EXHIBIT 2.2
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AMENDMENT
TO
AGREEMENT AND PLAN OF REORGANIZATION
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This Amendment is made as of the 20th day of October, 1997 by and among
VIALOG Corporation ("VIALOG"), TBMA Acquisition Corporation (the "VIALOG Merger
Subsidiary"), Telephone Business Meetings, Inc. (the "Company") and C. Raymond
Marvin (the "Principal Stockholder").
WHEREAS, VIALOG, the VIALOG Merger Subsidiary, the Company and the
Principal Stockholder are parties to that certain Amended Agreement and Plan of
Reorganization dated September 8, 1997 (the "Agreement"); and
WHEREAS, VIALOG, the VIALOG Merger Subsidiary, the Company and the
Principal Stockholder desire to amend the Agreement.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein and of those contained in the
Agreement, VIALOG, the VIALOG Merger Subsidiary, the Company and the Principal
Stockholder covenant, agree, represent and warrant as follows:
1. Terms. Terms defined in the Agreement are used herein as so defined unless
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otherwise specifically stated herein.
2. Amendments.
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(a) Article 6 is hereby amended by deleting Section 6.21 in its entirety
and replacing it with the following new Section 6.21:
6.21 Section 338(h)(10) Election. The Company, the Principal
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Stockholder, and each other stockholder of the Company agree to join with VIALOG
in making an election under Section 338(h)(10) of the Code (and any
corresponding election under state, local and foreign tax law) with respect to
the purchase and sale of the stock of the Company hereunder (the "Section
338(h)(10) Election"). Each stockholder of the Company agrees to include any
income, gain, loss, deduction or other tax item resulting from the Section
338(h)(10) Election on its tax returns to the extent permitted by applicable law
and agrees to pay any taxes imposed on the Company attributed to the making of
the Section 338(h)(10) Election, including but not limited to, (i) any taxes
imposed under Section 1374 of the Code, (ii) any taxes imposed under Regulation
Section 1.338(h)(10)-1(e)(5), or (iii) any state, local or foreign taxes imposed
on the Company's gain. At
the Closing, VIALOG shall pay to each of the Company's stockholders (i) an
amount (the "Estimated Additional Tax Liability") equal to the difference
between (A) the estimated taxes incurred by such stockholder under the
immediately preceding sentence and (B) the estimated taxes which such
stockholder would have incurred if no Section 338(h)(10) Election had been made,
and (ii) an amount equal to an estimate of any additional professional fees
arising out of the preparation, review and filing of such election. The
estimated amounts to be paid to each stockholder in accordance with clause (i)
are set forth on Schedule 6.21 (or Section 6.21 of the Disclosure Schedule, as
the case may be). In addition, VIALOG shall indemnify each stockholder, in
accordance with Article 6 of this Agreement, for any and all additional tax
liability, in excess of the Estimated Additional Tax Liability, associated with
each such stockholder's Section 338(h)(10) Election. The Estimated Additional
Tax Liability will be calculated by VIALOG's accountants based on information
available as of the closing and will assume that each of the Company's
stockholders is in the highest federal and applicable state income tax brackets.
By April 15th of the year following the closing each of the Company's
stockholders agrees to provide VIALOG's accountants with all information
necessary to permit VIALOG's accountants to adjust the Estimated Additional Tax
Liability to reflect the stockholder's actual income tax brackets and all other
relevant tax information affecting these calculations (the "Final Additional Tax
Liability"). VIALOG's accountants will provide each of the stockholders with a
schedule showing their calculation of the Final Additional Tax Liability within
thirty (30) days after receipt of all necessary information from the
stockholder. VIALOG agrees to reimburse the Company's stockholders to the
extent that the Final Additional Tax Liability exceeds the Estimated Additional
Tax Liability, and each of the stockholders agrees to reimburse VIALOG to the
extent that the Estimated Additional Tax Liability exceeds the Final Additional
Tax Liability, such reimbursement to be made in each case within thirty (30)
days after the Final Additional Tax Liability is finally determined.
(b) The definition of "Financing Document" contained in Article 12 is
hereby amended by deleting it in its entirety and replacing it with a new
definition as follows:
Financing Document means the private offering circular furnished to
potential investors or financial institutions in connection with the Financing
(which may include the Registration Statement, the Prospectus, exhibits, and
financial statements, and any amendments thereto) and any securities of VIALOG
issued to consummate the Financing.
3. Except as specifically amended hereby, all other terms and provisions of
the Agreement shall remain in full force and effect.
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4. This Amendment shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.
EXECUTED as an instrument under seal as of the date first above written.
TELEPHONE BUSINESS VIALOG CORPORATION
MEETINGS, INC.
By: /s/ C. Raymond Marvin By: /s/ Glenn D. Bolduc
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Name: C. Raymond Marvin Name: Glenn D. Bolduc
Title: President Title: President
PRINCIPAL STOCKHOLDERS: TBMA ACQUISITION CORPORATION
/s/ C. Raymond Marvin By: /s/ Glenn D. Bolduc
- ---------------------------- ------------------------
Name: C. Raymond Marvin Name: Glenn D. Bolduc
Title: President
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DISCLOSURE SCHEDULE 6.21
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VIALOG PREP'D: BEECY
ACCESS ACQUISITION DATE: 10-17-97
1997 BOND OFFERING
- --------------------------------------------------------------------------------
ACQUISITION OF STOCK W/(S)998(h)(10) ELECTION
- ------------------------------
AS OF 12-31-96
- ------------------------------
TAX BASIS OF ASSETS:
CASH 803,988
A/R -
PREPAID EXPS -
FIXED ASSETS -
COST 3,641,590
TAX A/D (1,476,150)
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2,165,440
DEPOSITS 121,300
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TAX BASIS OF ASSETS 3,090,728
PROCEEDS ON (h)(10)
CASH 19,000,000
LIABS ASSUMED
A/P 141,000
CURR LTD 9,185
CURR LEASES 31,909
ACCRD EXPS 366,000
LTD 1,202,657
LEASES 47,605
DEFERRED RENT -
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1,798,356
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20,796,356
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GAIN UNDER (S)338(h)(10) 17,707,628
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CHARACTER OF GAIN:
ORD INC
(S)1245 DEPR RECAPTR 1,476,150
A/R 1,309,000
PREPAID EXPS 161,000
A/P (141,000)
ACCRD EXPS (366,000)
DEFERRED RENT -
(S)123] CAP GAIN 14,761,478
TOTAL (h)(10) GAIN 17,200,628
==========
TAX A/D AS FOLLOWS:
CUMLTV DTL AT 12-31-94 (123,209)
1995 TNBE M-1 (41,843)
1996 BNTE M-1 129,417
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CUMLTV DTL AT 12-31-96 (35,635)
BOOK A/D AT 12-31-96 (1,440,515)
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TAX A/D AT 12-31-96 (1,478,150)
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VIALOG PREP'D: BEECY
ACCESS ACQUISITION DATE: 10-17-97
1997 BOND OFFERING
________________________________________________________________________________
ANALYSIS OF GAINS
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AS OF 12-31-96
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BASIS OF STOCK:
S/H MARVIN MICHELA MENDES TOTAL
% OWNED EOY 97.000737% 1.499631% 1.499631% 100.000000%
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STOCK 1,446,513 74,948 74,946 1,596,407
DEBT 761,000 - - 761,000
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TOTAL 2,207,513 74,948 74,946 2,357,407
ALL OC SALES PRICE 18,430,140 284,930 284,930 19,000,000
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CAP GAIN ON STOCK SALE 16,222,627 209,982 209,984 16,642,593
====================================================
S/H MARVIN MICHELA MENDES TOTAL
% OWNED EOY 97.000737% 1.499631% 1.499631% 100.000000%
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TOTAL BASIS 2,207,513 74,948 74,946 2,357,407
ALLOCTD (h)(10) GAIN 16,684,736 257,946 257,946 17,200,628
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BASIS AFTER GAIN 18,892,249 332,894 332,892 19,558,035
S-CORP LIQ'G DISTRBTN 18,430,140 284,930 284,930 19,000,000
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LIQ'G DISTRBTN GAIN (LOSS) (462,109) (47,964) (47,962) (558,035)
====================================================
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VIALOG PREP'D: BEECY
ACCESS ACQUISITION DATE: 10-17-97
1997 BOND OFFERING
________________________________________________________________________________
TAXES ON ALTERNATIVES
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AS OF 12-31-96
- ----------------------------------
(h)(10) GAIN TAXES:
CHARACTER OF GAIN:
ORD INC. AMOUNT STATE RATE (a) FED RATE TOTAL TAX
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(S)1245 DEPR RECAPTR 1,476,150 9.50% 39.6% 724,790
A/R 1,309,000 9.50% 39.6% 642,719
PREPAID EXPS 161,000 9.50% 39.6% 79,051
A/P (141,000) 9.50% 39.6% (69,231)
ACCRD EXPS (366,000) 9.50% 39.6% (179,706)
DEFERRED RENT - 9.50% 39.6% -
(S)1231 CAP GAIN 14,761,478 9.50% 20.0% 4,354,636
LIQ'G DISTRTBTN G(L) (558,035) 9.50% 20.0% (164,620)
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TOTAL (h)(10) GAIN AND TAX 16,642,583 5,387,639
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CAPITAL GAIN TAXES:
AMOUNT STATE RATE (a) FED RATE TOTAL TAX
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GAIN ON STOCK SALE 16,642,593 9.50% 20.0% 4,909,565
========== =========
(h)(10) TAX greater than STOCK TAX 478,074
RECIPROCAL OF TAX RATE (b) 90.00%
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GROSS UP REQ'D FOR (h)(10) 597,593
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PROOF:
ORD INC. AMOUNT TAX ORD TAX CAPTL DIFF
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(S)1245 DEPR RECAPTR 1,476,150 724,790 435,464 289,326
A/R 1,309,000 642,719 386,155 256,584
PREPAID EXPS 161,000 79,051 47,495 31,556
A/P (141,000) (69,231) (41,595) (27,636)
ACCRD EXPS (366,000) (179,706) (107,970) (71,736)
DEFERRED RENT - - - -
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TOTAL ORD INC. 2,439,150 1,197,623 719,549 478,074
=================================================================
39.6% LESS 20% 19.6%
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TAX DIFFRNTL ON (h)(10) 478,073
RECPRCL ON CAP GAIN RATE 80%
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GROSS UP REQ'D 597,591
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(a) ASSUME NO FED SIT DEDCTN DUE TO INCOME PHASE OUT OF BENEFIT. ALSO ASSUMES DC
INC TAX RATE AS MARVIN IS RES OF DC AND THE RATE THERE IS HIGHER THAN VA. DC
GIVES CR FOR TAXES PAID TO OTHER JURIS.
(b) RECIPROCAL BASED ONLY ON CAPITAL GAINS RATE AS ANY ADDT'L CONSIDERATION RCVD
FOR GROSS UP ON THE TXN WILL BE (S)1231 CAP GAIN. STATE RATE IS CONSTANT, SO NO
GROSS UP REQ'D.
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