Execution Copy
ATHLETIC DIVISION
________________________________________________________________________
ASSET PURCHASE AGREEMENT
BETWEEN
FOOTSTAR, INC.,
CERTAIN OF ITS SUBSIDIARIES,
FL SPECIALTY OPERATIONS LLC,
FL RETAIL OPERATIONS LLC,
FOOT LOCKER STORES, INC.,
FOOT LOCKER RETAIL, INC.
AND
FOOT LOCKER, INC. (solely for purposes of Sections 6.6, 6.8, 6.9, and 13.10)
________________________________________________________________________
Dated as of April 13, 2004
TABLE OF CONTENTS
Page
Article I..........................................................DEFINITIONS 1
1.1 Certain Definitions..........................................1
1.2 Terms Defined Elsewhere in this Agreement....................8
1.3 Other Definitional and Interpretive Matters..................9
Article II......PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES 10
2.1 Purchase and Sale of Assets.................................10
2.2 Excluded Assets.............................................11
2.3 Assumption of Liabilities...................................13
2.4 Excluded Liabilities........................................13
2.5 Cure Amounts................................................14
2.6 Further Conveyances and Assumptions.........................14
2.7 Bulk Sales Laws.............................................14
Article III.....................................................CONSIDERATION 15
3.1 Consideration...............................................15
3.2 Purchase Price Deposit......................................15
3.3 Payment of Purchase Price...................................15
3.4 Purchase Price Adjustments..................................15
3.5 Inventory Count; Post-Closing Adjustment....................16
Article IV............................................CLOSING AND TERMINATION 20
4.1 Closing Date................................................20
4.2 Deliveries by Seller........................................20
4.3 Deliveries by Purchaser.....................................21
4.4 Termination of Agreement....................................21
4.5 Procedure Upon Termination..................................22
4.6 Effect of Termination.......................................22
Article V...........................REPRESENTATIONS AND WARRANTIES OF SELLERS 23
5.1 Organization and Good Standing..............................23
5.2 Authorization of Agreement..................................23
5.3 Conflicts; Consents of Third Parties........................23
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Page
5.4 Title to Purchased Assets...................................24
5.5 Real Property...............................................24
5.6 Intellectual Property.......................................24
5.7 Employee Benefits...........................................25
5.8 Litigation..................................................25
5.9 Compliance with Laws........................................25
5.10 Financial Advisors..........................................25
5.11 No Other Representations or Warranties; Schedules...........25
Article VI........................REPRESENTATIONS AND WARRANTIES OF PURCHASER 26
6.1 Organization and Good Standing..............................26
6.2 Authorization of Agreement..................................26
6.3 Conflicts; Consents of Third Parties........................26
6.4 Litigation..................................................27
6.5 Financial Advisors..........................................27
6.6 Financial Capability........................................27
6.7 Condition of the Business...................................27
6.8 Authorization of Guarantee..................................27
6.9 Conflicts; Consents of Third Parties........................28
Article VII..........................................BANKRUPTCY COURT MATTERS 28
7.1 Approval of Break-Up Fee and Expense Reimbursement..........28
7.2 Competing Transaction.......................................29
7.3 Bankruptcy Court Filings....................................29
Article VIII........................................................COVENANTS 29
8.1 Access to Information.......................................29
8.2 Conduct of the Business Pending the Closing.................30
8.3 Consents....................................................31
8.4 Regulatory Approvals........................................31
8.5 Further Assurances..........................................32
8.6 Confidentiality.............................................32
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(continued)
Page
8.7 Preservation of Records.....................................33
8.8 Publicity...................................................33
8.9 Use of Name.................................................33
8.10 Supplementation and Amendment of Schedules..................34
8.11 Transition Services.........................................34
Article IX....................................EMPLOYEES AND EMPLOYEE BENEFITS 34
9.1 Employment..................................................34
9.2 Employee Benefits...........................................35
Article X...............................................CONDITIONS TO CLOSING 35
10.1 Conditions Precedent to Obligations of Purchaser............35
10.2 Conditions Precedent to Obligations of Sellers..............36
10.3 Conditions Precedent to Obligations of
Purchaser and Sellers.....................................36
10.4 Frustration of Closing Conditions...........................37
Article XI....................................NO SURVIVAL AND INDEMNIFICATION 37
11.1 No Survival of Representations and Warranties...............37
11.2 Indemnification by Sellers..................................37
11.3 Indemnification by Purchaser................................38
11.4 Indemnification Procedures..................................38
11.5 Certain Limitations on Indemnification......................40
11.6 Calculation of Losses.......................................40
11.7 Tax Treatment of Indemnity Payments.........................40
11.8 No Consequential Damages....................................40
11.9 Exclusive Remedy............................................40
Article XII.............................................................TAXES 40
12.1 Transfer Taxes..............................................41
12.2 Prorations..................................................41
12.3 Purchase Price Allocation...................................41
Article XIII.....................................................ISCELLANEOUS 42
13.1 Expenses....................................................42
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Page
13.2 Injunctive Relief...........................................42
13.3 Submission to Jurisdiction; Consent to Service of Process...42
13.4 Waiver of Right to Trial by Jury............................43
13.5 Entire Agreement; Amendments and Waivers....................43
13.6 Governing Law...............................................43
13.7 Notices.....................................................43
13.8 Severability................................................44
13.9 Binding Effect; Assignment..................................44
13.10 Guarantee...................................................45
13.11 Non-Recourse................................................45
13.12 Counterparts................................................45
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TABLE OF CONTENTS
Page
Schedules
1.1(a) Knowledge of Seller
1.1(b) Purchased Contracts
1.1(c) Purchased Intellectual Property
3.4(a) Gift Card Principles
3.4(b) Real Property Lease Adjustments
3.4(c) Radius Adjustment Amount
3.5(a) Agreed Principles
5.1 Jurisdictions, Qualifications to do Business, Licenses
5.3(a) No Conflicts
5.3(b) Consents
5.5(b) Real Property Leases
5.6 Intellectual Property
5.7(a) Employee Benefits Plans
5.8 Litigation
5.9 Compliance with Laws
5.10 Financial Advisors
6.3 Conflicts
8.2(a) Exceptions to Conduct of Business
8.2(b) Exceptions to Negative Covenants
8.9 Restricted Intellectual Property
Exhibits
--------
A Xxxx of Sale
B Assignment and Assumption Agreement
C Escrow Agreement
i
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of April 13, 2004 (this
"Agreement"), between Footstar, Inc., a Delaware corporation ("Parent"), its
Subsidiaries set forth on the signature page hereto (each an "Athletic Company,"
collectively, "Athletic Companies" and Athletic Companies together with Parent,
"Sellers"), FL Specialty Operations LLC, a New York limited liability company,
FL Retail Operations LLC, a New York limited liability company, Foot Locker
Stores, Inc., a Delaware corporation, and Foot Locker Retail, Inc., a New York
corporation (collectively, "Purchaser"), and Foot Locker, Inc., a New York
corporation ("Foot Locker"), solely for purposes of Sections 6.6, 6.8, 6.9, and
13.10. (Each of Sellers and Purchaser is a "Party" and collectively they are the
"Parties" to this Agreement).
W I T N E S S E T H:
WHEREAS, Sellers are debtors-in-possession under title 11, of
the United States Code, 11 U.S.C. ss. 101 et seq. (the "Bankruptcy Code"), and
filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on
March 2, 2004, in the United States Bankruptcy Court for the Southern District
of New York (the "Bankruptcy Court") (Case No. 04-22350 (ASH)) (the "Bankruptcy
Case");
WHEREAS, the Athletic Companies presently conduct the
Business;
WHEREAS, Sellers desire to sell, transfer and assign to
Purchaser, and Purchaser desires to purchase, acquire and assume from Sellers,
pursuant to Sections 363 and 365 of the Bankruptcy Code, all of the Purchased
Assets and Assumed Liabilities, all as more specifically provided herein; and
WHEREAS, certain terms used in this Agreement are defined in
Section 1.1;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties hereby agree
as follows:
Article I
DEFINITIONS
1.1 Certain Definitions.
For purposes of this Agreement, the following terms shall have
the meanings specified in this Section 1.1:
"Accounts Receivable" shall mean, related to the Business and
regardless of age, (a) all trade accounts receivable and other rights to payment
from customers and the full benefit of all security for such accounts or rights
to payment, including all trade accounts receivable representing amounts
receivable in respect of goods shipped or Products sold or services rendered to
customers, (b) all other accounts or notes receivable and the full benefit of
all security for such accounts or notes, and (c) any claim, remedy or other
right related to any of the foregoing.
"Acquired Inventory" shall mean all merchandise inventories of
the Business, wherever located, held for sale in the Ordinary Course of the
Business.
"Affiliate" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person, and
the term "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through ownership of voting securities, by contract or otherwise.
"Business" means the business of the Athletic Companies
selling footwear and apparel at retail through stores operated under the
tradename Footaction USA, and via catalogs and the internet under the same
tradename, but excluding Parent and any other businesses of Footstar
Corporation, which include, without limitation, those activities in which
Parent's Meldisco segment ("Meldisco") is currently engaged and those activities
in which Meldisco has previously engaged.
"Business Day" means any day of the year on which national
banking institutions in New York are open to the public for conducting business
and are not required or authorized to close.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any written contract, indenture, note, bond,
lease or other agreement.
"Documents" means all files, documents, instruments, papers,
books, reports, records, tapes, microfilms, photographs, letters, budgets,
forecasts, ledgers, journals, title policies, customer lists, regulatory
filings, operating data and plans, technical documentation (design
specifications, functional requirements, operating instructions, logic manuals,
flow charts, etc.), user documentation (installation guides, user manuals,
training materials, release notes, working papers, etc.), marketing
documentation (sales brochures, flyers, pamphlets, web pages, etc.), and other
similar materials related primarily to the Business and the Purchased Assets in
each case whether or not in electronic form.
"Employees" means all individuals, as of the date hereof,
whether or not actively at work as of the date hereof, who are employed by any
of the Athletic Companies in connection with the Business, together with
individuals who are hired in respect of the Business after the date hereof and
prior to the Closing.
2
"Environmental Law" means any foreign, federal, state or local
statute, regulation, ordinance, or rule of common law currently in effect
relating to the protection of human health and safety or the environment or
natural resources including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 X.X.X.xx. 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. Xxx.xx. 1801 et seq.), the
Resource Conservation and Recovery Act (42 X.X.X.xx. 6901 et seq.), the Clean
Water Act (33 X.X.X.xx. 1251 et seq.), the Clean Air Act (42 X.X.X.xx. 7401 et
seq.) the Toxic Substances Control Act (15 X.X.X.xx. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 X.X.X.xx. 136 et seq.), and the
Occupational Safety and Health Act (29 X.X.X.xx. 651 et seq.), and the
regulations promulgated pursuant thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excluded Contracts" means the Contracts of the Business not
set forth on Schedule 1.1(b).
"Furniture and Equipment" means all furniture, fixtures,
furnishings, equipment, vehicles, leasehold improvements, and other tangible
personal property owned or used by the Athletic Companies in the conduct of the
Business, including all such artwork, desks, chairs, tables, Hardware, copiers,
telephone lines and numbers, telecopy machines and other telecommunication
equipment, cubicles and miscellaneous office furnishings and supplies.
"GAAP" means generally accepted accounting principles in the
United States as of the date hereof.
"Governmental Body" means any government or governmental or
regulatory body thereof, or political subdivision thereof, whether foreign,
federal, state, or local, or any agency, instrumentality or authority thereof,
or any court or arbitrator (public or private).
"Hardware" means any and all computer and computer-related
hardware, including, but not limited to, computers, file servers, facsimile
servers, scanners, color printers, laser printers and networks.
"Hazardous Material" means any substance, material or waste
which is regulated by any Government Body including, without limitation,
petroleum and its by-products, asbestos, and any material or substance which is
defined as a "hazardous waste," "hazardous substance," "hazardous material,"
"restricted hazardous waste," "industrial waste," "solid waste," "contaminant,"
"pollutant," "toxic waste" or "toxic substance" under any provision of
Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
3
"Indebtedness" of any Person means, without duplication, (i)
the principal of and premium (if any) in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable; (ii) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable and other accrued current
liabilities arising in the Ordinary Course of Business); (iii) all obligations
of such Person under leases required to be capitalized in accordance with GAAP;
(iv) all obligations of such Person for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) of any Persons
for the payment of which such Person is responsible or liable, directly or
indirectly, as obligor, guarantor, surety or otherwise, including guarantees of
such obligations; and (vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person).
"Inventory" shall mean all merchandise inventories of the
Business, wherever located, held for sale in the Ordinary Course of the Business
other than customer returns that have been worn or used, in-store faded
merchandise, torn or discolored merchandise, shoes with excessive glue showing,
loose stitches or miss-stitched items, single or mismatched shoes, used sample
merchandise and test merchandise.
"IRS" means the Internal Revenue Service.
"Knowledge of Sellers" means the actual knowledge of those
officers, employees and directors of Sellers identified on Schedule 1.1(a).
"Law" means any federal, state, local or foreign law, statute,
code, ordinance, rule or regulation.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private) or claims or any
proceedings by or before a Governmental Body.
"Liability" means any debt, liability or obligation (whether
direct or indirect, known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, or due or to become due), and including
all costs and expenses relating thereto.
"Lien" means any lien, encumbrance, pledge, mortgage, deed of
trust, security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, proxy, voting trust or agreement, transfer restriction
under any shareholder or similar agreement or encumbrance.
4
"Material Adverse Effect" means (i) a material adverse effect
on the business, assets, properties, results of operations or financial
condition of the Business (taken as a whole), or (ii) a material adverse effect
on the ability of Sellers to consummate the transactions contemplated by this
Agreement or perform their obligations under this Agreement, other than an
effect resulting from an Excluded Matter. "Excluded Matter" means any one or
more of the following: (i) the effect of any change in the United States or
foreign economies or securities or financial markets in general; (ii) the effect
of any change that generally affects any industry in which Sellers operate;
(iii) the effect of any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any
escalation or material worsening of any such hostilities, acts of war, sabotage
or terrorism or military actions existing or underway as of the date hereof;
(iv) the effect of any action taken by Purchaser or its Affiliates with respect
to the transactions contemplated hereby or with respect to Sellers, including
their respective employees; (v) the effect of any changes in applicable Laws or
accounting rules; or (vi) any effect resulting from the public announcement of
this Agreement, compliance with terms of this Agreement or the consummation of
the transactions contemplated by this Agreement; or (vii) any effect resulting
from the filing of the Bankruptcy Case and reasonably anticipated effects
thereof.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 3(37) of ERISA.
"Order" means any order, injunction, judgment, decree, ruling,
writ, assessment or arbitration award of a Governmental Body.
"Ordinary Course of Business" means the ordinary and usual
course of normal day-to-day operations of the Business through the date hereof
consistent with past practice.
"Permits" means any approvals, authorizations, consents,
licenses, permits or certificates of a Governmental Body.
"Permitted Exceptions" means (i) all defects, exceptions,
restrictions, easements, rights of way and encumbrances disclosed in policies of
title insurance which have been made available to Purchaser; (ii) statutory
liens for current Taxes, assessments or other governmental charges not yet
delinquent or the amount or validity of which is being contested in good faith
by appropriate proceedings provided an appropriate and legally sufficient
reserve is established therefor; (iii) mechanics', carriers', workers',
repairers' and similar Liens arising or incurred in the Ordinary Course of
Business; (iv) zoning, entitlement and other land use and environmental
regulations by any Governmental Body provided that such regulations have not
been violated; and (v) title of a lessor under a capital or operating lease.
"Person" means any individual, corporation, limited liability
company, partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, Governmental Body or other entity.
5
"Products" means any and all products developed, manufactured,
marketed or sold by the Athletic Companies in connection with the Business.
"Purchased Contracts" means the Contracts set forth on
Schedule 1.1(b).
"Purchased Intellectual Property" means all intellectual
property rights used by Sellers solely in connection with the Business and
arising from or in respect of the following and as set forth on Schedule 1.1(c):
(i) patents and applications therefor, including continuations, divisionals,
continuations-in-part, or reissues of patent applications and patents issuing
thereon (collectively, "Patents") (ii) trademarks, service marks, trade names,
service names, brand names, all trade dress rights, logos, Internet domain names
and corporate names and general intangibles of a like nature, together with the
goodwill associated with any of the foregoing, and all applications,
registrations and renewals thereof, (collectively, "Trademarks"), (iii)
copyrights and registrations and applications therefor, works of authorship, and
mask work rights , (collectively, "Copyrights"), and (iv) Software and
Technology.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, or leaching into
the indoor or outdoor environment, or into or out of any property.
"Remedial Action" means all actions to (i) clean up, remove,
treat or in any other way address any Hazardous Material; (ii) prevent the
Release of any Hazardous Material so it does not endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and
care; or (iv) to correct a condition of noncompliance with Environmental Laws.
"Sale Motion" means the motion or motions of Sellers, in form
and substance reasonably acceptable to Purchaser and Sellers, seeking approval
and entry of the Sale Order.
"Sale Order" shall be an order or orders of the Bankruptcy
Court in form and substance reasonably acceptable to Purchaser and Sellers
approving this Agreement and all of the terms and conditions hereof, and
approving and authorizing Sellers to consummate the transactions contemplated
hereby. Without limiting the generality of the foregoing, such order shall find
and provide, among other things, that (i) the Purchased Assets sold to Purchaser
pursuant to this Agreement shall be transferred to Purchaser free and clear of
all Liens (other than Liens created by Purchaser and Permitted Exceptions) and
claims, such Liens and claims to attach to the Purchase Price; (ii) Purchaser
has acted in "good faith" within the meaning of Section 363(m) of the Bankruptcy
Code; (iii) this Agreement was negotiated, proposed and entered into by the
parties without collusion, in good faith and from arm's length bargaining
positions; (iv) the Bankruptcy Court shall retain jurisdiction to resolve any
controversy or claim arising out of or relating to this Agreement, or the breach
hereof as provided in Section 13.3 hereof; (v) Purchaser may take assignment of
6
the Real Property Leases under Section 365 of the Bankruptcy Code
notwithstanding any restrictions contained therein that would purport to
restrict such assignment or use by Purchaser; and (vi) this Agreement and the
transactions contemplated hereby may be specifically enforced against and
binding upon, and not subject to rejection or avoidance by, Sellers or any
chapter 7 or chapter 11 trustee of Sellers.
"Software" means, except to the extent generally available for
purchase from a third Person, any and all (i) computer programs, including any
and all software implementations of algorithms, models and methodologies,
whether in source code or object code, (ii) databases and compilations,
including any and all data and collections of data, whether machine readable or
otherwise, (iii) descriptions, flow-charts and other work product used to
design, plan, organize and develop any of the foregoing, and (iv) all
documentation including user manuals and other training documentation related to
any of the foregoing.
"Subsidiary" means any Person of which a majority of the
outstanding voting securities or other voting equity interests are owned,
directly or indirectly, by any Seller.
"Tax Authority" means any federal, state, local or foreign
government, or agency, instrumentality or employee thereof, charged with the
administration of any law or regulation relating to Taxes.
"Tax Return" means all returns, declarations, reports,
estimates, information returns and statements required to be filed in respect of
any Taxes.
"Taxes" means (i) all federal, state, local or foreign taxes,
charges or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, and (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any Tax Authority in connection with any
item described in clause (i).
"Technology" means, collectively, all designs, formulae,
algorithms, procedures, methods, techniques, know-how, research and development,
technical data, programs, subroutines, tools, materials, specifications,
processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice), apparatus, creations, improvements, works of authorship
and other similar materials, and all recordings, graphs, drawings, reports,
analyses, and other writings, and other tangible embodiments of the foregoing,
in any form whether or not specifically listed herein, and all related
technology, that are used in, incorporated in, embodied in, displayed by or
relate to, or are used or useful in the design, development, reproduction,
maintenance or modification of, any of the Products.
7
"WARN Act" means the Worker Adjustment and Retraining
Notification Act of 1988, as amended, and any similar state Law, ant the rules
and regulations thereunder.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of
this Agreement, the following terms have meanings set forth in the sections
indicated:
Term Section
---- -------
Accounting Firm 3.5(e)
Adjustment Amount 3.4(b)
Agreed Principles 3.5(a)
Antitrust Division 8.4(b)
Antitrust Laws 8.4(b)
Asset Acquisition Statement 12.3
Assumed Liabilities 3.1
Athletic Company Recitals
Bankruptcy Case Recitals
Bankruptcy Court Recitals
Break-Up Fee 7.1
Claim 11.4(a)
Closing 4.1
Closing Date 4.1
Closing Inventory Value 3.5(b)
Closing Statement of Inventory 3.5(b)
Competing Bid 7.2
Compromised Liabilities 2.4(c)
Confidential Information 8.6
Confidentiality Agreement 8.6
Copyrights (in Purchased
Intellectual
Property definition)
Effective Time 4.1
Employee Plans 5.7(a)
Escrow Agent 3.2
Escrow Agreement 3.2
Escrowed Funds 3.2
Excluded Assets 2.2
Excluded Liabilities 2.4
Expense Reimbursement 7.1
Expenses 11.2(a)(iv)
Final Number 3.5(e)
Foot Locker Recitals
Footstar 401(k) Plan 9.2(b)
FTC 8.4(a)
Gross Rings 3.5(a)
Guarantee 13.10
Indemnification Claim 11.4
8
Term Section
---- -------
Inventory Count 3.5(a)
Inventory Service 3.5(a)
Leased Real Property 5.5(b)
Losses 11.2(a)(i)
Position 3.5(e)
Meldisco (in Business definition)
Objection Notice 3.5(c)
Objection Period 3.5(c)
Parent Recitals
Party Recitals
Patents (in Purchased
Intellectual
Property definition)
Post-Closing Adjustment Amount 3.5(g)
Purchased Assets 2.1
Purchase Price 3.1
Purchaser Recitals
Purchaser Business 8.4(b)
Purchaser Documents 6.2
Purchaser 401(k) Plan 9.2(b)
Purchaser Plans 9.2(a)
Radius Adjustment Amount 3.4(c)
Radius Restrictions 3.4(c)
Real Property Escrow 3.4(b)
Real Property Lease 5.5(b)
Representative 3.5(f)
Revised Statements 12.3
Sellers Recitals
Seller Documents 5.2
SKU 3.5(a)
Termination Date 4.4(a)
Trademarks (in Purchased
Intellectual
Property definition)
Transferred Employees 9.1
Transfer Taxes 12.1
Unresolved Claims 11.6
1.3 Other Definitional and Interpretive Matters
(a) Unless otherwise expressly provided, for purposes of this
Agreement, the following rules of interpretation shall apply:
Calculation of Time Period. When calculating the period of
time before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
9
Dollars. Any reference in this Agreement to $ shall mean U.S.
dollars.
Exhibits/Schedules. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any matter or item disclosed on one
schedule shall be deemed to have been disclosed on each other schedule. Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined
therein shall be defined as set forth in this Agreement.
Gender and Number. Any reference in this Agreement to gender
shall include all genders, and words imparting the singular number only shall
include the plural and vice versa.
Headings. The provision of a Table of Contents, the division
of this Agreement into Articles, Sections and other subdivisions and the
insertion of headings are for convenience of reference only and shall not affect
or be utilized in construing or interpreting this Agreement. All references in
this Agreement to any "Section" are to the corresponding Section of this
Agreement unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof,"
and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
Including. The word "including" or any variation thereof
means "including, without limitation" and shall not be construed to limit any
general statement that it follows to the specific or similar items or matters
immediately following it.
(b) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the Parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement.
Article II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 Purchase and Sale of Assets. On the terms and subject to the
conditions set forth in this Agreement, at the Closing Purchaser shall purchase,
acquire and accept from the Athletic Companies, and the Athletic Companies shall
sell, transfer, assign, convey and deliver to Purchaser (as designated in
writing by Purchaser in advance of the Closing) all of the Athletic Companies'
right, title and interest in, to and under the Purchased Assets. "Purchased
Assets" shall mean the following assets of the Athletic Companies (but excluding
Excluded Assets) as of the Closing to the extent exclusively related to the
Business:
(a) all Acquired Inventory;
10
(b) all rights of the Athletic Companies under each Real
Property Lease, together with all improvements, fixtures and other appurtenances
thereto and rights in respect thereof;
(c) the Furniture and Equipment;
(d) the Purchased Intellectual Property;
(e) the Purchased Contracts;
(f) all Documents that are used in, held for use in or
intended to be used in, or that arise exclusively out of, the Business,
including Documents relating to Products, services, marketing, advertising,
promotional materials, Purchased Intellectual Property, personnel files for
Transferred Employees and all files, customer files and documents (including
credit information), supplier lists, records, literature and correspondence,
whether or not physically located on any of the premises referred to in clause
(d) above, but excluding (i) personnel files for Employees of any Seller who are
not Transferred Employees, (ii) such files as may be required under applicable
Law regarding privacy, and (iii) any Documents primarily related to or are
required to realize the benefits of any Excluded Assets;
(g) all Permits used by the Athletic Companies in the
Business to the extent assignable;
(h) all supplies owned by the Athletic Companies and used in
connection with the Business;
(i) all rights of the Athletic Companies under non-disclosure
or confidentiality, non-compete, or non-solicitation agreements with employees
and agents of any of the Athletic Companies or with third parties to the extent
relating to the Business or the Purchased Assets (or any portion thereof);
(j) all rights of the Athletic Companies under or pursuant to
all warranties, representations and guarantees made by suppliers, manufacturers
and contractors to the extent relating to Products sold, or services provided,
to the Athletic Companies or to the extent affecting any Purchased Assets other
than any warranties, representations and guarantees pertaining to any Excluded
Assets; and
(k) all goodwill and other intangible assets associated with
the Business, including customer and supplier lists and the goodwill associated
with the Purchased Intellectual Property.
2.2 Excluded Assets. Nothing herein contained shall be deemed to sell,
transfer, assign or convey the Excluded Assets to Purchaser, and the Athletic
Companies shall retain all right, title and interest to, in and under the
Excluded Assets. "Excluded Assets" shall mean all assets, properties, interests
and rights of the Athletic Companies other than the Purchased Assets, including,
without limitation, each of the following assets:
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(a) all cash, cash equivalents, bank deposits or similar cash
items of the Athletic Companies;
(b) all of the Athletic Companies' deposits or prepaid
charges and expenses paid in connection with or relating to any Excluded Assets;
(c) all Accounts Receivable;
(d) the Excluded Contracts
(e) any intellectual property rights of any Athletic Company
and its Subsidiaries other than the Purchased Intellectual Property;
(f) any (i) confidential personnel and medical records
pertaining to any Employee; (ii) other books and records that the Athletic
Companies are required by Law to retain or that the Athletic Companies determine
are necessary or advisable to retain including, without limitation, Tax Returns,
financial statements, and corporate or other entity filings; provided, however,
that Purchaser shall have the right to make copies of any portions of such
retained books and records that relate to the Business or any of the Purchased
Assets and shall have the rights set forth in Section 8.7; (iii) any information
management systems of the Athletic Companies, other than those used or held for
use exclusively in the conduct of the Business; (iv) minute books, stock ledgers
and stock certificates of Parent or any of its Subsidiaries; and (v) documents
relating to proposals to acquire the Business by Persons other than Purchaser.
(g) any claim, right or interest of the Athletic Companies in
or to any refund, rebate, abatement or other recovery for Taxes, together with
any interest due thereon or penalty rebate arising therefrom, for any Tax period
(or portion thereof) ending on or before the Closing Date;
(h) all insurance policies or rights to proceeds thereof
relating to the assets, properties, business or operations of the Athletic
Companies; and
(i) all deposits (including customer deposits and security
deposits for rent, electricity, telephone or otherwise) and prepaid charges and
expenses of the Athletic Companies other than any deposits or prepaid charges
and expenses paid in connection with or relating to any Excluded Assets;
(j) any rights, claims or causes of action of the Athletic
Companies against third parties relating to assets, properties, business or
operations of the Athletic Companies arising out of events occurring on or prior
to the Closing Date, provided that Sellers hereby waive all such claims against
Foot Locker or any of its subsidiaries or Affiliates arising out of events
occurring on or prior to the Closing Date and not in connection with this
Agreement or the transactions contemplated hereunder.
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2.3 Assumption of Liabilities. On the terms and subject to the
conditions set forth in this Agreement, at the Closing Purchaser shall assume,
effective as of the Closing, and shall timely perform and discharge in
accordance with their respective terms, the following Liabilities of Sellers
(collectively, the "Assumed Liabilities"):
(a) all Liabilities of Sellers under the Purchased Contracts
arising on or after the Closing Date;
(b) all Liabilities arising in connection with gift cards
related to the Business, as calculated in accordance with Schedule 3.4(a);
(c) Liabilities arising from the sale of Products or
Inventory in the Ordinary Course of Business pursuant to product warranties,
product returns and rebates under established procedures requiring presentation
of receipts, other than the Compromised Liabilities;
(d) all Transfer Taxes applicable to the transfer of the
Purchased Assets pursuant to this Agreement;
(e) all other Liabilities with respect to the Business, the
Purchased Assets or the Transferred Employees arising after the Closing; and
(f) all Liabilities relating to amounts required to be paid
by Purchaser hereunder.
2.4 Excluded Liabilities. Notwithstanding anything in this Agreement to
the contrary, Purchaser shall not assume, and shall be deemed not to have
assumed, any Liabilities relating to the Business of the Athletic Companies
except as expressly provided in Section 2.3 hereof or elsewhere in this
Agreement, and the Athletic Companies shall be solely and exclusively liable
with respect to all such Liabilities, other than the Assumed Liabilities and
such other Liabilities expressly assumed by Purchaser hereunder (collectively,
the "Excluded Liabilities"), including those Liabilities set forth below:
(a) all Liabilities arising out of Excluded Assets, including
Contracts that are not Purchased Contracts;
(b) except as otherwise provided in Section 2.3(d) and
Article XII, all Liabilities for Taxes of any Seller relating to the Purchased
Assets for any Tax periods (or portions thereof) ending on or before the
Effective Time;
(c) Liabilities incurred in the Ordinary Course of Business
existing prior to the filing of the Bankruptcy Case that are subject to
compromise under the Bankruptcy Case (the "Compromised Liabilities");
(d) Liabilities with respect to the Business, the Purchased
Assets or the Transferred Employees arising prior to the Closing which are not
Assumed Liabilities;
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(e) accounts payable incurred in the Ordinary Course of
Business existing on the Closing Date (including, for the avoidance of doubt,
(i) invoiced accounts payable and (ii) accrued but uninvoiced accounts payable);
and
(f) all Liabilities relating to amounts required to be paid
by Sellers hereunder.
2.5 Cure Amounts.
At Closing and pursuant to Section 365 of the Bankruptcy
Code, Sellers shall assume and assign to Purchaser and Purchaser shall assume
from Seller, the Purchased Contracts and Real Property Leases. The cure amounts,
as determined by the Bankruptcy Court, if any, necessary to cure all defaults,
if any, and to pay all actual or pecuniary losses that have resulted from such
defaults under the Purchased Contracts and Real Property Leases, shall be paid
by Sellers, on or before Closing. Purchaser shall not have the right to
terminate this Agreement as a result of the failure by Sellers to assume and
assign to Purchaser any Purchased Contract (on terms and conditions no less
favorable than those in existence as of the date hereof), unless any such
failure results in a Material Adverse Effect.
2.6 Further Conveyances and Assumptions.
(a) From time to time following the Closing, Sellers shall,
or shall cause their Affiliates to, make available to Purchaser such
non-confidential data in personnel records of Transferred Employees as is
reasonably necessary for Purchaser to transition such employees into Purchaser's
records.
(b) From time to time following the Closing, Sellers and
Purchaser shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquaintances and such other instruments, and shall take such
further actions, as may be reasonably necessary or appropriate to assure fully
to Purchaser and its respective successors or assigns, all of the properties,
rights, titles, interests, estates, remedies, powers and privileges intended to
be conveyed to Purchaser under this Agreement and the Seller Documents and to
assure fully to Sellers and their Affiliates and their successors and assigns,
the assumption of the liabilities and obligations intended to be assumed by
Purchaser under this Agreement and the Seller Agreements, and to otherwise make
effective the transactions contemplated hereby and thereby.
2.7 Bulk Sales Laws. Purchaser hereby waives compliance by Sellers with
the requirements and provisions of any "bulk-transfer" Laws of any jurisdiction
that may otherwise be applicable with respect to the sale and transfer of any or
all of the Purchased Assets to Purchaser.
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Article III
CONSIDERATION
3.1 Consideration. The aggregate consideration for the Purchased Assets
shall be (a) an amount in cash equal to One Hundred Sixty Million Dollars
($160,000,000) (the "Purchase Price"), subject to adjustment as provided in
Sections 3.4 and 3.5, and (b) the assumption of the Assumed Liabilities.
3.2 Purchase Price Deposit. Upon the execution of this Agreement,
pursuant to the terms of an escrow agreement substantially in the form of
Exhibit C attached hereto (the "Escrow Agreement"), Purchaser shall immediately
deposit with Wilmington Trust Company or such other Person mutually agreed upon
by the Parties, in its capacity as escrow agent (the "Escrow Agent") the sum of
Four Million Dollars ($4,000,000,000) by wire transfer of immediately available
funds and Parent will deliver to the Escrow Agent the Four Million Dollars
($4,000,000,000) wired by or on behalf of Purchaser to Seller on April 12, 2004
(collectively, the "Escrowed Funds"), to be released by the Escrow Agent and
delivered to either Purchaser or Parent, in accordance with the provisions of
the Escrow Agreement. Pursuant to the Escrow Agreement, the Escrowed Funds
(together with all accrued investment income or interest thereon) shall be
distributed as follows:
(a) if the Closing shall occur, the Escrowed Funds shall be
applied towards the Purchase Price payable by Purchaser to Sellers under Section
3.3 hereof and all accrued investment income or interest thereon shall be
delivered to Purchaser at the Closing;
(b) if this Agreement is terminated by Sellers pursuant to
Section 4.4(f), the Escrowed Funds, together with all accrued investment income
or interest thereon, shall be delivered to Seller; or
(c) if this Agreement is terminated for any reason other than
by Sellers pursuant to Section 4.4(f), the Escrowed Funds, together with all
accrued investment income or interest thereon, shall in each case be returned to
Purchaser.
3.3 Payment of Purchase Price. On the Closing Date, Purchaser shall pay
to Sellers, by wire transfer of immediately available funds into an account
designated by Parent, the Purchase Price (less the Escrowed Funds), as adjusted
in accordance with Section 3.4.
3.4 Purchase Price Adjustments.
(a) Gift Cards. At Closing, the Purchase Price shall be
reduced in respect of any Liabilities arising in connection with gift cards
related to the Business in an amount calculated in accordance with the
principles set forth on Schedule 3.4(a).
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(b) Real Property Leases. To the extent that at the Closing
any of the Real Property Leases set forth on Schedule 3.4(b) have not been
replaced by a new lease with respect to the real property subject to such Real
Property Leases, transferred or assigned to Purchaser, the adjustment amount set
forth on Schedule 3.4(b) (the "Adjustment Amount") with respect to any such Real
Property Lease shall be deducted from the Purchase Price and placed into escrow
(the "Real Property Escrow") with the Escrow Agent. At any time within one (1)
year from the Closing Date that any Purchaser or any of their Affiliates enter
into a lease with respect to any real property subject to any such Real Property
Lease (including relocating any store subject to any such Real Property Lease to
a new location in the same mall), the Adjustment Amount relating to such Real
Property Lease and any interest or investment income accrued thereon shall be
promptly disbursed from the Real Property Escrow by the Escrow Agent to Sellers.
After the one (1) year anniversary of the Closing Date, any amounts remaining in
the Real Property Escrow not payable to Sellers with respect to the Adjustment
Amount shall be promptly disbursed by the Escrow Agent to Purchaser.
(c) To the extent that at the Closing any of the Real
Property Leases set forth on Schedule 3.4(c) have not been replaced by a new
lease with respect to the real property subject to such Real Property Leases,
removing or modifying restrictions contained therein that prevent any Purchaser
or their Affiliates from operating another store existing as of the date hereof
within a radius set forth therein (the "Radius Restrictions"), or transferred or
assigned to Purchaser without such Radius Restrictions, the adjustment amount
set forth on Schedule 3.4(c) (the "Radius Adjustment Amount") with respect to
any such Real Property Lease shall be deducted from the Purchase Price and
placed into the Real Property Escrow with the Escrow Agent. At any time within
one (1) year from the Closing Date that any Purchaser or any of their Affiliates
enter into a lease or amended lease with respect to any real property subject to
any such Real Property Lease which does not contain the Radius Restrictions, the
Radius Adjustment Amount relating to such Real Property Lease and any interest
or investment income accrued thereon shall be promptly disbursed from the Real
Property Escrow by the Escrow Agent to Sellers. After the one (1) year
anniversary of the Closing Date, any amounts remaining in the Real Property
Escrow with respect to the Radius Adjustment not payable to Sellers shall be
promptly disbursed by the Escrow Agent to Purchaser.
3.5 Inventory Count; Post-Closing Adjustment.
(a) On a mutually convenient date or dates as near as
reasonably practicable to the Closing Date, but in no event more than three (3)
days prior to the then anticipated Closing Date and no more than three (3) days
after the actual Closing Date, Purchaser and Parent shall cause to be taken a
physical count of the Inventory of the Business on a stock keeping unit ("SKU")
basis as valued under the retail accounting method (the "Inventory Count"). The
Inventory Count shall be taken by RGIS Inventory Services or such other
inventory service designated jointly by Parent and Purchaser (the "Inventory
Service") with Purchaser and Parent sharing equally the fees and expenses of the
Inventory Service and Purchaser and Parent otherwise each bearing its own costs
and expenses in connection therewith. The Inventory Service shall conduct the
Inventory Count in accordance with the principles set forth on Schedule 3.5(a)
(the "Agreed Principles"). Purchaser and Parent shall conduct the Inventory
Count in accordance with the Agreed Principles, and shall roll back or roll
forward the Inventory Count, as the case may be, to the Effective Time based on
Gross Rings (as defined below). If the Inventory Count is conducted at any store
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location on a date that is before the Effective Time, then for the period from
the completion of the Inventory Count at such store location until the Effective
Time, Parent shall keep a count of units sold by SKU multiplied by the
applicable retail value of such SKUs ("Gross Rings"). All such reports shall be
made available by Parent to Purchaser on a daily basis. If the Inventory Count
is conducted at any store location on a date that is after the Effective Time,
then for the period from the Effective Time to the completion of the Inventory
Count at such store location, Purchaser shall keep a count of the Gross Rings.
All such reports shall be made available by Purchaser to Parent on a daily
basis.
(b) The Inventory Service shall be additionally instructed by
Purchaser and Parent to prepare and deliver to Purchaser and Parent a final
certified report of Inventory Count and an unaudited statement (the "Closing
Statement of Inventory") setting forth the value of the Inventory as determined
in accordance with the Agreed Principles as of the Effective Time (the "Closing
Inventory Value"), as promptly as practicable following the Inventory Count, but
in any event no later than seven (7) days after the last day of the Inventory
Count. Purchaser and Sellers shall cooperate with and reasonably assist the
Inventory Service, and shall make available to the Inventory Service the books,
records, personnel and properties of Purchaser or Sellers, as the case may be,
that the Inventory Service reasonably requires in order to prepare and deliver
the Closing Statement of Inventory.
(c) Purchaser and Parent shall have fifteen (15) days
following the Inventory Service's delivery of the Closing Statement of Inventory
(the "Objection Period") to provide written notice to the other Party (the
"Objection Notice") of any good faith objection to any portion of the Closing
Statement of Inventory relating to the calculation of the Closing Inventory
Value, which objection shall be set forth with reasonable detail in such
Objection Notice; provided, however, that if the disputed portions of the
Closing Statement of Inventory are less than $100,000 in the aggregate, then (A)
no such Objection Notice shall be delivered to the other Party and (B) the
Closing Statement of Inventory as prepared by the Inventory Service shall be
deemed final and undisputed. During the Objection Period, Purchaser, Parent and
their respective accountants will be permitted to examine the work papers and
all back-up materials and memoranda used or generated by Inventory Service in
connection with the preparation of the Closing Statement of Inventory and such
other documents as Purchaser or Parent may reasonably request in connection with
its review of the Closing Statement of Inventory, and shall be provided access
at all reasonable times to the personnel of the Service Company, Purchaser or
Parent, as the case may be, for the purpose of reviewing and ascertaining the
accuracy of the Closing Statement of Inventory. Unless Purchaser or Parent
timely delivers an Objection Notice before the expiration of the Objection
Period, the Closing Statement of Inventory (and the Closing Inventory Value
reflected thereon or calculated therefrom) shall be deemed to have been accepted
17
and approved by such non-objecting party and shall thereafter be final and
binding upon any such non-objecting party for purposes of any post-closing
adjustment set forth in this Section 3.5 (and any amounts to be paid pursuant to
Section 3.5(g) shall thereupon be paid). In addition, to the extent any portion
of the Closing Statement of Inventory or of the calculation of the Closing
Inventory Value shall not be expressly objected to in the Objection Notice, such
matters shall be deemed to have been accepted and approved by Purchaser and
Parent and shall be final and binding upon Purchaser and Parent for purposes
hereof (and the undisputed amount, if any, to be paid pursuant to Section 3.5(g)
shall thereupon be paid). If Purchaser or Parent timely delivers an Objection
Notice before the expiration of the Objection Period, then those aspects of the
Closing Statement of Inventory objected to in the Objection Notice shall not
thereafter be final and binding until resolved in accordance with this Section
3.5.
(d) Following receipt of any Objection Notice, Parent and
Purchaser shall discuss in good faith the applicable objections set forth
therein for a period of ten (10) days thereafter and shall, during such period,
attempt to resolve the matter or matters in dispute by mutual written agreement.
If Parent and Purchaser reach such an agreement, the agreement shall be
confirmed in writing and shall revise the Closing Statement of Inventory to
reflect such agreement, which agreement (and Closing Statement of Inventory, as
so revised, including the Closing Inventory Value reflected thereon or
calculated therefrom) shall thereafter be final and binding upon Sellers and
Purchaser for purposes of any post-closing adjustment set forth in this Section
3.5 (and any amounts remaining to be paid pursuant to Section 3.5(g) shall
thereupon be paid).
(e) If Purchaser and Parent are unable to reach a mutual
agreement in whole or in part in accordance with Section 3.5(d) during the ten
(10) day period referred to therein, then Parent and Purchaser shall appoint
Ernst & Young (or such other accounting firm of national standing designated
jointly by Parent and Purchaser) (the "Accounting Firm"), which shall resolve
those matters still in dispute with respect to the Closing Statement of
Inventory and the Closing Inventory Value reflected thereon or calculated
therefrom. Not later than 5:00 p.m. New York City time on the tenth (10th) full
Business Day after the day on which the Accounting Firm is appointed, Parent and
Purchaser each shall deliver or cause to be delivered to the Accounting Firm:
(i) a written statement of its position on each remaining dispute or
disagreement (that Party's "Position"); (ii) the aggregate Closing Inventory
Value, determined as though the Accounting Firm concurred with each such
position (that Party's "Final Number"); and (iii) a wire transfer or certified
check in the amount of $50,000, which amount the Accounting Firm shall be
authorized to apply towards its fees and expenses in the manner set forth below.
If one Party fully complies with the immediately preceding sentence and the
other Party does not, the compliant Party's Position shall be final and binding
on all Parties and no further action by the Accounting Firm is required. If both
Parties comply with the second sentence of this paragraph (e), the Accounting
Firm shall make a final and binding resolution of the remaining disputes or
disagreements between Purchaser and Parent. The Accounting Firm shall be
instructed that, in making its final and binding resolution, it must, as to each
disputed item, select either the Position of Purchaser or the Position of
Parent. No appeal from such determination shall be permitted. The costs and
18
expenses for the services of the Accounting Firm shall be borne entirely by the
Party whose Final Number is furthest (in dollars) from the Closing Inventory
Value as determined by the Accounting Firm. Subject to the foregoing sentence,
all fees and expenses of Parent relating to matters described in this Section
3.5 shall be borne by Parent, and all fees and expenses of Purchaser relating to
matters described in this Section 3.5 shall be borne by Purchaser. Parent and
Purchaser agree to fully cooperate with each other and with the Accounting Firm
to resolve any dispute.
(f) Notwithstanding any other provision of this Agreement,
including, without limitation, any provision stating that remedies shall be
cumulative and not exclusive, this Section 3.5 provides the sole and exclusive
method for resolving any and all disputes that may arise between or among the
Parties with respect to the determination of Closing Inventory Value. As among
the Parties, each Party hereby irrevocably waives, relinquishes and surrenders
on its own behalf and on behalf of its Affiliates and its officers, directors,
principals, attorneys, agents, employees and other authorized representatives
(each a "Representative") all rights to, and agrees that it will not attempt,
and shall cause its Affiliates and Representatives not to attempt, to, resolve
any such dispute or disputes related to the determination of the Closing
Statement of Inventory in any manner other than as set forth in this Section
3.5, including, without limitation, through litigation. Each Party further
agrees on its own behalf and on behalf of its Affiliates and Representatives
that if one or more of them should initiate any attempt to resolve any such
dispute or disputes related to the determination of the Closing Statement of
Inventory in any manner other than the sole and exclusive manner set forth in
this Section 3.5, such initiators shall pay and reimburse all fees, costs and
expenses incurred by any other Party as a result of, in connection with or
related to such attempt or attempts.
(g) The Purchase Price shall be calculated based upon the
final calculation of the Closing Inventory Value as determined in this Section
3.5 and shall be calculated at the time the Closing Statement of Inventory (and
the Closing Inventory Value reflected thereon or calculated therefrom) becomes
final and binding on the Parties pursuant to this Section 3.5. If the Closing
Inventory Value as reflected on or calculated from such final and binding
Closing Statement of Inventory is greater or less than the base amount set forth
in Schedule 3.5(a), then the Purchase Price shall be increased or decreased, as
the case may be, by an adjustment amount calculated in accordance with Schedule
3.5(a) (the amount of any such adjustment, the "Post-Closing Adjustment
Amount"). The Post-Closing Adjustment Amount payable by either Sellers or
Purchaser pursuant to this Section 3.5(g) shall be paid promptly by the Party
required to pay such Post-Closing Adjustment Amount, but in no event later than
two (2) Business Days following the determination of such Post-Closing
Adjustment Amount. Payment by either Sellers or Purchaser of the Post-Closing
Adjustment Amount shall be made in immediately available funds via wire transfer
to an account designated in writing by the Party entitled to receive such
payment. The Post-Closing Adjustment Amount payable under this Section 3.5(g)
shall be paid with interest thereon from and including the Closing Date, but
excluding the date of payment, calculated at the prime rate of interest as
published by The Wall Street Journal on the date of the final determination of
the Post-Closing Adjustment, plus one percent (1%), except that if the payment
of the Post-Closing Adjustment is made later than the date provided for above in
this Section 3.5(g), then the Post-Closing Adjustment Amount shall instead be
paid with interest thereon from and including the Closing Date, but excluding
the date of payment, calculated at the prime rate of interest as published by
The Wall Street Journal on the date of the final determination of the of the
Post-Closing Adjustment, plus five percent (5%).
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Article IV
CLOSING AND TERMINATION
4.1 Closing Date. Subject to the satisfaction of the conditions set
forth in Sections 10.1, 10.2 and 10.3 hereof (or the waiver thereof by the Party
entitled to waive that condition), the closing of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities provided for in
Article II hereof (the "Closing") shall take place at the offices of Weil,
Gotshal & Xxxxxx LLP located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (or at such
other place as the Parties may designate in writing) at 10:00 a.m. (New York
City time) on the date that is two (2) Business Days following the satisfaction
or waiver of the conditions set forth in Article X (other than conditions that
by their nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions), unless another time or date, or
both, are agreed to in writing by the Parties. The date on which the Closing
shall be held is referred to in this Agreement as the "Closing Date." The
Closing shall be deemed to have occurred at 11:59:59 p.m. on the Saturday prior
to the Closing Date (the "Effective Time").
4.2 Deliveries by Seller. At the Closing, Sellers shall deliver to
Purchaser:
(a) a duly executed xxxx of sale in the form of Exhibit A
hereto;
(b) duly executed assignment and assumption agreement in the
form of Exhibit B hereto, duly executed assignments of the registered
Trademarks, applications for registrations of Trademarks, Patents and Patent
applications in each case, included in the Purchased Intellectual Property, in a
form suitable for recording in the United States Patent and Trademark Office,
duly executed assignments of registered Copyrights included in the Purchased
Intellectual Property, in a form suitable for recording in the United States
Copyright Office and duly executed general assignments of all other Purchased
Intellectual Property;
(c) the officer's certificate required to be delivered
pursuant to Sections 10.1(a) and 10.1(b);
(d) all other instruments of conveyance and transfer, in form
and substance reasonably acceptable to Purchaser, as may be necessary to convey
the Purchased Assets to Purchaser; and
(e) such other documents, instruments and certificates as
Purchaser may reasonably request.
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4.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Sellers:
(a) the Purchase Price (less the Escrowed Funds), as adjusted
in accordance with Section 3.4, in immediately available funds, as set forth in
Section 3.3 hereof;
(b) a duly executed assignment and assumption agreement in
the form attached hereto as Exhibit B hereto;
(c) the officer's certificate required to be delivered
pursuant to Sections 10.2(a) and 10.2(b); and
(d) such other documents, instruments and certificates as
Sellers may reasonably request.
4.4 Termination of Agreement. This Agreement may be terminated prior to
the Closing as follows:
(a) by Purchaser or Sellers, if the Closing shall not have
occurred by the close of business on June 1, 2004 (the "Termination Date");
provided, however, that, if the Closing shall not have occurred due to the
failure of the Bankruptcy Court to enter the Sale Order and if all other
conditions to the respective obligations of the Parties to close hereunder that
are capable of being fulfilled by the Termination Date shall have been so
fulfilled or waived, then no Party may terminate this Agreement prior to June
15, 2004; provided, further, that if the Closing shall not have occurred on or
before the Termination Date due to a material breach of any representations,
warranties, covenants or agreements contained in this Agreement by Purchaser or
Sellers, then the breaching party may not terminate this Agreement pursuant to
this Section 4.4(a);
(b) by mutual written consent of Sellers and Purchaser;
(c) by Purchaser, if any of the conditions to the obligations
of Purchaser set forth in Sections 10.1 and 10.3 shall have become incapable of
fulfillment other than as a result of a breach by Purchaser of any covenant or
agreement contained in this Agreement, and such condition is not waived by
Purchaser;
(d) by Sellers, if any condition to the obligations of
Sellers set forth in Sections 10.2 and 10.3 shall have become incapable of
fulfillment other than as a result of a breach by any Seller of any covenant or
agreement contained in this Agreement, and such condition is not waived by
Sellers;
(e) by Purchaser, if there shall be a breach by any Seller of
any representation or warranty, or any covenant or agreement contained in this
Agreement which would result in a failure of a condition set forth in Section
10.1 or 10.3 and which breach cannot be cured or has not been cured by the
earlier of (i) 20 Business Days after the giving of written notice by Purchaser
to Sellers of such breach and (ii) the Termination Date;
21
(f) by Sellers, if there shall be a breach by Purchaser of
any representation or warranty, or any covenant or agreement contained in this
Agreement which would result in a failure of a condition set forth in Section
10.2 or 10.3 and which breach cannot be cured or has not been cured by the
earlier of (i) 20 Business Days after the giving of written notice by Sellers to
Purchaser of such breach and (ii) the Termination Date;
(g) by Sellers or Purchaser if there shall be in effect a
final nonappealable Order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; it being agreed that the Parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence); or
(h) by Purchaser or Sellers, if the Bankruptcy Court shall
enter an order approving a Competing Bid, subject to Purchaser's right to
payment of the Break-Up Fee and Expense Reimbursement in accordance with the
provisions of Section 7.1.
4.5 Procedure Upon Termination. In the event of termination and
abandonment by Purchaser or Sellers, or both, pursuant to Section 4.4 hereof,
written notice thereof shall forthwith be given to the other Party or Parties,
and this Agreement shall terminate, and the purchase of the Purchased Assets
hereunder shall be abandoned, without further action by Purchaser or Sellers. If
this Agreement is terminated as provided herein each Party shall redeliver all
documents, work papers and other material of any other Party relating to the
transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the Party furnishing the same.
4.6 Effect of Termination.
(a) In the event that this Agreement is validly terminated as
provided herein, then each of the Parties shall be relieved of its duties and
obligations arising under this Agreement after the date of such termination and
such termination shall be without liability to Purchaser or Sellers; provided,
however, that the obligations of the Parties set forth in Section 7.1, Article
XI and Article XIII hereof shall survive any such termination and shall be
enforceable hereunder.
(b) Nothing in this Section 4.6 shall relieve Purchaser or
Sellers of any liability for a breach of this Agreement prior to the date of
termination; in which event the non-breaching party shall be entitled to seek
indemnification from the breaching party pursuant to Article XI.
(c) The Confidentiality Agreement shall survive any
termination of this Agreement and nothing in this Section 4.6 shall relieve
Purchaser or Sellers of their obligations under the Confidentiality Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant to Purchaser that:
5.1 Organization and Good Standing.
Parent is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and each of the other
Sellers is a corporation duly organized, validly existing and in good standing
under the laws of its respective state of incorporation as identified on
Schedule 5.1, and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now conducted.
Schedule 5.1 identifies the only jurisdictions in which the ownership, use or
leasing of such Seller's assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary.
5.2 Authorization of Agreement. Each Seller has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each
Seller has all requisite power, authority and legal capacity to execute and
deliver each other agreement, document, or instrument or certificate
contemplated by this Agreement or to be executed by Sellers in connection with
the consummation of the transactions contemplated by this Agreement (the "Seller
Documents"), to perform their respective obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Seller Documents and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action on the part of each Seller. This
Agreement has been, and each of the Seller Documents will be at or prior to the
Closing, duly and validly executed and delivered by each Seller which is a party
thereto and (assuming the due authorization, execution and delivery by the other
parties hereto and thereto, the entry of the Sale Order, and, with respect to
Sellers' obligations under Section 7.1, the entry of an order of the Bankruptcy
Court approving such obligations) this Agreement constitutes, and each of the
Seller Documents when so executed and delivered will constitute, legal, valid
and binding obligations of Sellers enforceable against Sellers in accordance
with their respective terms, subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 5.3(a), none of the
execution and delivery by Sellers of this Agreement or the Seller Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by Sellers with any of the provisions hereof or thereof will conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination or cancellation under any
provision of (i) the certificate of incorporation and by-laws or comparable
organizational documents of Sellers; (ii) subject to entry of the Sale Order,
23
any Contract or Permit to which is a party or by which any of the properties or
assets of Sellers are bound; or (iii) subject to entry of the Sale Order, any
Applicable Law or Order of any Governmental Body applicable to Sellers or any of
the properties or assets of Sellers as of the date hereof.
(b) Except as set forth on Schedule 5.3(b), no consent,
waiver, approval, Order, Permit or authorization of, or declaration or filing
with, or notification to, any Person or Governmental Body is required on the
part of any Seller in connection with the execution and delivery of this
Agreement or the Seller Documents, the compliance by any Seller with any of the
provisions hereof or thereof, the consummation of the transactions contemplated
hereby or the taking by any Seller of any other action contemplated hereby,
except for (i) compliance with the applicable requirements of the HSR Act, (ii)
the entry of the Sale Order, and (iii) the entry of an order by the Bankruptcy
Court with respect to Sellers' obligations under Section 7.1.
5.4 Title to Purchased Assets. Except as set forth in Schedule 5.4, and
other than the Leased Real Property, intellectual property licensed to Sellers
and the personal property used in the Business subject to leases, the Athletic
Companies own each of the Purchased Assets, and Purchaser will be vested with
good title to such Purchased Assets, free and clear of all Liens, other than
Permitted Exceptions and Liens created by Purchaser, to the fullest extent
permissible under Section 363(f) of the Bankruptcy Code.
5.5 Real Property.
(a) Other than Footstar Corporation, the Athletic Companies
do not own any real property.
(b) Schedule 5.5(b) lists and describes briefly all real
property leased or subleased to any of the Athletic Companies (the "Leased Real
Property"). Sellers have made available to Purchaser correct and complete copies
of the leases and subleases listed on Schedule 5.5(b) and all modifications
thereof (collectively, the "Real Property Leases").
5.6 Intellectual Property. The Athletic Companies own and possess all
right, title and interest in and to (or have the right to use pursuant to a
valid and enforceable license) all Purchased Intellectual Property used by them
in the Ordinary Course of Business as it is presently conducted and the
Purchased Intellectual Property constitutes all of the intellectual property
used by the Business in the Ordinary Course of Business as it is presently
conducted. Except as set forth on Schedule 5.6, to the Knowledge of Sellers, (i)
the material Purchased Intellectual Property used by the Athletic Companies is
not the subject of any challenge received by Parent or the Athletic Companies in
writing or otherwise and (ii) the Athletic Companies have not received any
written notice of any default or any event that with notice or lapse of time, or
both, would constitute a default under any material Purchased Intellectual
Property license to which any of the Athletic Companies is a party or by which
any of the Athletic Companies is bound.
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5.7 Employee Benefits.
(a) Set forth on Schedule 5.7(a) is a complete and correct
list of all "employee benefit plans" as defined by Section 3(3) of ERISA, all
specified fringe benefit plans as defined in Section 6039D of the Code,
severance, vacation, sick leave, plan or agreement as to which Sellers have any
obligation or liability, contingent or otherwise, with respect to Employees
(collectively the "Employee Plans").
(b) Sellers have made available to Purchaser true, accurate
and complete copies of (i) the documents comprising each Employee Plan and; (ii)
the most recent summary plan descriptions, summaries of material modifications
and memoranda, employee handbooks and other written communications regarding the
Employee Plans.
5.8 Litigation. Except for the Bankruptcy Case or as set forth on
Schedule 5.8, there are no Legal Proceedings pending or, to the Knowledge of
Sellers, threatened against any of the Athletic Companies before any
Governmental Body.
5.9 Compliance with Laws. Except as described in Schedule 5.9: (i) each
Athletic Company is in compliance in all material respects with all applicable
Laws affecting the Business or the Purchased Assets and (ii) none of the
Athletic Companies have violated, and none of them is in default in any material
respect with respect to, any Order or any Permit, license or other authority
from, any Governmental Entity.
5.10 Financial Advisors. Except as set forth on Schedule 5.10, no
Person has acted, directly or indirectly, as a broker, finder or financial
advisor for any Seller in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment
from Purchaser in respect thereof.
5.11 No Other Representations or Warranties; Schedules. Except for the
representations and warranties contained in this Article V (as modified by the
Schedules hereto), neither Sellers nor any other Person makes any other express
or implied representation or warranty (including any implied or expressed
warranty of merchantability or fitness for a particular purpose, or of
conformity to models or samples of materials) with respect to Sellers, the
Business, the Purchased Assets, the Assumed Liabilities or the transactions
contemplated by this Agreement, and Sellers disclaim any other representations
or warranties, whether made by Sellers, any Affiliate of Sellers or any of their
respective officers, directors, employees, agents or representatives, and the
Purchased Assets and the Business are being transferred to Purchaser on a "where
is" and, as to condition, "as is" basis.
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Article VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants and Foot Locker ,with
respect to Sections 6.8 and 6.9, hereby represents and warrants to Sellers that:
6.1 Organization and Good Standing. Each Purchaser is the type of
entity set forth in the preamble hereto duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of organization set
forth in the preamble hereto and has all requisite limited liability or
corporate power, as the case may be, and authority to own, lease and operate its
properties, to carry on its business as now conducted and to perform its
obligations under this Agreement and the Purchaser Documents.
6.2 Authorization of Agreement. Each of Purchaser has full company
power and authority to execute and deliver this Agreement and each other
agreement, document, instrument or certificate contemplated by this Agreement or
to be executed by Purchaser in connection with the consummation of the
transactions contemplated hereby and thereby (the "Purchaser Documents"), and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and each Purchaser
Document have been duly authorized by all necessary company action on behalf of
Purchaser. This Agreement has been, and each Purchaser Document will be at or
prior to the Closing, duly executed and delivered by Purchaser and (assuming the
due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each Purchaser Document when so
executed and delivered will constitute, the legal, valid and binding obligations
of Purchaser, enforceable against Purchaser in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
6.3 Conflicts; Consents of Third Parties.
(a) Except as set forth on Schedule 6.3, none of the
execution and delivery by any Purchaser of this Agreement or the Purchaser
Documents, the consummation of the transactions contemplated hereby or thereby,
or the compliance by any Purchaser with any of the provisions hereof or thereof
will conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination
or cancellation under any provision of (i) the certificate of formation and
limited liability agreement of each Purchaser, (ii) any Contract or Permit to
which Purchaser is a party or by which Purchaser or its properties or assets are
bound or (iii) any Order of any Governmental Body applicable to Purchaser or by
which any of the properties or assets of any Purchaser are bound or (iv) any
applicable Law.
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(b) No consent, waiver, approval, Order, Permit or
authorization of, or declaration or filing with, or notification to, any Person
or Governmental Body is required on the part of any Purchaser in connection with
the execution and delivery of this Agreement or the Purchaser Documents, the
compliance by any Purchaser with any of the provisions hereof or thereof, the
consummation of the transactions contemplated hereby or the taking by any
Purchaser of any other action contemplated hereby, or for any Purchaser to
conduct the Business, except for compliance with the applicable requirements of
the HSR Act.
6.4 Litigation. There are no Legal Proceedings pending or, to the
knowledge of Purchaser, threatened against Purchaser, or to which Purchaser is
otherwise a party before any Governmental Body, which, if adversely determined,
would reasonably be expected to have a material adverse effect on the ability of
any Purchaser to perform its obligations under this Agreement or the Purchaser
Documents or to consummate the transactions hereby or thereby. Purchaser is not
subject to any Order of any Governmental Body except to the extent the same
would not reasonably be expected to have a material adverse effect on the
ability of any Purchaser to perform its obligations under this Agreement or the
Purchaser Documents or to consummate the transactions contemplated hereby or
thereby.
6.5 Financial Advisors. Except for Banc of America Securities (whose
fees and expenses shall be the sole obligation of Purchaser or its Affiliates),
no Person has acted, directly or indirectly, as a broker, finder or financial
advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment
from any Seller in respect thereof.
6.6 Financial Capability. Foot Locker has, and will cause Purchaser at
the Closing to have, sufficient internal funds (without giving effect to any
unfunded financing regardless of whether any such financing is committed)
available to pay the Purchase Price and any expenses incurred by each Purchaser
in connection with the transactions contemplated by this Agreement. Foot Locker
has, and will cause Purchaser at the Closing to have, the resources and
capabilities (financial or otherwise) to perform its obligations hereunder. Foot
Locker has not, and will cause Purchaser at the Closing not to have, incurred
any obligation, commitment, restriction or Liability of any kind, which would
impair or adversely affect such resources and capabilities.
6.7 Condition of the Business. Notwithstanding anything contained in
this Agreement to the contrary, Purchaser acknowledges and agrees that Sellers
are not making any representations or warranties whatsoever, express or implied,
beyond those expressly given by Sellers in Article V hereof (as modified by the
Schedules hereto as supplemented or amended), and Purchaser acknowledges and
agrees that, except for the representations and warranties contained therein,
the Purchased Assets and the Business are being transferred on a "where is" and,
as to condition, "as is" basis.
6.8 Authorization of Guarantee. Foot Locker has full corporate power
and authority to execute and deliver this Agreement and provide the Guarantee.
The execution, delivery and performance by Foot Locker of this Agreement and the
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Guarantee have been duly authorized by all necessary corporate action on behalf
of Foot Locker. This Agreement has been duly executed and delivered by Foot
Locker and (assuming the due authorization, execution and delivery by the other
parties hereto) the Guarantee constitutes the legal, valid and binding
obligation of Foot Locker, enforceable against Foot Locker in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
6.9 Conflicts; Consents of Third Parties.
(a) The Guarantee provided by Foot Locker will not conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination or cancellation
under any provision of (i) the certificate of incorporation and by-laws of Foot
Locker, (ii) any Contract or Permit to which Foot Locker is a party or by which
Foot Locker or its properties or assets are bound or (iii) any Order of any
Governmental Body applicable to Foot Locker or by which any of the properties or
assets of Foot Locker are bound or (iv) any applicable Law.
(b) Assuming compliance of Purchaser with the HSR Act, no
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of Foot Locker in connection with the execution and delivery of this
Agreement or the compliance by Foot Locker with the Guarantee.
Article VII
BANKRUPTCY COURT MATTERS
7.1 Approval of Break-Up Fee and Expense Reimbursement. In
consideration for Purchaser having expended considerable time and expense in
connection with this Agreement and the negotiation thereof and the
identification and quantification of assets of Sellers, Sellers shall pay
Purchaser a break-up fee in an amount equal to two and a half percent (2.5%) of
the cash portion of the Purchase Price (the "Break-Up Fee") and an expense
reimbursement up to half of a percent (0.5%) of the cash portion of the Purchase
Price for Purchaser's documented reasonable out-of pocket expenses (the "Expense
Reimbursement"). The Expense Reimbursement shall be payable to Purchaser on the
first Business Day following the Bankruptcy Court's approval of a Competing Bid
(as hereinafter defined) and the Break-Up Fee shall be payable to Purchaser on
the first Business Day following the date of consummation of a Competing Bid if
no material breach by Purchaser of this Agreement has occurred. Sellers shall
file with and seek the approval of the Bankruptcy Court of the Sale Motion, and
the Break-Up Fee and Expense Reimbursement (to the extent not previously
28
approved by the Bankruptcy Court). Sellers agree that the Break-Up Fee and
Expense Reimbursement shall constitute administrative priority claims against
Sellers' estate under Sections 503(b) and 507(a)(1) of the Bankruptcy Code.
7.2 Competing Transaction. This Agreement is subject to approval by the
Bankruptcy Court and, if required by the Bankruptcy Court, the consideration by
Sellers of higher or better competing bids (each a "Competing Bid"). Except as
may be required by the Bankruptcy Court, from the date hereof and until the
transaction contemplated by this Agreement is consummated, Sellers shall not,
and shall cause their representatives and Affiliates not to, initiate contact
with, solicit or encourage submission of any inquiries, proposals or offers by,
any Person (other than Purchaser and its Affiliates, agents and representatives)
in connection with any sale or other disposition of the Purchased Assets.
Sellers shall be permitted and have the responsibility and obligation to respond
to any inquiries or offers to purchase all or any part of the Purchased Asset
and perform any and all other acts related thereto which are required under the
Bankruptcy Code or other applicable law, including, without limitation,
supplying information relating to the Business and the assets of Sellers to
prospective purchasers. Sellers shall promptly notify Purchaser of the existence
of any Competing Bids received by Sellers after the date hereof and Sellers
shall communicate to Purchaser the material terms of any such Competing Bid but
not the identity of the party making such Competing Bid.
7.3 Bankruptcy Court Filings. As promptly as practicable following the
execution of this Agreement, Sellers shall file with the Bankruptcy Court the
Sale Motion seeking entry of the Sale Order. Purchaser agrees that it will
promptly take such actions as are reasonably requested by Sellers to assist in
obtaining entry of the Sale Order and a finding of adequate assurance of future
performance by Purchaser, including furnishing affidavits or other documents or
information for filing with the Bankruptcy Court for the purposes, among others,
of providing necessary assurances of performance by Purchaser under this
Agreement and demonstrating that Purchaser is a "good faith" purchaser under
Section 363(m) of the Bankruptcy Code. Purchaser shall not, without the prior
written consent of Sellers, file, join in, or otherwise support in any manner
whatsoever any motion or other pleading relating to the sale of the Purchased
Assets hereunder. In the event the entry of the Sale Order shall be appealed,
Sellers and Purchaser shall use their respective reasonable efforts to defend
such appeal.
Article VIII
COVENANTS
8.1 Access to Information. Sellers agree that, prior to the Closing
Date, Purchaser shall be entitled, through its officers, employees and
representatives (including, without limitation, its legal advisors and
accountants), to make such investigation of the properties, businesses and
operations of the Business and such examination of the books and records of the
Business, the Purchased Assets and the Assumed Liabilities as it reasonably
requests and to make extracts and copies of such books and records. Any such
investigation and examination shall be conducted during regular business hours
upon reasonable advance notice and under reasonable circumstances and shall be
subject to restrictions under applicable Law. Sellers shall cause the officers,
29
employees, consultants, agents, accountants, attorneys and other representatives
of Sellers to cooperate with Purchaser and Purchaser's representatives in
connection with such investigation and examination, and Purchaser and its
representatives shall cooperate with Sellers and its representatives and shall
use their reasonable efforts to minimize any disruption to the Business.
Notwithstanding anything herein to the contrary, no such investigation or
examination shall be permitted to the extent that it would require Sellers to
disclose information subject to attorney-client privilege or conflict with any
confidentiality obligations to which any Seller is bound.
8.2 Conduct of the Business Pending the Closing.
(a) Prior to the Closing, except (1) as set forth on Schedule
8.2(a), (2) as required by applicable Law, (3) as otherwise expressly
contemplated by this Agreement or (4) with the prior written consent of
Purchaser (which consent shall not be unreasonably withheld, delayed or
conditioned), Sellers shall conduct the Business in the Ordinary Course of
Business, and:
(i) maintain the Purchased Assets in good operating
condition and repair and continue normal maintenance, normal wear and
tear excepted; and
(ii) use their commercially reasonable efforts to (A)
preserve the present business operations, organization and goodwill of
the Business, and (B) preserve the present relationships with customers
and suppliers of the Business.
(b) Except (1) as set forth on Schedule 8.2(b), (2) as
required by applicable Law, (3) as otherwise contemplated by this Agreement or
(4) with the prior written consent of Purchaser (which consent shall not be
unreasonably withheld, delayed or conditioned), Sellers shall not, solely as it
relates to the Business:
(i) increase salaries or wages, declare bonuses, increase
benefits, or institute any new benefit plan or program, except as
required by law, as required by the terms of previously existing
contracts, or in accordance with past practices;
(ii) sell, lease, transfer, mortgage, encumber, alienate
or dispose of any Purchased Assets except for sales of Inventory,
Permitted Exceptions, and normally scheduled store closings;
(iii) transfer any inventory into any of the stores that
are subject to the Real Property Leases from any store that is not
subject to the Real Property Leases; and
(iv) agree to do anything prohibited by this Section 8.2.
30
8.3 Consents. Sellers shall use their commercially reasonable efforts,
and Purchaser shall cooperate with Sellers, to obtain at the earliest
practicable date all consents and approvals required to consummate the
transactions contemplated by this Agreement, including, without limitation, the
consents and approvals referred to in Section 5.3(b) hereof; provided, however,
that Sellers shall not be obligated to pay any consideration therefor to any
third party from whom consent or approval is requested or to initiate any Legal
Proceedings to obtain any such consent or approval.
8.4 Regulatory Approvals.
(a) If necessary, Purchaser and Sellers shall (a) make or
cause to be made all filings required of each of them or any of their respective
Subsidiaries or Affiliates under the HSR Act or other Antitrust Laws with
respect to the transactions contemplated hereby as promptly as practicable and,
in any event, within five (5) Business Days after the date of this Agreement in
the case of all filings required under the HSR Act and within five (5) Business
Days in the case of all other filings required by other Antitrust Laws, (b)
comply at the earliest practicable date with any request under the HSR Act or
other Antitrust Laws for additional information, documents, or other materials
received by each of them or any of their respective Subsidiaries from the
Federal Trade Commission (the "FTC"), the Antitrust Division Antitrust Division
of the United States Department of Justice (the "Antitrust Division Antitrust
Division") or any other Governmental Body in respect of such filings or such
transactions, and (c) cooperate with each other in connection with any such
filing (including, to the extent permitted by applicable law, providing copies
of all such documents to the non-filing Parties prior to filing and considering
all reasonable additions, deletions or changes suggested in connection
therewith) and in connection with resolving any investigation or other inquiry
of any of the FTC, the Antitrust Division or other Governmental Body under any
Antitrust Laws with respect to any such filing or any such transaction. Each
such Party shall use reasonable best efforts to furnish to each other all
information required for any application or other filing to be made pursuant to
any applicable law in connection with the transactions contemplated by this
Agreement. Each such Party shall promptly inform the other Parties of any oral
communication with, and provide copies of written communications with, any
Governmental Body regarding any such filings or any such transaction. No Party
hereto shall independently participate in any formal meeting with any
Governmental Body in respect of any such filings, investigation, or other
inquiry without giving the other Parties prior notice of the meeting and, to the
extent permitted by such Governmental Body, the opportunity to attend and/or
participate. Subject to applicable law, the Parties will consult and cooperate
with one another in connection with any analyses, appearances, presentations,
memoranda, briefs, arguments, opinions and proposals made or submitted by or on
behalf of any Party relating to proceedings under the HSR Act or other Antitrust
Laws. Sellers and Purchaser may, as each deems advisable and necessary,
reasonably designate any competitively sensitive material provided to the other
under this Section 8.4 as "outside counsel only." Such materials and the
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information contained therein shall be given only to the outside legal counsel
of the recipient and will not be disclosed by such outside counsel to employees,
officers, or directors of the recipient, unless express written permission is
obtained in advance from the source of the materials (Sellers or Purchaser, as
the case may be).
(b) Each of Purchaser and Sellers shall use its reasonable
best efforts to resolve such objections, if any, as may be asserted by any
Governmental Body with respect to the transactions contemplated by this
Agreement under the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
amended, the Federal Trade Commission Act, as amended, and any other United
States federal or state or foreign statutes, rules, regulations, orders,
decrees, administrative or judicial doctrines or other laws that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade (collectively, the "Antitrust Laws"). In
connection therewith, if any Legal Proceeding is instituted (or threatened to be
instituted) challenging any transaction contemplated by this Agreement is in
violation of any Antitrust Law, each of Purchaser and Sellers shall cooperate
and use its reasonable best efforts to contest and resist any such Legal
Proceeding, and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order whether temporary, preliminary or permanent,
that is in effect and that prohibits, prevents, or restricts consummation of the
transactions contemplated by this Agreement, including by pursuing all available
avenues of administrative and judicial appeal and all available legislative
action, unless, by mutual agreement, Purchaser and Sellers decide that
litigation is not in their respective best interests. Each of Purchaser and
Sellers shall use its reasonable best efforts to take such action as may be
required to cause the expiration of the notice periods under the HSR Act or
other Antitrust Laws with respect to such transactions as promptly as possible
after the execution of this Agreement. In connection with and without limiting
the foregoing, each of Purchaser and Sellers agrees to use its reasonable best
efforts to take promptly any and all steps necessary to avoid or eliminate each
and every impediment under any Antitrust Laws that may be asserted by any
Federal, state and local and non-United States antitrust or competition
authority, so as to enable the Parties to close the transactions contemplated by
this Agreement as expeditiously as possible, provided that notwithstanding
anything to the contrary provided herein, neither Purchaser nor any of their
Affiliates shall be required (i) to hold separate (including by trust or
otherwise) or divest any businesses, product lines or assets of any Purchaser or
their Affiliates (the "Purchaser Business"), or any of the Purchased Assets or
(ii) to agree to any limitation on the operation or conduct of the Business or
the Purchaser Business.
8.5 Further Assurances. Each of Sellers and Purchaser shall use its
commercially reasonable efforts to (i) take all actions necessary or appropriate
to consummate the transactions contemplated by this Agreement (including
conveyances of Purchased Intellectual Property and Real Property Leases) and
(ii) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement.
8.6 Confidentiality. Purchaser acknowledges that the Confidential
Information provided to it in connection with this Agreement, including under
Section 8.1, and the consummation of the transactions contemplated hereby, is
subject to the terms of the confidentiality agreement between Foot Locker and
Parent dated May 6, 2002 (the "Confidentiality Agreement"), the terms of which
32
are incorporated herein by reference. Effective upon, and only upon, the Closing
Date, the Confidentiality Agreement shall terminate with respect to information
relating solely to the Business or otherwise included in the Purchased Assets;
provided, however, that Purchaser acknowledges that any and all other
Confidential Information provided to it by any Seller or its representatives
concerning any Seller and their Subsidiaries shall remain subject to the terms
and conditions of the Confidentiality Agreement after the Closing Date. For
purposes of this Section 8.6, "Confidential Information" shall mean any
confidential information with respect to, including, methods of operation,
customers, customer lists, Products, prices, fees, costs, Technology,
inventions, trade secrets, know-how, Software, marketing methods, plans,
personnel, suppliers, competitors, markets or other specialized information or
proprietary matters.
8.7 Preservation of Records. Sellers and Purchaser agree that each of
them shall preserve and keep the records held by it or their Affiliates relating
to the Business for a period of seven (7) years from the Closing Date and shall
make such records and personnel available to the other as may be reasonably
required by such Party in connection with, among other things, any insurance
claims by, Legal Proceedings or tax audits against or governmental
investigations of any Seller or Purchaser or any of their Affiliates or in order
to enable any Seller or Purchaser to comply with their respective obligations
under this Agreement and each other agreement, document or instrument
contemplated hereby or thereby. In the event Sellers or Purchaser wishes to
destroy such records before or after that time, such Party shall first give
ninety (90) days prior written notice to the other and such other Party shall
have the right at its option and expense, upon prior written notice given to
such Party within that ninety (90) day period, to take possession of the records
within one hundred and eighty (180) days after the date of such notice.
8.8 Publicity. Neither Sellers nor Purchaser shall issue any press
release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
Party hereto, which approval will not be unreasonably withheld or delayed,
unless, in the sole judgment of Purchaser or Sellers, disclosure is otherwise
required by applicable Law or by the Bankruptcy Court with respect to filings to
be made with the Bankruptcy Court in connection with this Agreement or by the
applicable rules of any stock exchange on which Foot Locker or Sellers list
securities, provided that the Party intending to make such release shall use its
reasonable best efforts consistent with such applicable Law or Bankruptcy Court
requirement to consult with the other Party with respect to the text thereof.
8.9 Use of Name. From and after the Closing, neither Purchaser nor any
of its Affiliates will (i) use the name "Footstar" or the name of any of
Parent's Affiliates or any confusingly similar names, or the intellectual
property of Parent or its Affiliates identified on Schedule 8.9, without the
prior written consent of Parent or such Affiliate, which consent may be withheld
in any such party's sole discretion, and (ii) not hold itself out as having any
affiliation with any Seller or any of their Affiliates.
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8.10 Supplementation and Amendment of Schedules. Sellers may, at their
option, include in the Schedules items that are not material in order to avoid
any misunderstanding, and such inclusion, or any references to dollar amounts,
shall not be deemed to be an acknowledgement or representation that such items
are material, to establish any standard of materiality or to define further the
meaning of such terms for purposes of this Agreement. Information disclosed in
the Schedules shall constitute a disclosure for all purposes under this
Agreement notwithstanding any reference to a specific section, and all such
information shall be deemed to qualify the entire Agreement and not just such
section. From time to time prior to the Closing, Sellers shall have the right to
supplement or amend the Schedules with respect to any matter hereafter arising
or discovered after the delivery of the Schedules pursuant to this Agreement. No
such supplement or amendment shall have any effect on the satisfaction of the
condition to closing set forth in Section 10.1(a); provided, however, if the
Closing shall occur, then Purchaser shall be deemed to have waived any right or
claim pursuant to the terms of this Agreement or otherwise, including pursuant
to Article XI hereof, with respect to any and all matters disclosed pursuant to
any such supplement or amendment at or prior to the Closing.
8.11 Transition Services. Promptly following the date hereof, the
Parties will negotiate in good faith to finalize a form of transition services
agreement to be executed and delivered at the Closing by Purchaser, on the one
hand, and one or more Sellers and/or one or more of their Affiliates, on the
other hand.
Article IX
EMPLOYEES AND EMPLOYEE BENEFITS
9.1 Employment. Transferred Employees.
(a) Sellers shall terminate all Employees on the Closing Date
and Purchaser shall offer full-time employment effective as of the Closing to
the specific Employees designated by the Purchaser ("Transferred Employees"). To
facilitate Purchaser's obligations under this Section 9.1, Sellers shall provide
Purchaser within a reasonable period prior to the Closing (and again on the
Closing Date) a true and correct list of all Employees, including with respect
to any inactive Employee, the reason for such inactive status and, if
applicable, the anticipated date of return to active employment. Except as
otherwise specifically set forth herein, Sellers shall have no responsibility
whatsoever for any liabilities or obligations which relate in any way to such
Transferred Employee's employment service with Purchaser.
(b) Purchaser shall not during the 90-day period beginning on
the Closing Date terminate the employment of full-time employees (as determined
for purposes of the WARN Act) of the Business hired by Purchaser so as to cause
any "plant closing" or "mass layoff" (as those terms are defined in the WARN
Act) such that Sellers have any obligation under the WARN Act that Sellers
otherwise would not have had absent such terminations; provided, however, that
in the event of any breach by Purchaser of the foregoing, Purchaser agrees to
indemnify Sellers for any such obligations.
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9.2 Employee Benefits.
(a) Effective as of the Closing Date, Purchaser shall cause
each Transferred Employee who was covered under the Employee Plans immediately
prior to the Closing Date to be covered under the comparable employee benefit
plans, programs and arrangements maintained by Purchaser (the "Purchaser
Plans"), in accordance with the terms and provisions of the Purchaser Plans. The
Purchaser Plans shall recognize each Transferred Employee's prior service that
is recognized under the Employee Plans (including prior service with predecessor
employers to the extent such prior service is recognized under the Employee
Plans) for eligibility and vesting purposes and, in the case of vacation or
severance benefits, for purposes of determining the amount of benefits.
(b) Effective as of the Closing Date, Purchaser shall take
all action necessary or appropriate to cause a defined contribution plan adopted
or maintained by Purchaser (the "Purchaser 401(k) Plan") to recognize prior
service with Parent or any of its Subsidiaries for purposes of vesting and
participation. Parent shall cause the account balances of the Transferred
Employees under the 401(k) Profit Sharing Plan of Parent and its Affiliates, as
amended from time to time (the "Footstar 401(k) Plan"), to be fully vested as of
the Closing Date. Parent shall permit Transferred Employees to make a "direct
rollover" of such Transferred Employees' account balances (including loans to
Transferred Employees) under the Footstar 401(k) Plan to Purchaser 401(k) Plan.
Parent acknowledges that on and after the Closing Date, the account balances of
Transferred Employees held in the Footstar 401(k) Plan will be distributable
from the Footstar 401(k) Plan in accordance with the Code. Parent and the
Footstar 401(k) Plan shall not place any Transferred Employee's plan loan in
default or declare a default with respect to any outstanding plan loan during
the ninety (90) day period following the Closing Date or such shorter period
requested by Purchaser, so long as such Transferred Employee continues to make
loan repayments when due and such Transferred Employee transfers his or her
account balance under the Footstar Plan, together with the promissory note
evidencing the plan loan, to the Purchaser 401(k) Plan through a "direct
rollover" on or as soon as administratively practicable following the Closing.
Article X
CONDITIONS TO CLOSING
10.1 Conditions Precedent to Obligations of Purchaser. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable Law):
35
(a) the representations and warranties of Sellers set forth
in this Agreement shall be true and correct at and as of the Closing, except to
the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct on and as of such earlier date); provided, however, that in the event of
a breach of a representation or warranty, the condition set forth in this
Section 10.1(a) shall be deemed satisfied unless the effect of all such breaches
of representations and warranties taken together result in a Material Adverse
Effect, and Purchaser shall have received a certificate signed by an authorized
officer of Seller, dated the Closing Date, to the foregoing effect;
(b) Sellers shall have performed and complied in all material
respects with all obligations and agreements required in this Agreement to be
performed or complied with by it prior to the Closing Date, and Purchaser shall
have received a certificate signed by an authorized officer of Parent on behalf
of Sellers, dated the Closing Date, to the forgoing effect; and
(c) Sellers shall have delivered, or caused to be delivered,
to Purchaser all of the items set forth in Section 4.2.
10.2 Conditions Precedent to Obligations of Sellers. The obligations of
Sellers to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the
following conditions (any or all of which may be waived by Sellers in whole or
in part to the extent permitted by applicable Law):
(a) the representations and warranties of Purchaser set forth
in this Agreement qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects, at
and as of the Closing Date as though made on the Closing Date, except to the
extent such representations and warranties relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date), and Sellers shall have
received a certificate signed by an authorized officer of Purchaser, dated the
Closing Date, to the foregoing effect;
(b) Purchaser shall have performed and complied in all
material respects with all obligations and agreements required by this Agreement
to be performed or complied with by Purchaser on or prior to the Closing Date,
and Sellers shall have received a certificate signed by an authorized officer of
Purchaser, dated the Closing Date, to the foregoing effect; and
(c) Purchaser shall have delivered, or caused to be
delivered, to Sellers all of the items set forth in Section 4.3.
10.3 Conditions Precedent to Obligations of Purchaser and Sellers. The
respective obligations of Purchaser and Sellers to consummate the transactions
36
contemplated by this Agreement are subject to the fulfillment, on or prior to
the Closing Date, of each of the following conditions (any or all of which may
be waived by Purchaser and Sellers in whole or in part to the extent permitted
by applicable Law):
(a) there shall not be in effect any Order by a Governmental
Body of competent jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated hereby;
(b) the Bankruptcy Court shall have entered the Sale Order
substantially in the form of the Sale Order submitted to the Bankruptcy Court
pursuant to Section 7.3; and
(c) the waiting period applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or early
termination shall have been granted.
10.4 Frustration of Closing Conditions. Neither Sellers nor Purchaser
may rely on the failure of any condition set forth in Section 10.1, 10.2 or
10.3, as the case may be, if such failure was caused by such Party's failure to
comply with any provision of this Agreement.
Article XI
NO SURVIVAL AND INDEMNIFICATION
11.1 No Survival of Representations and Warranties. The Parties hereto
agree that the representations and warranties contained in this Agreement shall
not survive the Closing hereunder, and none of the Parties shall have any
liability to each other after the Closing for any breach thereof. The Parties
hereto agree that the covenants contained in this Agreement to be performed at
or after the Closing shall survive the Closing hereunder, and each Party hereto
shall be liable to the other after the Closing for any breach thereof.
11.2 Indemnification by Sellers.
(a) Subject to Section 11.5 hereof, Sellers hereby agree to
indemnify and hold Purchaser and its directors, officers, employees, Affiliates,
agents, successors and permitted assigns harmless from and against:
(i) any and all losses, liabilities, obligations,
damages, costs and expenses (individually, a "Loss" and, collectively,
"Losses") based upon, attributable to or resulting from the breach of
any covenant or other agreement on the part of any Seller under this
Agreement;
(ii) any and all Losses based upon or arising directly
from any Excluded Asset or any Excluded Liability;
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(iii) any Losses based upon or arising directly out of
any Purchased Asset or Sellers' operation of the Business prior to the
Closing Date other than any liabilities arising prior to the Closing
Date that are Assumed Liabilities; and
(iv) any and all notices, actions, suits, proceedings,
claims, demands, assessments, judgments, costs, penalties and expenses,
including attorneys' and other professionals' fees and disbursements
(collectively, "Expenses") incident to the foregoing.
(b) Purchaser shall take and shall cause its Affiliates to
take all reasonable steps to mitigate any Loss upon becoming aware of any event
which would reasonably be expected to, or does, give rise thereto, including
incurring costs only to the minimum extent necessary to remedy the breach which
gives rise to the Loss.
11.3 Indemnification by Purchaser.
(a) Subject to Section 11.5, Purchaser hereby agrees to
indemnify and hold Sellers and their Affiliates, agents, successors and
permitted assigns harmless from and against:
(i) any and all Losses based upon, attributable to or
resulting from the breach of any covenant or other agreement on the
part of Purchaser under this Agreement;
(ii) any and all Losses based upon or arising directly
out of any Assumed Liability;
(iii) any and all Losses based upon or arising directly
out of any Purchased Asset or Purchaser's operation of the Business
after the Closing Date; and
(iv) any and all Expenses incident to the foregoing.
(b) Sellers shall take and cause their Affiliates to take
all reasonable steps to mitigate any Loss upon becoming aware of any event which
would reasonably be expected to, or does, give rise thereto, including incurring
costs only to the minimum extent necessary to remedy the breach which gives rise
to the Loss.
11.4 Indemnification Procedures.
(a) In the event that any Legal Proceedings shall be
instituted or that any claim or demand shall be asserted by any Person in
respect of which payment may be sought under Section 11.2 and 11.3 hereof
(regardless of the limitations set forth in Section 11.5) (an "Indemnification
Claim"), the indemnified party shall reasonably and promptly cause written
notice of the assertion of any Indemnification Claim of which it has knowledge
which is covered by this indemnity to be forwarded to the indemnifying party.
38
The indemnifying party shall have the right, at its sole option and expense, to
be represented by counsel of its choice, which must be reasonably satisfactory
to the indemnified party, and to defend against, negotiate, settle or otherwise
deal with any Indemnification Claim which relates to any Losses indemnified
against hereunder. If the indemnifying party elects to defend against,
negotiate, settle or otherwise deal with any Indemnification Claim which relates
to any Losses indemnified against hereunder, it shall within thirty (30) days
(or sooner, if the nature of the Indemnification Claim so requires) notify the
indemnified party of its intent to do so. If the indemnifying party elects not
to defend against, negotiate, settle or otherwise deal with any Indemnification
Claim which relates to any Losses indemnified against hereunder, the indemnified
party may defend against, negotiate, settle or otherwise deal with such
Indemnification Claim. If the indemnifying party shall assume the defense of any
Indemnification Claim, the indemnified party may participate, at his or its own
expense, in the defense of such Indemnification Claim; provided, however, that
such indemnified party shall be entitled to participate in any such defense with
separate counsel at the expense of the indemnifying party if (i) so requested by
the indemnifying party to participate or (ii) in the reasonable opinion of
counsel to the indemnified party a conflict or potential conflict exists between
the indemnified party and the indemnifying party that would make such separate
representation advisable; and provided, further, that the indemnifying party
shall not be required to pay for more than one such counsel for all indemnified
parties in connection with any Indemnification Claim. The parties hereto agree
to cooperate fully with each other in connection with the defense, negotiation
or settlement of any such Indemnification Claim. Notwithstanding anything in
this Section 11.4 to the contrary, neither the indemnifying party nor the
indemnified party shall, without the written consent of the other party, settle
or compromise any Indemnification Claim or permit a default or consent to entry
of any judgment unless the claimant and such party provide to such other party
an unqualified release from all liability in respect of the Indemnification
Claim. Notwithstanding the foregoing, if a settlement offer solely for money
damages is made by the applicable third party claimant, and the indemnifying
party notifies the indemnified party in writing of the indemnifying party's
willingness to accept the settlement offer and, subject to the applicable
limitations of Sections 11.5 and 11.6, pay the amount called for by such offer,
and the indemnified party declines to accept such offer, the indemnified party
may continue to contest such Indemnification Claim, free of any participation by
the indemnifying party, and the amount of any ultimate liability with respect to
such Indemnification Claim that the indemnifying party has an obligation to pay
hereunder shall be limited to the lesser of (A) the amount of the settlement
offer that the indemnified party declined to accept plus the Losses of the
indemnified party relating to such Indemnification Claim through the date of its
rejection of the settlement offer or (B) the aggregate Losses of the indemnified
party with respect to such Indemnification Claim. If the indemnifying party
makes any payment on any Indemnification Claim, the indemnifying party shall be
subrogated, to the extent of such payment, to all rights and remedies of the
indemnified party to any insurance benefits or other claims of the indemnified
party with respect to such Indemnification Claim.
(b) After any final decision, judgment or award shall have
been rendered by a Governmental Body of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
39
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to an Indemnification Claim
hereunder, the indemnified party shall forward to the indemnifying party notice
of any sums due and owing by the indemnifying party pursuant to this Agreement
with respect to such matter.
11.5 Certain Limitations on Indemnification. Purchaser shall not make
any claim for indemnification under this Article XI in respect of any matter
that is taken into account in the calculation of any adjustment to the Purchase
Price pursuant to Section 3.5.
11.6 Calculation of Losses. The amount of any Losses for which
indemnification is provided under this Article XI shall be net of any amounts
actually recovered or recoverable by the indemnified party under insurance
policies or otherwise with respect to such Losses.
11.7 Tax Treatment of Indemnity Payments. Sellers and Purchaser agree
to treat any indemnity payment made pursuant to this Article XI as an adjustment
to the Purchase Price for federal, state, local and foreign income tax purposes.
11.8 No Consequential Damages. Notwithstanding anything to the contrary
elsewhere in this Agreement, no party shall, in any event, be liable to any
other Person for any consequential, incidental, indirect, special or punitive
damages of such other Person, including loss of future revenue, income or
profits, diminution of value or loss of business reputation or opportunity
relating to the breach or alleged breach hereof (provided that such limitation
with respect to lost profits shall not limit Seller's right to recover contract
damages in connection with Purchaser's failure to close in violation of this
Agreement).
11.9 Exclusive Remedy. Subject to Section 4.6 and Section 13.2 hereof,
the sole and exclusive remedy of Sellers and Purchaser for any breach or
inaccuracy, or alleged breach or inaccuracy, of any representation, warranty,
covenant or agreement made by Sellers or Purchaser shall be indemnification in
accordance with this Article XI. In furtherance of the foregoing, the parties
hereby waive, to the fullest extent permitted by applicable Law, any and all
other rights, claims and causes of action (including rights of contributions, if
any) known or unknown, foreseen or unforeseen, which exist or may arise in the
future, that it may have against Sellers or any of their Affiliates, or
Purchaser or any of its Affiliates, as the case may be, arising under or based
upon any federal, state or local Law (including any such Law relating to
environmental matters or arising under or based upon any securities Law, common
Law or otherwise).
40
Article XII
TAXES
12.1 Transfer Taxes. Purchaser shall be responsible for (and shall
indemnify and hold harmless Sellers and their directors, officers, employees,
Affiliates, agents, successors and permitted assigns against) any sales, use,
stamp, documentary stamp, filing, recording, transfer or similar fees or taxes
or governmental charges (including any interest and penalty thereon) payable in
connection with the transactions contemplated by this Agreement ("Transfer
Taxes"). Sellers shall, however, seek to include in the Sales Order a provision
that provides that the transfer of the Purchased Assets shall be free and clear
of any stamp or similar taxes under Bankruptcy Code Section 1146(c). To the
extent that any Transfer Taxes are required to be paid by Sellers (or such
Transfer Taxes are assessed against Seller), Purchaser shall promptly reimburse
Sellers, as applicable, for such Transfer Taxes. Sellers and Purchaser shall
cooperate and consult with each other prior to filing any Tax Returns in respect
of Transfer Taxes; provided, however, Sellers may initially pay any Transfer
Taxes (for which Purchaser shall promptly reimburse Sellers) and, thereafter, in
reliance on Section 1146(c) of the Bankruptcy Code (if applicable) apply for a
refund (which refund shall be remitted to the Purchaser to the extent such
Transfer Taxes were previously reimbursed by Purchaser). Sellers and Purchaser
shall cooperate and otherwise take commercially reasonable efforts to obtain any
available refunds for Transfer Taxes.
12.2 Prorations. All real and personal property Taxes or similar ad
valorem obligations levied with respect to the Purchased Assets for any taxable
period that includes the Effective Time and ends after the Effective Time,
whether imposed or assessed before or after the Closing Date, shall be prorated
between Sellers on the one hand and Purchaser on the other hand as of the
Effective Time. If any Taxes subject to proration are paid by Purchaser, on the
one hand, and Seller, on the other hand, the proportionate amount of such Taxes
paid (or in the event of a refund of any portion of such Taxes previously paid
is received, such refund) shall be paid promptly by (or to) the other after the
payment of such Taxes (or promptly following the receipt of any such refund).
12.3 Purchase Price Allocation. Sellers and Purchaser shall agree to an
allocation of the purchase price (including the Assumed Liabilities) among the
Purchased Assets as specified in a schedule to be initially prepared and
delivered by Purchaser to Parent within forty-five (45) days after the Closing
Date and, in accordance with such allocation, Purchaser shall prepare and
deliver to Sellers copies of Form 8594 and any required exhibits thereto (the
"Asset Acquisition Statement"). Purchaser shall prepare and deliver to Sellers
from time to time revised copies of the Asset Acquisition Statement (the
"Revised Statements") so as to report any matters on the Asset Acquisition
Statement that need updating (including purchase price adjustments, if any)
consistent with the agreed upon allocation. The purchase price for the Purchased
Assets shall be allocated in accordance with the Asset Acquisition Statement or,
if applicable, the last Revised Statements, provided by Purchaser to Seller, and
all income Tax Returns and reports filed by Purchaser and Sellers shall be
prepared consistently with such allocation.
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Article XIII
MISCELLANEOUS
13.1 Expenses. Except as otherwise provided in this Agreement, each of
Sellers on one hand and Purchaser on the other hand shall bear its own expenses
incurred in connection with the negotiation and execution of this Agreement and
each other agreement, document and instrument contemplated by this Agreement and
the consummation of the transactions contemplated hereby and thereby; it being
understood that Purchaser as acquiring Party, shall solely be responsible for
paying the HSR Act filing fees.
13.2 Injunctive Relief. Damages at law may be an inadequate remedy for
the breach of any of the covenants, promises and agreements contained in this
Agreement, and, accordingly, any Party hereto shall be entitled to injunctive
relief with respect to any such breach, including without limitation specific
performance of such covenants, promises or agreements or an order enjoining a
party from any threatened, or from the continuation of any actual, breach of the
covenants, promises or agreements contained in this Agreement. The rights set
forth in this Section 13.2 shall be in addition to any other rights which a
Party may have at law or in equity pursuant to this Agreement.
13.3 Submission to Jurisdiction; Consent to Service of Process.
(a) Without limiting any Party's right to appeal any order of
the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive
jurisdiction to enforce the terms of this Agreement and to decide any claims or
disputes which may arise or result from, or be connected with, this Agreement,
any breach or default hereunder, or the transactions contemplated hereby, and
(ii) any and all proceedings related to the foregoing shall be filed and
maintained only in the Bankruptcy Court, and the Parties hereby consent to and
submit to the jurisdiction and venue of the Bankruptcy Court and shall receive
notices at such locations as indicated in Section 13.7 hereof; provided,
however, that if the Bankruptcy Case has closed, the Parties agree to
unconditionally and irrevocably submit to the exclusive jurisdiction of the
United States District Court for the Southern District of New York sitting in
New York County or the Commercial Division, Civil Branch of the Supreme Court of
the State of New York sitting in New York County and any appellate court from
any thereof, for the resolution of any such claim or dispute. The Parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the Parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(b) Each of the Parties hereby consents to process being
served by any Party in any suit, action or proceeding by delivery of a copy
thereof in accordance with the provisions of Section 13.7.
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13.4 Waiver of Right to Trial by Jury. Each Party to this Agreement
waives any right to trial by jury in any action, matter or proceeding regarding
this Agreement or any provision hereof.
13.5 Entire Agreement; Amendments and Waivers. This Agreement
(including the schedules and exhibits hereto) and the Confidentiality Agreement
represent the entire understanding and agreement between the Parties with
respect to the subject matter hereof. This Agreement can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the Party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought. No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any Party, shall be deemed to
constitute a waiver by the Party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by
any Party of a breach of any provision of this Agreement shall not operate or be
construed as a further or continuing waiver of such breach or as a waiver of any
other or subsequent breach. No failure on the part of any Party to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such Party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.
13.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and performed in such State.
13.7 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given (i) when delivered personally by
hand (with written confirmation of receipt), (ii) when sent by facsimile (with
written confirmation of transmission) or (iii) one (1) Business Day following
the day sent by overnight courier (with written confirmation of receipt), in
each case at the following addresses and facsimile numbers (or to such other
address or facsimile number as a party may have specified by notice given to the
other party pursuant to this provision):
If to any Seller, to:
Footstar, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
43
With a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Simeon Gold
If to Purchaser, to:
Foot Locker, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, General Counsel
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
13.8 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any law or public policy,
all other terms or provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal, or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
13.9 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any Person or entity not a Party to this
Agreement except as provided below. No assignment of this Agreement or of any
rights or obligations hereunder may be made by Sellers or Purchaser (by
operation of law or otherwise) without the prior written consent of the other
Parties hereto and any attempted assignment without the required consents shall
be void. No assignment of any obligations hereunder shall relieve the Parties
hereto of any such obligations. Upon any such permitted assignment, the
references in this Agreement to Purchaser shall also apply to any such assignee
unless the context otherwise requires.
44
13.10 Guarantee. Foot Locker, Inc. hereby irrevocably and
unconditionally guarantees the due and punctual performance of all obligations
of Purchaser under this Agreement (the "Guarantee"); provided, however, that the
Guarantee shall terminate as of the consummation of the Closing, except to the
extent and until such time as Purchaser pays the Post-Closing Adjustment Amount
if required to pursuant to Section 3.5.
13.11 Non-Recourse. No past, present or future director, officer,
employee, incorporator, member, partner or equityholder (other than Parent) of
any Seller shall have any liability for any obligations or liabilities of
Sellers under this Agreement or the Seller Documents of or for any claim based
on, in respect of, or by reason of, the transactions contemplated hereby and
thereby.
13.12 Counterparts.. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
PURCHASERS:
FL SPECIALTY OPERATIONS LLC
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
FL RETAIL OPERATIONS LLC
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
FOOT LOCKER STORES, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
FOOT LOCKER RETAIL, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
FOOT LOCKER, INC. (solely for purposes of Sections 6.6, 6.8, 6.9, and 13.10)
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
46
SELLERS:
FOOTSTAR, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
FOOTSTAR CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
47
1162 XXXXX XXXXX MALL FOOTACTION, INC.
125TH FOOTACTION, INC.
000 XXXXX XXXX XXXX FOOTACTION, INC.
000 XXXXXXXXX XXXX FOOTACTION, INC.
00XX XXXXXX FOOTACTION, INC.
63RD & WESTERN FOOTACTION, INC.
00 XXXXXXX XXXX FOOTACTION, INC.
00XX XXX XXXXXXX XXXXX FOOTACTION, INC.
ALA MOANA FOOTACTION, INC.
ALBANY MALL FOOTACTION, INC.
ALEXANDRIA MALL FOOTACTION, INC.
XXXXXX FOOTACTION, INC.
XXXXXXXX FOOTACTION, INC.
ANIMAS MALL FOOTACTION, INC.
ANNAPOLIS MALL FOOTACTION, INC.
APACHE-MINNESOTA XXXX XXXX, INC.
ARSENAL FOOTACTION, INC.
ATHLETIC CENTER, INC.
AUGUSTA MALL FOOTACTION, INC.
AURORA FOOTACTION, INC.
AVENTURA FAN CLUB, INC.
BAKERSFIELD FOOTACTION, INC.
XXXXXXX HILLS FOOTACTION, INC.
BATON ROUGE FOOTACTION, INC.
BAY PLAZA FOOTACTION, INC
BEL AIR MALL FOOTACTION, INC.
BEL-AIR CENTER FOOTACTION, INC.
BERGEN FOOTACTION, INC.
BERKLEY MALL FOOTACTION, INC.
XXXXXX FAN CLUB, INC.
XXXXXX LAKES FOOTACTION, INC.
BOSSIER MALL FOOTACTION, INC.
BOULEVARD MALL FAN CLUB, INC.
BOULEVARD MALL FOOTACTION, INC.
BOYNTON BEACH FOOTACTION, INC.
BRAINTREE FOOTACTION, INC.
BRAZOS MALL FOOTACTION, INC.
BRICKYARD MALL FOOTACTION, INC.
BROAD STREET FOOTACTION, INC.
BROWARD MALL FOOTACTION, INC.
BRUNSWICK SQUARE FOOTACTION, INC.
BURLINGTON CENTER (N.J.) FOOTACTION, INC.
CAMBRIDGE GALLERIA FAN CLUB, INC.
CANAL AND BOURBON ST. FOOTACTION, INC.
CANTERBURY SQUARE FOOTACTION, INC.
48
CAPITAL CENTRE FOOTACTION, INC.
CARLSBAD FAN CLUB, INC.
CAROLINA EAST FOOTACTION, INC.
CAROUSAL CENTER FOOTACTION, INC.
XXXXXX MALL FAN CLUB, INC.
XXXX FOOTACTION, INC.
CENTURY FOOTACTION, INC.
CHARLESTON FOOTACTION, INC.
CHARLOTTESVILLE FASHION SQ. FOOTACTION, INC.
CHATHAM RIDGE FOOTACTION, INC.
CHERRY HILL FOOTACTION, INC.
CHRISTIANA FOOTACTION, INC.
CHULA VISTA FAN CLUB, INC.
CIELO VISTA MALL FOOTACTION, INC.
CITADEL MALL FOOTACTION, INC.
CITY PLACE LONG BEACH FOOTACTION, INC.
CITY PLACE SILVER SPRINGS FOOTACTION, INC.
CODDINGTOWN FOOTACTION, INC.
COLISEUM-HAMPTON FOOTACTION, INC.
COLONIAL HEIGHTS FOOTACTION, INC.
COLUMBIA CENTER FOOTACTION, INC.
COLUMBIA FOOTACTION, INC.
COLUMBIA MALL FOOTACTION, INC.
COLUMBUS FAN CLUB, INC.
CORAL SQUARE FOOTACTION, INC.
CORTANA FOOTACTION, INC.
COVINA (CAL.) FOOTACTION, INC.
XXXXXXXX VALLEY FOOTACTION, INC.
CROSS COUNTY (N.Y.) FAN CLUB, INC.
CROSS CREEK MALL FOOTACTION, INC.
CROSSROADS CENTER FOOTACTION, INC.
CROSSROADS FOOTACTION, INC.
CT POST FAN CLUB, INC.
CUMBERLAND FOOTACTION, INC.
CUMBERLAND MALL FOOTACTION, INC.
XXXXXX RIDGE MALL FOOTACTION, INC.
DARTMOUTH FAN CLUB, INC.
DEDHAM MALL FAN CLUB, INC.
DEERBROOK MALL FOOTACTION, INC.
DEL AMO FAN CLUB, INC.
DEPTFORD FOOTACTION, INC.
DEPTFORD OPEN COUNTRY, INC.
DESOTO SQUARE MALL FOOTACTION, INC.
DOLPHIN MALL FOOTACTION, INC.
DOVER MALL FOOTACTION, INC.
00
XXXXX XXXX XXXXX FOOTACTION, INC.
EAST TOWNE MALL FOOTACTION, INC.
EASTFIELD OPEN COUNTRY, INC.
EASTLAND MALL FOOTACTION, INC.
EASTLAND-COLUMBUS FOOTACTION, INC.
EASTPOINT MALL FOOTACTION, INC.
XXXXXXXXX FAN CLUB, INC.
XXXXXXXXX MALL FOOTACTION, INC.
EATONTOWN OPEN COUNTRY, INC.
XXXXXXXXX FOOTACTION, INC.
EMERALD SQUARE FOOTACTION, INC.
FA HQ, INC.
FAIR OAKS FOOTACTION, INC.
FAIRFIELD COMMONS FAN CLUB, INC.
FAIRGROUNDS SQ. FOOTACTION, INC.
FAIRLANE FOOTACTION, INC.
FAIRLANE XXXXXXX FOOTACTION, INC.
FIESTA FOOTACTION, INC.
FIRST COLONY FOOTACTION, INC
FLORIDA MALL FOOTACTION, INC.
FLORIN CENTER FOOTACTION, INC.
FOOTACTION CENTER, INC
FOOTACTION GULFGATE MALL, INC.
FORD CITY FOOTACTION, INC.
FOREST HILLS FOOTACTION, INC.
FOREST VILLAGE PARK FOOTACTION, INC.
FOUR SEASONS FOOTACTION, INC.
FOX HILLS (CAL.) FAN CLUB, INC.
FREEDOM MALL FOOTACTION, INC.
FRESNO FAN CLUB, INC.
XXXXXX FOOTACTION, INC.
GADSDEN MALL FOOTACTION, INC.
GENTILLY XXXXX FOOTACTION, INC.
GETTY SQUARE FOOTACTION, INC.
GLENDALE CENTER FOOTACTION, INC.
GLENDALE GALLERIA FOOTACTION, INC.
GOLDEN EAST CROSSING FOOTATION, INC.
GRAND AVENUE FOOTACTION, INC.
XXXXXXX FOOTACTION, INC.
GRANITE RUN FAN CLUB, INC.
GREECE TOWN MALL FAN CLUB, INC.
GREEN ACRES OPEN COUNTRY, INC.
GREENBRIAR MALL FOOTACTION, INC.
GREENSPOINT FOOTACTION, INC.
GURNEE XXXXX FAN CLUB, INC.
50
HALLWOOD FOOTACTION, INC.
XXXXXXXX FAN CLUB, INC.
XXXXXXXX PLACE FOOTACTION, INC.
HAMTRAMCK FOOTACTION, INC.
XXXXX MALL FOOTACTION, INC.
HANFORD FAN CLUB, INC.
HARLEM-IRVING FOOTACTION, INC.
XXXXXX XXXXX FOOTACTION, INC.
HARRISBURG EAST FOOTACTION, INC.
HATTISBURG FOOTACTION, INC.
XXXXXXX FOOTACTION, INC.
HICKORY HOLLOW MALL FOOTACTION, INC.
HICKORY RIDGE MALL FOOTACTION, INC.
HIGHLAND MALL FOOTACTION, INC.
HIGHLAND PARK FOOTACTION, INC.
HILLTOP FOOTACTION, INC.
HOMIGUERO FOOTACTION, INC
XXXXXX MALL FOOTACTION, INC.
XXXXX FOOTACTION, INC.
INDEPENDENCE CENTER FOOTACTION, INC.
INDEPENDENCE MALL FOOTACTION, INC.
XXXXXX PARK FOOTACTION, INC.
IRVING FOOTACTION, INC.
XXXXXXX MALL FOOTACTION, INC.
JACKSONVILLE MALL FOOTACTION, INC.
JEFFERSON FOOTACTION, INC.
JESSAMINE FOOTACTION, INC.
KENNER FOOTACTION, INC.
KENWOOD FOOTACTION, INC.
KILLEEN MALL FOOTACTION, INC.
KINGS PLAZA FAN CLUB, INC.
LA PLAZA MALL FOOTACTION, INC.
LADERA CENTER FOOTACTION, INC.
LAKEFOREST FAN CLUB, INC.
LAKELAND SQUARE FOOTACTION, INC.
LAKEWOOD FAN CLUB, INC.
LAUREL CENTRE FOOTACTION, INC.
LAWNDALE PLAZA FOOTACTION, INC.
LINCOLN PARK FOOTACTION, INC.
XXXXX CENTER FAN CLUB, INC.
LONGVIEW FOOTACTION, INC.
LUFKIN FOOTACTION INC.
MACOMB MALL FOOTACTION, INC.
MACON MALL FOOTACTION, INC.
MADISON SQUARE MALL FOOTACTION, INC.
00
XXXXXXXX XXXX FOOTACTION, INC.
MAINLAND MALL FOOTACTION, INC.
MALL @ XXXXXX CROSSING FOOTACTION, INC.
MALL AT 163RD ST. FOOTACTION, INC.
MALL DE AGUILAS FOOTACTION, INC.
MALL OF ABILENE FOOTACTION, INC.
MALL OF AMERICA FAN CLUB, INC.
MALL OF AMERICAS FOOTACTION, INC.
MALL ST. XXXXXXX FOOTACTION, INC.
MANASSAS FOOTACTION
MARKET CENTER FOOTACTION, INC.
MARKETPLACE AT HOLLYWOOD FOOTACTION, INC.
MCCREELESS MALL FOOTACTION, INC.
MD., WHEATON FOOTACTION, INC.
MEDIA CITY FAN CLUB, INC.
MELBOURNE SQUARE FAN CLUB, INC.
MENLO PARK FAN CLUB, INC.
MENLO PARK XXXX XXXX, INC.
MERCED MALL FOOTACTION, INC.
XXXXXXX ISLAND FOOTACTION. INC.
MESILLA VALLEY MALL FOOTACTION, INC.
METRO NORTH FOOTACTION, INC.
METROCENTER MALL FOOTACTION, INC.
MIAMI FLAGLER FOOTACTION, INC.
MIAMI INTERNATIONAL FAN CLUB, INC.
MIDLAND PARK FOOTACTION, INC.
MILITARY CIRCLE FOOTACTION, INC.
MONDAWMIN FOOTACTION, INC.
MONTEBELLO FAN CLUB, INC.
XXXXXXXXXX MALL FOOTACTION, INC.
MT. XXXXX SQUARE FOOTACTION, INC,
NEWBURGH MALL FOOTACTION, INC.
NEWPORT CENTER FAN CLUB, INC.
NEWPORT CITY XXXX XXXX, INC
NORTH EAST FOOTACTION, INC.
NORTH MILWAUKEE AVENUE FOOTACTION, INC.
NORTH RIVERSIDE FAN CLUB, INC.
NORTH SHORE FOOTACTION, INC.
NORTHGATE - DURHAM FOOTACTION, INC.
NORTHGATE - SEATTLE OPEN COUNTRY, INC.
NORTHGATE FOOTACTION, INC.
NORTHLAND CENTER FOOTACTION, INC.
NORTHWEST FOOTACTION, INC.
NORTHWEST MALL FOOTACTION, INC.
NORTHWOODS MALL FOOTACTION, INC.
00
XXX XXXXXX XXXXXXXXXX, XXX.
XXX XXXX FOOTACTION, INC.
OAKWOOD FOOTACTION, INC.
OCALA FOOTACTION, INC.
OCEAN COUNTY MALL FOOTACTION, INC.
OGLETHORPE FOOTACTION, INC.
OLD HICKORY MALL FOOTACTION, INC.
ORANGE PARK (FLA.) FOOTACTION, INC.
OXFORD VALLEY MALL FOOTACTION, INC.
PADRE FOOTACTION, INC.
PALM BEACH FOOTACTION, INC.
PARKCHESTER FOOTACTION, INC.
PARKDALE MALL FOOTACTION, INC.
PASADENA TOWNE SQUARE FOOTACTION, INC.
PATERSON MAIN FOOTACTION, INC.
PEARLRIDGE FOOTACTION, INC.
PECANLAND MALL FOOTACTION, INC.
PEMBROKE LAKES FOOTACTION, INC.
PERMIAN MALL FOOTACTION, INC.
PICO XXXXXX FOOTACTION, INC.
PINE BLUFF FOOTACTION, INC.
PLAZA DEL CARIBE FOOTACTION, INC.
POST OAK MALL FOOTACTION, INC.
XXXXX LAKE FOOTACTION, INC.
PRINCE GEORGE'S FOOTACTION, INC.
PROVIDENCE COUNTY FAN CLUB, INC.
XXXXXX HILLS FOOTACTION, INC.
QUAKER BRIDGE OPEN COUNTRY, INC.
RACEWAY FAN CLUB, INC.
XXXXXXX XXXX FOOTACTION, INC.
REDONDO BEACH FOOTACTION, INC.
REGENCY SQUARE FOOTACTION, INC.
RICHLAND MALL FOOTACTION, INC.
RIO-WEST MALL FOOTACTION, INC.
RIVER CENTER FOOTACTION, INC.
RIVER RIDGE MALL FOOTACTION, INC.
RIVERCHASE FOOTACTION, INC.
RIVERGATE MALL FOOTACTION, INC.
ROCK HILL MALL FOOTACTION, INC.
ROLLING ACRES OPEN COUNTRY, INC.
ROOSEVELT FIELD OPEN COUNTRY, INC.
ROOSEVELT MALL (PA) FOOTACTION, INC.
SAN CADOS FOOTACTION, INC.
SAN JACINTO FOOTACTION, INC.
SAN LEANDRO FOOTACTION, INC.
53
SANTA XXXXX FAN CLUB, INC.
SAWGRASS FAN CLUB, INC.
SECURITY SQUARE MALL FOOTACTION, INC.
SEMINARY SOUTH FOOTACTION, INC.
SERRAMONTE FOOTACTION, INC.
XXXXXXX FOOTACTION, INC.
SHARPSTOWN CENTER FOOTACTION, INC.
SIGNAL HILL MALL FOOTACTION, INC.
XXXXXX FOOTACTION, INC.
SOUTH PARK MALL FOOTACTION, INC.
SOUTH PLAINS FOOTACTION, INC.
SOUTH SHORE FOOTACTION, INC.
SOUTHERN PARK FOOTACTION, INC.
SOUTHLAKE MALL FOOTACTION, INC.
SOUTHLAND TERRACE FOOTACTION, INC.
SOUTHLAND-HAYWARD FOOTACTION, INC.
SOUTHRIDGE FOOTACTION, INC.
SOUTHWEST CENTER FOOTACTION, INC.
SPRINGFIELD MALL FOOTACTION, INC.
SQUARE ONE FOOTACTION, INC.
ST. CLAIR FOOTACTION, INC.
ST. LOUIS CENTER FOOTACTION, INC.
STATEN ISLAND FAN CLUB, INC.
STEAMTOWN FOOTACTION, INC.
STONY BROOK FOOTACTION, INC.
SUMMIT PLACE FAN CLUB, INC.
SUNRISE FOOTACTION, INC.
TACOMA MALL FOOTACTION, INC.
XXXXXXXXXX XXXX X#00 FOOTACTION, INC.
XXXXXX TOWNSHIP FOOTACTION, INC
TEMPLE FOOTACTION, INC.
THE LANDINGS FOOTACTION, INC.
THE XXXXXXX FAN CLUB, INC.
THE PARKS FOOTACTION, INC.
THE PLAZA FOOTACTION, INC.
THE VILLAGE FOOTACTION, INC.
TOWER CENTER FOOTACTION, INC.
TOWN EAST FOOTACTION, INC.
TREASURE COAST MALL FOOTACTION, INC.
TRI-COUNTY FOOTACTION, INC.
XXXX FOOTACTION, INC.
TRUMBULL PARK FAN CLUB, INC.
TUCSON MALL FOOTACTION, INC.
TUKWILA OPEN COUNTRY, INC.
TULSA PROMENADE FOOTACTION, INC.
00
XXXX XXXXXX XXXX FOOTACTION, INC.
TYLER MALL FAN CLUB, INC.
XXXXXX SQUARE FOOTACTION, INC.
UNIVERSITY FOOTACTION, INC.
UPPER XXXXX FOOTACTION, INC.
VALLEY HILLS FOOTACTION, INC.
VALLEY VIEW SHOPPING CTR. FOOTACTION, INC.
VILLAGE MALL FOOTACTION, INC.
VINTAGE FAIRE FOOTACTION, INC.
VIRGINIA CENTER COMMONS FOOTACTION, INC.
W. MIFFLIN FOOTACTION, INC.
WARNER ROBINS GALLERIA FOOTACTION, INC.
WASHINGTON SQUARE FOOTACTION, INC.
WASHINGTON STREET FAN CLUB, INC.
WEST END MALL FOOTACTION, INC.
WEST OAKS FOOTACTION, INC.
WEST OAKS FOOTACTION, INC.
WEST TOWNE FOOTACTION, INC.
WESTERN HILLS FOOTACTION, INC.
WESTFARMS OPEN COUNTRY, INC.
WESTGATE FAN CLUB, INC.
WESTGATE FOOTACTION, INC.
WESTGATE MALL FOOTACTION, INC.
WESTLAND-HAILEAH FAN CLUB, INC.
WHITE XXXXX OPEN COUNTRY, INC.
WHITE PLAINS GALLERIA FOOTACTION, INC.
WILLOWBROOK MALL FOOTACTION, INC.
WIREGRASS COMMONS FOOTACTION, INC.
WOODLAND HILLS FOOTACTION, INC.
WRIGLEY MARKETPLACE FOOTACTION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Authorized Signatory
55