Exhibit 10.17
AGREEMENT AND CONSENT TO ASSIGNMENT
AND ASSUMPTION OF PARTNERSHIP INTERESTS
This Agreement and Consent to Assignment and Assumption of
Partnership Interests (this "Agreement") is entered into as of the 13th day
of July, 1998 by and among EB Services Corporation, a Pennsylvania
corporation ("EB Services"), the Xxxxx X. Xxx Trust dated December 31, 1987,
the Xxxxx X. Xxx Trust dated December 31, 1987, the Xxxx X. Xxx Trust dated
December 31, 1987 (collectively, the "Xxx Trusts"), Xxxxx X. Xxx, Xxxxx X.
Xxx (collectively, the "Kims" and, together with the Xxx Trusts, the "Limited
Partners"), Electronics Boutique Holdings Corp., a Delaware corporation
("Holdings"), EB Investment Corp., a Delaware corporation ("EB Investment"),
and Electronics Boutique of America Inc., a Pennsylvania corporation ("EBOA")
. EB Services and the Limited Partners are collectively referred to herein as
the "Partners."
WHEREAS, the Partners are parties to a Limited Liability Partnership
Agreement, dated as of January 1997, as amended (the "Partnership
Agreement"), and collectively own 100% of the outstanding partnership
interests of EB Services Company, LLP, a limited liability partnership formed
pursuant to the Partnership Agreement and the Pennsylvania Revised Limited
Liability Partnership Act (the "Partnership");
WHEREAS, the Limited Partners own an aggregate of ninety-nine
percent (99%) of the outstanding partnership interests of the Partnership and
EB Services owns one percent (1%) of the outstanding partnership interests of
the Partnership (the "One Percent Interest"); and
WHEREAS, (i) the Partners desire to assign, transfer and set over to
Holdings an aggregate of 99.99% of the outstanding partnership interests of
the Partnership (the "Assigned Interests"), with EB Services retaining the
remaining .01% interest, (ii) Holdings desires to assign, transfer and set
over the Assigned Interests to EB Investment and (iii) EB Investment desires
to assign, transfer and set over the Assigned Interests to EBOA;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
1. Assignments.
(a) Assignment to Holdings. At the Effective Time (as defined
below), (i) each of the Limited Partners shall assign, transfer and set
over to Holdings all of its interest in the Partnership and (ii) EB
Services shall assign, transfer and set over to Holdings ninety-nine
percent (99%) of the One Percent Interest collectively in exchange for
an aggregate of 100 shares of Common Stock (as defined below). Pursuant
to the aforementioned assignments, (i) each of the Xxx Trusts shall
receive thirteen (13) shares of Common Stock, (ii) the Kims shall
receive an aggregate of sixty (60) shares of Common Stock and (iii) EB
Services shall receive one (1) share of Common Stock. The "Effective
Time" means that time immediately
prior to the execution of the Underwriting Agreement between Holdings
and EB Nevada Inc., on the one hand and Prudential Securities
Incorporated and Xxxxxxx Xxxxx Xxxxxx, as representatives of the
underwriters, on the other, to be entered into in connection with the
contemplated initial public offering of common stock ("Common Stock"),
par value $.01 per share, of Holdings.
(b) Assignment to EB Investment. At the Effective Time,
Holdings shall assign, transfer and set over the Assigned Interests to
EB Investment as a capital contribution to this wholly-owned
subsidiary.
(c) Assignment to EBOA. At the Effective Time, EB Investment
shall assign, transfer and set over the Assigned Interests to EBOA as a
capital contribution to this wholly-owned subsidiary.
(d) Timing. Each of the transfers of the Assigned Interests
contemplated by this Agreement shall occur simultaneously at the
Effective Time.
(e) Tax Consequences. Each of the assignments outlined above
are intended to qualify under Section 351 of the Internal Revenue Code
of 1986, as amended.
2. Assumption of Liabilities and Obligations. EBOA hereby agrees to
accept the Assigned Interests and assume, to the extent of the Assigned
Interests, the Partners' liabilities and obligations arising on or after the
Effective Time under the Partnership Agreement. EBOA agrees to be bound by all
terms, covenants and conditions of the Partnership Agreement and all related
instruments and documents as they pertain to the interests in the Partnership
transferred hereby from and after the Effective Time. The Limited Partners,
Holdings and EB Investment shall have no further obligations or liabilities with
respect to or by virtue of their interests in the Partnership transferred
hereby, except that the Limited Partners shall remain liable for those
obligations and liabilities which relate to the period of time prior to the
Effective Time.
3. Joinder to Partnership Agreement. At the Effective Time, EBOA shall
be bound as a partner by all of the terms and conditions set forth in the
Partnership Agreement.
4. Representations and Warranties. Each Partner represents and warrants
that (i) it has good title to its respective interest in the Partnership that it
is transferring hereby and the power and authority to assign and transfer such
interest, (ii) it has made no prior assignment of such interest and, (iii) to
the best of its knowledge, such interest is free and clear of all liens, claims
and encumbrances. Each of Holdings and EB Investment represents and warrants
that, at the Effective Time, it will have the power and authority to transfer
the interests it is transferring hereby, (ii) it has made no prior assignment of
such interests and, (iii) to the best of its knowledge, such interests are free
and clear of all liens, claims and encumbrances
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5. Indemnity. EBOA shall indemnify, defend and hold harmless the other
parties hereto from and against any and all cost, liabilities, damage or
expense, including reasonable attorneys' fees, originating from any failure by
it to pay any liability assumed hereunder or any act or omission by it, its
employees or agents, occurring or arising after the Effective Date, and arising
out of its right to any interest of the Partnership transferred hereby.
6. Acknowledgment and Consent of, and Waiver by, the General Partner.
EB Services, the general partner of the Partnership, consents, in accordance
with Article X of the Partnership Agreement, to each of the transfers described
herein and to the admission of EBOA as a partner thereof. EB Services hereby
waives (i) the requirement of written notice imposed by Section 10.1 of the
Partnership Agreement and (ii) its right of first refusal under Section 10.5
thereof.
7. Acknowledgment and Consent of the Limited Partners. The Limited
Partners, Holdings and EB Investment hereby consent, in accordance with Article
IX of the Partnership Agreement, to the transfer by EB Services of ninety-nine
percent (99%) of its interest in the Partnership and the subsequent transfers
thereof pursuant hereto and to the admission of EBOA as a partner thereof.
8. Further Assurances. The parties hereto agree that they shall execute
and deliver such instruments, documents and other writings as may be necessary
or desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
9. Successors and Assigns. The rights, interests and benefits granted
hereby and the burdens and obligations imposed hereby shall inure to the benefit
of and be binding upon, as the case may be, the parties hereto and their
respective successors and assigns.
10. Governing Law. This Assignment shall be governed by the laws of the
Commonwealth of Pennsylvania without regard to its choice of laws principles.
11. Counterparts. This Assignment may be signed in one or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute a single agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth below.
EB SERVICES CORPORATION
By: /s/Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
President
XXXXX X. XXX TRUST dated December 31, 1987
By: /s/Xxxxx X. Xxx By: /s/Xxxx X. Xxx By: /s/Xxxx X. X. Xxxxxx
-------------------- -------------------- --------------------
Xxxxx X. Xxx Xxxx X. Xxx Xxxx X. X. Xxxxxx
Trustee Trustee Trustee
XXXXX X. XXX TRUST dated December 31, 1987
By: /s/Xxxxx X. Xxx By: /s/Xxxxx X. Xxx By: /s/Xxxx X.X. Xxxxxx
-------------------- ------------------ -------------------
Xxxxx X. Xxx Xxxxx X. Xxx Xxxx X. X. Xxxxxx
Trustee Trustee Trustee
XXXX X. XXX TRUST dated December 31, 1987
By: /s/Xxxxx X. Xxx By: /s/Xxxx X. Xxx By: /s/Xxxx X. X. Xxxxxx
-------------------- -------------------- --------------------
Xxxxx X. Xxx Xxxx X. Xxx Xxxx X. X. Xxxxxx
Trustee Trustee Trustee
[Signatures Continued on Following Page]
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/s/ Xxxxx X. Xxx
------------------------
XXXXX X. XXX
/s/ Xxxxx X. Xxx
------------------------
XXXXX X. XXX
ELECTRONICS BOUTIQUE HOLDINGS CORP.
By: /s/Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
EB SERVICES CORPORATION
By: /s/Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
ELECTRONICS BOUTIQUE OF AMERICA INC.
By: /s/Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
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