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Exhibit 2.2
AMENDMENT NUMBER ONE
TO
STOCK PURCHASE AGREEMENT
This AMENDMENT NUMBER ONE (this "Amendment") is made as of the 17th day of
November, 1995, between The TJX Companies, Inc., a Delaware corporation (the
"Buyer"), and Melville Corporation, a New York corporation (the "Seller"), to
the Stock Purchase Agreement between Buyer and Seller dated as of October 14,
1995 (the "Stock Purchase Agreement").
Recitals
1. Seller and Buyer desire to amend certain provisions of the Stock
Purchase Agreement and to add certain additional provisions to the Stock
Purchase Agreement, all as set forth below.
2. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms as set forth in the Stock Purchase
Agreement.
Agreement
Therefore, in consideration of the foregoing and the mutual agreements and
covenants set forth below and in the Stock Purchase Agreement, the parties
hereto hereby agree as follows:
1. AMENDMENT.
1.1. Section 3.4.
1.1.1. Section 3.4(a) of the Stock Purchase Agreement is hereby
amended and restated in its entirety as follows:
"As promptly as possible following the Closing Date, the Company
shall prepare a consolidated balance sheet of the Company and its
Subsidiaries as of a time immediately prior to the Closing (the
"Closing Balance Sheet") in accordance with generally accepted
accounting principles applied consistently with the Company's past
practices used in the preparation of the Annual Financials, except
that inventory will be determined using the first-in first-out
inventory cost method and without
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regard to the "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of," and the change in the
Company's accounting policy with respect to the capitalization of
internally developed software (the "Accounting Policy Changes"). The
inventory reflected on the Closing Balance Sheet shall include all
merchandise inventory recorded in the Company's books and records
calculated in accordance with generally accepted accounting
principles consistently applied by the Company, utilizing the retail
method for the store inventory and the cost method for the warehouse
and distribution centers as consistently applied by the Company in
preparation of the Annual Financials, except inventory cost will be
determined using the first-in first-out inventory method. Amounts
reflected on the Closing Balance Sheet for those elements, accounts
or items to be included in the calculation of Company Net Assets
shall include all known and estimated assets and liabilities as of
the Closing Date consistent with the Company's fiscal year-end cutoff
procedures.
Coopers & Xxxxxxx, L.L.P. ("Coopers") shall perform procedures
agreed upon by the parties and Coopers (as set forth in Appendix B to
Schedule 3.4B, but as modified by Appendix C to Schedule 3.4B with
respect to certain inventory matters) in connection with the
elements, accounts or items of the Closing Balance Sheet that are to
be included in the calculation of Company Net Assets for the purposes
of issuing a report (the "Coopers Report") thereon detailing the
results of such procedures as applied by Coopers in accordance with
standards established by the American Institute of Certified Public
Accountants (and prior to the issuance by Coopers of such report,
KPMG Peat Marwick and representatives of the Seller and the Company
reasonably designated by the Seller shall have the opportunity to
review Coopers' work papers and to be present during the performance
of all such procedures and the procedures described in Appendix C to
Schedule 3.4B). Adjustments proposed by Coopers to the elements,
accounts or items of the Closing Balance Sheet to be included in the
calculation of Company Net Assets will be aggregated and to the
extent the total of such adjustments exceeds $750,000 (the
"Adjustment Basket") on a net basis, such excess adjustments shall be
reflected in the Closing Balance Sheet for the purpose of calculating
Company Net Assets (it being understood that the Shrink Adjustment
shall not be included in the Adjustment Basket, but rather that in
calculating the amount of Company Net Assets the Shrink Adjustment
shall be made on a dollar-for-dollar basis in accordance with the
next succeeding paragraph and Schedule 3.4A). Coopers shall furnish
the Coopers Report to the Seller and Buyer as soon as reasonably
practicable, but in
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any event not later than the date of delivery of the Company Net
Assets Statement.
Between the Closing Date and February 10, 1996, all inventory
will be physically counted and a shrink adjustment calculated in
accordance with the Warehouse Inventory Procedures and the Store
Inventory Procedures described in Appendix C to Schedule 3.4B (the
"Shrink Adjustment"). In calculating Company Net Assets, the
inventory value reflected on the Closing Balance Sheet shall be
adjusted by the amount of the Shrink Adjustment. Buyer, Seller and
their respective accountants shall have the opportunity to observe
the physical count of the inventory.
As soon as reasonably practicable after completion of the
physical inventories and calculation of the Shrink Adjustment,
Coopers shall prepare and deliver a Company Net Assets Statement in
substantially the form of Schedule 3.4A, which will include a
calculation of the Cash Purchase Price in the form of Appendix A
thereto. Assets and liabilities on the Company Net Assets Statement
will be equal to such items in the Closing Balance Sheet except as
otherwise specified in Schedule 3.4A and will exclude the impact of
the Accounting Policy Changes and will reflect property on the gross
cost basis. The Company Net Assets Statement will exclude those
assets and liabilities detailed in Schedule 3.4B, including Appendix
A thereto, under the columns titled "Items to be Assumed/Retained by
Seller" and "Other Adjustments." "Company Net Assets" shall mean the
net asset figure appearing on the Company Net Assets Statement.
Schedule 3.4B sets forth Company Net Assets as set forth on an
estimated basis as of October 30, 1995. The "Target Net Asset
Amount" shall mean $968,372,000 (which amount equals the net asset
figure shown under the column styled "Estimated Statement of Net
Assets" on said Schedule 3.4B)."
Buyer shall cause the Company and its Subsidiaries to maintain
through January 31, 1996 the shortage component of the field and
store management incentive program of the Company and its
Subsidiaries as in effect prior to Closing.
1.1.2. The Notes to Schedule 3.4A to the Stock Purchase Agreement
are hereby amended by adding the following:
"8) Merchandise inventories, FIFO - Balance is taken from the
Closing Balance Sheet adjusted by the Shrink Adjustment."
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1.1.3. There is hereby added a new Appendix C to Schedule 3.4B to
the Stock Purchase Agreement in the form of such Appendix C attached to
this Amendment.
1.1.4. Note 2 to Schedule 3.4A to the Stock Purchase Agreement is
hereby amended and restated in its entirety as follows:
"2) Cash - Balance represents change funds in each open store plus
all xxxxx cash funds."
1.1.5. The second sentence of Note 1 to Schedule 3.4B is hereby
amended by deleting the words "home office" and substituting therefor the
word "all."
1.2. Section 4.1.7. Section 4.1.7 of the Stock Purchase Agreement is
hereby amended by deleting the first two sentences therefrom and substituting
therefor the following sentence:
"Except as set forth on Schedule 4.1.7, the Company has no
Subsidiaries."
Schedule 4.1.7 attached to the Stock Purchase Agreement is hereby deleted
in its entirety and replaced by Schedule 4.1.7 attached to this Amendment.
1.3. Section 6.14 and Section 6.18. The following stores shall be
deemed to be included under the caption "Permitted Future Store Locations" on
the Section 6.l4 Letter and designated as a Seller Store under the caption
"Open Store Schedule" on the Store Schedule:
#697 Fresno, CA
#695 Chicago (6 Corners), IL
#034 E. Islip, N.Y
1.4. Section 9.5. Schedule 9.5 and Schedule 9.5A attached to the Stock
Purchase Agreement are hereby deleted in their entirety and replaced by
Schedule 9.5 and Schedule 9.5A attached to this Amendment.
1.5. New Section 14. There is hereby added to the Stock Purchase
Agreement the following new Section 14:
"14. ADDITIONAL PROVISIONS.
14.1. SELDEN, NEW YORK STORE (MARSHALLS NO. 454). In order to
confirm the continuation of an existing arrangement involving Bob's of
Selden, NY, Inc. ("Bob's-Selden") and the Company, Seller agrees to cause
Bob's-Selden to enter into an agreement (the "Bob's-Selden Agreement") to
pay to Buyer on the first day of each calendar month beginning with
December, 1995 through and including December,
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2018, in immediately available funds, the amount set forth below during
the respective periods set forth below:
Period Monthly Payment
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12/1/95 - 12/31/98 $10,989.08
1/1/99 - 3/31/2000 $19,844.33
4/1/2000 - 12/31/2003 $19,398.25
1/1/2004 - 12/31/2008 $20,685.50
1/1/2009 - 3/31/2010 $21,972.83
4/1/2010 - 12/31/2013 $21,377.42
1/1/2014 - 12/31/2018 $22,664.67
; PROVIDED, HOWEVER, that such payment obligations shall terminate upon
termination of the lease of the retail store currently leased by
Bob's-Selden to which such payment obligations relate. Any amount not
paid on the specified date shall bear interest at the rate of 10% per
annum. Seller shall cause Bob's, Inc. to provide a guarantee of the
foregoing payment obligations (the "Bob's Parent Guarantee"). Seller
shall provide Buyer with executed original copies of the Bob's-Selden
Agreement and the Bob's Parent Guarantee within 30 days following the
Closing.
14.2. MARSHALLS OF HONOLULU, HI, INC. RADIUS RESTRICTION.
Reference is hereby made to that certain Lease between Xxxxxxxx Xxxx,
Limited and Marshalls of Honolulu, HI., Inc. (the "Honolulu Lease").
Seller shall, and shall cause its affiliates (as defined in the Honolulu
Lease) to, take no action which shall permit the landlord under the
Honolulu Lease to collect additional rent as a result of the circumstances
described in Section 6.02 of the Honolulu Lease. Buyer hereby agrees with
Seller that the Seller's retail store divisions (other than the Company
and its Subsidiaries), as currently operated, do not constitute a
"business similar to or competing with the business conducted at the
demised premises" within the meaning of Section 6.02 of the Honolulu
Lease, and accordingly, operating such divisions as currently operated
does not violate the provisions of this Section 14.2.
14.3. Various Equipment and Software.
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14.3.1. With effect from and as of the Closing, Seller (or the
applicable Affiliate of Seller) shall assign to the Company or one of
its Subsidiaries all of Seller's or such Affiliate's right, title and
interest under the leases pursuant to which the Company and its
Subsidiaries use store point-of-sale equipment and store RS/6000
equipment, but only to the extent such leases relate to such
equipment to be used in the retail stores of the Company and its
Subsidiaries to be open following the Closing. The obligation to
make such assignment shall cease to exist if following Seller's use
of its reasonable best efforts (and subject to the next sentence)
Seller cannot obtain any third party consent required to
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effect such assignment pursuant to the applicable lease
documentation. If after use of reasonable best efforts by Seller to
obtain such consent without the requirement of the payment of any fee
to any such third party to obtain such consent, a fee is so required
to obtain such consent, then Buyer and Seller shall each bear
one-half of such fee or, at the election of Buyer, Seller shall be
released from any continuing obligation under this Section 14.3.1 to
obtain any such required consent or to make such assignment. If any
assignment pursuant to this Section 14.3.1 is effected, the Company
shall assume all obligations of Seller and its Affiliates under such
leases with respect to the equipment subject to such assignment.
14.3.2. Seller and Buyer hereby agree that each of the Company
and Seller independently has full legal right, title and ownership in
and to the "Retail Expert" software, the Genesis financial software
and the software (the "Peoplesoft Improvements") developed by the
Seller, the Company and their respective Affiliates related to the
Peoplesoft software licensed to the Seller (the "Peoplesoft
Software"); PROVIDED, HOWEVER, that the Buyer and its Affiliates
(including the Company and its Subsidiaries) shall not have any right
to the name "Retail Expert" in respect of the "Retail Expert"
software. The "Retail Expert" software, the Genesis financial
software and the Peoplesoft Improvements are referred to herein
collectively as the "Applicable Software." The right, title and
interest referred to in the first sentence of this Section 14.3.2 is
only in respect of the Applicable Software as developed through the
Closing. None of the Seller or its Subsidiaries shall have any right
to any improvements made to the Applicable Software following the
Closing by Buyer or its Subsidiaries and none of Buyer or its
Subsidiaries shall have any right to any improvements made to the
Applicable Software following the Closing by Seller or its
Subsidiaries. At the option of Buyer, Seller shall sell to Buyer one
copy of the Peoplesoft Software at the per copy price originally paid
by Seller to acquire the license to the Peoplesoft Software.
Seller's obligation to effect such sale shall be subject to
obtaining, without cost to Seller, any required consent of the
licensor under such license.
14.4. ADS PROJECT. Seller shall promptly pay over to the Company
following the Closing any rebates received under the ADS project insofar
as such rebates are attributable to the participation in such project of
the Company or any of its Subsidiaries.
14.5. AMERICAN EXPRESS CORPORATE CARDS. From and after the
Closing, the employees of the Company and its Subsidiaries who use
American Express charge cards pursuant to the corporate card program of
Seller shall cease to participate in such program and shall commence
participation in the American Express corporate card program of Buyer.
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14.6. WILSONS. To the extent following the Closing, the Company and
its Subsidiaries possess any merchandise inventories held on consignment
for the Wilsons retail store chain ("Wilsons"), the Company and its
Subsidiaries will return such inventories to Wilsons. Notwithstanding
anything to the contrary set forth in the definition of the term "Excluded
Liabilities", the Company and its Subsidiaries shall pay to Wilsons any
amounts owed and unpaid to Wilsons as of the Closing in respect of the
consignment arrangements existing between Wilsons and the Company prior to
Closing to the extent a payable or other liability in respect of such
amounts is recorded on the Closing Balance Sheet and is included in the
determination of the amount of Company Net Assets.
14.7. FOOTACTION. Notwithstanding anything to the contrary set
forth in the definition of the term "Excluded Liabilities," the Company
and its Subsidiaries shall pay to the Footaction retail store chain
("Footaction") any amounts owed and unpaid to Footaction as of the Closing
in respect of merchandise inventory purchased by the Company and its
Subsidiaries from Footaction prior to the Closing to the extent a payable
or other liability in respect of such amounts is recorded on the Closing
Balance Sheet and is included in the determination of Company Net Assets.
14.8. STORE NO. 378. The Company shall pay to Seller the amount of
any cash payments or rental reductions received after the date hereof by
the Company or any of its Subsidiaries in respect of the current lease for
Store No. 378 to the extent such cash payments or rental reductions are
attributable to the obligations of the landlord to reimburse the Company
or any of its Subsidiaries for the repair of earthquake damage previously
incurred at such store. The Company shall make such payments to Seller
promptly following receipt of any such cash payments or as and when the
amounts of rental reductions would otherwise have been payable to the
landlord in the absence of the agreement of the landlord to accept reduced
rents."
2. CONSENT TO INTERCOMPANY TRANSFER OF BUYER STOCK. Buyer hereby consents to
the transfer by Seller of the Buyer Stock to a wholly owned Subsidiary of
Seller (the "Transferee Subsidiary"); PROVIDED, that any event which causes the
Transferee Subsidiary to cease to be a wholly owned Subsidiary of Seller shall
be deemed to be a transfer of Voting Securities by Subscriber within the
meaning of the Standstill and Registration Rights Agreement. Effective upon
the transfer of the Buyer Stock to the Transferee Subsidiary, all of the terms
and provisions of the Preferred Stock Subscription Agreement and the Standstill
and Registration Rights Agreement shall be binding upon and inure to the
benefit of the Transferee Subsidiary in the capacity of the Subscriber
thereunder. Following such transfer, such terms and provisions shall also
continue to be binding upon and inure to the benefit of Seller in the capacity
of the Subscriber thereunder.
3. EFFECT ON STOCK PURCHASE AGREEMENT. Except to the extent of the
amendments set forth specifically herein, all provisions of the Stock Purchase
Agreement are and shall remain in full force and effect and are hereby ratified
and confirmed in all respects, and the
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execution, delivery and effectiveness of this Amendment shall not operate as a
waiver or amendment of any provision of the Stock Purchase Agreement not
specifically amended herein.
4. EXECUTION IN COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts, each of which shall be deemed for all purposes
to be an original, but all of which together shall constitute one and the same
Amendment. This Amendment shall become effective immediately upon execution.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Amendment Number One to be executed, as of the date
first above written by their respective officers thereunto duly authorized.
SELLER: MELVILLE CORPORATION
By
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Name:
Title:
BUYER: THE TJX COMPANIES, INC.
By
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Name:
Title:
