Exhibit 10.1

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”) is
entered into as of the 15th day of November, 2006, among MILLSTREAM II
ACQUISITION CORPORATION, a Delaware corporation (“Parent”), MILLSTREAM II MERGER
SUB, INC., a Pennsylvania corporation and a wholly owned subsidiary of Parent
(“Sub”), and SPECIALTY SURFACES INTERNATIONAL, INC., a Pennsylvania corporation
(the “Company”).

WHEREAS, Parent, Sub and the Company entered into an Agreement and Plan of
Merger dated August 11, 2006 (the “Merger Agreement”), pursuant to which the
Company will be merged with and into Sub (the “Merger”) and the sole shareholder
of the Company shall be entitled to receive cash and shares of common stock of
Parent in exchange for each share of common stock of the Company; and
 
WHEREAS, Parent, Sub and the Company wish to amend certain terms of the Merger
Agreement.
 
NOW, THEREFORE, the parties hereto agree as follows:

1.  Capitalized Terms. Capitalized terms used but not defined in this Amendment
shall have the meanings as set forth in the Merger Agreement.
 
2.  The fifth “WHEREAS” clause is hereby deleted in its entirety.
 
3.  The sixth “WHEREAS” clause is hereby deleted in its entirety and replaced
with the following:
 
“WHEREAS, simultaneously with the execution and delivery of this Agreement,
Parent and Henry A. Julicher (“H. Julicher”) are entering into an employment
agreement (the “Employment Agreement”), relating to his employment by Parent on
and after the Effective Time;”
 
4.  Section 2.1(c) of the Merger Agreement is deleted in its entirety and
replaced with the following text:
 
“Conversion of Company Common Stock. (i) Subject to Section 2.1(b), each share
of Company Common Stock shall be converted into the right to receive (A) the
number of shares of fully paid and nonassessable shares of Parent Common Stock
equal to (1) 1,500,000 divided by (2) the number of issued and outstanding
shares of Company Common Stock (the “Outstanding Shares”), (B) $8,000,000 in
cash divided by the number of Outstanding Shares, (C) the Delayed Cash
Consideration, if any, divided by the number of Outstanding Shares, (D) the
Delayed Stock Consideration, if any, divided by the number of Outstanding
Shares, (E) the Delayed Receivable
 
 
 

--------------------------------------------------------------------------------

 
Consideration, if any, divided by the number of Outstanding Shares, and (F) the
Additional Delayed Merger Consideration, if any, divided by the number of
Outstanding Shares. “Delayed Cash Consideration” means an amount equal to $10.00
for each $1.00 that EBITDA exceeds $4,600,000 for the fiscal year ended December
31, 2007 (“Fiscal 2007”), or $6,500,000 for the fiscal year ended December 31,
2008 (“Fiscal 2008”), but not to exceed $2,000,000 in the aggregate for Fiscal
2007 and Fiscal 2008 combined. “Delayed Stock Consideration” means (a) for
Fiscal 2007, an amount equal to 1⅔ shares of Parent Common Stock for each $1.00
that EBITDA exceeds $4,800,000 for Fiscal 2007, or (b) for Fiscal 2008, an
amount equal to a number of shares equal to the 2008 Stock Formula for each
$1.00 that EBITDA exceed the 2008 EBITDA Threshold, but not to exceed 2,000,000
shares in the aggregate for Fiscal 2007 and Fiscal 2008 combined. “2008 Stock
Formula” means the quotient of one divided by the quotient of (i) the difference
between $8,500,000 minus the 2008 EBITDA Threshold divided by (ii) the
difference between 2,000,000 million shares and the number of shares, if any, of
Delayed Stock Consideration earned in Fiscal 2007. “2008 EBITDA Threshold” means
an amount equal to $6,500,000 plus the quotient of (a) the difference between
$2,000,000 minus the amount of Delayed Cash Consideration earned in Fiscal 2007
divided by (b) ten. “Delayed Receivable Consideration” means an amount equal to
$0.50 for each $1.00 collected in respect of amounts owed by the Obligated
Parties at any time prior to the two year anniversary of the Closing Date in
respect of amounts owed by the Obligated Parties to the Company as of the date
of this Agreement. “Additional Delayed Merger Consideration” means an amount
equal to two percent of the increase in annual Net Sales of Parent for the
Fiscal 2007, Fiscal 2008 and fiscal year ending December 31, 2009 over Parent’s
Net Sales for the immediately preceding fiscal year (i.e., the increase of 2007
Net Sales over 2006 Net Sales, the increase of 2008 Net Sales over 2007 Net
Sales and the increase of 2009 Net Sales over 2008 Net Sales); provided that the
amount of Additional Delayed Merger Consideration shall not exceed $600,000 in
any year. For purposes of this Agreement, “Net Sales” shall mean gross sales as
set forth on Parent’s audited annual financial statements less promotional
discounts and allowances to the extent such discounts and allowances are
included in gross sales. For the fiscal year ending December 31, 2006, the Net
Sales of the Company prior to the Effective Time and of the Surviving
Corporation after the Effective Time shall constitute Net Sales of Parent. For
purposes of this Agreement, “EBITDA” shall mean operating income derived from
the operations of the Surviving Corporation for the specified period plus
depreciation and amortization attributable to the operations of the Surviving
Corporation for such period minus any amounts included in EBITDA (a) derived
from the sale of the Company’s interest in TurfStores.com, Inc. d/b/a Turf Store
Co. and (b) collected from the Obligated Parties in respect of amounts owed by
the Obligated Parties to the Company as of the date of this Agreement; provided,
however, that in the event the Surviving Company shall have acquired, either
through the acquisition of substantially all of the assets, all of the stock or
by merger or otherwise, an operating business (the “Target Business”) the amount
of operating income plus depreciation and amortization (the “Target Income”)
generated from the Target Business that shall be included for purposes of
calculating EBITDA will be the amount by which the Target Income generated
during the period between the date of the acquisition through the end of the
fiscal year in question (the “Measurement Period Target Income”) exceeds the
Target Income in the comparable prior year period (the “Comparable Period Target
Income”); provided, further, that in the event the acquisition of the Target
Business took place during the Fiscal 2007, the Measurement Period Target Income
will be the Target Income generated from January 1, 2008 through December 31,
2008 and the Comparable
 
 
 

--------------------------------------------------------------------------------

 
Period Target Income will be the Target Income generated from January 1, 2007
through December 31, 2007 for purposes of the EBITDA calculation for the Fiscal
2008; provided, further, that in the event the Measurement Period Target Income
is less than the Comparable Period Target Income, the amount of such difference
will be deducted for purposes of calculating EBITDA. EBITDA shall be as
determined by Parent’s certified public accountants from the audited financial
statements for the specified period. The parties acknowledge and agree that the
obligation to pay any Delayed Cash Consideration, Delayed Stock Consideration,
Delayed Receivable Consideration and/or Additional Delayed Merger Consideration
shall be binding upon any and all successors and assigns of the Surviving
Corporation, including, without limitation, any purchaser of all or
substantially all of the assets of Surviving Corporation and any surviving
company in a merger, consolidation or similar event involving the Surviving
Corporation (a “Successor”). Parent, Sub and the Surviving Corporation shall use
commercial reasonable efforts to ensure that Successor keeps books and records
reasonably sufficient to determine whether the conditions to such payment have
been met. Notwithstanding anything to the contrary contained herein, in the
event the payment of any Delayed Cash Consideration, Delayed Receivable
Consideration or Additional Delayed Merger Consideration would cause the value
of the shares of Parent Common Stock received by the shareholder of the Company
in the Merger to be less than forty percent (40%) of the total value of all
consideration received by the shareholder of the Company in the Merger for
purposes of Section 368(a)(2)(D) of the Code (the “Total Value”), then the
Surviving Corporation and Parent shall pay an amount of Delayed Cash
Consideration, Delayed Receivable Consideration or Additional Delayed Merger
Consideration in shares of Parent Common Stock necessary such that the value of
the shares of Parent Common Stock in lieu of cash received by the shareholder of
the Company in the Merger is equal to forty percent (40%) of the Total Value. In
the event Parent and theSurviving Corporation issue shares of Parent Common Sock
in lieu of the payment of Delayed Cash Consideration, Delayed Receivable
Consideration or Additional Delayed Merger Consideration in cash pursuant to the
immediately preceding sentence and thereafter amounts of Delayed Stock
Consideration become payable, then Parent and Surviving Corporation shall
thereafter, in lieu of issuing shares of Parent Common Stock in payment of the
obligation to pay Delayed Stock Consideration, pay an amount of Delayed Stock
Consideration in cash equal to the lesser of (i) the value of the Delayed Cash
Consideration, Delayed Receivable Consideration and Additional Delayed Merger
Consideration, as the case may be, that was paid in stock pursuant to the
immediately preceding sentence and (ii) an amount such that its payment would
not make the value of shares of Parent Common Stock issued in the Merger be less
than forty percent (40%) of Total Value. The value of each share of Parent
Common Stock to be received in the Merger shall equal the last closing sale of a
share of Parent Common Stock on the day prior to the date of issuance; provided,
however, for purposes of determining the number of shares to be issued in lieu
of the payment of Delayed Cash Consideration, Delayed Receivable Consideration
or Additional Delayed Merger Consideration in cash, such value shall equal the
average of the last closing sale price of Parent Common Stock for the ten
trading days immediately preceding the date of issuance.”
 
5.  The first sentence of Section 2.1(c)(ii) of the Merger Agreement is hereby
deleted in its entirety and replaced with the following:
 
“The shares of the Parent Common Stock to be issued, including the Delayed Stock
Consideration, if any, and all cash payable including the Delayed Cash
Consideration, if any, the Delayed Receivable Consideration, if any, and the
Delayed Merger
 
 
 

--------------------------------------------------------------------------------

 
Consideration, if any, upon the conversion of the Company Common Stock pursuant
to Section 2.1(c), are referred to collectively as “Merger Consideration”.”
 
6.  Section 2.1(c)(iii) of the Merger Agreement is hereby deleted in its
entirety.
 
7.  Section 2.2(b) of the Merger Agreement is hereby deleted in its entirety and
replaced with the following:
 
“Exchange Procedures. Immediately following the Effective Time, (x) Parent shall
pay to the holders of the outstanding Company Common Stock the $8,000,000 to
which such holders are entitled as the portion of the Merger Consideration
described in clause (B) of Section 2.1(c)(i) and (y) the Exchange Agent shall
deliver to the holders of shares of Company Common Stock certificates
representing the number of shares of Parent Common Stock into which such shares
shall have been converted in accordance with clause (A) of Section 2.1(c)(i).
The Delayed Cash Consideration, if any, and the Delayed Stock Consideration, if
any, shall be paid to the holders of the shares of Company Common Stock that
were converted into the right to receive the Merger Consideration within ten
days after the issuance of the audited financial statements of Parent for each
of the fiscal years ending 2007 and 2008. The Delayed Receivable Consideration,
if any, shall be paid to the holders of the shares of the Company Common Stock
that were converted into the right to receive the Merger Consideration with
thirty days of receipt of immediately available funds from the Obligated Parties
in respect of amounts owed by the Obligated Parties to the Company as of the
date of this Agreement. The Additional Delayed Merger Consideration, if any,
shall be paid to the holders of the shares of Company Common Stock that were
converted into the right to receive the Merger Consideration within ten days
after the issuance of the audited financial statements of Parent for each of the
fiscal years ending 2007, 2008 and 2009. Each share of Company Common Stock
shall be deemed at any time after the Effective Time to represent only the right
to receive the Merger Consideration as contemplated by this Section 2.2.”
 
8.  All references in the Merger Agreement to Delayed Merger Consideration are
hereby deleted and replaced with Additional Delayed Merger Consideration.
 
9.  Parent, Sub and the Company hereby agree that the Indemnification Agreement
is hereby terminated.
 
10.  All references in the Merger Agreement to the Indemnification Agreement are
hereby deleted.
 
11.  Section 6.4 is amended to delete the following text:
 
“; provided, however, that Parent shall not indemnify H. Julicher for any act or
omission to the extent such act or omission causes “Parent Losses” (as defined
in the Indemnification Agreement)”
 
12.  Section 6.13(b) of the Merger Agreement is hereby deleted in its entirety
 
13.  A new Section 7.1(h) is added to the Merger Agreement as follows:
 
 
 

--------------------------------------------------------------------------------

 
“(h) Stock Value. The value of the shares of Parent Common Stock to be received
in the Merger (at the Effective Time, and without regard to the possibility of
the payment of Delayed Cash Consideration, Delayed Stock Consideration, Delayed
Receivable Consideration and Additional Delayed Merger Consideration) can not be
less than forty percent (40%) of the total value of all consideration to be
received by the shareholder of the Company in the Merger for purposes of Section
368(a)(2)(D) of the Code. For purposes of this condition, the value of each
share of Parent Common Stock to be received in the Merger shall equal the last
closing sale of a share of Parent Common Stock on the day prior to the Merger.
 
14.  No Further Modifications. Except as expressly set forth in this Amendment,
the Merger Agreement shall be unmodified and remain in full force and effect.
 
15.  Governing Law. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the Commonwealth of Pennsylvania,
applicable to contracts made and to be performed entirely within the
Commonwealth of Pennsylvania (without giving effect to principles of choice of
law or conflict of laws that would require application of the laws of a
jurisdiction other than the Commonwealth of Pennsylvania).
 
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
 

 
 

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed this
Amendment, all as of the date first written above.

 
MILLSTREAM II ACQUISITION CORPORATION
                 
By:
/s/ Arthur Spector
 
 
Name:
Arthur Spector
 
 
Title:
Chairman, Chief Executive
 
 
 
Officer and President
                 
MILLSTREAM II MERGER SUB, INC.
                 
By:
/s/ Arthur Spector
 
 
Name:
Arthur Spector
 
 
Title:
Chairman, Chief Executive
 
 
 
Officer and President
                         
SPECIALTY SURFACES INTERNATIONAL, INC.
                 
By:
/s/ Henry Julicher
 
 
Name:
Henry Julicher
 
 
Title:
Chief Executive Officer

 
 

--------------------------------------------------------------------------------