FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
EXHIBIT
10.1
FIRST
AMENDMENT TO ASSET PURCHASE AGREEMENT
This
First Amendment to Asset Purchase Agreement (this “Amendment”)
dated
as of January 20, 2006, and entered into by and among Xxxxx Networks, Inc.,
a
Nevada corporation (the “Buyer”),
Abundance Networks, Inc., a Delaware corporation and wholly-owned subsidiary
of
the Buyer, Abundance Networks, LLC, a Delaware limited liability company
(the
“Seller”)
and
Abundance Networks (India) Pvt Ltd, an India private limited company and
wholly
owned subsidiary of the Seller (collectively, the “Parties”).
WITNESSETH
WHEREAS:
The
Parties previously entered into that certain Asset Purchase Agreement, dated
as
of December 1, 2005 (the “Original
Agreement”).
WHEREAS:
Section
10.9 of the Original Agreement provides that any term of the Original Agreement
may be amended with the written consent of each of the Parties.
WHEREAS:
In
connection with the Parties’ desire to amend the payment terms contained in the
Original Agreement, the parties hereto wish to amend the Original Agreement
as
set forth herein.
NOW,
THEREFORE,
the
Parties hereto, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, hereby agree as follows:
1.
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Section
1.3(a)(i) of the Original Agreement shall be deleted in its entirety
and
replaced with the following in lieu
thereof:
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“(i) 1,150,000
shares (the “Initial
Shares”)
plus
an additional number of shares equal to $500,000 divided by the Average Closing
Price on the Closing Date shall be issued to Seller;”
2.
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Section
1.3(b)(i) of the Original Agreement shall be deleted in its entirety
and
replaced with the following in lieu
thereof:
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“(i)
If,
on
the one-year anniversary of the Closing, the Initial Shares do not have an
Average Closing Price of at least $2.00 per share, then Buyer shall issue
an
additional number of shares of Common Stock to Seller as is determined by
the
following formula: (1,150,000 x ($2.00 - the Average Closing Price)) / the
Average Closing Price (the “Initial
True-Up Shares”).”
3.
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Section
1.3(b)(iii) of the Original Agreement shall be deleted in its entirety
and
replaced with the following in lieu
thereof:
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“(iii)
If,
on
the date that the Second Earnout Shares (as defined below) become due and
issuable (the “Second
Earnout Date”)
to
Seller, any Earnout Shares, that have been issued or are due and issuable,
do
not have an Average Closing Price of at least $2.00 per share, then, on such
Second Earnout Date Buyer shall issue an additional number of shares of Common
Stock to Seller as is determined by the following formula: (the number of
shares
earned pursuant to subsection (c) and (d) below x ($2.00 - the Average Closing
Price at the Second Earnout Date)) / the Average Closing Price at the Second
Earnout Date (the “Earnout
True-Up Shares”
and,
together with the Initial True-Up Shares, the Indemnification True-Up Shares,
collectively, the “True-Up
Shares”).”
4.
|
Section
1.3(c) of the Original Agreement shall be deleted in its entirety
and
replaced with the following in lieu
thereof:
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“(c)
If,
for
the 12-month period ending March 31, 2006 (the “First
Earnout Period”),
the
revenue generated by the Seller’s business (on a stand-alone basis as a
wholly-owned subsidiary or division, as the case may be, of Buyer and from
sales
of Seller’s products by Buyer or its other Subsidiaries or affiliates) (the
“Revenue”)
is at
least $2,000,000, then, within ten business days of the date on which Buyer’s
independent accountants have completed their review of the financial statements
indicating the revenues so generated, the Escrow Agent shall release a number
of
shares (the “First
Earnout Shares”)
equal
to the product of (i) 875,000 shares multiplied by (ii) a fraction, the
numerator of which is the Revenues actually generated during the First Earnout
Period and the denominator of which is $6,000,000 multiplied by (iii) a
fraction, the numerator of which is the Adjusted EBITDA (as defined below)
actually generated during the First Earnout Period based on the Revenues
earned
for such period and the denominator of which is $900,000; provided,
however,
that
the First Earnout Shares shall in no event exceed 875,000. Buyer shall use
good
faith reasonable efforts to have their independent accountants complete their
review of the financial statements for the 12-month period ending March 31,
2006, as soon as practicable following March 31, 2006.”
5.
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This
Amendment shall be governed by and construed in accordance with
the
internal laws of the State of California, without giving effect
to any
choice or conflict of law provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application
of laws of any jurisdictions other than those of the State
of California.
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6.
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This
Amendment may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so
executed
and delivered shall be deemed an original, but all such counterparts
together shall constitute one and the same instrument; signature
pages may
be detached from multiple separate counterparts and attached to
a single
counterpart so that all signature pages are physically attached
to the
same document.
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[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the Parties have caused this First Amendment to Asset Purchase
Agreement to be duly executed as of the date first above written.
XXXXX
NETWORKS, INC.
a
Nevada
corporation
By:
/s/ Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
President & CEO
ABUNDANCE
NETWORKS, INC.
a
Delaware corporation
By:
/s/ Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
President & CEO
ABUNDANCE
NETWORKS, LLC
a
Delaware limited liability company
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President & CEO
ABUNDANCE
NETWORKS (INDIA) PVT LTD
an
India
private limited company
By:
/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President & CEO