AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF ORGANIZATION
AMENDMENT NO. 1, dated as of November 28, 1997 (this "Amendment"), to
the Agreement and Plan of Organization, dated as of May 9, 1997 (the
"Agreement"), by and among COLLECTIBLES USA, INC., a Delaware corporation
("CEI"), DKG ACQUISITION CORP., a Delaware corporation ("Newco"), DKG
ENTERPRISES, INC., an Oklahoma corporation (the "Company"), and the Stockholders
named therein. Capitalized terms not otherwise defined herein have the
respective meanings set forth in the Agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Amendment to Section 1.3(iii) of the Agreement. Section 1.3(iii) of
the Agreement is hereby amended by deleting the phrase "Xxxxx X. Xxxxxx" in the
third line thereof and inserting in lieu thereof the phrase "Xxxxxx X.
Xxxxxxxx".
2. Amendment to Section 1.3(iv) to the Agreement. Section 1.3(iv) of
the Agreement is hereby amended by deleting the phrase "Xxxxx X. Xxxxxx" in the
third to fourth lines thereof, and inserting in lieu thereof the phrase "Xxxxxx
X. Xxxxxxxx".
3. Amendment to Section 12.1(ii) of the Agreement. The parties hereto
acknowledge and agree that notwithstanding Section 12.1 (ii) of the Agreement,
the Agreement has remained in full force and effect since May 9, 1997 through
the date hereof and Section 12.1(ii) of the Agreement is hereby amended by
deleting the phrase "October 31, 1997" in the fourth line thereof and inserting
in lieu thereof the phrase "July 31, 1998".
4. Amendment to Section 8.12 of the Agreement. Section 8.12 of the
Agreement is hereby amended by deleting such section in its entirety and
replacing it with the following:
8.12 RELEASE. The holders of CEI Stock shall have delivered to
CEI an instrument dated the Closing Date, releasing CEI from any and
all (i) claims of such holders against CEI and (ii) obligations of CEI
to such holders, except for (x) items specifically identified on
Schedule 8.12, (y) continuing obligations to such holders relating to
their employment by CEI and (z) obligations arising under this
Agreement or the transactions contemplated hereby.
5. Amendment to Section 1.5 to the Agreement. Section 1.5 of the
Agreement is hereby amended by adding the following sentence to the end thereof:
Notwithstanding the foregoing, the amount of all debt, as
evidenced by any promissory note, bond, debenture or other
similar instrument ("Indebtedness"), of the COMPANY assumed by
the Surviving Corporation shall not exceed $1,500,000 (the
"Allowable Indebtedness"). In the event the Indebtedness
exceeds the Allowable Indebtedness, such amount shall be
assumed by and shall become the obligation of the
STOCKHOLDERS. CEI shall be entitled to deduct from the amount
of cash otherwise to be paid to the STOCKHOLDERS pursuant to
Section 2.1 at the Funding and Consummation Date the amount of
such excess. To the extent that CEI does not so deduct any
such amounts, the STOCKHOLDERS shall promptly pay such
Indebtedness as and to the extent requested by the Surviving
Corporation from time to time. For purposes of this Section
1.5, the dollar limitation on Indebtedness to be assumed by
the Surviving Corporation shall not apply to Indebtedness
representing trade payables for goods and services incurred in
the ordinary course of business which shall be assumed by the
Surviving Corporation. Notwithstanding the foregoing, none of
the Indebtedness and liabilities assumed by the Surviving
Corporation shall include any liabilities or Indebtedness owed
by the COMPANY to any of the STOCKHOLDERS, including, without
limitation, any accrued liabilities representing accrued
compensation and benefits or interest, but specifically
excluding amounts due to the STOCKHOLDERS pursuant to those
certain leases listed on Schedule 5.16(B). In addition without
limiting the generality of the foregoing, the Surviving
Corporation shall not forgive the greater of the (i) $30,000
or (ii) the outstanding balance of all Indebtedness in
satisfaction of such Indebtedness and other liabilities, as
the case may be, owed by Xxxxx Xxxxx to the Company, whether
or not evidenced by a promissory note, bond, debenture or
other similar instrument. CEI shall be entitled to deduct from
the amount of cash otherwise to be paid to Xxxxx Xxxxx
pursuant to Section 2.1 at the Funding and Consummation Date
the greater of (i) $30,000 or (ii) the outstanding balance of
such Indebtedness in satisfaction of such Indebtedness and
other liabilities, as the case may be, in satisfaction of such
Indebtedness and other liabilities, owed by Xxxxx Xxxxx to the
Company.
6. Amendment to Section 7.3 to the Agreement. Section 7.3 of the
Agreement is hereby amended by deleting the word "or" from the end of clause (x)
thereof and adding the following to the end of clause (xi) thereof:
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; or (xii) make any payment or distribution of any kind to any
of its STOCKHOLDERS, including any payments in respect of
salary or earnings of the COMPANY, other than payments in
respect of salaries not to exceed $7,083 per month in the
aggregate to all such STOCKHOLDERS (pro rated for partial
months).
7. Amendment to Annex III of the Agreement. Annex III of the Agreement
is hereby amended by deleting such annex in its entirety and replacing it with a
new Annex III attached as Exhibit A hereto.
8. Effect on Agreement. The Agreement shall continue in full force and
effect as amended by this Amendment. From and after the date hereof, all
references to the Agreement shall be deemed to mean the Agreement as amended by
this Amendment.
9. Governing Law. This Amendment shall be construed in accordance with
the laws of the State of New York without reference to its conflicts of law
provisions.
10. Counterparts. This Amendment may be executed simultaneously in two
or more counterparts, each of which shall be an original, and all of which
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
COLLECTIBLES USA, INC.
By /s/ XXXXXX XXXXXXXX
----------------------------------
Name: XXXXXX XXXXXXXX
Title: CHAIRMAN
DKG ACQUISITION CORP.
By /s/ XXXXXX XXXXXXXX
----------------------------------
Name: XXXXXX XXXXXXXX
Title: CHAIRMAN
DKG ENTERPRISES
By /s/ XXXXX XXXXX
-----------------------------------
Name:
Title:
4D INVESTMENT LIMITED PARTNERSHIP II
By /s/ XXXXX XXXXX
---------------------------------
Xxxxx Xxxxx, a General Partner
By /s/ XXXXX XXXXX
---------------------------------
Xxxxx Xxxxx, a General Partner
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Exhibit A
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ANNEX III
CONSIDERATION TO BE PAID TO STOCKHOLDER
Aggregate consideration to be paid to STOCKHOLDER:
$1,730,000 in cash and 385,845 shares of Common Stock of CEI, to
be distributed as follows:
Consideration to be paid to each STOCKHOLDER:
Shares of Common
Stockholder Stock of CEI Cash
----------- ------------ ----
4D Investment Limited 300,000 $1,730,000
Partnership II
N.P.C. Investment 85,845
Ltd. Partnership
TOTALS: 385,845 $1,730,000
MINIMUM VALUE: $4,593,000
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