI
shall be issued upon the surrender for exchange of DDJ Certificates pursuant to
Section 10 and no dividend, stock split or other change in the capital structure
of BEI shall relate to any fractional security, and such fractional interests
shall not entitle the owner thereof to vote or to any rights as a security
holder of BEI. Each DDJ Shareholder shall be entitled to an amount of cash equal
to $.001 multiplied by the fractional share interest of BEI Stock to which such
Shareholder is entitled.
14. None of the DDJ Shareholders has exercised appraisal rights with
respect to the DDJ Common Stock in accordance with Sections 1300, et seq., of
the California Law.
15. BEI, Merger Sub, DDJ and the holders of DDJ Common Stock are
parties to an Agreement and Plan of Merger dated November 22, 1999 (the "Plan of
Merger"). The Merger of Agreement and the Plan of Merger are intended to be
construed together in order to effectuate their purposes.
16. This Agreement of Merger and the Plan of Merger are intended as a
plan of reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended.
[Signatures appear on the following page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on their behalf by the undersigned, thereunto duly authorized.
BREAKTHROUGH ELECTRONICS,
INC.
By:
Its:
DIGITAL DJ, INC.
By:
Its:
DIGITAL DJ SUBSIDIARY, INC.
By:
Its:
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