FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
THIS FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF REORGANIZATION (this
"Amendment"), dated as of March 24, 2005, is entered into by and between Rescon
Technology Corporation, a Nevada corporation ("Rescon"), ▇▇▇▇▇ Acquisition
Corp., a wholly-owned subsidiary of Rescon ("Sub"), ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the
"Shareholder Representative") and ▇▇▇▇▇ Networks, Inc. ("▇▇▇▇▇" and together
with Rescon, Sub and the Shareholder Representative, the "Parties")
WHEREAS, the Parties entered into that certain Agreement and Plan of
Reorganization dated as of October 15, 2004 (the "Merger Agreement");
WHEREAS, the Merger Agreement may be amended upon the written consent of
the Parties;
WHEREAS, the Parties desire to amend the Merger Agreement to, among other
things, reduce the number of shares being issued by 250,000 shares, update the
capitalization representation, include the final conversion ratios and change
the governing law; and
WHEREAS, capitalized terms not otherwise defined shall have the meaning
ascribed to them in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Amendment, the parties agree as follows:
1. Amendment of Recitals.
(a) The Parties hereby agree that the first Recital of the Merger
Agreement is hereby amended in its entirety to read as follows:
"WHEREAS, Parent desires to acquire the Company as a wholly-owned
subsidiary and to issue thirty-two million five hundred thousand
(32,250,000) shares of Parent Common Stock (as defined below) (on a
post-reverse split basis as described below) to certain stockholders of
the Company upon the terms and conditions set forth herein. Merger Sub is
a wholly-owned subsidiary corporation of Parent that shall be merged into
the Company, whereupon the Company shall be the surviving corporation of
said merger and shall become a wholly-owned subsidiary of Parent (Merger
Sub and the Company are sometimes collectively hereinafter referred to as
the "Constituent Corporations")."
(b) The Parties hereby agree that the sixth Recital of the Merger
Agreement is hereby amended in its entirety to read as follows:
"WHEREAS, the Company has an authorized capitalization consisting of
one hundred twenty-five million (125,000,000) shares of common stock, par
value $0.001 per share ("Company Common Stock"), and sixty-seven million
five hundred thousand (67,500,000) shares of preferred stock, par value
$0.001 per share ("Company Preferred Stock"), of which fifteen million
(15,000,000) are designated "Series CC" and fifty-two million five hundred
thousand (52,500,000) are designated "Series D", ninety-five million
sixty-three thousand seven hundred sixty-one (95,063,761) shares of
Company Common Stock fifteen million (15,000,000) shares of Series CC
Preferred Stock and nineteen million five hundred thirty-one thousand two
hundred forty-six (19,531,246) shares of Series D Preferred Stock are
currently issued and outstanding, seventy one million four hundred twenty
thousand seven hundred and five shares of Company Common Stock are
reserved for issuance pursuant to currently issued and outstanding options
and warrants and conversion of preferred stock into common shares, in each
case as of the date hereof."
2. Amendment of Conversion of Securities. The Parties hereby agree that
Section 2(b)(1) of the Merger Agreement is hereby amended in its entirety to
read as follows:
"(1) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Date shall be converted into the right
to receive 0.198916 of a share of Parent Common Stock (the "Common
Exchange Ratio"), each share of Series D Preferred Stock issued and
outstanding immediately prior to the Effective Date shall be converted
into the right to receive 0.683023 of a share of Parent Common Stock and
each share of Series CC Preferred Stock outstanding immediately prior to
the Effective Date shall be cancelled. All such shares of Company Common
Stock, Series D Preferred Stock and Series CC Preferred Stock shall no
longer be outstanding and shall automatically be cancelled and shall cease
to exist, and each certificate previously evidencing any such shares shall
thereafter represent the right to receive, upon the surrender of such
certificate in accordance with the provisions of Section 3 hereof,
certificates evidencing such number of shares of Parent Common Stock,
respectively, into which such shares of Company Common Stock were
converted. The holders of such certificates previously evidencing shares
of Company Common Stock or Series D Preferred Stock outstanding
immediately prior to the Effective Date shall cease to have any rights
with respect to such shares of Company Common Stock or Series D Preferred
Stock, as the case may be, except as otherwise provided herein or by law;"
3. Amendment of Capitalization Representation. The Parties hereby agree
that Section 4(a) of the Merger Agreement is hereby amended in its entirety to
read as follows:
"(a) As of the date hereof 95,063,761 shares of Company Common Stock
15,000,000 shares of the Series CC Preferred Stock and 19,531,247 shares
of the Series D Preferred Stock are issued and outstanding. Other than the
exercise or conversion of outstanding options or warrants to purchase
Company Common Stock, the foregoing shares represent all of the shares of
the Company's capital stock that will be issued and outstanding as of the
Closing."
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4. Amendment of Applicable Law. The Parties hereby agree that Section
14(o) of the Merger Agreement is hereby amended in its entirety to read as
follows:
"(o) Applicable Law. This Agreement shall be construed and governed
by the internal laws of the State of Delaware."
5. Representations and Warranties. Each party hereby represents and
warrants to the other that all corporate action on the part of such party
necessary for the due authorization, execution, delivery and performance by such
party of this Amendment has been taken prior to the date hereof. This Amendment
has been duly executed and delivered by such party and constitutes the legal,
valid and binding obligation of such party, enforceable in accordance with the
terms of this Amendment.
6. Miscellaneous.
(a) Binding Effect. This Amendment shall be binding upon and inure
to the benefit of the Parties and their respective heirs, successors and
permitted assigns. Except as otherwise expressly provided herein, the
Merger Agreement remains in full force and effect in accordance with its
terms.
(b) Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of
any other provision.
(c) Governing Law. This Amendment shall be governed, interpreted and
construed by and in accordance with the laws of the State of Delaware
without regard to principles of conflicts of law and shall be treated in
all respects as a Delaware contract.
(d) Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Amendment
by signing any such counterpart.
(e) Costs and Expenses. Each of the parties hereto shall bear its
own fees and expenses in connection with the preparation and execution of
this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day, month and year first above written.
RESCON TECHNOLOGY CORPORATION
By:
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Henrik Klausgaard, CEO
▇▇▇▇▇ ACQUISITION CORP.
By:
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Henrik Klausgaard, CEO
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ NETWORKS, INC.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇, President & CEO
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