EARN-OUT AGREEMENT by and among STEVEN MADDEN, LTD. and The Members of COMPO ENHANCEMENTS, LLC Dated as of May 16, 2007
Exhibit
10.2
by
and
among
XXXXXX
XXXXXX, LTD.
and
The
Members
of
COMPO
ENHANCEMENTS, LLC
Dated
as
of May 16, 2007
This
EARN-OUT AGREEMENT (this “Agreement”), dated as of May 16, 2007 and effective as
of the Closing Date (as defined below), if one occurs, is by and among Xxxxxx
Xxxxxx, Ltd., a Delaware corporation (“Madden”) and the individuals and/or
entities set forth on the signature pages hereto (each a “Seller” and
collectively, “Sellers”).
RECITALS
WHEREAS,
concurrently herewith, Sellers and Madden are entering into that certain
Membership Interest Purchase Agreement, dated as of the date hereof (as amended
from time to time in accordance with its terms, the “Membership Interest
Purchase Agreement”), pursuant to which Madden shall purchase all of the issued
and outstanding ownership interests of the Compo Enhancements, LLC from Sellers;
and
WHEREAS,
pursuant to Section 2.2(a) of the Membership Interest Purchase Agreement,
Sellers shall be entitled to receive certain earn-out purchase price payments,
subject to the terms and conditions of this Agreement;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions. As
used in this Agreement, the following terms shall have the meanings
indicated:
“Act”
shall mean the Securities Act of 1933, as amended.
“Affiliate”
with respect to any Person shall mean any other Person which, directly or
indirectly, is in control of, is controlled by or is under 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. In the
case of any Person who is an individual, such Person’s Affiliates shall include
such Person’s spouse, siblings, parents, children, grandchildren, and trusts for
the benefit of any of the foregoing.
“Agreement”
shall have the meaning set forth in the preamble.
“Applicable
Contingent Purchase Price Payment Date” shall have the meaning set forth in
Section 4(a) hereof.
“Business
Day” means any day that is not a Saturday or Sunday or a legal holiday on which
banks are authorized or required by law to be closed in New York, New
York.
“CIC
Acquirer” shall have the meaning set forth in Section 5.
“CIC
Trigger Event” shall have the meaning set forth in Section 5.
“Closing
Date” shall have the meaning set forth in the Membership Interest Purchase
Agreement.
“Contingent
Purchase Price Payment” shall mean each of the Tranche 1 Contingent Purchase
Price Payment and the Tranche 2 Contingent Purchase Price Payment.
“Contingent
Purchase Price Statement” shall have the meaning set forth in Section 3(a)
hereof.
“Diluted
EPS” shall have the meaning ascribed to it under GAAP.
“Diluted
EPS Goals” shall mean each of the Tranche 1 Diluted EPS Goal and
the Tranche 2 Diluted EPS Goal.
“Dispute
Notice” shall have the meaning set forth in Section 3(b)
hereof.
“Earn-Out
Year(s)” shall mean each of fiscal year 2008, fiscal year 2009, fiscal year
2010, fiscal year 2011 and fiscal year 2012, which shall end on December 31,
2008, 2009, 2010, 2011 and 2012, respectively.
“EBIT”
shall mean with respect to Madden or the Madden Unit (as appropriate), such
entity’s earnings before interest and taxes as determined in accordance with
GAAP.
“EBIT
Goal” shall mean each of the Tranche 1 EBIT Goal and the Tranche 2 EBIT
Goal.
“Employment
Agreement” shall mean the employment agreement, dated as of the date hereof,
between Madden and Xxxx Xxxxxxxxx, executed and delivered simultaneously with
the execution and delivery of the Membership Interest Purchase
Agreement.
“Final
Contingent Purchase Price Statement” shall have the meaning set forth in Section
3(c) hereof.
“Financial
Statements” means for any fiscal year, the publicly filed financial statements
of Madden for such fiscal year, which shall be prepared in accordance with
GAAP.
“GAAP”
shall mean United States generally accepted accounting principles consistently
applied.
“Independent
Accounting Firm” shall have the meaning set forth in Section 3(b)
hereof.
“Person”
shall mean an individual, partnership, venture, unincorporated association,
organization, syndicate, corporation, limited liability company, or other
entity, trust, trustee, executor, administrator or other legal or personal
representative or any government or any agency or political subdivision
thereof.
“Madden”
shall have the meaning set forth in the preamble.
2
“Madden
Common Stock” shall mean shares of the common stock of Madden, par value $0.0001
per share.
“Madden
Unit” shall have the meaning set forth in Section 5(a).
“Membership
Interest Purchase Agreement” shall have the meaning set forth in the
recitals.
“Registration
Statement” shall have the meaning set forth in Section 4(b) hereof.
“Revised
Contingent Purchase Price Statement” shall have the meaning set forth in Section
3(b) hereof.
“Restricted
Stock” shall have the meaning set forth in Section 4(b) hereof.
“SEC”
shall mean the United States Securities and Exchange Commission.
“Seller”
and “Sellers” shall have the meanings set forth in the preamble.
“Sellers
Representative” shall mean Xxxx Xxxxxxxxx, or any other Sellers(s) designated as
Sellers Representative(s) pursuant to the terms of the Membership Interest
Purchase Agreement.
“Tranche
1 Contingent Purchase Price Payment” shall have the meaning set forth in Section
2(a) hereof.
“Tranche
1 Diluted EPS Goal” shall have the meaning set forth in Section 2(a)(ii)
hereof.
“Tranche
1 EBIT Goal” shall have the meaning set forth in Section 2(a)(i)
hereof.
“Tranche
2 Contingent Purchase Price Payment” shall have the meaning set forth in Section
2(b) hereof.
“Tranche
2 Diluted EPS Goal” shall have the meaning set forth in Section 2(b)(ii)
hereof.
“Tranche
2 EBIT Goal” shall have the meaning set forth in Section 2(b)(ii)
hereof.
2. Contingent
Purchase Price Calculation.
(a) Tranche
1 Contingent Purchase Price Payment. Where Madden achieves (or exceeds), in
two consecutive Earn-Out Years, the Tranche 1 EBIT Goal for each such year
and
the Tranche 1 Diluted EPS Goal for each such year, then the aggregate amount
of
the contingent purchase price payment payable to Sellers (the “Tranche 1
Contingent Purchase Price Payment”) shall be 168,000 shares of Madden Common
Stock or the cash equivalent thereof (as
3
calculated
pursuant to Section 4(a)). For the avoidance of doubt, Sellers shall
only be eligible to earn the Tranche 1 Contingent Purchase Price Payment
once.
(i) “Tranche
1 EBIT Goal” shall mean for each listed Earn-Out Year, the corresponding EBIT of
Madden:
| Earn-Out Year | Diluted EPS |
|
2008
|
$94,600,000
|
|
2009
|
$113,500,000
|
|
2010
|
$136,200,000
|
|
2011
|
$163,400,000
|
|
2012
|
$196,100,000
|
(ii) “Tranche
1 Diluted EPS Goal” shall mean for each listed Earn-Out Year, the corresponding
Diluted EPS of Madden:
| Earn-Out Year | Diluted EPS |
|
2008
|
$2.52
|
|
2009
|
$3.02
|
|
2010
|
$3.63
|
|
2011
|
$4.35
|
|
2012
|
$5.23
|
(b) Tranche
2 Contingent Purchase Price Payment. Where Madden achieves (or
exceeds), in two consecutive Earn-Out Years, the Tranche 2 EBIT Goal for each
such year and the Tranche 2 Diluted EPS Goal for each such year, then the
aggregate amount of the contingent purchase price payment payable to Sellers
(the “Tranche 2 Contingent Purchase Price Payment”) shall be 168,000 shares of
Madden Common Stock or the cash equivalent thereof (as calculated pursuant
to
Section 4(a)). For the avoidance of doubt, Sellers shall only be
eligible to earn the Tranche 2 Contingent Purchase Price Payment
once.
(i) “Tranche
2 EBIT Goal” shall mean for each listed Earn-Out Year, the corresponding EBIT of
Madden:
| Earn-Out Year | Diluted EPS |
|
2008
|
$102,400,000
|
|
2009
|
$133,200,000
|
|
2010
|
$173,200,000
|
|
2011
|
$225,100,000
|
|
2012
|
$292,700,000
|
(ii) “Tranche
2 Diluted EPS Goal” shall mean for each listed Earn-Out Year, the corresponding
Diluted EPS of Madden:
| Earn-Out Year | Diluted EPS |
|
2008
|
$2.73
|
|
2009
|
$3.55
|
|
2010
|
$4.61
|
4
|
2011
|
$6.00
|
|
2012
|
$7.80
|
(c) In
case
Madden shall at any time after the date of this Agreement (i) subdivide the
outstanding Madden Common Stock, or (ii) combine the outstanding Madden Common
Stock into a smaller number of shares, then, in each case, the number of shares
of Madden Common Stock payable in connection with any Contingent Purchase Price
Payment shall be proportionately adjusted so that Sellers after such time shall
be entitled to receive the aggregate number and kind of shares for such
consideration which, if the Contingent Purchase Price Payment had been made
immediately prior to such time, Sellers would have owned upon such payment
and
been entitled to receive by virtue of such subdivision, or
combination. Such adjustment shall be made successively whenever any
event listed above shall occur.
3. Contingent
Purchase Price Statement; Dispute.
(a) As
promptly as practicable, but in any event within ten (10) Business Days after
the public release of Madden’s Financial Statements for each Earn-Out Year,
Madden shall prepare and deliver to the Seller Representative (i) a statement
which explains in reasonable detail the calculations of EBIT of Madden (or
the
Madden Unit, as appropriate) as well as (if applicable) any Diluted EPS of
Madden for such fiscal year and whether Sellers have qualified as of the end
of
such Earn-Out Year for a Contingent Purchase Price Payment (a “Contingent
Purchase Price Statement”) and (ii) reasonable supporting documentation
sufficiently detailed to enable the Seller Representative to verify the amounts
set forth in such Contingent Purchase Price Statement.
(b) The
Seller Representative may dispute such Contingent Purchase Price Statement
for
such fiscal year by sending a written notice (a “Dispute Notice”) to Madden
within thirty (30) days of Madden’s delivery of all of the items specified in
Section 3(a) to the Seller Representative. The Dispute Notice shall
identify each disputed item on the Contingent Purchase Price Statement, specify
the amount of such dispute and set forth in reasonable detail the good faith
basis for such dispute. In the event of any such disputes, Madden and
the Seller Representative shall attempt, in good faith, to reconcile their
differences (including providing information that is reasonably requested to
the
other party), and any resolution by them as to any disputed items shall be
final, binding and conclusive on the parties and shall be evidenced by a writing
signed by Madden and the Seller Representative, including a revised Contingent
Purchase Price Statement (a “Revised Contingent Purchase Price Statement”)
reflecting such resolution. If Madden and the Seller Representative
are unable to reach such resolution within twenty (20) days after the Seller
Representative’s delivery of the Dispute Notice to Madden, then Madden and the
Seller Representative shall promptly submit any remaining disputed items for
final binding resolution to any independent accounting firm mutually acceptable
to Madden and the Seller Representative (which accounting firm has not, within
the prior twenty-four (24) months, provided services to Madden, any Seller
or
any Affiliate of any of them). If Madden and the Seller
Representative are unable to agree upon an independent accounting firm within
ten (10) days, an independent accounting firm selected by Madden (which
accounting firm has not, within the prior twenty-four (24) months, provided
services to Madden or any of its Affiliates) and an independent accounting
firm
selected by the Seller Representative (which accounting firm
5
has
not,
within the prior twenty-four (24) months, provided services to any Seller or
any
of their Affiliates) shall select an independent accounting firm that has not,
within the prior twenty-four (24) months, provided services to Madden, any
Seller or any of their Affiliates. Such independent accounting firm
mutually agreed upon by Madden and the Seller Representative or
selected by the procedure referenced in the immediately preceding
sentence, as the case may be, is hereinafter referred to as the “Independent
Accounting Firm.” If any remaining disputed items are submitted to an
Independent Accounting Firm for resolution, (A) each party will furnish to
the
Independent Accounting Firm such workpapers and other documents and information
relating to the remaining disputed items as the Independent Accounting Firm
may
request and are available to such party, and each party will be afforded the
opportunity to present to the Independent Accounting Firm any material relating
to the disputed items and to discuss the resolution of the disputed items with
the Independent Accounting Firm; (B) each party will use its good faith
commercially reasonable efforts to cooperate with the resolution process so
that
the disputed items can be resolved within forty-five (45) days of submission
of
the disputed items to the Independent Accounting Firm; (C) the determination
by
the Independent Accounting Firm, as set forth in a written notice to Madden
and
the Seller Representative (which written notice shall include a Revised
Contingent Purchase Price Statement), shall be final, binding and conclusive
on
the parties; and (D) the fees and disbursements of the Independent Accounting
Firm shall be allocated between Madden and Sellers in the same proportion that
the aggregate dollar amount of the disputed items submitted to the Independent
Accounting Firm that are unsuccessfully disputed by the Seller Representative
(as finally determined by the Independent Accounting Firm) bears to the total
amount of all disputed items submitted to the Independent Accounting
Firm.
(c) The
Contingent Purchase Price Statement or, if adopted pursuant to Section 3(b),
the
Revised Contingent Purchase Price Statement, shall be deemed to be final,
binding and conclusive on Madden and Sellers (“Final Contingent Purchase Price
Statement”) upon the earliest of (A) the failure of the Seller Representative to
deliver to Madden the Dispute Notice within thirty (30) days of Madden’s
delivery to the Seller Representative of all of the items specified in Section
3(a) for such fiscal year; (B) the resolution by Madden and the Seller
Representative of all disputes, as evidenced by a Revised Contingent Purchase
Price Statement; and (C) the resolution by the Independent Accounting Firm
of
all disputes, as evidenced by a Revised Contingent Purchase Price
Statement. Any Contingent Purchase Price Payment based on a Final
Contingent Purchase Price Statement shall be made in accordance with Section
4
hereof.
4. Contingent
Purchase Price Payments.
(a) Each
Contingent Purchase Price Payment, which shall be allocated among Sellers in
the
same manner as the allocation set forth on Schedule A attached hereto,
shall be payable and paid by Madden on a date or dates selected by Madden that
results in the payment of such Contingent Purchase Price Payment to Sellers
in
full on or before the fifth Business Day after the later of the date on which
the Final Contingent Purchase Price Statement for an Earn-Out Year that would
give rise to a Contingent Purchase Price Payment is deemed final, binding and
conclusive for such Earn-Out Year (such date, the “Applicable Contingent
Purchase Price Payment Date”). Each Contingent Purchase Price Payment
shall be paid in shares of the Madden Common Stock or in cash, or in any
combination of the foregoing, as determined in the sole
6
discretion
of Madden. If Madden elects to pay all or a portion of any Contingent
Purchase Price Payment in cash, the value of such payment shall be the number
of
shares that would have otherwise been paid multiplied by the average of the
last
reported trading prices of a share of Madden Common Stock on the NASDAQ (or
such
other national stock exchange or quotation system on which such stock is then
principally traded) for the 20 consecutive trading days ending on the fifth
Business Day prior to the date Madden makes payment of the cash portion of
such
Contingent Purchase Price Payment. Payment of the cash portion of any
Contingent Purchase Price Payment shall be made by wire transfer of immediately
available funds to an account or accounts designated at least two Business
Days
prior to the applicable payment date by the Seller Representative in
writing.
(b) If
shares
of Madden Common Stock are issued in connection with the payment of all or
a
portion of any Contingent Purchase Price Payment (the “Restricted Stock”),
Madden shall, with in ninety (90) days, file and use its commercially reasonable
efforts to have declared effective by the SEC a registration statement pursuant
to Rule 415 of the Act (the “Registration Statement”) covering the resale of
such shares. To the extent necessary to ensure that the Registration Statement
is available for sales of Restricted Stock by the holders thereof, Madden shall
use its commercially reasonable efforts to keep any Registration Statement
required by this Section 4 continuously effective, supplemented, amended and
current as required by and subject to the provisions of, and in conformity
with,
the requirements of this Agreement, the Act and the rules and regulations of
the
SEC, as announced from time to time, for a period of one year from the date
of
the issuance of the Restricted Stock or such shorter period as will terminate
when all Restricted Stock covered by such Registration Statement has been sold
pursuant thereto. At the request of any Seller, Madden shall promptly
file a prospectus supplement and furnish to such Seller, without charge, as
many
copies of the then effective prospectus as such Seller may reasonably request
and any other documents reasonably necessary to facilitate the disposition
of
the Restricted Stock pursuant to the shelf registration. All expenses
incident to the registration of the Restricted Stock, other than discounts
and
commissions, shall be borne by Madden. No holder of Restricted Stock
may include any of its Restricted Stock in any Registration Statement pursuant
to this Agreement unless and until such holder furnishes to Madden in writing
the information required by the Act. Each Seller agrees to promptly
furnish to Madden additional information required to be disclosed in order
to
make the information previously furnished to Madden by such holder not
materially misleading.
(c) Madden
agrees to indemnify and hold harmless, to the full extent permitted by law,
but
without duplication, each Seller, and each Seller’s partners, advisors,
Affiliates, trustees, representatives, employees and agents, against all losses,
claims, damages, liabilities and expenses (including reasonable costs of
investigation and reasonable legal fees and expenses and including expenses
incurred in settlement of any litigation, commenced or threatened) resulting
from any untrue statement (or alleged untrue statement) of a material fact
in,
or any omission (or alleged omission) of a material fact required to be stated
in, any registration statement or prospectus or necessary to make the statements
therein (in the case of a prospectus in light of the circumstances under which
they were made) not misleading or any violation by Madden of the Act, state
securities laws or any rule or regulation promulgated under such laws applicable
to Madden in connection with any such registration, as such expenses are
incurred, except insofar as (i) the same are caused by or contained in any
information furnished in writing to Madden by such Seller expressly for use
therein or (ii) such untrue statement or
7
omission
(or alleged untrue statement or omission) has been corrected in a prospectus
supplement timely delivered to such Seller and such Seller failed to deliver
such updated prospectus (but only if the timely delivery of such prospectus
supplement by such Seller would have cured the defect giving rise to
such loss, expense, claim, damage or liability).
(d) In
connection with any registration statement in which Sellers are participating,
each Seller will furnish to Madden in writing such information as Madden
reasonably requests for use in connection with any such registration statement
or prospectus and agrees to indemnify and hold harmless, to the full extent
permitted by law, but without duplication, Madden and its respective, officers,
directors, shareholders, employees, advisors, representatives, agents and
Affiliates against any losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and reasonable legal fees and
expenses and including expenses incurred in settlement of any litigation,
commenced or threatened) resulting from any untrue statement (or alleged untrue
statement) of material fact in, or any omission (or alleged omission) of a
material fact required to be stated in, the registration statement or prospectus
or necessary to make the statements therein (in the case of a prospectus in
light of the circumstances under which they were made) not misleading or any
violation by Sellers of the Act, state securities laws or any rule or regulation
promulgated under such laws applicable to Sellers in connection with any such
registration, as such expenses are incurred, to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
so furnished in writing by Sellers to Madden specifically for inclusion
therein. In no event shall any Seller be liable pursuant to this
paragraph for any amount in excess of the net proceeds (net of payment of all
expenses) received by such Seller from the stock sold by such Seller pursuant
to
such registration statement. In no event shall this Section limit any Seller’s
liability with respect to any other portions of this Agreement or any other
agreement.
(e) If
for
any reason the indemnification provided for in the immediately preceding two
paragraphs is unavailable to an indemnified party or insufficient to hold it
harmless, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, expense, claim,
damage or liability in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, as well as any other
relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission relates to information
supplied by the indemnifying party or parties on the one hand or the indemnified
party or parties on the other and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. No party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any party who was not guilty of such fraudulent
misrepresentation. In no event shall any Seller be required to
contribute pursuant to this paragraph any amount in excess of the net proceeds
(net of payment of all expenses) received by such Seller from the stock sold
by
such Seller pursuant to such registration statement. In no event shall this
Section limit any Seller’s liability with respect to any other portions of this
Agreement or any other agreement.
5. Change
in Control Trigger Events. If during the term of this Agreement
the capital stock of Madden or all or substantially all of the assets of Madden
is sold to a third party that is not a 100 percent-owned subsidiary of Madden
(such event a “CIC Trigger Event” and
8
such
a
party, a “CIC Acquirer”) this Agreement continue in full force until terminated
pursuant to its terms, except that:
(a) In
calculating whether any Contingent Purchase Price Payment is due, with respect
to any fiscal year completed after the CIC Trigger Event, the Diluted EPS Goals
shall be disregarded and the EBIT Goal shall reference the EBIT of that unit
of
the CIC Acquirer comprised solely of the Madden business or, if no such unit
exists, those assets of the CIC Acquirer comprised of the Madden assets (the
“Madden Unit”).
(b) With
respect to any Contingent Purchase Price Payment due, in lieu of payment of
168,000 shares of Madden Common Stock (or the cash equivalent thereof), as
set
forth, as appropriate in Section 2(a) and 2(b), Sellers shall receive a cash
payment (or the stock equivalent thereof pursuant to Section 5(c) below) of
(i)
5,250,000 multiplied by (ii) the EBIT of Madden or the Madden Unit (as
appropriate) for the second of the two consecutive Earn-Out Years which gave
rise to the Contingent Purchase Price Payment divided by the EBIT of Madden
for
fiscal year 2006.
(c) In
the
event that the CIC Acquirer elects to pay all or a portion of any Contingent
Purchase Price Payment in shares of its common stock, the value of each share
delivered to Sellers shall be deemed to be equal to the average of the last
reported trading prices of a share of the CIC Acquirer’s common stock on the
national stock exchange or quotation system on which such stock is then
principally traded for the 20 consecutive trading days ending on the fifth
Business Day prior to the date CIC Acquirer makes payment of the stock portion
of such Contingent Purchase Price Payment.
(d) Payment
of the cash portion of any Contingent Purchase Price Payment shall be made
by
wire transfer of immediately available funds to an account or accounts
designated at least two Business Days prior to the applicable payment date
by
Sellers in writing.
(e) References
to Madden Common Stock and Madden in Sections 3, 4(b), 4(c), 4(d) and 4(e)
shall
thereinafter refer to the CIC Acquirer’s common stock and the CIC Acquirer
(respectively). In addition, references to Madden’s Financial
Statements shall thereinafter refer to the financial statements of the CIC
Acquirer, which such financial statements shall be prepared in accordance with
GAAP.
6. Term. This
Agreement shall be effective on the Closing Date, if one occurs, and shall
continue until the earlier the payment of all Contingent Purchase Price Payments
pursuant to Section 4 or the expiration of Sellers’ payment rights
hereunder.
7. Securities
Laws Matters. Each Seller hereby agrees that prior to acquiring
any shares of Madden Common Stock (or any shares of CIC Acquirer’s common stock)
pursuant to this Agreement, such Seller shall provide to Madden (or the CIC
Acquirer) any written representations reasonably requested by Madden (or the
CIC
Acquirer) to ensure that the issuance of such shares to such Seller will be
exempt from registration under the Act. Each Seller hereby further
acknowledges and agrees, that any shares of Madden Common Stock (or any shares
of CIC Acquirer’s common stock) acquired by such Seller pursuant to this
Agreement may be resold only pursuant to registration under the Act, or pursuant
to an exemption from
9
registration
under the Act (and that a restrictive legend to such effect will be placed
upon
any such securities), and that hedging activities involving those securities
may
not be conducted unless in compliance with the Act.
8.
Assignment;
Binding Nature. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by any
Seller. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto
and their respective heirs, personal representatives, legatees, successors
and
permitted assigns.
9.
Amendment. This
Agreement may be modified or amended only by an instrument in writing, duly
executed by Madden, on the one hand, and the Seller Representative, on the
other
hand.
10. Notices. All
notices, demands and communications of any kind which any party hereto may
be
required or desires to serve upon another party under the terms of this
Agreement shall be in writing and shall be given by: (a) personal
service upon such other party; (b) mailing a copy thereof by certified or
registered mail, postage prepaid, with return receipt requested;
(c) sending a copy thereof by Federal Express or equivalent courier
service; or (d) sending a copy thereof by facsimile, in each case addressed
as
required for notices pursuant to Section 13.3 of the Membership Interest
Purchase Agreement. In case of service by Federal Express or
equivalent courier service or by facsimile or by personal service, such service
shall be deemed complete upon delivery or transmission, as
applicable. In the case of service by mail, such service shall be
deemed complete on the fifth Business Day after mailing. The
addresses and facsimile numbers to which, and persons to whose attention,
notices and demands shall be delivered or sent may be changed from time to
time
by notice served as hereinabove provided by any party upon any other
party.
11. Governing
Law; Jurisdiction. This Agreement and all the transactions
contemplated hereby, and all disputes between the parties under or related
to the Agreement or the facts and circumstances leading to its execution,
whether in contract, tort or otherwise, shall be governed by, and construed
and
enforced in accordance with, the laws of the State of New York including,
without limitation, Section 5-1401 of the New York General Obligations Law
and
New York Civil Practice Laws and Rules 327.
12. Severability. If
any provision of this Agreement or the application of any such provision to
any
party or circumstances shall be determined by any arbitrator to be invalid
or
unenforceable to any extent, the remainder of this Agreement, or the application
of such provision to such person or circumstances other than those to which
it
is so determined to be invalid or unenforceable, shall not be affected thereby,
and each provision hereof shall be enforced to the fullest extent permitted
by
law. If the final determination of an arbitrator declares
that any item or provision hereof is invalid or unenforceable, the parties
hereto agree that the arbitrator making the determination of invalidity or
unenforceability shall have the power, and is hereby directed, to reduce the
scope, duration or area of the term or provision, to delete specific words
or
phrases and to replace any invalid or unenforceable term or provision with
a
term or provision that is valid and enforceable and that comes closest to
expressing the
10
intention
of the invalid or unenforceable term or provision, and this Agreement shall
be
enforceable as so modified.
13. Headings. The
headings in this Agreement are inserted for convenience only and shall not
constitute a part hereof.
14. Counterparts;
Facsimile. For the convenience of the parties, any number of
counterparts hereof may be executed, each such executed counterpart shall be
deemed an original, and all such counterparts together shall constitute one
and
the same instrument. Facsimile transmission of any signed original
counterpart and/or retransmission of any signed facsimile transmission shall
be
deemed the same as the delivery of an original.
15. Entire
Agreement. This Agreement, the Membership Interest Purchase
Agreement and the Employment Agreement, including all schedules and exhibits
hereto and thereto, contain the entire understanding of the parties hereto
with
respect to the subject matter hereof.
[Remainder
of page intentionally left blank]
11
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
PURCHASER:
XXXXXX
XXXXXX,
LTD.
By: /s/
Xxxxxxxx X. Xxxxxx
Name:
Xxxxxxxx X.
Xxxxxx
Title:
Chairman and Chief Executive Officer
SELLERS:
/s/ Xxxxxxx
Xxxxxxxxx
Xxxx
Xxxxxxxxx
/s/
Xxxxx
Xxxxxx
Xxxxx
Xxxxxx
/s/
Xxx
Xxxxx
Xxx
Xxxxx
/s/
Xxxxxxx
Xxxxx
Xxxxxxx
Xxxxx
/s/
Xxxxx
Xxxxxx
Xxxxx
Xxxxxx
/s/
Xxxxxx
Xxxxx
Xxxxxx
Xxxxx
12
