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
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made and entered into as of March 1, 2002, by and among WatchGuard Technologies,
Inc., a Delaware corporation ("Acquiror"), River Acquisition Corporation, a
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California corporation and direct wholly owned subsidiary of Acquiror ("Merger
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Sub"), RapidStream, Inc., a California corporation (the "Company"), and Wai San
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Loke, as representative of the shareholders of the Company (the "Shareholder
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Representative"), and amends that certain Agreement and Plan of Merger, dated as
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of February 6, 2002 (the "Merger Agreement"), by and among Acquiror, Merger Sub,
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the Company and, for purposes of Section 6.16 only, ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Lin and ▇▇▇▇ Ji-▇▇▇▇ ▇▇. Acquiror, Merger Sub, and the Company are sometimes
referred to herein, individually, as a "Party," and, collectively, as the
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"Parties."
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RECITALS
A. The Company instituted a mandatory ten percent work schedule reduction
and a corresponding ten percent pay decrease (the "Schedule Reduction") between
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July 16, 2001 and February 15, 2002 for all of its employees, with the exception
of commissioned sales personnel (the "Non-Sales Employees").
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B. In anticipation of the Merger and with the permission of Acquiror, the
Company cancelled the Schedule Reduction effective as of February 16, 2002.
C. In anticipation of the Merger and with the permission of Acquiror, on
February 26, 2002 the Company paid an aggregate of $163,272.49 to the Non-Sales
Employees for accrued liabilities and $12,256.08 in employer payroll taxes
relating to the Schedule Reduction.
D. Acquiror and the Company each have the right to terminate the Merger
Agreement and abandon the Merger under certain circumstances specified in
Section 7.1 of the Merger Agreement.
E. In the absence of the transactions contemplated by the Merger Agreement,
the Company would neither have cancelled the Schedule Reduction nor paid the
foregoing amounts due to business uncertainties.
F. The Merger Agreement provides that the Merger Consideration shall be
distributed among the holders of the Company's capital stock as set forth on
Annex II to the Merger Agreement, a copy of which is attached hereto as Exhibit
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A.
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G. Due to an error, if the Merger Consideration were to be so distributed
in accordance with Annex II, the holders of the Company's Series A Preferred
Stock would receive less Merger Consideration as a percentage of the aggregate
amount such holders have invested in the Company than the holders of the
Company's Series B Preferred Stock and Series C Preferred Stock would receive, a
result not intended by the Parties.
H. The Parties wish to amend the Merger Agreement to adjust the
distribution of consideration among the holders of each series of the Company's
Preferred Stock.
I. All terms used herein and not otherwise defined shall have the meanings
set forth in the Merger Agreement.
AGREEMENT
In consideration of the terms hereof, the Parties agree as follows:
ARTICLE I --AMENDMENTS TO MERGER AGREEMENT
1.1 Amendment Related to Effect of Termination
A new Section 7.2(e) is hereby inserted in the Merger Agreement immediately
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following Section 7.2(d), with such new Section 7.2(e) to read as follows:
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"(e) In the event of the termination of this Agreement pursuant to Section
7.1, Acquiror shall pay to the Company $175,528.57 by wire transfer of
immediately available funds, pursuant to wire instructions provided by the
Company, not later than five days after the date of such termination."
1.2 Amendment to Consideration Distribution Schedule
Annex II to the Merger Agreement is hereby replaced in its entirety with
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the Consideration Distribution Schedule attached hereto as Exhibit B.
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1.3 Additional Administrative Amendment
The following clause contained in Section 1.5 of the Merger Agreement is
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hereby deleted:
"except that such Articles of Incorporation shall be amended to change the
name of the Surviving Corporation to River, Inc."
ARTICLE II--GENERAL
2.1 Effect of Amendment
To the extent that there are any inconsistencies between this Amendment and
the Merger Agreement, the terms and conditions of this Amendment shall govern.
This Amendment amends only the provisions set forth herein and shall not
constitute an amendment, modification or waiver of any other provision of the
Merger Agreement. Except as otherwise expressly provided in this Amendment, the
provisions of the Merger Agreement shall remain in full force and effect.
2.2 Binding Commitments of the Parties; Effective Date.
Each of the provisions of this Amendment shall constitute a binding
commitment and agreement on the part of each of the Parties immediately upon the
execution of this Amendment by such Party and shall be effective as of the as of
the date first written above.
2.3 Headings
The descriptive headings contained in this Amendment are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Amendment.
2.4 Counterparts
This Amendment may be executed and delivered (including by facsimile
transmission) in counterparts, and by the different Parties in separate
counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
[Signature page follows]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first written above.
"Acquiror"
WATCHGUARD TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and Secretary
"Merger Sub"
RIVER ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
"Company"
RAPIDSTREAM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Chief Executive Officer
"Shareholder Representative"
WAI SAN LOKE
/s/ Wai San Loke
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Name: Wai San Loke
SIGNATURE PAGE TO AMENDMENT No. 1 TO MERGER AGREEMENT
Exhibit A
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Merger Agreement Annex II
Consideration Distribution Schedule
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Class/Series of Company Capital Stock Cash Consideration Value/1/ Stock Consideration Value/2/
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Common Stock $ 2,000,000 $ 7,000,000
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Series A Preferred Stock $ 1,050,000 $ 1,680,000
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Series B Preferred Stock $ 4,500,000 $ 7,200,000
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Series C Preferred Stock $ 9,450,000 $ 15,120,000
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Total $ 17,000,000 $ 31,000,000
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/1/ The Cash Consideration Value shall be reduced by the amount by which the
Company Expenses Estimate exceeds the Company Expense Cap, as provided in
Section 1.7.1(e). In the event of such an adjustment, the reduction in the Cash
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Consideration Value shall be made proportionately among each class and/or series
of Company Capital Stock.
/2/ The number of Aggregate Acquiror Shares is subject to adjustment as
provided in Section 1.7.1(f). In the event of such an adjustment, the reduction
shall be made proportionately among each class and/or series of Company Capital
Stock.
Exhibit B
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Consideration Distribution Schedule
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Class/Series of Company Capital Stock Cash Consideration Value/1/ Stock Consideration Value/2/
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Common Stock $ 2,000,000 $ 7,000,000
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Series A Preferred Stock $ 1,116,537 $ 1,786,459
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Series B Preferred Stock $ 4,465,856 $ 7,145,369
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Series C Preferred Stock $ 9,417,607 $15,068,172
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Total $17,000,000 $31,000,000
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/1/ The Cash Consideration Value applicable to each series of Company
Preferred Stock shall be reduced by the amount by which the Company Expenses
Estimate exceeds the Company Expense Cap, as provided in Section 1.7.1(e). In
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the event of such an adjustment, the reduction in the Cash Consideration Value
shall be made proportionately among each series of Company Preferred Stock.
/2/ The number of Aggregate Acquiror Shares is subject to adjustment as
provided in Section 1.7.1(f). In the event of such an adjustment, the reduction
shall be made proportionately among each class and/or series of Company Capital
Stock.
