1
FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION dated as of
February 1, 1999 (the "First Amendment"), is made, and hereby amends that
certain Agreement and Plan of Reorganization dated December 30, 1998 (the
"Original Agreement"), by and between QUASAR PROJECTS COMPANY, a Delaware
corporation (the "Company"), DIVA ACQUISITION CORP., a Florida corporation
("DAC"), DIVA ENTERTAINMENT, INC., a Florida corporation ("Diva"), and J R
CONSULTING, INC., a Nevada corporation (the "Shareholder").
1. Section 1.3 (c) of the Original Agreement is hereby amended in its
entirety to read as follows:
(c) The Company shall deliver the resignation of all of its current
officers and directors, and a board resolution electing Xxxxx
Xxxxxxxxx, Xxxxx Xxxx and Xxxx Xxxxxxx to the Board of Directors of
the Company.
2. Section 5.1 (g) of the Original Agreement is hereby amended in its
entirety to read as follows:
(g) At the Closing, 703,800 shares of the Company's currently
outstanding Common Stock (the "Escrow Shares") shall be placed in
escrow with the counsel for the Company pursuant to an escrow
agreement in substantially the same form as the escrow agreement
attached hereto as Exhibit 4-A and made a part hereof. Until an
aggregate of $1,342,440 has been received by the Company pursuant to
the private placement of the Company's Series A Convertible Preferred
Stock, none of the Escrow Shares shall be released from escrow. As
additional amounts in excess of $1,342,440 are raised in the private
placement, the corresponding portion of the Escrow Shares be released
from escrow. The number of such shares to be released from escrow
shall equal 1,273,800 multiplied by a fraction, the numerator of which
shall be the excess of the dollar amount raised to that date in the
private placement of Series A Convertible Preferred Stock over
$1,342,440 and the denominator of which shall be 3,000,000. The
portion of the $442,000 received from the Diva Subscribers that is not
returned to the Diva Subscribers shall be included in the amount
raised only when the aggregate amount raised, exclusive of that
$442,000, exceeds $1,500,000. If the two private placements of Series
A Convertible Preferred Stock contemplated by this Agreement result in
less than $3,000,000 net proceeds to the Company, then any shares of
the Company's Common Stock still remaining in escrow shall, at the
sole option of the Company's Board of Directors by a unanimous vote,
either be delivered to the Company for cancellation or be restricted
as to transferability to the extent that the Company's Board of
Directors in its sole discretion by a unanimous vote deems appropriate
and returned to their respective holders of record.
2
3. Section 5.1(h) of the Original Agreement is hereby amended in its
entirety to read as follows:
(h) The Shareholder and the Company shall have entered into an Option
Agreement in substantially the same form as Exhibit 5-A attached
hereto and made a part hereof, which Option Agreement provides that
the Shareholder shall have the right to purchase such additional
number of shares of the Company's Common Stock at a purchase price of
$.001 per share as shall be necessary to maintain the Shareholder's
percentage of ownership of record of the outstanding shares of the
Company's Common Stock, exclusive of any shares of such Common Stock
received by Shareholder from the conversion of any shares of the
Series B Redeemable Convertible Preferred Stock and before any
dispositions of such Common Stock except for shares of Common Stock
received by the Shareholder from the conversion of shares of the
Series B Redeemable Convertible Preferred Stock, at no less than 65%
plus an additional 1% multiplied by a fraction, the numerator of which
shall be $3,000,000 minus the dollar amount raised to that date in the
private placement of the Company's Series A Redeemable Convertible
Preferred Stock and the denominator of which shall be 85,714.
4. Section 5.1(j) of the Original Agreement is hereby amended to
replace the reference to Exhibit 6 therein to Exhibit 6-A.
5. Section 6.4(b) of the Original Agreement is hereby amended in its
entirety to read as follows:
(b) All expenses incurred in any registration of the Holders'
Registrable Securities under this Agreement shall be paid by the
Company, including without limitation, printing expenses, fees and
disbursements of counsel for the Company, expenses of any special
audits to which the Company shall agree or which shall be necessary to
comply with governmental requirements in connection with any such
registration, all registration and filing fees for the Holders'
Registrable Securities under federal and state securities laws, and
expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to subsection (a)(iv) of this section;
provided, however, the Company shall not be liable for:
(i) any discounts or commissions to any underwriter in
connection with the sale of such Holders' Registrable
Securities;
(ii) any stock transfer taxes incurred with respect to
Registrable Securities sold; or
(iii) the fees and expenses of counsel for any Holder.
6. Exhibit 6-A attached hereto and made a part hereof replaces
Exhibit 6 to the Original Agreement.
2
3
Except as amended hereby, the Original Agreement shall remain the same
and in full force and effect.
IN WITNESS WHEREOF, this First Amendment has been duly executed and
delivered by the parties hereto as the date first above written.
QUASER PROJECTS COMPANY, a Delaware
corporation
By: /s/ Jehu Hand
-----------------------------------
Name: Jehu Hand
Title: President
DIVA ENTERTAINMENT, INC., a Florida
corporation
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
DIVA ACQUISITION CORP., a Florida
corporation
By:
-----------------------------------
Name: Jehu Hand
Title: President
J R CONSULTING, INC., a Nevada
corporation
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
3
