June 1, 1999 Amendment
to the
Agreement and Plan of Reorganization between Netco Communications
Corporation, Netco Acquiring Corporation, FreeMail, Inc., Xxxxx Xxxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxxx and Xxxxxxx
Xxxxxx
WAMINET Inc. (f/k/a Netco Communications Corporation) ("The Company") Netco
Acquiring Corporation ("NAC"), FreeMail, Inc., Xxxxx Xxxxxxx, Xxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxxx and Xxxxxxx Xxxxxx and
FreeMail, Inc. are parties to an Agreement and Plan of Reorganization dated
December 18, 1997 (the "Agreement").
It is agreed between the parties that Section 1.3(b) of the Agreement be
amended to read:
(b) Additional Contingent Consideration
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(i) Subject to the terms of this Section 1.3(b), and subject to The Company's
and NAC's right of offset as described in Section 8.3 below, The Company
shall pay to the Shareholders the additional contingent consideration
("Additional Contingent Consideration") as, and not to exceed the total
amount, provided in this Section 1.3(b).
(ii) Commencing the third quarter 1999, the Company shall pay allocably to the
Shareholders as Additional Contingent Consideration an aggregate
quarterly sum (the "Quarterly Payment") equal to five percent (5%) of the
gross collected revenue derived by the Company during the applicable
period.
(iii) The Quarterly Payment shall be allocated among the Shareholders ratably
to their receipt of The Company common shares according to Schedule
1.3(a) to this Agreement.
(iv) The total amount of Quarterly Payments payable by The Company in
accordance with this Section 1.3(b) shall not exceed Two Million Dollars
($2,000,000.00) in value payable as follows: the first one million
dollars shall be paid in cash; thereafter quarterly payments shall be
made by the issuance of Company shares valued, in the alternative, by the
then current market value if said shares are publicly traded or, if
private, valued in accordance with the last sale of the Company's shares
in an investment transaction. For purposes of this valuation an
investment transaction is an arms length transaction with a third party
in an amount material to the Company. As an example, the most recent such
valuation arises from the transaction between WAMINET and SGI, which
valued the stock at a price of $11.38 per share calculated on a fully-
diluted basis.
(v) The Quarterly Payments will be made within thirty (30) days following the
end of each calendar quarter, the first payment is due after the third
quarter of 1999. At
the time of each Quarterly Payment, The Company shall furnish to a duly
appointed representative selected by majority of the Shareholders a
financial statement showing the gross collected revenue derived by the
Company during the applicable period. The duly appointed representative of
a majority of the Shareholders, or their agent and/or accountant shall have
the right, exercisable no more often than once each year, to examine The
Company's records during normal business hours, upon ten day's prior
written notice, to confirm the adequacy and accuracy of the Quarterly
Payments and of related quarterly financial statements since the then most
recent of the last such examination, or twenty four(24) months. The Company
shall promptly pay any deficiency revealed by such examination together
with simple interest at the rate of eight percent (8%) per annum from date
on which any such deficient amounts first became payable through the date
of payment. In addition, if such deficiencies exceed five percent (5%) of
the total amount owned for the period to which the examination relates, The
Company shall also pay all reasonable costs and expenses incurred by the
Shareholders, and by their duly appointed representative, in the conduct of
such examination.
IN WITNESS WHEREOF, the parties hereto have duly executed the amendment.
Date: 6/28/99 WAM!NET Inc.
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxx Xxxxxxx
Date: 6/21/99 /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxx
Date: 6/21/99 /s/ Xxxxx Xxxxxx
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Date: June 21st 1999 Xxx Xxxxxxx
/s/ Xxx Xxxxxxx
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Date: 6/21/99 Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
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Date: 6/22/99 Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
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Date: 6/22/99 Xxxx Xxxxxxxxx
/s/ Xxxx Xxxxxxxxx
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Date: 6/22/99 Xxxxx Xxxxx
/s/ Xxxxx Xxxxx
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