RIGHT OF FIRST REFUSAL AGREEMENT
Agreement made as of the 31st day of March, 2000, by and between
XXXXXXX XXXXXX CORPORATION ("LVC") and XXXXXX X. XXXXXX ("XXXXXX").
BACKGROUND
WHEREAS:
A. LVC, RDF Acquisition Corp. (the "Company"), Rue de France, Inc.
("RDF"), Xxxxxx and Xxxxxxx X. Xxxxxx have entered into an Asset Purchase
Agreement dated as of March 31, 2000 (the "Asset Purchase Agreement");
B. The Company and Xxxxxx have entered into an Employment Agreement
dated the date hereof (the "Employment Agreement");
C. LVC is the parent of the Company and has agreed to xxxxx Xxxxxx a
right of first refusal to purchase all of the capital stock of the Company
before LVC consummates a Change of Control Transaction (defined below); and
D. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Employment Agreement.
NOW, THEREFORE, the parties agree as follows:
1. RIGHT OF FIRST REFUSAL. Before LVC consummates a Change of Control
Transaction (defined below) with respect to the Company during the Right of
First Refusal Period (defined below) it shall first offer ("Offer") to Xxxxxx in
writing the right to purchase all of the outstanding capital stock of the
Company for a fixed purchase price (the "Purchase Price") payable in cash at the
closing of such purchase by Xxxxxx. Xxxxxx shall have twenty (20) days from the
date of such Offer to accept the same. Such acceptance shall be in writing and
shall be accompanied by a deposit equal to ten (10%) percent of the Purchase
Price and shall specify a date for closing at the headquarters of LVC which
shall be not later than thirty (30) days from the date of Xxxxxx'x acceptance of
the Offer. A Change of Control Transaction shall mean a sale of all or
substantially all of the assets of the Company to an unaffiliated third party,
or a sale of more than fifty (50%) percent of the voting stock of the Company to
an unaffiliated third party or a merger, consolidation or other reorganization
of the Company with an unaffiliated third party such that after such merger,
consolidation or other reorganization LVC owns less than fifty (50%) percent of
the voting stock of the surviving entity. A spin-off of the shares of the
Company or a public offering of stock of the Company shall not be considered a
Change of Control Transaction and Xxxxxx'x right of first refusal shall
terminate upon the happening of
either of such events. If Xxxxxx does not timely exercise her right of first
refusal, then LVC or the Company, as the case may be, may proceed to consummate
a Change of Control Transaction; provided, however, if the sale is an asset
sale, then the consummation of such sale shall be conditioned upon the purchaser
of the assets assuming in writing the obligations of the Company to Xxxxxx under
the Employment Agreement and the obligations of the Company to RDF under the
provisions of Section 1.5 (The Calculation and Payment of the Contingent Portion
of the Purchase Price) of the Asset Purchase Agreement. Such assumption shall
release both the Company and LVC from any further obligation under the
Employment Agreement and under Section 1.5 of the Asset Purchase Agreement. If
the Change of Control Price (defined below) is less than the Purchase Price,
then, before consummating such Change of Control Transaction, LVC shall reoffer
to Xxxxxx the right to purchase the capital stock of the Company at the lower
Change of Control Price except in such case Xxxxxx shall have ten (10) days in
which to accept the same. If LVC and Xxxxxx cannot agree upon the cash
equivalent value of the consideration offered in the Change of Control
Transaction (the "Change of Control Price"), then the same shall be determined
by an investment banker mutually acceptable to the parties. If the parties
cannot agree upon a mutually acceptable investment banker, then either party may
apply to the American Arbitration Association in the City of New York for the
appointment of the same. The fees and expenses of such investment banker and, if
necessary, the American Arbitration Association shall be borne equally by the
parties. The Right of First Refusal Period shall mean the period commencing on
the date hereof and ending on the earlier of (x) five (5) years from the date
hereof, (y) the termination of the Employment Agreement by Xxxxxx without Good
Reason or the termination of the Employment Agreement by the Company for Cause
and (z) the death of Xxxxxx.
2. GENERAL PROVISIONS
(a) ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the
entire agreement between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior agreements or understandings
between the parties with respect thereto. This Agreement shall not be altered or
otherwise amended or terminated (except as provided in Section 1 hereof) except
pursuant to an instrument in writing signed by each of the parties hereto.
(b) DESCRIPTIVE HEADINGS. Descriptive headings are for
convenience only and shall not control or affect the meaning or construction of
any provisions of this Agreement.
(c) NOTICES. All notices or other communications pursuant to
this Agreement shall be in writing and shall be deemed to be sufficient if
telecopied or sent by nationally-recognized, overnight courier to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
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if to LVC, to:
c/o Xxxxxxx Xxxxxx Corporation
Xxx Xxxxxx Xxxx
Xxx, Xxx Xxxx 00000-0000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
with copies to:
Salon, Marrow, Xxxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Salon
Telecopier: (000) 000-0000
if to the Executive, to:
Xxxxxx X. Xxxxxx
00 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxx 00000
with copies to:
Xxxxxx & Xxxxxxx, LLP
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxxx
Telecopier: (000) 000-0000
All such notices and other communications shall be deemed to have been delivered
and received (A) in the case of delivery by telecopy, on the date of such
delivery if delivery is confirmed on that date by telephone call with the
recipient and (B) in the case of delivery by nationally-recognized, overnight
courier, on the Business Day (defined below) following dispatch. As used herein,
"Business Day" shall mean any day that is not a Saturday, Sunday or a day on
which banking institutions in New York, New York are not required to be open.
Failure to accept a notice does not invalidate same.
(d) ARBITRATION. Except as hereinafter provided with respect
to injunctive relief, the parties agree to arbitrate any and all claims,
controversies or disputes arising under or out of this Agreement or relating in
any way thereto. All such claims, controversies or disputes shall be submitted
to arbitration in the City of New York, State of New York, to arbitrators
designated under and pursuant to the Rules of the American Arbitration
Association, and the
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arbitration shall be had under the auspices of said Association and subject to
its rules. The parties consent to the jurisdiction of the Supreme Court of the
State of New York and of any United States District Court sitting in the State
of New York with respect to any and all proceedings relating to any such
arbitration, and the parties further agree that any and all process and notices
of motions or applications in relation to any such arbitration may be served
upon a party personally or by registered or certified mail, return receipt
requested. Such service may be accomplished either within or without the State
of New York, and such notice shall be given of all applications and hearings as
is provided by the laws of the State of New York. The award of the arbitrators
shall be final and binding upon the parties and judgment thereon may be entered
as provided by the laws of the State of New York.
(e) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF
THE STATE OF NEW YORK OR ANY OTHER JURISDICTION OTHER THAN THE STATE OF NEW
YORK) TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE
STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS
AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW
ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.
(f) BENEFITS OF AGREEMENT; ASSIGNMENT. The terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns, representatives,
heirs and estate, as applicable. If this Agreement is assigned by LVC in
connection with the sale of all or substantially all of the operating assets of
LVC and the obligations hereunder of LVC are assumed in writing by the purchaser
of such assets, then in such event LVC shall have no further liability hereunder
to the Executive. Anything contained herein to the contrary notwithstanding,
this Agreement shall not be assignable by the Executive.
(g) WAIVER OF BREACH. The waiver by either party of a breach
of any provision of this Agreement by the other party must be in writing and
shall not operate or be construed as a waiver of any subsequent breach by such
other party.
(h) SEVERABILITY. It is the desire and intent of the parties
hereto that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
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(i) INTERPRETATION AND CONSTRUCTION.
(i) This Agreement shall be construed according to
its fair meaning as if prepared jointly by the parties hereto.
(ii) Each section, subsection and lesser section of
this Agreement constitutes a separate and distinct undertaking,
covenant and/or provision hereof.
(iii) This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which shall
constitute but one and the same instrument which may be sufficiently
evidenced by one counterpart.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
XXXXXXX XXXXXX CORPORATION
BY:
--------------------------------
Xxxxxxx Xxxxxx,
Chairman and Chief Executive
Officer
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XXXXXX X. XXXXXX
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