SECOND AMENDMENT TO STOCK ACQUISITION AGREEMENT
Second Amendment to Stock Acquisition Agreement dated as of this 8th day
of July, 1998 by and among XXXXXXX INVESTMENTS, INC., a New Jersey corporation
having an address c/o Redstone Capital Corp., 000 Xxxx Xxxxxx, 00xx Xxxxx Xxxx,
Xxx Xxxx, Xxx Xxxx 00000 ("Purchaser"), Xxxxxxx X. Xxxxxxx ("Shareholder"), CPS
Trailer Company, Inc. ("Trailer") and CPS Enterprises, Inc. ("Enterprises"),
both Missouri corporations of 000 Xxxxxx Xxxxxx, Xxxx, Xxxxxxxx 00000 (Trailer
and Enterprises collectively hereinafter "CPS").
WHEREAS, Purchaser, Shareholder, Trailer and Enterprises are parties to a
Stock Acquisition Agreement dated as of January 30, 1998, as amended by First
Amendment to Stock Purchase Agreement dated June 10, 1998 (collectively the
"Original Agreement"); and
WHEREAS, the Original Agreement called for a Closing Date on or before
July 15, 1998; and
WHEREAS, CPS has been threatened with a lawsuit relating to an accident in
Alabama involving a trailer manufactured by CPS (the "Lawsuit"), an adverse
determination in which could have material financial impact on CPS; and
WHEREAS, the parties desire to extend the Closing Date to allow time for
the attempted settlement of the Lawsuit and take certain other actions in
connection with the Lawsuit;
NOW THEREFORE, it is hereby agreed as follows:
1. Closing Date. Paragraph 4 of the Original Agreement shall be amended
such that the Closing Date shall be further postponed to a day selected by
Purchaser on or before the close of business September 15, 1998 or at such other
date as the parties shall otherwise mutually agree upon.
2. Adjustment to Purchase Price. It is understood that CPS is endeavoring
to settle the Lawsuit. In the event CPS settles the Lawsuit, the cash
consideration to be paid by Purchaser pursuant to Paragraph 3.1(a) of the
Original Agreement shall be increased by the lesser of one-half of the
settlement amount or $250,000; provided, however, that (i) the full amount of
the settlement shall be treated as an expense for purposes of determining the
net income of CPS pursuant to Paragraph 3.1(b) of the Original Agreement, (ii)
no part of the credit described in Paragraph 5.37 of the Original Agreement (the
"Basket") shall be applied against the settlement amount, and (iii) the amount
of the Basket shall not be reduced as a result of the settlement. Thus, for
example, if the Lawsuit is settled for $400,000, the cash portion of the
purchase price under Paragraph 3.1(a) of the Original Agreement would be
increased by $200,000, but the net income of CPS under Paragraph 3.1(b) would be
reduced by $400,000.
3. Failure to Settle Lawsuit. As soon as practicable following execution
of the Amendment, Purchaser shall pay an additional $250,000 to Shareholder's
attorney to
be held in escrow in accordance with Paragraph 3.2 of the Original Agreement and
this Amendment. In the event CPS fails to settle the Lawsuit on or before
September 15, 1998 for $1,000,000 or less, Purchaser, in its sole discretion,
may elect to not go forward with the purchase of CPS, and Purchaser in such
event shall receive back its $370,000 deposit (with interest earned thereon) and
neither party shall have any further rights or obligations under the Original
Agreement. In the event CPS settles the Lawsuit on or before September 15, 1998,
and Purchaser fails to purchase CPS in accordance with the Original Agreement
and this Amendment, and CPS and Shareholder are otherwise in compliance with the
Stock Acquisition Agreement, Shareholder in such event shall be entitled to
retain the full amount of the $370,000 deposit (with interest thereon).
4. Termination. Paragraph 13.2 of the Original Agreement is hereby amended
to change the dates therein to September 15, 1998.
5. Representations. Paragraph 5.2(a) is hereby modified to reflect the
fact that the stock of Trailer and of Enterprise do have pre-emptive rights.
6. Agreement in Full Force and Effect. Except as modified herein, the
Original Agreement shall remain in full force and effect.
7. Definitions. The capitalized terms used herein and not otherwise
defined shall have the same meaning as in the Original Agreement.
8. Facsimile Signatures Binding. It is agreed that facsimile signatures on
this Amendment shall be binding.
IN WITNESS WHEREOF, the undersigned have executed this Amended Stock
Acquisition Agreement as of the date first written above.
CPS ENTERPRISES, INC. CPS TRAILER COMPANY) INC.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
President Chief Executive Officer
Selling Shareholder:
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Individually
Purchasers: XXXXXXX INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, President
