SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
Exhibit
2.3
SECOND
AMENDMENT TO
This
Second Amendment to Asset Purchase Agreement (this “Second Amendment”) is made
as of October 31, 2006, by and between ClientLogic Operating Corporation, a
Delaware corporation (“Seller”) and Innotrac Corporation, a Georgia corporation
(“Buyer”).
WHEREAS,
Seller
and Buyer have executed and delivered that certain Asset Purchase Agreement
dated as of September 5, 2006 as amended by the First Amendment to Asset
Purchase Agreement dated as of September 27, 2006 (collectively referred to
as
the “Agreement”);
WHEREAS,
Seller
and Buyer desire to further amend the Agreement as contemplated in this Second
Amendment.
NOW,
THEREFORE,
in
consideration of the foregoing and the agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Article
II - Purchase and Sale; Section 2.06(b)(i) - Payment of Purchase Price is hereby
amended in its entirety to read as follows:
the
sum
of one million dollars ($1,000,000), less the Security Deposit and as further
adjusted pursuant to Section 2.07(b), shall be wired to Xxxxx Xxxxx Xxxx LLC
(“FBT”) as escrow agent pursuant to that certain Escrow Agreement dated as of
October 31, 2006 between Seller, Buyer and FBT at the Closing (the “Initial
Payment”);
2. Article
II - Purchase and Sale; Section 2.06(b)(ii) - Payment of Purchase Price is
hereby amended in its entirety to read as follows:
eight
hundred thousand dollars ($800,000) payable in cash or immediately available
funds on or before
February
28, 2007; and
3. A
new
Section 7.11 of the Agreement is hereby added to read in its entirety as
follows:
7.11 Payment
of Manhattan License Transfer Fee.
Seller
shall pay $50,000 (the “Manhattan Transfer Fee”) to Buyer for the costs and
expenses incurred with the assignment and transfer to Buyer of the Software
License, Services and Maintenance Agreement dated as of February 1, 2000, as
subsequently amended, between Seller and Manhattan Associates, Inc. The
Manhattan Transfer Fee shall be subtracted from the Earnout Payment due to
Seller the first month of the Earnout Period; provided, however, if the initial
Earnout Payment does not cover such fee, any difference shall be subtracted
from
subsequent months until the Manhattan Transfer Fee is paid in full.
4. A
new
Section 7.12 of the Agreement is hereby added to read in its entirety as
follows:
7.12 Payment
of CYBRA License Transfer Fee.
At the
Closing or as soon as commercially reasonable thereafter, Seller shall pay
$3,854 (the “CYBRA Transfer Fee”) to CYBRA Corp. (“CYBRA”) for the costs and
expenses incurred with the assignment and transfer to Buyer of the Software
License Agreement dated as of March 18, 2002 and the Support Agreement for
Magic
Xxxx dated February 18, 2002, each between Seller and CYBRA.
5. A
new
Section 7.13 of the Agreement is hereby added to read in its entirety as
follows:
7.13 Loss
of Existing Customer Business.
In the
event, subsequent to the Closing Date but prior to August 1, 2007 and provided
compliance by Buyer with the Buyer Covenants (as hereinafter defined), Supply
Chain Alliance, Inc. (“SCA”) discontinues the SCA Existing Customer Contract or
does not renew the SCA Existing Customer Contract with Buyer due to the award
of
the Purchased Business related to Cisco (the “Cisco Business”) to an entity
other than SCA or Buyer pursuant to the Cisco Request for Proposal, Seller
shall
pay to Buyer $400,000 (the “SCA Payment”). Buyer shall use commercially
reasonable efforts to maintain the SCA business, comply with the terms and
conditions of the SCA Existing Customer Contract and to otherwise be awarded
the
Cisco Request for Proposal (collectively, the “Buyer Covenants”).
Notwithstanding the foregoing, the SCA Payment shall not be payable if Buyer
enters into any new contract or agreement relating to the Cisco Business with
SCA or Cisco. The SCA Payment, if any, shall be subtracted from the Earnout
Payments owed to Seller beginning with the first month of the Earnout Period;
provided, however, Buyer shall not be able to deduct more than $80,000 per
month
from the monthly Earnout Payments. If at the end of the Earnout Period, the
Earnout Payments were not enough to pay the full amount of the SCA Payment,
any
remaining balance of the SCA Payment shall be discharged or otherwise forgiven
by Buyer and shall no longer be an obligation of Seller.
6. Except
as
otherwise provided in this Second Amendment, the terms and conditions of the
Agreement shall remain in full force and effect.
[Signature
Page to Follow]
IN
WITNESS WHEREOF,
the
parties have executed this Second Amendment through their duly authorized
signatories as of the date first set forth above.
INNOTRAC CORPORATION | CLIENTLOGIC OPERATING CORPORATION | |||
By | /s/ Xxxxx X. Xxxxxxx | By | /s/ Xxxxxx X. Xxxxxxxx | |
|
|
Name: Xxxxx X. Xxxxxxx | Name: Xxxxxx X. Xxxxxxxx | |||
Title: President and Chief Executive Officer | Title: Executive Vice President |