TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT
(this “Agreement”) is made and entered into as of
__________ ___, 2008, by and between Charming Shoppes of Delaware, Inc., a
Pennsylvania corporation (“Charming”), and
Arizona Mail Order Company, Inc, a Delaware corporation (“AMO”). Charming
and AMO are at times referred to herein individually as a “Party” and
collectively as the “Parties”.
WHEREAS,
Crosstown Traders, Inc., a Delaware corporation (“Seller”) and Xxxx
Xxxxxxxx Outfitters, Inc. (“NTO”) have entered
into that certain Stock Purchase Agreement dated August 25, 2008, as amended on
September ___, 2008 (the “Purchase Agreement”),
pursuant to which NTO has agreed to purchase all of the issued and outstanding
stock of AMO and its subsidiaries as more fully described in the Purchase
Agreement;
WHEREAS,
capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Purchase Agreement; and
WHEREAS,
as a condition to the Seller and NTO’s obligation to consummate the transactions
contemplated by the Purchase Agreement, the Parties have entered into this
Agreement pursuant to which each Party will make available to the other Party
certain transition services for the time periods specified herein.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE
1
SERVICES
PROVIDED
1.01 Transition
Services. Upon the terms and subject to the conditions set
forth in this Agreement, each Party (in such capacity, the “Provider”) will
provide to the other Party (in such capacity, the “Recipient”) for the
use in the businesses of the Recipient and its Affiliates each of the services
listed in Appendix A,
which is attached to and made part of this Agreement (hereinafter referred to
individually as a “Transition Service”,
and collectively as the “Transition
Services”), during the time period for each Transition Service set forth
on Appendix A
(hereinafter referred to as the “Time Periods” for all
of the Transition Services, and the “Time Period” for each
Transition Service).
1.02 Personnel. In
providing the Transition Services, the Provider, as it deems necessary or
appropriate in its sole discretion, may (a) use such personnel of the Provider
or its Affiliates and/or (b) employ the services of other third parties (each
such third party, a “Subcontractor”) to
the extent such Subcontractor’s services are routinely used to provide similar
services to the Provider’s business or are reasonably necessary for the
efficient performance of any of such Transition Services. The Provider shall
retain responsibility for the provision of such Transition Services to the
Recipient. If the Provider elects to commence the provision of
specified Transition Services hereunder through a Subcontractor that is not
engaged with respect to the Transition Services in question by the Provider as
of the date hereof, then the Recipient shall have the right to terminate such
specified Transition Services on 20 days prior written notice to the Provider
and to engage such Subcontractor to perform such specified Transition
Services
directly
for the Recipient and the Recipient shall have no further liability or
obligation to the Provider with respect to such terminated Transition
Services.
1.03 Level of Transition
Services.
(a) The
Provider shall perform the Transition Services exercising the same degree of
care as it exercises in performing the same or similar services for its own
account, with priority equal to that provided to its own businesses or those of
any of its Affiliates. Subject to the obligations under this
Agreement (including, without limitation, the
other provisions of this Section 1.03(a)), the Provider shall be responsible for
the proper management of and
control over the provision of the Transition Services (including, without
limitation, the determination or designation at any time of the equipment,
employees and other resources of the Provider to be used in connection with the
provision of the Transition Services), it being
expressly acknowledged and agreed that the Parties shall in good faith and shall
reasonably cooperate in the cost-effective transition of each Party’s business
units to stand alone functionality and, in the case of AMO, the integration of
AMO and its business with the businesses operated by AMO and its
Affiliates. Accordingly, the Recipient may from time to time request
that the Provider implement plans, procedures and other processes relating to
the provision of Transition Services which it in good faith believes will help
achieve such objectives and/or facilitate and expedite the Recipient's
transition to stand-alone functionality as well as such other plans, procedures
and other processes which it in good faith believes will improve the operational
efficiency of the Recipient's business. The Provider shall consider
in good faith and implement any such commercially reasonable plans, procedures
and other processes requested by the Recipient, so long as the Recipient agrees
to bear capital expenditures and incremental management expenses that the
Parties mutually agree will be required to be made in connection
therewith.
(b) As more
specifically set forth in Appendix A attached hereto, it is the intention of the
parties that the Recipient’s use of any Transition Service shall not be higher
than the level of use required by the affected business unit prior to the
Closing Date. In no event shall the Recipient be entitled to any new
service (other than any additional services mutually agreed by the Parties in a
separate writing) or to increase its use of any of the Transition Services above
the level of use prior to the date hereof without the prior written consent of
the Provider.
(c) In
connection with the provision of Transition Services and subject to Section 5.01
hereof, the Provider may undertake periodic maintenance and other temporary
shutdowns of its information technology system, processing center equipment,
call center services or other system related to any Transition Service as needed
and in accordance with its own practices and procedures (but not more frequently
than one (1) four (4) hour period per month) so long as the Provider makes
commercially reasonable efforts to minimize any disruption to the Recipient’s
business as a result thereof. The Provider shall give notice to the Recipient at
least 72 hours prior to any scheduled maintenance (and such notice shall provide
the estimated time such system is to be shut down for maintenance) and will make
commercially reasonable efforts to give notice to the Recipient 24 hours prior
to any non-scheduled temporary shutdowns but in any event will give notice as
soon as is practicable. Notice under this subsection shall be given
pursuant to Section 6.04 herein.
(d) The
Parties acknowledge that the intent of this Agreement is to provide for the
orderly and efficient transition of each Party’s respective business units to
stand-alone functionality and that the Parties are not in the business of
providing the Transition Services to third parties. Accordingly, each
Party agrees to use commercially reasonable efforts to make a transition of each
such Transition Service to its own internal organization (or any other third
party suppliers for the Transition Services) as promptly as practicable within
(or at the conclusion of) the Time Period applicable to such
Transition
2
Service
and shall take such commercially reasonable actions (e.g., providing the other
Party reasonable access to operational information) in furtherance of the
foregoing. Each Party shall assist the other Party’s efforts by (i)
collaborating on changes to operating procedure and third party providers (e.g.
shipping contracts), (ii) dedicating sufficient resources (including, without
limitation, personnel and materials) that are needed for the transition of each
Transition Service to a stand-alone functionality (which shall include, without
limitation, the transition from the Provider’s distribution centers and call
center to the Recipient’s distribution centers and call center), and (iii) other
mutually agreeable practices before termination of the Transition
Service.
(e) If a
Transition Service expires or is terminated pursuant to this Agreement, but
information or other support related to such service is still
required to perform another Transition Service that continues, provision of the
continuing Transition Service will be contingent upon the Recipient providing
the information and support needed from the expired or terminated service to
provide the Transition Service that continues.
1.04 Limitation of Liability and
Warranty.
(a) In the
absence of gross negligence or reckless or willful misconduct on the Provider’s
part, subject to the indemnity provisions of Article 5 of this Agreement, the
Provider shall not be liable for any claims, liabilities, damages, losses,
costs, expenses (including, but not limited to, settlements, judgments, court
costs and reasonable attorneys’ fees), fines and penalties incurred by the
Recipient, arising out of any actual or alleged injury, loss or damage of any
nature whatsoever by the Recipient in the Provider’s providing or failing to
provide the Transition Services to the Recipient. Notwithstanding
anything to the contrary contained herein, in the event the Provider commits an
error with respect to or incorrectly performs or fails to perform any Transition
Service, at the Recipient’s request, the Provider shall use reasonable best
efforts to correct such error, re-perform or perform such Transition
Service.
(b) In no
event shall the Provider be liable for any damages caused by the Recipient’s
failure to perform the Recipient’s responsibilities hereunder. The
Provider will not be liable to the Recipient for any act or omission of any
other entity that is not an Affiliate or Subcontractor of the Provider
furnishing any Transition Service (other than due to a default or breach by the
Provider or any of its Affiliates or Subcontractors of any agreement between the
Provider or any of its Affiliates or Subcontractors and such third
party).
(c) NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN OR AT LAW OR IN EQUITY, IN NO EVENT
SHALL THE PROVIDER BE LIABLE FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES SUFFERED BY THE RECIPIENT (INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR THE RECIPIENT’S LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION OR
ANY OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT
OR REGARDING THE PROVISION OF OR THE FAILURE TO PROVIDE THE TRANSITION SERVICES,
EVEN IF THE PROVIDER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
1.05 Obligation to Continue to
Use Services.
(a) Unless
terminated pursuant to this Agreement, the Provider shall provide, and the
Recipient shall purchase, the Transition Services for the Time Periods as is
specified with respect to the applicable Transition Service on Appendix
A. The Recipient may terminate any of the Transition Services
that the Provider is providing to the Recipient by giving the Provider prior
written notice of its
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desire to
terminate such Transition Services in accordance with the termination notice
periods specified in Appendix
A. Notwithstanding anything to
the contrary contained in this Agreement, if the Recipient is able to procure
from a third-party source services similar to, and in substitution for, any
particular Transition Service (a “Third Party
Service”) the Recipient shall have the
right to terminate such Transition Service upon the provision of written notice
of termination to the Provider as set forth in Appendix A and shall thereupon
utilize the services of such third-party provider for such Third Party Service
in lieu of the particular Transition Service so terminated without liability or
obligation to the Recipient, including quarterly true-up amounts set forth on
Appendix A (other than the obligation to compensate the Provider for services
performed prior to the effective date of termination). In the event that the Recipient requires the provision
of a Transition Service (other than the Transition Service so terminated and
replaced with such Third Party Service) in order to facilitate its utilization
of and migration to a Third Party Service, the Provider agrees to provide such
Transition Service as promptly as is commercially reasonable following the
Recipient’s request therefor and shall use commercially reasonable means to
prioritize the same so as to expedite the Recipient’s utilization of and
migration to such Third Party Service.
(b) If any
Transition Service is terminated by the Recipient, the Recipient may not elect
to reinstitute such Transition Service.
1.06 Provider
Access. To the extent reasonably required for the Provider’s
personnel to perform the Transition Services, the Recipient shall provide the
Provider’s personnel with access to its equipment, office space, plants,
telecommunications and computer equipment and systems, and any other areas and
equipment; provided that such access shall not include the use thereof in the
provision of any Transition Service.
1.07 Title to Assets; Methods,
etc; Ownership of Products.
(a) All
procedures, methods, systems, strategies, tools, equipment, facilities and other
resources used by Provider in connection with the provision of Transition
Services hereunder (including all intellectual property rights whether existing
or created in connection with the provision of the Transition Services or
otherwise) shall remain the property of Provider and shall at all times be under
the sole direction and control of Provider.
(b) Notwithstanding
any other provision of this Agreement, and except as otherwise expressly
provided in Appendix A or in a separate written agreement that is not, by its
terms, superseded by this Agreement, title to all products or other materials
that are transported, shipped, warehoused or otherwise held in the custody of
Provider on behalf of Recipient shall at all times remain with Recipient, and
Recipient shall at all times be the owner of record of such products or other
materials, and, subject to Section 5.01, shall be solely responsible for any
matters arising from or relating to such products or other
materials.
1.08 Review
Meetings. The Parties shall hold review meetings (“Review Meetings”) at
least bi-weekly or as otherwise mutually agreed by the Parties (in each case, at
mutually acceptable dates, times and locations) at which representatives of
Charming and AMO shall review and discuss
any operational, strategic or other issues raised by any participant with
respect to the provision of the Transition Services. The Parties
intend that the information exchanged at such Review Meetings shall be in
addition to ongoing communication between representatives of Charming and AMO with respect to the provision of Transition
Services hereunder.
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ARTICLE
2
COMPENSATION
2.01 Consideration.
(a) As
consideration for the Transition Services, the Recipient shall pay to the
Provider the amount specified for each Transition Service as set forth in Appendix A; provided, however, if a Subcontractor delivers
invoices to Recipient (rather than to the Provider) for Transition Services
rendered under this Agreement, Recipient shall pay such Subcontractor directly
and the Recipient shall have no further liability or obligation to the Provider
with respect to the payment for the Transition Services covered
thereby.
In such event, the Recipient shall notify Provider that such
invoices have been paid directly by Recipient. Upon the termination of
any Transition Service in accordance with this Agreement, the compensation to be
paid under this Section 2.01 shall no
longer include the amount specified for such terminated Transition
Service.
(b) If the
amount to be paid for any Transition Service is described in Appendix A as “Cost”,
“Cost” shall
mean the Provider’s direct out-of-pocket cash cost to provide that Transition
Service (i.e., direct labor costs, travel and related costs and any direct
third-party costs) and a reasonable and fairly allocated portion of costs and
expenses incurred by Provider and its Affiliates (so long as such allocation is
consistent with historical practice set forth in Charming’s P/L Statement
reviewed by AMO and its representatives) in providing such Transition Service
(including without limitation service-specific overhead costs, rents,
maintenance and utilities). Such Cost shall be sufficient to permit
the Provider to receive full reimbursement of its Costs in connection with the
provision of the Transition Services but shall not contain any profit-margin or
premium. The Parties acknowledge and agree that, subject to the
foregoing, (i) the Provider shall bear any and all costs required to permit Provider to provide any such Transition Services
(e.g., the cost of obtaining any third party consent required to enable
Provider to provide any such Transition Service to Recipient) and any and all costs of any kind or nature
incurred by Provider in connection with ceasing to provide any Transition
Service, and (ii) notwithstanding any provision in this
Agreement to the contrary, in no event will any amendment, restatement or other
modification of any contract between Provider and any third party enable
Provider to receive additional compensation for any Transition Service to be
provided under this Agreement (it being agreed that if the Provider is required
to pay additional costs to a third party with respect to a Transition Service
pursuant to any such amendment, restatement or other modification of any
contracts, and Appendix A provides for such costs to be passed through to the
Recipient, the Recipient shall be responsible for such increased pass through
costs).
2.02 Taxes. Any
taxes (other than income taxes) assessed on the provision of the Transition
Services shall be paid by the Recipient.
2.03 Payments on Behalf of the
Recipient. If Appendix A specifies that amounts be pre-funded
for the provision of a Transition Service by the Provider, Recipient shall
deposit the amount of such payment into an account designated by Provider as set
forth in Appendix A hereto. Provider shall have no responsibility to
pay such amounts until Recipient has deposited funds sufficient to pay such
amounts with the Provider. Any failure by the Provider to timely pay
such amounts due to a failure by the Recipient to pre-fund such items shall not
be considered an Event of Default.
2.04 Invoices. By
the 15th day
following the end of each month, the Provider will submit one invoice to the
Recipient for all Transition Services provided to the Recipient and its
Affiliates. Each invoice shall include documentation supporting the
invoiced amounts set forth therein (including the Transition Services provided
and the cost therefor (calculated in accordance with this
Agreement)). Such
5
invoices
shall contain such billing data, level of detail and such other supporting data
as the Recipient may reasonably request. All invoices and billing
data shall be sent to Charming and AMO at the addresses for notices specified
herein or to such other address as the Recipient shall have specified by notice
in writing to the Provider.
2.05 Payment of
Invoices. Payment of all invoices shall be made no later than
30 days after receipt of the invoice in accordance with Section 2.04, unless
otherwise specified in Appendix
A. All payments shall be made to the account stipulated in the
invoice or otherwise in writing to the Recipient by the Provider and shall be by
wire transfer of immediately available funds payable to the Provider with
written confirmation of payment sent by facsimile to the person stipulated in
the invoice or otherwise in writing to the Recipient by the
Provider. If the Recipient fails to pay the full amount of any
invoice under this Agreement within 30 days of the relevant due date, the
Recipient shall be obligated to pay, in addition to the amount due on such
payment due date, interest on such amount at a rate of 12% per annum, compounded
monthly, from the relevant payment due date through (but not including) the date
of payment. All payments made shall be applied first to unpaid
interest and then to amounts invoiced but unpaid.
2.06 Prohibition on
Offsets. Notwithstanding anything in this Agreement to the
contrary, neither Party shall offset, counterclaim, or otherwise withhold any
amounts due or payable hereunder on account of any amounts owed to such Party or
its Affiliates under this Agreement, the Purchase Agreement or any other
agreement or arrangement.
ARTICLE
3
CONFIDENTIALITY
3.01 Obligation.
(a) In
addition to any obligations of confidentiality pursuant to other agreements
between the Parties, without the prior written consent of the other Party, each
Party shall hold in confidence and not disclose to any third party any
confidential information received by it from the other Party during the
provision of the Transition Services; provided however, that the Provider may
disclose confidential information to its Subcontractors to the extent necessary
to provide Transition Services, so long as Provider informs such Subcontractors
of its confidentiality obligations and takes commercially reasonable efforts to
ensure that such Subcontractor maintain the same level of
confidentiality.
(b)
Each Party agrees that it shall only use the information
received by it from the other Party in connection with the provision or receipt of the Transition Services, and for no other
purpose.
(c) For
purposes of this Agreement, confidential information shall not include any
information: (i) which is or becomes publicly known without violation of this
Agreement by the receiving Party; (ii) which is or becomes available to the
receiving Party from a source other than the disclosing Party, which source has
no obligation of confidentiality to the disclosing Party in respect thereof;
(iii) which is required to be disclosed by law or governmental order or any rule
or regulation of the Nasdaq Stock Market (“Nasdaq”) (so long as
the receiving Party promptly notifies the disclosing Party of such requirement
and reasonably cooperates with disclosing Party’s efforts to obtain a protective
order or other assurance that confidential treatment will be afforded to such
information); (iv) which is disclosed in
6
connection
with the enforcement of the receiving Party’s rights under this Agreement, the
Purchase Agreement, or the Transaction Documents; or (v) the disclosure of which
is mutually agreed to by the Parties.
3.02 Effectiveness. The
foregoing obligation of confidentiality shall be in effect during the term of
this Agreement and any extensions thereof and for a period of five years after
the termination or expiration of this Agreement.
3.03 Care and Inadvertent
Disclosure. With respect to any confidential information, each
Party agrees as follows:
(a) it shall
use (i) the same degree of care in safeguarding
said information as it uses to safeguard its own information which must be held
in confidence, and (ii) commercially reasonable
methods to ensure its Affiliates and Subcontractors comply with the undertakings
in Section
3.01; provided that, in any event, the receiving Party shall be
responsible for any breach of the terms hereof by any of its Affiliates or
Subcontractors to whom or to which such confidential or proprietary information
was disclosed by the receiving Party, and
(b) upon the
discovery of any inadvertent disclosure or unauthorized use of said information,
or upon obtaining notice of such a disclosure or use from the other Party, it
shall (i) notify the other Party and (ii) take all necessary actions to prevent
any further inadvertent disclosure or unauthorized use.
3.04 Remedy for
Breach. Each Party acknowledges and agrees that in the event
of a breach by it of any of the provisions of this Article 3, monetary
damages shall not constitute a sufficient remedy. Consequently, in
the event of any such breach, the other Party and/or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof, in each case without the requirement of posting a bond
or proving actual damages.
ARTICLE
4
TERM AND
TERMINATION
4.01 Term. Except
as otherwise provided in this Article 4 or as
otherwise agreed in writing by the Parties, this Agreement shall become
effective as of the date hereof and the Provider’s obligation to provide, and
the Recipient’s obligation to purchase, any particular Transition Service
hereunder shall cease as of the first to occur of (a) the date of termination of
this Agreement as determined in accordance with Section 4.03 hereof
or (b) the applicable termination date for any particular Transition Service as
set forth in Appendix
A hereto.
4.02 Extension. Subject
to the earlier termination of this Agreement in accordance with Section 4.03, the
Recipient may request an extension of the Time Period for any Transition Service
for any period the Recipient deems necessary by giving the Provider at least 30
days prior written notice prior to the end of the Time Period in
question. Provider may agree to extend such Transition Service solely
at its discretion. If the Provider
agrees to provide such Transition Service beyond the Time Period, the fees
therefor shall be as set forth in Appendix A. Notwithstanding
anything to the contrary contained herein, for the avoidance of doubt, the
foregoing shall not limit or impair the Recipient’s right to extend the Time
Period with respect to a Transition Service if Appendix A provides for such an
extension (i.e., if such Appendix A provides the Recipient with the right to
seek an extension and the Recipient exercises such right, the Provider shall be
obligated to grant such extension).
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4.03 Termination.
(a) Recipient
may terminate individual Transition Services as outlined on Appendix
A. Any Transition Service on Appendix A that does not expressly
provide for early termination may not be terminated prior to the end of the
given Time Period.
(b) If either
Party (hereinafter, the “Defaulting Party”)
shall fail to perform or default in the performance of any of its material
obligations under this Agreement, the other Party (hereinafter, the “Non-Defaulting
Party”) may give written notice to the Defaulting Party specifying the
nature of such failure or default and stating that the Non-Defaulting Party
intends to terminate this Agreement if such failure or default is not cured
within 30 days of such written notice; provided that if such failure to perform
or default relates to a specific Transition Service, the Non-Defaulting Party
may elect to terminate only such specific Transition Service under this Section 4.03 and the
written notice will specify such Transition Service. If any failure
or default so specified is not cured within such 30-day period, the
Non-Defaulting Party may elect to immediately terminate this Agreement or the
specific Transition Service as set forth above; provided that if the failure or
default relates to a dispute made in good faith by the Defaulting Party, the
Non-Defaulting Party may not terminate this Agreement pending the resolution of
such dispute. Such termination shall be effective upon receipt of a
written notice of termination from the Non-Defaulting Party to the Defaulting
Party and shall be without prejudice to any other remedy which may be available
to the Non-Defaulting Party against the Defaulting Party.
4.04 Certain
Acknowledgements.
(a) The
Recipient agrees and acknowledges that all obligations of the Provider to
provide each Transition Service shall cease upon the expiration of the Time
Period (and any extension thereof in accordance with Section 4.02) for
such Transition Service, and the Provider’s obligations to provide all of the
Transition Services shall immediately cease upon the termination of this
Agreement. Upon the cessation of the Provider’s obligation to provide
any Transition Service, the Recipient shall immediately cease using, directly or
indirectly, such Transition Service.
(b) THE
PROVIDER SHALL HAVE NO LIABILITY OF ANY KIND OR NATURE WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, INDIRECT, CONSEQUENTIAL, SPECIAL, INCIDENTAL OR PUNITIVE
DAMAGES) TO THE RECIPIENT FOR THE PROVIDER’S CEASING TO PROVIDE ANY TRANSITION
SERVICE UPON THE EXPIRATION OF THE APPLICABLE TIME PERIOD (AND ANY EXTENSION
THEREOF IN ACCORDANCE WITH SECTION 4.02) FOR
SUCH TRANSITION SERVICE OR UPON THE VALID TERMINATION OF THIS AGREEMENT OR
TERMINATION OF SUCH TRANSITION SERVICE PURSUANT TO THIS AGREEMENT.
4.05
Survival of Certain
Obligations. Without prejudice to the survival of the other
agreements of the Parties, the following obligations shall survive the
termination of this Agreement: (a) for the periods set forth therein, the
obligations of each Party under Articles 3, 4 and 5, and (b) the
Provider’s right to receive the compensation for the Transition Services as
provided in Section
2.01 prior to the effective date of termination of each such Transition
Service.
ARTICLE
5
INDEMNITIES
5.01 Indemnity by the
Provider. Without affecting any provision of the Purchase
Agreement or the Parties’ respective rights or obligations set forth therein,
and subject to the limitations set forth in
8
Section 1.04 above,
the Provider shall indemnify, defend, and hold the Recipient harmless against
any and all claims, liabilities, damages, losses, costs, expenses (including,
but not limited to, settlements, judgments, court costs and reasonable
attorney’s fees), fines and penalties arising out of any injury, loss or damage
of any nature whatsoever to the Recipient (collectively, “Losses”) due or
relating to the provision of or failure to provide the Transition Services,
only to the
extent that such Losses are a direct result of the gross negligence or reckless
or willful misconduct of the personnel of the Provider and/or its Affiliates
and/or Subcontractors. At all times, each Provider is and shall
remain the sole employer of the employees who perform the Transition
Services. As such, subject to Section 1.04(b), the
Provider acknowledges its obligation to comply with all legal and contractual
obligations with respect to such employees, and will indemnify, defend and hold
harmless the Recipient from any breach by the Provider of such obligations and
all Losses arising therefrom.
5.02 Indemnity by the
Recipient. Without affecting any provision of the Purchase
Agreement or the Parties’ respective rights or obligations set forth therein,
the Recipient shall indemnify, defend and hold the Provider harmless against any
and all Losses arising out of the operations and activities of the Recipient,
except to the extent that such Losses are a direct result of the negligence,
gross negligence or reckless or willful misconduct of the personnel of the
Provider and/or its Affiliates and/or Subcontractors.
5.03 Indemnification
Procedures. The matters set forth in Section 14.3 of the
Purchase Agreement are incorporated by reference into and deemed a part of this
Agreement.
5.04 Term of
Indemnity. The indemnities contained in this Article 5 shall
survive for a period of five years after the termination of this Agreement for
any reason.
ARTICLE
6
MISCELLANEOUS
6.01 Amendment, Modification and
Waiver. No provision of this Agreement shall be amended,
modified or waived except in writing signed by the Parties. The
waiver by a Party of any breach of any provision of this Agreement shall not
constitute or operate as a waiver of any other breach of such provision or of
any other provision hereof, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision
hereof.
6.02 Successors and
Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns including any subsequent purchaser
of AMO, the Subsidiaries or any of their divisions or any material portion of
their assets (whether such sale is structured as a sale of stock, sale of
assets, merger, recapitalization or otherwise); provided that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any Party without the prior written consent of the other
Party. Notwithstanding the foregoing, without the prior written
consent of any Party, each of the Recipient
and its permitted assigns may at any time, in their sole discretion, assign, in
whole or in part, (a) their rights and obligations pursuant to this Agreement to
one or more of their Affiliates (provided that no such assignment shall release
the Recipient of its obligations
hereunder) and (b) the limited right to receive payments hereunder, for
collateral security purposes to any lender providing financing to the Recipient or its Affiliates.
6.03 Integration. This
Agreement and the documents referred to herein contain the entire agreement
between the Parties regarding the Transition Services and supersede any prior
understandings, agreements or representations by or between the Parties, written
or oral, which may have related to the subject matter hereof in any
way.
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6.04 Notices. All
notices, demands and other communications given or delivered under this
Agreement shall be in writing and shall be deemed to have been given when
personally delivered, mailed by first class mail, return receipt requested, or
delivered by express courier service or telecopied (with hard copy to
follow). Notices, demands and communications to the Charming and AMO
shall, unless another address is specified in writing, be sent to the
following:
To AMO:
c/o Orchard Brands Corporation
00 Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
Email: xxxx@xxxxxxxxxxxxx.xxx
With a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx
Facsimile: 000-000-0000
Email: xxxxxxxx@xxxxxxxx.xxx
To
Charming:
Charming
Shoppes of Delaware, Inc.
0000
Xxxxx Xxxx
Xxxxxxxx,
XX 00000
Attention: Xxxxxx
Xxxxxxx
Email:
xxxxxx.xxxxxxx@xxxxxxxx.xxx
With a
copy to:
Xxxxx X.
Xxxxx, General Counsel
Email: xxxxx.xxxxx@xxxxxxxx.xxx
6.05 Governing
Law. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
6.06 Captions. The
captions used in this Agreement are for convenience of reference only and do not
constitute a part of this Agreement and shall not be deemed to limit,
characterize or in any way affect any provision of this Agreement, and all
provisions of this Agreement shall be enforced and construed as if no caption
had been used in this Agreement.
6.07 Severability. Wherever
possible, each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law. If any portion of
this Agreement is declared invalid for any reason in any jurisdiction, such
declaration shall have no effect upon the remaining portions of this Agreement,
which shall continue in full force and effect as if this Agreement had been
executed with the invalid portions thereof deleted.
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6.08 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the same
instrument.
6.09 Rights of the
Parties. Nothing expressed or implied in this Agreement is
intended or will be construed to confer upon or give any person or entity, other
than the Parties and their respective Affiliates, any rights or remedies under
or by reason of this Agreement or any of the transactions contemplated
hereby.
6.10 Reservation of
Rights. Either Party’s waiver of any of its remedies afforded
hereunder or at law is without prejudice and shall not operate to waive any
other remedies which that Party shall have available to it, nor shall such
waiver operate to waive any Party’s rights to any remedies due to a future
breach, whether of a similar or different nature.
6.11 Force
Majeure. Any failure or omission by a Party in the performance
of any obligation under this Agreement shall not be deemed a breach of this
Agreement or create any liability, if the same arises from any cause or causes
beyond the control of such Party, including, but not limited to, the following,
which, for purposes of this Agreement shall be regarded as beyond the control of
each of the Parties hereto: acts of God, fire, storm, flood, earthquake,
governmental regulation or direction, acts of the public enemy, war, rebellion,
insurrection, riot, invasion, strike or lockout (collectively, “Force Majeure”);
provided that such Party shall resume the performance whenever such causes are
removed. If the Provider is unable to provide any Transition Services
due to Force Majeure, both Parties shall use commercially reasonable efforts to
cooperatively seek a solution that is mutually satisfactory, such as the
subcontracting of all or part of the provision of the Transition Services under
the supervision of the Provider for the period of time during or affected by the
Force Majeure; provided, if such Force Majeure continues for a period of six
months, the Recipient will have the right to terminate the Transition Services
affected by the Force Majeure.
6.12 Relationship of the
Parties. It is expressly understood and agreed that in
rendering the Transition Services hereunder, each Party is acting as an
independent contractor and that this Agreement does not constitute either Party
as an employee, agent or other representative of the other Party for any purpose
whatsoever. Neither Party has the right or authority to enter into
any contract, warranty, guarantee or other undertaking in the name or for the
account of the other Party, or to assume or create any obligation or liability
of any kind, express or implied, on behalf of the other Party, or to bind the
other Party in any manner whatsoever, or to hold itself out as having any right,
power or authority to create any such obligation or liability on behalf of the
other or to bind the other Party in any manner whatsoever (except as to any
actions taken by either Party at the express written request and direction of
the other Party). It is the understanding and intention of the
Parties hereto that execution of and performance under this Agreement shall
create no “joint employer” relationship between them.
6.13 Conflict. In
case of conflict between the terms and conditions of this Agreement and any
Appendix, the terms and conditions of such Appendix shall control and govern as
it relates to the Transition Service to which those terms and conditions
apply.
6.14 WAIVER OF JURY
TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
* * *
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IN WITNESS WHEREOF, the
parties hereto have caused this Transition Services Agreement to be executed as
of the day and year first above written.
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CHARMING
SHOPPES OF DELAWARE, INC.
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By:
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Name:
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Title:
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ARIZONA
MAIL ORDER COMPANY, INC.
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By:
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Name:
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Title:
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APPENDIX
A
TRANSITION
SERVICES
See
attached
