EXHIBIT 2.3
AMENDMENT NO. 1 TO PURCHASE AGREEMENT
This AMENDMENT NO. 1 dated as of February 13, 2004 (this "Amendment") to
the Purchase Agreement dated as of November 18, 2003 (the "Purchase Agreement")
among Ionics, Incorporated, a Massachusetts corporation (the "Purchaser"), and
the individuals and entities listed on Exhibit A thereto (the "Sellers").
WHEREAS, the Purchaser and Sellers wish to amend certain sections of the
Purchase Agreement as provided below;
NOW, THEREFORE, in consideration of the premises and the agreements herein
contained, and intending to be legally bound hereby, the parties hereby agree as
follows:
1. AMENDMENT OF PURCHASE AGREEMENT.
1.01 Section 1.04(a) of the Purchase Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"(a) "Excess Cash" shall mean the amount equal to (i) the sum of (A)
all cash, cash equivalents (including cash represented by undeposited
checks) and marketable securities held by the Companies and their
subsidiaries as of the close of business on January 31, 2004 (the
"Allocation Date") plus (B) cash deposits made by the Companies and
held by the Internal Revenue Service for Required Payment for Refund
under Section 7519 of the Code (which, as of November 18, 2003, were
in the approximate amount of $1,620,988) as described in SECTION
1.04(a) OF THE SELLER DISCLOSURE SCHEDULE (collectively, the
"Deposits"), plus (c) $900,000, which represents the agreed upon
adjustment related to the Excess Cash that the Companies and their
subsidiaries were expected to generate between the close of business
on the Allocation Date and the close of business on the business day
immediately prior to the Closing Date, minus (ii) the sum of (A) all
amounts necessary for the Companies and their subsidiaries to satisfy
and discharge in full all Borrowed Debt and all monetary liabilities
and obligations arising under any Derivatives existing as of the
Closing (including any Liens securing such Borrowed Debt and other
items), (B) if, as of the close of business on the business day
immediately prior to the Closing Date, the Companies and their
subsidiaries shall not have made all Required Capital Calls (as
defined below) in cash, the aggregate amount of all Required Capital
Calls that have not been made by the Companies and their subsidiaries
before the close of business on the business day immediately prior to
the Closing Date, (C) the amount represented by checks issued by the
Companies and their subsidiaries prior to the Allocation Date, but
uncollected or unpaid as of the close of business on the Allocation
Date and (D) $1,000,000, which represents the agreed upon adjustment
related to UK deferred income taxes as disclosed in the Combined
Balance Sheet. Between the date hereof and the close of business on
the business day immediately prior to the Closing Date, the Companies
and their subsidiaries shall make all investments in, and capital
contributions to, the Nalco JV that the Companies and their
subsidiaries are required to make through the Closing Date pursuant to
any partnership, operating or other governing agreements of the Nalco
Amendment No. 1 to Purchase Agreement - Page 2
JV (the "Required Capital Calls"); provided, however, that for
purposes of determining Excess Cash, the investments in, and capital
contributions to, the Nalco JV by the Companies and their subsidiaries
relating to the Project that were not made prior to the close of
business on the Allocation Date shall not constitute Required Capital
Calls. Sellers hereby inform Purchaser that there are no unmade
Required Capital Calls as of the date hereof, and that the Sellers
currently expect that the investment in, or capital contribution to,
the Nalco JV by the Companies and their subsidiaries relating to the
Project will be approximately $450,000. For purposes of determining
Excess Cash (and any related items), all assets and liabilities of the
Nalco JV shall be excluded. The parties acknowledge that Sellers
intend to cause to be distributed to Sellers before the Closing all
Excess Cash and no more. Sellers Representatives shall prepare and
deliver to Purchaser at least two business days before the Closing
Date, a good faith estimate of the amount of Excess Cash as of the
Closing (the "Estimated Closing Excess Cash Amount") (such estimate to
separately set forth both the aggregate and detailed amounts
supporting the Estimated Closing Excess Cash Amount and the amounts
thereof allocated to each Seller under Section 1.01(c)). Since the
Allocation Date neither the Companies nor their subsidiaries have
made, and from and after the Allocation Date neither the Companies nor
their subsidiaries shall make, any distribution of cash, cash
equivalents, marketable securities or Deposits unless the making of
such distribution and the amount thereof was specifically included in
the Sellers' calculation of the Estimated Closing Excess Cash Amount.
"Final Excess Cash Amount" shall mean the amounts of Excess Cash set
forth on the Closing Excess Cash Statement that becomes final and
binding on each Seller and Purchaser in accordance with this Section
1.04."
1.02 Section 1.04(h) of the Purchase Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"(h) "Working Capital" shall mean Current Assets minus Current
Liabilities. "Current Assets" shall mean total current assets of the
Companies and their subsidiaries, excluding any items included in the
calculation of Excess Cash. Current Assets shall be calculated in a
consistent manner, using the same GAAP accounting principles,
practices, methodologies and policies as applied to current assets in
the Combined Balance Sheet. "Current Liabilities" shall mean total
current liabilities of the Companies and their subsidiaries, excluding
any items included in the calculation of Excess Cash. Current
Liabilities shall be calculated in a consistent manner, using the same
GAAP accounting principles, practices, methodologies and policies as
applied to current liabilities in the Combined Balance Sheet. Working
Capital shall include Current Assets or Current Liabilities relating
to Taxes properly accruable by the Companies or their subsidiaries
calculated in a consistent manner, using the same GAAP accounting
principles, practices, methodologies and policies as applied to Taxes
in the
Amendment No. 1 to the Purchase Agreement - Page 3
Combined Balance Sheet (for the avoidance of doubt, deferred taxes
related to the UK, as recorded in the Combined Balance Sheet, are not
includable in Current Assets or Current Liabilities). Working Capital
shall not include any Borrowed Debt or any Derivatives, which are
included in the calculation of Excess Cash. Working Capital shall not
include any accruals for (i) unused vacation or (ii) advances to
Sellers that are reclassified as distributions to such Sellers before
the Closing Date. For purposes of determining Working Capital (and any
related items), all assets and liabilities of the Nalco JV shall be
excluded. All bonuses payable to employees of the Companies and their
subsidiaries that are currently scheduled to be paid in November 2003
for sales bonuses and January 2004 for other employees, although
discretionary, were paid before the close of business on the
Allocation Date. "Closing Working Capital" shall mean Working Capital
as of the close of business on the Allocation Date. "Closing WC
Amount" shall mean Closing Working Capital minus $17,000,000. Sellers
Representatives shall prepare and deliver to Purchaser at least two
business days before the Closing Date, a good faith estimate of the
amount of Closing Working Capital (the "Estimated Closing Working
Capital") and Closing WC Amount (the "Estimated Closing WC Amount")
(such estimates to separately set forth both the aggregate and
detailed amounts supporting the Estimated Closing Working Capital and
Estimated Closing WC Amount and the amounts thereof allocated to each
Seller under Section 1.01(c)). "Final Closing Working Capital" shall
mean the amounts of Closing Working Capital set forth on the Closing
Working Capital Statement that becomes final and binding on each
Seller and Purchaser in accordance with this Section 1.04. "Final
Closing WC Amount" shall mean Final Closing Working Capital minus
$17,000,000."
1.03 Section 1.04(i) of the Purchase Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
"(i) Until final resolution of any issues regarding the Post-Closing
Statements, Purchaser shall not take any actions with respect to the
historical accounting books and records of the Companies on which the
Post-Closing Statement are based not consistent with the past
practices of the Companies. Without limiting the generality of the
foregoing, no changes shall be made until such determination in any
reserve or other account existing as of the date of the Combined
Balance Sheet or the Allocation Date except as a result of events
occurring after the date of the Combined Balance Sheet through the
Allocation Date and, in such event, only in a manner consistent with
the methodology used in the Combined Balance Sheet. During the period
required for the preparation and review of, and resolution of disputes
relating to, the Post-Closing Statements or any amounts set forth
therein or based thereon, Sellers and Purchaser shall each afford the
other's accountants and other designated representatives reasonable
access during regular business hours to the books and records of the
Companies and their respective subsidiaries as they may reasonably
require in order to review and verify the items in the Post-Closing
Statements."
Amendment No. 1 to Purchase Agreement - Page 4
1.04 The Purchase Agreement shall be amended by adding new Section 1.04(k),
which shall read in its entirety as follows:
"(k) The Seller hereby represent and warrant to Purchaser that
Ecolochem JV Holdings, Inc. is responsible for making a final capital
contribution to the Nalco JV in the amount of $450,000 (the "Final
Capital Call Amount") in respect of the last remaining project to be
completed by the Nalco JV (the "Project"), that Ecolochem has
previously provided equipment to the Nalco JV in respect of the
Project with an aggregate value of $1,264,000 (the "Equipment Amount")
and that Ecolochem will issue one or more invoices to the Nalco JV in
respect of the Equipment Amount (the "Ecolochem Invoice") within 60
days of the Closing Date. Within 10 business days after receipt of
payment by Ecolochem from the Nalco JV with respect to the Ecolochem
Invoice, Purchaser will pay to the Ecolochem Sellers an amount equal
to the amount actually paid by the Nalco JV with respect to the
Ecolochem Invoice less the Final Capital Call Amount. Such amount to
be paid by Purchaser shall be allocated among the Ecolochem Sellers in
the same proportion as the Initial Cash Consideration is to be
apportioned as of the Closing Date.
1.05 Section 8.02(m) of the Purchase Agreement shall be amended by deleting
such section in its entirety.
Amendment No. 1 to the Purchase Agreement - Page 5
2. MISCELLANEOUS.
2.01. Effect. Except as previously amended and as amended hereby, the
Purchase Agreement shall remain in full force and effect.
2.03. No Waiver. This Amendment is effective only in the specific instance
and for the specific purpose for which it is executed and, except as
specifically set forth herein, shall not be considered a waiver or agreement to
amend as to any provision of the Purchase Agreement (as amended) in the future.
2.04. Defined Terms. All capitalized terms used but not specifically
defined herein shall have the same meanings given such terms in the Purchase
Agreement unless the context clearly indicates or dictates a contrary meaning.
2.05. Notices. All notices, requests, demands and other communications
provided for in this Amendment shall be delivered in compliance with Section
11.04 of the Purchase Agreement.
2.06. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF THE STATE OF NEW YORK.
2.07. Counterparts. This Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement. This
Amendment shall become effective when each party hereto shall have received a
counterpart, or facsimile of a counterpart, of this Amendment, each signed by
the other party or parties hereto or thereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Amendment No. 1 to the Purchase Agreement - Page 6
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
or have caused it to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
PURCHASER:
IONICS, INCORPORATED
By: /s/ Stephen Korn
------------------------------------
Stephen Korn
Vice President and General Counsel
[Amendment No. 1 to Purchase Agreement Signature Page]
SELLERS:
ECOLOCHEM, INC. SHAREHOLDERS
THE LYMAN B. DICKERSON REVOCABLE TRUST DATED
SEPTEMBER 9, 1996, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Lyman B. Dickerson
-----------------------------------------
LYMAN B. DICKERSON, Trustee
THE RICHARD DICKERSON REVOCABLE TRUST DATED
MARCH 5, 1993, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Co-Trustee
By: /s/ Marguerite W. Dickerson
-----------------------------------------
MARGUERITE W. DICKERSON, Co-Trustee
[Amendment No. 1 to Purchase Agreement Signature Page]
THE DOUGLAS G. DICKERSON REVOCABLE TRUST
DATED JUNE 22, 1988, OR ANY SUCCESSOR
TRUSTEE, AS AMENDED
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Trustee
ECOLOCHEM INTERNATIONAL, INC. SHAREHOLDERS
THE LYMAN B. DICKERSON REVOCABLE TRUST DATED
SEPTEMBER 9, 1996, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Lyman B. Dickerson
-----------------------------------------
LYMAN B. DICKERSON, Trustee
THE RICHARD DICKERSON REVOCABLE TRUST DATED
MARCH 5, 1993, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Co-Trustee
By: /s/ Marguerite W. Dickerson
-----------------------------------------
MARGUERITE W. DICKERSON, Co-Trustee
THE DOUGLAS G. DICKERSON REVOCABLE TRUST
DATED JUNE 22, 1988, OR ANY SUCCESSOR
TRUSTEE, AS AMENDED
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Trustee
[Amendment No. 1 to Purchase Agreement Signature Page]
THE LYMAN DICKERSON IRREVOCABLE TRUST, DATED
JULY 1, 1991
By: /s/ Lyman B. Dickerson
-----------------------------------------
LYMAN B. DICKERSON, Trustee
By: /s/ Charles C. Kline
-----------------------------------------
CHARLES C. KLINE, Independent Trustee
THE RICHARD DICKERSON IRREVOCABLE TRUST
NO. 3, DATED JULY 1, 1991
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Co-Trustee
By: /s/ Marguerite W. Dickerson
-----------------------------------------
MARGUERITE W. DICKERSON, Co-Trustee
By: /s/ Frederick T. Stant
-----------------------------------------
FREDERICK T. STANT, III,
Independent Trustee
THE DOUGLAS DICKERSON IRREVOCABLE TRUST
NO. 3, DATED JULY 1, 1991
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Trustee
By: /s/ Frederick T. Stant
-----------------------------------------
FREDERICK T. STANT, III,
Independent Trustee
[Amendment No. 1 to Purchase Agreement Signature Page]
MOSON HOLDINGS, L.L.C., MEMBERS
THE LYMAN B. DICKERSON REVOCABLE TRUST DATED
SEPTEMBER 9, 1996, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Lyman B. Dickerson
-----------------------------------------
LYMAN B. DICKERSON, Trustee
THE RICHARD DICKERSON REVOCABLE TRUST DATED
MARCH 5, 1993, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Co-Trustee
By: /s/ Marguerite W. Dickerson
-----------------------------------------
MARGUERITE W. DICKERSON, Co-Trustee
THE DOUGLAS G. DICKERSON REVOCABLE TRUST
DATED JUNE 22, 1988, OR ANY SUCCESSOR
TRUSTEE, AS AMENDED
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Trustee
THE LYMAN DICKERSON IRREVOCABLE TRUST, DATED
JULY 1, 1991
By: /s/ Lyman B. Dickerson
-----------------------------------------
LYMAN B. DICKERSON, Trustee
By: /s/ Charles C. Kline
-----------------------------------------
CHARLES C. KLINE, Independent Trustee
[Amendment No. 1 to Purchase Agreement Signature Page]
THE RICHARD DICKERSON IRREVOCABLE TRUST
NO. 3, DATED JULY 1, 1991
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Co-Trustee
By: /s/ Marguerite W. Dickerson
-----------------------------------------
MARGUERITE W. DICKERSON, Co-Trustee
By: /s/ Frederick T. Stant
-----------------------------------------
FREDERICK T. STANT, III,
Independent Trustee
THE DOUGLAS DICKERSON IRREVOCABLE TRUST
NO. 3, DATED JULY 1, 1991
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Trustee
By: /s/ Frederick T. Stant
-----------------------------------------
FREDERICK T. STANT, III,
Independent Trustee
[Amendment No. 1 to Purchase Agreement Signature Page]
ECOLOCHEM, S.A.R.L. SHAREHOLDERS
/s/ Lyman B. Dickerson
--------------------------------------------
LYMAN B. DICKERSON
/s/ Douglas G. Dickerson
--------------------------------------------
DOUGLAS G. DICKERSON
THE ESTATE OF RICHARD C. DICKERSON
By: /s/ Douglas G. Dickerson
-----------------------------------------
DOUGLAS G. DICKERSON, Co-Executor
By: /s/ Marguerite W. Dickerson
-----------------------------------------
MARGUERITE W. DICKERSON, Co-Executor