Exhibit 2.8
AMENDMENT NO. 2 TO
ITC AND HUNTINGTON GROUP ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 TO THE ITC and HUNTINGTON ASSET PURCHASE
AGREEMENT ("Amendment No 2") is made as of __________, 2000, by and among Xxxx,
Xxxxxx & Associates, Inc., a Delaware corporation ("Xxxx Xxxxxx"), Interactive
Acquisition Corporation and Huntington Acquisition Corporation, each a Delaware
Corporation and wholly-owned subsidiary of Xxxx Xxxxxx (the "Purchasers"),
Interactive Technology Consultants, LLC, and Huntington Group LLC, Connecticut
limited liability companies ("ITC" "HG" or the "Sellers"), and Xxxxxxx Xxxxxxx
and Xxxxx Vacheron Alexander, individuals (each, a Member, and collectively, the
"Members").
R E C I T A L S
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WHEREAS, Xxxx Xxxxxx, the Purchasers, the Sellers and the Members (
and in the case of ITC Xxxx Xxxxxx who is no longer a member of ITC and is not
Party to this Amendment 2) entered into those certain ITC and HG Asset Purchase
Agreements, each dated as of November 18, 1998, and each respectively amended as
of September 15, 1999 (the "Existing Agreements");
WHEREAS, pursuant to Section 9.6 of the Existing Agreements, the
Agreement may not be amended except by a writing executed by the parties
thereto; and
WHEREAS, each of the parties thereto desires to amend the Existing
Agreements in this global second amendment to provide for a modification to the
earn-out provision.
NOW, THEREFORE, in consideration of the promises and conditions
contained herein, the parties hereby agree as follows:
1. Section 3.5 of the Agreement be, and it hereby is, amended and
restated to read in full as follows:
3.5 Earn-Out Payments.
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(a) Subject to offset pursuant to the indemnification provisions
set forth in Article 8 hereof, Purchaser shall pay to ITC and Huntington up
to an aggregate amount of Three Million Six Hundred Thousand Dollars
($3,600,000) in cash, payable by check or wire transfer in three (3)
payments (collectively, the "Earnout Payments"), based upon the achievement
of certain milestones over a three (3) year period ending October 31, 2001
(the "Earnout Period") as follows:
(i) The subsequent payment corresponding to the First Year
Period (the "First Earnout Payment"), shall be equal to six hundred
thousand dollars ($600,000). The date of the First Earnout Payment
shall not be later than
January 31, 2000, or within ten (10) days after any dispute under
Section 3.7 is finally resolved, whichever is later.
(ii) The subsequent payment corresponding to the Second Year
Period (the "Second Earnout Payment"), shall be the Maximum Earnout
Payment for the Second Year Period (i.e. $1,600,000), provided that
the Second Year Achieved Revenue is greater than or equal to the
Second Year Target Revenue. If the Second Year Achieved Revenue is
less than the sum of First Year Achieved Revenue plus the product that
results from multiplying First Year Achieved Revenue by .20, then the
Second Earnout Payment shall be equal to zero. However, if the Second
Year Achieved Revenue is greater than or equal to the sum of First
Year Achieved Revenue plus the product that results from multiplying
First Year Achieved Revenue by .20, but less than the Second Year
Target Revenue, then the Second Earnout Payment shall be calculated by
multiplying the Maximum Earnout Payment for the Second Year Period by
the Second Year Factor. In addition, if Second Year Achieved EBIT for
ITC is greater than or equal to $950,000 (the Second Year Target EBIT
for ITC), then an additional one hundred thousand dollars ($100,000)
shall be payable to ITC. If Second Year Achieved EBIT for ITC is less
than $855,000 (which number represents an amount that is equal to .90
multiplied by the Second Year Target EBIT for ITC), then ITC will not
be entitled to any additional amounts. However, if Second Year
Achieved EBIT for ITC is greater than or equal to $855,000 (which
number represents an amount that is equal to .90 multiplied by the
Second Year Target EBIT), but less than $950,000 (the Second Year
Target EBIT for ITC), then the amount ITC will be entitled to receive
shall be a pro-rata amount, calculated by multiplying (A) the product
that results from dividing Second Year Achieved EBIT for ITC by
$950,000 (Second Year Target EBIT for ITC) by, (B) $100,000. If Second
Year Achieved EBIT for Huntington is greater than or equal to $675,000
(the Second Year Target EBIT for Huntington) an additional one hundred
thousand dollars ($100,000) shall be made payable to Huntington. If
Second Year Achieved EBIT for Huntington is less than $607,500 (which
number represents an amount that is equal to .90 multiplied by the
Second Year Target EBIT for Huntington), then Huntington will not be
entitled to any additional amounts. However, if Second Year Achieved
EBIT for Huntington is greater than or equal to $607,500 (which number
represents an amount that is equal to .90 multiplied by the Second
Year Target EBIT for Huntington), but less than $607,500 (the Second
Year Target EBIT for Huntington), then the amount Huntington will be
entitled to receive shall be a pro-rata amount, calculated by
multiplying (A) the product that results from dividing Second Year
Achieved EBIT for Huntington by $675,000 (Second Year Target EBIT for
Huntington) by, (B) $100,000. For purposes of this Amendment, EBIT
shall mean earnings before interest and taxes, less Bad Debt or
refunds. EBIT shall not include any costs incurred by Xxxx Xxxxxx in
support of either ITC or Huntington, unless they are incurred at ITC
or Huntington's request. Bad Debt shall mean any account receivable
that has not been collected within 120 days after it is due and that
Xxxx Xxxxxx has deemed to be uncollectible and/or any customer revenue
adjustment. The date of the Second Earnout Payment, if any, shall not
be later than
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January 31, 2001, or within ten (10) days after any dispute under
Section 3.7 is finally resolved, whichever is later.
(iii) The subsequent payment corresponding to the Third
Year Period (the "Third Earnout Payment"), shall be the Maximum
Earnout Payment for the Third Year Period (i.e. $400,000), provided
that the Third Year Achieved Revenue is greater than or equal to the
Third Year Target Revenue. If the Third Year Achieved Revenue is less
than the sum of Second Year Achieved Revenue plus the product that
results from multiplying Second Year Achieved Revenue by .15, then the
Third Earnout Payment shall be equal to zero. However, if the Third
Year Achieved Revenue is greater than or equal to the sum of Second
Year Achieved Revenue plus the product that results from multiplying
Second Year Achieved Revenue by .15, but less than the Third Year
Target Revenue, then the Third Earnout Payment shall be calculated by
multiplying the Maximum Earnout Payment for the Third Year Period by
the Third Year Factor. In addition, if Third Year Achieved EBIT for
ITC is greater than or equal to $1,550,000 (the Third Year Target EBIT
for ITC), then an additional four hundred thousand dollars ($400,000)
shall be made payable to ITC. If Third Year Achieved EBIT for ITC is
less than $1,395,000 (which number represents an amount that is equal
to .90 multiplied by the Third Year Target EBIT for ITC), then ITC
will not be entitled to any additional amounts. However, if Third Year
Achieved EBIT for ITC is greater than or equal to $1,395,000 (which
number represents an amount that is equal to .90 multiplied by the
Third Year Target EBIT for ITC), but less than $1,550,000 (the Third
Year Target EBIT for ITC), then the amount ITC will be entitled to
receive shall be a pro-rata amount, calculated by multiplying (A) the
product that results from dividing Third Year Achieved EBIT for ITC by
$1,550,000 (Third Year Target EBIT for ITC) by, (B) $400,000. If Third
Year Achieved EBIT for Huntington is greater than or equal to
$1,050,000 (the Third Year Target EBIT for Huntington) an additional
four hundred thousand dollars ($400,000) shall be made payable to
Huntington. If Third Year Achieved EBIT for Huntington is less than
$945,000 (which number represents an amount that is equal to .90
multiplied by the Third Year Target EBIT for Huntington), then
Huntington will not be entitled to any additional amounts. However, if
Third Year Achieved EBIT for Huntington is greater than or equal to
$1,050,000 (which number represents an amount that is equal to .90
multiplied by the Third Year Target EBIT for Huntington), but less
than $1,050,000 (the Third Year Target EBIT for Huntington), then the
amount Huntington will be entitled to receive shall be a pro-rata
amount, calculated by multiplying (A) the product that results from
dividing Third Year Achieved EBIT for Huntington by $1,050,000 (Third
Year Target EBIT for Huntington) by, (B) $400,000. The date of the
Third Earnout Payment, if any, shall not be later than January 31,
2002, or within ten (10) days after any dispute under Section 3.7 is
finally resolved, whichever is later.
(b) Earn-Out Payment. Except otherwise set forth herein, 75.56% of
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any Earn Out Payment made hereunder shall be made payable to ITC and the
remaining 24.44% shall be made payable to Huntington.
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2. Miscellaneous.
2.1 Successors and Assigns. Except as otherwise provided herein,
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the terms and conditions of this Amendment shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties.
2.2 Governing Law. This Amendment shall be governed by and
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construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
2.3 Counterparts. This Amendment may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Amendments and Waivers. Any term of this Amendment may be
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amended and the observance of any term of this Amendment may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of each of the parties hereto.
Except as explicitly stated in this Amendment all terms, conditions and
provisions of the existing Amendment remain unchanged by this Amendment.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XXXX, XXXXXX & ASSOCIATES, INC.
By:________________________________________
Xxxx X. Xxxxxxxx
President
Address: China Basin Landing
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
INTERACTIVE ACQUISITION
CORPORATION
By:_______________________________________
Xxxx X. Xxxxxxxx
President
Address: China Basin Landing
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
HUNTINGTON ACQUISITION CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
Address: _______________________________
_______________________________
HUNTINGTON GROUP, LLC
By:______________________________________
Name:____________________________________
Title:___________________________________
Address: _______________________________
_______________________________
INTERACTIVE TECHNOLOGY
CONSULTANTS, LLC
By:______________________________________
Name:____________________________________
Title:___________________________________
Address: 0000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
SIGNATURE PAGE TO AMENDMENT NO. 2 TO ITC AND HUNTINGTON ASSET PURCHASE AGREEMENT
___________________________________________
Xxxxxxx Xxxxxxx
___________________________________________
Xxxxx Vacheron Alexander
SIGNATURE PAGE TO AMENDMENT NO. 2 TO ITC AND HUNTINGTON ASSET PURCHASE AGREEMENT
