Exhibit 10.1
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (the "Agreement") is made and entered into as
of September 2, 2004, between Aladdin Systems Holdings, Inc., a Nevada
corporation ("ALHI") and International Microcomputer Software, Inc., a
California corporation ("IMSI").
RECITALS
WHEREAS, on January 20, 0000 XXXX and IMSI entered into a Stock Purchase
Agreement pursuant to which IMSI purchased from ALHI 100% of the outstanding
shares of capital stock of Aladdin Systems, Inc., a Delaware corporation
("Aladdin Systems");
WHEREAS, on Xxxxx 00, 0000, XXXX and IMSI consummated the acquisition of
Aladdin Systems (the "Closing");
WHEREAS, pursuant to the Stock Purchase Agreement, at the Closing, ALHI
and IMSI executed a Registration Rights Agreement;
WHEREAS, pursuant to the Stock Purchase Agreement, a portion of the
consideration to be paid by IMSI to ALHI is to be based upon the revenues of
Aladdin Systems for the three (3) year period following the Closing (the "Earn
Out");
WHEREAS, pursuant to the Registration Rights Agreement, IMSI was to have
filed, on or before July 18, 2004, a Form SB-2 registration statement with the
Securities and Exchange Commission ("SEC") to register shares of IMSI common
stock issued to ALHI at the Closing as part of the consideration under the Stock
Purchase Agreement
WHEREAS, ALHI and IMSI desire to modify certain provisions of the Stock
Purchase Agreement as they relate to the amount of the Earn Out and the payment
of the Earn Out and desire to modify certain provisions of the Registration
Rights Agreement as they relate to filing of the Registration Statement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1.1 Determination of the Earn Out.
Notwithstanding anything to the contrary contained in the Stock Xxxxxxxx
Xxxxxxxxx, XXXX and IMSI agree that the total amount of the Earn Out Payments,
as defined in Section 2.3 of the Stock Purchase Agreement, to be payable to ALHI
under the Stock Purchase Agreement shall be $1,700,000.00, payable in cash and
stock as described hereinafter (the "Earn Out Sum Certain"). Except for the Earn
Out Sum Certain, ALHI agrees to waive all other right to receive payment of the
Earn Out Payments.
The Earn Out Sum Certain shall be payable to ALHI by IMSI as set forth in
Section 1.2 below.
Section 1.2 Payment of the Earn Out Sum Certain.
Notwithstanding anything to the contrary contained in the Stock Xxxxxxxx
Xxxxxxxxx, XXXX and IMSI agree that the Earn Out Sum Certain shall be payable by
IMSI to ALHI as follows:
(a) The amount of six hundred sixty-six thousand six hundred sixty-seven
($666,667) Dollars payable in immediately available funds on or before June 2,
2005.
(b) The amount of One million xxxxxx-three thousand eight hundred and
thirty three ($1,033,833) dollars in newly issued restricted shares of IMSI
common stock, no par value, valued at the closing bid price on the day of
signing.
Section 1.3 Filing of the Registration Statement.
Notwithstanding anything to the contrary contained in the Stock Purchase
Agreement or the Registration Rights Agreement, ALHI agrees that IMSI shall not
be required to file the Registration Statement until September 30, 2004. IMSI
acknowledges that IMSI shall use it best efforts to prepare the Registration
Statement in accordance with the SEC's regulations thereof and IMSI acknowledges
that the Registration Statement, when filed, shall contain therein, IMSI's
audited financial statements for its fiscal year ended June 30, 2004.
Notwithstanding anything to the contrary contained herein, IMSI agrees and
acknowledges that in the event that the Registration Statement has not been
declared effective by the SEC on or before December 31, 2004, the liquidated
damages provided for in Section 10 of the Registration Rights Agreement shall
apply and the liquidated damages provided therein shall be payable by IMSI to
Aladdin commencing as of December 31, 2004.
Section 1.4 No Other Changes.
Except as set forth herein, there are no other modifications, amendments
or changes to the Stock Purchase Agreement and the Registration Rights Agreement
and the Stock Purchase Agreement and the Registration Rights Agreement shall be
in full force and effect, as amended herein.
Section 1.5 Entire Agreement.
This Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof, supersedes and is in full
substitution for any and all prior agreements and understandings among them
relating to such subject matter.
Section 1.6 Descriptive Headings.
The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 1.7 Counterparts.
For the convenience of the parties, any number of counterparts of this
Agreement may be executed by any one or more parties hereto, and each such
executed counterpart shall be, and shall be deemed to be, an original, but all
of which shall constitute, and shall be deemed to constitute, in the aggregate
but one and the same instrument.
Section 1.8 Severability.
In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, then to the
maximum extent permitted by law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
instrument. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
IN WITNESS WHEREOF, ALHI and IMSI have executed and delivered this
Agreement as of the day and year first written above.
ALADDIN SYSTEMS HOLDINGS, INC.
By: /s/ Xxxxxxxx Xxxx
Name: Xxxxxxxx Xxxx
Title: President
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: President
