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ASSET TRANSFER AGREEMENT
by and between
MOTHERS WORK, INC.
and
THE WET SEAL, INC.
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Dated August 28, 1998
TABLE OF CONTENTS
Page
1. SUBJECT OF AGREEMENT.................................................1
1.1. Transferred Assets..........................................1
1.2. Lease Assignments...........................................1
1.3. Excluded Assets.............................................2
2. CONSIDERATION........................................................2
2.1. Purchase Price..............................................2
2.2. Price Adjustments...........................................2
2.3. Assumption of Store Leases..................................2
2.4. Non-Assumption of Liabilities...............................3
3. REPRESENTATIONS AND WARRANTIES OF SELLER.............................3
3.1. Organization; Standing......................................3
3.2. Execution; Authority; Enforceability........................3
3.3. Governmental Consents.......................................4
3.4. No Conflicts................................................4
3.5. Transferred Assets..........................................4
3.6. Title to Transferred Assets.................................5
3.7. FIRPTA......................................................6
3.8. Compliance with Laws........................................6
3.9. Litigation..................................................6
3.10. Insurance...................................................6
3.11. Financial Statements........................................6
4. REPRESENTATIONS AND WARRANTIES OF BUYER..............................7
4.1. Organization; Standing......................................7
4.2. Execution; Authority; Enforceability........................7
4.3. Governmental Consents.......................................7
4.4. No Conflicts................................................7
4.5. Litigation..................................................7
4.6. Financial Statements........................................8
5. CONDUCT AND TRANSACTIONS PRIOR TO CLOSING............................8
5.1. Conduct of Business.........................................8
5.2. Access to Information.......................................9
5.3. Disclosure..................................................9
5.3.1. Public Disclosure..................................9
5.3.2. Confidentiality....................................9
5.4. Further Assurances.........................................10
5.5. Lessor's Consents..........................................10
5.5.1. Best Efforts to Obtain............................10
5.5.2. Buyer's Cooperation...............................12
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Page
5.5.3. Costs.............................................12
5.5.4. Excluded Leases...................................13
6. CLOSING.............................................................14
6.1. Closing Date...............................................14
6.2. Deliveries by Seller.......................................14
6.3. Deliveries by Buyer........................................15
6.4. Prorations.................................................15
6.5. Security Deposits..........................................16
7. CONDITIONS TO BUYER'S OBLIGATIONS AT CLOSING........................16
7.1. Representations and Warranties.............................16
7.2. Performance................................................16
7.3. Compliance Certificate.....................................16
7.4. Proceedings and Documents..................................16
7.5. Opinion of Seller's Counsel................................16
7.6. No Action or Proceeding....................................16
7.7. No Material Adverse Effect.................................17
7.8. Lessor's Consents..........................................17
8. CONDITIONS TO SELLER'S OBLIGATIONS AT CLOSING.......................17
8.1. Representations and Warranties.............................17
8.2. Performance................................................17
8.3. Compliance Certificate.....................................17
8.4. Proceedings and Documents..................................17
8.5. Opinion of Buyer's Counsel.................................17
8.6. No Action or Proceeding....................................17
8.7. Lessor's Consents..........................................18
9. SURVIVAL; INDEMNIFICATION...........................................18
9.1. Survival Past Closing......................................18
9.2. Indemnification by Seller..................................18
9.3. Indemnification by Buyer...................................18
9.4. Limitation.................................................18
9.5. Indemnification Procedures.................................18
10. CERTAIN COVENANTS...................................................20
10.1. Non-Assumed Liabilities....................................20
10.2. Assumed Liabilities........................................20
10.3. Records....................................................20
10.4. Further Assurances.........................................21
10.5. Store Lease Renewals.......................................21
11. TERMINATION OF AGREEMENT............................................21
11.1. Events of Termination......................................21
11.2. Effect of Termination......................................21
12. NOTICES.............................................................21
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Page
13. MISCELLANEOUS.......................................................22
13.1. Entire Agreement...........................................22
13.2. Amendments and Waivers.....................................23
13.3. Successors and Assigns.....................................23
13.4. Governing Law..............................................23
13.5. Severability...............................................23
13.6. Captions...................................................23
13.7. Counterparts...............................................23
13.8. Bulk Sales.................................................23
13.9. Transaction Taxes..........................................23
13.10. Finders' Fees..............................................24
13.11. Expenses...................................................24
13.12. Attorneys' Fees............................................24
13.13. Remedies...................................................24
13.14. Authority..................................................24
13.15. Defined Terms..............................................25
EXHIBITS
A - Form of Lessor's Consent
B - Form of Lease Assignment and Assumption
C - Form of Xxxx of Sale
D - Form of Opinion of Seller's Counsel
E - Form of Opinion of Buyer's Counsel
SCHEDULES
2.2(a) - Allocation of Purchase Price
3.5.1 - Store Leases
3.5.1(f) - Renewal Options Exercised
3.6 - Encumbrances
3.9 - Litigation
3.10 - Insurance
5.5.3(c) - Certain Additional Lease Costs Maximums
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ASSET TRANSFER AGREEMENT
AGREEMENT (herein called the "Agreement"), made and entered into as of this
31st day of August, 1998, by and between MOTHERS WORK, INC., a Delaware
corporation and T3 ACQUISITION, INC., a Delaware corporation (herein
individually and collectively called "Seller") and THE WET SEAL, INC., a
Delaware corporation (herein called "Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the lessee of a chain of retail stores located in
shopping centers, malls and street locations throughout the United States, which
it presently operates under the name "Episode"; and
WHEREAS, Seller desires to transfer to Buyer all of Seller's leasehold
rights and interests in and to twenty-four (24) of such retail stores, as set
forth on Schedule 3.5.1 hereto (each, a "Store" and collectively, the "Stores"),
together with (i) all right, title and interest of Seller in and to the
leasehold improvements and fixtures located in the Stores, (ii) the furniture,
furnishings and equipment (including but not limited to decorations, props,
displays, racks, shelving, computers, modems, computer interfaces, "Sensomatic"
(or equivalent) equipment and related tags and surveillance equipment and
related wiring) located in the Stores and (iii) all right, title and interest of
Seller in and to insurance proceeds on account of any damage or destruction of
any of the property described in (i) or (ii) above occurring after the date
hereof (except to the extent such proceeds are used to pay, or reimburse Seller
for, the costs of such repair or restoration) ((i), (ii) and (iii) being,
collectively, "FF&E"), and Buyer desires to acquire same, for the Purchase Price
and subject to and in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. SUBJECT OF AGREEMENT
1.1. Transferred Assets. Subject to the terms and conditions of this
Agreement, Seller shall sell, assign, transfer and convey to Buyer and Buyer
shall purchase and acquire from Seller, all of Seller's right, title and
interest in and to (i) each of the Store Leases identified on Schedule 3.5.1
(including any security deposited thereunder) and (ii) all FF&E relating to the
Store Premises ((i) and (ii) being, collectively, but excluding the Excluded
Leases and the FF&E relating thereto, the "Transferred Assets").
1.2. Lease Assignments. Seller, in coordination with Buyer, and in
accordance with the provisions of Section 5.5 hereof, shall promptly after the
date hereof use its Best Efforts (as defined below) to obtain from the lessor
under each Store Lease listed on Schedule 3.5.1 a Lessor's Consent (as defined
below). At the Closing, Seller shall assign to Buyer (and Buyer shall assume,
pursuant to Section 2.3 hereof) each Store Lease with respect to which a
Lessors' Consent shall have been obtained on or before the Closing Date. Each
such assignment and assumption shall be evidenced by a Lease Assignment and
Assumption mutually executed and delivered by Buyer and Seller in the form of
Exhibit B annexed hereto. A Store Lease with respect to which both a Lessor's
Consent is obtained and a Lease Assignment and Assumption is mutually executed
and delivered by Buyer and Seller is referred to herein as a "Transferred
Lease". In addition, at the Closing Seller shall convey to Buyer the FF&E
related to each Transferred Lease that is located in the related Store Premises
(and any insurance proceeds on account of damage or destruction thereof after
the date of this Agreement except to the extent such proceeds were used to pay,
or reimburse Seller for, the costs of such repair or restoration) pursuant to a
Xxxx of Sale in the form of Exhibit C annexed hereto.
1.3. Excluded Assets. The parties acknowledge and agree that Seller is not
selling or transferring and Buyer is not buying, receiving or accepting any
assets, rights and properties other than the Transferred Assets (any such other
assets, rights and properties, the "Excluded Assets"), which Excluded Assets
include, without limitation, trademarks and tradenames (including "Episode" and
"Xxxxxx and Xxxxxxx"), other intangible assets, inventory accounts receivable,
and rights and obligations under license and distribution agreements with Toppy
International Ltd. and/or its affiliates, all of which are hereby reserved by
Seller.
2. CONSIDERATION
2.1. Purchase Price.
(a) The purchase price to be paid by Buyer to Seller for the
Transferred Assets pursuant to this Agreement (the "Purchase Price") shall be
$2,825,000, and shall be paid on the Closing Date.
(b) All payments on account of the Purchase Price or otherwise payable
to Seller hereunder shall be paid by wire transfer of immediately available
funds to Seller and/or its designees, provided Seller gives Buyer notice of such
designees and wiring instructions at least five (5) days prior to the date such
payment is due or, if such notice is not given, by certified or official bank
check payable directly to the order of Seller.
2.2. Price Adjustments. The Purchase Price shall be reduced, however,
by:
(a) for each Excluded Lease (as defined below), the sum, if any,
allocated to such Excluded Lease on Schedule 2.2(a) hereto; and
(b) the amount of any Lease Cure Costs (as defined below) that Buyer
may incur on behalf of Seller.
2.3. Assumption of Store Leases.
(a) In addition to the payment of the Purchase Price, effective as of
the Closing Date Buyer shall assume and agree to pay and perform as and when due
all obligations required to be paid or performed on the part of the lessee under
each Transferred Lease, for all periods from and after the Closing Date.
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(b) Notwithstanding the foregoing or any other provision to the
contrary contained in this Agreement, Buyer shall not be obligated to assume any
obligation under any Store Lease (any such Store Lease, and the FF&E relating
thereto, an "Excluded Lease") with respect to which (i) the Lessor's Consent is
not obtained on or before the Closing Date (subject to Section 5.5.4) or (ii)
the Lessor's Consent is obtained, but before the Closing Date there shall occur
a default or breach by Seller of the related Store Lease, including but not
limited to a breach or default by reason of Seller being (if applicable) a
debtor in any bankruptcy or similar proceeding, such breach or default is not
waived by the lessor thereunder or cured by Seller before the Closing Date, and
Buyer shall elect not to accept an assignment of or assume such Store Lease.
(c) The obligations to be assumed by Buyer with respect to each
Transferred Lease are referred to herein collectively as the "Assumed
Liabilities". On the Closing Date, Buyer shall execute the Lease Assignment and
Assumption with respect to each Transferred Lease to evidence Buyer's assumption
of the lessee's obligations under each such Transferred Lease, for all periods
from and after the Closing Date.
2.4. Non-Assumption of Liabilities. Except for the Assumed Liabilities,
Buyer shall not assume any liabilities or obligations of any kind, nature or
description, whether known or unknown, asserted or unasserted, liquidated or
unliquidated, direct or indirect, due or to become due, absolute or contingent,
of Seller, or relating to the business of Seller whether or not conducted at any
of the Store Premises, or relating to the Transferred Assets, including, but not
limited to (i) any rents or additional rents or other charges or obligations
under any Store Lease relating to any periods prior to the Closing Date
(regardless of whether such rents, additional rents, charges or obligations are
billed by the lessor or payable by the lessee after the Closing Date), (ii) any
rents or additional rents or other charges or obligations under any Excluded
Lease, (iii) any liabilities or obligations secured by any Encumbrance on any of
the Transferred Assets (all of which Encumbrances are to be released and
discharged on the Closing Date as provided in Section 6.2(a)(vi)), and (iv) any
liabilities or obligations with respect to any of Seller's employees, including
liabilities and obligations under the WARN Act or any similar state or local law
(all of the foregoing, the "Non-Assumed Liabilities"). Nothing contained in this
Agreement shall require as a condition to Seller's obligations that Seller be
released by a lessor from any further liability or obligation under a Store
Lease, but the foregoing shall not limit Buyer's indemnification obligation with
respect to Assumed Liabilities pursuant to Section 9.3(iii) hereof.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller (jointly and severally) represents and warrants, as of the date of
this Agreement and as of the Closing Date, as follows:
3.1. Organization; Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own its
properties and assets and to carry on its business in the manner now conducted,
to execute and deliver this Agreement and all other agreements to be
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executed by it pursuant hereto, and to carry out the provisions of this
Agreement, and all other agreements to be executed by it pursuant hereto.
3.2. Execution; Authority; Enforceability. All corporate action on the
part of Seller, and their respective officers, directors and stockholders
necessary for the authorization, execution and delivery of this Agreement, all
other agreements to be executed by Seller pursuant hereto, and the performance
of all obligations of Seller hereunder and thereunder has been taken or will be
taken prior to the Closing Date; this Agreement and all other agreements to be
executed by Seller pursuant hereto have been duly and validly executed and
delivered by Seller; and this Agreement and all other agreements to be executed
by Seller pursuant hereto constitute valid and legally binding obligations of
Seller, enforceable in accordance with their respective terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by the availability or non-availability of
specific performance, injunctive relief, or other equitable remedies and general
principles of equity.
3.3. Governmental Consents. No consent, approval, qualification, order
or authorization of, or filing with, any local, state or federal governmental
authority is required on the part of Seller in connection with Seller's valid
execution, delivery or performance of this Agreement, or any other agreements to
be executed by Seller pursuant hereto, which, if not obtained, made or given,
could reasonably be expected to have a material adverse effect on Seller's valid
execution, delivery or performance of this Agreement, or any other agreements to
be executed by Seller pursuant hereto.
3.4. No Conflicts. The execution, delivery, and performance by Seller
of this Agreement, any other agreements to be executed by Seller pursuant
hereto, and the consummation of the transactions contemplated hereby and thereby
(a) will not result in a violation or default of any provision of Seller's
respective Certificate of Incorporation or By-Laws, (b) will not be in conflict
with or constitute, with or without the passage of time or giving of notice, a
material violation or default, or give rise to any material obligation, under
(i) any mortgage, indenture, agreement, instrument or contract to which Seller
is or on the Closing Date will be a party or by which it or any of the
Transferred Assets is or on the Closing Date will be bound or (ii) to the Best
Knowledge of Seller, any local, state or federal judgment, order, writ, decree,
statute, rule or regulation applicable to any of Seller, and (c) will not result
in the creation of any material mortgage, lien, charge, adverse claim or other
encumbrance, excluding any lien of a lessor under the terms of the applicable
Store Lease ("Encumbrance") upon any of the Transferred Assets, or the
acceleration of any indebtedness of or any performance required by Seller with
respect to any of the Transferred Assets, except, with respect to clauses (b)
and (c) above, for the necessity of obtaining Lessor's Consents. As used herein,
the term "Best Knowledge of Seller" shall mean the actual knowledge of Xxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxx.
3.5. Transferred Assets.
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3.5.1. Store Leases. Seller has delivered or made available to Buyer a
true and complete copy of the lease (and each amendment or supplement thereto)
covering each Store (each such store, a "Store Premises") under which Seller is
the lessee (each such lease, as so amended or supplemented, a "Store Lease"),
and has described each Store Lease on Schedule 3.5.1 by listing the name of the
current lessee, the name of the current lessor (by developer and by lessor
entity) and the location of the Store Premises covered thereby, the date of the
Store Lease (and each amendment or supplement thereto), and the amount of any
security deposit held by any lessor pursuant to such Store Lease, if any. Except
as disclosed on Schedule 3.5.1:
(a) Seller has provided Buyer with a true and complete copy of each
Store Lease (including each amendment or supplement thereto), and Seller does
not have any rights in or to the related Store Premises under any instrument or
document or under any agreement, written or oral, other than such Store Lease;
(b) Seller is the sole lessee under each Store Lease, and Seller has
not granted or permitted nor does there exist any sublease, license or other
right of occupancy by any third party with respect to any Store Premises;
(c) each Store Lease is in full force and effect, and has not been
assigned (as collateral or otherwise), modified, supplemented or amended;
(d) Seller has not received notice of nor to the Best Knowledge of
Seller is there any breach or default by the lessee or any event or condition
which, upon the giving of notice, passage of time, or both, would constitute
such a breach or default, under any Store Lease, and Seller has not given notice
of nor to the Best Knowledge of Seller is there any breach of default by the
lessor or any event or condition which, upon the giving of notice, passage of
time, or both, would constitute such a breach or default, under any Store Lease;
(e) Seller does not have notice of nor to the Best Knowledge of Seller
is there any event or occurrence in the nature of a casualty or condemnation
which affects any of the Store Premises (or any building or structure in which a
Store Premises is located) to such an extent so as to entitle the lessor or the
lessee under the applicable Store Lease to terminate such Store Lease;
(f) Seller has timely and properly exercised the renewal options under
the Store Leases listed on Schedule 3.5.1(f) annexed hereto, which renewal
options were required to be exercised prior to the date of this Agreement in
order to renew the term thereof beyond its current expiration date; and
(g) Seller has paid, or will have paid prior to the Closing Date, all
costs of labor and materials with respect to all improvements installed by or on
behalf of Seller in or about the Store Premises for which Seller was obligated
to pay, and there are no mechanics', materialmen's or similar liens against the
Store Premises resulting from any non-payment by Seller or any of Seller's
agents.
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3.5.2. FF&E. The FF&E situated at each Store Premises and in current
use by Seller is, in the aggregate, in operating condition and in a state of
repair sufficient for the conduct of normal operations, subject to any damage or
destruction by casualty that may occur between the date of this Agreement and
the Closing Date. EXCEPT AS PROVIDED IN THIS SECTION 3.5.2, ALL OF THE FF&E IS
BEING SOLD AND TRANSFERRED TO BUYER "AS IS" AND "WHERE IS" AND ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS OF USE,
ARE EXCLUDED FROM THE SALE AND TRANSFER OF THE FF&E. SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY NATURE WITH RESPECT TO THE PHYSICAL
CONDITION OF THE FF&E EXCEPT AS SET FORTH IN THE FIRST SENTENCE OF THIS SECTION
3.5.2.
3.6. Title to Transferred Assets. Seller has (except as disclosed on
Schedule 3.6), and on the Closing Date Seller will have, good and marketable
title to the Transferred Assets (other than the Store Leases), in each case free
and clear of all Encumbrances. With respect to the Store Leases, Seller holds
(except as disclosed on Schedule 3.6), and on the Closing Date Seller will hold,
a valid leasehold interest in and to the Store Leases, in each case, free and
clear of all Encumbrances. There are not, and on the Closing Date there will not
be, any outstanding agreements, options, commitments or rights with, to or in
any third party to acquire any of the Transferred Assets.
3.7. FIRPTA. Seller is not a "foreign person" as defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). At
each Closing, Seller shall deliver to Buyer the certificate required by Section
1445 of the Code.
3.8. Compliance with Laws. To the Best Knowledge of Seller, the
operation, conduct and ownership of the property and business of Seller at each
of the Store Premises at all times has been conducted in substantial compliance
with all federal, state and local laws, rules, regulations and ordinances,
except to the extent that any noncompliance could not reasonably be expected to
have a material adverse effect on the Transferred Assets or on Buyer.
3.9. Litigation. Except as disclosed on Schedule 3.9 hereto, there is
no action, suit, arbitration or other legal or administrative proceeding pending
or, to the Best Knowledge of Seller, any investigation pending or any action,
suit, arbitration or other legal or administrative proceeding or investigation
currently threatened, (a) with respect to any of the Transferred Assets or
which, if adversely determined, would be likely to have a material adverse
effect on the Transferred Assets, or (b) that (i) questions the validity of this
Agreement or any other agreements to be executed by Seller pursuant hereto or
the right of Seller to enter into this Agreement or such other agreements, or to
consummate the transactions contemplated hereby or thereby, or (ii) if adversely
determined, would be likely to have a material adverse effect on Seller's
ability to perform its obligations under this Agreement or any other agreement
to be executed by Seller pursuant hereto. Seller is not a party to or subject to
any order, writ, injunction, decree, judgment or other restriction of any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which has or is reasonably likely to have a
material adverse effect on Seller's ability to enter into this Agreement or any
other agreement to be executed by Seller pursuant hereto, or to consummate the
transactions contemplated hereby or thereby.
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3.10. Insurance. Schedule 3.10 sets forth all insurance maintained by
Seller with respect to each of the Store Premises and the FF&E. Such insurance
coverage is not less than the insurance coverage required to be maintained by
Seller pursuant to the Store Leases.
3.11. Financial Statements. The financial statements of Seller included
in Seller's quarterly report on Form 10-Q for the fiscal quarter ended June 30,
1998 and annual report on Form 10-K for the fiscal year ended September 30, 1997
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Securities and
Exchange Commission with respect thereto, have been prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the period covered and fairly present, in all material respects, the
financial position of Seller as of the date thereof and the results of
operations and changes in financial position for the period then ended (subject,
in the case of unaudited statements, to customary audit adjustments).
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants, as of the date of this Agreement and
as of the Closing Date, as follows:
4.1. Organization; Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has all requisite corporate power and authority to own its properties and assets
and to carry on its business in the manner now conducted and as proposed to be
conducted, to execute and deliver this Agreement and all other agreements to be
executed by it pursuant hereto, and to carry out the provisions of this
Agreement, and all other agreements to be executed by it pursuant hereto.
4.2. Execution; Authority; Enforceability. All corporate action on the
part of Buyer, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, all other agreements to
be executed by Buyer pursuant hereto, the performance of all obligations of
Buyer hereunder and thereunder, has been taken or will be taken prior to the
Closing Date; this Agreement and all other agreements to be executed by Buyer
pursuant hereto have been duly and validly executed and delivered by Buyer; and
this Agreement and all other agreements to be executed by Buyer pursuant hereto
constitute valid and legally binding obligations of Buyer, enforceable in
accordance with their respective terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by the availability or non-availability of specific performance,
injunctive relief, or other equitable remedies and general principles of equity.
4.3. Governmental Consents. No consent, approval, qualification, order
or authorization of, or filing with, any local, state or federal governmental
authority is required on the part of Buyer in connection with Buyer's valid
execution, delivery or performance of this Agreement, or any of the other
agreements to be executed by Buyer pursuant hereto, which, if not obtained, made
or given, could reasonably be expected to have a material adverse effect on
Buyer's
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valid execution, delivery or performance of this Agreement, or any other
agreements to be executed by Buyer pursuant hereto.
4.4. No Conflicts. The execution, delivery, and performance by Buyer of
this Agreement, any other agreements to be executed by Buyer pursuant hereto,
and the consummation of the transactions contemplated hereby and thereby (a)
will not result in a violation or default of any provision of its Certificate of
Incorporation or By-Laws, and (b) will not be in conflict with or constitute,
with or without the passage of time or giving of notice, a material violation or
default, or give rise to any material obligation, under (i) any mortgage,
indenture, agreement, instrument or contract to which Buyer is or on the Closing
Date will be a party or by which it or any of its material assets is bound or
(ii) to the best knowledge of Buyer, any local, state or federal judgment,
order, writ, decree, statute, rule or regulation applicable to Buyer.
4.5. Litigation. There is no action, suit, arbitration, or other legal
or administrative proceeding pending or, to the best knowledge of Buyer, any
investigation pending or any action, suit, arbitration, or other legal or
administrative proceeding or investigation currently threatened against Buyer
which (a) questions the validity of this Agreement, the agreements to be
executed by Buyer pursuant hereto or the right of Buyer to enter into this
Agreement or such other agreements, or to consummate the transactions
contemplated hereby or thereby, or (b) if adversely determined, would be likely
to have a material adverse effect on Buyer's ability to perform its obligations
under this Agreement or any other agreements to be executed by Buyer pursuant
hereto. Buyer is not a party to or subject to any order, writ, injunction,
decree, judgment or other restriction of any federal, state, municipal or other
governmental department, commission, board, bureau, agency, or instrumentality
which has or is reasonably likely to have a material adverse effect on Buyer's
ability to enter into this Agreement or any other agreement to be executed by
Buyer pursuant hereto, or to consummate the transactions contemplated hereby or
thereby.
4.6. Financial Statements. The financial statements of Buyer included
in Buyer's quarterly report on Form 10-Q for the fiscal quarter ended April 30,
1998 and annual report on Form 10-K for the fiscal year ended January 31, 1998
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Securities and
Exchange Commission with respect thereto, have been prepared in accordance with
GAAP applied on a consistent basis during the period covered and fairly present,
in all material respects, the financial position of Buyer as of the date thereof
and the results of operations and changes in financial position for the period
then ended (subject, in the case of unaudited statements, to customary audit
adjustments).
5. CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
5.1. Conduct of Business. Except as otherwise required or permitted by
this Agreement or with the prior written consent of Buyer, from the date of this
Agreement until the Closing Date, Seller: (a) shall conduct its business and
operations at each of the Store Premises in accordance with past practice and in
the ordinary course of business (other than in connection with or resulting from
the transactions contemplated hereby, including the conduct of a liquidation
sale
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at each Store Premises to the extent permitted by the applicable Store Lease or
Lessor's Consent and such changes in operations as may be required upon
announcement of this transaction); (b) shall not commit or permit any act or
omission which constitutes a breach or default, or upon the giving of notice,
passage of time, or both, would constitute a breach or default, under any Store
Lease, and shall promptly give Buyer a copy of any notice that Seller may
receive asserting any breach or default or any act or omission which, upon the
giving of notice, passage of time, or both, would constitute a breach or
default, under any Store Lease; (c) shall not modify, amend, renew (or exercise
any option to renew) or cancel any Store Lease (except as otherwise contemplated
by this Section 5.1); (d) unless otherwise directed by Buyer, with respect to a
Store Lease for which a Lessor's Consent has been obtained prior to the Closing
Date, shall timely and properly exercise any renewal or extension option under
any Store Lease which is required to be exercised prior to the Closing Date in
order to renew or extend the term thereof beyond its current expiration date;
(e) shall not sell, transfer, dispose or encumber any of the Transferred Assets;
(f) shall maintain the FF&E used by it in a state of repair reasonably
sufficient for the conduct of normal operations, ordinary wear and tear and
damage or destruction by casualty excepted; and (g) shall continue to maintain
all casualty, liability and other insurance described in Schedule 3.10, and
shall use its Best Efforts to collect all insurance proceeds on account of any
damage or destruction of any FF&E occurring after the date of this Agreement and
apply same to the repair of restoration of the FF&E (or transfer such proceeds
to Buyer on the Closing Date to the extent not applied).
5.2. Access to Information. From the date of this Agreement until the
Closing Date, Seller shall afford Buyer and its attorneys, accountants and other
representatives access, on reasonable notice during normal business hours, and
in a manner which will not unreasonably interfere with the operation of Seller's
business, and at no charge to Buyer, to all of the Store Premises (after
September 21, 1998) and to all of Seller's books, files and records directly
relating to the Transferred Assets, to cooperate in the inspection and
examination thereof, and shall furnish Buyer and its representatives all
information with respect to the Transferred Assets as Buyer or its
representatives may reasonably request. No such inspection or examination,
however, shall constitute a waiver or relinquishment by Buyer of its right to
rely upon Seller's representations, warranties, covenants and agreements as made
herein or pursuant hereto. Any information disclosed to Buyer or its
representatives in the course of such examination shall be maintained
confidentially pursuant to the Confidentiality Agreement dated July 9, 1998
between Seller and Buyer; which Confidentiality Agreement shall survive the
execution and delivery of, or any termination of, or Closing under, this
Agreement.
5.3. Disclosure.
5.3.1. Public Disclosure. From the date of this Agreement until the
Closing Date, no party to this Agreement shall directly or indirectly make or
cause to be made any public announcement or issue any public notice in any form
with respect to this Agreement or the transactions contemplated hereby, without
the consent of the other party except if in the opinion of such party's counsel
it is required by the securities laws of the United States or the rules of the
New York Stock Exchange or the Nasdaq National Market to make such disclosure,
including but not
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limited to disclosure made in connection with any registration statement which
may be filed by Buyer or Seller. The parties agree that, to their knowledge (and
given based on the advice of their respective counsel and the circumstances
prevailing at the date of this Agreement), no such public disclosure is required
at the date of this Agreement. The parties acknowledge, however, that such
public disclosure may be required based on actions of lessors or other persons
following the disclosure of this transaction to the lessors under the Store
Leases. The parties agree, to the extent practicable, to provide each other with
the opportunity to review and make reasonable comment on and to consult with
each other regarding any such public announcement (including the timing thereof)
in advance thereof.
5.3.2. Confidentiality. Except as otherwise provided in Section 5.3.1,
from the date of this Agreement until sixty (60) days after the Closing Date,
each party agrees that the terms and conditions of this Agreement shall be kept
strictly confidential and shall not, without the prior written consent of the
other party, be disclosed or revealed, in any manner whatsoever, directly or
indirectly, in whole or in part, to any lessor or other third party (other than
such party's financial advisor, attorney, accountant or other representative).
The provisions of this Section shall be inoperative as to any information which
is or becomes generally available to the public other than as a result of any
breach of these provisions by such party or its representatives. In the event
that any party or any person to whom such party furnishes any confidential
information is requested or becomes legally compelled (by oral questions,
interrogatories, request for information or documents, subpoena, criminal or
civil investigative demand or similar process) to disclose any confidential
information, such party will provide the other party with prompt written notice
so that the other party may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions hereof, and such party will
cooperate with the other party in any effort the other party undertakes to
obtain a protective order or other remedy. In the event that such protective
order or remedy is not obtained, or that the other party, in its sole
discretion, waives compliance with the provisions hereof, such party will
furnish only that portion of the information which is legally required and will
use its Best Efforts to obtain reliable assurance that confidential treatment
will be accorded the information.
5.4. Further Assurances. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its Best Efforts to take
promptly, or cause to be taken, all actions and to do promptly, or cause to be
done promptly, all things necessary, proper or advisable under applicable laws
to consummate and make effective the transactions contemplated by this
Agreement, and to satisfy all of the conditions to the Closing to be satisfied
by such party, including using its Best Efforts to obtain all necessary actions
or non-actions, extensions, waivers, consents and approvals from all applicable
governmental entities and third parties, and effecting all necessary
registrations and filings. As used in this Agreement, "Best Efforts" shall
require the diligent pursuance, in good faith, of the course of action or result
stated, but shall not require any party to (x) pay any sum or other
consideration or incur or assume any liability or obligation that (i) is not
otherwise required pursuant to any of the provisions of this Agreement or (ii)
is not otherwise required by law or contract, to be paid, incurred or assumed or
(y) commence litigation or take any other legal action. Each of the parties
hereto agrees not to take any action or fail to take any action
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that would be likely to cause any representation or warranty contained in this
Agreement to cease to be true or accurate or that would be reasonably likely to
prevent the performance of any covenant or the satisfaction of any condition
contained in this Agreement.
5.5. Lessor's Consents.
5.5.1. Best Efforts to Obtain. Seller shall use its Best Efforts to
obtain from the lessor under each Store Lease listed on Schedule 3.5.1 (a) an
estoppel certificate and (b) a written consent to:
(i) the assignment of the Store Lease from Seller to Buyer, and the
assumption of the Store Lease by Buyer;
(ii) the trade name, signage and use that Buyer proposes for the Store
Premises;
(iii) the remodeling of the Store Premises as contemplated by Buyer;
(iv) the prospective waiver of the breach or default, if any, that
would occur under the Store Lease in the event of any cessation of Seller's
operations at the Store Premises during the 15-day period prior to the Closing
hereunder and during Buyer's subsequent remodeling of the Store Premises;
(v) the prospective waiver of the breach or default, if any, that would
occur under the Store Lease in the event Seller conducts a liquidation sale at
the Store Premises during the period between September 21, 1998 and the Closing
Date;
(vi) the waiver of any term or provision in the Store Lease or in any
other lease to which such lessor or its affiliate and Buyer or its affiliate are
parties (a "radius clause") which prohibits the lessee thereunder or any
affiliate thereof from operating, or which restricts the right of the lessee
thereunder or any affiliate thereof to operate, any retail store in any
geographical area, or which includes the sales of any other retail store in the
calculation of any percentage or other rent payable under such Store Lease or
other lease, to the extent that such radius clause would be violated by or
require any additional payment as a result of Buyer operating the Store Premises
or any other store that is operated by Buyer or its affiliate as of the date of
this Agreement, or for which Buyer or its affiliate has as of the date of this
Agreement entered into or is negotiating to enter into or acquire a lease in
anticipation of commencing operations (including the Britches chain which Buyer
has agreed to acquire);
(vii) the waiver of any term or provision in the Store Lease which
provides that a breach or default under any other lease or agreement to which
Buyer is not a party, with or without the passage of time or the giving of
notice or both, would constitute a breach or default under the Store Lease;
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(viii) the waiver of any term or provision in the Store Lease that
would require Seller to remodel the Store Premises prior to the Closing Date or
that would require Buyer to remodel the Store Premises at any time during the
term of the Store Lease (other than Buyer's initial remodeling upon taking
possession of the Store Premises);
(ix) the waiver, in any such case solely by reason of the assignment of
the Store Lease to Buyer, of any term or provision in the Store Lease that would
allow or entitle the lessor to recapture any of the space covered by the Store
Lease, or, except as contemplated by Section 5.5.3(c) below, that would allow or
entitle the lessor to receive any consideration received by Seller hereunder, to
increase the rent, security or other monetary obligations or to effect any
change in the terms of the Store Lease (including terms applicable to space
other than the Store Premises) or to take or that would result in any other
action that would have a material adverse effect on the lessee's rights or
obligations under the Store Lease; and
(x) the waiver of any term or provision in the Store Lease pursuant to
which the trading of Buyer's stock on the Nasdaq National Market could be a
breach or default under the Store Lease or deemed to be an assignment of the
Store Lease,
(the foregoing (a) and (b), collectively, being a "Lessor's Consent"), provided
that except for clause (b)(i) Buyer may elect not to request or seek, or to
cease requesting or seeking, or to waive, any of the foregoing provisions of the
Lessor's Consent in its sole and absolute discretion. Each Lessor's Consent
shall be in substantially the form annexed hereto as Exhibit A (subject to
revision to reflect the provisions of any specific Store Lease or to eliminate
any provision that is not relevant to the specific Store Lease or that Buyer
elects not to request or seek or to cease requesting or seeking or to waive), or
otherwise reasonably satisfactory in form and substance to Buyer, and shall be
validly executed by the relevant lessor. Buyer also agrees not to unreasonably
withhold its approval of any customary changes to the estoppel certificate
included in the Lessor's Consent that may be requested by a lessor. Seller
agrees to deliver a written request for a Lessor's consent to each lessor within
three (3) business days after the date of this Agreement.
5.5.2. Buyer's Cooperation. Buyer shall reasonably cooperate with
Seller and use its Best Efforts to assist Seller in Seller's efforts to obtain
the Lessor's Consents, which cooperation will include providing such publicly
available financial and other information concerning Buyer as a lessor may
reasonably request. Buyer also shall use its Best Efforts to negotiate
commercially reasonable modifications to the terms of a Store Lease with the
lessor if necessary in order to obtain a Lessor's Consent. However, Buyer shall
not be required to accept or incur any Additional Lease Costs (as defined
below), except as provided in Section 5.5.3(c), or to accept any relocation of
any existing Store Premises or other premises leased to Buyer or its affiliate
or to agree to enter into or assume a lease or to cancel or modify any lease
with respect to any other premises leased to Buyer or its affiliate in order to
obtain a Lessor's Consent. If requested by a lessor of a Store Premises, Buyer
agrees that it will, in lieu of Seller and Buyer executing and delivering a
Lease Assignment and Assumption with respect to such Store Lease, enter into a
new lease with such lessor for such Store Premises for the same term, rents and
other terms and conditions as the existing Store Lease for such Store Premises,
with such modifications as Buyer
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may agree in accordance with the provisions of this Section 5.5.2. Seller shall
from time to time (but not less often than weekly) furnish Buyer with a detailed
status report with respect to Seller's efforts to obtain the Lessor's Consents.
Buyer will have the right to participate or to have its representative
participate at any meeting with a lessor under a Store Lease to discuss the
proposed assignment or the terms of the Lessor's Consent or actions to be taken
in connection therewith. If requested by Buyer, Seller will use its Best Efforts
to arrange a meeting for Buyer or its representative with any such lessor for
the purpose of discussing with the lessor the proposed assignment or the terms
of the Lessor's Consent or actions to be taken in connection therewith. Buyer
has informed Seller that is intends to convert, and agrees that if required to
obtain the applicable Lessor's Consent it will convert, all of the Stores to
"ArdenB" stores, except those Stores numbered 713, 720, 723, 759 and 795 listed
on Schedule 3.5.1, which Buyer has informed Seller that it intends to convert to
"Wet Seal", "Contempo Casuals" or "Limbo Lounge" stores.
5.5.3. Costs.
(a) Except as expressly set forth in this Agreement, neither Buyer nor
Seller shall be required or obligated in order to obtain a Lessor's Consent to
pay any sum, incur any liability, take any action to satisfy any net worth
requirement, provide any third party or affiliate guaranty, or provide any
security or additional security.
(b) Seller shall be obligated to pay, and shall pay when due, all rents
and additional rents due and owing under each Store Lease relating to all
periods prior to the Closing Date with respect to such Store Lease, and Seller
shall be obligated to cure, and shall cure when required, any breach or default
under each Store Lease relating to all periods prior to the Closing Date with
respect to such Store Lease (all of the foregoing, "Lease Cure Costs"). Buyer
reserves the right to pay in accordance with Section 10.1 any Lease Cure Costs
that are not paid when due by Seller, and to deduct the actual amount of the
Lease Cure Costs paid or incurred by Buyer from the Purchase Price as provided
in Section 2.2(b). Buyer shall provide Seller with a statement, in reasonable
detail, setting forth any Lease Cure Costs paid or incurred by Buyer, concurrent
with the deduction of any such Lease Cure Costs from the Purchase Price. If
Buyer shall pay or incur any Lease Cure Costs and the Purchase Price is reduced
pursuant to Section 2.2(b) as a result thereof, then such Lease Cure Costs shall
be an Assumed Liability for purposes of Section 9.3(iii) hereof.
(c) Each of Buyer and Seller agrees to pay, in accordance with the
provisions of this Section 5.5.3(c), the following costs and expenses in
connection with obtaining Lessor's Consents ("Shared Costs"): (i) fees and
expenses (including but not limited to legal and other professional fees)
charged by a lessor that are required by the Store Lease or otherwise are
reasonable in connection with evaluating a request for a Lessor's Consent,
reviewing preliminary design plans for the remodeling of the Store Premises
contemplated by Buyer, or making modifications to the Store Lease requested
hereunder ("Lessor Fees") and (ii) the amount of any increase in rent,
additional rent or other monetary obligation (including cost-of-living
adjustments), whether denominated as rent or otherwise, including but not
limited to security (other than security deposited or required to have been
deposited by Seller prior to the date of this Agreement) or additional security,
repayment of tenant allowances or increases in percentage rent (whether by
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increasing the percentage, reducing the breakpoint, or otherwise), that (x) is
required by the terms of the Store Lease solely by reason of the assignment of
the Store Lease to Buyer or (y) whether or not so required by the terms of the
Store Lease, is required by the lessor to be paid or incurred in order to obtain
a Lessor's Consent (the foregoing (x) and (y), "Additional Lease Costs"),
provided that if any Additional Lease Costs are payable after the Closing Date,
the reasonably estimated present value thereof as of the Closing Date
(calculated using a discount rate of 8%) shall be the amount included in
Additional Lease Costs. Buyer shall not be required or obligated to accept or
agree to pay any Additional Lease Costs except that, subject to each party's
obligation to pay Shared Costs, up to the maximum, pursuant to this Section
5.5.3(c), Buyer shall accept or agree to pay (i) those Additional Lease Costs
described in clause (x) above and (ii) those Additional Lease Costs described in
clause (y) above (provided that Buyer shall not be obligated to accept or agree
to pay or incur any Additional Lease Costs described in clause (y) above with
respect to a Store Lease if and to the extent that, together with Additional
Lease Costs described in clause (x) above with respect to that Store Lease, all
Additional Lease Costs with respect to that Store Lease shall exceed the amount
set forth opposite such Store Lease on Schedule 5.5.3(c) hereto). Seller shall
not have the right to pay or incur any Additional Lease Costs without Buyer's
consent. Shared Costs shall be paid one-half each by Buyer and Seller, up to a
maximum aggregate sum (for both Buyer and Seller) of $1,000,000 (i.e., $500,000
for Buyer and $500,000 for Seller). Any Shared Costs in excess of $1,000,000
shall be paid solely by Buyer, provided that Buyer shall not be required to pay
or incur more than an additional sum of $500,000. If any party shall pay or
incur Shared Costs in excess of the portion payable by such party pursuant to
this Section 5.5.3(c), such party shall be reimbursed by the other party
promptly upon request therefor, and in any case on or before the Closing Date
(except as otherwise provided in Section 5.5.4), or, with respect to Lessor Fees
only, upon any termination of this Agreement prior to the Closing Date; subject
in all events to each party's maximum obligation to pay Shared Costs pursuant to
this Section 5.5.3(c). Neither party shall be required to pay or incur prior to
the Closing Date any Shared Costs consisting of Additional Lease Costs.
5.5.4. Excluded Leases. With respect to any Excluded Lease, the
following provisions shall apply:
(a) Unless the lessor with respect to such Store Lease has definitively
advised the parties on or before the Closing Date that it is unwilling to grant
a Lessor's Consent (on terms and conditions acceptable to Buyer), the parties,
for a period of sixty (60) days following the Closing Date, shall continue to
cooperate with each other and use their Best Efforts to obtain such Lessor's
Consent in accordance with the provisions of this Section 5.5.
(b) If the Lessor's Consent is obtained within sixty (60) days after
the Closing Date, then (i) the parties shall make the deliveries required by
Sections 6.1 and 6.2 with respect to such Store Lease, effective as of the date
such Lessor's Consent is received, (ii) Buyer shall pay Seller the portion of
the Purchase Price allocated to such Store Lease on Schedule 2.2(a) hereto
(which portion previously had been reduced from the Purchase Price in accordance
with
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Section 2.2(a)), and (iii) each party shall reimburse the other, as applicable,
for any Shared Costs relating to such Store Lease in accordance with Section
5.5.3(c).
6. CLOSING
6.1. Closing Date. The closing of the transaction contemplated by this
Agreement (herein called the "Closing") shall take place at the offices of Akin,
Gump, Strauss, Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at
10:00 a.m. on December 1, 1998, or on such other date as the parties may
mutually agree. The date on which the Closing actually occurs is referred to
herein as the "Closing Date."
6.2. Deliveries by Seller.
(a) At the Closing, Seller shall deliver, cause to be delivered, or, as
applicable, execute and deliver to Buyer the following:
(i) an original fully-executed Lessor's Consent with respect to each
Store Lease (other than an Excluded Lease);
(ii) vacant, broom-clean possession of each Store Premises (excluding
any Store Premises demised under an Excluded Lease), and of the FF&E located in
each Store Premises;
(iii) an instrument of assignment and assumption of lease, duly
executed by Seller, with respect to each Store Lease with respect to which a
Lessor's Consent has been obtained, in substantially the form annexed hereto as
Exhibit B, assigning to Buyer all of the right, title and interest of Seller in
and to each Store Lease, free and clear of all Encumbrances (each, a "Lease
Assignment and Assumption"); provided, however, that if a lessor under a Store
Lease shall require a different form of Lease Assignment and Assumption, (x)
such form shall be reasonably satisfactory to counsel for Buyer and Seller and
(y) notwithstanding the provisions of any form of assignment, as between Buyer
and Seller, Buyer shall not be liable for any obligations of the lessee under
any Store Lease relating to any period prior to the Closing Date and Seller
shall not be liable for any obligations of the lessee under any Store Lease
relating to any period on or after the Closing Date, except as may be otherwise
expressly set forth in this Agreement;
(iv) a xxxx of sale, in substantially the form annexed hereto as
Exhibit C, duly executed by Seller, conveying to Buyer all of the right, title
and interest of Seller in the FF&E, free and clear of all Encumbrances (the
"Xxxx of Sale");
(v) to the extent in Seller's possession, originals or copies of all
Store Leases and all books, records, contracts, agreements, plans, blueprints,
operating manuals, warranties and other papers and documents relating to the
Transferred Assets;
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(vi) original releases, termination statements or similar instruments
as necessary to release, discharge and terminate any Encumbrances on or with
respect to any of the Transferred Assets (whether or not disclosed on Schedule
3.6);
(vii) a certified check to the order of Buyer (or a credit against
payment of the Purchase Price) in the amount of any unapplied insurance proceeds
included in the FF&E and an executed assignment of Seller's right to receive any
unpaid or uncollected insurance proceeds included in the FF&E;
(viii) a certified check to the order of Buyer (or a credit against
payment of the Purchase Price) in the amount equal to any net Shared Costs to be
reimbursed by Seller to Buyer pursuant to Section 5.5.3(c);
(ix) the amount of the net prorations in favor of Buyer pursuant to
Section 6.4 hereof; and
(x) all other agreements, instruments, certificates, resolutions,
opinions and other documents required to be delivered by Seller on or before the
Closing pursuant to this Agreement.
6.3. Deliveries by Buyer.
(a) At the Closing, Buyer shall deliver, cause to be delivered, or, as
applicable, execute and deliver, to Seller the following:
(i) the Purchase Price to be delivered pursuant to Section 2.1
(subject to adjustment pursuant to Section 2.2);
(ii) the Lease Assignment and Assumption, duly executed by Buyer,
withrespect to each Store Lease with respect to which a Lessor's Consent has
been obtained;
(iii) the amount of the net prorations in favor of Seller and
security deposits payable to Seller pursuant to Sections 6.4 and 6.5 hereof;
(iv) the amount equal to any net Shared Costs to be reimbursed by
Buyer to Seller pursuant to Section 5.5.3(c); and
(v) all other agreements, instruments, certificates, resolutions,
opinions and other documents required to be delivered by Buyer on or before the
Closing pursuant to this Agreement.
6.4. Prorations. On the Closing Date, the parties shall pro-rate as of
the Closing Date all rents, additional rents and other charges under the
respective Store Leases (other than the Excluded Leases). If bills for rents,
additional rents or other charges under Store Leases relating to periods prior
to the Closing Date have not been received or such prorations otherwise cannot
be
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determined at the time provided above, then such prorations shall be determined
and made as soon as practicable following the date that such prorations are
determinable.
6.5. Security Deposits. On the Closing Date, Buyer shall pay Seller an
amount equal to any unapplied cash security deposit held by a lessor under any
Transferred Lease. If a security deposit held by a lessor is in the form of a
letter of credit, Buyer shall deliver to such lessor either cash or a
replacement letter of credit conforming to the provisions of the Store Lease (in
which case the parties shall arrange for the release by such lessor of the
letter of credit deposited by Seller).
7. CONDITIONS TO BUYER'S OBLIGATIONS AT CLOSING
The obligations of Buyer under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against Buyer unless Buyer gives its
consent in writing thereto:
7.1. Representations and Warranties. The representations and warranties
of Seller contained in Section 3 shall be true in all material respects on and
as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing (or on the date
when made in the case of any representation or warranty which expressly relates
to an earlier date), except (a) as otherwise expressly permitted by this
Agreement and (b) for changes in such representations and warranties which would
not have (i) a material adverse effect on any Store Lease or, taken as a whole,
on the FF&E or (ii) a material adverse effect on Seller's valid execution,
delivery or performance of this Agreement, or any other agreements to be
executed by Seller pursuant hereto.
7.2. Performance. Seller shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
7.3. Compliance Certificate. Buyer shall have received at the Closing
certificates executed by a senior executive officer of Seller certifying (a)
that the conditions specified in Sections 7.1, 7.2, 7.7 and 8.6 have been
fulfilled, and (b) the status of Seller's efforts to obtain the Lessor's
Consents as of the Closing Date.
7.4. Proceedings and Documents. All corporate and other proceedings in
connection with the authorization of the transactions contemplated at the
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to Buyer's counsel, which shall have received all such
counterpart original and certified or other copies of such documents as it may
reasonably request.
7.5. Opinion of Seller's Counsel. Buyer shall have received from Xxxxxx
Xxxxxxxx LLP, counsel for Seller, an opinion, dated the date of the Closing, in
substantially the form annexed as Exhibit D.
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7.6. No Action or Proceeding. No claim, action, suit, investigation or
other proceeding shall be pending which, if adversely determined, would (i)
result in an order, writ, injunction or decree prohibiting Buyer from
consummating, (ii) grant relief from or against Buyer with respect to, or (iii)
render it unlawful for Buyer as of the Closing Date to consummate, the
transactions contemplated by this Agreement.
7.7. No Material Adverse Effect. Between the date of this Agreement and
the Closing Date, there shall not have occurred any event or condition which has
had or may reasonably be expected to have a material adverse effect on all or
any material portion of the Transferred Assets.
7.8. Lessor's Consents. The parties shall have received Lessor's
Consents with respect to not less than nineteen (19) of the Store Leases (not
including Merchandise Mart, with respect to which a Lessor's Consent shall not
be required pursuant to this Section 7.8).
8. CONDITIONS TO SELLER'S OBLIGATIONS AT CLOSING
The obligations of Seller to Buyer under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against Seller unless Seller gives its
consent in writing thereto:
8.1. Representations and Warranties. The representations and warranties
of Buyer contained in Section 4 shall be true in all material respects on and as
of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing (or on the date when made in
the case of any representation or warranty which expressly relates to an earlier
date), except for changes in such representations and warranties which would not
have a material adverse effect on Buyer's valid execution, delivery or
performance of this Agreement, or any other agreements to be executed by Buyer
pursuant hereto.
8.2. Performance. Buyer shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
8.3. Compliance Certificate. Seller shall have received at the Closing
a certificate executed by a senior executive officer of Buyer certifying that
the conditions specified in Sections 8.1, 8.2 and 7.6 have been fulfilled.
8.4. Proceedings and Documents. All corporate and other proceedings in
connection with the authorization of the transactions contemplated at the
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to Seller's counsel, which shall have received all such
counterpart original and certified or other copies of such documents as it may
reasonably request.
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8.5. Opinion of Buyer's Counsel. Seller shall have received from Akin,
Gump, Strauss, Xxxxx & Xxxx, L.L.P., counsel for Buyer, an opinion, dated the
date of the Closing, in substantially the form annexed as Exhibit E.
8.6. No Action or Proceeding. No claim, action, suit, investigation or
other proceeding shall be pending which, if adversely determined, would (i)
result in an order, writ, injunction or decree prohibiting Seller from
consummating, (ii) grant relief from or against Seller with respect to, or (iii)
render it unlawful for Seller as of the Closing Date to consummate, the
transactions contemplated by this Agreement.
8.7. Lessor's Consents. The parties shall have received Lessor's
Consents with respect to not less than nineteen (19) of the Store Leases (not
including Merchandise Mart, with respect to which a Lessor's Consent shall not
be required pursuant to this Section 8.7).
9. SURVIVAL; INDEMNIFICATION
9.1. Survival Past Closing. Any investigation or examination by Buyer
of the business, properties or affairs of the Seller or of the Transferred
Assets shall not affect the representations and warranties of Seller contained
in Section 3, and the representations and warranties of Seller contained in
Section 3 shall survive the Closing for a period of two (2) years, except with
respect to the provisions of Sections 3.2 and 3.6 which shall survive until the
expiration of any applicable statute of limitations. Any investigation or
examination by Seller of the business, properties or affairs of Buyer shall not
affect the representations and warranties of Buyer contained in Section 4, and
the representations and warranties of Buyer contained in Section 4 shall survive
the Closing for a period of two (2) years.
9.2. Indemnification by Seller. From and after the Closing Date, Seller
(jointly and severally) shall indemnify, defend and hold harmless Buyer, and
each of its officers, directors, parent, subsidiaries and affiliates, from and
against any and all liabilities, losses, damages, claims, fines, penalties,
costs and expenses (including, without limitation, reasonable attorneys' and
accounting fees) incurred by Buyer or any of its officers, directors, parent,
subsidiaries or affiliates, arising out of or resulting from (i) any breach of
any representation or warranty made by Seller contained in this Agreement, (ii)
the nonperformance of any covenant or obligation to be performed by Seller under
this Agreement, or (iii) any failure of Seller to pay and perform any
Non-Assumed Liabilities.
9.3. Indemnification by Buyer. From and after the Closing Date, Buyer
shall indemnify, defend and hold harmless Seller, and each of its officers,
directors, subsidiaries and affiliates, from and against any and all
liabilities, losses, damages, claims, fines, penalties, costs and expenses
(including, without limitation, reasonable attorneys' and accounting fees)
incurred by Seller or its officers, directors, parent, subsidiaries or
affiliates arising out of or resulting from (i) any breach of any representation
or warranty made by Buyer contained in this Agreement, (ii) the nonperformance
of any covenant or obligation to be performed by Buyer under this Agreement, or
(iii) any failure of Buyer to pay and perform any of the Assumed Liabilities.
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9.4. Limitation. Any claim for indemnification asserted pursuant to
Sections 9.2(i) or 9.3(i) shall be subject to the limitation that the Indemnitor
(as hereinafter defined) shall not be obligated to indemnify any one or more
Indemnitees (as hereinafter defined) with respect to such claim unless and until
the aggregate amount of all claims against Indemnitor exceed $25,000, whereupon
Indemnitor shall be subject to a claim for indemnification for the amount of
such claim or claims in excess of $25,000.
9.5. Indemnification Procedures. (a) If either party shall receive
notice of any matter which such party, or any of its officers, directors,
parent, subsidiaries or affiliates (any of the foregoing, an "Indemnitee"), has
determined has given or could give rise to a right of indemnification under this
Agreement, the Indemnitee shall promptly give the indemnifying party (the
"Indemnitor") written notice of such claim, stating the amount of the loss, if
known, and method of computation thereof, all with reasonable particularity and
including documentary proof, if available, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises; provided, however, that failure to so notify the
Indemnitor shall not relieve the Indemnitor from any liability which it may have
on account of the claim, except to the extent the Indemnitor shall have been
prejudiced by such failure.
(b) If an Indemnitee shall receive notice of any claim by a third party
which is or may be subject to indemnification, the Indemnitee shall promptly
give the Indemnitor written notice of such claim; provided, however, that
failure to so notify the Indemnitor shall not relieve the Indemnitor from any
liability which it may have on account of the claim, except to the extent the
Indemnitor shall have been prejudiced by such failure. In such event the
Indemnitee shall permit the Indemnitor, at its option, to participate in the
defense of such third party claim by counsel of its own choice and at its own
expense. If, however, the Indemnitor acknowledges in writing its obligation to
indemnify the Indemnitee hereunder against all losses that may result from such
claim, then the Indemnitor shall be entitled, at its option, to assume and
control the defense of such claim by counsel of its own choice and at its own
expense; provided that the Indemnitor and its counsel shall proceed with
diligence and good faith with respect thereto. Notwithstanding the foregoing,
the Indemnitee shall have the right to employ separate counsel in any such claim
or proceeding and the fees and expenses of such counsel shall be at the expense
of such Indemnitor if: (i) the Indemnitor has failed to promptly assume the
defense and employ counsel or (ii) the named parties to any such claim or
proceeding (including any impleaded parties) include such Indemnitee and any of
the Indemnitors, and such Indemnitee shall have been advised by its counsel that
there is a conflict of interest between the Indemnitor and the Indemnitee with
respect to such claim or proceeding or with respect to any legal defense which
may be available; provided, however that the Indemnitors shall not in such event
be responsible here-under for the fees and expenses of more than one firm of
separate counsel in connection with any claim or proceeding.
(c) In the event the Indemnitor exercises its right to undertake the
defense of any claim by a third party, the Indemnitee shall cooperate with the
Indemnitor in such defense and make available to the Indemnitor witnesses,
pertinent records, materials and information in its possession or under its
control relating thereto as are reasonably requested by the Indemnitor.
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Similarly, in the event the Indemnitee is, directly or indirectly, conducting
the defense against any claim by a third party, the Indemnitor shall cooperate
with the Indemnitee in such defense and make available to the Indemnitee
witnesses, pertinent records, materials and information in its possession or
under its control relating thereto as are reasonably requested by the
Indemnitee. No claim by a third party may be settled by the Indemnitor without
the written consent of the Indemnitee, which consent shall not be unreasonably
withheld or delayed; provided, however, that the Indemnitor may settle such
claim without the consent of the Indemnitee so long as the settlement includes a
written release of the Indemnitee, in form and substance reasonably satisfactory
to the Indemnitee, from the claim by the third party claimant. No claim by a
third party which is being defended in good faith by the Indemnitee alone, or
jointly with the Indemnitor, shall be settled by the Indemnitee without the
written consent of the Indemnitor, which consent shall not be unreasonably
withheld; provided, however, that the Indemnitee may settle such claim without
the consent of the Indemnitor so long as the settlement includes a written
release of the Indemnitor, in form and substance reasonably satisfactory to the
Indemnitor, from the claim by the Indemnitee and the third party claimant.
10. CERTAIN COVENANTS
10.1. Non-Assumed Liabilities. Seller shall pay and discharge, promptly
when due (including all Lease Cure Costs relating to periods prior to the
Closing Date), all Non-Assumed Liabilities. If, at Buyer's option, any
Non-Assumed Liabilities (including any Lease Cure Costs) relating to the
Transferred Assets are paid or discharged by Buyer, Seller shall reimburse Buyer
therefor to the extent paid or discharged by Buyer, upon presentation by Buyer
of invoices and other documentation reasonably satisfactory to Seller indicating
the amounts due (except to the extent the Purchase Price is reduced pursuant to
Section 2.2(b)). Notwithstanding the foregoing, Buyer shall not pay or discharge
any Non-Assumed Liabilities without the prior written consent of Seller, which
consent shall not be unreasonably withheld or delayed, unless the failure to pay
or discharge such Non-Assumed Liabilities (including any Lease Cure Costs) could
reasonably be expected to have a material adverse effect on Buyer or any of the
Store Leases or, taken as a whole, the FF&E, or on the ability of the parties to
consummate the transactions contemplated by this Agreement (including the
ability of the parties to obtain Lessor's Consents), in which case Buyer shall
give notice of such payment or discharge to Seller but no consent of Seller
shall be required. To the extent practicable, Buyer will give Seller prior
notice of its intention to pay or discharge any Non-Assumed Liabilities (with
respect to which Seller's consent is not required hereunder) and the opportunity
to settle such matter with the third party prior to payment or discharge thereof
by Buyer. The provisions of this Section 10.1 are for the sole benefit of Buyer
and its successors, assigns, subsidiaries and affiliates and are not intended,
nor shall they be construed, to confer any rights upon any third party.
10.2. Assumed Liabilities. Following the Closing Date, Buyer shall pay
and discharge, promptly when due, all of the Assumed Liabilities. Buyer shall
pay or discharge such Assumed Liabilities or, at Seller's option, reimburse
Seller therefor to the extent paid or discharged by Seller, upon presentation by
Seller of invoices and other documentation reasonably satisfactory to Buyer
indicating the amounts due. Notwithstanding the foregoing, Seller shall not pay
or discharge any Assumed Liabilities without the prior written consent of Buyer,
which consent shall
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not be unreasonably withheld or delayed, unless the failure to pay or discharge
such Assumed Liabilities could reasonably be expected to have a material adverse
effect on Seller, in which case Seller shall give notice of such payment or
discharge to Buyer but no such consent shall be required. To the extent
practicable, Seller will give Buyer prior notice of its intention to pay or
discharge any Assumed Liabilities (with respect to which Buyer's consent is not
required hereunder) and the opportunity to settle such matter with the third
party prior to payment or discharge thereof by Seller. The provisions of this
Section 10.2 are for the sole benefit of Seller and its successors, assigns and
affiliates and are not intended, nor shall they be construed, to confer any
rights upon any third party.
10.3. Records. After the Closing Date, the parties shall cooperate
fully with each other and make available to the other in a timely fashion such
files, books and records and other information (relating to the Transferred
Assets) as may be reasonably required by any such party for any proper business
purpose that is not inconsistent with the terms of this Agreement, including but
not limited to any litigation, proceeding or investigation with or involving a
third party.
10.4. Further Assurances. Upon request of either party, at any time or
from time to time after the Closing Date, the other party will, at no cost to
the other party, promptly execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered all such other and further instruments,
documents or assurances, and promptly do or cause to be done all such other and
further things, as may be necessary or required in order to further and more
fully consummate the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing, Seller agrees that at any time or from
time to time after the Closing Date, upon request of Buyer, Seller will, at no
cost to Seller, execute, acknowledge and deliver such other and further
instruments of conveyance and transfer and take such other action as Buyer may
reasonably require to vest more effectively in Buyer title to any of the
Transferred Assets, and Buyer shall reimburse Seller's out-of-pocket expenses in
connection therewith.
10.5. Store Lease Renewals. Buyer agrees that in the event that, after
the Closing Date, Buyer exercises any renewal or extension option contained as
of this date in any Store Lease to extend the term thereof beyond its current
expiration date, it will use its Best Efforts (as defined in this Agreement) to
obtain the Lessor's release of Seller with respect to any obligations of the
lessee under the Store Lease during such renewal or extension term.
11. TERMINATION OF AGREEMENT
11.1. Events of Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Closing Date: (i) by the mutual written consent of Seller and Buyer; (ii) by
Buyer, if Seller breaches in any material respect any of its representations,
warranties, covenants or agreements contained in this Agreement and such breach
is not cured to the reasonable satisfaction of Buyer within ten (10) days after
notice of such breach is given to Seller; (iii) by Seller, if Buyer breaches in
any material respect any of its representations, warranties, covenants or
agreements contained in this Agreement and such breach is not cured to the
reasonable satisfaction of Seller within ten (10) days after notice of such
breach is given to Buyer; or (iv) by either Buyer or Seller, if for any reason
(including the failure of any of
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the conditions to Closing to be fulfilled) other than the breach of this
Agreement by the terminating party the Closing has not occurred on or prior to
December 31, 1998. Each party agrees to give the other notice of any breach (or
alleged breach) promptly upon becoming aware thereof.
11.2. Effect of Termination. In the event that either party shall elect
to terminate this Agreement pursuant to Section 11.1, this Agreement shall
forthwith terminate and have no further effect, and neither party shall have any
further obligation or liability hereunder (except with respect to those
provisions hereof which by their terms expressly survive any termination of this
Agreement). Notwithstanding the foregoing, the termination of this Agreement
pursuant to any provision hereof shall not relieve any party of any liability
for a breach of any representation or warranty, or nonperformance of any
covenant or obligation hereunder; and any such termination shall not be deemed
to be a waiver of any available remedy for any such breach or nonperformance.
12. NOTICES
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
actual receipt by the party (but not necessarily the individual person) to be
notified. Any notice shall be sent by personal delivery, by a nationally
recognized overnight courier service or by registered or certified mail, postage
prepaid, or by facsimile transmission, and addressed to the party to be notified
at the address indicated below for such party, or at such other address as such
party may designate upon written notice to the other parties.
In the case of Seller:
Mothers Work, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxx X. Xxxxxxxx,
Chairman and CEO
Facsimile No.: 000-000-0000
With a copy to:
Xxxxxx Xxxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxx, III, Esq.
Facsimile No.: 000-000-0000
In the case of Buyer:
The Wet Seal, Inc.
00000 Xxxxxxx
-00-
Xxxxxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, President
Facsimile No.: 000-000-0000
With a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
13. MISCELLANEOUS
13.1. Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties with respect to the
subject matter hereof, supersede all prior agreements and understandings,
written or oral, among the parties with respect thereto (including without
limitation the Letter of Intent between Seller and Buyer dated August 7, 1998),
and no party shall be liable or bound to any other party in any manner by any
promises, conditions, warranties, representations, or covenants except as
specifically set forth herein or therein.
13.2. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only by
an instrument in writing and signed by the party against whom such amendment or
waiver is sought to be enforced.
13.3. Successors and Assigns. Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and permitted assigns of the
parties. Neither party shall have the right to assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other. Notwithstanding the foregoing, Buyer shall have the right, upon notice to
Seller, to assign its rights and obligations under this Agreement to any
affiliate of Buyer, provided (i) such affiliate assumes the obligations of Buyer
hereunder, (ii) no such assignment shall release Buyer from any obligations
hereunder, (iii) Buyer shall guarantee all obligations of the assignee under any
agreement required to be executed and delivered by Buyer to Seller pursuant
thereto, and (iv) if necessary in order to obtain a Lessor's Consent, Buyer
shall guarantee the obligations of any such affiliate that are assumed pursuant
to any Store Lease. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
13.4. Governing Law. This Agreement, including the validity hereof and
the rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers
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and consents hereunder, shall be construed in accordance with and governed by
the domestic substantive laws of the State of New York without giving effect to
any choice of law or conflicts of law provision or rule that would cause the
application of the domestic substantive laws of any other jurisdiction.
13.5. Severability. If any provisions of this Agreement as applied to
any part or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances or the
validity or enforceability of this Agreement.
13.6. Captions. The table of contents, headings and captions used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
13.7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.8. Bulk Sales. The parties hereby waive compliance with any bulk
sales law which may be applicable to the transactions contemplated by this
Agreement.
13.9. Transaction Taxes. Each of Seller and Buyer shall pay, when due,
one-half of any sales or transfer tax required to be paid in connection with the
transfer of the Transferred Assets pursuant to this Agreement. The parties shall
cooperate with each other with respect to the filing of all sales and transfer
tax returns required to be filed with respect to the transactions contemplated
by this Agreement, and shall make such joint filings as may reasonably be
requested by either party.
13.10. Finders' Fees. Each party represents that it neither is nor will
be obligated for any advisory or finders' fee or commission or other
compensation in connection with this transaction, other than compensation
payable by Seller to Financo, Inc. (the "Advisor") pursuant to separate
agreement. Buyer agrees to indemnify and hold harmless Seller from any liability
for any commission or compensation in the nature of an advisory or finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which Buyer or any of Buyer's officers, employees, or
representatives is responsible. Seller agrees to indemnify and hold harmless
Buyer from any liability for any commission or compensation in the nature of an
advisory or finders' fee (and the costs and expenses of defending against such
liability of asserted liability) for which Seller or any of Seller's respective
officers, employees, or representatives is responsible, including any
compensation payable to the Advisor. The provisions of this Section 13.10 shall
survive any termination of this Agreement.
13.11. Expenses. Irrespective of whether the Closing is effected, and
except as provided in Section 5.5.3(c) hereof or otherwise expressly provided
herein or therein, each party shall pay all costs and expenses (including, but
not limited to, legal and accounting fees and
-25-
expenses) that it incurs with respect to the negotiation and execution of this
Agreement and any other agreements to be executed pursuant hereto, and the
performance of any covenants to be performed by such party and satisfaction of
any conditions to be satisfied by such party which are contained herein or
therein. Without limiting the generality of the foregoing, Seller shall pay the
costs of filing or recording any releases, termination statements or similar
instruments necessary to discharge any Encumbrances on or with respect to any of
the Transferred Assets. The provisions of this Section 13.11 shall survive any
termination of this Agreement.
13.12. Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement or any other agreement or
document to be executed or delivered pursuant hereto, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which such party may be entitled.
13.13. Remedies. In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party or parties entitled to the benefit of such covenants or
agreements may, except as may otherwise be expressly provided in this Agreement,
proceed to protect and enforce their rights either by suit in equity and/or by
action at law, including, but not limited to, an action for damages as a result
of any such breach and/or an action for specific performance of any such
covenant or agreement contained in this Agreement. The rights, powers and
remedies of the parties under this Agreement are cumulative and not exclusive of
any other right, power or remedy which such parties may have under any other
agreement or law. No single or partial assertion or exercise of any right, power
or remedy of a party hereunder shall preclude any other or further assertion or
exercise thereof.
13.14. Authority. The persons executing this Agreement on behalf of
each party represent that they have been duly authorized to execute this
Agreement and bind the respective party hereto, and each party shall deliver to
the other within seven (7) business days after the date of this Agreement a
certified copy of the resolution of its Board of Directors authorizing the
execution and delivery of this Agreement.
13.15. Defined Terms. The following terms used in this Agreement shall
have the meanings set forth in the corresponding Sections or subsections of this
Agreement:
"Additional Lease Costs" Section 5.5.3(c)
"Advisor" Section 13.10
"Agreement" Head Paragraph
"Assumed Liabilities" Section 2.3(c)
"Best Efforts" Section 5.4
"Best Knowledge of Seller Section 3.4
"Xxxx of Sale" Section 6.2
"Closing" Section 6.1
"Closing Date" Section 6.1
"Code" Section 3.7
"Encumbrance" Section 3.4
-26-
"Excluded Assets" Section 1.3
"Excluded Lease" Section 2.3(b)
"FF&E" Second "WHEREAS" Clause
"Non-Assumed Liabilities" Section 2.4
"GAAP" Section 3.11
"Lease Assignment and Assumption" Section 6.2
"Lease Cure Costs" Section 5.5.3(b)
"Lessor's Consent" Section 5.5
"Lessor Fees" Section 5.5.3(c)
"Non-Assumed Liabilities" Section 2.4
"Purchase Price" Section 2.1(a)
"radius clause" Section 5.5.1
"Seller" Head Paragraph
"Shared Costs" Section 5.5.3(c)
"Stores" Second "WHEREAS" Clause
"Store Lease" Section 3.5
"Store Premises" Section 3.5
"Transferred Assets" Section 1.1
"Transferred Lease" Section 1.2
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IN WITNESS WHEREOF, the parties hereto have executed this Asset Transfer
Agreement as of the date first above written.
MOTHERS WORK, INC.
By: /s/ Xxx X. Xxxxxxxx
--------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman and
Chief Executive Officer
T3 ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
THE WET SEAL, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief
Operating Officer
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