EXHIBIT 2.2
AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
(this “
Amendment
”) is made as of the 20
th
day of July, 2018 (the “
Effective Date
”), by and among IZEA, Inc., a Nevada corporation (“
Parent
”), IZEA Merger Sub, Inc., a Delaware corporation (“
Merger Sub
”), TapInfluence, Inc., a Delaware corporation (the “
Company
”), certain stockholders of the Company signatory hereto and set forth on the signature page of this Amendment under the heading “Designated Stockholders” (the “
Designated Stockholders
”), and Shareholder Representative Services LLC, a Colorado limited liability company as the stockholders’ representative (“
Stockholders’ Representative
”). Parent, Merger Sub, the Company, the Designated Stockholders and Stockholders’ Representative are referred to in this Amendment collectively as the “
Parties
” and individually as a “
Party
.”
RECITALS
WHEREAS, the Parties are parties to that certain Agreement and Plan of Merger, dated as of July 11, 2018 (the “
Merger Agreement
”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement.
WHEREAS, the Parties desire to amend and modify the Merger Agreement as set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the Parties hereby agree as follows:
1.
Amendment of Section 1.4(a)(i)(A) of the Merger Agreement
.
Section 1.4(a)(i)(A) of the Merger Agreement is hereby amended and restated in its entirety as follows:
“a cash payment in the amount of $1,500,000,
minus
(i) the Estimated Closing Date Indebtedness (which shall be exclusive of Estimated Selling Transaction Expenses),
minus
(ii) (x) the amount of the Estimated Selling Transaction Expenses (to the extent not paid prior to or at the close of business on the day prior to the Closing Date), which shall be exclusive of the Estimated Closing Date Indebtedness,
less
(y) the amount of the Deferred Selling Transaction Expenses (which, for the avoidance of doubt, will be deducted from the Deferred Payments as set forth in Section 1.4(a)(ii)),
minus
(iii) the amount (if any) by which the Estimated Working Capital of the Company at Closing is less than the Target Working Capital,
plus
(iv) the amount (if any) by which the Estimated Working Capital of the Company at Closing is greater than the Target Working Capital,
plus
(v) the Estimated Cash and Cash Equivalents, if any (the “
Closing Cash Payment
”) to be paid pursuant to Section 1.4(b); and”
2.
Amendment of Section 1.4(a)(ii) of the Merger Agreement
.
Section 1.4(a)(ii) of the Merger Agreement is hereby amended and restated in its entirety as follows:
“(ii)
The portion of the Merger Consideration to be paid by Parent following the Closing shall consist of an additional $4,500,000 in consideration for payment to the Securityholders, on the schedule payment date set forth below and subject to any adjustments pursuant to the terms of this Agreement, in the following installments (the “
Deferred Payments
”):
(A)
on the date that is six (6) months after the Closing Date, a payment in the amount of $1,000,000 (the “
6-Month Payment
”), which shall be made, at the option of Parent, in the form of cash or Parent Common Stock or a combination thereof;
provided
that Parent shall deliver and pay the 6-Month Payment as follows:
(I)
to each Advisor who is owed Deferred Selling Transaction Expenses, an amount, in cash and/or Parent Common Stock (and paid in the same ratio of cash and Parent Common Stock as paid to the Securityholders in the 6-Month Payment), equal to the Deferred Selling Transaction Expenses owed to such Advisor as set forth in Schedule 1.4(a)(ii)(A)(I) to this Agreement; and
(II)
the remaining (i.e., after delivery and payment of the Deferred Selling Transaction Expenses) amount of the 6-Month Payment, to the Paying Agent, for payment to the Securityholders; and
(B)
on the date that is twelve (12) months after the Closing Date, a payment in the amount of $3,500,000 (the “
12-Month Payment
”), which shall be made, at the option of Parent, in the form of cash or Parent Common Stock or a combination thereof; provided that Parent shall deliver and pay the 12-Month Payment as follows:
(I)
to each Advisor who is then-owed Deferred Selling Transaction Expenses, an amount, in cash and/or Parent Common Stock (and paid in the same ratio of cash and Parent Common Stock as paid to the Securityholders in the 12-Month Payment), equal to any remaining Deferred Selling Transaction Expenses then owed to such Advisor as set forth in Schedule 1.4(a)(ii)(A)(I) to this Agreement; and
(II)
the remaining (i.e., after delivery and payment of any Deferred Selling Transaction Expenses pursuant to part (B)(I)) amount of the 12-Month Payment, to the Paying Agent, for payment to the Securityholders.”
3.
Amendment of Section 1.4(b)(ii) of the Merger Agreement
. Section 1.4(b)(ii) of the Merger Agreement is hereby amended and restated in its entirety as follows:
“recipients of Estimated Selling Transaction Expenses, as indicated on the Closing Payment Schedule (each, an “
Advisor
” and, collectively, the “
Advisors
”), the amount of the Estimated Selling Transaction Expenses, less the amount of any Deferred Selling Transaction Expenses payable to such Advisor, to be received by each such Advisor as set forth on and in the form provided on the Closing Payment Schedule;
provided
,
however
, that this shall exclude the payment of the Stockholders’ Representative Expense Amount to the Stockholders’ Representative, which is provided for in Section 1.4(b)(iv);”
4.
Amendment of Section 1.4(c) of the Merger Agreement
. Section 1.4(c) of the Merger Agreement is hereby amended and restated in its entirety as follows:
“
Closing Stock Issuance
. At the Closing, Parent shall effectuate the Closing Stock Issuance by causing its transfer agent to issue the Parent Common Stock to the Securityholders and, to the extent applicable, such other Persons as are set forth and pursuant to the Closing Payment Schedule. Prior to the Closing the Company shall cause to be delivered to Parent such information regarding such Persons as is required by Parent’s transfer agent to effectuate the Closing Stock Issuance.”
5.
Amendment of Section 1.7 of the Merger Agreement
. For purposes of Section 1.7 of the Merger Agreement, the defined terms “Estimated Selling Transaction Expenses” and “Final Selling Transaction Expenses” shall be deemed modified such that the amounts thereof are calculated net of Deferred Selling Transaction Expenses. For clarity, notwithstanding the exclusion of “Deferred Selling Transaction Expenses” from the calculations of Estimated Selling Transaction Expenses” and “Final Selling Transaction Expenses” for such purposes, Deferred Selling Transaction Expenses shall not be included in the calculations of Cash and Cash Equivalents, Indebtedness or Working Capital. Section 1.7 is further amended by adding the following sentence as the last sentence of Section 1.7: “All Estimated Closing Date Indebtedness and Estimated Selling Transaction Expenses (except for the Deferred Selling Transaction Expenses) shall be paid at Closing to the Creditors and Advisors, respectively, and no Estimated Closing Date Indebtedness and Estimated Selling Transaction Expenses (except for the Deferred Selling Transaction Expenses) shall remain outstanding at Closing. If the Closing Cash Payment, as calculated pursuant to Section 1.4(a)(i)(A) and this Section 1.7, is a negative amount, such amount shall be considered a Post-Closing Reduction under this Agreement.”
6.
Amendment of Section 7.4 of the Merger Agreement
. Section 7.4 of the Merger Agreement is hereby amended by adding the following as a new subsection (l) and re-lettering the following subsections accordingly:
“A Subscription Agreement, in form and substance reasonably satisfactory to Parent, between Parent and each of the Persons set forth on Schedule 7.4(l) to this Agreement with respect to each such Person’s subscription for the number of shares of Parent Common Stock set forth opposite such Person’s name on the Closing Payment Schedule, duly executed by such Person;”
7.
Amendment of Section 7.5 of the Merger Agreement
. Section 7.5 of the Merger Agreement is hereby amended by adding the following as a new subsection (a) and re-lettering the following subsection accordingly:
“A Subscription Agreement, in form and substance reasonably satisfactory to Parent, between Parent and each of the Persons set forth on Schedule 7.4(l) to this Agreement with respect to each such Person’s subscription for the number of shares of Parent Common Stock set forth opposite such Person’s name on the Closing Payment Schedule, duly executed by Parent; and”
8.
Amendment of Section 9.13 of the Merger Agreement
. Section 9.13 of the Merger Agreement is hereby amended by adding the following definition after the definition of “Deferred Payments” and by renumbering the reference to “Section 9.13 of the Parent Disclosure Schedules” in the definition of Selling Transaction Expenses to “Section 9.13(ii) of the Parent Disclosure Schedules” and renumbering Section 9.13 of the Parent Disclosure Schedules accordingly:
““
Deferred Selling Transaction Expenses
” means those Selling Transaction Expenses set forth on Schedule 9.13(i) to this Agreement, in the amount(s) set forth on Schedule 9.13(i) to this Agreement.”
9.
Amendment of the Company Disclosure Schedule
. The Sections of the Company Disclosure Schedule included in
Exhibit A
attached to this Amendment are hereby amended and restated in their entirety as set forth in
Exhibit A
.
10.
Amendment of the Parent Disclosure Schedule
. The Sections of the Company Disclosure Schedule included in
Exhibit B
attached to this Amendment are hereby amended and restated in their entirety as set forth in
Exhibit B
.
11.
Addition of Schedule 7.4(l)
. Schedule 7.4(l) attached to this Amendment as
Exhibit C
is hereby added to the Merger Agreement as Schedule 7.4(l) to the Merger Agreement.
12.
Addition of Schedule 9.13(ii)
. Schedule 9.13(ii) attached to this Amendment as
Exhibit D
is hereby added to the Merger Agreement as Schedule 9.13(ii) to the Merger Agreement.
13.
Effective Date
. This Amendment shall become effective on the Effective Date.
14.
No Other Amendments
. Except as expressly amended and modified herein, the Merger Agreement shall continue in full force and effect in accordance with its terms.
15.
Counterparts
. This Amendment may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. .pdf signatures shall have the same force and effect as original signatures.
16.
Governing Law
. This Amendment shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the choice of law principles thereof to the extent that the application of the Laws of another jurisdiction would be required thereby.
[Signatures Appear on Following Pages]
IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the day and year first above written.
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IZEA, INC.
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By:
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/s/ Edward H. Murphy
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Name:
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Edward H. (Ted) Murphy
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Title:
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President and Chief Executive Officer
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IZEA MERGER SUB, INC.
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By:
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/s/ Edward H. Murphy
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Name:
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Edward H. (Ted) Murphy
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Title:
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President and Chief Executive Officer
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TAPINFLUENCE, INC.
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By:
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Pat Benner
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Name:
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Pat Benner
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Title:
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Interim President
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STOCKHOLDERS’ REPRESENTATIVE:
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SHAREHOLDER REPRESENTATIVE SERVICES LLC, solely in its capacity as the Stockholders’ Representative
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By:
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/s/ Radha Subramanian
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Name:
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Radha Subramanian
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Title:
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Senior Director
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DESIGNATED STOCKHOLDERS:
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GROTECH VENTURES II, L.P.
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By:
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/s/ Lawson DeVries
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Name:
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Lawson DeVries
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Title:
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General Partner
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ACCESS VENTURE PARTNERS III, L.P.
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By:
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/s/ Kirk Holland
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Name:
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Kirk Holland
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Title:
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Managing Director
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Signature Page to Amendment No. 1 to the Agreement and Plan of Merger
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NORO-MOSELEY PARTNERS VII, L.P.
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By:
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/s/ Mike Elliott
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Name:
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Mike Elliott
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Title:
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General Partner
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NORO-MOSELEY PARTNERS SBIC, L.P.
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By:
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/s/ Mike Elliott
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Name:
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Mike Elliott
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Title:
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General Partner
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Signature Page to Amendment No. 1 to the Agreement and Plan of Merger
EXHIBIT 99.1
IZEA Announces Closing of TapInfluence Acquisition
ORLANDO, FL (July 27, 2018) -
IZEA
, Inc. (NASDAQ:
IZEA
), operator of IZEAx®, the premier online marketplace connecting brands and publishers with influential content creators, closed its previously announced acquisition of TapInfluence, Inc. (TapInfluence). Upon the completion of the transaction, TapInfluence became a wholly-owned subsidiary IZEA, Inc. as of July 26, 2018.
“Any time you put more smart people together, good things happen,” said Jeff Beringer, Global Head of Digital at GOLIN. “We are excited to have long-standing partners now with the scale to help shape the future of influencer marketing. We look forward to advances ahead- especially an even more diverse talent marketplace and more powerful tools for our teams to plan and execute campaigns.”
“The acquisition shows that influencer marketing is maturing,” commented Joe Scartz, Chief Digital Commerce Officer at TPN. “I expect the industry to continue to gain more credibility and thrive as standards and key players continue to evolve.”
IZEA intends to operate the TapInfluence platform for 12-18 months, during which key features and technologies will be migrated to IZEAx. Enhanced Influencer discovery and content workflow will be among the top software development priorities for the combined engineering team. Users of the TapInfluence platform will be migrated over time as certain new features are made available to end users.
“We are thrilled to close this transaction and begin integrating the two companies,” said Ted Murphy, Founder and CEO of IZEA, Inc. “Our teams worked closely throughout the acquisition process to create the optimal path forward for the IZEA Group. The vision for this transaction is simple: eliminate redundant spending to gain operational leverage and double-down on things that provide the most value to our customers - technology and service. Looking to the future we believe that, together, we will be a healthier company with a larger and significantly more diversified revenue base.”
As part of the integration process, IZEA and TapInfluence have taken immediate steps to effect the streamlining and optimization of operations of both organizations. A total of eleven full time employees will be joining the IZEA team in offices located in California and Colorado.
Total consideration for the transaction in cash and stock is approximately $7.6 million based on IZEA’s stock price as of market close on July 26, 2018. IZEA issued $1.3 million in cash and 1.15 million shares of common stock at the close of the transaction. One additional payment of $1 million, subject to certain contractual adjustments, will be due in cash or stock, at IZEA’s option, six months after closing. A second additional payment of $3.5 million will be due in cash or stock, at IZEA’s option, twelve months after closing.
Total number of shares outstanding after the close of the transaction is 10,566,933. All shares issued as part of this transaction will be unregistered with no piggy-back registration rights.
About IZEA
IZEA operates
IZEAx,
the premier online marketplace that connects marketers with content creators.
IZEAx
automates influencer marketing and custom content development, allowing brands and agencies to scale their marketing programs. IZEA influencers include everyday creators as well as celebrities and accredited journalists. Creators are compensated for producing unique content such as long and short form text, videos, photos, status updates, and illustrations for marketers or distributing such content on behalf of marketers through their personal websites, blogs, and social media channels. Marketers receive influential content and engaging, shareable stories that drive awareness. For more information about IZEA, visit
https://izea.com/
.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements, and terms such as “anticipate,” “expect,” “intend,” “may,” “will,” “should,” or other comparable terms, are based largely on IZEA's expectations and are subject to a number of risks and uncertainties, certain of which are beyond IZEA's control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, competitive conditions in the content and social sponsorship segment in which IZEA operates, delays in integrating the operations of IZEA and TapInfluence and realizing the desired financial and operational benefits of the TapInfluence acquisition, failure to popularize one or more of the marketplace platforms of IZEA, inability to raise sufficient capital when needed for both operations and growth initiatives, and changing economic conditions that are less favorable than expected. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will in fact occur.
Press Contact
Justin Braun
Manager, Corporate Communications
IZEA, Inc.
Phone: 407-674-6911
Email:
justin.braun@izea.com