KIT DIGITAL, INC. New York, NY 10010-5952 March 16, 2010
EXHIBIT
2.2
000
0xx Xxxxxx, Xxxxx #000
Xxx
Xxxx, XX 00000-0000
March 16,
2010
Multicast
Media Technologies, Inc.
Circle 75
Office Park, 6th Floor
0000
Xxxxxx 00 Xxxxxxx
Xxxxxxx,
Xxxxxxx 00000
Ladies
and Gentlemen:
This letter agreement is delivered in
connection with that certain Agreement and Plan of Merger, by and among KIT
digital, Inc. (the “Buyer”), KIT 2010 Corporation
(the “Merger Sub”),
Multicast Media Technologies, Inc. (the “Company”), and the other
parties named therein, dated March 10, 2010 (the “Agreement”). For
the purposes of this letter agreement (this “Letter Agreement”), all
initially capitalized terms used but not otherwise defined in this Letter
Agreement shall have the respective meanings ascribed to such terms in the
Agreement.
1. Notwithstanding
anything to the contrary in Section 2.4(c) of the Agreement, the Company or
Buyer shall pay the Option Cashout Amount directly to each holder of an
In-the-Money Option and the Company shall not be required to deliver any
information related to such payments to the Escrow Agent.
2. In
accordance with Section 5.11, Buyer hereby confirms that it has provided written
notice to the Company that the Multicast Media 401(k) Plan shall not be
terminated by the Company at or prior to the Closing.
3. The
definition of Buyer Common Stock Price in Section 1.15 of the Merger Agreement
shall be deleted in its entirety and replaced with the following
definition:
“1.15 ‘Buyer Common Stock
Price’ means $10.00 per share of Buyer Common Stock.”
4. The
definition of Weighted Average Price in Section 1.163 of the Merger Agreement
shall be deleted in its entirety and replaced with the following
definition:
“1.163 ‘Weighted Average
Price’ means with respect to Buyer Common Stock the average of the
closing prices, with a weighting factor for trading volume (excluding, for the
avoidance of doubt, any underwritten offering), for the shares of the Buyer
Common Stock on The Nasdaq Global Stock Market (or, if the shares of Buyer
Common Stock are not then traded on The Nasdaq Global Stock Market but are
traded on a different stock market, exchanges or other electronic marketplace as
reported on the applicable website (or the primary exchange or marketplace based
on the volume of shares of Buyer Common Stock, if there are multiple such stock
markets, exchanges or other electronic marketplaces), or if such website is
unavailable, as reported on the website xxx.xxxxxxxxx.xxx).”
March 16,
2010
Page 2 of
3
5. Section
2.4(a)(vii) of the Merger Agreement shall be amended by deleting the
parenthetical “(valued at the Buyer Common Stock Price)” and replacing it with
the parenthetical “(valued as determined by the Company’s Board prior to the
Effective Time).”
Additionally, the allocation of cash
and Buyer Common Stock distributed to the Stockholders as approved by the
Company’s Board has been determined in accordance with the Company’s certificate
of incorporation, as amended to date, and was based on the good faith
determination of the Company’s Board as required by Article Three, Section
E(2)(d)(iv) of the Company’s certificate of incorporation, as amended to
date. As a result of such determination, for purposes of the
allocation of Buyer Common Stock, the Buyer Common Stock is being valued at a
discount of 10.75% to the Buyer Common Stock Price due to the Restriction, the
escrow provisions of the Agreement, and other factors determined by the
Company’s Board. For the avoidance of doubt, any dispute by the
Stockholders relating to the valuation of and/or allocation of cash and Buyer
Common Stock received by such Stockholders shall be subject to the
indemnification provisions set forth in Section 9.1 of this
Agreement.
6. The
first sentence of Section 2.6(e)(i) of the Merger Agreement shall be amended by
deleting such sentence in its entirety and replacing it with the following
sentence:
“In the
event that the amount of the Closing Working Capital as reflected on the Final
Closing Statement is less than the Estimated Working Capital, then Buyer shall
direct the Escrow Agent in writing to release to Buyer from the Escrow Fund
(without regard to the Basket Amount) such portion of the Initial Escrow Amount
equal to the amount of the shortfall (the “Working Capital
Shortfall”) as provided in subsection (iv) below.”
7. Section
2.6(e)(ii) of the Merger Agreement shall be amended by deleting such section in
its entirety and replacing it with the following Section
2.6(e)(ii):
“(ii) If the Closing Working
Capital as reflected on the Final Closing Statement is greater than the
Estimated Working Capital, Buyer shall (A) issue instruction to the Escrow Agent
for the delivery of the entirety of the Initial Escrow Amount to the Stockholder
Representative for distribution to the Stockholders and (B) issue and deliver to
the Stockholder Representative for distribution to the Stockholders a number of
shares of Buyer Common Stock equal to such excess as provided in subsection (iv)
below and/or cash (at the election of Buyer) (the “Working Capital
Excess”) shall be delivered by Buyer to the Stockholder Representative
for distribution to the Stockholders; provided, that with respect
to clause (B) Buyer shall include enough cash in such delivery to provide a pro
rata amount of cash to each of the Company’s former stockholders that was an
Unaccredited Stockholder.”
8. Section
9.9 of the Merger Agreement shall be amended by deleting the phrase “Weighted
Average Stock Price” and replacing it with the phrase “Weighted Average
Price”.
This
Letter Agreement may be executed in one or more counterparts and by facsimile,
each of which shall be deemed an original and together shall constitute one and
the same instrument. This Letter Agreement shall be governed by, and
enforced in accordance with, the laws of the State of Delaware, without regards
to its rules of conflicts of laws.
[Signatures
Appear on Following Page]
Please
acknowledge your agreement by signing where indicated below and returning this
letter to me.
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Very
truly yours,
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By:
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/s/ Kaleil Xxxxx Xxxxxx
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Name: Kaleil
Xxxxx Tuzman
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Title: Chairman
and Chief Executive Officer
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KIT
2010 CORPORATION
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By:
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/s/ Kaleil Xxxxx Xxxxxx
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Name: Kaleil
Xxxxx Tuzman
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Title: Chief
Executive Officer
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Agreed
to and accepted as of this 16th
day
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of
March, 2010.
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MULTICAST
MEDIA TECHNOLOGIES, INC.
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By:
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Xxxxx Xxxxxxxx
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Name: Xxxxx
Xxxxxxxx
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Title: Chief
Executive Officer
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/s/ Xxxx Xxxxx
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XXXX
XXXXX
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