EXHIBIT 10.69
AMENDMENT TO ASSET PURCHASE AGREEMENT
This Amendment to Asset Purchase Agreement (this "Amendment") is made as
of this 8th day of April, 2002 by and between FFM Acquisition Corp., a
California corporation ("Buyer"), Fast Forward Marketing, Inc., a California
corporation ("Seller"), Intervisual Books, Inc., a California corporation and
Xxxxxxxxx Wireless, a Nevada corporation.
All capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to them in the Agreement (as defined below).
RECITALS:
WHEREAS, the parties hereto have entered into an Asset Purchase
Agreement dated March 29, 2002 (the "Agreement") with respect to the purchase
and sale of substantially all of the assets of Fast Forward Marketing, Inc.;
WHEREAS, pursuant to Section 2.4 of the Agreement, Buyer and Seller are
to jointly select an Escrow Agent and at Closing are to enter into an Escrow
Agreement establishing a Joint Account account into which the Closing
Receivables are to be deposited until the Joint Account Termination Date and
periodically disbursed by the Escrow Agent in accordance with Section 2.4 of the
Agreement; and
WHEREAS, the parties desire to amend the Agreement to provide for
alternative escrow arrangements.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
AMENDMENTS:
1. First Amendment. Section 2.4 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"Purchase Price. Subject to the adjustment set forth in Section 2.5
below, the purchase price for the Purchased Assets is up to $516,000
payable as follows: (a) $255,000 which shall be paid to Seller's legal
counsel as escrow agent on the date hereof and (b) up to $261,000 paid
from the amounts collected on accounts receivable outstanding at the
time of closing (including future accounts receivable related to Open
Orders) ("Closing Receivables") as set forth herein. Promptly following
the date hereof, the Buyer and the Seller shall jointly select a
mutually agreeable bank to serve as their banking agent (the "Banking
Agent") and establish a joint account with the Banking Agent under
Seller's federal tax identification number that requires the signatures
of one of two designees of Seller and one of two designees of Buyer for
any withdrawals or other
activity other than deposits (the "Joint Account"). The Banking Agent
shall collect and deposit the Closing Receivables and the New
Receivables (as defined below) into the Joint Account and shall
periodically provide to the Buyer and the Seller a detail of such
receivables (including the amount, payor and related invoice number of
each payment and copies of checks deposited along with any other
information submitted in connection with each such payment).
Joint authorization in writing signed by each of the Buyer and the
Seller will be required before any funds can be released from the Joint
Account. Within three (3) business days following the end of each
bi-weekly period commencing on the Closing Date, the Buyer shall notify
the Seller in writing (the "Buyer Notification") as to what amount of
the funds deposited into the Joint Account by the Banking Agent for a
given bi-weekly period were payments of Closing Receivables and what
amount of such funds were payments of accounts receivable from accounts
comprising the Closing Receivables generated post closing (the "New
Receivables"). Within three business days (3) following delivery of the
Buyer Notification, the Seller and the Buyer shall jointly execute
checks (or authorize wire transfers) drawing on funds held in the Joint
Account to (i) distribute to the Buyer all of the funds deposited in the
Joint Account with respect to the New Receivables, and (ii) distribute
to the Seller forty two and one half percent (42.5%) of the funds
deposited in the Joint Account with respect to the Closing Receivables;
provided however, that in no event shall the Seller be entitled to
receive payment in excess of an aggregate amount of $261,000 (the
"Maximum Amount") from the Joint Account. The remaining funds deposited
in the Joint Account with respect to the Closing Receivables shall be
used solely to repay in full all of the accounts payable reflected on
the Balance Sheet until the Joint Account Termination Date. The Buyer
shall submit to the Seller a schedule of invoices included in the
Assumed Liabilities to be paid and copies of any settlement agreements
executed by the Buyer with creditors with respect to the Assumed
Liabilities. Within five (5) days following the Seller's receipt of each
such schedule, the Seller and the Buyer shall jointly execute checks (or
authorize wire transfers) drawing on funds held in the Joint Account to
the parties as specified in such schedule.
The Joint Account shall terminate (the "Joint Account Termination Date")
upon the later of (i) the Seller's receipt of the Maximum Amount from
funds deposited in the Joint Account, (ii) the payment by the Buyer of
all of the Assumed Liabilities, or such lesser amount pursuant to
settlement agreements with such third party creditors, such settlement
agreements to be in form and substance reasonably satisfactory to the
Seller; or (iii) 30 days following the first anniversary of the Closing
Date.
Buyer agrees to use its reasonable best efforts to collect all of the
Closing Receivables, maintain good working relationships with such
accounts
comprising the Closing Receivables and discourage returns of previously
sold products. Amounts collected by Buyer from accounts comprising
Closing Receivables shall be applied first to the oldest Closing
Receivable prior to applying such amounts to New Receivables. Buyer
further agrees that after the Closing Date it, together with Seller,
shall prepare a notice to be delivered to all customers corresponding to
the Closing Receivables informing such customers that payments relating
to the Closing Receivables are to be made to the Joint Account."
2. Second Amendment. The last sentence of Section 2.5 of the Agreement
is hereby amended and restated to read in its entirety as follows:
"In the event that Seller has received payment from the Joint Account
for Closing Receivables in excess of the Adjusted Amount, then the
Seller shall repay to the Buyer the amount of such overpayment by
immediate cash payment."
3. Third Amendment. Section 9.12 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"Joint Account. Each of the Seller and Buyer shall have agreed upon a
Banking Agent to administer the Joint Account and shall have established
the Joint Account as described in Section 2.4."
4. Fourth Amendment. Section 10.7 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"Joint Account. Each of the Seller and Buyer shall have agreed upon a
Banking Agent to administer the Joint Account and shall have established
the Joint Account as described in Section 2.4."
5. No Other Changes Intended; Conflicts. Except as specifically set
forth in this Amendment, no other changes, amendments or modifications are
intended to the Agreement and the Agreement shall remain unmodified and in full
force and effect. If there is a conflict between the provisions of this
Amendment and the provisions of the Agreement, the provisions of this Amendment
shall control.
6. Facsimile Execution; Execution in Counterparts. Executed facsimile
copies of this Amendment shall have the same effect as manually executed copies.
This Amendment may be executed in multiple counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.
(signature page follows)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.
BUYER:
FFM Acquisition Corp.
By: /s/ Xxxx Xxxxxxxxx
------------------------------------------
Title: CEO
SELLER:
Fast Forward Marketing, Inc.
By: /s/ Xxx X. Xxxxxx
------------------------------------------
Title: President
Intervisual Books, Inc.
By: /s/ Xxxxx Xxxxxxx
------------------------------------------
Title: CEO
Xxxxxxxxx Wireless
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------------
Title: CEO
