EXHIBIT 2.2(a)
JJ Acquisition Corp.
Norton XxXxxxxxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
May 27, 1998
Xxxx-Xx Knitwear Inc.
Xxxxx Xxxxx, Inc.
Stockholders of Xxxxx Xxxxx, Inc.
c/o Currants
0000 Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Re: Agreement of Purchase and Sale dated as of April 15, 1998 (the
"Agreement") by and among JJ Acquisition Corp., Norton XxXxxxxxxx,
Inc., Xxxx-Xx Knitwear Inc., Xxxxx Xxxxx, Inc. and the Stockholders of
Xxxxx Xxxxx, Inc.
-----------------
Ladies and Gentlemen:
Reference is made to the Agreement; capitalized terms used herein and
not defined herein shall have the meanings assigned to such terms in the
Agreement. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby amend the Agreement as
set forth herein.
1. Section 2.02(C) of the Agreement is hereby amended to add the
following clauses before the definition of "Acceleration Event" in the first
sentence of Section 2.02(C) of the Agreement:
"(vi) for any reason not initiated or consented to by Xxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx, for so long as any of them is
employed by the Purchaser, or for any reason other than a force majeure event
(which event causes the Purchaser not to utilize the warehouse and distribution
facility which is the subject of the Warehouse Lease), the Purchaser shall
utilize a warehouse or distribution facility other than the facility which is
the subject of the Warehouse Lease,
(vii) there shall occur (a) (i) a final and non appealable judgment
or arbitration determination against the Purchaser, Miss Xxxxx, Inc. ("Miss
Xxxxx"), Xxxxxx XxXxxxxxxx of Xxxxxx, Inc. ("Squire") or Norton in an amount of
more than $5 million, inclusive of interest and costs, or (ii) a payment by
Norton of such a judgment or arbitration determination, or (b) a settlement
agreed to by Norton in an amount of more than $75 million, in any case, which
judgment, arbitration determination or settlement shall arise out of the
warehousing, distribution and/or cutting activities of Norton, Miss Xxxxx,
Xxxxxx, or the Purchaser, or
(viii) other than as a result of events or circumstances affecting
the financial markets or the apparel industry generally, the Market Value for
the Norton Common Stock shall decline by over 50% (determined without reference
to the 20-business day averaging set forth in the definition of "Market Value"
herein, but rather with Market Value determined over a five consecutive business
day period commencing on and including the date of a public announcement by
Norton concerning events affecting Norton other than matters concerning (a) the
financial performance of Norton or any of its subsidiaries relating to the day
to day business operations of Norton or any of its subsidiaries, (b)
acquisitions or dispositions of businesses, or (c) public offerings or other
sales of equity or debt securities of Norton."
2. Section 7.12(a) of the Agreement is hereby amended by adding the
following clause at the end of Section 7.12(a) of the Agreement:
"(vii) Norton agrees, in good faith, to recommend the Xxxx-Xx
Recommendation (as defined below) for approval by the Stock Option Committee of
the Board of Directors of Norton, and agrees to use its best efforts to have
such Committee approve the Xxxx-Xx Recommendation. For purposes hereof, the
"Xxxx-Xx Recommendation" shall mean the written recommendation given, if at all,
at the end of each fiscal year of Norton by Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx
and Xxxxx Xxxxxxxxx, for so long as any of them is employed by the Purchaser, as
to (i) the employees of the Purchaser to whom they recommend the granting of
options to purchase shares of Norton Common Stock under stock option and other
similar plans adopted by Norton and (ii) the number of shares of Norton Common
Stock to be subject to options granted to each such employee; provided that,
Norton agrees to so recommend an aggregate number of options for grant to
employees of the Purchaser pursuant to the Xxxx-Xx Recommendation which is not
less than a number which is approximately equal to the aggregate number of
options to be submitted for the approval of the Stock Option Committee of the
Board of Directors of Norton at the end of a fiscal year multiplied by the
approximate percentage of operating income contributed by the Purchaser to the
consolidated operating income of Norton for such fiscal year."
3. Section 7.12(a)(ii) of the Agreement is hereby amended by adding
the following phrase to the phrase "including the opening or closing of or
access to showrooms and warehouse facilities":
"and the selection of which warehouse or distribution facility to be
utilized by the Purchaser"
4. Section 9.13 of the Agreement is hereby amended by adding the
following phrase at the end thereof:
"; provided that the Warehouse Lease will provide for a five year term
commencing on the Closing Date, notwithstanding the terms of Exhibit K hereto."
5. Section 9.07 of the Agreement is hereby amended to add the
following phrase at the end thereof:
"; provided that, notwithstanding the definition of Earn Out Letter of
Credit set forth in Section 14.01 hereof and notwithstanding Exhibit G of the
Agreement, the face amount of the Earn Out Letter of Credit shall be $30
million, of which $30 million shall be drawable in payment of the Seventh Amount
(as defined in the Earn Out Certificate attached to the Earn Out Letter of
Credit in the Form of Exhibit F hereto) and of which $15 million shall be
drawable in payment of the First Amount, Second Amount, Third Amount, Fourth
Amount, Fifth Amount or Sixth Amount (as defined in the Earn Out Certificate).
6. Section 7.07(a) of the Agreement is hereby amended by adding the
following sentences after the first sentence of Section 7.07(a):
"Those benefits shall include but not be limited to eligibility of
each Transferred Employee to participate in, to the extent permitted by
applicable law and such plan, the Norton XxXxxxxxxx, Inc. Employee Stock
Purchase Plan. In addition, to the extent permitted by applicable law and the
terms of the applicable plan, at the request of Xxxxx Xxxxxxxxx made during the
Earn Out Period, the Purchaser shall have the right to adopt and participate in
Norton's 401(k) plan and medical plan."
7. The definition of "EBITDA" set forth in Section 14.01 of the
Agreement shall be amended to add the following sentence at the end of such
definition:
"Notwithstanding anything to the contrary contained in this
definition, EBITDA shall not include any expenses or costs incurred by the
Purchaser in connection with the events which are the subject of clause (vii) of
Section 2.02(C) hereof."
8. Exhibit F to the Agreement is hereby amended in its entirety to
read as set forth in Exhibit F attached hereto.
9. Notwithstanding the terms of the Employment Agreements attached
as exhibits to the Agreement, the Employment Agreements to be executed and
delivered at the Closing shall provide that Xxxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxx
will be the Co-Chief Executive Officers and Presidents of the Purchaser and that
Xxxxx Xxxxxxxxx shall be the Executive Vice President of the Purchaser.
10. Except as amended hereby, the Agreement is ratified and confirmed
in all respects by the parties hereto. Nothing herein shall confer or be deemed
to confer any right, remedy, benefit or entitlement on any third-party. This
amendment shall be construed pursuant to and in accordance with the laws of the
State of New York, without regard to conflict of laws principles, and may be
executed in counterparts, including by telecopy, each of which shall be deemed
an original, all of which taken together shall constitute one and the same
amendment.
* * *
Very truly yours,
JJ ACQUISITION CORP.
NORTON XXXXXXXXXX, INC.
By:______________________________
Name: Xxxxx Xxxxxxxxx
Agreed as of the date
above written:
XXXX-XX KNITWEAR INC.
By:____________________________
Name: Xxxxxxx Xxxxxxxxx
XXXXX XXXXX, INC.
By:____________________________
Name: Xxxxx Xxxxxxxxx
_______________________________
Xxxxx Xxxxxxxxx
_______________________________
Xxxxxx Xxxxxxxxx
_______________________________
Xxxxx Xxxxxxxxx
