AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER AND INTERESTS PURCHASE AGREEMENT
EXHIBIT
10.1
AMENDMENT
NO. 2 TO AGREEMENT AND PLAN OF MERGER
AND
INTERESTS PURCHASE AGREEMENT
This
Amendment (this “Amendment”)
is
entered into as of August 1, 2008, by and among FORTISSIMO ACQUISITION CORP.,
a
Delaware corporation (“Parent”);
FAC
ACQUISITION SUB CORP., a New York corporation and a wholly-owned subsidiary
of
Parent (“Merger
Sub”);
PSYOP, INC., a New York corporation (the “Company”);
PSYOP
SERVICES, LLC, dba Blacklist (“Blacklist”);
XXXXXX XXXXX-XXXXXXXX, HEJUNG XXXXX XXXX, XXXXXX XXXX, KYLIE MATULICK,
XXXX XXXXX, XXXXXX XXXX XXXXXXX, XXXXXX XXXXXXXX, XXXXX XXXXX AND
XXXXXXXXXXX XXXXXX (individually, a “Stockholder”
and
collectively, the “Stockholders”);
and
XXXXXX XXXXX-XXXXXXXX (the “Stockholders’
Representative”)
as
agent and attorney-in-fact for each Stockholder.
WHEREAS,
the parties to this Amendment are parties to the Agreement and Plan of Merger
and Interests Purchase Agreement, dated as of January 15, 2008, by and among
Parent, Merger Sub, the Company, Blacklist, the Stockholders and the
Stockholders’ Representative, as amended by Amendment No. 1 thereto dated as of
May 12, 2008 (together, the “Merger
Agreement”);
WHEREAS,
the parties to this Amendment wish to make certain modifications to the Merger
Agreement as set forth herein;
NOW,
THEREFORE, in consideration of the premises, covenants and representations
set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree to amend
the Merger Agreement as set forth below:
1. Definitions.
Unless
otherwise specified, capitalized terms used and not otherwise defined in this
Amendment shall have the same meanings as set forth in the Merger
Agreement.
2. Interpretation.
The
rules of construction set forth in Section 1.02 of the Merger Agreement shall
apply mutatis mutandis to
this
Amendment as if set forth in full in this Section 2.
3. Amendment
to Section 1.01; Definition of Combined Financial Statements.
The
definition of “Combined Financial Statements” is hereby deleted from Section
1.01 of the Merger Agreement.
4. Amendment
to Section 1.01; Definition of Consolidated Financial Statements.
The
definition of “Consolidated Financial Statements” is hereby deleted from Section
1.01 of the Merger Agreement.
5. Amendment
to Section 1.01; Definition of Financial Statements.
The
following definition of “Financial Statements” is hereby inserted immediately
after the definition of “Expenses” and immediately prior to the definition of
“GAAP” in Section 1.01 of the Merger Agreement:
“Financial
Statements”
has the
meaning set forth in Section 3.07(a).
6. Amendment
to Section 2.13.
A
new
Section 2.13(d) is hereby added to the Merger Agreement, to read as
follows:
(d) Notwithstanding
anything to the contrary in this Section 2.13 or elsewhere in this Agreement,
including Exhibit A hereto, Xxxxxx Xxxxxxxx shall not receive any Contingent
Consideration with respect to the Annual Contingent Consideration Period ending
December 31, 2010 and the Stock Contingent Consideration and Cash Contingent
Consideration that he otherwise would be entitled to receive with respect to
such Annual Contingent Consideration Period shall be allocated among the other
Stockholders pro rata in accordance with their stock ownership percentages
set
forth in Table D of Exhibit A, which allocation is reflected in Tables B and
C
of Exhibit A with respect to such Annual Contingent Consideration
Period.
7. Amendment
to Section 3.07.
Section
3.07 of the Merger Agreement is hereby replaced in its entirety with the
following:
(a) The
Company has delivered to the Parent copies of (i) the audited consolidated
and
combined balance sheet of the Company (including the Company Subsidiary) and
Blacklist at December 31, 2007, together with the related statements of
operations, stockholders’ equity and cash flows for the year then ended and the
notes thereto and (ii) the unaudited consolidated and combined balance sheet
of
the Company (including the Company Subsidiary) and Blacklist at March 31, 2008,
together with the related statements of operations, stockholders’ equity and
cash flows for the three months then ended and the notes thereto (collectively,
the “Financial
Statements”).
The
Financial Statements (x) were prepared in accordance with GAAP (except, with
respect to such thereof that are unaudited, for the absence of notes thereto
and
for year-end adjustments) applied on a consistent basis throughout the periods
covered thereby; (y) present fairly the financial position, results of
operations and cash flows of the Company (including the Company Subsidiary)
and
Blacklist as of such dates and for the periods then ended; and (z) are correct
and complete in all material respects and can be reconciled with the books
of
account and records of the Company (including the Company Subsidiary) and
Blacklist. Each of the Company (including the Company Subsidiary) and Blacklist
maintains and will continue to maintain an adequate system of internal controls
established and administered in accordance with GAAP.
(b) Except
as
and to the extent set forth or reserved against on the audited balance sheet
of
the Company at December 31, 2007, none of the Company, Blacklist or the Company
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on
a
balance sheet or in notes thereto prepared in accordance with GAAP, except
for
immaterial liabilities or obligations incurred in the ordinary course of
business consistent with past practice since December 31, 2007.
2
8. Amendment
to Section 8.02(g).
Section
8.02(g) of the Merger Agreement is hereby replaced in its entirety with the
following:
(g)
SAS
100. Parent
shall have received a review report, reasonably satisfactory in form and
substance to Parent, from the Company’s independent public accountants, pursuant
to Statement of Accounting Standards No. 100, relating to the unaudited
consolidated and combined balance sheet of the Company (including the Company
Subsidiary) and Blacklist at the end of the most recent quarter for which
financial statements are included in the proxy statement, together with the
related statements of operations, stockholders’ equity and cash flows for the
interim period then ended and the notes thereto.
9. Amendment
to Section 11.02.
Section
11.02 of the Merger Agreement is hereby replaced in its entirety with the
following:
Section
11.02. Notices.
All
notices which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be sufficient and deemed to be received
if (i) on the date of delivery, if delivered personally, (ii) 3 days after
mailing, if mailed by registered or certified mail, return receipt requested
and
postage prepaid, (iii) the day after mailing, if sent via a nationally
recognized overnight courier service or (iv) the day after transmission, if
sent
via facsimile or e-mail confirmed in writing to the recipient, in each case
as
follows:
if
to
Parent, to:
|
Fortissimo
Acquisition Corporation
|
|
00
Xxxxxxxxx Xxxxxx
|
|
Xxxx
Afek XX Xxx 00000
|
|
Xxxx
Xxxxxx 00000
|
|
Xxxxxx
|
|
Attention:
Xxxx X. Xxxxxxx
|
Telephone:
000-000-0-000-0000
|
Facsimile:
011-972-3-915-7411
|
|
E-mail:
xxxx@xxxxxxxxx.xxx
|
with
a
copy (which shall not constitute notice) to:
|
Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
|
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxxxxx, Esq.
|
Telephone:
(000) 000-0000
|
|
Facsimile:
(000) 000-0000
|
E-mail:
xxxxx.xxxxxxxx@xxxxxxxxxx.xxx
3
if
to the
Company, to:
Psyop,
Inc.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxx-Xxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
E-mail:
xxxxxx@xxxxx.xx
with
a
copy (which shall not constitute notice) to:
Xxxxxxxx
Xxxxxx
000
Xxxxxxxxx Xxxxxx
|
Xxx
Xxxx, XX 00000
|
Attention:
Xxxxx X. Xxxxxx, Esq.
Telephone:
000-000-0000
Facsimile:
000-000-0000
E-mail:
xxxxxxx@xxxxxxxx.xxx
if
to any
Stockholder, to the address appearing under the name of such Stockholder in
Schedule
I
hereto;
or
such
other address or addresses as any party shall have designated by notice in
writing to the other parties.
10. Amendment
to Tables B, C and D of Exhibit A.
Tables
B, C and D of Exhibit A are hereby replaced in their entirety by the following:
|
TABLE
B
|
||||||
|
Stockholder
Maximum Revenue Contingent Stock and Maximum
Revenue
|
||||||
|
Contingent
Cash By Fiscal Year
|
||||||
|
Maximum
Revenue Contingent Stock
|
Maximum
Revenue Contingent Cash
|
|||||
|
(shares)
|
($)
|
|||||
|
Fiscal
Year
|
2008
|
2009
|
2010
|
2008
|
2009
|
2010
|
|
Xxxxxx
Xxxxx-Xxxxxxxx
|
12,145.93
|
12,145.93
|
9,500.97
|
$
35,041.00
|
$
35,041.00
|
$
27,410.28
|
|
Hejung
Xxxxx Xxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxx
Xxxx
|
9,109.44
|
9,109.44
|
7,125.72
|
$
26,280.75
|
$
26,280.75
|
$
20,557.71
|
|
Kylie
Matulick
|
32,368.89
|
32,368.89
|
25,320.07
|
$
93,384.26
|
$
93,384.26
|
$
73,048.38
|
|
Xxxx
Xxxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxx
Xxxx Xxxxxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxx
Xxxxxxxx
|
11,903.01
|
11,903.01
|
0.00
|
$
34,340.18
|
$
34,340.18
|
$
0.00
|
|
Xxxxx
Xxxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxxxxxxx
Xxxxxx
|
20,243.21
|
20,243.21
|
15,834.94
|
$
58,401.66
|
$
58,401.66
|
$
45,683.79
|
|
Maximum
Total
|
288,850.38
|
288,850.38
|
216,637.78
|
$833,333.33
|
$833,333.33
|
$625,000.00
|
4
|
TABLE
C
|
||||||
|
Stockholder
Maximum EBITDA Contingent Stock and Maximum
EBITDA
|
||||||
|
Contingent
Cash By Fiscal Year
|
||||||
|
Maximum
EBITDA Contingent Stock
|
Maximum
EBITDA Contingent Cash
|
|||||
|
(shares)
|
($)
|
|||||
|
Fiscal
Year
|
2008
|
2009
|
2010
|
2008
|
2009
|
2010
|
|
Xxxxxx
Xxxxx-Xxxxxxxx
|
12,145.93
|
12,145.93
|
9,500.97
|
$
35,041.00
|
$
35,041.00
|
$
27,410.28
|
|
Hejung
Xxxxx Xxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxx
Xxxx
|
9,109.44
|
9,109.44
|
7,125.72
|
$
26,280.75
|
$
26,280.75
|
$
20,557.71
|
|
Kylie
Matulick
|
32,368.89
|
32,368.89
|
25,320.07
|
$
93,384.26
|
$
93,384.26
|
$
73,048.38
|
|
Xxxx
Xxxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxx
Xxxx Xxxxxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxx
Xxxxxxxx
|
11,903.01
|
11,903.01
|
0.00
|
$
34,340.18
|
$
34,340.18
|
$
0.00
|
|
Xxxxx
Xxxxx
|
50,769.97
|
50,769.97
|
39,714.02
|
$146,471.37
|
$146,471.37
|
$114,574.96
|
|
Xxxxxxxxxxx
Xxxxxx
|
20,243.21
|
20,243.21
|
15,834.94
|
$
58,401.66
|
$
58,401.66
|
$
45,683.79
|
|
Maximum
Total
|
288,850.38
|
288,850.38
|
216,637.78
|
$833,333.33
|
$833,333.33
|
$625,000.00
|
|
TABLE
D
Stockholder
Ownership Percentages*
|
|
|
Stockholder
|
Percentage
|
|
Xxxxxx
Xxxxx-Xxxxxxxx
|
4.2049%
|
|
Hejung
Xxxxx Xxxx
|
17.5766%
|
|
Xxxxxx
Xxxx
|
0.0000%
|
|
Xxxxx
Xxxxxxxx
|
11.2061%
|
|
Xxxx
Xxxxx
|
17.5766%
|
|
Xxxxxx
Xxxx Xxxxxxx
|
17.5766%
|
|
Xxxxxx
Xxxxxxxx
|
4.1208%
|
|
Xxxxx
Xxxxx
|
17.5766%
|
|
Xxxxxxxxxxx
Xxxxxx
|
7.0082%
|
*
Ownership is calculated as of the date of the Closing. Numbers in
table
D do not equal 100.0000% due to rounding.
11. Acknowledgment
Regarding Section 2(b) of Exhibit A.
The
parties acknowledge that the termination of Xxxxxx Xxxxxxxx’x employment with
the Company, which termination was effective as of June 30, 2008, shall not
be
deemed to be a Disqualifying Termination for purposes of the Merger
Agreement.
12. Conflict.
In the
event of conflict between this Amendment and the Merger Agreement, this
Amendment shall prevail.
13. No
Other Amendment.
Except
as expressly provided in this Amendment, no other amendments to the Merger
Agreement are made by this Amendment.
14. Continuing
Effectiveness.
Except
as amended by this Amendment, the Merger Agreement shall continue in full force
and effect in accordance with its terms.
15. Governing
Law.
This
Amendment shall be governed by, and construed and enforced in accordance with,
the law of the State of New York other than conflicts of law principles thereof
directing the application of any law other than that of New York.
16. Counterparts;
Facsimiles.
This
Amendment may be executed in two (2) or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument. This Amendment may be executed by facsimile
signature.
5
IN
WITNESS WHEREOF, the undersigned have executed this Amendment or have caused
this Amendment to be duly executed and delivered by their proper and duly
authorized representatives as of the day and year first above
written.
| |
|
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| By: | /s/ Xxxxx Xxxxx | |
|
Name:
Xxxxx Xxxxx
Title:
President and Chief Executive Officer
|
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FAC
ACQUISITION SUB CORP.
|
||
| |
|
|
| By: | /s/ Xxxxx Xxxxx | |
|
Name:
Xxxxx Xxxxx
Title:
President
|
||
6
|
PSYOP,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx-Xxxxxxxx | |
|
Name:
Xxxxxx Xxxxx-Xxxxxxxx
Title:
Chief Executive Officer
|
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PSYOP
SERVICES, LLC
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx-Xxxxxxxx | |
|
Name:
Xxxxxx Xxxxx-Xxxxxxxx
Title:
Member and Chief Executive Officer
|
||
| /s/ Xxxxxx Xxxxx-Xxxxxxxx | ||
|
XXXXXX
XXXXX-XXXXXXXX
|
||
| /s/ Hejung Xxxxx Xxxx | ||
|
HEJUNG
XXXXX XXXX
|
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| /s/ Xxxxxx Xxxx | ||
|
XXXXXX
XXXX
|
||
| /s/ Kylie Matulick | ||
|
KYLIE
MATULICK
|
||
| /s/ Xxxx Xxxxx | ||
|
XXXX XXXXX
|
||
| /s/ Xxxxxx Xxxx Xxxxxxx | ||
|
XXXXXX
XXXX XXXXXXX
|
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| /s/ Xxxxxx Xxxxxxxx | ||
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XXXXXX
XXXXXXXX
|
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| /s/ Xxxxx Xxxxx | ||
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XXXXX
XXXXX
|
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| /s/ Xxxxxxxxxxx Xxxxxx | ||
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XXXXXXXXXXX
XXXXXX
|
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STOCKHOLDERS’
REPRESENTATIVE
|
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| |
|
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| By: | /s/ Xxxxxx Xxxxx-Xxxxxxxx | |
|
Xxxxxx
Xxxxx-Xxxxxxxx
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7
