Projectavision, Inc.
Two Penn Plaza, Suite 640
New York, New York 10121
April 30, 1998
Vidikron Industries, S.p.A.
Via Dei Guasti, 29
20020 Misuito (Milano), Italy
Re: Agreement of Purchase and Sale of Assets dated January 20th, 1998 by
and between Projectavision, Inc. ("Projectavision") and Vidikron
Industries, S.p.A ("Vidikron")
--------------------------------------------------------------------
Gentlemen:
Reference is hereby made to the above-referenced Asset Purchase
Agreement. Inasmuch as it is the intention of Vidikron and Projectavision to
proceed with the transaction contemplated by the Asset Purchase Agreement, by
execution and delivery of this letter, each of Projectavision and Vidikron
reaffirm their intention to effect the transaction contemplated by the Asset
Purchase Agreement, subject to amending the Asset Purchase Agreement as
hereinbelow set forth.
Specifically, the parties hereto agree that the Asset Purchase
Agreement shall be amended as follows:
1. The second sentence of Section 3(a) shall be deleted in its entirety
and replaced with the following:
"Notwithstanding the foregoing, in the event that all of the
conditions set forth in Section 14 below have been satisfied or
waived, except for Purchaser's delivery obligation pursuant to
Section 5(a)(i), Purchaser shall have the right to extend the
Closing Date to July 31, 1998 (subject to further extension as set
forth in the immediately following sentence) by paying to directly
to the Company, by certified or cashiers bank check or wire
transfer, (i) Three Hundred Thousand Dollars ($300,000) on or before
May 11, 1998, (ii) Two Hundred and Fifty Thousand Dollars ($250,000)
on or before May 26, 1998, (iii) Two Hundred and Fifty Thousand
Dollars ($250,000) on or before June 11, 1998, and (iv) Two Hundred
Thousand Dollars ($200,000) on or before June 26, 1998 (all such
sums, in the aggregate, are sometimes hereinafter referred to as the
"Third Prepayment"); provided; however; that the Company agrees that
the holdback previously contemplated under this Section 3(a) in
conjunction with Section 15(a) below will be accommodated by the
parties in a manner to be mutually agreed upon and so as to maintain
the overall economics of the transaction. Notwithstanding anything
set forth herein to the contrary, Purchaser shall have the right,
provided that Purchaser is otherwise in compliance with the
provisions of this Section 3(a), to extend the Closing Date to
September 30, 1998, solely in the event that it is required to do so
because the Company needs additional time to obtain the stockholder
approvals necessary in order to effect the transaction contemplated
by the Asset Purchase Agreement."
2. Section 19 of the Asset Purchase Agreement is hereby deleted in its
entirety and replaced with the revised Section 19 a copy of which (marked to
show changes) is annexed hereto.
Except as expressly set forth in this letter and the annex hereto, all
of the terms and conditions set forth in the Asset Purchase Agreement shall
remain in full force and effect.
In the event that the foregoing accurately reflects our agreement to
effect the transaction contemplated by and amend the Asset Purchase Agreement as
hereinabove set forth, please acknowledge such by counter-executing the copy of
this letter where indicated below.
Very truly yours,
PROJECTAVISION, INC.
By: _____________________________________
Martin J. Holleran
President and Chief Executive Officer
Agreed to and Accepted by:
VIDIKRON INDUSTRIES, S.p.A
By:_______________________
Flavio Peralda
President
Accounts Payable with a vendor or supplier for less than the amount set forth on
Schedule 1(b).1, any such remaining amount of the Trade Payables Deposit shall
be the sole and exclusive property of the Purchaser. All interest earned with
respect to the Trade Payables Deposit shall be the property of the Purchaser and
Purchaser shall be responsible for all taxes in connection therewith.
19. Earn-Out. The Purchaser shall, pursuant to an agreement to be
entered into with the Escrow Agent (the "Earn Out Escrow Agreement") deposit the
Earn Out Deposit upon the Closing into a segregated interest bearing escrow
account (the "Earn Out Escrow Account") to be held by the Escrow Agent for
twelve (12) months subsequent to the Closing Date (the "Escrow Term") in
accordance with the provisions of Section 16(b)(iv) above and the provisions
hereinbelow set forth. In the event that the Purchaser sells during the period
commencing May 1, 1998 and terminating twelve (12) months after the Closing (the
"Earn Out Selling Period") Fourteen Hundred (1,400) "Qualifying Units" (as that
term is hereinafter defined), the Company will be entitled to the entire Earn
Out Deposit. As used herein, a sale by the Purchaser during the Escrow Selling
Period after the Closing, or a sale by the Company during the Escrow Selling
Period prior to the Closing, of one (1) of the Company's "Helios" projectors,
one (1) of its "Kronos" projectors or two (2) of its "CRT" projectors at prices
and upon such terms and conditions to be mutually agreed upon by the Purchaser
and the Company from time to time, shall be deemed to be a sale of a Qualifying
Unit. At such time as the Purchaser has effected the sale during the Escrow
Selling Period of 100 Qualifying Units subsequent to the Closing in the manner
described herein, the Company shall be entitled to receive One Million
($1,000,000) Dollars from the Earn Out Escrow Account. Thereafter, the Company
shall be entitled to receive a pro rata share of the remaining balance of the
Earn Out Deposit for each Qualifying Unit sold during the Escrow Selling Period
up to the sale of an additional 1,300 Qualifying Units; provided, however, that
the parties agree that any sale by the
55
Company of a Qualifying Unit during the Earn Out Selling Period and prior to the
Closing shall be deemed to be the last Qualifying Units sold during the Escrow
Selling Period. Purchaser shall cause the Escrow Agent to pay to the Company the
requisite portion of the Earn Out Deposit from the Earn Out Escrow Account with
respect to the remaining 1,300 Qualifying Units at such time and from time to
time as the Company is entitled to receive at least $200,000 with respect to
such sales of Qualifying Units in accordance with the provisions of this Section
19; provided, however, that in the event that Purchaser and the Company enter
into certain agreements mutually acceptable to Purchaser and the Company with
Mr. Giovanni Cozzi and James Wellnitz pursuant to which the Company is obligated
to make certain payments Messrs. Cozzi and Wellnitz, the first such $200,000
payment due and owing to the Company with respect to the remaining 1,300
Qualifying Units in accordance with the terms and conditions of this Section 19
shall be reduced by up to $150,000 as consideration for any payments made by
Purchaser on the Company's behalf to Messrs. Cozzi and Wellnitz pursuant to the
aforementioned agreements entered into by the Purchaser and the Company with
each of them on or prior to the Closing Date (i.e., by way of example, in the
event that this proviso is applicable, and in the event that the first payment
that the Company would be entitled to receive with respect to the remaining
1,300 Qualifying Units pursuant of this Section 19 would be $210,000, the
Company will receive instead $60,000, but will be deemed to have received, for
the purposes of this Section 19, $210,000). The Purchaser shall cause any
payment required to the made to the Company pursuant to the terms and conditions
of this Section 19 to be made promptly subsequent to the Company achieving the
requisite sales of Qualifying Units. It is agreed and understood that the Earn
Out provisions of this Section 19 are subject to sufficient capital being
available to effect the sale in a timely manner of Units for which the Company
has actually received orders; it being agreed and understood that in the event
that there is insufficent capital to effect sales of Units for which the Company
has actually received orders, the parties will, in good faith, resolve to modify
the provisions of this Section 19 as appropriate. In the event that the parties
are unable to agree upon a resolution with respect to the foregoing, the matter
shall be resolved in accordance with the provisions of Section 21(h) below. The
Earn Out Escrow Account shall automatically terminate and be liquidated on the
expiration of the Escrow Term. All interest earned on the Earn Out Deposit and
any amount of the Earn Out Deposit remaining upon the termination and
liquidation of the Earn Out Escrow Account, including all interest with respect
thereto, shall be the sole and exclusive property of the Purchaser and the
Company shall have no rights of any nature whatsoever with respect thereto.
Accordingly, the Purchaser shall be responsible for all taxes payable in
connection with the interest earned on the Earn Out Deposit.
56