Exhibit 10.2
OMNIBUS AGREEMENT
THIS OMNIBUS AGREEMENT (this "Agreement") is made as of the 15th day
of March 1999, by and among XXXXXX A.S.L., LTD., a Delaware corporation having
an office at 00 Xxxxx Xxx, Xxxxxxxx, XX 00000 ("Buyer") and XXXX XXXXX COMPANY
LLC, a New York limited liability company having an office at 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Seller").
WHEREAS, Seller is presently engaged in, among other things, the
development, design, production, marketing, distribution and sale of certain
apparel, including, without limitation, women's sportswear, suits and dresses,
under the "Xxxx Xxxxx," "Xxxx Xxxxx XX," and "A Line Xxxx Xxxxx" trademarks in
the United States and certain foreign countries (the "Business");
WHEREAS, Xxxx Xxxxx desires to sell to Buyer, and Buyer desires to
purchase from Xxxx Xxxxx, Existing Continuing Initials Inventory (as hereinafter
defined) on the terms and conditions set forth herein;
WHEREAS, Seller intends to wind down the Business, and in connection
therewith Seller and Buyer desire to enter into certain transactions as set
forth herein, subject to the terms and conditions set forth in this Agreement;
WHEREAS, in connection with the execution and delivery of this
Agreement, on the date hereof (i) Buyer and Seller are entering into a license
agreement (the "License Agreement") pursuant to which Seller is licensing to
Buyer certain of the trademarks used by Seller in connection with the Business,
(ii) Buyer, Seller and Takihyo Inc. ("Takihyo") are entering into an asset
purchase agreement (the "Purchase Agreement") pursuant to which Buyer is
agreeing to purchase certain assets used by Seller in connection with its
licensing business, (iii) Buyer and Seller are entering into a certain
management consulting and services agreement (the "Management Consulting
Agreement") pursuant to which Buyer is providing certain services to Seller
relating to the wind down of the Business and (iv) Buyer and Seller are entering
into a certain services agreement (the "Services Agreement") pursuant to which
Seller is providing certain services to Buyer in connection with Buyer's
operations pursuant to the License Agreement (collectively, the "Transaction
Documents" and the transactions contemplated by the Transaction Documents, the
"Xxxx Xxxxx Transactions"); and
WHEREAS, the consummation of certain transactions contemplated by
this Agreement and certain of the Transaction Documents, and the effectiveness
of certain provisions of the License Agreement, is subject to, among other
things, receipt of FTC Approval (as defined in Section 9.2).
NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:
#793458 v1
ARTICLE I
CONDITION OF FTC APPROVAL EARLY TERMINATION OF THIS AGREEMENT
1.1 FTC Approval; Early Termination. The purchase of the Existing
Continuing Initials Inventory, the payment of the Purchase Price (as hereinafter
defined), the lease by Buyer of certain floors at 00 Xxxx 00xx Xxxxxx
contemplated by Section 8.2, as well as the consummation of the other
transactions contemplated by this Agreement, except those transactions set forth
in Article II and the provisions of Section 9.2 and Articles XI and XII, are
expressly and absolutely subject to obtaining FTC Approval. In the event that
FTC Approval is not obtained prior to May 31, 1999, or on such other date upon
which Buyer and Seller shall mutually agree in writing (the "FTC Deadline"),
then, except for Section 2.9, (a) this Agreement shall terminate and (b) none of
the parties hereto shall have any further rights or obligations of any nature
pursuant hereto.
ARTICLE II
PURCHASE AND SALE OF RESORT 1999 AND SPRING 2000 INVENTORY
2.1 Purchase and Sale of Resort 1999 and Spring 2000 Inventory.
Concurrently with the execution and delivery of this Agreement, and subject to
the terms and conditions hereof, Seller shall sell, transfer and convey to
Buyer, and Buyer shall purchase and acquire from Seller, at Seller's R&S LDP
Cost (as hereinafter defined) thereof, the components (including, without
limitation, piece goods, works-in-progress, finished goods, supplies, labels and
sales and promotional materials and brochures) relating to Resort 1999 and
Spring 2000 inventory purchased or financed by Seller prior to the date hereof
and listed on Schedule 2.1 (collectively, the "R&S Inventory"). Schedule 2.1
sets forth (i) the approximate number and type of each component of the R&S
Inventory and (ii) the R&S LDP Cost of such components as set forth on the books
and records of Seller. The term "R&S LDP Cost" shall mean Seller's landed duty,
paid cost for each item of R&S Inventory.
2.2 R&S Purchase Price. In consideration for the sale and transfer of
the R&S Inventory in accordance with the terms and conditions of this Agreement,
Buyer will pay to Seller the R&S LDP Cost for the R&S Inventory (the "R&S
Purchase Price"), by wire transfer in immediately available funds in accordance
with the wire transfer instructions set forth on Schedule 2.2.
2.3 Allocation of R&S Purchase Price. The R&S Purchase Price shall be
allocated among the R&S Inventory in accordance with an allocation schedule to
be mutually agreed upon by Seller and Buyer within fourteen (14) days of the
date hereof, which allocation schedule shall be prepared in accordance with the
rules under Section 1060 of the Internal Revenue Code of 1986, as amended (the
"Tax Code"), and the Treasury Regulations promulgated thereunder. Unless
otherwise required by applicable law, Seller and Buyer agree to report the
allocation of the R&S Purchase Price in accordance with such schedule for all
purposes, and neither Seller nor Buyer will take any position inconsistent
therewith with respect to any tax return, audit or examination by any taxing
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authority, litigation, proceeding or otherwise. In this regard, and without
limiting the foregoing, Buyer and Seller agree to act, and cause their
respective affiliates to act, in accordance with the computations and
allocations contained in such schedule in any forms or reports required to be
filed pursuant to Section 1060 of the Tax Code or the Treasury Regulations
promulgated thereunder ("1060 Forms"), to cooperate in the preparation of any
1060 Forms and to file such 1060 Forms in the manner required by applicable law.
2.4 Physical Inventory Count and Inventory Valuation. Seller and
Buyer acknowledge and agree that Seller has conducted a physical count and
valuation of the R&S Inventory. Each item of the R&S Inventory was physically
counted and valued by Seller at its R&S LDP Cost and the R&S Inventory has been
segregated from Seller's other properties and assets. Damaged, defective and
obsolete items of the R&S Inventory shall be assigned no value.
2.5 Delivery of R&S Inventory. After purchase of the R&S Inventory,
but not later than the close of business on the date hereof, Seller will
assemble the R&S Inventory and shall place it at a loading dock or other
accessible place at such locations as Seller shall designate, which other
locations shall be reasonably acceptable to Buyer, and Buyer's employees, agents
or independent contractors retained by Buyer will load such R&S Inventory onto
trucks or other transportation vehicles provided by Buyer or independent
contractors retained by Buyer. Risk of loss (including risk of damage or
destruction) of such R&S Inventory shall pass to Buyer upon delivery of the R&S
Inventory to Buyer on the later of the R&S Closing Date or the actual delivery
of the R&S Inventory. The sale of the R&S Inventory hereunder shall be evidenced
by a xxxx of sale (a "Xxxx of Sale") executed by Seller substantially in the
form of Exhibit A attached hereto and made a part hereof, to be delivered to
Buyer contemporaneously with the signing of this Agreement (the "R&S Xxxx of
Sale").
2.6 Disputes. Any disputes with regard to any item of the R&S
Inventory or the R&S LDP Cost thereof shall be resolved by the parties acting in
good faith.
2.7 Assumption of R&S Purchase Commitments. Concurrently with the
execution and delivery of this Agreement, and subject to the terms and
conditions hereof, Seller shall assign to Buyer, and Buyer shall assume and
agree to pay, perform and discharge when due and payable, in accordance with
their respective terms, the purchase commitments for Resort 1999 and Spring 2000
inventory listed in Schedule 2.7, complete and correct copies of which purchase
commitments have been delivered to Buyer (the "R&S Purchase Commitments"). Such
assignment and assumption shall be evidenced by execution and delivery by Buyer
and Seller of an assignment and assumption agreement (an "Assignment and
Assumption Agreement") substantially in the form attached hereto as Exhibit B
with respect to the R&S Commitments (the "R&S Assignment and Assumption
Agreement").
2.8 Financing of Resort 1999 and Spring 2000 Inventory Post-Closing.
From and after the date hereof, Buyer shall be solely responsible for the
purchase and financing of all components of Resort 1999 and Spring 2000
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inventory, which product lines shall be produced by Buyer under the terms of the
License Agreement subject to its becoming effective in accordance with its
terms. Seller shall not purchase or commit to purchase any components of Resort
2000 or Sprint 2000 inventory without the prior written consent of Buyer.
2.9 FTC Unwind. In the event that FTC Approval is not obtained prior
to the FTC Deadline, then within 20 Business Days after the FTC Deadline (or
such later date as the parties may agree in writing), (i) Buyer shall assign to
Seller and Seller shall assume and agree to pay, perform and discharge when due
and payable, in accordance with their respective terms, the R&S Purchase
Commitments pursuant to an Assignment and Assumption Agreement, (ii) Seller
shall reimburse Buyer for all amounts theretofore paid by Buyer in respect of
the payment, performance and discharge of R&S Purchase Commitments, (iii) Seller
shall repurchase from Buyer, at the R&S LDP Cost, all R&S Inventory purchased by
Buyer from Seller pursuant to this Article II pursuant to a Xxxx of Sale (iv)
Seller shall purchase and acquire from Buyer and Buyer shall sell, transfer and
convey to Seller, pursuant to a Xxxx of Sale, all components of Resort 1999 and
Spring 2000 inventory purchased by Buyer pursuant to R&S Purchase Commitments
which Buyer shall have paid, performed or discharged and with respect to which
Seller shall have reimbursed Buyer pursuant to Section 2.9(ii) above (but
without any consideration for such components other than such reimbursement) and
(v) Seller shall purchase from Buyer, at Buyer's landed duty, paid cost, and
arrange for financing for all components of Resort 1999 and Spring 2000
inventory purchased or financed, as the case may be, by Buyer pursuant to
Section 2.8 hereof, provided that Seller shall not be obligated to purchase or
finance any components of Resort 1999 or Spring 2000 inventory unless Buyer
shall have received the written consent of Xx. Xxxxx Xxxx with respect thereto
prior to Buyer's purchase or finance, as the case may be, of such inventory.
Buyer and Seller agree that the physical inventory, delivery and dispute
resolution procedures set forth in Sections 2.4, 2.5 and 2.6, respectively,
shall be followed in connection with any such purchase by Seller (modified as
appropriate to substitute Seller for Buyer in connection with such purchase).
ARTICLE III
PURCHASE AND SALE OF EXISTING CONTINUING INITIALS INVENTORY
3.1 Purchase and Sale of Inventory. Subject to the terms and
conditions of this Agreement, on the Initials Closing Date (as hereinafter
defined), Seller shall sell, transfer and convey to Buyer, and Buyer shall
purchase and acquire from Seller, at the Initials Inventory LDP Cost (as
hereinafter defined) the Existing Continuing Initials Inventory (as hereinafter
defined). As used herein, "Existing Continuing Initials Inventory" shall mean
(i) those items of inventory from Seller's "Initials" replenishment program
inventory (the "Initials Inventory") listed on Schedule 3.1 and existing at the
Initials Closing, and (ii) those items of Initials Inventory, including piece
goods and finished goods, purchased by Seller after the date hereof and prior to
the Initials Closing with the prior written approval of Buyer, and existing at
the Initials Closing; provided Seller shall have the right to exclude from the
Existing Continuing Initials Inventory to be purchased by Buyer those items for
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which Seller has firm purchase orders in place on the Initials Closing Date,
which orders were placed in the ordinary course of Seller's business. The
Existing Continuing Initials Inventory will be subject to the provisions of
Section 3.4.
3.2 Purchase Price. In consideration for the transfer of the Existing
Continuing Initials Inventory on the Initials Closing Date in accordance with
the terms and conditions of this Agreement, at the Initials Closing, Buyer will
pay to Seller Seller's estimated Initials Inventory LDP Cost for the Existing
Continuing Initials Inventory (the "Purchase Price"), subject to adjustment
under Sections 3.4(c) and 3.5 hereof, by wire transfer in immediately available
funds in accordance with wire transfer instructions to be provided to Buyer by
Seller in writing no later than two (2) days prior to the Initials Closing Date.
3.3 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Existing Continuing Initials Inventory in accordance with an
allocation schedule to be mutually agreed upon by Seller and Buyer within
fourteen (14) days of the date hereof, which allocation schedule shall be
prepared in accordance with the rules under Section 1060 of the Tax Code and the
Treasury Regulations promulgated thereunder. Buyer and Seller agree that such
schedule shall be amended to reflect any post-Closing adjustments determined
under Section 3.5. Unless otherwise required by applicable law, Seller and Buyer
agree to report the allocation of the Purchase Price in accordance with such
schedule for all purposes, and neither Seller nor Buyer will take any position
inconsistent therewith with respect to any tax return, audit or examination by
any taxing authority, litigation, proceeding or otherwise. In this regard, and
without limiting the foregoing, Buyer and Seller agree to act, and cause their
respective affiliates to act, in accordance with the computations and
allocations contained in such schedule in any 1060 Forms, to cooperate in the
preparation of any 1060 Forms and to file such 1060 Forms in the manner required
by applicable law.
3.4 Physical Inventory Count. (a) Prior to or on the Initials Closing
Date, Seller shall conduct a physical count of the Existing Continuing Initials
Inventory, which physical count may, at Seller's discretion, occur as the
Existing Continuing Initials Inventory is loaded on a truck or other
transportation vehicle as contemplated by Section 3.6. Buyer and its accountants
and other advisors, employees or agent shall be entitled to be present at and
shall be entitled to observe such physical count and to inspect (at Buyer's
cost) the Existing Continuing Initials Inventory during such physical count.
(b) Upon completion of the physical count referred to in Section
3.4(a) Seller shall provide to Buyer a list of the Existing Continuing Initials
Inventory along with Seller's estimate of the landed, duty, paid cost of each
item of the Existing Continuing Initials Inventory (the "Initials Inventory LDP
Cost"). Damaged and defective items of the Existing Continuing Initials
Inventory shall be assigned no value subject to compliance with the procedures
described in subsection (c) below.
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(c) Within five (5) business days after delivery of the Existing
Continuing Initials Inventory in accordance with Section 3.6, Buyer shall be
entitled to notify Seller that items of the Existing Initials Inventory
delivered to Buyer were defective or damaged, specifying in reasonable detail
such items. In the event Seller shall agree with Buyer as to such items, such
items shall not be considered items of Existing Continuing Initials Inventory
and the Purchase Price shall be adjusted accordingly. Buyer shall make such
items available to Seller at a loading dock or other accessible place at Buyer's
warehouse reasonably acceptable to Seller and Seller shall promptly retrieve
such items after such notification. Any disputes with regard to any such item
shall be resolved by the parties acting in good faith.
(d) Within forty-five (45) days after the Initials Closing, Seller
shall provide Buyer with Seller's final calculation of the actual Initials
Inventory LDP Cost per item (the "Final Valuation") with appropriate adjustments
for items of Existing Continuing Initials Inventory disputed in accordance with
Section 3.4(c) theretofore resolved by Buyer and Seller. At such xxxx Xxxxxx
shall also provide Buyer and Buyer's accountants with a copy of Seller's and, if
applicable, Seller's accountants' work papers relating to the determination of
such Final Valuation, as well as such support and other existing documentation
as Buyer and Buyer's accountants may reasonably request.
3.5 Post-Closing Adjustment of Inventory Valuation. (a) Within twenty
(20) days after Buyer's receipt of the Final Valuation, Buyer shall be entitled
to notify Seller in writing of any dispute with regard to the Initials Inventory
LDP Cost of the Existing Continuing Initials Inventory specifying in reasonable
detail the disputed items, and the nature and basis of the disputes. The
Purchase Price shall be adjusted dollar-for-dollar by an amount, if any,
determined pursuant to Section 3.5(b).
(b) Seller and Buyer shall attempt to reconcile any and all disputes
acting in good faith. However, if Seller and Buyer are unable to reach a
resolution as to any disputes within three (3) business days after the giving of
the notice referred to in Section 3.5(a), the items remaining in dispute shall
be submitted for resolution to a firm of independent certified public
accountants in their capacity as experts (the "Experts"), who shall be mutually
chosen by Seller, on the one hand, and Buyer, on the other hand, and who shall
not then be, and prior thereto shall not have been, retained by either of Seller
or Buyer, except for the resolution of disputes pursuant to the Purchase
Agreement. The Experts shall be instructed to, and shall, determine and report
to Seller and Buyer, upon the remaining disputed items no later than twenty (20)
days after submission of such items to the Experts. The report of the Experts
shall be limited to calculation of the Initials Inventory LDP Cost of any items
of Existing Continuing Initials Inventory delivered to Buyer. Such report shall
be final, binding and conclusive on the parties hereto. The fees and
disbursements of the Experts shall be borne equally by Seller, on the one hand,
and Buyer, on the other hand. Seller and Buyer shall each bear the fees and
disbursements of their own accountants and other advisors.
(c) Within three (3) days following the resolution of all disputed
items by Seller and Buyer, or by the Experts as applicable, the Purchase Price
shall be adjusted based on such resolution and Seller shall pay to Buyer or
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Buyer shall pay to Seller, as the case may be, the amount of the adjustment of
the Purchase Price, without interest, by wire transfer in immediately available
funds in accordance with wire transfer instructions provided by one of the
parties to the other.
3.6 Delivery of Inventory. Not later than the close of business on
the Initials Closing Date, Seller will assemble the Existing Continuing Initials
Inventory and shall place it at a loading dock or other accessible place at such
locations as Seller shall designate, which other locations shall be reasonably
acceptable to Buyer, and, on the Initials Closing Date, Buyer's employees,
agents or independent contractors retained by Buyer will load such Existing
Continuing Initials Inventory onto trucks or other transportation vehicles
provided by Buyer or independent contractors retained by Buyer. Subject to
Section 3.4(c), once Buyer takes delivery of the Existing Continuing Initials
Inventory, Buyer shall be deemed to have accepted such inventory and shall be
thereafter estopped from claiming that any of such inventory, when delivered to
Buyer hereunder, was damaged or defective. Risk of loss (including risk of
damage or destruction) of such Existing Continuing Initials Inventory shall pass
to Buyer upon delivery of the Existing Continuing Initials Inventory to Buyer on
the later of the Initials Closing Date or the actual delivery of the Existing
Continuing Initials Inventory. The sale of the Existing Continuing Initials
Inventory hereunder shall be evidenced by a Xxxx of Sale executed by Seller, to
be delivered to Buyer at the Initials Closing (the "Initials Xxxx of Sale").
Until Buyer's employees, agents or independent contractors retained by Buyer
load the Existing Continuing Initials Inventory onto a truck or other
transportation vehicles provided by Buyer or such independent contractors,
Seller shall maintain insurance as provided in Section 8.1.
3.7 Assumption of Initials Purchase Commitments. At the Initials
Closing, and subject to the terms and conditions hereof, Seller shall assign to
Buyer, and Buyer shall assume and agree to pay, perform and discharge when due
and payable, in accordance with their respective terms all purchase commitments
for Initials Inventory to which Seller is bound on the Initials Closing Date and
which were incurred by Seller with the prior written approval of Buyer (the
"Initials Commitments"). Seller shall provide to Buyer, no later than ten (10)
business days prior to the Initials Closing, a list of the Initials Commitments
and complete and correct copies thereof. Such assignment and assumption shall be
evidenced by execution or delivery of an Assignment and Assumption Agreement
with respect to the Initials Commitments (the "Initials Assignment and
Assumption Agreement").
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ARTICLE IV
INTENTIONALLY OMITTED
ARTICLE V
CLOSINGS
5.1 R&S Closing. The closing of the sale and purchase of the R&S
Inventory (the "R&S Closing") shall be held concurrently with the signing of
this Agreement at the offices of Buyer, or its counsel, in New York City, or at
such other place as the parties may agree upon, as of the date hereof.
5.2 Seller at R&S Closing. At the R&S Closing, Seller shall deliver
to Buyer:
(a) the R&S Inventory to be purchased and transferred to Buyer
hereunder in the manner contemplated by Section 2.5;
(b) the R&S Xxxx of Sale;
(c) the R&S Assignment and Assumption Agreement; and
(d) termination statements (which statements shall be delivered to
Buyer at the R&S Closing for filing), lien releases and satisfactions of liens,
in form and substance reasonably satisfactory to Buyer, evidencing the
termination, release and satisfaction of all security interests, rights of first
refusal, first offer or similar rights, claims, liens, charges or other
encumbrances of any kind on the R&S Inventory or a certificate executed by the
Member Manager of Seller or such other duly authorized representative of Seller
reasonably acceptable to Buyer, dated the date hereof, certifying that there are
no such security interests, rights of first refusal, first offer or similar
rights, claims, liens, charges or other encumbrances of any kind on the R&S
Inventory.
5.3 Buyer at R&S Closing. At the R&S Closing, Buyer shall deliver to
Seller the R&S Purchase Price in the manner contemplated by Section 2.2.
5.4 Initials Closing. The closing of the sale and purchase of the
Existing Continuing Initials Inventory (the "Initials Closing") shall be held at
the offices of Buyer, or its counsel, in New York City, or at such other place
as the parties may agree upon, at 9:30 a.m. ten (10) business days after Seller
shall have notified Buyer in writing that Seller has completed shipping its Fall
1999 collection, but in no event later than October 15, 1999 (and in the event
that such notice shall not be given by September 30, 1999, the Closing shall be
held on October 15, 1999), or as may otherwise be mutually agreed upon by the
parties (such date and time of the Closing being herein referred to as the
"Initials Closing Date").
5.5 Seller at Closing. At the Initials Closing, Seller shall deliver
to Buyer:
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(a) the Existing Continuing Initials Inventory to be purchased and
transferred to Buyer hereunder in the manner contemplated Sections 3.4 and 3.6;
(b) an officer's certificate, as required by 10.1(c);
(c) the Initials Xxxx of Sale; and
(d) the Initials Assignment and Assumption Agreement.
5.6 Buyer at Closing. At Closing, Buyer shall deliver to Seller:
(a) an officer's certificate, as required by 10.2(c);
(b) the Purchase Price in the manner contemplated by Section 3.2; and
(c) the Initials Assignment and Assumption Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer on and as of the date hereof
as follows:
6.1 Organization. Seller is a limited liability company validly
existing and in good standing under the laws of the State of New York and has
all requisite power and authority to enter into this Agreement, the R&S Xxxx of
Sale and the Initials Xxxx of Sale (the "Bills of Sale"), the R&S Assignment and
Assumption Agreement and the Initials Assignment and Assumption Agreement (the
"Assignment and Assumption Agreements") and its officer's certificates required
by Section 5.2(d), if applicable, and Section 10.1(c) (the Agreement, the Bills
of Sale, the Assignment and Assumption Agreements and such officer's
certificates are sometimes collectively hereinafter referred to as the "Seller
Documents") and to carry out the transactions contemplated hereby and thereby.
6.2 Execution Delivery and Performance. Except as set forth on
Schedule 6.2, the authorization, execution, delivery and performance of this
Agreement and the other Seller Documents, and the consummation by Seller of the
transactions contemplated hereby and thereby, will not (i) conflict with or
result in a breach of the articles of organization or the operating agreement of
Seller, or any other constituent documents of Seller, (ii) violate any U.S. or
foreign laws, statutes or regulations to which Seller is subject or by which
Seller or its assets are bound, (iii) violate any order, writ, injunction,
judgment, award, arbitration or decree of any court, governmental body,
administrative agency, arbitrator or other competent authority (collectively,
"Orders") to which Seller or its assets are subject, (iv) violate, conflict
with, result in or constitute (with the giving of notice, the lapse of time, or
both) a breach or default under, or result in the termination or acceleration
of, any material agreement, mortgage, indenture, note, lease, license, insurance
policy, or other material commitment, obligation or instrument to which Seller
9
is a party or by which Seller or any of its properties or assets is bound
(collectively, the "Seller's Contracts"), or (v) create or impose any lien on
any R&S Inventory or the Existing Continuing Initials Inventory pursuant to any
Seller's Contract. Except for the FTC Approval and as otherwise set forth on
Schedule 6.2, no consent, approval or authorization of, notice to, or filing or
registration with, any court, governmental body, administrative agency,
arbitrator or other competent authority, or any other person or entity, is
required, pursuant to the terms of any of the Seller's Contracts, applicable law
or any Orders to which Seller or its assets are subject, to be made or obtained
by Seller in connection with the execution, delivery and performance by Seller
of this Agreement or the other Seller Documents and the consummation of the
transactions contemplated hereby and thereby.
6.3 Authority. All proceedings required to be taken by Seller to
authorize the execution, delivery and performance of this Agreement and the
other Seller Documents to which it is or will be a party have been properly
taken. This Agreement constitutes, and each of the other Seller Documents, when
duly executed and delivered by Seller, will constitute, the valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as such enforcement may be limited by bankruptcy and
other laws affecting the enforceability of creditors' rights generally or laws
governing the availability of specific performance or other equitable remedies.
6.4 Inventory. At the R&S Closing, Seller will transfer the R&S
Inventory to Buyer in accordance with this Agreement, and pursuant to the R&S
Xxxx of Sale, will transfer, assign and convey to, and vest in, Buyer good title
to the R&S Inventory, free and clear of any security interests, rights of first
refusal, first offer or similar rights, claims, liens, charges or other
encumbrances of any kind other than those created by or imposed upon Buyer. At
the Initials Closing, Seller will transfer the Existing Continuing Initials
Inventory to Buyer in accordance with this Agreement and, pursuant to the
Initials Xxxx of Sale, will transfer, assign and convey to, and vest in, Buyer
good title to the Existing Continuing Initials Inventory, free and clear of any
security interests, rights of first refusal, first offer or similar rights,
claims, liens, charges or other encumbrances of any kind other than those
created by or imposed upon Buyer.
6.5 Litigation. Except as set forth on Schedule 6.5, there are no
actions, suits, arbitrations or proceedings pending against Seller, or, to the
Actual Knowledge (as hereinafter defined) of Seller, threatened (and Seller has
not received written notice of any such threatened action, suit, arbitration or
proceeding), at law, in equity, in arbitration or by or before any other
authority, involving or affecting any of the R&S Inventory or Existing
Continuing Initials Inventory or any of the transactions contemplated by this
Agreement or the other Seller Documents. Seller is not in default with respect
to any judgment, order, writ, injunction, award, arbitration, decree or consent
of any court, governmental body, administrative agency, arbitrator or other
competent authority involving or affecting any of the R&S Inventory or the
Existing Continuing Initials Inventory, or any of the transactions contemplated
by this Agreement or the other Seller Documents. Solely for the purposes of this
Agreement, the term "Actual Knowledge" shall mean the actual knowledge of Xxxxx
Xxxx, Xxxxx Xxxx, Xxxxxxx Xxxx and Xxxxxxxx Xxxxx.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
7.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to enter into this Agreement, the
Assignment and Assumption Agreements and its officer's certificate required by
Section 10.3(c) (the Agreement, the Assignment and Assumption Agreements and
such officer's certificates are sometimes collectively hereinafter referred to
as the "Buyer Documents"), and to carry out the transactions contemplated hereby
and thereby.
7.2 Execution Delivery and Performance. The authorization, execution,
delivery and performance of this Agreement and the Buyer Documents, and the
consummation by Buyer of the transactions contemplated hereby and thereby, will
not (i) conflict with or result in a breach of Buyer's certificate of
incorporation or by-laws, (ii) violate any U.S. or foreign laws, statutes or
regulations to which Buyer is subject or by which Buyer or its assets are bound,
(iii) violate any Order to which Buyer or its assets is subject, or (iv)
violate, conflict with, result in or constitute (with the giving of notice, the
lapse of time, or both) a breach or default under, or result in the termination
or acceleration of, any material agreement, mortgage, indenture, note, lease,
license, insurance policy, or other material commitment, obligation or
instrument to which Buyer is a party or by which Buyer or any of its properties
or assets is bound (collectively, the "Buyer Contracts"). Except for the FTC
Approval, or as otherwise provided on Schedule 7.2, no consent, approval or
authorization of, notice to, or filing or registration with, any court,
governmental body, administrative agency, arbitrator or other competent
authority, or any other person or entity, is required, pursuant to the terms of
any of the Buyer Contracts, applicable law, or any Orders to which Buyer or its
assets are subject, to be made or obtained by Buyer in connection with the
execution, delivery and performance by Buyer of this Agreement or the other
Buyer Documents and the consummation of the transactions contemplated hereby and
thereby.
7.3 Authority. All proceedings required to be taken by Buyer to
authorize the execution, delivery and performance of this Agreement and the
other Buyer Documents have been properly taken. This Agreement constitutes, and
each of the other Buyer Documents, when duly executed and delivered by Buyer,
will constitute, the valid and binding obligations of Buyer, enforceable against
it in accordance with its terms, except as such enforcement may be limited by
bankruptcy and other laws affecting the enforceability of creditors', rights
generally or laws governing the availability of specific performance or other
equitable remedies.
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ARTICLE VIII
ADDITIONAL AGREEMENTS REGARDING THE BUSINESS
8.1 Operation and Wind Down of Business.
(a) Seller and Buyer will cooperate in the wind down of the Business
in an orderly manner in accordance with the terms of this Agreement and the
other Transaction Documents. During the period from the date hereof through the
time of delivery of the Existing Continuing Initials Inventory pursuant to
Section 3.6, Seller shall keep in full force and effect insurance comparable in
amount and scope to that now maintained with respect to the Initials Inventory.
(b) All of Seller's inventory, other than (i) the R&S Inventory after
the R&S Closing, (ii) the Existing Continuing Initials Inventory after the
Initials Closing and (iii) any other inventory of Seller acquired by Buyer
pursuant to the Transaction Documents after a closing of such acquisition (the
"Prior Inventory"), shall remain the property of Seller and may be sold by
Seller as provided in the Transaction Documents. Seller shall retain all
accounts receivables resulting from sales by Seller of the Prior Inventory
("Seller's Accounts Receivable"), including any adjustments, deductions,
chargebacks and other charges from the customers. Buyer shall promptly remit to
Seller any payments received by Buyer relating to Prior Inventory or Seller's
Accounts Receivable. Seller shall promptly remit to Buyer any payments received
by Seller relating to Buyer's accounts receivable. If a customer remits payment
and designates an invoice or receivable being paid, such designation shall be
binding upon the parties (unless such customer has made an incorrect
designation). In the event a customer remits payment to any party without
designating an invoice or receivable being paid, such party shall have twenty
(20) business days within which to contact the customer to seek a designation by
such customer. In the event the customer designates an invoice or account
receivable being paid within such twenty-day period, such designation shall be
binding upon the parties (unless such customer has made an incorrect
designation). In the event the customer cannot or does not designate an invoice
or receivable within such twenty-day period, such payment shall be credited to
the oldest outstanding receivable of such customer.
8.2 00 Xxxx 00xx Xxxxxx Premises. (a) The parties intend that on or
before May 31, 1999, (i) Buyer and the landlord (the "Landlord") of Seller's
leased office space located at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
will enter into a new lease (the "New Lease") for the 20th and 21st floors and
the portion of the 22nd floor as is presently used by Seller for use in
connection with its computer system at such location (the "Floors"), on the same
economic and on substantially the same other terms and conditions, on a
proportionate basis, as are set forth in the Lease dated as of June 1996 between
11 West 42 Limited Partnership and Xxxx Xxxxx & Company and Xxxx of the Lion
Associates (the "42nd Street Lease") and on such other terms and conditions as
may be reasonably satisfactory to Buyer and the Landlord, and (ii) Seller and
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the Landlord shall enter into an amendment (the "Lease Amendment") to the Lease
removing the Floors therefrom, on terms and conditions, including, without
limitation, the release by the Landlord of Seller and its predecessors and
Takihyo from any liability accruing or arising from and after commencement of
the New Lease for rental and any other charges or other obligations attributable
to the Floors under the 00xx Xxxxxx Lease, as may be reasonably satisfactory to
Seller and the Landlord. Buyer shall not enter into a New Lease, and Seller
shall not be obligated to surrender the Floors, unless and until the Landlord
and Seller shall have executed and delivered to the other the Lease Amendment.
The parties acknowledge that the transactions contemplated above in this Section
8.2 may be structured in another manner or on other terms. From the date hereof,
Buyer and Seller shall use commercially reasonable efforts to promptly and
jointly consult and reach a mutually acceptable agreement with the Landlord
regarding the foregoing.
(b) In the event that Buyer shall enter into the New Lease and Seller
shall enter into the Lease Amendment, Buyer will provide to Seller, at no
rental, office space reasonably determined by Buyer for not more than five (5)
of Seller's employees for the period from and after the date of the New Lease to
and including March 1, 2000 and shall furnish to Seller, at Seller's cost, phone
and telecopier services during such period; provided, that (i) the Landlord
shall have consented in writing to the foregoing and all other approvals and
consents necessary for the foregoing, in Buyer's commercially reasonable
judgment, shall have been obtained by Buyer, (ii) the use of such office space
by Seller and its employees shall at all times be subject to the terms and
conditions of the New Lease (other than the rental and other payment provisions
thereof), (iii) the rights of Seller in such office space shall at all times be
subordinate to the New Lease and (iv) Seller's and its employees' right to use
such office space shall be subject at all times to compliance by Seller and its
employees with items (ii) and (iii) of this Section 8.2(b). In the event that
the transactions contemplated by Section 8.2 shall be structured in a manner or
on terms other than as the New Lease, Buyer and Seller shall use their
commercially reasonable efforts to agree on the terms and conditions under which
the forgoing office space shall be made available to Seller.
8.3 Certain Employment Agreements. Seller has previously delivered to
Buyer a complete and correct copy of the employment agreements dated December
17, 1996, between Seller and each of Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx. Promptly
after the execution and delivery of this Agreement, Buyer shall contact Messrs.
Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx and shall offer to each of them employment with
Xxxxxx commencing on the earlier of (a) the date on which the closing of the
transactions contemplated in the Purchase Agreement occurs or (b) the date on
which the Purchase Agreement is terminated, which offer shall at all times be
conditioned in writing upon the release by each such individual of Seller and
Takihyo and their respective directors, officers, stockholders and controlling
persons from any and all liabilities or obligations arising out of or in
connection with their respective employment by Seller and its predecessors.
Unless and until Seller shall have notified Buyer that such a release has been
obtained from such individual, Xxxxxx will not employ Messrs. Xxxxxxx or Franco.
Seller shall notify Buyer promptly upon obtaining such a release. From time to
time after the date hereof, Buyer shall keep Seller informed of the status of
such offers and the acceptance thereof. Seller shall be solely responsible for
obtaining the release by Messrs. Xxxxxxx Xxxxxxx and Xxxxx Xxxxxx and Buyer
shall have no obligation or responsibility therefor.
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8.4 Option to Acquire Other Assets. Buyer is hereby granted a right
of first offer and negotiation on the following terms and conditions, effective
from the date hereof until the Initials Closing Date, with respect to the
tangible assets used by Seller in connection with the Business, including
inventory, work-in process, piece goods, office equipment and finishings but
excluding (a) the 22nd (other than the portion of the 22nd floor as is presently
used by Seller for use in connection with its computer system) and the 23rd
floors of Seller's offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, X.X., (x) (i)
Seller's leasehold interest in the warehouse in Lyndhurst, N.J. and any of
Seller's equipment, furniture and finishings at such warehouse and (ii) Sellers
leasehold interest in its office space located in Dallas, Texas and any of
Seller's equipment, furniture and finishings at such location, (c) the R&S
Inventory, (d) Initials Inventory, (e) the leasehold interests covered in
Section 8.2 and (f) any other assets otherwise expressly provided for in the
Transaction Documents, including, without limitation, the Assets (as such term
is defined in the Purchase Agreement) (the "Miscellaneous Assets"):
(a) If Seller desires to dispose of its interest in any of the
Miscellaneous Assets, Seller shall first notify Buyer and Buyer shall, within
two (2) Business Days thereafter, notify Seller whether it is interested in
acquiring such Miscellaneous Assets. Buyer and Seller shall thereafter negotiate
in good faith for five (5) Business Days regarding the terms and conditions,
including price, on which Buyer would acquire such Miscellaneous Assets. If
Buyer and Seller agree on the terms and conditions of Buyer's acquisition of
such Miscellaneous Assets, then such transaction shall be consummated as soon as
practicable after such agreement is reached.
(b) If Buyer and Seller do not agree on the terms and conditions of
Buyer's acquisition of such Miscellaneous Assets, then Seller shall thereafter
be entitled to dispose of such Miscellaneous Assets to any person or entity
provided that such disposition is on (i) economic terms that are not materially
less favorable to Seller than the terms and conditions offered by Buyer for such
Miscellaneous Assets and (ii) terms and conditions which, in the aggregate, are
not materially less beneficial to Seller than the terms and conditions offered
by Buyer for such Miscellaneous Assets.
(c) If any Miscellaneous Assets to be acquired by Buyer are rights of
Seller under any lease, license or other third party contract, then Buyer's
acquisition of such rights will in all events be subject to Buyer's assumption
of all obligations and liabilities under such lease, license or contract and the
obtaining of such third party's consent and release from all obligations or
liabilities thereunder for the benefit of Seller, its affiliates and their
respective directors, officers, members, stockholders and controlling parties.
(d) The foregoing option shall not be applicable to the sale of
inventory in the ordinary course of the Seller's Business. In addition, nothing
in this Section 8.4 shall be deemed to permit the sale of Assets (as defined in
the Purchase Agreement) except as expressly set forth in the Purchase Agreement.
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8.5 Further Assurances. Consistent with the terms and conditions
hereof, each party hereto shall cooperate with each other and execute and
deliver any and all instruments and take any and all other actions, either
before or after the Initials Closing, as applicable, which may be necessary,
proper or advisable to effect or evidence the provisions of this Agreement and
to consummate the transactions contemplated hereby.
ARTICLE IX
CERTAIN AGREEMENTS OF THE PARTIES
9.1 Access to Personnel; Inspection of Information and Documents; and
Cooperation. (a) Subject to the last two sentences in this Section 9.1(a), and
subject to the prior approval of Xx. Xxxxx Xxxx (which approval shall be granted
or denied in the commercially reasonable judgment of Xx. Xxxx), prior to the
Initials Closing upon reasonable notice, (i) Seller shall afford Buyer and its
Representatives reasonable access during regular business hours during the
period from the date hereof up to and including the Initials Closing to any and
all of the premises, properties, contracts, books, records, data and personnel
of Seller relating to the transactions covered by this Agreement and (ii) Seller
shall, and shall use reasonable efforts to cause each of its directors,
officers, members, managers, agents and/or employees, to cooperate in a
reasonable manner in connection with the foregoing. In the event that Buyer or
its Representatives shall desire such access or any such information or
documents concerning the transactions covered by this Agreement, Buyer, through
its Chairman of the Board, Chief Operating Officer, or Executive Vice
President-Finance and Administration, shall provide the aforementioned
reasonable notice in accordance with Section 12.2. Subject to the discretion of
Xx. Xxxx as described above, Seller shall afford Buyer and its Representatives
such access or such information or documents, as the case may be, in each case
to the extent consistent with the foregoing provisions of this Section 9.1(a)
within a reasonable time after the request therefor is made in accordance with
this Section 9.1(a).
(b) Seller hereby covenants that prior to the Initials Closing,
Seller will promptly notifying Buyer of any pending claim, suit, proceeding,
arbitration or investigation in or by any court, governmental body,
administrative agency, arbitrator or other competent authority relating to the
Existing Continuing Initials Inventory, or which is threatened against Seller,
of which Seller has Actual Knowledge or receives written notice.
9.2 FTC Approval. As promptly as practicable after the execution and
delivery of this Agreement and the other Transaction Documents, Seller and Buyer
shall each file or cause to be filed a notification and report form under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with the Federal Trade Commission and the Department of Justice. The
purchase of the Existing Continuing Initials Inventory, the payment of the
Purchase Price and the consummation of the transactions contemplated hereby,
except those transactions set forth in Article II and the provisions of this
Section 9.2 and Articles XI and XII, are expressly and absolutely subject, in
each case, to the expiration or termination of all applicable waiting periods
under the HSR Act, without any party hereto (or, if different, any "person" in
15
which such party is included for purposes of the HSR Act) having been formally
or informally advised by the Federal Trade Commission or the Department of
Justice that either of them will or may seek to enjoin the consummation of, or
otherwise will or may challenge, the transactions contemplated by this Agreement
or the other Transaction Documents and without either Seller or Buyer (or their
respective "persons") being obligated to divest itself of any assets or
reorganize its existing corporate structures ("FTC Approval"). Each of Seller
and Buyer shall use its best efforts to prosecute all such applications, as soon
as possible after the filing thereof, and will cooperate with the other and take
all steps reasonably necessary, proper or desirable to expedite the prosecution
of such applications (provided that there is no obligation to agree to any
divestiture or reorganization).
9.3 Employee Matters. (a) Buyer shall have the right, but shall not
be obligated, to hire or otherwise establish an independent contractor,
consultant or other business relationship with (collectively "Hire") any
employees of Seller, but shall have no right to Hire any employees of Seller's
licensing operations unless and until the closing of the transactions
contemplated under the Purchase Agreement are consummated, although Buyer shall
not be restricted from making offers to Hire such employees provided such offers
are conditioned on the consummation of such closing. Buyer shall provide to
Seller reasonable advance written notice of any employee of Seller to whom Buyer
intends to extend an offer to Hire and shall keep Seller informed of the status
of any such offer and the acceptance thereof.
(b) In the event that Seller shall notify Buyer in writing that any
employees of Seller who are not represented by a labor organization to whom
Buyer intends to extend or shall have extended an offer to Hire shall be, in the
commercially reasonable judgment of Xxxxx Xxxx, necessary to the wind-down of
the Business as contemplated by the Omnibus Agreement, the Purchase Agreement
and the License Agreement, Seller and Buyer shall in good faith attempt to agree
upon a sharing arrangement with respect to such employees on terms and
conditions reasonably acceptable to both Seller and Buyer; provided, that any
such sharing arrangement shall contain, among other things, the following terms:
(i) within thirty (30) days after receipt by Buyer from Seller of vouchers
and/or receipts or other documentation reasonably requested by Buyer, Buyer
shall reimburse Seller with respect to the services of any employee of Seller
who shall perform services for Buyer pursuant to any such sharing arrangement in
an amount equal to the pro rata portion of such employee's salary based upon the
portion of such employee's working time spent in performing such services, and
(ii) if Buyer shall fail to reimburse Seller for such pro rata portion of the
salary of any shared employee as provided above in this Section 9.3(b), and such
failure shall continue for a period of three (3) business days after Seller
shall have notified Buyer, in accordance with Section 12.2 hereof, of such
failure, Seller shall have the right to terminate the sharing arrangement with
respect to such employee. In such event, except for the pro rata portion of the
salary of such employee that Buyer shall not have paid, neither Seller or Buyer
shall have any further rights or obligations with respect to such sharing
arrangement.
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(c) Seller has advised Buyer as to its current severance practice
(the "Severance Practice") with regard to its employees who are not represented
by a labor organization, and has provided Buyer with such information with
regard to such employees reasonably requested by Buyer. If Buyer Hires any such
employee during the twelve-week period from and after the termination of such
employee's employment with Seller and Seller shall have paid or committed to pay
to such employee severance in accordance with the terms and conditions of the
Severance Practice, Buyer shall, within five (5) business days, after written
notice by Seller to Buyer of the actual payment of such severance and upon
receipt from Seller of documentation reasonably satisfactory to it in respect of
such severance payments, reimburse Seller for such severance payments. The
foregoing severance reimbursement shall not, in any event, include reimbursement
for severance paid or payable under any oral or written employment agreement, or
other arrangement (other than the Severance Practice), between Seller and any of
its employees.
9.4 Cooperation on Retail Stores. Seller shall cooperate with Buyer,
to the extent and in the manner it shall determine in its sole and absolute
discretion, in Buyer's efforts to obtain an agreement to purchase the retail
store operations of Fashions of Seventh Avenue, Inc.
9.5 Transfer Tax Filings. Each tax return (and any exemption,
clearance or similar filing or certificate) with respect to any sales, use,
transfer, stamp, value-added, motor vehicle transfer or registration,
documentary, registration, recording, excise, real estate transfer or similar
taxes or fees ("Transfer Taxes") required to be paid to any relevant taxing
authority (or for which an exemption is being sought) in connection with the
transactions contemplated by this Agreement shall be timely filed by the party
legally obligated to file such tax return (or exemption, clearance or similar
filing or certificate) with respect thereto. In this regard, Seller and Buyer
agree to cooperate, and to cause their respective affiliates to cooperate, with
each other in the making of all such filings required in connection with any
such Transfer Taxes. Buyer shall deliver to Seller prior to the Initials Closing
Date all exemption, clearance, resale or similar certificates which would under
applicable law enable the transactions contemplated by this Agreement to be
exempt from any Transfer Taxes.
9.6 Actions with Respect to Initials Closing. Seller and Buyer agree
to use their commercially reasonable efforts to bring about the satisfaction of
the conditions to the Initials Closing set forth in Article X of this Agreement
and to cause the covenants and agreements contained in this Agreement to be
satisfied and performed hereunder by each of them.
ARTICLE X
CONDITIONS PRECEDENT TO CLOSING AND OTHER OBLIGATIONS
10.1 Conditions Precedent to Buyer's Obligations. All obligations of
Buyer to consummate the Initials Closing shall be subject, at the option of
Buyer, to fulfillment of each of the following conditions at or prior to the
Initials Closing:
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(a) Representations and Warranties. All representations and
warranties of Seller contained herein shall be true and correct in all material
respects when made and as of the date hereof, and as of the Initials Closing;
provided, that any representation and warranty which refers or relates to the
R&S Inventory shall be true and correct only when made and as of the date
hereof.
(b) Covenants. All covenants, agreements and obligations required by
the terms of this Agreement or any document delivered pursuant hereto, to be
executed or performed by Seller at or before the Initials Closing, shall have
been duly and properly executed and performed in all material respects
(c) Officer's Certificate. There shall have been delivered to Buyer a
certificate executed by the Managing Member(s) of Seller or such other duly
authorized representatives of Seller reasonably acceptable to Buyer, dated as of
the Initials Closing Date certifying that the applicable conditions set forth in
Sections 10.1(a) and (b) have been fulfilled.
(d) Documentation. All documents, agreements, instruments and
certificates required to be delivered hereunder to Buyer at or prior to the
applicable Closing shall have been so delivered.
(e) No Orders. There shall not be in effect any injunction or order
restraining, enjoining, prohibiting or invalidating this Agreement or the
consummation of the transactions contemplated hereby and no action, suit,
arbitration or proceeding shall be pending or threatened in writing before any
court, governmental body, administrative agency, arbitrator or other competent
authority which seeks to restrain or prohibit, or to obtain damages or a
discovery order in respect of, this Agreement or the consummation of the
transactions contemplated hereby.
(f) Consents. The consents and approvals set forth on Schedule
10.1(f) shall have been obtained.
(g) Lien Releases. Buyer shall have received termination statements
(which statements shall be delivered to Buyer at the Initials Closing for
filing), lien releases and satisfactions of liens, in form and substance
reasonably satisfactory to Buyer, evidencing the termination, release and
satisfaction of all security interests, rights of first refusal, first offer or
similar rights, claims, liens, charges or other encumbrances of any kind on the
Existing Continuing Initials Inventory.
10.2 Conditions Precedent to Certain Other Obligations. Seller's
obligations under Section 8.4 are expressly subject to obtaining any consents,
approvals, waivers and releases Seller deems necessary in its commercially
reasonable judgment from lessors, licensors or other relevant third parties
under relevant leases, licenses or other contracts; provided, that in obtaining
18
such consents, approvals, waivers or releases Seller shall not be obligated to
pay any additional consideration to or incur additional liabilities for the
benefit of the applicable lessor, licensor or other third party.
10.3 Conditions Precedent to Seller's Obligations. All obligations of
Seller to consummate the Closing shall be subject, at the option of Seller, to
fulfillment of each of the following conditions at or prior to the Initials
Closing:
(a) Representations and Warrants. All representations and warranties
of Buyer contained herein or in any document delivered pursuant hereto shall be
true and correct in all material respects when made and as of the Closing.
(b) Covenants. All covenants, agreements and obligations required by
the terms of this Agreement, or any document delivered pursuant hereto to be
executed or performed by Buyer at or before the Closing shall have been duty and
properly executed and performed in all material respects.
(c) Officer's Certificate. There shall have been delivered to Seller
a certificate executed by the President or a Vice President and the Secretary or
an Assistant Secretary of Buyer, or other duty authorized representatives of
Buyer reasonably acceptable to Seller, dated as of the Initials Closing Date,
certifying that the conditions set forth in Sections 10.3(a) and (b) have been
fulfilled.
(d) Documentation. All documents, agreements, instruments and
certificates required to be delivered hereunder to Seller at or prior to the
Closing shall have been so delivered.
(e) No Orders. There shall not be in effect any injunction or order
restraining, enjoining, prohibiting or invalidating this Agreement or the
consummation of the transactions contemplated hereby and no action, suit,
arbitration or proceeding shall be pending or threatened in writing before any
court, governmental body, administrative agency, arbitrator or other competent
authority which seeks to restrain or prohibit, or to obtain damages or a
discovery order in respect of, this Agreement or the consummation of the
transactions contemplated hereby.
(f) Consents. The consents and approvals set forth on Schedule
10.3(f) shall have been obtained.
ARTICLE XI
INDEMNIFICATION; FINDERS
11.1 Indemnification by Seller. Seller shall indemnify, defend and
hold Buyer and its affiliates and its and their respective stockholders,
officers, directors, employees, affiliates and agents (the "Buyer Indemnified
Parties) harmless from and against any and all losses, liabilities, claims,
demands, investigations, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) of every kind, nature
and description (collectively, "Claims") to which any of the Buyer Indemnified
19
Parties becomes subject based upon, or arising out of or otherwise in respect
of: (a) except with regard to the obligations and liabilities assumed by Buyer
under the Assumed Agreements (as defined in the Purchase Agreement) pursuant to
the Purchase Agreement, the Initials Commitments and the R&S Purchase
Commitments (which obligations and liabilities, Initials Commitments and R&S
Commitments shall in no event include the Excluded Liabilities, as defined in
the Purchase Agreement), the business of Seller (but in no event including the
Purchaser's Liabilities (as such term is defined in the Purchase Agreement)),
including, without limitation, Claims relating to (i) arrangements with
suppliers, vendors, contractors, warehousemen, shippers, distributors and
customers of the business, and any Claims with respect to credits, refunds or
charge backs for products or other financial terms of such arrangements, or (ii)
products manufactured, distributed or sold by Seller including, but not limited
to, product liability, false advertising and improper labeling claims; or (b)
any breach of any representation, warranty, covenant or agreement of Seller
contained in this Agreement or the other Seller Documents.
11.2 Indemnification by Buyer. Buyer shall indemnify, defend and hold
Seller and its affiliates and its and their respective members, stockholders,
partners, officers, directors, employees, affiliates and agents (the "Seller
Indemnified Parties") harmless from and against any and all Claims to which any
of the Seller Indemnified Parties becomes subject, based upon, arising out of or
otherwise in respect of (a) any breach of any representation, warranty, covenant
or agreement of Buyer contained in this Agreement or the other Buyer Documents,
(b) the R&S Inventory and the R&S Purchase Commitments following the date hereof
to the extent that such Claim is based upon, arises out of or is otherwise in
respect of any act or omission to act by Buyer after the date hereof and (c) the
Existing Continuing Initials Inventory and the Initials Commitments following
the Initials Closing Date to the extent that such Claim is based upon, arises
out of or is otherwise in respect of any act or omission to act by Buyer after
the Initials Closing Date.
11.3 Notice and Opportunity to Defend. Promptly after receipt by
either party hereto of notice of the assertion of any Claim or discovery of any
facts upon which such party expects to make a claim for indemnification
hereunder, such party (the "Indemnified Party") shall give the other party who
may become obligated to provide indemnification hereunder (the "Indemnifying
Party") written notice describing such Claim or facts in reasonable detail;
provided, however, that any delay or failure by an Indemnified Party to provide
such notice shall not impair or affect its rights hereunder or the obligation of
the Indemnifying Party with respect to such Claim, except to the extent the
Indemnifying Party can demonstrate that it was prejudiced by the Indemnified
Party's delay in giving or failure to give such notice. Such Indemnifying Party
shall have the right, at its option, to compromise or defend, at its own expense
and by its own counsel, any such matter involving the asserted liability of the
Indemnified Party; provided, however, that no Indemnifying Party shall
compromise or settle any asserted liability (except a liability settled or
compromised for monetary consideration or damages only payable solely by other
20
than the Indemnified Party and such compromise or settlement provides for a full
and unconditional release of the claims asserted against the Indemnified Party
and its affiliates) without the prior written consent of the Indemnified Party
(such consent not to be unreasonably withheld). If any Indemnifying Party shall
undertake to compromise or defend any such asserted liability, it shall promptly
notify the Indemnified Party of its intention to do so, and shall diligently
defend against such claims with counsel reasonably acceptable to the Indemnified
Party. The Indemnified Party agrees to reasonably cooperate with the
Indemnifying Party and its counsel in the compromise of, or defense against, any
such asserted liability. No Indemnified Party shall compromise or settle any
asserted liability (except a liability settled or compromised for monetary
consideration or damages only payable solely by other than the Indemnifying
Party and such compromise or settlement provides for a full and unconditional
release of the claims asserted against the Indemnifying Party and its
affiliates) without the prior written consent of the other Indemnifying Party.
In any event, the Indemnified Party shall have the right at its own expense and
by its own counsel to participate in the defense of such asserted liability;
provided, however, that if after having notified the Indemnified Party of its
intention to assume the defense of a claim or asserted liability as aforesaid,
the Indemnifying Party fails to do so in a reasonably prompt and diligent manner
or the Indemnified Party is advised in writing by counsel reasonably
satisfactory to the Indemnifying Party that there probably is a conflict between
the interests of the Indemnified Party and the Indemnifying Party with respect
to such defense under the applicable code or rules of Professional
Responsibility, then in either such case the Indemnifying Party shall be
responsible for the reasonable fees and expenses of one firm of separate counsel
for the Indemnified Party. Except as may otherwise be agreed in writing between
an Indemnifying Party and an Indemnified Party, from and after the R&S Closing,
with regard to matters based upon, or arising out of or otherwise in respect of
the R&S Inventory and the R&S Closing, and from and after the Initials Closing,
with regard to all other matters contained herein, as applicable, an
Indemnifying Party shall not be deemed liable under this Article XI with respect
to third party claims unless and until (i) any final judgment or award shall
have been rendered by a court, arbitration board or administrative agency of
competent jurisdiction with respect to such claim and the time in which to
appeal therefrom shall have expired, or (ii) a settlement of such claim shall
have been agreed to with the third party in compliance with this Article XI
which requires the payment of monetary damages by the Indemnifying Party.
11.4 Finders. Each of the parties hereto represents to the other that
no finder, broker, agent or other intermediary has acted on behalf of such party
in connection with the introduction or bringing together of the parties hereto,
or the negotiation or consummation of the transactions contemplated by this
Agreement (except for the financial advisors of each party identified on
Schedule 11.4 hereto), and each party shall indemnify the other and hold it
harmless against all fees, losses, costs, expenses (including reasonable
attorneys', fees and expenses), liabilities and damages, if any, arising from
the employment or other engagement by such party or services rendered to such
party (or any allegation having a reasonable basis of any such employment or
other engagement or services) of any finder, broker, agent or other intermediary
(and the financial advisors of each party identified on Schedule 11.4 hereto) in
such connection.
21
11.5 Survival. The representations and warranties of the parties
contained in this Agreement and the parties' indemnification obligations under
this Article XI shall survive for a period of two (2) years after the Initials
Closing Date; provided, that if any Indemnified Party shall have given to an
Indemnifying Party any notice on or prior to the second anniversary of the
Initials Closing Date of the assertion of any Claim or discovery of any facts
upon which an Indemnified Party expects in good faith to make a claim for
indemnification under this Agreement as contemplated by the first sentence of
Section 11.3, the limitations set forth in this Section 11.5 shall not be
applicable in respect of the matters set forth in such notice.
11.6 Exclusive Remedy. The provisions of Article XI of this Agreement
contain the exclusive remedies of the parties hereto and the Buyer Indemnified
Parties and Seller Indemnified Parties with respect to any breach or alleged
breach of any representation, warranty or covenant contained herein and with
respect to any claim otherwise arising from or relating to the transactions
contemplated by this Agreement; provided, that (a) nothing herein shall be
deemed to limit or restrict any party's rights or remedies based upon, or
arising out of or otherwise in respect of, fraud and (b) nothing herein shall be
deemed to limit or restrict any party's rights or remedies prior to the Initials
Closing Date (other than matters based upon, or arising out of or otherwise in
respect of the R&S Inventory or the R&S Purchase Commitments), including rights
or remedies based upon equitable principles (including specific performance and
injunctive relief) and, in that connection, each party against whom such
equitable remedies are being sought agrees that money damages would not be a
sufficient remedy in any such instance and that the party seeking such relief
shall be entitled, without the necessity of actual monetary loss being proved or
the posting of a bond, to such equitable relief.
ARTICLE XII
MISCELLANEOUS COVENANT S AND AGREEMENTS
12.1 Confidentiality; Disclosure.
(a) In connection with the transactions contemplated by this
Agreement and the other Transaction Documents, each of Takihyo and Seller, on
the one hand, and Buyer, on the other hand, or, in either case, their
Representatives (as hereinafter defined) have been or will be furnished with or
have access to certain Proprietary Information (as hereinafter defined) relating
to the other parties. Except as expressly provided herein, each party hereby
agrees with regard to the Proprietary Information of the other party, unless
otherwise expressly consented to in each case in advance in writing by Xxxxx
Xxxx, with regard to Takihyo and Seller, and the Chairman of the Board, Chief
Operating Officer, President, Executive Vice President-Finance and
Administration, or Chief Financial Officer of Buyer, with regard to Buyer, (i)
to keep, and cause its Representatives to keep, all information concerning the
other parties hereto to the extent furnished by the other parties or their
respective Representatives, whether furnished before or after the date hereof,
whether oral or written and regardless of the manner in which it is furnished
("Proprietary Information"), confidential and not disclose or reveal any
Proprietary Information to any person other than its Representatives who are
22
involved in the Xxxx Xxxxx Transactions, and (ii) not use the Proprietary
Information for any purpose other than in connection with the transactions
contemplated by this Agreement or any of the other Transaction Documents. For
purposes hereof, Proprietary Information includes all analyses, compilations,
studies, summaries or extracts of any information or materials which contain,
are derived from or otherwise reflect Proprietary Information, whether prepared
by any party hereto or its Representatives. Each party shall be responsible for
any breach of this Section 12.1(a) by any of its Representatives. For purposes
hereof, the term "Proprietary Information" shall not include information which
(i) is presently available to the public, or hereafter shall become available to
the public other than as a result of a disclosure by a party or its
Representatives in breach of this Agreement, or (ii) becomes available to Seller
and Takihyo, on the one hand, or Buyer, on the other hand, from a source other
than the other parties or their respective Representatives; provided; that such
source does not provide such information in violation of a confidentiality
obligation with respect to such information, which confidentiality obligation is
known to the party receiving the information after making reasonable inquiry as
to the existence of such confidentiality obligation at the time such information
is disclosed.
(b) During the period from the date hereof until the closing of the
transactions contemplated by the Purchase Agreement, Buyer, on the one hand, and
Seller and Takihyo, on the other hand, will not, and will cause their respective
Representatives not to, without the prior written consent of the other party,
(i) make any release to the press or other public disclosure, or (ii) make any
statement with regard to this Agreement, the Transaction Documents or the Xxxx
Xxxxx Transactions to any competitor, customer, client, licensee or supplier of
Seller or any of its affiliates, or any other person or entity, other than (A)
the parties' respective Representatives and (B) subject to Section 12.1(c)
below, any persons or entities to which any party has a contractual obligation
to disclose or provide notice in connection with obtaining third party consents
and approvals contemplated hereby; provided; that none of the parties shall hold
any other party responsible hereunder for any statement with respect to any of
the foregoing made prior to November 23, 1998 to Xxxx Xxxx, Xxxxxxx Xxxx, PG
Capital LLC, Schottenstein Stores Corporation or any of their affiliates or
representatives. Each party shall be responsible for any breach of the foregoing
by any of its Representatives. As used in this Section 12.1, the term
"Representatives" means, with respect to Buyer, its directors, officers,
financial advisors, counsel, independent public accountants, bankers,
financiers, and other representatives (including, without limitation, potential
bankers, financiers and other lenders in respect of the Purchaser's Financing
(as defined in the Purchase Agreement)), and, with respect to Seller, its
members, stockholders, directors, officers, financial advisors, counsel,
independent public accountants, bankers, financiers, controlling persons and
other representatives. Each party shall be responsible for any breach of the
foregoing by any of its Representatives.
(c) The restrictions in Section 12.1(b) shall not prohibit the
disclosure of any information by Buyer, on the one hand, and Seller and Takihyo,
on the other hand, in connection with obtaining the consents and approvals to be
obtained by Buyer or Seller and Takihyo, as the case may be, pursuant to the
Transaction Documents (including, without limitation, obtaining consents and
23
approvals of the holders of Buyer's Senior Notes as provided in the Purchase
Agreement), or the disclosure of information required by law, rule or regulation
(including, without limitation, the rules and regulations of the Securities and
Exchange Commission and any stock exchange (including The NASDAQ National
Market) upon which any of the securities of Buyer or Seller are listed) subject
to compliance with the following provisions: (i) the disclosing party shall give
the other parties hereto written notice of such requirement as soon as possible
after becoming aware of such requirement; (ii) the disclosing party shall
provide the other parties hereto with a copy of any proposed disclosure a
reasonable period of time in advance of actual disclosure to any third party for
review and comment on such proposed disclosure, and the disclosing party will
use its commercially reasonable efforts to address any concerns raised by a
non-disclosing party consistent with the disclosing party's legal obligations
(including, without limitation, reporting and filing requirements under federal
and state securities laws); (iii) in case of disclosures being compelled by
legal process, prior to making such disclosure the disclosing party shall afford
the non-disclosing parties an opportunity to seek an appropriate protective
order with respect to such information, and the disclosing party shall provide
the non-disclosing parties with reasonable cooperation and assistance in
connection therewith; and (iv) with respect to any information which is
disclosed to a third party in accordance with these provisions, the disclosing
party, consistent with its legal obligations, shall use its best efforts to
obtain assurances from such third party that such information will be treated as
confidential by such third party. The parties shall issue a joint press release
upon the signing of the Transaction Documents, upon the consummation of the
closing of the transactions contemplated by the Purchase Agreement (or, if
applicable, upon termination of such agreement) and as they shall thereafter
otherwise mutually agree.
(d) Buyer may use any information, including Proprietary Information,
in Buyer's financial statements, including its pro forma financial statements,
required pursuant to its legal obligations, including, without limitation, under
applicable federal and state securities laws.
(e) Buyer, on the one hand, and Seller and Takihyo, on the other
hand, will not, and will cause their respective Representatives not to, without
the prior written consent of the other party, make any release to the press or
other public disclosure or make any statement to any other Person with regard to
the negotiation process with respect to this Agreement, the Transaction
Documents and the transactions contemplated hereby and thereby. In addition,
Buyer will not, and will cause its Representatives not to, without the prior
written consent of Xx. Xxxxx Xxxx, make any disparaging or derogatory statement
to any other Person with regard to the conduct by Seller or Takihyo of their
respective businesses prior to Closing. Each party shall be responsible for any
breach of the foregoing by any of its Representatives. The restrictions in this
Section 12.1(e) shall not prohibit the disclosure of any information by Buyer,
on the one hand, and Seller and Takihyo, on the other hand, required by law,
rule or regulation (including, without limitation, the rules and regulations of
the Securities and Exchange Commission and any stock exchange (including The
NASDAQ National Market) upon which any of the securities of Buyer or Seller are
listed) subject to compliance with the following provisions: (A) the disclosing
24
party shall give the other parties hereto written notice of such requirement as
soon as possible after becoming aware of such requirement; (B) the disclosing
party shall provide the other parties hereto with a copy of any proposed
disclosure a reasonable period of time in advance of actual disclosure to any
third party for review and comment on such proposed disclosure, and the
disclosing party will use its commercially reasonable efforts to address any
concerns raised by a non-disclosing party consistent with the disclosing party's
legal obligations (including, without limitation, reporting and filing
requirements under Federal and State securities laws); (C) in case of
disclosures being compelled by legal process, prior to making such disclosure
the disclosing party shall afford the non-disclosing parties an opportunity to
seek an appropriate protective order with respect to such information, and the
disclosing party shall provide the non-disclosing parties with reasonable
cooperation and assistance in connection therewith; and (D) with respect to any
information which is disclosed to a third party in accordance with these
provisions, the disclosing party, consistent with its legal obligations, shall
use its best efforts to obtain assurances from such third party that such
information will be treated as confidential by such third party.
(f) The provisions of clause (iii) of the second paragraph and the
fourth paragraph of the Confidentiality Agreement shall terminate at the closing
of the transactions contemplated by the Purchase Agreement and be of no further
force or effect. In addition, to the extent of an inconsistency between the
terms and conditions of Section 12.1 of this Agreement and that certain letter
agreement between Takihyo and Buyer dated November 23, 1998 (executed by Buyer
on November 24, 1998), the terms and provisions of Section 12.1 shall govern.
12.2 Notices. Any and all notices or other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if given by personal delivery, by certified or
registered mail, postage prepaid, return receipt requested, or by telecopier
with verified answer back or by a recognized major overnight delivery service.
Any such notice shall be deemed given when personally delivered against written
receipt therefor, five (5) Business Days after posting, postage prepaid, in the
mails of the United States of America, upon receipt of verified answer back with
respect to transmission by telecopier (with the original sent postage prepaid by
first class mail) or, with respect to delivery by major overnight delivery
service, upon its receipt against written receipt therefor, at the following
addresses or to such other address or to such other addressee as any party may
from time to time specify by notice to the other party given as aforesaid:
If to Buyer:
Xxxxxx A.S.L., Ltd.
00 Xxxxx Xxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
25
With a copy to:
Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Seller:
Xxxx Xxxxx Company LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Facsimile No.: (000) 000-0000
and:
Takihyo Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Facsimile No.: (000) 000-0000
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxx, Esq.
Facsimile No.: (000) 000-0000
12.3 Miscellaneous.
(a) Entire Agreement. This Agreement, the Schedules and Exhibits
hereto, together with the agreements, certificates and other documents referred
to herein, and that certain letter agreement between Takihyo and Buyer dated
November 23, 1998 (executed by Buyer on November 24, 1998), constitute the
entire agreement and set forth the entire understanding of the parties with
respect to the subject matter hereof, supersede all prior agreements, covenants,
arrangements, letters, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of either party,
relating to the subject matter hereof, and may not be modified or amended,
except by a written agreement specifically referring to this Agreement signed by
the parties hereto and any other party to be charged.
(b) No Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
of the same or similar nature. No failure on the part of any party to exercise,
26
and no delay in exercising any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
(c) Assignment. Neither party may transfer or assign this Agreement
or its rights hereunder or delegate its performance hereunder without the prior
written consent of the other party, and any purported assignment without such
consent shall be void and of no effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
(d) Headings. The Section and paragraph headings contained herein are
for the purposes of convenience only and are not intended to define or limit the
contents of any Section or paragraph.
(e) Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, all legal and other costs and expenses
incurred in connection with this Agreement and the Transaction Agreements and
the transactions contemplated hereby or thereby shall be paid by the party
incurring such expenses, except as otherwise specifically provided herein or
therein.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to
contracts made and to be performed therein, without regard to that state's
conflicts of laws provisions that would defer to the substantive law of another
jurisdiction.
(h) No Third Party Beneficiaries. Nothing herein, express or implied,
is intended to or shall confer upon any person or entity including, without
limitation, any employee, contractor, vendor or distributor of the Business, or
any labor organization, other than the parties hereto the Buyer Indemnified
Parties and Seller Indemnified Parties and other than with respect to Takihyo
with respect to Section 12.1 and 12.3, any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duty executed as of the day and year first above written.
XXXXXX A.S.L., LTD.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Operating Officer
XXXX XXXXX COMPANY LLC,
a New York limited liability company,
by its Member Manager
TAKIHYO INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
As to Section 12.1
TAKIHYO INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------------------
Name: Xxxxx X. Xxxx
Title: President
28
EXHIBIT A
FORM OF XXXX OF SALE
This Xxxx of Sale ("Xxxx of Sale") dated the ____ day of
_________, 1999, is made by Xxxx Xxxxx Company LLC ("Seller"), a New York
limited liability company with its principal office at 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX 00000
WHEREAS, in connection with that certain Omnibus Agreement
(the "Omnibus Agreement") dated as of __________,
1999, between Xxxxxx A.S.L., Ltd. ("Buyer"), a Delaware corporation with its
principal office at 00 Xxxxx Xxx, Xxxxxxxx, XX 00000 and Seller, which is
incorporated herein by reference, Seller desires to transfer to, and Buyer
desires to acquire, all Seller's right, title and interest in and to the [R&S
Inventory][Existing Continuing Initials Inventory] (all capitalized terms used
but not otherwise defined herein shall have the meaning assigned thereto in the
Omnibus Agreement);
NOW, THEREFORE, Seller, in exchange for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby grants and assigns, transfers and conveys to Buyer, its successors and
assigns, all Seller's right, title and interest in and to the [R&S Inventory]
[Existing Continuing Initials Inventory] free and clear of all liens, claims,
pledges, security interests and other encumbrances;
TO HAVE AND TO HOLD, all the [R&S Inventory] [Existing
Continuing Initials Inventory], hereby granted and assigned unto Buyer, its
successors, assigns and legal representatives, to and for its and their own use
and benefit forever.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE OMNIBUS
AGREEMENT, THE [R&S INVENTORY][EXISTING CONTINUING INITIALS INVENTORY][IS BEING
DELIVERED TO THE TRANSFEREE BY THE TRANSFEROR IN "AS IS" "WHERE IS" CONDITION
AND THE TRANSFEROR MAKES NO REPRESENTATIONS, WARRANTIES, GUARAN TEES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE [R&S
INVENTORY][EXISTING CONTINU-ING INITIALS INVENTORY]. THE TRANSFEREE WAIVES,
RELEASES AND RENOUNCES ALL WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY
NONCONFORMITY OR DEFECT IN THE [R&S INVEN-TORY][EXISTING CONTINUING INITIALS
INVENTORY].
Seller will from time to time, at Buyer's request and
without further cost or expense to Buyer, execute and deliver to Buyer such
other instruments of transfer and take such other action as Buyer may reasonably
request so as to more effectively transfer the [R&S Inventory] [Existing
Continuing Initials Inventory] to Buyer.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT
CONSIDERATION OF PRINCIPLES OF CONFLICTS OR CHOICE OF LAWS.
This Xxxx of Sale shall inure to the benefit of Buyer and
its successors, assigns and legal representatives, and shall be binding upon
Seller and its successors, assigns and legal representatives.
IN WITNESS WHEREOF, Seller has hereunto caused its name to
be signed to this Xxxx of Sale this ____ day of ____________, 1999.
XXXX XXXXX COMPANY LLC,
a New York limited liability company,
by its Member Manager
TAKIHYO INC.
By:
Name:
Title:
XXXXXX A.S.L., LTD.
By:
Name:
Title:
EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement")
is entered into as of _______________, 1999, by and between Xxxxxx A.S.L., Ltd.,
a Delaware corporation ("Buyer") and Xxxx Xxxxx Company LLC, a New York limited
liability company ("Seller").
WHEREAS, in connection with that certain Omnibus Agreement
(the "Omnibus Agreement") dated as of _____________, 1999, between Buyer and
Seller which is incorporated herein by reference, Seller has agreed to assign to
Buyer, and Buyer has agreed to assume the [R&S Purchase Commitments][Initials
Commitments] (all capitalized terms used but not otherwise defined herein shall
have the meaning assigned thereto in the Omnibus Agreement);
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties to this Agreement hereby agree as
follows:
1. Assignment by Seller. Seller hereby transfers and
assigns to Buyer all of its rights, title and interest in and to, and all of its
obligations under the [R&S Purchase Commitments][Initials Commitments], listed
on Schedule 1.
2. Assumption by Buyer. Buyer hereby consents to the
transfer and assignment of the [R&S Purchase Commitments][Initials Commitments]
to Buyer and assumes and agrees to pay, perform and discharge when due and
payable, in accordance with their respective terms, all of the liabilities and
obligations of Seller from and after the [R&S Closing] [Initials Closing] AND
which arise after the [R&S Closing] [Initials Closing] pursuant to the [R&S
Purchase Commitments] [Initials Commitments].
3. Further Assurances. The parties shall, upon request of
each other from time to time, do and execute and deliver, or cause to be done,
executed or delivered, all such further acts, deeds, assignments, transfers and
conveyances as each of them may reasonably request to more completely consummate
and make effective the transactions contemplated hereby.
4. Entire Agreement. This Agreement, together with the
Omnibus Agreement and other agreements referenced therein, constitute the entire
and sole agreement and understanding between the parties hereto with respect to
the subject matter hereof and thereof supersede any prior or contemporaneous
understanding, agreement, representation or warranty, whether oral or written,
with respect to the subject matter hereof and thereof
5. Amendment and Waiver. No modifications or amendment of
any provision of this Agreement shall be effective unless approved in writing by
the parties to this Agreement. No party shall be deemed to have waived
compliance by any other party with any provision of this Agreement unless such
waiver is in writing, and the failure of any party at any time to enforce any of
the provisions of this Agreement shall in no way be construed as a waiver of
such provisions and shall not affect the rights of any party thereafter to
enforce such provisions in accordance with their terms. No waiver of any
provision of this Agreement shall be deemed to be a waiver of any other
provision of this Agreement. No waiver of any breach of any provision of this
Agreement shall be deemed the waiver of any subsequent breach thereof or of any
other provision of this Agreement.
6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOV-ERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW
YORK WITHOUT CONSIDER-ATION OF PRINCIPLES OF CONFLICTS OR CHOICE OF LAWS.
7. Severability. Any provision of this Agreement which may
be determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement, and any such prohibition or unenforceability in
such jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8. Counterparts. This Agreement may be executed in one or
more counterparts and in separate counterparts, each of which shall be deemed to
be an original copy of this Agreement, and all of which, when taken together,
shall be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
XXXX XXXXX COMPANY LLC,
a New York limited liability company,
by its Member Manager
TAKIHYO INC.
By: ____________________________
Name:___________________________
Title:__________________________
XXXXXX A.S.L., LTD.
By: ____________________________
Name:___________________________
Title:__________________________
