EXHIBIT 10.39
ASSET PURCHASE AGREEMENT
dated as of
August 29, 1996,
among
Xxxxx Xxxxxxxxxx & Co. AG,
Xxxxx Xxxxxxxxxx, Inc.
and
St. Xxxx Knits, Inc.
TABLE OF CONTENTS
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SECTION PAGE
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Recitals
ARTICLE 1
PURCHASE AND SALE OF ASSETS.............. 1
1.1 Transfer of Assets.......................... 1
1.1.1 Devices............................. 1
1.1.2 Other Personal Property............. 1
1.1.3 Patents............................. 2
1.1.4 TFA Technology...................... 2
1.1.5 Books and Records................... 2
ARTICLE 2
CLOSING/PURCHASE PRICE/
ASSUMPTION OF LIABILITIES......... 2
2.1 The Closing................................. 2
2.2 Purchase Price.............................. 2
2.3 Payment to Sellers on Closing Date.......... 2
2.4 Instruments of Conveyance and Transfer...... 3
2.5 Non-Assumption of Liabilities............... 3
2.6 Allocation.................................. 3
2.7 Sales and Use Tax........................... 3
2.8 Offset...................................... 3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS. 5
3.1 Organization, Corporate Power and Authority. 5
3.2 Authorization of Agreements................. 5
3.3 Effect of Agreement......................... 5
3.4 Governmental Approvals...................... 6
3.5 Permits..................................... 6
3.6 Assigned Contracts.......................... 6
3.7 Title/Condition of Property................. 6
3.8 Inventory................................... 6
3.9 Tax Matters................................. 7
3.10 Legal Proceedings........................... 7
3.11 Insurance................................... 7
3.12 Compliance with Law......................... 7
3.13 Employee Benefits........................... 7
3.14 Environmental Matters....................... 8
3.15 Intellectual Property....................... 8
3.16 Accuracy of Information..................... 9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER. 9
4.1 Organization, Corporate Power and Authority. 9
4.2 Authorization of Agreement.................. 10
4.3 Effect of Agreement......................... 10
4.4 Governmental Approvals...................... 10
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ARTICLE 5
COVENANTS WITH RESPECT TO
CONDUCT OF SELLER PRIOR TO CLOSING.... 10
5.1 Access........................................ 10
5.2 Material Adverse Changes...................... 11
5.3 Conduct of Business........................... 11
5.4 Confidentiality............................... 11
5.5 Customer List................................. 12
ARTICLE 6
ADDITIONAL CONTINUING COVENANTS..... 12
6.1 Nondisclosure of Proprietary Data............. 12
6.2 Transition.................................... 12
6.3 Covenant Not to Xxx........................... 13
6.4 Confidentiality Obligations Relating to
Intellectual Property......................... 13
6.5 Right of First Refusal........................ 13
ARTICLE 7
CONDITIONS OF PURCHASE.......... 15
7.1 General Conditions............................ 15
7.2 Conditions to Obligations of Buyer............ 15
7.3 Conditions to Obligations of Seller........... 17
ARTICLE 8
TERMINATION OF OBLIGATIONS; SURVIVAL... 17
8.1 Termination of Agreement...................... 17
8.2 Effect of Termination......................... 18
ARTICLE 9
INDEMNIFICATION............. 18
9.1 Obligations of Sellers........................ 18
9.2 Obligations of Buyer.......................... 19
9.3 Procedure..................................... 19
9.4 Notice by Sellers............................. 20
9.5 Limitation on Indemnity....................... 20
ARTICLE 10
GENERAL................. 20
10.1 Amendments; Waivers........................... 20
10.2 Schedules; Exhibits; Integration.............. 20
10.3 Best Efforts; Further Assurances.............. 20
10.4 Governing Law................................. 21
10.5 No Assignment................................. 21
10.6 Headings...................................... 21
10.7 Counterparts.................................. 21
10.8 Publicity and Reports......................... 21
10.9 Remedies Cumulative........................... 22
10.10 Parties in Interest........................... 22
10.11 Notices....................................... 22
10.12 Expenses and Attorneys Fees................... 23
10.13 Survival...................................... 24
10.14 Bulk Transfers................................ 24
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ARTICLE 11
DEFINITIONS.............. 24
iii
Exhibits
EXHIBIT A-1 Xxxx of Sale
EXHIBIT A-2 Xxxx of Sale and Assumption Agreement
EXHIBIT B-1 Opinion of Counsel to Xxxxxxxxxx U.S.
EXHIBIT B-2 Opinion of Counsel to Xxxxxxxxxx
EXHIBIT C TFA License Agreement
EXHIBIT D General Technology License Agreement
EXHIBIT E Employment Agreement
EXHIBIT F Form of Opinion of Counsel to Buyer
Schedules
1.1.1 Devices
1.1.2 Personal Property, Including Inventory
1.1.3 Patents
2.6 Allocation of Purchase Price
3.3 Violation of Material Agreements
3.4 Governmental Approvals
3.5 Permits
3.6 Assigned Contracts
3.7 Encumbrances
3.11 Insurance
3.13 Certain Employee Arrangements
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of August 29, 1996,
among St. Xxxx Knits, Inc., a California corporation ("Buyer"), Xxxxx Xxxxxxxxxx
& Co. AG, a Swiss corporation ("Xxxxxxxxxx"), and Xxxxx Xxxxxxxxxx, Inc., a
Delaware corporation ("Xxxxxxxxxx U.S." and, together with Xxxxxxxxxx,
"Sellers"). Capitalized terms used herein without definition are defined in
Article 11.
R E C I T A L S
WHEREAS, Sellers own certain assets more particularly described in
this Agreement used by them in their business; and
WHEREAS, Sellers desire to sell, and Buyer desires to buy, those
assets for the consideration and on the terms and conditions described herein.
A G R E E M E N T
In consideration of the mutual promises contained herein and intending
to be legally bound, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 TRANSFER OF ASSETS. Subject to the terms and conditions of this
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Agreement, on the Closing Date, each Seller will sell, transfer, assign and
deliver to Buyer or its affiliate, and Buyer or its affiliate will purchase from
each Seller, all of such Seller's worldwide right, title and interest in and to
the following assets (collectively, the "Assets"):
1.1.1 DEVICES. The machines, devices, tools, apparatus and equipment
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identified on Schedule 1.1.1 hereto (collectively, the "Devices");
1.1.2 OTHER PERSONAL PROPERTY. Tangible personal property other than
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the Devices, including, but not limited to, supplies and inventory
(including, but not limited to, finished goods, work-in-process and raw
materials; collectively, the "INVENTORY"), a list of which as of August 15,
1996 is set forth in Schedule 1.1.2 hereto;
1.1.3 PATENTS. United States Patent No. 4,753,702, issued June 28,
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1988, entitled "Method and Apparatus for Sticking a Multiplicity of
Ornamental Pieces onto a Base Sheet Material," and such other United
States and foreign patents and patent applications as are identified on
Schedule 1.1.3 hereto, and all continuations, continuations-in-part,
extensions, divisions, substitutions, additions, reexaminations and
reissues thereof (collectively, the "Patents");
1.1.4 TFA TECHNOLOGY. All trade secrets, information, know-how,
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show-how, processes, process parameters, methods, practices, designs,
fabrication techniques, technical plans, compilations, creations, data,
algorithms, programs, documentation, and the like, known by Sellers as of
the Closing Date and related to the Patents and methods and apparatus for
applying articles to a web (collectively, the "TFA Technology"); and
1.1.5 BOOKS AND RECORDS. All books and records and all files,
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documents, papers and agreements (including, but not limited to, those
contained in computerized storage media), pertaining directly to the
Assets, but excluding the corporate records of Sellers.
ARTICLE 2
CLOSING/PURCHASE PRICE/
ASSUMPTION OF LIABILITIES
2.1 THE CLOSING.
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The Closing will take place at the offices of O'Melveny & Xxxxx LLP,
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx, at 10:00 a.m.
on September 30, 1996, or on such other date as may be mutually agreed to by the
parties.
2.2 PURCHASE PRICE.
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Subject to the terms and conditions of this Agreement, Buyer agrees to
acquire the Assets from Sellers and to pay $2,600,000 (the "PURCHASE PRICE"),
which Purchase Price shall be payable in the amount of $1,850,000 in cash at the
Closing and, subject to the provisions of Section 2.8 below, the amount of
$250,000 and $500,000 in cash six months and one year, respectively, after the
Closing Date.
2.3 PAYMENT TO SELLERS ON CLOSING DATE. Sellers shall provide wire
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transfer instructions to Buyer not less than two (2) business days prior to the
Closing Date. On the Closing Date, Buyer shall pay $1,850,000 of the Purchase
Price to Sellers by wire transfer in immediately available funds.
2.4 INSTRUMENTS OF CONVEYANCE AND TRANSFER. On the Closing Date, Sellers
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shall execute and deliver or cause to be
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delivered to Buyer (a) the Bills of Sale in the form attached hereto as Exhibits
A-1 and A-2, (b) patent assignments in such forms as are reasonably acceptable
to Sellers and Buyer, (c) the documents and other agreements set forth in
Section 7.2, and (d) such other documents as may be reasonably requested by
Buyer in order to carry out the Transactions.
2.5 NON-ASSUMPTION OF LIABILITIES. Buyer is not assuming, and shall not
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be deemed to have assumed, any liability or obligation of either Seller or any
Affiliate of either Seller, of any kind or nature, whether absolute, contingent,
accrued or otherwise, known or unknown, and whether arising before or after the
Closing Date, including, but not limited to: (i) liabilities for Taxes with
respect to any period or portion thereof ending on or prior to the Closing Date;
(ii) liabilities for any pension, profit-sharing or welfare benefit plans or
arrangement, oral or written, maintained by either Seller or its Affiliates; or
(iii) any liabilities relating to employees of either Seller or its Affiliates,
whether for severance pay or otherwise.
2.6 ALLOCATION OF PURCHASE PRICE. Buyer and Sellers shall allocate the
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Purchase Price to broad categories constituting components of the Assets in
accordance with the basis of allocation set forth in Schedule 2.6. Each party
will report the Transactions in accordance with the agreed upon allocation.
2.7 SALES AND USE TAX. Sellers and Buyer shall each pay one-half of any
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and all sales, transfer or use tax due with regard to, the Transactions.
2.8 OFFSET.
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(A) RIGHT OF OFFSET. If any matter as to which Buyer may be able to
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assert a claim against Sellers under this Agreement is pending or
unresolved at the time the post-Closing payments are due from Buyer to
Sellers under Section 2.2 above, Buyer shall have the right, in addition to
other rights and remedies (whether under this Agreement or applicable Law),
to withhold from such payment an amount equal to the amount of the claim
until such matters are resolved. If it is finally agreed or determined
that Buyer is entitled to recover on such claims, the amount of such claims
may be offset against the retained payments and the remainder, if any,
shall promptly be delivered to Sellers pursuant to this Agreement, together
with interest on such remainder payable from the Closing Date until paid at
the rate of 7.5% per annum.
(B) Negotiation Between Executives. The parties shall attempt in good
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faith to resolve any dispute
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arising out of or relating to Section 2.8(a) of this Agreement promptly by
negotiation between executives who have authority to settle the controversy
and who are at a higher level of management (if any) than the persons with
direct responsibility for administration of this Agreement. Any party may
give the other party written notice of any dispute not resolved in the
normal course of business. Within 15 days after delivery of the notice the
receiving party shall submit to the other a written response. The notice
and the response shall include (i) a statement of each party's position and
a summary of arguments supporting that position, and (ii) the name and
title of the executive who represents that party and of any other person
who will accompany the executive. Within 10 days after delivery of the
disputing party's notice, the executives of both parties shall meet at a
mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one party to the other will be
honored. If the matter has not been resolved within 45 days of the
disputing party's notice, or if the parties fail to meet within 10 days of
such notice, either party may initiate arbitration of the controversy or
claim as provided hereinafter. All negotiations pursuant to this clause
are confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence of California
and any other applicable rules of evidence.
(C) Arbitration. Any dispute arising out of or relating to Section
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2.8(a) of this Agreement, which has not been resolved by the nonbinding
meet and confer provisions provided in subsection (b) within 90 days of the
initiation of such procedure, shall be settled by arbitration in accordance
with the then-current End Dispute-Judicial Arbitration and Mediation
Services (JAMS) rules for arbitration of business disputes. The parties
shall use their best efforts to select a single arbitrator. In the event
that the parties cannot agree on a single arbitrator within 10 days of
initiation of the arbitration procedure, the selection of the arbitrator
shall be referred to JAMS, which shall appoint a single arbitrator having
substantial experience in sophisticated business matters. The arbitration
shall be governed by the California Code of Civil Procedure Section 1280 et
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seq. and the parties intend this procedure to be specifically enforceable
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in accordance with such provisions. Judgment upon the award rendered by
the arbitrator may be entered by any court having jurisdiction thereof.
The place of arbitration shall be Orange County, California. The
arbitrator may award equitable relief in those circumstances where monetary
4
damages would be inadequate. The arbitrator shall be required to follow
the applicable law as set forth in the governing law section of this
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Except as otherwise indicated on schedules attached hereto, each
Seller represents, warrants and agrees:
3.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY.
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Each Seller is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and is
duly qualified to do business as a foreign corporation in the jurisdictions in
which it conducts its business, except where the failure so to qualify will not
have a material adverse effect on the Assets. Each Seller has all requisite
corporate power and authority to own, operate and lease the Assets, to execute
and deliver the Transaction Documents and to perform its obligations thereunder.
3.2 AUTHORIZATION OF AGREEMENTS. The execution, delivery and performance
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by each Seller of the Transaction Documents, and the consummation by it of the
Transactions, have been duly authorized by all necessary corporate action by
such Seller. This Agreement has been, and each other Transaction Document will
be at the Closing, duly executed and delivered by each Seller and constitutes,
or will, when delivered, constitute, the legal, valid and binding obligations of
Seller, enforceable against such Seller in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws and equitable principles relating to or
limiting creditors' rights generally.
3.3 EFFECT OF AGREEMENT. The execution, delivery and performance by each
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Seller of the Transaction Documents, and the consummation by it of the
Transactions, will not violate the charter documents or bylaws of such Seller or
any Law to which such Seller is subject, or any judgment, award or decree or,
except as set forth on Schedule 3.3, any material indenture, material agreement
or other material instrument to which such Seller is a party, or by which such
Seller or the Assets are bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under, any such
indenture, agreement or other instrument, or result in the creation or
imposition of any Encumbrance of any nature whatsoever upon any of the Assets.
3.4 GOVERNMENTAL APPROVALS. Except as set forth on Schedule 3.4, no
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Approval or Order or action of or filing with
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any Governmental Entity or other third party is required to be obtained by
either Seller for the execution and delivery by such Seller of the Transaction
Documents or the consummation by it of the Transactions.
3.5 PERMITS. Schedule 3.5 sets forth each Permit (and applications
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therefore) obtained by each Seller in connection with the conduct of its
business together with the name of the Governmental Entity issuing such Permit.
Such Permits are valid and in full force and effect. Except as set forth in
Schedule 3.5, all such Permits are freely transferable by such Seller, and upon
Closing Buyer will have all right, title and interest of the holder thereof. To
the best knowledge of Sellers, all Permits necessary in connection with the
operation of their business as presently conducted have been obtained.
3.6 ASSIGNED CONTRACTS.
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Schedule 3.6 lists each Contract (i) to which either Seller is a party
that is related primarily to the Assets or (ii) by which any of the Assets are
bound (the "Assigned Contracts"). Each Assigned Contract is valid and
subsisting; each Seller has duly performed all its obligations thereunder to the
extent that such obligations to perform have accrued; and no breach or default,
alleged breach or default, or event which would (with the passage of time,
notice or both) constitute a breach or default thereunder by either Seller, or,
to the best knowledge of Sellers, any other party or obligor with respect
thereto, has occurred or as a result of the Transactions will occur. True
copies of the Assigned Contracts listed on Schedule 3.6, including all
amendments and supplements thereto, have been delivered to Buyer.
3.7 TITLE/CONDITION OF PROPERTY.
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Sellers have good and marketable title to all of the Assets, free of
Encumbrances, except the Encumbrances in favor of Sellers' lenders listed on
Schedule 3.7 attached hereto. All of the Assets are in good operating condition
and repair.
3.8 INVENTORY.
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Schedule 1.1.2 is a true and correct list of the Inventory as of
August 15, 1996.
3.9 TAX MATTERS.
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Each Seller has timely filed or will file (or, where permitted or
required, its direct or indirect parents have timely filed or will file) all Tax
Returns required of it and has paid all Taxes due for all periods or portions of
periods ending on or before the Closing Date (except as provided in
6
the following sentence). Adequate provision has been made in the books and
records of Sellers, and for all Taxes whether or not due and payable and whether
or not disputed to the extent not paid.
3.10 LEGAL PROCEEDINGS.
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There is no Order or Action pending, or, to the best knowledge of
either Seller, threatened, against or affecting either Seller or the Assets that
individually or when aggregated with one or more other Orders or Actions has or
would reasonably be expected to have a material adverse effect on the Assets or
on either Seller's ability to perform its obligations under the Transaction
Documents.
3.11 INSURANCE.
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Each Seller is, and at all times during the past two years has been,
insured with reputable insurers against all risks normally insured against by
companies engaged in similar businesses. Schedule 3.11 is a true and correct
list of the insurance policies and bonds of Sellers. All such insurance
policies and bonds are in full force and effect. Neither Seller is in default
under any such policy or bond and has received no notice of cancellation of any
such policy or bond.
3.12 COMPLIANCE WITH LAW.
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To the best knowledge of Sellers, each Seller has conducted its
business in accordance with applicable Laws.
3.13 EMPLOYEE BENEFITS.
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(A) Employee Benefit Plans, Collective Bargaining and Employee
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Agreements, and Similar Arrangements.
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(1) Xxxxxxxxxx U.S. is in full compliance with the applicable
provisions of ERISA and all other Laws applicable with respect to all employee
benefit plans, agreements and arrangements and to all group health plans.
Xxxxxxxxxx U.S. had performed all of its obligations under all such plans,
agreements and arrangements. There are no Actions (other than routine claims
for benefits) pending or threatened against such plans or their assets, or
arising out of such plans, agreements or arrangements, and no facts exist which
could give rise to any such Actions.
(2) Except as set forth on Schedule 3.13, each of the plans,
agreements or arrangements can be terminated by Xxxxxxxxxx U.S. within a period
of 30 days following the Closing Date, without payment of any additional
compensation or amount or the additional vesting or acceleration of any
benefits.
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(B) Qualified Stock, Pension and Profit-sharing Plans.
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Xxxxxxxxxx U.S. has no plan that is a stock bonus, pension or
profit-sharing plan within the meaning of Section 401(a) of the Code.
(C) Pension Plans (Defined Contribution and Benefit).
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Xxxxxxxxxx U.S. has no plan that is a plan subject to Title IV of
ERISA.
(D) Multiemployer Plans.
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Xxxxxxxxxx U.S. has no plan that is a "multiemployer plan" (within
the meaning of Section 3(37) of ERISA). Xxxxxxxxxx U.S. has never contributed to
or had an obligation to contribute to any multiemployer plan.
(E) Xxxxxxxxxx/ERISA Affiliates.
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Xxxxxxxxxx has no U.S. employees and is not subject to ERISA.
Xxxxxxxxxx U.S. has no Affiliates that are, or have at any time been, subject to
ERISA.
3.14 ENVIRONMENTAL MATTERS.
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Each Seller has maintained all documents and records and made all
filings required by, and has complied with all applicable Laws relating to air
or water quality, waste management, Hazardous Substances, or the protection of
health or the environment. The air and water emission, discharge and waste
disposal practices used by Seller fully comply with, and have at all times fully
complied with, all applicable Laws in all material respects. None of the Assets
is contaminated with any Hazardous Substance.
3.15 INTELLECTUAL PROPERTY.
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(A) Xxxxxxxxxx is the owner of all right, title and interest in and to
the Patents and the TFA Technology;
(B) To the best of Sellers' knowledge, the Patents are valid, and
Sellers are aware of no facts that would invalidate or render unenforceable any
of the Patents;
(C) To the best of Sellers' knowledge, the TFA Technology is an
exclusive secret of Sellers, and all information, know-how, show-how, processes,
process parameters, methods, practices, designs, fabrication techniques,
technical plans, compilations, creations, data, algorithms, programs,
documentation, and the like, known by
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Sellers as of the Closing Date and related to the TFA Technology is exclusively
known by Sellers and preserved as secret and confidential, except as disclosed
in the Patents.
(C) Neither Seller is aware of any claims (either threatened or
actual) that the TFA Technology or the General Technology or the Devices
infringe any rights of any third parties;
(D) Neither Seller is aware of any patents or other third party rights
that would interfere with Buyer's right to practice the TFA Technology or the
General Technology or to use the Devices;
(E) To the best of Sellers' knowledge, Buyer's practice of the TFA
Technology and the General Technology and use of the Devices will not infringe
any rights of any third parties; and
(F) Xx. Xxxxxxx Xxxxxx is thoroughly familiar with the TFA Technology,
the Devices and the General Technology and for 5 years has been responsible for
Sellers' use of the TFA Technology, the Devices and the General Technology,
including the training of Sellers' employees and/or agents in such use.
3.16 ACCURACY OF INFORMATION.
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To the best knowledge of Sellers, all information furnished by or on
behalf of Sellers to Buyer in connection with the transactions contemplated by
this Agreement is true and complete in all material respects and does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make any statement therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents, warrants and agrees as follows:
4.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Buyer is a corporation
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duly organized, validly existing and in good standing under the laws of the
state in which it is incorporated and is duly qualified to do business as a
foreign corporation in the jurisdictions in which Buyer conducts its business,
except where the failure so to qualify will not have a material adverse effect
on Buyer's ability to perform its obligations under the Transaction Documents.
Buyer has all requisite corporate power and authority to acquire, own, lease and
operate the Assets, to conduct its business after the Closing, to execute and
deliver the Transaction Documents to which it is a party and to perform its
obligations thereunder.
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4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
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by Buyer of the Transaction Documents to which it is a party, and the
consummation by it of the Transactions, have been duly authorized by all
necessary corporate action by Buyer. This Agreement has been, and each other
Transaction Document to which Buyer is a party will be at the Closing, duly
executed and delivered by Buyer and constitute, or will, when delivered,
constitute, the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws and equitable principles relating to or limiting creditors' rights
generally.
4.3 EFFECT OF AGREEMENT. The execution, delivery and performance by Buyer
-------------------
of the Transaction Documents to which it is a party, and the consummation by it
of the Transactions, will not violate the charter documents or bylaws of Buyer
or any Law to which Buyer is subject, or any judgment, award or decree or any
material indenture, material agreement or other material instrument to which
Buyer is a party, or by which Buyer or its properties or assets are bound, or
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under, any such indenture, agreement or other
instrument, or result in the creation or imposition of any Encumbrance of any
nature whatsoever upon any of the properties or assets of Buyer.
4.4 GOVERNMENTAL APPROVALS. No Approval or Order or action of or filing
----------------------
with any Governmental Entity is required to be obtained by Buyer for the
execution and delivery by Buyer of the Transaction Documents to which it is a
party or the consummation by it of the Transactions.
ARTICLE 5
COVENANTS WITH RESPECT TO
CONDUCT OF SELLER PRIOR TO CLOSING
5.1 ACCESS.
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Subject to applicable Laws and fiduciary and privacy obligations of
which Sellers will advise Buyer, Sellers shall authorize and permit Buyer and
its representatives (which term shall be deemed to include its independent
accountants and counsel) to have reasonable access during normal business hours,
upon reasonable notice and in such manner as will not unreasonably interfere
with the conduct of Sellers' business, to Sellers' properties, books, records,
operating instructions and procedures relating to the Assets and all other
information with respect to the Assets as Buyer may from time to time reasonably
request.
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5.2 MATERIAL ADVERSE CHANGES.
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Each Seller will promptly notify Buyer of any event of which such
Seller obtains knowledge which has had or might reasonably be expected to have a
material adverse effect on the Assets or which if known as of the date hereof
would have been required to be disclosed to Buyer.
5.3 CONDUCT OF BUSINESS.
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Between the date of this Agreement and the Closing Date, each Seller
covenants and agrees that it shall not without the prior consent in writing of
Buyer:
(A) conduct its business in any manner except in the ordinary course
consistent with past practices; or
(B) accept any purchase order for products to be manufactured in Los
Angeles, California that will not be either (i) completed and shipped on or
prior to September 30, 1996 or (ii) transferred to St. Gallen, Switzerland on or
prior to September 30, 1996 for completion and shipping in compliance with the
terms and conditions of the TFA License Agreement attached hereto as Exhibit C;
(C) sell, transfer, mortgage, encumber or otherwise dispose of any
Assets, except for dispositions of Inventory in the ordinary course of business.
5.4 CONFIDENTIALITY.
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All non-public information disclosed by any party (or its
representatives) whether before or after the date hereof, in connection with the
transactions contemplated by, or the discussions and negotiations preceding,
this Agreement to any other party (or its representatives) shall be kept
confidential by such other party and its representatives and shall not be used
by any such Persons other than as contemplated by this Agreement, except to the
extent that such information may otherwise be required by Law to be used or
disclosed, such information is included in any filing with the Securities and
Exchange Commission, or such duty as to confidentiality is waived in writing by
the other party. If this Agreement is terminated, each party shall use all
reason able efforts to return upon written request from the other party all
documents (and reproductions thereof) received by it or its representatives from
such other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include information not within the exceptions
contained in the first sentence of this Section 5.4, unless the recipients
provide assurances reasonably satisfactory to the requesting party that such
documents have been destroyed.
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5.5 CUSTOMER LIST.
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Sellers shall deliver to Buyer on or before September 16, 1996 a list
of customers to be attached as Schedule 1 to the TFA License Agreement. Buyer
shall in its absolute discretion have the right to approve or disapprove the
customer list.
ARTICLE 6
ADDITIONAL CONTINUING COVENANTS
6.1 NONDISCLOSURE OF PROPRIETARY DATA.
---------------------------------
After the Closing, neither Sellers nor any of their representatives or
Affiliates shall, at any time, make use of, divulge or otherwise disclose,
directly or indirectly, any trade secret or other proprietary data concerning
the Assets. In addition, neither Sellers nor any of their representatives or
Affiliates shall make use of, divulge or otherwise disclose, directly or
indirectly, to Persons other than Buyer, any confidential information concerning
the Assets.
6.2 TRANSITION.
----------
The parties will cooperate in the transfer of the Assets from the
premises of Sellers to the premises of Buyer, and the parties will use their
best efforts to accomplish the transfer as soon as practicable, but in any event
no later than October 31, 1996 with respect to the Assets located in Los
Angeles, California and January 31, 1997 with respect to the Assets located in
St. Gallen, Switzerland. During the transition period, Sellers agree (i) that
Buyer shall have reasonable access to the Assets during regular business hours,
(ii) that the Assets will be covered by Sellers' existing insurance policies for
the benefit of Buyer, (iii) to comply with the covenants set forth in the Bills
of Sale attached hereto as Exhibits A-1 and A-2 and (iv) to exercise the same
reasonable degree of care with respect to the Assets as Sellers do with respect
to their own property. Notwithstanding the Employment Agreement attached hereto
as Exhibit E, Buyer agrees that Xx. Xxxxxxx Xxxxxx may render services to
Sellers as reasonably requested by them until January 1, 1997, to the extent
that Xx. Xxxxxx and Buyer determine in their sole discretion that such services
do not interfere with Xx. Xxxxxx'x obligations to Buyer.
6.3 COVENANT NOT TO XXX.
-------------------
Each Seller covenants that it will not xxx Buyer due to Buyer's use
of the General Technology, provided that such use does not breach the terms of
the General Technology License Agreement attached hereto as Exhibit D.
12
6.4 CONFIDENTIALITY OBLIGATIONS RELATING TO INTELLECTUAL PROPERTY.
-------------------------------------------------------------
Each Seller acknowledges that the TFA Technology obtains independent
economic value from being not generally known; accordingly, each Seller shall
take reasonable steps to preserve the TFA Technology as secret and confidential.
Neither Seller shall publish or disclose the TFA Technology in any manner. Each
Seller shall use at least the same level of care to prevent the disclosure of
the TFA Technology that it exercises in protecting its own confidential
information and shall in any event take all reasonable precautions to prevent
the disclosure of TFA Technology to any third party. Each Seller acknowledges
and agrees that Buyer, in addition to any other available rights or remedies,
shall, without the necessity of posting any bond or similar security, be
entitled to specific performance, injunctive relief and any other equitable
remedy for the breach or default or threatened breach or default of this Section
6.4, and each Seller waives any defense that a remedy at law or damages is
adequate.
6.5 RIGHT OF FIRST REFUSAL.
----------------------
For a period of five years after the date of this Agreement, neither
Seller shall sell the General Technology (or any portion thereof) without first
offering to Buyer the right to purchase the General Technology (or such portion
thereof) on terms at least as favorable to Buyer as the terms contained in any
bona fide offer negotiated by such Seller with a non-affiliated third party
purchaser; provided, however, that the provisions of this Section 6.5 shall not
-------- -------
be applicable in the event of a sale of Xxxxxxxxxx or substantially all of its
assets. Such Seller shall give to Buyer written notice of such Seller's offer
to sell the General Technology, and the terms of such offer. If Buyer decides
to purchase the General Technology, Buyer shall give written notice accepting
such offer to such Seller within thirty (30) days of receipt of such Seller's
offer (the "Offer Period"). Failure by Buyer to accept such Seller's offer
within the Offer Period shall constitute rejection of the offer, and such Seller
shall be free to consummate the sale of the General Technology to the third
party purchaser on substantially the same terms contained in such Seller's offer
to Buyer within ninety (90) days of the expiration of the Offer Period. Any
change in the substantial terms of the transaction with the third party
purchaser, or such Seller's failure to consummate the transaction within the
period contained in the preceding sentence, shall require such Seller to repeat
the procedure contained in this Section 6.5.
6.6 SELLERS' COVENANT NOT TO COMPETE.
--------------------------------
13
(A) RESTRICTIONS. Each Seller agrees that it shall not for a period
------------
of eight years after the Closing Date, directly or indirectly, in (i) any
county or city in the State of California in which Seller's business is
carried on and in which Buyer conducts a similar business after the Closing
Date, or (ii) in any other state in the United States, or (iii) in any
other country, compete with, assist any Person in competing with or acquire
an interest in any Person competing with, Buyer's manufacture, use or sale
of TFA, including, without limitation, the sale of TFA in bulk, whether as
an owner, shareholder, joint venturer, partner, officer, employee,
consultant, agent or otherwise. Nothing contained in this Section 6.6
shall prohibit either Seller from holding and making investments in
securities of any corporation or limited partnership whose securities are
traded in a generally recognized market, provided, such Seller's equity
interest therein does not exceed five percent (5%) of the outstanding
shares or interests in such corporation or partnership. Notwithstanding
the foregoing, the parties agree that (i) each Seller shall be permitted to
practice the TFA Technology in accordance with the terms and conditions of
the TFA License Agreement and (ii) each Seller shall be prohibited from any
activity that violates or is inconsistent with the terms and conditions of
the TFA License Agreement.
(B) SPECIAL REMEDIES AND ENFORCEMENT. Sellers and Buyer agree that a
--------------------------------
breach of any of the covenants set forth in this Section 6.6 could cause
irreparable harm to Buyer, that Buyer's remedies at law in the event of
such breach would be inadequate, and that, accordingly, in the event of
such breach, a restraining order or injunction or both may be issued
against Sellers, in addition to any other rights and remedies that are
available to Buyer. In connection with any such action or proceeding for
injunctive relief, Sellers hereby waive the claim or defense that a remedy
at law alone is adequate and agree, to the maximum extent permitted by Law,
to have each provision of this Section 6.6 specifically enforced against
them and consent to the entry of injunctive relief against them enforcing
or restraining any breach or threatened breach of this Section 6.6.
(C) SEVERABILITY. If this Section 6.6 is more restrictive than
------------
permitted by the Laws of any jurisdiction in which Buyer seeks enforcement
hereof, this Section 6.6 shall be limited to the extent required to permit
enforcement under such Laws. In particular, the parties intend that the
covenants contained in Section 6.6 shall be construed as a series of
separate covenants, one for each city, county, state and country in which
Sellers' business has been carried on and in
14
which Buyer conducts a similar business after the Closing Date. Except for
geographic coverage, each such separate covenant shall be deemed identical
in terms. If, in any proceeding, a court or arbitrator shall refuse to
enforce any of the separate covenants, then such unenforceable covenant
shall be deemed eliminated from this Section 6.6 for the purpose of those
proceedings to the extent necessary to permit the remaining separate
covenants to be enforced. If the provisions of this Section 6.6 shall ever
be deemed to exceed the duration or geographic limitations or scope
permitted by applicable Law, then such provisions shall be reformed to the
maximum time or geographic limitations in scope, as the case may be,
permitted by applicable Law.
ARTICLE 7
CONDITIONS OF PURCHASE
7.1 GENERAL CONDITIONS.
------------------
The obligations of the parties to effect the Closing shall be subject
to the following conditions:
(A) No Orders; Legal Proceedings. No Law or Order shall have been
----------------------------
enacted, entered, issued, promulgated or enforced by any Governmental Entity,
nor shall any Action have been instituted and remain pending or have been
threatened and remain so at what would otherwise be the Closing Date, which
prohibits or restricts or would (if successful) prohibit or restrict the
Transactions.
(B) Approvals. All Permits and Approvals required to be obtained from
---------
any Governmental Entity shall have been received or obtained on or prior to the
Closing Date.
7.2 CONDITIONS TO OBLIGATIONS OF BUYER.
----------------------------------
The obligations of Buyer to effect the Closing are subject, at the
option of Buyer, to the satisfaction or written waiver of each of the following
conditions:
(A) Representations and Warranties and Covenants of Sellers. The
-------------------------------------------------------
representations and warranties of Sellers herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time (except where such representation and warranty is made as of a date
specifically set forth therein); Sellers shall have in all material respects
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by them at or prior
to the Closing Date, and Sellers shall have delivered to Buyer certificates of
Sellers in form and substance satisfactory to
15
Buyer, dated the Closing Date and signed by their Chief Executive Officers to
such effect.
(B) No Material Adverse Change. There shall not have been any
--------------------------
material adverse change in or affecting the Assets subsequent to the date
hereof.
(C) Opinions of Counsel. Buyer shall receive at the Closing from
-------------------
Ropers, Majeski, Xxxx & Xxxxxxx, counsel to Xxxxxxxxxx U.S., and from Xx. Xxxxxx
Xxxxxxxxxx, counsel to Xxxxxxxxxx, opinions dated the Closing Date,
substantially in the form of Exhibits B-1 and B-2.
(D) Approvals/Lien Releases. All required Approvals from third
-----------------------
parties shall have been received or obtained on or prior to the Closing Date,
including releases of the Encumbrances listed on Schedule 3.7 attached hereto.
(E) Termination of Xxxxxx Employment Agreement. The Contract of
------------------------------------------
Employment, executed in 1995, between Xxxxxxxxxx and Xxxxxxx Xxxxxx, shall have
been terminated effective as of the Closing and shall be of no further force and
effect.
(F) Due Diligence. Buyer shall not have notified Sellers within five
-------------
business days of the date hereof that the results of Buyer's due diligence with
respect to the Assets are not satisfactory to Buyer.
(G) License Agreements. The License Agreements in the forms attached
------------------
hereto as Exhibits D and E shall have been executed and delivered by Xxxxxxxxxx,
and Sellers and Buyer shall have agreed on the names of the customers to be
attached as Schedule 1 to the TFA License Agreement.
(H) Employment Agreement. The Employment Agreement in the form
--------------------
attached hereto as Exhibit E shall have been executed and delivered by Xxxxxxx
Xxxxxx.
(I) Inventory List. Sellers shall have delivered to Buyer a true and
--------------
correct list of the Inventory as of five (5) business days before the Closing.
7.3 CONDITIONS TO OBLIGATIONS OF SELLERS.
------------------------------------
The obligations of Sellers to effect the Closing are subject, at the
option of Sellers, to the satisfaction or written waiver of each of the
following conditions:
16
(A) Representations and Warranties and Covenants of Buyer. The
-----------------------------------------------------
representations and warranties of Buyer herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time (except where such representation and warranty is made as of a date
specifically set forth therein); Buyer shall have in all material respects
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it at or prior to
the Closing Date, and Buyer shall have delivered to Sellers certificates of
Buyer in form and substance satisfactory to Seller, dated the Closing Date and
signed by its President, to such effect.
(B) Opinion of Counsel. Sellers shall receive at the Closing from
------------------
O'Melveny & Xxxxx LLP, counsel to Buyer, an opinion dated the Closing Date,
substantially in the form of Exhibit F.
(C) License Agreements. The License Agreements in the forms attached
------------------
hereto as Exhibits D and E shall have been executed and delivered by Buyer, and
Sellers and Buyer shall have agreed on the names of the customers to be attached
as Schedule 1 to the TFA License Agreement.
ARTICLE 8
TERMINATION OF OBLIGATIONS; SURVIVAL
8.1 TERMINATION OF AGREEMENT.
------------------------
This Agreement and the transactions contemplated by this Agreement
shall terminate if the Closing does not occur on or before the close of business
on December 31, 1996, unless extended by mutual consent in writing of Buyer and
Sellers and otherwise may be terminated at any time before the Closing as
follows:
(A) Mutual Consent. By mutual consent in writing of Buyer and
--------------
Sellers.
(B) Conditions to Buyer's Performance Not Met. By Buyer by written
-----------------------------------------
notice to Sellers if any event occurs or condition exists which would render
impossible the satisfaction of one or more conditions to the obligations of
Buyer to consummate the transactions contemplated by this Agreement as set forth
in Section 7.1 or 7.2.
(C) Conditions to Sellers' Performance Not Met. By Sellers by written
------------------------------------------
notice to Buyer if any event occurs or condition exists which would render
impossible the satisfaction of one or more conditions to the obligation of
Seller to consummate the transactions contemplated by this Agreement as set
forth in Section 7.1 or 7.3.
17
(D) Material Breach. By Buyer or Sellers if there has been a material
---------------
misrepresentation or other material breach by the other party in its
representations, warranties and covenants set forth herein; provided, however,
that if such breach is susceptible to cure, the breaching party shall have five
business days after receipt of notice from the other party of its intention to
terminate this Agreement if such breach continues in which to cure such breach.
8.2 EFFECT OF TERMINATION.
---------------------
Subject to the immediately following sentence, if this Agreement shall
be terminated pursuant to Section 8.1, all further obligations of the parties
under this Agreement shall terminate without further liability of any party to
another; provided that the obligations of the parties contained in Section 5.4
[Confidentiality] and Section 10.12 [Expenses] shall survive any such
termination. A termination under Section 8.1 shall not relieve any party of any
liability for a breach of, or for any misrepresentation under this Agreement, or
be deemed to constitute a waiver of any available remedy (including specific
performance if available) for any such breach or misrepresentation.
ARTICLE 9
INDEMNIFICATION
9.1 OBLIGATIONS OF SELLERS.
----------------------
Sellers agree to indemnify and hold harmless Buyer and its directors,
officers, employees, affiliates, agents and assigns from and against any and all
Losses, directly or indirectly, as a result of, or based upon or arising from:
(A) any breach of any representation, warranty or covenant of Sellers
made in this Agreement;
(B) any liability or obligation of, or claims against, Sellers or
their business; and
(C) any liability or obligation relating to the Assets arising prior
to the Closing.
9.2 OBLIGATIONS OF BUYER.
--------------------
Buyer agrees to indemnify and hold harmless Sellers and their
directors, officers, employees, affiliates, agents and assigns from and against
any and all Losses, directly or indirectly, as a result of, or based upon or
arising from:
18
(A) any breach of any representation, warranty or covenant of Buyer
made in this Agreement;
(B) any liability or obligation of, or claims against, Buyer or its
business; and
(C) any liability or obligation relating to the Assets arising after
the Closing.
9.3 PROCEDURE.
---------
(A) Notice. Any party seeking indemnification with respect to any
------
Loss shall give notice to the party required to provide indemnity hereunder (the
"Indemnifying Party").
(B) Defense. If any claim, demand or liability is asserted by any
-------
third party against any Indemnified Party, the Indemnifying Party shall, upon
the written request of the Indemnified Party, defend any actions or proceedings
brought against the Indemnified Party in respect of matters embraced by the
indemnity with counsel satisfactory to the Indemnified Party, but the
Indemnified Party shall have the right to conduct and control the defense,
compromise or settlement of any Indemnifiable Claim if the Indemnified Party
chooses to do so, on behalf of and for the account and risk of the Indemnifying
Party who shall be bound by the result so obtained to the extent provided
herein. If, after a request to defend any action or proceeding, the
Indemnifying Party neglects to defend the Indemnified Party, a recovery against
the latter suffered by it in good faith, is conclusive in its favor against the
Indemnifying Party, provided however that, if the Indemnifying Party has not
received reasonable notice of the action or proceeding against the Indemnified
Party, or is not allowed to control its defense, judgment against the
Indemnified Party is only presumptive evidence against the Indemnifying Party.
Each party hereto, to the extent that it is or becomes an Indemnifying Party,
hereby stipulates that a judgment against the Indemnified Party shall be
conclusive upon the Indemnifying Party. In connection with the defense of any
claim, each party shall make available to the party controlling such defense,
any books, records or other documents within its control that are reasonably
requested in the course of such defense.
9.4 NOTICE BY SELLERS.
-----------------
Each Seller agrees to notify Buyer of any liabilities, claims or
misrepresentations, breaches or other matters covered by this Article 9 upon
discovery or receipt of notice thereof (other than from Buyer), whether before
or after Closing.
9.5 LIMITATION ON INDEMNITY.
-----------------------
19
No party shall assert any claim against the other party or parties for
indemnification hereunder unless and until the amount of all Losses determined
to have been incurred or suffered at the time by the party seeking
indemnification exceeds, in the aggregate, Twenty Five Thousand Dollars
($25,000) (the "Basket Amount"). At such time, if any, as the aggregate amount
of such Losses exceeds the Basket Amount, the Indemnifying Party shall be liable
for all of such Losses, including the first $25,000.
ARTICLE 10
GENERAL
10.1 AMENDMENTS; WAIVERS.
-------------------
This Agreement and any schedule or exhibit attached hereto may be
amended only by agreement in writing of all parties. No waiver of any provision
nor consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided.
10.2 SCHEDULES; EXHIBITS; INTEGRATION.
--------------------------------
Each schedule and exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement,
although schedules need not be attached to each copy of this Agreement. This
Agreement, together with such schedules and exhibits, constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith.
10.3 BEST EFFORTS; FURTHER ASSURANCES.
--------------------------------
(A) Standard. Each party will use its best efforts to cause all
--------
conditions to its obligations to be timely satisfied and to perform and fulfill
all obligations on its part to be performed and fulfilled under this Agreement,
to the end that the transactions contemplated by this Agreement shall be
effected substantially in accordance with its terms as soon as reasonably
practicable. Each party shall execute and deliver such further certificates,
agreements and other documents and take such other actions as the other party
may reasonably request to consummate or implement the transactions contemplated
hereby or to evidence such events or matters.
(B) Transfer of Assets. If, after the Closing Date and the
------------------
transition period described in Section 6.2, any Assets shall remain on Sellers'
premises, then Sellers shall take
20
reasonable efforts to deliver such Assets to Buyer at the expense of Buyer and,
so long as such Assets shall remain on said premises, each Seller shall exercise
the same reasonable degree of care with respect thereto as it does with respect
to its own property.
10.4 GOVERNING LAW.
-------------
This Agreement and the legal relations between the parties shall be
governed by and construed in accordance with the laws of the State of California
applicable to contracts made and performed in such State and without regard to
conflicts of law doctrines except to the extent that certain matters are
preempted by federal law or are governed by the law of the jurisdiction of
incorporation of the respective parties. Notwithstanding the foregoing, Section
6.6 and any issues relating to the transfer of title of the Assets located in
Switzerland shall be governed by and construed in accordance with the laws of
Switzerland.
10.5 NO ASSIGNMENT.
-------------
Neither this Agreement nor any rights or obligations under it are
assignable, except that Buyer may assign its rights hereunder to any Affiliate
of Buyer or to any post-Closing purchaser of a substantial part of the Assets.
10.6 HEADINGS.
--------
The descriptive headings of the Articles, Sections and subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
10.7 COUNTERPARTS.
------------
This Agreement and any amendment hereto or any other agreement (or
document) delivered pursuant hereto may be executed in one or more counterparts
and by different parties in separate counterparts. All of such counterparts
shall constitute one and the same agreement (or other document) and shall become
effective (unless otherwise provided therein) when one or more counterparts have
been signed by each party and delivered to the other party.
10.8 PUBLICITY AND REPORTS.
---------------------
Sellers and Buyer shall coordinate all publicity relating to the
transactions contemplated by this Agreement and no party shall issue any press
release, publicity statement or other public notice relating to this Agreement,
or the transactions contemplated by this Agreement, without obtaining the prior
consent of the other party (which consent shall not be unreasonably withheld),
except with respect to
21
filings by Buyer with the Securities and Exchange Commission or to the extent
that a particular action is required by applicable Law.
10.9 REMEDIES CUMULATIVE.
-------------------
All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available. In
addition, Article 9 shall not be deemed to preclude or otherwise limit in any
way the exercise of any other rights or pursuit of other remedies for the breach
of this Agreement or with respect to any misrepresentation.
10.10 PARTIES IN INTEREST.
-------------------
This Agreement shall be binding upon and inure to the benefit of each
party, and nothing in this Agreement, express or implied, is intended to confer
upon any other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement. Nothing in this Agreement is intended to relieve
or discharge the obligation of any third Person to (or to confer any right of
subrogation or action over against) any party to this Agreement.
10.11 NOTICES.
-------
Any notice or other communication hereunder must be given in writing
and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism or (c) mailed by certified or registered mail,
postage prepaid, receipt requested as follows:
IF TO BUYER, ADDRESSED TO:
St. Xxxx Knits, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxx
Facsimile: (000) 000-0000
WITH A COPY TO:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
22
IF TO SELLERS, ADDRESSED TO:
Xxxxx Xxxxxxxxxx & Co. Ltd.
Xxxxxxxxxxxxxxx 00
XX-0000 Xx. Xxxxxx, Xxxxxxxxxxx
Attn: Xxxx Xxx Xxxxx
Facsimile:
WITH A COPY TO:
Ropers, Majeski, Xxxx & Bentley
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 10.11 and an appropriate answerback is received, (ii) if given by mail,
five days after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when actually delivered at such address.
10.12 EXPENSES AND ATTORNEYS FEES.
---------------------------
Sellers and Buyer shall each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including but not limited to the fees, expenses and
disbursements of their respective counsel ("Transaction Expenses"); provided,
--------
however, that if this Agreement is terminated pursuant to Section 8.1(d), the
-------
terminating party shall be entitled to recover its Transaction Expenses in
addition to any other rights and remedies it may have against the breaching
party. In the event of any Action for the breach of this Agreement or
misrepresentation by any party, the prevailing party also shall be entitled to
reasonable attorney's fees, costs and expenses incurred in such Action.
10.13 SURVIVAL.
--------
The representations and warranties and agreements contained in or made
pursuant to this Agreement shall survive the Closing.
23
10.14 BULK TRANSFERS.
--------------
Buyer hereby waives compliance by Sellers with any applicable bulk
transfer laws in connection with the sale of the Assets hereunder and Sellers
hereby agree to indemnify Buyer against and hold Buyer harmless from any and all
Losses relating to or resulting from such non-compliance pursuant to the
indemnification provisions of Article 9; provided, however, that any such Losses
-------- -------
shall be paid in full and shall not be subject to the Basket Amount provided for
in Section 9.5.
ARTICLE 11
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires,
(A) the terms defined in this Article 11 have the meanings assigned to
them in this Article 11 and include the plural as well as the singular,
(B) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of the body of this Agreement,
(C) pronouns of either gender or neuter shall include, as appropriate,
the other pronoun forms, and
(D) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply.
"Action" means any action, complaint, petition, investigation, suit or
other proceeding, whether civil or criminal, in law or in equity, or before any
arbitrator or Governmental Entity.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person.
"Approval" means any approval, authorization, consent, qualification
or registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice,
24
statement or other communication required to be filed with or delivered to, any
Governmental Entity or any other Person.
"Bills of Sale" means the Bills of Sale substantially in the forms of
Exhibits A-1 and A-2 hereto.
"Closing" means the consummation of the Transactions.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended, or as
hereafter amended.
"Contract" means any contract, agreement, lease, license, sales order,
purchase order, or other legally binding commitment or instrument, whether or
not in writing.
"Encumbrance" means any claim, charge, easement, encumbrance, lease,
covenant, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.
"General Technology" means all trade secrets, information, know-how,
show-how, processes, process parameters, methods, practices, designs,
fabrication techniques, technical plans, compilations, creations, data,
algorithms, programs, documentation, and the like, related to the Devices, known
by Sellers as of the Closing Date, except the TFA Technology.
"Governmental Entity" means any government or any agency, district,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"Hazardous Substance" means (but shall not be limited to) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Laws as "hazardous substances," "hazardous materials," "hazardous
wastes" or "toxic substances," or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as ignitibility,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the
25
exploration, development, or production of crude oil, natural gas or geothermal
energy.
"Indemnifiable Claim" means any Loss for or against which any party is
entitled to indemnification under this Agreement; "Indemnified Party" means the
-----------------
party entitled to indemnity hereunder; and "Indemnifying Party" means the party
------------------
obligated to provide indemnification hereunder.
"Law" means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order.
"License Agreements" means the TFA License Agreement and the General
Technology License Agreement.
"Loss" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid in
settlement, that may be imposed on or otherwise incurred or suffered by the
specified person.
"Order" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"Permit" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
"Tax" means any foreign, federal, state, county or local income,
sales, use, excise, franchise, ad valorem, real and personal property, transfer,
gross receipt, stamp, premium, profits, customs, duties, windfall profits,
capital stock, production, business and occupation, disability, employment,
payroll, severance or withholding taxes, fees, assessments or charges of any
kind whatever imposed by any Governmental Entity, any interest and penalties
(civil or criminal), additions to tax, payments in lieu of taxes or additional
amounts related thereto or to the nonpayment thereof, and any Loss in connection
with the determination, settlement or litigation of any Tax liability.
26
"Tax Return" means a declaration, statement, report, return or other
document or information required to be filed or supplied with respect to Taxes.
"TFA" means Thermo-Film Application, method and apparatus for sticking
a multiplicity of ornamental pieces on to a base sheet material.
"Transaction Documents" means this Agreement, the Bills of Sale, the
License Agreements and the patent assignments to be executed and delivered
pursuant to Section 2.4.
"Transactions" means the transactions contemplated by the Transaction
Documents.
27
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers as of the day and year
first above written.
BUYER
ST. XXXX KNITS, INC.
By: /s/ XXX XXXX
_________________________________
Name: Xxx Xxxx
Title: Chairman of the Board
and Chief Executive Officer
SELLERS
XXXXX XXXXXXXXXX & CO. AG
By: /s/ X. XXXXX /s/ X. X. XXXXX
_______________ _______________
Name: X. Xxxxx X. x. Xxxxx
Title: Chairman CEO
XXXXX XXXXXXXXXX, INC.
By: /s/ X. X. XXXXX
___________________________
Name: X. x. Xxxxx
Title: Chairman
28
EXHIBIT A-1
-----------
XXXX OF SALE
For good and valuable consideration, receipt of which is hereby
acknowledged, in connection with the Asset Purchase Agreement, dated August 29,
1996 (as amended, the "AGREEMENT"), by and among St. Xxxx Knits, Inc., a
California corporation, Xxxxx Xxxxxxxxxx, Inc., a Delaware corporation
("XXXXXXXXXX U.S.") and Xxxxx Xxxxxxxxxx & Co. AG, a Swiss corporation and
intending to be legally bound hereby, Xxxxxxxxxx U.S. does hereby sell, convey,
grant, assign and transfer to Xxxxxxxxxx U.S. all of its right, title and
interest in and to the Assets (as defined in the Agreement) owned by it as set
forth in Schedule 1.1 to the Agreement.
Xxxxxxxxxx U.S. hereby agrees and will be obliged to inform all
interested third parties that the Assets are owned by and are the exclusive
property of Xxxxxxxxxx U.S., and to refrain from representing and/or declaring
to any third parties that the Assets are a part of the building or premises or
real estate where such Assets are located, or otherwise constitute fixtures of
such building or premises or real estate in any manner.
IN WITNESS WHEREOF, the undersigned parties have caused this Xxxx of
Sale to be executed this ____ day of September, 1996.
XXXXX XXXXXXXXXX, INC.,
a Delaware corporation
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
X-0
XXXXXXX X-0
-----------
XXXX OF SALE
AND
ASSIGNMENT AGREEMENT
For good and valuable consideration, receipt of which is hereby
acknowledged, in connection with the Asset Purchase Agreement, dated August 29,
1996 (as amended, the "AGREEMENT"), by and among St. Xxxx Knits, Inc., a
California corporation, Xxxxx Xxxxxxxxxx, Inc., a Delaware corporation and Xxxxx
Xxxxxxxxxx & Co. AG, a Swiss corporation ("XXXXXXXXXX"), and intending to be
legally bound hereby:
(i) Xxxxxxxxxx does hereby sell, convey, grant, assign and transfer
to St. Xxxx Knits AG, a Swiss corporation ("St. Xxxx Knits AG") all of
its right, title and interest in and to (A) the Assets (as defined in
the Agreement) owned by it, including the Assigned Contracts (as defined
in the Agreement) and (B) agrees to prominently label the Assets
remaining in the possession of Xxxxxxxxxx as the property of St. Xxxx
Knits AG;
(ii) Xxxxxxxxxx acknowledges and agrees and the Parties to the
Agreement herewith agree that the ownership of and title to the Assets
will be transferred to St. Xxxx Knits AG as a result of the execution of
the Agreement and this Xxxx of Sale and Assignment Agreement, but that
possession of certain of the Assets, as set forth in Section 6.2 of the
Agreement will remain with Xxxxxxxxxx in accordance with Article 924
paragraph 1 of the Swiss Civil Code for a period of time after the
execution of the Agreement and this Xxxx of Sale and Assignment
Agreement ("BESITZESKONSTITUT" under applicable Swiss law); and
(iii) Xxxxxxxxxx hereby agrees and will be obliged to inform all
interested third parties to which this could be relevant that the Assets
are owned by and are the exclusive property of St. Xxxx Knits AG, and to
refrain from representing and/or declaring to any third parties that the
Assets are a part of the building or premises or real estate where such
Assets are located, or otherwise constitute fixtures of such building or
premises or real estate in any manner ("ZUGEHOR" under applicable Swiss
law).
A-2-1
IN WITNESS WHEREOF, the undersigned parties have caused this Xxxx of
Sale and Assignment Agreement to be executed this _____ day of September, 1996.
ST. XXXX KNITS, INC.,
a California corporation
By:
------------------------------------
Xxxxxx X. Xxxx
Chairman of the Board and
Chief Executive Officer
XXXXX XXXXXXXXXX & CO. AG,
a Swiss corporation
By: ------------------------------------
Name:
-------------------------------
Title:
------------------------------
ST. XXXX KNITS AG, in
foundation,
a Swiss corporation
By: ST. XXXX KNITS, INC.,
a California corporation
By: ------------------------------------
Xxxxx X. Xxxxxxx
Chief Financial Officer
By: DR. XXXXXX XXXXXX
By: St. Xxxx Knits, Inc.,
as Attorney-in-Fact for
Dr. Xxxxxx Xxxxxx
By:
---------------------------------
Xxxxx X. Xxxxxxx
Chief Financial Officer
By: XXXXXX XXXXXXXX
By: St. Xxxx Knits, Inc.,
as Attorney-in-Fact for
Xxxxxx Xxxxxxxx
By:
------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
A-2-2
EXHIBIT B-1
-----------
FORM OF OPINION OF COUNSEL TO
XXXXX XXXXXXXXXX, INC.
September ___, 1996
St. Xxxx Knits, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxx
Re: Xxxxx Xxxxxxxxxx, Inc.
----------------------
Gentlemen:
We have acted as special counsel to Xxxxx Xxxxxxxxxx. Inc., a Delaware
corporation ("Seller"), in connection with the sale by it of certain Assets to
you pursuant to an Asset Purchase Agreement dated as of August ___, 1996 (the
"Asset Purchase Agreement"). This opinion is delivered to you pursuant to
Section 7.2(c) of the Assert Purchase Agreement. Terms used herein that are
defined in the Asset Purchase Agreement are used herein with the meanings set
forth in the Asset Purchase Agreement, unless otherwise defined herein.
We have examined such corporate documents and records of Seller, and
made such other inquiries or examinations, as we deem necessary or appropriate
in connection with this opinion. In rendering this opinion. we have relied, as
to matters of fact, upon representations and certificates of officers and
employees of Seller, certificates of third parties and certificates of
government authorities; and we have assumed the genuineness of signatures of all
persons signing any documents, the authority of all governmental authorities,
the truth and accuracy of all matters of fact set forth in all certificates
furnished to us, the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents submitted to us as
certified, conformed or photostatic copies.
Based upon the foregoing, we are of the opinion that:
(i) Seller has been duly incorporated and is validly existing in good
standing under the laws of the State of Delaware and has the corporate power to
own its properties and assets and to carry on its business.
B-1-1
Re: Xxxxx Xxxxxxxxxx, Inc.
August 27, 1996 Page Two
--------------------------------------------------------------------------------
(ii) The execution, delivery and performance of the Asset Purchase
Agreement, the License Agreements and the Bills of Sale (the "Principal
Agreements") have been duly authorized by all necessary action on the part of
Seller, and the Principal Agreements have been duly executed and delivered by
Seller.
(iii) The Principal Agreements constitute the legally valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally (including, without limitation, fraudulent conveyance
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
(iv) Seller's execution and delivery of, and performance of its
obligations under, the Principal Agreements do not (a) violate Seller's
Certificate of Incorporation or By-Laws, (b) to the best of our knowledge,
violate, breach or result in a default under any material agreement of Seller or
(c) to the best of our knowledge, breach or otherwise violate any existing
obligation of Seller under any order, judgment or decree of any court or
governmental authority binding on Seller.
(v) The execution and delivery by Seller of, and performance of its
obligations under, the Principal Agreements do not violate any state or federal
statute or regulation that we have, in the exercise of customary professional
diligence, recognized as directly applicable to the Seller or to the
transactions of the type contemplated by the Principal Agreements.
(vi) No order, consent, permit or approval of any state or federal
governmental authority that we have, in the exercise of customary professional
diligence, recognized as directly applicable to the Seller or to transactions of
the type contemplated by the Principal Agreements is required on the part of the
Seller for the execution and delivery of, and performance under, the Principal
Agreements, except for such as have been obtained.
(vii) We have not given substantive attention on behalf of Seller
to, or represented Seller in connection with, any actions, suits or proceedings
pending or threatened against Seller before any count, arbitrator or
governmental agency.
B-1-2
Re: Xxxxx Xxxxxxxxxx, Inc.
August 27, 1996 Page Three
-------------------------------------------------------------------------------
We are not admitted to practice in any jurisdiction other than the
State of California. We do not purport to be expert on, and we are not
expressing an opinion with respect to the laws of any jurisdictions other then
the laws of the United States and the State of California and the General
Corporation Law of Delaware.
Very truly yours,
Ropers, Majeski, Xxxx & Xxxxxxx
B-1-3
EXHIBIT B-2
-----------
FORM OF OPINION OF SWISS COUNSEL TO
XXXXX XXXXXXXXXX & AG and XXXXX XXXXXXXXXX, INC.
------------------------------------------------
September ___, 1996
St. Xxxx Knits, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxx
Re: Xxxxx Xxxxxxxxxx & Co. AG and Xxxxx Xxxxxxxxxx, Inc.
----------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Xxxxx Xxxxxxxxxx & Co. AG, a Swiss corporation
("Xxxxxxxxxx") and Xxxxx Xxxxxxxxxx, Inc., a Delaware corporation (`'Xxxxxxxxxx
U.S.") (and together with Xxxxxxxxxx the "Sellers") in connection with the sale
of certain Assets to you pursuant to an Asset Purchase Agreement dated as of
August ___, 1996 (the "Asset Purchase Agreement").
This opinion is delivered to you pursuant to Section 7.2(c) of the Assert
Purchase Agreement. Terms used herein that are defined in the Asset Purchase
Agreement are used herein with the meanings set forth in the Asset Purchase
Agreement unless otherwise defined herein.
We have examined such corporate documents and records of Sellers, and made such
other inquiries or examinations, as we deem necessary or appropriate in
connection with this opinion. In rendering this opinion, we have relied, as to
matters of fact, upon representations and certificates of officers and employees
of the Sellers, certificates of third parties and certificate of government
authorities; and we have assumed the genuineness of signatures of all persons
signing any documents, else authority of all governmental authorities, the truth
and accuracy of all matters of fact set forth in all certificates Furnished to
us, the authenticity of all documents submitted to us as originals and the
conformity to original documents of all documents submitted to us as certified,
conformed or photostatic copies.
B-2-1
Re: Xxxxx Xxxxxxxxxx, Inc.
August 27, 1996 Page Two
------------------------------------------------------------------------------
Based upon the foregoing, we are of the opinion that:
(i) Xxxxxxxxxx has been duly incorporated and is validly existing in good
standing under Swiss laws and has the corporate power to own its
properties and assets and to carry on its business.
(ii) The execution, delivery and performance of the Asset Purchase Agreement,
the License Agreements and the Bills of Sale (the "Principal
Agreements") have been duly authorized by all necessary actions on the
part of the Sellers, and the Principal Agreements have been duly
executed and delivered by Sellers.
(iii) The Principal Agreements constitute the legally valid and binding
obligations of Sellers, enforceable against Sellers in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without limitation,
fraudulent conveyance limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law).
(iv) Sellers' execution and delivery of, and performance of their obligations
under, the Principal Agreements do riot (a) violate Sellers' Certificate
of Incorporation or By-Laws, (b) to the best of our knowledge violate,
breach or result in a default under any material agreement of Sellers or
(c) to the best of our knowledge breach or otherwise violate any
existing obligation of Sellers under any order, judgment or decree of
arty Swiss court or Swiss governmental authority binding on Sellers.
(v) The execution and delivery by Sellers of, and performance of their
obligations under, the Principal Agreements do not violate any Swiss
statute or regulation that we have, in the exercise of customary
professional diligence, recognized as directly applicable to the Sellers
or to the transactions of the type contemplated by the Principal
Agreements.
(vi) No order, consent, permit or approval of any Swiss governmental
authority that we have, in the exercise of customary professional
diligence, recognized as directly applicable to the SeDers or to
transactions of the type contemplated by the Principal Agreements is
required on the part of the Sellers for the execution and delivery of,
and performance under, the Principal Agreements, except for such as have
been obtained.
B-2-2
Re: Xxxxx Xxxxxxxxxx, Inc.
August 27, 1996 Page Three
-----------------------------------------------------------------------------
This opinion is furnished by us as Swiss counsel for the Sellers and may be
relied upon by you only in connection with the sale of the Assets by the
Sellers. It may not be used or relied upon by you for any other purpose or by
any other person, nor may copies be delivered to any other person, without in
each instance our prior written consent.
Very truly yours,
Dres. Guggenheim and Schnellmann
B-2-3
EXHIBIT C
---------
LICENSE AGREEMENT
This License Agreement ("Agreement") is made and entered into as of
September 30, 1996, by and between ST. XXXX KNITS AG, a corporation organized
under the laws of Switzerland ("St. Xxxx"), and XXXXX XXXXXXXXXX & CO., AG, a
corporation organized under the laws of Switzerland ("Xxxxxxxxxx").
RECITALS
--------
11.1 Pursuant to that certain Asset Purchase Agreement, dated August 29,
1996, by and between St. Xxxx Knits, Inc., a California corporation ("St. Xxxx
U.S.") and Xxxxxxxxxx (as amended, the "Asset Agreement"), Xxxxxxxxxx has sold
and transferred to St. Xxxx all of Schlaepfer's right, title and interest in and
to the Patents and the TFA Technology (as such terms are defined in the Asset
Agreement).
11.2 Xxxxxxxxxx desires to obtain from St. Xxxx, and St. Xxxx is willing to
grant to Xxxxxxxxxx, a license in and to the Patents and the TFA Technology,
pursuant to the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings for
-----------
purposes of this Agreement:
1.1 Licensed Products. "Licensed Products" shall mean apparel products in
-----------------
the "Couture" and "pret a xxxxxx" lines or markets; provided, however, that
-------- -------
Licensed Products shall not include knit garments, knit fabrics, or woven
garments or fabrics having the appearance of knit garments or fabrics.
1.2 Patents. "Patents" shall have the meaning contained in the Asset
-------
Agreement.
1.3 TFA Technology. "TFA Technology" shall have the meaning contained in
--------------
the Asset Agreement.
1.4 TFA Paper. "TFA Paper" shall mean a web of material bearing an
---------
adhesive layer, on which ornamental pieces are stuck, as these terms are used in
the Patents, which web is useful in the TFA Technology.
2. GRANT OF LICENSE
----------------
2.1 Grant of License. St. Xxxx hereby grants to Xxxxxxxxxx, and
----------------
Xxxxxxxxxx accepts, a non-exclusive, worldwide,
C-1
royalty-free license (with no right to grant sublicenses) in the TFA Technology
and the Patents, subject to the terms and conditions of this Agreement, for the
sole purposes of making, having made, using, offering for sale and selling the
Licensed Products.
2.2 Conditions and Limitations to Grant. The license granted in Section
-----------------------------------
2.1 hereof shall be subject to the following conditions and limitations:
(a) Xxxxxxxxxx shall not practice the TFA Technology or make, use,
sell, offer for sale, export or import any goods using the methodology described
in the Patents or the TFA Technology, except in accordance with the terms and
conditions contained in this Agreement.
(b) Xxxxxxxxxx shall only use the methodology described in the Patents
and the TFA Technology in connection with Licensed Products, and Xxxxxxxxxx
shall only sell Licensed Products in or to the "Couture" and "pret a xxxxxx"
lines or markets.
(c) Xxxxxxxxxx shall not transfer by sale or otherwise TFA Paper to
any third party.
(d) Xxxxxxxxxx shall not use the TFA Technology or the methodology
described in the Patents in connection with knit garments, knit fabrics, or
woven garments or fabrics having the appearance of knit garments or fabrics.
(e) Nothing contained or construed to be contained in this Agreement
shall constitute the grant by St. Xxxx of any right by way of license or
otherwise to Xxxxxxxxxx to use any trademark of St. Xxxx or of St. Xxxx U.S.
(f) Except as expressly granted herein, all rights to the TFA
Technology and the Patents are reserved by St. Xxxx.
(g) On or before the 15th day of each month, Xxxxxxxxxx shall deliver
to St. Xxxx and St. Xxxx U.S. a written list of the customers who have ordered
Licensed Products during the prior calendar month. St. Xxxx and St. Xxxx U.S.
shall in their sole and absolute discretion have the right to disapprove sales
to any customer by delivering written notice of such disapproval to Xxxxxxxxxx;
provided, however, that Xxxxxxxxxx shall have the right to complete any purchase
-------- -------
orders outstanding as of the date Xxxxxxxxxx receives written notice of
disapproval. Xxxxxxxxxx agrees to accept orders on a month-to-month basis and
shall not enter into any contractual agreements obligating it to deliver
Licensed Products over a period exceeding one month without St. John's prior
written approval.
3. INJUNCTIVE RELIEF.
-----------------
C-2
Xxxxxxxxxx acknowledges that in the event of any breach or default or
threatened breach or default by Xxxxxxxxxx of Section 2 hereof, St. Xxxx and St.
Xxxx U.S. may be irreparably damaged and that it would be extremely difficult
and impractical to measure such damage, so that the remedy of damages at law
would be adequate. Consequently, Xxxxxxxxxx acknowledges and agrees that St.
Xxxx and St. Xxxx U.S., in addition to any other available rights or remedies,
shall, without the necessity of posting any bond or similar security, be
entitled to specific performance, injunctive relief and any other equitable
remedy for the breach or default or threatened breach or default of said Section
2, and Xxxxxxxxxx waives any defense that a remedy at law or damages is
adequate.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
4.1 Authority. Each party represents and warrants to the other party that
---------
this Agreement has been duly authorized, executed and delivered by it and that
this Agreement is a binding obligation of it, enforceable in accordance with its
terms.
4.2 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4, ST. XXXX
----------
MAKES NO REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED (INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OR MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY EXPRESS OR IMPLIED WARRANTY THAT THE USE OF THE TFA
TECHNOLOGY OR THE MANUFACTURE, USE OR SALE OF ANY OF THE LICENSED PRODUCTS WILL
NOT INFRINGE ANY PATENTS, COPYRIGHT OR OTHER RIGHT OF ANY THIRD PARTY), OF ANY
KIND OR NATURE WHATSOEVER.
5. INDEMNIFICATION
---------------
Xxxxxxxxxx shall indemnify, hold harmless and defend St. Xxxx and St. Xxxx
U.S. and their respective officers, directors, employees, representatives and
agents from and against any and all claims, demands, lawsuits, actions,
proceedings, liabilities, losses, damages, fees, costs and expenses (including
without limitation attorneys' fees and costs of investigation and experts)
resulting from or arising out of the manufacture, use or sale of any of the
Licensed Products or the exercise by Xxxxxxxxxx of any right granted hereunder,
including without limitation any liabilities, losses or damages whatsoever with
respect to death or injury to any individual or damage to any property arising
from the possession, use or operation of any of the Licensed Products by
Xxxxxxxxxx or any third party in any manner whatsoever.
6. TERM
----
This Agreement shall become effective on the date first above written and
shall remain in effect until the latter of (i) the expiration of the last to
expire of any patent included in
C-3
the Patents, or (ii) so long as any portion of the TFA Technology remains a
trade secret (i.e., the owner of the TFA Technology continues to obtain
independent economic value, actual or potential, from a portion of the TFA
Technology not being generally known to, and not being readily ascertainable by
proper means by, other persons who could obtain economic value from disclosure
of the TFA Technology) (unless the reason why the owner of the TFA Technology
ceases to obtain such value is due to a wrongful act or disclosure by
Xxxxxxxxxx, its agents or employees, or another third party, in which case the
term of this Agreement shall not expire), unless the term of this Agreement is
sooner terminated pursuant to Section 7.1 hereof.
7. TERMINATION
-----------
7.1 Termination. This Agreement may be terminated by either party if the
-----------
other party breaches any material provision hereof.
7.2 Effect of Termination or Expiration. Upon the termination or
-----------------------------------
expiration of the term of this Agreement, the license granted by St. Xxxx to
Xxxxxxxxxx pursuant to Section 2.1 hereof shall terminate. Notwithstanding any
termination or expiration of the term of this Agreement, Xxxxxxxxxx shall be
permitted for a period of not more than six (6) months from and after such
termination or expiration to sell or otherwise dispose of all Licensed Products
then in inventory in accordance with the terms and conditions of this Agreement.
8. ASSIGNMENT
----------
The rights and obligations of Xxxxxxxxxx shall not be assignable without
the prior written consent of St. Xxxx which consent may be granted or withheld
by St. Xxxx in its sole and absolute discretion. The rights and obligations of
St. Xxxx shall be assignable without the prior written consent of Xxxxxxxxxx.
9. GOVERNING LAW
-------------
This Agreement and the legal relations between the parties shall be
governed by and construed in accordance with the laws of the State of
California, except where such are governed exclusively by federal law.
10. RELATIONSHIP OF PARTIES.
-----------------------
Each party shall conduct all business in its own name as an independent
contractor. No joint venture, partnership, employment, agency or similar
arrangement is created between the parties. Neither party has the right or
power to act for or on behalf of the other or to bind the other in any respect,
to pledge its credit, to accept any service of process upon it, or to receive
any notices of any nature whatsoever on its behalf.
C-4
11. SEVERABILITY
------------
If any provision of this Agreement is determined to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction then, to that
extent and within the jurisdiction in which it is illegal, invalid or
unenforceable, it shall be limited, construed or severed and deleted from this
Agreement, and the remaining extent and/or remaining portions hereof shall
survive, remain in full force and effect and continue to be binding and shall
not be affected except insofar as may be necessary to make sense hereof, and
shall be interpreted to give effect to the intention of the parties insofar as
that is possible.
12. ENTIRE AGREEMENT
----------------
This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous negotiations,
agreements, arrangements and understandings with respect to the subject matter
hereof.
13. INTERPRETATION
--------------
The normal rule of construction that an agreement shall be interpreted
against the drafting party shall not apply. In this Agreement, whenever the
context so requires, the masculine, feminine or neuter gender, and the singular
or plural number or tense, shall include the others.
14. AMENDMENT AND WAIVER
--------------------
Neither this Agreement nor any of its provisions may be amended, changed,
modified or waived except in writing duly executed by an authorized officer of
the party to be bound thereby.
15. SUCCESSORS AND ASSIGNS
----------------------
This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective legal representatives, successors and assigns.
16. COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, and such counterparts together shall
constitute one agreement.
17. NOTICE
------
Any notice or other communication hereunder must be given in writing and
(a) delivered in person or by courier service, or (b) transmitted by telex,
telefax or telecommunications mechanism:
C-5
IF TO ST. XXXX U.S., ADDRESSED TO:
St. Xxxx Knits, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxx and Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
IF TO ST. XXXX, ADDRESSED TO:
St. Xxxx Knits AG
c/o Homburger Rechtsanwalte
Xxxxxxxxxxxxxxx 00/00
XX-0000 Xxxxxx, Xxxxxxxxxxx
Attn: Dr. Xxxxxx Xxxxxx
WITH A COPY TO:
St. Xxxx Knits, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxx and Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
IF TO XXXXXXXXXX, ADDRESSED TO:
Xxxxx Xxxxxxxxxx & Co. Ltd.
Xxxxxxxxxxxxxxx 00
XX-0000 Xx. Xxxxxx, Xxxxxxxxxxx
Attn: Xxxx Xxx Xxxxx
Facsimile: 011-41-71-228-2118
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 17 and an appropriate answerback is received or (ii) if given by any
other means, when actually delivered at such address.
C-6
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.
XXXXX XXXXXXXXXX & CO. AG
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ST. XXXX KNITS AG, in foundation,
a Swiss corporation
By: ST. XXXX KNITS, INC.,
a California corporation
By:
-------------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
By: DR. XXXXXX XXXXXX
By: St. Xxxx Knits, Inc.,
as Attorney-in-Fact for
Dr. Xxxxxx Xxxxxx
By:
-----------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
By: XXXXXX XXXXXXXX
By: St. Xxxx Knits, Inc.,
as Attorney-in-Fact for
Xxxxxx Xxxxxxxx
By:
-----------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
C-7
EXHIBIT E
---------
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of September 30,
1996, between St. Xxxx Knits AG, a Swiss corporation ("Company"), and Xxxxxxx
Xxxxxx ("Executive"). In consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows.
ARTICLE I
EMPLOYMENT
----------
The Company hereby employs Executive and Executive accepts employment
with the Company upon the terms and conditions herein set forth, subject to the
condition that Executive will obtain from the Swiss authorities a work permit
for the Company.
1.1 Employment. The Company hereby employs Executive, and Executive
----------
agrees to serve as the Company's Geschaftsfuhrer during the term of this
Agreement, and shall serve at the discretion of the Company's Board of
Directors. Executive agrees to devote substantially his full business time and
attention and best efforts to the affairs of the Company during the term of this
Agreement. Notwithstanding the foregoing, Executive shall be entitled to devote
such time as may be approved by the Company to providing services to Xxxxx
Xxxxxxxxxx Co. Ltd. ("Xxxxxxxxxx") in accordance with the terms of the Asset
Purchase Agreement, dated as of August 29, 1996, by and between the Company and
Xxxxxxxxxx (as amended, the "Purchase Agreement").
1.2 Term. The employment of Executive by the Company under the terms
----
and conditions of this Agreement will commence as of the date hereof and will
continue until terminated in accordance with the provisions hereof.
1.3 Place of Employment. Executive agrees to provide services to the
-------------------
Company primarily in Switzerland and in the United States. The parties agree to
be flexible with respect to the frequency, length and timing of Executive's
trips to the United States. The parties anticipate that the number of days to
be spent by Executive during the first year in the United States will range from
60 to 120 days, not exceeding a period of 20 days each time, and agree to use
their good faith efforts to keep the number of days within that range. The
parties agree that Executive will spend a reasonable amount of time in the
United States after the first year, as required by the Company in good faith,
taking into account that the Executive's place of main residence will remain
Austria.
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1.4 Reporting. The Executive will report to Xxxxxx Xxxx, or such
---------
other person designated by the Company from time to time. During the initial
transition period, Executive will work with Xxxxxx Xxxxx while Xx. Xxxxx remains
a consultant to St. Xxxx Knits, Inc. ("St. Xxxx").
ARTICLE II
COMPENSATION
------------
2.1 Annual Salary. During the employment of Executive, the Company
-------------
shall pay to Executive a base salary at the gross annual rate of CHF 243,000.00
(the "Base Salary"). The Base Salary shall be payable, subject to any
deductions required by law or by the Company Benefit Plans referred to in
Section 2.6 below, including social security and pension deductions, as follows:
Monthly installment of salary - CHF 17,350.00
Annual Christmas payment in December - CHF 17,400.00
Annual vacation payment in July - CHF 17,400.00
2.2 Bonus. Executive shall be eligible for an annual bonus from time
-----
to time, the amount and timing of which shall be in the sole discretion of the
Board of Directors of the Company.
2.3 Review. Executive's performance will be reviewed annually in
------
accordance with the Company's policies and procedures, which currently provide
for a regular annual review in October or November, with any increase in annual
salary to be effective the first Monday in December.
2.4 Reimbursement of Expenses. Executive shall be entitled to
-------------------------
receive prompt reimbursement of all reasonable expenses incurred by Executive in
performing services hereunder, including all expenses of travel, entertainment
and living expenses while away from home on business at the request of, or in
the service of, the Company, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Company. Executive shall be entitled to travel business class.
2.5 Housing/Automobile Allowance. The Company shall reimburse
----------------------------
Executive for suitable housing and automobile expenses during the period that
Executive is required under this Agreement to travel to the United States to
perform his duties hereunder.
2.6 Benefits. Executive shall be entitled to all employee benefits
--------
required under Swiss law and to participate in and be covered by all health,
insurance, pension and other employee plans and benefits currently established
for the employees of the Company (collectively referred to as the
E-2
"Company Benefit Plans") on at least the same terms as other employees of the
Company, subject to meeting applicable eligibility requirements.
2.7 Vacations and Holidays. During Executive's employment with the
----------------------
Company, Executive shall be entitled to an annual vacation leave of four (4)
weeks at full pay. Executive shall be entitled to such holidays as are
established by the Company for all employees.
ARTICLE III
CONFIDENTIALITY AND NONDISCLOSURE
---------------------------------
3.1 Confidentiality. Executive will not during Executive's
---------------
employment by the Company or thereafter at any time disclose, directly or
indirectly, to any person or entity or use for Executive's own benefit any trade
secrets or confidential information relating to the business operations,
marketing data, business plans, strategies, employees, negotiations and
contracts with other companies, of the Company or St. Xxxx, or any other subject
matter pertaining to the business of the Company or St. Xxxx or any of their
respective clients, customers, consultants, or licensees, known, learned, or
acquired by Executive during the period of Executive's employment by the Company
or by Xxxxxxxxxx (collectively "Confidential Information"), except as may be
necessary in the ordinary course of performing Executive's particular duties as
an employee of the Company. Any material or repeated violation of this
confidentiality agreement will be punished by a fine for breach of contract
amounting to one year of Executive's Base Salary. Payment of such fine will not
release the Executive from his obligation to keep his pledge of confidentiality.
The Company reserves the right to demand payment of compensation for further
damages or to pursue injunctive or equitable relief in accordance with Section
3.6 below.
3.2 Return of Confidential Material. Executive shall promptly
-------------------------------
deliver to the Company on termination of Executive's employment with the
Company, whether or not for Cause and whatever the reason, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints, Confidential Information and any other documents of a
confidential nature belonging to the Company, including all copies of such
materials which Executive may then possess or have under Executive's control.
Upon termination of Executive's employment by the Company, Executive shall not
take any document, data, or other material of any nature containing or
pertaining to the proprietary information of the Company.
3.3 Prohibition on Solicitation of Customers. During the term of
----------------------------------------
Executive's employment with the Company and for a period of three years
thereafter, Executive shall not, directly or indirectly, either for Executive or
for any other person or
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entity, solicit any person or entity to terminate such person's or entity's
contractual and/or business relationship with the Company or St. Xxxx, nor shall
Executive interfere with or disrupt or attempt to interfere with or disrupt any
such relationship. None of the foregoing shall be deemed a waiver of any and
all rights and remedies the Company or St. Xxxx xxx have under applicable law.
3.4 Prohibition on Solicitation of Employees, Agents or Independent
---------------------------------------------------------------
Contractors After Termination. During the term of Executive's employment with
-----------------------------
the Company and for a period of three years following the termination of
Executive's employment with the Company, Executive will not solicit any of the
employees, agents, or independent contractors of the Company or St. Xxxx to
leave the employ of the Company or St. Xxxx for a competitive company or
business. However, Executive may solicit any employee, agent or independent
contractor who voluntarily terminates his or her employment with the Company or
St. Xxxx after a period of 120 days has elapsed since the termination date of
such employee, agent or independent contractor. None of the foregoing shall be
deemed a waiver of any and all rights and remedies the Company or St. Xxxx xxx
have under applicable law.
3.5 Prohibition on Competition. Executive agrees for the period of
--------------------------
time described in the next sentence (the "Noncompetition Period"), Executive
shall not, directly or indirectly, in Southeast Asia, Japan, Korea, Europe, the
United States, Canada or Mexico, compete with, assist any person or entity in
competing with or acquire an interest in any person or entity competing with,
the Company's or St. John's manufacture, use or sale of TFA (as defined in the
Purchase Agreement), including, without limitation, the sale of TFA in bulk,
other than in the "couture" or "pret a xxxxxx" lines or markets, whether as an
owner, shareholder, joint venturer, partner, officer, employee, consultant,
agent or otherwise. Executive agrees that the foregoing noncompetition
agreement shall prohibit any activity that would violate or be inconsistent with
the terms and conditions of the TFA License Agreement (as defined in the
Purchase Agreement). The Noncompetition Period shall begin on the Effective
Date (as defined in Sections 4.2 and 4.3 below) and shall be equal to (a) one
year, if Executive has been or will be paid by the Company, including pursuant
to any termination payments under Section 4.4, for a period greater than one
year and less than three years, or if Executive terminates his employment
pursuant to Section 4.3 below and the Effective Date is prior to the first
anniversary of this Agreement, (b) two years, if Executive has been or will be
paid by the Company, including pursuant to any termination payments under
Section 4.4, for a period greater than three years and less than five years, and
(c) three years, if Executive has been or will be paid by the Company, including
pursuant to any termination payments under Section 4.4, for a period greater
than five years, or if the Company terminates Executive's employment for Cause
(as defined in Section 4.1). Nothing contained in this Section 3.5 shall
E-4
prohibit Executive from holding and making investments in securities of any
corporation or limited partnership whose securities are traded in a generally
recognized market, provided, Executive's equity interest therein does not exceed
five percent (5%) of the outstanding shares or interests in such corporation or
partnership.
3.6 Right to Injunctive and Equitable Relief. Executive's
----------------------------------------
obligations in this Article III are of a special and unique character which
gives them a peculiar value. The Company cannot be reasonably or adequately
compensated for damages in an action at law in the event Executive breaches such
obligations. Therefore, Executive expressly agrees that the Company shall be
entitled to injunctive and other equitable relief without bond or other security
in the event of such breach in addition to any other rights or remedies which
the Company may possess or be entitled to pursue. Furthermore, the obligations
of Executive and the rights and remedies of the Company under this Article III
are cumulative and in addition to, and not in lieu of, any obligations, rights,
or remedies created by applicable law relating to misappropriation or theft of
trade secrets or Confidential Information.
3.7 Survival of Obligations. Executive agrees that the terms of this
-----------------------
Article III shall survive the term of this Agreement and the termination of
Executive's employment by the Company.
ARTICLE IV
TERMINATION
-----------
4.1 For purposes of this Article IV, "Cause" shall include, but not
be limited to, the following:
(i) personal dishonesty or willful misconduct by Executive;
(ii) a breach of Executive's fiduciary duties to the Company
which involves personal profit or benefit to Executive;
(iii) willful violation and conviction of any law, rule or
regulation (other than traffic violations or similar offenses) or of
any final cease and desist order issued by any financial institution
or regulatory authority against the Company; or
(iv) a material breach of this Agreement by Executive.
4.2 Termination by Company. The Company may terminate Executive's
----------------------
employment hereunder immediately for Cause. Subject to the other provisions
contained in this Agreement, the Company
E-5
may terminate this Agreement on the last day of any calendar month for any
reason other than Cause upon one year's written notice to Executive. The
effective date of termination ("Effective Date") shall be considered to be the
date of termination for Cause or the last day of the calendar month one year
subsequent to written notice of termination in the case of termination for any
reason other than Cause; however, the Company may elect to have Executive leave
the Company immediately or at any time thereafter.
4.3 Termination by Executive. Executive may terminate his employment
------------------------
hereunder immediately for cause (as defined under Swiss law). Subject to the
other provisions contained in this Agreement, Executive may terminate his
employment hereunder on the last day of any calendar month upon one year's
written notice to the Company; however, the Company may elect to have Executive
leave the Company immediately or at any time thereafter. The effective date of
termination ("Effective Date") shall be considered to be (i) the date of
termination for cause or (ii) the last day of the calendar month one year
subsequent to written notice of termination in the case of termination for any
reason other than cause, provided that the Company and the Executive may
mutually agree upon an earlier Effective Date.
4.4 Severance Benefits Received Upon Termination.
--------------------------------------------
(a) If Executive's employment is terminated by the Company for
Cause, or if Executive terminates his employment for cause, then the
Company shall pay Executive his Base Salary through the Effective Date of
such termination plus credit for any vacation earned but not taken, and the
Company shall thereafter have no further obligations to Executive under
this Agreement. Notwithstanding the foregoing, all rights under Article
337b of the Swiss Code of Obligations are reserved.
(b) If Executive's employment is terminated by the Company
without Cause, or by the Executive in accordance with Section 4.3, then the
Company shall provide Executive:
(i) salary continuation in an amount equal to Executive's
then Base Salary, to be paid monthly in installments in accordance
with Section 2.1 at the times salary payments are usually made, for
the period through the Effective Date; and
(ii) health insurance coverage as then in effect for
Executive, his spouse and dependent children for the period through
the Effective Date, subject to any employee contribution provisions as
defined in the Company Benefit Plans.
E-6
ARTICLE V
GENERAL PROVISIONS
------------------
5.1 Notice. For purposes of this Agreement, notices and all other
------
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by registered mail,
return receipt requested, postage prepaid, as follows:
If to the Company: St. Xxxx Knits AG
c/o Homburger Rechtsanwalte
Xxxxxxxxxxxxxxx 00/00
XX-0000 Xxxxxx, Xxxxxxxxxxx
Attn: Dr. Xxxxxx Xxxxxx
With copies to: St. Xxxx Knits, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Executive Officer
Xxxxx X. Xxxxxxx
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
If to Executive: Xxxxxxx Xxxxxx
Xx Xxxxxxxxxx 0
X-0000 Xxxxxxxxx
Austria
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
5.2 No Waivers. No provision of this Agreement may be modified,
----------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.
5.3 Beneficial Interests. This Agreement shall inure to the benefit
--------------------
of and be enforceable by Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's
E-7
devisee, legatee, or other designee or, if there be no such designee, to
Executive's estate.
5.4 Governing Law/Swiss Code of Obligations.
---------------------------------------
(a) This Agreement shall be governed by and construed in
accordance with the laws of Switzerland.
(b) In its present form and in any future revised form, the Swiss
Code of Obligations constitutes an integrated part of this Agreement. Any
deviations from the Swiss Code of Obligations must be agreed to in writing
by the Company and Executive.
(c) In the absence of other agreements in this Agreement, the
requirements of Article 319 (and following) of the Swiss Code of
Obligations will come into force.
5.5 Severability or Partial Invalidity. The invalidity or
----------------------------------
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
5.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
5.7 Legal Fees and Expenses. Should any party institute any action
-----------------------
or proceeding to enforce this Agreement or any provision hereof, or for damages
by reason of any alleged breach of this Agreement or of any provision hereof, or
for a declaration of rights hereunder, the prevailing party in any such action
or proceeding shall be entitled to receive from the other party all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party
in connection with such action or proceeding.
5.8 Entire Agreement. This Agreement constitutes the entire
----------------
agreement of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations between the
parties with respect to the subject matter hereof. This Agreement is intended
by the parties as the final expression of their agreement with respect to such
terms as are included in this Agreement and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence may be introduced in any judicial proceeding involving
this Agreement.
5.9 Assignment. This Agreement and the rights, duties, and
----------
obligations hereunder may not be assigned or
E-8
delegated by any party without the prior written consent of the other party and
any attempted assignment or delegation without such prior written consent shall
be void and be of no effect. Notwithstanding the foregoing provisions of this
Section 5.9, the Company may assign or delegate its rights, duties, and
obligations hereunder to any Affiliate or to any person or entity which succeeds
to all or substantially all of the business of the Company through merger,
consolidation, reorganization, or other business combination or by acquisition
of all or substantially all of the assets of the Company.
E-9
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Company"
ST. XXXX KNITS AG, in foundation,
a Swiss corporation
By: ST. XXXX KNITS, INC.,
a California corporation
By:
---------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
By: DR. XXXXXX XXXXXX
By: St. Xxxx Knits, Inc.,
as Attorney-in-Fact for
Dr. Xxxxxx Xxxxxx
By:
------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
By: XXXXXX XXXXXXXX
By: St. Xxxx Knits, Inc.,
as Attorney-in-Fact for
Xxxxxx Xxxxxxxx
By:
------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Financial Officer
"Executive"
--------------------------------------------------
Xxxxxxx Xxxxxx
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EXHIBIT F
---------
FORM OF OPINION OF COUNSEL OF BUYER
September
30th
1 9 9 6
744,574-041
NB1-275847.V3
Xxxxx Xxxxxxxxxx & Co. Ltd.
Xxxxx Xxxxxxxxxx, Inc.
Xxxxxxxxxxxxxxx 00
XX-0000 Xx. Xxxxxx, Xxxxxxxxxxx
Attn: Xxxx Xxx Xxxxx
Re: St. Xxxx Knits, Inc.
--------------------
Ladies and Gentlemen:
We have acted as counsel to St. Xxxx Knits, Inc., a California
corporation ("St. Xxxx"), in connection with the Asset Purchase Agreement, dated
as of August 29, 1996 (the "Agreement"), by and among St. Xxxx and each of you
(the "Sellers"). We are providing this opinion to you at the request of St.
Xxxx pursuant to Section 7.3(b) of the Agreement. Except as otherwise
indicated, capitalized terms used in this opinion and defined in the Agreement
will have the meanings given in the Agreement.
In our capacity as such counsel, we have examined originals or copies
of those corporate and other records and documents we considered appropriate.
As to relevant factual matters, we have relied upon, among other things, St.
John's factual representations in the Company Certificate. In addition, we have
obtained and relied upon those certificates of public officials we considered
appropriate.
We have assumed the genuineness of all signatures (other than the
signatures of officers of St. Xxxx on the Agreement), the authenticity of all
documents submitted to us as originals and the conformity with originals of all
documents submitted to us as copies. To the extent St. John's obligations
depend on the due authorization, execution and delivery of the Agreement by the
other parties to the Agreement, we have assumed that the Agreement has been so
authorized, executed and delivered
F-1
and that the Agreement constitutes the legally valid and binding obligation of
each such party enforceable in accordance with its terms.
On the basis of such examination, our reliance upon the assumptions
contained herein and our consideration of those questions we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that:
(i) St. Xxxx has been duly incorporated and is validly existing
in good standing under the laws of its jurisdiction of organization, with
the corporate power to own its properties and assets and to carry on its
business.
(ii) The execution, delivery and performance of the Agreement
have been duly authorized by all necessary action on the part of St. Xxxx,
and the Agreement has been duly executed and delivered by St. Xxxx.
(iii) The Agreement constitutes the legally valid and binding
obligations of St. Xxxx, enforceable against St. Xxxx in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether considered in a proceeding in
equity or at law.
(iv) The execution and delivery by St. Xxxx of, and performance
of its obligations under, the Agreement do not violate any state or federal
statute or regulation that we have, in the exercise of customary
professional diligence, recognized as directly applicable to St. Xxxx or to
the transactions of the type contemplated by the Agreement.
The law covered by this opinion is limited to the present law of the
State of California. We express no opinion as to the laws of any other
jurisdiction and no opinion regarding the statutes, administrative decisions,
rules or regulations of any county, municipality or special political
subdivision or other local authority.
This opinion is furnished by us as counsel for St. Xxxx and may be
relied upon by you only in connection with the purchase by St. Xxxx of the
Assets. It may not be used or relied upon by you for any other purpose or by
any other person, other than the Sellers, nor may copies be delivered to any
other person, other than the Sellers, without in each instance our prior written
consent.
Respectfully submitted,
F-2
