EXHIBIT (10)(B)
SECOND AMENDMENT
TO
STOCK PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT is entered into this
25th day of February, 1998 by and between XXXXXXXX XXXXX, INC., a Delaware
corporation (the "Buyer"), and XXXXX XXXXXXX (the "Seller").
WITNESSETH:
WHEREAS, pursuant to a Stock Purchase Agreement, dated January 12,
1996, between the Buyer and the Seller, as amended by Amendment No. 1, dated as
of January 17, 1996 (collectively, the "Stock Purchase Agreement"), the Buyer
purchased from the Seller 100% of the issued and outstanding shares of common
stock of each of Xxxxxxx Laces, Ltd., Raschel Fashion Interknitting, Ltd. and
Curtains and Fabrics, Inc. (collectively hereinafter referred to as the
"Companies"); and
WHEREAS, the Buyer and the Seller desire to amend the Stock Purchase
Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Sections 1.2(e), (f), (g), (h), (i) and (j) of the Stock Purchase
Agreement are hereby deleted in their entirety and the following provision is
hereby substituted in its place as Section 1.2(e):
(e) The term "Earnout Price" shall mean an
amount equal to Thirty Four Million Four Hundred
Fifty Two Thousand Nine Hundred Fifty Five Dollars
($34,452,955.00). The Earnout Price shall be paid to
the Seller in two installments as follows: (i) the
first installment in an amount equal to Seventeen
Million Dollars ($17,000,000.00), to be paid to the
Seller on February 25, 1998 and (ii) the second
installment in an amount equal to Seventeen Million
Four Hundred Fifty Two Thousand Nine Hundred Fifty
Five Dollars ($17,452,955.00), to be paid to the
Seller on October 1, 1998, in each case with the
installment to be paid by the wire transfer of
immediately available funds into an account or
accounts designated by the Seller.
2. The first sentence of Section 5.1 of the Stock Purchase Agreement is
hereby deleted in its entirety. The third, fourth and fifth sentences of Section
5.1 of the Stock Purchase Agreement are hereby deleted in their entirety and the
following provision is substituted in their place:
Any shares of Restricted Stock acquired by the Seller
shall be acquired for his own account, for investment
purposes only and not with a view to the distribution
thereof, as that phrase has meaning under the Act,
and the rules and regulations of the Commission. The
Seller shall not sell or make any other distribution
of the shares of Restricted Stock in violation of the
provisions of any applicable laws and regulations,
including, without limitation, the rules and
regulations of the Commission and state securities or
"blue sky" laws. The Seller shall not transfer any
shares of Restricted Stock in violation of the
transfer restriction set forth in Section 1.2(d)
hereof. The Seller covenants that from and after
February 25, 1998 until December 31, 2003, neither
he, any affiliate (as defined herein) of the Seller,
nor any group (as defined herein) of which the Seller
or any affiliate of the Seller becomes a member,
shall (i) individually or collectively acquire, or
offer, propose or agree to acquire beneficial
ownership (as defined herein) of more than Six
Hundred Thousand (600,000) shares of Common Stock
(the "Acquisition Maximum") or (ii) propose or
publicly announce or otherwise disclose an intent to
propose, or enter into or agree to enter into, singly
or with any other person or directly or indirectly,
(x) any form of business combination, acquisition, or
other transaction relating to the Buyer or any
affiliate thereof, (y) any form of restructuring,
recapitalization or similar transaction with respect
to the Buyer or any such affiliate, or (z) any
demand, request or proposal to amend, waive or
terminate this Section 5.1, (iii) make, or in any way
participate in, any solicitation of proxies with
respect to any shares of Common Stock (including by
the execution of action by written consent), become a
participant in any election contest with respect to
the Buyer, seek to influence any person with respect
to any shares of Common Stock or demand a copy of the
Buyer's list of its stockholders or other books and
records, or (iv) participate in or encourage the
formation of any partnership, syndicate, or other
group which seeks to effect control of the Buyer or
to circumvent any provision of this Section 5.1. In
the event of any change in the number of outstanding
shares of Common Stock through merger,
recapitalization, stock dividend, stock split,
split-up, split-off, spin-off or other like change
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in the capital structure of the Buyer, appropriate
adjustments shall be made to the Acquisition Maximum
in order to take into account the effect of such
change in capital structure on the number of
outstanding shares of Common Stock. The Seller
represents and warrants to the Buyer that as of
February 25, 1998 (i) he beneficially owns Six
Hundred Three Thousand One Hundred Fifty (603,150)
shares of Common Stock and (ii) he is not part of any
group. The term "affiliate" as used in this Section
5.1 shall have the meaning ascribed to it in Rule 405
under the Act. The term "group" as used in this
Section 5.1 shall have the meaning ascribed to it in
Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "1934 Act"). The term
"beneficial ownership" or "beneficially own" shall
have the meaning ascribed to such terms in Rule 13d-3
under the 0000 Xxx.
3. Section 5.2 of the Stock Purchase Agreement is hereby deleted in its
entirety.
4. Section 5.3 of the Stock Purchase Agreement is hereby deleted in its
entirety.
5. Section 5.4(a) of the Stock Purchase Agreement is hereby deleted in
its entirety. The second sentence of Section 5.4(b) of the Stock Purchase
Agreement is hereby deleted in its entirety. The Seller hereby resigns as a
member of the Board of Directors of each of the Companies.
6. Section 5.5 of the Stock Purchase Agreement is hereby deleted in its
entirety.
7. Section 5.7 of the Stock Purchase Agreement is hereby deleted in its
entirety.
8. The Buyer and the Seller acknowledge and agree that for purposes of
Section 6.3 of the Stock Purchase Agreement, the Subsequent Election Tax Cost,
as defined therein, is zero. Notwithstanding anything to the contrary contained
herein, the indemnity obligations set forth in Section 6.3(e) of the Stock
Purchase Agreement shall survive the execution and delivery of this Second
Amendment to Stock Purchase Agreement and shall continue in full force and
effect in accordance with their terms.
9. The penultimate sentence of Section 7.1(a) of the Stock Purchase
Agreement is hereby deleted in its entirety and the following provision is
substituted in its place:
Notwithstanding the foregoing, the Indemnification
Cap for each of Cobleskill Losses and Herkimer Losses
shall be
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Three Million Dollars ($3,000,000.00), if a
claim for indemnification for Herkimer Losses or
Cobleskill Losses is made between February 25, 1998
and October 1, 1998.
10. The last sentence of Section 7.1(c) of the Stock Purchase Agreement
is hereby deleted in its entirety and the following provision is substituted in
its place:
If the Buyer shall become entitled to indemnification
pursuant to this Section 7.1 before the Earnout Price
is paid in full, but the Seller or his legal
representative fails to pay to the Buyer such
indemnity payment within such ten day period, the
Buyer may deduct or offset against the Earnout Price
remaining to be paid the indemnity payment owing the
Buyer hereunder.
11. The following clause at the end of the first sentence of Section
7.1(e) of the Stock Purchase Agreement is hereby deleted in its entirety: "or
the proceeds from the Insurance Policy, as the case may be." The parties
acknowledge and agree that the representations and warranties contained in
Section 2.1(t) of the Stock Purchase Agreement shall survive until the Earnout
Price is paid in full.
12. Except as otherwise set forth herein, the Stock Purchase Agreement
remains unmodified and in full force and effect. To the extent not otherwise
defined, capitalized terms used herein shall have the meanings ascribed to them
in the Stock Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Second
Amendment to Stock Purchase Agreement as of the day and year first above
written.
THE BUYER:
XXXXXXXX XXXXX, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
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Title: Executive Vice President
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and Chief Financial Officer
THE SELLER:
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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