AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT dated as of July 20, 2008 by and among ZVUE CORPORATION, EBAUM’S WORLD, INC. and ERIC’S UNIVERSE, INC.
EXHIBIT
10.1
AMENDMENT
NO. 1 TO ASSET PURCHASE AGREEMENT
dated
as of
July 20,
2008
by
and among
ZVUE
CORPORATION,
EBAUM’S
WORLD, INC.
and
AMENDMENT
NO. 1 TO ASSET
PURCHASE AGREEMENT
THIS
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (the “Amendment
No. 1”)
is
made and entered into as of July 20, 2008, by and among ZVUE Corporation
(formerly known as Handheld Entertainment, Inc.), a Delaware corporation
(“Parent”),
eBaum’s World, Inc. (formerly known as EBW Acquisition, Inc.), a Delaware
corporation and wholly-owned subsidiary of Parent (“Purchaser”),
and
Eric’s Universe, Inc. (formerly known as eBaum’s World, Inc.), a New York
corporation (“Seller”).
W
I T
N E S S E T H:
WHEREAS,
Parent, Purchaser and Seller entered into that certain Asset Purchase Agreement,
dated as of August 1, 2007 (the “Asset
Purchase Agreement”);
and
WHEREAS,
Parent, Purchaser and Seller have agreed, upon the following terms and
conditions, to amend the Asset Purchase Agreement as provided herein.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto hereby agree as follows,
intending to be legally bound:
ARTICLE
1
DEFINITIONS
1.01 Defined
Terms; References.
Unless
otherwise specifically defined herein, each term used herein that is defined
in
the Asset Purchase Agreement shall have the meaning assigned to such term
in the
Asset Purchase Agreement.
ARTICLE
2
AMENDMENTS
TO ASSET PURCHASE AGREEMENT
1.02 Purchase
Price Provisions.
Section 1.08 of the Asset Purchase Agreement is hereby amended by deleting
it in its entirety and replacing it with the following:
1.08.
Purchase
Price.
The
total purchase price for the Assets (the “Purchase
Price”)
shall
be up to $57,530,000 (a portion of which will be in Parent Common Stock,
valued as specified herein), of which (i) $15,000,000 in immediately
available funds has been paid to Seller as provided in clause (a) below,
(ii) $7,500,000 in Parent Common Stock (valued as provided herein) was
delivered at Closing to La Salle National Bank Association (the “Escrow
Agent”)
as
provided in clauses (b) and (c) below and shall thereafter be payable
to Seller as provided in clauses (c) and (d) below,
(iii) $833,334 in immediately available funds has been paid to Seller as
provided in clause (e) below, (iv) up to an additional $1,050,000 shall be
paid to Seller or its designees as provided in clause (e) below;
(v) $480,000 in cash and shares of Parent Common Stock (valued as provided
herein), as provided in Section 3.01 of this Amendment No. 1, and
(vi) up to an additional $32,666,666 (a portion of which will be in Parent
Common Stock, valued as specified herein) shall be contingent consideration,
payable as provided in Section 1.09. The Purchase Price shall be payable
and/or
deliverable as follows:
(a) Seller
hereby acknowledges and agrees that, on the Closing Date, an amount equal
to
(i) $14,250,000,
was delivered to Seller in immediately available funds (the “Closing
Cash Payment”);
and
(ii) the Deposit, reflecting $750,000 of the Purchase Price, was delivered
by the escrow agent to Seller, as provided in Section 1.07;
(b) Seller
hereby acknowledges and agrees that, as of the Amendment Date, 663,529
Par B Shares have been released from escrow and delivered to Seller, and
1,327,076 Par B Shares are held in escrow by the Escrow Agent, pursuant to
the Purchase Price Escrow Agreement, which Par B Shares cumulatively
represent $5,000,000 of the Purchase Price;
(c) Seller
hereby acknowledges and agrees that, on the Closing Date, 1,635,056 shares
of
Parent Common Stock (the “Par C
Shares”),
which
represent $2,500,000 of the Purchase Price, were delivered to the Escrow
Agent.
The Par C Shares were issued in the name of the Escrow Agent as of the
Closing, are being held by the Escrow Agent, and shall be voted as directed
by
the Parent. The Par C Shares shall be delivered to Seller as
follows:
| (i) |
one
third (1/3) promptly after it is determined on any date on or prior
to
October 31, 2010, that the Designated Website Businesses have achieved
at
least $6,000,000 in gross revenue over the immediately preceding
four
consecutive calendar quarters but not including any quarter earlier
than
the third quarter of 2008;
|
| (ii) |
one
third (1/3) promptly after it is determined on any date on or prior
to
October 31, 2010, that the Designated Website Businesses have achieved
at
least $7,000,000 in Net Revenue over the immediately preceding four
consecutive calendar quarters but not including any quarter earlier
than
the third quarter of 2008; and
|
| (iii) |
one
third (1/3) on October 31, 2012.
|
If
at any
time the Purchaser is managing different websites than those listed on Schedule
1.09(a) as of the date hereof, then the gross revenue amounts in clause (i)
and/or the Net Revenue amounts in clause (ii) above shall be adjusted, by
good
faith negotiation between the parties, to reflect the equitable effect of
such
modification. The parties hereto shall execute a Joint Instruction to the
Escrow
Agent within five (5) Business Days following the satisfaction of a condition
set forth in clauses (i), (ii) and/or (iii) above instructing it in such
circumstances to deliver such shares to Seller.
-2-
(d) after
Closing, to Seller from the Escrow Agent pursuant to the Purchase Price Escrow
Agreement, the Par B Shares, in twenty-three (23) installments. The
first such payment was made on or about the last Business Day of the second
full
calendar month following the month in which the Closing Date occurred in
an
amount equal to one-twelfth of the Par B Shares. As of the Amendment Date,
six (6) additional subsequent monthly installments each equal to one
twenty-fourth of the Par B Shares have been paid on or about the last Business
Day of each subsequent calendar month, and such payments shall be followed
by
sixteen (16) equal monthly installments to be paid on the last Business Day
of each calendar month beginning on the earlier of: (A) the last Business
Day of
January, 2009; or (B) the last Business Day of the month after the month
in
which the Purchaser determines that it has earned $3,000,000 in Net Revenue
over
the immediately preceding two consecutive calendar quarters; provided,
that
(i) Purchaser’s obligation to make payments and effect deliveries pursuant
to this section shall be subject to Purchaser’s right to withhold and/or set off
against such payments or deliveries pursuant to Section 1.13 or a Claim
made against the Xxxxxx Guaranty pursuant to Section 1.12, and
(ii) Seller may not dispose of or otherwise transfer any Par B Shares
it may receive for a period of ninety (90) days following the
Closing;
(e) All
payments under this Section 1.08(e) shall be designated as “Performance
Earn Out Cash Payments.”
Seller
hereby acknowledges and agrees that, as of the Amendment Date, it has received
two (2) payments, in an aggregate amount equal to $833,334. Three (3) additional
payments of up to $350,000 each shall be paid to Seller (in cash or unregistered
shares of Parent Common Stock at the Parent’s election, with any such shares
valued based upon the VWAP for the last ten (10) trading days of the period
after the date on which the applicable Performance Earn Out Cash Payment
shall
have been deemed earned and payable) with the first payment due within
forty-five (45) days following December 31, 2008, the second payment due
within
forty-five (45) days following June 30, 2009 and the third payment due within
forty-five (45) days following December 31, 2009. Notwithstanding the foregoing,
(i) Purchaser’s obligation to make payments pursuant to this subsection (e)
shall be subject to and conditioned upon successful achievement of the
applicable “Targets”
specified in Schedule 1.08(e), (ii) no amounts will be paid unless and until
the
applicable Target has been successfully achieved not later than June 30,
2010;
and (iii) in the event any Target is not successfully achieved for the period
for which it is scheduled on Schedule 1.08(e), payment of the related amount
shall be suspended until such time, if any, as the Target is met, but any
payment for which any applicable Target has not been met by June 30, 2010,
shall
be forfeited;
(f) Up
to $32,666,666 in additional consideration (all or a portion of which shall
be payable in Parent Common Stock, valued as specified herein) shall be paid
to
Seller pursuant to Section 1.09; and
(g) The
Seller and the Purchaser agree to renegotiate the Targets in good faith prior
to
September 30, 2008, and to amend Schedule 1.08(e) to reflect any revised
Targets
agreed to by each of them, but the existing Targets shall remain in effect
until
any such revised Targets are so agreed by the parties in writing.
-3-
2.02 Earn
Out Provisions. Section 1.09
of the Asset Purchase Agreement is hereby amended by deleting it in its entirety
and replacing it with the following:
1.09
Earn
Out.
(a) As
partial consideration for the Assets, Purchaser shall pay and deliver to
Seller
the Annual Earn Out Payment for each year in the Earn Out Period (collectively,
the “Earn
Out Payments”),
payable in additional amounts of cash, promissory notes and/or shares of
Parent
Common Stock as provided herein, up to a maximum aggregate amount intended
to
represent $32,666,666 in value, dependent upon the operating and financial
performance of the Business during calendar years 2008, 2009, 2010, 2011,
and
2012 (collectively, the “Earn
Out Period”)
(refer
to Schedule 1.09 for an illustrative example). The “Annual
Earn Out Payment”
for
each calendar year in the Earn Out Period shall be an amount equal to
(x) the Earn Out Period Valuation, calculated as of the date that is the
last day of each such calendar year, minus (y) the Cumulative
Consideration, calculated as of the calculation date of the Annual Earn Out
Payment.
(b) Each
Annual Earn Out Payment shall be payable by Purchaser to Seller on any date
(the
“Earn
Out Payment Date”)
designated by Purchaser that falls within one hundred twenty (120) days
after the end of each calendar year of the Earn Out Period, subject, in each
case, to the following:
| (i) |
an
amount equal to forty percent (40%) of the Annual Earn Out Payment
payable
on such Earn Out Payment Date shall be paid to Seller in cash in
immediately available funds; provided,
that, if Purchaser, in its reasonable discretion, determines that
(x) the amount of such cash payment of the Annual Earn Out Payment is
greater than fifty percent (50%) of Purchaser’s Net Current Assets,
calculated as of the Earn Out Payment Date, or (y) paying the cash
portion of the Annual Earn Out Payment would materially adversely
impact
Purchaser’s financial condition, then: (A) an amount equal to twenty
percent (20%) of the Annual Earn Out Payment payable on such Earn
Out
Payment Date shall be paid to Seller in cash in immediately available
funds, and (B) on such Earn Out Payment Date, Purchaser shall issue a
promissory note (the “Earn
Out Promissory Note”)
in favor of Seller for an amount equal to twenty percent (20%) of
the
Annual Earn Out Payment payable on such Earn Out Payment Date. The
Earn
Out Promissory Note shall be issued in form and substance satisfactory
to
Seller, in substantially the form of Exhibit P; and
|
|
(ii)
|
an
amount equal to sixty percent (60%) of the Annual Earn Out Payment
payable
on such Earn Out Payment Date shall be paid to Seller by delivery
of that
number of shares of Parent Common Stock as are necessary such that
the
value of shares in Parent Common Stock delivered to Seller is equal
to
sixty percent (60%) of such Annual Earn Out Payment; provided,
that, Purchaser shall value such shares at the VWAP over the ten (10)
trading days immediately preceding the final day of each Earn Out
Period.
|
-4-
(c) Within
ninety (90) days after the end of each calendar year of the Earn Out Period,
Purchaser shall deliver to Seller a written statement setting forth in
sufficient detail the calculation and supporting details thereof of the Annual
Earn Out Payment, if any, for such calendar year (the “Earn
Out Statement”).
If
Seller does not object in writing to the calculation of the Annual Earn Out
Payment, if any, for such calendar year within twenty (20) days after
Seller’s receipt of the applicable Earn Out Statement, the calculation set forth
in such Earn Out Statement shall be deemed final and conclusive. In the event
that Seller objects in writing to the calculation of the Annual Earn Out
Payment, if any, set forth in an Earn Out Statement within such twenty
(20) day period, Purchaser and Seller shall promptly meet and endeavor to
reach agreement as to the calculation. If Purchaser and Seller reach agreement
on the calculation, it will become final and conclusive. If Purchaser and
Seller
are unable to reach agreement within ten (10) days after delivery of
Seller’s written objection to an Earn Out Statement, then an Independent
Registered Public Accounting Firm will promptly be retained to undertake
a
review of such Earn Out Statement and to determine the calculation of the
Annual
Earn Out Payment, if any, which determination will be made as quickly as
possible. In resolving any disputed item, the Independent Registered Public
Accounting Firm may not assign a value or amount to such item greater than
the
greatest value or amount for such item claimed by either party or lower than
the
lowest value or amount for such item claimed by either party, in each case
as
presented to the Independent Registered Public Accounting Firm. The
determination of the Independent Registered Public Accounting Firm will be
final
and binding, and payment of the Annual Earn Out Payment, if any, based on
such
calculation will be made by Purchaser within ten (10) days after its
determination by the Independent Registered Public Accounting Firm. The fees
and
expenses of the Independent Registered Public Accounting Firm shall be borne
by
Purchaser if the Independent Registered Public Accounting Firm determines
that
any payment set forth in the Earn Out Statement should be adjusted by five
percent (5%) or more; otherwise, such fees shall be borne by Seller. The
revised
Earn Out Statement delivered by the Independent Registered Public Accounting
Firm shall be final and binding upon Purchaser and Seller and shall not be
subject to challenge or appeal by either party.
(d) In
the
event that any Earn Out Payments payable in cash are not timely paid, such
amounts shall bear interest at the rate of 1.5% per month for a maximum of
nine
(9) months, and one-half of one percent (0.5%) per month thereafter or, if
lesser, the maximum amount permitted by law.
(e) In
the
event that, prior to the expiration of the Earn Out Period, (i) all or
substantially all of the assets of Purchaser are sold, transferred or assigned,
(ii) fifty percent (50%) or more of the voting capital stock of Purchaser
is
sold, transferred or assigned to an unaffiliated third party in a single
transaction or a series of transactions, (iii) Purchaser is merged with or
into
another entity such that Purchaser is not the surviving entity nor the owner
of
greater than fifty percent (50%) of the voting equity interests of such
surviving entity, (iv) Purchaser materially changes the operation of, or
ceases
to conduct, the Business in substantially the same manner as conducted as
of the
date of this Agreement, (v) the Parent Common Stock is delisted from the
NASDAQ
Stock Market, and not listed on a recognized national stock exchange or
over-the-counter market within sixty (60) days, or is the subject of any
delisting notice or action which is not dismissed or discharged within sixty
(60) days, or (vi) the Purchaser terminates the employment of Xxxx Xxxxxx
without “Cause,” as that term is defined in his Employment Agreement (any of the
foregoing, an “Acceleration
Event”),
then
an amount equal to $32,666,666 less the Cumulative Consideration previously
paid
shall become immediately due and payable to Seller. In such event, the number
of
shares of Parent Common Stock to be delivered in satisfaction of such unpaid
Earn Out Payments shall be equal to (A) the amount of such unpaid Earn Out
Payments to be paid in shares of Parent Common Stock, divided by (B) the
closing
price of the Parent Common Stock on the NASDAQ Stock Market (or such other
securities exchange or trading market where the Parent Common Stock is then
traded) on the day immediately preceding the day on which the Acceleration
Event
is publicly announced.
-5-
2.03 Pledge. Section 1.10
of the Asset Purchase Agreement is hereby amended by deleting it in its entirety
and replacing it with the following:
1.10
Pledge.
In
order to secure to Seller any payments of Par B Shares, Par C Shares,
Performance Earn Out Cash Payments, Earn Out Payments, and any payments under
the Earn Out Promissory Note, whether or not earned, which may be or become
due
to Seller (the “Protected
Payments”),
Parent shall grant to Seller a pledge of all of the issued and outstanding
capital stock of Purchaser, specified in the Pledge Agreement executed as
of
October 31, 2007, which shall remain in effect for the period during which
the
Protected Payments remain unissued or unpaid. A form of the Pledge Agreement
appears as Exhibit 1.10(a) hereto. Parent shall have the right at any time
to replace the pledge of Purchaser capital stock with a cash escrow account
to
be held by the Escrow Agent, in an amount equal to the then remaining balance
of
the Protected Payments; a form of escrow agreement pursuant to which such
cash
escrow would be held is attached hereto as Exhibit 1.10(b) (the
“Protected
Payments Escrow Agreement”).
Any
Protected Payments not made when due shall bear interest thereon at the rate
of
one and one-half percent (1.5%) per month up to a maximum of nine (9) months,
and one-half percent (0.5%) per month thereafter or, if lesser, the maximum
amount permitted by law, from the date such payment was otherwise due until
the
date such payment is made in full.
2.04 First
Year Revenues.
Section 4.07 of the Asset Purchase Agreement is hereby amended by deleting
it in its entirety.
2.05 Definitions.
(a) Section 10.12
of the Asset Purchase Agreement is hereby amended by adding the following
definitions, in alphabetical order:
-6-
“Amendment
Date”
shall
mean July 20, 2008.
“Amendment
No. 1”
shall
mean that certain Amendment No. 1 to the Asset Purchase Agreement, dated as
of the Amendment Date, entered into by Seller, Purchaser and Parent.
“Annual
Earn Out Cash Flow”
means,
with respect to any period, an amount equal to (a) Net Income of the
Designated Website Businesses for such period, plus (b) the amount of all
depreciation and amortization expenses and stock-based compensation expenses
related to the Designated Website Businesses, but only to the extent deducted
in
the determination of Net Income of the Designated Website Businesses for
such
period, minus (c) the amounts spent by the Designated Website
Businesses for equipment, fixed assets, real property or improvements or
for
replacements or substitutions therefore or additions thereto, in connection
with
the operation of the Designated Website Businesses, and which are or would
be
set forth as additions to the Designated Website Businesses’ property in the
Designated Website Businesses’ financial statements, and minus (d) the
aggregate amount of any accounts receivable of the Designated Website Businesses
that are older than seventy five (75) days.
“Annual
Earn Out Payment”
shall
have the meaning assigned to such term in Section 1.09.
“Cumulative
Consideration”
means,
as of any calculation date, an amount equal to (a) the aggregate of any and
all amounts, whether in cash, promissory notes, shares, or otherwise, that
Seller has received, or has irrevocably earned but not yet received, pursuant
to, and in accordance with, the Agreement and this Amendment No. 1,
including, but not limited to the Initial Consideration minus (b) the
aggregate of any and all amounts, whether in cash, promissory notes, shares,
or
otherwise that Seller has received, or has irrevocably earned but not yet
received, pursuant to, and in accordance with, the Agreement and this Amendment
No. 1, as compensation for any services provided by Seller pursuant to, and
in accordance, with the Agreement, including, but not limited to, salaries,
bonuses, and other payments made pursuant to the Employment Agreements or
any
other similar document. For purposes of this calculation, any non-cash items
shall have the value given to such non-cash items in accordance with the
Agreement and this Amendment No. 1, and in no event shall such non-cash
items be valued on any other basis.
“Designated
Website Businesses”
means,
collectively, (a) the Business, and (b) the other websites listed on
Schedule
1.09(a).
“Earn
Out Period Valuation”
means,
as of any calculation date, the sum of (a) with respect to, and including,
the first $5,000,000 of Annual Earn Out Cash Flow calculated as of such date,
an
amount equal to the product of (x) the amount of Annual Earn Out Cash Flow,
up to $5,000,000, multiplied by (y) seven (7), and (b) with respect to
any amount of Annual Earn Out Cash Flow, calculated as of such date, that
exceeds $5,000,000, an amount equal to the product of (x) the amount
of any such excess, multiplied by (y) five (5).
-7-
“Earn
Out Promissory Note”
shall
have the meaning assigned to such term in Section 1.09(b)(i).
“Net
Income”
means,
with respect to any period, the net income (or loss) of the Designated Website
Businesses for such period, after eliminating all offsetting debits and credits
among the Designated Website Businesses; provided,
that
the following shall be excluded:
(a) the
income (or loss) of any Designated Website Business accrued prior to the
date it
becomes a Designated Website Business or is merged into or consolidated with
any
Designated Website Business, and the income (or loss) of any Designated Website
Business, substantially all of the assets which have been acquired in any
manner, realized by such Designated Website Business prior to the date of
acquisition;
(b) the
income (or loss) of any Person in which a Designated Website Business has
an
ownership interest, except to the extent that any such income has been actually
received by such Designated Website Business in the form of cash dividends
or
similar cash distributions;
(c) any
restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made out of income accrued during such period;
(d) any
aggregate net gain (but not any aggregate net loss) during such period arising
from the sale, conversion, exchange, or other disposition of capital assets
(such term to include, without limitation, (i) all non-current assets and,
without duplication, (ii) the following, whether or not current: all fixed
assets, whether tangible or intangible, all inventory sold in conjunction
with
the disposition of fixed assets, and all Securities);
(e) any
gains
resulting from any write-up of any assets (but not any loss resulting from
any
write-down of any assets); and
(f) any
gain
arising from the acquisition of any Security, or the extinguishment of any
indebtedness of any Designated Website Business;
provided,
further,
that,
for purposes of this definition, Net Income shall be calculated based on
the
financial statements prepared by Purchaser’s independent accountants for each
Designated Website Business that is listed on the most current
Schedule 1.09(a), and shall include allocations of general administration
and overhead costs and expenses for each such Designated Website Business.
-8-
“Net
Revenue”
shall
mean gross revenue of the Designated Website Businesses less commissions
and
fees paid to advertising agencies, networks, partners and/or content
providers.
“Security”
shall
have the meaning assigned to such term in section 2(1) of the Securities
Act.
“VWAP”
means,
as of any calculation date, the Volume Weighted Average Price of the Parent
Common Stock for the designated period, based on the value of such shares
as it
appears on the Bloomberg Screen of Purchaser on such date.
(b) The
definitions of Initial Consideration, Par B Shares, and Purchase Price
Escrow Agreement, set forth in Section 10.12 of the Asset Purchase
Agreement, are each hereby amended by deleting it in its entirety and replacing
it with the following:
“Initial
Consideration”
shall
have the meaning assigned to such term in Section 3.01 of this Amendment
No. 1.
“Par B
Shares”
means
such number of shares of Parent Common Stock representing $5,000,000 of value
as
of the Closing, as provided in Section 1.08(b).
“Purchase
Price Escrow Agreement”
means
that certain escrow agreement entered into as of October 31, 2007
by and
among the Purchaser, the Seller and LaSalle Bank National Association, as
escrow
agent.
(c) The
definitions of Annual Earn Out Amount, Annual Earn Out Payable, Base Year
EBITDA, Cumulative Earn Out Potential, Cumulative Earn Out Value, Designated
CPM, Earn Out Basis, First Guaranteed Revenue Period, First Year Revenues,
Minimum Pro Forma Earn Out EBITDA, Pro Forma Earn Out EBITDA, Pro Forma Earn
Out
Net Revenue, Pro Forma Earn Out Operating Expenses, and Second Guaranteed
Revenue Period, set forth in Section 10.12 of the Asset Purchase Agreement,
are each hereby amended by deleting it in its entirety.
2.06 Earn
Out Promissory Note.
The
Agreement is hereby amended by adding a new Exhibit P to the Agreement, in
the form attached hereto as Annex A.
2.07 Schedule
1.08(e).
Schedule 1.08(e) of the Agreement is hereby amended by deleting it in its
entirety and replacing it with a new Schedule 1.08(e), as attached hereto as
Annex B.
2.08 Schedule 1.09.
Schedule 1.09 of the Agreement is hereby amended by deleting
it in its entirety and replacing it with a new Schedule 1.09, as attached
hereto as Annex C.
-9-
2.09 Schedule 1.09(a).
The
Agreement is hereby amended by adding a new Schedule 1.09(a) to the
Agreement, in the form attached hereto as Annex D.
ARTICLE
3
EFFECTIVENESS;
WAIVERS
3.01 Initial
Consideration.
As
consideration for the parties executing this Amendment No. 1 and as part of
the Purchase Price (the “Initial
Consideration”),
Purchaser shall deliver:
(a) $400,000
as follows:
| (i) |
$250,000
shall be paid to Seller in immediately available funds within two
(2)
Business Days of the date hereof; and
|
| (ii) |
$150,000
shall be paid to Seller in immediately available funds in five (5)
equal
monthly installments of $30,000 each, with such payments commencing
on
August 20, 2008, with each subsequent payment made on the twentieth
(20th)
of each such successive month.
|
In
the
event of the sale by the Parent of its personal media player business for
aggregate cash consideration in an amount not less than $2,000,000, the total
amount of the outstanding installment payments to be paid pursuant to Section
3.01(a)(ii) above shall be due and payable within five (5) Business Days
of the
closing of such sale.
(b) Within
two (2) Business Days of the date hereof, 250,000 shares
of
Parent Common Stock to Xxxx Xxxxxx, which such shares of Parent Common Stock
shall be deemed to have a value equal to $40,000; and
(c) Within
two (2) Business Days of the date hereof, 250,000 shares of Parent Common
Stock
to Xxxx Xxxxxx, which such shares of Parent Common Stock shall be deemed
to have
a value equal to $40,000.
3.02 Waiver
by Seller.
Seller
hereby waives, to the fullest extent permitted by law, any rights that it
may
have to claim and receive any amounts that were due and unpaid pursuant to
the
Agreement, prior to its amendment hereby, but that no longer remain due as
a
result of this Amendment No. 1.
3.03 No
Further Obligations.
Each of
the parties hereby acknowledges and agrees that none of the parties shall
have
any further obligations to make any adjustments or payments pursuant to,
or in
accordance with, Section 1.11 of the Agreement.
ARTICLE
4
MISCELLANEOUS
4.01 No
Other Amendments;
Ratification.
Except
as
expressly amended herein, the terms of the Asset Purchase Agreement shall
remain
in full force and effect; and each of the parties hereby ratifies, confirms
and
agrees that the Asset Purchase Agreement shall remain in full force and effect,
as amended hereby.
-10-
4.02 Limitation
on Agreements. The
amendments set forth herein are limited precisely as written and shall not
be
deemed: (a) to be a consent under or waiver of any other terms or condition
in the Asset Purchase Agreement, or (b) to prejudice any right or rights
which the Seller, Parent or Purchaser now have or may have in the future
under,
or in connection with the Asset Purchase Agreement, as amended hereby, or
any of
the other documents referred to herein or therein. From and after the date
of
this Amendment No. 1, all references to the Asset Purchase Agreement shall
be deemed to be references to the Asset Purchase Agreement, after giving
effect
to this Amendment No. 1, and each reference to “hereof”, “hereunder”, or
“hereby” and each other similar reference and each reference to “this Agreement”
and each other similar reference in the Asset Purchase Agreement shall from
and
after the date hereof refer to the Asset Purchase Agreement as amended
hereby.
4.03 Counterparts.
This
Amendment No. 1 may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party hereto
and
delivered to all of the other parties, it being understood that all parties
need
not sign the same counterpart. In the event that any signature is delivered
by
facsimile transmission or by email delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing
(or
whose behalf such signature is executed) with the same force and effect as
if
such facsimile signature page were an original thereof.
4.04 Governing
Law.
This
Amendment No. 1 shall be construed and enforced in accordance with and
governed by the law of the State of New York without regard to any provision
thereof that would allow or require the application of the law of any other
jurisdiction. The parties hereby agree that any dispute between or among
them
arising out of or in connection with this Amendment No. 1 shall be
adjudicated before the courts of the State of New York, New York County,
or, if
any party has or can acquire jurisdiction, before the United States District
Court for the Southern District of New York, and they hereby submit to the
jurisdiction of such courts (and the appropriate appellate courts), with
respect
to any action or legal proceeding commenced by any party, and irrevocably
waive
any objection they now or hereafter may have respecting the venue of any
such
action or proceeding brought in such courts or respecting the fact that such
courts are an inconvenient forum, relating to or arising out of this Amendment
No. 1, and consent to the service of process in any such action or legal
proceeding by means of registered or certified mail, return receipt requested,
in care of the address set forth above or such other address as the undersigned
shall furnish in writing to the other.
(Remainder
of this page left blank intentionally. Next page is signature
page.)
-11-
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
duly executed by their respective authorized officers effective as of the
day
and year first above written but executed on the dates set forth
below.
PURCHASER:
EBAUM’S
WORLD, INC.
By:
/s/
Xxxx
Oscodar
Name:
Xxxx Oscodar
Title:
President & CEO
PARENT:
ZVUE
CORPORATION
By:
/s/
Xxxx
Oscodar
Name:
Xxxx Oscodar
Title:
President & CEO
SELLER:
ERIC’S
UNIVERSE, INC.
By:
/s/
Xxxx
Xxxxxx
Name:
Xxxx Xxxxxx
Title:
President
-12-
