EXHIBIT 10.2
AMENDMENT NO. 1
TO AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1, is made and entered into effective as of this
31st day of July, 2002, by and among Navarre Corporation, a Minnesota
corporation ("Navarre"), Encore Software, Inc., a California corporation
("Seller"), and Encore Acquisition Corporation, a Minnesota corporation,
affiliated with and controlled by Navarre ("Affiliate").
RECITALS:
WHEREAS, Navarre and Seller entered into an Asset Purchase Agreement, dated June
7, 2002 (the "Original Agreement");
WHEREAS, Navarre, Seller and Affiliate thereafter entered into an Amended and
Restated Asset Purchase Agreement, dated July 10, 2002, which amended and
restated Original Agreement in its entirety (the "Restated Agreement"); and
WHEREAS, Navarre, Seller and Affiliate desire to enter into this Amendment of
purposes of amending and clarifying certain provisions of the Restated Agreement
as specified below (as amended hereby, the "Agreement").
NOW, THEREFORE, pursuant to Section 12.5 of the Restated Agreement, and in
consideration of the above recitals, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency and mutuality of which are hereby acknowledged, the parties agree as
follows:
1. DEFINED TERMS. All capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Restated agreement.
2. NAVARRE ASSIGNMENT. As permitted by the Restated Agreement,
all rights, interests and obligations of Navarre under the Agreement are hereby
assigned and transferred to and assumed by the Affiliate, and the term "Buyer"
under the Agreement shall hereafter mean and refer to the Affiliate.
3. NAME CHANGE. Effective as of the Closing or as soon as
practicable hereafter, Seller shall change its corporate legal name to a name
substantially different from "Encore Software, Inc." and Buyer shall change its
legal corporate name to "Encore Software, Inc."
4. REVISED PURCHASE PRICE. Section 2.1 of the Restated Agreement
is hereby restated in its entirety to read as follows:
2.1 PURCHASE PRICE AMOUNT. The Purchase Price
("Purchase Price") to be paid for the Purchased Asset
shall be equal to the sum of the follows:
2.1.1 An amount necessary to assume or
satisfy Seller's debt to Comerica Bank (hereinafter
the "Comerica debt").
2.1.2 One Million and 00/100 Dollars
($1,000,000.00).
2.1.3 Six Hundred Fifty Thousand and 00/100
Dollars $650,000.00), expressly conditioned upon
Buyer receiving Sony's written approval to
manufacture the PS2 version of Dragon's Lair by no
later than October 17, 2002. If such approval is
received on or after October 18, 2002, this component
of the Purchase Price shall be zero.
2.14 An aggregate of $1,450,958.00 to
satisfy the cure payment obligations of Seller listed
below:
These cure payments will be paid by Buyer
directly to the cure payment receipts on terms
specified in the applicable addenda and stipulations
entered into with the cure payment recipients. In
consideration for these payments, certain rights and
assets shall be transferred by the cure payment
receipts to Buyer as provided in the applicable
addenda and stipulations.
5. REVISED TERMS OF PAYMENT. Terms of payment of the Purchase Price
shall be revised as follows:
a. The Comerica debt under Section 2.1.1 shall be
assumed or satisfied by Buyer on the Closing Date
pursuant to documentation separately negotiated and
prepared between Buyer, Navarre and Comerica.
b. The $1,000,000 under Section 2.1.2 shall be paid
(i) $500,000 by distribution to Seller from the
Escrow Account on the Closing date (Navarre, Buyer
and Seller shall deliver written notice to the Escrow
Agent directing it to make distribution of the
$500,000 to Seller and the balance of the Escrow
Account to Navarre) and (ii) $500,000 by the
execution and delivery to Seller by Navarre of a
$500,000 interest-free promissory note due in a
single lump sum payment on January 1, 2003 (if not
paid within ten (10) days from Navarre's receipt of
written notice from Seller of Navarre's failure to
make payments as due, the amount due under
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such note shall include interest at 8% per annum
accrued from August 1, 2002 to the day of payment).
c. The $650,000 under Section 2.1.3 shall be paid by
the execution and delivery to Seller by Navarre of a
$650,000 interest free promissory note due in a
single lump sum payment on April 1, 2003, subject to
the PS2 condition specified in Section 2.1.3 (if not
paid within ten (10) days from Navarre's receipt of
written notice from Seller of Navarre's failure to
make payment as due, the amount due under such note
shall include interest at 8% per annum accrued from
August 1, 2002 to the date of payment).
d. Buyer shall make the cure payments as described in
Section 2.1.4 above.
Sections 3.1, 3.2, 3.3 and 3.4 of the Restated Agreement shall be deemed amended
to the extent inconsistent with the revised payment terms indicated in this
Section above and Section 3.6 is hereby deleted and of no further force and
effect.
6. SELLER PAYMENT RESPONSIBILITIES. Seller acknowledges and reaffirms
its responsibility and covenant to pay all post-bankruptcy petition filing
(March 21, 2002) liabilities of Seller accrued through the Closing.
7. RELEASE. The form of release attached to the Restated Agreement as
Exhibit 9.6 is revised to be as provided on Exhibit 9.6 attached hereto.
8. ACCOUNTANT REVIEW. Following the Closing, Seller shall retain and
pay the independent certified public accounting firm Nigro, Karlin & Segal to
review and confirm the financial statement accruals as of the Closing Date for
the Seller's cash, accounts receivable (excluding Navarre), finished goods
inventory and prepared expense account entries. There shall be no Purchase Price
adjustment or other financial impact as a result of this review.
9. COURT APPROVAL. The obligations of the parties under this Amendment
and the terms of the Amendment are conditioned on Bankruptcy Court approval.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 effective
as of the date and year indicated above.
NAVARRE: BUYER:
Navarre Corporation Encore Acquisition Corporation
By: James G. Gilbertson By: James G. Gilbertson
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Its: Chief Financial Officer Its: Chief Financial Officer
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SELLER:
Encore Software, Inc.
By: Michael Bell
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Its: Chief Executive Officer
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