Exhibit 2.2
Amendment No. 1 to Agreement and Plan of Merger
AMENDMENT NO.1 TO AGREEMENT AND PLAN OF MERGER
AMENDATORY AGREEMENT, dated as of June 27, 1995, by and
among ENTEX Information Services, Inc., a Delaware corporation
("Parent"), ENTEX Acquisition Corp., a Colorado corporation and
wholly owned subsidiary of Parent ("Sub"), and Random Access,
Inc., a Colorado corporation (the "Company").
WHEREAS, Parent, Sub and the Company are parties to an
Agreement and Plan of Merger, dated as of May 15, 1995 (the
"Agreement"); and
WHEREAS, the parties have mutually agreed that it is in
their respective best interests that the Agreement be amended as
provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment of Section 2.01 of the Agreement. Section
2.01 of the Agreement is hereby amended by deleting such Section
as it currently exists in its entirety and inserting in lieu
thereof the following:
Section 2.01. Conversion of Securities. Each
share of common stock, $0.0001 par value, of the
Company (the "Shares") issued and outstanding
immediately prior to the Effective Time, other than
Shares owned by Parent, Sub or any other wholly owned
subsidiary of Parent or held in the treasury of the
Company, all of which shall be canceled (collectively,
the "Canceled Shares"), and Shares held by Dissenting
Shareholders (as defined in Section 2.06 hereof)
(collectively, the "Dissenting Shares"), shall, by
virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to
receive $3.25 net to the holder in cash (the "Merger
Consideration"), payable to the holder thereof, without
interest thereon, upon the surrender of the certificate
representing such Share.
2. Amendment of Section 3.03 of the Agreement. Section
3.03 of the Agreement is hereby amended by deleting the third
sentence of such Section as it currently exists in its entirety
and inserting in lieu thereof the following:
Other than Total Access Limited Liability Company, a
Wyoming limited liability company ("Total Access"),
which is 88%-owned by the Company, all of the
outstanding shares of capital stock of each Subsidiary
are validly issued, fully paid and nonassessable and
owned directly or indirectly by the Company free and
clear of all liens, claims or encumbrances and were not
issued in violation of any preemptive right.
3. Amendment of Section 5.02 of the Agreement.
Section 5.02 of the Agreement is hereby amended by deleting such
Section as it currently exists in its entirety and inserting in
lieu thereof the following:
Section 5.02. Consolidated Net Worth.
(a) As promptly as practicable after the
date hereof, the Company will prepare and deliver to
Parent unaudited financial statements for the Company
and its consolidated subsidiaries as of May 31, 1995
(the "May 31 Financial Statements") and a report (the
"Tangible Net Worth Report") setting forth the amount
of the Tangible Net Worth of the Company as of May 31,
1995. The May 31 Financial Statements shall include
line items consistent with the financial statements of
the Company included in the Amended February 28 Form
10-Q and shall be prepared in accordance with
generally accepted accounting principles applied on a
consistent basis with those used in preparing the
financial statements included in the Amended
February 28 Form 10-Q.
(b) The May 31 Financial Statements shall be
audited by Parent's independent accountants, KPMG Peat
Marwick LLP ("KPMG Peat Marwick"), and the Company will
use its best efforts to cooperate with KPMG Peat
Marwick to enable such firm to complete its audit as
promptly as practicable and to express its opinion as
to the fairness of the presentation of the May 31
Financial Statements. The Company shall use its best
efforts to cause its independent accountants, Deloitte
& Touche LLP ("Deloitte & Touche"), to cooperate with
KPMG Peat Marwick in making available to KPMG Peat
Marwick all workpapers of Deloitte & Touche that KPMG
Peat Marwick may reasonably request in connection with
such audit. The Company will conduct a physical count
of all the inventory of the Company and its
consolidated subsidiaries as of May 31, 1995. This
physical count will be observed by KPMG Peat Marwick as
part of such firm's examination of the May 31 Financial
Statements in accordance with generally accepted
auditing standards. Representatives of Parent and
Parent's lenders shall have the right to observe such
count and to review the Company's compilation of such
physical inventory and the workpapers of KPMG Peat
Marwick relating to its observations of the physical
inventory conducted by the Company. The fees and
expenses of KPMG Peat Marwick in conducting such audit
shall be paid by the Company.
(c) As promptly as practicable after the
delivery by the Company of the May 31 Financial
Statements, KPMG Peat Marwick shall use its best
efforts to complete its audit of the May 31 Financial
Statements and to express its opinion thereon. Prior
to expressing its opinion, KPMG Peat Marwick shall
deliver to Parent and the Company a draft of the May 31
Financial Statements and its draft opinion thereon (the
"Audited Financial Statements"). KPMG Peat Marwick
shall also deliver to Parent the Tangible Net Worth
Report, together with a statement by KPMG Peat Marwick
to the effect that such report has been prepared in
accordance with generally accepted accounting
principles applied on a consistent basis with those
used in preparing the financial statements included in
the Amended February 28 Form 10-Q and the terms of this
Agreement. Representatives of the Company shall have
the opportunity to examine the workpapers, schedules
and other documents prepared or used by KPMG Peat
Marwick in connection with the draft report on the
audit of the May 31 Financial Statements and the
Tangible Net Worth Report.
(d) The Company shall have a period of
twenty (20) days after delivery of the draft Audited
Financial Statements and the draft Tangible Net Worth
Report to present in writing to Parent objections the
Company may have to the matters set forth therein,
which objections shall be set forth in reasonable
detail. If no objections are raised within such twenty
(20) day period, the draft Audited Financial Statements
and draft Tangible Net Worth Report shall be deemed
accepted and approved by the Company. If the Company
shall raise any objections within such twenty (20) day
period, and, Parent and the Company are unable to
resolve such dispute within ten (10) days after such
objections are raised, then the specific matters in
dispute shall be submitted to a nationally recognized
firm of independent accountants agreed upon by Parent
and the Company (the "Arbitrating Accountants"), which
firm shall make a final and binding determination as to
such matter or matters within ten (10) days after the
submission of such matters to such Arbitrating
Accountants. The fees and expenses of the Arbitrating
Accountants shall be borne equally by Parent and the
Company. The parties shall use their best efforts to
resolve all disputes with respect to the Audited
Financial Statements and the Tangible Net Worth Report
by August 15, 1995.
(e) For purposes of this Agreement, the
"Tangible Net Worth" of the Company shall mean the
stockholders' equity of the Company, reduced by amounts
reflected on the Company's balance sheet as "Other
Assets", including, but not limited to, franchise
rights and vendor authorizations, goodwill and other
intangible assets, and deposits, and giving effect to
(i) the acquisition by the Company of all of the
outstanding common stock of Advanced Systems and
Peripherals, Inc. ("ASAP"), and (ii) the payment of
accrued costs and settlement costs and legal fees and
expenses of approximately $175,000 (taking into account
applicable tax benefits) in connection with the
settlement of the Lane Litigation; provided, however,
that for purposes of determining such Tangible Net
Worth, the Company shall not be required to include as
additional goodwill as of May 31, 1995, any accrued
"earn-out" or additional purchase price consideration
payable by the Company in connection with the
acquisition of ASAP or the acquisition by the Company
on February 15, 1995 from Documatrix Corporation
("Documatrix") of certain assets (the "Documatrix
Assets"), and the assumption by the Company of certain
liabilities of Documatrix (the "Documatrix
Liabilities") in conjunction with the acquisition of
the Documatrix Assets. By way of example, Schedule
5.02(e) attached hereto sets forth a calculation of the
Tangible Net Worth of the Company as of February 28,
1995, based upon the pro forma balance sheet of the
Company as of such date set forth in Note 5 to the
financial statements included in the Amended February
28 Form 10-Q, and giving effect to the ASAP acquisition
and the settlement of the Lane Litigation as of such
date.
4. Amendment of Section 5.15 of the Agreement. Section
5.15 of the Agreement is hereby amended by deleting such Section
as it currently exists in its entirety and inserting in lieu
thereof the following:
Section 5.15. Directors' and Officers' Insurance. The
Company shall deliver to Parent a binder (the "D&O Insurance
Binder") validly obtained from an insurer approved by
Parent, evidencing such insurer's irrevocable commitment to
provide not less than $2.5 million of directors' and
officers' insurance covering the directors and officers of
the Company for the period beginning on June 8, 1995 and
ending not earlier the Effective Time and for non-
cancellable "tail" coverage for the period beginning at
Effective Time and ending not earlier than one year after
the Effective Time, and otherwise containing terms and
conditions (including, but not limited to, scope of
coverage) at least as favorable as the directors' and
officers' insurance policies covering the Company's
directors and officers in effect on May 15, 1995.
5. Addition of New Section 5.16 to the Agreement. The
Agreement is hereby amended by adding thereto a new Section
5.16, reading as follows:
Section 5.16. Documatrix Divestiture. The Company will
use its best efforts to negotiate, execute and deliver as
promptly as practicable one or more agreements or other
documents satisfactory in form and substance to Parent in
its sole discretion (the "Documatrix Divestiture
Documents"), pursuant to which the Company will divest its
entire right, title and interest in and to the Documatrix
Assets and will be relieved of substantially all the
Documatrix Liabilities, and to consummate the transactions
contemplated by the Documatrix Divestiture Documents on or
before August 11, 1995.
6. Amendment of Section 6.03(f) of the Agreement.
Subparagraph (f) of Section 6.03 of the Agreement is hereby
amended by deleting such Subsection as it currently exists in its
entirety and inserting in lieu thereof the following:
(f) The Tangible Net Worth of the Company as
reflected on the consolidated balance sheet of the
Company as of May 31, 1995, determined in accordance
with Section 5.02, shall be not less than $13,500,000;
7. Amendment of Section 6.03(l) of the Agreement.
Subsection (l) of Section 6.03 of the Agreement is hereby amended
by deleting such Subsection as it currently exists in its
entirety and inserting in lieu thereof the following:
(l) By not later than immediately prior to the
Effective Time, the Company and Milliken shall have
entered into a Purchase Agreement, and Total Access and
Milliken shall have entered into a Second Amendment to
the Operating Agreement of Total Access, each
substantially in the form of Annexes E-1 and E-2
hereto, pursuant to which the Company shall acquire
from Milliken all of his right, title and interest in
Total Access and the transactions contemplated by such
Purchase Agreement shall have been consummated;
8. Addition of new Section 6.03(n) to the Agreement.
The Agreement is hereby amended by adding thereto after
Subsection (m) of Section 6.03 thereof a new Subsection (n) of
Section 6.03 thereof, reading as follows:
(n) The Documatrix Divestiture Documents shall have
been executed and delivered and the transactions
contemplated thereby shall have been consummated;
The Agreement is further amended by renumbering
Subsections (n) through (q) of Section 6.03 of the Agreement as
they currently exist (prior to giving effect to addition of the
new Subsection (n) of Section 6.03 of the Agreement as described
in this Section 7, as Subsections (o) through (r) of Section
6.03, respectively.
9. Amendment of Annex C to the Agreement. Annex C to
the Agreement, the form of the Consulting Agreement to be entered
into by Parent, the Company and Bruce A. Milliken, is hereby
amended by deleting the whole thereof as it currently exists, and
substituting therefor the revised Annex C in the form attached
hereto.
10. Amendment of Annex E to the Agreement. Annex E to
the Agreement, the form of the Purchase Agreement to be entered
into by the Company and Bruce A. Milliken, is hereby amended by
deleting the whole thereof as it currently exists, and
substituting therefor revised Annexes E-1 and E-2 in the form
attached hereto.
11. Amendment of Section 8.01 of the Agreement. (a)
Subsection (b) of Section 8.01 of the Agreement is hereby amended
by deleting such Subsection as it currently exists in its
entirety and inserting in lieu thereof the following:
(b) If this Agreement is terminated as a result of the
occurrence of any of the events set forth below (a "Trigger
Event"):
(i) the Company shall have entered into, or shall
have publicly announced its intention to enter into, an
agreement or an agreement in principle with respect to
any Acquisition Proposal;
(ii) any representations or warranty made by the
Company in, or pursuant to, this Agreement shall not
have been true and correct in all material respects
when made and any such failures to be true and correct
could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect or
the Company shall have failed to observe or perform in
any material respect any of its obligations under this
Agreement;
(iii) the Board of Directors of the Company shall
have withdrawn or materially modified in a manner
adverse to Parent or Sub its approval or recommendation
of the Merger or this Agreement, in any such case
whether or not such withdrawal or modification is
required by the fiduciary duties of the Board of
Directors; or
(iv) the Company's shareholders shall have failed
to approve the Merger at the Shareholders' Meeting;
and, at the time of such termination, Parent is not in
breach of any material provision of this Agreement, then (A)
if such termination is due to a Trigger Event other than the
event described in subclause (ii) above, the Company shall
pay Parent promptly, but in no event later than two business
days after the termination of the Agreement, a cash
termination fee of $1,050,000, on account of fees, costs and
out-of-pocket expenses incurred by Parent or Sub (including,
without limitation, fees and expenses payable to all legal,
accounting, financial, public relations and other
professional advisors) arising out of, in connection with or
related to the Merger or the transactions contemplated by
this Agreement and (B) if such termination is due to a
Trigger Event described in subclause (ii) above the Company
shall pay to Parent a cash termination fee of $750,000, on
account of such fees, costs and out-of pocket expenses, of
which $500,000 shall be paid promptly, but in no event later
than two business days after the termination of the
Agreement, and the remainder shall be paid, without interest
thereon, fourteen months after the termination of the
Agreement.
(b) Subsection (c) of Section 8.01 of the Agreement is
hereby amended by deleting such Subsection as it currently
exists in its entirety and inserting in lieu thereof the
following:
(c) If this Agreement is terminated by reason of (i)
the failure by Parent to satisfy the condition contained in
Section 6.03(g) for any reason other than as a consequence
of a Company Material Adverse Effect, or (ii) the failure by
Parent to satisfy the condition contained in Section 6.03(i)
and, at the time of such termination, the Company is not in
breach of any material provision of this Agreement, then
Parent shall pay to the Company promptly, but in no event
later than two business days after the termination of this
Agreement by reason of the failure by Parent to satisfy
either of such conditions, a cash termination fee of
$750,000 on account of fees, costs and out-of-pocket
expenses incurred by the Company (including, without
limitation, fees and expenses payable to all legal,
accounting, financial, public relations and other
professional advisors) arising out of, in connection with or
related to the Merger or the transactions contemplated by
this Agreement, of which $500,000 shall be paid promptly,
but in no event later than two business days after such
termination, and the remainder shall be paid, without
interest thereon, fourteen months after such termination.
12. Defined Terms. Capitalized terms that are defined in
the Agreement and not otherwise defined in this Amendatory
Agreement shall have the meanings ascribed to them in the
Agreement.
13. Representations and Warranties Restated. Except as
set forth on Schedule A hereto, each and every representation and
warranty made by the parties to the Agreement is hereby restated
as of, and as if originally made on, the date hereof.
14. Agreement Remains in Force. Except as expressly set
forth in this Amendatory Agreement, the Agreement remains
unmodified and in full force and effect.
15. Counterparts; Effect. This Amendatory Agreement may
be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the
same agreement.
IN WITNESS WHEREOF, Parent, Sub and the Company have
caused this Amendatory Agreement to be signed by their respective
officers thereunto duly authorized as of the date first written
above.
ENTEX INFORMATION SERVICES, INC.
By: /s/ Robert R. Auray, Jr.
Name: Robert R. Auray, Jr.
Title: Executive Vice
President and Chief
Financial Officer
ENTEX ACQUISITION CORP.
By: /s/ Robert R. Auray, Jr.
Name: Robert R. Auray, Jr.
Title: Vice President
RANDOM ACCESS, INC.
By: /s/ Bruce A. Milliken
Name: Bruce A. Milliken
Title: Chairman
Schedule A
Add to Schedule 3.09:
15. Losses from operations for the fiscal quarter ended May
31, 1995, previously identified and disclosed to Parent,
currently estimated to be approximately $950,000 after
taxes.