AMENDMENT NO. 1 TO AMENDED AND RESTATED AGREEMENT
AND PLAN OF MERGER
This AMENDMENT NO. 1 TO AMENDED AND RESTATED AGREEMENT AND PLAN OF
MERGER (this "Amendment") is made and entered into this 1st day of March 2000,
among Xxxxx Systems, Inc., a Texas corporation ("EVSI"), I-Net Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of EVSI ("Sub"),
I-Net Holdings, Inc., a Delaware corporation (the "Company"), and those
shareholders of the Company (the "I-Net Shareholders") listed on Schedule I to
the Agreement (as defined below).
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend that certain Amended and Restated
Agreement and Plan of Merger, dated as of January 31, 2000 (the "Agreement"),
among EVSI, Sub, the Company and the I-Net Shareholders, as follows:
Section 1. Defined Terms. All capitalized terms used but not defined in
this Amendment have the respective meanings ascribed to such terms in the
Agreement.
Section 2. Amendments.
(a) The first sentence of Section 2.1(d) of the Agreement is
hereby deleted in its entirety and replaced with the following:
"Each Company Share outstanding immediately prior to
the Effective Time (other than the Company Shares
described in Sections 2.1(a) and 2.1(b)) shall be
converted into the right to receive the number of
fully paid and nonassessable shares (the "EVSI
Shares") of EVSI common stock, $.01 par value (the
"EVSI Common Stock") equal to (i) the sum of (A)
15,000,000 and (B) the number of Company Shares
issuable pursuant to the Existing Company Option (as
defined below) and (C) the number of Company Shares
issuable pursuant to the Future Employee Options (as
defined in Section 6.1) and (D) the number of Company
Shares issuable pursuant to Company Warrants (as
defined below) (the sum being the "Merger
Consideration"), divided by (ii) the sum of (A) the
number of Company Shares issued and outstanding
immediately prior to the Effective Time and (B) the
number of Company Shares issuable pursuant to the
Existing Company Option and (C) the number of Company
Shares issuable pursuant to the Future Employee
Options and (D) the number of Company Shares issuable
pursuant to Company Warrants (the quotient being the
"Exchange Ratio")."
(b) The following new Section 2.1 (f) is added to the
Agreement:
"(f) At the Effective Time, each outstanding warrant
(the "Company Warrants") to purchase or acquire
Company Shares shall be converted into a warrant to
purchase the number of shares of EVSI Common Stock
equal to the Exchange Ratio times the number of
Company Shares issuable pursuant to the Company
Warrants, at an exercise price per share equal to the
exercise price for each such share of Company Shares
subject to a warrant divided by the Exchange Ratio,
and all references in each such warrant to the
Company shall be deemed to refer to EVSI, where
appropriate."
(c) In the ninth line of Section 3.6 (b), following "Future
Employee Options (as defined below)," the following is hereby added:
", the Company Warrants and Company Convertible
Debt".
(d) The last sentence of Section 5.7(a) of the Agreement is
hereby deleted in its entirety and replaced with the following:
"A total of 456,500 shares of EVSI Common Stock have
been reserved for issuance pursuant to the stock
options and awards described in Section 5.7(b)."
(e) Section 5.7(b) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"As of March 1, 2000, there were outstanding options
to purchase an aggregate of 456,500 shares of EVSI
Common Stock, of which, (i) options to purchase
170,000 shares of EVSI Common Stock were immediately
exercisable as of such date and (ii) options to
purchase 286,500 shares of EVSI Common Stock will
become exercisable following the approval of the EVSI
2000 Stock Option Plan at the EVSI Shareholders
Meeting (as defined below)."
(f) in the second line of Section 6.1(c), following "(the
"Future Employee Options")", the following is hereby added:
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", the Company Warrants and Company Convertible Debt"
(g) The first sentence in Section 8.12 is hereby deleted in
its entirety and replaced with the following:
"The Company shall seek to complete in a single
transaction or series of transactions a private
placement of (i) Company Common Stock, (ii) preferred
stock, par value $.001 per share, of the Company
("Company Convertible Preferred") which shall convert
into Company Common Stock immediately prior to the
Effective Time (as more fully described on Schedule
6.1), (iii) debt which is convertible into Company
Common Stock ("Company Convertible Debt") as more
fully described on Schedule 6.1) or (iv) Company
Warrants, resulting in at least $15.0 million in net
proceeds on or before the Effective Time (the
"Company Financing"); provided, however, that the
Company may not, without the prior written consent of
EVSI, issue more than 9,000,000 shares of Company
Common Stock (including shares of Company Common
Stock issuable upon conversion of Company Convertible
Preferred or Company Convertible Debt or shares of
Company Common Stock issuable upon conversion of
Company Warrants) to consummate the Company
Financing."
(h) Section 9.1(e) of the Agreement is hereby deleted in its
entirety.
(i) Number 1 on Schedule 6.1 to the Agreement is hereby
deleted in its entirety and replaced with the following:
"1. Solicit, enter into agreements for, and raise in
a transaction or series of transactions an aggregate
of $15,000,000 in a private placement or private
placements of Company Common Stock, Company
Convertible Preferred, Company Warrants or Company
Convertible Debt. Any shares of Company Convertible
Preferred and any Company Convertible Debt issued in
such private placement shall automatically convert to
Company Common Stock concurrently with or prior to
the Effective Time. For purposes of calculating the
Exchange Ratio in Section 2.1, all shares of Company
Convertible Preferred and Company Convertible Debt
outstanding immediately prior to the Effective Time
shall be considered Company Shares. The Company may
issue Company Warrants to purchase up to 3,000,000
Company Shares at an exercise price of not less than
$1.00 per share to consummate the Company Financing.
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(j) Number 4 on Schedule 6.1 is hereby amended to change the
exercise price for the options from $5.00 per share to $2.125 per share. Also,
the reference to "three years" is changed to "no less than two years." In
addition the following new subsection (i) is added to Number 4 on Schedule 6.1:
"(i) Xxxxx Xxxxxxx - 300,000".
(k) Number 5 on Schedule 5.1 is hereby amended to change the
additional options that can be issued from 325,000 to 25,000 and to change the
exercise price per shares from $5.00 to $2.125.
(l) Schedule 8.9 to the Agreement is hereby deleted and
replaced in its entirety with Exhibit A to this Amendment.
(m) Exhibit B to the Agreement is hereby amended to provide
that the term of the employment agreement with Xx. Xxxxxxx X. Xxxxx, Xx., as
amended, shall be 12 months rather than 18 months and that X. X. Xxxxx, Xx. will
not be an officer or director of EVSI upon consummation of the Merger.
Section 3. Effect. Except as amended by this Amendment, the Agreement
remains in full force and effect and nothing herein shall affect, or be deemed
to be a waiver of, the other terms and provisions of the Agreement.
Section 4. Counterpart Originals. This Amendment may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument. This Amendment shall be
effective when it has been executed by each of the parties either in person or
by facsimile.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX SYSTEMS, INC.
By: /s/ X.X. Xxxxx, Xx.
-----------------------------------
Name: X.X. Xxxxx, Xx.
Title: President
I-NET ACQUISITION CORP.
By: /s/ X.X. Xxxxx, Xx.
-----------------------------------
Name: X.X. Xxxxx, Xx.
Title: President
I-NET HOLDINGS, INC.
By: /s/ Xxxxxxx Xxx
-----------------------------------
Name: Xxxxxxx Xxx
Title: President
PRINCIPAL SHAREHOLDER:
/s/ Xxxxxxx Xxx
--------------------------------------
Xxxxxxx Xxx
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Exhibit A
Schedule 8.9
EVSI Officers and Board of Directors
At the Effective Time, the Board of Directors of EVSI shall consist of
the following Persons:
Xxxxxxx Xxx
Xxxxx Xxxxxx
Xxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxxxx
Xxxx Xxxxxxxx
The officers of EVSI shall consist of the following Persons:
Xxxxxxx Xxx - Chairman of the Board and Chief
Executive Officer
Xxxxx Xxxxxxxx - Chief Financial Officer
Xxx Xxxxxx - Vice President
