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EXHIBIT 2.2
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment"), dated
August 1, 1997, by and among DS Group Limited, a corporation formed under the
laws of England and Wales ("Buyer"), Thermadyne Holdings Corporation, a
Delaware corporation ("Holdings"), and Xxxxxx Xxxxxxxx Holdings Corporation, a
Delaware corporation formerly known as MAG Acquisition Corp. and Xxxxxx
Xxxxxxxx Corporation (the "Company").
RECITALS:
WHEREAS, Buyer, Holdings and the Company are parties to that certain
Stock Purchase Agreement dated July 11, 1997 (the "Stock Purchase Agreement")
pursuant to which Buyer will acquire all of the issued and outstanding capital
stock of the Company; and
WHEREAS, Buyer, Holdings and the Company desire to amend certain
provisions of the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
AMENDMENT OF AGREEMENT
Section 1.1 Consideration for the Shares. The first sentence of
Section 2.2 of the Stock Purchase Agreement is hereby amended in its entirety
to read as follows: "The aggregate purchase price payable by Buyer for the
Shares shall be $88,543,000 in cash (the "Purchase Price")."
Section 1.2 Purchase Price Adjustment. Section 2.3(a) of the
Stock Purchase Agreement is hereby amended in its entirety to read as follows:
As soon as practicable, but in no event later than 60 days following
the Closing Date, Holdings shall prepare an unaudited consolidated
balance sheet of the Company as of the Closing Date (including the
notes thereto, the "Closing Date Balance Sheet"). The Closing Date
Balance Sheet shall be prepared in the following manner and contain
the following agreed adjustments and, except as so provided, shall
otherwise fairly present the consolidated financial position of the
Company in accordance with GAAP applied on a consistent basis in the
same manner as the Interim Balance Sheet: (i) the Closing Date Balance
Sheet shall reflect a provision for doubtful account in the amount of
$615,000 relating to the account
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receivable of CHPO Deloro; (ii) an additional tax accrual in the
amount of $225,000 shall be reflected on the Closing Date Balance
Sheet (unless paid before Closing) relating to the settlement of the
tax audit in Germany of Xxxxxx Xxxxxxxx GmbH for the years 1992 to
1995; (iii) the Closing Date Balance Sheet shall reflect an additional
accrual in the amount of $498,000 for U.K. pension fund liability;
(iv) the Closing Date Balance Sheet shall reflect an additional
accrual in the amount of $100,000 for warranty costs for equipment
repair and replacement associated with the alleged failure of power
sources supplied by Thermal Dynamics Corporation and included in
Starweld 9000 PTA machines sold by the Company to TRW prior to the
Closing Date; (v) inventories shall be confirmed pursuant to the
physical inventory referenced in the immediately following sentence
and shall be recorded on the Closing Date Balance Sheet in a manner
consistent with Holdings' historical valuation methods; and (vi)
except as referenced in the immediately preceding clauses (i) through
(iv) no adjustments shall be made to the Closing Date Balance Sheet to
address any other matter referenced in Appendix B of that certain
letter dated July 31, 1997 from Xxxxxx Xxxxxxxx Development Capital
Limited to Holdings and Gleacher NatWest Inc. (the "MG Capital
Letter"). As of the Closing Date, Holdings and Buyer shall jointly
conduct a physical inventory of the raw materials, work-in-process and
finished goods inventories of the Company and its Subsidiaries,
provided that such physical inventory shall not include a review for
obsolescence.
Section 1.4 Covenants. Article V of the Stock Purchase Agreement
is hereby amended to add the following section as follows:
SECTION 5.18 Conduct of TRW Litigation. Holdings hereby
agrees that Holdings and its affiliates will take into account the
importance to the Company of maintaining its on-going
customer/business relationship with TRW when conducting all litigation
and settlement negotiations with TRW in connection with the alleged
failure of power sources supplied by Thermal Dynamics Corporation and
included in Starweld 9000 PTA machines sold by the Company prior to
the Closing Date.
Section 1.5 Indemnification. Section 8.3(a) of the Stock
Purchase Agreement is hereby amended to add the following clauses (v), (vi),
(vii) and (viii):
(v) all payments in excess of $200,000 for dilapidation costs
required to be paid pursuant to that certain Lease Agreement dated
June 24, 1987 between Europa Investments Limited and Xxxxxx Xxxxxxxx
Limited, as amended;
(vi) all pension payments hereafter made by the Company or its
Subsidiaries to Xxxx Rohrmann in excess of $422,000;
(vii) any and all Indemnifiable Losses (other than
Indemnifiable Losses for warranty costs for equipment repair and
replacement relating to, resulting from or arising out
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of the alleged failure of power sources supplied by Thermal Dynamics
Corporation) in excess of $200,000 relating to, resulting from or
arising out of the alleged failure of Starweld 9000 PTA machines sold
by the Company to TRW prior to the Closing Date; and
(viii) the first $100,000 of any and all Indemnifiable
Losses and fifty percent (50%) of any and all Indemnifiable Losses
thereafter to the extent relating to, resulting from or arising out of
the litigation referred to in Item 5 of Section 3.11 of the Disclosure
Schedule; provided, that Holdings' obligations under this clause
(viii) are subject to the condition that, after the Closing, the
Company agrees that it will not enter into a French joint venture or
set up a wholly-owned French subsidiary that competes with CHPO-Deloro
prior to the settlement or judicial resolution of the litigation
referred to in Item 5 of Section 3.11 of the Disclosure Schedule.
Section 1.6 Defense of Claims. Section 8.4(a) of the Stock
Purchase Agreement is amended to add the following clause at the end thereof:
"; provided, that Holdings will assume the defense of any claim or action to
the extent relating to, resulting from or arising out of the litigation
referred to in Item 5 of Section 3.11 of the Disclosure Schedule and Buyer
shall be responsible for fifty percent (50%) of the costs of such defense in
excess of $100,000."
Section 1.7 Termination. Section 9.1(c)(iii) of the Stock
Purchase Agreement is hereby amended to read in its entirety as follows:
"(iii) fail, prior to 9:00 a.m. (New York City time) on August 7, 1997, to
deliver to Holdings a new unconditional Debt Commitment or modify the existing
Debt Commitment so that there shall be no conditions to funding thereunder
other than the closing of this Agreement, apart from payment of the Purchase
Price, upon fulfillment of the conditions set forth in Section 6.1 and Sections
6.2(a), 6.2(b) and 6.2(c);"
ARTICLE II
MISCELLANEOUS
Section 2.1 Defined Terms. All capitalized terms used and not
defined herein shall have the meanings ascribed to such terms in the Stock
Purchase Agreement as hereby amended.
Section 2.2 Effect of Amendment. Except as specifically provided
herein, the Stock Purchase Agreement is in all respects ratified and confirmed.
All of the terms, conditions and provisions of the Stock Purchase Agreement as
hereby amended shall be and remain in full force and effect. Buyer hereby
confirms that it shall not hereafter assert that any matter referenced in the
MG Capital Letter constitutes a breach of the representations of Holdings
contained in the Stock Purchase Agreement, nor, except to the extent expressly
provided herein, shall Buyer assert any right to seek indemnification from
Holdings in respect of any such matter.
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Section 2.3 Entire Agreement. This Amendment, together with the
unaltered portions of the Stock Purchase Agreement, embodies the entire
agreement and understanding of the parties hereto and supersedes all prior
agreements and understandings relating to the subject matter hereof.
Section 2.4 Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to the conflicts of laws rules thereof.
Section 2.5 Duplicate Originals. This Amendment may be executed
in as many counterparts as may be necessary or convenient and each of which,
when so executed, shall be deemed to be an original, but all such counterparts
shall constitute but one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first written above.
DS GROUP LIMITED
By: /s/ XXX X. XXXXXX
Name: Xxx X. Xxxxxx
Title: Director
THERMADYNE HOLDINGS CORPORATION
By:/s/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx
Title: Senior Vice President &
Chief Financial Officer
XXXXXX XXXXXXXX HOLDINGS CORPORATION
By:/s/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx
Title: Senior Vice President &
Chief Financial Officer
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