Exhibit 2.4
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT dated as of July 18,
1997 is by and among GE Capital Information Technology Solutions
Acquisition Corp., a Delaware corporation ("Buyer"), The Future Now, Inc.,
an Ohio corporation, XLSource, Inc., an Arkansas corporation, E-C Computer
Technical Services, Inc., a Texas corporation, RCK Computers, Inc., a Texas
corporation (The Future Now, Inc., XLSource, Inc., E-C Computer Technical
Services, Inc. and RCK Computers, Inc. are each a "Seller" and,
collectively, the "Sellers") and Intelligent Electronics, Inc., a
Pennsylvania corporation and, directly or indirectly, the sole shareholder
of Sellers ("Shareholder").
PRELIMINARY STATEMENT. The Buyer, the Sellers, and the
Shareholder have entered into an Asset Purchase Agreement dated July 1,
1997 (as modified, amended or supplemented from time to time, the
"Agreement"). Any term used herein and not otherwise defined herein shall
have the meaning assigned to such term in the Agreement.
Each of the parties hereto have agreed to amend the Agreement as
hereinafter set forth.
SECTION 1. Amendments to Agreement. The Agreement is, effective
as of the date hereof and subject to the satisfaction of the conditions
precedent set forth in Section 2 hereof, hereby amended as follows:
(1) Section 3.01, Purchase Price, is amended to delete the first
paragraph thereof and replace it with the following:
(a) The purchase price to be paid by Buyer for the Purchased
Assets and the assumption of the obligations of Sellers under the
Assigned Agreements and the assumption of the Assumed Liabilities (the
"Purchase Price") shall be an amount equal to the sum of
$94,240,000.00 (Ninety-Four Million Two Hundred Forty Thousand
Dollars), the sum of the Net Assets Acquired as of May 3, 1997 (except
that Inventory and Receivables are as of June 30, 1997 with respect to
E-C Computer Technical Services, Inc. and RCK Computers, Inc. and as
of July 11, 1997 with respect to the rest of the Business) as set
forth on Exhibit 3.01(a)(1), and $41,500,000.00 (Forty-One Million
Five Hundred Thousand Dollars) (the "Closing Payment"), as adjusted
pursuant to Section 3.01(c) plus, the purchase price of any Fixed
Assets acquired in accordance with Section 8.01(m). All payments in
respect of the Purchase Price shall be allocated in accordance with
the allocation of the Purchase Price as set forth on Exhibit
3.01(a)(2).
(2) Section 3.01, Purchase Price, is further amended by (a)
deleting "$126,116,000 (One Hundred Twenty-Six Million Five Hundred
Thousand Dollars)" in the first and second lines of clause (b)(i) thereof
and inserting in its place the following: "$102,454,000.00 (One Hundred
and Two Million Four Hundred and Fifty-Four Thousand Dollars)" and (b)
changing "$10,000,000" in the first line of clause (b)(ii) thereof to
"$32,813,000.00".
(3) Section 8.03(b), Shareholder's and Sellers' Agreement to
Indemnify, is hereby amended to replace the word "and" immediately
preceding the "(vi)" with a comma and to insert the following at the end of
such section:
"and (vii) any failure by Shareholder or Sellers to obtain the
consent of any third party to the assignment of any Assigned Agreement to
Buyer."
(4) Section 8.03 is hereby amended to add at the end thereof the
following:
(g) Third Party Consents. Each of Buyer, Sellers and
Shareholder shall, and Sellers and Shareholder shall cause XLConnect
to, use its reasonable commercial efforts following the Closing Date
to obtain any consents to the assignment of the Assigned Agreements
which consents have not been obtained at the Closing Date.
(5) Section 8.07, Non-Competition; Non-Solicitation, is hereby
amended as follows:
(i) Section 8.07(a)(i) is hereby amended to change the words "Exhibit
8.07(a)" to the words "Exhibit 8.07(a)(i)";
(ii) Section 8.07(b)(i) is hereby amended to change the words
"Exhibit 8.07(a)" to the words "Exhibit 8.07(a)(ii)"; and
(iii) A new Section 8.07(d) is hereby added at the end thereof, as
follows:
(d) Notwithstanding the provisions of Section 8.07(a)(i) and
Section 8.07(b)(i) hereof, none of the restrictions contained in such
Sections shall apply with respect to any XLS Transferred Customer
historically serviced by XLSource or XLConnect from the Brookfield,
Wisconsin location or any XLS Transferred/XLC Customer historically
serviced by XLSource from the Brookfield, Wisconsin location.
(6) Attachment A, Definitions, is hereby amended as follows:
(i) The definition of "Other Sites" is hereby amended to delete the
reference to the Clayton, Missouri site in (xiii) thereof;
(ii) The definition of "XLS Transferred/XLC Customer" is hereby
amended to read in full as follows:
"XLS Transferred/XLC Customer" shall refer to any XLConnect
customer listed on Exhibit 1 hereto to whom XLConnect provided
Computer Services with revenues in excess of $25,000 and Sellers
received product revenues in excess of $100,000 during the first six
months of 1997 on an annualized basis.
(iii) The definition of "XLC Common Customer" is hereby amended to
read in full as follows:
"XLC Common Customer" shall refer to any customer who is both an
XLS Transferred/XLC Customer and a customer to whom any GECITS
Entities provided Computer Services with revenues in excess of $25,000
or more during the first six months of 1997 on an annualized basis.
(7) Exhibit 5.01(d)(1)(D), Intangibles, is hereby amended (a) to
add the names "E-C Computer Technical Services, Inc." and "RCK Computers,
Inc" and (b) to add the Intellectual Property listed below:
Access to all network information relating to XLS Transferred
Customers and customers party to a Power-by-the-Hour Agreement
regarding special Logins, Login Scripts, Drive Mappings, Boot Disks,
Menuing systems, etc. but not to such tools themselves.
Access to special tagging, stickers, database's, spreadsheet's (asset
& other) used for order for XLS Transferred Customers and customers
party to a Power-by-the Hour Agreement including IP addresses, etc.
but not to such tools themselves.
All customer owned product, including hardware, software, templates,
and instructions.
All CD Master and Duplicate Images, both current and old.
A copy of all CD and other media backup for all Intellectual
Properties acquired by Buyer pursuant to the Agreement.
Access to all custom modified disks pertaining to the integration of
product for the Acquired Sites and the Other Sites but not to such
tools themselves.
Access to complete Promus Hotel integration instructions but not to
such tools themselves.
Access to instructions that include referencing ISO procedures but not
to such tools themselves.
Explanation of standard tools and disks used in the Business.
(8) Exhibit 8.07(a), E-C Computer Technical Services, Inc. and
RCK Computers, Inc. Customers, is hereby amended to change its name to
"Exhibit 8.07(a)(i), E-C Computer Technical Services, Inc. and RCK
Computers, Inc. Customers to whom XLConnect will not Provide Computer
Services".
(9) Exhibit 8.07(a)(ii) is hereby added to the Agreement and
shall read in full as follows:
E-C Computer Technical Services, Inc. and RCK Computers, Inc.
Customers
All customers listed on Exhibit 8.07(a)(i).
Altra Energy IMCON
Amoco Gas Xxx Consulting
ANR Pipeline Xxxxx
Boerne ISD Kinetic Concepts
Xxxxx & Root, Inc. Life Tabernacle
Xxxxxxx X. Street Living Centers of America
CHC XX Xxxxxxx
Coastal Corporation NATCO
Continental Airlines PanEnergy
Xxxxxx Xxxxxxx Xxxx Xxxxxxx
Elf Atochem Pennzoil
Equitable Resources Xxxxxx Xxxxxx
Georgia Gulf SGS
Global Procurement Shell Services
Grinneil Fire Protection St. Xxxxxxx Xxxxxxx
H&H Dental Texas Commerce Bank
Houston Cellular Xxx Xxxxxx
Houston Police Dept. Velvet Air
(10) Exhibit 8.07(d), XLS Transferred/XLC Customers and Exhibit
8.07(f), XLC Common Customers, from and after the Closing Date, are deleted
in their entirety from the Agreement.
(11) Each reference to "GE Information Technology Solutions
Acquisition Corp." in the Agreement shall be deemed to be a reference to
the following: "GE Capital Information Technology Solutions Acquisition
Corp."
SECTION 2. Delivery of Lists of XLS Transferred/XLC Customers
and XLC Common Customers. (a) Sellers, Shareholders and XLConnect agree
to deliver to Buyer on or before July 22, 1997 a true and correct list of
the XLS Transferred/XLC Customers.
(b) Buyer agrees to deliver to XLSource on or before the date 20
business days following Buyer's receipt of the list of XLS Transferred/XLC
Customers a true and correct list of the XLC Common Customers.
(c) Each of Sellers, Shareholders, XLConnect and Buyer agree that
until the date Buyer delivers the list of XLC Common Customers to XLSource
it will not expand its provision of Computer Services to the customers
listed on Exhibit 1.
SECTION 3. Certain Severance Payments. Sellers and Shareholders
agree to reimburse Buyer or any GECITS Entity for all severance payments
(but not in excess of the severance payments that such Transferred
Employees would have received if they had been terminated by Sellers,
Shareholder or XLConnect on the Closing Date) made to the first ten
Transferred Employees whose employment is terminated by Buyer or such
GECITS Entity during the 60 days following the Closing Date. Buyer shall
request such reimbursement in writing addressed to XLSource which request
shall provide the names and amounts of the severance payments made for
which reimbursement is requested. Sellers and Shareholders shall make such
reimbursement within 10 days following receipt of any such request.
SECTION 4. Availability of Certain Employees. Each of Buyer,
Sellers and Shareholder acknowledge and agree that Xxxx Xxxxxx, Xxxx
Xxxxxxxx and Xxxx Xxxx presently perform certain management and support
services with respect to the Oracle software being acquired by Buyer. Xxxx
Xxxxxxxx and Xxxx Xxxx are Transferred Employees. Buyer shall use its best
efforts to make available to Sellers and Shareholder at least 10% of Xxxx
Xxxxxxxx'x and Xxxx Xxxx'x time during regular business hours for the first
150 days following the Closing Date to perform duties presently performed
by such personnel. Sellers and Shareholder shall use their best efforts to
make available to Buyer and the GECITS Entities at least 90% of the Xxxx
Xxxxxx'x time during regular business hours for the first 150 days
following the Closing Date to perform duties presently performed by such
personnel in connection with the Business. Following such 150 days, Xxxx
Xxxxxx shall become a Transferred Employee.
SECTION 5. Un-Wind with Respect to Certain Assigned Agreements.
With respect to the Assigned Agreement with each of Computer Services
Corporation ("CSC") and Promus Hotels, Inc. ("Promus"), certain amounts
have been deposited pursuant to the Escrow Agreement pending receipt of all
necessary consents to the assignment thereof to Buyer. Buyer, Sellers and
Shareholder agree that with respect to any such Assigned Agreement, if such
consents to the assignment thereof are not received on or before the date
10 business days following the Closing Date, as promptly as practicable, to
un-wind the purchase of such Assigned Agreements and the related Purchased
Assets, including, without limitation, taking the following actions: (a)
Buyer shall reassign such Assigned Agreement and the Receivables related
thereto to XLSource, (b) Sellers and Shareholders shall purchase any
accounts receivables related to such Assigned Agreement arising after the
Closing Date from Buyer for a purchase price equal to the recorded amount
thereof on Buyer's or any GECITS Entity's books, (c) XLSource shall hire
the Transferred Employees servicing such accounts and (d) Sellers and
Shareholders shall pay to Buyer an amount equal to the difference between
(x) the portion of the Purchase Price allocable to such Assigned Agreements
and the related Purchased Assets, including without limitation, with
respect to CSC, 17.45% of the purchase price premium ($41,500,000) and with
respect to Promus, 2.1% of such premium) less (y) the sum of the amount
distributed to Buyer pursuant to the Escrow Agreement with respect to such
Assigned Agreement and the amount of any Receivables related to such
Assigned Agreement collected by Buyer, if such difference is positive and
Buyer shall pay an amount equal to such difference to XLSource, if such
difference is negative.
SECTION 6. Subsequent Assignment of WCUP. With respect to the
Subcontract Agreement dated January 1, 1995 with Hewlett-Packard Company
("WCUP") Buyer, Sellers and Shareholder agree that if consent to the
assignment thereof is received on or before the date 10 business days
following the Closing Date, as promptly as practicable: (a) Buyer shall
assign such Subcontract Agreement and the Receivables related thereto to
Buyer and from and after such assignment, such Subcontract Agreement shall
constitute an Assigned Agreement, (b) Buyer, Sellers, Shareholders and
XLConnect shall release and deliver the WCUP Services Agreement that has
been executed on the Closing Date, (c) Buyer shall purchase such
Subcontract Agreement and any related Purchased Assets for a purchase price
of $525,000 and (d) Buyer shall provide XLSource with reasonable access to
the server servicing such account for up to 90 days following the date of
such assignment during normal business hours in a manner that is not
disruptive of Buyer's or any other GECITS Entity's business.
SECTION 7. Purchase of Fixed Assets at Other Sites. On or
before the date 20 business days following the Closing Date, Buyer shall
notify XLSource of any Fixed Assets located at the Other Sites which Buyer
desires to purchase. Such Fixed Assets shall be purchased at a purchase
price equal to the net book value thereof on Sellers' or Shareholder's
books. Payment of the purchase price therefor shall be included in the
Post-Closing Adjustment.
SECTION 8. Oracle-Related Assets. Buyer agrees that XLConnect
shall have the right to obtain and use copies of all data in the Oracle
System acquired by Buyer as part of the Business and any proprietary
software developed for use with such Oracle System.
SECTION 9. Time of Closing. Buyer, Sellers and Shareholders
agree that the Closing hereunder shall have occurred at 8:00 A.M. on July
18, 1997.
SECTION 10. Condition of Effectiveness. This First Amendment
shall become effective as of the date on which each of the parties hereto
shall each executed and delivered this First Amendment.
SECTION 11. Reference to and Effect on the Agreement. (a) Upon
the effectiveness of Section 1 hereof, on and after the date hereof each
reference in the Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference in the documents
delivered in connection therewith, shall mean and be a reference to the
Agreement as amended hereby.
(b) The execution, delivery and effectiveness of this First
Amendment shall not operate as a waiver of any right, power or remedy of
any party to the Agreement, nor constitute a waiver of any provision of the
Agreement, and, except as specifically provided herein, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed.
SECTION 12. Governing Law. This First Amendment shall be
governed by and construed in accordance with the laws of the Commonwealth
of Pennsylvania.
SECTION 13. Headings. Section headings in this First Amendment
are included herein for convenience of reference only and shall not
constitute a part of this First Amendment for any other purpose.
SECTION 14. Counterparts. This First Amendment may be executed
in any number of counterparts, all of which taken together shall constitute
one and the same instrument, and any party hereto may execute this First
Amendment by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed as of the day and year first above written.
GE INFORMATION TECHNOLOGY SOLUTIONS ACQUISITION
CORP., as Buyer
By: /s/ Xxxxxx X. Xxxx
---------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Chairman of the Board and President
THE FUTURE NOW, INC.,
as Seller
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President, Secretary and Treasurer
XLSOURCE, INC.,
as Seller
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President, Secretary and Treasurer
E-C COMPUTER TECHNICAL SERVICES, INC.,
as Seller
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President, Secretary and Treasurer
RCK COMPUTERS, INC.,
as Seller
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
INTELLIGENT ELECTRONICS, INC., as Shareholder
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Secretary
XLCONNECT SOLUTIONS, INC. XLCONNECT
SERVICES, INC. and XLCONNECT SYSTEMS,
INC., each hereby agrees to and accepts
its obligations under Section 2 hereof.
XLCONNECT SOLUTIONS, INC.
By: /s/ M. Xxxxxxx Xxxxxx
------------------------------------------
Name: M. Xxxxxxx Xxxxxx
Title: Vice President
XLCONNECT SERVICES, INC.
By: /s/ M. Xxxxxxx Xxxxxx
------------------------------------------
Name: M. Xxxxxxx Xxxxxx
Title: Vice President
XLCONNECT SYSTEMS, INC.
By: /s/ M. Xxxxxxx Xxxxxx
------------------------------------------
Name: M. Xxxxxxx Xxxxxx
Title: Vice President
