AGREEMENT
This Agreement ("Agreement"), dated as of September 30, 2001, by and
between Xxxxxxx & Xxxxxxxx, LLC ("K&M") and Vizacom Inc. (the "Company").
WHEREAS, as a result of K&M extending extensive interest-free trade
credit to the Company for an extended period of time while continuing to provide
services to the Company at deeply discounted rates, the Company is indebted to
K&M in the amount of $739,654.85 as of the date hereof, after giving effect to
the most recent payment of $4,000 made by the Company to K&M by check dated
September 28, 2001, in respect of legal services rendered to the Company and
expenses incurred by K&M on behalf of the Company through August 31, 2001 (the
"Outstanding Legal Fees");
WHEREAS, the Company has executed a Letter of Intent ("LOI"), dated
September 7, 2001, with SpaceLogix, Inc. ("SpaceLogix") to acquire SpaceLogix by
merging (the "Merger") SpaceLogix with and into the Company or one of its
subsidiaries;
WHEREAS, the LOI contemplates that SpaceLogix will extend to the
Company a bridge loan (the "Loan") in three installments (each, an
"Installment");
WHEREAS, as a condition to SpaceLogix entering into a definitive Merger
Agreement with the Company, SpaceLogix has required the Company to restructure
or satisfy at least $1,000,000 of its outstanding current liabilities, which
includes the Outstanding Legal Fees (the "Liabilities Condition");
WHEREAS, in order to satisfy the Liabilities Condition, the Company has
requested K&M to (a) reduce the amount of the Outstanding Legal Fees by $300,000
(the "Reduction") and (b) accept payment of the remainder of the Outstanding
Legal Fees under a long-term payment plan; and
WHEREAS, K&M is willing to accept the Reduction and payment pursuant to
a long- term payment plan, and continue to provide services to the Company
pursuant to paragraph 5 below, which the Company acknowledges have significant
value to the Company, only on the terms and subject to the conditions contained
in this Agreement, including without limitation the security interest and other
provisions of paragraph 3 below.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein, the parties hereto hereby agree as
follows:
1. Effective Date. This Agreement shall be effective upon the upon
execution and delivery of this Agreement.
2. Reduction. K&M hereby agrees to reduce the amount of the
Outstanding Legal Fees by an amount equal to $300,000.
3. Promissory Note, Security Agreement and Direct Payment. The Company
shall pay to K&M the $439,654.85 balance of the Outstanding Legal Fees remaining
after giving effect to the Reduction pursuant to paragraph 2 above at a rate
equal to $25,000 per month, commencing upon the earlier of (a) the consummation
of the Merger or (b) January 1, 2002, pursuant to the promissory note in the
form of Exhibit A hereto (the "Note"). All payments required pursuant to the
Note shall be secured by the Company's interest in the promissory note dated as
of March 31, 2001 payable to the Company by Serif Inc., and the Company shall
deliver to Serif Inc. irrevocable instructions to pay $25,000 per month directly
to K&M. In connection therewith, the Company shall execute and deliver to K&M
the Security Agreement in the form of Exhibit B hereto.
4. Merger Fee. In addition to the payment of the Outstanding Legal
Fees, the Company shall pay to K&M $120,000 for all legal work in connection
with the Loan, the Merger and the related proxy statement (but not any private
placement financing or other transaction), $40,000 of which shall be payable
simultaneously with the receipt by the Company of each Installment. These
payments will not be applied to or reduce the amount of the Outstanding Legal
Fees.
5. Reduced Retainer. So long as the Company pays K&M in full for (a)
all invoices from K&M to the Company from and after the date hereof with respect
to retainer amounts and disbursements within 30 days after the date of each such
invoice and (b) all amounts contemplated by the Note, K&M will reduce the
monthly retainer payable by the Company to K&M to a discounted rate equal to
$12,000 per month, and the Retainer Agreement dated as of January 1, 2001
between the Company and K&M shall be deemed amended in accordance with the terms
hereof. If the Company at any time fails to pay K&M in full for (a) all invoices
from K&M to the Company from and after the date hereof with respect to retainer
amounts and disbursements within 30 days after the date of each such invoice and
(b) all amounts contemplated by the Note, the monthly retainer payable by the
Company to K&M shall be increased to $15,000 per month until all such amounts
have been paid in full. In addition, the Retainer Agreement between the Company
and K&M with respect to 2002 shall reflect these amounts and terms.
6. Fairness. The Company acknowledges (i) that the terms hereof are
fair and reasonable to the Company, (ii) that K&M has advised the Company to
obtain independent counsel in connection with the execution and delivery of this
Agreement, and (iii) that officers the Company have read and fully understand
the terms of this Agreement.
7. Counterparts. This Agreement may be executed by the parties hereto
in one or more counterparts, all of which shall be considered one and the same
agreement.
8. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without
regard to the conflict of laws thereof.
9. Liquidated Damages. The Company and K&M hereby acknowledge and
agree
that any default or failure to pay in full in a timely manner any amounts
payable hereunder by the Company to K&M will cause damage to K&M in an amount
that is difficult or impossible to ascertain. Accordingly, the Company agrees
that, upon a default or any failure to pay in full by the Company to K&M in a
timely manner any amounts set forth in clauses (a) or (b) of section 5 of this
Agreement, the Company shall pay to K&M an amount equal to $50,000, plus any
costs of collection, including without limitation reasonable attorneys' fees and
expenses, as liquidated damages, as K&M's sole legal and equitable remedy.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
VIZACOM INC.
By: /s/ Xxxx Xxxxxxxxxx
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Name: Xxxx Xxxxxxxxxx
Title: CFO
XXXXXXX & XXXXXXXX, LLC
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Member
