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AMENDMENT NO. 1 TO THE
SHARE ACQUISITION AGREEMENT
This Amendment No. 1 to the Share Acquisition Agreement (the
"Amendment No. 1") is made and entered into as of March 10, 1997 among CKS
Group, Inc., a Delaware corporation ("Parent"), RIA 96 Vermogensverwaltungs
GmbH, a German limited liability company and wholly owned subsidiary of Parent
("Sub"), Prisma Holding GmbH, a German limited liability company (the
"Company"), and the shareholders of the Company.
RECITALS
WHEREAS, the parties hereto are parties to the Share Acquisition
Agreement dated as of January 8, 1997 (the "Original Agreement") and all such
parties now desire to amend the Original Agreement as follows.
NOW THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
considerations, the parties hereby agree as follows:
1. Amendment to Section 1.8.
a. Certain of the term definitions contained in Section
1.8 are amended to read in their entirety as follows:
"Expenses" shall include Direct Salaries and Related Expenses, Other
Direct Operating Expenses and General and Administrative Expenses and also
Headquarters Expenses equivalent to 0.675% of the Company's and Swiss Sub's
Gross Profits (the "Headquarters Expense"). Except as to the Headquarters
Expense, Expenses shall not include expenses relating to services provided or
deliveries made by Parent and its other subsidiaries, unless such services or
deliveries are requested or provided with the consent of the Shareholder
Representative.
"First Earnout Goal" shall mean $2,723,000 of Pretax Income of the
Company and Swiss Sub in the 1997 Fiscal Year.
"Pretax Income" shall mean all sales and other sources normally
determined to be revenues of the Company or Swiss Sub less all Expenses of the
Company and of Swiss Sub, including without limitation all compensation
expenses of the Company Shareholders. Any local, state, federal and foreign
income taxes incurred by the Company or Swiss Sub shall not be subtracted from
revenues for purposes of calculating Pretax Income.
"Second Earnout Goal" shall mean $3,993,000 of Pretax Income of the
Company and Swiss Sub in the 1998 Fiscal Year.
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"Third Earnout Goal" shall mean $4,749,000 of Net Pretax Income of the
Company and Swiss Sub for the 1999 Fiscal Year.
b. The following definition is added to Section 1.8:
"Swiss Sub" shall mean CKS Marketing Agency AG, a corporation
currently being organized under the laws of Switzerland, and which will be
wholly-owned subsidiary of Sub.
c. Section 1.8(b)(i) is hereby amended to read in its
entirety as follows:
"(i) Not later than 90 calendar days following the end of each of
the 1997 Fiscal Year, the 1998 Fiscal Year, and the 1999 Fiscal Year, Parent
shall deliver to the Shareholder Representative a statement of the Pretax
Income of the Company and Swiss Subfor the 1997 Fiscal Year, the 1998 Fiscal
Year, or the 1999 Fiscal Year, as the case may be (the "Pretax Income
Statement"), which will be determined in accordance with U.S. generally
accepted accounting principles ("GAAP") applied on a basis consistent with that
used by the Parent from time to time in preparation of Parent's consolidated
financial statements, but applied to the Company as if it were a stand alone
entity, which such Pretax Income Statement shall be reviewed by Parent's
certified public accountants. The costs of such review will be included in
General and Administrative Expenses of the Company.
d. Section 1.8(b)(iii) is hereby amended to read in its
entirety as follows:
"(iii) Payments.
(A) Fiscal Year 1997. Not more than 15
days after the 1997 Pretax Income Statement becomes the Final Statement, (i) if
the Company and Swiss Sub shall have achieved the First Earnout Goal, each
Company Shareholder shall be entitled to receive its Pro Rata Portion of the
First Earnout Payment, (ii) if the Company and Swiss Sub shall have not
achieved the First Earnout Goal, but the Pretax Income as reflected on the
Final Statement is equal to or greater than $223,000, each Company Shareholder
shall be entitled to receive its Pro Rata Portion of the First Adjusted
Payment, and (iii) if the Pretax Income for the 1997 Fiscal Year shall have
exceeded $3,407,000, each Company Shareholder shall be entitled to receive its
Pro Rata Portion of the Increased Earnout Payment for the 1997 Fiscal Year.
(B) Fiscal Year 1998. Not more than 15
days after the 1998 Pretax Income Statement becomes the Final Statement, (i)
if the Company and Swiss Sub shall have achieved the Second Earnout Goal each
Company Shareholder shall be entitled to receive its Pro Rata Portion of the
Second Earnout Payment, (ii) if the Company and Swiss Sub shall have not
achieved the Second Earnout Goal, but the Pretax Income as reflected on the
Final Statement is equal to or greater than $2,243,000, each Company
Shareholder shall be entitled to receive its Pro Rata Portion of the Second
Adjusted Payment, and (iii) if the Pretax Income for the 1998 Fiscal Year shall
have exceeded $4,626,000 each Company Shareholder shall be entitled to receive
its Pro Rata Portion of the Increased Earnout Payment for the 1998 Fiscal Year.
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(C) Fiscal Year 1999. Not more than 15
days after the 1999 Pretax Income Statement becomes the Final Statement, (i) if
the Company and Swiss Sub shall have achieved the Third Earnout Goal, each
Company Shareholder shall be entitled to receive its Pro Rata Portion of the
Third Earnout Payment, (ii) if the Company and Swiss Sub shall not have
achieved the Third Earnout Goal, but Pretax Income as reflected in the Final
Statement is equal or greater than $3,999,000, each Company Shareholder shall
be entitled to receive its Pro Rata Portion of the Third Adjusted Payment,
(iii) if the Pretax Income for the 1999 Fiscal Year exceeds $5,088,000, each
Company Shareholder shall be entitled to receive its Pro Rata Portion of the
Increased Earnout Payment for the 1999 Fiscal Year."
2. Amendment to Section 1.10. Section 1.10 is hereby amended to
read in its entirety as follows:
"1.10 Repurchase of Parent Common Stock. In the event that
any shares of Parent Common Stock issued in connection with the Acquisition may
not be sold on the Nasdaq Stock Market by the Company Shareholder holding such
shares pursuant to an exemption from the registration requirements of the
Securities Act within seventy-five (75) days after the issuance of such shares,
Sub shall, at the request of such Company Shareholder (which request may be
made at any time after the issuance such shares), purchase such shares from the
Company Shareholder for a cash price per share equal to the Trading Price as of
the date of receipt of such Company Shareholder's request by Sub; provided that
Sub shall not be under any obligation to purchase such shares if a Registration
Statement has been filed with respect to such shares pursuant to Section 5.1
hereof, and such Registration Statement is effective or effectiveness of such
Registration Statement has been postponed in compliance with Section 3 of the
Registration Rights Agreement attached hereto as Exhibit E. Such purchase
shall be effected within 30 days of receipt of a written request therefore from
the Company Shareholder."
3. Amendment to Article V. Article V is amended by adding new
Section 5.18 and 5.19 as follows:
"5.18 Waiver of Rights of First Refusal. Each of the Company
Shareholders hereby (i) consents to the sale of the Company Capital (including
their respective shares in the Company) by each of the Company Shareholders
pursuant hereto as required by Section 13.1 of the Company's charters
(Gesellschaftsvertrag) waives any and all rights of first refusal such Company
Shareholder may have, whether by virtue of Section 13 or Section 14 of the
Company's charter or otherwise, with respect to sale of Company Capital to Sub
by the other Company Shareholders pursuant to this Agreement.
5.19 Office Lease. The Company Shareholders shall ensure that, no
more than 30 days after the Closing Date, the Company shall have entered into a
lease agreement of the owner of the Hamburg offices occupied by the Company and
the Subsidiaries (the "Owner") with respect to the office space occupied by the
Company and the Subsidiaries. The terms of such new agreement, including the
length of the term of the agreement and the rental payments per square meter,
shall be no less favorable to the Company and the Subsidiaries than the terms
of the Lease Agreement dated July 12, 1991 between the Company and the Owner."
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4. Amendment to Section 7.3. Section 7.3 is hereby amended to
read in its entirety as follows:
"7.3 Compliance with Securities Laws.
(a) The Company Shareholders have been advised
that (i) the shares of Parent Common Stock issued to the Company Shareholders
pursuant to the Acquisition will be issued as securities exempt from the
registration requirements of the U.S. Securities Act by virtue of Section 4(2)
thereof; and (ii) each Company Shareholders may be deemed to be an affiliate of
the Company. The Company Shareholders accordingly agree not to sell, transfer
or otherwise dispose of any shares of Parent Common Stock issued to the Company
Shareholders pursuant to the Acquisition unless such sale, transfer or other
disposition is made on the Nasdaq National Market (w) in conformity with the
requirements of Rule 144 promulgated under the Securities Act, or (x) pursuant
to a resale registration statement on Form S-1 or Form S-3 filed by Parent with
the Securities and Exchange Commission ("SEC") which is then in effect; or (y)
upon delivery to Parent of a written opinion of counsel, reasonably acceptable
to Parent in form and substance, that such sale, transfer or other disposition
is otherwise exempt from registration under the Securities Act, or (z) an
authorized representative of the SEC shall have rendered written advice to the
Company Shareholder wishing to effect such sale, transfer or other disposition
(sought by such Company Shareholder or counsel to such Company Shareholder,
with a copy thereof and of all other related communications delivered to
Parent) to the effect that the SEC would take no action or that the staff of
the SEC would not recommend that the SEC take action, with respect to the
proposed sale, transfer or other disposition, if consummated.
(b) Parent will give stop transfer instructions
to its transfer agent with respect to any shares of its Common Stock received
by the Company Shareholder pursuant to the Acquisition and there will be placed
on each certificate representing such shares of Parent Common Stock, or, any
substitutions therefor, a legend stating in substance:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold or transferred, directly or indirectly, in the
absence of such registration or an exemption therefrom under
said Act." "
5. Amendment of Exhibits. Exhibit A (Representation
Certificate), Exhibit B-1 (Form of Legal Opinion of Counsel to the Company) and
Exhibit E (Registration Rights Agreement) are amended to read in their entirety
as set forth in Exhibit 1, Exhibit 2 and Exhibit 3 hereto, respectively.
6. Full Force and Effect. Subject to the foregoing amendments,
the Original Agreement remains in full force and effect and is herewith
confirmed.
7. Counterparts. This Amendment No. 1 may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
all parties need not sign the same counterpart.
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the date first written above.
EPG ELEKTRONISCHE CKS GROUP, INC.
PUBLIKATIONEN GMBH
By: /s/Versteegen By: /s/Xxxxxx Xxxxx/Attorney in Fact
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Xxxxxxx Xxxx Xxxxxx, Geschaftsfuhrer Xxxxxxx X. Xxxx,
Executive Vice President and
Chief Financial Officer
RIA 96 VERMOGENSVERWALTUNGS
GMBH
By: /s/Xxxxxx Xxxxx/Attorney in Fact
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Xxxxxxx X. Xxxx, Geschaftsfuhrer
COMPANY SHAREHOLDERS
/s/Versteegen
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Xxxxxxx Xxxxxx
/s/Versteegen
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Xxxxxxx Xxxx Xxxxxx
/s/Versteegen
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Xxxxx Xxxxxxxxx
/s/Versteegen
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Xxxxxx Xxxxxxx
*** AMENDMENT NO.1 TO THE SHARE ACQUISITION AGREEMENT***
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/s/Versteegen
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Xxxxxx Xxxxxxxx
/s/Versteegen
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Xxxxx Xxxxxx
/s/Versteegen
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Xxxx Xxxxxxx Munchmeyer
Hannover Finanz GmbH Beteiligungen und
Kapitalanlagen
Signature: /s/Versteegen
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Name:
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Title:
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Commerz Unternehmensbeteiligungs-AG
Signature: /s/Junge
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Name:
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Title:
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*** AMENDMENT NO.1 TO THE SHARE ACQUISITION AGREEMENT***
