Exhibit 10.27
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT is made as of this 10th day of March, 1998, between
Creative Bakeries, Inc., a New York corporation ("Purchaser") and Xxxx Xxxxxxxx
("Seller"). All capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Stock Purchase Agreement (as such term is defined
below).
W I T N E S S E T H:
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WHEREAS, Purchaser, Seller and Chatterley Elegant Desserts, Inc. (the "Company")
entered into that certain Stock Purchase Agreement dated as August 27, 1997 (the
"Stock Purchase Agreement"), pursuant to which Purchaser purchased from Seller
all of the capital stock of the Company (the "Stock");
WHEREAS, in payment of the purchase price (the "Purchase Price") for the Stock,
Purchaser delivered to Seller 1,300,000 shares of common stock of Purchaser
("Creative Shares");
WHEREAS, Purchaser has made a claim (the "Claim") for indemnification against
Seller based upon certain alleged misrepresentations and warranties of Seller
contained in the Stock Purchase Agreement relating to certain financial
statements of the Company furnished by Seller to Purchaser;
WHEREAS, the parties hereto have reached a mutually satisfactory resolution of
all issues and disputes relating to the Claim; and
WHEREAS, the parties wish to make certain other amendments to the Stock Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements and warranties herein contained, the parties agree as follows:
1. Amendment to Stock Purchase Agreement.
1.1 Non-Survival of Financial Statement Representations.
Notwithstanding anything in the Stock Purchase Agreement to the
contrary, the provisions of Sections 4.10, 4.13(a), 4.14(a)(iii), the
first sentence of 4.14(b), 4.20 and 4.21 of the Stock Purchase
Agreement shall be deleted in their entirety and shall have no further
force and effect and each party hereto shall have no further liability
or obligation to any other party hereto pursuant to such provision. In
addition, effective as of the date of the Stock Purchase Agreement, (i)
the phrase in the second sentence of Section 4.17 of the Stock Purchase
Agreement which reads "... the Company has paid in all respects or
accrued all amounts due there under to be satisfied or provided for
through the date hereof ..." shall be deleted and (ii) the first
sentence of Section 4.26 of the Stock Purchase Agreement is amended to
add the phrase "as amended by the Amendment Agreement dated March 10,
1998" after the word "Agreement" and to delete the phrase "nor the
Company Financial Statements, nor any other financial statements."
1.2 Non-Survival of Representations and Warranties. The Stock Purchase
Agreement is hereby further amended to provide that the remaining
representations and warranties (other than representations and
warranties relating to Taxes which shall survive for the applicable
statute of limitations) contained therein shall not survive beyond the
second anniversary of the Stock Purchase Agreement (the "Survival
Period") and all claims for indemnification under Section 6.2 of the
Stock Purchase Agreement must be made to Seller in writing prior to
expiration of the applicable Survival Period.
1.3 Release of Certain Matters. Purchaser hereby irrevocably waives and
surrenders any and all rights and claims in respect of, and hereby
irrevocably releases and discharges Seller from and against all
actions, claims, and demands (at law or in equity) which Purchaser
and/or its successors and assigns ever had, now have or hereafter can,
shall or may have, relating to or arising out of any alleged
misrepresentations and/or breaches of warranty or from any inaccuracies
contained in those provisions of the Stock Purchase Agreement referred
to in the first sentence of Section 1.1 hereof including, without
limitation, the failure to reflect certain accounts payable of the
Company in the financial statements of the Company furnished to
Purchaser, any obligation of the Company to pay incentive bonuses to
four employees of the Company identified by the Seller, any obligation
of the Company with respect to common area charges under its building
lease or any loss incurred by the Company solely arising out of any
lien encumbering the landlord's real property created or incurred by
the landlord (but not directly created or incurred by the Company or
directly encumbering the Company's leasehold interest) (collectively,
the "Disclosed Obligations") or based on any oral representations
(whether made by Seller or by Xxxxx Xxxxxxxx, a former officer of the
Company), agreements or understandings including, but not limited to,
those relating to the past and projected operating profitability and/or
income and expenses of the Company or relating to the determination of
the Purchase Price (collectively, the "Negotiations").
2. Adjustment of Purchase Price.
2.1 Resolution of Dispute. The parties hereto acknowledge and agree that
they have, subject to the terms and conditions hereof, reached a
mutually satisfactory resolution of all issues and disputes relating to
the Claim, and that such resolution is final and binding upon all
parties hereto. Each of the parties hereby irrevocably agrees that,
subject to the terms and conditions hereof, there shall be no further
adjustment of the Purchase Price pursuant to any claim pursuant to the
terms of those provisions of the Stock Purchase Agreement referred to
in the first sentence of Section 1.1 hereof or based upon the Disclosed
Obligations or the Negotiations and Purchaser hereby irrevocably waives
and surrenders any and all claims and rights that it has or may have to
seek or propose any further adjustment of the Purchase Price pursuant
to the terms of those provisions of the Stock Purchase Agreement
referred to in the first sentence of Section 1.1 hereof or based upon
Disclosed Obligations or the Negotiations.
2.2 Adjustment; Revocation of Board Resolution. The parties hereby agree
that the Purchase Price adjustment shall be to adjust the number of
Creative Shares paid as the Purchase Price to 1,100,000 which
adjustment shall be made by Seller delivering certificates evidencing
200,000 Creative Shares to Purchaser duly endorsed to Purchaser or with
appropriately executed stock transfer powers attached. Purchaser shall
promptly cause its Board of Directors to rescind the resolution
previously adopted by such Board placing a "stop transfer" instruction
on the remaining Creative Shares owned by Seller.
3. Covenants of the Parties. The parties covenant and agree to the following:
3.1 Covenant Not to Xxx. Purchaser shall not initiate any legal action
against Xxxxx Xxxxxxxx based on those provisions of the Stock Purchase
Agreement referred to in the first sentence of Section 1.1 hereof or
based upon the Disclosed Obligations or the Negotiations; provided,
however, that Purchaser reserves the right to assert any of the
foregoing as defenses and/or counterclaims (the "Counterclaims") in any
action initiated by Xxxxx Xxxxxxxx; provided, further, however, that in
the event that Xxxxx Xxxxxxxx shall initiate legal action against
Seller arising out, or related to, or in connection with, the assertion
of the Counterclaims, Purchaser shall reimburse Seller for her
reasonable attorneys' fees and expenses in defending such action and
claims arising out of the Counterclaims up to $40,000.
3.2 Confidentiality; No Admission. None of the parties shall disclose or
publicize the terms of this Agreement or the transactions contemplated
hereby without the prior written consent of the other party subject, in
the case of Purchaser, to its disclosure obligations under applicable
securities laws or pursuant to any listing agreement. Seller's
execution of, and entry into, this Amendment Agreement, and her
transfer of 200,000 Creative Shares to Purchaser, do not constitute,
and/or may not be deemed or construed to be, an admission, declaration
against interest or concession by Seller, whether express or implied,
as to any wrongdoing, liability or responsibility with respect to any
or all of the claims raised by Purchaser, whether as to herself or as
to others, and neither this Amendment Agreement nor any of its contents
shall be admissible in evidence, or used in any way for any purpose, in
any subsequent litigation, arbitration, mediation or other dispute
resolution proceedings, involving Purchaser, including, but not limited
to, claim presentations, pleadings, motions, hearings, trial,
depositions, written discovery proceedings, oral or written
presentations or cross-examination of witnesses.
3.3 Assumption of Liabilities. Purchaser acknowledges that, by operation of
law, any currently unpaid obligations of the Company existing on the
Closing Date of the Stock Purchase Agreement which are disclosed on
Schedule A attached hereto continue to be obligations of the Company to
be paid, discharged and/or otherwise satisfied in the business judgment
of management of the Company or pursuant to lawful procedures afforded
to creditors related to the enforcement of orders and/or judgments for
the payment of money.
4. Miscellaneous.
4.1 Amendment. This Agreement may be amended, modified or
supplemented only by written agreement of the parties.
4.2 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.3 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the
State of New York without giving effect to the principles of conflicts
of law thereof.
4.4. Binding Agreement. No party hereto may assign its rights or delegate
its obligations hereunder without the prior written consent of the
other parties hereto. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
4.5 Entire Understanding. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the subject
matter hereof. Except as amended pursuant to this Agreement, the
provisions of the Stock Purchase Agreement and any other agreements
between the parties relating to the Stock Purchase Agreement including,
without limitation, the assumption or retention of certain liabilities
of the Company, shall remain in full force and effect.
4.6 Benefit of the Parties. Nothing herein contained shall confer or is
intended to confer on any third party or entity which is not a party to
this Agreement any rights under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
CREATIVE BAKERIES, INC.
By:
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Name:
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Title:
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Xxxx Xxxxxxxx
