-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CWf6wksp+lT5+NJy3xrXJ3ptmJCkVSBOrY+kjf0iCDYAAEV5kMo+70zZjiPZ9Jmo DdQmIj7wljpE0rCBEgBPoQ== 0000941655-07-000004.txt : 20070201 0000941655-07-000004.hdr.sgml : 20070201 20070201172936 ACCESSION NUMBER: 0000941655-07-000004 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20070201 DATE AS OF CHANGE: 20070201 GROUP MEMBERS: HABIB KAIROUZ GROUP MEMBERS: JOSHUA RUCH GROUP MEMBERS: MARK LESCHLY GROUP MEMBERS: RHO MANAGEMENT TRUST I SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AUTO DATA NETWORK CENTRAL INDEX KEY: 0001029762 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 133944580 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79250 FILM NUMBER: 07572810 BUSINESS ADDRESS: STREET 1: 712 FIFTH AVENUE STREET 2: 19TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-897-6848 MAIL ADDRESS: STREET 1: 712 FIFTH AVENUE STREET 2: 19TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: MEDIC MEDIA INC DATE OF NAME CHANGE: 19980626 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RHO CAPITAL PARTNERS INC CENTRAL INDEX KEY: 0001020455 IRS NUMBER: 133087622 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 152 WEST 57TH STREET STREET 2: 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127516677 MAIL ADDRESS: STREET 1: 152 WEST 57TH STREET STREET 2: 23RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: RHO MANAGEMENT CO INC DATE OF NAME CHANGE: 19960806 SC 13D/A 1 r_adn13dam2.txt AMENDMENT NO. 2 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2)* Auto Data Network, Inc. (Name of Issuer) Common Stock, $0.001 par value (Title of Class of Securities) 05270Q104 (CUSIP Number) Jeffrey I. Martin Rho Capital Partners, Inc. 152 West 57th Street, 23rd Floor New York, New York 10019 212-751-6677 (Name, Address, and Telephone Number of Person Authorized to Receive Notices and Communications) January 29, 2007 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. - ----------------------- 1/ The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 05270Q104 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Rho Capital Partners, Inc. 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) N/A (b) 3. SEC Use Only 4. Source of Funds (See Instructions) N/A 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) N/A 6. Citizenship or Place of Organization New York 7. Sole Voting Power 2,598,853 shares Number of Shares 8. Shared Voting Power Beneficially Owned by 0 shares Each 9. Sole Dispositive Power Reporting Person With 2,598,853 shares 10. Shared Dispositive Power 0 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 2,598,853 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) N/A 13. Percent of Class Represented by Amount in Row (11) 4.6% 14. Type of Reporting Person (See Instructions) CO/IA CUSIP No. 05270Q104 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Rho Management Trust I 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) N/A (b) 3. SEC Use Only 4. Source of Funds (See Instructions) N/A 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) N/A 6. Citizenship or Place of Organization New York 7. Sole Voting Power 2,598,853 shares Number of Shares 8. Shared Voting Power Beneficially Owned by 0 shares Each 9. Sole Dispositive Power Reporting Person With 2,598,853 shares 10. Shared Dispositive Power 0 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 2,598,853 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) N/A 13. Percent of Class Represented by Amount in Row (11) 4.6% 14. Type of Reporting Person (See Instructions) CO/IA CUSIP No. 05270Q104 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Joshua Ruch 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) N/A (b) 3. SEC Use Only 4. Source of Funds (See Instructions) N/A 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) N/A 6. Citizenship or Place of Organization Republic of South Africa 7. Sole Voting Power 0 shares Number of Shares 8. Shared Voting Power Beneficially Owned by 2,598,853 shares Each Reporting 9. Sole Dispositive Power Person With 0 shares 10. Shared Dispositive Power 2,598,853 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 2,598,853 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) N/A 13. Percent of Class Represented by Amount in Row (11) 4.6% 14. Type of Reporting Person (See Instructions) IN CUSIP No. 05270Q104 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Habib Kairouz 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) N/A (b) 3. SEC Use Only 4. Source of Funds (See Instructions) N/A 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) N/A 6. Citizenship or Place of Organization Canada 7. Sole Voting Power 0 shares Number of Shares 8. Shared Voting Power Beneficially Owned by 2,598,853 shares Each Reporting 9. Sole Dispositive Power Person With 0 shares 10. Shared Dispositive Power 2,598,853 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 2,598,853 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) N/A 13. Percent of Class Represented by Amount in Row (11) 4.6% 14. Type of Reporting Person (See Instructions) IN CUSIP No. 05270Q104 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Mark Leschly 2. Check the Appropriate Box if a Member of a Group (See Instructions) N/A (a) (b) 3. SEC Use Only 4. Source of Funds (See Instructions) N/A 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) N/A 6. Citizenship or Place of Organization Kingdom of Denmark 7. Sole Voting Power 0 shares Number of Shares 8. Shared Voting Power Beneficially Owned by 2,598,853 shares Each Reporting 9. Sole Dispositive Power Person With 0 shares 10. Shared Dispositive Power 2,598,853 shares 11. Aggregate Amount Beneficially Owned by Each Reporting Person 2,598,853 shares 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) N/A 13. Percent of Class Represented by Amount in Row (11) 4.6% 14. Type of Reporting Person (See Instructions) IN This Amendment No. 2 to Schedule 13D for Auto Data Network, Inc., a Delaware corporation ("ADNI" or the "Issuer"), amends a statement on Schedule 13D, originally dated December 30, 2004, as amended February 25, 2005, with respect to the beneficial ownership by Rho Capital Partners, Inc., a New York corporation ("Rho"), and its controlling shareholders Joshua Ruch, Habib Kairouz and Mark Leschly, and an affiliated investment vehicle, Rho Management Trust I ("Trust I"), of shares of Common Stock, par value $0.001 per share, of ADNI. This Amendment is filed to amend Items 5, 6 and 7 in the Schedule 13D as previously filed, by deleting Items 5, 6 and 7 as previously filed and substituting in lieu thereof the following: Item 5. Interest in Securities of the Issuer (a)-(b) Amount and Nature of Beneficial Ownership. As the investment advisor to Trust I, Rho may be deemed for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, to be the beneficial owner, on an as- converted basis, of 2,598,853 Shares of ADNI Common Stock registered in the name of Trust I, constituting 4.6% of the approximately 56,962,700 Shares of ADNI Common Stock outstanding as of January 17, 2007 (based on information provided by the Issuer). Messrs. Ruch, Kairouz and Leschly may be deemed to share investment and voting control over the 2,598,853 Shares of ADNI Common Stock beneficially owned by Rho and Trust I. In each case, such reporting persons may be deemed to beneficially own, on an as-converted basis, 4.6% of the approximately 56,962,700 shares of ADNI Common Stock outstanding as of January 17, 2007 (based on information provided by the Issuer). Other than the Shares of ADNI Common Stock in which they have a pecuniary interest, each of Rho and Messrs. Ruch, Kairouz and Leschly disclaims beneficial ownership of the Shares reported in this statement. (c) Recent Transactions. There were no transactions in the Shares by the reporting persons in the past 60 days. (d) Dividends. No persons other than the reporting persons and their investment clients have the right to participate in the receipt of dividends from, or the proceeds from the sale of, the Shares of ADNI Common Stock covered hereby. (e) Not Applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer By letter agreement dated January 29, 2007, the Issuer and the reporting persons agreed to a series of related transactions by which the reporting persons would consent to the spin-off of Aftersoft Group, Inc., waive certain contractual defaults relating to the Issuer's failure to maintain an effective registration statement, and surrender their currently held shares of Series D- 1 and D-2 Preferred Stock, in exchange for an aggregate number of Shares of Common Stock of the Issuer that would result in Trust I owning just over 10% of the Issuer=s total Shares to be outstanding on conclusion of the proposed transactions on an as-converted basis. Such transactions are contingent on the occurrence of certain events, including required votes of the Issuer=s stockholders and a registration statement that covers all of the shares being issued in the spin-off of Aftersoft Group, Inc. being filed by no later than February 18, 2007 and declared effective by the Securities and Exchange Commission prior or simultaneously with the closing of the spin-off. The foregoing summary of the terms of the letter agreement is qualified in its entirety by reference to the full text of such agreement, which is identified in Item 7, and is incorporated herein by reference. Item 7. Material to be Filed as Exhibits The following documents are included as exhibits: A. Statement Appointing Designated Filer and Authorized Signer dated January 14, 2005.* B. Letter agreement between Rho Management Trust I and the Issuer, dated January 29, 2007. _____________________ * Previously filed SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 1, 2007. RHO CAPITAL PARTNERS, INC. By: /s/ Jeffrey I. Martin ------------------------------------- Jeffrey I. Martin, Authorized Signer RHO MANAGEMENT TRUST I By: RHO CAPITAL PARTNERS, INC. as Investment Advisor By: /s/ Jeffrey I. Martin ------------------------------------- Jeffrey I. Martin, Authorized Signer JOSHUA RUCH /s/ Jeffrey I. Martin ------------------------------------- Jeffrey I. Martin, Authorized Signer HABIB KAIROUZ /s/ Jeffrey I. Martin ------------------------------------- Jeffrey I. Martin, Authorized Signer MARK LESCHLY /s/ Jeffrey I. Martin ------------------------------------- Jeffrey I. Martin, Authorized Signer EX-99 2 r_adn13dam2-99.txt LETTER AGREEMENT [letterhead of Auto Data Network, Inc.] January 29, 2007 Dear Jeff We have been working to create and implement a plan to develop additional value for shareholders of Auto Data Network, Inc. ("ADNI"). We believe that we have made significant progress in this effort. We have already announced the combination of ADNI's DMS business with the Aftersoft Group, Inc. ("Aftersoft") business, and the planned spin-off of ADNI's holdings in Aftersoft to the shareholders of ADNI (the "Aftersoft Spinoff"). As a holder of ADNI preferred stock, you are entitled to participate in that dividend on an "as-if-converted-into-common-stock" basis. We are seeking the consent of a majority in interest in each class of ADNI's preferred stock to the dividend of Aftersoft shares in the Aftersoft Spinoff. Rho Management Trust I ("Trust I") currently owns 280,000 shares of ADNI Series A1 Convertible Preferred Stock (the "Class A1 Preferred Stock") which would convert into 560,000 shares of common stock of ADNI at the currently effective conversion price of $1.25. Trust I has certain voting rights as a holder of the Class A1 Preferred Stock. Trust I also owns 943,933 shares of ADNI Series D1 Convertible Preferred Stock (Class D1 Preferred Stock) which would convert into 943,933 shares of common stock of ADNI at the currently effective conversion price of $1.90. Trust I has certain voting rights as a holder of Class D1 Preferred Stock. Trust I also owns 900,165 shares of common stock of ADNI Series D2 Convertible Preferred Stock (Class D2 Preferred Stock) which would convert into 900,165 shares of common stock of ADNI at the currently effective conversion price of $1.90. Trust I has certain voting rights as a holder of Class D1 Preferred Stock. By executing and returning this letter to ADNI, Trust I evidences its consent, subject to the conditions set forth below. with respect to all of its shares of Class A/D1/D2 Preferred Stock, to the Aftersoft Spinoff via dividend to its shareholders of its holdings in Aftersoft, as well as the repurchase from the holders of Class D1/D2 Preferred Stock of their shares pursuant to this Agreement. Upon receipt and effectiveness of Trust I's consent and the consent of a majority in interest of each class of ADNI's preferred stock, we shall issue additional shares of the common stock of ADNI to holders of the Class A1 Preferred Stock, in the aggregate, in proportion to their respective holdings of those securities as of the applicable dividend date, such that the sum of (I) those newly issued shares plus (ii) the shares of common stock into which the Class A1 Preferred Stock is convertible shall equal, in the aggregate, 1,388,000 shares, of which 777,280 of those shares or as-converted shares shall be owned by Trust I, as detailed on the attached capitalization table in Excel format. Upon receipt and effectiveness of Trust I's consent and the consent of a majority in interest of each class of ADNI's preferred stock, we shall repurchase an aggregate of 943,933 shares of Trust I's Class D-1 Preferred Stock from Trust I, representing all of Trust I's Class D-1 Preferred Stock, for an aggregate of 3,303,765 shares of common stock of ADNI. We will simultaneously offer the same repurchase to the other holders of Class D1 Preferred Stock, in the aggregate, in proportion to their respective holdings of those securities as of that date (collectively, the "Class D-1 Repurchase"). The amount of shares to be issued to each holder of Class D-1 Preferred Stock in the Class D-1 Repurchase (assuming that each one accepts the offer) is set forth in the attached capitalization table in Excel format. Upon receipt and effectiveness of Trust I's consent and the consent of a majority in interest of each class of ADNI's preferred stock, we shall repurchase an aggregate of 900,165 shares of Trust I's Class D-2 Preferred Stock from Trust I, representing all of Trust I's Class D-2 Preferred Stock, for an aggregate of 3,150,577 shares of common stock of ADNI. We will simultaneously offer the same repurchase to the other holders of Class D2 Preferred Stock, in the aggregate, in proportion to their respective holdings of those securities as of that date (collectively, the "Class D-2 Repurchase"). The amount of shares to be issued to each holder of Class D-2 Preferred Stock in the Class D-2 Repurchase (assuming that each one accepts the offer) is set forth in the attached capitalization table in Excel format. We covenant and agree that the Aftersoft Spinoff will not be consummated, and Trust I's consent to the Aftersoft Spinoff shall not be valid, unless and until a registration statement covering all of the spin-off shares is effective and the shares you receive shall be free of any restrictive legend and transferable accordingly except as a consequence of any voting or dispositive interest you may have, acquire or share in securities of Aftersoft in addition to the shares which you will receive in the Aftersoft Spinoff. The Class D-1 Repurchase and the Class D-2 Repurchase, and the Aftersoft Spinoff itself, will not occur without Trust I's prior written consent if, after the transactions, either (I) you would own, on a fully diluted basis, less than your current percentage of ADNI common stock or (ii) upon consummation of the Aftersoft Spinoff Trust I would own less than ten percent (10%) of the outstanding common stock of Aftersoft on a fully-diluted basis not counting "excluded shares." For this purpose, "excluded shares" shall mean any shares which Aftersoft may issue to unrelated third parties prior to the effectiveness of the registration statement provided, that in no event shall Trust I's ownership of the common stock of Aftersoft on a fully-diluted basis after any such issuances be below 9% upon consummation of the Aftersoft Spin off and Aftersoft will issue such additional shares of Aftersoft common stock as necessary to ensure that condition is fulfilled with respect to Trust I's ownership and also shall make proportional additional issuances to other holders of Class A1 Preferred Stock, as well as to other holders of Class D-1 Preferred Stock and Class D-2 Preferred Stock who accept the offer. Subject to receipt of consents, the repurchase of the D-1 and D-2 Preferred Stock shall occur on the last date upon which you must be a shareholder of record of ADNI in order to receive the spin-off dividend of shares of Aftersoft, which date shall be immediately prior to the time that a registration statement covering all of the spin-off shares is declared effective by the United States Securities and Exchange Commission. ADNI hereby represents and warrants to Trust I that the attached capitalization table in Excel format shows a true and accurate summary of (I) the existing capital structures of both ADNI and Aftersoft, including all fully diluted outstanding shares and any outstanding convertible securities, with Trust I's current holdings detailed as a separate line item and (ii) the foregoing capital structures of both ADNI and Aftersoft, on a pro forma basis as described therein, immediately following the transactions described herein including the Aftersoft Spinoff and the Class D-1 Repurchase and Class D-2 Repurchase, on a fully diluted basis, with a separate line item for Trust I's pro forma ownership of both companies. Trust I's consent set forth in this letter shall be invalid in the event the capitalization tables described above are inaccurate in any material respect. In addition, ADNI and Trust I hereby agree that Trust I's consent to the Aftersoft Spinoff shall not be valid unless (I) each holder of Class A-1 Preferred, Class D-1 Preferred and Class D-2 Preferred is offered the same share consideration (on a pro rata basis) as Trust I is receiving in respect of the shares of that class of preferred stock as described herein and (ii) prior to the Aftersoft Spinoff, Trust I receives a tax opinion, mutually acceptable in all respects to Trust I and ADNI, that confirms that the Aftersoft Spinoff will be tax-free to ADNI's shareholders. ADNI shall indemnify and hold harmless Trust I for any costs, expenses or losses incurred by Trust I as a result of any breach of any of ADNI's representations, warranties or covenants contained herein. By executing and returning this letter to us, Trust I acknowledges and agrees that (I) the shares being issued to Trust I as described above, when issued to Trust I, are issued in settlement of any breaches or defaults under the applicable securities purchase agreement and related agreements [including any obligation to issue any penalty securities whatsoever under the applicable registration rights agreement];; and (ii) that the shares are issued in reliance upon the continued accuracy of Trust I's representations in the applicable securities purchase agreement and Trust I's questionnaire, including those to the effect that Trust I is an "accredited investor", has appropriate investment experience, has adequate means to hold the investment indefinitely and has had access to publicly available information concerning the company. We have previously corresponded with Trust I on the subject matter of this letter and this letter supersedes in its entirety any previous correspondence. Trust I's consent set forth herein shall terminate and be deemed revoked if the registration statement covering the dividend of shares of Aftersoft in the Aftersoft Spinoff is not filed with the United States Securities and Exchange Commission by February 18, 2007. This letter shall be governed by and construed in accordance with the laws of the State of New York. ADNI and Trust I hereby submit to the exclusive jurisdiction of the courts in New York, New York with regard to any dispute hereunder. Yours sincerely, Ian Warwick CEO Execution: /s/ Ian Warwick ------------------------------------------------ Title CEO Date January 29, 2007 Rho Management Trust I By: Rho Capital Partners, Inc. as Investment Advisor By: s/ Jeffrey I. Martin --------------------------- Name: Jeffrey I. Martin Title: Attorney-in-Fact [Capitalization Table - Attachment to Letter Agreement] ADNW Outstanding Capital Stock as of this date (1) January 17 2007 Stock Preferred Common/Common equivalents on an as-converted basis Common 42,836,715 Series A1 500,000 1,000,000 Series A2 1,468,900 2,937,800 Series B 3,391,424 6,790,210 Series D1 1,594,189 1,594,189 Series D2 1,803,786 1,803,786 Total 56,962,700 (1) Does not include out-of-the-money warrants ADNW capitalisation structure Pro Forma for consummation of Class D-1 and Class D-2 repurchases and proposed issuances to holders of Class A-1, A-2 and B shares (1) (2) Preferred Common/Common equivalents on an as-converted basis (1) Common 42,836,715 Series A1 500,000 1,388,000 Series A2 1,468,900 4,077,666 Series B 3,391,424 11,869,984 Series D1 1,594,189 5,579,662 Series D2 1,803,786 6,313,251 Total 72,065,278 (1) Assumes that all holders accept offers (2) Does not include out-of-the-money warrants Trust 1 holdings of AND Series A-1 Preferred, Series D-1 Preferred and Series D-2 Preferred, Existing and Pro Forma as above (1) (2) Current Common/Common equivalents on an as-converted basis Pro Forma as above Series A1 280,000 777,280 Series D1 943,933 3,303,765 Series D2 900,165 3,150,577 7,231,622 (1) Assumes that all holders accept offers (2) Trust 1 holdings aggregate 10.3 % of pro forma outstanding common stock and common stock equivalents on an as-converted and as-repurchased basis Aftersoft Group Inc. Outstanding Capital Stock as of this date (1) Stock Preferred Common/Common equivalents on an as-converted basis 63,071,167 - 63,071,167 (1) 100 million shares of common stock and 10 million shares of preferred stock authorized Pro Forma Note: On that basis, when Spin-Off occurs, Trust 1 would receive 6,327,669 shares of common stock of Aftersoft Group Inc., which would constitute approximately 10.3% of the common stock of Aftersoft Group, Inc., post-spin-off, assuming no other corporate transactions. Aftersoft Group Inc. has undertaken that in the event such number of shares would constitute less than 9% of the outstanding common stock of Aftersoft Group Inc. upon consummation of the spin-off, on a fully diluted basis, then Aftersoft Group Inc. shall issue such additional shares of Aftersoft Group Inc. common stock to Trust 1 as shall be necessary in order that the 9% condition be fulfilled upon consummation of the Spin-Off, and that Aftersoft also shall make proportional issuances to the other holders of the Class A-1 Preferred Stock and the Class D-1 Preferred Stock and Class D-2 Preferred Stock who accept the offers. -----END PRIVACY-ENHANCED MESSAGE-----