AMENDMENT NO. 5 TO PLAN OF REORGANIZATION AND STOCK PURCHASE AGREEMENT
Exhibit
2.1
AMENDMENT
NO. 5 TO
PLAN
OF REORGANIZATION
AND
This
Amendment No. 5 to the Plan of Reorganization and Stock Purchase Agreement
entered into by and among Modavox, Inc. (“Buyer”), a Delaware corporation, New
Aug, LLC, a Delaware limited liability company (“Seller”) and Augme Mobile, Inc.
(to be formed) (“Newco”) as of January 16, 2009, and as amended as of March 3,
2009 (“Amendment No. 1”), March 31, 2009 (“Amendment No. 2”), June 4, 2009
(“Amendment No. 3”) and June 30, 2009 (“Amendment No. 4”) (collectively, the
“Agreement”), is approved and entered into as of July __, 2009 (“Amendment
Effective Date”). Capitalized terms used but not defined herein have
the meanings assigned to them in the Agreement.
Recitals
WHEREAS, Buyer, Seller and Newco (to be
formed by Seller) previously entered into the Agreement, the purpose of which
was to facilitate the acquisition of up to one hundred percent (100%) of
Seller’s mobile marketing business and related assets, subject to Seller’s
rights to retain minority ownership of the assets under certain conditions and
Seller’s right to re-acquire transferred assets under certain
conditions;
WHEREAS, under the Agreement as
originally contemplated, Seller would transfer assets of the business to a new
entity (“Newco”) and Buyer would subsequently acquire 100% of the stock of
Newco;
WHEREAS, under the Agreement, the
Purchase Price to be paid by Buyer at Closing includes (but is not limited to)
transferring to Newco one million dollars ($1,000,000) in operating cash
(“Majority Cash”) as well as the issuance to Seller of certain common stock of
Buyer;
WHEREAS, Section 15.10 of the Agreement
(“Amendment & Waivers”) permits the amendment of the Agreement by mutual
written agreement;
WHEREAS,
in order to assist Seller with certain cash flow needs prior to Closing, which
Closing was originally required under the Agreement to occur no later than March
31, 2009, Buyer, Seller and Newco previously executed an Amendment to the Plan
of Reorganization and Stock Purchase Agreement, effective as of March 3, 2009,
pursuant to which Buyer transferred to Seller twenty five thousand dollars
($25,000) as an advance on the Majority Cash, reducing the outstanding Majority
Cash required to Close to nine hundred and seventy five thousand dollars
($975,000) (“Amendment No. 1”);
WHEREAS,
in recognition of the fact that the conditions required to Close the
Transaction, including the Majority Cash requirement, would not be satisfied on
or before the Closing Date (to be no later than March 31, 2009), Buyer, Seller
and Newco previously executed a second Amendment to the Plan of Reorganization
and Stock Purchase Agreement, effective as of March 31, 2009, pursuant to which
Buyer transferred to Seller two hundred and fifty thousand dollars ($250,000),
as an advance on the Majority Cash, reducing the outstanding Majority Cash
required to Close to seven hundred and twenty five thousand dollars ($725,000),
and extending the Closing Date until June 30, 2009 (“Amendment No.
2”);
WHEREAS,
in order to assist Seller with certain cash flow needs prior to Closing, which
Closing was required under the Agreement to have occurred no later than June 30,
2009, Buyer, Seller and Newco previously executed a third Amendment to the Plan
of Reorganization and Stock Purchase Agreement, effective as of June 4, 2009,
pursuant to which Buyer transferred to Seller fifty thousand dollars ($50,000)
as an advance on the Majority Cash, reducing the outstanding Majority Cash
required to Close to six hundred and seventy five thousand dollars ($675,000)
(“Amendment No. 3”);
WHEREAS,
in order to give the parties additional time to close, Buyer, Seller and Newco
previously executed a fourth Amendment to the Plan of Reorganization and Stock
Purchase Agreement, effective as of June 30, 2009, pursuant to which the last
date for Closing was extended from June 30, 2009 to July 10, 2009 (“Amendment
No. 4”);
WHEREAS,
the parties remain interested in pursuing the business consolidation
contemplated by the Agreement (specifically, accelerated acquisition by Buyer
from Seller of the Business and the 100% of the Acquired Assets) under modified
and simplified terms (without requiring Buyer to fund the remaining $675,000 of
the Majority Cash as a condition to Close), pursuant to which the Acquired
Assets will be transferred directly from Seller to Buyer as of July ___, 2009
(in lieu of the transfer of the Acquired Assets to Newco and the subsequent
acquisition of Newco by Buyer, per the terms of the original Agreement),
according to the terms and conditions described below.
The Parties hereto consent and agree as
follows:
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1.
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The
name of the Agreement is changed to the “Asset Purchase Agreement Between
Modavox, Inc. and New Aug, LLC” and references throughout the Agreement
are hereby modified accordingly and any references to Newco in the
Agreement will be construed as references to
Seller.
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2.
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The
Recitals in the Agreement are superseded by the Recitals in this Amendment
No. 4. Section 1 of the Agreement is hereby amended to add, in
alphabetical order, the following definition: “Business shall
mean the technology and software company operated by Seller that
specializes in mobile marketing solutions and
services.”
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In
Section 1, the definition of “Acquired Assets” is amended to delete the words
“excluding Cash (except that cash deposits and pre-pays form customers for work
yet to be done post-Closing by Newco will be a transferred Acquired Asset)” and
to substitute in lieu thereof the words “including Cash”.
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3.
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Section
2 of the Agreement (“Basic Transaction”), as previously amended by
Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 4, is
hereby further amended to read, in its entirety, as
follows:
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2.1 Sale of Acquired Assets to
Buyer. Subject to the terms and conditions of this Agreement,
upon the Closing Date Seller will transfer to Buyer, free and clear of all
Encumbrances, all of the Acquired Assets, but not the Excluded Assets, in
exchange for the Acquired Asset Purchase Price described below.
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2.2 No Assumption of
Liabilities. Buyer will not assume or have any responsibility
with respect to any obligation or any of the Liabilities of either Seller or the
Business except for any Liability under existing contracts related to the
current and ongoing delivery of services and management of Seller’s Business
which will be transferred to and honored by Buyer. For the avoidance
of any doubt, Buyer will not assume or be responsible for Seller’s debt
obligation or loan payable to Xxx Xxxxx.
2.3 Acquired Asset Purchase
Price. The total purchase price, payable or transferable to
Seller by Buyer, for the Acquired Assets (the “Acquired Asset Purchase Price”)
is (i) the portion of the Majority Cash already transferred to Seller under
Amendment No. 1 ($25,000), Amendment No. 2 ($250,000) and Amendment No. 3
($50,000); (ii) issuance to Seller of shares of Buyer’s common stock (MDVX:
Modavox “Commons Stock”) as defined in Section 2.4(c) below (“Seller
Equity”); and (iii) Buyer’s previous grant to Seller, as of the original
Agreement Date (January 16, 2009), of an exclusive, fully paid, perpetual and
irrevocable license to use (but not to sublicense), Modavox Patent No. 6,594,691
and Patent No. 7,269,636 (the “Modavox Patents”) with respect to the business of
providing mobile interactive services, including SMS, MMS, targeted mobile ad
delivery and 2D/QR barcode publishing and management directly to Internet and
Mobile Internet Destinations (the “Modavox Licenses”).
a.
Portions of the Majority Cash have been transferred to Seller as follows: (i)
with respect to the portion of the Majority Cash conveyed pursuant to Amendment
No. 1, to the account of Seller on or before March 8, 2009, to be used for
Seller operational requirements prior to the Closing Date; (ii) with respect to
the portion of the Majority Cash conveyed pursuant to Amendment No. 2, to the
account of Seller on or before April 2, 2009, to be used for Seller operational
requirements for the period commencing April 1, 2009 and ending June 30, 2009;
and (iii) with respect to the portion of the Majority Cash conveyed pursuant to
Amendment No, 3, to the account of Seller on or before June 30, 2009, to be used
for Seller operational requirements prior to the Closing Date.
b. Upon
the Parties’ original execution of this Agreement on January 16, 2009 (the
“Agreement Date”), Seller was granted the Modavox Licenses, which Modavox
Licenses remain subject to Section 2.3(f) below.
c. The
share price of Modavox common stock used to calculate the number of shares
required for the Seller Equity as described in Section 2.3 above (the
“Acquisition Share Price”) will be $1.50 per share. The number of Modavox shares
included in the Seller Equity will be $5,500,000 divided by the Acquisition
Share Price. (For example, given the Acquisition Share Price of $1.50 per share,
the number of shares that comprise the Seller Equity would be 3,666,667
shares.)
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d.
Modavox has or will issue to Seller Modavox Common Stock shares, as evidenced by
two (2) Common Stock Certificates, as follows: (i) a 200,000 shares certificate
(the “First Certificate”); and (ii) a shares certificate for the number of
shares necessary to reach the Seller Equity when combined with the First
Certificate (e.g., 3,466,667 shares given the Acquisition Share Price of $1.50
per share) (the “Second Certificate”). The First Certificate was issued to
Seller following the Parties’ execution of a Letter of Intent to enter into the
transaction contemplated hereunder. The Second Certificate will be
delivered to Seller no later than five business days after the Closing
Date.
At
Closing, Modavox and certain managers, members and/or employees of Seller shall
enter into written employment agreements on mutually acceptable terms and
conditions.
e. Except
with respect to Modavox shares evidenced by the First Certificate, all shares of
Modavox common stock transferred under this Agreement will have a restricted
legend limiting resale, and the restrictions will not be lifted for twelve (12)
months after the Closing Date, unless a change in control or acquisition of
Modavox occurs in which case the restriction is void.
f. If for
any reason Modavox is unable by July 10, 2009 (or,
as extended by written agreement of both Parties), to pay the Acquired Asset
Purchase Price, or, in the event Modavox is acquired on or before July 10, 2009
(or as mutually extended) as described in Section 2.3(i), Modavox fails to pay
the consideration described in Section 2.3(i), then both parties agree that the
purchase described in Section 2.1 will not occur (and shares of Modavox owed to
Seller as described in Section 2.3(d) above will not be issued to Seller);
provided, however, that the parties further agree that:
(i)
Seller will retain ownership of the Modavox Common Stock evidenced and conveyed
by the First Certificate;
(ii)
Buyer will receive within 10 days thereafter Seller common stock with a value
equal to the portion of the Majority Cash conveyed pursuant to Amendment No. 1
($25,000) based on a “pre-money” valuation of Seller at $5,500,000;
(iii)
Buyer will receive within 10 days thereafter Seller common stock with a value
equal to the portion of the Majority Cash conveyed pursuant to Amendment No. 2
($250,000) based on a “pre-money” valuation of Seller at
$5,500,000;
(iv)
Buyer will receive within 10 days thereafter Seller common stock with a value
equal to the portion of the Majority Cash conveyed pursuant to Amendment No. 3
($50,000) based on a “pre-money” valuation of Seller at $5,500,000.
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(v)
Seller will retain its rights to the Modavox Licenses as described in Section
2.3(b) provided that Seller pays to Modavox the transaction-based
/“click-through”-based license fees (“Per Transaction License Fees”) described
below related to Seller’s (and Seller’s clients’) use of the Modavox
Patents. Such Per Transaction License Fees will be equal to five
percent (5%) of the click-through/transaction fees collected by Seller from
Seller’s clients or end users related to use of the Modavox
Patents. For purposes of this paragraph, a Transaction occurs any
time a consumer accesses content or information through Seller’s mobile
interactive systems and services (or through a Seller sub-licensee) which
information is customized for the consumer due to Seller’s use of the Modavox
Patents.
i. If
Modavox is acquired on or before the Closing Date, the transactions described
herein (i.e., Buyer’s acquisition from Seller of the Acquired Assets) shall
accelerate and the Closing Date for purposes of this Agreement shall mean the
day before the date on which Modavox is so acquired. In such event,
(i) the purchase price to be paid on the Closing Date will be the sum of the
consideration described in Section 2.3, and (ii) upon receipt of such
consideration, Seller will have sold 100% of the Acquired Assets.
2.5 Name
Change. Seller will inform its current clients and channel
partners of the transaction and the acquisition of the Acquired Assets and the
Business by Buyer, and make available upon request, where applicable, all
contracts upon closing to Buyer. Buyer understands there is limited
revenue generated from these clients. However, Seller will make every
effort to renew those contracts and assign them to Buyer. Current
contracts and channel partner agreements are described in Exhibit A, attached
hereto.
2.6 Closing. The
closing of the transactions contemplated by this Agreement (the “Closing”) shall
take place on the business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Parties may mutually determine (the “Closing Date”); provided, however, that the
Closing Date shall be no later than July ___, 2009.
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3.
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Sections
3 (“Newco Management and Governance”), 4 (“Majority Cash”), 5 (“Option
Conditions”), 6.16 (“Insurance”), 12.5 (“Working Capital”), 12.6 (“Working
Capital Adjustment”) and 12.7 (“Exclusive Remedy”) of the Agreement are
deleted in their entirety and references to such sections and terms
defined therein will have no effect under the Agreement as of the
Amendment Effective Date.
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4.
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Section
6 is amended as follows:
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Introductory
paragraph – In the second sentence, delete the word “Newco” and substitute in
lieu thereof the word “Seller”. Delete the third sentence and the
forth sentence.
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Section
6.2 – Delete the word “corporate”
(twice).
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Section
6.3 – Delete in clause (ii) the words “the Articles of Incorporation or
Bylaws of Seller” and substitute in lieu thereof the words “the
certificate of formation, operating agreement of
Seller”.
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Section
6.5 – Delete the word “Newco” and substitute in lieu thereof the word
“Seller”.
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Section
6.6 – Delete the words “March 31, 2009” and substitute in lieu thereof the
words “July __, 2009”.
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Section
6.12(a) – Delete the word “Newco” and substitute in lieu thereof the word
“Buyer”.
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Section
6.13 – Delete the word “Newco” and substitute in lieu thereof the word
“Buyer”.
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Section
6.17 – After the words “reserve for warranty claims” add the words
“reflected on the financial statements of Seller provided to Buyer during
the due diligence process.”
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Section
6.21 – In clause (i), delete the words “(except to Seller’s shareholders)”
and substitute in lieu thereof the words “(except to Seller’s
members)”.
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5.
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Exhibit
A, and Schedules 6.14, 6.17, 6.19 and 6.20, to the Agreement are attached
hereto and incorporated herein by this
reference.
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6.
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Except
as set forth above, the Agreement shall remain in full force and effect in
accordance with its terms.
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the
parties hereto, intending to be legally bound, have caused this Amendment No. 5
to Plan of Reorganization and Stock Purchase Agreement to be executed by their
duly authorized representatives as of the Amendment Effective Date.
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BUYER:
MODAVOX,
INC.
By:________________________________
Name:______________________________
Tile:_______________________________
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SELLER:
NEW
AUG, LLC
By:________________________________
Name:______________________________
Tile:_______________________________
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NEWCO:
NEW
AUG, LLC (AS OWNER OF NEWCO)
By:
________________________________
Name:
______________________________
Title:
_______________________________
Exhibit A
– attached hereto.
Schedules
– attached hereto.
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EXHIBIT
A
Excluded
Assets –
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(1)
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Any
and all owned or leased real property, including any office leases (of
which there are none).
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(2)
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Any
and all Employee Benefit Plans (of which there are
none).
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(3)
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Any
and all employment contracts or other employment agreements with managers,
members, or employees of Seller.
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Current
contracts and channel partner agreements –
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(1)
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Any
and all such contracts and agreements provided, or made otherwise
available, by Seller to Buyer during or as part of the due diligence
process.
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*****************************************************************************
SCHEDULE
6.14 –
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(1)
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Any
and all contracts and agreements referred to in Section 6.14 which were
provided, or made otherwise available, by Seller to Buyer during or as
part of the due diligence process.
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SCHEDULE
6.17 –
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(1)
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The
standard terms and conditions for sale of Seller’s products and services,
if any, are as set forth in the contracts and agreements referred to on
Schedule 6.14.
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SCHEDULE
6.19 –
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(1)
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Said
list was provided, or made otherwise available, by Seller to Buyer during
or as part of the due diligence
process.
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******************************************************************************
SCHEDULE
6.20 –
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(1)
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None.
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