ADDENDUM TO SUBSCRIPTION
AGREEMENT
This Addendum (the “ Addendum
”) relates to the TechoConcepts, Inc. (the “
Company ” or the “ Corporation
”) subscription agreement (the “ Subscription
Agreement ”) for the offering of units (“
Units ”), with each $30,000 Unit consisting of: (i)
$30,000 of 8% secured convertible debentures, convertible into
shares of no par value common stock of the Company (“
Common Stock ”) at $1.50 per share, (ii) warrants to
purchase 10,000 shares of Common Stock at a purchase price of $1.90
per share, and (iii) warrants to purchase 10,000 shares of Common
Stock at a purchase price of $2.75 per share. This Addendum
supplements certain information contained in the Subscription
Agreement and the Offering Memorandum referenced therein and it
exhibits. Capitalized terms not otherwise defined herein shall have
the meaning ascribed to them in the Subscription
Agreement.
The opening paragraph of the Subscription
Agreement states as follows:
“Investors purchasing 67 Units
($2,010,000) or more shall be issued additional warrants (the
“ Additional Warrants ”) at the rate of 40,000
Additional Warrants per Unit purchased, which Additional Warrants
shall be identical in form to the Warrants, except that (a) 50% of
such Additional Warrants shall have an exercise price of $2.00 per
share, shall not have a cashless exercise feature, and shall expire
eighteen (18) months from the Final Closing (defined below), (b)
25% of such Additional Warrants shall have an exercise price of
$2.50 per share, and (c) 25% of such Additional Warrants shall have
an exercise price of $3.50 per share.”
This Addendum is to advise that the Additional
Warrants shall have one additional feature which will differ from
the Warrants issued as part of the Units. This feature will grant
the holders of the Additional Warrants the right to receive a cash
payment based upon the closing bid price of an acquirer’s
stock or based upon a Black Scholes valuation of the Additional
Warrants in the event the Company is acquired or sells all of its
assets in a transaction in which the Common Stock is valued at less
than $3.50 per share. As a result of this right, in place of
Section 5(a) as set forth in the form of Warrant, the Additional
Warrant shall contain the following provision:
|
(a)
|
Merger or
Consolidation .
|
i. For purposes of this Section 5(a), the term
“Per Share Transaction Value” shall mean (A) the sum of
the (i) cash, notes, securities and other property of value; (ii)
liabilities (x) assumed by the purchaser (in the case of a sale of
assets) and/or (y) existing on the Corporation’s balance
sheet at the time the transaction is consummated (in the case of a
merger or sale of stock); (iii) payments to be made in
installments; (iv) amounts paid or payable under consulting,
supply, service, distribution, licensing or lease agreements not to
compete or similar arrangements (including such payments to
management); and, (v) contingent payments (whether or not related
to future earnings or operations), divided by (B) the number of
shares of common stock of the Corporation outstanding immediately
prior to the merger.
ii. If at any time there shall be a merger or a
consolidation of the Corporation with or into another corporation
when the Corporation is not the surviving corporation and where the
Per Share Transaction Value equals or exceeds $3.50, then, as part
of such merger or consolidation,
|
