Exhibit 10.1
VCM Settlement and Termination Agreement
AGREEMENT made as of the 2nd day of February, 2002 by ODD JOB TRADING
CORP. (the "Mazel Member"), a New York corporation and GB RETAILERS, INC. (the
"VCD Member"), a Delaware corporation. The Mazel Member and the VCD Member are
referred to herein individually as a "PARTY" and together as the "PARTIES."
RECITAL
WHEREAS, the Parties entered into the VCM, Ltd. Operating Agreement
dated July 14, 1997 (the "Agreement") to operate certain operations (the "Joint
Venture");
WHEREAS, the Mazel Member managed the day-to-day operations of the
Joint Venture pursuant to the terms of Section 5.3 of the Agreement (the
"Management Agreement");
WHEREAS, there have been substantial ongoing disagreements among the
Parties with respect to the Joint Venture's operations, financial statements,
management fee and its calculations, and respective rights and obligations;
WHEREAS, purportedly pursuant to Section 5.3.4 of the Agreement, the
VCD Member unilaterally gave notice to the Mazel Member of its election to
terminate and dissolve the Joint Venture in accordance with the provisions of
Section 7.2 of the Agreement; and
WHEREAS, the Mazel Member disputed the authority of the VCD Member to
invoke Section 5.3.4 of the Agreement and the proposed terms for the termination
of the Joint Venture; and
WHEREAS, negotiations between the Parties ensued concerning the
aforesaid notice and related and unrelated issues; and
WHEREAS, the VCD Member desires to resolve, and the Mazel Member has
agreed to resolve, these issues by terminating the Mazel Member's Interest in
the Joint Venture upon the terms and conditions hereinafter stated, and
WHEREAS, the VCD Member also desires to terminate the Management
Agreement, and the Mazel Member has agreed to such termination upon the terms
and conditions hereinafter stated.
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the VCD Member and the Mazel Member hereby
covenant and agree as follows:
1. TERMINATION OF MEMBERSHIP RIGHTS. The Mazel Member does hereby agree
to extinguish and terminate, effective as of the close of business February 2,
2002 (the "Effective Date") all of the Mazel Member's Interest and other rights
in and to the Joint Venture (collectively, the "Membership Rights"). In
consideration of the foregoing termination of the Mazel Member's Membership
Rights hereunder, the VCD Member shall pay to the Mazel Member or its designee
eight million three hundred and seventy five thousand ($8,375,000) dollars by
wire transfer simultaneous with the execution and delivery of this Agreement.
2. TERMINATION OF MANAGEMENT AGREEMENT. The Parties agree that the
Management Agreement is likewise deemed terminated as of the Effective Date. The
VCD Member agrees to pay to the Mazel Member or its designee Four Million
Eighty-two Thousand ($4,082,000) Dollars by wire transfer simultaneous with the
execution and delivery of this Agreement, representing the agreed upon amount
due to the Mazel Member under such Management Agreement for the period to and
including the Effective Date.
3. REPRESENTATIONS BY THE MAZEL MEMBER. The Mazel Member hereby
represents that: (i) it is the sole owner of its respective fifty (50%) percent
Membership Interest in the Joint Venture and has not previously transferred,
assigned or encumbered the same, and (ii) all of the authorizations and
approvals, as the case may be, necessary under its organizational documents and
under any other agreement or contract by which it may be bound, to enter into
this Agreement and to carry out the provisions hereof, have been received.
Notwithstanding anything herein to the contrary, the Mazel Member and Mazel
Stores, Inc. agree to indemnify and hold harmless the VCD Member and Value City
Department Stores, Inc. from and against any and all actions, proceedings,
suits, judgments, demands, penalties and/or other claims, liabilities or
obligations of whatever kind or nature, including reasonable attorneys' fees,
hereafter suffered or incurred by the VCD Member and Value City Department
Stores, Inc. arising out of or related to a breach of the representation
contained in this paragraph 3.
4. REPRESENTATIONS BY VCD MEMBER. The VCD Member hereby represents
that: (i) it is the sole owner of its respective fifty (50%) percent Membership
Interest in the Joint Venture and has not previously transferred, assigned or
encumbered the same, and (ii) all of the authorizations and approvals, as the
case may be, necessary under its organizational documents and/or under any other
agreement or contract by which it may be bound, to enter into this Agreement and
to carry out the provisions hereof, have been received. Notwithstanding anything
herein to the contrary, the VCD Member and Value City Department Stores, Inc.
agree to indemnify and hold harmless the Mazel Member and Mazel Stores, Inc..
from and against any and all actions, proceedings, suits, judgments, demands,
penalties and/or other claims, liabilities or obligations of whatever kind or
nature, including reasonable attorneys' fees, hereafter suffered or incurred by
the Mazel Member and Mazel Stores, Inc. arising out of or related to a breach of
the representation contained in this paragraph 4.
5. RELEASES. A. Subject only to the representations contained in
paragraph 3 above, the VCD Member and Value City Departments Stores, Inc.
hereby: (i) acknowledge and agree that they are accepting the termination of the
Membership Rights without recourse, warranty or other representation of any
kind, express or implied, and (ii) release and discharge the Mazel Member and
Mazel Stores, Inc. from any claim, liability or obligation relating to the Joint
Venture and/or with respect to the Management Agreement, whether known or
unknown, foreseen or unforeseen.
B. Subject only to the representations contained in paragraph 4 above,
the Mazel Member and Mazel Stores, Inc. hereby release and discharge the VCD
Member and Value City Department Stores, Inc. from any claim, liability or
obligation relating to the Joint Venture and/or with respect to the Management
Agreement, whether known or unknown, foreseen or unforeseen
6. CAPITALIZED TERMS. All capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Agreement.
7. CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.
8. NOTIFICATIONS. Any "notice" as defined in Section 9.2 of the
Agreement shall be given in the manner set forth therein.
9. APPLICABLE LAW. All questions concerning the construction, validity
and interpretation of this Agreement and the performance of the obligations
imposed by this Agreement shall be governed by the internal law, not the law of
conflicts, of the State of Ohio.
10. BINDING PROVISIONS. This Agreement is binding upon and inures to
the benefit of the Parties named herein and their respective heirs, executors,
administrators, personal and legal representatives, successors and permitted
assigns.
11. COMPLETE AGREEMENT. This Agreement constitutes the complete and
exclusive statement
of the agreement between the Member relating to the material herein. It
supersedes all prior written and oral statements, including any prior
representation, statement, condition or warranty. This Agreement may not be
amended without the written consent of all of the Members. Oral agreements which
purport to amend this Agreement shall not be enforceable.
12. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of
which, when taken together, constitute one and the same document. The signature
of any Party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their duly authorized officers on the date first
above written.
ODD JOB TRADING CORP.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: CEO
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GB RETAILERS, INC.
By: /s/ Xxxxx X. XxXxxxx
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Name: Xxxxx X. XxXxxxx
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Title: CFO
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VALUE CITY DEPARTMENT STORES, INC. (As to the second sentence of Paragraph 4,
and paragraph 5.A. only)
By: /s/ Xxxxx X. XxXxxxx
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Name: Xxxxx X. XxXxxxx
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Title: CFO
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MAZEL STORES, INC. (As to the second sentence of Paragraph 3, and Paragraph 5.B.
only)
By: /s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
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Title: CEO
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