▇▇▇▇▇▇ ▇▇▇▇▇▇
c/o ABRAMS/▇▇▇▇▇▇▇ ENTERTAINMENT, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
February 12, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Chairman
Dear ▇▇. ▇▇▇▇▇:
Reference is made to that certain Stock Purchase Agreement (the
"Agreement") as amended by Letter Agreements dated September 4, 1998, September
24, 1998, October 1, 1998, January 21, 1999 and January 28, l999 (the
"Amendments") between MSH Entertainment Corporation (`Buyer") and ▇▇▇▇▇▇ ▇▇▇▇▇▇
(`Seller"). This Agreement will modify the Agreement and the Amendments;
however, except as expressly provided herein, the terms and conditions of the
Agreement and the Amendments are hereby confirmed and ratified. Notwithstanding
anything to the contrary contained in the Agreement and Amendments, the
transaction contemplated shall be structured as a forward triangular merger
under Internal Revenue Code Section 368(a)(2)(D) so that the issuance of shares
of MSH to Seller shall be treated as a tax-free exchange of stock. Seller has
agreed to Close as of Tuesday, February 16, 1999, on the condition that MSH
confirm the following, by signing where indicated below:
1. Buyer hereby authorizes ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇ to
release to Seller the 2,915,000 shares of MSH that are currently held in escrow
pursuant to the Agreement. Buyer confirms that Seller continues to have the
right to receive, on May 6, 1999, an additional 500,000 freely trading shares of
MSH.
2. Buyer further hereby authorizes ▇▇▇▇▇ ▇▇▇▇▇▇ Ortoli ▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇ to release to Seller the $300,000 that is currently held in escrow, such
amount to be deemed a partial payment of the purchase price pursuant to the
Agreement.
3. (a) The Agreement is hereby amended to provide for the delivery of
the remainder of the purchase price as described below. Buyer agrees that,
notwithstanding the Closing, Buyer shall be deemed the beneficial owner of that
portion of the Purchased Shares indicated below only upon payment of the amounts
described below.
GRACE PERCENTAGE AND AGGREGATE NUMBER
PAYMENT DUE DUE DATE PERIOD OF PURCHASED SHARES OWNED
------------ -------- -------- -------------------------------
$ 300,000 2/12/99 0 days 6.90% ( 3.04 shares)
$l,200,000* 3/02/99 3 days 34.60% (15.23 shares)
$ 100,000 3/16/99 7 days 36.90% (16.24 shares)
$ 100,000 4/16/99 7 days 39.20% (17.25 shares)
$ 750,000** 4/29/99 7 days 56.54% (24.88 shares)
$ 100,000 5/16/99 7 days 58.84% (25.90 shares)
$ 100,000 6/16199 7 days 61.14% (26.91 shares)
$ 100,000 7/16/99 7 days 63.44% (27.92 shares)
$1,575,000 8/16/99 7 days 100% (44.01 shares)
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*Includes the $175,000 payment Buyer further confirms that it shall cause AGE to
pay Seller as of the Due Date, which sum represents Seller's share of previously
reported taxable profits which Seller voluntarily elected to leave in AGE.
**Payment made to HC Crown Corp. pursuant to the Hallmark Loan.
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(b) Seller agrees that if Seller has not received an amount by
the end of business on or before a Due Date, Seller shall nonetheless have the
indicated grace period during which to make payment. If Seller does not receive
such payment by the end of business on the last day of the applicable grace
period, Buyer agrees that Seller shall have the right, upon written notice to
Buyer: (i) to require Buyer to sell back to Seller all of the Purchased Shares
then owned by Buyer at a price equal to 14% of the aggregate purchase amount
already paid to Seller pursuant to subparagraph 3(a) above, and (ii) to keep all
consideration, including, without limitation, cash and shares, previously
delivered by Buyer to Seller pursuant to the Agreement. Without limiting the
foregoing, and by way of example, if Buyer fails to make the 3/16/99 payment by
the end of the 7 day grace period, Seller shall have the right to repurchase the
15.23 shares then owned by Buyer at a price equal to $210,000. All payments
shall be made by wire transfer, to the account described in Exhibit A, or as
otherwise instructed by Seller, and shall not be deemed received until
confirmation is received by Seller from Seller's bank.
4. Buyer agrees to contribute to AGE working capital of not less than
$400,000 by no later than April 2, 1999.
5. Buyer agrees that until all of the payments described in
subparagraph 3(a) have been received, Seller shall have the exclusive right to
vote the Purchased Shares, notwithstanding Buyer's beneficial ownership in the
percentage shares actually paid for in accordance with subparagraph 3(a).
6. Buyer further confirms that Buyer shall, no later than April 29,
1999, repay Up Up & Away for the interest payments Seller has caused to be
theretofore made with respect to the Hallmark Loan since the execution of the
Agreement.
7. Buyer acknowledges and agrees that the terms of the consulting
agreements required to be entered into with Seller and ▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to
the Agreement shall commence as of the date of the final payment required
pursuant to subparagraph 3(a) above.
8. Buyer hereby agrees to deliver to Seller, on or before August 16,
1999, 250,000 additional restricted shares of MSH, as additional consideration
for the Purchased Shares. Delivery of such additional shares shall be subject to
the grace period and default provisions described in subparagraph 3(b) above
which are applicable to the payments to be made pursuant to subparagraph 3(a)
above.
9. Buyer agrees to pay to ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇, in
partial consideration of the legal fees incurred by Seller in connection with
the Agreement, an amount equal to $75,000, payable as follows: (a) $37,500 on or
before March 2,1999, (b) $12,500 on or before March 16, 1999, (c) $12,500 on or
before April 16, 1999 and (d) $12,500 on or before May 16, 1999.
10.) Buyer further agrees that Seller shall be entitled to receive 25%
of all net proceeds received by AGE, or any of its affiliates, from exploitation
of the "Blink" technology (i.e., the beeper technology that AGE showed at Toy
Fair 1999).
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11.) Buyer further agrees that until the final payments and deliveries
required by the Agreement and this Agreement have been made and delivered, Buyer
shall not issue any press releases regarding AGE, Seller or any of their
affiliates or properties, without Seller's prior written approval, such
agreement being a material term of this agreement.
12.) Annexed hereto as Exhibit B are copies of the Certificate of
Merger and the Agreement and Plan of Merger between AGE and AGE Acquisition
Corp. Buyer and Seller acknowledge and agree that it is their intention to cause
such documents to be executed and filed with the applicable authorities,
together with all other required documents, on or about the date of Closing, so
as to effect the merger described therein. In that connection, Buyer and Seller
further acknowledge and agree that references to the Purchased Shares shall be
deemed references to the shares of the surviving corporation referred to in such
merger documents, and Seller and Buyer shall have the same interests in such
shares of the surviving corporation as they each have in the Purchased Shares
referred to in the Agreement, the Amendments and the documents being executed
and/or delivered pursuant thereto.
Kindly indicate your confirmation below.
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
AGREED AND CONFIRMED:
MSH ENTERTAINMENT CORPORATION
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇, Chairman
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