FORM OF AGREEMENTAgreement and Plan of Merger |
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Search Agreement and Plan of Merger by:
AGREEMENT
AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated
as of December 30, 2004, is entered into between Level 8 Systems, Inc., a public
company incorporated in the State of Delaware (the "Company") and
Cicero, Inc., a Delaware corporation ("Cicero").
RECITALS
WHEREAS,
the board of directors of each of the Company and Cicero deems it advisable,
upon the terms and subject to the conditions herein stated, that the Company be
merged with and into Cicero, and that Cicero be the surviving corporation (the
"Merger"); and
WHEREAS,
the Company will submit this Agreement for approval by a vote of the holders of
shares of the Company’s common stock, par value $0.001 per share (the
“Company
Common Stock”), and
for approval by a vote by class of each currently issued and outstanding series
of preferred stock of the Company.
NOW,
THEREFORE, in consideration of the premises and of the agreements of the parties
hereto contained herein, the parties hereto agrees as follows:
ARTICLE I
THE
MERGER; EFFECTIVE TIME
1.1. The
Merger. Upon
the terms and subject to the conditions set forth in this Agreement, at the
Effective Time (as defined in Section 1.2), the Company shall be merged
with and into Cicero whereupon the separate existence of the Company shall
cease. Cicero shall be the surviving corporation (sometimes hereinafter referred
to as the "Surviving
Corporation") in the
Merger and shall continue to be governed by the laws of the State of Delaware.
The Merger shall have the effects specified in the General Corporation Law of
the State of Delaware, as amended (the "DGCL") and
the Surviving Corporation shall succeed, without other transfer, to all of the
assets and property (whether real, personal or mixed), rights, privileges,
franchises, immunities and powers of the Company, and shall assume and be
subject to all of the duties, liabilities, obligations and restrictions of every
kind and description of the Company, including, without limitation, all
outstanding indebtedness of the Company.
1.2. Effective
Time. Provided
that the condition set forth in Section 5.1 has been fulfilled or waived in
accordance with this Agreement and that this Agreement has not been terminated
or abandoned pursuant to Section 6.1, on the date of the closing of the
Merger, the Company and Cicero shall cause a Certificate of Merger to be
executed and filed with the Secretary of State of Delaware (the "Delaware
Certificate of Merger"). The
Merger shall become effective upon the date and time specified in the Delaware
Certificate of Merger (the "Effective
Time").
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ARTICLE
II
CHARTER
AND BYLAWS OF THE SURVIVING CORPORATION
2.1. The
Certificate of Incorporation. The
certificate of incorporation of Cicero in effect at the Effective Time shall be
the certificate of incorporation of the Surviving Corporation, until amended in
accordance with the provisions provided therein or applicable law.
2.2. The
Bylaws. The
bylaws of Cicero in effect at the Effective Time shall be the bylaws of the
Surviving Corporation, until amended in accordance with the provisions provided
therein or applicable law.
ARTICLE
III
OFFICERS,
DIRECTORS AND EMPLOYEES OF THE SURVIVING CORPORATION
3.1. Officers. The
officers of the Company at the Effective Time shall, from and after the
Effective Time, be the officers of the Surviving Corporation, until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal.
3.2. Directors. The
directors and the members of the various committees of the board of directors of
the Company at the Effective Time shall, from and after the Effective Time, be
the directors and members of such committees of the Surviving Corporation, until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal.
3.3.
Employees. The
employees of the Company at the Effective Time shall, from and after the
Effective Time, be employees of the Surviving Corporation, under the same terms
and
conditions
as their employment with the Company at the Effective Time. All employee benefit
plans applicable to any Company employee at the Effective Time shall, from and
after the Effective Time, be applicable to such employee as an employee of the
Surviving Corporation. The Surviving Corporation shall assume all liabilities of
the Company existing at the Effective Time with respect to any employee benefit
plans.
ARTICLE
IV
EFFECT OF
MERGER ON CAPITAL STOCK
4.1. Effect
of Merger on Capital Stock. At
the Effective Time, as a result of the Merger and without any action on the part
of the Company, Cicero or the shareholders of the Company:
| a. | Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time shall be converted (without the surrender of stock certificates or any other action) into one-twentieth (.05) of a share of fully paid and non-assessable share of common stock, par value $0.001, of Cicero (“Cicero Common Stock"), with the same rights, powers and privileges as the shares so converted and all shares of Company Common Stock shall be cancelled and retired and shall cease to exist. |
| b. | Notwithstanding any other provision of this Agreement, no fraction of a share of Cicero Common Stock will be issued. Instead, Cicero shall pay to each holder of Company Common Stock who would otherwise be entitled to a fraction of a share of Cicero Common Stock an amount in cash equal to (i) the fraction of a share of Cicero Common Stock to which such holder would otherwise be entitled, multiplied by (ii) the actual market value of Cicero Common Stock, which shall be deemed to be the average of the closing bid prices of the Company’s Common Stock as reported to OTCBB during each of the five (5) trading days preceding the Effective Date of the Merger. Following consummation of the Merger, no holder of Company Common Stock shall be entitled to dividends or any other rights in respect of any such fraction. |
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| c. | Each share of the Company’s Series A3 Preferred Stock, par value $0.001 per share (the “Series A3 Preferred Stock”), issued and outstanding immediately prior to the Effective Time shall be converted (without the surrender of stock certificates or any other action) into .0142857 shares of fully paid and non-assessable shares of Series A-1 Preferred Stock, par value $0.001, of Cicero ("Cicero A-1 Preferred Stock"). Each share of Cicero A-1 Preferred Stock will convert into 1,000 shares of the Company Common Stock with the rights, powers and privileges, set forth in the Cicero A-1 Preferred Stock certificate of designation and all shares of the Company’s Series A3 Preferred Stock shall be cancelled and retired and shall cease to exist. |
| d. | Each
share of the Company’s Series B3 Preferred Stock, par value $0.001 per
share (the “Series B3 Preferred Stock”), issued and outstanding
immediately prior to the Effective Time shall be converted (without the
surrender of stock certificates or any other action) into .0125 shares of
fully paid and non-assessable shares of Cicero A-1 Preferred Stock, Each
share of Cicero A-1 Preferred Stock will convert into 1,000 shares of the
Company Common Stock with the rights, powers and privileges, set forth in
the Cicero A-1 Preferred Stock certificate of designation and all shares
of the Company’s Series B3 Preferred Stock shall be cancelled and re
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