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EXHIBIT 10.3
AMENDMENT (NO. 2)
TO THE ASSET PURCHASE AGREEMENT
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Amendment (No. 2), dated as of March 13, 1998, to the ASSET PURCHASE
AGREEMENT, dated as of February 27, 1998, as amended by Amendment (No. 1) dated
March 13, 1998 (the "Agreement"), by and among (i) Xxxxxxxxx Industries, Inc., a
Delaware corporation ("Xxxxxxxxx"), (ii) Integrated Technology Holdings Corp., a
Delaware corporation and a wholly-owned subsidiary of Xxxxxxxxx ("Xxxxxxxxx
Subsidiary"), (iii) Integrated Technology Corp., a New Jersey corporation (the
"Company"), and (iv) Xxxxxx Xxxxxxx, an individual residing at 00 Xxxxxxxx
Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (the "Principal").
WHEREAS, Xxxxxxxxx, Xxxxxxxxx Subsidiary, the Company and the Principal
have determined that it is in the best interest of the parties, and in
furtherance of their purposes, to amend the Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter contained, the parties hereto agree as follows:
1. The Agreement shall be amended by:
(a) deleting SCHEDULE 2.03(A) (including Appendix X thereto)
in its entirety and replacing it with SCHEDULE 2.03(a)
attached hereto.
(b) deleting Section 2.03(c) in its entirety and replacing it
with the following:
"(c) CALCULATION OF ADDITIONAL PAYMENTS. The
calculation of the Additional Payment, if any, for
each Payment Year (as defined in Schedule 2.03(a))
shall be determined by Xxxxxxxxx and delivered to the
Company and the Principal within [_______] days of
the conclusion of each Payment Year."
(c) deleting in its entirety the paragraph immediately
following clause (z) of Section 7.09 and replacing it with the
following:
"Termination of the Employment Agreement, or the
non-competition provisions contained therein, shall
in no way affect or diminish the obligations of the
Principal pursuant to this Section 7.09.
Notwithstanding the foregoing or anything else in
this Agreement to the contrary, (a) in the event that
it is determined as set forth in Section 2.03, or
otherwise
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agreed to by Xxxxxxxxx that Xxxxxxxxx is required to
pay the Company Additional Payments and Xxxxxxxxx is
in default of such payments or (b) the Principal
leaves the employ of Xxxxxxxxx for good reason (as
defined in Section 5(d) of the Employment Agreement),
the non-competition provisions contained herein shall
terminate."
(d) Section 7.12 of the Agreement is deleted in its entirety.
2. The letter agreement, dated June 23, 1998, by and among Xxxxxxxxx,
Xxxxxxxxx Subsidiary, the Company and the Principal, is null and void and of no
force or effect.
3. Except as amended herein, the Agreement shall remain in full force
and effect.
1. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
4. This Amendment shall be governed by and construed and enforced in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as of the date set forth above.
XXXXXXXXX INDUSTRIES, INC.
By: /s/ Zivi X. Xxxxxx
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Zivi X. Xxxxxx
President and Chief Executive Officer
INTEGRATED TECHNOLOGY HOLDINGS CORP.
By: /s/ Zivi X. Xxxxxx
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Zivi X. Xxxxxx
President
INTEGRATED TECHNOLOGY CORP.
By: /s/ Xxxxxx Xxxxxxx
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Title: President
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/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
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SCHEDULE 2.03(A)
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5. The Company shall be entitled to certain additional payments (the
"ADDITIONAL PAYMENTS"), if any, calculated in accordance with this Schedule
2.03(a). The term "PAYMENT YEARS" shall mean each of the three twelve-month
periods ending December 31, 1998, 1999 and 2000.
(a) If Xxxxxxxxx has Net Income (as hereinafter defined) for any
Payment Year in an amount equal to or greater than Xxxxxxxxx'x target net income
as determined in the sole discretion of the Board of Directors of Xxxxxxxxx (or
its Executive Committee of the Board of Directors) relating to Xxxxxxxxx'x
senior executive officers for such Payment Year (the "Target"), the Additional
Payment shall be $3,333,333, it being understood that such Additional Payment
shall not be increased in the event that Xxxxxxxxx'x Net Income exceeds the
Target in such Payment Year.
(b) If Xxxxxxxxx has Net Income for such Payment Year of less than 50%
of the Target, the Company shall not be entitled to an Additional Payment for
such Payment Year.
(c) If Xxxxxxxxx has Net Income for such Payment Year of at least 50%
of the Target but less than the Target, the Company shall be entitled to an
Additional Payment as calculated below:
AP = $3,333,333 -[ $3,333,333 x (T-NI) ]
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T
where:
AP = the Additional Payment for such year.
T = the Target for such Payment Year.
NI = the actual Net Income of Xxxxxxxxx for such Payment Year.
"Net Income" means the net income of Xxxxxxxxx as determined by the
independent auditors of Xxxxxxxxx, in conformity with generally
accepted accounting principles and practices in the United States
applied on a consistent basis with prior periods of Xxxxxxxxx, [as
reported by Xxxxxxxxx in its annual report on Form 10-K, filed with the
Securities and Exchange Commission, relating to the applicable Payment
Year].
(d) Xxxxxxxxx shall inform the Company and the Principal of the Target
for each Payment Year immediately following the determination of the Target by
the Board of Directors of Xxxxxxxxx (or its Executive Committee of the Board of
Directors) [which determination shall be made no later than [______] in any
Payment Year].
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6. The Company may assign the right to receive Additional Payments
under this Schedule 2.03(a) to Xxxxxx Xxxxxxx.
7. Notwithstanding anything to the contrary contained in this Agreement
or in the Employment Agreement, dated the Closing Date, between Xxxxxx Xxxxxxx
and Xxxxxxxxx Subsidiary (the "Employment Agreement"), in the event that (i)
Xxxxxx Xxxxxxx'x employment under the Employment Agreement is terminated under
Section 5(c)(i), (ii) or (iii) of the Employment Agreement, all rights to
receive Additional Payments not yet received relating to Payment Years ending
after the date of any such termination shall be null and void and of no further
force or effect.
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