EXHIBIT 2.2
AMENDMENT NO. 1 TO THE ASSET PURCHASE AGREEMENT
DATED FEBRUARY 27, 1998
BY AND BETWEEN
YES! ENTERTAINMENT CORPORATION, A DELAWARE CORPORATION,
AND
WHAM-O, INC., A DELAWARE CORPORATION
THIS AMENDMENT NO. 1 (the "Amendment Agreement") to the Asset Purchase
Agreement (the "Asset Purchase Agreement") dated as of February 27, 1998 by and
between YES! Entertainment Corporation, a Delaware corporation ("Seller"), and
Wham-O, Inc., a Delaware corporation ("Purchaser"), is entered into as of March
20, 1998. All terms used herein not otherwise defined herein shall have the
respective meanings assigned to them in the Asset Purchase Agreement.
RECITALS
WHEREAS, on February 27, 1998, Seller and Purchaser executed the Asset
Purchase Agreement which provided for the purchase, subject to the terms and
conditions therein, by Purchaser of certain assets from Seller; and
WHEREAS, Seller and Purchaser have agreed to amend the Asset Purchase
Agreement to reflect their agreement regarding the purchase of the Assets.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Amendment Agreement, the parties hereto agree as follows:
SECTION 1. PURCHASE PRICE.
Section 1.3(d) of the Asset Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"(D) two percent (2%) of the Net Sales of the Products by Purchaser,
excluding the Xxxxxx-Xxxxxxx Ice Cream Maker, from the Closing Date through
the seventh anniversary of the Closing Date, and one percent (1%) of Net
Sales of the Xxxxxx-Xxxxxxx Ice Cream Maker by Purchaser, from the Closing
Date through the third anniversary of the Closing Date, which in no case
shall exceed an aggregate of $5,500,000 (the "Royalty")."
SECTION 2. PAYMENT OF PURCHASE PRICE.
Section 1.4(c) of the Asset Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
1.
"(C) The Royalty, as determined pursuant to Sections 1.3(d) and 1.6, shall
be due and payable thirty (30) days after the end of each calendar quarter
for the immediately preceding quarter, beginning July 30, 1998 (each a
"Quarterly Payment"). The Prepaid Royalty shall be credited toward
Quarterly Payments due and the first such Quarterly Payment shall include
Royalties for the period from the Closing Date through June 30, 1998. In
addition, the Residual Offset Amount (as defined in Section 1.8(b)), if
any, shall be credited toward Quarterly Payments due. The amount by which
the Royalty payments due in any one-year period ending on March 31 exceed
$800,000 shall be accrued and one fourth of such excess amount shall be
added to the Royalty payments due in each quarter of the subsequent year.
If a Quarterly Payment is not made within thirty (30) days of the date it
is due, Purchaser shall immediately pay an amount equal to 50% of such
Quarterly Payment, in addition to such Quarterly Payment, which amount
shall be credited toward any Royalty amount due or that will become due.
If such Quarterly Payment is not made within seven (7) months of the date
it is due, Purchaser shall immediately pay $800,000, which amount shall be
credited to the Royalty amounts due in such year."
SECTION 3. DETERMINATION OF INVENTORY/MATERIALS VALUE.
Section 1.5 of the Asset Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
"1.5 DETERMINATION OF INVENTORY/MATERIALS VALUE. On or before the date
that the Inventory and Packaging Materials are shipped from Seller to
Purchaser, Ernst & Young LLP or another independent third party mutually
agreed upon by Purchaser and Seller shall take a physical count of the
Inventory and Packaging Materials. The Inventory/Materials Value and any
adjustments thereto shall be determined by the parties in accordance with
the following principles: Inventory and Packaging Materials shall be
valued on an item-by-item basis at cost, with all unmarketable or damaged
Inventory or Packaging Materials valued at zero."
SECTION 4. RESOLUTION OF DISPUTE REGARDING INVENTORY/MATERIALS VALUE OR XXX.
XXXXXX VALUE.
Section 1.8(b) of the Asset Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"(B) Within three (3) business days of the final determination of the
Inventory/Materials Value, Purchaser shall pay to Seller the amount by
which the Inventory/Materials Value exceeds 80% of the Estimated
Inventory/Materials Value, or Seller shall pay to Purchaser the amount by
which 80% of the Estimated Inventory/Materials Value exceeds the
Inventory/Materials Value, as the case may be. Any payment due to Seller
pursuant to this Section shall be offset by $235,917 (the "Offset Amount"),
and the balance remaining, if any, of the Offset Amount shall be the
Residual Offset Amount."
2.
SECTION 5. DELIVERIES ON THE CLOSING DATE.
Section 9(b) of the Asset Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
"(B) On the Closing Date, each of Seller and Purchaser shall execute and
deliver to the other party a Transition Services Agreement pertaining to
transition services to be provided in connection with this transaction."
SECTION 6. SCHEDULE B - DISCLOSURE SCHEDULE.
Schedule B to the Asset Purchase Agreement is hereby updated, amended and
restated in its entirety to read as attached hereto.
SECTION 7. EXHIBIT B - SPECIFIED CONTRACTS.
Exhibit B to the Asset Purchase Agreement is hereby updated, amended and
restated in its entirety to read as attached hereto.
3.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
the Asset Purchase Agreement dated February 27, 1998 by and between YES!
Entertainment Corporation, a Delaware corporation and Wham-O, Inc., a Delaware
corporation, as of the date first set forth above.
YES! ENTERTAINMENT CORPORATION,
a Delaware corporation
By: ____________________________
Xxxxxx X. Xxxxxxxxxxxx
Chief Executive Officer
WHAM-O, INC.,
a Delaware corporation
By: ____________________________
Xxxxxxx Xxxxxxx, President
and Chief Executive Officer
__________________________________
XXXXXX X. XXXXXXXXXXXX
