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EXHIBIT 2.5
AMENDMENT NO. 2 TO THE
STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 TO THE STOCK PURCHASE AGREEMENT (this "Amendment")
is entered into this 27th day of March, 2000 among Synagro Technologies, Inc., a
Delaware corporation (the "Purchaser"), and Xxxxxx X. Xxxxxxx and Xxxxxx X.
Xxxxxxx (collectively, the "Shareholders"). The Purchaser and each of the
Shareholders are a "Party" and, collectively, they are sometimes referred to as
the "Parties."
WHEREAS, the Parties entered into a Stock Purchase Agreement dated as
of October 26, 1999 (the "Agreement"), whereby the Shareholders agreed to sell
and transfer to the Purchaser, and the Purchaser agreed to purchase, all the
outstanding stock of Xxxxxxx, Inc., a Minnesota corporation (the "Company");
WHEREAS, the Parties amended the Agreement in certain respects by a
Letter Agreement dated December 23, 1999 (the "Letter Agreement");
WHEREAS, the Parties agree to further amend the Agreement in certain
respects as set forth below; and
WHEREAS, capitalized terms not defined herein shall have the meanings
given to them in the Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, and intending to be legally bound
hereby, the Parties hereto agree as follows:
1. AMENDMENTS, ADDITIONS AND DELETIONS TO THE AGREEMENT.
(a) The Parties agree to amend Section 3.2 of the
Agreement in its entirety to read as follows:
"(a) The aggregate purchase price (the "Purchase
Price") for the Company Common Stock and the
representations, warranties, covenants and agreements
referenced herein shall be (i) Eight Million Four
Hundred Thousand Dollars ($8,400,000), less the
Adjustment Amount, payable to the order of and in the
amounts listed on Schedule 3.2 attached hereto; and
(ii) the earnout consideration, if any, due and
payable under the Earnout Agreement between the
Purchaser and the Shareholders attached hereto as
Exhibit H (the "Earnout Agreement").
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(b) The capitalized terms used in this Section
shall have the following meanings:
"Adjustment Amount" means the sum of (1) the
Company's Indebtedness as of Closing and (2) the
amount, if any, by which the Company's Net Working
Capital as of Closing is less than or exceeds Five
Hundred Seventy-Seven Thousand and Ninety Dollars
($577,090), of which a minimum of $62,610 shall be in
cash.
"Indebtedness" means the aggregate long-term
indebtedness and other long-term liabilities of the
Company determined in accordance with GAAP.
"Net Working Capital" means the aggregate
current assets of the Company less the aggregate
current liabilities of the Company in accordance with
GAAP."
(b) The Parties hereby agree to add a new clause (x) to
Section 3.4(a) of the Agreement to read in its entirety as follows:
"(x) the Earnout Agreement between the
Purchaser and the Shareholders in the form attached
as Exhibit H hereto."
(c) The Parties hereby agree to delete clause (iv) to
Section 3.4(b) of the Agreement in its entirety and add a new clause
(iv) to read in its entirety as follows:
"(iv) the Earnout Agreement between the
Purchaser and the Shareholders in the form attached
as Exhibit H hereto."
(d) The Parties hereby agree to add a new clause (d) to
Section 8.2 of the Agreement to read in its entirety as follows:
"(d) the Shareholders shall have received an
executed copy of the Earnout Agreement, in the form
attached as Exhibit H hereto."
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(e) The Parties hereby agree to amend clause (k) to
Section 8.2 of the Agreement to read in its entirety as follows:
"(k) Xxxxxx Xxxxxxx and Xxxx Xxxxxxx shall
have entered into Employment and Non-Competition
Agreements in the form attached as Exhibit D hereto;"
(f) The Parties hereby agree to add a new clause (q) to
Section 8.3 of the Agreement to read in its entirety as follows:
"(q) the Purchaser shall have received an
executed copy of the Earnout Agreement, in the form
attached as Exhibit H hereto."
(g) The Parties hereby agree to amend clause (ii) of
Section 9.1(a) to read in its entirety as follows:
"(ii) if the transactions contemplated
hereby are not completed by March 27, 2000, (provided
that the right to terminate this Agreement under this
Section 9.1(a)(ii) shall not be available to the
Shareholders if the failure of the Shareholders to
fulfill any obligation to Purchaser under or in
connection with this Agreement has been the cause of
or resulted in the failure of the transactions
contemplated hereby to occur on or before such
date);"
(h) The Parties hereby agree to amend clause (ii) of
Section 9.1(b) to read in its entirety as follows:
"(ii) if the transactions contemplated
hereby are not completed by March 27, 2000 (provided
that the right to terminate this Agreement under this
Section 9.1(b)(ii) shall not be available to
Purchaser if the failure of Purchaser to fulfill any
obligation to the Shareholders under or in connection
with this Agreement has been the cause of or resulted
in the failure of the transactions contemplated
hereby to occur on or before such date); or"
(i) The Parties hereby agree to add a new Section 10.7 to
read in its entirety as follows:
"SECTION 10.7 RIGHT OF OFFSET. Upon written
notice to the Shareholders under the Earnout
Agreement specifying in reasonable detail its
justification therefore, the Purchaser may offset the
amount of any Indemnified Amount determined by
litigation, arbitration or settlement under Section
10.3 to be owed
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to Purchaser against any amount owed by the Purchaser
to the Shareholder under the Earnout Agreement."
(j) The Parties hereby agree to add a new Section 10.8 to
read in its entirety as follows:
"SECTION 10.8 ESCROW. If there exists a bona
fide dispute at the time of payment of the earnout
consideration under the Earnout Agreement regarding a
claim by a Purchaser Indemnified Party or with
respect to the right of the Purchaser to offset
against the Earnout Agreement, the Parties agree that
at such time, the Purchaser shall deposit a portion
of such earnout consideration due and payable equal
to the amount in dispute into an interest bearing
escrow account (`Escrow Account'), pending resolution
of such dispute. Interest on the Escrow Account shall
accrue for the benefit of the Party to whom the
Escrow Account proceeds are released upon resolution
of such dispute; provided, that if the Escrow Account
proceeds are released to more than one Party, the
interest shall be prorated among the Parties based on
the amounts released to the Parties. Upon resolution
of the dispute, the Purchaser shall be entitled to
exercise its right of set-off as and in the manner
provided in Section 10.7 of this Agreement against
the proceeds in the Escrow Account. Immediately after
resolution of the dispute, the Escrow Agent shall
immediately release and deliver to the payee under
the Earnout Agreement all of the remaining Escrow
Account proceeds."
(k) Section 11.1 of the Agreement is hereby amended in
its entirety to read as follows:
"SECTION 11.1. SURVIVAL. The
representations, warranties, covenants and agreements
(including, but not limited to, indemnification
obligations) set forth in this Agreement and in any
certificate or instrument delivered in connection
herewith shall be continuing and shall survive the
Closing for a period of three (3) years following the
date of Closing; provided, however, that in the case
of all such representations, warranties, covenants
and agreements (including, but not limited to,
indemnification obligations) there shall be no such
termination with respect to any such representation,
warranty, covenant or agreement as to which a bona
fide claim has been asserted by written notice of
such claim delivered to the Party or Parties making
such representation, warranty, covenant or agreement
prior to the expiration of the survival period;
provided, further, that (i) the representations and
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warranties set forth in Sections 5.2, 5.6 and 5.24
hereof shall survive the Closing indefinitely, (ii)
Sections 5.5, 5.8, 5.10, 5.13 and 5.15 shall survive
the Closing for the greater of three years or the
statutory survival period, (iii) the representations
and warranties in Section 5.12 shall survive the
Closing for the greater of (a) three years or (b) the
statutory survival period applicable to the Company
or any entity that transferred any property or assets
to the Company in connection with the consummation of
the transactions contemplated hereby, (iv) the
indemnification obligations of the Shareholders set
forth in Section 10.1(a) shall survive the Closing
until termination of the applicable representations
and warranties, and (v) the indemnification
obligations of the Shareholders set forth in Sections
10.1(c), (d) and (e) shall survive the Closing for
the greater of three years or the statutory survival
period applicable to the underlying claims."
(l) The Parties agree to amend SCHEDULE 3.4(b)(iv)
(Guarantees or Surety Obligations) of the Agreement by adding the
following:
"Bond No. __________: City of Xxx Waste Water
Treatment Plant"
(m) The Parties agree to amend SCHEDULE 5.5 (Financial
Statements) of the Agreement by inserting the financial statements
attached as Exhibit A hereto.
(n) The Parties agree to amend SCHEDULE 5.8 (Litigation)
of the Agreement by adding the following at the end of (2):
"The Company settled Xxx Xxxxxxxx'x claim and a
similar claim made by Xxxx Xxxxxx. Xxx Xxxxxxxx and Xxxx Xxxxxx
each signed a Release of Claims Agreement."
(o) The Parties agree to amend SCHEDULE 5.14. (Employee
and Labor Matters) of the Agreement by deleting the current schedule
and replacing it with the schedule attached as Exhibit B hereto.
(p) The Parties agree to amend SCHEDULE 5.17 (Title to
Assets) of the Agreement by adding the language attached as Exhibit C
hereto to the end of the schedule.
(q) The Parties agree to amend SCHEDULE 5.18. (Contracts,
Agreements, Plans and Commitments) of the Agreement by by deleting the
current schedule and replacing it with the schedule attached as Exhibit
D hereto.
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2. RATIFICATION. Except as expressly amended by this Amendment,
the Agreement, the Letter Agreement and the exhibits and schedules thereto shall
remain in full force and effect. None of the rights, interests and obligations
existing and to exist under the Agreement or the Letter Agreement are hereby
released, diminished or impaired, and the parties hereby reaffirm all covenants,
representations and warranties in the Agreement and the Letter Agreement.
3. EXECUTION IN COUNTERPARTS. For the convenience of the parties,
this Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
4. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
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IN WITNESS WHEREOF, this Amendment is hereby duly executed by each
Party hereto as of the date first written above.
PURCHASER:
SYNAGRO TECHNOLOGIES, INC.
By: /s/ Xxxx X. Rome
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Xxxx X. Rome, Executive Vice President
THE SHAREHOLDERS
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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