AMENDMENT NO. 1 TO ACQUISITION AGREEMENT

 

The following provisions (the “Amendment”) are hereby incorporated into, and are
hereby made a part of, that certain Acquisition Agreement, dated October 4, 2011
(the “Agreement”), by and among Consorteum Holdings, Inc., a Nevada corporation
(the “Buyer”), Tarsin, Inc., a Nevada corporation (the “Company”), and Tarsin
(Europe) Limited, a company organized under the laws of the United Kingdom (the
“Seller”), and such provisions are effective retroactively to the date of the
Agreement (the “Effective Date”). All capitalized terms in this Amendment, to
the extent not otherwise defined herein, shall have the meanings assigned to
such terms in the Agreement.

 

1.      Recital A of the Agreement is hereby deleted and replaced as follows:

 

A.    The capital stock of the Company consists of 1,000,000 authorized shares
of Common Stock, $0.001 par value , of which 100% are currently issued and
outstanding and held by the Seller (the “Shares”) such that the Company is a
wholly owned subsidiary of Seller

 

2.      Section 1.2.1 of the Agreement is hereby deleted and replaced as
follows:

 

1.2.1      Purchase Price. The purchase price for the Shares shall be 24.5
million shares of common stock of Buyer, currently equal to 4.9% of the Buyer’s
outstanding common stock, on a fully-diluted basis (the “Purchase Shares”).

 

3.      Section 1.2.2 of the Agreement is hereby deleted and replaced as
follows:

 

1.2.2      Buyer Assumption of Liabilities. The existing indebtedness of the
Company as itemized in Exhibit A attached shall be discharged by the Buyer who
shall indemnify the Seller against any claim for payment in respect thereof. Any
indebtedness of the Company incurred after Closing shall also be the
responsibility of the Buyer;

 

4.      Section 1.2.3 of the Agreement is hereby deleted and replaced as
follows:

 

1.2.3      Seller License Agreement to Buyer. Seller is the sole owner of the
Capsa Mobile Platform technology (“Capsa”) and Other Software. Seller agrees to
enter into a licensing agreement with Seller in the form set out in Exhibit B,
(“ Software Licensing Agreement”) whereby Seller shall grant to Company an
exclusive, worldwide perpetual license to use, distribute, and sell Capsa and
Other Software as defined in Exhibit B on the commercial terms as set out
therein. Seller acknowledges that the License Agreement is a material term of
this Agreement of which the Buyer is placing reliance upon and, without which,
the Buyer would not have otherwise been induced to enter into the Agreement;

 

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5.      Section 1.2.4 of the Agreement is hereby deleted and replaced as
follows:

 

1.2.4      Company’s Board of Directors. The Company shall, at the next meeting
of Company shareholders and in accordance with the Company’s bylaws, nominate
John Osborne to the Company’s Board of Directors for election by the Company’s
shareholders;

 

6.      Section 1.2.6 of the Agreement is hereby deleted and replaced as
follows:

 

1.2.6      Buyer’s Working Capital Obligation. Buyer shall provide or procure
the provision of working capital to Company as follows: (1) $300,000 no later
than December 30, 2011, (2) an additional $250,000 no later than March 30, 2012,
and (3) an additional $1,150,000 no later than December 31, 2012. Failure to
provide or procure the working capital as described herein shall constitute a
material breach;

 

7.      Section 1.2.7 of the Agreement is hereby deleted and replaced as
follows:

 

1.2.7      Anti-Dilution Protection. Until such time as the Buyer has a market
capitalization equal to or greater than $100,000,000 on any business day, if the
Buyer issues additional shares of its common stock which cause the Seller’s
Purchase Shares’ percentage ownership of the Buyer to decrease, the Buyer shall
issue to Seller that certain number of additional shares of common stock in
order to restore Seller’s percentage ownership interest in the Buyer
(“Anti-Dilution Protection”), except, however, that without triggering
Anti-Dilution Protection adjustments, shares of common stock and/or options
therefore may be sold or reserved for issuance by the Buyer in which exemption
from the Anti-Dilution Protection is approved by the Seller.

 

8.      Section 2.1.26 of the Agreement is hereby deleted and replaced as
follows:

 

2.1.26      Effect of Warranties. It is hereby agreed and acknowledged by Buyer
that save for the warranties given at Article 2.1.1 ( c) and 2.1.2 no warranties
are given by Seller which relate to Seller or its business

 

9.      Section 3.3(b) of the Agreement is hereby deleted and replaced as
follows:

 

(b)      Payment of Line of Credit with NAT West. Prior to Closing, Buyer shall
pay in full the existing outstanding balance owed by Seller on the line of
credit established with NAT West.

 

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10.    Section 5.1 (a) of the Agreement is hereby deleted and replaced as
follows:

 

  5.1     Seller and the Company’s Indemnity Obligations.

 

(a)       Upon receipt of notice thereof, Seller and the Company shall, jointly
and severally, indemnify, defend, and hold harmless Buyer from any and all
claims, demands, liabilities, damages, deficiencies, losses, obligations, costs
and expenses, including attorney fees and any costs of investigation that Buyer
shall incur or suffer, that arise, result from or relate to: (i) any breach of,
or failure by Seller or the Company to perform any obligations in this Agreement
that remain to be performed by them after the date hereof (which for the
avoidance of doubt shall not include the Representations and Warranties in
Article 2) or in any schedule, certificate, exhibit, or other instrument
furnished or to be furnished by Seller and/or the Company under this Agreement;
and (ii) the employment of any of the Company’s employees which is in violation
of any law, regulation, or ordinance of any Governmental Entity.

 

11.       The following paragraph is hereby added to the Agreement:

 

If Buyer fails to pay when due any payments required under sections 1.2.1, 1.2.3
or 1.2.6 of the Agreement, then Seller, in addition to all other remedies it may
have under the Agreement or in law and equity, shall have the right to terminate
the License Agreement upon 15 calendar days written notice, and the right of
termination shall become effective unless Buyer cures such breach within the 15
calendar day period. Buyer hereby agrees that, upon such termination, all rights
granted to Buyer under the License Agreement shall revert to Seller.

 

12.       The following provision is hereby added to the Agreement:

 

The Buyer agrees that the Company shall continue to provide engineering support
to Seller for all service agreements that Seller currently has in place at terms
as set out in Exhibit C (“Seller Support”).

 

13.       All other provisions of the Agreement shall remain unchanged. 

 

(SIGNATURE PAGE IMMEDIATELY FOLLOWS)

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed
and delivered as of November [   ], 2011.

 

BUYER:   THE COMPANY:       CONSORTEUM HOLDINGS, INC.,   TARSIN, INC., a Nevada
corporation   a Nevada corporation             By: Joseph R. Cellura   By:  
Its:  Chief Executive Officer   Its:  

 

SELLER:       TARSIN (Europe) LTD,   a United Kingdom company           By:    
Its:    

 

[SIGNATURE PAGE TO AMENDMENT NO. 1 TO ACQUISITION AGREEMENT]

 

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Exhibit A

Buyer Assumption of Liabilities 

 

1.At closing of the Agreement Buyer shall assume the liabilities as set out
below from Seller:

 

1.1.Assume all ongoing trading liabilities of Company. This shall include but
not be limited to staff and general overhead costs and any and all third party
charges related to the continued development and use of the software as defined
in Exhibit B.

 

1.2.A list of other creditors as of October 31st 2011 is provided below as
Exhibit A.1 for reference. It is accepted by all parties that through the normal
course of business the names and total amount owed may change and will be
finalized at Closing. It shows how the liabilities will be shared between
Company and Seller at Closing.

 

1.3.Any contracts for third party services related to the use of the licensed
software currently in the name of the Seller. These will either be transferred
to Company or, where this is not possible, be cancelled. Any third party costs
associated with these actions will be paid by Buyer.

 

 

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Exhibit A.1

Outstanding Debt at 31st October 2011 stated in USD

Split Between Company and Seller 

Employees and directors  Total   Company   Seller  salaries JO   198,498  
 198,498       salaries  DB   139,842         139,842  team salaries at 31 oct 
 50,170    50,170       pr tax on accrual   13,576    13,576       SRJ-Beachhead
-salary   132,800         132,800  directors fees   64,000         64,000  gsj
salary   57,200         57,200  srj travel   4,800         4,800  director
travel   3,520         3,520  srj loan   328,000         328,000  line of
credit   126,602    126,602       cg loan   288,000         288,000  Employees
and directors   1,407,008    388,846    1,018,162                  
Non-employees and directors:                payroll taxes on JO accruals,
estimate   20,000    20,000       nevada payroll tax   1,097    1,097      
Company phones   3,200    3,200       Device Anywhere, other   1,660    1,660  
                     Inc. Aged invoices                Rent 916 Southwood 
 35,159    35,159       Ian Burns, patent attorney   7,500         7,500  Right
Scale, cloud   3,500    3,500       Herakles, co-location   4,032    4,032      
MySql, software   2,521    2,521       Rowbotham, cpa USA   750         750    
              Remaining aged invoices   5,378    5,378       chris read 
 11,558         11,558  golin harris   50,264         50,264  us tax   11,559  
 11,559       Josolyn, UK accountants   9,600         9,600  MFG, UK attorney 
 9,600         9,600  Nextel: withholding tax on accrued revenue   13,760       
 13,760  cloud costs, Amazon   5,564         5,564  Motorola related debt:      
         ericcson uk codes   2,400         2,400  Ericsson accrued sms costs 
 19,200         19,200  ericsson invoiced   7,443         7,443  Csoft invoiced
sms costs   37,810         37,810  OpenMarket US sms costs and codes   1,866  
      1,866  OpernMarket invoiced  1,848       1,848                  
Non-employees and directors:   267,268    88,105    179,163                  
Total debt in USD (£1 =$1.6USD)   1,674,276    476,951    1,197,325 

 

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Exhibit B

Software Licensing Agreement,

 

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Exhibit C

Seller Support

 

1.Buyer agrees to provide Seller with the support services detailed below for
those products and contracts in existence with Seller at date of Closing of the
Agreement until such time the Seller no longer requires the service. This
service shall be at no cost to seller except where detailed in Clause 3 below.

 

2.This service relates to Sellers BackUp, Text and SetUp products as currently
in use with Nextel International, Motorola and The Car Phone Warehouse.

 

3.The support service shall include:

3.1.Telephone support

3.2.Analysis of problems and timely provision of fixes to comply with Sellers
contracts with its customers.

3.3.Keeping products current with operating systems and handsets as may be
required from time to time by Sellers customers. If this work is chargeable to
Sellers customer, then buyer shall quote for completing the work in a timely
manner and be promptly reimbursed by Seller when Seller is paid by customer.

3.4.Provide provisioning services to enable software to be installed and
operated by end user. In the case where seller is being reimbursed directly for
any messaging costs, as with Motorola, then Seller will reimburse Buyer for
these costs within ten (10) working days of being reimbursed by customer.

3.5.Provide secure hosting services for any user data to comply with existing
contractual commitments Seller has with its customers.

3.6.Immediately notify Seller of any issues that cannot be resolved through the
support channel.

 

4.If Buyer fails to provide the Seller Support set out above then Seller, in
addition to all other remedies it may have under the Agreement or in law and
equity, shall have the right to terminate the License Agreement upon 15 calendar
days written notice, and the right of termination shall become effective unless
Buyer cures such breach within the 15 calendar day period. Buyer hereby agrees
that, upon such termination, all rights granted to Buyer under the License
Agreement shall revert to Seller.

 

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