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EXHIBIT 2.6
SECOND AMENDED AGREEMENT
TO
STOCK PURCHASE AGREEMENT,
AGREEMENT OF PLAN AND MERGER,
AND
ESCROW AGREEMENT
THIS AGREEMENT, made and entered into this 10th day of October, 1995,
by and among CHANNEL AMERICA TELEVISION NETWORK, INC., a Delaware corporation
("Company"), having offices located in Darien, Connecticut, EVRO CORPORATION, a
Florida corporation ("Purchaser"), with its principal place of business located
in Orlando, Florida, and SCOLARO, SHULMAN, XXXXX, XXXXXX & XXXXXXXX, P.C., a
New York professional corporation ("Escrow Agent"), with its principal place of
business located in Syracuse, New York.
W I T N E S S E T H :
WHEREAS, the parties hereto have entered into a certain Stock Purchase
Agreement dated July 13, 1995 ("Stock Purchase Agreement");
WHEREAS, the parties hereto have entered into a certain Agreement and
Plan of Merger dated July 13, 1995 ("Merger Agreement");
WHEREAS, the parties hereto have entered into a certain Escrow
Agreement dated July 13, 1995 ("Escrow Agreement"); and
WHEREAS, the parties hereto have entered into a certain Amendment
Agreement to Stock Purchase Agreement, Agreement of Plan and Merger and Escrow
Agreement dated September 18, 1995 ("Amendment Agreement"); and
WHEREAS, the parties hereto desire to amend the Stock Purchase
Agreement, Merger Agreement, Escrow Agreement, and Amendment Agreement by and
among the parties.
NOW, THEREFORE, in consideration of the foregoing, the covenants,
agreements, conditions and promises hereinafter set forth, the sum of One
Dollar ($1.00) each paid to the other in hand, and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Closing of Stock Purchase Agreement. The purchase of the
"Control Shares" as defined in paragraph 1 of the Stock Purchase Agreement,
shall be deemed closed by the parties hereto upon receipt of the initial cash
payment of $200,000 by the Company, as set forth in the Amendment Agreement,
and receipt and delivery by Purchaser of a certificate evidencing the
27,500,000 shares, as called for in paragraph 6(a)(i) of the Stock Purchase
Agreement.
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Thereupon, notwithstanding anything contained in any of the agreements to the
contrary, the Stock Purchase Agreement shall be removed from Escrow and a
closing deemed to occur on the purchase of the 27,500,000 shares of Channel
America. Paragraphs 2(a)(ii), 2(b), 3, 6(c), and 7(b) of the Stock Purchase
Agreement, as well as paragraphs 3(a)(i), 3(a)(ii), and 4(a) of the Escrow
Agreement, shall be so amended to reflect a closing of the Stock Purchase
Agreement outside of Escrow. The subsequent payments totalling $800,000 which
are called for in paragraph 1 of the Amendment Agreement, shall be paid
directly to the Company without the involvement of the Escrow Agent or an
Escrow.
2. Adjustment for non-timely payment In the event that Purchaser
does not timely pay to the Company the balance of the purchase price as
required in paragraph 2(a) of the Stock Purchase Agreement, as amended by
paragraph 1 of the Amendment Agreement, or defaults in making such payment and
does not cure such default within a timely manner, then there shall be an
adjustment in the number of shares owned by Purchaser, pro-rata, and Purchaser
shall return a pro-rata amount of shares to the Company for cancellation. Such
shares shall be adjusted on the basis of 27.5 shares of the Company per dollar
to be received by the Company.
3. Confirmation of receipt of $200,000. The parties hereto
hereby confirm that the Company has received the first installment of $200,000
and that the Purchaser has fully paid for 5,500,000 shares of the Company,
notwithstanding the requirement to continue to make the other installment
payments totalling $800,000.
4. Purchaser's Capital Structure. Attached hereto and
incorporated herein by reference is "Schedule A", which sets forth the current
capitalization structure of the Purchaser, on a fully diluted basis, assuming
the completion of a $5,000,000 Regulation D stock offering and other events
that are disclosed in the footnotes to such Schedule.
5. Majority control of Company by Purchaser. The parties hereto
confirm that upon execution of this Agreement, the Purchaser shall have a
majority interest in the Company and as such shall be responsible for the
Company's day to day activities, including the arranging of payment of all
related operating costs.
6. Amendment. This Agreement may be amended, modified, or
supplemented only by instrument in writing executed by all the parties hereto.
7. Entire Agreement. This Agreement, the Amendment Agreement,
the Stock Purchase Agreement, the Merger Agreement, and the Escrow Agreement
(collectively "Original Documents") constitute the entire agreement of the
parties regarding the subject matter hereof, and supersede all prior agreements
and understandings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof. Notwithstanding anything to the
contrary contained herein, unless this Agreement specifically amends a
provision contained in the Original Documents, the terms and conditions of the
Original Documents shall remain in full force and effect. In case of a
discrepancy or conflict between
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this Agreement and the Original Documents, this Agreement shall be controlling
and the parties agree to use their best efforts to fully implement the spirit
and intent of this Agreement.
8. Severability. If any provision of this Agreement is to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid and enforceable.
9. Governing Law. This Agreement and the rights and obligations
of the parties shall be governed by and construed and enforced in accordance
with the substantive laws of the State of Florida.
10. Expenses. Except as otherwise specifically provided in this
Agreement, each party shall pay its own legal and other expenses related to the
consummation of the transactions contemplated in this Agreement.
11. Counterparts and Facsimile Signatures. This Agreement may be
executed in multiple counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument.
Execution and delivery of this letter by exchange of facsimile copies bearing
facsimile signature of a party shall constitute a valid and binding execution
and delivery of this Agreement. Such facsimile copies shall constitute
enforceable original documents.
IN WITNESS WHEREOF, this Agreement has been executed effective as of
the date first above written by the parties hereto.
CHANNEL AMERICA TELEVISION NETWORK, INC.
By: /s/ Xxxxx X. Post
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Xxxxx X. Post, Chairman
EVRO CORPORATION
By: /s/Xxxxxx M /Xxxxx
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Xxxxxx X. Xxxxx, Authorized Signatory
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SCOLARO, SHULMAN, XXXXX, XXXXXX & XXXXXXXX, P.C.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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SCHEDULE "A"
CAPITALIZATION
The following table summarizes the stockholder's equity in the Company
as of October 6, 1995:
EVRO CORPORATION CAPITALIZATION TABLE
OCTOBER 6, 1995
Stockholders' Conversion Fully Diluted
Equity Factor of Common Stock
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Preferred Stock:
Series A 10% Convertible Preferred, $1.00 face
value, 100,000 shares authorized, 44,000 shares
issued or outstanding1 $ 880,000 0
Series C Convertible Preferred Stock, no par value,
500,000 shares authorized, 95,400 shares issued and
outstanding 954,000 1.4252 669,474
Series D Convertible Preferred Stock, no par value,
17,000 shares authorized, 16,984.9 shares issued and
outstanding3 4,084,153 0
Series E Convertible Preferred Stock, no par value,
30,000 shares authorized, issued and outstanding4 30,000 100 3,000,000
Series F Convertible Preferred Stock, no par value,
1,680 shares authorized, 1,300 shares issued and 1,300 10,000
outstanding5
Shares of Common Stock to be issued upon
conversion of Series F Convertible Preferred
Stock held by The Stellar Companies, Inc. 4,000,000
Shares to be held in escrow subject to
Escrow/Earn-Out 9,000,0006
Series H Convertible Preferred Stock, no par value,
100,000 shares authorized, 48,000 shares issued and
outstanding7 6,000,000 2.375 2,526,315
Series I Convertible Preferred Stock, no par value,
7,000 shares authorized, 5,750 shares issued and 955,469 200 1,150,000
outstanding8
Less: Unearned compensation for future services
as of June 30, 1995, adjusted for Series I
shares issued thereafter (955,469)
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Series J Convertible Preferred Stock, no par value,
100 shares authorized, no shares issued and 0 50,000 5,000,0009
outstanding ------------
11,069,447
Common Stock, no par value, 2,500,000 authorized,
2,497,665 shares issued and outstanding 2,825,346 1 2,497,665
Less: Unearned compensation for future services
as of June 30, 1995, adjusted for Series I
shares issued thereafter (1,627,987)
Accumulated deficit as of June 30, 1995 (3,928,446)
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TOTAL STOCKHOLDERS' EQUITY $ 9,195,558 27,843,454
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Additional Common Shares to be issued re:
The Stellar Companies, Inc. 2,271,986(10)
Minority shareholders of TSSN 281,418
Winsat Communication Corporation 86,000
Xxxxxxx X. Molinari11 400,000
First Capital Resources, Inc. - Warrants12 200,000
Genesee Cattle Corporation 421,052
Participating Brokers - Warrants13 500,000
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FULLY DILUTED SHARES OUTSTANDING 32,003,910
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FOOTNOTES:
(1) Series A 10% convertible preferred stock is convertible based upon
Lintronics Corporation, a wholly-owned subsidiary of THI, achieving
earnings on a quarterly basis. The Company does not anticipate
Lintronics meeting these earnings requirements, as the operations of
Lintronics have been discontinued.
(2) Series C convertible preferred stock is convertible at a conversion
price equal to 50% of the Common Stock's market value at the time of
conversion; 1.425 represents the conversion price if such preferred
stock were converted as of October 6, 1995.
(3) Pursuant to the terms of the acquisition of TSSN by the Company and in
connection with the formation of THI and the transfer to THI of the
Original Subsidiaries, the Company issued to the shareholder the
Company, except for the Stellar Companies, Inc. ("Stellar"), as of
March 27, 1995 shares of Series D convertible
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preferred stock at the rate of one share of Series D convertible
preferred for every 100 shares of Common Stock held by such
shareholders as of such date. All of the Series D convertible
preferred stock may be converted in whole, but not in part, at the
option of the Company, into 100% of the outstanding common stock of
THI owned by the Company as of the date of conversion. Series D
convertible preferred stock is not convertible into Common Stock of
the Company. However, the Company has agreed to issue annually to THI
on each March 14, shares of Common Stock equal to 20% of THI's average
total assets for the previous 12 months, assuming a Common Stock value
of $2.00 per share. Pursuant to a Funding Agreement, THI has granted
Stellar an option to purchase all such Common Stock. In the event
that, as of June 30, 1997, the Company does not convert the Series D
convertible preferred stock into THI common stock, as described above,
the Company shall declare a stock dividend of restricted Common Stock
equal to the aggregate number of shares of Common Stock distributed by
the Company to THI as of such date. For more details, see the
certificate of designation of the Series D convertible preferred stock
attached to the Company's Private Placement Memorandum at Exhibit I.
(4) 30,000 shares of Series E convertible preferred stock were originally
issued to Xxxxx Holdings, Inc., a corporation controlled by Xxxxxx X.
Xxxxx, the former Chief Executive Officer and President of the
Company, as partial consideration for the assignment of the option to
purchase TSSN then held by Xxxxx Holdings, Inc. 10,000 of such shares
of Series E convertible preferred stock have been pledged by Xxxxx
Holdings, Inc. as collateral for a 30-day bridge loan of $200,000 by
First Capital Resources, Inc. to the Company obtained in connection
with the financing of the Company's acquisition of Channel America
Television Network, Inc.; the Company intends to repay such bridge
loan out of proceeds from this offering. See "Use of Proceeds."
(5) The Company issued 500 shares of Series F convertible preferred stock
(the "Series F Stock") to Stellar on April 19, 1995 in partial
consideration of the return by Stellar to the Company of 500,000
shares of Common Stock, and originally obtained by Stellar in
connection with the acquisition by the Company of TSSN from Stellar.
The Company requested the return of such shares of Common Stock in
order to make additional shares of Common Stock available to the
Company for issuance pursuant to its 1995 Employee Stock Compensation
Plan. Each share of Series F Stock is entitled to 1,000 votes on all
matters on which holders of Common Stock may vote. In addition, the
Company agreed to issue to Stellar additional shares of Series F Stock
equal to the voting rights of subsequently issued shares of Common
Stock or preferred stock of the Company, in order to ensure to Stellar
voting control over the Company. As a result of additional stock
issuances of 550,000 shares of Common Stock in connection with the
Company's 1995 Employee Stock
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Compensation Plan, 224,000 shares of Common Stock sold in private
placements, Stellar now holds 1,280 shares of Series F Stock giving to
Stellar voting rights equivalent to 1,280,000 shares of Common Stock.
Common Stock issued to Stellar pursuant to conversion of Series F
Stock reduces the obligation of the Company to issue a total of
17,759,038 shares of Common Stock to Stellar in connection with the
acquisition of TSSN.
(6) 9,000,000 shares of Common Stock to be issued to Stellar in connection
with the acquisition of TSSN by the Company will be held in escrow
pursuant to the terms of an Escrow Earn-Out Agreement dated as of
October 6, 1995, by and among Stellar, the Company, and the escrow
agent named therein, which agreement provides for the deposit by
Stellar of 9,000,000 shares of Common Stock into escrow, until such
time as the Company achieves net earnings of $5,000,000, to be
released pro-rata upon the Company achieving net earnings (net of
earnings in connection with THI) of $1,000,000, but in no event later
than December 31, 2000, in accordance with the terms of the agreement.
(7) Series H convertible preferred stock shall be placed in escrow on
October 12, 1995 on behalf of the shareholders of Channel America
Television Network, Inc., as described herein under "The Company-
Potential Acquisition of Channel America Television Network, Inc.,"
which shares will be converted into shares of the Company's Common
Stock upon effectiveness of the registration of such Common Stock
under the Securities Act. Series H convertible preferred stock is
convertible at a conversion price equal to the greater of the Common
Stock's market value at the time of conversion, or $2.00; $2.375
represents the market price if such preferred stock were converted as
of October 6, 1995.
(8) Series I convertible preferred stock issued pursuant to various
consulting agreements. Specifically, 1,250 shares issued to Xxxxxxx
X. Xxxxxxxx and 1,000 shares issued to Xxxxx Xxxxxx.
(9) Dilution assumes that all 100 shares of Series J convertible preferred
stock are issued in connection with this Offering.
(10) Reflects a reduction of 2,126,000 shares of Common Stock to Stellar
for payment by the Company of legal and financial consulting services.
Taking into account the 9,000,000 shares of Common Stock to be
escrowed as described above in footnote (6), 17,759,038 shares of
Common Stock are issuable to Stellar in connection with the sale by
Stellar of 98% of the capital stock of TSSN to the Company.
(11) Xxxxxxx X. Xxxxxxxx will receive up to 250,000 shares of Common Stock
to the extent that $2,500,000 in proceeds from this Offering are
generated by sales as a
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result of the introduction to the Company of Participating
Brokers by Xx. Xxxxxxxx. Xx. Xxxxxxxx will also receive an additional
150,000 shares of Common Stock if such Broker Dealers generate sales
exceeding $3,500,000.
(12) The Company has agreed to issue warrants to First Capital Resources,
Inc. exercisable for one year to purchase 200,000 shares of Common
Stock at a price per share of $1.00 or, if the closing bid price of
the Common Stock is less than $2.00 on the date of exercise of such
warrants, one-half of such closing bid price, which warrants are
issued in connection with a $200,000 30-day bridge loan by First
Capital Resources, Inc. to the Company in connection with the
acquisition by the Company of Channel America Television Network, Inc.
(13) Each Participating Broker will be issued Warrants to purchase such
number of shares of Common Stock of the Company equal to 10% of the
number of shares of Common Stock into which Convertible Preferred
Stock sold by such Participating Broker is convertible, which Warrants
are exercisable for two years following the Share Authorization at an
exercise price of $1.00 per share. If the Minimum Amount is sold,
warrants to purchase 50,000 shares of Common Stock will be
outstanding; if the Maximum Amount is sold, warrants to purchase
500,000 shares of Common Stock will be outstanding.
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