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Exhibit 2.2
AGREEMENT dated March 6, 1998, by and among XXXX DIGITAL TECHNOLOGIES, INC., a
Delaware corporation, having an address at Twenty-One Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (hereafter referred to as "KDTI"); XXXX N.Y. ACQUISITION, INC., a
Delaware corporation, having an address at Twenty-One Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (hereafter referred to as "KDTI-NY" or "Purchaser"); MOONDANCE, INC.
a New York corporation formerly known as SPEED GRAPHICS, INC., having an address
at 00 Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereafter referred to as
"MI"); DDP, INC., a New York corporation, having an address at 00 Xxxxxxx Xxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereafter referred to as "DDP", and,
collectively with MI referred to as "MOON"); and XXXXXX XXXXXXXXXX, an
individual residing at 00 Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereafter referred to as "XXXXXX").
W I T N E S S E T H :
WHEREAS, KDTI, KDTI-NY, MOON and XXXXXX are parties to that certain Asset
Acquisition Agreement dated as of January 1, 1998 (the "Acquisition Agreement");
WHEREAS, XXXXXX, Purchaser and KDTI-NY wish to provide herein for certain
amendments to the Acquisition Agreement and for the mutually acceptable terms of
the termination of RONALD's employment with Purchaser; and.
WHEREAS, MOON has agreed to accept prepayment of the Promissory Note and the
parties have agreed that the Purchase Price for the Acquired Assets (as such
capitalized terms are defined in the Acquisition Agreement) will be adjusted in
the manner provided for in this Agreement, and the parties have therefore agreed
to modify the Acquisition Agreement upon the terms and conditions hereof.
NOW, THEREFORE, in consideration of the agreements herein set forth and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and notwithstanding anything to the contrary in the Acquisition
Agreement, the parties hereto agree as follows:
I. Capitalized terms in this Agreement are used with the same respective
meanings ascribed thereto in the Acquisition Agreement.
II. The number of Shares is hereby reduced to 173,913 shares of Common Stock.
III. The Excluded Assets shall be deemed to include a 1987 Rolls Royce
automobile (VIN XXXXX00X0XXX00000) (the "Rolls Automobile") and a 1997 Lexus
automobile (VIN XX0XX00X0X0000000) (the "Lexus Automobile"). The Motor Vehicle
Lease Agreement dated November 13, 1997 between MOON and Lexus Financial
Services New York, as assignee of Rallye Lexus, regarding the Lexus Automobile
shall not be cancelled or transferred to KDTI and shall remain in full force and
effect and shall be the sole liability and responsibility of MOON.
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IV. Purchaser hereby acknowledges receipt of (i) the Share Certificate (together
with a stock power duly executed, in such manner as is necessary to transfer the
Shares represented thereby in accordance with Article 8 of the Uniform
Commercial Code of New York) representing 293,848 shares of Common Stock and
(ii) the Promissory Note, each of which previously was delivered by MI to KDTI
for reissuance in the name of "Moondance, Inc."
V. Concurrently with the execution and delivery of this Agreement:
a. KDTI has paid $1,750,000.00 to MI in immediately available funds
by wire transfer to Mellon Bank, Pittsburgh, PA (ABA No. 043-000261), for credit
to Xxxxxxx Xxxxx (Acct. No. 101-1730), for final credit to the account of Xxxxxx
Xxxxxxxxxx (Acct. No. 821- 61183);
b. a Share Certificate representing the Shares (as such term has
been amended by this Agreement) has been issued to Moondance, Inc.;
c. KDTI has executed and delivered documents transferring ownership
of the Rolls Automobile to MI;
d. KDTI has delivered to MOON a copy of a letter from The Bank of
New York acknowledging and agreeing to (i) the prepayment and cancellation of
the Promissory Note as contemplated by this Agreement and (ii) the termination
of the Subordination Agreement.
VI. MI and XXXXXX acknowledge that no interest or other amounts shall be due or
payable under the Promissory Note for the period beginning March 1, 1998.
VII. The Purchase Price shall not be adjusted as provided in Section 3.3.2 of
the Acquisition Agreement, and any and all rights of either party with respect
to any adjustment to the Purchase Price provided for in Section 3.3.2 of the
Acquisition Agreement are hereby waived by the parties.
VIII. The parties agree that the portion of the Purchase Price allocated to the
value of the machinery and equipment constituting part of the Acquired Assets,
including furniture and computer equipment but excluding leasehold improvements,
shall be $3,075,350.00. The parties agree that the value of such leasehold
improvements is as stated on the Closing Date Balance Sheet prepared by the
Present Accountants. The parties further acknowledge that there are certain
other Closing Date Balance Sheet accounts, the value of which have not yet been
finally agreed upon, and that such value shall be resolved in accordance with
the provisions of Section 3.3.1 of the Acquisition Agreement.
IX. Section 8.7 of the Acquisition Agreement is hereby deleted in its entirety
and XXXXXX hereby resigns as an officer and director of KDTI. Nothing in this
Agreement shall or shall be deemed to limit, alter or otherwise affect in any
manner any rights of XXXXXX under (i) the
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Certificate of Incorporation of KDTI, (ii) the By-laws of KDTI or (iii) the
directors' and officers' liability insurance maintained by KDTI, in each case
for any acts or omissions of XXXXXX in his capacity as an officer, director or
employee of KDTI on and after the Closing and on or prior to the date of this
Agreement.
X. RONALD's employment under the Employment Agreement is hereby terminated as of
the date hereof. It is agreed that such termination has been mutually agreed
upon by the parties, and is without cause by the Company and other than for good
reason by XXXXXX. XXXXXX acknowledges receipt in full of all compensation and
other benefits due to him under the Employment Agreement, and further
acknowledges that he is not entitled to any stock options under KDTI's Employee
Stock Option Plan notwithstanding the provisions of Section 8.10 of the
Acquisition Agreement.
XI. MOON and XXXXXX confirm that, notwithstanding the termination of RONALD's
employment under the Employment Agreement, the non-competition covenants
included in the Employment Agreement survive such termination, and MOON and
XXXXXX agree to perform and comply with the non-competition covenants included
in the Employment Agreement, as though fully set forth herein and in the
Acquisition Agreement as applicable to, and enforceable against, both MOON and
XXXXXX; provided, however, that for purposes of this Agreement the term
"Restricted Period" shall mean the period commencing on the day hereof and
ending on the fifth anniversary of the date of this Agreement.
XII. KDTI will continue to carry XXXXXX as an insured under KDTI's group health
insurance plan during the eighteen (18) month period following the date of this
Agreement, and will reimburse XXXXXX for the cost of maintaining such coverage
(the "Insurance Reimbursement"), and if such coverage may under the provisions
of applicable law be extended beyond such eighteen (18) month period, then KDTI
will continue such coverage and Insurance Reimbursement for up to six (6) months
(or such lesser period permitted by applicable law) following the end of the
initial eighteen (18) month period.
XIII. For the two (2) week period beginning on March 6, 1998, KDTI agrees to
make Xxxxx Began (or if she resigns her employment, any other KDTI secretary
approved by XXXXXX, such approval not to be unreasonably withheld or delayed)
available during normal business hours to (A) answer or receive telephone calls
placed to, and receive messages for, XXXXXX or MOON at the offices of KDTI; (B)
collect or receive personal correspondence addressed to XXXXXX or MOON and
received at the offices of KDTI; and (C) forward to XXXXXX such telephone calls
in a manner reasonably directed by XXXXXX and forward correspondence to him by
regular mail to an address designated by him. During such period KDTI also
agrees to afford XXXXXX (or his agents or designees) access to the offices of
KDTI to remove or cause to be removed his personal effects and other items
constituting the Excluded Assets.
XIV. The parties agree that the $35,000.00 reimbursement due to MOON under
Section 3.3.1 of the Acquisition Agreement for the fees of the
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Present Accountants in preparing and resolving any issues regarding the Closing
Date Balance Sheet (the "Accountants' Reimbursement") shall be satisfied in the
following manner: the Present Accountants' outstanding invoice No. 0070928 dated
January 31, 1998, in the amount of $25,837.00 shall be paid by MOON or Xxxxxx,
and such amount shall be credited against the $37,280.00 (the "Advance") demand
obligation due from XXXXXX to SPEED reflected on the Closing Date Balance Sheet,
leaving a balance of $11,443.00 due from XXXXXX on account of the Advance, and
$9,163.00 due from KDTI on account of the Accountants' Reimbursement. The
balance of the Accountants' Reimbursement shall be satisfied in the same manner
as provided in the preceding sentence, and the remaining balance of the Advance,
if any, shall be paid by crediting against such balance the amount of the
Insurance Reimbursement due to XXXXXX from KDTI. A copy of any additional
invoice(s) from the Present Accountants shall be given to KDTI.
XV. Each of KDTI and KDTI-NY reaffirms the representations and warranties
contained in Section 7.3 and 7.4 of the Acquisition Agreement with respect to
this Agreement to the same extent as if set forth fully herein; provided,
however, that references in such representations and warranties as so reaffirmed
hereby to "this Agreement and the Other Documents to which it is a party" or
words of similar effect shall be deemed to be references to this Agreement.
XVI. Each of MOON and Xxxxxx reaffirms the representations and warranties
contained in Section 6.18 and 6.19 of the Acquisition Agreement with respect to
this Agreement to the same extent as if set forth fully herein; provided,
however, that references in such representations and warranties as so reaffirmed
hereby to "this Agreement and the Other Documents to which it is a party" or
words of similar effect shall be deemed to be references to this Agreement.
XVII. The parties acknowledge and agree that neither this Agreement nor any of
the transactions contemplated hereby shall constitute or shall be deemed to
constitute a breach of any of the parties' respective representations,
warranties, covenants or other agreements in the Acquisition Agreement or the
Employment Agreement.
XVIII. The provisions of Sections 10.1, 10.2, 10.5, 10.7, 10.8 and 10.9 of the
Acquisition Agreement are incorporated by reference in this Agreement as if
separately stated herein; provided, however, that references in such Sections as
so incorporated herein to "this Agreement and the Other Documents" or words of
similar effect shall be deemed to be references to this Agreement.
XIX. Except as amended by this Agreement, the Acquisition Agreement remains in
full force and effect.
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IN WITNESS WHEREOF, the individual parties have executed and the corporate
parties have each caused its corporate name to be hereunto subscribed by their
respective duly authorized officers on the date first written above.
XXXX DIGITAL TECHNOLOGIES, INC. XXXX N.Y. ACQUISITION INC.
By: By:
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XXXX XXXX XXXX XXXX
Chief Executive Officer President
MOONDANCE, INC. DDP, INC.
By: By:
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Name: Xxxxxx Xxxxxxxxxx Name: Xxxxxx Xxxxxxxxxx
Title: President Title:
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Xxxxxx Xxxxxxxxxx
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