Exhibit 2.5
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT dated as of
February 6, 1998 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 amended by the First Amendment to Asset Purchase Agreement dated
as of July 18, 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.
Since the Closing Date, XLConnect Services, Inc. has been merged
into XLConnect Systems, Inc. and XLConnect Systems, Inc. is the successor
thereto for all purposes of 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, hereby amended as follows:
(i) Section 3.01(c), is amended to read in full as follows:
(c) Post-Closing Adjustment to Closing Payment. The parties
hereto agree that, they have resolved all objections and disagreements
respecting determination of the Closing Date Balance Sheet and that based
on the unaudited combined statement of assets and liabilities of the
Business as of the Closing Date (the "Closing Date Balance Sheet"), Sellers
and Shareholder, jointly and severally, agree to repay to Buyer an amount
equal to $4,351,000 (the "Post-Closing Adjustment). The Post-Closing
Adjustment shall be made by Sellers and Shareholder by wire transfer to the
Buyer on the date of execution of this Second Amendment. The parties
acknowledge that the Closing Date Balance Sheet shall be final and binding
for purposes of determining the Purchase Price and the line items covered
thereby shall not be considered matters subject to or providing the basis
for indemnification pursuant to Section 8.03 of the Agreement except to the
extent otherwise provided in Section 5(A)(b) hereof.
(ii) Section 8.10(a), Collection of Receivables, is hereby
amended by amending the last two sentences thereof to read in full as
follows:
Buyer has assigned to Seller Receivables acquired by Buyer on the Closing
Date that remained uncollected on November 15, 1997 pursuant to that
certain Assignment Agreement dated as of December 12, 1997. XLSource
agrees to pay to Buyer an amount equal to $14,120,000 in consideration of
such assignment. Such amount shall be paid by XLSource on the date of
execution of this Second Amendment by wire transfer from the Escrow Account
of $13,822,309.63 (constituting the entire principal amount thereof
together with interest accrued thereon to and including February 5, 1998)
and wire transfer of the balance thereof ($297,690.37). Buyer acknowledges
and agrees that it shall have no other right or claim of any nature against
XLSource, the other Sellers or Shareholder in any manner arising out of or
based upon the Receivables except to the extent otherwise provided in
Section 5(A)(b) hereof.
SECTION 2. Reduction of Purchase Price. The parties hereto agree
that the payments to Buyer set forth in Section 1 of this Second Amendment
shall constitute a reduction in the Purchase Price equal to the aggregate
amount of such payments.
SECTION 3. Instructions to Escrow Agent. XLSource and Buyer
hereby jointly instruct the Escrow Agent to disburse to Buyer on or
promptly following the date of execution of this Second Amendment, the
entire amount held by the Escrow Agent in the XLSource Escrow Account
pursuant to the Escrow Agreement dated as of July 18, 1997 among XLSource,
Buyer and the Escrow Agent (the "Escrow Agreement"). After February 5,
1998, all interest accruing on the amounts held pursuant to the Escrow
Agreement shall be deemed income earned by and allocable to Buyer.
XLSource shall pay to Buyer by wire transfer on the date of execution of
this Second Amendment an amount equal to the amount of any such interest
that has been paid by the Escrow Agent to XLSource.
SECTION 4. Payment for Transition Services. Buyer agrees to pay
to XLSource, on the date of execution of this Second Amendment, $50,000 in
full payment for all transitional services provided by Sellers, Shareholder
and XLConnect to Buyer pursuant to the Transitional Services Agreement.
Buyer shall pay such amount by check payable to XLSource or at the option
of XLSource, XLSource may reduce the payment to Buyer pursuant to Section
1(i) of this Second Amendment by the amount of $50,000.
SECTION 5. Mutual Releases. Buyer hereby releases and
discharges each other party hereto and each such other party's
administrators, successors and assigns, and Sellers, Shareholders and
XLConnect hereby release and discharge Buyer and the GECITS Entities and
their administrators, successors and assigns, in each case, from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
promises, damages, judgments, executions, claims and demands whatsoever, in
law or equity, which any such party may have against any other such party
arising out of or with respect to the Agreement and relating to a time on
or prior to the date hereof; provided, however, that such release shall not
apply to and (A) the Buyer does not make any such discharge or release (a)
with respect to amounts owed by Sellers, Shareholder or XLConnect to Buyer
(x) as facilities usage charges which are due to Buyer and unpaid on the
date hereof, (y) for services provided by Buyer or the GECITS Entities to
Sellers, Shareholder, XLConnect or Hewlett-Packard Company with respect to
the arrangements referred to as WCUP and (b) with respect to the inaccuracy
of incompleteness of any representation or warranty made by the Sellers or
the Shareholder and not known to Buyer on the date hereof, (B) Sellers and
Shareholder do not make any such discharge or release (a) with respect to
amounts payable by GECITS for a certain golf outing marketing event held at
the Oakmont Country Club, (b) with respect to amounts payable by GECITS for
services provided at GECITS' or an XLS Transferred Customers' request after
the Closing Date by XLConnect to such SLS Transferred Customers which
either were billed by GECITS or billed by XLConnect but paid to GECITS, (c)
with respect to the Assignment Agreement dated as of December 12, 1997 and
(d) any outstanding accounts receivable payable by any GECITS Entities for
services or products provided by Sellers or Shareholder prior to the date
hereof and (C) neither Buyer nor Sellers or Shareholder release the
collecting or receiving party in respect of claims based on any collection
of or receipt of payment on any Receivables or accounts receivable by the
wrong entity.
Notwithstanding the foregoing, except as specifically provided in this
Section 5, this Second Amendment shall not be construed to release any
party from its obligations under, or terminate the obligations of any party
to, the Agreement, including, without limitations the obligations of the
parties hereto with respect to the non-competition provisions of the
Agreement.
SECTION 6. Reference to and Effect on the Agreement. (a) 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) Except as specifically provided in Section 4 hereof, the
execution, delivery and effectiveness of this Second 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 7. Governing Law. This Second Amendment shall be
governed by and construed in accordance with the laws of the Commonwealth
of Pennsylvania.
SECTION 8. Headings. Section headings in this Second Amendment
are included herein for convenience of reference only and shall not
constitute a part of this Second Amendment for any other purpose.
SECTION 9. Counterparts. This Second 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 Second
Amendment by signing any such counterpart.
SECTION 10. Entire Agreement. The Agreement, as amended by this
Second Amendment, supersedes all prior agreements, arrangements and
understandings relating to the subject matter of this Second Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Second
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
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Name: Xxxxxx X. Xxxx
Title: Chairman of the Board and President
THE FUTURE NOW, INC.,
as Seller
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Vice President
XLSOURCE, INC.,
as Seller
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Vice President
E-C COMPUTER TECHNICAL SERVICES, INC.,
as Seller
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Vice President
RCK COMPUTERS, INC.,
as Seller
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Vice President
INTELLIGENT ELECTRONICS, INC., as Shareholder
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Vice President
XLCONNECT SOLUTIONS, INC. and XLCONNECT SYSTEMS,
INC., each hereby agrees to Section 4 and Section 5
hereof.
XLCONNECT SOLUTIONS, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
XLCONNECT SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
