United Communications HUB, Inc.
00000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxxxxx, XX 00000
January 21, 2004
Expertise Technology Innovation, Inc.
x/x Xxxxxxx Xxxxxx, Xxx.
00000 Xxx Xxxxxxx
Xxxxxx Xxxxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxx, President
Re: Second Amendment of Agreement and Plan of Merger
Dear Xxxx:
As a result of conversations between our respective counsel, this letter
sets forth our agreement and shall be considered the Second Amendment to the
Agreement and Plan of Merger (the "Agreement") entered into as of May 28, 2003
by and among ETI Corporation ("ETI"), New ETI, Inc., you and United
Communications HUB, Inc. ("UC Hub"). The true and correct name of ETI, as set
forth in its Certificate of Amendment to Articles of Incorporation filed on
April 25, 2003, is Expertise Technology Innovation, Inc. Any and all references
to ETI, ETI Corporation, or Eti Expertise Technology Innovation Corp. shall mean
and refer to Expertise Technology Innovation, Inc.
Because the amendment to ETI's Articles of Incorporation only authorizes 5
million shares of preferred stock, in order to provide for the issuance of
Series A Preferred Stock as required by the Agreement, we agree to amend Section
2.03(b) of the Agreement by changing the exchange ratio of UC Hub Shares for ETI
preferred stock as provided below.
(b) Conversion of UC Hub Shares and Options and Warrants. At and as of
the Effective Time, each eight UC Hub Shares shall be converted into the
right to receive an amount equal to one and two thirds shares of Series A
Preferred Stock (the "Preferred Stock") (the "Merger Consideration") having
the rights and preferences described in the Certificate of Designation of
Rights and Preferences of the Series A Preferred Stock of Expertise
Technology Innovation, Inc., as amended, and ETI shall receive UC Hub
Shares in an amount equal to the number owned by those who do not own
Dissenting Shares. Fractional shares of Preferred Stock shall be issued in
one third share increments only. Upon conversion, UC Hub agrees to pay each
holder of a fractional share cash equal to the last sales price on the last
trading day prior to the closing and fractional shares be cancelled.
Following the Merger, the outstanding Newco common stock shall be
cancelled. At the
Expertise Technology Innovation, Inc.
x/x Xxxxxxx Xxxxxx, Xxx.
January 21, 2004
Page 2
Closing, Newco shall deliver to the stockholders of UC Hub the stock
certificates to which they are entitled. If any UC Hub Shares are not
delivered, the Parties shall arrange to escrow the applicable Preferred
Stock certificates as provided in Section 2.02. At and as of the Effective
Time, all issued and outstanding options and warrants of UC Hub will be
converted into options and warrants of ETI with a five for eight reduction
in the number of underlying shares (rounded down) and an eight for five
increase in their exercise price (rounded down). The 1,500,000 options
granted under UC Hub's Stock Option Plan shall be issued under ETI's 2003
Stock Option Plan as 1,500,000 ETI options, exercisable at $.16 per share.
In addition, the provisions, including Section 2.03(c) relating to UC Hub
Series H Preferred Stock are revoked inasmuch as the holder of UC Hub Series H
Preferred Stock has converted her shares into UC Hub Shares.
We further agree to amend Sections 1, 2(a) and 3 of the Certificate of
Designation of Rights and Preferences of the Series A Preferred Stock of ETI
Corporation as follows:
1. Number of Shares of Preferred Stock. The Company hereby authorizes the
issuance of 3,521,681 shares of Preferred Stock designated as Series A
Preferred Stock (the "Preferred Stock") with a par value of $0.001 per
share.
2. Voting; Other Rights.
a. Except as provided by law or by Section 2(b) below, holders of
Preferred Stock (the "Holders") shall have the right to vote on
any matter affecting the Company in the same manner and on the
same basis as shares of common stock (except for the number of
votes per share) on all matters requiring the approval of holders
of common stock or Preferred Stock. Each share of Preferred Stock
shall entitle the Holder to 60 votes per share, whether voting
with the common stock or separately as a class, but otherwise
each share of Preferred Stock shall have the same rights and
powers as each share of common stock of the Company.
3. Conversion.
a. Except for transfers in which there is no change of beneficial
ownership, as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, a sale, gift or other transfer shall
result in the automatic conversion of such shares of Preferred
Stock into common stock of the Company on a one share of
Preferred Stock to three shares of common stock basis.
b. Each share of Preferred Stock shall also be convertible into
three shares of common stock of the Company upon such Holder
providing notice thereof to the Company.
Expertise Technology Innovation, Inc.
x/x Xxxxxxx Xxxxxx, Xxx.
January 21, 2004
Page 3
In order to comply with Rule 14f-1 promulgated under the Securities
Exchange Act of 1934, you agree to appoint me to the board of directors of ETI
at the Closing, and you shall remain as a director until such time as ETI can
comply with Rule 14f-1. As part of the Closing, ETI shall adopt a resolution
appointing me, Xxxxxxx Xxxxxxxxxxx and V. Xxxxxxx Xxxxxxxx as directors and such
persons as UC Hub designates as officers of ETI. The appointments of Messrs.
Sharborough and Xxxxxxxx shall be conditioned on ETI first complying with Rule
14f-1.
The definition of Form 10-QSB is changed to read " each Form 10-QSB filed
with the SEC by ETI for the quarters ended March 31, June 30 and September 30,
2003."
In all other respects, the Agreement is ratified and confirmed. If the
foregoing is acceptable to you, please execute a copy of this and return it to
me evidencing the intent of ETI Corp. to be bound.
Very truly yours,
/s/ Xxxxx Xxxxxx
-----------------------
Xxxxx Xxxxxx
Chief Executive Officer
I hereby agree to the foregoing this _____ day of January, 2004.
/s/ Xxxx Xxxxxx
-----------------------
Xxxx Xxxxxx, President
