Exhibit 10.2
October 8, 2004 Amendment To The Pure Nature Class A Units
Purchase Agreement Entered Into On June 9, 2004
This October 8, 2004 Amendment To The Pure Nature Class A Units Purchase
Agreement Entered into On June 9, 2004 (the "Amendment") is entered into
effective as of October 8, 2004 by and between Pure Nature, LLC (Colorado),
whose address appears below ("PN"), Compound Management, LLC (California),
whose address appears below ("CM"), and the various unit holders of Pure
Nature, LLC, whose names and addresses appear below. The above are
collectively referred to as the Parties.
RECITALS
WHEREAS, on October 8, 2004 Compound Management, LLC ("CM") voted its
51% controlling interest in Pure Nature, LLC ("PN") to approve the exchange
of the Pure Nature LLC ("PN") units for shares in Compound Natural Foods,
Inc. ("CNF"), and
WHEREAS, Compound Natural Foods, Inc. ("CNF"), also hereinafter referred
to as the "Public Company" and/or the "Parent Company" has acquired the
controlling interest in that certain public company currently known as Zurich
American Financial Group S.A. whose stock is traded on over-the-counter
market (OTC) under the stock symbol "ZRAF". Compound Natural Foods, Inc. is
in the processing of changing the name of the pubic company from Zurich
American Financial Group SA. to Compound Natural Foods, Inc. and is applying
for a new stock symbol, which shall be provided to the unit holders of Pure
Nature, LLC ("PN") as soon as the new stock symbol has been approved. The
nationwide press release announcing the acquisition of Zurich American by
Compound Natural Foods, Inc. ("CNF") is on xxx.xxxxxxxxxxxxxxxxxxxx.xxx, and
WHEREAS, Pure Nature, LLC wishes to confirm the number of public company
shares to be exchanged with each of the Pure Nature, LLC unit holders of
record and confirm other business and administrative matters in conjunction
with this Amendment.
AGREEMENT WITH RESPECT TO THE AMENDMENT
NOW THEREFORE, for adequate consideration, the sufficiency of which is
hereby acknowledged, the Parties hereby mutually agree as it pertains to each
them as follows:
1. Issuance Of Public Company Stock Certificates To Pure Nature Unit
Holders. New public company stock certificates are being prepared in the
name of Compound Natural Foods, Inc. which shall be provided to the holders
of Pure Nature, LLC ("PN") units as per the below Exchange Agreement. It Is
anticipated that the new stock certificates will be printed and mailed to the
addresses provided below for each of the Pure Nature, LLC ("PN") unit holder
on or before November 15, 2004.
2. Purpose Of Exchange Agreement. The purpose of the exchange of Pure
Nature, LLC ("PN") units for shares of the public company is to allow Pure
Nature, LLC ("PN" or the "Subsidiary"), to operate as a wholly-owned
subsidiary of the Public Company and to be able to work with the Parent
Company in a joint effort to raise up to one million dollars ($1,000,000) of
operating capital on a best efforts basis under applicable provisions of
Securities and Exchange Commission (SEC) Regulation 504 (the "Offering"). The
legal cost of such Offering and the stock being offered to investors shall be
provided by the Parent under terms and conditions it shall establish,
however, there is no guarantee as to exactly how much capital will be raised
by the Offering, nor the amount of time necessary to raise the capital being
sought. Use of such capital raised in the Offering shall be based upon a use
of proceeds budget to be prepared by the Subsidiary and approved in writing
by the Parent.
3. Officers and Directors of The Subsidiary. Joey Canyon, shall serve
as Founder, Chairman of the Board and President of the Pure Nature (the
"Subsidiary") and Xxx Xxxxx shall serve as a director and Chief Executive
Officer of the Subsidiary. The Parent Company and Compound Management, LLC
("ACM") shall be entitled to jointly appoint up to three (3) directors,
Including the Vice Chairman to the Subsidiary board of directors. Subject to
his approval, the Parent hereby nominates Xxxxxx Xxxxxxxxxx to serve as Vice
Chairman of the Board of the subsidiary. Compound Management, LLC ("CM")
nominates Xxxxxxx Xxxxxxx and Xxxxxx X. Xxxxxx to serve as directors of the
Subsidiary.
4. Banking and Accounting Procedures Of The Subsidiary. The Board of the
Subsidiary shall appoint a consulting Chief Financial Officer ("CFO"). The
CFO shall be the same CFO as that used by the Parent Company so that common
costs can be allocated between the two companies. The CFO shall maintain the
financial records of the Subsidiary, receive all payments of accounts
receivable and disburse payments from the Subsidiary bank accounts for all
approved expenses based upon the budget established by the Subsidiary and
approved by the Parent Company. All directors of the Subsidiary and of the
Parent shall receive a financial report from the CFO on a monthly basis. It
is the intent of this Amendment that the financial statements of the
Subsidiary shall be consolidated and reported with the financial statements
of the Parent Company.
5. Incorporation By Reference and Conforming of Previous Agreements.
All terms and conditions set forth in the Pure Nature, LLC Class A Units
Purchase Agreement (the "Agreement") dated as of June 9, 2004 shall remain in
effect, unless otherwise amended herein in which case they shall be modified
to conform with the superseding terms and conditions of this Amendment;
Including, but not limited to, the ongoing condition that the Subsidiary
shall not enter any agreement which will or may create a liability or
obligation on behalf of the Subsidiary, or the Parent Company, that has not
bean approved in advance, and in writing, by Xxxxxx X. Xxxxxx, acting his
capacity as director and consulting legal counsel to the Subsidiary. In
addition, Joey Canyon shall continue to remain personally liable for, and
reimburse and hold harmless both the Subsidiary and the Parent Company, for
any liability or cost to defend any suit brought by any persons named In
Exhibit "B" of the Agreement under the list entitled Long Term Liabilities,
Investor Loans and Exhibit "H", as well as any other Pure Nature, LLC ("PN")
investor claims or other liabilities not disclosed in the Agreement and
expressly assumed under the terms of the Unit Purchase Agreement. To the
extent that any term of the Operating Agreement of Pure Nature, LLC (Exhibit
C) referred to in the Agreement is inconsistent with this Amendment those
provisions of the operating Agreement shall hereby be deemed to be modified
to conform to the superseding terms and conditions of this Amendment. Any
employment agreements previously entered by Pure Nature, LLC ("PN") prior to
October 8, 2004 with Joey Canyon or Xxx Xxxxx shall remain in effect, unless
modified by the terms and conditions of this Amendment, in which case they
shall be deemed modified to conform to the superseding terms and conditions
this Amendment.
6. Exchange Agreement. The terms and conditions of the exchange of Pure
Nature, LLC ("PN") units into stock of the Public Company are as follows:
a. All common shares of the Public Company exchanged with Pure
Nature ("PN") unit holders are subject to the rules and regulations
of the Securities and Exchange Commission (SEC), now and in the
future, with respect to sale and transferability, and such other
SEC regulations that pertain to owners of public company stock.
b. Effective as of October 8, 2004 all LLC ownership units of Pure
Nature ("PN") shall be deemed exchanged and acquired by the Public
Company under this Exchange Agreement
c. The initial and future number of the Public Company shares that
shall be issued to each Pure Nature ("PN") unit holder has been
calculated by the president of PN, Joey Canyon, and each unit
holder of Pure Nature ("PN") confirms that the number of the Public
Company shares that shall be issued to them under this Exchange
Agreement is correct by their signature below.
d. The maximum number of the Public Company shares that shall be
issued to all of the unit holders of Pure Nature, LLC shall be ten
million (10,000,000) shares; allocated fifty-one percent (51%) to
Compound Management, LLC and forty-nine percent (49%) to Joey
Canyon and the other unit holders, as set forth in the Pure Units
Purchase Agreement dated June 9, 2004.
e. Due to the fact that Pure Nature, LLC as of the date of this
Amendment has not received any significant purchase orders, the
initial amount of the Public Company shares issued to all unit
holders of Pure Nature, LLC shall be two million (2,000,000) shares
to be allocated to each unit holder as provided for on the
signature page of this Amendment
f. Compound Management, LLC waives its right to be issued any
initial shares of the Public Company for the exchange of its Pure
Nature, LLC units and agrees that its shares of the Public Company
may be issued in the future to the remaining unit holders of Pure
Nature, LLC, on a pro rata basis, provided Pure Nature, LLC
attains a net operating profit of two million dollars ($2,000,000)
within a twenty-four month period of this Amendment. The term "net
operating profit" shall be defined as that term is usually applied
under General Accepted Accounting Principals (GAAP).
g. The balance of the eight million (8,000,000) shares of the
Public Company stock shall be issued in the future to Joey Canyon,
Xxx Xxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxx, in
proportion to their issuance of the initial shares, on a semi-
annual basis based upon the Subsidiary attaining a pro rata portion
during that semi-annual period of its total target two million
dollar $2,000,000) net operating profit within twenty-four (24)
months.
h. After a period of twenty-four (24) months, the remaining
portion, if any, of the eight million (8,000,000) shares of the
Public Company not issued as provided in paragraph 6., g., above,
shall be issued to Compound Management, LLC in exchange for its
units in Pure Nature, LLC.
i. In consideration for the waiver of initial shares of the Public
Company, and the possibility that it may never receive any of the
Public Company shares in exchange for its units in Pure Nature,
LLC, Compound Management, LLC shall be entitled to stock options of
the Public Company based upon the sum of the Public Company in
raising operating capital for the Subsidiary. The options shall be
five cents ($00.05) per share and one hundred thousand (100,000)
options shall vest for each one hundred thousand dollars ($100,000)
of operating capital raised by the Parent Company for the benefit
of the Subsidiary, up to a maximum of one million (1,000,000)
options when one million dollars (1,000,000) of operating capital
has been raised by the Parent Company for use by the Subsidiary.
The vested options must be exercised within a twenty-four (24)
month period from the date of this Amendment or they shall
automatically expire.
7. Miscellaneous Provisions.
a. Choice of Law. The validity, construction and performance of
this Amendment shall be governed by the laws of the State of
California as that law is applied between California residents,
irrespective of any choice of law principles.
b. Entire Agreement. This Amendment constitutes the entire
agreement between the parties pertaining to the subject matter
hereof and supersedes and replaces all prior and contemporaneous
agreements, representations and understandings of the parties
whether verbal or written. Each of the parties acknowledges and
represents that no promise or inducement not expressed in
this Amendment has been made to them in connection with this
Amendment. No modification or amendment of this Amendment shall be
valid unless in writing and signed by the party who rights or
obligations are modified or amended. The signature of any party
transmitted by fax shall have the same legally binding effect as an
original signature and the faxed copy shall be deemed the
original of the document for all purposes. If a court of competent
jurisdiction shall deem any portion of this agreement non-
enforceable, it shall not effect the remaining provisions of this
Amendment.
c. Additional Ads and Documents Each party hereto agrees to perform
such additional acts and execute such additional documents as may
be necessary to implement this Amendment, including, but not
limited to, the conversion of Pure Nature ("PN") from an LLC into a
corporation prior to the exchange of shares with the Parent
Company, if such is deemed necessary by legal counsel to the
Subsidiary.
d. Each party has had an opportunity prior to execution of this
Amendment to ask questions to the other with respect to their
duties and obligations under this Amendment and to seek the advice
of independent legal or business counsel prior to the execution of
this Amendment.
e. Construction. No question of doubtful interpretation of this
Amendment shall resolved by any rule of interpretation providing
for interpretation against the drafting party.
f. Waiver. No waiver of any of the provisions of this Amendment
shall be deemed or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute
a continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
g. Counterparts. This Amendment may be executed in one or more
counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same Instrument.
Signatures transmitted by fax shall be deemed of the same legal
effect as an original signature.
h. Notices. Any notice required to be provided to a party to this
Amendment shall be sent registered mail to their address provided
on the signature page below and shall be deemed effective five (5)
days following such mailing.
i. Captions. The subject headings and captions of the sections of
this Amendment are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its
provisions.
j. Jurisdication. Any suit to enforce or interpret any provision
of this Amendment, or the business relationship between the
parties, shall be brought exclusively in the United States District
Court for the Central District of California or in the Superior
Courts for Los Angeles County, State of California, Xxxxxxx Hills
Judicial District. The prevailing party in such action shall be
entitled to costs of suit and reasonable attorney fees in addition
to such damages and/or injunctive relief as may be awarded.
IN WITNESS WHEREOF, each party whose signature appears below has agreed
to the terms and conditions of this eight (8) page document. (including
signature pages)of this October 8, 2004 Amendment To The Pure Nature Class A
Units Purchase Agreement Entered Into On June 9, 2004, in the City of Xxxxxxx
Hills, County of Los Angeles, State of California,
Pure Nature, LLC, ("PN") by:
/s/ Joey Canyon, Manager
Dated:
/s/ Xxx Xxxxx, Manager
Dated:
/s/ Xxxxxx X. Xxxxxx, Manager
Dated:
Mailing address:
0000 Xxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxx 00000
Compound Management, LLC (("CM") by:
/s/ Xxxxxx X. Xxxxxx, Manager
Dated:
Mailing address:
000 X. Xxxxxxxxx Xxxx., Xxx. 000
Xxxxxxx Xxxxx, Xxxxxxxxxx
Unit Holder of Pure Nature, LLC, by:
/s/ Joey Canyon
Dated:
Mail Compound Natural Foods, Inc. public company stock certificate in the
above name for 1,254,490 initial common shares (after adjustment for
transfers to Xxxxx and Xxxxxxxxx, below), and such future common shares as
may be issued pursuant to this Amendment, to:
A. Joey Canyon has agreed to debit his common shares account and credit
the common shares account of Xxx Xxxxx the sum of fifteen percent (15%) of
Canyon's initial common shares in the public company (1,522,930), as well as
fifteen percent (15%) of Canyon's future common shares as may be issued
pursuant to this Amendment.
/s/ Xxx Xxxxx
Dated:
Mail Compound Natural Foods, Inc. public company stock certificate in the
above name for 228,440 initial common shares, and such future common shares
as may be issued pursuant to this Amendment and subparagraph A., above, to:
B. In exchange for two (2) promissory notes in the collective sum of
ten thousand dollars ($10,000), for the personal benefit of Joey Canyon, the
undersigned hereby cancels such promissory notes in consideration for the one
time issuance of forty thousand (40,000) common shares of the Public Company
stock debited from the account of Joey Canyon and issued to:
/s/ Xxx Xxxxxxxxx
Dated: 10/20/04
Street: 0000 X. Xxxxxxx Xxxxxx Xxx.
City: Highlands Ranch
State: CO Zip Code: 80129
Tel (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxxxxxx@xxxxxxx.xxx
Unit Holder of Pure Nature, LLC, by:
/s/ Xxxx Xxxxxxxx
Dated:
Mail Compound Natural Foods, Inc. public company stock certificate in the
above name for 400,000 initial common shares, and such future common shares
as may be issued pursuant to this Amendment, to:
Unit Holder of Pure Nature, LLC, by:
/s/ Xxxxx Xxxxxxxx Corner
Dated:
Mail Compound Natural Foods, Inc. public company stock certificate in the
above name for 51,170 initial common shares, and such future common shares as
may be issued pursuant to this Amendment, to:
Street: 0000 X. Xxxxxxxx Xxxxx
Xxxx: Xxxxxxxxx
Xxxxx: CO Zip Code: 80126
Tel (000) 000-0000
Fax: (000) 000-0000
Email: xxx000@xx.xxx
"My right to receive initial and future stock of the public company sold to
Joey Canyon on 10/21/04"
Unit Holder of Pure Nature, LLC, by:
/s/ Xxxxxxxx Xxxxxxx
Dated:
Mail Compound Natural Foods, Inc. public company stock certificate in the
above name for 25,900 initial common shares, and such future common shares as
may be issued pursuant to this Amendment, to:
TO RECEIVE YOUR PUBLIC COMPANY STOCK CERTIFICATES PLEASE FOLLOW THESE
PROCESSING INSTRUCTIONS:
1. Sign your name and date where indicated.
2. Confirm the spelling of your name as you want it to appear on your public
company stock certificates.
3. Print clearly the mailing address where you would like your public
company stock certificates sent. Allow up the three (3) weeks delivery.
4. Initial each of the other seven (7) pages on the bottom right corner.
5. Fax the entire eight (8) page document to Xxxxxx X. Xxxxxx, Pure Nature,
LLC, Manager, at (000) 000-0000
