Exhibit 2.2(a)
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (this
"Amendment"), dated as of November 28, 2003, is entered into by and among LCS
Group, Inc., a Delaware corporation ("LCS"), LCS Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of LCS ("Merger Sub"), Conversion
Services International, Inc., a Delaware corporation ("CSI") and the persons
listed on the signature pages hereof under the caption "Affiliated CSI
Stockholders" (the "Affiliated CSI Stockholders", and, together with LCS, Merger
Sub and CSI, the "Parties").
WHEREAS, the Parties are parties to that certain Agreement and Plan of
Reorganization, dated as of August 21, 2003 (the "Agreement");
WHEREAS, pursuant to Section 11.5 of the Agreement, amendments to the
Agreement may be made only by the written agreement of all of the Parties; and
WHEREAS, the Parties desire to enter into this Amendment in order to
memorialize certain amendments to the Agreement that have been agreed to by the
Parties.
NOW, THEREFORE, in light of the foregoing and intending to be legally
bound, the Parties hereby amend the Agreement as follows:
1. Capitalized Terms. Unless otherwise defined herein, all capitalized
terms used but not defined herein shall have the meanings ascribed such terms in
the Agreement.
2. Amendment to Closing Date. To effect the extension of the Closing Date
from December 31, 2003 to January 31, 2004, the Parties hereby agree to the
following amendments to the Agreement:
(a) Section 2.3 of the Agreement is hereby amended by deleting the date
"December 31, 2003" appearing in the fourth line thereof and replacing such date
with "January 31, 2004."
(b) Section 11.1(b) of the Agreement is hereby amended by deleting the
date "December 31, 2003" appearing in the first line thereof and replacing such
date with "January 31, 2004."
3. Amendment to LCS Certificate of Incorporation. Section 2.5(a) of the
Agreement is hereby deleted in its entirety and replaced with the following
provision in lieu thereof:
"(a) LCS. The certificate of incorporation and bylaws of LCS in effect
immediately prior to the Effective Time shall remain in full force and effect
after the Effective Time; provided, however, that as of the Effective Time, LCS
shall take all actions necessary to amend the certificate of incorporation of
LCS in order to: (i) change the name of LCS to Conversion Services
International, Inc., (ii) authorize an increase in the total number of shares of
capital stock of LCS to one billion twenty million (1,020,000,000) shares; (iii)
authorize an increase in the number of shares of Common Stock LCS is authorized
to issue to one billion (1,000,000,000) (the
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"Authorization Increase"); (iv) authorize the issuance of twenty million
(20,000,000) shares of "blank check" preferred stock, par value $0.001 per
share; (v) amend the provisions thereof regarding director liability on terms
agreed to by the parties; and (vi) add a provision for director and officer
indemnification on terms agreed to by the parties (all such amendments,
collectively, the "Amended COI Matters")."
4. LCS Directors and Officers. Section 2.6(a) of the Agreement is hereby
deleted in its entirety and replaced with the following provision in lieu
thereof:
"(a) LCS. As of the Effective Time, the parties hereto shall take all
actions necessary to cause the following to be effected: (i) the directors of
LCS shall be comprised of those persons nominated by CSI's principals and
elected by the stockholders of LCS at the LCS Stockholders' Meeting and
referenced as such in the Proxy Statement, and no other persons, (ii) the
officers of CSI as of the Closing Date shall be appointed as the officers of
LCS, and (iii) the officers and directors of LCS prior to the Effective Time
shall resign."
5. Amendment to Purchase Price. Section 2.7(b)(i) of the Agreement is
amended by striking the words "four hundred and fifty million (450,000,000)"
beginning in the tenth line thereof and replacing such words with "five hundred
million (500,000,000)."
6. Amendment to date of LCS' latest Form 10-QSB. Section 5.12 of the
Agreement is hereby amended by deleting the date "May 31, 2003" appearing in the
second and fifth lines thereof and replacing such date with "August 31, 2003."
7. Capitalization of LCS at Closing. Section 7.11 of the Agreement is
hereby deleted in its entirety and replaced with the following provision in lieu
thereof:
"7.11 LCS Capitalization After Closing. Immediately following the
Effective Time (assuming the approval at the LCS Stockholders' Meeting of the
Amended COI Matters), and by reason of the transactions contemplated by this
Agreement and undertaken at the Closing, the Common Stock ownership of LCS shall
be as follows:
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Amount of Percentage of Total
Holder(s) Common Stock Owned Outstanding Common Stock(1)
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Xxxxx Xxxxxx 300,000,000(2) 50.6%
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Xxxxx Xxxxxxx 150,000,000 25.3%
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Former CSI Note Holders 50,000,000 8.4%
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All LCS Stockholders Prior
to the Effective Time 93,000,000(3) 15.7%
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TOTAL 593,000,000(4) 100.00%
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1. Rounded to the nearest tenth. Subject to adjust as provided for in
footnote 3.
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2. Excludes 50,000 shares owned by Xxxxx Xxxxxx as of the date hereof.
3. The Parties agree that this amount includes the maximum number of shares
of LCS Common Stock to be issued on or prior to the Closing to certain
creditors of LCS (the "LCS Creditors"), including but not limited to
Xxxxxxx Xxxxxxxx and Xxxx Xxxxx, LCS' two executive officers, and in
accordance with commitments by LCS to issue shares of its Common Stock
when the Authorization Increase has been approved by the LCS stockholders
(the recipients thereof herein referred to as the "LCS Common Stock
Recipients").
The Parties further acknowledge and agree that: (i) anything to the
contrary in the Agreement notwithstanding, (ii) assuming the Authorization
Increase, and (iii) by reason of the issuance of Common Stock to the LCS
Common Stock Recipients:
(a) as of the Effective Date, no more than 43,779,824 shares of LCS
Common Stock (the "Recipient Stock") shall be issued to the LCS Common
Stock Recipients and no more than 93,000,000 shares of LCS Common Stock in
the aggregate shall be issued and outstanding ;
(b) LCS shall have no obligation to issue any additional shares of
its Common Stock, except for the 500,000,000 shares to be issued to the
CSI Stockholders as provided in this Agreement;
(c) Xxxxxxx Xxxxxxxx shall receive no more than 18,313,157 shares of
Common Stock (the "Xxxxxxxx Stock") at the Closing;
(d) the number of shares of Common Stock comprising the Recipient
Stock shall be reduced, at a rate of $0.03 per share, for every dollar
less than $650,000 that the LCS Creditors may advance to the Company prior
to the Closing;
(e) the number of shares of Common Stock comprising the Xxxxxxxx
Stock shall be reduced (and the shares to the LCS Creditors shall be
increased), at a rate of $0.03 per share, for every dollar over $650,000
that the LCS Creditors may advance to the Company prior to the Closing;
and
(f) all indebtedness of LCS and any Affiliates thereof to the LCS
Creditors shall either be converted into LCS Common Stock or forgiven at
or prior to the Closing.
3. Subject to downward adjustment as provided for in footnote 4 above."
8. Amendment to LCS Closing Conditions. Section 9.2 is amended to add the
following subparagraph at the conclusion of such Section:
"(h) Simultaneously with or prior to the Closing, CSI shall have lawfully
effected the merger of its affiliate, Doorways, Inc., with and into CSI, with
CSI remaining as the surviving corporation following such merger."
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9. Amendment to CSI Closing Conditions. Section 9.3 is amended to add the
following subparagraphs at the conclusion of such Section:
"(j) Simultaneously with or prior to the Closing, LCS shall have
liquidated, sold, merged, reorganized and/or otherwise disposed of its
subsidiary, LCS Golf, Inc., or all of the outstanding indebtedness owed by such
entity, such that all outstanding indebtedness owed by such entity shall no
longer be owed, directly or indirectly, by such entity or LCS and would not
appear on the consolidated financial statements of LCS if such statements were
prepared in accordance with GAAP as of the Closing Date.
(k) The directors nominated by the principals of LCS to serve on the board
of directors of LCS following the Merger shall have been duly elected by the
stockholders of LCS at the LCS Stockholders' Meeting and all of the actions
contemplated by Section 2.6(a) hereof shall have been effected.
(l) Simultaneously with or prior to the Closing, LCS and/or CSI shall have
entered into registration rights agreements with the former CSI Note Holders,
the LCS Creditors and the LCS Common Stock Recipients, the terms of such
agreements to be agreed to in good faith by the applicable parties, it being
understood and agreed that such registration rights agreements shall provide the
former CSI Note Holders and Xxxxxxx Xxxxxxxx with no less than one (1) demand
registration right and unlimited "piggyback" registration rights and the other
LCS Creditors and the LCS Common Stock Recipients with unlimited "piggyback"
registration rights."
10. Certain Conforming Amendments. The following sections of the Agreement
are amended to reflect the amendments to the Agreement effected hereby:
(a) Section 3.28 of the Agreement is amended by striking the words
"Authorization Increase" in the fourth line thereof and replacing such words
with "Amended COI Matters, the Stock Option Plan and the election of directors
and other matters contemplated by Section 2.6(a) hereof."
(b) Section 5.3 of the Agreement is hereby amended by striking the words
"except to amend the certificate of incorporation of LCS to increase the number
of shares of Common Stock it is authorized to issue to one billion
(1,000,000,000) (the "Authorization Increase")" beginning in the fifth line
there and replacing such words with "except to amend the certificate of
incorporation of LCS to effect the Amended COI Matters."
(c) Section 5.4 of the Agreement is amended by striking the words
"Authorization Increase" in the third line thereof and replacing such words with
"Amended COI Matters."
(d) Section 5.31 of the Agreement is amended by striking the words
"Authorization Increase" in the third line thereof and replacing such words with
"Amended COI Matters."
(e) Section 7.10 of the Agreement is hereby deleted in its entirety and
replaced with the following:
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"Section 7.10 Amended COI Matters and Approval of Stock Option Plan. LCS
shall use its best efforts to effect the Amended COI Matters and obtain
stockholder approval of a stock option plan (the "Stock Option Plan") acceptable
to CSI and the Affiliated CSI Stockholders."
(f) The first sentence of Section 8.1(a) of the Agreement is hereby
deleted in its entirety and replaced in lieu thereof with the following: "As
promptly as practicable after the date of this Agreement, LCS shall prepare and
cause to be filed with the Commission the Proxy Statement with respect to the
Amended COI Matters, the Stock Option Plan and the election of LCS directors
nominated by CSI's principals as contemplated by Section 2.6 hereof."
(g) Section 9.3(f) of the Agreement is hereby deleted in its entirety and
replaced with the following provision in lieu thereof:
"(f) At Closing, LCS shall have effected the Amended COI Matters and,
excluding all treasury shares, it shall have 93,000,000 shares of LCS Common
Stock issued and outstanding on a fully-diluted basis (subject to downward
adjustment as provided for herein), excluding the shares of LCS Common Stock to
be issued as part of the Purchase Price."
(h) Section 11.1(e) of the Agreement is amended by striking the words
"Authorization Increase is" in the seventh line thereof and replacing in lieu
thereof such words with "Amended COI Matters are."
(i) The definition of "Authorization Increase" appearing on Annex A to the
Agreement is deleted and replaced in lieu thereof with the following:
"Authorization Increase" has the meaning set forth in Section 2.5(a)."
11. No Further Amendment. Except as amended hereby, the Agreement remains
unchanged and in full force and effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Amendment to the
Agreement and Plan of Reorganization to be duly executed as of the date first
above written.
LCS GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: President
LCS ACQUISITION CORP.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: President
CONVERSION SERVICES INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer
AFFILIATED CSI STOCKHOLDERS:
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
