EXHIBIT 2 - MARCH 13, 1996 AGREEMENT
Page 35 of 37 Pages
000 XXXX XXXXXX
XXXXX XXXXX
XXX XXXX, XXX XXXX 00000
(000) 000-0000; FAX (000) 000-0000
March 13, 1996
Xx. Xxxxxxx X. Xxxxxxxxx,
Chief Executive Officer
Digital Solutions, Inc.
0000-X Xxxxxx Xxxx
Xxxxx Xxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
This letter shall confirm the various understandings of the undersigned as
follows:
1. Katie and Xxxx Bridge Partners, L.P. (the "Partnership") hereby tenders
to Digital Solutions, Inc. (the "Company") and the Company hereby accepts from
the Partnership for cancellation, the Partnership's 12% Contingent Convertible
Subordinated Note (the "Note") in consideration for $1,098,111.11 in immediately
available funds, representing payment of $1,000,000 in principal, $51,000.00 in
interest from December 30, 1994 through November 28, 1995 (12% per annum) and
$47,111.11 in interest from November 29, 1995 to March 13, 1996 (16% per annum).
The parties acknowledge that the Partnership has heretofore tendered to the
Company a lost note affidavit with respect to the Note, and that such affidavit
serves as delivery of the Note for payment.
2. The Common Stock Purchase Warrant, which was issued by the Company to
the Partnership simultaneous with the execution and delivery of the Note, is
hereby deemed amended to reduce the exercise price contained therein from $2.59
to $1.90 per share (the "Partnership Warrant"). In furtherance thereof,
immediately following the execution and delivery of this letter agreement, the
Company will issue a replacement Partnership Warrant reflecting such amended
exercise price.
3. The Company hereby covenants and agrees that it shall include the shares
of Common Stock underlying the Partnership Warrant and the similar warrants
issued to each of the investors of the Company's December 1994 private placement
which was placed by Sands Brothers (collectively, the "Warrantholders") in the
registration statement which is required to be filed by the Company in
connection with its current private placement of securities, a portion of which
private placement has already been consummated, and in which private placement
such registration is required.
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4. Sands Brothers hereby assigns its (i) 25,000 warrants issued in
connection with the 1993 Partnership loan to the Company; (ii) its 66,666
warrants issued in connection with the 1993 Reg. S offering of the Company; and
(iii) its remaining 106,565 warrants issued in connection with the 1993 Reg. D
offering of the Company, each exercisable at $0.75 per share, to Ponderosa
Partners, L.P. ("Ponderosa"). Upon execution and delivery of this letter
agreement, and delivery of the foregoing warrants for cancellation, the Company
shall issue new warrants in favor of Ponderosa evidencing the right to acquire
such 25,000, 66,666 and 106,565 shares of the Company's Common Stock, in the
form attached hereto, and the Sands Brothers warrants will be deemed cancelled.
5. The Company shall pay Xxxxxxx Xxxxxx & Xxxx, P.C. the sum of Seven
Thousand Five Hundred ($7,500) Dollars.
6. This letter is in full and complete satisfaction with all matters
relating to the Note and the Partnership Warrant accruing prior to the date
hereof.
Please indicate your acceptance to the foregoing by signing in the space
provided below and returning a fully executed copy of this letter to the
undersigned.
Very truly yours,
Katie and Xxxx Bridge Partners, L.P.
By: K&A Bridge Partners Corp.,
General Partner
By: \s\ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
Administrator
Sands Brothers & Co., Ltd.
By: \s\ Xxxx Xxxxxxxx
--------------------------------
Authorized Officer
Accepted and Agreed
Digital Solutions, Inc.
By: \s\ Xxxxxx Xxxxxx
-------------------------
Authorized Officer
Page 37 of 37 Pages
