SECOND ADDENDUM
TO THE
AGREEMENT
AND
PLAN OF REORGANIZATION
This Second Addendum (the "Second Addendum") is made as of the 20th day
of August, 1999, among Equitex, Inc., a Delaware corporation ("Equitex"); First
Bankers Mortgage Services, Inc., a Florida corporation ("FBMS"); Vincent L.
Muratore, an individual and the sole shareholder of the common stock of FBMS
(the "Shareholder"); and FBMS Acquisition Corp., a Delaware corporation (the
"Merger Subsidiary"), which is wholly owned by Equitex.
W I T N E S S E T H:
WHEREAS, the parties entered into an Agreement and Plan of
Reorganization dated June 22, 1999 (the "Agreement"), as amended by the First
Addendum to the Agreement dated August 4, 1999 (the "First Addendum");
WHEREAS, Sections 7.11 and 8.8 of the Agreement require as a condition
to the Closing of the transactions contemplated by the Agreement, that the
Equitex stockholders shall have approved an increase in the authorized Equitex
Common Stock from 7,500,000 to 50,000,000 shares (the "Capitalization
Increase");
WHEREAS, the parties have agreed to amend the Agreement in accordance
with Section 12.8 to reflect that the Closing will occur prior to the
Capitalization Increase, and to effect the Closing upon the issuance of a series
of Equitex Preferred Stock pursuant to Section 9.3 of the First Addendum;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and certain other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto covenant and
agree as follows:
ARTICLE 1
CHANGE OF CONSIDERATION
1.1 DELIVERY OF PREFERRED STOCK. The Merger Consideration to be
delivered at Closing by Equitex shall be 1,000 shares of Equitex Series E
Convertible Preferred Stock (the "Series E Preferred Stock"). Until the shares
of Series E Stock are converted into shares of Equitex Common Stock, all
references in the Agreement to the Merger Consideration or to the Equitex Common
Stock shall mean and refer to the Series E Preferred Stock, in all circumstances
where appropriate. All denominations of Equitex Common Stock stated in the
Agreement shall be divided by 1,000 when
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referring to denomination of Series E Preferred Stock to be delivered in
accordance with this Second Addendum.
1.2 STATE FILINGS. The parties acknowledge that the Certificate of
Designations, Rights and Preferences for the Series E Preferred Stock, in the
form attached hereto as Exhibit A (the "Designation"), has not been filed with
the Delaware Secretary of State. Equitex shall file the Designation promptly
after the Closing and deliver the certificates representing the Series E
Preferred Stock upon acceptance of the Designation by the Delaware Secretary of
State. All representation and warranties of Equitex regarding the Series E
Preferred Stock shall only be effective from and after the filing and acceptance
of the Designation with and by the Delaware Secretary of State.
ARTICLE 2
WAIVERS OF CLOSING CONDITIONS
2.1 WAIVERS BY FBMS AND SHAREHOLDER. FBMS and the Shareholder hereby
waive the following conditions to Closing:
a. Section 7.1 of the Agreement, with respect to any matters concerning
the Capitalization Increase.
b. Section 7.2 of the Agreement with respect to any matters concerning
the Capitalization Increase and the status of the Series E Preferred Stock prior
to the filing of the Designation with the Delaware Secretary of State.
c. Section 7.11 of the Agreement.
2.1 WAIVERS BY EQUITEX AND THE MERGER SUBSIDIARY. Equitex and the
Merger Subsidiary hereby waive the following conditions to Closing:
a. Section 8.8 of the Agreement
b. Section 8.9 of the Agreement
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ARTICLE 3
CERTAIN ADDITIONAL AGREEMENTS
3.1 ENTIRE AGREEMENT. This Second Addendum, the First Addendum and the
Agreement and the exhibits thereto contain the complete agreement among the
parties with respect to the transactions contemplated hereby and supersede all
prior agreements and understandings among the parties with respect to such
transactions. Except as expressly modified by this Second Addendum, the First
Addendum and the Agreement remain in full force and effect. Article and other
headings are for reference purposes only and shall not affect the interpretation
or construction of this Second Addendum. The parties hereto have not made any
representation or warranty except as expressly set forth in this Second
Addendum, the First Addendum or the Agreement or in any certificate or schedule
delivered pursuant hereto. The obligations of any party under any agreement
executed pursuant to this Second Addendum, the First Addendum or the Agreement
shall not be affected by this section.
3.2 COUNTERPARTS. This Second Addendum may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
3.3 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Delaware.
3.4 WAIVER AND OTHER ACTION. This Second Addendum may be amended,
modified, or supplemented only by a written instrument executed by the parties
against which enforcement of the amendment, modification or supplement is
sought.
3.5 SEVERABILITY. If any provision of this Second Addendum is held to
be illegal, invalid, or unenforceable, such provision shall be fully severable,
and this Second Addendum shall be construed and enforced as if such illegal,
invalid, or unenforceable provision were never a part hereof; the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance; and in lieu of such illegal, invalid, or unenforceable provision,
there shall be added automatically as part of this Second Addendum, a provision
as similar in its terms to such illegal, invalid, or unenforceable provision as
may be possible and be legal, valid, and enforceable.
3.6 MUTUAL CONTRIBUTION. The parties to this Second Addendum and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.
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[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Second
Addendum as of the day and year Second above written.
First Bankers Mortgage Services, Inc.
By: /s/ Vincent L.Muratore
--------------------------------
Name: Vincent L. Muratore
Title: President and Chief Executive Officer
Shareholder
By: /s/ Vincent L.Muratore
--------------------------------
Name: Vincent L. Muratore
Equitex, Inc.
By: /s/ Henry Fong
--------------------------------
Name: Henry Fong
Title: President
FBMS Acquisition Corp.
By: /s/ Henry Fong
--------------------------------
Name: Henry Fong
Title: President
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LIST OF EXHIBITS
Exhibit A Certificate of Designations, Rights and Preferences of the
Series E Preferred Stock of Equitex, Inc.
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TABLE OF CONTENTS
ARTICLE 1
Change of Consideration.............................................-1-
1.1 Delivery of Preferred Stock.......................-1-
1.2 State Filings.....................................-2-
ARTICLE 2
Waivers of Closing Conditions.......................................-2-
2.1 Waivers by FBMS and Shareholder............................-2-
2.1 Waivers by Equitex and the Merger Subsidiary...............-2-
ARTICLE 3
Certain Additional Agreements.......................................-2-
3.1 Entire Agreement...........................................-2-
3.2 Counterparts...............................................-3-
3.3 Governing Law..............................................-3-
3.4 Waiver and Other Action....................................-3-
3.5 Severability...............................................-3-
Mutual Contribution........................................-3-
List of Exhibits.............................................................-5-
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Second Addendum
to the
Agreement and Plan of Reorganization
AMONG
Equitex, Inc.
(a Delaware Corporation)
-----------------------------------
First Bankers Mortgage Services, Inc.
(a Florida Corporation)
-----------------------------------
Vincent L. Muratore
(an Individual)
AND
FBMS Acquisition Corp.
(a Delaware Corporation)
AUGUST 20, 1999