REPURCHASE AGREEMENT
THIS REPURCHASE AGREEMENT (this "Agreement") is dated and effective as of
November 21, 2003 by and among BANG & OLUFSEN AMERICA, INC., a Delaware
corporation ("BOA"), WHITEHALL RETAIL FINANCE, a division of Whitehall Business
Credit Corporation, a New York corporation ("Lender"), and XXXXXX ELECTRONICS,
INC., a New York corporation ("Xxxxxx").
Recitals
X. Xxxxxx and Xxxxxx Realty ("New York Landlord") have entered into a lease
dated December 23, 1999 (together with all amendments and supplements thereto
and restatements, modifications, extensions, renewals and/or replacements
thereof, the "New York Lease") in respect of the retail store location commonly
known as 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx (the "New York Store").
X. Xxxxxx and BOA have entered into a sublease dated as of June 1, 2000
(together with all amendments and supplements thereto and restatements,
modifications, extensions, renewals and/or replacements thereof, the "Greenwich
Sublease") in respect of the retail store location commonly known as 00
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx (the "Greenwich Store" and together
with the New York Store, the "Premises").
X. Xxxxxx and BOA have entered into (1) a Licensed Dealer Agreement dated
as of June 1, 1999 with respect to the New York Store (together with all
amendments and supplements thereto and restatements, modifications, extensions,
renewals and/or replacements thereof, the "New York Dealer Agreement") and (2) a
Licensed Dealer Agreement dated as of June 1, 2000 with respect to the Greenwich
Store (together with all amendments and supplements thereto and restatements,
modifications, extensions, renewals and/or replacements thereof, the "Greenwich
Dealer Agreement" and together with the New York Dealer Agreement, the "Dealer
Agreements").
D. Pursuant to the terms and conditions of the Dealer Agreements, BOA
appointed Xxxxxx as an authorized Bang & Olufsen(R) dealer for the purpose of
selling audio and video products produced by Bang & Olufsen a/s and sold under
the trademark "Bang & Olufsen(R)" or under other proprietary marks of Bang &
Olufsen a/s (collectively, the "Products") at the Premises.
E. Concurrently with the execution and delivery of this Agreement, Xxxxxx
and Lender are entering into a Loan and Security Agreement dated as of the date
hereof (together with all amendments and supplements thereto and restatements,
modifications, extensions, renewals and/or replacements thereof, the "Loan
Agreement") pursuant to which Lender shall provide revolving credit loans and
other financial accommodations to Xxxxxx. To secure its obligations in respect
of such loans and other financial accommodations Xxxxxx has granted Lender a
security interest in and to all or substantially all of its tangible and
intangible personal property (including, without limitation, the Products)
whether now owned or hereafter acquired (the "Security Interest").
X. Xxxxxx, BOA and Lender desire to establish certain rights and
obligations in respect of the Products and the Premises.
NOW THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Lender, Xxxxxx and BOA agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
"Credit Documents" means the Loan Agreement together with all agreements,
instruments and other documents executed in connection therewith, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Current Products" means Products that are among the authorized Products
designated in Exhibit A-1 of the Dealer Agreements in effect as of the date of
the Sale Notice (defined below) and contained in the original, factory-sealed
packaging.
"Current Products Purchase Price" means an amount equal to the amount
invoiced to Xxxxxx by BOA for the Current Products, net of any ordinary course
discounts received by Xxxxxx in connection with Xxxxxx'x acquisition of the
Current Products.
"Non-Current Products" means Products other than Current Products that bear
a Bang & Olufsen serial number.
"Non-Current Products Purchase Price" means the purchase price for the
Non-Current Products set forth in BOA's Notice of Exercise that is accepted by
Lender.
"Purchase Price" means the Current Products Purchase Price plus, if BOA is
obligated to purchase the Non-Current Products as provided herein, the
Non-Current Products Purchase Price.
"Purchased Products" means the Current Products and, if BOA is obligated to
purchase the Non-Current Products as provided herein, the Non-Current Products.
2. Repurchase by BOA.
(a) If Xxxxxx, with the consent of Lender, undertakes the liquidation of
the Products following any default under the Credit Documents or otherwise or if
Lender exercises its rights under the Credit Documents and obtains possession of
the Products for purposes of liquidation of the Products after Xxxxxx defaults
under its obligations under the Credit Documents, Xxxxxx or Lender, as the case
may be, shall give BOA prompt notice thereof (the "Sale Notice"). The Sale
Notice shall be accompanied by a complete list of all Non-Current Products in
Xxxxxx'x possession as of the date of the Sale Notice (the "Non-Current Products
Inventory List").
(b) BOA hereby agrees that upon receipt of the Sale Notice, it will
purchase all Current Products in Xxxxxx'x possession as of the date of the Sale
Notice, subject to the terms and conditions of this Agreement. BOA shall pay
Lender the Current Products Purchase Price as the purchase price for the Current
Products.
(c) In addition to BOA's obligation to purchase the Current Products as
provided in paragraph 2(b), BOA shall have the option and first right (but not
the obligation) to repurchase all (but not less than all) of the Non-Current
Products owned by Xxxxxx as of the date of the Sale Notice. Such repurchase
option shall be exercisable by BOA upon delivery of notice thereof to Lender and
Xxxxxx (a "Notice of Exercise") at any time during the three business day period
commencing on the later to occur of (i) BOA's receipt of the Sale Notice or (ii)
if a Non-Current Products Inventory List is not delivered with the Sale Notice,
BOA's receipt of such Non-Current Products Inventory List (such three business
day period, the "Option Period"). The Notice of Exercise shall state the
purchase price which BOA is willing to pay for the Non-Current Products. Within
three business days after receipt of the Notice of Exercise, Lender shall
deliver notice to BOA that Lender will either accept or reject BOA's proposed
purchase price for the Non-Current Products. If Lender fails to deliver such
notice, it shall be deemed to have rejected BOA's proposed purchase price. If
BOA fails to deliver the Notice of Exercise as provided in this paragraph 2(c)
or if Lender fails to accept BOA's proposed purchase price for the Non-Current
Products, BOA shall have no further rights or obligations in respect of the
Non-Current Products; provided, however, that BOA shall still purchase the
Current Products in accordance with this paragraph 2.
(d) If Lender accepts BOA's proposed purchase price for the Non-Current
Products as set forth in the Notice of Exercise, BOA agrees that upon receipt of
such acceptance from Lender, BOA will purchase all of the Non-Current Products
owned by Xxxxxx as of the date of the Sale Notice, subject to the terms and
conditions of this paragraph 2.
(e) Settlement of the obligations of the parties hereto in respect of the
sale, conveyance and delivery of the Purchased Products, and payment of the
Purchase Price, shall occur no later than three business days after the date BOA
delivers the Notice of Exercise to Lender and Xxxxxx (the "Closing").
(f) BOA's obligation to pay the Purchase Price shall be conditioned upon
delivery of the Purchased Products to BOA at the Premises free and clear of all
liens and encumbrances. To the extent that Xxxxxx retains the right to occupy
the Premises, Xxxxxx hereby covenants agrees that delivery of the Purchased
Products shall occur at the Premises and shall cooperate with the parties and
use its best efforts to effect such delivery at the Premises.
(g) At Closing, BOA shall pay the Purchase Price to Lender by wire transfer
in accordance with Lender's written instructions which shall be provided to BOA
at least one business day prior to Closing. The cost of all handling and
shipping costs, if any, arising out of the repurchase of the Purchased Products
by BOA pursuant to this paragraph 2 shall be borne solely by Xxxxxx. Xxxxxx
hereby waives any and all right to payment in respect of the sale, conveyance
and delivery of the Purchased Products to BOA as provided in this paragraph 2.
The parties hereto agree that the sale of the Purchased Products hereunder and
the method of establishing the Purchase Price therefor are for all purposes
commercially reasonable.
(h) To protect and preserve BOA's rights under this Agreement, if Lender
issues a Sale Notice, Lender covenants and agrees that it shall take such action
as may be reasonably necessary, but only to the extent permitted by applicable
law, to effect a secured party sale of the Purchased Products to BOA in
accordance with the terms and conditions hereof, and of the applicable Credit
Documents and provisions of the Uniform Commercial Code. All costs and expenses
incurred by Lender in connection therewith shall be paid by Xxxxxx. Any sale and
conveyance to BOA by Xxxxxx or by Lender hereunder shall be "as is" and without
recourse to Lender or Xxxxxx.
(i) If after Xxxxxx or Lender issues a Sale Notice, BOA (i) does not
deliver a Notice of Exercise within the Option Period; or (ii) fails for any
reason, including, without limitation, failure of any of the conditions set
forth in paragraph 2(f) hereof, to pay the Purchase Price at Closing, then
Lender may, in its discretion, exercise any and all of its rights hereunder or
under the Credit Documents with respect to the Products without further
obligation to BOA. Notwithstanding the terms and conditions of the New York
Lease or the Greenwich Sublease, BOA shall cooperate with Lender and shall not
impair or interfere in any way with Lender's right to take possession of the
Products and any other collateral, and remove same from the Premises.
(j) BOA hereby consents to the sale of any Products or other collateral
which Lender is entitled to take possession of as provided in paragraph 2(i)
and/or paragraph 3 at any location, including without limitation, any store or
other location at which Xxxxxx conducts business (excluding the Premises).
3. Possession of the Premises. In no event shall Lender have the right to
take possession of the Premises, notwithstanding anything to the contrary
contained in the Credit Documents or any other agreement between Lender, New
York Landlord and/or BOA; provided, however, that if a default has occurred and
is continuing under any of the Credit Documents, Lender shall have the right to
enter onto the Premises for a reasonable period of time to take possession of
any Products (other than the Purchased Products) or any other of its collateral
which may be located on the Premises, subject to the terms and conditions of the
New York Lease. Subject to Lender's right to enter onto the Premises as provided
in the immediately preceding sentence and/or in paragraph 2(g) (if applicable),
Lender acknowledges that BOA shall have the sole and exclusive right to
possession of the Premises, subject to the terms and conditions of (i) in the
case of the New York Store, the New York Lease and any other documents between
New York Landlord and BOA; and (ii) in the case of the Greenwich Store, the
lease between BOA and its landlord.
4. Dealer Agreement Right of Repurchase.
(a) Notwithstanding anything to the contrary contained in paragraph 16.C of
either Dealer Agreement, BOA, Xxxxxx and Lender hereby agree that if BOA
exercises its right of repurchase under either such paragraph 16.C in accordance
with the terms thereof (the "Dealer Agreement Right of Repurchase"), (i) BOA
shall provide Lender with a copy of the demand that BOA is required to deliver
to Xxxxxx pursuant to either such paragraph 16.C concurrent with the delivery of
such demand to Xxxxxx and (ii) all sums payable by BOA pursuant to either such
paragraph 16.C shall be paid in accordance with Lender's written instructions
therefor; provided, however, that if BOA shall at any time receive a Sale Notice
prior to consummation of the transactions contemplated by the exercise of a
Dealer Agreement Right of Repurchase, the Dealer Agreement Right of Repurchase
shall automatically be null and void without any further act or instrument of
any party hereto and the rights and obligations of the parties hereto in respect
of the Products shall be governed solely and exclusively by the terms and
conditions of this Agreement.
(b) BOA shall be entitled to conclusively rely on any written instructions
delivered by Lender pursuant to paragraph 4(a) of this Agreement, and Xxxxxx
hereby releases BOA from, and agrees to hold BOA harmless in respect of, any and
all liability, claims, losses, damages, costs and/or expenses (including
attorneys' fees and disbursements) resulting from BOA's reliance on, and/or
compliance with, said written instructions of Lender.
5. Lender' Security Interest. BOA hereby acknowledges and consents to
Xxxxxx'x granting of the Security Interest to Lender.
6. Notice of Amendment or Termination. Xxxxxx shall give Lender notice of
any material waiver, amendment or other modification of either of the Dealer
Agreements or of the intention of Xxxxxx to exercise its rights to terminate a
Dealer Agreement simultaneously with the giving of such notice to BOA.
7. Status of Various Agreements. Xxxxxx represents and warrants to Lender
and BOA that (i) no default or event of default exists under any of the Credit
Documents, the Dealer Agreements, the New York Lease or the Greenwich Sublease
and (ii) no event has occurred and no condition exists which, with the giving of
notice or lapse of time, or both, would constitute a default or event of default
under any of the Credit Documents, the Dealer Agreements, the New York Lease or
the Greenwich Sublease.
8. Notice of Default under Credit Documents. Xxxxxx shall give BOA notice
if Xxxxxx is at any time in default of any of its obligations under the New York
Lease or any of the Credit Documents and Xxxxxx has notice from New York
Landlord or Lender, as applicable, that New York Landlord or Lender, as
applicable, intends to take action to enforce its rights pursuant to the New
York Lease or any of the Credit Documents, as applicable.
9. Method of Notice. Any notice, demand, or other communication required or
permitted to be given by any provision of this Agreement shall be in writing
addressed as follows:
If to BOA: Bang & Olufsen America, Inc.
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile Number: (000) 000-0000
With a copy to: Xx. Xxx X. Xxxx and Xx. Xxxxxxx X. Xxxxxx
Xxxxx Xxxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
If to Lender: Whitehall Retail Finance
00 Xxxxxxxxx Xxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X'Xxxxxx
Facsimile: (000) 000-0000
With copy to: Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, P.C.
Facsimile: (000) 000-0000
If to Xxxxxx: Xx. Xxxxxxxx Xxxx
Xxxxxx Electronics, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
With copy to: Xx. Xxxxxxx X. Xxxxx
Ruskin Moscou Faltischek, P.C.
000 XXX Xxxxx
Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Any such notice, demand or other communication shall be deemed to have been
sufficiently given or served for all purposes upon: (i) the actual receipt by
the recipient, if notice is given by personal delivery or any method not
described below; (ii) one business day after mailing, if notice is given by
reputable overnight commercial courier service; (iii) five business days after
mailing, if notice is given by U.S. mail, postage prepaid, certified or
registered, return receipt requested; and (iv) when sent, if notice is given by
facsimile and a confirmation copy of such notice is simultaneously sent as
described in clauses (ii) or (iii) of this paragraph 9.
10. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts without reference
to choice of law or conflict of law principles.
11. Amendments. This Agreement may be amended or modified only by a written
instrument executed by all of the parties hereto.
12. No Reliance.
(a) Each of Lender, Xxxxxx and BOA represents to the other that: (i) it is
entering into this Agreement on its own account; (ii) it is entering into this
Agreement in accordance with all laws, regulations and statutes affecting or
otherwise applicable to it; (iii) it has reviewed and approved this Agreement
and all of its agreements with any of the parties hereto; (iv) it has previously
entered into similar agreements and made agreements of the type and kind and
nature of those set forth in any of its agreements with any of the parties
hereto; and (v) it is aware of and able to bear the economic risks involved in
entering into this Agreement and its agreements with any of the parties hereto
and does not foresee the occurrence of any event which would alter said ability.
(b) Each of Lender and BOA represent to the other that: (i) it has been
given adequate opportunity to review, and has reviewed all financial and other
data and information relating to Xxxxxx as it deems necessary for it to make a
determination to enter into this arrangement; (ii) it has not relied upon the
credit judgment or analysis of the other concerning Xxxxxx and has independently
reached its own decision, based upon its own assessment and analysis of the
financial condition and affairs of Xxxxxx; and (iii) agrees that, on a going
forward basis, it will not rely on the credit judgment of the other concerning
Xxxxxx and will continue to make its own decisions, based upon its own
assessment and analysis of the financial condition and affairs of Xxxxxx when
determining whether to take or not to take any discretionary action under this
Agreement or any of its agreements with Xxxxxx.
(c) Under no circumstances shall Lender have any obligation to provide BOA
with any notice of any default of Xxxxxx under the Credit Documents or
otherwise.
[SIGNATURE PAGE FOLLOWS.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
BANG & OLUFSEN AMERICA, INC.
By:______________________________
Name:________________________
Title:_________________________
XXXXXX ELECTRONICS, INC.
By:______________________________
Xxxxxx X. Xxxxxxxxx
Executive Vice President and Chief
Financial Officer
WHITEHALL RETAIL FINANCE, a division of
Whitehall Business Credit Corporation
By:______________________________
Xxxxx X. Xxxxxxx
Vice President
