Exhibit 10.1(a)
AMENDMENT TO SHARE EXCHANGE AGREEMENT
THIS AMENDMENT to the Share Exchange Agreement (the "Agreement") entered
into on August 12, 1998, by and between EXECUTONE Information Systems, Inc., a
Virginia corporation ("Executone"), Unistar Gaming Corp., a Delaware corporation
and wholly-owned subsidiary of Executone ("Unistar"), and Watertone Holdings,
L.P., Cooper Life Sciences, Inc., John C. Shaw, Richard Bartlett, Jerry M.
Seslowe, 10-26 S. William St. Associates, Louis K. Adler and Resource Holdings
Associates (together, the "Shareholders") is entered into as of this 22nd day of
December, 1998.
In accordance with the provisions of Section 8.2 of Article VIII of the
Agreement, the parties hereto agree to amend the Agreement as follows:
1. In the introductory paragraph of the Agreement, the name "Watertone,
L.P." is deleted and the name "Watertone Holdings, L.P." is substituted
therefor.
2. In the line 1 of the chart following Paragraph A of the "RECITALS"
section of the Agreement, the name "Watertone, L.P." is deleted and the name
"Watertone Holdings, L.P." is substituted therefor.
3. Paragraphs B, C and D of the "RECITALS" section of the Agreement are
deleted, and the following are substituted therefor:
B Executone intends to terminate Executone's ownership of Unistar by the
exchange of its shares of common stock of Unistar (the "Unistar Common Stock")
for the Executone Preferred Stock pursuant to this Agreement and the
distribution (the "Distribution") to the holders of Executone common stock (the
"Executone Common Stock") of 85% of the outstanding shares of Unistar Common
Stock.
C. The Shareholders wish to continue to participate in the growth of
Unistar, if any, following the Distribution, and Executone and Unistar believe
that it is in the best interests of each company to permit the Shareholders to
continue such participation.
D. Executone, Unistar and the Shareholders have agreed to a share exchange
whereby the Shareholders will exchange their shares of Executone Preferred Stock
for shares of Unistar Common Stock and shares of Unistar's Cumulative
Convertible Preferred Stock, Series A (the "Unistar Preferred Stock"), pursuant
to the terms and conditions of this Agreement.
4. The following definition is added in Article I of the Agreement:
"Distribution Date" shall have the meaning set forth in Section
2.1(b).
5. The definition of "Registration Statement" in Article I of the
Agreement is deleted and the following is substituted therefor:
"Registration Statement" means the Registration Statement with
respect to the Unistar Common Stock that will be distributed in the
Distribution.
6. The heading title of Article II and Section 2.1 of Article II of the
Agreement are deleted and the following is substituted therefor:
ARTICLE II
SEPARATION
2.1. Mechanics of Separation.
(a) Executone agrees to consummate the Distribution in
accordance with the terms and subject to the conditions set forth in
the Reorganization Agreement between Executone and Unistar, a draft
of which is attached as Exhibit B hereto.
(b) The Distribution will take the form of a distribution to
the holders of Executone Common Stock of shares of Unistar Common
Stock not delivered to the Shareholders pursuant to the Agreement,
which shares shall constitute 85% of the outstanding shares of
Unistar Common Stock as of the date of consummation of the
Distribution (the "Distribution Date").
7. In the first line of Section 2.2 of Article II of the Agreement, the
words "Rights Offering" are deleted and the word "Distribution" is substituted
therefor.
8. In the first sentence of Section 3.1(a) of Article III of the
Agreement, in subsection (i) the words "date of closing (the "Separation Date")
of the Rights Offering" are deleted and the words "Distribution Date" are
substituted therefor and the words "exclusive of any shares acquired by the
Shareholders pursuant to the Standby Agreement," are deleted; and in subsection
(ii) the words "Series A" are deleted.
9. The existing paragraph under Section 3.2 of Article III of the
Agreement shall become Section 3.2(a) and, in the third line of Section 3.2(a)
of Article III of the Agreement, the words "Rights Offering" are deleted and the
word "Distribution" is substituted therefor.
10. The following new Section 3.2(b) is added to Article III of the
Agreement:
(b) Cooper Life Sciences, Inc. and 10-26 S. William St.
Associates will receive a total of $125,000 concurrent with their
signing of the Agreement, to be allocated on a pro-rata basis
consistent with their respective percentage ownership interests in
the Executone Preferred Stock, in settlement of all claims against
Executone or Unistar of any kind, regardless of basis, arising on or
prior to the Distribution Date.
11. In the second sentence of Section 4.1(b) of Article IV of the
Agreement, the words "to the Rights Offering" are deleted and the words "the
Distribution" are substituted therefor; and the words "exclusive of any shares
acquired pursuant to the Standby Agreement," are deleted.
12. In the third line of Section 4.1(c) of Article IV of the Agreement,
the words "Rights Offering" are deleted and the word "Distribution" is
substituted therefor.
13. In the third line of Section 4.2(b) of Article IV of the Agreement,
the words "Rights Offering" are deleted and the word "Distribution" is
substituted therefor.
14. In the first line of Section 5.2 of Article V of the Agreement, the
words "Rights Offering" are deleted and the word "Distribution" is substituted
therefor.
15. In the fifth and twelfth lines of Section 5.3(b) of Article V of the
Agreement, the words "Executone Common Stock and" are deleted.
16. In the third line of Section 5.5 of Article V of the Agreement, the
name "Watertone, L.P." is deleted and the name "Watertone Holdings, L.P." is
substituted therefor.
17. Section 5.6 of Article V of the Agreement is deleted and the following
new Section 5.6 is substituted therefor:
5.6. Capital Contribution.
At the Closing Date, in addition to the funding provided under
Section 5.5 hereof, Executone will provide Unistar with $3.0 million in
cash, plus an additional amount in cash based upon when the Distribution
is consummated as follows:
Distribution Consummated Cash Payable by
By: Executone
------------------------ ---------------
March 31, 1999 $2.5 million
April 30, 1999 $2.0 million
May 31, 1999 $1.5 million
June 30, 1999 $1.0 million
If the distribution is consummated after June 30, 1999, then the
additional amount of cash shall be $500,000, provided that the Agreement
is not terminated prior thereto. At the Closing Date, Executone also will
assume responsibility for, and pay when due, expenses incurred by Unistar
but not yet paid, provided, however, that the maximum of such expenses
shall not exceed $500,000 based on Executone's undertaking to keep current
on Unistar's liabilities.
18. In the first line of Section 5.7 of Article V of the Agreement, the
word "Separation" is deleted and the word "Distribution" is substituted
therefor; and in the fourth line of Section 5.7, the words "reasonably
exercised" are deleted.
19. In the third line of the first paragraph of Section 5.8 of Article V
of the Agreement, the word "Separation" is deleted and the word "Distribution"
is substituted therefor.
20. The following language is deleted from the end of the first sentence
of Section 5.8(a) of Article V of the Agreement:
", provided that the Employees must pledge, in addition to shares of
Executone capital stock pledged under the Plan as of the Separation Date
(the "Pledged Executone Stock"), any equity interest in Unistar held by
them as a result of the exercise of Rights attributable to the Pledged
Executone Stock to secure any loan guaranteed by Executone"
21. In the second and fifth lines of Section 5.8(b) of Article V of the
Agreement, the word "Separation" is deleted and the word "Distribution" is
substituted therefor.
22. In the signature block for Watertone, L.P., the name "Watertone, L.P."
is deleted and the name "Watertone Holdings, L.P." is substituted therefor, and
the zip code 10019 is deleted and the zip code 10038 is substituted therefor.
23. All of the remaining terms and conditions of the Agreement shall
remain in full force and effect:
IN WITNESS WHEREOF, the undersigned hereby agree to this amendment of the
Agreement as of this 22nd day of December, 1998.
EXECUTONE INFORMATION SYSTEMS, INC.
By: /s/ Stanley J. Kabala
------------------------------------
Name: Stanley J. Kabala
Title: President and Chief Executive Officer
Date: December 22nd, 1998
Address: 478 Wheelers Farms Road
Milford, Connecticut 06460
eLOTTERY, INC.
By: /s/ Michael W. Yacenda
---------------------------------
Name: Michael W. Yacenda
Title: President and Chief Executive Officer
Date: December 22nd, 1998
Address: 478 Wheelers Farms Road
Milford, Connecticut 06460
WATERTONE HOLDINGS, L.P.
By: /s/ Robert A. Berman
--------------------------------------
Name: Robert A. Berman
Title: Managing Director
Date: December 22nd, 1998
Address: 730 Fifth Avenue
New York, New York 10038
COOPER LIFE SCIENCES, INC.
By: /s/ Steven Rosenberg
--------------------------------
Name: Steven Rosenberg
Title:
Date: December 22nd, 1998
Address: 160 Broadway
New York, New York 10038
By: /s/ John C. Shaw
-----------------------------
Name: John C. Shaw
Date: December 22nd, 1998
Address: 8 Indian Drive
Old Greenwich, CT 06870
By: /s/ Richard Bartlett
----------------------------------
Name: Richard Bartlett
Date: December 22nd, 1998
Address: 15 West 81st Street
New York, New York
By: /s/ Jerry M. Seslowe
-----------------------------------
Name: Jerry M. Seslowe
Date: December 22nd, 1998
Address: 2 Chanticlare Drive
Mannasset, NY 11030
10-26 S. WILLIAM ST. ASSOCIATES
By: /s/ Steven Rosenberg
----------------------------------
Name: Steven Rosenberg
Title:
Date: December 22nd, 1998
Address:
By: /s/ Louis K. Adler
---------------------------------
Name: Louis K. Adler
Date: December 22nd, 1998
Address:
RESOURCE HOLDINGS ASSOCIATES
By: /s/ Jerry M. Seslowe
-----------------------------------
Name: Jerry M. Seslowe
Title: Managing Director
Date: December 22nd, 1998
Address: 520 Madison Avenue, 40th Floor
New York, New York 10022