AMENDMENT NO. 1
This Amendment No. 1 (this "Amendment"), dated as of June 9, 1999, to
the Agreement of Purchase and Sale (the "Agreement"), dated as of June 4, 1999,
by and among Xxxxxxxxxxx.xxx, Inc., a Delaware corporation ("Buyer"), Applied
Cellular Technology, Inc., a Missouri corporation ("ACT"), and Xxxxx Xxxxxx and
Xxxx Xxxxxx, (each individually, a "Seller" and collectively, the "Sellers").
W I T N E S S E T H:
In consideration of the mutual agreements hereinafter set forth, the
parties do hereby agree as follows:
1. Purchase Price. (a) The first sentence of Section 1.03(a) is hereby
amended by deleting the amount "$25,000,000" and replacing it with the amount
"25,055,000".
(b) Clause (i) of Section 1.03(a) is hereby amended by deleting the
amount "$10,000,000" and replacing it with the amount "$10,055,000".
2. Target Book Value. Clause (iii) of Section 1.04(d) is hereby
amended by deleting such clause and replacing it in its entirety with the
following:
"(iii) the term "Target Book Value" shall mean (X)
$4,500,000, minus (Y) any Tax Distribution Amount (as
defined in Section 4.09), minus (Z) an amount previously
distributed (but not more than $100,000) in respect of the
estimated aggregate federal and state income tax liability
of Sellers with respect to the S corporation income from the
normal operation of Bostek during the period beginning on
January 1, 1999 and ending on March 31, 1999".
3. Responsibility For Taxes. (a) Paragraph (1) of Section 4.09(a) of
the Agreement is hereby amended by adding the following to the end of the first
sentence thereof (immediately before the period):
"; and provided further that Sellers' obligation to
indemnify Buyer as provided in this sentence shall not apply
to the extent Buyer fails to make payments (or allow
distributions) to Sellers or Bostek as provided in this
Section 4.09".
(b) Paragraph (2) of Section 4.09(d) of the Agreement is hereby
amended by deleting such Paragraph and replacing it in its entirety with the
following:
"(2) If the Section 338(h)(10) Elections are made, Sellers
and Bostek will have an Income Tax liability in an amount
equal to the Section 338(h)(10) Payment (as defined below).
Notwithstanding anything to the contrary in Section 4.09(a),
Buyer shall pay to Sellers or Bostek (as applicable), not
later than 30 days before the Section 338(h)(10) Payment
must be paid by Sellers or Bostek (as applicable) to the
applicable governmental authority, an amount equal to (i)
the difference between (x) the combined Federal and State
Income Tax liability of the Sellers assuming the Section
338(h)(10) Elections were made, and (y) the combined Federal
and State Income Tax liability of the Sellers assuming the
Section 338(h)(10) Elections were not made (the "Section
338(h)(10) Payment"), plus (ii) a payment equal to the
additional Taxes incurred by Sellers by virtue of receiving
the Section 338(h)(10) Payment and the additional Taxes
incurred by Sellers by virtue of receiving any payments
pursuant to this clause (ii). Buyer shall pay Sellers all
federal, state, local and foreign entity level taxes
incurred by Bostek under Section 1374 or its equivalent as a
result of, arising from or attributable to the making of the
Section 338(h)(10) Elections, up to a maximum of $56,000,
such payment to be made not later than 30 days before the
same must be paid by Sellers to the applicable governmental
authority. Schedule 4.09(d) sets forth an example of the
calculation of the Section 338(h)(10) Payment; the parties
agree that the methodology used in such example will govern
any disputes between the parties regarding the
interpretation of this Section 4.09(d)(2) as it relates to
calculating the actual Section 338(h)(10) Payment. Buyer
shall indemnify Sellers against Losses arising out of any
failure by Buyer to make the payments required of Buyer
pursuant to this paragraph (2). Notwithstanding anything to
the contrary contained herein, Buyer shall not be required
to pay to Sellers any amount in respect of time value of
money in connection with Taxes being due or paid earlier as
a result of making the Section 338(h)(10) Elections."
(c) Section 4.09(h) is hereby amended by adding to the end thereof the
following sentence:
"Sellers shall pay to Bostek the amount, if any, of the
excess of (X) the amounts distributed to Sellers in respect
of the estimated aggregate federal and state income tax
liability of Sellers with respect to the S corporation
income from the normal operation of Bostek during the period
beginning on January 1, 1999 and ending on the Closing Date,
over (Y) the actual federal and state income tax liability
of Sellers for such period as computed in accordance with
the foregoing sentence. Any amount, in excess of $100,000,
paid by Sellers pursuant to the preceding sentence in
respect of the period from January 1, 1999 to March 31, 1999
shall be deemed to have been paid to Bostek one minute prior
to the close of business on the day immediately preceding
the Closing Date (and, accordingly, shall be reflected in
the Closing Balance Sheet)."
4. Acceptance of Schedules; Completion of Tax Matters. Buyer
acknowledges receipt of Sellers' schedules to the Agreement and explicitly
waives its right to terminate the Agreement pursuant to Sections 4.15 and
8.01(d). Sellers acknowledge that this Amendment constitutes the amendment
referred to in Section 4.15 and explicitly waive their right to terminate the
Agreement pursuant to Sections 4.15 and 8.01(d). Except as explicitly set forth
in this Section 3, neither Buyer nor Sellers are waiving rights of termination
set forth in the Agreement.
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5. Headings. The headings of the Sections and paragraphs of this
Amendment are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
6. Modification and Waiver. No amendment, modification or alteration
of the terms or provisions of this Amendment shall be binding unless the same
shall be in writing and duly executed by the parties hereto, except that any of
the terms or provisions of this Agreement may be waived in writing at any time
by the party which is entitled to the benefits of such waived terms or
provisions. No waiver of any of the provisions of this Amendment shall be deemed
to or shall constitute a waiver of any other provision hereof (whether or not
similar). No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.
7. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
8. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of law. Each of the parties hereto hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America, in each
case located in the County of New Castle, for any Litigation (as defined in the
Agreement) arising out of or relating to this Amendment and the transactions
contemplated hereby (and agrees not to commence any Litigation relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective address set forth
in this Agreement shall be effective service of process for any Litigation
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Litigation arising out of this Amendment or the transactions contemplated
hereby in the courts of the State of Delaware or the United States of America,
in each case located in the County of New Castle, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such Litigation brought in any such court has been brought in an
inconvenient forum.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed on its behalf as of the date first above written.
BUYER:
XXXXXXXXXXX.XXX, INC.
By:
-----------------------------
Name:
Title:
APPLIED CELLULAR TECHNOLOGY, INC.
By:
-----------------------------
Name:
Title:
---------------------------------
SELLERS:
---------------------------------
XXXXX XXXXXX
---------------------------------
XXXX XXXXXX
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Schedule 5.03
Consents, etc.
1. Waivers must be obtained for any rights of first refusal applicable to
shares of common stock of Bostek or Micro Components (see Schedule
2.08(a)(iii)(b)-(d)).
2. Bostek's guarantee of the mortgage on the facility located at 000
Xxxxxxx Xx. must be removed.
3. Bostek and Micro Components must revoke the power of attorney granted
to Xx. Xxxxxxx (and Xx. Xxxxxxx must agree to such revocation).
4. See Schedule 2.13.
