EXHIBIT 2.04
SECOND AMENDMENT
TO REORGANIZATION AGREEMENT
THIS SECOND AMENDMENT TO REORGANIZATION AGREEMENT ("Amendment") is made
and entered into as of the 10th day of September 1999, by and between SCHIMATIC
CASH TRANSACTIONS XXXXXXX.XXX,. INC., a Florida corporation ("Public Company"),
and IC ONE, INC., a Delaware corporation ("Private Company"), on the following
Premises:
WHEREAS, the parties have entered into that certain Reorganization
Agreement dated as of June 30, 1999 (the "Agreement"), providing for the
acquisition by the Public Company of the Private Company (terms used but not
defined herein shall have the same meanings ascribed to them as in the
Agreement);
WHEREAS, the board of directors and stockholders of the Public Company
have approved the Agreement and have authorized the officers and the board of
directors, respectively, to take such action as they may deem appropriate to
specify the final terms and conditions of the transactions contemplated by such
Agreement;
WHEREAS, the board of directors and stockholders of the Private Company
have approved the Agreement and have authorized the officers and the board of
directors, respectively, to take such action as they may deem appropriate to
specify the final terms and conditions of the transactions contemplated by such
Agreement; and
WHEREAS, the Public Company and the Private Company have resolved
various details respecting the specific terms of the transaction contemplated by
the Agreement and desire to set forth such further terms and conditions in this
Amendment.
NOW, THEREFORE, upon these premises, which are incorporated herein by
reference, and for and in consideration of the mutual promises and covenants
hereinafter set forth, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
Agreement:
1. The parties desire to structure the transaction to qualify for
federal income taxes as a tax-free reorganization under the provisions of
sections 368(a)(1)(A) and 368(a)(2)(E) of the United States Internal Revenue
Code of 1986, as amended (the "Code"), and each party will take all actions
reasonably necessary to so qualify the transaction. In connection therewith a
newly formed wholly owned subsidiary of Public Company will be merged with and
into Private Company, which shall be the surviving entity in such merger.
Notwithstanding the foregoing, neither party has obtained or will be required to
obtain or provide an opinion of counsel to the foregoing effect.
2. Public Company, which has an aggregate of 12,900,000 shares issued
and outstanding as of the Closing Date, shall issue an aggregate of 42,400,000
shares of Public Company Stock to acquire all of the issued and outstanding
shares of the Private Company as well as the interest and claims of certain
investors in CardOne Corporation (the "CardOne Group"), all in a single, unified
transaction to be completed at the earliest practicable date. Of such 42,400,000
shares, 34,810,801 shares shall initially be issued in exchange for all
45,868,876 issued and outstanding common stock of the Private Company, with
7,589,199 shares reserved for possible issuance to the CardOne group, such
shares to be distributed to the stockholders of the Private Company, pro rata in
accordance with the number of shares owned by each, in the event that the
acquisition of the claims and interests of the CardOne Group is not completed on
such date as the Public Company may hereafter specify, but in any event on or
before December 31, 1999.
3. Of the shares to be issued to the stockholders of the Private
Company, that number of shares of Public Company Stock that would be issuable as
a result of the ownership of 1,000,000 shares of the Private Company held by
each of Xxxxx X. Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxx Xxxxxx, Xxxx
Xxxxxxxxxxx, and Xxxxxx X. Xxxxxxx, or each's respective affiliates or
successors-in-interest shall be retained by the Public Company and returned to
it for cancellation in the event that MCI and MGM do not participate in or
facilitate funding to the Private Company of at least $1,000,000 on or before
five years from the date of this Agreement.
4. The Private Company has caused to be organized IC One Patent, Inc.,
the corporation referred to in the Agreement as IC Smartworld, Inc.
("PatentCo"), and has transferred to PatentCo Private Company's rights to United
States Patent No. 5,806,045, dated September 8, 1998, and entitled "Method and
System for Allocating and Redeeming Incentive Credits between a Portable Device
and a Base Device," a copy of which is attached hereto (the "Patent") in
consideration of a license to use such Patent and an aggregate of 47,111,111
shares of common stock of PatentCo, after giving effect to a forward split,
which constitutes all of the issued and outstanding stock of PatentCo. An
aggregate of 42,400,000 of such shares of PatentCo shall be distributed to the
stockholders of Private Company on a share-for-share basis immediately preceding
the Effective Time.
5. At the Effective Time, an aggregate of 4,711,111 shares of PatentCo
shall be transferred by the Private Company to the Public Company for
distribution to the stockholders of record of the Public Company immediately
preceding the Effective Time. Such distribution shall be held by the Public
Company in trust for and on behalf of such stockholders of the Public Company
immediately prior to the Effective Time and shall be distributed at such time as
such distribution can be effected in compliance with the Securities Act of 1933,
as amended, and all applicable law.
6. Each of the parties shall execute and deliver such other and further
documents as the other may reasonably request in order to consummate the
transactions contemplated by the Agreement and the Amendment.
7. In the event of a conflict between this Amendment and the Agreement
or the First Amendment thereto dated effective July 17, 1999, this Amendment
shall prevail. In all other respects, the provisions of the Agreement and First
Amendment shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the year and date first above written.
Public Company: Private Company:
SCHIMATIC CASH TRANSACTIONS IC ONE, INC.
XXXXXXX.XXX, INC.
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxx, President Xxxxxx X. Xxxxxxx, President
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