EXHIBIT 2.1
EXECUTION COPY
FIRST AMENDMENT TO THE
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO THE ASSET PURCHASE AGREEMENT (this
"Amendment"), is dated as of March 31, 2004, by and among General Electric
Capital Corporation, a Delaware corporation ("GE"), IKON Office Solutions,
Inc., an Ohio corporation ("IKON"), in its own capacity and as successor by
merger to IOS Capital, LLC, a Delaware limited liability company ("IOS
Capital"):
RECITALS
WHEREAS, the parties hereto have entered into that certain Asset
Purchase Agreement, dated as of December 10, 2003, by and between GE, IKON and
IOS Capital (the "Purchase Agreement"); and
WHEREAS, the parties hereto desire to amend the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and of
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, and of the mutual covenants and
agreements set forth herein and in the Purchase Agreement, the parties
intending to be legally bound hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have the respective meanings assigned to such terms in the Purchase Agreement.
2. AMENDMENT TO THE PURCHASE AGREEMENT.
(a) Section 2.05 of the Purchase Agreement is hereby amended by
deleting such section in its entirety and replacing it as follows:
Section 2.05. SETTLEMENT PAYMENTS. (a) Without prejudicing in any
manner the rights or obligations of the parties pursuant to Section 5.05
(including the preparation of the Final Adjusted Closing Date Schedule,
the settlement of the Purchase Price in accordance with Section 2.05(b)
and the dispute resolution procedures in respect of the Draft Closing
Statements and the Final Closing Statements in accordance with Section
5.05(a)(iv) and Section 5.05(b)), within two (2) Business Days following
the date of the delivery by the Purchaser of the Interim Balance Sheet
pursuant to Section 5.05(a)(iii), the following amounts shall be paid, by
wire transfer of immediately available funds, to an account designated in
writing prior to such payment date by the recipient thereof to the party
required to make such payment:
(i) if the Interim Purchase Price exceeds the Initial
Payment, the Purchaser shall (and/or shall cause the applicable
Acquiring Entity to) pay to the Seller the absolute value of
the amount of such excess, together with accrued interest
thereon, calculated at the Settlement Rate as from time to time
in effect, for the period from the Closing Date to and
including the date upon which such payment is made (calculated
on the basis of the actual number of days elapsed in a year of
365 or 366 days, as the case may be); and
(ii) if the Initial Payment exceeds the Interim Purchase
Price, the Seller shall pay, or shall cause to be paid, to the
Purchaser (and/or one or more Acquiring Entities, as directed
by the Purchaser) the absolute value of the amount of such
excess, together with accrued interest thereon, calculated at
the Settlement Rate as from time to time in effect, for the
period from the Closing Date to and including the date upon
which such payment is made (calculated on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as
the case may be);
provided, however, that notwithstanding any provision of Section
5.05, any disputes in respect of the preparation of the draft
Closing Date Schedule, the Interim Balance Sheet or the calculation
of the Interim Purchase Price and any proposals for adjustments to
any of the foregoing shall be reserved (and not waived) by the
parties and deferred until the conclusion of the settlement in
accordance with this Section 2.05(a) and the delivery of the draft
of the audited Closing Date Schedule.
(b) In the event the parties settle certain amounts in
accordance with Section 2.05(a), then on the Settlement Date, the
following amounts shall be paid, by wire transfer of immediately
available funds, to an account designated in writing prior to the
Settlement Date by the recipient thereof to the party required to
make such payment:
(i) if the Purchase Price exceeds the Interim Purchase
Price, the Purchaser shall (and/or shall cause the applicable
Acquiring Entity to) pay to the Seller an amount equal to the
absolute value of the amount of such excess, together with
accrued interest thereon, calculated at the Settlement Rate as
from time to time in effect, for the period from the Closing
Date to and including the Settlement Date (calculated on the
basis of the actual number of days elapsed in a year of 365 or
366 days, as the case may be); or
(ii) if the Interim Purchase Price exceeds the Purchase
Price, the Seller shall pay to the Purchaser (and/or one or
more Acquiring Entities, as directed by the Purchaser) an
amount equal to the absolute value of the amount of such
excess, together with accrued interest thereon, calculated at
the Settlement Rate as from time to time in effect, for the
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period from the Closing Date to and including the Settlement
Date (calculated on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be).
(c) In the event the parties do not settle any amounts in accordance
with Section 2.05(a), then on the Settlement Date, the following amounts
shall be paid, by wire transfer of immediately available funds, to an
account designated in writing prior to the Settlement Date by the
recipient thereof to the party required to make such payment:
(i) if the Purchase Price exceeds the Interim Purchase Price,
the Purchaser shall (and/or shall cause the applicable Acquiring
Entity to) pay to the Seller an amount equal to the Settlement
Payment plus the Settlement Interest in respect thereof; or
(ii) if the Initial Payment exceeds the Purchase Price, the
Seller shall pay to the Purchaser (and/or one or more Acquiring
Entities, as directed by the Purchaser) an amount equal to the
Settlement Payment plus the Settlement Interest in respect thereof."
(b) Section 5.01(d) of the Purchase Agreement is hereby amended by
deleting the proviso in its entirety and restating it as follows:
"provided, however, that nothing contained in this Agreement shall
prohibit (A) any Seller Entity from granting Encumbrances to secure borrowings
that will be repaid at or prior to Closing or (B) any Seller Entity from
complying with each Non-Purchased Securitization Document or continuing each
Securitization Transaction in effect on the date hereof in compliance with
such Securitization Documents in effect on the date hereof, subject to the
satisfaction of the condition set forth in Section 6.01(l), in each case, in
the ordinary course of business consistent with past practices."
(c) Section 5.03(c) of the Purchase Agreement is hereby amended by
deleting the last two sentences thereof and replacing them with the following:
"The Seller or the Purchaser, as the case may be, shall retain in
its possession all Tax Returns and tax records, relating to the Purchased
Assets, held by such party immediately after the Closing that might be
relevant to any Taxable period ending on or prior to the Closing Date until
the relevant statute of limitations has expired. After such time, the Seller
or the Purchaser, as the case may be, may dispose of such materials; provided,
however, that prior to such disposition the Seller or the Purchaser, as the
case may be, shall give the other party a reasonable opportunity to take
possession of such materials, at such other party's expense."
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(d) Section 5.05(a)(iii) of the Purchase Agreement is hereby amended
by deleting the first sentence and replacing it as follows:
"Concurrently with the preparation and delivery to the Purchaser's
Accountants, the Seller and the Seller's Accountants of the draft Closing
Date Schedule, the Purchaser shall, or shall cause the Purchaser's
Accountants to, prepare and deliver to the Purchaser or the Purchaser's
Accountants, as applicable, the Seller and the Seller's Accountants, a
draft of the adjusted Closing Date Schedule that reflects the Special
Adjustments (the "Interim Balance Sheet").".
(e) Section 5.20 of the Purchase Agreement is hereby amended by deleting the
words "setting forth the Portfolio Information as of the Closing Date".
(f) Section 5.22 of the Purchase Agreement is hereby amended by
deleting such section in its entirety and replacing as follows:
Section 5.22. GE Facility. At the Closing, subject to the
obligation to reflect on the Final Adjusted Closing Date Schedule in
accordance with the Accounting Principles an accrued liability in an
amount equal to the outstanding balance of the GE Facility as of the
Closing Date, the GE Facility shall be deemed paid in full and
terminated in accordance with its terms.
(g) The definition of "Assumed Liabilities" in Exhibit A to the
Purchase Agreement is hereby amended by deleting the comma that appears before
the word "(iv)" and replacing it with the word "and".
(h) The definition of "Assumed Liabilities" in Exhibit A to the
Purchase Agreement is hereby further amended by deleting the word "and" prior
to subsection (v) and deleting subsection (v) in its entirety.
(i) The definition of "Excluded Assets" in Exhibit A to the Purchase
Agreement is hereby amended by deleting the clause "(viii) all Old Facility
Management Contracts, other than the right to receive the equipment lease
rental payments pursuant thereto and set forth on the Final Adjusted Closing
Date Schedule and the right, title and interest in and to the equipment
subject thereto" in its entirety and replacing it with "(viii) all Old
Facility Management Contracts, other than the right to receive the equipment
lease rental payments, including Equipment Sales Tax Payments, CPI Charges,
Administration Fees, Late Charges and the Uplift Payments, payments made in
connection with the exercise by an Obligor of any right to purchase equipment
related thereto, Insurance Proceeds, equipment casualty payments by the
related Obligor, Obligor indemnity payments in respect of any of the foregoing
or in respect of the equipment related to any such Old Facility Management
Contract, in each case, due to the lessor pursuant thereto and the right,
title and interest in and to the equipment subject thereto".
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(j) The definition of "Excluded Assets" in Exhibit A to the Purchase
Agreement is hereby further amended by deleting the word "and" that appears
before the word "(xx)" and replacing it with a comma.
(k) The definition of "Excluded Assets" in Exhibit A to the Purchase
Agreement is hereby further amended by deleting the period at the end of such
definition and replacing it with the following:
"(xxi) any equipment in respect of a Financing Contract that is cancelled
or terminated prior to the Closing and is not in automatic renewal in
accordance with its terms on the Closing, (xxii) any Financing Contract
in automatic renewal that has been in automatic renewal for 120 days
prior to the Closing Date in respect of which the related Obligor did not
make any payment thereon for 120 days following the term end date of such
Financing Contract and (xxiii) the Financing Contracts set forth on
Schedule 1.01(o)."
(l) The definition of "Excluded Liabilities" in Exhibit A to the
Purchase Agreement is hereby amended by deleting clause (ii)(7) thereof and
replacing it with the language set forth on Annex 6 hereto.
(m) The definition of "Financing Contract" in Exhibit A to the
Purchase Agreement is hereby amended by deleting the proviso in its entirety
and restating it as follows:
"provided, however, that "Financing Contract" shall (A) include any
right under the Old Facilities Management Agreements to receive the
equipment lease or rental payment and all related payments due
thereunder and (B) not include any Non-Purchased Securitization
Document, Securitization Document, Conduit Facilities Document or
Syndication Agreement."
(n) The definition of "Program Documentation" in Exhibit A to the
Purchase Agreement is hereby deleted in its entirety and restated as follows:
"Program Documentation" shall mean the Program Agreement and
each of the documents and agreements set forth on Schedule 1.01(m)
hereto.
(o) The definition of "Purchased Assets" in Exhibit A to the
Purchase Agreement is hereby deleted in its entirety and restated as follows:
"Purchased Assets" shall mean (i) all of the assets,
Properties, contracts or claims of any kind or description (whether
tangible or intangible, real, personal or mixed) of IOS Capital
(immediately prior to the Pre-Closing Merger) (including all
Purchased Financing Contracts, the Backlog, Credit Enhancements and
Portfolio Property held by IOS
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Capital and all Capital Stock of the ABS Entities immediately prior
to the Pre-Closing Merger), (ii) the right to receive any payments
from an Obligor in respect of any Purchased Financing Contract or
Old Facilities Management Contract that has reached maturity on or
prior to the Closing Date and the residual in respect thereof has
been reduced on the books and records of IOS Capital to $0
(including any payments received by any Party in respect thereof and
the right, title and interest in and to the equipment subject
thereto), (iii) the Specified IKON Assets and (iv) restricted cash
in respect of the ABS Entities; provided, however, that in no event
shall the Purchased Assets include any Excluded Assets.
(p) The definition of "Special Adjustments" in Exhibit A to the
Purchase Agreement is hereby further amended by deleting the word "and" that
appears before the word "(ix)" and replacing it with a comma.
(q) The definition of "Special Adjustments" in Exhibit A to the
Purchase Agreement is hereby further amended by deleting the period at the end
of such definition and replacing it with the following:
"and (x) remove any accrual for leases that have not been funded as
of the Closing Date and are reflected on the books and records of IOS
Capital as "accrued leases"."
(r) The following definitions are hereby inserted into Exhibit A to
the Purchase Agreement in their proper alphabetical order:
"Interim Purchase Price" shall mean an amount equal to (i)
the aggregate amount of the Purchased Assets minus (ii) the aggregate
amount of the Assumed Liabilities, in each case as reflected on the
Interim Balance Sheet plus (iii) the Additional Amount. "Late
Charges" shall have the meaning set forth in the Program Agreement.
"Program Agreement" shall mean the Program Agreement among
IKON, GE and GE Capital Information Technology Solutions, Inc.,
dated March 31, 2004.
"Sales Tax Payments" shall have the meaning set forth in the
Program Agreement.
"Uplift Payments" shall have the meaning set forth in the
Program Agreement.
(s) Section 3.03 in Exhibit B to the Purchase Agreement is hereby
amended by deleting clause (iii) thereof and replacing it with the following:
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"(iii) any contract required to be set forth on Schedule 3.12(b) to
which any IKON Party or any ABS Entity is a party (including any
Syndication Agreement and any servicing agreement related thereto,
in respect of which GE shall provide subservicing for IKON pursuant
to the Program Documentation) or to which such IKON Party or such
ABS Entity or any of its Properties are subject (including any
Purchased Asset)."
(t) Paragraph (d)(1) of Exhibit H to the Purchase Agreement is
hereby amended by adding the following sentence at the end of such paragraph:
"The Seller shall allow any Transferred Employee that has
outstanding as of the Closing a qualified 401(k) plan
"participation" loan in the Seller's 401(k) plan the option to
continue to amortize such loan following the Closing in accordance
with the Seller's 401(k) plan requirements and shall provide each
such Transferred Employee that elects to continue such amortization
with payment options and loan servicing that shall prevent the
occurrence of a withdrawal event under such plan other than from the
failure of such Transferred Employee to make timely payments in
respect of such loan."
(u) Paragraph (f) of Exhibit H to the Purchase Agreement is hereby
amended by deleting the last sentence of subsection (f)(2).
(v) Paragraph (f) of Exhibit H to the Purchase Agreement is hereby
further amended by adding the following subsection:
" (4) The Seller shall pay no later than ten (10) Business Days
following the Closing to each Transferred Employee eligible for a
monthly or quarterly bonus under the Seller's bonus policies and
program the bonus payment earned by such Transferred Employee for
the IOS Capital fiscal quarter ending March 31, 2004. On the date
that is no later than the date Seller pays its current employees any
annual bonus payments, Seller shall pay each Transferred Employee
who is (x) eligible for annual bonus under the Seller's bonus
policies and program and (y) an employee of the Purchaser or its
Affiliates on such payment date an amount equal to 50% of the annual
bonus amount earned by such Transferred Employee as if such
Transferred Employee had remained an employee of the Seller through
September 30, 2004. Such annual bonus amount shall be calculated on
the Seller's bonus policies and program in effect prior to the
Closing Date and shall be based on (A) salaries in effect on the
Closing Date and (B) equally on the financial performance metrics
set forth in such programs and policies for (i) IOS Capital through
the Closing Date and (ii) IKON through September 30, 2004, unless an
alternate bonus calculation is prescribed by the current terms of
employment of any such Transferred Employee."
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(w) Paragraph (j) of Exhibit H to the Purchase Agreement is hereby
amended by adding the following sentence at the end of such paragraph:
"The Seller shall deliver to the Purchaser at the Closing copies of
all employment files and records in respect of each Transferred
Employee and, following the Closing, the Seller shall provide the
Purchaser access to the facilities of the Seller such that the
Purchaser shall have access to the original of such employment files
and records; provided, however, the Seller shall not be obligated to
disclose to the Purchaser any medical or other records pertaining to
any Transferred Employee that the Seller or IOS Capital is required
by Law to keep confidential."
(x) Exhibit H to the Purchase Agreement is hereby amended by adding
the following paragraph following new paragraph:
(k) On the closing of the transactions contemplated by that
certain Asset Purchase Agreement between Heller Financial Canada, an
Ontario partnership, and IKON Office Solutions, Inc., an Ontario
corporation, dated as of the date hereof, GE or its Affiliates shall
offer to employ the employees set forth on Schedule 1.01(n) in
accordance with paragraph (a)(2) or (a)(3), as applicable. Any such
employees that accept such offer of employment shall be employed by
GE or its Affiliates on terms consistent with the terms set forth in
this Exhibit H in respect of any similarly situated Transferred
Employee.
(y) Exhibit K to the Purchase Agreement is hereby amended and
restated in its entirety in the form of Annex 1 hereto.
(z) Schedule 1.01(j) to the Purchase Agreement is hereby amended and
restated in its entirety in the form of Annex 2 hereto.
(aa) A new Schedule 1.01(m) is hereby added to the Purchase
Agreement in the form of Annex 3 hereto.
(bb) A new Schedule 1.01(n) is hereby added to the Purchase
Agreement in the form of Annex 4 hereto.
(cc) A new Schedule 1.01(o) is hereby added to the Purchase
Agreement in the form of Annex 5 hereto.
3. Effect on the Purchase Agreement.
(a) On and after the date hereof, each reference in the Purchase
Agreement to "this Agreement", "herein", "hereof", "hereunder" or words of
similar import shall mean and be a reference to the Purchase Agreement as
amended hereby.
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(b) Except as specifically amended by this Amendment, the Purchase
Agreement shall remain in full force and effect and the Purchase Agreement, as
amended by this Amendment, is hereby ratified and confirmed in all respects.
4. GOVERNING LAW. This Amendment and the legal relations between the
parties hereto arising hereunder shall be governed by and construed and
enforced in accordance with the Laws of the State of New York, without regard
to the principles regarding the choice of Law.
5. HEADINGS. The headings and captions in this Amendment are for
convenience of reference only and shall not define, limit or otherwise affect
any of the terms or provisions hereof.
6. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other parties hereto.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed on its behalf by its officers or representatives
thereunto duly authorized, as of the date first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
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Name:
Title:
IKON OFFICE SOLUTIONS, INC.
By:
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Name:
Title: