FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
(the "Amendment") is made and entered into, effective on the date
set forth below, by and among AMERICOM USA, INC., a Delaware
corporation ("Parent Corporation"); KIOSK ACQUISITION, INC., a
Delaware corporation ("Acquiring Corporation"); KIOSK SOFTWARE,
INC., a California corporation ("Target Corporation"); and ▇▇▇▇
▇▇▇▇▇▇ ("Principal Shareholder"), with reference to the following
facts:
RECITALS:
A. Parent Corporation, Target Corporation, Principal
Shareholder, and an entity named KSI ACQUISITION, INC., a Delaware
corporation ("NEWCO") executed that certain "Agreement and Plan of
Reorganization" dated effective January 24, 1999 (the "Merger
Agreement").
B. NEWCO was an entity in formation and was intended to
serve as the "Acquiring Corporation" and "Surviving Corporation," as
such terms are defined in the Merger Agreement.
C. After execution of the Merger Agreement:
(1) Parent Corporation disclosed to Target Corporation
and Principal Shareholder that (i) the Secretary of the State of the
State of Delaware refused to allow NEWCO to be formed under the name
"KSI ACQUISITION, INC.," and (ii) such entity would be formed under
the name "KIOSK ACQUISITION, INC., a Delaware corporation;"
(2) Target Corporation and Principal Shareholder
delivered to Parent Corporation copies of certain schedules to the
Merger Agreement which had been discussed orally with Parent
Corporation's representatives prior to execution of the Merger
Agreement; and
(3) The parties agreed to certain other changes in the
Merger Agreement.
D. The parties have agreed to execute this Amendment in
order to (i) substitute KIOSK ACQUISITION, INC., a Delaware
corporation, as the "Acquiring Corporation" and "Surviving
Corporation" under the Merger Agreement, (ii) confirm the disclosure
and delivery of certain addition Schedules to the Merger Agreement
by Target Corporation and Principal Shareholder, and (iii) reflect
certain other agreements of the parties.
AGREEMENTS:
NOW, THEREFORE, the parties hereto, intending to be legally
bound, do hereby agree as follows:
ARTICLE I
AMENDMENT TO MERGER AGREEMENT
Notwithstanding any provision of the Merger Agreement to the
contrary, the Merger Agreement is hereby amended as follows:
1.1 Substitution of Kiosk Acquisition, Inc.
(a) KIOSK ACQUISITION, INC., a Delaware corporation,
hereby (a) adopts and agrees to all the terms and conditions of the
Merger Agreement as if it originally had signed that instrument as
the "Acquiring Corporation" and "Surviving Corporation," (b) agrees
to discharge and perform all obligations imposed upon either the
"Acquiring Corporation" or the "Surviving Corporation" thereunder,
and (c) adopts and affirms all representations and warranties of the
"Acquiring Corporation" and "Surviving Corporation" thereunder as if
such representations and warranties were given as of the effective
date of this Amendment.
(b) Parent Corporation, Target Corporation, and
Principal Shareholder each hereby consents to the substitution of
KIOSK ACQUISITION, INC., a Delaware corporation, as the "Acquiring
Corporation" and "Surviving Corporation" under the Merger Agreement,
and agrees to accept performance from KIOSK ACQUISITION, INC., a
Delaware corporation, pursuant to the Merger Agreement as if such
entity originally had signed that instrument as the "Acquiring
Corporation" and the "Surviving Corporation." Parent Corporation
hereby ratifies and confirms with respect to KIOSK ACQUISITION,
INC., a Delaware corporation, all representations and warranties of
Parent Corporation under Section 4.2 of the Merger Agreement, as if
such representations and warranties were made as of the effective
date of this Agreement.
(c) Target Corporation and Principal Shareholder each
hereby waives all claims against Parent Corporation arising solely
by reason of the fact that the "Acquiring Corporation" named in the
Merger Agreement had not been formed as of the date that Agreement
was signed.
1.2 Adjustment in Exchange Ratio. The parties
acknowledge that prior to the execution of the Merger Agreement, the
Shareholders and members of the Board of Directors of Target
Corporation had approved a ten-for-one split in outstanding shares
of, and corresponding increase in the authorized number of, Target
Corporation's capital stock, that amended and restated articles of
incorporation for Target Corporation (the "Restated Articles")
implementing that stock split and increase were filed with the
Secretary of State of the State of California on or about January 4,
1999, and that due to an administrative backlog in the office of the
Secretary of State of the State of California, the Restated Articles
have not yet been finally accepted as filed by that office. The
parties agree that if as of the Effective Time the Restated Articles
have not been finally accepted as filed by the Secretary of State of
the State of California, then the Merger nonetheless shall proceed
as contemplated by the Merger Agreement without any adjustment in
the "Exchange Ratio" described in Section 1.6(a) of the Merger
Agreement or in the ratio for the exchange of Target Corporation
Options for Parent Corporation Options set forth in Section 1.6(e)
of the Merger Agreement.
1.3 Addenda to Schedules. Target Corporation and
Principal Shareholder have attached hereto at Exhibit A copies of
the following supplemental materials which are to appear as
Schedules reflecting exceptions to the representations and
warranties set forth in Article II of the Merger Agreement:
(a) A list of inventory to be attached at Schedule 2.8;
(b) Copies of the following items to be attached at
Schedule 2.9: (i) 1998 Federal and California income tax returns
for Target Corporation; (ii) balance sheet of Target Corporation as
of December 31, 1998; and (iii) Income Statement of Target
Corporation for period ended December 31, 1998;
(c) An Employee List and a copy of a Consulting
Agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, which are to be attached at Schedule
2-13.1;
(d) A list of aged payables and a list of aged
receivables of Target Corporation, both of which are to be attached
at Schedule 2.18;
(e) A description of a patent for "Kiosk Browser," which
is to be attached at Schedule 2.21; and
(f) A schedule of loans to be paid by Parent Corporation
and Acquiring Corporation at the closing of the Merger.
Parent Corporation and Acquiring Corporation each hereby accepts
such supplemental Schedules as if those items were attached to the
Merger Agreement at the time it was executed, and further hereby
waives all claims (if any) which either such entity may have against
either Target Corporation or Principal Shareholder by reason of
those supplemental Schedules not having been actually attached to
the Merger Agreement at the time it was executed.
1.4 Acknowledgments re Target Corporation Options. The
parties acknowledge and agree that
Target Corporation originally had executed with certain employees
and members of its Board of Directors (the "Grantees") certain
option agreements (the "Original Option Agreements") implementing
the grant of Target Corporation Options, that those agreements
referenced a number of shares of Target Corporation Common Stock
which assumed that the Restated Articles had been accepted as filed
by the Secretary of State of the State of California, and that until
those Restated Articles are so accepted by the Secretary of State of
the State of California, those Original Option Agreements reference
a number of shares which is ten (10) times larger than appropriate
and reference an option exercise price which is one-tenth (1/10th)
the appropriate price. Therefore, and in order to reflect certain
other agreements, the parties agree that:
(a) Target Corporation shall issue to its Grantees
restated option agreements (the "Restated Option Agreements") which
correctly reflect the number of shares for which the Target
Corporation Options were granted and the exercise price for those
shares;
(b) The provisions of those Restated Option Agreements
which provide that the Target Corporation options shall:
(i) Terminate "three months after cessation of
your relationship as a director of the Company" shall be applied in
the agreements evidencing the Parent Corporation Options delivered
at the Effective Time only as to Principal Shareholder and only if
she resigns or is removed or otherwise is not re-elected as a member
of the Board of Directors of Acquiring Corporation; and
(ii) Terminate "three months after a Change in
Control" shall not occasion the termination of any Target
Corporation Option or Parent Corporation Option as a result of the
Merger.
1.5 Additional Amendments. At the request of Parent
Corporation, the parties agree that the Merger Agreement is further
amended as follows:
(a) Section 2.28 of the Merger Agreement is hereby
amended to read as follows:
"Investor Status. Each Shareholder is taking ownership of
the Parent Corporation Common Stock for investment purposes
only and not with a view to distribute same within the
meaning of the Securities Act of 1933, as amended (the
"Securities Act"). Each Shareholder has been provided with
an opportunity to ask questions of management of Parent
Corporation and Acquiring Corporation as such Shareholder
deemed appropriate."
(b) Sections 3.6, 3.7, 3.8, and 3.9 of the Merger
Agreement are further hereby amended to read as follows:
"3.6 No Registration Under the Securities Act. Each
Shareholder understands that the shares of Parent
Corporation Common Stock to be issued to such Shareholder
under this Agreement have not yet been and in the future may
not be registered under the Securities Act of 1933, as
amended (the "Securities Act"), except as otherwise set
forth in this Agreement in reliance upon exemptions
contained in the Securities Act or interpretations thereof,
and until so registered as contemplated by Section 6.1(d),
below, cannot be offered for sale, sold or otherwise
transferred unless such shares of Parent Corporation Common
Stock are registered or qualify for exemption from
registration under the Securities Act. It is acknowledged
and agreed that until such Parent Corporation Common Stock
is so registered as contemplated by Section 6.1(d), below,
each certificate representing Parent Corporation Common
Stock issued pursuant to a Shareholder pursuant to this
Agreement, and any shares issued or issuable in respect of
any such shares of Parent Corporation Common Stock upon any
stock split, stock dividend, recapitalization, or similar
event, shall be imprinted with a legend in substantially the
following form (in addition to any legend required under
applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE TRANSFERRED OR SOLD OTHER THAN (I) PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT AND
OTHER APPLICABLE STATE SECURITIES LAWS OR AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION, AND (II)
UPON RECEIPT BY THE ISSUER OF EVIDENCE SATISFACTORY
TO IT OF COMPLIANCE WITH THE SECURITIES ACT AND
OTHER APPLICABLE STATE SECURITIES LAWS. THE ISSUER
SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL
SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH
THESE REQUIREMENTS.
The certificates evidencing the shares of Parent Corporation
Common Stock to be issued to the Shareholders under this
Agreement shall also bear any legend required by the
Commissioner of Corporations of the State of California or
such as are required pursuant to any state, local or foreign
law governing such securities.
3.7 Acquisition for Investment. The shares of Parent
Corporation Common Stock being issued to Principal
Shareholder pursuant to this Agreement are being acquired by
such Shareholder in good faith solely for the Shareholder's
own account, for investment and not with a view toward
resale or other distribution within the meaning of the
Securities Act. Principal Shareholder further represents
that each Shareholder has no present contract, undertaking,
agreement or arrangement with any person to sell, transfer
or grant participation to such person or to grant to any
third person with respect to any share of Parent Corporation
Common Stock. The shares of Parent Corporation Common Stock
being issued to each Shareholder pursuant to this Agreement
will not be offered for sale, sold or otherwise transferred
by such Shareholder without either registration or exemption
from registration under the Securities Act.
3.8 Evaluation of Merits and Risks of Investment. Each
Shareholder has such knowledge and experience in financial
and business matters that such Shareholder is capable of
evaluating the merits and risks of such Shareholder's
investment in the shares of Parent Corporation Common Stock
being acquired hereunder. It is further (i) acknowledged
that the only materials being delivered to each Shareholder
for purposes of evaluating Parent Corporation's financial
condition and prospects are (or prior to the Closing Date
will be) copies of (A) Parent Corporation's Form 8-K dated
December 18, 1998, (B) Parent Corporation's Offering
Memorandum, (C) a statement of shareholder equity for Parent
Corporation dated January 20, 1998, (D) audited financial
statements for Parent Corporation for the period ended
September 30, 1998, (E) an unaudited balance sheet for
Parent Corporation as of and a statement of income and
expense for Parent Corporation with respect to the period
ended December 31, 1998, and (F) an estimated profit and
loss statement for Parent Corporation for calendar month
January 1999 (collectively, the "Parent Corporation
Disclosure Materials"), (ii) acknowledges that except for
information to be supplied after the effective date of this
Agreement and prior to Closing, each Shareholder has
received all the information that Principal Shareholder has
requested from Acquiring Corporation and Target Corporation
that Principal Shareholder considers necessary or
appropriate for deciding whether to accept the Parent
Corporation Common Stock being issued pursuant to this
Agreement; (iii) represents that each Shareholder has the
ability to bear the economic risks of the Shareholder's
prospective investment; and (iv) represents that each
Shareholder is able, without materially impairing such
Shareholder's financial condition, to hold the Parent
Corporation Common Stock for an indefinite period of time
and to suffer complete loss on such Shareholder's
investment. It is confirmed that Acquiring Corporation has
made available to each Shareholder and its representatives
and agents the opportunity to ask questions of the officers
and management employees of Acquiring Corporation about the
business and financial condition of Acquiring Corporation as
such Shareholder has requested.
3.9 Forward Looking Information/ Risk Factors. It is
acknowledged and agreed that any oral or written
forward-looking statements made by or on behalf of Acquiring
Corporation in connection with the Merger were made in the
context of and shall have been deemed to have been
accompanied by the risk factors set forth in the Parent
Corporation Disclosure Materials. It is acknowledged that
actual results could differ materially from those projected
in or implied by any forward-looking statement."
(c) Section 6.1(e) of the Merger Agreement is hereby
amended in its entirety to read as follows:
"Adoption and Registration of Option Plan. On or before the
Closing Date, Parent Corporation shall adopt in compliance
with applicable law and its bylaws and certificate of
incorporation the Parent Corporation Option Plan (as defined
in Section 1.6(e), above) and reserve and set aside
thereunder at least such number of shares as are necessary
to permit Parent Corporation to satisfy its obligation to
issue Parent Corporation Options as of the Effective Time
pursuant to Section 1.6(e), above. On or before April 30,
1999, Parent Corporation shall file with the United States
Securities and Exchange Commission such application and
registration filings and forms with respect to such Parent
Corporation Option Plan, and thereafter shall prosecute such
applications and registration filings with reasonable
diligence, to the extent reasonably necessary to permit
shares of Parent Corporation Common Stock issued upon
exercise of Parent Corporation Options to be registered
under the Securities Act of 1933."
ARTICLE II
MISCELLANEOUS
2.1 Ratification. Except as expressly modified by this
Amendment, the Merger Agreement is hereby ratified and confirmed and
remains in full force and effect.
2.2 Defined Terms. All capitalized terms which appear
in this Amendment and are not defined herein shall have the meaning
ascribed to such terms in the Merger Agreement.
2.3 Effective Date. The effective date of this
Amendment shall be February 8, 1999.
(Signatures appear on the following page.)
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, effective on the date set forth above.
"PARENT CORPORATION:" "TARGET CORPORATION:"
AMERICOM USA, INC., a Delaware corporation KIOSK SOFTWARE, INC.,
a California corporation
By
Name: By
Title: ▇▇▇▇ ▇▇▇▇▇▇, President
Date "PRINCIPAL SHAREHOLDER:"
"ACQUIRING CORPORATION:"
▇▇▇▇ ▇▇▇▇▇▇
KIOSK ACQUISITION, INC., a Delaware
corporation
Date
By
Name:
Title:
Date
