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EXHIBIT 2.2
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment to the Agreement and Plan of Merger (the
"Amendment") is entered into as of June 30, 1999 by and among MemberWorks
Incorporated, a Delaware corporation ("Buyer"), CIC Merger, Inc. a Delaware
corporation and XxxxxxxxXxxx.Xxx, Inc., a California corporation (the
"Company"). The Buyer, the Transitory Subsidiary and the Company are referred
to collectively herein as the ("Parties").
WHEREAS, the parties have agreed to certain changes to the Agreement
and Plan of Merger dated as of April 27, 1998 (the "Merger Agreement").
NOW, THEREFORE, in consideration of the representations, warranties and
covenants herein contained, the parties hereby agree to amend the Merger
Agreement as follows:
1. In Section 1.2 of the Merger Agreement, delete "Xxxx and Xxxx LLP in
Boston Massachusetts" and insert "The Buyer in Stamford, Connecticut" in its
place, and delete "July 1, 1999 or such earlier" and insert "July 30, 1999 or
such other" in its place. Also in Section 1.2, delete the phrase "provided that
the Closing shall occur only if the Buyer notifies the Company in writing (the
"Exercise Notice") on or before June 1, 1999, but not prior to May 1, 1999, that
the Buyer has determined to consummate the Merger. The giving of the Exercise
Notice shall be in the sole and absolute discretion of the Buyer".
2. Section 1.5 of the Merger Agreement is deleted and the following
Section 1.5 is inserted in the Merger Agreement:
"1.5 Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of any Party or the
holder of any of the following securities:
(a) (i) Each share of common stock, $.001 par value
per share, of the Company ("Common Shares") issued and outstanding
immediately prior to the Effective Time (other than Common Shares owned
beneficially by the Buyer, Transitory Subsidiary or any affiliate
thereof, Dissenting Shares (as defined below) and Common Shares held in
the Company's treasury), (ii) each share of Preferred Stock, $.001 par
value per share, of the Company ("Preferred Shares" which, together
with the Common Shares, are sometimes collectively referred to herein
as the "Company Shares") issued and outstanding immediately prior to
the Effective Time (other than Preferred Shares owned beneficially by
the Buyer or the Transitory Subsidiary, all of the issued and
outstanding shares of Series D Preferred Stock of the Company,
Dissenting Shares and Preferred Shares held in
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the Company's treasury) and (iii) each warrant to purchase shares of
the Series B Preferred Stock issued and outstanding immediately prior
to the Effective Time (the "Series B Warrants") shall be converted into
and represent the right to receive (A) that amount per share as is
determined by allocating, in accordance with the Company's Articles of
Incorporation in effect immediately prior to the Effective Time, the
aggregate initial cash consideration of $15,885,000 (the "Merger
Consideration") (less fees payable to CEA Xxxxxxxxxx, L.L.C. pursuant
to Section 4.9 hereof, less $280,285.70 paid to the Escrow Agent
pursuant to Section 1.8 hereof, and less amounts paid by the Company to
cancel stock options covering Series B Preferred Stock pursuant to
Section 1.5(b) hereof) to be paid immediately following the Effective
Time. For purposes of allocating the Merger Consideration to be paid
for the Series B Warrants in accordance with this Section 1.5(a), each
Series B Warrants shall be deemed to have been exercised immediately
prior to the Effective Time, provided that the amount of Merger
Consideration allocable to a share of Series B Preferred Stock deemed
outstanding pursuant to this sentence shall be reduced by $9.00. The
Merger Consideration not allocated to the Series B Preferred Stock
deemed outstanding in accordance with the preceding sentence shall be
allocated to the Company Shares (and the Series B Preferred Stock
deemed outstanding pursuant to the preceding sentence) in accordance
with the Company's Articles of Incorporation in effect immediately
prior to the Effective Time. For purposes of this Agreement, "Company
Shareholder" means any holder of any Company Shares or Series B
Warrants.
(b) The Company shall use its best effort to obtain
the signatures of all holders of Options to purchase shares of the
Company's Series B Preferred Stock (the "Series B Options") to
agreements canceling said Series B Options. The Company represents and
warrants that there are outstanding Series B Options to purchase only
49,115 shares of Series B Preferred Stock and the Company covenants
that it shall neither issue nor grant any additional Series B Options.
Three business days prior to the Effective Time, the Company shall
issue checks to all holders of Series B Options who have signed
cancellation agreements, with the amount of such checks equal to $12.19
multiplied by the number of shares purchasable under his or her Series
B Option, provided, that the Company shall withhold from said checks
the required Federal and state payroll taxes. The Buyer shall reimburse
the Company at the Closing for amounts paid by the Company to cancel
employee stock options as provided in this subsection 1.5(b) and
Section l.7 hereof and shall cause the Company to pay over all
withholdings to the appropriate taxing authorities."
3. Add the following at the beginning of Section 1.7(a) of the Merger
Agreement: "Prior to the Effective Time the Company shall cause all holders of
stock options covering 51,664 shares of Common Stock granted in accordance with
the Company's 1998 Stock Incentive Plan to exercise such options and shall issue
stock certificates to each such option holder for the number of shares of common
stock each such option holder is entitled to receive upon exercise of his or her
option."
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4. In Section 1.8 of the Merger Agreement, delete the word "Additional"
in the first and third line of subsection (a) and in the fourth line of
subsection (b). Also in Section 1.8, delete "$300,000" and insert "$280,285.70"
in its place.
5. Delete the last sentence in Section 1.14(b) of the Merger Agreement.
6. In Section 4.3 of the Merger Agreement, delete "June 15, 1999" and
insert "July 19, 1999" in its place. Also, in Section 4.3, add the following
sentence at the end of such section: "In lieu of calling and holding the Special
Meeting, the Company may solicit shareholder written consents to obtain approval
of the Merger."
7. In Section 4.9 of the Merger Agreement, delete the phrase "and the
Additional Merger Consideration Payment Date, as applicable," and delete the
phrase "or the Additional Merger Consideration, as the case may be,".
8. The amounts due to Xxxxxx Xxxxxx and Xxxxxx Xxxxxxx as shareholders
of the Company out of the Merger Consideration shall be reduced by any
outstanding balances owed by such individuals to the Company pursuant to their
respective promissory notes.
9. Section 5.1(d) of the Merger Agreement is deleted. There will be no
requirement to enter into the Operating Agreement. Exhibit E is deleted from the
Merger Agreement.
10. Section 5.1(f) of the Merger Agreement is deleted.
11. In Section 6.3 of the Merger Agreement, delete "$300,000" and
insert "$280,285.70" in its place.
12. Except as specifically set forth in this Amendment, all of the
other provisions of the Merger Agreement shall continue in full force and
effect.
13. Any capitalized terms used in this Amendment not defined herein
shall have the meaning given to them in the Merger Agreement.
14. 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 instrument. This Amendment shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
California.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
MEMBERWORKS INCORPORATED
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Senior Vice President
CIC MERGER, INC. (a Delaware corporation)
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Treasurer
CONSUMERINFO COM, INC.
By: : /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President and Chief Executive Officer
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