Exhibit 2.2
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 to ASSET PURCHASE AGREEMENT is made and entered into
as of this day of June 20, 1996, by and among ACE NOVELTY ACQUISITION CO., INC.,
a Texas corporation ("Buyer"), PLAY BY PLAY TOYS & NOVELTIES, INC., a Texas
corporation and the parent corporation of Buyer ("PBYP"), ACE NOVELTY CO., INC.,
a Washington corporation ("ACE"), SPECIALTY MANUFACTURING LTD., a British
Columbia, Canada corporation ("Specialty"), ACME ACQUISITION CORP., a Washington
corporation ("ACME"), and BENJAMIN H. MAYERS and LOIS E. MAYERS, husband and
wife, RONALD S. MAYERS, a married individual, KAREN GAMORAN, a married
individual, and BETH WEISFIELD, a married individual, who are owners of all of
the issued and outstanding capital stock of ACE (collectively "Stockholders").
ACE, ACME and Specialty are collectively referred to herein as "Sellers."
WHEREAS, Buyer, PBYP, Sellers and Stockholders entered into an Asset
Purchase Agreement dated as of May 1, 1996 (the "Asset Purchase Agreement"), and
WHEREAS, the parties desire to amend certain provisions of the Asset
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1 SECTION 3.01 "CLOSING DATE." In "(ii)" of Section 3.01, the date "May
31, 1996" shall be deleted and in its stead the date "June 21, 1996" shall be
inserted.
2 SECTION 4.06 "EMPLOYEE MATTERS." There shall be added as an additional
sentence at the end of subparagraph "(A)" of Section 4.06 the following
sentence: "Sellers shall keep in force through June 30, 1996 the health
insurance applicable to Hired Employees and shall receive as a positive
adjustment to the Purchase Price the cost of such health insurance allocable to
the period from the Closing Date to June 30, 1996."
3 SECTION 4.09 "ENVIRONMENTAL REMEDIATION." Section 4.09 is hereby amended
in its entirety to read as follows:
4.09 ENVIRONMENTAL REMEDIATION. Notwithstanding anything to the
contrary in this Agreement, except as expressly provided in this Section
4.09, Sellers and Stockholders shall have no liability or obligations to
Buyer or PBYP under this Agreement with regard to the remediation of
Hazardous Substances present on the ACE Facilities on the Closing Date, by
reason of a breach of Seller's representations and warranties in Section
5.28 or otherwise; provided, however, this limitation shall not limit
Sellers' and Stockholders' liability under Section 5.28 with respect to
claims other than for the remediation of Hazardous Substances. Sellers and
Stockholders shall be responsible for completing the remedial action
recommended by EPS Environmental Services, Inc. in its asbestos
survey/assessment contained in Section V.E of the Phase II environmental
assessment dated February 2, 1994, delivered to Buyer with respect to
asbestos remediation at the Chicago ACE Facility, which remedial action
Sellers represent has been completed by Sellers and Stockholders except
for removal of 810 linear feet of TSI which will be completed within 60
days after the Closing Date. Sellers have delivered to Buyer an
environmental phase I and phase II assessment with respect to the Chicago
Ace Facility ("First Assessment"). Buyer may, at its sole cost and
expense, within 120 days of the Closing Date, obtain a phase I
environmental assessment and, if desired, a phase II environmental
assessment of the Chicago Ace Facility and such other assessments as such
environmental assessments shall indicate or recommend ("Second
Assessment"). Sellers and Stockholders shall also be responsible for
completing any remedial action and shall also be liable to Buyer and PBYP
for the direct, out-of-pocket costs and expenses of Buyer related to (i)
the remediation of the Hazardous Substances present at the ACE Facilities
on the Closing Date, arising from a breach of a representation or warranty
in Section 5.28, but only to the extent such remediation is now, or in the
future, required by a local, state, or federal agency; and (ii) the
remediation of any Hazardous Substances disclosed in the Second Assessment
that are not disclosed in the First Assessment but only to the extent the
Second Assessment states that a local, state or federal agency would
require such remediation based upon the regulatory cleanup objectives
applicable to the property as of the Closing Date; provided, however,
Sellers shall not be obligated for such remediation costs under this
Section 4.09 if such required remediation results from (y) a change in the
use or operation of the ACE Facilities or an addition to or modification
of any improvements situated on the ACE Facilities subsequent to the
Closing Date, or (z) any addition to or modification of any applicable
Environmental Laws (as hereinafter defined) subsequent to the Closing
Date. Sellers shall have the sole and exclusive control over the actual
conduct of such remediation and may use the least expensive remediation
method available so long as all such remediation is conducted in
accordance with applicable Environmental Laws. Sellers' and Stockholders'
obligations under this Section 4.09, with the exception of remedial action
arising out of the Second Assessment to
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the extent provided in (ii) above, shall be subject to the indemnification
procedures and limitations set forth in Article VIII.
4 SECTION 4.02 "PAYMENT OF CASH, PURCHASE PRICE AND PROMISSORY NOTE."
Section 4.02(C)(iii) and (iv) are hereby amended in their entirety to read as
follows:
(iii) Five Hundred Thousand Dollars ($500,000.00) of principal
thereof, subject to Offset, shall be due and payable twelve (12) months
from the Closing Date,
(iv) Eight Hundred Thousand Dollars ($800,000.00) of principal
thereof, subject to Offset, shall be due and payable twenty four (24)
months and one day from the Closing Date, and
5 SECTION 7.21(A) "LETTER OF CREDIT." Buyer and PBYP hereby agree and
acknowledge that the condition to closing set forth in Section 7.21(A) has been
waived in its entirety by Buyer and PBYP.
6 SECTION 8.03 "INDEMNIFICATION NOTICE". The second to the last paragraph
of Section 8.03 is hereby amended in its entirety to read as follows:
Notwithstanding anything in this Agreement to the contrary, except with
respect to the matters described in Section 8.01(A)(v) and 8.01(A)(vi) and
with respect to completion of the removal of 810 linear feet of TSI and
remedial action arising out of the Second Assessment to the extent
provided in Section 4.09, Buyer shall have no claim or demand against
Sellers or Stockholders under or in connection with this Agreement,
including, without limitation, for indemnification under this ARTICLE
VIII, unless and until the aggregate amount of such claims and demands
(excluding any claims with respect to matters described in Section
8.01(A)(v) and 8.01(A)(vi) and with respect to completion of the removal
of 810 linear feet of TSI and remedial action arising out of the Second
Assessment to the extent provided in Section 4.09) shall exceed Three
Hundred Twenty-Five Thousand Dollars ($325,000.00), and, then, only to the
extent of such excess; provided, however, that the Three Hundred
Twenty-Five Thousand Dollar ($325,000.00) threshold shall be reduced by
the amount of any indemnification payment made by Buyer to Sellers or
Stockholders pursuant to Section 9.01(A)(iii).
7 SECTION 10.03 "COVENANT TO MAINTAIN INSURANCE." The last sentence of
Section 10.03 is hereby amended in its entirety to read as follows:
Notwithstanding Sellers' obligation to obtain tail insurance, Buyer shall,
immediately upon demand by Sellers, pay to Sellers the sum of One Hundred
Five Thousand Dollars ($100,000.00) to reimburse Sellers for the cost of
such insurance.
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8 SCHEDULES TO AGREEMENT. The cover sheet to the Schedules is hereby
amended in its entirety to read as attached hereto. Schedules 1.01(A), 1.01(F),
1.01(G), 1.01(I), 1.02(G), 1.02(N), 2.01 (Attachment 3), 2.02(B), 5.05, 5.06,
5.11, 5.16, 5.21, 5.22, 5.23 and 5.24 to the Agreement are each hereby amended
in their entirety to read in the form attached hereto. Schedule 4.06 is hereby
supplemented to include the additional information attached hereto.
9 EXHIBIT A "PROMISSORY NOTE." Exhibit A to the Agreement is hereby
amended in its entirety to the form attached hereto.
10 EXHIBIT B "ESCROW AGREEMENT". Exhibit B to the Agreement is hereby
amended in its entirety to the form attached hereto.
Except to the extent amended or modified by this Amendment No. 1 to Asset
Purchase Agreement, the Agreement and all the Schedules and Exhibits thereto
remain in full force and effect.
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IN WITNESS WHEREOF, this Agreement has been duly executed by Buyer, PBYP,
Sellers and Stockholders as of and on the date first above written.
ACE NOVELTY ACQUISITION CO., INC.
By
Mark A. Gawlik, President
"Buyer"
PLAY BY PLAY TOYS & NOVELTIES,
INC.
By
Mark A. Gawlik, President
"PBYP"
ACE NOVELTY CO., INC.
By
Ronald S. Mayers, President
SPECIALTY MANUFACTURING LTD.
By
Benjamin H. Mayers, President
ACME ACQUISITION CORP.
By
Ronald S. Mayers, President
"Sellers"
BENJAMIN H. MAYERS LOIS E. MAYERS
RONALD S. MAYERS KAREN GAMORAN
BETH WEISFIELD "Stockholders"
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