EXHIBIT 2.3
SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment") is
dated as of May 25, 2000 and entered into by and among DIGITAL INSIGHT
CORPORATION, a Delaware corporation ("Parent"), ATA ACQUISITION CORP., a
California corporation and a wholly-owned subsidiary of Parent ("Merger Sub"),
and ANYTIME ACCESS, INC., a California corporation ("Company"), and is made with
reference to that certain Agreement and Plan of Merger, dated as of March 30,
2000, as amended by that certain First Amendment to Agreement and Plan of
Merger, dated as of May 2, 2000 (as so amended, the "Merger Agreement"), by and
among Parent, Merger Sub and Company. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Merger
Agreement.
RECITALS
WHEREAS, Parent, Merger Sub and Company have entered into the Merger
Agreement; and
WHEREAS, Parent, Merger Sub and Company desire to amend the Merger
Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. AMENDMENTS TO THE MERGER AGREEMENT
1.1 Amendments to Section 1.6: Effect on Capital Stock.
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(a) Subsections 1.6(a)(i) through 1.6(a)(iv) of the Merger Agreement
are hereby amended by deleting such subsections in their entirety and
substituting therefor the following:
"(i) With respect to the Company Common Stock, the Common Stock
Applicable Fraction (as defined below) of a share of Common Stock,
$0.001 par value per share, of Parent ("Parent Common Stock"), a
portion of which will constitute Holdback Shares (as defined in
Section 1.6(d)(i)) and be deposited in the Escrow Account (as defined
in Section 1.6(d)(i)) in accordance with the terms of Section 1.6(d);
(ii) With respect to the Series A Preferred Stock, the Series A
Preferred Stock Applicable Fraction (as defined below) of a share of
Parent Common Stock, a portion of which will constitute Holdback
Shares and be deposited in the Escrow Account in accordance with the
terms of Section 1.6(d);
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(iii) With respect to the Series B Preferred Stock, the Series B
Preferred Stock Applicable Fraction (as defined below) of a share of
Parent Common Stock, a portion of which will constitute Holdback
Shares and be deposited in the Escrow Account in accordance with the
terms of Section 1.6(d); and
(iv) With respect to the Series C Preferred Stock, the Series C
Preferred Stock Applicable Fraction (as defined below) of a share of
Parent Common Stock, a portion of which will constitute Holdback
Shares and be deposited in the Escrow Account in accordance with the
terms of Section 1.6(d)."
(b) Subsections 1.6(b)(ii) through 1.6(b)(vii) of the Merger
Agreement are hereby amended by deleting such subsections in their entirety
and substituting therefor the following:
"(ii) the "Common Stock Applicable Fraction" shall be equal to
0.053165;
(iii) the "Series A Preferred Stock Applicable Fraction" shall
be equal to 0.056556;
(iv) the "Series B Preferred Stock Applicable Fraction" shall be
equal to 0.086690;
(v) the "Series C Preferred Stock Applicable Fraction" shall be
equal to 0.082924;
(vi) the "Merger Shares" shall mean the shares of Parent Common
Stock to be issued upon the exchange and conversion of Company Stock
in accordance with Section 1.6(a); and
(vii) the "Aggregate Merger Consideration" shall mean the
aggregate of 1,900,753 shares of Parent Common Stock to be issued in
exchange for Company Stock pursuant to Section 1.6(a), upon exercise
of Company Stock Options, Employee Options and Warrants pursuant to
Sections 5.8 and 5.10, and the Holdback Shares (as reduced by any
Holdback Shares transferred to Parent to satisfy indemnification
claims pursuant to the Shareholder Agreements)."
(c) Subsection 1.6(d) of the Merger Agreement is hereby amended by
deleting such subsection in its entirety and substituting therefor the
following:
"(d) Escrow Agreement.
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(i) Parent shall establish and maintain an escrow (the
"Escrow Account") comprised of shares of Parent Common Stock in a
number equal to 210,939 of the Merger Shares (the "Holdback
Shares"), and shall designate and appoint U.S. Trust Company of
California or such other third party escrow agent that is
mutually and reasonably acceptable to Parent and the
Shareholders' Agent (as defined in the Shareholders
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Agreement) in connection therewith (the "Escrow Agent") to serve
in accordance with the Escrow Agreement attached as Exhibit C
hereto (the "Escrow Agreement") to be entered into among Parent,
the Escrow Agent and the Shareholders' Agent at Closing. In the
absence of any change in tax treatment under the Code or other
applicable tax law, any disbursements of Holdback Shares to
Parent or any other indemnified party in satisfaction of the
indemnification obligations of the former shareholders of Company
pursuant to Section 2(a)(i) of the Shareholder Agreement shall be
treated as a reduction of the aggregate purchase price under this
Agreement.
(ii) The number of shares of Parent Common Stock to be
received at the Effective Time by the holders of a particular
series of Company Stock (the "Contributing Series") (as a group)
shall be reduced by the number of Holdback Shares that the
holders of the Contributing Series (as a group) must deposit in
the Escrow Account, calculated as follows:
210,939 x F(CONTRIB) x O(CONTRIB)
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((F(COM) x O(COM)) + (F(A) x O(A)) + (F(B) x O(B)) + (F(C) x O(C)))
where
F(CONTRIB) = the Applicable Fraction for the Contributing
Series;
O(CONTRIB) = the total number of shares of the Contributing
Series outstanding at the Effective Time;
F(COM) = the Common Stock Applicable Fraction;
O(COM) = the total number of shares of Company Common
Stock outstanding at the Effective Time;
F(A) = the Series A Preferred Stock Applicable
Fraction;
O(A) = the total number of shares of Series A
Preferred Stock outstanding at the Effective
Time;
F(B) = the Series B Preferred Stock Applicable
Fraction;
O(B) = the total number of shares of Series B
Preferred Stock outstanding at the Effective
Time;
F(C) = the Series C Preferred Stock Applicable
Fraction; and
O(C) = the total number of shares of Series C
Preferred Stock outstanding at the Effective
Time
Each holder of a Contributing Series shall deposit a pro rata
portion of the total number of Holdback Shares that the holders
of the Contributing
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Series (as a group) must deposit in the Escrow Account. For
purposes of the calculations set forth in this Section
1.6(d)(ii), the Employee Options (as defined in Section 5.8(c))
shall not be considered shares of Company Stock outstanding at
the Effective Time, regardless of whether the Employee Options
have been issued in the form of options or in the form of
restricted stock."
1.2 Amendments to Section 5.8: Stock Options and Employee Benefits.
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Subsections 5.8(c) and 5.8(d) of the Merger Agreement are hereby amended by
deleting such subsections in their entirety and substituting therefor the
following:
"(c) Notwithstanding anything else in this Agreement, prior to the
Closing, Company may issue to certain senior employees of Company options
to purchase an aggregate of 1,700,419 shares of Company Common Stock (the
"Employee Options"). The Employee Options will have an exercise price of
$0.01 per share of Company Common Stock and will be subject to the terms
set forth in Section 5.8 of the Company Schedule. Any shares of Parent
Common Stock subject to an Employee Option but not issued because the
Employee Option is not exercised or is not exercisable as a result of the
terms thereof shall be deposited by Parent as soon as practicable in the
Escrow Account and shall be deemed to be Holdback Shares. Company may, at
its option, issue restricted stock in place of the Employee Options with
terms substantially the same as the Employee Options.
(d) Effective as of the Closing, Parent shall issue to certain senior
employees to Company options to purchase an aggregate of 15,067 shares of
Parent Common Stock (the "Parent Options"), either under Company's 1997
Stock Option Plan, which will be assumed by Parent at the Closing, or one
of Parent's stock option plans. Within ten (10) days prior to the Closing,
Company shall deliver to Parent a list setting forth the names of the
senior employees who shall receive Parent Options and the number of shares
of Parent Common Stock issuable upon exercise of each of such options. The
Parent Options will have an exercise price of $0.19 per share of Parent
Common Stock and will be subject to the same terms and conditions
applicable to the Employee Options, as set forth in Section 5.8 of the
Company Schedule. Any shares of Parent Common Stock subject to a Parent
Option but not issued because the Parent Option is not exercised or is not
exercisable as a result of the terms thereof shall be deposited by Parent
as soon as practicable in the Escrow Account and shall be deemed to be
Holdback Shares."
Section 2. REPRESENTATIONS AND WARRANTIES
Parent, Merger Sub and Company each represent and warrant to the other
parties hereto that the following statements are true, correct and complete as
of the date of this Amendment:
2.1 Corporate Power and Authority. Such party has all necessary corporate
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power and authority to execute and deliver this Amendment and, subject to
Company obtaining the approval of the Merger by the shareholders of Company, to
perform its obligations under the Merger Agreement as amended by this Amendment
(the "Amended Agreement").
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2.2 Authorization of Agreement. The execution and delivery of this
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Amendment by such party and the consummation by such party of the transactions
contemplated by the Amended Agreement have been duly and validly authorized by
all necessary corporate action on the part of such party.
2.3 Binding Obligation. This Amendment and the Amended Agreement have
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been duly and validly executed and delivered by such party, and, assuming the
due authorization, execution and delivery by the other parties hereto,
constitute legal and binding obligations of such party, enforceable against such
party in accordance with the terms hereof and thereof, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
laws affecting creditors' rights generally, or by general equitable principles
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and to the extent any indemnification or contribution provisions hereof
or thereof may be limited by applicable federal or state securities laws.
Section 3. MISCELLANEOUS
3.1 Reference to and Effect on the Merger Agreement and the Other Merger
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Documents.
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(a) On and after the date of this Amendment, each reference in the
Merger Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import referring to the Merger Agreement, and each reference
in the other documents and agreements executed in connection with the
Merger Agreement (the "Merger Documents") to the "Merger Agreement",
"thereunder", "thereof" or words of like import referring to the Merger
Agreement shall mean and be a reference to the Amended Agreement.
(b) Except as specifically amended by this Amendment, the Merger
Agreement and the other Merger Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Parent, Merger Sub, or Company under, the Merger Agreement or any of the
other Merger Documents.
3.2 Headings. Section and subsection headings in this Amendment are
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included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
3.3 Applicable Law. This Amendment shall be governed and construed in
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accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
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3.4 Counterparts. This Amendment may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized respective officers as of the date first
written above.
DIGITAL INSIGHT CORPORATION
By: /s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx
President
By: /s/ Xxxxx XxXxxxxxx
---------------------------------
Xxxxx XxXxxxxxx
Chief Financial Officer
ATA ACQUISITION CORP.
By: /s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
President
By: /s/ Xxxxx XxXxxxxxx
--------------------------------
Xxxxx XxXxxxxxx
Chief Financial Officer
ANYTIME ACCESS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
President
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
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