FIRST ADDENDUM TO THE
AGREEMENT AND PLAN OF REORGANIZATION
THIS ADDENDUM TO THE AGREEMENT AND PLAN OF REORGANIZATION (the "Addendum")
is made as of August 10, 2001, by and among Informed Care, Inc., a privately
owned Florida corporation ("ICI"), Hometown Info, Inc., a privately owned
Minnesota corporation ("HII"), Xxxxxxx Communications, Corp., a publicly owned
and traded Iowa corporation ("MCC") (collectively referred hereinafter as the
"Parties").
WHEREAS, the Parties executed an Agreement and Plan of Reorganization on
July 25, 2001 (the "Definitive Agreement") pursuant to which the Parties shall
exchange shares of their common stock so that ICI and HII will become
wholly-owned subsidiaries of MCC subsequent to the amendment to MCC's charter
("Newco"); and
WHEREAS, pursuant to the terms and conditions of the Definitive Agreement,
ICI will acquire 43.50% of the issued and outstanding shares of common stock of
Newco in exchange for all the issued and outstanding shares of ICI common stock,
HII will acquire 26.50% of the issued and outstanding shares of common stock of
Newco in exchange for all of the issued and outstanding shares of HII common
stock and MCC will retain 30% of the issued and outstanding shares of common
stock of Newco; (the "Exchange Shares"); and
WHEREAS, the Definitive Agreement sets forth that it shall not become
effective until three (3) days after ICI has completed its pending transaction
with Accent Health which shall have resulted in revenues to ICI in a minimum
amount of $200,000; and
WHEREAS, the Definitive Agreement sets forth that HII's outstanding capital
consists of 33,000 shares of common stock, no par value; and
WHEREAS, the Parties desire to amend the terms of the Definitive Agreement
pursuant to the terms and conditions of this Addendum;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 The terms as set forth in Article 1 of the Definitive Agreement
shall have the same meaning in this Addendum
ARTICLE 2
2.1 ENFORCEABILITY OF THE DEFINITIVE AGREEMENT. This Addendum is
intended only to supplement the terms and conditions of the Definitive
Agreement. None of the terms and conditions contained herein are intended to,
nor shall have the effect of, relieving any of the Parties of its obligations as
set forth within the Definitive Agreement.
2.2 ADDENDUM TO PREVAIL. Notwithstanding anything to the contrary
contained within Section 2.1, any inconsistencies between the terms and
conditions of the provisions of this Addendum and the Definitive Agreement shall
be resolved in favor of the provisions of this Addendum.
ARTICLE 3
AMENDEMENT TO THE EXCHANGE
3.1 This Article 3 is intended to supplement the provisions of Article
3 of the Definitive Agreement, "Exchange of Stock".
3.2 SHARE OWNERSHIP. Notwithstanding anything to the contrary
contained within Section 2.5.8 of the Definitive Agreement, the Parties hereto
set forth that the shares of common stock of Newco shall be issued so that,
after the Exchange, ICI shareholders shall own 41.00% of the issued and
outstanding shares of common stock of Newco, HII shareholders shall own 29.00%
of the issued and outstanding shares of common stock of Newco and MCC
shareholders shall retain 30.00% of Newco shares of common stock.
3.3 Notwithstanding anything to the contrary contained within the
Definitive Agreement, the Parties shall not receive the Consideration upon the
Effective Time in the manner set forth therein.
3.4 REDUCTION OF SHARES. Founders, officers, directors and affiliates,
of ICI ("ICI Insiders") and founders, officers, directors and affiliates of HII
("HII Insiders") shall receive shares of common stock of Newco reduced by the
amount of shares as set forth within this Section. The list of ICI Insiders and
HII Insiders and the amount of shares subject to the terms and provisions of
this Section are set forth in Exhibit A hereto.
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3.5 THE ESCROW SHARES. Pursuant to the terms and conditions set forth
herein, 1,721,625 shares of common stock of ICI, which represent seventy-five
percent (75%) of the pre-Exchange shares of ICI common stock of ICI founders,
officers, directors and affiliates, intended to be exchanged for shares of Newco
common stock and transferred to ICI Insiders, (the "ICI Escrow Shares") and
34,083 shares of common stock of HII, which represent sixty-five percent (65%)
of the pre-Exchange shares of HII common stock of Xxxx Xxxxxxxx, HII's Chief
Executive Officer and sole founder, intended to be exchanged for shares of Newco
common stock and transferred to Xxxx Xxxxxxxx (the "HII Escrow Shares") as
Consideration for the Exchange as set forth in Article 3 of the Definitive
Agreement, shall be delivered to Levy, Boonshoft & Xxxxxxxx, as Escrow Agent
(the "Escrow Agent") to be held pursuant to the provisions set forth within this
Section.
3.6 YEAR 2002 REVENUES.
3.6.1 If Newco generates revenues in the amount of ten million
dollars ($10,000,000) from the Effective Time to December 31, 2002 and Newco has
---
received net financing in the amount of one million five hundred thousand
--------
dollars ($1,500,000) on or before December 31, 2001, then 50% of the ICI Escrow
Shares shall be transferred to the ICI Insiders and 50% of the HII Escrow Shares
shall be transferred to the HII Insiders.
3.6.2 If Newco generates revenues in the amount of ten million
dollars ($10,000,000) from the Effective Time to December 31, 2002 and Newco has
---
not received net financing in the amount of one million five hundred thousand
-------------
dollars ($1,500,000) on or before December 31, 2001, then 50% of the ICI Escrow
Shares shall be transferred to the ICI Insiders and 50% of the HII Escrow Shares
shall be transferred to the HII Insiders.
3.6.3 If Newco does not generate revenues of ten million dollars
($10,000,000) from the Effective Time to December 31, 2002 after having received
---------------------
net financing in the amount of $1,500,000 on or before December 31, 2001 then
50% of the ICI Escrow Shares and 50% of the HII Escrow Shares shall be retired
and released by the Escrow Agent to Newco as treasury stock on or before January
15, 2003.
3.7 YEAR 2003 REVENUES.
3.7.1 If Newco generates revenues in the amount of twenty-five
million dollars ($25,000,000) during the period January 1, 2003 to December 31,
2003 and Newco has received net financing in the amount of three million five
------------
hundred thousand dollars ($3,500,000) between the period of January 1, 2002 to
December 31, 2002, then the remaining ICI Escrow Shares shall be transferred
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to the ICI Insiders and the remaining HII Escrow Shares shall be transferred to
the HII Insiders.
3.7.2 If Newco generates revenues in the amount of twenty-five
million dollars ($25,000,000) during the period January 1, 2003 to December 31,
2003 and Newco has not received net financing in the amount of three million
-----------------
five hundred thousand dollars ($3,500,000) between the period of January 1, 2002
to December 31, 2002, then the remaining ICI Escrow Shares shall be transferred
to the ICI Insiders and the remaining HII Escrow Shares shall be transferred to
the HII Insiders.
3.7.3 If Newco does not generate revenues of twenty-five million
dollars ($25,000,000) during the period January 1, 2003 to December 31, 2003
after having received net financing in the amount of three million five hundred
----------------------
thousand dollars ($3,500,000) between the period of January 1, 2002 to December
31, 2002 then the remaining ICI Escrow Shares and the remaining HII Escrow
Shares shall be retired and released by the Escrow Agent to Newco as treasury
stock on or before January 15, 2004.
3.8 RECISION. If Newco enters into an agreement, from the Effective
Time to December 31, 2003, for the sale of all or substantially all of Newco's
assets, the sale of a number of shares of its capital stock that would result in
a change of control, or the merger with another entity, then any remaining
Escrow Shares shall revert to the ICI Insiders and HII insiders on a pro rata
basis.
3.9 Upon release from escrow by the Escrow Agent under the terms and
conditions set forth herein, the Escrow Shares shall be exchanged for shares of
Newco common stock pursuant to the terms and conditions set forth in the
Definitive Agreement.
3.10 VOTING OF ESCROW SHARES. ICI Insiders and HII Insiders shall
retain all voting rights to their corresponding Escrow Shares of Newco common
stock on all matters in which Newco shareholders are entitled to vote, for as
long as the Escrow Shares shall remain deposited with the Escrow Agent. If the
Escrow shares are forfeited and retired as set forth in Sections 3.5.3 and
3.6.3, then the ICI Insiders and HII Insiders shall forfeit all voting rights to
the corresponding Escrow Shares.
ARTICLE 4
ACCENT HEALTH TRANSACTION
4.1 This Article 4 is intended to modify the provisions of Sections
2.1.1, 8.8 and 10.18 of the Definitive Agreement.
4.2 Notwithstanding anything to the contrary contained within the
Definitive Agreement, the effectiveness of the Definitive Agreement shall not,
as
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set forth therein, be contingent upon ICI's completion of a transaction with
Accent Health resulting in revenues in the minimum amount of $200,000 for ICI.
4.3 Pursuant to the terms and conditions set forth herein, Sections
2.1.1, 8.8 and 10.18 shall be amended to state that the Definitive Agreement
shall not be effective unless and until ICI has executed a Letter of Intent with
Accent Health.
ARTICLE 5
HII CAPITAL RESTATEMENT
5.1 This Article 5 is intended to modify the provisions of Sections
3.1.1.2 and 6.3.1 of the Definitive Agreement.
5.2 Notwithstanding anything to the contrary contained within the
Definitive Agreement, there are 151,219 shares issued and outstanding shares of
HII common stock, no par value, rather than the 33,000 set forth within Sections
3.1.1.2 and 6.3.1 of the Definitive Agreement.
ARTICLE 6
USE OF PROCEEDS
6.1 This Article is intended to supplement the provision of the Definitive
Agreement by setting forth the following table of use of proceeds from the
financing in the net amount of one million five hundred thousand dollars
($1,500,000) on or before December 31, 2001.
6.2 The table set forth in Exhibit B reflects the intended application of
the net proceeds from financing set forth in Section 6.1 of this Addendum and
may be modified pursuant to written agreement among the Parties.
(THE REST OF THIS PAGE LEFT INTENTIONALLY BLANK.)
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INFORMED CARE, INC.
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxx, CEO
HOMETOWN INFO, INC.
By /s/ Xxxxxx Xxxxxxxx
--------------------------------
Xxxxxx Xxxxxxxx, CEO
XXXXXXX COMMUNICATIONS CORPORATION
By /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx, CEO
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EXHIBIT A
INFORMED CARE, INC. INSIDERS
Total Escrow
Name Shares Shares
-------------------------- ------- -------
Xxxxxxx Xxxxxxx. . . . . . 310,000 232,500
Xxxxx Xxxxxxx. . . . . . . 308,000 231,000
Xxxxxx X. Xxxxxxxx . . . . 308,000 231,000
Xxxx Xxxxxx. . . . . . . . 150,000 115,500
Xxxx X. Xxxxx. . . . . . . 30,000 22,500
Xxxxxxxx Xxxxxx Xxxxx, III 40,000 30,000
Xxxxxx Xxxxxx. . . . . . . 14,000 10,500
Xxxxxxx Xxxxxxxx . . . . . 541,500 406,125
Xxxxxx Xxxxxx* . . . . . . 590,000 442,500
*Shares underlying options treated as founders' shares.
HOMETOWN INFO, INC. INSIDERS
Total Escrow
Name Shares Shares
------------- ------ ------
Xxxx Xxxxxxxx 52,435 34,083
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EXHIBIT B
ICI MCC HII
-------- -------- -------
Salary and Taxes $140,000 $ 85,000 $30,000
Notes Payable. . 60,000 0 70,000
Legal. . . . . . 180,000 135,000 30,000
Accounting . . . 90,000 40,000 30,000
Trade. . . . . . 100,000 365,000 30,000
Other. . . . . . 0 115,000 0
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