EXHIBIT 2.3
AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER is entered into
as of October ___, 1998 by and among EXECUTIVE TELECARD, LTD., a Delaware
corporation ("Buyer"), EXTEL Merger Sub. No. 1, Inc., a Virginia corporation and
a wholly-owned subsidiary of Buyer ("Merger Sub"), IDX INTERNATIONAL, INC., a
Virginia corporation (the "Company"), and each of the Company's stockholders
listed on the signature pages hereto (the "Stockholders").
WHEREAS, Buyer, Merger Sub, the Company and the Stockholders entered
into an Agreement and Plan of Merger dated June __, 1998, which was subsequently
amended on August 27, 1998 pursuant to a certain Consent and Extension (the
"Merger Agreement"); and
WHEREAS, the parties desire to make certain amendments to the Merger
Agreement.
NOW THEREFORE, the parties hereto do hereby agree as follows:
1. Section 2.1(a) of the Merger Agreement shall be replaced in its
entirety so as to read as follows:
"(a) Company Stock. All of the shares of common stock, no par value
("Company Common Stock"), and all of the shares of preferred stock, no par
value, of the Company ("Company Preferred Stock", and together with Company
Common Stock, "Company Stock"), issued and outstanding immediately prior to the
Effective Time (excluding any shares described in Section 2.1(c)), shall be
converted into and exchanged for, in the aggregate, the right to receive (i)
500,000 shares of Series B Convertible Preferred Stock, par value $.001 per
share, of Acquiror ("Acquiror Convertible Preferred Stock"), and Warrants
("Acquiror Warrants") to purchase 2,500,000 shares of Common Stock, par value
$.001 per share, of Acquiror ("Acquiror Common Stock"), with the terms and
conditions referred to in Section 2.1(b), plus (ii) the amount of FIVE MILLION
DOLLARS ($5,000,000) in the form of convertible promissory notes (as described
in more detail below) decreased by the amount of the Closing Indebtedness (as
defined in Section 2.4) and any other amounts to be deducted from the notes
portion of the Purchase Price as provided herein, including Section 12.11 hereof
(collectively, the "Notes Portion"). The net
amount determined pursuant to this clause, including both stock and notes
portions, is referred to as the ("Purchase Price"). The Notes Portion shall be
evidenced by three (3) convertible subordinated promissory notes of Buyer, in
the respective forms attached hereto as Exhibits D1, 2, and 3 (the "Notes"),
which by their terms are convertible into Acquiror Common Stock under certain
circumstances. The Purchase Price shall be allocated among the Stockholders in
the proportions set forth opposite the names of such Stockholders in the column
on Schedule 2.1 entitled "Purchase Price Payable at Closing" (the "Stockholder
Percentages"), with the Notes Portion made payable to the Representative (as
hereinafter defined) for the benefit of the Stockholders, to be distributed to
the Stockholders by the Representative in such proportions following payment or
conversion into Acquiror Common Stock. All such shares of Company Stock shall
cease to be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each certificate previously evidencing any such shares
shall thereafter represent only the right to receive the shares of Acquiror
Convertible Preferred Stock, Acquiror Warrants and the proceeds of the Notes
(whether cash or Acquiror Common Stock, when paid or issued) pursuant to this
Section 2.1(a) and the cash payable in lieu of fractional shares pursuant to
Section 2.1(e). The holders of certificates previously evidencing such shares of
Company Stock outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares of Company Stock, except as
otherwise provided herein or by law. Each such certificate shall be exchanged
for certificates evidencing the appropriate number of shares of Acquiror
Convertible Preferred Stock, Acquiror Warrants to purchase the appropriate
number of shares of Acquiror Common Stock and the right to receive the
appropriate portion of the proceeds of the Notes (whether cash or Acquiror
Common Stock, when paid or issued) as set forth on Schedule 2.1 upon the
surrender of such certificate as provided in Section 2.2."
2. Section 2.4 of the Merger Agreement shall be replaced in its
entirety so as to read as follows:
"Immediately prior to the Effective Time, Acquiror shall cause to be
paid all principal and accrued interest outstanding under any debt to
stockholders ("Stockholder Debt"). The sum of (x) the Stockholder Debt and (y)
(I) the net collectible accounts receivable of the Company (on a consolidated
basis) as of the Closing Date, net of accounts payable of the Company (on a
consolidated basis) as of the Closing Date (all as determined in accordance with
generally accepted accounting principles consistently applied), less (II) all
accrued but
unpaid dividends as of the Closing Date, is referred to herein collectively as
the "Closing Indebtedness". Any principal and interest outstanding under various
Loan Agreements between Acquiror and the Company and various Promissory Notes of
the Company in favor of Acquiror of the same date, including without limitation
the Second Bridge Loan (as defined in Section 8.15) shall not constitute Closing
Indebtedness for purposes of this Agreement. Payment of Closing Indebtedness
owed to any creditor other than Acquiror shall be made in accordance with a
written payoff letter from the holder of the Closing Indebtedness in a form
reasonably acceptable to Acquiror."
3. Section 2.1(e) shall be renumbered as Section 2.1(f) and a new
Section 2.1(e) shall be included in the Merger Agreement which shall read as
follows:
"(e) Fractional Shares. The Acquiror shall not be obligated to deliver
to the Stockholders any fractional share of Acquiror Convertible Preferred Stock
or Acquiror Common Stock upon conversion of Acquiror Convertible Preferred Stock
or Acquiror Warrants, but in lieu thereof may at its option make a cash payment
in respect thereof in any manner permitted by law equal to the Market Price (as
defined in Exhibit A hereto) of the Acquiror Common Stock or, in the case of the
Acquiror Preferred Stock, the Acquiror Common Stock into which the Acquiror
Preferred Stock is convertible. All shares of Common Stock (including fractions
thereof) issuable under this Agreement shall be aggregated for purposes of
determination whether the issuance would result in the issuance of any
fractional shares."
4. Section 8.13(g) shall be renumbered as Section 8.13(h) and a new
Section 8.13(g) shall be included in the Merger Agreement which shall read as
follows:
"(g) Receive the proceeds of the Notes and allocate and distribute
such proceeds as provided in Section 2.1(a) of the Merger Agreement and in the
Notes. Nothing in this Agreement shall give rise to any liability on the part of
Representative for any mistakes that may occur in making such allocations and
distributions so long as Representative, has acted in good faith and without
willful misconduct or fraud."
5. All references in the Merger Agreement to a cash portion of the
Purchase Price shall be deemed to refer instead to the Notes Portion. All
references in the Merger Agreement to payment of cash by Acquiror as part
of the Purchase Price shall be deemed to refer instead to the proceeds of the
Notes (whether cash or Acquiror Common Stock, when paid or issued).
6. Capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Merger Agreement. All other terms and provisions
of the Merger Agreement shall continue in full force and effect and unchanged
and are hereby confirmed in all respects.
7. This Amendment No. 2 to the Agreement and Plan of Merger may be
executed in several counterparts, each of which is an original, but all of which
together constitute one and the same agreement. The descriptive headings in this
Amendment No. 2 to the Agreement and Plan of Merger are for convenience of
reference only and shall not define or limit the provisions hereof.
8. This Amendment No. 2 to Agreement and Plan of Merger is governed
by, and shall be construed in accordance with, the laws of the State of
Virginia.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to
the Agreement and Plan of Merger on and as of the date first set forth above.
EXECUTIVE TELECARD, LTD.
By:_______________________________
Name:_____________________________
Title:____________________________
EXTEL MERGER SUB NO. 1, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
IDX INTERNATIONAL, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
STOCKHOLDERS:
__________________________________
XXXX International, Inc.
__________________________________
Chatwick Investments, Ltd.
__________________________________
Xxxxxx X. Xxx
__________________________________
Yi-Xxxxx Xxxx
__________________________________
Xxxxxxx Xxxxxxx
___________________________________
Trylon Partners, Inc.
___________________________________
Xxxxxxx Xxxxxxxxx
___________________________________
Teknos Communications, S.A.
___________________________________
Tenrich Holdings, Ltd.
___________________________________
Telecommunications Development
Corporation
__________________________________
Xxxxx Xx-Xxx Xxxxx
___________________________________
Silicon Applications Corporation
___________________________________
Xxxx Xxxxx Xxxxx
___________________________________
Xxxx Xxxx Xxxxx
___________________________________
Kou Xxxx Xxxx
___________________________________
Xxx Xx Xxx
___________________________________
Xxxx Xx Xxxx
___________________________________
Chuang Xx Xxxx
___________________________________
Flextech Holdings Ltd.
