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Exhibit 2.0
AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
This amendment ("Amendment") is intended to amend the Agreement and Plan of
Reorganization dated May 4, 2000, ("Agreement") by and among TSET, Inc., a
Nevada corporation ("TSET"); EdgeAudio.Com, Inc., an Oregon corporation
("EdgeAudio"); LYNK Enterprises, Inc., an Oregon corporation ("LYNK"); Robert
Lightman, an individual; J. David Hogan, an individual; Eric Alexander, an
individual; and Eterna Internacional, S.A. de C.V., a corporation organized and
existing under the laws of the Republic of Mexico ("Eterna") (LYNK), Robert I.
Lightman, J. David Hogan, Eric J. Alexander, and Eterna are hereinafter
collectively referred to as the "Stockholders"), and Bryan Holbrook
("Holbrook").
RECITALS
TSET, as EdgeAudio's sole shareholder, has authorized EdgeAudio's Articles
of Incorporation to be amended to authorize and issue Preferred Stock
("Preferred Stock") of EdgeAudio to Holbrook.
As a condition to Holbrook's acquisition of the Preferred Stock, certain
provisions of the Agreement must be amended.
AMENDMENT
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree to amend the Agreement as
follows:
1. Holbrook shall hereby be added to the Agreement as a party and
shall have privity of contract with all other parties to the
Agreement.
2. Section 5(a) of the Agreement shall be amended as follows:
Effective the date of this Amendment (a) Holbrook shall replace James
Eric Anderson as a member of EdgeAudio's board of directors, and at
that time Holbrook shall also become Chairman of the Board, and (b)
Richard A. Papworth ("Papworth") shall replace J. David Hogan as a
member of EdgeAudio's board of directors and Papworth shall be
elected chief financial officer of EdgeAudio.
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3. The following language found at the end of the first sentence of
Section 5(c) of the Agreement shall be deleted: "but with such
consultations and determinations as are consistent with TSET's
ownership of EdgeAudio".
4. The term "TSET" at the end of the first sentence of Section 6 of the
Agreement shall be changed to "its shareholders." The second sentence
of Section 6 of the Agreement shall be amended to read as follows:
"The shareholders intend that the Corporate Business be conducted by
EdgeAudio in substantially the same manner as conducted prior to
execution and delivery of this Amendment and the Agreement."
5. The last sentence of Section 8 of the Agreement shall be amended to
read as follows: "As an additional inducement to management and to
ensure participation by management in the potential future success of
EdgeAudio, TSET, as sole stockholder of EdgeAudio, hereby agrees to
reserve up to 20% of EdgeAudio's authorized capital stock to be used
in Programs to be adopted by EdgeAudio's board of directors and
consents to the full participation of management therein. The terms
for such participation in the EdgeAudio related Programs shall be
established by EdgeAudio's board of directors."
6. Section 9 of the Agreement shall be deleted in its entirety and
replaced by the following: "TSET shall use its best efforts to assist
EdgeAudio to negotiate and consummate a long term manufacturing
agreement with Eterna International S.A. de C.V. and Johnstowne, Inc.
related to the manufacture of product for EdgeAudio upon mutually
agreeable terms."
7. Section 10 of the Agreement shall be deleted in its entirety and
replaced by the following:
(a) In the event that before the earlier of the date all
the Earn-out Shares have been issued, the date the Earn-out
Period expires, or the date of an IPO of EdgeAudio stock,
TSET and/or Holbrook propose to sell part or all of their
EdgeAudio stock (other than in an IPO) to a bona fide third
party who is willing to purchase such stock, and EdgeAudio,
TSET and Holbrook have all declined to exercise any rights to
purchase such shares pursuant to Section 3 of the
Shareholders Agreement of even date herewith, TSET and/or
Holbrook must, pursuant to the timing requirements of Section
3.4 of the Shareholders Agreement, offer to sell such stock
to the Stockholders, at the same price and on the same terms
of the proposed transfer. The offer shall be made by giving
the Stockholders written notice of the proposed transfer (the
"Proposed Transfer Notice") stating (1) that TSET and/or
Holbrook intends to transfer part or all of their stock, and
(2) the terms of the proposed transfer, including the name
and address of the proposed transferee, the transfer price,
and the terms of payment.
(b) For 30 days after the Stockholders receive a Proposed
Transfer Notice, the Stockholders shall have the option to
purchase all of the offered stock. If the Stockholders elect
to purchase the offered stock the option
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shall be exercised upon the Stockholders giving written
notice to TSET and/or Holbrook during the option period,
which notice shall demonstrate that the Stockholders have
obtained financing or a commitment for financing sufficient
to fund the purchase. In the event the Stockholders are
unable to agree on how many shares of stock each Stockholder
shall purchase, each Stockholder shall have the right to
purchase the offered shares in proportion to the respective
number of EdgeAudio Shares set forth opposite such
Stockholder's name in Section 1.
(c) Following exercise of the option, the parties shall
close the purchase no later than 60 days after the
Stockholders receive a Proposed Transfer Notice.
(d) If the option to purchase is not exercised by the
Stockholders, TSET and/or Holbrook may complete the
transfer(s), but only in strict accordance with the terms
previously offered by the transferee stated to the
Stockholders as required under Section 10(a).
8. Section 13 of the Agreement shall be deleted in its entirety.
9. Except as expressly amended by this Amendment, all other terms of the
Agreement shall remain in full force and effect.
10. This Amendment may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This
Amendment may be executed by facsimile signatures, each of which
shall be deemed an original.
11. Section 16 of the Agreement shall be incorporated into
this Amendment by this reference and shall fully apply
to the terms of this Amendment.
12. The following shall be added onto the end of Section
16(f) of the Agreement: "To Bryan Holbrook, 142 N. Blue
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Sage, Layton, Utah 84040 (801) 544-0690".
13. Except as set forth below, EdgeAudio shall not take any
of the following actions or participate in the
following transactions without TSET's prior written
approval: (a) the sale of all or substantially all of
its assets; (b) a merger, consolidation or similar
transaction; (c) confession of any judgment; (d)
amendment of its articles of incorporation or bylaws;
(e) dissolution, winding up or liquidation; (f) the
filing of any voluntary petition in bankruptcy; or (g)
any action that requires approval under the Oregon
Business Corporation Act (the "Act") of more than a
majority of the shares
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entitled to vote on the matter. Notwithstanding the
previous sentence or the Act, TSET's approval shall not
be required for any action or transaction that would
result in TSET receiving or retaining shares or other
consideration equal in value to the consideration paid
by TSET for its shares of EdgeAudio plus any direct
capital contributions made by TSET to EdgeAudio.
14. Promptly after execution of the Amendment, EdgeAudio
shall issue new share certificates to document the
ownership of its shares.
15. EdgeAudio shall cooperate with TSET and supply
information related to EdgeAudio as necessary to enable
TSET to comply with its obligations to supply
information and make reports required by federal and
state securities law.
16. EdgeAudio, Robert I. Lightman, LYNK Enterprises, Inc.,
J. David Hogan, Eric J. Alexander, and Eterna
Internacional, S.A. de C.V. hereby release TSET and
TSET hereby releases the above referenced parties from
any and all claims and causes of action identified or
unidentified that may have arisen after May 4, 2000,
related to TSET's obligation to provide additional
funding to EdgeAudio or otherwise arising from any
cause whatsoever to the extent related to or arising
out of the Agreement. This release is intended to
release only claims related to breaches and causes of
action arising on of before the date of this Amendment,
but is not intended to and does not release any of the
above referenced parties from their continuing
obligations under the Agreement as modified by this
Amendment.
17. EdgeAudio acknowledges that TSET has satisfied $186,100
of its obligation under Section 7 of the Agreement to
provide working capital. TSET's obligation to provide
the remainder of the funding described in Section 7 of
the Agreement shall be suspended until Holbrook has
contributed the full $700,000 he is obligated to
provide under the Preferred Stock Purchase Agreement of
even date herewith.
18. Section 14 of the Agreement shall be incorporated into
this Amendment and the Preferred Stock Purchase
Agreement, and any Claims related to this Amendment
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or the Preferred Stock Purchase Agreement shall be
resolved using the dispute resolution mechanism
contained in Section 14 of the Agreement.
19. The parties agree to cooperate with each other and take
such other actions and sign such other documentation
following the closing as is necessary to effectuate the
intent of this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment effective
________________, 2000.
TSET, Inc. ___________________________________
Robert I. Lightman, individually
By:_______________________________
Jeffrey D. Wilson, Chairman and ___________________________________
Chief Executive Officer J. David Hogan, individually
EdgeAudio.Com, Inc. ___________________________________
Eric J. Alexander, individually
By:_______________________________
Robert I. Lightman ___________________________________
President Bryan Holbrook, individually
LYNK Enterprises, Inc.
By:_______________________________
Winthrop E. Jeanfreau
President
Eterna Internacional, S.A. de C.V.
By:_______________________________
James Eric Anderson
President
