COLLECTIBLES USA, INC.
Xxx Xxxxxxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx X. Xxxxxx
00000 Xxxxxxx Xxx Xxxx
Xxx Xxxxx Xxxxx, XX 00000
July 8, 1998
Dear Xx. Xxxxxx:
Reference is made to the Agreement and Release, dated as of August 8, 1997
(the "Release Agreement"), between Collectibles USA, Inc. (the "Company") and
you. All capitalized terms used herein but not defined shall have the meanings
set forth in the Release Agreement.
Please be advised that the Company proposes to amend effective as of June
1, 1998 the Release Agreement as follows:
(1) The $350,000 payment that you are entitled to receive pursuant to
paragraph 2 of the Release Agreement shall be payable by delivery,
within three business days of the consummation of the Company's IPO of
its Common Stock, of (A) a $250,000 lump-sum payment by wire transfer
of funds to an account designated by you and (B) a $100,000
convertible promissory note (the "Note") executed by the Company in
the form attached hereto as Exhibit A.
(2) Paragraph 3 of the Release Agreement is amended by: (A) deleting the
reference to "104,580 shares" of Common Stock in the first sentence
and substituting therefor a reference to "79,580 shares" of Common
Stock; (B) deleting the second sentence in its entirety and
substituting therefor the following, "On the effective date of your
acceptance of this letter, you shall surrender any rights in the stock
certificate for the 104,580 shares of Common Stock, which certificate
was issued to you (and is currently held in escrow) upon your
surrender of rights in the stock certificate for 174,580 shares of
Common Stock, whereupon the Company will deliver to you a new stock
certificate (the "New Stock Certificates") for 79,580 shares of Common
Stock."; and (C) deleting the reference to "100,000" in the fourth
sentence and substituting therefor "75,000."
(3) Paragraph 8(a) of the Release Agreement is amended by deleting it in
its entirety and substituting therefor the following: "The Company
shall prepare and file a
registration statement to effect the registration under the Securities
Act of 1933, as amended (the "Securities Act"), of the 79,580 shares
and any shares acquired by you upon the conversion of the Note
(collectively, the "Shares"), all to the extent requisite to permit
the public resale of the Shares. In connection with this registration
process, the Company shall furnish you with copies of a prospectus,
enter into and perform its obligations under an underwriting
agreement, if any, cause the registered Shares to be listed on each
securities exchange on which similar securities issued by the Company
are listed, if any, and provide a transfer agent and CUSIP number for
the registered Shares . The Company shall initiate such registration
statement at least 90 days prior to the end of the Lock-Up Period and
shall use best efforts to cause the registration statement which is
the subject of this Section 8 to be declared effective by the
Securities and Exchange Commission (the "Commission") immediately upon
the expiration of the Lock-Up Period."
(4) Paragraph 8(c) of the Release Agreement is amended by deleting the
last sentence and substituting therefor the following: "The Company
covenants with you that it shall take such action as is necessary to
keep such registration statement current and effective through the
longer of (i) at least the six month anniversary of the expiration of
the Lock-Up Period or (ii) the six month anniversary of the date such
registration statement was first declared effective."
(5) Paragraph 8(d) of the Release Agreement is amended by inserting ",
within three months of the IPO," after "If the Company".
(6) The following paragraph is added to the Release Agreement:
"8. g. At all times while you retain the option to convert all or
part of the Note into shares of Common Stock, the Company shall
reserve and keep available out of its authorized but unissued Common
Stock such number of its shares of Common Stock, which shall not be
subject to preemption or any similar right, as shall be sufficient to
effect the conversion of the entire principal due under the Note."
The Company also shall reimburse you, by wire transfer of funds to an
account designated by you, for the legal fees and expenses incurred by you in
connection with this amendment to the Release Agreement; provided, that, the
Company's reimbursement obligation shall not exceed $2,000.00, shall be
contingent upon receipt by the Company of sufficient documentation of such fees
and expenses, and shall be made within 15 days of the Company's receipt of such
documentation.
Furthermore, the Company hereby acknowledges that your ownership and
operation of Wings America, Inc., an operator of retail clothing stores in
Northern California, which stores incidentally sell objects which may be deemed
collectible items to customers of the Company, shall not constitute a violation
of any of the terms of your Employment Agreement with the Company.
Sincerely,
COLLECTIBLES USA, INC.
By:/s/ XXXXXXX XXXXX
----------------------
Name:
Title: CEO
The foregoing is hereby agreed to as of
July 8, 1998.
By:/s/ XXXXX XXXXXX
---------------------------
Xxxxx X. Xxxxxx
