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Exhibit 2.2
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
This AMENDMENT NO. 1 (the "Amendment") TO ASSET PURCHASE AGREEMENT,
as defined hereinbelow, entered into as of this first day of June, 2001 between
GREENHOUSE DAY SPA GROUP, INC. (formerly known as Steiner Spas USA, Inc.) (the
"Buyer"), and the SELLER PARTIES, as defined hereinbelow.
WHEREAS, as of April 30, 2001 STEINER SPAS USA, INC., a Florida
corporation, whose name was changed to GREENHOUSE DAY SPA GROUP, INC., and
BIRMINGHAM DAY SPA, LLC, a Pennsylvania limited liability company
("Birmingham"), 57TH STREET DAY SPA, LLC, a New York limited liability company
("57th Street"), GH DAY SPAS, INC., a Pennsylvania corporation and the holder of
all of the Capital Stock of 57th Street ("GHDS" and together with Birmingham and
57th Street, the "Spa Sellers", and individually, a "Spa Seller"), GH DAY SPA
SECOND STREET, LLC, a Pennsylvania limited liability company ("Second Street"
and together with the Spa Sellers, the "Operational Sellers", and individually,
an "Operational Seller") THE GREENHOUSE SPA, INC., a Pennsylvania corporation
("Greenhouse"and together with the Operational Sellers, the "Sellers", and
individually, a "Seller"), TGH, LLC, a Pennsylvania limited liability company
("TGH") and the holder of all of the Capital Stock of Greenhouse, THE STUART
MICHAEL KATZOFF TRUST u/d/t dated October 9th, 1990, an irrevocable trust
declared under the laws of the State of Pennsylvania (the "Trust") and the
holder of all of the Capital Stock of GHDS, Birmingham and Second Street (each
of the Trust, GHDS and TGH are sometimes referred to herein, individually, and
as the "Shareholders" and, individually, a "Shareholder"), GERALD KATZOFF, a
resident of the State of Pennsylvania and trustee of the Trust (the "Trustee"),
LYDIA KATZOFF, a resident of the State of Pennsylvania, and STUART KATZOFF, a
resident of the State of Pennsylvania and the sole beneficiary of the Trust (the
"Beneficiary") entered into an asset purchase agreement (the "Asset Purchase
Agreement"). The Sellers, the Shareholders, the Trustee, the Beneficiary and
Lydia Katzoff are sometimes referred to herein, individually, as "Seller
Parties" and, individually, a "Seller Party". Certain other capitalized terms
used herein are defined in the Asset Purchase Agreement.
WHEREAS, the Closing Date under the Asset Purchase Agreement was
anticipated to be on or about May 31, 2001;
WHEREAS, Seller Parties and the Buyer have agreed that the Closing Date
be postponed to a date not sooner than July 1, 2001;
WHEREAS, Seller Parties and the Buyer have agreed that the Closing Date
be postponed to a date not later than July 15, 2001.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements herein contained, and intending to be legally bound
hereby, the Parties hereto agree as follows:
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1. SCOPE OF AMENDMENT. Unless specially set forth in this Amendment
to the contrary, the terms and conditions set forth in the Asset Purchase
Agreement shall remain as set forth therein.
2. NAME CHANGE. Wherever the word Buyer or Steiner Spas USA, Inc.
or Steiner USA Day Spas, Inc. appears in the Asset Purchase Agreement it shall
mean Greenhouse Day Spa Group, Inc., a Florida corporation.
3. CONSIDERATION. The first sentence of Section 2.1(a) of the Asset
Purchase Agreement shall be amended in its entirety as follows:
The consideration to be paid by Buyer, whether at Closing or
after Closing, in exchange for the Purchased Assets and the
covenants not to compete set forth in Section 11.1 (the
"Consideration") shall be equal to an amount not to exceed Thirty
Million Eight Hundred Thousand Dollars and No Cents
($30,800,000.00) payable in cash and Steiner Securities in
accordance with Sections 2.1(b), 2.4 and 2.7-2.9 below.
In addition, the reference, in Section 2.1(b) of the Asset Purchase
Agreement, to "Twenty-Four Million Seven Hundred Fifty Thousand Dollars and No
Cents ($24,750,000.00)" shall be replaced with "Twenty-Four Million Eight
Hundred Thousand Dollars and No Cents ($24,800,000.00)."
4. CASH ADVANCE. This Section 4 shall supplement the Asset Purchase
Agreement as follows:
a. Upon execution of this Amendment the Buyer shall deliver to
Sellers Five Million Dollars ($5,000,000) by wire transfer of immediately
available funds, as an advance of the cash portion of the Closing Date Purchase
Price (the "Cash Advance"). At Closing the Cash Advance shall be deducted from
the cash portion of the Closing Date Purchase Price at Closing in addition to
the other amounts to be deducted therefrom at Closing as set forth in Section
2.1(b)(i) of the Asset Purchase Agreement.
b. Provided that all of the following has occurred: (i) the
Conditions to the Obligations of Buyer as set forth in Section 8.1 of the Asset
Purchase Agreement have been fulfilled by the Seller Parties, (ii) the Closing
has not occurred and been concluded on or before July 15, 2001 (and the failure
to close is not attributable to or caused by any Seller Party) and (iii) the
Parties cannot mutually agree in writing on an Alternative Closing Date (as
defined in Section 6 hereinbelow), the Cash Advance shall become the property of
Sellers on July 16, 2001 without any obligation to repay the Cash Advance to the
Buyer.
c. In the event that (i) any of the Seller Parties shall have
substantially breached the terms of the Asset Purchase Agreement prior to the
Closing and such breach has not been cured prior to the Closing after notice of
the breach and a reasonable opportunity to cure (the "Breach")
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or (ii) the Closing shall not have occurred on or before July 15, 2001 (y) due
to the failure by any of the Seller Parties to perform and comply with any of
its obligations required by the Asset Purchase Agreement to be performed or
complied with at or prior to the Closing (where the Buyer has performed and
complied with all of its obligations required by the Asset Purchase Agreement to
be performed and complied with prior to the Closing) then the Seller Parties
shall repay in full to the Buyer the amount of (a) the Cash Advance and the (b)
Negative Cash Flow Advance (as defined in Section 10 hereof) within fifteen (15)
days following the earlier of the date of the Breach or July 15, 2001 and any
failure by the Seller Parties to repay the Cash Advance and the Negative Cash
Flow Advance within such 15-day period (i) shall constitute a default under that
certain Amended and Restated Loan Agreement, dated as of April 26, 2001, by and
among Greenhouse, TGH and Steiner U.S. Holdings and (ii) shall entitle Steiner
U.S. Holdings, Inc. to exercise, in respect of the Cash Advance and the Negative
Cash Flow Advance, all of the remedies set forth in the Loan Agreement which
Seiner U.S. Holdings, Inc. may exercise in an event of default thereunder. With
respect to the immediately preceding sentence, the Parties acknowledge and agree
that Steiner U.S. Holdings, Inc. shall be a third-party beneficiary of this
Amendment.
5. CLOSING. Section 2.10 of the Asset Purchase Agreement shall be
amended in its entirety as follows:
CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of
Akerman, Senterfitt & Eidson, P.A., Miami, Florida not earlier
than July 1, 2001. As soon as practicable after both (i) July 1,
2001 and (ii) the fulfillment of all of the conditions to the
Closing as set forth in Article VIII, the Closing shall occur
(effective 12:01 a.m. on such date of Closing, the "Closing
Date"). The Parties intend that the Closing occur on or about
July 2, 2001 but not later than July 15, 2001. However, if all of
the conditions to the Closing as set forth in Article VIII have
not been fulfilled by July 15, 2001 the parties by mutual
agreement, in writing may select another place, time or date
following July 15, 2001 for the Closing to occur (the
"Alternative Closing Date").
6. LICENSE AGREEMENT. Section 7.11 shall be amended in its entirety
to read as follows:
7.11 LICENSE AGREEMENT. At the Closing, Greenhouse and the Buyer
shall enter into both the Trade Mark Service Mark License
Agreement and Assignment of Intellectual Property relating to the
Greenhouse Mark in the forms attached as Exhibits 6.11-A and
6.11-B to the Amendment.
7. PREPARATION OF DOC FORMS. Section 7.13 of the Asset Purchase
Agreement shall be amended in its entirety to read as follows:
7.13 DEPARTMENT OF COMMERCE. Provided the Buyer timely
provides the Seller Parties the necessary information regarding
the
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Buyer, the Seller Parties shall cause to be prepared for filing
the documentation required by the Department of Commerce as a
result of the transactions contemplated hereby (the "DOC Forms").
8. DELIVERY OF DOC FORMS. Section 8.1(m) of the Asset Purchase
Agreement shall be amended in its entirety to read as follows:
(m) The Seller Parties shall have delivered to the Buyer properly
completed and executed DOC Forms in form reasonably acceptable to
the Buyer, provided that the Buyer has provided to the Seller
Parties the information relating to the Sellers necessary to
complete the DOC Forms;
9. LEGAL FEES. Clause (iv) of Section 2.1(b)(i) of the Asset
Purchase Agreement shall be amended in its entirety as follows:
(iv) the extent to which the legal fees and expenses relating to
the TGH Indebtedness referred to in Section 8.1(s) exceed $8,000.
10. TERMINATION BY BUYER. Section 14.1(b) of the Asset Purchase
Agreement shall be amended in its entirety as follows:
(b) if the Buyer shall have satisfied all of its conditions as
specified in Section 8.2, then by Buyer if the transactions
contemplated by this Agreement to take place at the Closing shall
not have been consummated by the close of business on July 15,
2001 but only if the failure of the Parties to close the
transactions contemplated hereby on the Closing Date solely
relates to the failure by any of the Seller Parties to satisfy
the conditions specified in Section 8.1;
11. OPERATIONAL PERIOD. Section 14.1(d) of the Asset Purchase
Agreement shall be amended in its entirety as follows:
(d) (i) if the Seller Parties shall have satisfied all of their
respective conditions as specified in Section 8.1, then by Seller
Parties if the transactions contemplated by this Agreement to
take place at the Closing shall not have been consummated by the
close of business on July 15, 2001 but only if the failure of the
Parties to close the transactions contemplated hereby on the
Closing Date solely relates to Buyer's failure to satisfy the
conditions specified in Section 8.2;
(ii) The Buyer agrees to pay to the Sellers at Closing an
estimate (the "Estimate") of the negative net cash flow of the
Business (the "Negative Cash Flow") for the period from June 1,
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2001 to the earlier to occur of the Closing or July 15, 2001 (the
"Operational Period"). The Buyer has advanced to the Sellers, as
of the date of the Amendment, Three Hundred Fifty Thousand
Dollars ($350,000) (the "Negative Cash Flow Advance") against the
Estimate of the Negative Cash Flow. At or prior to Closing,
Gerald Katzoff, on behalf of the Seller Parties, shall cause to
be delivered to the Buyer a detailed statement of cash flows of
the Sellers for the Operational Period (the "Estimated
Operational Period Financial Statement") which estimate shall be
attached as an Exhibit to the Closing Statement. Within sixty
(60) days after the Closing Date, the Buyer shall prepare and
deliver to Gerald Katzoff, on behalf of the Seller Parties, a
determination (the "Operational Period Financial Determination")
of the actual amount of the Negative Cash Flow (which actual
amount is referred to herein as the "Preliminary Negative Cash
Flow Amount"), including the basis for such Operational Period
Financial Determination set forth in reasonable detail, prepared
in accordance with GAAP. If, within thirty (30) days after the
date on which the Operational Period Financial Determination is
delivered to Gerald Katzoff, he shall not have given written
notice to the Buyer setting forth in reasonable detail any
objection of the Seller Parties to such Operational Period
Financial Determination, then such Operational Period Financial
Determination shall be final and binding upon the Parties and the
Preliminary Negative Cash Flow Amount shall be deemed the "Final
Negative Cash Flow Amount". In the event that Gerald Katzoff, on
behalf of the Seller Parties, gives written notice of any
objection to such Operational Period Financial Determination
within such 30-day period, then the Buyer and Gerald Katzoff,
shall use all reasonable efforts to resolve the dispute within
thirty (30) business days following the receipt by the Buyer of
such written notice from Gerald Katzoff. If the Parties are
unable to reach an agreement as to the Final Negative Cash Flow
Amount within such 30-day period, the matter shall be submitted
to the Settlement Accountant for determination of the Final
Negative Cash Flow Amount to be made within 45 days after
submission, and the determination of the Settlement Accountant
shall be final and binding upon the Buyer and the Seller Parties.
The Buyer and the Seller Parties shall contribute equally to all
costs (including fees and expenses charged by the Settlement
Accountant) in connection with the resolution of any such
dispute. If the Final Negative Cash Flow Amount is lower than the
Negative Cash Flow paid to the Sellers at Closing then such
amount shall be deemed to be Indemnifiable Damages under Article
X hereof and the Buyer may set off against and recoup from any
Cash Holdback Amount the difference between the Final Negative
Cash Flow Amount and the Negative Cash Flow paid to the Sellers
at
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Closing or take any other action or exercise any other remedy
available to it by appropriate legal proceedings to recover such
amount. If the Final Negative Cash Flow Amount is higher than the
Negative Cash Flow paid to the Sellers at Closing, then such
amount shall be paid by the Buyer to the Sellers within thirty
(30) days of the determination of the Final Negative Cash Flow
Amount. Notwithstanding anything to the contrary set forth above,
the calculation of Negative Cash Flow (i) shall not take into
account any expenses incurred as a result of an Extraordinary
Cause (as hereinafter defined) and (ii) shall take into account
any revenue that otherwise would have been generated (as measured
by the prior operation(s) of such spa(s)) but for such
Extraordinary Cause. "Extraordinary Cause" shall mean any or all
of the following: (i) a breach by any of the Seller Parties of
the terms of the Asset Purchase Agreement, (ii) an event of Force
Majeure that occurs during the Operational Period or (iii) the
gross negligence, recklessness or intentional misconduct of any
of the Seller Parties during the Operational Period that
adversely affects the Business.
(iii) From and after the Closing Date, and for the
purpose of enabling the Buyer to prepare the Operational Period
Financial Determination or any other determinations contemplated
by clause (ii) above, the Seller Parties will, and the Seller
Parties will cause the Company to, (a) afford to the
Representatives of the Buyer, at reasonable times, reasonable
access to the key employees, sites, properties, books and records
of each of the Sellers and the Company, (b) provide the Buyer
with such additional financial and operating data and other
information relating to the business and properties of each of
the Sellers and the Company as the Buyer may from time to time
reasonably request and (c) cooperate with the Buyer and its
Representatives in the preparation of the Operational Period
Financial Determination or any other determinations contemplated
by clause (ii) above.
12. CURRENT BALANCE SHEET. Notwithstanding anything to the contrary
set forth in the Asset Purchase Agreement and except as otherwise provided
below, (i) all references in the Asset Purchase Agreement to the "Current
Balance Sheet" shall mean the balance sheet of each of the Operational Sellers
and the Company dated as of April 30, 2001 and attached as Exhibit 11 to this
Amendment and (ii) all references in the Asset Purchase Agreement to the
"Current Balance Sheet Date" shall mean April 30, 2001; provided, however, that
with respect to the penultimate sentence of Section 4.18 and Sections 4.26(a)
and 4.28 of the Asset Purchase Agreement, the definition of "Current Balance
Sheet" and "Current Balance Sheet Date" shall mean (i) the balance sheet of each
of the Operational Sellers and the Company dated as of March 31, 2001 and
included in the Financial Statements attached as Schedule 4.33 to the Asset
Purchase Agreement and (ii) March 31, 2001, respectively.
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13. DEVELOPMENT PROJECTS. Section 15.12 of the Asset Purchase Agreement
and Schedule 15.12 attached thereto shall be amended, to the extent necessary,
to provide that, upon the written approval of Buyer, the amounts set forth on
Schedule 15.12 will be increased during the Operational Period so as to continue
the build-out of the Newtown, Pennsylvania and Birmingham, Alabama spas in
accordance with Section 15.12 of the Asset Purchase Agreement.
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IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Amendment as of the date first above written.
GREENHOUSE DAY SPA GROUP, INC.,
a Florida corporation
By: /s/ Leonard I. Fluxman
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Name: Leonard I. Fluxman
Title: President and Chief Executive Officer
BIRMINGHAM DAY SPA, LLC,
a Pennsylvania limited liability company
By: /s/ Gerald Katzoff
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Name: Gerald Katzoff
Title: Manager
57TH STREET DAY SPA, LLC,
a New York limited liability company
By:/s/ Gerald Katzoff
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Name: Gerald Katzoff
Title: Manager
GH DAY SPAS, INC.,
a Pennsylvania corporation
By: /s/ Gerald Katzoff
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Name: Gerald Katzoff
Title: President
[SIGNATURES CONTINUED ON FOLLOWING PAGE.]
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GH DAY SPA SECOND STREET, LLC,
a Pennsylvania limited liability company
By: /s/ Gerald Katzoff
-----------------------------------------
Name: Gerald Katzoff
Title: Manager
THE GREENHOUSE SPA, INC.,
a Pennsylvania corporation
By: /s/ Gerald Katzoff
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Name: Gerald Katzoff
Title: President
THE STUART KATZOFF TRUST
u/d/t dated October 9, 1990
By: /s/ Gerald Katzoff
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Name: Gerald Katzoff
Title: Trustee
/s/ Gerald Katzoff
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GERALD KATZOFF, individually
/s/ Lydia Katzoff
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LYDIA KATZOFF, individually
/s/ Stuart Katzoff
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STUART KATZOFF, individually
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