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EXHIBIT 2.3
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment (this "First Amendment") to the Agreement and
Plan of Merger (the "Merger Agreement"), dated as of July 14, 2000, between Saw
Mill Investments LLC ("Saw Mill"), GEEG Holdings, L.L.C. (the "Company"), GEEG
Acquisition Holdings Corp. ("Parent") and GEEG Acquisition, L.L.C. ("Merger
Sub"), is dated as of August 1, 2000. Each capitalized term which is used and
not otherwise defined in this First Amendment has the meaning given to such term
in the Merger Agreement.
1. AMENDMENTS TO THE MERGER AGREEMENT.
(a) Definition of Cash and Cash Equivalents. The phrase "as of
immediately prior to the Closing" wherever used in the definition of "Cash and
Cash Equivalents" (as such term is defined in Section 1.9(a) of the Merger
Agreement) is hereby deleted and the following is substituted therefore: "as of
July 29, 2000".
(b) Definition of Closing Date Funded Indebtedness. The phrase "as
of immediately prior to the Closing" wherever used in the definition of "Closing
Date Funded Indebtedness" (as such term is defined in Section 1.9(a) of the
Merger Agreement) is hereby deleted and the following is substituted therefore:
"as of July 29, 2000".
(c) Net Working Capital. The phrase "Net Working Capital as of
immediately prior to the Closing" wherever used in the Merger Agreement
(including Exhibit B attached thereto) is hereby deleted and the following is
substituted therefore: "Net Working Capital as of July 29, 2000".
(d) Tax Distributions. The phrase "except to the extent necessary
to permit the Company to comply with its obligations to make tax distributions
to its members pursuant to Section 6.4 of the Company LLC Agreement" is hereby
deleted from Section 4.1(c) of the Merger Agreement.
(e) Tax Matters. Section 4.2(b) is hereby amended to read as
follows:
"Each of the Company, Parent, Merger Sub, Surviving Entity and Saw
Mill agrees for federal income Tax purposes to treat the transactions
contemplated by this Agreement as producing a termination of the Company
pursuant to Code section 708(b)(1)(B) (and any similar provision of state and/or
local income tax law) which in turn produces, as required by current Treasury
Regulations, a termination of certain Subsidiaries of the Company treated as
partnerships for federal income tax purposes (the "Terminated Subsidiaries").
Each of the Company, Parent, Merger Sub, Surviving Entity and Saw Mill agrees to
allocate the income, gains, losses, deductions,
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credits and other items of the Company (and, where necessary, of any Terminated
Subsidiary) to the holders of Company Common Units (or the owner of any
Terminated Subsidiary) for the taxable period ending on the Closing Date by
using a "closing of the books" method (as described in Treasury Regulation
Section 1.706-1(c), and not, except as provided in the following sentence, by
estimating the pro rata part of such items) as of the end of the Closing Date.
For purposes of this Section 4.2(b), a "closing the books" of the Company and
any Terminated Subsidiary, and the resulting income, gains, losses, deductions,
credits and other items as of the Closing Date shall be achieved by calculating
(i) the actual results of operations of the Company and, as necessary, any
Terminated Subsidiary for the current taxable year through July 29, (but
excluding Seller Expenses) to which shall be added (ii) 2/5 of the income,
gains, losses, deductions, credits and other items of the Company, or, as
necessary, a Terminated Subsidiary, other than Extraordinary Items, for the week
ended August 5, 2000, and from which shall be subtracted (iii) all Extraordinary
Items. For purposes of this Section 4.2(b), "Extraordinary Items" shall mean,
without duplication, (a) the Option Consideration, (b) amounts paid during the
week ended August 5, 2000, on or prior to the Closing Date or payable as of the
Closing Date in the nature of compensation as a result of the transactions
contemplated herein, (c) amounts paid during the week ended August 5, 2000, on
or prior to the Closing Date or payable as of the Closing Date with respect to
the prepayment of financing arrangements of the Company or any Subsidiary
(including, without limitation, termination fees and pre-payment penalties) as a
result of the transactions contemplated herein, (d) the Seller Expenses, and (e)
all other amounts incurred by the Company or any Subsidiary during the week
ended August 5, 2000, on or prior to the Closing Date that were not incurred in
the ordinary course of business but incurred with respect to the transactions
contemplated herein. In the event that it is determined that the transactions
contemplated by this Agreement do not result in a termination of the Company
pursuant to Code section 708(b)(1)(B), then each of the Company, Parent, Merger
Sub, Surviving Entity and Saw Mill agrees that for purposes of Code section 706
(for both members who dispose of their entire interest in the Company and
members whose interest in the Company changes) to allocate the income, gains,
losses, deductions, credits and other items of the Company (and, where
necessary, of any Terminated Subsidiary) to the holders of Company Common Units
(or the owner of any Terminated Subsidiary) for the taxable period ending on the
Closing Date by using a "closing of the books" as of the end of the Closing
Date, as described above."
(f) Adjustment to Estimated Purchase Price. The phrase "from the
Closing Date" wherever used in Section 1.9(d) is hereby deleted and the
following is substituted therefore: "from July 29, 2000".
(g) Representations and Warranties of the Company. Article 2 shall
be amended by adding the following Section immediately after Section 2.19 and by
renumbering Section 2.20 as Section 2.21:
"Section 2.20 Post-July 28, 2000 Payments.
During the period beginning on July 28, 2000 and ending as of
immediately prior to Closing, none of the Company or any Subsidiary has (i)
expended any cash or cash equivalents to discharge all or any portion of the
Seller
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Expenses or Funded Indebtedness or to make distributions to any of the members
of the Company or (ii) incurred any Funded Indebtedness."
(h) Threshold. The phrase "except for Losses pursuant to Section
7.2(a)(iii)" wherever used in Section 7.4(b) is hereby deleted and the following
is substituted therefore: "except for Losses pursuant to Section 7.2(a)(iii) and
except for Losses pursuant to any breach of the representations and warranties
of the Company contained in Section 2.20, in each case,".
2. INTEREST. As consideration for this First Amendment, on the
Closing Date, contemporaneously with the filing of the Certificate of Merger,
the Company shall pay (i) by wire transfer of immediately available funds to Saw
Mill (on behalf of the holders of the Company Common Units as of immediately
prior to the Closing) an interest payment of $127,723 (the "Common Equity
Interest Payment"), which interest payment represents interest at a rate of
7.50% per annum on the Estimated Purchase Price (less the Equity Amount) for the
three-day period beginning on July 29, 2000 and ending on August 1, 2000 and
(ii) to each holder of Company Equity Options his or its pro rata share (based
upon the number of Company Common Units all such Company Equity Options are
exercisable for as of immediately prior to the Closing) of an aggregate interest
payment of $36,799 (the "Company Equity Options Interest Payment"), which
aggregate interest payment represents interest at a rate of 7.50% per annum on
the Option Payments for the three-day period beginning on July 29, 2000 and
ending on August 1, 2000. Immediately after receipt of the Common Equity
Interest Payment, Saw Mill shall distribute the Common Equity Interest Payment
to the holders of Company Common Units as of immediately prior to the Closing
based upon the relative amount of the Estimated Purchase Price (less the Equity
Amount) such holders of Company Common Units shall be entitled to receive
pursuant to the Merger Agreement.
3. THE MERGER AGREEMENT. In all other respects the Merger
Agreement is ratified and shall, as so changed by this First Amendment, continue
in full force and effect.
4. COUNTERPARTS. This First Amendment may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
5. GOVERNING LAW. This First Amendment shall be governed and
construed in accordance with the same laws as the Merger Agreement.
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IN WITNESS WHEREOF, the parties have executed this First Amendment
to the Merger Agreement as of the date first written above.
SAW MILL INVESTMENTS LLC
By: /s/ Howard Unger
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Name: Howard Unger
Title: President
GEEG HOLDINGS, L.L.C.
By: /s/ Larry Edwards
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Name: Larry Edwards
Title: Chief Executive Officer
GEEG ACQUISITION HOLDINGS CORP.
By: /s/ Stephen Eisenstein
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Name: Stephen Eisenstein
Title: President
GEEG ACQUISITION, L.L.C.
By: /s/ Stephen Eisenstein
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Name: Stephen Eisenstein
Title: President