Amendment No. 1 to Agreement for Purchase and Sale of Stock
This Amendment No. 1 ("Amendment") dated as of the 15th day of May 1998
is made by and between Advanced D.C. Holdings, Inc., a Delaware corporation
("Holdings"), Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxxxx Xxxxxxx and
Xxxxxx Xxxxxx (all of said individuals being hereinafter collectively referred
to as the "Sellers"), and A.D.C.M. Holding Corp., a New York corporation
("Guarantor").
r e c i t a l s:
Holdings and Sellers previously entered into a certain Agreement for
Purchase and Sale of Stock dated as of the 9th day of April 1998 (the
"Purchase Agreement") concerning the purchase and sale of stock of Advanced
D.C. Motors Inc. ("ADCM") and companies related thereto (the "ADCM
Affiliates"). Holdings and Sellers now agree that the Purchase Agreement
should be amended to reflect revisions and modifications to certain provisions
of the Purchase Agreement as a result of the parties' further discussions and
review subsequent to April 9, 1998. Guarantor has agreed to guarantee the
obligations of Sellers to Holdings under the Purchase Agreement as herein
amended. Capitalized terms not defined herein shall have the meaning ascribed
to them in the Purchase Agreement.
Now therefore, the parties hereby agree that the Purchase Agreement is
amended as set forth below:
1. The first paragraph of the Purchase Agreement is hereby amended to
read as follows to correct typographical errors in the names of some of the
ADCM Companies:
"THIS AGREEMENT (this "Agreement"), dated as of the 9th day of April,
1998, is made by and among ADVANCED D.C. HOLDINGS, INC., a Delaware
corporation ("Holdings"), XXXXXXX X. XXXXXXX, XXXXXX X. XXXXXXXXX, XXXXXXX
XXXXXXX and XXXXXX XXXXXX (all of said individuals being hereinafter
collectively referred to as the "Sellers"), such Sellers at Closing being the
holders of all of the outstanding shares of capital stock of ADVANCED D.C.
MOTORS INC., a New York corporation ("ADCM"), and such Sellers at Closing
being the owners of all the outstanding shares of stock of the following
affiliated corporations: D.C.M. Holding Corp., a New York corporation ("DCM
Holdings"), Electric Vehicle Power Systems Inc., a New York corporation
("EVPS"), Sermed USA Inc., a Texas corporation ("Sermed USA"); Jencoil, Inc.,
a Texas corporation ("Jencoil"); Xxxxxxxx Industries, Inc., a Texas
corporation ("Xxxxxxxx Industries"); Xxxxxxxx Motors & Parts Inc., a Texas
corporation ("WMP"); Electric Vehicle Components, Ltd., a New York corporation
("EVC (NY)") (collectively, the "ADCM Affiliates"), and such Sellers at
Closing also being the indirect owners of certain outstanding shares of stock
of the following subsidiaries of ADCM: Electric Vehicle Components Ltd., a
California corporation and a 50% owned subsidiary of ADCM ("EVC (CA)"); Sermed
S.A.R.L., a French limited liability company and a 99% owned subsidiary of
ADCM ("Sermed"); Advanced DC Motors GmbH, a German limited liability company
and a 90% owned subsidiary of ADCM and Sermed ("ADCM-Germany"); and R&A
Machine Tool Corporation, a New York corporation and a 20% owned subsidiary of
EVC (NY) ("R&A") (collectively, the "Partially-Owned Subsidiaries") (ADCM, the
ADCM Affiliates and the Partially-Owned Subsidiaries herein collectively
referred to as the "ADCM Companies" and individually as an "ADCM Company")."
1. Attached hereto as Schedule A are Wire Transfer Instructions to
which Sellers and Holdings have agreed as the method of satisfying Section
1.2(a) of the Purchase Agreement.
2. Notwithstanding any other provision of Section 1.3 of the Purchase
Agreement, ADCM and Jencoil have designated Sellers and/or Guarantor as their
agents to make payment of certain liabilities as specified on Schedule A
attached hereto. Sellers and Holdings have also agreed that $240,000 shall be
held ("SBA Reserve Account") by ADCM to pay, after Closing, the Small Business
Administration ("SBA") Mortgage and SBA Equipment Loan ("SBA Obligations")
specified in Exhibit 1.3 to the Purchase Agreement as Excluded Liabilities;
and that Holdings shall, after Closing, cause ADCM to pay such SBA Obligations
from the SBA Reserve Account. If the SBA Reserve Account is not sufficient to
pay the SBA Obligations, Sellers and/or Guarantor shall provide additional
funds to Holdings. If the SBA Reserve Account is greater than the amount
needed to pay the SBA Obligations, then Holdings shall promptly cause ADCM to
pay any surplus to Sellers.
3. Holdings hereby acknowledges that, in satisfaction of Sellers'
obligations pursuant to Section 1.6 of the Purchase Agreement, Sellers shall
generate, as of the Closing Date, a computer-generated schedule of all
accounts and notes receivable (and the face amounts thereof) for the ADCM
Companies which are outstanding as of the Closing Date and within 5 business
days deliver such report to Holdings. Holdings agrees to accept such schedule
after the Closing Date in satisfaction of Sellers' obligation under Section
1.6 of the Agreement to deliver such schedule at Closing.
4. Notwithstanding anything to the contrary in the second sentence of
Section 7.7(a) of the Purchase Agreement, Holdings hereby acknowledges that
the ADCM Companies' net sales for the 12 months ended December 31, 1997
equalled $39,350,000 and Holdings hereby waives the requirement that such 1997
net sales for the ADCM Companies equal or exceed $39,800,000.
5. Holdings hereby acknowledges that its due diligence review of the
ADCM Companies and their business operations, prospects and assets has been
completed to its satisfaction of Section 7.9 of the Purchase Agreement, except
for matters relating to the failure to register the air emissions of the
respective ADCM Companies in the states of New York and Texas (the "Air
Emissions"). The Sellers agree to indemnify and hold harmless Holdings and
the ADCM Companies from and against any and all costs and expenses (including
the reasonable fees of attorneys and consultants) related to the Air
Emissions. Notwithstanding the foregoing, Holdings does not waive any of its
other rights under the Purchase Agreement.
6. Notwithstanding the third sentence of Section 7.10 of the Purchase
Agreement (requiring ADCM and Xxxxx Xxxxxxxxx to have terminated the
Stockholders Agreement regarding EVC (CA)), Holdings acknowledges that this
requirement has in all respects been satisfied by the execution and delivery
to Holdings of the Amended Stockholders Agreement attached hereto as Schedule
B.
7. Holdings hereby waives receipt of Estoppel Certificates from the
Lessors under the following leases as described on Exhibit 2.10(A) to the
Purchase Agreement:
Lease No. Landlord Premises
2 Xxxxxxx Food, Inc. 0 Xxxxxxx Xxxxx
Xxxx, XX (R&A)
3 DCM Holding 0000 X. Xxxxxx Xx.
6 DCM Holding 0000 Xxxxx Xx.
10 Xxxxx Xxxxxxx Advanced D.C. Motors GmbH
11 Town of Eternoz Sermed S.A.R.L.
8. The revised exhibits attached to this Amendment No. 1 as Schedule
C are hereby added to and made a part of the exhibits to the Purchase
Agreement.
9. The Guarantor hereby unconditionally guarantees to Holdings the
full and prompt performance and payment of all obligations owed Holdings by
the Sellers under the Purchase Agreement. The Guarantor acknowledges that
this guarantee is being provided to Holdings to induce Holdings to cause the
cash portion of the Purchase Price to be wired to Guarantor instead of the
Sellers.
Except as amended by the provisions set forth above, the Purchase
Agreement shall remain in full force and effect.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
In Witness Whereof the parties hereto have entered into this Amendment
No. 1 as of the date set forth above.
ADVANCED D.C. HOLDINGS, INC.
By:/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx, Vice President
SELLERS:
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
A.D.C.M HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, President
