FIRST AMENDMENT TO THE ASSET PURCHASE AGREEMENT
Exhibit
10.7
FIRST
AMENDMENT TO THE ASSET PURCHASE AGREEMENT
THIS
FIRST AMENDMENT to the Asset Purchase Agreement by and among River Hawk
Aviation, Inc., a closely held Nevada corporation (“Seller” or the “Company”);
and Xxxxxx Xxxxxxxx, a resident of Texas (“Xxxxxxxx” or the “Shareholder”); and
Viva International, Inc. a Nevada corporation (“Buyer”) dated September 19, 2006
(the “Agreement”), entered into this 10th
of
January 2007, amends the Agreement as follows (the “Amendment”):
RECITALS
A. Seller,
the Shareholder and Buyer (collectively, the “Parties”) entered into an Asset
Purchase Agreement on September 19, 2006;
B. In
furtherance of the Agreement, the Parties wish to amend the Agreement in order
to restate the terms of consideration;
C.
In
furtherance of the Agreement, the Parties wish to amend the Agreement in order
to restate the date upon which time the Parties must satisfy the conditions
subsequent to the Agreement;
D. Unless
otherwise defined in this Amendment, capitalized terms have the meaning as
defined in the Agreement.
Accordingly,
the Parties hereby agree as follows:
| 1. |
Section
2.9(c) of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
|
c. The
day
before March 31, 2007, Seller shall deliver to Buyer (i) a list of its Accounts
Receivable as of that date showing the aging thereof, (ii) a statement of its
Inventory value as of that date, and (iii) a list of the Assumed Liabilities
as
of that date. Buyer shall then determine the Working Capital as of the Closing
by subtracting the Assumed Liabilities as of that date from the sum of the
Accounts Receivable as of that date and the Inventory as of that date (the
“Closing Working Capital”).
| 2. |
Section
7.4(a) of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
|
a.
an
opinion of _____________, Esquire, dated March 31, 2007, in the form of Exhibit
7.4(a);
| 3. |
Section
10.4 of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
|
10.4
REMOVING EXCLUDED ASSETS
On
or
before the March 31, 2007, Seller shall remove all Excluded Assets from all
Facilities and other Real Property to be occupied by Buyer. Such removal shall
be done in such manner as to avoid any damage to the Facilities and other
properties to be occupied by Buyer and any disruption of the business operations
to be conducted by Buyer after the Closing. Any damage to the Assets or to
the
Facilities resulting from such removal shall be paid by Seller at the Closing.
Should Seller fail to remove the Excluded Assets as required by this Section,
Buyer shall have the right, but not the obligation, (a) to remove the Excluded
Assets at Seller’s sole cost and expense; (b) to store the Excluded Assets and
to charge Seller all storage costs associated therewith; (c) to treat the
Excluded Assets as unclaimed and to proceed to dispose of the same under the
laws governing unclaimed property; or (d) to exercise any other right or remedy
conferred by this Agreement or otherwise available at law or in equity. Seller
shall promptly reimburse Buyer for all costs and expenses incurred by Buyer
in
connection with any Excluded Assets not removed by Seller on or before March
31,
2007.
| 4. |
Section
10.6 of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
|
10.6
ASSISTANCE IN PROCEEDINGS
Seller
will cooperate with Buyer and its counsel in the contest or defense of, and
make
available its personnel and provide any testimony and access to its books and
Records in connection with, any Proceeding involving or relating to (a) any
Contemplated Transaction or (b) any action, activity, circumstance, condition,
conduct, event, fact, failure to act, incident, occurrence, plan, practice,
situation, status or transaction on or before March 31, 2007 involving Seller
or
its business or the ShareholderEquity
Holders.
5.
Section 2.3 of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
2.3
CONSIDERATION
a. The
consideration for the Assets (the “Purchase Price”) will be (a) Two Million Five
Hundred Thousand Dollars ($2,500,000.00) plus or minus the Adjustment Amount
and
(b) the issuance of three million five hundred thousand (3,500,000) shares
of
Buyer’s common stock pursuant to Section 4(2) of the Securities Act, the
subsequent transfer of which is restricted, in whole for a minimum of one year
or in part for a minimum of two years, in accordance with Section 144 of the
Securities Act and the assumption of the Assumed Liabilities. In accordance
with
Section 2.7(b), at the Closing, the Purchase Price, prior to adjustment on
account of the Adjustment Amount, shall be delivered by Buyer to Seller as
follows:
(i) One
Million
Dollars ($ 1,000,000.00) by means of one Secured Subordinated Promissory Note
bearing an interest rate of eight percent (8%) per annum and shall mature on
March 31, 2007; and will be retired as soon as practical through the receipt
of
funds raised through the sale of debentures or proceeds from a Private Placement
Memorandum.
| (ii) |
The
balance as adjusted payable in the form of a second Secured Subordinated
Promissory Note bearing an interest rate of eight percent (8%) per
annum
which shall
mature no later than March 31, 2007 (Attached as Exhibit “H”) and will be
retired as soon as practical through the receipt of funds raised
through
the sale of debentures or proceeds from a Private Placement Memorandum.
The security for the Secured Subordinated Promissory Note is defined
in
Section 2.7(a)(i). The Adjustment Amount shall be paid in accordance
with
Section 2.8.
|
| (iii) |
Issued
at the time of Closing, three million five hundred thousand (3,500,000)
shares of common stock, which shall not be subject to any anti-dilution
provisions but shall be subject to a recapitalization (the “Shares”),
pursuant to Section 4(2) of the Securities Act of Buyer’s Preferred Stock,
the subsequent transfer of which is restricted, in whole for a minimum
of
one year or in part for a minimum of two years, in accordance with
Section
144 of the Securities Act, commencing from the date that consideration
is
provided for the Shares. After the Shares have been held for a minimum
of
one (1) year they shall become eligible for sale at the rate of one
percent (1%) per quarter of the Company’s total outstanding shares
provided that the Company and the eligible sale of Shares meet the
conditions of Section 144 of the Securities Act.
|
b.
Conditions
Subsequent to Finality of the Transfer of the Assets.
Until
the Buyer tenders full payment of the Secured Subordinated Promissory Note,
in
the amount of $1,000,000 principal plus interest in the amount of 8% per annum,
as detailed in section 2.3(a)(i) above (“Payment Of The First Note”), on March
31, 2007, the Seller and Equity Holders shall have the right to obtain in
exchange for return of the Shares, complete domain and control of the Assets.
Upon payment of the First Note, the Assets shall be deemed to rest with the
Buyer, subject to the remaining conditions of this Agreement.
6.
Section 2.6 of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
Effective
Date;
Closing.
This
Agreemente Merger
shall
be
closed upon the mutual execution of this Agreement (the “EFFECTIVEClosing”).
Additionally, following the Closing
this
Agreement creates conditions subsequent to this
Agreement that
the
parties hereto are obligated to satisfy within
twelve (12) monthsby
March
31, 2007 from
Effective Date unless
otherwise extended beyond twelve
(12) monthsMarch
31,
2007 by mutual, written agreement of the parties
(the
“Effective Date”).
The
right of either the ParentBuyer
to
resell
the
Assets to Seller or the CompanySeller
to
unwind
the Mergerrepurchase
the Assets
from
Buyer, shall
be
pursuant to material failure of the other party to meet the conditions of this
Agreement, and thereby discontinue the parent-subsidiaryAsset
Purchase Agreement relationship
which
shall become irrevocably waived if not exercised within the time or upon March
31, 2007 the
date
which is twelve (12) months following the Effective Date (which
date shall be referred to as the “WAIVER
DATE”).
Additionally,
within seven (7) seven following the Effective Date, the parties hereto also
agree to ,
the
parties hereto shall confirm
the cause
the
consummation
of the Merger
to
be consummated by filing a Certificate of Merger on the preprinted form of
Certificate of Merger required by the Secretary of State of the State of Nevada
and that of Washington (the “CERTIFICATE OF MERGER”), with the Secretary of
State of the State of Nevada and that of Washington, respectively, in accordance
with the relevant provisions of Nevada Law and Washington Law (the time of
such
filing (or such later time as may be agreed in writing by the parties and
specified in the Certificate of Merger).
being
the
“EFFECTIVE TIMEEFFECTIVE
DATE”)
as
soon as practicable on or after the Closing Date (as defined herein). Unless
the
context otherwise requires, the term “AGREEMENT” as used herein refers
collectively to this Agreement and Plan of Reorganization and the Certificate
of
Merger.
In
such a
situation, the Closing will occur as soon as practicable, subject to Article
9.
7.
Section 2.7 of the Agreement is hereby deleted in its entirety and substituted
therefore as is the following:
2.7
CLOSING OBLIGATIONS
| a. |
Buyer
shall deliver to Seller and Shareholderthe
Shareholder,
as the case may be, documentation necessary for the Seller to pay
all
sales taxes necessary for the transfer, filing or recording thereof:
|
| (i) |
a
Promissory Note executed by Buyer and payable to Seller in the principal
amount of One Million Dollars ($1,000,000.00) in the form of Exhibit
“G”
(the “Secured Subordinated Promissory Note”). The Secured Subordinated
Promissory Note shall be secured with a subordinated lien on the
Assets,
which subordinated lien will be evidenced by the Security Agreement.
The
Seller will agree to execute a commercially reasonable subordination
agreement proffered by lenders to Buyer either contemporaneous with
or
subsequent to the Closing, and will execute whatever documents may
be
reasonably necessary to make Seller’s security interest in the Assets
subordinate to Buyer’s lenders;
|
| (ii) |
the
Security Agreement (Exhibit 2.7(a)(ii)) and Financing Statement necessary
to perfect Seller’s security interest in the Assets;
and
|
| (iii) |
an
agreement evidencing an assignment of all of the Assets that are
intangible personal property in the form of Exhibit 2.7(a)(iii),
which
assignment shall also contain Buyer’s undertaking and assumption of the
Assumed Liabilities (the “Assignment and Assumption Agreement”) executed
by Seller.
|
| b. |
In
addition to delivery of the consideration as described in Section
2.3, the
following documents are to be delivered on March 31, 2007:
|
| (i) |
a
xxxx of sale for all of the Assets that are Tangible Personal Property
in
the form of Exhibit 2.7(b)(i) (the “Xxxx of Sale”) executed by Seller;
|
| (ii) |
assignments
of all Intellectual Property Assets and separate assignments of all
registered Marks, Patents and Copyrights in the form of Exhibit 2.7(b)(ii)
executed by Seller; and
|
| (iii) |
an
opinion of counsel for the Seller and the Shareholders in form and
substance satisfactory to buyer and its legal counsel (Exhibit
2.7(b)(iii)).
|
8.
Except
as otherwise provided herein, all other terms of the Agreement remain in full
force and effect.
9.
This
Amendment sets forth the entire understanding and agreement of the parties,
and
supersedes any and all prior contemporaneous oral or written agreements or
understandings between the parties as to the subject matter of this Amendment.
This Amendment shall be governed by the laws of the State of Michigan.
10.
This
Amendment may be executed by facsimile and in one (1) or more counterparts,
each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Signature
Page to Follow]
IN
WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed
as
of the date listed above.
RIVER
HAWK AVIATION, INC.
/s/
Xxxxxx Xxxxxxxx
By:
Xxxxxx Xxxxxxxx
Its:
President
VIVA
INTERNATIONAL, INC.
/s/
Xxxxxx Xxxxx
By:
Xxxxxx Xxxxx
Its:
Chief Financial Officer and Director
