Second Amendment to Asset Purchase Agreement between Olivotto Glass Technologies S.p.A. and Lynch Systems, Inc.

 Exhibit 10.1 SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Second Amendment"), dated as of May 31, 2007, by and between OLIVOTTO GLASS TECHNOLOGIES S.P.A., an Italian corporation ("Buyer"), and LYNCH SYSTEMS, INC., a South Dakota corporation ("Seller"). W I T N E S S E T H: WHEREAS, the Buyer and the Seller entered into that certain Asset Purchase Agreement dated as of May 17, 2007, as amended by First Amendment to Asset Purchase Agreement dated May 22, 2007 (as so amended, the "Agreement"), and desire to enter into this Second Amendment in order to make additional amendments to the Agreement; WHEREAS, pursuant to Section 11.3 of the Agreement, Buyer has assigned and delegated, and Lynch Technologies LLC, a Delaware limited liability company wholly owned by Buyer ("Assignee"), has accepted and assumed, Buyer's rights and obligations under the Agreement, including without limitation the payment of the Closing Payment; NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I. AMENDMENTS 1.1 Capitalized terms used in the Second Amendment but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Agreement. 1.2 For the purpose of calculating the Purchase Price and the Closing Payment, items of Inventory first received by Seller on or after May 31, 2007 ("Transition Inventory") shall be valued at 100% of Book Value only if (i) such Transition Inventory relates to open purchase orders existing on the date hereof listed on Schedule 1.2 annexed hereto as approved by Buyer or (ii) such Transition Inventory relates to new customer orders received subsequent to May 31, 2007 approved by Buyer in writing. In all other cases, such Transition Inventory shall be valued in accordance with Schedule 3.4(a) (as amended by this Second Amendment) for purposes of calculating the Purchase Price and the Closing Payment. 1.3 Effective as of the date hereof Section 9.1(e) of the Agreement is amended and restated to read in full as follows: "(e) by either Buyer or Seller if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply in all material respects with its obligations under this Agreement) on or before June 18, 2007;" 1.4 Effective as of the date hereof Section 7.1(b) of the Agreement is amended and restated to read in full as follows:  "(b) Executed counterparts of Assignments and Assumptions of the Permits, the Personal Property Leases and the Contracts which include the written consents of all parties (including the consent of Emhart Glass S.A. but excluding that of The Eldrid Company, Inc.) necessary in order to duly transfer all of Seller's rights thereunder to Buyer, in the form of Exhibit C hereto (the "Assignments and Assumptions")." 1.5 The last paragraph of Section 1.1 is hereby amended and restated in its entirety as follows: Notwithstanding the foregoing, there shall be excluded from the Property the following assets and properties of Seller related to or used in connection with the Business: (i) all cash and cash equivalents; (ii) all tax refunds of any kind paid or payable to Seller; (iii) all assets listed on Schedule 1.1(l), (iv) all accounts receivable from Hind Glass, Bouteillerie and PT Kedaung, the gearless tablewear shear, the show machine and that certain used machine presently in India which Buyer has received in partial payment from Advanced Lamp Component & Tablewares (the "Used Machine"); (v) the real property of Seller identified on Schedule 1.1(m) (the "Real Property"); (vi) all corporate minute books, stock records, tax returns, checkbooks, books of original entry and bank statements and supporting materials of Seller for all periods, all of which shall be subject to Buyer's right to inspect and copy; (vii) all insurance policies; (viii) all claims, causes of and choses in action of any sort that Seller may have, including, without limitation, under any of Seller's insurance policies, against any of the officers, directors and/or shareholders of Seller and/or the parents, spouses and lineal descendants of any such persons; (ix) rights of set-off, counterclaim and/or recoupment respecting any liabilities or obligations of Seller not included within the Assumed Liabilities (as hereinafter defined); and (x) the Closing Payment (as hereinafter defined); and (xi) all rights in and to the name "Lynch" for all uses other than in connection with the products manufactured in the Business on the Closing Date. 1.6 Section 3.6 is hereby amended and restated in its entirety as follows: "SECTION 3.6 CONSIGNMENT OF CERTAIN ITEMS. (a) For a period of eighteen (18) months following the Closing Date the gearless tablewear shear and the show machine (the "Consigned Items") shall be held on consignment by Buyer. If Buyer  receives any offers to purchase any of the Consigned Items from a third party during such eighteen-month period Buyer shall promptly notify Seller and if Seller accepts such offered terms the proceeds of such sale shall be shared equally between Seller and Buyer. If the Consigned Items have not been so sold by the end of such eighteen-month period Buyer shall deliver possession of the Consigned Items to Seller. (b) For a period of twenty-four (24) months following the Closing Date the Used Machine shall be held on consignment by Buyer. If Buyer receives any offers to purchase the Used Machine from a third party during such twenty-four month period Buyer shall promptly notify Seller and if Seller accepts such offered terms the proceeds of such sale shall be delivered promptly to Seller in such form as they were received including any necessary endorsements. If the Used Machine has not been so sold by the end of such twenty-four month period Buyer shall deliver possession of the Used Machine to Seller. 1.7 The Agreement is hereby amended by adding the following new Section 6.13: "SECTION 6.13 COLLECTION OF RECEIVABLES. If after the Closing Date, Seller receives any payments with respect to Receivables, Seller agrees to promptly deliver such payments to the Buyer in the form received, including any necessary endorsements, and in any event within five Business Days to a bank account designated by Buyer by June 22, 2007. Seller agrees to provide Buyer with updates on Tuesday evening of each week regarding Seller's receipt, if any, of payments on the Receivables." 1.8 Schedule 3.4(a) is amended and restated to read in full as annexed hereto. ARTICLE II. MISCELLANEOUS 2.1 COUNTERPARTS. This Second Amendment may be executed by one or more of the parties to this Second Amendment in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 2.2 GOVERNING LAW. This Second Amendment and the rights and obligations of the parties under this Second Amendment shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York without regard to choice of law provisions.  2.3 ENTIRE AGREEMENT. This Second Amendment, together with the Agreement and the other documents and agreements reverenced therein to be executed by the parties concurrently with the Agreement or at the Closing thereunder, constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes any prior agreements or understandings, whether written or oral with respect to such subject matter. [SIGNATURE PAGE FOLLOWS]  IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first written above. BUYER: OLIVOTTO GLASS TECHNOLOGIES S.P.A. By: /s/ Giulio Napoli --------------------- Name: Giulio Napoli Title: President SELLER: LYNCH SYSTEMS, INC. By: /s/ Jeremiah Healy ---------------------- Name: Jeremiah Healy Title: Chairman of the Board of Directors ASSIGNEE: LYNCH TECHNOLOGIES LLC By: /s/ Giulio Napoli ---------------------- Name: Giulio Napoli Title: President