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EXHIBIT 2.2
AMENDMENT TO STOCK PURCHASE AGREEMENT
This Amendment to Stock Purchase Agreement (this "Amendment") is made
and entered into as of April 15, 1996, by and between Xxxxxx Xxxxxxxx, Xx. (the
"Shareholder") and Health Valley Company, a Delaware corporation (the "Buyer"),
with reference to the following facts:
A. The Shareholder and the Buyer previously entered into that
certain Stock Purchase Agreement, dated as of March 17, 1996 (the "Agreement").
B. The Shareholder and the Buyer now desire to amend the
Agreement as more particularly set forth in this Amendment.
C. Capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed thereto in the Agreement.
NOW, THEREFORE, in consideration of the respective covenants,
representations and warranties contained in the Agreement and in this
Amendment, and intending to be legally bound hereby and thereby, the parties
hereto hereby agree as follows:
1. New Definitions, Modifications to Existing Definitions.
1.1. Amendment. The following new definition is added to the
Agreement:
""AMENDMENT" means that certain Amendment to Stock Purchase
Agreement, dated as of April 15, 1996, by and between the
Shareholder and the Buyer."
1.2. Ancillary Documents. The term "AncIllary Documents" is hereby
deleted in its entirety and the following is substituted in
lieu thereof:
""ANCILLARY DOCUMENTS" means the Escrow Agreement, the Option
Agreement, the License Agreement, the State Tax Escrow
Agreement, the Shareholder Noncompetition Agreement, the Roof
Repair Escrow Agreement, the Other Repairs Escrow Agreement,
the Xxxx Xxxxxxx Escrow Agreement and the Assumption
Agreement."
1.3. Buyer's Special Damages.
(A) Clause (b) of the term "Buyer's Special Damages" is
hereby deleted in its entirety and the following is
substituted in lieu thereof:
"any claim with respect to any of the matters set
forth in Section 8.1(B)(1), (3), (4), (5), (6), (7),
(10) and (11) of the Agreement and Section 6.2 of the
Amendment."
(B) Clause (d) of the term "Buyer's Special Damages is
hereby deleted in its entirety and the following is
substituted in lieu thereof:
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"any breach of Section 3.2 hereof or any
representation or statement by the Shareholder set
forth therein; and"
1.4. Escrow Amount. The term "Escrow Amount" is hereby deleted in
its entirety and the following is substituted in lieu thereof:
""ESCROW AMOUNT" means One Million Seven Hundred Ninety-three
Thousand Two Hundred Thirty Dollars ($1,793,230)."
1.5. Xxxx Xxxxxxx Deficit. The following new definition is added
to the Agreement:
""XXXX XXXXXXX DEFICIT" means the difference between (i) the
aggregate amount of all checks issued by either of the
Companies and outstanding on the Closing Date which were drawn
on the account maintained at the Xxxx Xxxxxxx Bank (the "XXXX
XXXXXXX ACCOUNT") that are presented for payment by the
holders thereof, and (ii) One Hundred Thirty-eight Thousand
Nine Hundred Forty-nine Dollars and Thirty-four Cents
($138,949.34), as reasonably determined by Buyer, at its sole
cost and expense."
1.6. Xxxx Xxxxxxx Escrow Agreement. The following new definition
is added to the Agreement:
""XXXX XXXXXXX ESCROW AGREEMENT" means an escrow agreement
between the Buyer, the Shareholder and the Escrow Agent, in
substantially the form of the Escrow Agreement (except that
its term shall be ninety (90) days) and otherwise reasonably
acceptable to the Buyer and the Shareholder, pursuant to which
an amount equal to the XXXX XXXXXXX ESCROW AMOUNT shall be
deposited into escrow in order to secure the Shareholder's
liability to indemnify, or reimburse, the Buyer pursuant to
Section 8.1(B)(10) hereof."
1.7. Xxxx Xxxxxxx Escrow Amount. The following new definition is
added to the Agreement:
""XXXX XXXXXXX ESCROW AMOUNT" means Two Hundred Fifty Thousand
Dollars ($250,000)."
1.8. Other Repairs Escrow Agreement. The following new definition
is added to the Agreement:
""OTHER REPAIRS ESCROW AGREEMENT" means an escrow agreement
between the Buyer, the Shareholder and the Escrow Agent, in
substantially the form of the Roof Repair Escrow Agreement and
otherwise reasonably acceptable to the Buyer and the
Shareholder, pursuant to which the OTHER REPAIRS ESCROW AMOUNT
shall be deposited into escrow in order to secure the
Shareholder's liability to indemnify the Buyer pursuant to
Section 8.1(B)(11) hereof."
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1.9. Other Repairs Escrow Amount. The following new definition is
added to the Agreement:
""OTHER REPAIRS ESCROW AMOUNT" means Two Hundred Fifty
Thousand Dollars ($250,000)."
1.10. Purchase Price.
(A) In order to reflect the following adjustments, the
term "Purchase Price" is restated as set forth in
Section 1.10(B) hereof:
(1) Increased by $10,742 to reflect the parties'
agreement with respect to a $10,742
adjustment to the Overdraft Debt Amount.
(2) Increased by $8,909 to reflect the parties'
agreement with respect to an $8,909
adjustment to the amount of principal of
Funded Indebtedness paid by the Companies
prior to the Closing.
(3) Reduced by $7,000 to reflect the parties'
agreement with respect to the Companies'
obligations in the approximate amount of
$7,000 to CT Corporation relating to
qualifying Health Valley Foods, Inc. to do
business in twelve (12) states.
(4) Reduced by $5,000 to reflect the parties'
agreement with respect to the Companies'
obligation to provide certain group health
coverage to Xxxxxxx L'Heureux for a period of
one (1) year following the Closing.
(5) Reduced by $25,600 to reflect the parties'
agreement with respect to a discrepancy in
the Companies' "billback" accrual rate for
receivables between 6.5% and 7%.
(6) Reduced by $36,000 to reflect the parties'
agreement with respect to approximately
$36,000 of additional brokerage commissions
accrued by the Companies.
(7) Reduced by $120,000 to reflect the parties'
agreement with respect to a "change in
control" payment to Xxxxxxx L'Heureux in the
amount of $120,000.
(8) Reduced by $100,000 to reflect a bonus
payment by the Companies to Xxxxxxx Xxxx in
the gross amount of $100,000, as contemplated
by Section 6.1 of the Amendment.
(9) Reduced by $380,000 to reflect a bonus
payment by the Companies to Xxxxxxx L'Heureux
in the gross amount of $380,000, as
contemplated by Section 6.1 of the Amendment.
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(10) Reduced by $17,063 to reflect the parties'
agreement with respect to the Companies'
obligations for employment related taxes with
respect to items (7), (8) and (9) above.
(11) Reduced by $120,578 to reflect the parties'
agreement with respect to certain other
adjustments to the Purchase Price.
(12) Increased by $9,370.30 to reflect the
parties' agreement with respect to interest
that will have accrued after April 12, 1996,
and through and including the Closing Date,
on that component of Funded Indebtedness owed
to Sanwa Bank.
(13) Increased by $670.16 to reflect the parties'
agreement with respect to interest that will
have accrued after April 12, 1996 and through
and including the day following the Closing
Date on that component of Funded Indebtedness
owed to Xxxxxx & Xxxxxxxxxx
Lebensmitteltechnik GmbH ("Xxxxxx").
(B) The term "Purchase Price" is hereby deleted in its
entirety and the following is substituted in lieu
thereof:
""PURCHASE PRICE" shall mean the Options and
aggregate amount of Thirty-one Million Two Hundred
Eighteen Thousand Four Hundred Fifty Dollars and
Forty-six Cents ($31,218,450.46)."
1.11. Roof Repair Escrow Agreement. The term "Roof Repair Escrow
Agreement" is hereby deleted in its entirety and the following
is substituted in lieu thereof:
"ROOF REPAIR ESCROW AGREEMENT" means an escrow agreement
between the Buyer, the Shareholder and the Escrow Agent, in
substantially the form of the Escrow Agreement and otherwise
reasonably acceptable to the Buyer and the Shareholder,
pursuant to which an amount equal to the Roof Repair Escrow
Amount shall be deposited into escrow in order to secure the
Shareholder's liability to indemnify the Buyer pursuant to
Section 8.1(B)(7) hereof."
1.12. Roof Repair Escrow Amount. The following new definition is
added to the Agreement:
"ROOF REPAIR ESCROW AMOUNT" means an amount equal to One
Hundred Fifty Eight Thousand Three Hundred Twenty-five Dollars
($158,325)."
1.13. Transaction Costs. The definition of "Transaction Costs" is
hereby amended by deleting clause (iii) therefrom and
renumbering clause (iv) thereof as clause (iii) thereof.
2. Closing Date. Section 3.1 is hereby amended by changing the reference
therein to "April 10, 1996" (which was previously changed to April 12,
1996) to "April 15, 1996".
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3. Modifications to Section 3.2 of the Agreement. Section 3.2 of the
Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
"(A) At the Closing, subject to the provisions of this Agreement,
the Shareholder shall deliver to the Buyer, free and clear of
all Liens, the certificates for the Stocks in negotiable form,
duly endorsed in blank, or with separate notarized stock
transfer powers attached thereto and signed in blank, in
exchange for:
(1) The delivery by the Buyer to the Shareholder of (a)
an Option Agreement, duly executed by the Buyer, and
(b) the wire transfer into an account to be
designated by the Shareholder of an amount equal to
$13,253,743, determined by subtracting from
$31,218,450.46 (the cash component of the Purchase
Price) the following amounts (the Shareholder
represents and warrants to the Buyer that the
amounts, and the statements with respect thereto, are
true and correct as of the Closing Date):
(i) $14,348,418.46, constituting all Funded
Indebtedness as of the Closing Date, less
$664,964 (which $14,348,418.46 consists of
the following two (2) components: (X)
$10,825,734.30 owed to Sanwa Bank, and (Y)
$3,522,684.16 for capitalized leases and
Capital lease equivalents (net of $664,964));
(ii) $1,793,230, constituting the Escrow Amount;
(iii) $350,000, constituting the State Tax Escrow
Amount;
(iv) $158,325, constituting the Roof Repair Escrow
Amount;
(v) $250,000, constituting the Xxxx Xxxxxxx Escrow
Amount;
(vi) $250,000, constituting the Other Repairs
Escrow Amount;
(vii) $80,151, constituting that amount of
Transaction Costs that have been paid after
December 31, 1995 and on or prior to the
Closing Date by the Companies;
(viii) $107,519, constituting all loans made by
either of the Companies to the Shareholder
that are outstanding on the Closing Date
(which reduction constitutes the repayment by
the Shareholder of all such loans);
(ix) $61,811, constituting the Overdraft Debt
Amount; and
(x) $565,253, constituting that amount of Funded
Indebtedness (other than interest on Funded
Indebtedness paid in the ordinary course of
business) that has been paid after December
31, 1995 and on or
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prior to the Closing Date by the Companies
(which the Shareholder represents and
warrants to the Buyer constitutes the
aggregate amount of all Funded Indebtedness
(other than interest on Funded Indebtedness
paid in the ordinary course of business) that
has been paid after December 31, 1995 and on
or prior to the Closing Date by the
Companies.
(2) The Shareholder hereby agrees that the amounts set
forth in items (A)(1)(i), (vii), (ix) and (x)
hereinabove constitute amounts that the Shareholder
agrees to pay to the Buyer and the Companies, and the
Shareholder hereby directs that the Buyer, and the
Buyer hereby agrees to, (X) deduct such amounts from
the cash component of the Purchase Price in the
manner set forth hereinabove and (Y) upon such
deduction, recognize the Shareholder's payment of
such amounts.
(3) The wire transfer or other delivery by the Buyer to
the Escrow Agent of(V) the Escrow Amount, which
amount shall be held and eventually disbursed by the
Escrow Agent in accordance with this Agreement and
the Escrow Agreement, (W) the State Tax Escrow
Amount, which amount shall be held and eventually
disbursed by the Escrow Agent in accordance with the
State Tax Escrow Agreement, (X) the Roof Repair
Escrow Amount, which amount shall be held and
eventually disbursed by the Escrow Agent in
accordance with the Roof Repair Escrow Agreement, (Y)
the Xxxx Xxxxxxx Escrow Amount, which amount shall be
held and eventually disbursed by the Escrow Agent in
accordance with the Xxxx Xxxxxxx Escrow Agreement,
and (Z) the Other Repairs Escrow Amount, which amount
shall be held and eventually disbursed by the Escrow
Agent in accordance with the Other Repairs Escrow
Agreement.
(B) With respect to Funded Indebtedness, at the Closing:
(1) Out of the cash component of the Purchase
Price, the Buyer shall cause to be paid the
following components of Funded Indebtedness
in the manner set forth below (which amounts
the Shareholder represents and warrants to
the Buyer are the true and correct
outstanding amounts of such components of
Funded Indebtedness as of the Closing Date):
(i) $10,825,734.30 to Sanwa Bank by wire
transfer;
(ii) $1,088,665.81 to Sumitomo Bank by
wire transfer (which amount includes
all principal, interest, prepayment
penalties and sales taxes, as set
forth in the demand letter received
by the parties hereto from Sumitomo
Bank prior to the Closing Date); and
(iii) $629,939.40 to Xxxxxx.
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(2) The cash component of the Purchase Price
shall be reduced by $1,804,078.95,
constituting the difference between (i)
the aggregate amount of all Funded
Indebtedness as of the Closing Date, and
(ii) the amounts referred to in clause (1)
above (which $1,804,078.95 the Shareholder
represents and warrants to the Buyer
constitutes the true and correct
difference between (i) the aggregate
amount of all Funded Indebtedness as of
the Closing Date, and (ii) the amounts
referred to in clause (1) above).
(C) With respect to Transaction Costs, at the Closing:
(1) Out of the cash component of the Purchase Price to be
received by the Shareholder in accordance with
Section 3.2(A) hereof, the Shareholder shall cause to
be paid the following amounts by a check drawn on the
Shareholder's personal bank account:
(i) $1,067,243, constituting fees and costs
owing to Xxxxxxxxxxx Xxxxxxx & Co.;
(ii) $50,298.07, constituting legal fees and
costs owing to Weinstock, Manion, Xxxxxxx,
Shore & Xxxxxxx, a Law Corporation; and
(iii) $114,357.93, constituting legal fees and
costs owing to Xxxx X. Xxxxxx, a
Professional Corporation.
(2) The Shareholder shall obtain from each such service
provider a release of the Companies with respect to
all Transaction Costs owed to it and Xxxx X. Xxxxxx,
a Professional Corporation, shall agree to pay, and
indemnify the Buyer with respect to, all amount owed
by the Companies and the Shareholder to Xxxxxx, Xxxx
& Xxxxxxxx LLP.
(D) At the Closing, the Shareholder shall pay to the Buyer an
amount equal to the aggregate amount, if any, paid by the
Companies for Roof Repairs prior to the Closing.
(E) At the Closing, the Shareholder shall pay to the Buyer an
amount equal to the aggregate amount, if any, paid by the
Companies for Other Repairs prior to the Closing.
(F) At the Closing, the Shareholder will deliver to the Buyer the
written resignations of all the directors and officers of
either of the Companies, and all plan fiduciaries of all
Employee Benefit Plans, effective as of the Closing except for
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such directors, officers and plan fiduciaries as the Buyer
shall designate in writing.
(G) At the Closing, the Shareholder shall deliver to the Buyer,
and the Buyer shall deliver to the Shareholder, the
certificates, opinions and other instruments and documents
referred to in Sections 9 and 10, respectively."
4. Additional Shareholder Indemnification Obligations.
4.1. The following provisions are hereby added to Section 8.1(B) of
the Agreement:
"(10) any liabilities or obligations of the Companies arising
as a consequence of the payment of checks drawn on the Xxxx
Xxxxxxx Account and relating to the Xxxx Xxxxxxx Deficit,
whether or not the Companies are legally obligated to honor
any such checks (the Shareholder agrees to pay to the
Companies the amount of the Xxxx Xxxxxxx Deficit as such
deficit is determined, but the Buyer, on behalf of the
Companies, shall first proceed against the Xxxx Xxxxxxx Escrow
Amount then remaining subject to the Xxxx Xxxxxxx Escrow
Agreement, if any, before preceding directly against the
Shareholder), the Buyer hereby agreeing to provide reasonable
accounting to the Shareholder in connection therewith; and
(11) the reasonable repairs of the Companies' existing
facilities (other than the Roof Repairs) set forth on EXHIBIT
H attached hereto and other reasonable work incidental thereto
("OTHER REPAIRS"), which Other Repairs and the contractor or
contractors hired to perform such Other Repairs shall be
acceptable to the landlords of such facilities."
4.2. Exhibit H to this Amendment is hereby incorporated as Exhibit H
to the Agreement.
5. Additional Conditions Precedent to the Obligations of the Buyer. The
following provisions are hereby added to Article 9 of the Agreement:
"9.23. Xxxx Xxxxxxx Escrow Agreement. The Buyer, the Shareholder and
the Escrow Agent shall have entered into the Xxxx Xxxxxxx Escrow
Agreement.
9.24. Other Repairs Escrow Agreement. The Buyer, the Shareholder
and the Escrow Agent shall have entered into the Other Repairs Escrow
Agreement.
9.25. Assumption Agreement. The Buyer and the Shareholder shall
have entered into the Assumption Agreement.
9.26. Funded Indebtedness Releases. The Shareholder shall have
obtained from each holder of Funded Indebtedness referred to in
Section 3.2(B)(1) of the Agreement, as amended by the Amendment, a
release of the Companies with respect to such Funded Indebtedness."
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6. Bonus Payments to Certain Company Employees, Related Matters.
6.1. Bonus Payments. Subject to the satisfaction of the provisions
set forth in Section 6.2 of this Amendment, in addition to
amounts otherwise due, the Companies shall pay by cashier's
check issued on the Closing Date and delivered via overnight
mail on the day following the Closing Date (with evidence
thereof delivered via telecopy to the Shareholder at the
Closing) (a) a bonus in the amount of One Hundred Thousand
Dollars ($100,000) to Xxxxxxx Xxxx, (b) a bonus in the amount
of Three Hundred Eighty Thousand Dollars ($380,000) to Xxxxxxx
L'Heureux, and (c) a "change of control" payment in the amount
of One Hundred Twenty Thousand Dollars ($120,000) to Xxxxxxx
L'Heureux, arising pursuant to that certain letter dated
August 14, 1994, from Xxxxxx Xxxxxxxx, Xx. of Health Valley
Foods, Inc. to Xxxxxxx L'Heureux, as amended by those parties
on the Closing Date. The payments to be made pursuant to this
Section 6.1 shall be subject to all customary withholding.
6.2. Resignation; Release. The Shareholder hereby agrees to (a)
cause Xxxxxxx L'Heureux to (i) resign from all of his
positions with either of the Companies, whether as an officer
(including, without limitation, as an assistant secretary of
Health Valley Foods, Inc.), a director, an employee, a Trustee
and/or Administrative Committee member of the Health Valley
Foods, Inc. Retirement/Savings Plan, or otherwise, and (ii)
execute a general release (the "RELEASE") in favor of the
Companies, in form reasonably acceptable to the Buyer, with
respect to any and all claims that he may have against either
of the Companies, provided that he receives (X) all salary and
other benefits due to him (for services rendered), from the
date of the last paycheck received by him or deposited
directly into his account through the Closing and (Y) all of
the other amounts referred to in the Agreement, as amended
hereby, and (b) the Shareholder shall indemnify and hold
harmless the Buyer from and against any loss, claim, damage,
cost or expense suffered by either of the Companies or the
Buyer as a consequence of Xxxxxxx L'Heureux's revocation or
termination of the Release at any time prior to the date that
is twenty-one (21) days following the Closing Date, including,
but not limited to, any loss, claim, damage, cost or expense
arising out of any claim, action or proceeding brought by or
on behalf of Xxxxxxx L'Heureux.
7. Updated Schedules of Accounts Receivable and Accounts Payable. The
parties hereto hereby acknowledge and agree that, subject to the other
terms and conditions set forth in the Agreement and in this Amendment,
the Shareholder has provided the Buyer with a schedule listing all of
the Companies' accounts receivable and accounts payable as of March
31, 1996.
8. Assignment and Assumption of Automobile. The parties hereto hereby
acknowledge and agree that, subject to the other terms and conditions
set forth in the Agreement and in this Amendment, at the Closing, (a)
the Companies shall assign to the Shareholder all of their right,
title and interest in and to that certain Intrepid automobile leased
by the Companies, or either of them, and used by the Shareholder as of
the Closing, and (b) the
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Shareholder shall execute a written agreement whereby he shall (i)
assume all obligations in connection therewith, and (ii) indemnify and
hold harmless the Companies and the Buyer with respect thereto (the
"Assumption Agreement").
9. Joint Instructions to Escrow Agent.
9.1. Roof Repair Escrow Agreement. Following the completion of the
Roof Repairs in the manner required by Section 8.1(B)(7) of
the Agreement, the Shareholder and the Buyer hereby agree to
issue joint instructions to the Escrow Agent to pay to the
contractor or contractors that performed such Roof Repairs, or
reimburse the Companies for, the cost of such Roof Repairs,
and to release the balance of the Roof Repair Escrow Amount,
if any, to the Shareholder.
9.2. Other Repairs Escrow Agreement. Following the completion of
the Other Repairs in the manner required by Section 8.1(B)(11)
of the Agreement, the Shareholder and the Buyer hereby agree
to issue joint instructions to the Escrow Agent to pay to the
contractor or contractors that performed such Other Repairs,
or reimburse the Companies for, the cost of such Other
Repairs, and to release the balance of the Other Repairs
Escrow Amount, if any, to the Shareholder.
10. Continuation of Other Terms and Conditions. Except as specifically
modified by this Amendment, all of the other terms and conditions of
the Agreement shall remain in full force and effect.
11. Execution in Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first written above.
THE SHAREHOLDER
/S/ Xxxxxx Xxxxxxxx, Xx.
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Xxxxxx Xxxxxxxx, Xx.
HEALTH VALLEY COMPANY, a
Delaware corporation
By: /S/ Xxxxxxx X. Xxxx
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Title: President
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