1
EXHIBIT 2.3
SECOND AMENDMENT TO THE
AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER (this "Second
Amendment"), is made and entered into as of the 31st day of July, 2001, by and
among SONICBLUE INCORPORATED, a Delaware corporation ("Parent"), REWIND
ACQUISITION CORP., a Delaware corporation and a wholly owned subsidiary of
Parent ("Merger Sub"), and REPLAYTV, INC., a Delaware corporation (the
"Company"). Capitalized terms used herein and not otherwise defined herein have
the meanings set forth in the Merger Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, Parent, Merger Sub and the Company executed an Agreement and
Plan of Merger, dated as of March 23, 2001 (the "Merger Agreement"), providing
for the merger of Merger Sub with and into the Company upon the terms and
subject to the conditions of the Merger Agreement, as amended by that certain
First Amendment to the Agreement and Plan of Merger, dated as of May 22, 2001
(the "First Amendment").
WHEREAS, pursuant to Section 8.3 of the Merger Agreement, the parties
hereto wish to amend the Merger Agreement as provided herein:
NOW, THEREFORE, in consideration of the covenants, promises,
representations and warranties set forth herein, and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by
the parties), intending to be legally bound hereby, the parties agree as
follows:
1. Section 7.2(c) of the Merger Agreement is hereby amended and
restated in its entirety as set forth below:
"(c) Escrow Period; Distribution of Escrow Fund upon Termination
of Escrow Period; Partial Release of Shares After First General Escrow
Period.
(i) Subject to the following requirements, the Escrow
Fund shall be in existence immediately following the Effective
Time and shall terminate at 5:00 p.m., Pacific Time, on the
General Expiration Date (with respect to the General Escrow
Amount) or the IP Expiration Date (with respect to the IP Escrow
Amount) (the period of time from the Effective Time through and
including the General Expiration Date or the IP Expiration Date,
as the case may be, is referred to herein as the "Escrow
Period"); and all shares of Parent Common Stock remaining in the
Escrow Fund shall be distributed as set forth in this Section
7.2(c); provided, however, that the Escrow Period shall not
terminate with respect to such amount (or some portion thereof)
that is necessary in the reasonable judgment of Parent, subject
to the objection of the Stockholder Agent and the subsequent
arbitration of the matter in the manner as provided in
-1-
2
Section 7.2(g), to satisfy any unsatisfied claims under this
Section 7.2 concerning facts and circumstances existing prior to
the termination of such Escrow Period which claims are specified
in any Officer's Certificate delivered to the Escrow Agent prior
to termination of such Escrow Period. As soon as all such
unsatisfied claims, if any, have been resolved, the Escrow Agent
shall deliver to the stockholders of the Company the remaining
portion of the Escrow Fund not required to satisfy such
unsatisfied claims. Deliveries of shares of Parent Common Stock
remaining in the Escrow Fund to the stockholders of the Company
pursuant to this Section 7.2(c) shall be made ratably in
proportion to their respective contributions to the Escrow Fund.
Each stockholder of the Company who would otherwise be entitled
to a fraction of a share of Parent Common Stock (after
aggregating all fractional shares of Parent Common Stock to be
received by such holder) shall be entitled to receive from Parent
an amount of cash (rounded to the nearest whole cent) equal to
the product of (i) such fraction, multiplied by (ii) the Closing
Price. Parent shall use its commercially reasonable efforts to
have such shares and cash delivered within five (5) Business Days
after such resolution.
(ii) Notwithstanding the foregoing, upon the six (6)
month anniversary of the Effective Time (such time period between
the Closing Date and the six (6) month anniversary of the
Effective Time, the "First General Escrow Period", and the time
period beginning after the six (6) month anniversary of the
Closing Date until the General Expiration Date, the "Second
General Escrow Period"), fifty percent (50%) of the shares of
Parent Common Stock constituting the General Escrow Amount shall
be released to the stockholders of the Company ratably in
proportion to their respective contributions to the General
Escrow Amount as set forth in this Section 7.2(c); provided,
however, that if in the reasonable judgment of Parent, subject to
the objection of the Stockholders' Agent and the subsequent
arbitration of the matter in the manner specified in Section
7.2(g) hereof, the shares of Parent Common Stock remaining in the
General Escrow Amount during the Second General Escrow Period
after such release of shares of Parent Common Stock would not be
sufficient to satisfy any unsatisfied claims specified in any
Officer's Certificate delivered to the Escrow Agent prior to the
expiration of the First General Escrow Period with respect to
facts and circumstances existing prior to the expiration of the
First General Escrow Period, then a portion of the shares of
Parent Common Stock which would otherwise be released upon the
expiration of the First General Escrow Period shall instead
remain in the Escrow Fund (as part of the General Escrow Amount)
until such claims have been resolved. Deliveries of shares of
Parent Common Stock to stockholders of the Company pursuant to
this Section 7.2(c)(ii) shall be made ratably in proportion to
their respective contributions to the General Escrow Amount.
Parent shall use its commercially reasonable efforts to have
these shares delivered within five (5) Business Days after the
expiration of the First General Escrow Period.
(iii) Each party hereto, except the Escrow Agent, shall
provide the Escrow Agent with their Tax Identification Number
(TIN) as assigned
-2-
3
by the IRS. All interest or other income earned under this
Agreement shall be allocated and paid as provided herein and
reported by the recipient to the IRS as having been so allocated
and paid."
2. The following definitions set forth in Section 10.1 of the Merger
Agreement are hereby added to such Section 10.1 as set forth below:
"First General Escrow Period" shall have the meaning ascribed to
such term in Section 7.2(c) of the Merger Agreement (as amended by this
Second Amendment).
"Second General Escrow Period" shall have the meaning ascribed to
such term in Section 7.2(c) of the Merger Agreement (as amended by this
Second Amendment).
3. Other than with respect to the Sections of the Merger Agreement
specifically enumerated above, this Second Amendment does not modify, change or
delete any other addendum, term, provision, representation, warranty or covenant
(the "Provisions") relating to or contained in the Merger Agreement, and all
such Provisions shall remain in full force and effect.
4. This Second Amendment shall be construed in accordance with and
shall be governed by the laws of the State of California, without regard to its
laws as to conflict of laws.
5. This Second Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
[remainder of page intentionally left blank; signature page follows]
-3-
4
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Second Amendment to be signed by their duly authorized representatives, all as
of the date first written above.
REPLAYTV, INC. SONICBLUE INCORPORATED
By /s/ Xxxxxxx Xxxx By /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------- -----------------------------------------
Name Xxxxxxx Xxxx Name Xxxxxxx X. Xxxxxxxxx
------------------------ --------------------------------------
Title CEO Title President and Chief Executive Officer
----------------------- --------------------------------------
REWIND ACQUISITION CORP.
By /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------
Name Xxxxxxx X. Postashner
-----------------------
Title President
-----------------------
-4-
