ADDENDUM AND MODIFICATION TO
ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
On December 30, 2003, X-Xxx.Xxx, Inc., a Colorado corporation ("H-NET")
and Donobi, Inc., a Washington corporation ("DONOBI") entered into an
Acquisition Agreement and Plan of Reorganization which set forth the terms and
conditions upon which DONOBI is to be acquired by and become a wholly owned
subsidiary of H-NET. As part of the Acquisition Agreement and Plan of
Reorganization, XXXXXX agreed to exchange all of the issued and outstanding
voting common stock of DONOBI for 13,558,750 shares of the voting $.001 par
----------
value common stock of H-NET. The Closing Date set forth in the Acquisition
Agreement and Plan of Reorganization was to be January 19, 2004. Concurrently
with the Acquisition Agreement and Plan of Reorganization, XXXXXX agreed to
enter into a Consulting Agreement with Xxxxxxxxx Xxxxxxxx (former CFO of H-NET)
and prepared a Promissory Note, to guaranty payment of the Consulting Agreement.
Due to intervening circumstances, the Closing could not occur on the
intended date. Now, the Parties wish to complete the transaction, consummate the
acquisition of DONOBI by H-NET and implement all the terms and conditions of the
Acquisition Agreement and Plan of Reorganization, with the following
modifications contained in this Addendum to the Acquisition Agreement and Plan
of Reorganization.
1. All of the terms of the original Acquisition Agreement and Plan of
Reorganization, executed by the parties on or about December 30, 2003,
shall remain in full force and effect as to all matters set forth therein
except as to the limited and specific items contained in this Addendum.
2. Closing of the transaction shall be modified to take place on FEBRUARY 15,
2004.
3. The Consulting Agreement and Promissory Note shall be modified by reducing
the consulting fee and promissory note principal amount by $50,000.00. All
payment dates and other terms therein shall remain unchanged.
4. All resignations and appointments of H-NET directors and officers shall be
effective as of the modified closing date, FEBRUARY 15, 2004.
5. All representations, warranties and covenants of all Parties shall be
effective up to and including the modified closing date.
6. The Stock Purchase Agreement, dated January 29, 2004, for the acquisition
of the Canadian Subsidiaries shall be effective as of the modified closing
date.
7. DONOBI shall hold $30,000.00 in a segregated account for the benefit of
Xxxxxxxxx Xxxxxxxx. Said sum is held as a contingency fund for the purpose
of settling or resolving any outstanding claims against X-Xxx.Xxx, Inc.,
including without limitation, certain litigation in the State of New York
initiated by Xxxxxx Xxxxxxx, Esq., against Xxxxx Xxxxxxxx and X-Xxx.Xxx,
Inc. DONOBI shall have exclusive control over the contingency funds and
shall have sole and unilateral discretion to negotiate, settle and pay out
funds in full or partial satisfaction of any outstanding claims. One year
after the modified closing date, DONOBI shall give an accounting to
Xxxxxxxxx Xxxxxxxx and any amount remaining from the contingency funds that
have not been paid as discussed herein, shall be paid to Xxxxxxxxx
Xxxxxxxx. The amount discussed herein shall not bear any interest.
Notwithstanding anything to the contrary herein contained, DONOBI shall not
disburse any moneys from the said contingency fund without the prior
written consent of Xxxxx Xxxxxxxx, whose consent shall not be unreasonably
withheld. In the event that Xxxxx Xxxxxxxx or X-Xxx.Xxx, Inc. obtain a
declaratory order of the New York State Court in the action in Niagara
County stating that X-Xxx.Xxx, Inc. (the Colorado Corporation) is not
responsible for the judgment obtained against Xxxxx Xxxxxxxx and
Alphabytes, Index No. 105963-00, and said order is not appealed by February
15, 2005, then the full balance of the contingency fund shall be released
to Xxxxxxxxx Xxxxxxxx. If Xxxxx Xxxxxxxx and/or X-Xxx.Xxx, Inc. are
successful at the initial court determination in Niagara County New York
State by February 15, 2005, and if Xxxxxx, Xxxxx, et al appeal the said
court decision within the same time period provided for appeal, the full
balance of the contingency fund shall continue to be held by Xxxxxx, Inc.
in escrow pending the determination or abandonment of all appeals and paid
out to Xxxxxxxxx Xxxxxxxx if Xxxxx Xxxxxxxx and/or X-Xxx.Xxx, Inc. are
successful in upholding the said order of the Niagara County Court in their
favor.
8. XXXXX XXXXXXXX, as holder of 4.99% of the issued and outstanding shares,
does hereby agree to the following resale restrictions as to the shares
held by him or his assign:
X. Xxxxx to May 1, 2004, no sales of shares by Xxxxx Xxxxxxxx;
B. From May 1 through May 31, 2004, Xxxxx Xxxxxxxx or assign, may sell up
to 100,000 shares of HNNT stock;
C. From June 1 through June 30, 2004 Xxxxx Xxxxxxxx or assign, may sell
up to 100,000 shares of HNNT stock;
D. From July 1 through July 31, 2004 Xxxxx Xxxxxxxx or assign, may sell
up to 100,000 shares of HNNT stock; and
X. Xxxxx to any sales hereunder, Xxxxx Xxxxxxxx or assign does hereby
grant an option to DONOBI, or its assign, to purchase the particular
shares to be sold at that time, at a price of $3.00 per share. Said
option shall be valid for a period of 24 hours and may be exercised by
written confirmation and tender of the purchase amount to Xxxxx
Xxxxxxxx or assign against delivery of the shares.
Sales limitations are cumulative and amounts entitled but not sold in any
monthly period may be carried over and added to a subsequent monthly period.
These resale restrictions shall be binding upon any transferee who receives
shares from Xxxxx Xxxxxxxx. The costs of verification of this provision shall be
borne by DONOBI.
Xxxxxx to and accepted as of FEBRUARY 15, 2004.
DONOBI , INC., a Washington Corporation
By: /s/ Xxxxxxx X. Xxxxxx, III
------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: President & CEO
X-XXX.XXX, INC., a Colorado Corporation
By: /s/ Xxxxx Xxxxxxxx
--------------------
Name: Xxxxx Xxxxxxxx
Title: President & CEO
By: /s/ Xxxxx Xxxxxxxx
--------------------
Xxxxx Xxxxxxxx, an individual
