Exhibit 10.1
ASSET PURCHASE AGREEMENT
AMONG
FILENE'S BASEMENT, INC.,
FB LEASING SERVICES LLC
AND
SYL, LLC
DATED AS OF JUNE 18, 2009
ASSET PURCHASE AGREEMENT, dated as of June 18, 2009 (the "Agreement"), by
and between Filene's Basement, Inc., a Delaware corporation, FB LEASING SERVICES
LLC, a Delaware limited liability company (the "FB Subsidiary") and wholly owned
subsidiary of Filene's Basement Inc. (together with Filene's Basement Inc., "FB"
or "Seller"), and SYL, LLC, a Delaware limited liability company, or its
permitted assigns (the "Purchaser"). Capitalized terms used herein but not
defined in the provisions in which they first appear shall have the meanings
ascribed to them in Section 8.1(a).
WITNESSETH:
WHEREAS, the Seller, among other things, operate the Stores (as defined
herein);
WHEREAS, the Purchaser desires to purchase certain assets of the Seller and
to assume certain liabilities of the Seller, and the Seller desire to sell such
assets to the Purchaser and to assign such liabilities to the Purchaser, all on
the terms and conditions set forth in this Agreement and in accordance with
Sections 105, 363 and 365 of Title 11 of the United States Code (as in effect
for cases filed on the Petition Date, the "Bankruptcy Code") and other
applicable provisions of the Bankruptcy Code (the "Acquisition");
WHEREAS, on or about May 4, 2009 (the "Petition Date"), each Seller filed a
voluntary bankruptcy petition (the "Bankruptcy Case") with the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"); and
WHEREAS, it is contemplated that the Assets will be sold to Purchaser free
and clear of Encumbrances pursuant to an order of the Bankruptcy Court approving
such sale under Section 363 of the Bankruptcy Code, and such sale will include
the assumption by the Purchaser of the Assumed Contracts under Section 365 of
the Bankruptcy Code, all in accordance with the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the parties hereto agree as follows:
1. Purchase and Sale.
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1.1 Assets to Be Transferred.
On the terms and subject to the conditions set forth in this Agreement, at
the Closing, the Seller shall sell, assign, transfer, convey and deliver to the
Purchaser or its designated permitted assigns, and the Purchaser or its
designated permitted assigns shall purchase and assume from the Seller, all of
the Seller's right, title and interest in, to and under the following assets,
wherever such properties, assets and rights are located, whether real, personal
or mixed, whether accrued, fixed, contingent or otherwise, other than the
Excluded Assets (collectively, other than the Excluded Assets, the "Assets"), in
accordance with Sections 363 and 365 of the Bankruptcy Code:
(a) all Real Property Leases listed on Schedule 1.1(a) and the
Distribution Center Lease (as defined below) (collectively, the "Assumed
Leases");
(b) all Contracts listed on Schedule 1.1(b), subject to the provisions
of Section 1.8 below regarding Purchaser's right to eliminate the Contracts on,
and/or add additional Contracts to, Schedule 1.1(b) (the Contracts listed in
Schedule 1.1(b), as such Schedule is modified pursuant to Section 1.8, are
collectively referred to herein as the "Listed Contracts"; the Listed Contracts
and the Assumed Leases are collectively referred to herein as the "Assumed
Contracts");
(c) (i) the Intellectual Property set forth on Schedule 1.1(c), and
(ii) to the extent transferable and assignable, all other Intellectual Property;
(d) all Fixed Assets and Equipment, wherever located, that are used to
operate the Stores that are the subject of the Assumed Leases or that are used
to operate the Distribution Center or the Buying Office (collectively, the
"FF&E") including the FF&E located in such Stores set forth on Schedule 1.1(d);
(e) all customer data and customer management relationship software
relating to the Business and in connection with the Stores that are the subject
of the Assumed Leases (the "Customer Information");
(f) all Security Deposits relating to the Stores that are the subject
of the Assumed Leases;
(g) all Inventory;
(h) to the extent transferable and assignable, all Books and Records
relating to the Stores that are the subject of the Assumed Leases; provided,
however, the Assets shall not include any books and records that are subject to
attorney-client or other similar privilege or any other books or records that
Seller is precluded or restricted from transferring pursuant to applicable law;
(i) to the extent transferable and assignable, all licenses,
franchises, permits, variances, exemptions, orders, approvals, and
authorizations issued by Governmental Bodies in connection with the Stores that
are the subject of the Assumed Leases (collectively, "Permits");
(j) all telephone numbers and addresses (including electronic mail
addresses) used by the Seller in connection with the Stores that are the subject
of the Assumed Leases;
(k) all goodwill arising in connection with the Stores that are
subject to the Assumed Leases;
(l) all rights to causes of action, accounts receivables, lawsuits,
rights to legal or equitable remedies, judgments and other Claims of any nature
(whether legal or equitable, secured or unsecured, matured or un-matured, known
or unknown, liquidated or unliquidated, contingent or non-contingent, senior or
subordinated, disputed or non-disputed) owned or assertable by, or available to,
any Seller or any Seller's estate in the Bankruptcy Case (whether or not such
cause of action, accounts receivable, lawsuit, right to legal or equitable
remedies, judgment or claim is being pursued) to the extent (and only to the
extent) arising with respect to or in any way related to the Lease, dated as of
April 30, 1988, as amended, between The May Department Stores Company, a New
York corporation, and Federated Department Stores, Inc., a Delaware corporation,
for the property located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the
"Downtown Crossing Lease"), including for any amounts due from 426 Washington
(as defined below) to any Seller or any Seller's estate in the Bankruptcy Case
or whether arising by way of counterclaim, set off, rights of self-help under
such lease or otherwise; and
(m) all representations, warranties, guarantees, indemnities,
undertakings, covenants not to compete benefiting the Business, certificates,
covenants, agreements and all security therefor received by the Seller on the
purchase or other acquisition of any part of the Assets.
1.2 Excluded Assets.
Only those rights, interests and assets specifically described in Section
1.1 above shall be included as a part of the Assets. All other assets,
properties and rights of the Seller, of whatever type, kind or character, are
expressly excluded from the transaction contemplated herein and are retained by
Seller (collectively, the "Excluded Assets").
1.3 Assumed Liabilities.
Upon the terms and subject to the conditions hereof, as of the Closing, the
Purchaser shall assume from the Seller only those Liabilities arising with
respect to the performance after the Closing Date of the Assumed Contracts,
excluding any Liability resulting from any breach thereof by any Seller on or
prior to the Closing Date (the "Assumed Liabilities"). Neither Purchaser nor its
designated permitted assigns nor any of its Affiliates shall assume or undertake
to perform, pay, satisfy or discharge any other Liabilities or obligations of
the Seller. All such Liabilities and obligation other than the Assumed
Liabilities are collectively referred to as the "Excluded Liabilities".
Neither Purchaser nor its designated permitted assigns nor any of its
Affiliates shall assume or undertake to perform, pay, satisfy or discharge any
Excluded Liabilities and, without limiting the generality of the foregoing,
Seller agrees to pay and satisfy when due any Excluded Liabilities.
1.4 Purchase Price; Inventory Count; Allocation of Purchase Price;
Proration.
(a) Subject to the terms and conditions hereof, in reliance upon the
representations and warranties of the Seller and the covenants of the Seller
herein set forth, and as consideration for the sale and purchase of the Assets,
at the Closing, the Purchaser shall assume the Assumed Liabilities and shall
tender the Purchase Price. The "Purchase Price" shall be an amount equal to the
sum of (i) Forty-Seven Million Five Hundred Ninety-Two Thousand One Hundred
Twenty Dollars ($47,592,120.00), plus (ii) the Security Deposits, plus (iii) an
amount equal to seventy percent (70%) of the Inventory Cost of the Inventory
determined in accordance with Section 1.4(e). Purchaser has deposited into an
escrow (the "Escrow") with an escrow agent (the "Escrow Holder") reasonably
designated by Seller an amount equal to $25,000,000.00 (the "Good Faith
Deposit") in immediately available, good funds of the United States of America
(funds delivered in this manner are referred to herein as "Good Funds"),
pursuant to the bid requirements described in the Bidding Procedures (as defined
below). The Good Faith Deposit has been funded by Purchaser pursuant to the
Bidding Procedures. Following the execution of this Agreement by Seller, the
Good Faith Deposit shall become nonrefundable upon the termination of this
Agreement by Seller pursuant to Section 7.1(d) (which such termination right is
restricted, as provided below) and shall be refunded to the Purchaser upon the
termination of this Agreement for any other reason, including under Sections
7.1(a), (b), (c) or (f). At the Closing, the Good Faith Deposit (and any
interest or income accrued thereon) shall be paid over to Seller and upon such
payment, credited and applied toward payment of the Purchase Price. In the event
the Good Faith Deposit becomes nonrefundable as provided herein before the
Closing by reason of a termination pursuant to Section 7.1(d), Escrow Holder
shall immediately disburse the Good Faith Deposit and all interest or income
accrued thereon to Seller to be retained by Seller for its own account,
provided, however, Seller agrees that Seller shall not have the right to
terminate this Agreement and receive the Good Faith Deposit by reason of the
matters described in Section 7.1(d) (but excluding the Purchaser's obligations
under Section 1.7 of the Agreement), so long as the Purchaser is otherwise
ready, willing and able to close the transactions contemplated under this
Agreement. Seller's retention of the Good Faith Deposit pursuant to the
preceding sentence shall constitute liquidated damages for the Purchaser's
breach, and, except for the loss of the Good Faith Deposit, the Purchaser shall
not have any further liability to the Seller. If the transactions contemplated
herein terminate in accordance with the termination provisions hereof by any
reason other than pursuant to Section 7.1(d) before the Sale Approval Order is
entered by the Bankruptcy Court, the Escrow Holder shall return to Purchaser the
Good Faith Deposit (together with all income or interest accrued thereon), but
less Purchaser's one-half share of the Escrow Holder's escrow fees and charges,
within three (3) Business Days after the Agreement is terminated.
(b) The Purchaser shall prepare an allocation of the Purchase Price
(and all other capitalized costs) among the Assets for U.S. federal, state,
local and foreign income and franchise Tax purposes, which allocation shall be
binding on the parties. On or prior to the sixtieth (60th) day after the Closing
Date, the Purchaser shall deliver such allocation to FB. The Purchaser and the
Seller and their respective Affiliates shall report, act and file Tax Returns in
all respects and for all purposes consistent with such allocation prepared by
the Purchaser. The Seller shall timely and properly prepare, execute, file and
deliver to Purchaser all such documents, forms and other information as the
Purchaser may reasonably request to prepare such allocation. Neither the
Purchaser nor the Seller shall take any tax position (whether in audits, Tax
Returns or otherwise) with respect to the allocation which is inconsistent with
such allocation, unless (and then only to the extent) required by a
"determination" within the meaning of Section 1313(a) of the Code.
(c) Notwithstanding any term contained herein, under no circumstances
shall the Purchaser be responsible for, or have any liability in connection
with, determinations regarding the allocation of the Purchase Price among the
Seller or to any particular Seller.
(d) All rent, taxes, insurance, common area maintenance charges or
payments payable by the tenant under any Assumed Lease and other items treated
as "rent" for purposes of any Assumed Lease paid by a Seller under any Assumed
Lease before the Closing Date which relates to the period after the Closing
Date, together with all comparable payments made by Seller under any other
Assumed Contract before the Closing Date which relate to the period after the
Closing Date, shall be reimbursed to the Seller on the Closing Date.
(e) Commencing at approximately 6:00 p.m. (Eastern Time) on Tuesday,
June 16, 2009 (the "Initial Inventory Count Date"), Purchaser and Seller caused
RGIS LLC or such other mutually acceptable, qualified third party (the
"Inventory Auditor") to begin conducting an initial physical count (an "Initial
Count") of the Inventory at each location where the Inventory of Seller is
located (it being understood that each of Purchaser and Seller shall have the
right to have one or more representatives in attendance during the Count at each
such location). Pursuant to the Sale Approval Order described herein, the costs
and expenses of the Initial Count shall be paid by Purchaser. The Initial Count
is being, and shall continue to be, taken in a manner consistent with inventory
instructions acceptable to Purchaser and Seller, such acceptance not to be
unreasonably withheld by Purchaser or Seller. If completed prior to the Closing,
the results of the Initial Count shall be updated by Purchaser and Seller prior
to the Closing through the use of Seller's perpetual inventory system to reflect
all purchases, sales, returns and other Inventory transactions occurring
following the Initial Count and immediately prior to the Closing and the Initial
Count, as so updated through the close of business on the day immediately
preceding the date of Closing, shall be final and binding upon the parties and
shall, unless otherwise agreed in writing by Purchaser and Seller, be used for
the calculation of the Inventory Cost of the Inventory hereunder and as the
basis for calculating those portions of the Purchase Price payable at the
Closing that are based upon the value of the Inventory. In the event that, at
the time of the Closing, the Initial Count is not complete and has not been
updated pursuant to the immediately preceding sentence, then, Seller and
Purchaser shall mutually agree upon an estimate of the Inventory Cost of the
Inventory hereunder as of the Closing (the value so determined, the "Inventory
Cost Estimate"), which shall be used as the basis for calculating those portions
of the Purchase Price payable at the Closing that are based upon the value of
the Inventory, in which event the Purchase Price shall be subject to adjustment
as provided in Section 1.9 below.
1.5 Closing.
Subject to the terms and conditions of this Agreement and the Sale Approval
Order, the sale and purchase of the Assets and the assumption of the Assumed
Liabilities contemplated by this Agreement shall take place at a closing (the
"Closing") to be held at the offices of Xxxxxxxxx Xxxxx Xxxxx & Xxxxx LLP
located in Wilmington, Delaware, at 10:00 am, (Eastern Standard Time), on the
second (2nd) Business Day following the satisfaction or waiver of all conditions
to the obligations of the parties set forth in Sections 5 and 6 (other than
those conditions which by their nature can only be satisfied at the Closing), or
at such other place or at such other time or on such other date as the Seller
and the Purchaser may mutually agree upon in writing (the day on which the
Closing takes place being the "Closing Date"). For all purposes of this
Agreement, the Closing shall be deemed to be effective, and title and risk of
loss shall pass, as of 11:59 pm (Eastern Standard Time) on the Closing Date (the
"Effective Time").
1.6 Closing Deliveries by the Seller.
At the Closing, unless otherwise waived in writing by the Purchaser, the
Seller shall deliver or cause to be delivered to the Purchaser:
(a) duly executed Bills of Sale to transfer the Assets to the
Purchaser (or its permitted assign(s));
(b) duly executed counterparts of the Assignment and Assumption
Agreement;
(c) duly executed counterparts of the Real Estate Assignments;
(d) duly executed counterparts of the Intellectual Property
Assignment; and
(e) such other documents, notices, items and certificates (in each
case to the extent not inconsistent with the other terms, provisions and
limitations set forth herein) as the Purchaser may reasonably require in order
to consummate the transactions contemplated hereunder.
1.7 Closing Deliveries by the Purchaser.
At the Closing, unless otherwise waived in writing by the Seller, the
Purchaser shall deliver or cause to be delivered to the applicable Seller:
(a) FB shall at least two (2) Business Days prior to the Closing Date
designate in writing to Purchaser an account (or accounts) to which the Good
Faith Deposit and balance of the Purchase Price shall be wire transferred. On
the Closing Date, Purchaser shall cause the Good Faith Deposit to be delivered
to Seller by wire transfer of immediately available funds to such account(s) and
deliver the balance of the Purchase Price by wire transfer to such account(s);
(b) duly executed counterparts of the Assignment and Assumption
Agreement;
(c) duly executed counterparts of the Real Estate Assignments; and
(d) such other documents, notices, items and certificates (in each
case to the extent not inconsistent with the other terms, provisions and
limitations set forth herein) as the Seller may reasonably require in order to
consummate the transactions contemplated hereunder.
1.8 Additional Assumed Contracts and Leases. The following provisions shall
apply in the absence of an order of the Bankruptcy Court providing otherwise:
(a) During the period (the "Lease Retention Period") from the
execution date hereof until the earlier to occur of (i) the date which is 180
days following the Petition Date, or (ii) the date which is ten (10) days prior
to the outside date for Seller to assume or reject Seller's lease with respect
to the Buying Office (the "Buying Office Lease") pursuant to Section 365(d) of
the Bankruptcy Code (as may be extended by Bankruptcy Court Order), in the
absence of an order of the Bankruptcy Court directing assumption, rejection,
amendment or modification of the Buying Office Lease, Seller shall not assume
(or pay any cure amounts in connection therewith), reject, amend, modify or seek
to assume or reject the Buying Office Lease without first obtaining Purchaser's
written consent, which consent may not be unreasonably withheld or delayed;
provided that it shall not be deemed unreasonable for Purchaser to withhold such
consent so long as Purchaser in good faith has not reached a decision as to
whether the Buying Office Lease shall be an Excluded Asset. Prior to the
expiration of the Lease Retention Period, in the absence of an order of the
Bankruptcy Court directing rejection, amendment or modification of the Buying
Office Lease, Seller shall not reject, amend or modify the Buying Office Lease
unless it has been designated by Purchaser as an Excluded Asset.
(b) During the period (the "Contract Retention Period") from the date
of this Agreement until the date which is 180 days following the Petition Date,
in the absence of an order of the Bankruptcy Court directing assumption,
rejection, amendment or modification of the Buying Office Lease, Seller shall
not assume (or pay any cure amounts in connection therewith), reject, amend,
modify or seek to assume or reject any Contract described on Schedule 1.1(b) or
any other Contract relating directly to the ownership, operation or conduct or
business of any of the Stores, the Distribution Center or the Buying Office
(such Contracts, other than the Licensed Department/Sourcing Contracts,
collectively, the "Subject Contracts") without first obtaining Purchaser's
written consent, which consent may not be unreasonably withheld or delayed;
provided, however, that it shall not be deemed unreasonable for Purchaser to
withhold such consent so long as Purchaser in good faith has not reached a
decision as to whether such Subject Contract shall be an Excluded Asset. Prior
to the expiration of the Contract Retention Period, in the absence of an order
of the Bankruptcy Court directing rejection, amendment or modification of any
Subject Contracts, Seller shall not reject, amend or modify any Subject Contract
that has not been designated by Purchaser as an Excluded Asset.
(c) During the period (the "Licensed Department/Sourcing Contract
Retention Period") from the date of this Agreement until the date which is 180
days following the Petition Date, in the absence of an order of the Bankruptcy
Court directing assumption, rejection, amendment or modification of the Buying
Office Lease, Seller shall not assume (or pay any cure amounts in connection
therewith), reject, amend, modify or seek to assume or reject any Contract
relating directly to licensed departments or sourcing relating to the ownership,
operation or conduct or business of any of the Stores, the Distribution Center
or the Buying Office (such Contracts, collectively, the "Licensed
Department/Sourcing Contracts") without first obtaining Purchaser's written
consent, which consent may not be unreasonably withheld or delayed; provided,
however, that it shall not be deemed unreasonable for Purchaser to withhold such
consent so long as Purchaser in good faith has not reached a decision as to
whether such Licensed Department/Sourcing Contract shall be an Excluded Asset.
Prior to the expiration of the Licensed Department/Sourcing Contract Retention
Period, in the absence of an order of the Bankruptcy Court directing rejection,
amendment or modification of any Licensed Department/Sourcing Contract, Seller
shall not reject, amend or modify any Licensed Department/Sourcing Contract that
has not been designated by Purchaser as an Excluded Asset.
(d) Upon Purchaser's providing evidence of adequate assurance of
future performance thereunder to the satisfaction of the Bankruptcy Court,
Seller shall take all actions reasonably necessary to cause Assumed Contracts to
be assumed by Seller and assigned to Purchaser pursuant to Section 365 of the
Bankruptcy Code.
(e) The following provisions shall apply to the circumstances
described below:
(i) Other than (X) the Assumed Leases described on Schedule
1.1(a) hereto, (Y) the Distribution Center Lease and (Z) the Listed Contracts
described on Schedule 1.1(b) hereto (which, for purposes of clarity, means those
Subject Contracts that are included on Schedule 1.1(b) after giving effect to
this Section 1.8(e)(i)), all Subject Contracts, Licensed Department/Sourcing
Contracts and the Buying Office Lease shall during the Contract Retention
Period, the Licensed Department/Sourcing Contract Retention Period and the Lease
Retention Period, as applicable, be deemed to be "Held Contracts." Held
Contracts shall not automatically be deemed to be Excluded Assets. Purchaser may
at any time prior to the expiration of the Lease Retention Period, the Licensed
Department/Sourcing Contract Retention Period or the Contract Retention Period,
as applicable, have the right, which right may be exercised at any time and from
time to time in Purchaser's sole and absolute discretion, to provide written
notice to Seller (each such notice, a "Held Contract Assumption Notice"), of
Purchaser's election to deem the Held Contract identified in the Held Contract
Assumption Notice an Assumed Contract to be assumed by Seller and assigned to
Purchaser or an Excluded Asset. Upon the designation of a Held Contract as an
Excluded Asset, such Held Contract will cease to be a Held Contract and
thereafter for all purposes be treated as an Excluded Asset hereunder. So long
as Purchaser complies with its obligations to pay the Run Rate Costs (as defined
below) in accordance with Section 1.8(e)(ii) and provides evidence of adequate
assurance of future performance, Seller shall not reject or seek to reject any
Held Contract prior to the expiration of the Lease Retention Period, the
Licensed Department/Sourcing Contract Retention Period or the Contract Retention
Period, as applicable, unless otherwise agreed in writing by Purchaser. Within
fifteen (15) days following the date Purchaser delivers a Held Contract
Assumption Notice to Seller designating a Held Contract as an Assumed Contract,
Seller shall, subject to Purchaser's providing evidence of adequate assurance of
future performance thereunder to the satisfaction of the Bankruptcy Court, take
all requisite actions (including actions required under Section 363 and/or
Section 365 of the Bankruptcy Code, as applicable) to assume and/or assign such
Held Contract to Purchaser. The Cure Costs with respect to any Held Contract
assigned to Purchaser shall be paid by Purchaser. Seller and Purchaser
acknowledge and agree that the agreements and covenants in Section 1.8 shall
survive the Closing. Notwithstanding anything in this Agreement to the contrary,
on the date any Held Contract is assumed and assigned to Purchaser pursuant to
this Section 1.8(e)(i), such Held Contract shall thereafter be deemed an Assumed
Contract for all purposes under this Agreement. Any Held Contract for which
Purchaser has not provided a Held Contract Assumption Notice prior to the end of
the Lease Retention Period, the Licensed Department/Sourcing Contract Retention
Period or the Contract Retention Period, as applicable, shall be automatically
deemed to be an Excluded Asset which Seller, in its sole discretion, may act to
assume or reject.
(ii) During the Lease Retention Period, the Licensed Department/
Sourcing Contract Retention Period and the Contract Retention Period, as
applicable with respect to each Held Contract, Purchaser shall pay to Seller, in
advance, on the first day of each calendar month (pro rated for any portion of a
month, but only to the extent that Seller will not be obligated to bear the
prorated portion for which Purchaser would not be obligated) an amount equal to
Seller's documented estimated (such estimate to be provided to Purchaser no
later than fifteen (15) days prior to the month to which it applies)
out-of-pocket costs and expenses incurred by Seller (other than costs and
expenses willfully incurred by Seller outside of the ordinary course of business
without Purchaser's approval) during the Lease Retention Period, the Licensed
Department/Sourcing Contract Retention Period and the Contract Retention Period
under or in connection with the Held Contracts (collectively, the "Run Rate
Costs"), which shall include, without limitation, with respect to the Buying
Office Lease and other real property leases, if any, included among the Held
Contracts, the real estate occupancy expenses and the prorated amount of rent in
respect of the period from the date on which the Buying Office Lease is so
designated through the end of the next month (the "Pro-Rated Rent"). Not later
than the fifteenth (15th) day of each month of the Lease Retention Period, the
Licensed Department/Sourcing Contract Retention Period or the Contract Retention
Period, as applicable (starting with the second month thereof), Purchaser and
Seller shall reconcile between them, based upon documentation provided by
Seller, the actual Run Rate Costs for the immediately preceding month for each
Held Contract that is the subject of the Lease Retention Period, the Licensed
Department/Sourcing Contract Retention Period or the Contract Retention Period,
as applicable. Prior to the Closing, Purchaser and Seller shall reasonably
calculate the Run Rate Costs that would be incurred if all Held Contracts were
retained by Seller as such for the entire portion of the Lease Retention Period,
the Licensed Department/Sourcing Contract Retention Period or the Contract
Retention Period falling after the Closing (the "Run Rate Cover Amount") and at
the Closing, Purchaser shall provide to Seller a letter of credit in the amount
of a portion of the Run Rate Cover Amount applicable to two calendar months and
issued by an institution and in form and content reasonably satisfactory to
Seller, or, if such letter of credit is not provided, some other form of
assurance of payment of such portion of the Run Rate Costs acceptable to Seller
in its discretion.
(f) During the Contract Retention Period and the Licensed
Department/Sourcing Contract Retention Period, Seller shall take such efforts as
reasonably requested by Purchaser in order to limit the Run Rate Costs in
respect of each Held Contract.
1.9 Inventory True Up.
(a) Pursuant to that certain side letter concerning reconciliation of
estimates of certain components of the Purchase Price (the "Side Letter")
entered into by Seller and Purchaser in connection with this Agreement, Seller
and Purchaser shall use diligent and commercially reasonable efforts to promptly
determine the actual Inventory Cost of the Inventory as of the Effective Time at
each location where Inventory of Seller is located (the value so determined, the
"Actual Closing Inventory Cost").
(b) Within five (5) calendar days following the final determination of
the Actual Closing Inventory Cost pursuant to Section 1.9(a) above, and based
upon such determination, if the Actual Closing Inventory Cost:
(i) is greater than the Inventory Cost Estimate (such excess,
the "Inventory Excess"), then Purchaser shall pay to Seller in cash an amount
equal to seventy percent (70%) of the Inventory Excess; and
(ii) is less than the Inventory Cost Estimate (such shortfall,
expressed as a positive number, the "Inventory Deficiency"), then Seller shall
pay to Purchaser in cash an amount equal to seventy percent (70%) of the
Inventory Deficiency.
2. Representations and Warranties of the Seller.
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Except as set forth in the schedules to this Agreement (the "Schedules")
delivered by the Seller on the date hereof, each of which Schedule shall specify
the section to which such Schedule relates and shall be deemed to qualify only
such section, Seller represents and warrants to the Purchaser on the date
hereof, that:
2.1 Due Incorporation and Authority.
The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Seller is licensed,
registered, qualified or admitted to do business in each jurisdiction in which
the ownership, use or leasing of any of the Seller's assets or properties or the
conduct or nature of the Business makes such licensing, qualification, or
admission necessary (except where the failure to be so licensed, registered,
qualified or admitted could not, individually or in the aggregate, have a
Material Adverse Effect). The Seller has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. Subject to the entry of the Sale Approval Order, (a) the
Seller has all requisite corporate power and authority to enter into this
Agreement, carry out its obligations hereunder and consummate the transactions
contemplated hereby and (b) the execution and delivery by the Seller of this
Agreement, the performance by the Seller of its respective obligations hereunder
and the consummation by the Seller of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on the part of the Seller
and no other corporate proceedings on the part of the Seller are necessary to
authorize the execution and delivery of this Agreement or to consummate the
other transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Seller, and, upon entry of the Sale Approval Order
(assuming the due authorization, execution and delivery of this Agreement by the
Purchaser), this Agreement constitutes the legal, valid and binding obligation
of the Seller enforceable against the Seller in accordance with its terms.
2.2 No Conflicts.
Subject only to the entry of the Sale Approval Order, the execution and
delivery by the Seller of this Agreement, the consummation of the transactions
contemplated hereby, and the performance by Seller of this Agreement in
accordance with its terms will not (with or without notice or lapse of time or
both):
(a) violate the certificate of incorporation or by-laws (or comparable
instruments) of the Seller;
(b) require Seller to obtain any consent, approval, authorization or
actions of, or make any filings with or give any notices to, any Governmental
Bodies or any other Person, except for (i) the notification requirements of the
HSR Act (and any foreign counterparts thereof), if applicable or (ii) consents,
approvals, or authorizations of, or declarations or filings with, the Bankruptcy
Court; or
(c) violate any Requirement of Law to which the Seller or any of its
assets, Liabilities or properties are subject;
provided, however, that each of the cases set forth in clauses (b) and (c) above
is subject to exceptions that would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
2.3 Compliance with Laws.
To the Seller's Knowledge, the Seller is not in material violation during
the period from July 1, 2007 until the date hereof of any domestic, foreign,
federal, state or local statute, law, rule, regulation, order, writ, ordinance,
judgment, governmental directive, injunction, decree or other requirement of any
Governmental Body with respect to the Business or the Assets ("Requirement of
Law").
2.4 Permits.
On the Closing Date, to Seller's Knowledge, the Seller will be in
compliance with all material Permits to which the Assets are subject.
2.5 Reserved.
2.6 Property.
The Seller (subject to the entry of, and the provision of, the Sale
Approval Order) will convey to the Purchase title to the Assets free and clear
of all Encumbrances, except for Liens that shall be released at or prior to the
Closing.
2.7 Real Property.
(a) Schedule 2.7(a) sets forth a true and correct list of the Assumed
Leases and all Security Deposits as of the date hereof with respect to each
Assumed Lease, and the current rent for each Assumed Lease and to the Seller's
Knowledge the remaining term (including renewal options thereunder) for each
Assumed Lease. Seller has heretofore furnished to Purchaser true, correct and
complete copies of all Assumed Leases (including all amendments, modifications,
updates and supplements thereto), which have not been further modified or
amended.
(b) There are no eminent domain or other similar proceedings pending
or, to the Seller's Knowledge, threatened affecting any portion of the Leased
Real Property or the Assets.
(c) To the Seller's Knowledge there is no proposed or pending
proceeding to change or redefine the applicable legal requirements pertaining to
zoning of any portion of the Leased Real Property.
2.8 Intellectual Property.
Schedule 2.8 sets forth as of the date hereof a complete and accurate list
of all material Intellectual Property. Except as set forth on Schedule 2.8, the
Seller owns, free and clear of all Encumbrances (except for Encumbrances to be
released on or prior to the Closing Date pursuant to the Sale Approval Order),
or have valid licenses on reasonable terms to use all the Intellectual Property,
and subject to entry of the Sale Approval Order as of the Closing, Purchaser
shall have the same. Except as set forth on Schedule 2.8, to the Seller's
Knowledge, no Person is infringing upon or otherwise violating any rights
associated with such Intellectual Property. The Intellectual Property and the
license agreements transferred pursuant to this Agreement constitute all of the
Intellectual Property that is necessary to operate or conduct the Business as
currently conducted.
2.9 Litigation.
There are no Claims pending or, to the knowledge of the Seller, threatened
against the Seller, before any Governmental Body that would prevent or
materially delay the consummation by the Seller of the transactions contemplated
by this Agreement.
3. Representations and Warranties of the Purchaser.
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The Purchaser represents and warrants to the Seller as follows:
3.1 Due Incorporation and Authority.
The Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Purchaser has all requisite limited liability company power and authority to
enter into this Agreement, carry out its obligations hereunder and consummate
the transactions contemplated hereby. The execution and delivery by the
Purchaser of this Agreement, the performance by the Purchaser of its obligations
hereunder and the consummation by the Purchaser of the transactions contemplated
hereby have been duly authorized by all requisite limited liability company
action on the part of the Purchaser and no other limited liability company
proceedings on the part of the Purchaser are necessary to authorize the
execution and delivery of this Agreement or to consummate the other transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Purchaser.
3.2 No Conflicts.
The execution and delivery by the Purchaser of this Agreement, the
consummation of the transactions contemplated hereby, and the performance by the
Purchaser of this Agreement in accordance with its terms will not:
(a) violate the certificate of formation or limited liability company
operating agreement of the Purchaser;
(b) require the Purchaser to obtain any material consents, approvals,
authorizations or actions of, or make any filings with or give any notices to,
any Governmental Bodies or any other Person, except for (i) the notification
requirements of the HSR Act (and any foreign counterpart thereof) or (ii)
consents, approvals or authorizations of, or declarations or filings with, the
Bankruptcy Court;
(c) violate or result in the breach of any of the terms and conditions
of, cause the termination of or give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time, or both, constitute)
a material default under, any material Contract to which the Purchaser is a
party or by or to which each of the Purchaser or any of its properties is or may
be bound or subject; or
(d) violate any Requirement of Law to which the Purchaser is subject;
provided, however, that each of the cases set forth in clauses (b) through (d)
above is subject to exceptions that could not have, either individually or in
the aggregate, a material adverse effect on the Purchaser.
3.3 Litigation.
There are no Claims pending or, to the knowledge of the Purchaser,
threatened against the Purchaser, before any Governmental Body that would
prevent or materially delay the consummation by the Purchaser of the
transactions contemplated by this Agreement.
3.4 Availability of Funds.
On the Closing Date, the Purchaser will have cash available that is
sufficient to enable Purchaser to consummate the transactions contemplated by
this Agreement.
4. Covenants and Agreements.
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4.1 Conduct of Business.
Except (i) as expressly provided in this Agreement or on Schedule 4.1, or
(ii) to the extent that the following is inconsistent with Seller's duties and
obligations as a debtor in the Bankruptcy Case or with orders issued by the
Bankruptcy Court, or (iii) with respect to Sections 4.1(a)(i) only, to the
extent Seller does not have adequate funding to comply, or (iv) as otherwise
agreed to in writing by the Purchaser, the Seller agrees that, from the date
hereof until the earlier of the Closing and the date on which this Agreement is
terminated pursuant to Section 7.1 hereof, Seller shall:
(a) maintain the Assets at the existing level of repair and operating
condition;
(b) preserve in full force and effect all material Permits;
(c) with respect to the period following initiation of the Bankruptcy
Case, comply with all applicable Requirements of Law in all material respects in
connection with the Stores that are the subject of the Assumed Leases;
(d) sell or convey any of the Assets or any interests therein
consistent with past practice;
(e) not cancel, terminate or amend any Assumed Contract;
(f) not enter into any Contract the effect of which would be to grant
to a third party any license to use any Intellectual Property;
(g) not (A) sell, lease, license, transfer, encumber, or otherwise
dispose of any Intellectual Property, except for liens that will be released on
the Closing Date; or (B) knowingly, willfully or wantonly misappropriate or
otherwise violate the rights of any third party intellectual property;
(h) not enter into any Contract that contains non-competition
restrictions, including any restrictions purporting to relate to the Business or
the sale of the Seller's products or any geographic restrictions, or in any case
that would prohibit or restrict the Purchaser, assuming the consummation of the
transactions contemplated by this Agreement;
(i) not engage in any going out of business sale at any of the Stores
or in a new management or similar sale pursuant to which all or substantially
all of the Inventory will be sold; or
(j) not agree in writing or otherwise to take any of the actions
described in (e) through (i) above.
Notwithstanding anything in this Agreement to the contrary, all of the
actions described in this Section 4.1 relate solely to the Business and the
Assets and the Purchaser acknowledges that the Seller can take any actions, in
its sole and absolute discretion, relating solely to the Excluded Assets,
Excluded Stores or Excluded Liabilities.
4.2 Expenses.
Other than any HSR Act filing fees (and fees required to be paid by foreign
counterparts of the HSR Act), which shall, if applicable, be borne equally
between the Seller on the one hand and the Purchaser on the other, and except as
otherwise specifically provided herein, including, without limitation, Section
7.2, the Purchaser and the Seller shall bear their respective expenses incurred
in connection with the preparation, execution and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
their Representatives.
4.3 Access to Information.
From the date hereof until the earlier of (x) the Closing and (y)
termination of this Agreement pursuant to Section 7.1, upon reasonable notice,
Seller shall, and shall cause each of its officers, directors, employees,
auditors and agents to, (i) afford the officers, employees and Representatives
of the Purchaser reasonable access, during normal business hours, to the
offices, plants, warehouses, properties, books and records of the Seller and
(ii) furnish to the officers, employees and Representatives of the Purchaser
such additional financial and operating data and other information regarding the
operations of the Seller as are then in existence and as the Purchaser may from
time to time reasonably request; provided, however, that such investigation
shall not unreasonably interfere with the operations of the Seller or of any of
its Affiliates; and provided further, however, that (i) the auditors of the
Seller shall not be obliged to make any work papers available to any Person
except as otherwise provided herein, and (ii) nothing in this Section 4.3 shall
be deemed to give rise to any condition or contingency to Purchaser's obligation
to consummate the transactions contemplated herein. All information provided
pursuant to this Section 4.3 shall be governed by the terms of the
Confidentiality Agreement.
4.4 Regulatory and Other Authorizations; Consents.
(a) Each of the parties hereto shall cooperate and use its
commercially reasonable efforts to (i) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under any Requirement of Law or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (ii) obtain any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made in connection with the authorization, execution
and delivery of this Agreement and, to the extent that the need for the same is
not obviated by the entry of the Sale Approval Order, the consummation of the
transactions contemplated hereby, and (iii) within fifteen (15) calendar days of
the date hereof, make all filings and give any notice, and thereafter make any
other submissions either required or reasonably deemed appropriate by each of
the parties, with respect to this Agreement and the transactions contemplated
hereby required under any Requirement of Law, including applicable securities
and antitrust Requirements of Law, and the rules and regulations of any stock
exchange on which the securities of any of the parties are listed or traded.
Commercially reasonable efforts shall not obligate the Seller or the Purchaser
to make or offer to make any payments to obtain any consents, licenses, permits,
waivers, approvals, authorizations or orders.
(b) The parties hereto shall cooperate and consult with each other in
connection with the making of all filings and notices which the parties are
required to make, including by providing copies of all such documents to the
non-filing party and its advisors a reasonable period of time prior to filing or
the giving of notice to the extent practicable. No party to this Agreement shall
consent to any voluntary extension of any statutory deadline or waiting period
or to any voluntary delay of the consummation of the transactions contemplated
in this Agreement at the behest of any Governmental Body without the consent and
agreement of the other parties to this Agreement, which consent shall not be
unreasonably withheld or delayed. Each party shall promptly inform the others of
any material communication from any Governmental Body regarding any of the
transactions contemplated by this Agreement. To the extent practicable, no party
to this Agreement shall agree to participate in any meeting with any
Governmental Body in respect of any filing with such body, investigation or
other inquiry unless it consults with the other party in advance and, to the
extent permitted by such Governmental Body, gives the other party the
opportunity to attend and participate at such meeting.
4.5 Further Action; Additional Assignments of Intellectual Property.
Each of the parties hereto shall prepare and execute such documents and
take such further actions as may be reasonably required or desirable to carry
out the provisions hereof and give effect to the transactions contemplated
hereby; provided, however, nothing herein shall require either party to this
Agreement to (i) execute any document that would impose any material additional
monetary obligation or otherwise materially increase the burdens of this
Agreement imposed upon such party by the other provisions hereof, or (ii) to
initiate or participate in any action or other proceeding other than those
specifically contemplated by this Agreement. From time to time after the
Closing, the Seller shall execute and deliver such documents (to the extent
consistent with the limitations set forth above in this Section 4.5) reasonably
necessary to further the sale and assignment of the Intellectual Property to the
Purchaser hereunder. Such Intellectual Property assignments shall be in
recordable form based on the local law requirements. The Purchaser assumes
responsibility for and will bear the expenses of recording such Intellectual
Property assignments in all jurisdictions. Following the Closing, the Seller
shall have no obligation or responsibility for maintaining or prosecuting any
Intellectual Property transferred to the Purchaser hereunder.
(a) Employee Matters. From and after the date hereof, the Purchaser,
(i) in its sole and absolute discretion, may, in consultation and cooperation
with the Seller, communicate with any of the Business Employees about possible
employment with the Purchaser after the Closing Date; and/or (ii) shall
interview and offer employment to only those employees that it deems appropriate
in its discretion for its conduct of the Business after the Closing Date on such
terms and conditions as the Purchaser deems appropriate in its discretion. Those
of the Business Employees that accept the Purchaser's offer of employment shall
be terminated by the Seller, and shall become employed by the Purchaser or one
of its Affiliates (referred to in this Agreement as "Transferred Employees") as
of the Closing Date. All employment offers are subject to the satisfactory
completion by the Purchaser of its customary employment interview, background
checks and drug testing procedures. Nothing in this Agreement shall prevent the
Purchaser or any of its Affiliates from terminating the employment of any
Transferred Employee at any time.
(b) The Seller acknowledges that the Purchaser shall not assume any
liability related to any Benefit Plan that is sponsored or maintained by the
Seller or any ERISA Affiliate (whether former or current).
(c) The Seller shall be responsible for any liabilities or obligations
(i) arising under the WARN Act, if any, and (ii) resulting from or precipitated
by layoffs, if any, in respect of employees of the Seller whose employment was
terminated on or prior to the Closing. For the sake of clarity, and without
limiting any other provision of this Agreement, the parties acknowledge and
agree that neither of the Purchaser nor any of its Affiliates shall have
liability for the payment of any amounts due to the Seller's current or former
employees, including any Business Employees, under agreements with or plans of
the Seller, including termination, severance, and retention payments and any
obligation to provide health, disability, life, retirement, or other benefits
(whether covered by insurance or not).
(d) The Seller shall retain all liability and responsibility for any
Benefit Plan, including without limitation any health care continuation coverage
("COBRA Coverage") required under Section 4980B of the Code and Part 6 of
Subtitle B of Title 1 of ERISA with respect to any Business Employees or former
employees who do not receive an offer of employment from the Purchaser or
decline an offer of employment from the Purchaser, and shall not terminate any
Benefit Plan pursuant to which any Business Employees are eligible for COBRA
Coverage.
4.6 Bankruptcy Court Approval.
The Bankruptcy Court has entered an order establishing notice and service
requirements to creditors and parties in interest with respect to the
Acquisition, and approving the bidding procedures (the "Bidding Procedures") set
forth in the Bidding Procedures Order entered by the Bankruptcy Court on May 15,
2009 (the "Bidding Procedures Order"). No later than June 19, 2009, the
Bankruptcy Court shall enter an order approving the sale of the Assets to the
Purchaser pursuant to the terms of this Agreement (the "Sale Approval Order").
(a) The Bidding Procedures Order. Among other matters, the Bidding
Procedures Order:
(i) Intentionally omitted;
(ii) approves the Bidding Procedures; and
(iii) schedules a hearing to consider entry of the Sale Approval
Order and provides that notice of such hearing be given to all of the Seller's
creditors, interest holders of record, the Environmental Protection Agency, all
state/local environmental agencies in any jurisdiction where Seller owns or has
owned or used real property, the Internal Revenue Service, all state/local
taxing authorities in jurisdictions where the Seller has or may have any tax
liability, and potential other purchasers identified by the Seller and otherwise
in accordance with Bankruptcy Rule 2002.
(b) Intentionally omitted.
(c) The Sale Approval Order. The Sale Approval Order shall be
substantially in the form of Exhibit A hereto, and shall, among other matters:
(i) approve the Acquisition on the terms set forth herein;
(ii) find that, as of the Closing Date, the transactions
contemplated by this Agreement effect a legal, valid, enforceable and effective
sale and transfer of the Assets to the Purchaser and shall vest the Purchaser
with title to the Assets free and clear of all Encumbrances;
(iii) find that the consideration provided by the Purchaser
pursuant to this Agreement constitutes reasonably equivalent value and fair
consideration for the Assets;
(iv) (A) authorize the Seller to assume and assign to the
Purchaser each of the Assumed Contracts and (B) find that, as of the Closing
Date, the Contracts to be assumed by the Seller and assigned to the Purchaser
pursuant to this Agreement will have been duly assigned to the Purchaser in
accordance with Section 365 of the Bankruptcy Code;
(v) find that the Purchaser is a good faith purchaser of the
Assets pursuant to Section 363(m) of the Bankruptcy Code;
(vi) order that the Assumed Contracts will be transferred to, and
remain in full force and effect for the benefit of the Purchaser,
notwithstanding any provision in any such Contract or lease or any Requirement
of Law (including those described in Sections 365(b)(2) and (f) of the
Bankruptcy Code) that prohibits, restricts or limits in any way such assignment
or transfer;
(vii) find that the Seller gave due and proper notice of the
Acquisition to each party entitled thereto;
(viii) find that the Purchaser has satisfied all requirements
under Sections 365(b)(l) and 365(f)(2) of the Bankruptcy Code to provide
adequate assurance of future performance of the Assumed Contracts; provided,
however, Purchaser shall provide such financial information and evidence
regarding future operations as the Bankruptcy Court may require and otherwise
use Purchaser's best efforts to satisfy the Bankruptcy Court that "adequate
assurance of future performance" exists as to all Assumed Contracts for purposes
of Section 365 of the Bankruptcy Code;
(ix) authorize and direct the Seller to pay all Cure Costs (the
"Real Estate Cures") relating to assumption and assignment of the Assumed Leases
other than the Paramus Lease and the Xxxxxxxx Lease (all Assumed Leases other
than the Paramus Lease and the Xxxxxxxx Lease, the "Seller Cure Leases") out of
the proceeds of the Acquisition; provided that nothing in this Agreement shall
be deemed to obligate Seller to pay Cure Costs payable in connection with the
assumption and assignment of any Assumed Contracts other than the Seller Cure
Leases (the Cure Costs, if any, related to any Assumed Contracts other than the
Seller Cure Leases, are referred to herein as the "Other Cure Amounts"), it
being agreed that Purchaser shall be solely responsible for paying any and all
Other Cure Amounts, if any, payable in connection with and as a condition to
Seller's assumption and assignment of Assumed Contracts;
(x) bar the nondebtor party or parties to each Assumed Contract
from asserting against the Purchaser, the Business or any of the Assets: (a) any
default, Claim, Liability or other cause of action existing as of the Closing
Date and (b) any objection to the assumption and assignment of such nondebtor
party's Assumed Contract;
(xi) find that to the extent permitted by law, the Purchaser is
not a successor to the Seller or its bankruptcy estate by reason of any theory
of law or equity, and the Purchaser shall not assume or in any way be
responsible for any liability or obligation of the Seller and/or its bankruptcy
estate, except as otherwise expressly provided in this Agreement; and
(xii) order that, notwithstanding the provisions of Federal Rules
of Bankruptcy Procedure 6004(g) and 6006(d), the Sale Approval Order is not
stayed and is effective immediately upon entry.
4.7 Access to Books and Records and Personnel.
During the pendency of the Bankruptcy Case, Purchaser shall make available
to Seller and its Representatives (to the extent in the Purchaser's or an
Affiliate's employ or exclusive possession, as the case may be, and to the
extent that the same does not unreasonably interfere with the Purchaser's
operation of its business) access at reasonable times to the Books and Records
acquired by Purchaser hereunder, the chief financial officer of Purchaser,
Seller's current senior employees and such other persons as shall be agreed upon
by Purchaser and Seller for reasonable consultation or review of reasonable
duration and, in the case of the Books and Records, to make and obtain copies
thereof, in any case solely in connection with matters relating to
administration and wind-down of the Bankruptcy Case.
4.8 Tax Matters.
(a) Sales, Use and Other Transfer Taxes. The Purchaser and Seller
shall share and be equally responsible for any and all excise, sales, value
added, use, registration, stamp, franchise, transfer and similar Taxes, levies,
charges and fees incurred in connection with the transactions contemplated by
this Agreement. The Seller shall be responsible for all income, profit, and
similar taxes incurred or imposed with respect to the sale of the Assets by the
Seller. The parties hereto agree to cooperate in the filing of all necessary
documentation and all Tax Returns with respect to all such Taxes, including any
available pre-sale filing procedure.
(b) Cooperation. The parties hereto shall cooperate with each other
and with each other's respective Representatives, including accounting firms and
legal counsel, in connection with the preparation or audit of any Tax Return(s)
and any Tax claim or litigation in respect of the Assets and Assumed Liabilities
that include whole or partial taxable periods, activities, operations or events
on or prior to the Closing Date, which cooperation shall include, but not be
limited to, making available employees, if any, for the purpose of providing
testimony and advice, or original documents, or any of the foregoing.
4.9 Cure Costs.
The Seller shall be exclusively responsible for the payment of, and shall
pay as and when required by the Sale Approval Order, all Real Estate Cures and
Purchaser shall be exclusively and solely responsible for payment of, and shall
pay, as and when required by the Sale Order, all Other Cure Amounts.
4.10 Use of Intellectual Property.
The Seller shall promptly, following the Closing Date, take such actions as
may be necessary so that it ceases to use all of the corporate names, trade
names and trademarks included in the Intellectual Property, together with all
related designs that were owned by the Seller prior to the Closing (the
"Names"). At the Closing, the Seller and the Purchaser shall enter into a
Limited License Agreement to allow Seller to continue to use the Names solely in
connection with the orderly liquidation or sale of the Excluded Assets, on a
royalty-free basis, for a period not to exceed 30 days.
4.11 Intentionally Omitted.
4.12 Real Estate Matters.
Following the date hereof , the parties shall prepare, and at the Closing,
shall execute and deliver an assignment with respect to each Assumed Lease
between Seller, or other lessee, as assignor and Purchaser or its designees as
assignee providing for the assignment of the applicable Assumed Lease to the
Purchaser (collectively, the "Real Estate Assignments").
4.13 Material Contracts.
The Seller will make available, upon request by the Purchaser, copies of
all Contracts to which the Seller is a party or by which any of the Assets is
bound that are used in the Business or that relate to the conduct of the
Business ("Material Contracts").
4.14 "AS IS" Transaction.
Purchaser hereby acknowledges and agrees that Seller makes no
representations or warranties whatsoever that will survive the Closing, express
or implied (including, without limitation, any implied warranty of
merchantability or fitness for any particular purpose, which implied warranties
are hereby expressly disclaimed), with respect to any matter relating to the
Assets. Accordingly, Purchaser will accept the Assets at the Closing "AS IS,
WHERE IS," and "WITH ALL FAULTS."
5. Conditions Precedent to the Obligation of the Purchaser.
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The obligation of the Purchaser to consummate the transactions contemplated
by this Agreement is subject to the fulfillment on or prior to the Closing Date
of each of the following conditions, any one or more of which (to the extent
permitted by law) may be waived by the Purchaser:
5.1 Representations and Warranties: Covenants.
The representations and warranties of Seller set forth herein shall be true
and correct in all material respects. The covenants and agreements contained in
this Agreement to be complied with by the Seller at or before the Closing shall
have been complied with in all material respects. The Purchaser shall have
received a certificate of Seller to such effect signed by a duly authorized
officer thereof.
5.2 No Order.
No Governmental Body shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and has the effect of
making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions and which are not
satisfied or resolved or preempted by the Sale Approval Order.
5.3 RESERVED.
5.4 Bankruptcy Filing.
The Bankruptcy Case shall not have been dismissed or converted to Chapter 7
of the Bankruptcy Code and no trustee shall have been appointed. The Bankruptcy
Court shall have entered the Sale Approval Order and it shall not have been
vacated, reversed or stayed.
5.5 RESERVED.
5.6 Closing Documents.
The Seller shall have delivered to the Purchaser on the Closing Date the
documents required to be delivered pursuant to Section 1.6.
6. Conditions Precedent to the Obligation of the Seller to Close.
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The obligation of the Seller to consummate the transactions contemplated by
this Agreement is subject to the fulfillment on or prior to the Closing Date of
each of the following conditions, any one or more of which (to the extent
permitted by law) may be waived by the Seller:
6.1 Representations and Warranties: Covenants.
The representations and warranties of the Purchaser set forth herein shall
be true and correct in all material respects. The covenants and agreements
contained in this Agreement to be complied with by the Purchaser at or before
the Closing shall have been complied with in all material respects. The Seller
shall have received a certificate of the Purchaser to such effect signed by a
duly authorized officer thereof.
6.2 No Order.
No Governmental Body shall have enacted, issued, promulgated, enforced or
entered any statute, rule, regulation, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and has the effect of
making the transactions contemplated by this Agreement illegal or otherwise
restraining or prohibiting consummation of such transactions and which are not
satisfied or resolved or preempted by the Sale Approval Order.
6.3 RESERVED.
6.4 Sale Approval Order.
The Bankruptcy Court shall have entered the Sale Approval Order, and the
Sale Approval Order shall be in full force and effect and not have been vacated,
reversed or stayed.
6.5 Closing Documents.
The Purchaser shall have delivered to the Seller on the Closing Date the
documents and payments required to be delivered by it pursuant to Section 1.7.
7. Termination of Agreement.
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7.1 Termination Prior to Closing.
Notwithstanding anything herein to the contrary, this Agreement may be
terminated, and the transactions contemplated by this Agreement abandoned, at
any time before the Closing, upon notice by the terminating party to the other
party:
(a) by the mutual written consent of the Seller and the Purchaser;
(b) by either the Seller or the Purchaser if the Closing shall not
have occurred on or before June 19, 2009; provided, however, that the right to
terminate this Agreement under this Section 7.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the failure of the Closing to
occur prior to such date;
(c) by the Purchaser, if (x) any of the representations and warranties
of any Seller contained in this Agreement shall fail to be true and correct, or
(y) there shall be a breach by any Seller of its covenants or agreements in this
Agreement that in either case (i) would result in the failure of a condition set
forth in Section 5.1 and (ii) which is not curable or, if curable, is not cured
within five (5) calendar days after written notice thereof is delivered by the
Purchaser to the Seller; provided, that the Purchaser may not terminate this
Agreement pursuant to this Section 7.1(c) if Purchaser is in material breach of
this Agreement and; provided further, that it is understood that the failure to
cause an Assumed Contract to be assigned to Purchaser due to Purchaser's failure
to provide evidence of adequate assurance of future performance under any such
Assumed Contract to the satisfaction of the Bankruptcy Court shall not itself
constitute a breach of a covenant or failure of a condition allowing the
Purchaser to terminate this Agreement or to require a reduction or other
adjustment of or to the Purchase Price;
(d) by the Seller, if (x) any of the representations and warranties of
the Purchaser contained in this Agreement shall fail to be materially true and
correct, or (y) there shall be a material breach by the Purchaser of its
covenants or agreements in this Agreement that in either case (i) would result
in the failure of a condition set forth in Section 6.1 and (ii) which is not
curable or, if curable, is not cured within five (5) calendar days after written
notice thereof is delivered by the Seller to the Purchaser; provided, that the
Seller may not terminate this Agreement pursuant to this Section 7.1(d) if any
Seller is in material breach of this Agreement;
(e) intentionally omitted; or
(f) by the Purchaser (provided that the Purchaser is not then in
material breach of any provision of this Agreement), if any of the following
shall occur:
(i) the Bankruptcy Case is dismissed or converted to Chapter 7 of
the Bankruptcy Code or a chapter 11 trustee is appointed for the Seller; or
(ii) intentionally omitted; or
(iii) if the Sale Approval Order has not been entered by the
Bankruptcy Court on or before June 19, 2009; provided, however; that the
Purchaser shall not be entitled to exercise its rights under this clause (iii)
if the Sale Order has been entered by the Bankruptcy Court prior to the
Purchaser exercising such rights.
7.2 Return of Good Faith Deposit. In the event that this Agreement is
terminated under Section 7.1(a), (b), (c) or (f) and provided that the Purchaser
is not in material breach of any provision of this Agreement prior to such
termination, the Escrow Holder shall disburse to the Purchaser any amounts held
in the Escrow.
8. Miscellaneous.
-------------
8.1 Certain Definitions.
(a) As used in this Agreement, the following terms have the following
meanings:
"Affiliate" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such specified Person.
"Assignment and Assumption Agreement" means the Assignment and Assumption
Agreement in form and content consistent with the terms of this Agreement and
otherwise reasonably satisfactory to Purchase and Seller to be executed by the
Purchaser and the Seller on the Closing Date.
"Benefit Plan" means any pension, retirement, savings, profit sharing,
deferred compensation, stock ownership, stock purchase, stock option, incentive,
severance pay, medical, dental, health, welfare, disability, life, death
benefit, group insurance, bonus, vacation pay, sick pay, post-retirement medical
or life or other employee benefit plan, program, agreement, policy or
arrangement (including, without limitation, each "pension plan" as defined in
Section 3(2) of ERISA, any "welfare plan" as defined in Section 3(1) of ERISA
and any "multiemployer plan" as defined in Section 3(37) of ERISA), whether
written or unwritten, qualified or non-qualified, funded or unfunded, maintained
or contributed to by the Seller or its Subsidiaries (or to which any Seller or
its Subsidiaries are party) for the benefit of, or with, Business Employees.
"Xxxx of Sale" means Bills of Sale in form and content consistent with the
terms of this Agreement and otherwise reasonably satisfactory to Purchaser and
Seller to be executed by the Purchaser and the Seller on the Closing Date.
"Books and Records" means all files, documents, instruments, papers, books
and records, including Tax books and records (whether stored or maintained in
hard copy, digital or electronic format or otherwise) used by the Seller in
connection with the Business or the other Assets, including Contracts (including
Material Contracts), customer lists, customer information and account records,
computer files, data processing records, payroll, employment and personnel
records, advertising and marketing data and records, credit records, records
relating to suppliers and other data.
"Business" means the ownership, operation, conduct or business of the
Stores which are the subject of the Assumed Leases.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which banks located in New York, New York are authorized or obligated to close.
"Business Employees" means the Seller's current employees employed in
connection with, or rendering services to, the Business in those Stores which
are the subject of the Assumed Leases.
"Buying Office" means Seller's buying office located at 000 Xxxxxxxxxx
Xxxxxx, 00 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000.
"Claim" means a suit, claim, action, proceeding, inquiry, investigation,
litigation, demand, charge complaint, grievance, arbitration, indictment, or
grand jury subpoena.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985 as
described in Section 4980B of the Code, sections 601 et seq. of ERISA, each as
amended, and the regulations promulgated thereunder.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Contract" means any written or oral agreement, arrangement, understanding,
lease, license, sublicense, or instrument or other contractual or similar
arrangement or commitment to which Seller is a party.
"Cure Costs" means the cure, compensation and restatement, costs and
expenses of or relating to the assumption and assignment of the Assumed
Contracts (including, without limitation, Assumed Leases) included in the Assets
assumed and assigned to the Purchaser hereunder pursuant to Section 365 of the
Bankruptcy Code.
"Distribution Center" means Seller's warehouse and distribution facilities
located in Auburn, Massachusetts.
"Distribution Center Lease" means Seller's real property lease with respect
to the Distribution Center.
"Encumbrances" means all Liens, claims, conditional sales agreements,
rights of first refusal, rights of first offer or rights of first negotiation or
options.
"Equipment" means all machinery, rolling stock, equipment, computer
equipment, software, software systems, databases and database systems used at
the Stores that are the subject of the Assumed Leases.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"Excluded Store" means all rights relating to the Stores from time to time
listed on Schedule 8.1(a)-2 to this Agreement, all of which rights (other than
the rights to the Inventory located at the Excluded Stores) comprise part of the
Excluded Assets under this Agreement.
"Fixed Assets" means all furniture, furnishings, fixtures, trade fixtures,
racks, pallets, displays and office equipment used at those Stores that are the
subject of the Assumed Leases.
"Governmental Body" means a domestic or foreign national, federal, state,
provincial, or local governmental, regulatory or administrative authority,
department, agency, commission, court, tribunal, arbitral body or self-regulated
entity.
"HSR Act" means the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Intellectual Property" means, to the extent relating to or used in
connection with the Business, whether owned or licensed, whether related to use
in the United States or another country, (i) any and all patents (including
design patents, industrial designs and utility models) and patent applications
(including docketed patent disclosures awaiting filing, reissues, divisions,
continuations, continuations-in-part and extensions), patent disclosures
awaiting filing determination, inventions and improvements thereto, (ii)
trademarks, service marks, certification marks, trade names, brand names, trade
dress, logos, business and product names, slogans, and registrations and
applications for registration thereof, including the marks Filene's Basement
(USPTO Registration Number 2366267) and Filene's Basement of Boston (USPTO
Registration Number 1280220), (iii) copyrights (including software) and
registrations thereof, (iv) inventions, processes, designs, formulae, trade
secrets, know-how, industrial models, confidential and technical information,
manufacturing, engineering and technical drawings, product specifications,
domain names, discoveries and confidential business information, (v)
intellectual property rights similar to any of the foregoing, (vi) computer
software, web site and domain names, (vii) copies and tangible embodiments
thereof (in whatever form or medium, including electronic media) and (viii) all
contracts or licenses for the use of any of the foregoing, in the case of each
of the foregoing together with all goodwill directly or indirectly associated
therewith.
"Intellectual Property Assignment" means the instrument (in form and
content reasonably satisfactory to Purchaser and Seller) pursuant to which the
Seller will assign to the Purchaser all of the Seller's right, title and
interest, domestic and foreign, state, federal and common law, in and to the
Intellectual Property.
"Inventory" means all of Seller's merchandise inventory, regardless of
whether such inventory is located at the Stores, at the Buying Office, at the
Distribution Center, at the Excluded Stores or elsewhere as of the date of the
Closing.
"Inventory Cost" means, with respect to any Inventory, Seller's actual cost
of acquiring such Inventory.
"IRS" means the United States' Internal Revenue Service.
"Knowledge": an individual will be deemed to have "Knowledge" of a
particular fact or other matter if: (i) such individual is actually aware of
such fact or other matter; or (ii) a prudent individual could be expected to
discover or otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or other matter. A Person (other than an individual) will be deemed to
have "Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.
"Leased Real Property" means any real property subject to a Real Property
Lease.
"Liabilities" means any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense) of or by any Person of any type,
whether accrued, absolute or contingent, liquidated or unliquidated, xxxxxx or
inchoate, matured or unmatured, or otherwise. Without limiting the foregoing in
any manner, the term "Liabilities" includes and refers to all liabilities and
obligations for or with respect to Taxes, including liabilities for Taxes of any
Person under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by contract, or
otherwise.
"Lien" means any security interest, mortgage, pledge, lien, encumbrance,
right, hypothecation, option, charge or claim of any nature whatsoever.
"Xxxxxxxx Lease" means Seller's real property lease with respect to
Seller's store located at 000 X. Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
"Material Adverse Effect" means any change, event, occurrence, fact,
condition, effect or development that is materially adverse to (i) the Assets,
the Liabilities, the Business, the results of operations of the Business or the
condition (financial or otherwise) of the Business, (ii) the ability of the
Seller to consummate the transactions contemplated hereunder in accordance with
the terms hereof or (iii) the Purchaser's ownership and operation of the Stores
following the Closing.
"Paramus Lease" means Seller's real property lease with respect to Seller's
store located at Xxxxxx Xxxx, 000X Xxxxxx Xxxx Center, Xxxxx 0, Xxxxxxx, Xxx
Xxxxxx 00000.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
entity thereto.
"Person" means any individual, corporation, partnership, limited liability
company, limited liability partnership, joint venture, joint-stock company,
trust, Governmental Body or other entity.
"Real Property Lease" means any real property lease, sublease, license or
other agreements under which Seller uses or occupies or has the right to use or
occupy, as lessor (or sublessor) or lessee (or sublessee), or licensor or
licensee, now or in the future, any real property used in the conduct of or
related to the Business or any portion thereof.
"Representative" means, with respect to a particular Person, any director,
officer, manager, partner, member, employee, agent, consultant, advisor or other
representative of such Person, including legal counsel, accountants, and
financial advisors.
"Requirements of Law" means any law, rule, regulation, ordinance, treaty,
writ, judicial decision, judgment, injunction, decree, determination, award or
other order of any Governmental Body.
"Security Deposits" means all security deposits (including cash) held by
landlords, utilities or other parties under Assumed Leases or Assumed Contracts.
"Seller's Knowledge" refers to the knowledge of Xxxx Xxxxxxx, Xxx Xxxxx or
Xxxx Xxxxxxxx.
"Stores" means those stores listed on Schedule 8.1(a)-3.
"Tax" or "Taxes" means all taxes, charges, fees, imposts, levies or other
assessments, including all net income, franchise, profits, gross receipts,
capital, sales, use, ad valorem, value added, transfer, transfer gains,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, real or personal
property, and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts thereon, imposed by any taxing authority
(federal, state, local or foreign) and shall include any successor or transferee
liability in respect of Taxes.
"Tax Returns" means all returns, declarations, reports, forms, estimates,
information returns and statements required to be filed in respect of any Taxes
or to be supplied to a taxing authority in connection with any Taxes.
8.2 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
(a) The Purchaser and the Seller irrevocably and unconditionally
consent to submit to the jurisdiction of the Bankruptcy Court for any litigation
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agree not to commence any litigation relating hereto except in the
Bankruptcy Court).
(b) Any and all service of process and any other notice in any such
Claim shall be effective against any party if given personally or by registered
or certified mail, return receipt requested, or by any other means of mail that
requires a signed receipt, postage prepaid, mailed to such party as herein
provided. Nothing herein contained shall be deemed to affect the right of any
party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.
8.3 Notices.
Any notice or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given (a) on the day of
delivery if delivered in person, or if delivered by facsimile upon confirmation
of receipt, (b) on the first (1st) Business Day following the date of dispatch
if delivered by a nationally recognized express courier service, or (c) on the
fifth (5th) Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated by notice given in accordance with this
Section 8.3 by the party to receive such notice:
(a) if to the Purchaser, to:
SYL, LLC
Xxx Xxxx Xxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Facsimile: 000-000-0000
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000
(b) if to the Seller, to:
Mr. Xxxx Xxxxx
Chief Restructuring Officer
Filene's Basement, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Phone:
Facsimile:
AND
Mr. Xxxx Xxxxx
Abacus Advisors
00 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
WITH A CONCURRENT COPY TO:
Pachuiski, Xxxxx, Xxxxx & Xxxxx LLP
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
Phone: (000) 000-0000
Facsimile: (000) 000-0000
8.4 Entire Agreement.
This Agreement (including any exhibits or schedules hereto) and any other
collateral agreements executed in connection with the consummation of the
transactions contemplated hereby, contain the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements,
written or oral, with respect thereto. Any exception or disclosure made by
Seller in the Schedules to this Agreement with regard to a representation of the
Seller shall be deemed made with respect to any other representation by such
party to which such exception or disclosure is reasonably apparent.
8.5 Waivers and Amendments.
This Agreement may be amended, superseded, canceled, renewed or extended,
and the terms hereof may be waived, only by a written instrument signed by the
Purchaser and the Seller or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any such right, power or privilege, nor any single or
partial exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or privilege.
8.6 Governing Law.
This Agreement and all Claims with respect thereto shall be governed by and
construed in accordance with federal bankruptcy law, to the extent applicable,
and, where state law is implicated, the laws of the State of Delaware without
regard to any conflict of laws rules thereof that might indicate the application
of the laws of any other jurisdiction.
8.7 Binding Effect; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns. This Agreement is not
assignable by any party without the prior written consent of the other parties;
provided that the Purchaser, in its sole discretion, may (i) assign this
Agreement to a wholly-owned subsidiary of the Purchaser or (ii) assign its
rights under this Agreement to acquire and assume the Downtown Crossing Lease
and the Assets described in Section 1.1(l) of this Agreement, and any and all
rights under this Agreement relating thereto, to 000 Xxxxxxxxxx Xxxxxx Owner LLC
or a subsidiary or affiliate thereof ("426 Washington"); provided, further that,
in each case, the Purchaser shall not be relieved of any of its obligations
under this Agreement as a result of any such assignment except as provided below
in this Section 8.7.
In addition to and not in limitation of the foregoing, in lieu of the
Seller's assigning the Downtown Crossing Lease to the Purchaser and transferring
to the Purchaser the Assets described in Section 1.1(l) of this Agreement, the
Seller and 426 Washington shall mutually terminate the Downtown Crossing Lease
at the Closing, provided that (i) such termination is memorialized by a written
agreement among the Seller, 426 Washington and the Purchaser, on terms
reasonably satisfactory to each of such entities (the "Three Party Agreement"),
(ii) the Seller and 426 Washington exchange releases and/or the Seller assigns
the Assets described in Section 1.1(l) of this Agreement to 426 Washington on
terms mutually satisfactory to such entities, and (iii) 426 Washington pays to
the Seller such consideration as shall be set forth in the Three Party
Agreement, which amount shall reduce the Purchase Price, on a dollar for dollar
basis. For avoidance of doubt, nothing in this Section 8.7 shall be deemed to
obligate Seller to accept less than an amount equal to the Purchase Price stated
in Section 1.4(a) hereof (the "Stated Price"), in the aggregate, in
consideration of the transfer of the Assets at the Closing (irrespective of who
the transferees thereof are) or to close the transactions contemplated by this
Agreement except upon receipt of a total cash amount equal to the Stated Price.
8.8 Usage.
All pronouns and any variations thereof refer to the masculine, feminine or
neuter, singular or plural, as the context may require. All terms defined in
this Agreement in their singular or plural forms have correlative meanings when
used herein in their plural or singular forms, respectively. Unless otherwise
expressly provided, the words "include," "includes" and "including" do not limit
the preceding words or terms and shall be deemed to be followed by the words
"without limitation."
8.9 Articles and Sections.
All references herein to Articles and Sections shall be deemed references
to such parts of this Agreement, unless the context shall otherwise require. The
Article and Section headings in this Agreement are for reference only and shall
not affect the interpretation of this Agreement.
8.10 Interpretation.
The parties acknowledge and agree that (a) each party and its counsel
reviewed and negotiated the terms and provisions of this Agreement and have
contributed to its revision, (b) the rule of construction to the effect that any
ambiguities are resolved against the drafting party shall not be employed in the
interpretation of this Agreement, and (c) the terms and provisions of this
Agreement shall be construed fairly as to all parties, regardless of which party
was generally responsible for the preparation of this Agreement. Notwithstanding
any provision herein to the contrary, the parties further acknowledge that the
provisions of this Agreement are subject to the provisions of the Bid Procedures
Order. In the event of any conflict between the terms of this Agreement and the
terms of the Bid Procedures Order, the terms of the Bid Procedures Order shall
govern.
8.11 Severability of Provisions.
If any provision or any portion of any provision of this Agreement shall be
held invalid or unenforceable, the remaining portion of such provision and the
remaining provisions of this Agreement shall not be affected thereby. If the
application of any provision or any portion of any provision of this Agreement
to any Person or circumstance shall be held invalid or unenforceable, the
application of such provision or portion of such provision to Persons or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby.
8.12 Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts together shall constitute one and the same instrument.
Each counterpart may consist of a number of copies hereof each signed by less
than all, but together signed by all, of the parties hereto. The parties agree
that the delivery of this Agreement may be effected by means of an exchange of
copies of signatures delivered by email or facsimile with original copies to
follow by mail or courier service.
8.13 No Third Party Beneficiaries.
No provision of this Agreement is intended to, or shall, confer any third
party beneficiary or other rights or remedies upon any Person other than the
parties hereto. Without limiting the generality of the foregoing no provision of
this Agreement shall create any third party beneficiary rights in any employee
or former employee of the Seller in respect of continued employment by Seller.
8.14 Damage and Destruction: Condemnation.
The Seller shall promptly notify Purchaser of the occurrence of any
material damage to or destruction of the Assets that occurs prior to the Closing
Date. In the event of any uninsured damage to or destruction of the Assets prior
to the Closing Date the cost of which to repair would total $50,000 or less,
then such damage or destruction shall have no effect whatsoever on the Purchase
Price or Purchaser's or Seller's obligation to close. Should any uninsured
damage or destruction to the Assets occur prior to the Closing Date the cost of
which to repair would total more than $50,000 but less than $150,000, then
unless Seller causes the same to be repaired and restored in all material
respects prior to the Closing Date (in which case the Purchase Price shall be
unaffected and the parties shall proceed with the Closing as though such damage,
destruction or proceedings had never occurred or been initiated) (provided such
damage or destruction does not entitle any lessor or sublessor under any Real
Property Lease to terminate such Real Property Lease and further provided that
the Purchaser shall be permitted uninterrupted use and occupancy of the premises
demised under such Real Property Lease), Purchaser's sole remedy shall be to
receive a dollar-for-dollar reduction in the Purchase Price in an amount equal
to the sum of (i) the cost of such repairs, less (ii) the amount of any valid
insurance proceeds with respect thereto assigned to Purchaser at the Closing,
and consummate the transaction contemplated herein. If any uninsured damage or
destruction to the Assets occurs prior to the Closing Date the cost of which to
repair would total $150,000 or more or any damage or destruction to the Assets
occurs prior to the Closing Date that entitles any lessor or sublessor under any
Real Property Lease to terminate such Real Property Lease or results in
Purchaser no longer being permitted uninterrupted use and occupancy of the
premises demised under such Real Property Lease, then irrespective of whether
the same can be repaired and/or restored prior to the Closing Date, Purchaser
shall have the right and option to either (i) terminate the transaction
contemplated herein, or (ii) elect to receive, as its sole and exclusive remedy
by reason of such damage, destruction, a Purchase Price reduction in the amount
of $150,000 and consummate the transaction contemplated herein as though the
damage or destruction had never occurred or been initiated. In all other events
or in the event that Purchaser elects to consummate the purchase pursuant to
clause (ii) above, (xx) all insurance or condemnation proceeds, including
business interruption and rental loss proceeds, collected by or paid to Seller
prior to the Closing Date, shall be credited against the Purchase Price on
Purchaser's account or the Purchase Price shall be adjusted by an amount agreed
between Purchaser and Seller, and (yy) all entitlement to all other insurance or
condemnation proceeds arising out of such damage or destruction or proceedings
and not collected prior to the Closing Date shall be assigned to Purchaser at
the Closing. Notwithstanding anything to the contrary in this Agreement, the
risk of loss or damage to the Assets shall unconditionally shift to the
Purchaser on the Closing Date. For avoidance of doubt, Purchaser and Seller
intend that the provisions of this Section 8.14 shall control over any right or
remedy to which the Purchaser may otherwise be entitled under this Agreement by
reason of the occurrence of any event subject to this Section 8.14.
8.15 No Survival of Representations and Warranties. The respective
representations of the Seller and the Purchaser under this Agreement shall lapse
and cease to be of any further force or effect effective upon the Closing. The
Seller and the Purchaser hereby agree that the covenants contained in this
Agreement to be performed at or after the Closing shall survive hereunder.
8.16 Limited Liability of FB Sub. Notwithstanding anything to the contrary
in this Agreement, Purchaser hereby expressly acknowledges that the FB
Subsidiary is joining in this Agreement solely to make the covenants,
undertakings and representations set forth herein with respect to those of the
Assets owned by the FB Subsidiary (the "FB Assets") and not with respect to any
of the other Assets and, accordingly, the FB Subsidiary shall not have any
liability or obligation hereunder except to the extent that the covenants,
undertakings and representations of Seller set forth herein cover or relate
directly to the FB Subsidiary or the FB Assets.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SYL, LLC, a Delaware limited liability company
By: SYMS CORP,
Manager
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and
Chief Financial Officer
FILENE'S BASEMENT, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: President
FB LEASING SERVICES LLC
By: /s/ Xxxx Xxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: President
