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EXHIBIT D
FIRST AMENDMENT TO THE
CONTRIBUTION AND SHARE EXCHANGE AGREEMENT
DATED APRIL 22, 1998
BY AND AMONG
XXXXX COMMUNICATIONS HOLDINGS LIMITED PARTNERSHIP,
A NEVADA LIMITED PARTNERSHIP
XXXXX WORLD WIDE DIGITAL TRANSMISSION & VAULTING
LIMITED PARTNERSHIP,
A NEVADA LIMITED PARTNERSHIP
XXXXX PRODUCTIONS LIMITED PARTNERSHIP,
A NEVADA LIMITED PARTNERSHIP
XXXXX VIRTUAL MEDIA LIMITED PARTNERSHIP,
A NEVADA LIMITED PARTNERSHIP
AND
PRECISION SYSTEMS, INC.,
A DELAWARE CORPORATION
AUGUST 31, 1998
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FIRST AMENDMENT TO THE
CONTRIBUTION AND SHARE EXCHANGE AGREEMENT
This FIRST AMENDMENT (the "Amendment") to that certain Contribution and
Share Exchange Agreement (the "Agreement") dated April 22, 1998 by and among
Xxxxx Communications Holdings Limited Partnership, a Nevada limited partnership
("Xxxxx Communications"), Xxxxx World Wide Digital Transmission & Vaulting
Limited Partnership, a Nevada limited partnership ("Xxxxx World Wide"), Xxxxx
Productions Limited Partnership, a Nevada limited partnership ("Xxxxx
Productions"), Xxxxx Virtual Media Limited Partnership, a Nevada limited
partnership ("SVM") and Precision Systems, Inc., a Delaware corporation ("PSI")
is entered into by and among Xxxxx Communications, Xxxxx World Wide, Xxxxx
Productions, SVM and PSI (the "Parties") as of this 31st day of August, 1998.
WHEREAS, the Parties have determined to amend the Agreement pursuant to the
terms of this Amendment; and
WHEREAS, capitalized terms not defined herein shall have the meaning
ascribed to such terms in the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
Parties hereto agree as follows.
1. Amendments.
a. Paragraph (a) of Section 1.1 of the Agreement is hereby amended to
read as follows:
(a) Subject to the terms and conditions of this Agreement, at the
Closing Date, as hereinafter defined, Xxxxx agrees to grant, contribute,
convey, assign, transfer and deliver to PSI (the "Contribution")
pursuant to an Assignment and Assumption Agreement substantially in the
form attached as Exhibit 1.1 hereto (the "Assignment and Assumption
Agreement") all right, title and interest in all of the assets, tangible
or intangible, along with all contractual and leasehold rights Xxxxx
holds necessary for PSI to operate the Businesses (as hereinafter
defined) as Xxxxx operates them as of the date hereof (the "Xxxxx
Assets") in exchange for the consideration set forth in Section 1.2. The
Xxxxx Assets include, without limitation, those assets set forth in
Schedule 1.1(a)(i), together with all of the issued and outstanding
capital stock of Professional Video Services Corporation, a District of
Columbia corporation ("PVS") and of Xxxxx Communications Virtual Media,
Inc., a Delaware corporation ("SCVM") (the capital stock of PVS and SCVM
are hereinafter referred to as the "Equity Interests") and $15 million
in cash (the "Cash"), but do not include those assets set forth in
Schedule 1.1(a) (the "Excluded Assets").
b. Section 1.4 of the Agreement is hereby amended to read as follows:
1.4 Alternative Transaction. Prior to the Closing Date, Xxxxx
shall be entitled in its sole discretion and upon not less than twenty
(20) days prior written notice to elect not to close the Contribution
and Exchange Transaction and the Real Estate Transaction. In lieu of
such transactions and subject to the terms and conditions of this
Agreement, Xxxxx Communications and SVM would grant, contribute, convey,
assign, transfer and deliver to PSI all of the stock of SCVM and
Thirty-Six Million Dollars ($36,000,000) in cash (the "Alternative
Transaction"). In consideration for the contribution of the stock of
SCVM and cash referred to in the preceding sentence, and in lieu of
PSI's obligation to deliver the Share Exchange Consideration and the
Real Estate Consideration, PSI shall issue and deliver 41,000,000 newly
issued shares of PSI Common Stock (the "Alternative Consideration") to
Xxxxx Communications and SVM. Xxxxx shall not have any obligation or
liability to PSI with respect to the Contribution and Exchange
Transaction or the Real Estate Transaction, and PSI shall have no right
to conclude the Contribution and Exchange Transaction or the Real Estate
Transaction in the event Xxxxx elects to pursue the Alternative
Transaction.
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c. Section 6.4 of the Agreement is hereby amended to read as follows:
6.4 Board of Directors. Prior to the Closing Date, PSI shall adopt
a resolution fixing the number of Board members of its Board of
Directors at six members.
d. Section 6.5 of the Agreement is hereby amended by adding the
following clause at the end thereof:
; provided, however, in the event the closing relates to the
Alternative Transaction, only those employees of SVM as of the Closing
Date shall become employees of PSI.
e. Section 8.16 of the Agreement is hereby amended to read as follows:
8.16. Election of Directors. Two nominees of Xxxxx shall have been
elected to fill vacancies on the PSI Board of Directors.
f. Section 8.17 of the Agreement is hereby amended to read as follows:
8.17. Non-Fulfillment Date. In the event that one or more of the
foregoing conditions in this Article VIII is not fulfilled as of October
31, 1998, Xxxxx may, upon notice to PSI and on or prior to the Closing
Date, elect not to consummate the transactions provided for herein, or
may waive the condition and proceed to Closing, but any breach of
condition, warranty, representation or covenant known to Xxxxx at the
Closing Date as to which Xxxxx does not make a claim by the Closing Date
shall be deemed to have been waived.
g. Section 9.10 of the Agreement is hereby amended by adding the
following clause (iii) at the end thereof:
(iii) immediately prior to the Closing, SVM shall contribute to
SCVM all of the assets of SVM listed in Schedule 1.1(a)(1) and shall
cause SCVM to assume only those liabilities of SVM listed on Schedule
1.1(b) and SVM shall have delivered to PSI true and accurate copies of
the Certificate of Incorporation and By-laws of SCVM.
h. Section 9.11 of the Agreement is hereby amended to read as follows:
9.11. Non-Fulfillment Date. In the event that one or more of the
foregoing conditions in this Article IX is not fulfilled as of October
31, 1998, PSI may, upon notice to Xxxxx and on or prior to the Closing
Date, elect not to consummate the transactions provided for herein, or
may waive the condition and proceed to Closing, but any breach of
condition, warranty, representation or covenant known to PSI at the
Closing Date as to which PSI does not make a claim by the Closing Date
shall be deemed to have been waived.
i. Paragraph (h) of Section 11.2 of the Agreement is hereby amended to
read as follows:
(h) Certificates representing all of the outstanding capital stock
of SCVM duly endorsed for transfer or accompanied by an appropriate
instrument transferring such stock to PSI.
j. Clause (iii) of paragraph (a) of Section 15.1 of the Agreement is
hereby amended to read as follows:
(iii) any liabilities arising after the Closing Date and relating
to the Xxxxx Assets or the conduct of the Businesses prior to the
Closing Date other than those assumed by PSI pursuant to the Assignment
and Assumption Agreement referred to in Section 1.1 or disclosed in
Section 4.9 of the Xxxxx Disclosure Letter and other than liabilities of
PVS or SCVM set forth in Schedule 1.1(b), or
k. Paragraph (b) of Section 15.1 is hereby amended by adding the
following clause (iii) at the end of the first sentence thereof:
or (iii) any liabilities arising after the Closing Date and
relating to the conduct of the business of SCVM prior to the Closing
Date other than liabilities of SVM set forth in Schedule 1.1(b) and
assumed by SCVM prior to the Closing.
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x. Xxxxxxxxxx (0) xx xxxxxxxxx (x) of Section 27.1 is hereby amended
to read as follows:
(1) if the Closing shall not have occurred on or before October 31,
1998, due to a failure of any of the conditions precedent set forth in
Article IX.
m. Subsection (1) of paragraph (c) of Section 27.1 is hereby amended
to read as follows:
(1) if the Closing shall not have occurred on or before October 31,
1998 due to a failure of any of the conditions precedent set forth in
Article VIII; or
2. Additional Loan and Forbearance with Respect to Promissory
Note. Following execution and delivery by PSI of a promissory note in the form
of Exhibit 1 attached hereto (the "Additional Note"), Xxxxx shall provide PSI a
line of credit (which shall be in addition to the line of credit required by
Section 6.7 of the Agreement) of up to $2,000,000 on the terms and conditions
set forth in the Additional Note. The principal amount and accrued interest on
such loan shall become due and payable on the earlier of the Closing Date and
November 1, 1998; provided, however, that at Xxxxx'x sole discretion the
repayment of such loan may be forgiven and the amount of the cash required to be
delivered by Xxxxx at the Closing shall be reduced by an amount equal to the
principal balance and unpaid interest on the Additional Note so forgiven. Xxxxx
further agrees to refrain from taking any action to collect on or declaring an
event of default with respect to the Promissory Note until the earlier of the
Closing or November 1, 1998.
3. Effect. Except as otherwise set forth in this Amendment, the Agreement
shall remain in full force and effect in accordance with its terms.
4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be considered an original, but all of which
shall constitute but one and the same agreement by and among the Parties.
5. Governing Law. This Amendment shall be construed in accordance with the
laws of Florida, without regard to the principles of conflicts.
6. Amendment. This Amendment may not be amended except by action of each
of the Parties hereto set forth in an instrument in writing signed on behalf of
each of the Parties hereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the day and year first above written.
XXXXX COMMUNICATIONS HOLDINGS
LIMITED PARTNERSHIP,
a Nevada Limited partnership
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
President, Holdings Investments,
Inc.
General Partner of Xxxxx
Communications
Holdings Limited Partnership
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XXXXX VIRTUAL MEDIA LIMITED
PARTNERSHIP,
a Nevada limited partnership
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
President, Magnatone Entertainment
Group, Inc.
General Partner of Xxxxx Virtual
Media Limited Partnership
XXXXX WORLD WIDE DIGITAL TRANSMISSION
& VAULTING LIMITED PARTNERSHIP,
a Nevada limited partnership
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
President, Xxxxx World Wide, Inc.
General Partner of Xxxxx World Wide
Digital Transmission & Vaulting
Limited Partnership
XXXXX PRODUCTIONS LIMITED PARTNERSHIP,
a Nevada limited partnership
By: /s/ XXX X. XXXXX
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Xxx X. Xxxxx
President, Xxxxxxxxx Communications,
Inc.
General Partner of Xxxxx Productions
Limited Partnership
PRECISION SYSTEMS, INC.,
a Delaware corporation
By: /s/ XXX XXXXXXXXX
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Name: Xxx Xxxxxxxxx
Title: Chief Executive Officer
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