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:
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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 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.
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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
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.
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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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