EXHIBIT 2.7
SECOND AMENDMENT TO
STOCK AND ASSET PURCHASE AGREEMENT
FOR WET PRODUCTS DIVISION
THIS SECOND AMENDMENT TO STOCK AND ASSET PURCHASE AGREEMENT FOR WET
PRODUCTS DIVISION (the "Second Amendment"), dated as of December 5, 2003, is
entered into by and among ▇▇▇▇▇▇▇ Technology, Inc., a Delaware corporation
("▇▇▇▇▇▇▇") and SCP Global Technologies, Inc., a Delaware
corporation ("Buyer").
RECITALS
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▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ International, Inc., a Delaware corporation
("MII"), ▇▇▇▇▇▇▇ Wet Products, Inc., a Pennsylvania corporation ("WPI"), ▇▇▇▇▇▇▇
Technology Finance, Inc., a Delaware corporation ("MTF"), and SCP Global
Technologies, Inc., an Idaho corporation ("SCP Idaho") have entered into that
certain Stock and Asset Purchase Agreement for Wet Products Division, dated as
of February 12, 2003, as subsequently amended by the First Amendment of Stock
and Asset Purchase Agreement for Wet Products Division, dated as of March 17,
2003 (together, the "Original Agreement"). Buyer became party to the Original
Agreement as assignee from SCP Idaho.
B. Section 9.13 of the Original Agreement provides that any term of
the Original Agreement may be amended and the observance of any term thereof may
be waived with the written consent of only ▇▇▇▇▇▇▇ and Buyer, and that any such
amendment or waiver is binding upon MII, WPI and MTF.
B. The parties desire to amend the Original Agreement as set forth
below.
NOW, THEREFORE, in consideration of the payment by ▇▇▇▇▇▇▇ to Buyer
set forth herein, and for other good and valuable consideration, ▇▇▇▇▇▇▇ and
Buyer agree as follows:
1. Aggregate Payment by ▇▇▇▇▇▇▇ to Buyer. On the date of this Second
Amendment, ▇▇▇▇▇▇▇ will pay to Buyer the sum of Four Million Four Hundred
Eighteen Thousand Three Hundred Sixty Six Dollars ($4,418,366) (the "Payment"),
by wire transfer in immediately available funds to an account designated in a
written notice delivered to ▇▇▇▇▇▇▇ by Buyer.
2. Cash Balance as of Closing. Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that
Buyer retained at Closing cash and cash equivalent balances owned by the
Transferred Subsidiaries as of the Effective Time in the amount of Three Million
Three Hundred Fifty Thousand One Hundred Two Dollars ($3,350,102) (the "Retained
Cash"). Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that the amount of the Payment
reflects credit to ▇▇▇▇▇▇▇ for retention by Buyer and its subsidiaries of the
Retained Cash. ▇▇▇▇▇▇▇ waives all rights to any further payment or remittance
from Buyer that might otherwise be provided for under Section 1.4(b) of the
Original Agreement.
3. Balance Sheet Adjustment. Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that
(i) the Effective Time Net Working Capital was less than $17 million, (ii) the
parties have mutually agreed upon a Definitive Balance Sheet, and (iii) the
Payment includes payment to Buyer in full of all amounts owing by ▇▇▇▇▇▇▇ to
Buyer, and reflects full satisfaction of ▇▇▇▇▇▇▇'▇ obligations, under Section
1.4(c) of the Original Agreement. Each party waives all rights to any further
payment or Purchase Price adjustment that might otherwise be provided for under
Section 1.4(c) of the Agreement.
4. Pension Obligations of ▇▇▇▇▇▇▇ Tech GmbH. Section 5.2(b) of the Original
Agreement is amended to read in full as follows:
"On or prior to December 31, 2003, ▇▇▇▇▇▇▇ shall assume or transfer to a
subsidiary of ▇▇▇▇▇▇▇ other than a Transferred Subsidiary, and shall cause
Wet Products GmbH to be fully released from, any and all pension
obligations of ▇▇▇▇▇▇▇ Tech GmbH."
5. Reduction in Force Reimbursement. Buyer and ▇▇▇▇▇▇▇ agree and
acknowledge that the Payment includes payment to Buyer in full of all amounts
owing by ▇▇▇▇▇▇▇ to Buyer, and reflects full satisfaction of ▇▇▇▇▇▇▇'▇
obligations, under Section 5.3(b) of the Original Agreement and Section 5.3(b)
of the ▇▇▇▇▇▇▇ Disclosure Schedule, including full payment by ▇▇▇▇▇▇▇ of any and
all amounts payable by ▇▇▇▇▇▇▇, including salary, and Severance Costs relating
to reductions in force by Buyer and/or Wet Products GmbH that have occurred to
date and that may occur in the future, and all costs and expenses, (including
attorneys' fees) that have been invoiced by Buyer to ▇▇▇▇▇▇▇ to date; provided,
however that ▇▇▇▇▇▇▇ will remain obligated to reimburse Wet Products GmbH or
Buyer for the actual amount of professional fees (attorneys' fees and consulting
fees) incurred in connection with the First RIF by legal counsel and consultants
selected and engaged at the direction of ▇▇▇▇▇▇▇. Buyer waives all rights to any
further payment or reimbursement from ▇▇▇▇▇▇▇ that might otherwise be provided
for under Section 5.3(b) of the Agreement and/or Section 5.3(b) of the ▇▇▇▇▇▇▇
Disclosure Schedule, except for the obligation of ▇▇▇▇▇▇▇ to reimburse Buyer for
professional fees described in the preceding sentence.
6. Reimbursement for FSI Litigations. Buyer and ▇▇▇▇▇▇▇ agree and
acknowledge that the Payment includes payment to Buyer in full of all amounts
owing, now and in the future, by ▇▇▇▇▇▇▇ to Buyer, and reflects full
satisfaction of ▇▇▇▇▇▇▇'▇ obligations, under Section 5.13 of the Original
Agreement. Buyer waives all rights to any further payment or reimbursement from
▇▇▇▇▇▇▇ that might otherwise be provided for under Section 5.13 of the Original
Agreement.
7. Special Accounts; Payments under Customer Contracts; Addition to Section
5.14 of the ▇▇▇▇▇▇▇ Disclosure Schedule. Buyer and ▇▇▇▇▇▇▇ agree and acknowledge
that the Payment includes payment to Buyer in full of all amounts owing, now and
in the future, by ▇▇▇▇▇▇▇ to Buyer, and reflects full satisfaction of ▇▇▇▇▇▇▇'▇
obligations under, the specified items set forth in the Second ▇▇▇▇▇▇▇
Disclosure Schedule Supplement, dated December 5, 2003. Buyer waives all rights
to any further payment or reimbursement from ▇▇▇▇▇▇▇ that might otherwise be
provided for under Section 5.14 of the ▇▇▇▇▇▇▇ Disclosure Schedule as to the
items noted as fully paid and performed in the Second ▇▇▇▇▇▇▇ Disclosure
Schedule Supplement. The Original Agreement is amended to add the
acknowledgements and item set forth in the Second ▇▇▇▇▇▇▇ Disclosure Schedule
Supplement dated December 5, 2003.
8. Tax Related Matters.
(a) Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that Buyer and/or Wet
Products GmbH shall retain the full amount of VAT refunds received by then
them and attributable to the portion of 2003 prior to the Closing.
(b) With respect to the preparation and filing of tax returns or
claims for refund (the "Refund Claims") by Wet Products GmbH relating to
withholding taxes on capital yields for 2001 and 2002, Buyer and ▇▇▇▇▇▇▇
agree and acknowledge that (i) it is the responsibility of ▇▇▇▇▇▇▇, at its
expense, to cause the preparation of such Refund Claims, (ii) upon the
preparation of such Refund Claims, ▇▇▇▇▇▇▇ shall cause them to be delivered
to the Controller (or, if that position is vacant, the Geschaftsfuhrer or
other officer with authority to sign tax returns) of Wet Products GmbH (the
"GmbH Officer"), (iii) within two business days following the presentation
of any Refund Claim to the GmbH Officer, Buyer will cause an authorized
officer of Wet Products GmbH to sign such Refund Claim and deliver it back
to ▇▇▇▇▇▇▇'▇ designated agent for filing with the appropriate tax
authorities, and (iv) within two business days following the receipt by Wet
Products GmbH of any refund relating to withholding taxes on capital yields
for 2001 and 2002, Buyer will cause Wet Products GmbH to transfer the full
amount thereof to ▇▇▇▇▇▇▇ by wire transfer in immediately available funds
to an account designated in a written notice delivered to Buyer by ▇▇▇▇▇▇▇.
(c) Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that the Payment includes
payment to Buyer of amounts to cover the cost of fees for the audit and
preparation of income tax returns for 2001 and 2002, and that ▇▇▇▇▇▇▇ will
have no further obligation under the Original Agreement to prepare or to
pay for the preparation of financial statements and/or income tax returns
pertaining to Wet Products GmbH for those tax years.
(d) If (i) Buyer fails to cause timely performance of its/Wet Products
GmbH's obligations under clauses (iii) or (iv) of Section 8(b), (ii)
▇▇▇▇▇▇▇ has delivered written notice to Buyer (attention Director of
Finance and General Counsel) (the "Notice") of ▇▇▇▇▇▇▇'▇ delivery of a
Refund Claim in accordance with clause (ii) of Section 8(b), referencing
this Second Amendment, and noting the amount of liquidated damages set
forth below (which Notice may not be given earlier than the delivery by
▇▇▇▇▇▇▇ of such Refund Claim), and (iii) the obligations of Buyer/Wet
Products GmbH under clauses (iii) or (iv) of Section 8(b) are not performed
within two business days of delivery of the Notice, then, Buyer will pay to
▇▇▇▇▇▇▇, as liquidated damages the sum of One Hundred Thousand Dollars
($100,000), plus Five Thousand Dollars ($5,000) for each day of additional
delay in performance by Buyer/Wet Products GmbH of their obligations under
clauses (iii) or (iv) of Section 8(b). The parties acknowledge that this
amount of liquidated damages was specifically bargained for and is
reasonable under the circumstances at the time this Second Amendment is
made.
9. ERM Invoice. Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that the Payment
includes payment to Buyer in full of all amounts owing, now and in the future,
by ▇▇▇▇▇▇▇ to Buyer, and reflects full satisfaction of ▇▇▇▇▇▇▇'▇ obligations,
under Section 5.21 of the Original Agreement. Buyer waives all rights to any
further payment or reimbursement from ▇▇▇▇▇▇▇ that might otherwise be provided
for under Section 5.21 of the Original Agreement.
10. Other Outstanding Invoices. Buyer and ▇▇▇▇▇▇▇ agree and acknowledge
that the Payment includes payment to Buyer in full of all amounts owing by
▇▇▇▇▇▇▇ to Buyer under the outstanding invoices from Buyer and/or Wet Products
GmbH to ▇▇▇▇▇▇▇ and relating to inventory transfers, customer collections and
service contracts handled through ▇▇▇▇▇▇▇, as set forth on Schedule A hereto,
and that the Payment is a net amount reflecting credit to Buyer for payment to
▇▇▇▇▇▇▇ in full of all amounts owing by Buyer to ▇▇▇▇▇▇▇ under the outstanding
invoices from ▇▇▇▇▇▇▇ to Buyer, set forth on Schedule A hereto, and amounts not
yet invoiced by ▇▇▇▇▇▇▇ for reimbursement of services by ▇▇▇▇▇▇▇ to Buyer and
its subsidiaries pursuant to the Transition Services Agreement for September,
October and November of 2003. ▇▇▇▇▇▇▇ waives all rights to any further payment
or reimbursement from Buyer that might otherwise be provided for under the
Transition Service Agreement, and Buyer and ▇▇▇▇▇▇▇ agree and acknowledge that
▇▇▇▇▇▇▇ has no further obligation to provide any additional services to Buyer or
its subsidiaries pursuant to the Transition Service Agreement.
11. Transfer to ▇▇▇▇▇▇▇ of Certain Accounts Receivable and Inventory. Buyer
and ▇▇▇▇▇▇▇ agree and acknowledge that the Payment includes amounts relating to
Definitive Balance Sheet adjustments pertaining to specific accounts receivable
and inventory items set forth on Schedule B hereto (the "Designated Accounts"
and the "Repurchased Inventory") that were conveyed to Buyer or were owned by
Wet Products GmbH at the Closing, but are now to be conveyed to ▇▇▇▇▇▇▇ by Buyer
or by Wet Products GmbH, as the case may be. ▇▇▇▇▇▇▇ hereby purchases, and Buyer
hereby sells to ▇▇▇▇▇▇▇, all of Buyer's right, title and interest (but none of
Buyer's obligations) with respect to such Designated Accounts, and all of
Buyer's right, title and interest with respect to such Repurchased Inventory.
Buyer represents to ▇▇▇▇▇▇▇ that Buyer is transferring the Designated Accounts
and Repurchased Inventory free and clear of all security interests, liens,
charges or encumbrances.
12. No Other Changes. Except as expressly amended or modified by this
Second Amendment, the Original Agreement remains in full force and effect.
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ and Buyer have caused this Second
Amendment to be executed and delivered by each of them or their respective
officers thereunto duly authorized, all as of the date first written above.
SCP GLOBAL TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
▇▇▇▇▇▇▇ TECHNOLOGY, INC.
By: /s/ Ludger Viefhues
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Ludger Viefhues
Chief Financial Officer
