AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT is made effective and entered into effective this 16th day
of December 1997, between and among ALLIED WIRELESS, INC. ("Allied"), SKYLYNX
EXPRESS HOLDINGS, INC. ("SkyLynx") and NETWORK SYSTEM TECHNOLOGIES, INC.
("NST");
WITNESSETH:
WHEREAS, Allied, SkyLynx and NST have entered into a certain Agreement
and Plan of Reorganization dated as of August 5, 1997 (the "Agreement");
WHEREAS, the parties desire to modify the Agreement in the particulars
hereinbelow set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained the parties covenant and agree as follows:
1. Prior to the Closing, SkyLynx shall be initially capitalized so as
to issue founders' stock to the following shareholders in the following
proportions:
Percent
Shareholder of Shares
----------- -----------
NST 25.000%
Xxxx Xxxxx 28.125%
Technology Research Bank 12.500%
Xxxxxxx Xxxxxxxx 6.250%
Rovel Finance, Ltd. 8.750%
Dostil Securities, Ltd. 10.625%
A.V.G. Enterprises, Inc. 10.625%
-----------
Total 100.000%
At the Closing, the foregoing shall constitute the sole shareholders of
SkyLynx entitled to receive Exchange Shares of Allied in the reorganization in
accordance with the terms and conditions of the Agreement.
2. Concurrently with the Closing, the Board of Directors of SkyLynx
shall be reconstituted to consist of the following persons:
Xxxx Xxxxx Chairman
Xxxxxxx Xxxxx
General Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
3. Concurrently with the Closing, the following persons shall be
elected to serve as executive officers of SkyLynx until the next regular
annual meeting of the Company's Board of Directors or until their successors
have been duly elected and qualified:
Xxxx Xxxxx President
Xxxxxxx Xxxxxxxx Vice President of Marketing and Sales
4. At the Closing, Allied shall purchase from NST a dishonored bank
draft issued by Paradise Cable Corporation ("Paradise") in the amount of
$71,570.91 (the "Paradise Check"). NST will assign to Allied all of NST's
right, title and interest in and to the Paradise Check in consideration for
payment to NST in the amount of $71,570.91.
5. At the Closing, Allied shall acquire from NST that certain
Promissory Note issued by NST in favor of Man Xxxx Xxx dated July 21, 1997 in
the principal amount of $100,000 (the "Man Xxxx Xxx Note"). Allied shall
agree to assume the Man Xxxx Xxx Note in accordance with its terms.
6. At the Closing, Allied shall reimburse NST for all legal expenses
and costs incurred in connection with consummating the Agreement in the amount
of $37,500. NST shall indemnify, defend and hold harmless Allied and SkyLynx
from any further obligation or liability for legal fees or other expenses
incurred by NST or SkyLynx in connection with consummating the Agreement.
7. As soon as practicable following the Closing, NST and SkyLynx shall
enter into a formal Project Agreement and General Operating Agreement for the
installation of a SkyLynx express wireless communication network in the Los
Angeles metropolitan area (the "Los Angeles Project"). The terms of the
General Operating Agreement for the Los Angeles Project shall be those
customarily contained in NST's project operating agreements and shall be
negotiated by the parties in good faith. At the Closing, Allied shall pay to
NST a $91,000 xxxxxxx money deposit under the contemplated Los Angeles Project
Agreement. If the parties fail to execute and deliver a definitive General
Operating Agreement for the Los Angeles Project within thirty (30) days
following the Closing, then NST shall pay the full $91,000 deposit to Hybrid
Networks to reduce the outstanding NST liability to Hybrid that Allied will
assume pursuant to paragraph 8 below.
8. At or prior to the Closing, NST shall assign to SkyLynx all of NST's
right, title and interest in and to its existing contracts and agreements with
Digital Broadcast Corporation ("DBC") and Paradise Cable Corporation
("Paradise"), together with all inventory currently held by NST under the DBC
agreements. In consideration of those assignments, Allied shall assume and
agree to pay the existing liability of NST to Hybrid Networks ("Hybrid")
incurred in connection with NST's performance under the DBC contracts;
provided, however, that Allied will not be deemed to have assumed $91,000 of
such liability and NST will indemnify and hold harmless Allied to the extent
of such $91,000, if NST is required to pay same to Hybrid pursuant to
paragraph 7 above. Subject to executing and delivering all documents of
conveyance, assignment and assumption necessary to consummate the foregoing,
Allied agrees to pay to Hybrid at Closing the sum of $150,000 to reduce the
outstanding Hybrid liability by that amount.
9. For so long as NST is the record and beneficial owner of 10% of the
issued and outstanding shares of Allied Common Stock, NST shall have the pre-
emptive right, subject to any uniform conditions prescribed by the Allied
Board of Directors to provide a fair and reasonable opportunity to exercise
the right, to acquire proportional amounts of the unissued shares of Allied
common Stock upon the decision of the Board of Directors to issue them;
provided, however, that there shall be no pre-emptive right with respect to:
(i) Shares issued as compensation to directors, officers, agents or
employees of the corporation or its subsidiaries or affiliates;
(ii) Shares issued to satisfy conversion or option rights created to
provide compensation to directors, officers, agents or employees of the
corporation or its subsidiaries or affiliates;
(iii) Shares issued upon exercise of options or warrants or upon
conversion of convertible securities issued pursuant to due authorization of
the corporation's Board of Directors; or
(iv) Shares sold otherwise than for cash.
10. At or prior to the Closing, NST shall execute and deliver to SkyLynx
a non-exclusive license (the "License") granting to SkyLynx the non-exclusive,
worldwide, royalty-free, perpetual right and license to use and otherwise
commercially exploit any or all of NST's present products, services and other
intellectual property and technology, including any and all future
improvements thereof. Without in any way limiting the generality of the
foregoing, the License shall include, without limitation, the right to utilize
and commercially exploit the technology more fully described on Exhibit A
hereto. Such License shall be in lieu of the technology assignment provided
for in the Agreement.
11. Following the Closing, NST shall make available to SkyLynx all
products, services and technology developed by NST or offered by NST on terms
no less favorable than terms offered by NST to its preferred customers and
clients. Subject to such "favored nations" status, NST shall offer SkyLynx
System Integration and Network Operations Agreements pursuant to which NST
shall cooperate and assist SkyLynx in all reasonable respects in the efforts
of SkyLynx to originate, maintain and support network service areas and
affiliates. Subject to such "favored nations" status, NST shall provide such
origination, maintenance and support through NST's network operation center in
consideration for payment equal to 9% of network subscriber revenues generated
by SkyLynx utilizing such NST services. Notwithstanding the foregoing, in the
event SkyLynx in unable to renegotiate the terms of the DBC and Paradise
contracts, NST agrees that its fee for such services under the DBC and
Paradise Contracts shall be reduced to 4.5% of net subscriber revenues for
those networks.
12. NST agrees to make available to SkyLynx Remote Link Adapters at
volume discount prices to the prevailing list price, subject to SkyLynx
providing NST with a mutually-agreeable forecast covering a period of not less
than six months to which forecast SkyLynx is willing to commit.
13. The parties stipulate and agree that all conditions precedent to
Closing have as of this date either been satisfied or are herewith waived by
the parties. Each party unconditionally agrees to close the transactions
provided for or contemplated by the Agreement as expeditiously as possible.
14. Notwithstanding any provision of the Agreement to the contrary, the
Agreement shall remain and continue in full force and effect until the first
to occur of the Closing Date or December 31 1997, if the parties fail to close
by that date. The parties agree to exercise best efforts to complete the
preparation and delivery of all documents necessary to be delivered at the
Closing. Upon Closing, each party shall be deemed to have released the other
from any claims under the Agreement arising prior to the Closing.
15. Unless the context otherwise requires, all capitalized terms used
herein shall have the meanings set forth in the Agreement.
16. Except as expressly modified by the provisions hereof, all other
terms and conditions of the Agreement shall remain in full force and effect.
In the event that any conflict or inconsistency between any provision of this
Amendment and any provision of the Agreement, the provisions of this Amendment
shall control.
IN WITNESS WHEREOF, the parties have signed the Agreement the date and
year first above written.
ALLIED WIRELESS, INC., a Colorado corporation
By: /s/ Xxxx X. Xxx
----------------------------------------
Xxxx X. Xxx, President
SKYLYNX EXPRESS HOLDINGS, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
NETWORK SYSTEM TECHNOLOGIES, INC., a
California corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
APPROVED AND ACCEPTED
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
