REPURCHASE AGREEMENT
THIS REPURCHASE AGREEMENT (this "Agreement") is dated and effective as of
June __, 2000 by and among BANG & OLUFSEN AMERICA, INC., a Delaware corporation
("BOA"), PARAGON, LLC, a Delaware limited liability company ("Lender") and
XXXXXX ELECTRONICS, INC., a New York corporation ("Xxxxxx").
Recitals
X. Xxxxxx and Xxxxxx Realty, ("Landlord") have entered into a lease dated
December 23, 1999 (together with all amendments and supplements thereto and
restatements, modifications, extensions, renewals and/or replacements thereof,
the "Lease") in respect of the retail store location commonly known as 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx (the "New York Store").
X. Xxxxxx and BOA have entered into a sublease dated as of June 1, 2000
(together with all amendments and supplements thereto and restatements,
modifications, extensions, renewals and/or replacements thereof, the "Sublease")
in respect of the retail store location commonly known as 00 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxx (the "Greenwich Store" and together with the New York
Store, the "Premises").
X. Xxxxxx and BOA have entered into (1) a Licensed Dealer Agreement dated
as of June 1, 1999 (together with all amendments and supplements thereto and
restatements, modifications, extensions, renewals and/or replacements thereof,
the "New York Dealer Agreement") with respect to the New York Store and (2) a
Licensed Dealer Agreement dated as of June 1, 2000 (together with all amendments
and supplements thereto and restatements, modifications, extensions, renewals
and/or replacements thereof, the "Greenwich Dealer Agreement" and together with
the New York Dealer Agreement, the "Dealer Agreements") with respect to the
Greenwich Store.
D. Pursuant to the terms and conditions of the Dealer Agreements, BOA
appointed Xxxxxx as an authorized Bang & Olufsen(R) dealer for the purpose of
selling audio and video products produced by Bang & Olufsen a/s and sold under
the trademark "Bang & Olufsen(R)" or under other proprietary marks of Bang &
Olufsen Holding a/s (collectively, the "Products") at the Premises.
E. In connection with Xxxxxx'x development and operation of the Business at
the Premises, Lender has agreed to make certain financial accommodations to
Xxxxxx pursuant to the terms and conditions of certain documents, agreements and
instruments between Lender and Xxxxxx (together with all amendments and
supplements thereto and restatements, modifications, extensions, renewals and/or
replacements thereof, the "Credit Documents"). Pursuant to the Credit Documents,
Xxxxxx has granted a lien and security interest in and to certain of its assets,
including without limitation, all Products now owned or hereafter acquired by
Xxxxxx (as the same may be modified or extended from time to time, the "Security
Interest").
X. Xxxxxx, BOA and Lender desire to establish certain rights and
obligations in respect of the Products and the Premises.
NOW THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Lender, Xxxxxx and BOA agree as follows:
1. Repurchase by BOA.
(a) If Xxxxxx, with the consent of Lender, undertakes the liquidation of
the Products following any default under the Credit Documents or otherwise, or
if Lender exercises its rights under the Credit Documents and obtains possession
of the Products for purposes of liquidation of the Products after Xxxxxx
defaults under its obligations under the Credit Documents, Xxxxxx or Lender, as
the case may be, shall give BOA prompt notice thereof (the "Sale Notice"). The
Sale Notice shall be accompanied by a complete list of all Non-Current Products
(as defined in paragraph 1(c)) in Xxxxxx'x possession as of the date of the Sale
Notice (the "Non-Current Products Inventory List").
(b) BOA hereby agrees that upon receipt of the Sale Notice, it will
purchase all Current Products (as defined in paragraph 1(c)) in the possession
of Xxxxxx as of the date of the Sale Notice, subject to the terms and conditions
of this paragraph 1. BOA shall pay Lender as the purchase price for the Current
Products (the "Current Products Purchase Price") an amount equal to the amount
invoiced to Xxxxxx by BOA for the Current Products, net of any ordinary course
discounts received by Xxxxxx in connection with Xxxxxx'x acquisition of the
Current Products.
(c) As used herein, (i) the term "Current Products" means Products that are
among the authorized Products designated in Exhibit A-1 of the Licensed Dealer
Agreements in effect as of the date of the Sale Notice and contained in the
original, factory-sealed packaging and (ii) the term "Non-Current Products"
means Products means Products that bear a Bang & Olufsen serial number, other
than Current Products.
(d) In addition to BOA's obligation to purchase the Current Products as
provided in paragraph 1(b), BOA shall have the option and first right (but not
the obligation) to repurchase all, but not less than all of the Non-Current
Products owned by Xxxxxx as of the date of the Sale Notice (the "Repurchase
Option"). The Repurchase Option shall be exercisable by BOA upon delivery of
notice thereof to Lender and Xxxxxx (a "Notice of Exercise") at any time within
three business days after the later to occur of (i) BOA's receipt of the Sale
Notice or (ii) BOA's receipt of the Non-Current Products Inventory List (the
"Option Period"). The Notice of Exercise shall state the purchase price which
BOA is willing to pay for the Non-Current Products. Within three business days
after receipt of the Notice of Exercise, Lender shall deliver notice to BOA that
Lender will either accept or reject BOA's proposed purchase price for the
Non-Current Products. If Lender fails to deliver such notice, it shall be deemed
to have rejected BOA's proposed purchase price. If BOA fails to deliver the
Notice of Exercise as provided in this paragraph 1(d) or if Lender fails to
accept BOA's proposed purchase price for the Non-Current Products, BOA shall
have no further rights or obligations in respect of the Non-Current Products;
provided, however, that BOA shall still purchase the Current Products in
accordance with this paragraph 1.
(e) If Lender accepts BOA's proposed purchase price for the Non-Current
Products as set forth in the Notice of Exercise, BOA agrees that upon receipt of
such acceptance from Lender, BOA will purchase all of the Non-Current Products
owned by Xxxxxx as of the date of the Sale Notice, subject to the terms and
conditions of this paragraph 1. As used herein, (i) the term "Non-Current
Products Purchase Price" shall mean the purchase price for the Non-Current
Products set forth in BOA's Notice of Exercise and accepted by Lender and (ii)
the term "Purchase Price" shall mean the Current Products Purchase Price and, if
BOA is obligated to purchase the Non-Current Products as provided in this
paragraph 1(e), the Non-Current Products Purchase Price.
(f) Settlement of the obligations of the parties hereto in respect of the
sale, conveyance and delivery of the Purchased Products (as hereinafter
defined), and payment of the Purchase Price, shall occur no later than three
business days after the date BOA delivers the Notice of Exercise to Lender and
Xxxxxx (the "Closing"). As used herein, the term "Purchased Products" means the
Current Products and, if BOA is obligated to purchase the Non-Current Products
as provided in paragraph 1(e) above, the Non-Current Products.
(g) BOA's obligation to pay the Purchase Price shall be conditioned upon
delivery of the Purchased Products to BOA at the Premises free and clear of all
liens and encumbrances. To the extent that Xxxxxx retains the right to occupy
the Premises, Xxxxxx hereby covenants agrees that delivery of the Purchased
Products shall occur at the Premises and shall cooperate with the parties and
use its best efforts to effect such delivery at the Premises.
(h) At Closing, BOA shall pay the Purchase Price to Lender by wire transfer
in accordance with Lender's written instructions which shall be provided to BOA
at least one business day prior to Closing. The cost of all handling and
shipping costs, if any, arising out of the repurchase of the Purchased Products
by BOA pursuant to this paragraph 1 shall be borne solely by Xxxxxx. Xxxxxx
hereby waives any and all right to payment in respect of the sale, conveyance
and delivery of the Purchased Products to BOA as provided in this paragraph 1.
The parties hereto agree that the sale of the Purchased Products hereunder and
the method of establishing the Purchase Price therefor are for all purposes
commercially reasonable.
(i) To protect and preserve BOA's rights under this Agreement, if Lender
issues a Sale Notice, Lender covenants and agrees that it shall take such action
as may be reasonably necessary, but only to the extent permitted by applicable
law, to effect a secured party sale of the Purchased Products to BOA in
accordance with the terms and conditions hereof, and of the applicable Credit
Documents and provisions of the Uniform Commercial Code. All costs and expenses
incurred by Lender in connection therewith shall be paid by Xxxxxx. Any sale and
conveyance to BOA by Xxxxxx or by Lender hereunder shall be "as is" and without
recourse to Lender or Xxxxxx.
(j) If after Xxxxxx or Lender issues a Sale Notice, (i) BOA does not
deliver an Exercise Notice within the Option Period; or (ii) fails for any
reason, including, without limitation, failure of any of the conditions set
forth in subsection 1(g) hereof, to pay the Purchase Price at Closing, then
Lender may, in its discretion, exercise any and all of its rights hereunder or
under the Credit Documents with respect to the Products without further
obligation to BOA. Notwithstanding the terms and conditions of the Lease or the
Sublease, BOA shall cooperate with Lender and shall not impair or interfere in
any way with Lender's right to take possession of the Products and any other
collateral, and remove same from the Premises.
(k) BOA hereby consents to the sale of any Products or other collateral
which Lender is entitled to take possession of as provided in paragraph 1(j)
and/or paragraph 2 at any location, including without limitation, any store or
other location at which Xxxxxx conducts business (excluding the Premises).
2. Possession of the Premises. In no event shall Lender have the right to
take possession of the Premises, notwithstanding anything to the contrary
contained in the Credit Documents or any other agreement between Lender,
Landlord and/or BOA; provided, however, that if a default has occurred and is
continuing under any of the Credit Documents, Lender shall have the right to
enter onto the Premises for a reasonable period of time to take possession of
any Products (other than the Purchased Products) or any other of its collateral
which may be located on the Premises, subject to the terms and conditions of the
Lease. Subject to Lender's right to enter onto the Premises as provided in the
immediately preceding sentence and/or in paragraph 1(h) (if applicable), Lender
acknowledges that BOA shall have the sole and exclusive right to possession of
the Premises, subject to the terms and conditions of (i) in the case of the New
York Store, the Lease and any other documents between Landlord and BOA and (ii)
in the case of the Greenwich Store, the lease between BOA and its landlord.
3. Notice of Amendment or Termination. Xxxxxx shall give Lender notice of
any material waiver, amendment or other modification of either of the Dealer
Agreements or of the intention of Xxxxxx to exercise its rights to terminate a
Dealer Agreement simultaneously with the giving of such notice to BOA.
4. Status of Various Agreements. Xxxxxx represents and warrants to Lender
and BOA that (i) no default or event of default exists under any of the Credit
Documents, the Dealer Agreements, the Lease or the Sublease and (ii) no event
has occurred and no condition exists which, with the giving of notice or lapse
of time, or both, would constitute a default or event of default under any of
the Credit Documents, the Dealer Agreements, the Lease or the Sublease.
5. Notice of Default under Credit Documents. Xxxxxx shall give BOA notice
if Xxxxxx is at any time in default of any of its obligations under the Lease or
any of the Credit Documents and Xxxxxx has notice from Landlord or Lender, as
applicable, that Landlord or Lender, as applicable, intends to take action to
enforce its rights pursuant to the Lease or any of the Credit Documents, as
applicable.
6. Method of Notice. Any notice, demand, or other communication
required or permitted to be given by any provision of this Agreement shall be in
writing addressed as follows:
If to BOA: Bang & Olufsen America, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile Number: (000) 000-0000
With a copy to: Xx. Xxx X. Xxxx and Xx. Xxxxxxx X. Xxxxxx
Xxxxx, Xxxxx and Xxxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
If to Lender: Paragon Capital, LLC
Xxxxxxxx Xxxxxx Xxxxxxxx
00 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx, President
Facsimile: (000) 000-0000
With copy to: Ms. Xxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx & Weiner, P.C.
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
If to Xxxxxx: Xx. Xxxxxxxx Xxxx
Xxxxxx Electronics, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
With copy to: Mr. Xxxxxxx Xxxxxx
Xxxxx, Xxxxxx & Associates
000 Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Any such notice, demand or other communication shall be deemed to have been
sufficiently given or served for all purposes upon: (i) the actual receipt by
the recipient, if notice is given by personal delivery or any method not
described below; (ii) one business day after mailing, if notice is given by
reputable overnight commercial courier service; (iii) five business days after
mailing, if notice is given by U.S. mail, postage prepaid, certified or
registered, return receipt requested; and (iv) when sent, if notice is given by
facsimile and a confirmation copy of such notice is simultaneously sent as
described in clauses (ii) or (iii) of this paragraph 6.
7. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts without reference
to choice of law or conflict of law principles.
8. Amendments. This Agreement may be amended or modified only by a written
instrument executed by all of the parties hereto.
9. No Reliance. (i) Each of Lender, Xxxxxx and BOA represents to the other
that: (a) it is entering into this Agreement on its own account; (b) it is
entering into this Agreement in accordance with all laws, regulations and
statutes affecting or otherwise applicable to it; (c) it has reviewed and
approved this Agreement and all of its agreements with any of the parties hereto
; (d) it has previously entered into similar agreements and made agreements of
the type and kind and nature of those set forth in any of its agreements with
any of the parties hereto ; (e) it is aware of and able to bear the economic
risks involved in entering into this Agreement and its agreements with any of
the parties hereto and does not foresee the occurrence of any event which would
alter said ability; and (ii) Each of Lender and BOA represent to the other that:
(a) it has been given adequate opportunity to review, and have reviewed all
financial and other data and information relating to Xxxxxx as it deems
necessary for it to make a determination to enter into this arrangement; (b) it
has not relied upon the credit judgment or analysis of the other concerning
Xxxxxx and has independently reached its own decision, based upon its own
assessment and analysis of the financial condition and affairs of Xxxxxx, and
(c) agrees that, on a going forward basis, it will not rely on the credit
judgment of the other concerning Xxxxxx and will continue to make its own
decisions, based upon its own assessment and analysis of the financial condition
and affairs of Xxxxxx when determining whether to take or not to take any
discretionary action under this Agreement or any of its agreements with Xxxxxx.
(iii) Under no circumstances shall Lender have any obligation to provide BOA
with any notice of any default of Xxxxxx under the Credit Documents or
otherwise.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
Bang & Olufsen America, Inc.
By:_______________________
Xxx Xxx, President
Paragon Capital, LLC
By:_______________________
Its:_______________________
Xxxxxx Electronics, Inc.
By:_______________________
Xxxxxxxx Xxxx, President
