Exhibit 2.2
SERVICES AGREEMENT
dated as of
August 16, 2001
between
LBH, Inc.
and
The Limited, Inc.
Article 1
Definitions
Section 1.01. Definitions......................................................................... 1
Section 1.02. Internal Reference.................................................................. 4
Article 2
Purchase and Sale of Services
Section 2.01. Purchase and Sale of Services....................................................... 4
Section 2.02. Additional Services................................................................. 4
Article 3
Service Costs
Section 3.01. Service Costs Generally............................................................. 5
Section 3.02. Subcontractors...................................................................... 6
Section 3.03. Title to Equipment; Methods......................................................... 6
Section 3.04. Customary Billing................................................................... 6
Section 3.05. Pass-Through Billing................................................................ 6
Section 3.06. Percent of Sales Billing............................................................ 7
Section 3.07. Capital Investments................................................................. 7
Section 3.08. Invoicing and Settlement of Costs................................................... 7
Section 3.09. Amended Schedules................................................................... 9
Article 4
Provision of Services; Indemnification
Section 4.01. General Standard of Service......................................................... 10
Section 4.02. Ownership of Products............................................................... 10
Section 4.03. Review Meetings..................................................................... 11
Section 4.04. Limitation of Liability............................................................. 11
Section 4.05. Indemnification of The Limited by Lane Xxxxxx....................................... 12
Section 4.06. Indemnification of Lane Xxxxxx by The Limited; Mitigation of Damages................ 13
Section 4.07. Notice of Certain Matters........................................................... 13
Section 4.08. Indemnification Procedures.......................................................... 13
Article 5
Term and Termination
Section 5.01. Term................................................................................ 15
Section 5.02. Termination of the Parties.......................................................... 15
Section 5.03. Effect of Termination............................................................... 16
Section 5.04. Notification of Change of Control................................................... 17
Section 5.05. Change of Control of Parent......................................................... 17
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Article 6
Miscellaneous
Section 6.01. Confidential Information; Non-Solicitation.......................................... 17
Section 6.02. Audits.............................................................................. 18
Section 6.03. No Agency........................................................................... 19
Section 6.04. Force Majeure....................................................................... 19
Section 6.05. Entire Agreement; Successors and Assigns............................................ 20
Section 6.06. Notices............................................................................. 20
Section 6.07. Governing Law....................................................................... 21
Section 6.08. Jurisdiction........................................................................ 22
Section 6.09. WAIVER OF JURY TRIAL................................................................ 22
Section 6.10. Severability........................................................................ 22
Section 6.11. Amendment........................................................................... 22
Section 6.12. Counterparts........................................................................ 22
Section 6.13. Headings; Interpretation and Construction........................................... 23
Section 6.14. Mutual Contribution................................................................. 23
Schedule I Human Resources and Benefits Services
Schedule II Information Technology Services
Schedule III Logistics and Related Services
Schedule IV Store Design and Store Construction Services
Schedule V Real Estate Services
Schedule VI Tax Services for the United States
Schedule VII Treasury and Cash Management Services
Schedule VIII Production and Sourcing Support Services
Schedule IX Cafeteria
Schedule X Building Security
Schedule XI Travel
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SERVICES AGREEMENT
This Services Agreement (this "Agreement") is entered into as of August 16,
2001 by and between LBH, Inc., a Delaware corporation ("Lane Xxxxxx"), and The
Limited, Inc., a Delaware corporation ("The Limited").
W I T N E S S E T H:
WHEREAS, Venice Acquisition Corporation, a Delaware corporation ("Buyer"),
has acquired all of the outstanding capital stock of Lane Xxxxxx pursuant to the
Stock Purchase Agreement (the "Stock Purchase Agreement") dated as of July 9,
2001, among The Limited, LFAS, Inc., Buyer and Charming Shoppes, Inc.
("Parent");
WHEREAS, The Limited has heretofore provided to Lane Xxxxxx and its
Subsidiaries certain administrative, financial, management and other services;
and
WHEREAS, Lane Xxxxxx desires to obtain certain services from The Limited,
on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. (a) All terms used but not defined herein shall
have the meanings ascribed to them in the Stock Purchase Agreement. The
following terms, as used herein, have the following meanings, applicable to both
the singular and the plural forms of the terms described:
"Agreement" has the meaning ascribed thereto in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.
"Building" has the meaning ascribed to it in the HQ Lease.
"Change of Control of Lane Xxxxxx" means (1) the direct or indirect
acquisition (by merger, consolidation, business combination or otherwise) by any
Person or group or Persons of beneficial ownership (as defined in Rule 13d-1 and
Rule 13d-5 under the Securities Exchange Act of 1934) of 35% or more of the
Total Voting Power of Lane Xxxxxx or any of its Subsidiaries; (2) any
transaction or arrangement pursuant to which any Person possesses, directly or
indirectly, the power to direct or to cause the direction of the management or
policies of Lane Xxxxxx or any Subsidiary of Lane Xxxxxx or any of their
respective businesses, whether through the ownership of voting securities, by
contract or otherwise; (3) any merger, consolidation or other business
combination of Lane Xxxxxx or any
Subsidiary of Lane Xxxxxx with any Person after giving effect to which (x) the
shareholders of Lane Xxxxxx immediately prior to such transaction do not own at
least 65% of the Total Voting Power of the ultimate parent entity of the parties
to such transaction, or (y) individuals who were directors of Lane Xxxxxx
immediately prior to such transaction (or their designees) do not constitute a
majority of the board of directors of such ultimate parent entity; or, (4) the
direct or indirect acquisition by any Person or group of Persons of 50% or more
of the assets of Lane Xxxxxx; provided that Parent may cause the transfer of the
capital stock of Lane Xxxxxx to, or merger of Lane Xxxxxx with, any of its
wholly-owned Subsidiaries and such transaction shall not result in a Change of
Control of Lane Xxxxxx; provided, further, that such Subsidiary shall be bound
by all of the terms and conditions of this Agreement and that no such transfer
shall relieve Parent of its obligations hereunder. For purposes of this
Agreement, a Change of Control of Parent shall not result in a Change of Control
of Lane Xxxxxx.
"Change of Control of Parent" means (1) the direct or indirect acquisition
(by merger, consolidation, business combination or otherwise) by any Person or
group or Persons of beneficial ownership (as defined in Rule 13d-1 and Rule 13d-
5 under the Securities Exchange Act of 1934) of 35% or more of the Total Voting
Power of Parent; (2) any transaction or arrangement pursuant to which any Person
possesses, directly or indirectly, the power to direct or to cause the direction
of the management or policies of Parent or its businesses, whether through the
ownership of voting securities, by contract or otherwise; (3) any merger,
consolidation or other business combination of or involving Parent with any
Person after giving effect to which (x) the shareholders of Parent immediately
prior to such transaction do not own at least 65% of the Total Voting Power of
the ultimate parent entity of the parties to such transaction, or (y)
individuals who were directors of Parent immediately prior to such transaction
(or their designees) do not constitute a majority of the board of directors of
such ultimate parent entity; or, (4) the direct or indirect acquisition by any
Person or group of Persons of 50% or more of the assets of Parent.
"Limited Entities" means The Limited and its Subsidiaries, and "Limited
Entity" shall mean any of the Limited Entities.
"Premises" has the meaning ascribed to it in the HQ Lease.
"Products" means apparel and accessory (of a type typically sold by Lane
Xxxxxx) merchandise acquired for re-sale by Lane Xxxxxx.
"Schedules" means Schedules I, II, III, IV, V, VI, VII, VIII, IX, X and XI
hereto and any additional Schedule hereto by written agreement of the parties.
"Services" means one or more of the various services described in any of
the Schedules.
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"Subsidiary" means, at any time, with respect to any Person (the "Subject
Person"), (1) any Person of which either (x) more than 50% of the shares of
stock or other interests entitled to vote in the election of directors or
comparable Persons performing similar functions (excluding shares or other
interests entitled to vote only upon the failure to pay dividends thereon or
other contingencies) or (y) more than a 50% interest in the profits or capital
of such Person, are at the time owned or controlled directly or indirectly by
the Subject Person or (2) any Person whose assets, or portions thereof, are
consolidated with the net earnings of the Subject Person and are recorded on the
books of the Subject Person for financial reporting purposes in accordance with
generally accepted accounting principles in effect in the country in which the
Subject Person is incorporated.
"Total Voting Power" with respect to any Person means the total combined
voting power of all securities of such Person entitled to vote generally in the
election of directors of such Person.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Actions 4.05
Additional Services 2.02
Allocated Cost 3.01
Capital Investments 3.07
Change of Control Notice 5.04
Confidential Information 6.01
Cost Component(s) 3.01
Customary Billing 3.04
Damages 4.05
Employee Welfare Plans 4.05
Equipment 3.03
Force Majeure 6.04
Indemnified Party 4.08
Indemnified Person 4.06
Indemnifying Party 4.08
Lane Xxxxxx Indemnified Person 4.06
Limited Indemnified Person 4.08
Net Sales Ratio 3.06
Non-Compliance Notice 4.07
Pass-Through Billing 3.05
Payment Date 3.07
Percent of Sales Billing 3.06
Proposed Change 3.09
Review Meetings 4.03
Service Costs 3.01
Significant Increase 3.09
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Term Section
---- -------
Specific Billing 3.01
Subcontractor 3.02
Section 1.02. Internal Reference. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references to the
parties shall mean the parties to this Agreement.
ARTICLE 2
Purchase and Sale of Services
Section 2.01. Purchase and Sale of Services. (a) On the terms and subject
to the conditions of this Agreement, The Limited agrees to provide to Lane
Xxxxxx, or procure the provision to Lane Xxxxxx of, and Lane Xxxxxx agrees to
purchase from The Limited, the Services.
(b) Notwithstanding anything herein to the contrary, (1) the Services to
be provided to Lane Xxxxxx under this Agreement shall, at Xxxx Xxxxxx'x request,
be provided to any Subsidiary of Lane Xxxxxx so long as such Subsidiary is
focused primarily on the sale of, or supporting the sale of, Large Size Women's
Clothing, (2) The Limited shall have the right, in its sole and absolute
discretion, to satisfy its obligation to provide or procure Services hereunder
by causing one or more of its Subsidiaries (directly or through one or more
Subcontractors as set forth in Section 3.02) to provide or procure such Services
in the manner set forth on the Schedules, and (3) in no event shall The Limited
be required to provide Lane Xxxxxx with any Service for any fiscal year at
volumes or levels more than 110% of the volumes or levels provided to Lane
Xxxxxx in the immediately preceding fiscal year with respect to such Service.
With respect to Services provided to, or procured on behalf of, any Subsidiary
of Lane Xxxxxx, Xxxx Xxxxxx agrees to pay or to cause such Subsidiary to pay all
amounts payable by or in respect of such Services pursuant to this Agreement.
Notwithstanding anything in this Agreement to the contrary, The Limited shall
not be obligated to provide any Service where the consent of a third party is
related to and reasonably required for the provision of such Service. The
Limited and Lane Xxxxxx shall use their reasonable commercial efforts to
cooperate in obtaining any such consent (the terms of which shall not impose any
obligations or conditions on The Limited) and Lane Xxxxxx shall bear any and all
costs incurred in connection with the obtaining of such consent.
Section 2.02. Additional Services. In addition to the Services to be
provided or procured by The Limited in accordance with Section 2.01, if
requested by Lane Xxxxxx, and to the extent that The Limited and Lane Xxxxxx may
mutually agree, The Limited shall provide additional services to Lane Xxxxxx
(the "Additional Services"). The scope of any such Additional Services, as well
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as the term, costs, and other terms and conditions applicable to such Additional
Services, shall be as mutually agreed by The Limited and Lane Xxxxxx and shall
be reflected in amendments or additions to the Schedules as mutually agreed by
The Limited and Lane Xxxxxx. It is understood and agreed that (1) The Limited
shall be under no obligation to provide or procure any such Additional Service
requested by Lane Xxxxxx and (2) any decision to provide or procure any such
Additional Service shall be made by The Limited in its sole discretion;
provided, however, that The Limited, in its reasonable discretion, shall provide
Additional Services consistent with those customarily provided generally to
Limited Entities.
ARTICLE 3
Service Costs
Section 3.01. Service Costs Generally. (a) The Schedules indicate, with
respect to each Service listed therein, whether the costs to be charged to Lane
Xxxxxx for such Service are determined by (1) the customary billing method
described in Section 3.04 ("Customary Billing"), (2) the pass-through billing
method described in Section 3.05 ("Pass-Through Billing"), (3) the percentage of
net sales method described in Section 3.06 ("Percent of Sales Billing"), (4) a
specific billing method to be mutually agreed upon by Lane Xxxxxx and The
Limited ("Specific Billing") or (5) some combination thereof. The amounts
calculated by the Limited Entities pursuant to the Customary Billing, Pass-
Through Billing, Percent of Sales Billing and Specific Billing methods
applicable to Services provided to Lane Xxxxxx and charged to Lane Xxxxxx as
provided herein are collectively referred to herein as the "Service Costs."
(b) Lane Xxxxxx agrees to pay to The Limited or its designee in the
manner set forth in Section 3.08 the Service Costs applicable to each of the
Services actually provided or procured by The Limited.
(c) The Service Costs calculated pursuant to each of the specific billing
methods described herein may include without limitation one or more of the
following costs: (1) direct costs incurred by the Limited Entities in providing
the Services, (2) a reasonably and fairly allocated portion of costs or expenses
(including without limitation service-specific overhead costs and the costs of
depreciation of new and existing assets) incurred by one or more of the Limited
Entities in providing services to one or more of the Limited Entities, their
Affiliates and Lane Xxxxxx (each, an "Allocated Cost"), and (3) third party
costs incurred by the Limited Entities in providing the Services (each of
(1)-(3), a "Cost Component," and collectively, the "Cost Components"). In the
discretion of The Limited, one or more of the Limited Entities may charge Lane
Xxxxxx directly for Allocated Costs whether or not the remaining allocable
portion of such costs attributed to other businesses of The Limited (the
"Non-Lane Xxxxxx Costs") are directly or indirectly charged to such other
business by the Limited Entities; provided that The Limited shall in no event
charge such Non-Lane Xxxxxx Costs to Lane Xxxxxx.
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(d) The parties intend and agree that the methods of calculation of each
of the Service Costs hereunder shall be sufficient to permit the Limited
Entities to receive full reimbursement for all fully absorbed costs and expenses
incurred directly or indirectly by the Limited Entities in connection with the
provision of the Services (including without limitation one or more of the Cost
Components), but shall not contain a xxxx-up, profit or premium in excess of
fully absorbed costs and expenses except as may otherwise be provided herein.
Section 3.02. Subcontractors. The Limited shall have the right, directly
or through one or more Subsidiaries, to hire or engage one or more
subcontractors or other third parties (each, a "Subcontractor") to perform all
or any of its obligations under this Agreement; provided that The Limited shall
remain ultimately responsible for ensuring that the obligations with respect to
the nature, quality and standards of care set forth in Section 4.01 hereof are
satisfied with respect to any Services provided by any Subcontractor. In hiring
or engaging any Subcontractor pursuant to this Section, The Limited shall ensure
that the terms of such arrangement (including, without limitation, the price and
applicable standards of quality to be charged or maintained by the Subcontractor
for such Services) are no less favorable than the terms (taken as a whole) and
applicable standards of quality (taken as a whole) which The Limited would be
able to obtain for itself or its Subsidiaries with respect to such Services.
Section 3.03. Title to Equipment; Methods. (a) All procedures, methods,
systems, strategies, tools, equipment, facilities and other resources used by
any Limited Entity in connection with the provision of Services hereunder
(collectively, the "Equipment") shall remain the property of such Limited Entity
and shall at all times be under the sole direction and control of The Limited.
(b) Notwithstanding any other provisions of this Agreement, but subject
to the terms of Section 4.01 of this Agreement, The Limited shall have the right
in its sole discretion to modify or change the methods of operation and delivery
of the Services; provided that such modifications or methods do not discriminate
against Lane Xxxxxx and its Subsidiaries as compared with the methods of
operation and delivery of the Services to the Limited Entities.
Section 3.04. Customary Billing. The costs of Services to which the
Customary Billing method applies shall, subject to Section 3.01(c), be
calculated on a basis that is equivalent to the basis on which costs are
attributed (whether through direct or indirect charges, allocations or
otherwise) from time to time to other businesses operated by The Limited for
comparable services, which may include without limitation one or more of the
Cost Components.
Section 3.05. Pass-Through Billing. The costs of Services to which the
Pass-Through Billing method applies shall, subject to Section 3.01(c), be equal
to the aggregate amount of the third-party costs and expenses incurred (which
costs shall include but not be limited to adjustments for attributable rebates
and the costs incurred in connection with obtaining the consent of any party to
a contract
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or agreement to which any Limited Entity is a party where such consent is
related to and reasonably required for the provision of any Service) by any
Limited Entity on behalf of Lane Xxxxxx.
Section 3.06. Percent of Sales Billing. The costs of Services to which the
Percent-of-Sales Billing method applies shall, subject to Section 3.01(c), be
equal to the amount obtained by multiplying (x) the aggregate cost incurred each
month by the Limited Entities in providing such Services to one or more
businesses of The Limited and to Lane Xxxxxx by (y) the Net Sales Ratio for such
month. "Net Sales Ratio" means the net sales of Lane Xxxxxx for a particular
month divided by the aggregate net sales of all businesses of The Limited,
combined with the net sales of Lane Xxxxxx, to which costs for such month are
being allocated. In order to permit The Limited to calculate the billing method
provided for in this Section 3.06 (and for no other purpose), Lane Xxxxxx shall
provide The Limited with all necessary sales information not later than the
close of business on the first Business Day immediately following such calendar
month.
Section 3.07. Capital Investments. (a) Subject to clauses (b)-(c) hereto,
The Limited shall have the right from time to time to make such capital
investments as one or more of the Limited Entities deems reasonably necessary to
support performance of the Services. Costs incurred by The Limited in connection
with such capital investments (including without limitation transportation and
installation costs) ("Capital Investments") shall be part of the Service Costs
and shall be reimbursed by Lane Xxxxxx pursuant to the procedures set forth in
Section 3.08(c).
(b) Capital Investments incurred by The Limited on Xxxx Xxxxxx'x behalf
in connection with store design and construction shall be paid for by Lane
Xxxxxx directly or through the Pass-Through Billing method.
(c) For Capital Investments specifically incurred on behalf of Lane
Xxxxxx which support the Services hereunder, Lane Xxxxxx shall reimburse The
Limited for, and shall retain title to, such Capital Investments. The Limited
shall consult with Lane Xxxxxx with respect to any such Capital Investment in
excess of $100,000; provided that if Lane Xxxxxx declines to pay for such
Capital Investment, The Limited may terminate such Service if, in the reasonable
judgment of The Limited, the provision of such Service is not practicable
without the making of such Capital Investment.
Section 3.08. Invoicing and Settlement of Costs. (a) The Limited shall (or
shall cause one or more of the Limited Entities to) invoice the Chief Financial
Officer of Lane Xxxxxx on a monthly basis (not later than the fifteenth day of
the following month), for the Service Costs incurred in the prior month, and
will provide to Lane Xxxxxx the same billing data and level of detail as The
Limited customarily provides to the other businesses operated by The Limited and
such other data as may be reasonably requested by Lane Xxxxxx. The Limited shall
use its commercially reasonable best efforts to cause invoices to be presented
to Lane
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Xxxxxx on the schedule set forth in this Article 3, but no delay in presentation
of an invoice shall affect Xxxx Xxxxxx'x obligation to pay the full amount of
such invoice on the terms set forth herein.
(b) Except as provided in Section 3.08(d) or as specifically provided for
in any Schedule hereto, Lane Xxxxxx agrees to pay on or before 30 days after the
date on which The Limited invoices Lane Xxxxxx of the Service Costs, all amounts
(other than amounts disputed in good faith by prior notice to The Limited)
invoiced by The Limited pursuant to Section 3.08(a). Such payments shall be made
by Lane Xxxxxx, at its option, through one of the following methods: (1) by
check or (2) by wire transfer of immediately available funds payable to the
order of The Limited. If any check payable to The Limited under this Agreement
is not received by The Limited within 5 days after date on which such payment
was due, Lane Xxxxxx shall cancel such check and deliver to The Limited within
two Business Days all such amounts due by wire transfer of immediately available
funds.
(c) Subject to Section 3.07(c), Lane Xxxxxx shall pay, by check or other
methods mutually agreeable to the parties, The Limited all amounts with respect
to Capital Investments within 10 Business Days of the date on which The Limited
invoices Lane Xxxxxx of such Capital Investments (either in whole or on a
percentage of completion basis). The Limited shall be under no obligation to
make any Capital Investment before receipt of Xxxx Xxxxxx'x advance payment for
such expenditure.
(d) If Lane Xxxxxx fails to pay any monthly payment within 15 days of the
relevant payment date (other than amounts disputed in good faith by prior notice
to The Limited), Lane Xxxxxx shall be obligated to pay, in addition to the
amount due on such payment date, interest on such amount at the greater of (1)
12% and (2) the Reference Rate plus 5%, in each case per annum compounded
monthly from the relevant payment date through the date of payment; provided
that such interest rate shall not exceed the maximum rate permitted by
applicable law. All payments made shall be applied first to unpaid interest and
then to amounts billed but unpaid. If Lane Xxxxxx fails to pay the full amount
of any invoice within 30 days of the relevant payment date, such failure shall
be considered a material breach of this Agreement (except to the extent of any
invoiced amounts reasonably disputed by Lane Xxxxxx in good faith) and to the
extent the aggregate amount of such overdue unpaid invoices exceeds $75,000, The
Limited may, without liability, suspend its obligations hereunder to provide any
and all Services to Lane Xxxxxx until such time as such invoices have been paid
in full (except to the extent of any invoiced amounts disputed by Lane Xxxxxx in
good faith by prior notice to The Limited); provided, that this sentence may be
invoked only after 30 days' prior notice to Lane Xxxxxx of the payment
delinquency.
(e) For certain Services, as reasonably deemed appropriate from time to
time by the Limited Entities, Service Costs may be billed to Lane Xxxxxx on an
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estimated basis. In such cases the method of estimation will be reasonably
determined by The Limited and will be made available to Lane Xxxxxx. Any
estimated costs billed pursuant to this Section 3.08(e) shall be invoiced and
paid pursuant to the procedures set forth in this Section 3.08. At such point in
time as the actual costs for any Services previously billed on an estimated
basis are determined, The Limited will notify Lane Xxxxxx of such actual costs
and will notify Lane Xxxxxx if any adjustment is necessary to reimburse one
party for any difference between the actual and estimated costs. If in any case
(1) an adjustment is necessary in favor of Lane Xxxxxx, The Limited will
reimburse Lane Xxxxxx for the amount of such adjustment at the time such notice
is given and (2) an adjustment is necessary in favor of The Limited, Lane Xxxxxx
shall reimburse The Limited for the amount of such adjustment no later than 30
days after receipt of such notice. The Limited shall have the right to notify
Lane Xxxxxx of such adjustment and, as applicable, to receive payment from Lane
Xxxxxx or make payment to Lane Xxxxxx for the amount of such difference, whether
or not such notification and adjustment is made with respect to any Limited
Entity receiving comparable services.
(f) Notwithstanding anything in this Agreement to the contrary, Lane
Xxxxxx shall not offset amounts due or payable hereunder to The Limited with any
amounts owing to Lane Xxxxxx or its Affiliates under this Agreement, the Stock
Purchase Agreement or any other agreement or arrangement.
Section 3.09. Amended Schedules. (a) Prior to January 31 of each year for
so long as the relevant Services continue to be provided under this Agreement,
The Limited may prepare and deliver to Lane Xxxxxx amended versions of the
Schedules, setting forth with respect to the Services described in such
Schedules, proposed changes in any of the methodologies used to calculate the
Service Costs (each, a "Proposed Change") and, to the extent available, the
Service Costs estimated to be payable for such Services for the then current
Fiscal Year of The Limited. Except as Lane Xxxxxx and The Limited may otherwise
agree, and except as specifically described in this Agreement, any Proposed
Change shall (1) be on terms and conditions no less favorable than the terms and
conditions on which costs are calculated and charged to any Limited Entity to
which comparable services are provided, (2) not burden Lane Xxxxxx with charges
in excess of fully absorbed costs incurred by the Limited Entities consistent
with Section 3.01(d) and the cost methodologies set forth herein, and (3) be
accompanied by a statement providing reasonable justification of, and support
for, such Proposed Change. Upon receipt of any notice of a Proposed Change, Lane
Xxxxxx shall, within 21 days, provide a written statement to The Limited stating
any objection to the Proposed Change and the reasons therefor. The Limited and
Lane Xxxxxx shall work together in good faith to resolve any such objections in
a manner reasonably satisfactory to both parties. In any case, after all
Proposed Changes for a fiscal year have been submitted to Lane Xxxxxx, The
Limited shall be available for a meeting at Xxxx Xxxxxx'x request to review all
such Proposed Changes prior to the date such Proposed Changes are to take
effect. Subject to Section 3.09(b), all Proposed Changes shall take effect no
sooner than 60 days
9
after notification to Lane Xxxxxx of such Proposed Changes, but not before
February 1 of the applicable fiscal year (e.g., a Proposed Change delivered in
November 2001 would take effect on February 1, 2002).
(b) Notwithstanding any other provision of this Agreement, if a Proposed
Change for a particular Service would result in a significant increase in the
amount of Service Costs that Lane Xxxxxx would be obligated to pay under this
Agreement as compared to those that would be payable were such Proposed Change
not made, then Lane Xxxxxx shall have the right during such 60-day period
following receipt of notice of such Proposed Change to terminate such Service
upon written notice to The Limited, and such termination shall be effective
within the time period specified in Section 5.02 with respect to such Service.
If Lane Xxxxxx terminates such Service in accordance with this Section 3.09(b),
The Limited shall continue to provide such Service until the effective date of
such termination on the financial terms (or reasonable estimate thereof)
existing prior to the Proposed Change. For purposes of this paragraph, a
"significant increase" means an aggregate increase of more than 10% over the
total amount of Service Costs applicable to any such Service during the previous
Fiscal Year of The Limited; provided such increase is at least $100,000 with
respect to any allocated overhead and provided such increase is at least
$500,000 with respect to any non-allocated overhead cost (each such amount as
annually adjusted for changes pursuant to the U.S. Department of Commerce
Services Index).
ARTICLE 4
Provision of Services; Indemnification
Section 4.01. General Standard of Service. Except as otherwise agreed with
Lane Xxxxxx or described in this Agreement, and provided that The Limited is not
restricted by contract with third parties or by applicable law, The Limited
agrees that the nature, quality, and standard of care applicable to the delivery
of the Services hereunder shall be substantially the same as that of the
Services which The Limited generally provides from time to time to its
Subsidiaries and Affiliates throughout its businesses. Subject to The Limited's
express obligations under this Agreement, management of and control over the
provision of the Services (including without limitation the determination or
designation at any time of the Equipment, employees and other resources of the
Limited Entities to be used in connection with the provision of the Services)
shall reside solely with The Limited. Without limiting the generality of the
foregoing, all labor matters relating to any associates of The Limited and its
Subsidiaries (including, without limitation, any associates of any Limited
Entity involved in the provision of Services to Lane Xxxxxx) shall be within the
exclusive control of The Limited, and Lane Xxxxxx shall take no action affecting
such matters.
Section 4.02. Ownership of Products. (a) Notwithstanding any other
provision of this Agreement, title to all Products or other materials that are
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transported, shipped, warehoused or otherwise held in the custody of any Limited
Entity on behalf of Lane Xxxxxx shall at all times remain with Lane Xxxxxx, and
Xxxx Xxxxxx shall at all times be the owner of record of such Products or other
materials, and, subject to Section 4.04, shall be solely responsible for any
matters arising from such products.
(b) In connection with any obligations of any Limited Entity to a third
party, The Limited shall not permit any lien or other encumbrance to be placed
upon any Products or other materials that are transported, shipped, warehoused
or otherwise held in the custody of any Limited Entity on behalf of Lane Xxxxxx
or any of its Subsidiaries. The Limited, on behalf of all Limited Entities,
hereby waives any rights under applicable laws, rules or regulations such
Limited Entities may have as a warehouseman or otherwise with respect to the
Products or other materials that are transported, shipped, warehoused or
otherwise held in the custody of any Limited Entity on behalf of Lane Xxxxxx.
The Limited shall execute, and shall cause the other Limited Entities to
execute, any agreement, waiver, assignment or other document reasonably
requested from time to time by the lenders to Lane Xxxxxx and Parent that relate
to the matters set forth in this Section 4.02.
Section 4.03. Review Meetings. The parties agree to hold review meetings
(the "Review Meetings") not less than once each Fiscal Year of The Limited on a
date to be set by management of The Limited with the consent of Lane Xxxxxx,
which shall not be unreasonably withheld, conditioned or delayed.
Representatives of Lane Xxxxxx and of all Limited Entities which are providing
Services to Lane Xxxxxx at the time of the meeting shall attend the Review
Meeting and shall review and discuss any operational, strategic or other issues
raised by any participant with respect to the provision of the Services,
including any Proposed Changes pursuant to Section 3.09 prior to their effective
date. The parties intend that information exchanged at such Review Meetings
shall be in addition to ongoing communication between representatives of Lane
Xxxxxx and the Limited Entities with respect to the provision of the Services
hereunder.
Section 4.04. Limitation of Liability. Lane Xxxxxx agrees that none of
the Limited Entities and their respective directors, officers, agents, and
employees (each, a "Limited Indemnified Person") shall have any liability,
whether direct or indirect, in contract or tort or otherwise, to Lane Xxxxxx or
any other Person for or in connection with the Services rendered or to be
rendered by any Limited Indemnified Person pursuant to this Agreement, the
transactions contemplated hereby or any Limited Indemnified Person's actions or
inactions in connection with any such Services or transactions, except for
damages which have resulted from such Limited Indemnified Person's gross
negligence or willful misconduct in connection with any such Services, actions
or inactions.
(b) Notwithstanding the provisions of Section 4.04(a) or any other
provision of this Agreement, none of the Limited Entities shall be liable for
any special, indirect, incidental, punitive or consequential damages of any kind
11
whatsoever (including, without limitation, attorneys' fees) in any way due to,
resulting from or arising in connection with any of the Services or the
performance of or failure to perform The Limited's obligations under this
Agreement. This disclaimer applies without limitation (1) to claims arising from
the provision of the Services or any failure or delay in connection therewith;
(2) to claims for lost profits; (3) regardless of the form of action, whether in
contract, tort (including negligence), strict liability, or otherwise; and (4)
regardless of whether such damages are foreseeable or whether The Limited has
been advised of the possibility of such damages.
(c) In addition to the foregoing, Lane Xxxxxx agrees that it shall, in
all circumstances, use commercially reasonable efforts to mitigate and otherwise
minimize its and its Subsidiaries damages, whether direct or indirect, due to,
resulting from or arising in connection with any failure by The Limited to
comply fully with its obligations under this Agreement.
Section 4.05. Indemnification of The Limited by Lane Xxxxxx. Xxxx Xxxxxx
agrees to indemnify and hold harmless each Limited Indemnified Person from and
against any and all damage, loss, liability and expense (including, without
limitation, reasonable expenses of investigation and reasonable attorneys' fees
and expenses in connection with any action, suit or proceeding) ("Damages")
incurred or suffered by any Limited Indemnified Person arising out of or in
connection with Services rendered or to be rendered by any Limited Indemnified
Person pursuant to this Agreement, any transaction entered into in connection
with the Services to be performed hereunder or any Limited Indemnified Person's
actions or inactions in connection with any such Services or transactions;
provided that Lane Xxxxxx shall not be responsible for any damages of any
Limited Indemnified Person that have resulted from such Limited Indemnified
Person's gross negligence or willful misconduct in connection with any of the
advice, actions, inactions, or Services referred to above (it being understood
and agreed that the provision by any Limited Entity of any of the Services
without obtaining the consent of any party to any contract or agreement to which
any Limited Entity is a party as of the date hereof shall not constitute gross
negligence or willful misconduct by any Limited Entity; provided that the
relevant Limited Entity has used commercially reasonable efforts to obtain the
relevant consent). Notwithstanding the provisions of this Section 4.05 or any
other provision of this Agreement, Lane Xxxxxx shall not be liable for (1) any
special, indirect, incidental, punitive or consequential damages of any kind
whatsoever (including, without limitation, attorneys' fees) in any way due to,
resulting from or arising in connection with any of the Services or the
performance of or failure to perform Xxxx Xxxxxx'x obligations under this
Agreement, (2) any damage to property (other than the Products or other property
owned or held for use by Lane Xxxxxx) located within the Building (but outside
of the Premises), where such damage is caused by any Limited Entity or any of
their employees or agents; or (3) any damage to property of any Limited Entity
located within the Premises (other than property located in the Premises
pursuant to the HQ Lease or in connection with the provision of the Services
hereunder), except for damages arising out of the
12
gross negligence or willful misconduct of Lane Xxxxxx and any of its Affiliates
or any of their employees or agents.
Section 4.06. Indemnification of Lane Xxxxxx by The Limited; Mitigation of
Damages. (a) Except as set forth in Section 4.07, The Limited agrees to
indemnify and hold harmless Lane Xxxxxx and its directors, officers, agents, and
employees (each, a "Lane Xxxxxx Indemnified Person") from and against any and
all Damages incurred or suffered by any Lane Xxxxxx Indemnified Person arising
out of the gross negligence or willful misconduct of any Limited Indemnified
Person in connection with the Services rendered or to be rendered pursuant to
this Agreement.
(b) In addition to the foregoing, The Limited agrees that it shall, in
all circumstances, use commercially reasonable efforts to mitigate and otherwise
minimize its and its Affiliates' damages, whether direct or indirect, due to,
resulting from or arising in connection with any failure by Lane Xxxxxx to
comply fully with its obligations under this Agreement and any other matter for
which Lane Xxxxxx is obligated to indemnify a Limited Indemnified Person under
Section 4.05 hereunder.
Section 4.07. Notice of Certain Matters. If Lane Xxxxxx at any time
believes that The Limited is not in full compliance with its obligations under
this Agreement, Lane Xxxxxx shall so notify The Limited in writing promptly (but
not later than 30 days) after becoming aware of such possible non-compliance by
The Limited. Such notice (a "Non-Compliance Notice") shall set forth in
reasonable detail the basis for Xxxx Xxxxxx'x belief as well as Xxxx Xxxxxx'x
view as to the steps to be taken by The Limited to address the possible
non-compliance. For the 30 days after receipt of such a notice, appropriate
representatives of The Limited and Lane Xxxxxx shall work in good faith to
develop a plan to resolve the matters referred to in the Non-Compliance Notice.
If such matters are not resolved through such discussions, Lane Xxxxxx may elect
to terminate The Limited's obligation to provide or procure, and its obligation
to purchase, the Service or Services referred to in its Non-Compliance Notice in
accordance with Section 5.02. In the event such matters are resolved through
such discussions and Lane Xxxxxx does not elect to terminate such Service or
Services within 60 days of the end of the 30-day period referred to in the third
sentence of this Section 4.07, Lane Xxxxxx shall not be entitled to deliver
another Non-Compliance Notice or pursue other remedies with respect to same or
any substantially similar matter so long as The Limited complies in all material
respects with the terms of such resolution.
Section 4.08. Indemnification Procedures. (a) Each party and any other
indemnified persons shall be entitled to the indemnity described in this Article
4, provided that, in the case of third party claims, the following conditions
are met (the party obliged to provide indemnification is referred to as the
"Indemnifying Party," and the party entitled to be indemnified is referred to as
the "Indemnified Party"):
13
(1) Promptly upon learning of any claim for which
indemnification is sought from the Indemnifying Party, the Indemnified
Party shall notify the Indemnifying Party of such claim and shall
furnish to the Indemnifying Party all information known and reasonably
available to the Indemnified Party related to such claim; provided
that any failure to comply with the provisions of this clause (1)
shall not relieve the Indemnifying Party of its indemnification
obligations except to the extent such failure shall have adversely
prejudiced the Indemnifying Party.
(2) In the event of the commencement of litigation on the basis
of such claim, the Indemnified Party shall tender the defense of such
litigation to the Indemnifying Party, and the Indemnifying Party shall
promptly assume and thereafter diligently prosecute the defense of
such claim, and the Indemnifying Party shall bear all Damages in
connection therewith, using counsel selected by the Indemnifying Party
(which shall be subject to the Indemnified Party's approval, which
shall not be unreasonably withheld, conditioned or delayed). The
Indemnified Party shall be entitled to engage separate counsel and
participate in such defense; provided that the fees and expenses and
such separate counsel shall be paid by the Indemnified Party unless
the interests of the Indemnified Party and the Indemnifying Party are
in conflict so that they cannot be adequately represented by the same
counsel, in which event the reasonable fees and expenses of such
separate counsel shall be paid by the Indemnifying Party following a
final determination of the indemnification liabilities hereunder.
(3) Neither the Indemnifying Party nor the Indemnified
Party shall settle any such claim without the prior written consent of
the other party, which consent may be withheld in the other party's
sole discretion if such settlement would require the expenditure of
funds by the other party or admit on behalf of, or otherwise attribute
to, the other party any fault or misconduct. To the extent that both
The Limited and Lane Xxxxxx are required to bear damages, claims,
costs and expenses with respect to a particular claim, the intent of
The Limited and Lane Xxxxxx is that they shall bear such damages,
claims, costs and expenses in proportion to their respective degrees
of responsibility for such claim as allocated in this Article 4 or, if
not allocated herein, then in accordance with their respective
percentages of fault or responsibility for such claims.
(b) Except as otherwise specifically set forth herein, the terms of this
Article 4 shall provide the exclusive remedy for monetary damages of the Limited
Indemnified Persons and the Lane Xxxxxx Indemnified Persons with respect to
Damages associated with the matters set forth in this Agreement.
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ARTICLE 5
Term and Termination
Section 5.01. Term. Except as otherwise provided in this Article 5 or as
otherwise agreed in writing by the parties, this Agreement shall be effective as
of the date hereof and The Limited's obligation to provide or procure, and Xxxx
Xxxxxx'x obligation to purchase, a Service shall cease as of the applicable date
set forth in the applicable Schedules or such earlier date determined in
accordance with Section 5.02.
Section 5.02. Termination of the Parties.
(a) Lane Xxxxxx only may terminate Services hereunder pursuant to the
following provisions:
(i) Lane Xxxxxx may terminate any Service hereunder if The
Limited shall have failed to perform any of its material obligations
under this Agreement relating to such Service, Lane Xxxxxx has
notified The Limited in writing of such failure, and such failure
shall have continued for a period of 60 days after receipt by The
Limited of written notice of such failure; and
(ii) For any reason, upon 60 days advance written notice, Lane
Xxxxxx may terminate any Service the initial term of which as set
forth in the applicable Schedule for such Service does not extend
beyond October 1, 2002.
(iii) For any reason, upon 15 months advance written notice, Lane
Xxxxxx may terminate any Service the initial term of which as set
forth in the applicable Schedule for such Service extends beyond
October 1, 2002; provided that the effective date of such termination
shall be no earlier than the second anniversary of the date of this
Agreement.
(b) The Limited may terminate any Service at any time: (1) upon a Change
of Control of Lane Xxxxxx; provided that the effective date of such termination
shall be the later of (x) 60 days from the date of The Limited's termination
notice (which may be given after receipt of the Change of Control Notice (as
defined in Section 5.04) or otherwise upon The Limited's becoming aware of a
contemplated Change of Control of Lane Xxxxxx) and (y) the date of such Change
of Control of Lane Xxxxxx; (2) if Lane Xxxxxx shall have failed to perform any
of its material obligations under this Agreement relating to such Service, The
Limited has notified Lane Xxxxxx in writing of such failure, and such failure
shall have continued for a period of 60 days after receipt by Lane Xxxxxx of
written notice of such failure; (3) pursuant to Section 3.07(c); or (4) upon the
termination by The Limited of the HQ Lease following a default and breach by
Lane Xxxxxx.
15
Section 5.03. Effect of Termination. (a) Upon termination of any Service
pursuant to Sections 3.07(c), 3.09, 4.07, 5.02 or 5.05, or upon termination of
this Agreement in accordance with its terms, The Limited shall have no further
obligation to provide the terminated Service (or any Service, in the case of
termination of this Agreement) or to perform its obligations hereunder, and Lane
Xxxxxx shall have no obligation to purchase any such Services from The Limited,
pay any fees relating to such Services or make any other payments hereunder;
provided that this Agreement shall not in any way operate to impair or destroy
any of the rights or remedies of either party or to relieve either party of its
obligations to comply with the provisions of this Agreement which have accrued
prior to the effective date of termination. Notwithstanding such termination,
but subject to the other terms of this Agreement, (1) Lane Xxxxxx shall remain
liable to The Limited for all Service Costs incurred by any Limited Entity on
behalf of Lane Xxxxxx in connection with the provision of any Services prior to
the effective date of the termination (including without limitation (A) the
aggregate outstanding amount of any capital expenditure incurred by any Limited
Entity on behalf of Lane Xxxxxx in accordance with the terms of this Agreement,
and (B) any amounts owed under any noncancelable or other contract or agreement
entered into by any Limited Entity on behalf of Lane Xxxxxx); (2) The Limited
shall continue to charge Lane Xxxxxx for administrative and program costs
relating to benefits paid after but incurred prior to the termination of any
Service and other services required to be provided after the termination of such
Service and Lane Xxxxxx shall be obligated to pay such expenses in accordance
with the terms of this Agreement; and (3) the provisions of Articles 4, 5 and 6
shall survive any such termination indefinitely.
(b) No later than six (6) months following the effective date of any
termination of this Agreement (18 months following the effective date of any
termination of this Agreement as to amounts payable in connection with the
Services provided under Schedule IV), The Limited shall invoice Lane Xxxxxx for
the aggregate outstanding amount payable to The Limited pursuant to Section
5.03(a)(1). Lane Xxxxxx shall pay such amount within 30 days of receipt of such
invoice, by wire transfer of immediately available funds to an account
designated by The Limited.
(c) As soon as practicable, and in any event no later than 30 days after
termination of this Agreement in accordance with its terms, each party shall
return to the other party in accordance with such other party's instructions and
at such other party's expense, all of the other party's materials and
Confidential Information in its possession or control (including, without
limitation, all Confidential Information and any copies thereof).
(d) Following the delivery of a notice with respect to the termination of
any Service, The Limited and Lane Xxxxxx, commencing promptly following such
notice, shall cooperate in good faith to provide for an orderly transition of
such Service to Lane Xxxxxx or to a successor service provider in accordance
with a transition schedule reasonably requested by Lane Xxxxxx.
16
Section 5.04. Notification of Change of Control. Lane Xxxxxx shall
promptly notify The Limited of any Change of Control of Lane Xxxxxx or Change of
Control of Parent (or any definitive agreement, arrangement or plan which, if
consummated, would result in such a Change of Control), setting forth the date
and circumstances of such Change of Control and the identity of the third
party(ies) involved in such Change of Control (such notice, the "Change of
Control Notice").
Section 5.05. Change of Control of Parent. Immediately upon any Change
of Control of Parent by a Person which is engaged in the specialty retail
apparel business, The Limited may impose a 10% surcharge on all Service Costs
(other than Service Costs in connection with Schedule III, for which The Limited
may impose a 20% surcharge on such Service Costs) incurred by Lane Xxxxxx from
the date of the Change of Control of Parent, which surcharge shall be deemed to
be part of such Service Costs. If The Limited imposes such surcharge, then from
and after the date such surcharge is imposed, Lane Xxxxxx shall have the right
to terminate the Services under Schedule III upon twelve months advance written
notice to The Limited.
ARTICLE 6
Miscellaneous
Section 6.01. Confidential Information; Non-Solicitation. (a) Confidential
Information. Either party may provide to the other party certain confidential,
proprietary and trade secret business and technical information in connection
with the performance of this Agreement ("Confidential Information"). All
information shall be presumed to be Confidential Information unless such
information is generally available to the public (other than by the receiving
party in violation of this Section 6.01) or if a disclosing party acknowledges
in writing that such information is not Confidential Information. Each party
shall preserve the confidentiality of all Confidential Information that is
provided by the other party in connection with this Agreement, and shall not,
without the prior written consent of the other party, disclose, display or make
available to any Person, or use for its own or any other Person's benefit, other
than as necessary in performance of or its obligations under this Agreement, any
Confidential Information of the other party; provided that a party may disclose
such portion of the Confidential Information relating to the other party to the
extent, but only to the extent, the disclosing party reasonably believes that
such disclosure is required under law or the rules of a securities exchange;
provided, further that the disclosing party first notifies the other party
hereto of such requirement and allows such party a reasonable opportunity to
seek a protective order or other appropriate remedy to prevent such disclosure.
The parties shall exercise a commercially reasonable standard of care to
safeguard all Confidential Information of the other party against improper
disclosure or use. The parties acknowledge that money damages would not be a
sufficient remedy for any
17
breach of the provision of this Section 6.01 and that the non-breaching party
shall be entitled to equitable relief in a court of law in the event of, or to
prevent, a breach or threatened breach of this Section 6.01.
(b) Notwithstanding the provisions of Section 6.01, upon a Change of
Control of Lane Xxxxxx or a Change of Control of Parent, Lane Xxxxxx shall (1)
promptly (but in no event later than 30 days after the occurrence of such Change
of Control) return to The Limited or destroy all Confidential Information in its
possession (or that of any of its Affiliates) relating to The Limited or any of
its Affiliates, (2) no longer be permitted to use such Confidential Information
in its business or operations (or the business or operations of any of its
Affiliates) and (3) promptly (but in no event later than 30 days after the
occurrence of such Change of Control) deliver a written certificate to The
Limited executed by Xxxx Xxxxxx'x Chief Executive Officer expressly
acknowledging the obligations set forth in clauses (1) and (2) of this sentence
and certifying that Lane Xxxxxx has and will continue to adhere to such
requirements.
(c) Third-Party Non-Disclosure Agreements. To the extent that any third-
party proprietor of information or software to be disclosed or made available to
Lane Xxxxxx in connection with performance of Services requires a specific form
of non-disclosure agreement as a condition of its consent to use of the same for
the benefit of Lane Xxxxxx or to permit Lane Xxxxxx access to such information
or software, Lane Xxxxxx will execute (and will cause Lane Xxxxxx employees to
execute, if required) any such form.
(d) Non-Solicitation. From, and until the expiration of six (6) months
from the termination of all of the Services under this Agreement, Lane Xxxxxx
shall not, and shall cause its Affiliates not to, without the prior written
approval of The Limited, directly or indirectly solicit for employment any
person who is an employee of The Limited or any of its Affiliates and who has
performed any of the Services under this Agreement or with whom the Lane Xxxxxx
or any of its Affiliates otherwise has had any contact at any time during the
performance of the Services hereunder; provided that the foregoing shall not
prohibit solicitation conducted through an independent employment or recruitment
firm (so long as the firm was not directed to solicit such person or the
personnel of The Limited or its Affiliates generally) or as a result of the use
of a general solicitation (such as an advertisement) not specifically directed
to employees of The Limited or its Affiliates.
Section 6.02. Audits. (a) Throughout the term of this Agreement and for
one (1) year thereafter, Lane Xxxxxx shall have the right once within each 12
month period, at its own expense and on thirty (30) days advance written notice
to The Limited, to have its auditors or other representatives audit the books
and records of any Limited Entity for the sole purpose of certifying the
accuracy of the Service Costs and Cost Components charged by The Limited to Lane
Xxxxxx in accordance with the terms of this Agreement for the preceding 12-month
period. In the event such auditing indicates any overpayment or underpayment of
18
amounts paid to The Limited by Lane Xxxxxx, the applicable party shall pay the
other party for the amount of such overpayment or underpayment, as the case may
be, plus interest accruing monthly from the date of such overpayment or
underpayment until the settlement of such amount is made at the greater of (1)
12% and (2) the Reference Rate plus 5%, in each case per annum compounded
monthly from the relevant payment date through the date of payment (provided
that such interest rate shall not exceed the maximum rate permitted by
applicable law), within thirty (30) days following the date of such audit.
(b) Notwithstanding any other provision of this Agreement, upon a Change
of Control of Parent by a Person which is engaged in the specialty retail
apparel business, (1) Lane Xxxxxx only shall be permitted to exercise its rights
under Section 6.02(a) by employing the services of a third party auditor
reasonably acceptable to The Limited, (2) Lane Xxxxxx and its Affiliates shall
have no access to such auditor's workpapers and (3) such auditor shall agree in
writing to be bound by a confidentiality agreement with respect to the foregoing
on terms reasonably acceptable to The Limited.
Section 6.03. No Agency. (a) Nothing in this Agreement shall constitute
or be deemed to constitute a partnership, agency or joint venture between the
parties hereto or, except as is necessary for performance of the Services, shall
constitute or be deemed to constitute any party the agent or employee of the
other party for any purpose whatsoever and neither party shall have authority or
power to make any statements, representations or commitments of any kind, take
any action which shall be binding on the other, or bind the other or to contract
in the name of, or create a liability against, the other in any way or for any
purpose.
(b) Nothing in this Agreement shall establish or be deemed to establish
any fiduciary relationship between the parties hereto. The parties' respective
rights and obligations hereunder shall be limited to the contractual rights and
obligations expressly set forth herein on the terms and conditions set forth
herein.
(c) Except as otherwise specifically provided for herein, each party shall
be responsible for compliance with all applicable laws, rules, regulations and
orders of governmental authorities, for obtaining required licenses and permits,
for the payments of all applicable taxes and for the conduct and compensation of
its employees.
Section 6.04. Force Majeure. (a) Neither party shall be held liable or
responsible to the other party nor be deemed to have defaulted under or breached
this Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party, including, but not limited to,
fire; floods; storms; embargoes, war or acts of war (declared or undeclared);
insurrections, riots or other civil commotions; strikes, lockouts, or other
labor disturbances; explosions; sabotage; accidents; governmental orders;
changes in statutes, rules or regulations; delays by unaffiliated suppliers or
carriers; shortages
19
of fuel, power, raw materials or components; acts of God; or acts, omissions, or
delays in acting by any governmental or military authority, or the other party;
provided, however, it is understood that this Section 6.04 is intended only to
suspend and not discharge a party's obligations under this Agreement, and that
when the causes of the failure or delay are removed or alleviated the affected
party shall resume performance of its obligations hereunder. A party that is
unable to fulfill its obligations due to any "force majeure" event shall (1)
promptly after the occurrence thereof give notice to the other party with
details of such event and (2) use its commercially reasonable best efforts to
remedy such event as promptly as practicable. If The Limited is unable to
provide any of the Services due to force majeure, both parties shall exert
commercially reasonable best efforts to cooperatively seek a solution that is
mutually satisfactory, such as the subcontracting of all or part of the
provision of the Services under the supervision of The Limited for the period of
time during or affected by the force majeure.
(b) Promptly on becoming aware of force majeure causing a delay in
performance or preventing performance of any obligations imposed by this
Agreement (and termination of such delay), Lane Xxxxxx shall have the right, but
not the obligation, to engage Subcontractors to perform such obligations for the
duration of such period that force majeure delays or prevents the performance of
such obligation by a party.
Section 6.05. Entire Agreement; Successors and Assigns. (a) This Agreement
(including the Schedules constituting a part of this Agreement) and any other
writing signed by authorized representatives of the parties after the date
hereof that specifically references this Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof. This
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
(b) This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. Except as expressly
provided herein, neither party may assign, delegate or otherwise transfer any
rights or duties under this Agreement to any party without the prior written
consent of the other party hereto.
Section 6.06. Notices. Any notice, instruction, direction or demand under
the terms of this Agreement required to be in writing shall be duly given upon
delivery, if delivered by hand, facsimile transmission (with the original copy
promptly thereafter delivered by mail), or mail, to the following addresses:
(a) If to Lane Xxxxxx or Parent, to:
Charming Shoppes, Inc.
20
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000.
Attention: Xxxxx X. Xxxxx
with a copy (which shall not constitute notice) to:
Drinker, Xxxxxx & Xxxxx LLP
Xxx Xxxxx Xxxxxx
00xx & Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx
(b) If to The Limited, to:
The Limited, Inc.
Three Limited Parkway
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
with a copy (which shall not constitute notice) to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
or to such other addresses or telecopy number and with such other copies, as
such party may hereafter specify for the purpose by notice to the other parties.
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.
Each such notice, request or other communication shall be effective (1) if given
by telecopy, when such telecopy is transmitted to the telecopy number specified
in this Section and evidence of receipt is received or (2) if given by any other
means, upon delivery or refusal of delivery at the address specified in this
Section 6.06.
Section 6.07. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without regard to conflict of
laws and rules of such state.
21
Section 6.08. Jurisdiction. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated thereby shall
be brought in the United States District Court for the Southern District of New
York or any New York State court sitting in New York City, Borough of Manhattan,
so long as one of such courts shall have subject matter jurisdiction over such
suit, action or proceeding, and each of the parties hereby irrevocably consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding which is brought in any such
court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 6.06 shall be deemed effective service of process on such party.
Section 6.09. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 6.10. Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not render
the entire Agreement invalid. Rather, the Agreement shall be construed as if not
containing the particular invalid or unenforceable provision, and the rights and
obligations of each party shall be construed and enforced accordingly.
Section 6.11. Amendment. (a) This Agreement may not be amended or modified
except in writing signed by the parties hereto.
(b) Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the party or parties entitled to the benefit
thereof. Any such waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if it is authorized in writing by the other party. No
course of dealing, manner of performance or failure of any party hereto to
enforce at any time any provision of this Agreement shall be construed to be a
waiver of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of any party thereafter to enforce
each and every such provision in accordance with its terms. No wavier of any
breach of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
Section 6.12. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which, when
22
taken together, shall constitute one agreement. An executed copy or counterpart
hereof delivered by facsimile shall be deemed an original instrument.
Section 6.13. Headings; Interpretation and Construction. The headings to
sections of this Agreement and the table of contents to this Agreement are
inserted for convenience of reference only and in no way define, limit or
describe the scope of this Agreement or the meaning of any provisions of this
Agreement. The words "include," "includes," "including" and "such as" are deemed
to be followed by the phrase ", without limitation,". All references to "$" or
"dollars" shall be to United States dollars and all references to "days" shall
be to calendar days unless otherwise specified. Any reference to the masculine,
feminine or neuter gender shall include such other genders, and references to
the singular or plural shall include the other, in each case unless the context
otherwise requires. The Schedules hereto shall be deemed to be incorporated in
and an integral part of this Agreement.
Section 6.14. Mutual Contribution. The parties to this Agreement and
their counsel have mutually contributed to its drafting. Consequently, no
provision of this Agreement shall be construed against any party on the ground
that party drafted the provision or caused it to be drafted.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives.
THE LIMITED, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President-Treasury,
Mergers and
Acquisitions
LBH, INC.
By: /s/ Xxxxxxx XxXxxxxx
--------------------------------
Name: Xxxxxxx XxXxxxxx
Title: Executive Vice President
Undertaking and Guarantee:
The undersigned hereby guarantees the
performance of all of the obligations of
LBH, Inc. under this Agreement, and, in
addition, agrees to undertake the obligations
set forth in Section 5.04 and Section 6.01.
CHARMING SHOPPES, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
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