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:
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
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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 thereunder 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
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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:
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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
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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.
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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
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