EXHIBIT 2.3
SECOND
AMENDMENT
TO THE
STOCK PURCHASE AGREEMENT
This Second Amendment to the STOCK PURCHASE AGREEMENT, dated October 2, 1996
between Compost America Holding Company, Inc. ("CAHC" or the "Purchaser"), a New
Jersey Corporation, located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
and
Xxxxxx X. Xxxxx, Xx. ("Seller"), with a mailing address of X.X. Xxx 000, Xxxxxx,
Xxx Xxxxxx, 00000-0000
and
American Soil, Inc. ("Company"), a New York Corporation with a mailing address
of X.X. Xxx 000, Xxxxxx, Xxx Xxxxxx, 00000-0000
Witnesseth:
Background: The Purchaser desires to extend the closing date of the December 4,
1995 STOCK PURCHASE AGREEMENT (the "December 4, 1995 Agreement) and the closing
date of the April 1, 1996 Amendment to the Stock Purchase Agreement (the "First
Amendment") and the Seller desires to adjust the terms and conditions as
hereinafter set forth and agrees to extend the Closing Date to October 2, 1996.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree to the preceding and as follows:
(a) The Purchaser paid to the Seller $37,500 upon execution of the
December 4, 1995 Agreement which amount shall be non-refundable;
(b) The Purchaser paid to the Seller $12,500 upon execution of the
December 4, 1995 Agreement which amount was to have been refunded to the
Purchaser within five (5) business days of the Closing Date (which was extended
by the First Amendment to June 30, 1996) if the Closing did not occur;
(c) On July 5, 1996 the Seller refunded to the Purchaser the $12,500
described in (b) above since the June 30, 1996 Closing Date did not occur;
(d) The Purchaser paid to the Seller $125,000 upon the execution of
the First Amendment which amount shall be non-refundable;
(e) Under the First Amendment, the Purchaser was to have issued
one-hundred thousand (100,000) shares of restricted common stock of the
Purchaser, substantially identical to the stock represented by the certificate
attached as Exhibit A to the First Amendment and with substantially identical
rights, in the name of Xxxxxx X. Xxxxx, Xx. and placed into escrow no later than
April 21, 1996. In the event that the closing of the First Amendment did not
take place by June 30, 1996, those shares were to become the possession of
Seller. These shares were never placed in escrow or delivered to Seller, and
remain due and owing to Seller;
(f) At the Closing, the Purchaser will place $132,500 cash or 50,000
shares of unregistered common stock of Compost America Holding Company, Inc. in
the names of Xxxxx X. Xxxxxx and Xxxxxxxxx Xxxxxx (attached as Exhibit A), with
stock power attached, endorsed in blank, signature medallion guaranteed, into an
Escrow Account to be held by the Escrow Agent for nine (9) months for the
payment by the Company of any Unknown Liability (defined as any individual
liability incurred by the Company more than 90 days prior to the Closing Date
that is for more than $5,000) and any environmental clean-up that may be
required by law. Said environmental clean-up shall include, but not be
exclusively limited to the discovery of hazardous materials, contaminated soils,
groundwater contamination, and stockpiles of solid waste which require disposal
under the Nonhazardous Waste Regulations of the State of New Jersey found at
N.J.A.C. 7:26 - 1 et seq. Said environmental clean-up shall not include site
monitoring, capitalization or any activity associated with changes in law
adopted following the Closing Date, incidental site clean up, such as litter
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control, on-site ponding of surface water, the disposal of routine quantities of
solid waste from compost screening activities or other site conditions
reasonably associated with the day-to-day operations of an outdoor windrow
composting facility. The Purchaser shall notify the Seller by registered mail of
liabilities or the need to undertake environmental clean-up activities within
ten business days of said finding. Nine months following the Closing Date
herein, the Purchaser shall replace the 50,000 shares of common stock with
$132,500 in cash less the dollar value, as agreed upon by the Seller and the
Purchaser, of Unknown Liabilities or environmental clean-up costs as defined
herein. At such time, with the mutual consent of the Purchaser and Seller, the
Escrow Agent shall distribute to the Seller $132,500 in cash less such agreed
upon amount of any Unknown Liabilities or environmental clean-up costs as
defined herein.
(g) At the Closing, the Purchaser shall pay Isdaner & Company and
Xxxxxxxx & X'Xxxx, LLP for services performed and invoiced as identified in
Exhibit B, which represents the agreed upon amount for services rendered by such
firms.
(h) Receivables attributable to the business of the Company up to and
including the Closing Date will be the property of the Purchaser. Liabilities of
the Company as of the Closing Date shall be assumed by the Purchaser, other than
as provided in Section (f) above.
(i) No sooner than January 5, 1997 and no later than January 8, 1997,
the Seller shall be issued 150,000 shares of restricted stock of the Purchaser.
Such restricted stock shall be under no transfer restriction under the
securities laws, rules, regulations or orders of the United States, any state,
or any agency thereof having relevant regulatory authority, or any other law,
rule, regulation, decision, or order, except for the failure of such restricted
stock to be registered pursuant to an effective registration statement filed
pursuant to the Securities Act of 1933. Upon proper delivery of the 150,000
shares pursuant to this paragraph (i), the Purchaser's obligation to deliver
shares to Seller as set forth in paragraph (e) above shall cease.
(j) At the Closing Date, the Purchaser shall pay to the Seller
$325,000 in cash (which figure is derived from the $310,000 referenced within
Paragraph (d) of the First Amendment, as well as the $12,500 referenced within
Paragraph (b) of the First Amendment which was
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subsequently returned to the Purchaser by the Seller, plus an additional payment
of $2,500).
(k) Up to 4,000 cubic yards of screened non-sludge compost per 12
month period from the date hereof, may be picked up from time to time at the
site by the Seller at no charge for use only on research projects and not for
commercial clients, ending on the fourth anniversary of the date hereof.
(1) At the Closing, the Purchaser shall make the payments referenced
in the first and fifth paragraphs of Paragraph 7 of the Consulting Agreement
between Purchaser and Seller to be dated the Closing Date.
(m) The Closing Date shall occur on the date on which the conditions
set forth in the letter attached hereto as Exhibit B-1 are satisfied.
(n) Seller is released from any non-complete clauses entered into
previously with CAHC.
(o) Without limiting the generality of (h) above, all outstanding
liabilities and long-term payables of the Company including outstanding State
and Federal taxes, and penalties and interest thereon, will be paid by the
Purchaser; provided however that the maximum amount that the Purchaser shall be
required to pay pursuant to this sentence for State and Federal taxes and
penalties and interest thereon, shall be $275,000 calculated as of the Closing
Date. The notes relating to the equipment leases described in Exhibit 3.1 of the
December 4, 1995 Agreement, and to the Company's Caterpillar 966 front end
loader (the "Equipment Leases"), will become the financial responsibility of the
Purchaser. Purchaser shall indemnify Seller in full for any consequences of its
failure to discharge any payments under such liabilities, long term payables or
notes, including, but not limited to, any consequences that arise because of
Seller's guarantee of payment relating to the Equipment Leases.
(q) Article 9 of the December 4, 1995 Agreement is hereby amended to
add the following:
"9.5 Funds. The Seller's bank shall have confirmed that the funds
referenced in Sections (f), (g), and (j), and the first and fifth paragraphs of
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Section 7 of the Consulting Agreement dated as of the date hereof, shall have
been credited to the Seller's bank account."
(r) Article 2.3 of the December 4, 1995 Agreement, as amended by the
First Amendment, is deleted in its entirety.
PURCHASER
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ Xxxxx Xxxxxx 10/2/96
------------------------------- -------------------------------------
Xxxxx Xxxxxx, President Date
SELLER
By: /s/ Xxxxxx X. Xxxxx, Xx. October 8th, 1996
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Xxxxxx X. Xxxxx, Xx. Date
COMPANY
AMERICAN SOIL, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx. October 8th, 1996
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Xxxxxx X. Xxxxx, Xx. Date
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