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
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
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").
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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
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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.
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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
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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: ___________________________________
Name: __________________________
Title: _________________________
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Xxxx Xxxxxxxx
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