ACQUISITION AGREEMENT
Parties: GLOBAL SPORTS, INC.,
a Delaware corporation ("Global")
0000 Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, XX 00000
GEN-X ACQUISITION (U.S.), INC.,
a Washington corporation ("U.S. Co.")
000 0xx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx
00000-0000
GEN-X ACQUISITION (CANADA) INC.,
an Ontario corporation ("Canadian Co.")
00 Xxxxxx Xxxxxxxx
Xxxxx Xxxx, Xxxxxxx
X0X 0X0
DMJ FINANCIAL, INC.,
a Barbados limited company ("DMJ")
Royal Bank of Canada (Caribbean) Corporation
0xx Xxxxx, Xxxxxxxx #0
Xxxxxxxx Xxxx, Xxxxxxxxx
Xx. Xxxxxxx, Barbados
XXXXX X. XXXXXX,
an individual ("Xxxxxx")
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X0X0
XXXXXXX X. XXXXXXXXXXX,
an individual ("Xxxxxxxxxxx")
00 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X0X0
Date: September 24, 1999, as amended March 13, 2000
Background: Global owns beneficially and of record all of the issued and
outstanding shares of capital stock of Gen-X Equipment Inc., an Ontario
corporation ("Gen-X Equipment") and Gen-X Holdings Inc., a Washington
corporation ("Gen-X Holdings"). Gen-X Holdings is a Washington corporation
also in the business of distributing excess inventories of sports equipment
and accessories. Gen-X Equipment and Gen-X Holdings (along with each of their
direct or indirect Subsidiaries (as defined herein)) are collectively referred
to herein as the "Gen-X Companies". Xxxxxx and Xxxxxxxxxxx own beneficially
and of record all of the issued and outstanding shares of capital stock of
DMJ. DMJ and the individuals set forth on Schedule A own beneficially and of
record all of the issued and outstanding shares of capital stock of U.S. Co.
U.S. Co. owns beneficially and of record all of the issued and outstanding
shares of Canadian Co. (U.S. Co. and Canadian Co. shall be referred to
individually as "Buyer" and collectively as "Buyers"). The parties desire that
Global sell and Buyers purchase all of the issued and outstanding shares of
capital stock of the Gen-X Holdings and Gen-X Equipment, all on and subject to
the terms and conditions of this Agreement.
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INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINED TERMS
Certain defined terms used in this Agreement and not specifically defined in
context are defined in this Section 1, as follows:
1.1. "Acquisition Agreements" means this Agreement and the Ancillary
Agreements (as defined in Section 1.3).
1.2. "Affiliate" means any Person (as defined in Section 1.17) which
controls, is controlled by or is under common control with, the designated
party, either directly or indirectly through one or more intermediaries.
1.3. "Ancillary Agreements" means: (a) the Purchase Price Escrow Agreement,
(b) the Termination Agreements, (c) the Right of First Offer Agreement, (d)
the Non-Competition Agreement, (e) the Termination of Non-Competition
Agreement, (f) the Assignment and Assumption Agreement and (g) the Escrow
Agreement, each as hereinafter defined.
1.4. "Asset" means any real, personal, mixed, tangible or intangible
property of any nature.
1.5. "Consent" means any consent, approval, order or authorization of, or
any declaration, filing or registration with, or any application or report to,
or any waiver by, or any other action (whether similar or dissimilar to any of
the foregoing) of, by or with, any Person, which is legally necessary in order
to take a specified action or actions in a specified manner and/or to achieve
a specified result.
1.6. "Contract" means any written or oral contract, agreement, instrument,
order, arrangement, commitment or understanding of a legally binding nature,
including, but not limited to, sales orders, purchase orders, leases,
subleases, data processing agreements, maintenance agreements, license
agreements, sublicense agreements, loan agreements, promissory notes, security
agreements, pledge agreements, deeds, mortgages, guaranties, indemnities,
warranties, employment agreements, consulting agreements, sales representative
agreements, joint venture agreements, buy-sell agreements, options or
warrants.
1.7. "Encumbrance" means any lien, security interest, pledge, mortgage,
easement, covenant, restriction, reservation, conditional sale, prior
assignment, or other encumbrance, claim, burden or charge of any nature.
1.8. "GAAP" means, in respect of a United States entity, generally accepted
accounting principles under United States accounting rules and regulations, as
in effect from time to time, consistently applied and, in respect of a
Canadian entity, accounting principles generally accepted in Canada, including
those set out in the Handbook of the Canadian Institute of Chartered
Accountants, at the relevant time, applied on a consistent basis.
1.9. "Gen-X Material Adverse Effect" means a material adverse effect on the
business, results of operations or financial condition of the Gen-X Companies
taken as a whole; provided, however, that the term "Gen-X Material Adverse
Effect" shall not include any effect attributable to changes in the economy
(of the United States or any other country) generally, changes in the
industries in which the Gen-X Companies operate, or seasonality of the
businesses of the Gen-X Companies.
1.10. "Global Management" means the officers and directors of Global other
than Xxxxxx, Xxxxxxxxxxx or any employee reporting to Xxxxxx or Xxxxxxxxxxx.
1.11. "Inventory" means, with respect to a Person, all inventory,
merchandise, goods, packaging, supplies, boxes and other personal property
held for sale or rental in the business conducted by the Person and its
Subsidiaries, wherever such property is located, and any prepaid deposits for
any of the same.
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1.12. "Judgment" means any order, writ, injunction, citation, award, decree
or other judgment of any nature of any foreign, federal, state, provincial or
local court, governmental body, administrative agency, regulatory authority or
arbitration tribunal.
1.13. "Law" means any provision of any foreign, federal, state, provincial
or local law, statute, ordinance, charter, constitution, treaty, rule or
regulation.
1.14. "Obligation" means any debt, liability or obligation of any nature,
whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated,
accrued, absolute, fixed, contingent, ascertained, unascertained, known,
unknown or otherwise.
1.15. "Original Investor Group" means DMJ and the individuals set forth on
Schedule A.
1.16. "Permitted Encumbrance" means (a) any lien for Taxes which are not yet
due or which are being contested in good faith by appropriate proceedings
diligently prosecuted, in either case provided that adequate reserves therefor
have been established in accordance with GAAP; (b) any carrier's,
warehouseman's, mechanic's, materialman's, repairman's, landlord's or similar
statutory or inchoate lien incidental to the ordinary conduct of business
which involves an obligation that is not more than sixty (60) days past due or
which is being contested in good faith by appropriate proceedings diligently
prosecuted, in either case provided that adequate reserves therefor have been
established in accordance with GAAP; or (c) any interest of a governmental
agency in any lawfully made pledge or deposit under workers' compensation,
unemployment insurance or other social security statutes. Notwithstanding the
foregoing, Permitted Encumbrances shall not include any Encumbrance that was
incurred or arose in connection with any Obligation to pay or guarantee the
payment of borrowed funds including, but not limited to, funds obtained as a
result of bank debt, capitalized lease, installment purchase or other
financing activity.
1.17. "Person" means any individual, sole proprietorship, joint venture,
partnership, corporation, association, cooperative, trust, estate,
governmental body, administrative agency, regulatory authority or other entity
of any nature.
1.18. "Prime Rate" means the prime rate of general application as set forth
in the "Money Rates" section (or such future section as shall replace it) of
The Wall Street Journal (Eastern Edition), as published on a specified date or
dates, or, if no date(s) are specified, as the same shall be published from
time to time.
1.19. "Proceeding" means any suit, action, litigation, governmental
investigation, arbitration, administrative hearing or other legal proceeding
of any nature.
1.20. "Restructuring Plan" means the restructuring plan set forth on
Schedule 1.20.
1.21. "Subsidiary" means, with respect to any Person, any other Person as to
which such person directly or indirectly owns or has the power to vote, or to
exercise a controlling influence with respect to, 50% or more of the
securities or interests of any class of such other person which are entitled
to vote for the election of directors or others performing similar functions.
1.22. "Tax" means (a) any foreign, federal, provincial, state or local
income, earnings, profits, gross receipts, franchise, capital stock, net
worth, sales, use, occupancy, general property, real property, personal
property, intangible property, transfer, fuel, excise, payroll, withholding,
unemployment compensation, social security or other tax of any nature, (b) any
foreign, federal, state, provincial or local organization fee, qualification
fee, annual report fee, filing fee, occupation fee, assessment, sewer rent or
other fee or charge of any nature, or (c) any deficiency, interest or penalty
imposed with respect to any of the foregoing.
1.23 "Amendment Date" means the date on which Amendment No. 1 to this
Agreement is made and entered into.
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2. THE TRANSACTION
2.1. Sale of Gen-X Equipment and Gen-X Holdings. On the Closing Date (as
defined in Section 10.1), (i) Global shall sell, transfer, assign and convey
to U.S. Co., and U.S. Co. shall purchase, all right, title and interest in and
to all of the issued and outstanding shares of capital stock of Gen-X
Holdings, and (ii) Global shall sell, transfer, assign and convey to Canadian
Co, and Canadian Co. shall purchase, all right, title and interest in and to
all of the issued and outstanding shares of capital stock of Gen-X Equipment
(the issued and outstanding shares of capital stock of Gen-X Holdings and Gen-
X Equipment are collectively referred to herein as the "Gen-X Stock").
3. PURCHASE PRICE AND CLOSING FINANCIAL STATEMENTS
3.1. Purchase Price. Subject to the adjustments and provisions of Sections
3.2 and 3.3, the total purchase price (the "Purchase Price") for the Gen-X
Stock shall consist of the following:
(a) Gen-X Holdings Stock. On the Amendment Date, U.S. Co. shall, and DMJ,
Xxxxxx and Xxxxxxxxxxx shall cause U.S. Co. to, deliver to Xxxxxx Xxxxxx
Gervais LLP as escrow agent, to be held by such escrow agent pursuant to
the escrow agreement (the "Purchase Price Escrow Agreement") attached
hereto as Exhibit "T", a cash payment in the amount of Six Million Dollars
($6,000,000) and on the Closing Date, U.S. Co. shall, and DMJ, Xxxxxx and
Xxxxxxxxxxx shall cause U.S. Co. to (i) deliver to Global a cash payment in
the amount of Three Million Six Hundred Thousand Dollars ($3,600,000) (the
"Gen-X Holdings Closing Payment"), and (ii) assume Global's non-negotiable
subordinated notes in the original aggregate principal amount of Three
Million Nine Hundred Sixty Thousand Dollars ($3,960,000) payable to Gen-X
Holdings, dated as of the Closing Date (the "Replacement Notes"), together
with all accrued and unpaid interest thereon; and
(b) Gen-X Equipment Stock. On the Closing Date, Canadian Co. shall, and
U.S. Co., DMJ, Xxxxxx and Xxxxxxxxxxx shall cause Canadian Co. to, deliver
to Global a cash payment (together with the Gen-X Holdings Closing Payment,
the "Closing Payment") in the amount of Three Million Six Hundred Thousand
Dollars ($3,600,000).
3.2 Purchase Price Adjustment.
(a) If, during the two hundred seventy-three (273) day period following
the Closing Date, either Buyer or any of the Gen-X Companies enter into an
agreement, option or understanding or executes a letter of intent,
agreement in principle or definitive agreement with any of the parties set
forth on Schedule 3.2(a) (a "Sale Transaction Agreement") with respect to
or that is likely to result in a Sale Transaction (as defined below), then
the Purchase Price shall be increased by an amount (the "Purchase Price
Adjustment") determined as follows:
(1) If the Company enters into or executes a Sale Transaction
Agreement within ninety-one (91) days following the Closing Date, the
Purchase Price Adjustment shall be equal to seventy-five percent (75%)
of the amount, if any, by which (i) the Sale Transaction Consideration
(as defined below) exceeds (ii) Thirteen Million Two Hundred Thousand
Dollars ($13,200,000);
(2) If the Company enters into or executes a Sale Transaction
Agreement on or after ninety-two (92) days and prior to one hundred
eighty-two (182) days following the Closing Date, the Purchase Price
Adjustment shall be equal to fifty percent (50%) of the amount, if any,
by which (i) the Sale Transaction Consideration exceeds (ii) Thirteen
Million Two Hundred Thousand Dollars ($13,200,000); and
(3) If the Company enters into or executes a Sale Transaction
Agreement on or after one hundred eighty three (183) days and prior to
two hundred seventy-three (273) days following the Closing Date, the
Purchase Price Adjustment shall be equal to fifteen percent (15%) of
the amount, if any, by which (i) the Sale Transaction Consideration
exceeds (ii) Thirteen Million Two Hundred Thousand Dollars
($13,200,000).
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(b) For the purposes of this Agreement, a Sale Transaction shall mean (i)
any transaction or series of related transactions in which either Buyer or
any of the Gen-X Companies sells, assigns, transfers, leases or licenses
all or a substantial portion of its Assets, (ii) any transaction or series
of related transactions (including any reorganization, merger,
consolidation or other business combination) in which either Buyer or any
of its Subsidiaries sells, assigns or transfers 50% or more of the
outstanding capital stock (or other outstanding ownership interests) of any
of the Gen-X Companies, (iii) any transaction or series of related
transactions (including any reorganization, merger, consolidation or other
business combination, but not including public offerings of equity
securities) in which DMJ, Xxxxxx and/or Xxxxxxxxxxx sells, assigns or
transfers 50% or more of the outstanding capital stock (or other
outstanding ownership interests) of either Buyer, (iv) any transaction or
series of related transactions (other than public offerings of equity
securities) in which any Person or group of Persons acquires "beneficial
ownership" within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of 50% or more of the capital
stock of either Buyer or any of the Gen-X Companies, (v) any liquidation,
dissolution or winding up of either Buyer or any of the Gen-X Companies, or
(vi) any other transaction or series of related transactions the purpose or
effect of which is to sell, assign or transfer control or a majority of the
ownership of either Buyer or any of the Gen-X Companies or to sell, assign
or transfer the business or goodwill of either Buyer or any of the Gen-X
Companies; provided, however, that the implementation of the Restructuring
Plan shall not in and of itself constitute a Sale Transaction.
(c) For purposes of this Agreement, Sale Transaction Consideration shall
mean the total amount of cash and the fair market value (on the date of the
closing of the Sale Transaction) of all other securities and/or property
paid or payable directly or indirectly to either Buyer and/or any of the
Gen-X Companies or any of its securityholders (or holders of ownership
interests) in connection with the Sale Transaction (including (i) amounts
paid to holders of any warrants or convertible securities of either Buyer
and/or any of the Gen-X Companies or to holders of any options or stock
appreciation rights issued by either Buyer and/or any of the Gen-X
Companies, whether or not vested; (ii) the fair market value of any assets
of either Buyer and/or any of the Gen-X Companies which are retained by or
otherwise distributed to their securityholders (or holders of ownership
interests) or Affiliates in anticipation of or in connection with the Sale
Transaction; (iii) amounts characterized as deferred compensation,
consulting fees, non-competition payments and private pension benefits
unless the payments are for actual bona fide services and are commercially
reasonable in amount for such services); and (iv) assumption of the
outstanding amounts due under the U.S. Co. Promissory Note and/or the
Canadian Co. Promissory Note.
(d) No adjustment under this Section 3.2 shall result in a decrease to
the Purchase Price. Any amount paid under this Section 3.2 is intended by
all parties to be, and shall be treated by the parties as, an adjustment to
the Purchase Price.
(e) The Purchase Price Adjustment shall be paid in full in cash by Buyers
to Global contemporaneously with the closing of the Sale Transaction;
provided, however, that if the Sale Transaction Consideration is payable in
installments and/or consists of non-cash consideration Global shall have
the right, but not the obligation, to receive the Purchase Price Adjustment
as and when each installment of the Sale Transaction Consideration is
payable and/or in the form of such non-cash consideration.
(f) Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx shall notify Global in writing
within three (3) business days after either Buyer, DMJ, Xxxxxx, Xxxxxxxxxxx
or any of the Gen-X Companies enter into or execute a Sale Transaction
Agreement. Notwithstanding the immediately preceding sentence, Buyers, DMJ,
Xxxxxx and Xxxxxxxxxxx shall notify Global in writing at least thirty (30)
days prior to the consummation of a Sale Transaction.
(g) If the Sale Transaction Consideration shall consist in whole or in
part of non-cash consideration, the fair market value of such consideration
shall be determined by agreement between Global and Buyers. If Global and
Buyers cannot agree upon the fair market value of such consideration within
ten (10) days after the consummation of the Sale Transaction, Global and
Buyers shall each select an appraiser who shall determine within thirty
(30) days after the closing date of the sale the fair market value of such
consideration as of the closing date of the Sale Transaction. If the two
appraisers agree upon the fair market value of such
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consideration, the agreed upon value shall be the fair market value of such
consideration. If the appraisers do not agree upon the fair market value of
such consideration, the higher of the two appraisals is not more than 110%
of the lower of the appraisals, the fair market value of such consideration
shall be the mean of the two appraisals. If the higher of the two
appraisals is greater than 110% of the lower appraisal, the two appraisers
shall jointly select a third appraiser who independently shall determine
within sixty (60) days after the closing date of the Sale Transaction the
fair market value of such consideration as of the closing date of the Sale
Transaction. The fair market value of such consideration as determined by
the third appraiser will be arithmetically averaged with the two appraisals
determined by the prior two appraisers, and the appraisal farthest from the
average of the three appraisals will be disregarded. The fair market value
of such consideration shall be the average of the two remaining appraisals.
3.3. Currency and Method of Payment. All dollar amounts stated in this
Agreement are stated in United States currency, and all payments required
under this Agreement shall be paid in United States currency. All payments
required under this Agreement shall be made as follows unless otherwise agreed
by both the payor and the payee: (a) any payment may be made by wire transfer
of immediately available United States federal funds; (b) any payment
exceeding $100,000 shall be made by wire transfer of immediately available
United States federal funds; (c) any payment not exceeding $100,000 may be
made by ordinary check.
4. REPRESENTATIONS OF GLOBAL
Knowing that Buyers are relying thereon, Global, represents and warrants to
Buyer as follows:
4.1. Organization and Authority. Gen-X Equipment is a corporation duly
organized and validly existing under the Laws of Ontario. Gen-X Holdings is a
corporation duly organized, validly existing and in good standing under the
Laws of the state of Washington. Gen-X Equipment and Gen-X Holdings each
possess the full corporate power and authority to own their Assets, conduct
their business as presently conducted and enter into and perform this
Agreement and the transactions contemplated hereby and the Ancillary
Agreements to which they are a party or by which they are bound and the
transactions contemplated thereby.
4.2. The Gen-X Equipment Stock. The authorized capital stock of Gen-X
Equipment consists of an unlimited number of common shares and an unlimited
number of preference shares, of which 10,000 common shares are issued and
outstanding (the "Gen-X Equipment Stock") and owned beneficially and of record
by Global, free and clear of all Encumbrances, except as set forth on Schedule
4.2. Subject to obtaining the required consents set forth on Schedule 4.4,
Global has the full right to sell and transfer all right, title and interest
in and to the Gen-X Equipment Stock, and upon delivery and payment for the
Gen-X Equipment Stock as provided herein, Buyers will acquire good title
thereto, free and clear of all Encumbrances. Except for this Agreement, none
of the Global Management has entered into any outstanding Contract relating to
the issuance, sale, redemption, ownership or disposition of any of the Gen-X
Equipment Stock or other securities of Gen-X Equipment. None of the Global
Management has entered into any contract relating to any stock appreciation
rights, phantom shares, cash performance units or other similar rights issued
by Gen-X Equipment.
4.3. The Gen-X Holdings Stock. The authorized capital stock of Gen-X
Holdings consists of (i) 1,000,000 shares of Class A common shares, no par
value, and 1,000,000 shares of Class V common shares, no par value, of which
9,650 shares and 350 shares, respectively, are issued and outstanding (the
"Gen-X Holdings Common Stock") and owned beneficially and of record by Global,
free and clear of all Encumbrances, except as set forth on Schedule 4.3, and
(ii) 1,000,000 preferred shares, of which 49,975 shares are issued and
outstanding (the "Gen-X Holdings Preferred Stock") and owned beneficially and
of record by Global, free and clear of all Encumbrances (the Gen-X Holdings
Common Stock and the Gen-X Holdings Preferred Stock being collectively
referred to as the "Gen-X Holdings Stock"). Global has the full right to sell
and transfer all right, title and interest in and to the Gen-X Holdings Stock,
and upon delivery and payment for the Gen-X Holdings Stock as provided herein,
Buyers will acquire good title thereto, free and clear of all Encumbrances.
Except for this Agreement, none of the Global Management has entered into any
outstanding Contract relating to the issuance, sale, redemption, ownership or
disposition of any of the Gen-X Holdings Stock or other securities of
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Gen-X Holdings. None of the Global Management has entered into any contract
relating to any stock appreciation rights, phantom shares, cash performance
units or other similar rights issued by Gen-X Holdings.
4.4. Effect of Agreement. The execution, delivery and performance of the
Acquisition Agreements by Global (to the extent it is a party thereto or bound
thereby), and the consummation by it of the transactions contemplated hereby
and thereby, (a) have been duly authorized by all necessary corporate actions
by its board of directors and shareholders, except that Global is required to
obtain the approval of this Agreement and the transactions contemplated hereto
by its shareholders (the "Global Shareholder Approval"), (b) do not constitute
a breach or violation of, or a default under, the certificate of
incorporation, bylaws or other organizational document of Global, (c) do not
constitute a breach or violation of, or a default under, any Contract to which
Global is a party or by which Global is bound or its assets or business, (d)
do not constitute a violation of any Law or Judgment applicable to Global or
its assets or business, (e) do not result in the creation of any Encumbrance
upon, or give to any other Person any interest in, the Gen-X Equipment Stock
or the Gen-X Holdings Stock, and (f) except as may be required under the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Bylaws of the National Association of Securities Dealers, Inc. (the "NASD")
and for the Global Shareholder Approval and the Consents set forth on Schedule
4.4 (the "Global Required Consents"), do not require the Consent of any
Person; except in the case of clauses (c), (d), and (f) for breaches,
violations, defaults, interests or Consents which would not have a material
adverse effect on the ability of Global to consummate the transactions
contemplated by this Agreement. This Agreement constitutes, and the Ancillary
Agreements when executed and delivered will constitute, the valid and legally
binding agreements of Global enforceable against it (to the extent it is a
party thereto or bound thereby) in accordance with their respective terms.
4.5. Proceedings and Judgments. Except as described on Schedule 4.5, to the
knowledge of Global, (a) no Proceeding is currently pending or threatened, to
which any of the Gen-X Companies are a party, except any such Proceeding that
would not have a Gen-X Material Adverse Effect, or by which the Gen-X Holdings
Stock or the Gen-X Equipment Stock is affected, and (b) no Judgment is
currently outstanding against any of the Gen-X Companies, except any such
Judgment that would not have a Gen-X Material Adverse Effect, or by which the
Gen-X Holdings Stock or the Gen-X Equipment Common Shares is affected.
4.6. Brokerage Fees. Except for Deutsche Bank Alex. Xxxxx, the fees of which
will be paid by Global, no Person acting on behalf of Global is entitled to
any brokerage, finder=s or other similar fee or commission in connection with
the transactions contemplated by this Agreement.
4.7. Full Disclosure. No representation or warranty made by Global in this
Agreement or the Ancillary Agreements or pursuant hereto or thereto contains
any untrue statement of any material fact or omits to state any material fact
that is necessary to make the statements made, in the context in which made,
not false or misleading.
5. REPRESENTATIONS OF BUYERS, DMJ, XXXXXX AND XXXXXXXXXXX
Knowing that Global is relying thereon, Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx,
jointly and severally, represent and warrant to Global as follows:
5.1. Organization and Authority. Each Buyer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. DMJ is a limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Buyers and DMJ each possess the full corporate power and
authority to own their respective Assets, conduct their respective businesses
as presently conducted, and enter into and perform this Agreement and the
transactions contemplated hereby and the Ancillary Agreements to which they
are a party or by which they are bound and the transactions contemplated
thereby. Xxxxxx and Xxxxxxxxxxx each have the full capacity, power and
authority to enter into and perform this Agreement and the transactions
contemplated hereby and the Ancillary Agreements to which they are a party and
by which they are bound and the transactions contemplated thereby.
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5.2. Effect of Agreement. The execution, delivery and performance of the
Acquisition Agreements by Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx (to the extent
they are parties thereto or bound thereby), and the consummation by them of
the transactions contemplated hereby and thereby, (a) in the case of Buyers
and DMJ, have been duly authorized by all necessary corporate actions by their
boards of directors and shareholders, (b) in the case of Buyers and DMJ, do
not constitute a breach or violation of, or a default under, the certificate
of incorporation or bylaws (or other organization documents) of Buyers, (c) do
not constitute a breach or violation of, or a default under, any Contract to
which Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx are parties or by which Buyers are
bound, (d) do not constitute a violation of any Law or Judgment applicable to
Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx (e) do not result in the creation of any
Encumbrance upon, or give to any other Person any interest in, Buyers' capital
stock or in the business or Assets of Buyers, and (f) except as may be
required under the HSR Act, the Exchange Act, and the Bylaws of the NASD and
for the Consents set forth on Schedule 5.2 (the "Buyer Required Consents"), do
not require the Consent of any Person; except in the case of clauses (c), (d)
and (f) for breaches, violations, defaults, Encumbrances, interests or
Consents which would not have a material adverse effect on the ability of
Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx to consummate the transactions contemplated
by this Agreement. This Agreement constitutes, and the Ancillary Agreements
when executed and delivered will constitute, the valid and legally binding
agreements of Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx enforceable against them (to
the extent they are parties thereto or bound thereby) in accordance with their
respective terms.
5.3. Global Preferred Stock and Contingent Notes. DMJ owns, free and clear
of all Encumbrances and has the full right to sell and transfer all right,
title and interest in and to Seven Thousand Two Hundred (7,200) shares of
Global preferred stock, par value $.01 per share (the "Global Preferred
Stock") Global's non-negotiable subordinated contingent notes in the aggregate
original principal amount of Four Million Five Hundred Thousand Dollars
($4,500,000), dated May 12, 1998 (the "Contingent Notes"), and upon delivery
of the Global Preferred Stock and the Contingent Notes as provided in the
Restructuring Plan, Global will acquire good title thereto, free and clear of
all Encumbrances.
5.4. Operations and Obligations of Buyer. Except as set forth on Schedule
5.4, Buyers were formed solely for the purpose of engaging in the transactions
contemplated by this Agreement and the Ancillary Agreements, and neither Buyer
has other than the transactions, engaged in any business activities, conducted
any operations or incurred or agreed to incur any obligation.
5.5. Proceedings and Judgments. Except as described on Schedule 5.5, (a) no
Proceeding is currently pending, or to the knowledge of DMJ, Xxxxxx and
Xxxxxxxxxxx, threatened, to which Buyers DMJ, Xxxxxx or Xxxxxxxxxxx are
parties, or by which Buyers' capital stock or the business or Assets of Buyers
are affected, and (b) no Judgment is currently outstanding against Buyers,
DMJ, Xxxxxx or Xxxxxxxxxxx or by which Buyers' capital stock or the business
or Assets of Buyers are affected other than the transactions.
5.6. Brokerage Xxxx.Xx Person acting on behalf of Buyers DMJ, Xxxxxx or
Xxxxxxxxxxx is entitled to any brokerage or finder's fee in connection with
the transactions contemplated by this Agreement.
5.7. Investment Matters. The Gen-X Stock to be received by Buyers hereunder
is being acquired for investment purposes only and not with a view to, or for
sale in connection with, any resale or distribution in violation of the
Securities Act of 1933, as amended (the "1933 Act"). Buyers have had access to
or been furnished with all information about the Gen-X Companies which they
believe is necessary to evaluate the purchase of the Gen-X Stock. Buyers
believe that they are fully knowledgeable or have been fully apprised of all
facts and circumstances necessary to permit them to make an informed decision
about the Gen-X Stock to be received by Buyers hereunder, that they has
sufficient knowledge and experience in business and financial matters, that
they are capable of evaluating the merits and risks of an investment in such
securities, and that they have the capacity to protect their own interests in
connection with the transactions contemplated hereby. Buyers are "accredited
investors" as defined in Regulation D under the 1933 Act. Buyers have been
advised by Global and understand that (a) the Gen-X Stock to be received by
Buyers hereunder will not be registered under the 1933 Act or any securities
Law of any Governmental Authority, and (b) such securities must be held
indefinitely
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unless and until they are subsequently registered under the 1933 Act and all
other applicable securities Laws or an exemption from registration becomes
available.
5.8. Obligations. Neither of DMJ, Xxxxxx or Xxxxxxxxxxx has incurred any
Obligation on behalf of Global or any of its Subsidiaries other than the Gen-X
Companies.
5.9. Negotiations. Neither Xxxxxx, Xxxxxxxxxxx nor any of their Affiliates
or representatives have engaged in the past six (6) months in any discussion
with any Person or any Subsidiary, Affiliate, representative or advisor of any
Person listed on Schedule 5.9 regarding (i) the sale, conveyance or
disposition of all or substantially all of the assets of the Gen-X Companies
or any transaction in which more than fifty percent (50%) of the voting power
of the Gen-X Companies is disposed of, or (iii) regarding any other form of
acquisition, liquidation, dissolution or winding up of the Gen-X Companies.
5.10. Global Representations. To the knowledge of DMJ, Xxxxxx and
Xxxxxxxxxxx, no representation or warranty made by Global in any of the
Acquisition Agreements or pursuant thereto contains any untrue statement of
any material fact or omits to state any material fact that is necessary to
make the statements made, in the context in which made, not false or
misleading.
5.11. Competition Act. There is no requirement to make any filing, give any
notice, or obtain any authorization, in connection with the Competition Act
(Canada) as a condition to the lawful completion of the transactions
contemplated by this Agreement.
5.12. Full Disclosure. No representation or warranty made by Buyers, DMJ,
Xxxxxx or Xxxxxxxxxxx in this Agreement or the Ancillary Agreements or
pursuant hereto or thereto contains any untrue statement of any material fact
or omits to state any material fact that is necessary to make the statements
made, in the context in which made, not false or misleading.
5.13. Xxxx-Xxxxx-Xxxxxx. Buyers are their own "ultimate parent entity" as
such term is defined pursuant to the HSR Act. Except for Buyers, no other
person or entity is an ultimate parent entity of Buyers. Buyers and all
entities controlled by them, on a consolidated basis, do not (i) hold
$10,000,000 in total assets (as shown on Buyers' most recent regularly
prepared balance sheet) or (ii) have $10,000,000 in annual net sales (as shown
on Buyers' most recent regularly prepared annual statement of income and
expense), as such amounts are determined under HSR. For purposes of this
Section 5.7, the terms "controlled", "annual net sales", "regularly prepared
annual statement of income and expense", "total assets" and "regularly
prepared balance sheet" shall have the meanings ascribed to them pursuant to
the HSR Act.
6. CERTAIN OBLIGATIONS OF GLOBAL PENDING CLOSING
6.1. Global Shareholders' Meeting. Promptly after the date of this
Agreement, Global shall prepare and cause to be filed with the SEC a proxy
statement (the "Proxy Statement") to be sent to the shareholders of Global in
connection with the Global Shareholders' Meeting (as defined below). Subject
to the exercise by the board of directors of Global of its fiduciary duties
under applicable Law, Global shall take all action reasonably necessary under
all applicable Law to call, give notice of, convene and hold a meeting of
Global's shareholders (the "Global Shareholders' Meeting") to consider, act
upon and vote upon the approval of this Agreement and the transactions
contemplated hereby.
6.2. Conduct Pending Closing. During the period from the date of this
Agreement to the Closing Date, except with the express prior written consent
of Buyers, Global shall cause the Gen-X Companies to conduct their respective
businesses in the ordinary course and shall cause the Gen-X Companies not make
any changes in the business of the Gen-X Companies that would have a Gen-X
Material Adverse Effect or to pay any dividend or distribution to Global.
6.3. Consents. Between the date of this Agreement and the Closing Date,
Global shall, and Global shall cause the Gen-X Companies to, in good faith,
use all reasonable efforts to obtain as promptly as practicable the
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Global Required Consents, including all required filings under the HSR Act,
and cooperate with Buyers in obtaining the Buyer Required Consents.
6.4. Advice of Changes. Between the date of this Agreement and the Closing
Date, Global shall promptly advise Buyers in writing of any fact of which any
of them obtains knowledge and which, if existing or known as of the date of
this Agreement, would have been required to be set forth or disclosed in or
pursuant to any of the Acquisition Agreements (it being understood that any
such advice shall not be deemed to modify the representations, warranties or
covenants of Global contained in the Acquisition Agreements or any written
statement, document or certificate delivered by Global under or in connection
with the Acquisition Agreements).
6.5. Reasonable Efforts. Global shall, and Global shall cause the Gen-X
Companies to, use all reasonable efforts to consummate the transactions
contemplated by the Acquisition Agreements as promptly as practicable.
6.6. Investment Canada Notice. Global, within thirty (30) days after the
Closing Date, will make, or cause to be made, together with Buyers, DMJ,
Xxxxxx and Xxxxxxxxxxx, the filing of any requisite notice under the
Investment Canada Act.
7. CERTAIN OBLIGATIONS OF BUYERS, DMJ, XXXXXX AND XXXXXXXXXXX PENDING CLOSING
7.1. Consents. Between the date of this Agreement and the Closing Date,
Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx shall, in good faith, use all reasonable
efforts to obtain as promptly as practicable, the Buyer Required Consents,
including all required filings under the HSR Act, and shall cooperate with
Global in obtaining the Global Required Consents.
7.2. Advice of Changes. Between the date of this Agreement and the Closing
Date, Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx shall promptly advise Global in
writing of any fact of which it obtains knowledge and which, if existing or
known as of the date of this Agreement, would have been required to be set
forth or disclosed in or pursuant to any of the Acquisition Agreements (it
being understood that any such advice shall not be deemed to modify the
representations, warranties or covenants of Buyers contained in any of the
Acquisition Agreements or any written statement, document or certificate
delivered by Buyers under or in connection with any of the Acquisition
Agreements).
7.3. Reasonable Efforts. Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx shall use all
reasonable efforts to consummate the transactions contemplated by the
Acquisition Agreements.
7.4. Conduct Pending Closing. During the period from the date of this
Agreement to the Closing Date, except with the express prior written consent
of Global, Xxxxxx and Xxxxxxxxxxx shall cause the Gen-X Companies to conduct
their respective businesses in the ordinary course and shall not make any
changes in the business of the Gen-X Companies that would have a Gen-X
Material Adverse Effect.
7.5. Investment Canada Notice. Each of Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx,
within thirty (30) days after the Closing Date, will make, or cause to be
made, together with Global, the filing of any requisite notice under the
Investment Canada Act.
7.6. This Section Intentionally Left Blank.
7.7. Certain Obligations. Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx shall cause
Global and all of its subsidiaries other than the Gen-X Companies to be
released from any and all obligations that Global has to Ride, Inc., RoyNat
and their Affiliates.
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8. CONDITIONS PRECEDENT TO CLOSING BY GLOBAL
Each obligation of Global to be performed on the Closing Date shall be
subject to the satisfaction of each of the following conditions, except to the
extent that such satisfaction is waived by Global in writing:
8.1. Representations of Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx.
8.1.1 Subject to Section 8.1.2, the representations and warranties of
Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx contained in this Agreement shall have
been true in all material respects on and as of the date made and shall be
true in all material respects on and as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date, except that
any representation or warranty made as of a specified date shall be true in
all material respects on and as of such date, in each case without giving
effect to any advice given by Buyers under Section 7.2.
8.1.2 The representations and warranties of Buyers, DMJ, Xxxxxx and
Xxxxxxxxxxx contained in this Agreement that are qualified by materiality
shall have been true in all respects on the date of this Agreement and
shall be true in all respects on and as of the Closing Date, except that
any such representation or warranty made as of a specified date shall be
true in all respects on and as of such date, in each case without giving
effect to any advice given by Buyers under Section 7.2.
8.2. Performance by Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx. All of the
covenants, terms, obligations and conditions of this Agreement to be satisfied
or performed by Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx on or before the Closing
Date shall have been substantially satisfied or performed.
8.3. This Section Intentionally Left Blank.
8.4. Global Shareholder Approval. The Global Shareholder Approval shall have
been obtained.
8.5. Restructuring. The Restructuring shall be in form and substance
reasonably satisfactory to Global.
8.6. Removal from Obligations. Global and all of its Subsidiaries other than
the Gen-X Companies shall have been released from any and all obligations to
Ride, Inc., RoyNat and their Affiliates.
8.7. Absence of Proceedings. No Proceeding shall have been instituted on or
before the Closing Date by any Person (other than Global and/or any of the
Gen-X Companies), no Judgment shall have been issued, and no new Law shall
have been enacted, that seeks to or does prohibit or restrain, or that seeks
material damages as a result of, the consummation of the transactions
contemplated by the Acquisition Agreements.
8.8. Fairness Opinion. Global shall have received the written opinion of its
financial advisor to the effect that, as of the date of approval by the board
of directors of Global of the Acquisition Agreements, the consideration to be
received by Global for the Gen-X Stock in connection with the transactions
contemplated by the Acquisition Agreements is fair, from a financial point of
view, to Global, which written opinion shall not have been withdrawn, modified
or changed.
9. CONDITIONS PRECEDENT TO CLOSING BY BUYERS
Each obligation of Buyers to be performed on the Closing Date shall be
subject to the satisfaction of each of the following conditions, except to the
extent that such satisfaction is waived by Buyers in writing:
9.1. Representations of Global.
9.1.1 Subject to Section 9.1.2, the representations and warranties of
Global contained in this Agreement shall have been true in all material
respects on and as of the date made and shall be true in all material
respects on and as of the Closing Date, with the same force and effect as
though made on and as of the Closing Date, except that any representation
or warranty made as of a specified date shall be true in all material
respects on and as of such date, in each case without giving effect to any
advice given by Global under Section 6.4.
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9.1.2 The representations and warranties of Global contained in this
Agreement that are qualified by materiality shall have been true in all
respects on the date of this Agreement and shall be true in all respects on
and as of the Closing Date, except that any such representation or warranty
made as of a specified date shall be true in all respects on and as of such
date, in each case without giving effect to any advice given by Global
under Section 6.4.
9.2. Performance by Global. All of the covenants, terms, obligations and
conditions of this Agreement to be satisfied or performed by Global on or
before the Closing Date shall have been substantially satisfied or performed.
9.3. Absence of Proceedings. No Proceeding shall have been instituted on or
before the Closing Date by any Person (other than Buyers, DMJ, Xxxxxx or
Xxxxxxxxxxx), no Judgment shall have been issued, and no new Law shall have
been enacted, that seeks to or does prohibit or restrain, or that seeks
material damages as a result of, the consummation of the transactions
contemplated by the Acquisition Agreements.
9.4. Acceleration of Vesting of Options. Global shall have accelerated (a)
the vesting of all of the options to purchase shares of Global common stock,
par value $.01 per share ("Global Common Stock"), held as of the date hereof
by Xxxxxx and Xxxxxxxxxxx, so that such options shall become exercisable as of
the Amendment Date; and (b) the vesting of the options granted to the
employees set forth on Schedule 9.4 in the aggregate amount of 281,930 shares
of Global Common Stock, so that such options shall become exercisable as of
the Amendment Date.
10. CLOSING
10.1. Closing. Unless this Agreement is terminated in accordance with
Section 13, the closing of the transactions contemplated by this Agreement
("Closing") shall be held at 10:00 A.M. Philadelphia, Pennsylvania time on
such date and at such time as is agreed upon by Global and Buyers which shall
be no later than the second business day after the satisfaction or waiver of
all conditions set forth in Sections 8 and 9 hereof, unless another date and
time is agreed upon by Global and Buyers ("Closing Date"). The Closing shall
be held at the offices of Blank Rome Comisky & XxXxxxxx LLP, Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000 or such other location as is agreed upon by Global and
Buyers.
10.2. Obligations of Global. At the Closing, Global shall deliver or cause
to be delivered the following to Buyers:
10.2.1 Gen-X Equipment Stock. Stock certificates representing all of the
Gen-X Equipment Stock, together with assignments separate from certificate
in blank, dated the Closing Date and duly executed by Global, and stamps or
other proper evidence of the payment of any stock transfer or similar Taxes
due as a result of the transfer of such stock, to transfer all of the Gen-X
Equipment Stock.
10.2.2 Gen-X Holdings Stock. Stock certificates representing all of the
Gen-X Holdings Stock, together with assignments separate from certificate
in blank, dated the Closing Date and duly executed by Global, and stamps or
other proper evidence of the payment of any stock transfer or similar Taxes
due as a result of the transfer of such stock, to transfer all of the Gen-X
Holdings Stock.
10.2.3 This Section Intentionally Left Blank.
10.2.4 Corporate Records and Minute Books. All of the original minute
books and stock books of the Gen-X Companies.
10.2.5 Certified Resolutions. Copies of the resolutions duly adopted by
the board of directors, and if necessary the shareholders, of Global,
authorizing Global to execute, deliver and perform this Agreement and to
consummate the transactions contemplated by this Agreement, certified by an
officer of Global as in full force and effect, without modification or
rescission, on and as of the Closing Date.
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10.2.6 Termination of Employment Agreements. Termination Agreements in
the forms attached hereto as Exhibit "C" and Exhibit "D", relating to the
Employment Agreements of Xxxxxx and Xxxxxxxxxxx, duly executed by Global as
of the Closing Date.
10.2.7 This Section Intentionally Left Blank.
10.2.8 Right of First Offer Agreement. Right of First Offer Agreement in
the form attached hereto as Exhibit "F", duly executed by Global as of the
Closing Date.
10.2.9 Non-Competition Agreement. Non-Competition Agreement in the form
attached hereto as Exhibit "G", dated the Closing Date, duly executed by
Global and Xxxxxxx X. Xxxxx.
10.2.10 Termination of Non-Competition Agreement. Termination of Non-
Competition Agreement in the form attached hereto as Exhibit "H", relating
to the Non-Competition Agreement of DMJ, Xxxxxx and Xxxxxxxxxxx duly
executed by Global as of the Closing Date.
10.2.11 Closing Certificate. A certificate dated the Closing Date and
duly executed by Global, in which Global represents and warrants to Buyers
that the conditions set forth in Sections 9.1, 9.2, 9.3 and 9.4 have been
satisfied.
10.2.12 Legal Opinion. Legal Opinion of Blank Rome Xxxxxxx & XxXxxxxx
LLP, counsel to Global in the form attached hereto as Exhibit AI A.
10.2.13 This Section Intentionally Left Blank.
10.2.14 Consents. The Global Required Consents.
10.2.15 Other Documents. All other agreements, certificates, instruments,
opinions and documents reasonably requested by Buyers in order to fully
consummate the transactions contemplated by the Acquisition Agreements.
10.3. Obligations of Buyers at Closing. At the Closing, Buyers, DMJ, Xxxxxx
and Xxxxxxxxxxx shall deliver or cause to be delivered the following to
Global:
10.3.1 Closing Payment. The Closing Payment in the amount set forth in
Section 3.1, paid in the manner set forth in Section 3.3.
10.3.2 This Section Intentionally Left Blank.
10.3.3 Proxy of DMJ. A voting proxy in favor of Global in connection with
the 800 shares of Global Preferred Stock registered in the name of DMJ.
10.3.4 Preferred Stock. Stock certificates representing 7,200 shares of
Global Preferred Stock, together with assignments separate from certificate
duly executed by DMJ to transfer such shares to Global.
10.3.5 Assignment and Assumption of Replacement Notes. Assignment and
Assumption Agreement in the form attached hereto as Exhibit "K", relating
to the Replacement Notes, duly executed by DMJ as of the Closing Date.
10.3.6 Termination of Employment Agreements. Termination Agreements in
the forms attached hereto as Exhibit "C" and Exhibit "D", relating to the
Employment Agreements of Xxxxxx and Xxxxxxxxxxx, duly executed by Xxxxxx
and Xxxxxxxxxxx, respectively, as of the Closing Date.
10.3.7 This Section Intentionally Left Blank.
10.3.8 This Section Intentionally Left Blank.
10.3.9 This Section Intentionally Left Blank.
10.3.10 This Section Intentionally Left Blank.
10.3.11 This Section Intentionally Left Blank.
10.3.12 This Section Intentionally Left Blank.
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10.3.13 Preferred Stock Purchase Agreement. Preferred Stock Purchase
Agreement in the form attached hereto as Exhibit "Q", duly executed by DMJ,
Gen-X Holdings and Gen-X Equipment as of the Closing Date.
10.3.14 Gen-X Holdings Stock. Stock certificates representing all of the
Gen-X Holdings Stock, together with assignments separate from certificate
in blank, dated the Closing Date and duly executed by U.S. Co., to be held
by the pledgeholder under the Pledge and Security Agreement to be executed
by U.S. Co.
10.3.15 This Section Intentionally Left Blank.
10.3.16 This Section Intentionally Left Blank.
10.3.17 This Section Intentionally Left Blank.
10.3.18 Certified Resolutions. Copies of the resolutions duly adopted by
the boards of directors of Buyers, authorizing such companies to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated by this Agreement, certified by an officer of such company as
in full force and effect, without modification or rescission, on and as of
the Closing Date.
10.3.19 Closing Certificate. A certificate dated the Closing Date and
duly executed by Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx, in which they
represent and warrant to Global that the conditions set forth in Sections
8.1, 8.2, 8.3, 8.4, 8.5, 8.6 and 8.7 have been satisfied.
10.3.20 Legal Opinion. Legal Opinion of Xxxxxx & Elliot, counsel to
Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx, in the form attached hereto as Exhibit
"R".
10.3.21 Consents. The Buyers Required Consents.
10.3.22 Other Documents. All other agreements, certificates, instruments,
opinions and documents reasonably requested by Global in order to fully
consummate the transactions contemplated by the Acquisition Agreements.
11. CERTAIN POST-CLOSING OBLIGATIONS
11.1. Further Assurances. At any time and from time to time after the
Closing Date, at Buyers' request, and without further consideration, Global
shall promptly execute and deliver all such further agreements, certificates,
instruments and documents, and perform such further actions, as Buyers may
reasonably request in order to fully consummate the transactions contemplated
by the Acquisition Agreements and carry out the purposes and intent of the
Acquisition Agreements. At any time and from time to time after the Closing
Date, at Global's request, and without further consideration, Buyers, DMJ,
Xxxxxx and/or Xxxxxxxxxxx shall promptly execute and deliver all such further
agreements, certificates, instruments and documents, and perform such further
actions, as Global may reasonably request in order to fully consummate the
transactions contemplated by the Acquisition Agreements and carry out the
purposes and intent of the Acquisition Agreements.
11.2. Nondisclosure
11.2.1 At all times after the Closing Date, except with Buyers' express
prior written consent, Global shall not, directly or indirectly, in any
capacity, communicate, disclose or divulge to any Person, or use for the
benefit of any Person, any confidential or proprietary knowledge or
information of the Gen-X Companies. For purposes of this Section 11.2.1,
confidential information shall not include any information that (i) is now
available to the public or which becomes available to the public other than
as a result of disclosure by Global, (ii) is or becomes available to Global
on a non-confidential basis from a source other than the Gen-X Companies,
or (iii) has been independently acquired or developed by Global without
violating any of its obligations under this Agreement.
11.2.2 At all times after the Closing Date, except with Global=s express
prior written consent, neither Buyers, DMJ, Xxxxxx nor Xxxxxxxxxxx shall,
directly or indirectly, in any capacity, communicate, disclose or divulge
to any Person, or use for the benefit of any Person, any confidential or
proprietary knowledge or information of Global. For purposes of this
Section 11.2.2, confidential information shall not include any
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information that (i) is now available to the public or which becomes
available to the public other than as a result of disclosure by Buyers,
DMJ, Xxxxxx or Xxxxxxxxxxx, (ii) is or becomes available to Buyers, DMJ,
Xxxxxx or Xxxxxxxxxxx on a non-confidential basis from a source other than
the Global, or (iii) has been independently acquired or developed by
Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx without violating any of its obligations
under this Agreement.
11.2.3 Global, on the one hand, and Buyers, DMJ, Xxxxxx nor Xxxxxxxxxxx
on the other, expressly acknowledge that any breach by it of the covenant
contained in Section 11.2.1 or 11.2.2, as the case may be (the "Covenant"),
may result in irreparable injury to the other party for which money damages
could not adequately compensate. If there is such a breach, the aggrieved
party shall be entitled, in addition to all other rights and remedies it
may have at law or in equity, to have an injunction issued by any competent
court enjoining and restraining the breaching party and all other Persons
involved therein, from continuing such breach.
11.2.4 If any portion of the Covenant or its application is construed to
be invalid, illegal or unenforceable, then the other portions and their
application shall not be affected thereby and shall be enforceable without
regard thereto. If any portion of the Covenant is determined to be
unenforceable due to its scope, duration, geographical area or similar
factor, then the court making such determination shall have the power to
reduce or limit such scope, duration, area or other factor, and such
Covenant shall then be enforceable in its reduced or limited form.
11.3. Noncompetition
11.3.1 During the period beginning on the date hereof and ending on the
date when Buyers' obligations under the U.S. Co. Promissory Note and the
Canadian Co. Promissory Note have been completely and indefeasibly
satisfied (the "Restrictive Period"), except with Global's prior written
consent, none of Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx shall, directly or
indirectly, in any capacity, at any location where any of the Gen-X
Companies currently conducts or proposes to conduct business as of the date
hereof (the "Territory"):
(A) Communicate with or solicit any Person who is or during the one-
year period prior to the Closing Date was, or during the Restrictive
Period becomes, a customer, supplier, employee, salesman, agent or
representative of, or a consultant to, any of the Gen-X Companies, in
any manner which interferes or might interfere with such Person's
relationship with any of the Gen-X Companies, or in an effort to obtain
any such Person as a customer, employee, salesman, agent or
representative of, or a consultant to, any other Person that conducts a
business competitive with or similar to all or any part of the business
of any of the Gen-X Companies as currently conducted, or
(B) Establish, own, manage, operate, finance or control, or
participate in the establishment, ownership, management, operation,
financing or control of, or be a director, officer, employee, salesman,
agent or representative of, or be a consultant to, any Person that
conducts a business competitive with or similar to all or any part of
the business of any of the Gen-X Companies as currently conducted.
11.3.2 Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx expressly acknowledge that (a)
the restrictive covenants of this Section 11.3 (the "Covenants") are a
material part of the consideration bargained for by Global, and (b) without
the agreement of Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx to be bound by the
Covenants, Global would not have agreed to enter into this Agreement and
consummate the transactions contemplated hereby.
11.3.3 Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx expressly acknowledge that any
breach by any of them of any of the Covenants will result in irreparable
injury to Global for which money damages could not adequately compensate.
If there is such a breach, Global shall be entitled, in addition to all
other rights and remedies it may have at law or equity, to have an
injunction issued by any competent court enjoining and restraining Buyers,
DMJ, Xxxxxx, Xxxxxxxxxxx and all other Persons involved therein from
continuing such breach. The existence of any claim or cause of action which
any of Buyers, DMJ, Xxxxxx, Xxxxxxxxxxx or any such other Person may have
against Global shall not constitute a defense or bar to the enforcement of
any
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of the Covenants. If Global must resort to litigation to enforce any of the
Covenants that has a fixed term, then such term shall be extended for a
period of time equal to the period during which a breach of such Covenant
was occurring, beginning on the date of a final court order (without
further right of appeal) holding that such a breach occurred or, if later,
the last day of the original fixed term of such Covenant.
11.3.4 If any portion of any Covenant or its application is construed to
be invalid, illegal or unenforceable, then the other portions and their
application shall not be affected thereby and shall be enforceable without
regard thereto. If any of the Covenants is determined to be unenforceable
due to its scope, duration, geographical area or similar factor, then the
court making such determination shall have the power to reduce or limit
such scope, duration, are or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.
11.3.5 Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx expressly acknowledge that the
provisions of this Section 11.3 of the Agreement are reasonable and valid
in all respects and irrevocably waive (and irrevocably agree not to raise)
as a defense any issue of reasonableness (including the reasonableness of
the noncompetition covenant insofar as it relates to the business of the
Gen-X Companies, the Territory or the duration or scope of the Covenants)
in any proceeding to enforce any provision of this Section 11.3 of the
Agreement, the intention of the parties being to provide for the legitimate
and reasonable protection of the interests of Global and by providing,
without limitation, for the broadest scope, the longest duration and the
widest territory allowable by law.
11.4. Removal of Assets. Buyers shall, at their expense, within ninety (90)
days after the Closing Date, remove all of the Assets owned by Gen-X Holdings
and Gen-X Equipment (including any Inventory and warehouse and racking
equipment sold by KPR Sports International, Inc. to Gen-X Holdings, or its
Affiliates, prior to the date hereof) from Global's premises, FOB King of
Prussia, without any disruption of Global's operation, and at such times as
shall be reasonably satisfactory to Global. If not so removed during such time
period, Global may, at its option, have such items shipped to Buyers at
Buyers' expense, or agree to store such items for Buyers, in which case Buyers
shall pay to Global a reasonable storage charge for such period of time that
Global stores such items. In the event Global stores such items for Buyers,
Buyers agree that Global shall have no liability with respect to such items
and hereby releases and holds harmless Global from any such liability.
11.5. Investigation
11.5.1 During the period beginning on the date hereof and ending on the
date when Buyers= obligations under the U.S. Co. Promissory Note and the
Canadian Co. Promissory Note shall have been completely and indefeasibly
satisfied:
(A) Buyers shall permit Global and its authorized representatives to
have full access to the Gen-X Companies' facilities during normal
business hours, to observe the Gen-X Companies' business operations, to
meet with the Gen-X Companies' officers and employees engaged in the
Gen-X Companies' business, and to audit, examine and copy all of the
Gen-X Companies' files, books and records, and other documents and
papers relating to the Gen-X Companies' business, and
(B) Buyers shall provide to Global and its authorized representatives
all information concerning the Gen-X Companies and the Gen-X Companies'
business and Assets, and all information concerning the financial
condition of the Gen-X Companies and the Gen-X Companies' business,
that is reasonably requested by Global.
11.5.2 The expense of any investigation by Global pursuant to this
Section 11.5 shall be borne solely by Global; provided, however, that if
there has been: (a) a misrepresentation, breach or failure of any
representation or warranty made by Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx in
any of the Acquisition Agreements or (b) a failure or refusal by Buyers,
DMJ, Xxxxxx or Xxxxxxxxxxx to satisfy or perform any covenant, term,
obligation or condition of any of the Acquisition Agreements required to be
satisfied or
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performed by Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx, then Buyers shall
reimburse Global for all reasonable fees and expenses incurred by or on
behalf of Global in connection with such investigation.
11.6. Accounting Matters, Books and Records. Commencing on the Closing Date
and continuing for a period of one year thereafter, the Gen-X Companies shall,
and DMJ, Xxxxxx, Xxxxxxxxxxx and U.S. Co shall cause the Gen-X Companies to,
(a) give Global, its counsel, accountants and other representatives access to
the accounting books, records and accounts of the Gen-X Companies during
regular business hours.
12. INDEMNIFICATION, SETOFF AND PAYMENT OF ADJUSTMENTS
12.1. Indemnification Obligations of Global. From and after the Closing,
Global shall indemnify and hold harmless Buyers and their directors, officers,
employees, Affiliates, successors and assigns, from and against any and all
Proceedings, Judgments, Obligations, losses, damages, deficiencies,
settlements, assessments, charges, costs and expenses (including, but not
limited to, reasonable attorneys' fees, investigation expenses, court costs,
interest and penalties) arising out of or in connection with, or caused by,
directly or indirectly, any or all of the following:
12.1.1 Any misrepresentation, breach or failure of any representation or
warranty made by Global in any of the Acquisition Agreements or any written
statement, document or certificate delivered to Buyers by Global under or
in connection with the Acquisition Agreements.
12.1.2 Any failure or refusal by Global to satisfy or perform any
covenant, term, obligation or condition of this Agreement required to be
satisfied or performed by any of them.
12.1.3 Amounts due to Just for Feet, Inc. resulting from purchases by
Global from Just for Feet, Inc. prior to August 1, 1999.
12.2.Indemnification Obligations of Buyers, DMJ, Xxxxxx and
Xxxxxxxxxxx. From and after the Closing, Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx,
jointly and severally, shall indemnify and hold harmless Global and its
respective directors, officers, employees, Affiliates, successors and assigns,
from and against any and all Proceedings, Judgments, Obligations, losses,
damages, deficiencies, settlements, assessments, charges, costs and expenses
(including, but not limited to, reasonable attorneys' fees, investigation
expenses, court costs, interest and penalties) arising out of or in connection
with, or caused by, directly or indirectly, any or all of the following:
12.2.1 Any misrepresentation, breach or failure of any representation or
warranty made by Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx in any of the
Acquisition Agreements or any written statement, document or certificate
delivered to Global by Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx under or in
connection with any of the Acquisition Agreements.
12.2.2 Any failure or refusal by Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx to
satisfy or perform any covenant, term, obligation or condition of any of
the Acquisition Agreements required to be satisfied or performed by Buyers,
DMJ, Xxxxxx or Xxxxxxxxxxx.
12.2.3 Any action, suit or claim arising out of, caused by or based in
whole or in part upon any act or omission of Gen-X Holdings or Gen-X
Equipment, or any of their respective shareholders, partners, directors,
executives, officers, employees, agents or representatives at any time
after the Closing or any event which occurs after the Closing.
12.2.4 Any liability of or claim against Global in connection with any
Customs Canada detailed adjustment statement issued against any of the Gen-
X Companies, including, but not limited to the Customs Canada detailed
adjustment statements issued against Gen-X Equipment: (a) dated January 27,
1999, assessing duties in the amount of Cdn$303,548, GST in the amount of
Cdn$233,650 together with interest in the amount of Cdn$72,416; and (b)
dated March 1, 1999, assessing duties in the amount of Cdn$625,985, GST in
the amount of Cdn$526,240 together with interest in the amount of
Cdn$60,232.
12.2.5 Any action, suit or claim by any of the Minority Shareholders (as
defined in the Stock Purchase Agreement, dated May 12, 1998, by and among
Global, DMJ, Xxxxxx, Xxxxxxxxxxx and certain other individuals and
entities) or any of their respective shareholders, partners, directors,
executives, officers,
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employees, agents, representatives, heirs, executors, administrators,
personal representatives or assigns arising out of, caused by or based in
whole or in part upon any act or omission of DMJ, Salter, Finkelstein, Gen-
X Holdings or Gen-X Equipment, or any of their respective shareholders,
partners, directors, executives, officers, employees, agents,
representatives, heirs, executors, administrators, personal representatives
or assigns.
12.2.6 Amounts due to Just for Feet, Inc. resulting from purchases by any
of the Gen-X Companies from Just for Feet, Inc. on or after August 1, 1999.
12.2.7 Any action, suit or claim related to, arising out of or resulting
from Gen-X Holdings' indebtedness to Ride, Inc. and its successors or
assigns, pursuant to promissory notes in the original principal amounts of
$977,624 and $1,022,376.
12.2.8 Any action, suit or claim related to, arising out of or resulting
from Gen-Holdings' indebtedness to Xxxx XxXxx, Xxxxxx X. Xxxxxxx, Xxxx X.
Xxxxxxx and Xxxxxxx X. Xxxxxxx and their respective heirs or assigns,
pursuant to promissory notes in the original principal amounts of $113,889,
$381,705, 293,094 and $211,302, respectively.
12.2.9 Any action, suit or claim related to, arising out of or resulting
from Gen-X Equipment's alleged infringement of HYI's EVEREST trademark.
12.3. Indemnification Notice. With respect to each event, occurrence or
matter ("Indemnification Matter") and with respect as to which Buyers, DMJ,
Xxxxxx or Xxxxxxxxxxx on the one hand, or Global on the other hand (referred
to as the "Indemnitee"), is entitled to indemnification from another party
(referred to as the "Indemnitor") under this Section 12, within ten days after
the Indemnitee receives any written documents underlying the Indemnification
Matter, or, if the Indemnification Matter does not involve a third party
action, suit, claim or demand, promptly after the Indemnitee first has actual
knowledge of the Indemnification Matter, the Indemnitee shall give notice to
the Indemnitor of the nature of the Indemnification Matter and the amount
demanded or claimed in connection therewith ("Indemnification Notice").
12.4. Defense of Indemnification Matters. If an Indemnification Matter
involves a third party action, suit, claim or demand, then, upon receipt of
the Indemnification Notice, the Indemnitor shall, at its expense and through
counsel of its choice, promptly assume and have sole control of the
litigation, defense or settlement of the Indemnification Matter (referred to
as the "Defense"), except that:
12.4.1 The Indemnitee may, at its option and expense and through counsel
of its choice, participate in (but not control) the Defense.
12.4.2 If the Indemnitee reasonably believes that the handling of the
Defense by the Indemnitor may have a material adverse effect on the
Indemnitee's business or its relationship with any customer, supplier,
employee, contractor, salesman, agent or representative, then the
Indemnitee may, at its option and expense and through counsel of its
choice, assume control of the Defense; provided that the Indemnitor shall
continue to be obligated to indemnify the Indemnitee with respect thereto
and shall be entitled to participate in the Defense at its expense and
through counsel of its choice, provided further that Indemnitee shall not
consent to any Judgment or agree to any settlement without Indemnitor's
prior written consent.
12.4.3 The Indemnitor shall not consent to any Judgment or agree to any
settlement without the Indemnitee's prior written consent; provided that if
the Indemnitee withholds its consent to any monetary Judgment or settlement
that is acceptable to the Indemnitor, then (a) the Indemnitor's liability
with respect to such Indemnification Matter shall be limited to such
monetary amount, and (b) the Indemnitee shall be responsible for any
additional costs reasonably incurred by the Indemnitor in connection
therewith.
12.4.4 If the Indemnitor does not promptly assume control over the
Defense diligently and in good faith or, after doing so, does not continue
to prosecute the Defense in good faith, the Indemnitee may, at its option
and through counsel of its choice, but at the Indemnitor's expense, assume
control over the Defense; provided that the Indemnitor shall continue to be
obligated to indemnify the Indemnitee with respect thereto, provided
further that Indemnitee shall not consent to any Judgment or agree to any
settlement without Indemnitor's prior written consent.
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12.4.5 In any event, the Indemnitor and the Indemnitee shall fully
cooperate with each other in connection with the Defense, including, but
not limited to, furnishing all available documentary or other evidence as
is reasonably requested by the other.
12.5. Limits on Indemnification Matters and Global's Payment.
12.5.1 Limits on Global's Payment. The amounts, if any, owed by Global to
Buyers as Indemnitor pursuant to Section 12.1 ("Global's Payment"), shall
be subject to the following:
(A) Deductible. No amount shall be payable by Global to Buyers for
Global's Payment, unless and until the aggregate amount of Global's
Payment exceeds Fifty Thousand Dollars ($50,000), in which event Global
shall pay such aggregate amount and all future amounts payable by
Global under this Section 12.
(B) Exceptions. The limitation in Sections 12.5.1(A) shall not apply
in case of any Indemnification Matter or other adjustment involving
fraud, willful misconduct or criminal matters.
(C) Duration. With respect to any Indemnification Matter, Global
shall have no liability unless Buyers give an Indemnification Notice in
accordance with Section 12.3 within 12 months after the Closing Date,
provided, however, that the limitation contained in this Section
12.5.1(C) shall not apply to any Indemnification Matter that arises
from any failure or refusal by Global to satisfy or perform any
covenant, term, obligation or condition of any of the Acquisition
Agreements required to be satisfied or performed by Global after the
Closing Date.
12.5.2 Limits on Buyers' Indemnification. The amount, if any, owed by
Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx to Global as Indemnitor pursuant to
Section 12.2 shall be subject to the following:
(A) Deductible. No amount shall be payable by Buyers, DMJ, Xxxxxx and
Xxxxxxxxxxx to Global under this Section 12, unless and until the
aggregate amount otherwise payable by Buyers, DMJ, Xxxxxx and
Xxxxxxxxxxx under this Section 12 exceeds Fifty Thousand Dollars
($50,000), in which event Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx shall pay
such aggregate amount and all future amounts payable by Buyers, DMJ,
Xxxxxx and Xxxxxxxxxxx under this Section 12.
(B) Exceptions. The limitation in Sections 12.5.2(A) shall not apply
in case of any Indemnification Matter involving fraud, willful
misconduct or criminal matters.
(C) Duration. With respect to any Indemnification Matter, Buyers
shall have no liability unless Global gives an Indemnification Notice
in accordance with Section 12.3 within 12 months after the Closing
Date, provided, however, that the limitation contained in this Section
12.5.2(C) shall not apply to any Indemnification Matter that arises
from any failure or refusal by Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx to
satisfy or perform any covenant, term, obligation or condition of any
of the Acquisition Agreements that is required to be satisfied or
performed after the Closing Date or that arises under Section 12.2.3.
12.5.3 If Global is obligated to pay Buyers any amounts under Section
12.1 after taking into account the application of the limitations contained
in Section 12.5.1(A), then any such amount payable by Global to Buyers
shall be reduced by any amounts Buyers would have been required to pay to
Global under Section 12.5.2 but for the application of the limitations
contained in Section 12.5.2(A). If Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx is
obligated to pay Global any amounts under Section 12.2 after taking into
account the limitations contained in Section 12.5.2(A), then any such
amounts payable by Buyers to Global shall be reduced by any amounts Global
would have been required to pay to Buyers under Sections 12.1 but for the
application of the limitations contained in Section 12.5.1(A).
12.6. Indemnification Payment and Buyers' Payment. All amounts owed by the
Indemnitor to the Indemnitee (if any) shall be paid in full within twenty (20)
days after a final settlement or agreement as to the amount owed is reached,
or after a final Judgment (without further right of appeal) determining the
amount owed is rendered. Any amount paid under this Section 12 is intended by
all parties and shall be considered to be and treated as an adjustment to the
Purchase Price.
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12.7. Setoff and Holdback. In addition to all other rights and remedies that
the Indemnitee may have, the Indemnitee shall have the right to setoff,
against any monies due to the Indemnitor (whether under this Agreement or
otherwise), any sums for which the Indemnitee is entitled to indemnification
under this Section 12 or any other sums which the Indemnitor may owe to the
Indemnitee (whether under this Agreement or otherwise). The Indemnitee's
rights to indemnification under this Section 12 shall under no circumstances
be in any manner limited by this right of setoff. If any Indemnification
Matters are pending at the time the Indemnitee is required to make any payment
to the Indemnitor (whether under this Agreement or otherwise), then the
Indemnitee shall pay the total amount for which the Indemnitor may become
liable as a result thereof, determined by the Indemnitee reasonably and in
good faith, to Xxxxxx & Elliot, as escrow agent, to be held by such escrow
agent pursuant to the escrow agreement (the "Escrow Agreement") attached
hereto as Exhibit "S", until final determination of such Indemnification
Matter, and shall pay the balance, if any, of such payment to the Indemnitor.
13. TERMINATION
13.1. Termination. This Agreement, and the transactions contemplated hereby,
may be terminated at any time before Closing in accordance with any of the
following methods:
13.1.1 By the mutual written consent of Global and Buyers.
13.1.2 By written notice from Global to Buyers, or from Buyers to Global,
if the Closing does not occur on or before May 31, 2000 for any reason
other than a breach of this Agreement by the party giving such notice.
13.1.3 By written notice from Buyers to Global, if it becomes certain,
for all practical purposes, that any of the conditions to the Closing
Obligations of Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx cannot be satisfied for a
reason other than Buyers', Xxxxxx'x or Xxxxxxxxxxx'x breach of this
Agreement, and Buyers are not willing to waive the satisfaction of such
condition.
13.1.4 By written notice from Global to Buyers if it becomes certain, for
all practical purposes, that any of the conditions to the Closing
Obligations of Global cannot be satisfied for a reason other than Global=s
breach of this Agreement, and Global is not willing to waive the
satisfaction of such condition.
13.1.5 By written notice from Buyers to Global if Global breaches any of
its representations, warranties, covenants or agreements contained in this
Agreement.
13.1.6 By written notice from Global to Buyers if Buyers, DMJ, Xxxxxx or
Xxxxxxxxxxx breaches any of its representations, warranties, covenants or
agreements contained in this Agreement.
13.1.7 By written notice from Global to Buyers if Global receives an
offer from a third party to acquire Gen-X Holdings and Gen-X Equipment and
the board of directors of Global determines, in good faith, that its
fiduciary duties under applicable Law require Global to accept such offer.
13.2. Effect of Termination. Upon termination of this Agreement pursuant to
Section 13.1, this Agreement shall forthwith have no further force or effect,
and there shall be no liability on the part of any party hereto; provided,
however, that (i) this Section 13.2 and Section 14 (other than Section 14.7),
shall survive the termination of this Agreement and shall remain in full force
and effect, and (ii) the termination of this Agreement shall not relieve any
party from any breach of this Agreement prior to such termination; further
provided, however, that if Global terminates this Agreement pursuant to
Section 13.1.7, and neither Buyers, DMJ, Xxxxxx nor Xxxxxxxxxxx is in breach
of the Agreement, then Global shall pay to DMJ, within five business days
after the termination of this Agreement, a nonrefundable fee in the amount of
$1.5 million.
14. OTHER PROVISIONS
14.1. Confidentiality. During the period from the date of this Agreement to
the Closing Date, (a) each of the parties shall maintain the confidentiality
of all confidential information which is disclosed to them in connection with
this Agreement, and (b) none of the parties will discuss the existence or
nature of this Agreement
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or the transaction contemplated hereby with any of the other parties=
customers, prospects, suppliers, employees, contractors, salesmen, agents or
representatives. If this Agreement is terminated in accordance with Section
13, then each party shall promptly return all confidential information and
materials of the other parties, and the provisions of the foregoing sentence
shall survive such termination indefinitely.
14.2. Publicity. All voluntary public announcements concerning the
transactions contemplated by this Agreement shall be mutually acceptable to
both Global and Buyers. Unless required by Law, neither Global, on the one
hand, nor Buyers, DMJ, Xxxxxx or Xxxxxxxxxxx, on the other hand, shall make
any public announcement or issue any press release concerning the transactions
contemplated by this Agreement without the prior written consent of Global or
Buyers, respectively. With respect to any announcement that any of the parties
is required by Law to issue, such party shall, to the extent possible under
the circumstances, review the necessity for and the contents of the
announcement with the other parties before issuing the announcement.
14.3. Expenses. Global shall pay all of the fees and expenses incurred by it
in negotiating and preparing the Acquisition Agreements and in consummating
the transactions contemplated by the Acquisition Agreements. The Gen-X
Companies shall pay all of the fees and expenses incurred by Buyers, DMJ,
Xxxxxx and Xxxxxxxxxxx in negotiating and preparing the Acquisition Agreements
and in consummating the transactions contemplated by the Acquisition
Agreements. Notwithstanding the foregoing, Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx
(and not the Gen-X Companies) shall pay all of the fees and expenses incurred
by Buyers, DMJ, Xxxxxx and Xxxxxxxxxxx in negotiating and preparing the
Acquisition Agreements and in consummating the transactions contemplated by
the Acquisition Agreements if this Agreement, and the transactions
contemplated hereby, are terminated pursuant to Section 13.1.6 of this
Agreement.
14.4. Notices. All notices, consents or other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) three
business days after being mailed by first class certified mail, return receipt
requested, postage prepaid, or (c) one business day after being sent by a
reputable overnight delivery service, postage or delivery charges prepaid, to
the parties at their respective addresses stated on the first page or the
signature pages of this Agreement. Notices may also be given by prepaid
telegram or facsimile and shall be effective on the date transmitted if
confirmed within 24 hours thereafter by a signed original sent in the manner
provided in the preceding sentence. A copy of each notice to Buyers, DMJ,
Xxxxxx or Xxxxxxxxxxx shall be simultaneously sent to Xxxxxx & Elliot, Scotia
Plaza, 00 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0, Xxxxxx, Attn: Xxxxxx X.
Xxxxx. A copy of each notice to Global shall be simultaneously sent to: Blank
Rome Comisky & XxXxxxxx LLP, Xxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attn: Xxxxxxx X. Xxxxx, Esquire. Any party may change its address for
notice and the address to which copies must be sent by giving notice of the
new addresses to the other parties in accordance with this Section 14.4,
except that any such change of address notice shall not be effective unless
and until received.
14.5. Amendment. This Agreement may be amended, modified or supplemented by
the parties hereto, provided that any such amendment, modification or
supplement shall be in writing and signed by Global, and Buyers, DMJ, Xxxxxx
and Xxxxxxxxxxx.
14.6. Waivers. No waiver with respect to this Agreement shall be enforceable
against Global unless in writing and signed by Global. No waiver with respect
to this Agreement shall be enforceable against Buyers, DMJ, Xxxxxx and/or
Xxxxxxxxxxx unless in writing and signed by Buyers, DMJ, Xxxxxx and/or
Xxxxxxxxxxx, as the case will be. Except as otherwise expressly provided
herein, no failure to exercise, delay in exercising, or single or partial
exercise of any right, power or remedy by any party, and no course of dealing
between or among any of the parties, shall constitute a waiver of, or shall
preclude any other or further exercise of the same or any other right, power
or remedy.
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14.7. Survival of Representations. Survival of Representations. All
representations, warranties and covenants made in or pursuant to this
Agreement shall survive the date hereof, the Closing Date and the consummation
of the transactions contemplated hereby and thereby.
14.8. Entire Understanding. Entire Understanding. The Acquisition
Agreements, together with the Exhibits and Schedules hereto and thereto, state
the entire understanding among the parties with respect to the subject matter
hereof and thereof, and supersede all prior oral and written communications
and agreements, and all contemporaneous oral communications and agreements,
with respect to the subject matter hereof and thereof.
14.9. Parties in Interest. Parties in Interest. This Agreement shall bind,
benefit, and be enforceable by and against each party hereto and its
successors and assigns. Global shall not in any manner assign any of its
rights or obligations under this Agreement without the express prior written
consent of Buyers, and neither Buyers, DMJ, Xxxxxx nor Xxxxxxxxxxx shall in
any manner assign any of its rights or obligations under this Agreement
without the express prior written consent of Global.
14.10. Severability. I Severability. If any provision of this Agreement is
construed to be invalid, illegal or unenforceable, then the remaining
provisions hereof shall not be affected thereby and shall be enforceable
without regard thereto.
14.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall constitute an
original hereof, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one original counterpart hereof;
provided, however, that if acceptable to Global, Buyers, DMJ, Xxxxxx and
Xxxxxxxxxxx, the Closing may be effected by facsimile transmission of executed
copies of the signature pages to this Agreement delivered at the Closing and
by sending original copies of signature pages to this Agreement delivered at
the Closing by reputable overnight delivery service, postage or delivery
charges prepaid, for delivery to the parties at their addresses stated on the
first page or signature pages of this Agreement by the third business day
following the Closing Date.
14.12. Section Headings. The section and subsection headings in this
Agreement are for convenience of reference only, do not constitute a part of
this Agreement, and shall not affect its interpretation.
14.13. References. All words used in this Agreement shall be construed to be
of such number and gender as the context requires or permits. Unless a
particular context clearly provides otherwise, (i) the words "hereof" and
"hereunder" and similar references refer to this Agreement in its entirety and
not to any specific section or subsection hereof, and (ii) the word
"including" shall mean including but not limited to.
14.14. CONTROLLING LAW. THIS AGREEMENT IS MADE UNDER, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
14.15. Jurisdiction and Process. Each of the parties (a) irrevocably
consents to the exclusive jurisdiction of the Courts of Common Pleas of
Xxxxxxxxxx County, Pennsylvania, or the United States District Court for the
Eastern District of Pennsylvania, in any and all actions between or among any
of the parties, whether arising hereunder or otherwise, (b) irrevocably waives
its right to trial by jury in any such action, and (c) irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid, to the address at which such party is to receive notice in
accordance with Section 14.4. In any and all actions between or among any of
the parties, whether arising hereunder or otherwise, the prevailing party or
parties shall be entitled to recover their reasonable attorneys= fees and
legal expenses from the other party or parties.
14.16. No Third Party Beneficiaries. No provision of this Agreement is
intended to or shall be construed to grant or confer any right to enforce this
Agreement, or any remedy for breach of this Agreement, to or upon any Person
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other than the parties hereto, including, but not limited to, any customer,
prospect, supplier, employee, contractor, salesman, agent or representative of
any of the parties hereto.
14.17. Construction. The parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of the Acquisition
Agreements or any other agreements or documents delivered in connection with
the transactions contemplated by the Acquisition Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed, or have caused this Agreement
to be executed on their behalf by their duly authorized officers, as of the
date first stated above.
GLOBAL SPORTS, INC. DMJ FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-------------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxx Name:
Title: Chairman and CEO Title:
GEN-X ACQUISITION (U.S.), INC. GEN-X ACQUISITION (CANADA) INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------------- --------------------------------
Name: Name:
Title: Title:
/s/ Xxxxxxx X. Xxxxxxxxxxx /s/ Xxxxx X. Xxxxxx
------------------------------------ ------------------------------------
XXXXXXX X. XXXXXXXXXXX XXXXX X. XXXXXX
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