EXHIBIT 2.5
AMENDMENT NO. 2 TO
AGREEMENT AND PLAN OF MERGER
This Amendment No. 2 to Agreement and Plan of Merger (this "Amendment')
dated as of November 12, 2002, is made by and among IMPROVENET, INC., a Delaware
corporation ("IMPV"), ETECHLOGIX, INC., an Arizona corporation ("ETECH"), ETECH
ACQUISITION, INC., an Arizona corporation and a wholly owned subsidiary of IMPV
("Merger Sub").
PRELIMINARY STATEMENT
A. This Amendment is made with reference to the Agreement and Plan of
Merger, dated as of July 30, 2002, as amended on October 1, 2002 (the "Merger
Agreement"), between IMPV, ETECH and Merger Sub (collectively, the "Parties").
Capitalized terms used herein shall have the same meanings ascribed to them in
the Merger Agreement.
B. The Parties have agreed to change the terms of the Merger Agreement so
that the occurrence of the Effective Time prior to the expiration of the twenty
(20) business day period during which IMPV will offer to repurchase the
outstanding Buyback Interests of IMPV in connection with the Share Buyback is a
condition to the obligations of IMPV to purchase and pay for Buyback Interests
in the Share Buyback. The parties have further agreed that the current directors
of IMPV will remain on the Board of Directors of IMPV until the Buyback Price
has been paid to all holders of Buyback Interests who properly tender their
Buyback Interests in the Share Buyback so that the directors may personally
direct the fulfillment by IMPV of its obligations with respect to the Share
Buyback. In accordance with Section 9.1 of the Merger Agreement, the Parties
have agreed to amend and modify the Merger Agreement as set forth below.
AMENDMENT
In consideration of the premises, and of the mutual agreements made herein,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged by each Party, the Parties agree as follows:
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1. Sections 1.2(b), 1.2(c), 1.2(d) and 1.2(e) of the Merger Agreement are
hereby amended and restated to read in their entirety as follows:
"(b) CLOSING DELIVERIES. At Closing, (i) IMPV and ETECH
shall each deliver any undelivered items of the items set
forth in Section 8, (ii) ETECH shall deliver the $250,000
balance of the New Capital (as defined below) and those
funds and the $250,000 previously deposited by ETECH
pursuant to Section 2.3(a) shall be paid to American Stock
Transfer & Trust Company (the "DEPOSITARY"), (iii) IMPV
shall irrevocably pay cash in an amount which, when added to
the $500,000 referred to above, will equal the aggregate
Buyback Price which would be payable in the Share Buyback if
all Buyback Interests, other than those held by the New IMPV
Shareholders (as defined below), were tendered, and (iv)
IMPV and ETECH shall have delivered mutually acceptable
instructions to the Depositary meeting the requirements of
this Section 1.2(b). The funds paid to the Depositary
pursuant to items (ii) and (iii) shall be referred to herein
as the "ESCROWED FUNDS." ETECH and IMPV shall give
irrevocable instructions to the Depositary to hold the
Escrowed Funds in escrow for the exclusive benefit of
tendering holders of Buyback Interests and for the exclusive
purpose of paying the Buyback Price to such holders.
Arrangements satisfactory to IMPV and ETECH shall be made
with the Depositary so that the Depositary is irrevocably
bound to hold the Escrowed Funds in escrow for the exclusive
benefit of tendering holders of Buyback Interests, to pay
the Buyback Price to such holders from the Escrowed Funds
and to return to IMPV as soon as possible and in any event
within two (2) business days any portion or portions of the
Escrowed Funds which will not be required to fund the
payment of the Buyback Price to tendering holders of Buyback
Interests whenever the Depositary is able to determine that
such portion or portions of the Escrowed Funds will not be
so required. The arrangements shall provide, for the benefit
of tendering holders of Buyback Interests, that the
Depositary may not return any of the Escrowed Funds to IMPV
other than as required above unless the Depositary is
instructed to do so by a writing signed by both IMPV and
Xxxxxx X. Xxxxxx. IMPV shall become the owner of the funds
transferred pursuant to item (ii) above when the Articles of
Merger are filed with the Arizona Corporation Commission,
but not before. If the Articles of Merger are not filed with
the Arizona Corporation Commission within 30 days from the
date of the Closing, ETECH and IMPV shall provide written
instructions to the Depositary, signed by them and by Xxxxxx
X. Xxxxxx, directing the Depositary to return the Escrowed
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Funds by wire to the bank accounts from which they were
transferred to the Depositary.
(c) EFFECTIVE TIME. Upon (i) confirmation of receipt by IMPV
of the $250,000 balance of the New Capital, and (ii) IMPV's
receipt of evidence reasonably satisfactory to it that the
Escrowed Funds have been received by the Depositary and
escrow arrangements with the Depositary have been made as
required by Section 1.2(b), IMPV shall cause the Articles of
Merger to be filed with the Arizona Corporation Commission.
(d) SHARE BUYBACK. Once the Articles of Merger have been
filed, IMPV shall be irrevocably obligated to complete the
Share Buyback and to pay the BuyBack Price to all holders of
Buyback Interests who tender their Buyback Interests
pursuant to the terms of the Share Buyback as such terms are
in effect immediately prior to the filing of the Articles of
Merger. The persons who hold Buyback Interests immediately
prior to the filing of the Articles of Merger are third
party beneficiaries of this Agreement with respect to the
obligations of IMPV under the preceding sentence and may
exercise any and all remedies available under applicable law
to enforce such obligations.
(e) RECONSTITUTION OF THE BOARD OF DIRECTORS. Upon written
confirmation to IMPV and ETECH that (i) the Depositary has
paid the Buyback Price to all holders of Buyback Interests
who have been determined to have properly tendered Buyback
Interests in the Share Buyback and (ii) with respect to any
holders of Buyback Interests with respect to which there is
a dispute concerning whether a proper tender has been made
or with respect to which the only condition to payment of
the Buyback Price is the delivery of a share certificate
pursuant to a properly executed and tendered Notice of
Guaranteed Delivery, the Depositary is holding a sufficient
amount of the Escrowed Funds which is irrevocably dedicated
to be applied to payment to such holders to the extent that
it may ultimately be determined that payment should be made
to them (the receipt of which confirmation shall be referred
to herein as the "BUYBACK CLOSING"), the letters of
resignation described in Section 2.1 shall become effective
and the Board of Directors shall be reconstituted as
described in Section 2.1.
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2. Section 2.2(d) of the Merger Agreement is hereby amended and restated
to read in its entirety as follows:
(d) Notwithstanding anything to the contrary contained
herein, the Buyback Closing is expressly conditioned upon
the Closing of this Agreement having occurred prior to the
expiration of the tender offer related to the Share Buyback,
and the Closing of this Agreement is expressly conditioned
upon the commencement of such tender offer.
3. The second sentence of Section 2.3(b) of the Merger Agreement is
hereby amended and restated to read in its entirety as follows:
"Funding of the final $250,000 of the New Capital is
expressly conditioned upon the Closing of the Agreement."
4. Section 7.1(b) of the Merger Agreement is hereby amended and restated
to read in its entirety as follows:
"(d) The tender offer related to the Share Buyback shall
have commenced;"
5. Section 7.1(o) of the Merger Agreement is hereby amended and restated
to read in its entirety as follows:
"(o) IMPV shall have immediately available for payment to
the Depositary the full amount of the Escrowed Funds, less
the $250,000 balance of the New Capital."
In witness whereof, this Amendment No. 2 to the Merger Agreement is
executed by IMPV, ETECH and Merger Sub as of the date first set forth above.
IMPV:
IMPROVENET, INC.
By: ____________________________________
Xxxxxx X. Xxxxxx
Chairman
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MERGER SUB:
ETECH ACQUISITION, INC.
By: ____________________________________
Xxxxxx X. Xxxxxx, President
ETECH:
ETECHLOGIX, INC.
By: ____________________________________
Xxxxxxx X. Xxxxxx, CEO
By: ____________________________________
Homey J. Farsi, President
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