AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AMENDMENT
TO
This
Amendment, dated as of September 12, 2008, is among Driftwood Ventures, Inc.,
a
Delaware corporation (“Parent”), DFTW Merger Sub, Inc., a Delaware corporation
and a wholly-owned subsidiary of Parent (“Merger Sub”), Zoo Games, Inc. (f/k/a
Green Screen Interactive Software, Inc.), a Delaware corporation (the
“Company”), and Xxxx Xxxxxxx as representative of the stockholders of the
Company.
1.
Reference
to Merger Agreement; Definitions. Reference is made to the Agreement and
Plan of Merger dated as of July 7, 2008, by and among Parent, Merger Sub, the
Company and the Xxxx Xxxxxxx as successor representative of the stockholders
of
the Company (the “Merger Agreement”). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Merger
Agreement.
2.
Amendment
to Section 1.7(a) of Merger Agreement. Section 1.7(a) of the Merger
Agreement is hereby amended by deleting the number “7.063643” in the last line
of such section and replacing it with the number “7.023274”, such that Section
1.7(a) reads as follows:
“(a)
Each
share of the Company’s common stock, par value $0.001 per share (“Company
Common Stock”),
issued and outstanding immediately prior to the Effective Time (other than
any
shares of Company Common Stock to be canceled and retired pursuant to
Section 1.10 and any Dissenting Shares (as defined in Section 1.15))
shall be converted automatically into the right to receive that number
(expressed as a decimal) of fully paid and non-assessable shares of common
stock
of Parent, par value $0.001 per share (the “Parent
Common Stock”),
equal
to the Exchange Ratio. For purposes of this Agreement, the “Exchange
Ratio”
shall
initially be 7.023274, subject to adjustment as set forth in
Section 1.14.”
3.
Amendment
to Section 1.7(c) of Merger Agreement. Section 1.7(c) of the Merger
Agreement is hereby amended by deleting the number “2,609,830” of the second
line of such section and replacing it with the number “2,609,861”, such that
Section 1.7(c) reads as follows:
“(c) Escrow.
At
Closing, Parent, on behalf of the Company Stockholders, shall deposit, 2,609,861
shares out of the Closing Shares in escrow (the “Escrow
Amount”),
to be
held by the escrow agent pursuant to the terms and conditions of the Escrow
Agreement (as hereafter defined). Each
Company Stockholder shall be deemed to have contributed his, her or its Pro
Rata
Portion of the Escrow Amount to provide a source of funding to the Compensated
Person for any Losses for which they are entitled to be indemnified pursuant
to
Article VII. “Pro
Rata Portion”
of
the
Escrow Amount shall mean, with respect to each Company Stockholder, that portion
of the Escrow Amount equal to a fraction, the numerator of which is the number
of Closing Shares to be received by such Company Stockholder pursuant to Section
1.7(b) and the denominator of which is the total number of Closing Shares to
be
received by all Company Stockholders pursuant to Section
1.7(b).”
4.
Amendment
to Section 1.12. Section 1.12 of the Merger Agreement is hereby deleted in
its entirety and replaced with the following:
“1.12 Company
Stock Options and Warrants. At
the
Effective Time:
334,983
options to purchase shares of Company Common Stock (“Company
Options”)
outstanding under the Company’s 2008 Equity Incentive Plan (the “Company
Incentive Plan”),
by
virtue of the Merger and without any action on the part of the holders thereof,
shall be assumed by Parent in accordance with Section 5.4, and converted
into options of Parent as follows: 243,040 options at an exercise price of
$2.58
per share, 421,396 options at an exercise price of $2.25 per share and 1,688,240
options at an exercise price of $1.52 per share.
246,243
warrants (“Company
Warrants”)
to
purchase shares of Company Capital Stock (as herein defined) then outstanding,
by virtue of the Merger and without any action on the part of the holders
thereof, shall be assumed by Parent in accordance with Section 5.4, and
converted into warrants to acquire Parent Common Stock as follows: 1,411,186
warrants at an exercise price of $2.84 per share and 318,246 warrants at an
exercise price of $2.13 per share.
5.
Amendment
to Schedule 2.3(b) of the Company Disclosure Schedule. Schedule 2.3(b) of
the Company Disclosure Schedule is hereby deleted in its entirety and replaced
with new Schedule 2.3(b) attached hereto.
6.
Amendment
to Section 5.4. Section 5.4 of the Merger Agreement is hereby deleted in its
entirety and replaced with the following:
“Section
5.4 Stock
Options; Warrants.
At
the
Effective Time, 334,983 Company Stock Options shall be assumed by Parent in
accordance with Section 1.12. Accordingly, each such Company Stock Option shall
be deemed to constitute an option to acquire, on the same terms and conditions
as were applicable under such Company Stock Option, the same number of shares
of
Parent Common Stock as the holder of such Company Stock Option would have been
entitled to receive pursuant to the Merger had such holder exercised such option
in full including as to unvested shares, immediately prior to the Effective
Time
(rounded down to the nearest whole number), at a price per share (rounded up
to
the nearest whole cent) equal to (i) the aggregate exercise price for the shares
of Company Common Stock otherwise purchasable pursuant to such Company Stock
Option divided by (ii) the number of full shares of Parent Common Stock deemed
purchasable pursuant to such Parent stock option in accordance with the
foregoing; provided,
however,
that,
in the case of any Company Stock Option to which Section 422 of the Code
applies (“Incentive
Stock Options”),
the
option price, the number of shares purchasable pursuant to such option and
the
terms and conditions of exercise of such option shall be determined in order
to
comply with Section 424(a) of the Code.
2
At
the
Effective Time, 246,243 Company Warrants shall be assumed by Parent in
accordance with Section 1.12. Accordingly, each Company Warrant shall be deemed
to constitute an option to acquire, on the same terms and conditions as were
applicable under such Company Warrant, the same number of shares of Parent
Common Stock as the holder of such Company Warrant would have been entitled
to
receive pursuant to the Merger had such holder exercised such warrant in full
including as to unvested shares, immediately prior to the Effective Time
(rounded down to the nearest whole number), at a price per share (rounded up
to
the nearest whole cent) equal to (i) the aggregate exercise price for the shares
of Company Common Stock otherwise purchasable pursuant to such Company Warrant
divided by (ii) the number of full shares of Parent Common Stock deemed
purchasable pursuant to such Parent warrant in accordance with the
foregoing.
As
soon
as practicable after the Effective Time, Parent shall deliver to the holders
of
Company Options and Company Warrants appropriate notice evidencing the foregoing
assumption and setting forth such participants’ rights pursuant thereto, and the
grants shall continue in effect on the same terms and conditions as existed
on
the date of this Agreement (subject to the adjustments required by this
Section 5.4 after giving effect to the Merger). Parent shall comply with
the terms of the Company Incentive Plan to ensure, to the extent required by,
and subject to the provisions of, such plan, that Company Options which
qualified as Incentive Stock Options prior the Effective Time continue to
qualify as Incentive Stock Options after the Effective Time.
Parent
shall take all corporate action necessary to reserve for issuance a sufficient
number of shares of Parent Common Stock for delivery under Company Options
and
Company Warrants assumed in accordance with this Section 5.4 and Section
1.12.”
7.
Director
Designation. The Company’s right to designate a third director to serve on
the Parent’s Board of Directors following the Merger, as set forth in Section
5.7 of the Merger Agreement, shall survive for 60 days following Closing, which
director shall be designated by the Stockholder Representative, subject to
Parent’s approval of such individual which approval shall not be unreasonably
withheld.
8.
Bonuses.
With respect to the employment agreements being assumed by Parent, or
entered into in connection with the Merger, in the event any
bonuses may be paid to certain employees as a result of the achievement of
certain performance criteria as may have been set or will be set by
the President of the Company, in accordance with such employment
agreements, such bonuses shall not be paid unless and until they are approved
by
Parent’s Board of Directors.
3
9.
Miscellaneous.
Except as otherwise set forth herein, the Merger Agreement shall remain in
full
force and effect without change or modification. This Amendment may be executed
in any number of counterparts, which together shall constitute one instrument,
and shall bind and inure to the benefit of the parties and their respective
successors and assigns.
4
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day
and year first above written.
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By:
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/s/
Xxxxxxx Xxxxx
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Name:
Xxxxxxx Xxxxx
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Title:
Chief Financial Officer
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DFTW
MERGER SUB, INC.
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By:
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/s/
Xxxxxxx Xxxxx
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Name:
Xxxxxxx Xxxxx
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Title:
Chief Financial Officer
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ZOO
GAMES, INC.
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By:
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/s/
Xxxx Xxxxxxx
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Name:
Xxxx Xxxxxxx
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Title:
President
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REPRESENTATIVE:
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/s/
Xxxx Xxxxxxx
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