EXHIBIT 10.126
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
dated as of February ____, 2001
by and among
ARIS INDUSTRIES, INC.
and
XOXO CLOTHING COMPANY, INCORPORATED
and
XX XXXX FUND I, L.P.
SECURITIES PURCHASE AGREEMENT, dated as of February ___, 2001 (the
"Agreement"), between Aris Industries, Inc., a New York corporation (the
"Company"), and its indirect wholly-owned subsidiary, XOXO Clothing Company,
Incorporated, a Delaware corporation ("XOXO"), on the one hand, and XX Xxxx Fund
I, L.P., a California limited partnership ("Purchaser"), on the other.
WHEREAS, XOXO is a wholly-owned subsidiary of ECI, which is a wholly-owned
subsidiary of the Company;
WHEREAS, XOXO's business generates a majority of the Company's revenues;
WHEREAS, the Company and XOXO are in need of capital; and
WHEREAS, the Purchaser is willing to provide such capital on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context clearly
requires a different meaning, the following terms have the meanings respectively
indicated:
"Act" means the Securities Act of 1933, as amended, or any successor
act or statute regulating the transactions contemplated hereby that were
formerly regulated under said Act that may be enacted after the date hereof, and
the rules and regulations promulgated thereunder.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof.
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"Business Day" means any day which is not a Saturday or Sunday, or a
day on which banking institutions are authorized or required to close in the
city of Los Angeles, California.
"Closing" has the meaning provided therefor in Section 2.1 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Act.
"Common Stock" means the Common Stock, $.01 par value, of the Company.
"Company" means Aris Industries, Inc., a New York corporation.
"ECI" shall mean Europe Craft Imports, Inc., a New Jersey corporation.
"GAAP" shall mean United States Generally Accepted Accounting
Principles.
"Governmental Authority" shall have the meaning provided therefor in
Section 3.6 of this Agreement.
"Note" means the Convertible Debenture to be issued by XOXO hereunder
in the form attached hereto as Exhibit A.
"Person" shall mean any individual, corporation, company, partnership,
limited liability company, joint venture, association, joint stock company,
unincorporated organization or government or other agency or political
subdivision thereof.
"Purchaser" shall have the meaning set forth in the preamble to this
Agreement.
"Security Agreement" shall mean a Security Agreement in the form
attached hereto as Exhibit B.
"Shares" shall mean the shares of Common Stock into which the Note may
be converted.
"Significant Subsidiaries" shall mean ECI, and its wholly-owned
subsidiary, ECI Sportswear, Inc., a New York corporation, and XOXO.
"Subsidiary" shall mean any corporation or other entity of which at
least a majority of the outstanding capital stock or equity interest having
voting power in ordinary circumstances to elect directors (or persons having
similar responsibilities) of such corporation or
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other entity shall at the time be held, directly or indirectly, by the Company,
by the Company and any one or more Subsidiaries, or by one or more Subsidiaries.
"Taxes" shall mean all taxes, charges, fees, duties, levies, or other
similar assessments imposed by any taxing Governmental Authority, including, but
not limited to, income, gross receipts, excise, property, sales, gain, use,
license, capital stock, transfer, franchise, payroll, withholding, social
security or other taxes, including any interest or penalties attributable
thereto.
"Tax Return" shall mean any return, report or information return
(including any related or supporting information) required to be filed with any
taxing Governmental Authority with respect to Taxes.
"XOXO" shall have the meaning set forth in the preamble to this
Agreement.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
PURCHASE OF THE NOTE
2.1 Purchase of Securities; the Closing. Subject to the terms and
conditions herein set forth:
(a) Note Purchase. The Purchaser agrees to purchase, XOXO agrees to
issue, and the Company agrees to cause XOXO to issue, a Convertible Debenture
(the "Note"), in the principal amount of $10,000,000 (the "Purchase Price"), in
the form attached hereto as Exhibit A. The Note will be issued at the closing of
the transactions contemplated by this Agreement (the "Closing").
(b) Closing. The Closing will take place at the offices of Xxxxxxx
Xxxxxx & Xxxxx, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, within three
(3) Business Days after the satisfaction of all closing conditions applicable
thereto set forth in Article V below. The date on which the Closing occurs is
referred to herein as the "Closing Date". On the Closing Date, Purchaser shall
wire transfer an amount in cash equal to the Purchase Price to an account or
accounts specified by the Company. Delivery of the Note to be purchased by
Purchaser pursuant to this Agreement shall be made at the Closing by the
Company.
(c) Legends. Purchaser acknowledges and agrees that the Note and any
certificate evidencing the Shares shall be imprinted with customary legends to
reflect the applicability of Federal and state securities laws limitations on
the transfer of the Shares.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser, as of the
date hereof except where otherwise specified, that:
3.1 Corporate Existence and Power; Subsidiaries. Each of the Company
and the Significant Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to do business as a foreign corporation in
each additional jurisdiction where the failure to so qualify would have a
material adverse effect on (i) the assets, liabilities, cash flows, financial
condition, results of operations, or business of the Company and the Significant
Subsidiaries taken as a whole or (ii) the ability of the Company to consummate
the transactions contemplated hereby (each, a "Material Adverse Effect"). The
jurisdiction of incorporation of the Company and the Subsidiaries are set forth
on Schedule 3.1 hereto. Except as set forth on Schedule 3.1 hereto, the Company
has no Subsidiaries, nor are there any other businesses in which the Company has
an equity stake, other than the Significant Subsidiaries and inactive
Subsidiaries. Each of the Company and the Significant Subsidiaries has all
requisite power and authority (corporate and otherwise) to own its properties
and to carry on its business as now being conducted and, in the case of the
Company and XOXO, to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. All of the
issued and outstanding securities of XOXO are owned by ECI, and all of the
issued and outstanding securities of ECI are owned by the Company.
3.2 Corporate Authority. The execution, delivery and performance by the
Company and XOXO of this Agreement and the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of,
respectively, the Company and XOXO.
3.3 Binding Effect. This Agreement has been duly executed and delivered by
the Company and XOXO, and (assuming due execution and delivery by Purchaser)
constitutes a valid and binding obligation of, respectively, the Company and
XOXO, enforceable against, respectively, the Company and XOXO in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
or by general equitable principles.
3.4 No Required Consents, etc. Other than in connection with
satisfaction of conditions precedent to the Closing, and as set forth in
Schedule 3.4 hereto, no consent, approval or authorization of or declaration,
registration or filing with any Governmental Authority (as defined in Section
3.6 hereof) or any non-governmental Person is required to be obtained or made by
the Company or the Significant Subsidiaries in connection with the execution,
delivery
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and performance of this Agreement or the transactions contemplated hereby other
than those which, if not obtained or made, would not have a Material Adverse
Effect.
3.5 No Conflicting Agreements, etc. Except as set forth on Schedule
3.5 hereto, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, will conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute (or
with notice or lapse of time would constitute) a default under, or result in any
violation of, or give rise to any right of termination, cancellation or
acceleration under, the certificate of incorporation or by-laws (or similar
organizational documents) of the Company or any of the Significant Subsidiaries,
any contract, agreement, mortgage, bond, note, credit agreement, indenture,
license, lease, instrument, order, statute, law, rule or regulation to which the
Company or any of the Significant Subsidiaries is party or subject or by which
any of their respective businesses, properties or assets may be bound, or result
in the creation of any lien, claim, charge or encumbrance (collectively,
"Liens") on any properties or assets of the Company or the Significant
Subsidiaries other than such Liens the existence of which would not have a
Material Adverse Effect.
3.6 Litigation; No Violation of Government Orders or Laws. No actions,
suits or proceedings are pending or, to the knowledge of the Company,
threatened, nor is there any investigation pending or, to the knowledge of the
Company, threatened, against or affecting the Company or any Significant
Subsidiary which seeks to enjoin, or otherwise prevent the consummation of, any
of the transactions contemplated by this Agreement or to recover any damages or
obtain any relief as a result of any of the transactions contemplated hereby in
any court or before any arbitrator of any kind or before or by any Governmental
Authority (as defined below), other than those which would not have a Material
Adverse Effect. Except as set forth in Schedule 3.6, there are no pending or, to
the knowledge of the Company, threatened, investigations, by any Federal, state,
local, foreign or other governmental department, commission, board, bureau,
agency or instrumentality (each, a "Governmental Authority") with respect to the
Company or any of the Significant Subsidiaries (an "Investigation"), other than
Investigations which, if the resolution thereof were adverse, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as set forth in Schedule 3.6, (i) there are no actions or
proceedings pending or, to the knowledge of the Company, threatened, against the
Company or any of the Significant Subsidiaries before any court or before any
administrative agency, whether Federal, state, local or foreign, which, if
adversely determined, would reasonably be expected to have a Material Adverse
Effect, and (ii) there are no outstanding domestic or foreign judgments, decrees
or orders against the Company or any of the Significant Subsidiaries.
3.7 Capitalization. The Company's entire authorized capital stock
consists of 200,000,000 shares of Common Stock and 10,000,000 shares of
preferred stock. There are (a) 79,506,735 shares of Common Stock issued and
outstanding, (b) approximately 13,000,000 shares of Common Stock reserved for
issuance upon exercise of outstanding stock options granted under the 1993 Stock
Incentive Plan (as defined infra), (c) 584,345 shares of Common
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Stock reserved for issuance upon exercise of the Xxxxxx Warrant (as defined
infra), and (d) no shares of preferred stock issued or outstanding. All of the
outstanding shares of Common Stock are duly authorized and validly issued, fully
paid, nonassessable and were not issued in violation of any preemptive rights.
Except for (i) the conversion rights under the Note, (ii) the Warrant granted by
the Company to Xxxxxx Financial, Inc. on September 30, 1996 (the "Xxxxxx
Warrant"), and (iii) stock options granted prior to the date hereof pursuant to
and in accordance with the terms and conditions of the Aris Industries, Inc.
1993 Stock Incentive Plan (the "1993 Stock Incentive Plan"), there will, on the
Closing Date, be no outstanding options or warrants exercisable into, rights to
subscribe to, calls or commitments relating to, or securities or rights
convertible into, or exercisable for, shares of capital stock of the Company, or
contracts, commitments or arrangements obligating the Company to issue
additional shares of its capital stock or options, warrants or rights to
purchase or acquire any shares of its capital stock.
3.8 Intentionally Omitted.
3.9 Status of Shares upon Issuance. Upon conversion of the Note, the
Shares will be duly authorized, validly issued and outstanding, fully paid and
non-assessable, and not subject to preemptive or any other similar rights of the
Company, its shareholders or others.
3.10 SEC Documents. (a) The Company has delivered to the Purchaser true and
complete copies of its Annual Reports on Form 10-K for the fiscal years ended
December 31, 1998 and December 31, 1999 (the "Annual Reports"); and its
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2000,
June 30, 2000 and September 30, 2000 (collectively, "SEC Documents"). Each of
the SEC Documents has been duly filed, and when filed was in substantial
compliance with the requirements of the applicable form of the Commission.
(b) Each of the SEC Documents was complete and correct in all material
respects as of its date and each of the SEC Documents did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances in which made, not misleading. The financial
statements of the Company included in the SEC Documents fairly present the
consolidated financial position of the Company and the Significant Subsidiaries
as at the respective dates thereof and the consolidated results of their
operations and cash flows for the respective periods then ended, in each case in
accordance with GAAP consistently applied with prior periods.
3.10A Inventory. All inventory of the Company as of January 31, 2001
consisted (as of that date) of current and marketable products or raw material
usable in the ordinary course of business of the Company. As of that date, such
inventory was valued on the Company's internal balance sheet at the lower of
cost or market in accordance with GAAP, in an aggregate amount, net of the
reserve therefor, of $21,422,686.
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3.10B Accounts Receivable. The accounts receivable of the Company as of
January 31, 2001 as summarized on Schedule 3.10B attached hereto, in an
aggregate principal amount of $28,610,855, (i) arose from bona fide sales
transactions in the ordinary course of business and are payable on ordinary
trade terms, (ii) are (to the extent not fully collected by the Company prior to
the date hereof), and will be, legal, valid and binding obligations of the
respective account debtors enforceable in accordance with their terms, (iii) are
not, to the best knowledge of the Company, subject to any valid set-off or
counterclaim, and (iv) do not represent obligations for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement.
3.10C Projections. Attached hereto as Schedule 3.10C are statements of
projected results of operations of the Company for the fiscal years ending
December 31, 2001, 2002 and 2003 (the "Projected Financial Statements"). The
Projected Financial Statements are reasonable, taken as a whole, and
mathematically accurate, and the assumptions underlying the Projected Financial
Statements provide a reasonable basis for the projections set forth therein. The
factual data used to prepare the Projected Financial Statements are true and
correct in all material respects. The Projected Financial Statements reflect the
Company's projection that the worldwide licensing rights attached to the
Company's "XOXO" trademark will generate an aggregate minimum of $50 million in
licensing fees and royalties for the Company during the three year period
covered by the Projected Financial Statements.
3.11 Material Agreements. Neither the Company nor the Significant
Subsidiaries, except as set forth on Schedule 3.11 hereto, are a party to or
bound by any written, oral or implied contact, agreement, license, lease or
other commitment material to the businesses, properties, assets, results of
operations or financial condition of the Company and the Significant
Subsidiaries, taken as a whole (each a "Material Agreement"), including, without
limitation: (i) loan agreements, credit lines, promissory notes, mortgages,
pledges, guarantees, security agreements, factoring agreements and other
agreements relating to indebtedness of such Persons for borrowed money; (ii)
real property leases; (iii) personal property leases involving annual payments
in excess of $250,000; (iv) trademark or other intellectual property licenses;
(v) employment, management, or severance agreements; (vi) contracts or other
agreements to undertake capital expenditures or to acquire any property (other
then in the ordinary course of business) in an aggregate amount exceeding
$250,000; (vii) pledges, guarantees, contracts or other agreements of such
Persons to loan money or to extend credit, other than (a) vendor deposits, (b)
unfactored accounts receivable and (c) any extension of credit in the ordinary
course of business in an amount not greater than $250,000 to any Person or group
of related Persons; (viii) contracts or other agreements which would restrict
the Company or the Significant Subsidiaries from carrying on any business or
which would restrict the products or services which the Company or the
Significant Subsidiaries may sell or the customers to whom they may sell; (ix)
contracts or other agreements involving any consultant in which the per annum
compensation payable thereunder exceeds $250,000; (x) contracts or other
agreements involving the sale of any of the assets or properties of the Company
or the Significant Subsidiaries, other
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than in the ordinary course of business consistent with past practices, or the
grant to any Person of any preferential right to purchase any of the assets or
properties of the Company or the Significant Subsidiaries; (xi) contracts or
other agreements pursuant to which the Company or the Significant Subsidiaries
agree to share or otherwise indemnify the tax liability of any party; (xii)
contracts or other agreements or arrangements between the Company or the
Significant Subsidiaries and any of their respective officers, directors or
affiliates; (xiii) contracts or agreements (other than purchase orders for
inventory and supplies in the ordinary course of business) pursuant to which
there is either a current or future obligation of the Company or the Significant
Subsidiaries to make payments in excess of $250,000 in the aggregate to any
party or related group of parties; and (xiv) insurance policies. Neither the
Company nor the Significant Subsidiaries own any real property. Except as set
forth in Schedule 3.11, all of the Company's and the Significant Subsidiaries'
Material Agreements are valid, binding and enforceable by or against the Company
and the Significant Subsidiaries, as applicable, which are parties thereto in
accordance with their respective terms. Except as set forth in Schedule 3.11,
there is no breach or violation of, or default under, any such Material
Agreement on the part of the Company or the Significant Subsidiaries, and no
event has occurred which, with notice or lapse of time or both, would constitute
a breach, violation or default on the part of the Company or the Significant
Subsidiaries of, or give rise to a right of termination, modification,
cancellation, prepayment or acceleration under, any such Material Agreement,
other than such breaches, violations or defaults which would not have a Material
Adverse Effect.
3.12 Tax Matters. Except as set forth in the SEC Documents:
(i) Each of the Company and the Significant Subsidiaries has (x) duly
and timely filed (or there has been filed on its behalf) with the appropriate
Governmental Authorities all Tax Returns required to be filed by it, and all
such Tax Returns are true, correct and complete and (y) timely paid (or there
has been paid on its behalf) all Taxes due or claimed to be due from it by any
taxing authority;
(ii) Each of the Company and the Significant Subsidiaries has complied
in all respects with all applicable laws relating to the payment and withholding
of Taxes (including withholding of Taxes pursuant to Sections 1441 and 1442 of
the Code) and has, within the time and manner prescribed by law, withheld and
paid over to the proper Governmental Authorities all amounts required to be
withheld and paid over under all applicable laws;
(iii) There are no Liens for Taxes upon the assets or properties of
any of the Company or the Significant Subsidiaries except for statutory liens
for Taxes not yet due;
(iv) Neither the Company nor any of the Significant Subsidiaries has
requested an extension of time within which to file any Tax Return in respect of
any taxable year, which Tax Return has not since been filed;
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(v) No federal, state, local or foreign audits or other administrative
proceedings have formally commenced or are presently pending with regard to any
Taxes or Tax Returns of or including the Company or any Significant Subsidiary,
and no notification has been received by either the Company or any Significant
Subsidiary that such an audit or other proceeding is pending or threatened with
respect to any Taxes due from or with respect to the Company or any Significant
Subsidiary or any Tax Return filed by or with respect to the Company or any
Significant Subsidiary;
(vi) Neither the Company nor any of the Significant Subsidiaries has
changed any method of accounting, received a ruling from any taxing authority or
signed an agreement with any taxing authority which would have an adverse effect
on the Company or any Significant Subsidiary;
(vii) No deficiency for any Tax has been assessed with respect to the
Company or any Significant Subsidiary which has not been paid in full;
(viii) Neither the Company nor any of the Significant Subsidiaries is
a party to, has an obligation under, or is bound by, any Tax sharing or
indemnification agreement or similar contract or arrangement or has a potential
liability or obligation to any Person as a result of, or pursuant to, any such
agreement, contract or arrangement;
(ix) No jurisdiction where either the Company or any of the
Significant Subsidiaries does not file a Tax Return has made a claim that the
Company or any of the Significant Subsidiaries is required to file a Tax Return
for such jurisdiction; and
(x) No power of attorney which is currently in force has been granted
by or with respect to the Company or any Significant Subsidiary with respect to
any matter relating to Taxes.
3.13 Compliance. Except as set forth on Schedule 3.13 hereto, each of the
Company and the Significant Subsidiaries (i) is in material compliance with all
federal, state, local and foreign laws, ordinances, regulations and orders
applicable to it, or its business or the ownership of its assets, and (ii) has
all federal, state, local and foreign governmental licenses and permits material
to and necessary in the conduct of its business as currently being conducted.
3.14 Offering Exemption. Subject to the accuracy of the representations and
warranties of Purchaser set forth under Article IV of this Agreement, the
offering and sale of the Note to be issued hereunder are exempt from
registration under the Act, pursuant to Section 4(2) thereof.
3.15 Intentionally Omitted.
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3.16 Intellectual Property and Related Contracts. Except as set forth on
Schedule 3.16 hereto, the Company and each of the Significant Subsidiaries (x)
own, free and clear of all Liens, the trademarks, service marks (including
common law names and marks and federally registered names and marks), trade
names, service names, copyrights, patents, technology, know-how and processes
(collectively, "Intellectual Property") as respectively set forth on Schedule
3.16 under the heading "Owned Intellectual Property," and (y) is licensed to use
all of the Intellectual Property as respectively set forth on Schedule 3.16
under the heading "Licensed Intellectual Property." The Intellectual Property as
respectively described in clauses (x) and (y) is all of the Intellectual
Property used in or necessary for the conduct of the Company's and the
Significant Subsidiaries' business as currently conducted or material to the
condition (financial and other), business, or operations of the Company and the
Significant Subsidiaries taken as a whole. Except as set forth on Schedule 3.16,
(i) the use of such Intellectual Property by the Company, the Significant
Subsidiaries and their respective agents or licensees does not infringe on the
rights of any Person, and (ii) , to the knowledge of the Company no person is
infringing on any right of the Company, any of the Significant Subsidiaries or
their respective agents or licensees with respect to any such Intellectual
Property. There are no agreements, written or oral, except as set forth on
Schedule 3.16, which in any material respect limit or otherwise relate to any
rights by the Company to use any of its Intellectual Property.
3.17 Absence of Undisclosed Liabilities. Neither the Company nor any of the
Significant Subsidiaries has any liabilities (whether absolute, accrued,
contingent or otherwise), except: (a) liabilities, obligations or contingencies
that are accrued and reserved against in the consolidated balance sheet of the
Company and the Significant Subsidiaries, or reflected in the notes thereto,
included in the Company's Form 10-Q filed for the quarter ended September 30,
2000, (b) liabilities incurred since September 30, 2000 in the ordinary course
of business, (c) liabilities disclosed in Schedule 3.17 hereto, (d) liabilities
otherwise disclosed in the SEC Documents, (e) liabilities under executory
contracts entered into in the ordinary course of business or (f) liabilities
otherwise disclosed on the Schedules to this Agreement.
3.18 Changes. Since September 30, 2000, except (i) as set forth in the SEC
Documents, (ii) as otherwise disclosed in Schedule 3.18 hereto or (iii) as
otherwise provided by this Agreement:
(a) there has been no event or events giving rise to, or reasonably
likely to give rise to, a Material Adverse Effect on the financial condition,
business or prospects of the Company;
(b) there has been no direct or indirect redemption, purchase or other
acquisition of any shares of Company capital stock, or any declaration, setting
aside or payment of any dividend or other distribution by the Company in respect
of any Company capital stock, or any issuance of any shares of capital stock of
the Company (other than pursuant to the exercise of options and warrants
pursuant to their terms), or, except in the ordinary course of business, any
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grant to any person of any option to purchase or other right to acquire shares
of capital stock of the Company or any stock split or other change in the
Company's capitalization;
(c) neither the Company nor any of the Significant Subsidiaries has
entered into or agreed to enter into any new or amended contract with any of the
officers thereof or, except in the ordinary course of business, otherwise
increased the compensation payable to the officers or directors of any such
entity; and
(d) neither the Company nor any of the Significant Subsidiaries has
(i) entered into or amended any bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance or other
employee benefit plan (including, without limitation, the 1993 Stock Incentive
Plan) except as required by law or regulations or (ii) made any contribution to
any such plan except for contributions specifically required by law or pursuant
to the terms of such plans.
3.19 Labor Matters. Except as set forth on Schedule 3.19 hereto, (i) none
of the Company and the Significant Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other understanding with a labor
union or labor organization, (ii) there are no material controversies, strikes,
slowdowns or work stoppages pending or, to the knowledge of the Company,
threatened, between the Company or any of the Significant Subsidiaries and any
of their respective employees, and (iii) to the knowledge of the Company, there
are no organizational efforts presently being made involving any of the
employees of the Company or the Significant Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company, as of the date
hereof, that:
4.1 Organization, Existence, Qualification and Authority of Purchaser.
Purchaser is a limited partnership, duly organized, validly existing and, if
applicable, in good standing under the laws of the State of California, and has
the power and authority to enter into this Agreement and perform its obligations
hereunder. The execution, delivery and performance of this Agreement by
Purchaser has been duly and validly authorized by all requisite limited
partnership action and this Agreement has been duly executed and delivered by
Purchaser. This Agreement is legal, valid and binding upon Purchaser and is
(assuming due execution and delivery by the Company and XOXO ) enforceable
against Purchaser in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally or by general equitable principles.
4.2 No Breach or Default. The execution, delivery and performance of this
Agreement by Purchaser and the consummation by Purchaser of the transactions
contemplated by
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this Agreement do not and will not: (i) violate Purchaser's charter documents;
(ii) violate any law or regulation applicable to Purchaser; (iii) result in the
breach of, or constitute a default under, any indenture, mortgage, deed of
trust, lease or sublease, contract or other agreement or instrument to which
Purchaser is a party or by which Purchaser or any of its properties is bound;
(iv) result in the creation or imposition of any Lien upon any of the property
of Purchaser; or (v) except as set forth on Schedule 4.2 hereto, require the
Purchaser to procure or obtain the consent or approval of, or make any filing
with, any Governmental Authority.
4.3 Purchase for Own Account.
(a) The Note to be acquired by Purchaser pursuant to this Agreement
and the Shares, are being, and will be, acquired for its own account and with no
intention of distributing or reselling such Note or Shares or any part thereof
in any transaction that would be in violation of the securities laws of the
United States, without prejudice, however, to Purchaser's rights at all times to
sell or otherwise dispose of all or any part of such Note or Shares under a
registration statement under the Act or under an applicable exemption from the
registration requirements of the Act.
(b) Purchaser understands that neither the Note nor the Shares have
been registered under the Act, and cannot be resold unless they are subsequently
registered under the Act or unless an exemption from such registration is
available thereunder.
4.4 Investor Sophistication. Purchaser is an "accredited investor" within
the meaning of Rule 501(a) under the Act, and by reason of its business and
financial experience, or the business and financial experience of those Persons
retained by it to advise it with respect to its investment in the Note being
acquired pursuant to this Agreement, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment therein, is able to bear the
economic risk of such investment, and, at the present time, is able to afford a
complete loss of such investment.
4.5 Brokers. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Purchaser.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions Precedent to Obligations of Purchaser. The obligations of
Purchaser to purchase the Note hereunder are subject to the satisfaction of each
of the following conditions at the Closing Date:
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(a) The representations and warranties made by the Company herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been made
on and as of the Closing Date (except where the specific representation or
warranty by its terms applies to an earlier date);
(b) The Company shall have performed and complied in all material
respects with all covenants, agreements and conditions set forth herein which
are required to be performed or complied with by it on or prior to the Closing
Date;
(c) The purchase of and payment for the Note to be purchased hereunder
shall not (i) be prohibited by any applicable law or governmental regulation,
(ii) subject Purchaser to any penalty or other onerous condition pursuant to any
applicable law or governmental regulation, or (iii) be enjoined;
(d) All authorizations, consents, approvals, permits and licenses and
filings with, by or in respect of any Governmental Authority, court or other
body required to be taken, given or obtained that are necessary in connection
with the transactions contemplated hereby and in the other documents related
hereto, shall have been taken, given or obtained, be in full force and effect
and not be subject to any pending proceedings or appeals, administrative,
judicial or otherwise, other than those the pendency of which would not have a
Material Adverse Effect;
(e) All consents and approvals to be obtained by the Company from
third parties (including licensors, lessors and others), including without
limitation those set forth on Schedule 3.4 hereto, that are required in
connection with the transactions contemplated hereby and in the other documents
related hereto, shall have been given or obtained and be in full force and
effect, and in form and substance satisfactory to the Purchaser;
(f) The Certificate of Amendment to the Company's certificate of
incorporation increasing to 200,000,000 the authorized number of shares of the
Common Stock the Company may issue (the "Certificate of Amendment") shall have
been accepted for filing by the Department of State of the State of New York;
(g) There shall not have occurred any material adverse change in the
financial condition or business of the Company and the Significant Subsidiaries
taken as a whole since the date of this Agreement; and
(h) Purchaser shall have received duly executed originals or copies,
as applicable, of the documents set forth in Section 8.1 hereof.
5.2 Conditions Precedent to Obligations of the Company and XOXO. The
obligations of XOXO to issue and sell the Note pursuant to this Agreement, and
the obligations of the Company to cause XOXO to take such action, are subject,
at the Closing Date, to the satisfaction of each of the following conditions:
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(a) The representations and warranties made by Purchaser herein shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of the Closing Date (except where the specific representation or warranty
by its terms applies to an earlier date);
(b) Purchaser shall have performed and complied in all material
respects with all covenants, agreements and conditions set forth herein which
are required to be performed or complied with by it on or prior to the Closing
Date;
(c) All authorizations, consents, approvals, permits and licenses and
filings with, by or in respect of any Governmental Authority, court or other
body required to be taken, given or obtained that are necessary in connection
with the transactions contemplated hereby and in the other documents related
hereto, shall have been taken, given or obtained, be in full force and effect
and not be subject to any pending proceedings or appeals, administrative,
judicial or otherwise, other than those the pendency of which would not have a
Material Adverse Effect; and
(d) All consents and approvals to be obtained by the Company from
third parties (including licensors, lessors and others), including without
limitation those set forth on Schedule 3.4 hereto, that are required in
connection with the transactions contemplated hereby and in the other documents
related hereto, shall have been given or obtained and be in full force and
effect, and in form and substance satisfactory to the Company.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1 Conduct of Businesses Prior to the Closing Date. Except as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, or with the consent of Purchaser, during the period from the
date of this Agreement to the Closing Date, each of the Company and the
Significant Subsidiaries shall (i) conduct its business in the usual, regular
and ordinary course consistent with past practice, and (ii) use reasonable good
faith efforts to maintain and preserve intact its business organization,
employees and advantageous business relationships and retain the services of its
officers and key employees.
6.2 Forbearance. Without limiting Section 6.1 hereof, except as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
Closing Date, neither the Company nor any of the Significant Subsidiaries shall,
without the prior written consent of Purchaser:
(a) adjust, split, combine or reclassify any of its capital stock;
make, declare or pay any dividend or make any other distribution on, or directly
or indirectly redeem, purchase
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or otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock; issue, deliver or sell any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, options or warrants to
acquire, any such shares or securities (whether for cash or property), except
for (i) the issuance of shares of Common Stock issuable on the exercise of stock
options granted prior to the date hereof pursuant to the 1993 Stock Incentive
Plan, which options become vested and exercisable on or prior to the Closing
Date, (ii) the issuance of shares of Common Stock issuable upon the exercise of
the Xxxxxx Warrant; or (iii) the issuance of shares of Common Stock in exchange
for the extinguishment of any obligation of the Company;
(b) sell, lease, transfer, or otherwise dispose of any of its
properties or assets, or cancel, release or assign any material indebtedness
owed to it or any material claim held by it, except (i) in the ordinary course
of business consistent with past practice, (ii) as required under any agreement
relating to indebtedness for borrowed money to which the Company or the
Significant Subsidiaries are party or (iii) pursuant to contracts or agreements
in force as of the date of this Agreement;
(c) make any material acquisition or investment either by purchase of
stock or securities, merger or consolidation, contributions to capital, property
transfers, or purchases of any property or assets of any other individual,
corporation or other entity other than a wholly- owned Subsidiary;
(d) increase in any material respect the compensation or fringe
benefits of any of its employees or pay any bonus, pension or retirement
allowance not required by any existing plan, program or agreement to any such
employees or become a party to, amend or commit itself to any pension,
retirement, profit-sharing or welfare benefit plan or agreement or employment
agreement with or for the benefit of any employee or accelerate the vesting of
any stock options or other stock-based compensation;
(e) except for the filing on behalf of the Company of the Certificate
of Amendment, amend its certificate of incorporation, bylaws or similar
governing documents, as the case may be;
(f) enter into any line of business other than the importation,
manufacturing, distribution, and merchandising of apparel, the licensing (as
licensee) of trademarks relating thereto, and the licensing (as licensor) of the
Company's and Significant Subsidiaries' owned trademarks;
(g) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time prior to the
Closing Date, or in any of the conditions to the transactions contemplated
hereby set forth in Article V not being satisfied, or in a violation of any
provision of this Agreement; or
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(h) agree to, or make any commitment to, take any of the actions
prohibited by this Section 6.2.
ARTICLE VI A
POST-CLOSING COVENANTS
6A.1 Board Representation. From and after the Closing, for so long as
either (i) any indebtedness is outstanding under the Note, or (ii) the Purchaser
(alone or in conjunction with one or more of its Affiliates) owns not less than
50% of the Shares issuable upon conversion of the Note, the Company and Xxxxxx
X. Xxxxx, in his individual capacity, on behalf of himself and his Affiliates
that he controls that are shareholders of the Company, hereby agree to exert
their respective best efforts to cause and maintain the election to the Board of
Directors of the Company of two designees of the Purchaser, who shall initially
be Xxxx Xxxxxxxxx and Xxxxx Xxxxxxxx.
6A.2 Implementation of Security Agreement. The Company hereby agrees to
take all actions necessary or desirable to cause XOXO to comply with all of its
duties and obligations under the Security Agreement and to take all other
actions, whether or not expressly requested by Purchaser, reasonably in
furtherance of Purchaser's effectuation of its rights thereunder.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Access to Information.
(a) Upon reasonable notice, the Company shall, and shall cause the
Significant Subsidiaries to, afford to the representatives of Purchaser during
normal business hours during the period prior to the Closing Date, access to all
its properties, books, contracts, commitments and records, and to its officers,
employees, accountants, counsel and other representatives and, during such
period, the Company shall, and shall cause the Significant Subsidiaries to, make
available to the Purchaser all information concerning their business, properties
and personnel as the Purchaser may reasonably request. Neither the Company nor
the Significant Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would, in the opinion of
its counsel, waive the attorney-client privilege of the Person in possession or
control of such information or contravene any law, rule, regulation, order,
judgment, decree, fiduciary duty or binding agreement entered into prior to the
date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
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(b) All information furnished by the Company or the Significant
Subsidiaries to Purchaser pursuant to this Agreement (the "Confidential
Information") shall be treated as the sole property of the Company and, if this
Agreement shall be terminated, the Purchaser shall upon request promptly return
to the Company all of such written information and all documents, notes,
summaries or other materials containing, reflecting or referring to, or derived
from, such information. The Purchaser shall keep confidential all such
information, will use such information solely for the purpose of evaluating the
transactions contemplated by this Agreement and shall not directly or indirectly
use such information for any competitive or other commercial purpose.
(c) The obligation to keep confidential the Confidential Information
as such shall not apply to (i) any information which (A) was already in the
Purchaser's possession on a non-confidential basis prior to the disclosure
thereof by the furnishing party, (B) was then publicly available or generally
known to the public other than as a result of disclosure by the Purchaser in
violation of the provisions hereof, or (C) was disclosed to the Purchaser by a
third party not bound by any obligation of confidentiality or (ii) disclosures
made as required by law. If the Purchaser is requested or required (by oral
question or request for information or documents in legal proceedings,
interrogatories, subpoena, civil investigative demand or similar process) to
disclose any Confidential Information concerning the Company or any Significant
Subsidiary, the Purchaser will promptly notify the furnishing party of such
request or requirement so that the furnishing party may seek an appropriate
protective order and/or waive the Purchaser's compliance with the provisions of
this Agreement. It is further agreed that, if in the absence of a protective
order or the receipt of a waiver hereunder the Purchaser is nonetheless, in the
opinion of its counsel, compelled to disclose information concerning the
furnishing party to any tribunal or governmental body or agency or else stand
liable for contempt or suffer other censure or penalty, the Purchaser may
disclose such information to such tribunal or governmental body or agency to the
extent necessary to comply with such order as advised by counsel without
liability hereunder.
(d) The Purchaser understands and agrees that the applicable
furnishing party will suffer immediate, irreparable harm in the event the
Purchaser fails to comply with any of its obligations of confidentiality under
this Agreement, that monetary damages will be inadequate to compensate the
furnishing party for such breach and that such furnishing party shall be
entitled to specific performance as a remedy for any such breach without the
necessity of posting a bond or proving special damages. Such remedy shall not be
deemed to be the exclusive remedy in the event of any such breach by the
Purchaser, but shall be in addition to all other remedies available to the
furnishing party at law or in equity.
(e) No representations or warranties are made by the Company, the
Significant Subsidiaries, or any Affiliate thereof except as expressly set forth
in this Agreement.
7.2 Further Assurances. In case at any time after the Closing Date any
further action, or the execution and delivery of any additional documents or
instruments, is necessary or
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desirable to carry out the purposes of this Agreement, the parties hereto shall
take such actions and execute and deliver such additional documents and
instruments as may be reasonably requested by the Company or the Purchaser.
7.3 Advice of Changes. Each of the parties hereto shall promptly advise
each other party hereto of any change or event which, individually or in the
aggregate with other such changes or events, would, or would be reasonably
likely to, cause or constitute a material breach of any of its representations,
warranties or covenants contained herein. From time to time prior to the
Closing, each party hereto shall promptly supplement or amend the disclosure
schedules attached hereto relating to such party, to reflect any matter which,
if existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in such disclosure schedules or which is
necessary to correct any information in such disclosure schedules which has been
rendered inaccurate thereby. No supplement or amendment to such disclosure
schedules shall have any effect for the purpose of determining the accuracy of
any party's representations and warranties contained herein, the satisfaction of
any of the conditions in Article V hereof, or the compliance by any party with
its covenants or agreements contained herein.
7.4 Public Announcements. Purchaser shall not make any announcement or
disclosure of the transactions contemplated hereby without the prior consent of
the Company. Any such announcement or disclosure made by the Company shall be
subject to the prior review and reasonable approval of the Purchaser.
7.5 Closing Covenant. The parties hereto agree to act in good faith in
taking any and all commercially reasonable actions necessary to facilitate the
Closing and the other transactions contemplated by this Agreement, including,
without limitation, the satisfaction of the respective closing conditions of the
parties set forth herein. Each party hereto further agrees not to take any
action that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the Closing Date, or in any
of the conditions to the transactions contemplated hereby not being satisfied,
or in a violation of any provision of this Agreement.
ARTICLE VIII
CLOSING DOCUMENTS
8.1 The Company's Obligations. At the Closing, the Company shall deliver to
the Purchaser the following:
(a) Resolutions. Copies of resolutions of the Company's and of XOXO's
Boards of Directors certified by the Secretary or Assistant Secretary of the
Company and XOXO, as the case may be, authorizing the execution, delivery and
performance of this Agreement and
-18-
the transactions contemplated hereby, and in form and substance reasonably
satisfactory to the Purchaser;
(b) Note. An original of the Note, duly executed by XOXO and the
Company and registered in the name of Purchaser;
(c) Compliance Certificate. A duly executed original of a certificate
of an officer of the Company certifying that all representations and warranties
of the Company contained in this Agreement are true and correct in all material
respects as of the Closing Date, and that the Company has fully performed in all
material respects all obligations, agreements, conditions and commitments
required to be fulfilled by the Company pursuant to the terms hereof on or prior
to the Closing Date;
(d) Opinion of Counsel. A duly executed original of an opinion of
counsel for the Company and XOXO in the form attached hereto as Exhibit 8.1(d);
and
(e) Security Agreement. An original of the Security Agreement duly
executed by XOXO.
8.2 The Purchaser's Obligations. At the Closing, the Purchaser shall
deliver to the Company the following:
(a) Payment. Funds in the amount and payable as set forth in Section
2.1 hereof and all other payments required to be made by the Purchaser on or
prior to the Closing Date pursuant to the provisions of this Agreement; and
(b) Compliance Certificate. A duly executed original of a certificate
of an officer of Purchaser certifying that all representations and warranties of
the Purchaser contained in this Agreement are true and correct in all material
respects as of the Closing Date, and that Purchaser has fully performed in all
material respects all obligations, agreements, conditions and commitments
required to be fulfilled by the Purchaser on or prior to the Closing Date.
ARTICLE IX
MISCELLANEOUS
9.1 Indemnification and Related Provisions.
(a) Indemnification. Each of the Company and the Purchaser (each, as
such, an "Indemnifying Party") agrees and covenants to hold harmless and
indemnify the other party (including any Affiliate, director, officer, employee,
agent or controlling Person of such party) (each of the foregoing Persons being
an "Indemnified Person"), from and against any losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees and expenses of
-19-
investigation) incurred by such Indemnified Person after the Closing Date
(collectively, "Indemnifiable Costs and Expenses") arising out of or based upon
any breach by the Indemnifying Party of any of its representations, warranties
or covenants contained herein.
(b) Adjustment of Indemnity. The amount by which an Indemnified Person
shall be indemnified for any Indemnifiable Costs and Expenses shall be reduced
by (i) any insurance proceeds or indemnity, contribution, warranty or other
similar payments recoverable by such Indemnified Person and (ii) any right to
income tax or other Tax savings that reduce or will reduce the impact to such
Indemnified Person of such Indemnifiable Costs and Expenses (provided, however,
that in the event that any Indemnified Person seeking indemnification hereunder
is unable to collect a payment with respect to such right to such insurance
proceeds, indemnity, contribution, warranty or other similar payments (other
than as a result of a waiver, settlement or failure to use commercially
reasonable efforts to diligently prosecute such right by such party), then, at
the time such right under clause (i) or (ii) hereof is unenforceable or it
becomes evident that such right is unenforceable (regardless of when such time
occurs), the amount of Indemnifiable Costs and Expenses will be increased by the
amount such Indemnifiable Costs and Expenses were previously reduced on account
of such right).
(c) Period of Survival of Representations and Warranties of the
Company. All representations and warranties of the Company contained in this
Agreement shall terminate and expire eighteen (18) months after the Closing
Date.
(d) Limitations. Notwithstanding any provision to the contrary
contained in this Agreement, neither the Purchaser nor the Company (including
its related Indemnified Persons) shall be entitled to indemnification from the
other for breaches, inaccuracy or nonfulfillment or nonperformance of
representations, warranties, covenants or agreements under this Agreement, until
the dollar amount of all such claims shall exceed $200,000 (Two Hundred Thousand
Dollars) (the "Basket Amount"). If such claims exceed the Basket Amount, the
Indemnifying Party shall be liable only for the portion of such claims which
exceed the Basket Amount.
9.2 Termination; Amendment; Extension; Waiver.
(a) Termination. This Agreement may be terminated at any time prior to
the Closing Date:
(i) by mutual consent of Purchaser, the Company and XOXO in a
written instrument;
(ii) by Purchaser or the Company if the transactions contemplated
hereby shall not have been consummated on or before March 15, 2001, unless the
failure of such consummation to occur by such date shall be due to the failure
of the party seeking to terminate
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this Agreement to perform or observe the covenants and agreements of such party
set forth herein; and
(iii) by Purchaser or the Company, provided that the terminating
party is not then in material breach of any representation, warranty, covenant
or other agreement contained herein, if the other party shall have breached in
any material respect (i) any of the covenants or agreements made by such other
party herein or (ii) any of the representations or warranties made by such other
party herein; provided, however, that neither party shall have the right to
terminate this Agreement pursuant to this Section 9.2 (iii) unless the breach of
any representation or warranty, together with all other such breaches, would
involve a claim in excess of $200,000 and such breach is not cured within
fifteen (15) days following written notice to the party committing such breach,
or, by its nature, cannot be cured prior to the Closing.
(b) Effect of Termination. In the event of termination of this
Agreement by Purchaser or the Company in accordance with the terms hereof,
neither Purchaser nor the Company shall have any further liability of any nature
whatsoever hereunder, or in connection with the transactions contemplated
hereby, provided however, that neither party shall be relieved or released from
any liabilities or damages arising out of its prior breach of any provision of
this Agreement.
(c) Amendment; Extension; Waiver. The parties hereto may (i) amend any
provision of this Agreement, (ii) extend the time for the performance of any of
the obligations or other acts of another party hereto, (iii) waive any
inaccuracies in the representations and warranties of another party contained
herein or in any document delivered pursuant hereto, and (iv) waive compliance
by another party with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such amendment, extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party, but any extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. No failure or delay by a party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
9.3 Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the transactions contemplated hereby and
supersedes all prior agreements and understandings with respect thereto. No
representations or warranties are made by any party hereto except as expressly
set forth in this Agreement, and no party hereto is entitled to rely on any
statement, oral or written, or document or instrument delivered outside of this
Agreement or the schedules or exhibits hereto.
9.4 Communications. All notices, demands and other communications
provided for hereunder shall be in writing, and, if to Purchaser, c/o Kavanaugh
Consulting, Inc., 000 Xxxxxxxx
-00-
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, XX 00000, telecopier No. (000) 000-0000,
Attn: Xxxx Xxxxxxxxx, and shall be given by telecopy, courier service or
personal delivery, so addressed to Purchaser, or to such other address as
Purchaser may designate to the Company in writing and, if to the Company or
XOXO, shall be given by similar means at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, telecopier No. (000) 000-0000, and 0000 Xxxxxx Xx., Xxxxxxxx Xxxx, XX
00000, telecopier No. (000) 000-0000, Attention: Xxxxxx X. Xxxxx, or to such
other address as the Company may designate in writing, with a copy to Xxxxxx X.
Xxxxxx, Xxxxxxx Xxxxxx & Xxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, telecopier No. (000) 000-0000, and shall be deemed given when received.
9.5 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
9.6 Assignment. The rights and obligations of Purchaser under this
Agreement may not be assigned to any other Person, other than an Affiliate of
Purchaser, except with the consent of the Company. The rights and obligations of
the Company and XOXO under this Agreement may not be assigned to any other
Person, except with the consent of Purchaser.
9.7 Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of California, and for all purposes shall be
construed in accordance with the laws of said State, without regard to
principles of conflict of laws. Each of the parties hereto agrees to submit to
the jurisdiction of the federal or state courts located in the City of Los
Angeles in any action or proceeding arising out of or relating to this
Agreement.
9.8 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
9.9 Headings. The Article and Section headings used or contained in this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
9.10 Waiver of Jury Trial. The parties hereto hereby irrevocably waive all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement or the transactions contemplated hereby.
9.11 Absence of Third Party Beneficiary Rights. Except as expressly
provided in this Article IX with respect to Indemnified Persons, the provisions
of this Agreement are solely for the benefit of the parties hereto and no
provision of this Agreement is intended, nor will any provision be interpreted,
to provide or create any third party beneficiary rights or any other rights of
any kind in any shareholder, creditor, customer, lessor, lessee, licensor,
licensee, employee or any other person or entity not a party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be executed by their respective officers hereunto duly
authorized, as of the date first above written.
ARIS INDUSTRIES, INC.
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
XOXO CLOTHING COMPANY, INCORPORATED
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
XX XXXX FUND I, L.P.
By: XX Xxxx Group I, Inc.,
its general partner
By:
------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer
AGREED AND ACKNOWLEDGED
AS TO SECTION VI A ONLY:
By:
-------------------------------------
Xxxxxx X. Xxxxx
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Schedules
3.1 All Subsidiaries
3.4 Required Consents, etc.
3.5 Conflicting Agreements
3.6 Litigation, etc.
3.10(B) Accounts Recievable
3.10(C) Projected Financial Statements
3.11 Material Agreements
3.13 Compliance With Laws
3.16 Intellectual Property
3.17 Undisclosed Liabilities
3.18 Changes Since September 30, 2000
3.19 Labor Matters
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