EXHIBIT 2.3 (C)
SECOND AMENDMENT TO MERGER AGREEMENT
THIS SECOND AMENDMENT TO MERGER AGREEMENT (the "Amendment") is executed
effective as of the ____ day of October, 1999, by and among INNOVATIVE VALVE
TECHNOLOGIES, INC., a Delaware corporation ("Invatec"), COLONIAL PROCESS SERVICE
& EQUIPMENT CO., INC., a Delaware corporation ("Colonial Delaware") and
successor-by-merger to Colonial Acquisition, Inc., Colonial Process Equipment
Co., Inc. and Colonial Service Company, Inc., and MARTIN T. DOONEY, an
individual residing in Massachusetts (Invatec, Colonial Delaware and Mr. Dooney
are hereinafter sometimes referred to collectively as the "Parties" and
individually as a "Party"). Except as otherwise specifically indicated herein,
all defined terms contained herein shall have the same meanings as contained in
that certain Merger Agreement (the "Original Merger Agreement") dated effective
July 9, 1998, executed by Invatec, Colonial Acquisition, Inc., Colonial Process
Equipment Co., Inc., Colonial Service Company, Inc. and Mr. Dooney, as amended
by that certain Amendment to Merger Agreement (the "First Amendment") dated
effective January 1, 1998, executed by the Parties (the Original Merger
Agreement, as amended by the First Amendment, is hereinafter referred to as the
"Merger Agreement").
WHEREAS, Invatec has provided to Mr. Dooney, on a confidential basis
pursuant to the Confidentiality and Nondisclosure Agreement entered into as of
October __, 1999, (the "Confidentiality Agreement"), information regarding one
or more possibilities for a potential Restructuring (as defined in the
Confidentiality Agreement) and, in connection with a Restructuring, Invatec has
requested that Mr. Dooney and certain other third parties (collectively, the
"Holders"), including certain former owners of companies acquired by Invatec,
and certain holders of debt or preferred stock issued by Invatec or its
subsidiaries, amend the terms of the obligations owed to such Holders (any
agreements entered into with any Holders, if any, being hereinafter referred to
collectively as the "Holders' Modification Agreements"), in order to allow
Invatec to pursue, discuss and negotiate a Restructuring and induce the
stockholders of Invatec to approve or otherwise participate in a Restructuring
and any other Restructuring approved by Invatec, and to enter into and
consummate any transactions which may arise therefrom or in connection therewith
(any such Restructuring and such transactions being hereinafter collectively
referred to as the "Transaction");
WHEREAS, Mr. Dooney has agreed to modify the terms of Invatec's
obligations to him under the Merger Agreement on the terms hereinafter set
forth;
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
1. Paragraph 5(C) of the Merger Agreement is hereby deleted in its
entirety, and substituted therefor is the following:
"(C) ADJUSTMENT. Notwithstanding the foregoing or any provision
hereof to the contrary, if the Current Market Price as of the one year
anniversary of the Effective Time (the "Subsequent Measurement Date") is
less than Seven and 31/100
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Dollars ($7.31) (the "Agreed Closing Value of Invatec Stock"), then
Invatec will pay the Stockholder for each share of Invatec Common Stock
issued to him in the Acquisition (after giving effect to any adjustment
pursuant to this PARAGRAPH 5) and still owned by the Stockholder as of the
Subsequent Measurement Date (a) if such payment is made on or before
January 31, 2000, Three and 21/100 Dollars ($3.21), payable in cash, or
(b) if such payment is made after January 31, 2000, Four and 81/100
Dollars ($4.81), at least one-half of such payment to be made by Invatec
issuing to the Stockholder Invatec Common Stock at a per share price equal
to the Current Market Price as of the Subsequent Measurement Date.
2. The parties hereby acknowledge and agree that as of the Subsequent
Measurement Date, Mr. Dooney owned Eighty-One Thousand Twenty (81,020) shares of
Invatec Common Stock issued to him in the Acquisition and that upon execution
hereof he will be entitled to (a) Two Hundred Sixty Thousand Seventy Four and
20/100 Dollars ($260,074.20), all of which is to be paid in cash, if such
payment is made on or before January 31, 2000, and (b) Three Hundred Eighty-Nine
Thousand Seven Hundred Six and 20/100 Dollars ($389,706.20), at least one-half
of such payment to be made in Invatec Common Stock as contemplated above, if
such payment is made after January 31, 2000.
3. Each Party hereby agrees not to file any claim or cause of action
against any person or entity, whether or not a party to this Agreement, with
respect to the Merger Agreement or any of the transactions contemplated therein,
prior January 31, 2000 (the "Standstill Expiration Date").
4. The Parties agree that any limitations periods for bringing a claim or
cause of action not already barred at the date of this Amendment but which would
expire before the Standstill Expiration Date, are hereby tolled and extended
through and including February 15, 2000. This Amendment shall not serve to
extend or in any manner affect limitations periods which would not otherwise
expire prior to the Standstill Expiration Date, nor shall it serve to revive any
claims or actions upon which limitations have expired at the date of this
Amendment. Each Party acknowledges and confirms that in no way shall the terms
and provisions hereof be, or be construed to be, an admission of any liability
of any Party to any other Party, or an acknowledgment of the validity of any
claim or potential claim of any other Party.
5. Effective upon receipt of the payment described in Section 2 hereof, to
the maximum extent permitted by applicable law, Mr. Dooney releases and forever
discharges Invatec and its officers, directors, shareholders, employees, agents,
representatives and affiliates, and their respective heirs, administrators,
successors and assigns (individually a "Released Party" and collectively, the
"Released Parties"), from any and all debts, liabilities, obligations, claims,
demands, actions or causes of action that arise out of or are based upon any
misrepresentation, omission, transaction, fact, event or other matter related
to, based upon or arising out of the Merger Agreement, as amended hereby, this
Amendment, or any of the transactions contemplated herein or therein (INCLUDING
ANY ACT OR FAILURE TO ACT THAT CONSTITUTES ORDINARY OR GROSS NEGLIGENCE OR
RECKLESS OR WILLFUL, WANTON MISCONDUCT). Mr. Dooney (i) acknowledges that he
fully comprehends and understands all the terms of this release and its legal
effects, and (ii) expressly represents and warrants that (a) he is competent to
effect the release made herein knowingly and voluntarily and
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without reliance on any statement or representation of any Released Party or any
of their agents, employees or representatives, and (b) he has had the
opportunity to consult with an attorney of his choice regarding this release and
has done so.
6. Mr. Dooney understands that Invatec is subject to the reporting
requirements of Section 13 of the Securities Exchange Act of 1934 (the "Exchange
Act"). Mr. Dooney has been furnished a copy of Invatec's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 and its quarterly reports on
Form 10-Q for the fiscal quarters ended March 31 and June 30, 1999
(collectively, the "Reports"). Mr. Dooney has (i) for a reasonable amount of
time had an opportunity to ask questions and receive answers concerning the
Reports, Invatec and its business, the terms and conditions of the
Restructuring, this Agreement and the Holders' Modification Agreements, and is
satisfied with the results thereof, (ii) been given access, if requested, to all
other documents with respect to Invatec or the Restructuring, as well as to such
other information as Mr. Dooney has requested, and (iii) relied solely on
investigations conducted by Mr. Dooney in making the decision to execute and
deliver this Agreement.
7. All other terms, conditions and covenants contained in the Merger
Agreement shall remain in full force and effect except as expressly amended
herein. The Parties hereby authorize, adopt, ratify, confirm and approve the
Acquisition on the terms and conditions set forth in the Merger Agreement,
except as the same are expressly amended hereby.
8. Although Invatec agrees to pursue the execution and delivery of the
Holders' Modification Agreements by the other Holders, this Amendment shall be
binding upon, and inure to the benefit of, each of the Parties hereto, and their
respective heirs, executors, administrators, successors and assigns, regardless
of whether any other Holder executes a Holders' Modification Agreement.
9. From time to time after the execution hereof, at the request of Invatec
or its successors or assigns, each other Party shall execute an deliver such
further documents and take such other and further actions as may be reasonably
requested by Invatec or its successors or assigns arising out of this Amendment
or any of the agreements or transactions contemplated herein.
10. Each of the undersigned representatives of each Party represents and
warrants that his signature constitutes the valid and binding act of such Party,
and that he has been duly authorized, empowered and directed to execute and
deliver this Amendment.
11. The Merger Agreement, this Amendment and the Confidentiality Agreement
embody the entire agreement and understanding among the Parties relating to the
subject matter hereof, and supersede all prior proposals, negotiations,
agreements, commitments and understandings relating to such subject matter.
There are no unwritten agreements among the Parties. In addition, the Parties
acknowledge and agree that (a) the form, terms and provisions of any Transaction
may change, (b) such changes may be material, (c) any Transaction may be
abandoned for a different Restructuring, and (d) the obligations of each Party
hereunder shall remain in full force and effect with respect to such changed or
different Transaction.
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12. This Amendment may be executed simultaneously in a number of identical
counterparts, each of which shall be an original and all of which together shall
constitute but one and the same instrument. Facsimile signatures shall be
treated as original signatures for all purposes relating to this Amendment.
IN WITNESS WHEREOF, this Amendment has been executed and delivered to be
effective as of the date first set forth above.
INNOVATIVE VALVE
TECHNOLOGIES, INC.
By: /s/ CHARLES F. SCHUGART
Charles F. Schugart, President
COLONIAL PROCESS EQUIPMENT
& SERVICE CO., INC.
By: /s/ CHARLES F. SCHUGART
Charles F. Schugart, Senior Vice
President
MARTIN T. DOONEY
MARTIN T. DOONEY
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