Exhibit 2.1
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment") is
made and entered into as of June 20 , 2002 by and among Workstream Inc., a
corporation organized under the laws of Canada ("Purchaser"), Icarian, Inc., a
Delaware corporation ("Icarian"), and Workstream Acquisition, Inc., a Delaware
corporation and wholly-owned subsidiary of Purchaser (the "Merger Sub"), to
amend that certain Agreement and Plan of Merger by and among Purchaser, Icarian
and the Merger Sub (the "Agreement"). All capitalized terms not otherwise
defined herein will have the meanings given to such terms in the Agreement.
RECITALS
WHEREAS, the parties to the Agreement wish to reduce the maximum
aggregate number of Exchange Shares issuable under the Agreement from 3,300,000
shares to 2,800,000 shares and substitute U.S.$10,000.00 in cash for the Escrow
Shares as the security for the indemnification obligations of the Icarian
Stockholders under the Agreement;
NOW, THEREFORE, in consideration of the foregoing recital, and for
other good and valuable, consideration, the parties hereto agree as follows:
1. Modification of Section 2.5. Section 2.5 of the Agreement is hereby
amended and restated in its entirety as follows:
"2.5 Purchase Price. In connection with the Merger and pursuant to the
provisions of this Agreement and the Agreement of Merger, subject to
adjustment pursuant to Section 2.6(f) hereof, the Purchaser shall issue
an aggregate of 2,800,000 fully paid and nonassessable shares of
Purchaser Common Stock (each share, an "Exchange Share") and pay an
aggregate of U.S.$10,000.00 (the "Escrow Cash" and, together with the
Exchange Shares, the Purchase Price) in exchange for all Icarian Shares
outstanding immediately prior to the Effective Time."
2. Modification of Section 2.6. Section 2.6 of the Agreement is hereby
amended and restated in its entirety as follows:
"2.6 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, Icarian or the
Icarian Stockholders:
(a) Each share of Preferred Stock and Common Stock of the
Corporation held by an Icarian Stockholder that is
issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger, be
cancelled and extinguished and automatically
converted into the right to receive that number of
Exchange Shares and, subject to Section 2.7, amount
of Escrow Cash determined in accordance with Article
IV, Section 3 of the Corporation's currently
effective Amended and Restated Certificate of
Incorporation which is attached hereto as Exhibit B
(the "Distribution Mechanism"), with the value of an
Exchange Share for this determination being equal to
the Merger Price Per Share, upon surrender of the
certificate representing such Icarian Share in the
manner provided herein. The portion of the Escrow
Cash payable to any Icarian Stockholder following the
Escrow Period shall be rounded to the nearest whole
cent (with 0.5 being rounded up). Each of the parties
to this Agreement hereby acknowledge and agree that
the Escrow Cash may be paid, in the discretion of the
Purchaser, from the assets of the Surviving
Corporation. The preceding provisions of this Section
2.6(a) are subject to the provisions of Section
2.6(e) (regarding the elimination of fractional
shares), Section 2.6(f) (regarding Capital Changes),
Section 2.6(g) (regarding Dissenting Shares (as
defined below)) and Section 2.7 (regarding the
withholding of the Escrow Cash).
(b) Each share of Icarian capital stock held by Icarian
immediately prior to the Effective Time shall be
cancelled and extinguished without any conversion
thereof.
(c) Intentionally omitted.
(d) Each share of common stock, $0.00l par value per
share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and
nonassessable share of common stock, $0.001 par value
per share, of the Surviving Corporation. Each
certificate evidencing ownership of shares of the
common stock of Merger Sub shall evidence ownership
of such shares of capital stock of the Surviving
Corporation.
(e) No fractional shares of Purchaser Common Stock will
be issued in connection with the Merger. In lieu of
such issuance, each Icarian Stockholder who would
otherwise be entitled to receive a fraction of a
share of Purchaser Common Stock, computing after
aggregating all shares of Purchaser Common Stock to
be received by such holder pursuant to Section
2.6(a), will instead receive from the Purchaser, upon
surrender of such holder's share certificates as
provided herein, an amount of cash (rounded to the
nearest whole cent) equal to the product obtained by
multiplying (a) the Merger Price Per Share, by (b)
the fraction of a share of Purchaser Common Stock
that such holder would otherwise have been entitled
to receive.
(f) Notwithstanding anything to the contrary herein, if
the Purchaser recapitalizes, either through a
subdivision (or stock split) of any of its
outstanding shares of Purchaser Common Stock into a
greater number of such shares, or a combination (or
reverse stock split) of any of its outstanding shares
of Purchaser Common Stock into a lesser number of
such shares, or reorganizes, reclassifies or
otherwise changes its outstanding shares of Purchaser
Common Stock into the same or a different number of
shares of other classes or series of stock of the
Purchaser (other than through a subdivision or
combination of shares provided for in the preceding
clause), or declares a dividend or other distribution
on its outstanding shares payable in shares of
Purchaser Common Stock, in shares or securities
convertible into shares of Purchaser Common Stock
and/or other equity securities of the Purchaser
(each, a "Capital Change"), at any time after the
date of this Agreement and prior to the Effective
Time, then the Merger Price Per Share and the
Purchase Price will be appropriately adjusted.
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(g) Holders of shares of capital stock of the Corporation
who have complied with all requirements for
perfecting (i) stockholders' rights of appraisal, as
set forth in Section 262 of the Delaware Law, shall
be entitled to their rights under the Delaware Law,
or (ii) shareholders' dissenting rights, as set forth
in Section 1300 et. seq. under the California General
Corporation Law ("California Law"), shall be entitled
to their rights under the California Law, with
respect to such shares ("Dissenting Shares").
(h) Prior to the Closing Date, Purchaser and the
Corporation will calculate and set forth in Schedule
2.6(h) (to be attached hereto at the Closing) the
number of Exchange Shares and amount of Escrow Cash
issuable to each Icarian Stockholder at the Effective
Time in accordance with this Section 2.6, subject to
Section 2.7."
3. Modification of Section 2.7. Section 2.7 of the Agreement is hereby
amended and restated in its entirety as follows:
"2.7 Escrow.
(a) Immediately following the Closing, the Purchaser
shall deliver the Escrow Cash to Xxxxxx-Xxxxxxxxx,
Hill & XxXxxxxxx LLP (the "Escrow Agent"), as escrow
agent, to be held by Escrow Agent as collateral for
the Corporation's indemnification obligations under
Article 10 and pursuant to the provisions of an
escrow agreement (the "Escrow Agreement") in a form
to be mutually agreed by the parties hereto prior to
Closing and, upon such agreement, to be attached
hereto as Exhibit 2.7.
(b) The Escrow Cash will be held by the Escrow Agent from
the date it is deposited by Purchaser until the date
that is twelve (12) months after the Closing Date
(the "Escrow Period") and invested by the Escrow
Agent as provided in the Escrow Agreement. Following
the Escrow Period, any Escrow Cash remaining in the
escrow account shall be paid to the Icarian
Stockholders in accordance with the Escrow Agreement.
(c) In the event that the Merger is approved by the
Icarian Stockholders as provided herein, the Icarian
Stockholders shall, without any further act of any
Icarian Stockholder, be deemed to have consented to
and approved (i) the use of the Escrow Cash as
collateral for the Corporation's indemnification
obligations under Article 10 in the manner set forth
in Article 10 and the Escrow Agreement, (ii) the
appointment of Apax Partners as the representative of
the Icarian Stockholders (the "Stockholder
Representative") with respect to the matters set
forth in Article 10 and under the Escrow Agreement
and as the attorney-in-fact and agent for and on
behalf of each Icarian Stockholder (other than
holders of Dissenting Shares), and the taking by the
Stockholder Representative of any and all actions and
the making of any decisions required or permitted to
be taken by him under the Escrow Agreement
(including, without limitation, the exercise of the
power to: authorize delivery to the Purchaser of
Escrow Cash in satisfaction of claims by the
Purchaser; agree to, negotiate, enter into
settlements and compromises of and demand arbitration
and comply with orders of courts and awards of
arbitrators with respect to such claims; resolve any
claim made pursuant to Article 10; and take all
actions necessary in the judgment of the Stockholder
Representative for the accomplishment of the
foregoing) and (iii) to all of the other terms,
conditions and limitations in the Escrow Agreement."
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3. Modification of Sections 3.1(a)-(c). Sections 3.1(a)-(c) of the
Agreement are hereby amended and restated in their entirety as follows:
"3.1 Surrender Procedures.
(a) Purchaser shall act as its own exchange agent in the
Merger (except for the Escrow Cash).
(b) At or as soon as practicable after the Effective Time,
each Icarian Stockholder shall surrender to the Purchaser
for cancellation the share certificates representing the
Icarian Shares that are not Dissenting Shares (the
"Certificates"), in each case duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer
powers of attorney duly executed in blank, in either case
by the holders of record (to the extent that such Icarian
Stockholder has not surrendered its Certificates and/or
such executed irrevocable security transfer powers of
attorney to the Purchaser at or prior to the Effective
Time). On or prior to Closing, each Icarian Stockholder
who is entitled to receive Exchange Shares pursuant to
the Distribution Mechanism shall deliver a duly executed
Transmittal Letter together with such holder's
Certificate(s) (or an affidavit of lost certificate as
described in Section 3.1(c) below) to the Purchaser. At
the Closing, subject to receipt of such Transmittal
Letter and Certificates (or affidavits of lost
certificate), the Purchaser will issue to each tendering
Icarian Stockholder a certificate for the number of
Exchange Shares to which such Icarian Stockholder is
entitled pursuant to Section 2.6(a) hereof and pay such
Icarian Stockholder any cash payable in lieu of a
fractional share to which such Icarian Stockholder may be
entitled pursuant to Section 2.6(e) hereof.
(c) In the event any Certificates shall have been lost,
stolen or destroyed, the Purchaser shall issue in
exchange for such lost, stolen or destroyed Certificates,
upon the making of an affidavit of that fact by the
holder thereof and the posting of reasonable bond
therefore, such number of Exchange Shares and cash for
fractional shares, if any, as may be required pursuant to
Section 2.6, any dividends or distributions payable
pursuant to Section 3.1(d), and, subject to Section 2.7,
the amount of Escrow Cash that may be payable pursuant to
Section 2.6."
4. Addition of Section 9.1(g). The following section is hereby inserted
into the Agreement immediately following Section 9.1(f):
"(g) Not, without the prior written consent of the Purchaser,
which consent shall not be withheld unreasonably, incur
or commit to incur any expenditure which individually
equals or exceeds U.S.$5,000."
5. Modification of Sections 10.1(d)-(f) and (h). Sections 10.1(d)-(f)
and (h) of the Agreement are hereby amended and restated in their entirety as
follows:
"(d) Intentionally Omitted.
(e) the foregoing indemnity shall be subject to the
limitation that, for Claims made in connection with any
representation or warranty contained in Article 5,
Purchaser shall not, absent fraud, be required to pay any
amount in excess of the value of the Escrow Cash;
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(f) the foregoing indemnity shall be subject to the
limitation that, for Claims made in connection with any
representation or warranty contained in Article 4, the
aggregate liability of the Corporation and the Icarian
Stockholders for such Claims will not exceed, absent
fraud, the Escrow Cash;
...
(h) in no event shall any Icarian Stockholder who does not
receive the right to receive Escrow Cash pursuant to
Section 2.6 be liable for any indemnification claims
hereunder; and"
6. Modification of Section 10.3. Section 10.3 of the Agreement is
hereby amended and restated in its entirety as follows:
"10.3 Recovery for Indemnification Claims. In the event that Purchaser
is entitled to indemnification from the Icarian Stockholders pursuant
to the terms of this Agreement for any Claims, such indemnification
shall only be recovered by deducting the amount of such Claims from the
Escrow Cash by instructing the Escrow Agent to return an amount of the
Escrow Cash to the Purchaser equal to the value of such Claim. The
right to obtain indemnification from, and only from, the Escrow Cash
pursuant to the indemnification provisions of this Article 10 and the
Escrow Agreement shall be the Purchaser's sole and exclusive remedy for
any breach by the Corporation of the terms of this Agreement or any
Claims described in Section 10.1."
7. Miscellaneous.
(a) Survival. Except as modified hereby, the Agreement continues in
full force and effect, unmodified in any way.
(b) Governing Law. This Amendment shall be governed and construed in
accordance with the laws of the State of Delaware and the federal laws of
the United States of America applicable in the State of Delaware, and
without regard to the conflict of laws principles applicable in such
jurisdiction.
(c) Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment and
have caused this Amendment to be delivered as of the date first above written.
WORKSTREAM INC. ICARIAN, INC.
By:/s/ Xxxxxxx X. Xxxxxxxxx By:/s/ Xx Xxxxxxxx
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Xxxxxxx X. Xxxxxxxxx Xx Xxxxxxxx
Chief Executive Officer Chief Executive Officer
WORKSTREAM ACQUISITION, INC.
By:/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Director
[Signature Page to Amendment to Agreement and Plan of Merger]
