EXHIBIT 10.3
OPTION AGREEMENT
THIS OPTION AGREEMENT is made and entered into as of April 14, 1997 by and
among THE XXXXXX GROUP INC., a Delaware corporation ("Xxxxxx"), XXXXXXX SHOE
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COMPANY INC., a Delaware corporation ("Xxxxxxx"), XXXXXXX RETAIL INC., a
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Delaware corporation ("Xxxxxxx Retail"), and SLJ RETAIL LLC, a Delaware limited
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liability company (the "Company").
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RECITALS
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X. Xxxxxx, Xxxxxxx and Xxxxxxx Retail are parties to the Contribution
Agreement and Xxxxxx and Xxxxxxx Retail are parties to the Operating Agreement
(as such terms are defined below).
B. Pursuant to the Contribution Agreement and in connection with the
transactions contemplated by the Operating Agreement, the parties wish to enter
into this Agreement, setting forth their mutual understandings and agreements
with respect to the matters set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
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1.1 Definitions. The following definitions will apply to the capitalized
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terms used in this Agreement for all purposes, unless otherwise clearly
indicated to the contrary:
"Aggregate Put Price" has the meaning set forth in Section 2.2(a).
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"Agreement" means this Option Agreement, as it may be amended, modified,
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supplemented or restated from time to time.
"Business Day" means any day that is not a Saturday or Sunday or a day on
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which banks are required or permitted to be closed in the States of New York or
Massachusetts.
"Xxxxxx" means The Xxxxxx Group Inc., a Delaware corporation, and its
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successors and assigns pursuant to any Transfer permitted under the Operating
Agreement.
"Xxxxxx Exchange Rights" has the meaning set forth in Section 2.1.
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"Capital Contribution" has the meaning set forth in the Operating
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Agreement.
"Class A Member Interests" has the meaning set forth in the Operating
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Agreement.
"Class A Member Units" has the meaning set forth in the Operating
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Agreement.
"Class B Member Interests" has the meaning set forth in the Operating
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Agreement.
"Class B Member Units" has the meaning set forth in the Operating
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Agreement.
"Code" has the meaning set forth in the Operating Agreement.
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"Company" means SLJ Retail LLC, the limited liability company formed
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pursuant to the Operating Agreement.
"Contribution Agreement" means the Contribution Agreement dated of even
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date herewith among Xxxxxx, Xxxxxxx and Xxxxxxx Retail, as it may be amended,
modified, supplemented or restated from time to time.
"Current Market Price" means, in respect of any share of Xxxxxxx Common
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Stock on any date, the average of the daily market prices for the ninety
consecutive trading days immediately preceding such date. The daily market
price for each such trading day shall be (i) the last sale price on such day on
the principal stock exchange on which the Xxxxxxx Common Stock is then listed or
admitted to trading, or (ii) if no sale takes place on such day on any such
exchange, the average of the last reported closing bid and asked prices on such
day as officially quoted on any such exchange, or (iii) if the Xxxxxxx Common
Stock is not then listed or admitted to trading on any stock exchange, the last
sale price on such day as reported in the NASD Automated Quotations System, or
if the Xxxxxxx Common Stock is not on the National Market List, the average of
the last reported closing bid and asked prices on such day in the over-the-
counter market, as furnished by the National Quotation Bureau, Inc., or if
neither such corporation at the time is engaged in the business of reporting
such prices, as furnished by any similar firm then engaged in such business, or
if there is no such firm, as furnished by any member of the NASD selected
mutually by Xxxxxx and Xxxxxxx or, if they cannot agree upon such selection, as
selected by two such members of the NASD, one of which shall be selected by
Xxxxxx and one of which shall be selected by Xxxxxxx.
"Formula Value" means, at any date, the amount equal to the product of (a)
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seven and 2/10 (7.2) multiplied by (b) the sum of (i) the Company's net income
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(without any provision for federal and state income taxes) for the most recent
period of twelve consecutive fiscal months of the Company ending on or after the
first anniversary of the date of this Agreement and on or before the date of
determination, plus (ii) depreciation and amortization during such period with
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respect to assets contributed to the Company by or on behalf of the Members
pursuant to the Contribution Agreement (but not assets acquired by the Company
otherwise), to the extent deducted in determining such net income, in each case
determined in accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United States
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of America as from time to time in effect, applied on a consistent basis with
those accounting principles applied at prior dates or for prior periods.
"Governmental Body" means any governmental or quasi-governmental agency,
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authority, commission, board or other body.
"Lien" has the meaning set forth in the Contribution Agreement.
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"Manager" has the meaning set forth in the Operating Agreement.
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"Xxxxxxx" means Xxxxxxx Shoe Company Inc., a Delaware corporation.
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"Xxxxxxx Common Stock" means the Class A Common Stock, par value $.01 per
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share, of Xxxxxxx, as it exists on the date of this Agreement, and any capital
stock of Xxxxxxx into which such Class A Common Stock may hereafter be changed.
"Xxxxxxx Option Rights" has the meaning set forth in Section 3.1.
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"Xxxxxxx Registration Rights Agreement" has the meaning set forth in the
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Contribution Agreement.
"Xxxxxxx Retail" means Xxxxxxx Retail Inc., a Delaware corporation, and its
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successors and assigns pursuant to any Transfer permitted under the Operating
Agreement.
"Member Interest" has the meaning set forth in the Operating Agreement.
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"Member Units" has the meaning set forth in the Operating Agreement.
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"NASD" means the National Association of Securities Dealers, Inc., or any
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successor corporation thereto.
"Notice of Objection" has the meaning set forth in Section 2.2(g).
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"Person" means an individual, corporation, partnership, limited liability
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company, joint venture, trust, estate, unincorporated organization, association,
Governmental Body or other entity.
"Put Exercise Notice" has the meaning set forth in Section 2.2(a).
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"Put Price Per Member Unit" means, in respect of any Class B Member Unit as
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of the date of any Put Exercise Notice, the quotient of (a) the Formula Value of
the Company as of such date (determined on the basis set forth in the definition
thereof, without giving effect to any
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discount for (i) the fact that the Class B Member Units may constitute a
minority interest, or (ii) any restrictions on the transferability of the Class
B Member Units, or (iii) the absence of a public market for the Class B Member
Units) divided by (b) the total number of Class A Member Units and Class B
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Member Units held as of such date or deemed to be held as of such date in
accordance with Sections 2.4 and 3.2(a).
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"Put Price Notice" has the meaning set forth in Section 2.2(b).
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"Subordinated Notes" has the meaning set forth in the Contribution
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Agreement.
"Transfer" has the meaning set forth in the Operating Agreement.
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1.2 Rules of Construction.
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(a) All article, section and paragraph titles and captions in this
Agreement are for convenience only, will not be deemed part of this Agreement,
and in no way define, limit, extend, or describe the scope or intent of any
provisions of this Agreement. Except as specifically provided otherwise,
references to "Articles," "Sections" and "Exhibits" are to Articles, Sections
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and Exhibits of or to this Agreement.
(b) Whenever the context may require, any pronoun used in this Agreement
includes the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs includes the plural and vice versa. The
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locative adverbs "hereof," "herein," "hereafter," etc. refer to this Agreement
as a whole.
(c) All accounting terms used in this Agreement and not specifically
defined in Section 1.1 of this Agreement shall be construed in conformity with
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GAAP. In the event that GAAP changes during the term of this Agreement such
that the defined terms set forth in Section 1.1 or any other accounting terms
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used herein would then be calculated in a different manner, then (i) the parties
hereto agree to amend this Agreement in such respects as are necessary to
conform the defined terms set forth in Section 1.1 or any other accounting terms
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used herein so that the criteria for the computations contemplated by Section
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2.2(g) of this Agreement are substantially the same as were effective prior to
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such change in GAAP, and (ii) until the parties so amend this Agreement, the
defined terms set forth in Section 1.1 or any other accounting terms used
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herein and the application of such terms pursuant to Section 2.2(g) shall be
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construed in conformity with GAAP as in effect immediately prior to such change.
ARTICLE II
XXXXXX'X OPTION RIGHTS
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2.1 Xxxxxx'x Exchange Option.
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(a) Xxxxxx shall have the right (the "Xxxxxx Exchange Rights"), exercisable
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at any time on or prior to the fifth anniversary of the date of this Agreement,
by giving written notice of such exercise to the Company with a copy thereof to
Xxxxxxx and the Manager, to exchange (i) all (but not less than all) of the
4,500 Class A Member Units issued to it pursuant to Section 4.2(b) of the
Operating Agreement, together with all (but not less than all) of the
$12,500,000 in principal amount of the Subordinated Notes, for (ii) 4,500 Class
B Member Units of the Company.
(b) The closing of the Xxxxxx Exchange Rights pursuant to paragraph (a)
above shall take place concurrently with the closing of the transactions
contemplated by Section 3.2(b) hereof if the Xxxxxx Exchange Rights are deemed
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to be exercised on the basis contemplated by Section 3.2(a) hereof, and
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otherwise shall take place on the date (not later than thirty days following the
date that Xxxxxx'x notice is given pursuant to paragraph (a) above) agreed upon
by the Company and Xxxxxx (or, if such day is not a Business Day, on the next
succeeding Business Day), at the principal place of business of the Company (or
at such other place as Xxxxxx and the Company shall agree).
(c) On the date of closing of the Xxxxxx Exchange Rights pursuant to
paragraph (b) above, (i) Xxxxxx shall deliver the Subordinated Notes to the
Company for cancellation and, upon such delivery, Xxxxxx shall be deemed to hold
4,500 Class B Member Units in lieu of the 4,500 Class A Member Units issued to
it pursuant to Section 4.2(b) of the Operating Agreement and such Class B
Member Units, together with any other Member Units then held by Xxxxxx, shall
evidence Xxxxxx'x aggregate Member Interest in the Company, and (ii) the Company
shall pay to Xxxxxx the amount of any accrued but unpaid interest on the
Subordinated Notes through and including such date.
2.2 Xxxxxx'x Put Option.
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(a) At any time or times from and after the exercise by Xxxxxx of the
Xxxxxx Exchange Rights, through and including the seventh anniversary of the
date of this Agreement, Xxxxxx shall have the right, by giving written notice of
such exercise to Xxxxxxx with a copy thereof to the Manager (a "Put Exercise
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Notice"), to require Xxxxxxx to purchase from Xxxxxx, on the date and in the
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manner set forth in paragraphs (d) and (e) below, those Class B Member Units of
Xxxxxx as are designated in such Put Exercise Notice for an aggregate purchase
price (the "Aggregate Put Price") equal to the product of (i) the number of
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Class B Member Units designated in the Put Exercise Notice, multiplied by (ii)
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the Put Price Per Member Unit as of the date of such Put Exercise Notice,
determined on the basis set forth in paragraphs (b) and (g) below. Any such
notice may be given concurrently with any notice with respect to the exercise of
the Xxxxxx Exchange Rights given pursuant to Section 2.1(a) hereof and, in such
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event, shall apply to the Class B Member Units to be issued to Xxxxxx pursuant
to such notice. Xxxxxx may exercise the rights set forth in this paragraph (a)
on not more than three occasions.
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(b) Promptly upon receiving a Put Exercise Notice given pursuant to
paragraph (a) above, the Manager shall cause the Company to take all necessary
or appropriate actions to cause the Put Price Per Member Unit and the Aggregate
Put Price to be determined in accordance with paragraph (g) hereof and shall, in
any event, within thirty days after the date the Put Exercise Notice is
received, give Xxxxxx written notice (a "Put Price Notice") of the amount of
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such Put Price Per Member Unit and Aggregate Put Price as so determined,
accompanied by (i) a statement, in reasonable detail, setting forth the basis on
which such Put Price Per Member Unit and Aggregate Put Price were so determined,
and (ii) a certification of the independent accountants making such
determination, as to the accuracy of such statement. The Aggregate Put Price,
as so determined, shall be payable at closing in accordance with paragraph (e)
below.
(c) Nothing contained in this Section 2.2 shall preclude the rescission by
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Xxxxxx of any Put Exercise Notice at any time before the consummation of the
purchase of the Class B Member Units contemplated thereby by giving written
notice of such rescission to Xxxxxxx but, in the event of such a rescission, (i)
Xxxxxxx Retail shall have the right to rescind any exercise by it of the Xxxxxxx
Option Rights pursuant to Section 2.4 hereof, (ii) such Put Exercise Notice
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shall count as one of the three Put Exercise Notices permitted by paragraph (a)
hereof and (iii) Xxxxxx shall reimburse the Company's reasonable out-of-pocket
expenses incurred pursuant to paragraph (g) hereof.
(d) The purchase of the Class B Member Units provided for in paragraph (a)
hereof shall be consummated on the date (not later than thirty days following
the date established for determination of the Put Price Per Member Unit and the
Aggregate Put Price pursuant to paragraph (b) hereof) agreed upon by Xxxxxxx and
Xxxxxx (or if such day is not a Business Day, on the next succeeding Business
Day), at the principal office of the Company (or at such other place as Xxxxxx
and Xxxxxxx shall agree).
(e) On the date of any purchase of Class B Member Units by Xxxxxxx pursuant
to this Section 2.2, (i) Xxxxxx shall assign to Xxxxxxx the Class B Member
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Units being purchased by Xxxxxxx hereunder, without any representation or
warranty whatsoever (other than to the effect that Xxxxxx has good title to such
Class B Member Units, free and clear of Liens, and has all requisite power and
authority to assign such Class B Member Units to Xxxxxxx hereunder), and (ii)
Xxxxxxx shall deliver to Xxxxxx the Aggregate Put Price for such Class B Member
Units, at the option of Xxxxxxx, either by (A) wire transfer of the Aggregate
Put Price to an account in a bank located in the United States designated by
Xxxxxx for such purpose, (B) delivery to Xxxxxx of an official bank check drawn
on a member of the New York Clearing House, payable to the order of Xxxxxx in
the amount of the Aggregate Put Price, or (C) the issuance by Xxxxxxx to Xxxxxx
of that number of shares of Xxxxxxx Common Stock (rounded up to the next whole
number of shares), having a value equal to the Aggregate Put Price based on the
Current Market Price of such shares of Xxxxxxx Common Stock as of the date the
Put Exercise Notice is given, determined on the basis set forth in paragraph (g)
below. Upon such assignment of Class B Member Units to Xxxxxxx, such Class B
Member Units shall automatically, without further action on the part of any
party, be converted into the same number of Class A Member Units.
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(f) Any purchase by Xxxxxxx of Class B Member Units pursuant to this
Section 2.1 which is delayed past the date specified in paragraph (d) above by
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(i) the failure of the Company to determine the Put Price Per Member Unit or the
Aggregate Put Price within the time period required in paragraph (b) above, or
(ii) an objection by Xxxxxx to any determination by the Company of the Put Price
Per Member Unit or the Aggregate Put Price pursuant to paragraph (g) below,
shall be consummated within thirty days after the resolution of such objection
pursuant to paragraph (g) below, and the Aggregate Put Price shall bear interest
at the rate of eight percent (8%) per annum, calculated daily on the basis of a
360-day year and actual days elapsed, for the period beginning sixty days after
the date the Put Exercise Notice is given and ending on the date of payment in
full of the Aggregate Put Price pursuant to paragraph (e) above.
(g) The determination of the Formula Value, Put Price Per Member Unit,
Aggregate Put Price and Current Market Price of each share of Xxxxxxx Common
Stock shall be made by the firm of independent accountants then retained by the
Company, at the sole expense of the Company. Xxxxxx shall have the right at any
time to object to the Formula Value, Put Price Per Member Unit, Aggregate Put
Price and Current Market Price so determined by giving written notice (a "Notice
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of Objection") to Xxxxxxx with a copy thereof to the Manager, specifying the
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nature of its objection, within fifteen days following receipt of the Company's
Put Price Notice pursuant to paragraph (b) hereof and, unless such objection is
resolved by agreement of the Company, Xxxxxxx and Xxxxxx within fifteen days
following the date such Notice of Objection is given, Xxxxxxx and Xxxxxx shall
each have the right to subject the disputed determination to separate firms of
independent accountants of recognized national standing for a joint resolution
of the objection of Xxxxxx (neither of which shall be the firm of independent
accountants regularly retained by the Company). If such firms cannot jointly
resolve the objection of Xxxxxx, then, unless otherwise directed by agreement of
Xxxxxxx and Xxxxxx, such firms shall choose another firm of independent
accountants of recognized national standing, which firm shall resolve such
objection. In such case, the determination of the Formula Value, Put Price Per
Member Unit, Aggregate Put Price and Current Market Price so made shall be
conclusive and binding on Xxxxxx, Xxxxxxx and all Persons claiming under or
through either of them. The cost of the independent accountants selected by
Xxxxxxx shall be borne solely by Xxxxxxx, the cost of the independent
accountants selected by Xxxxxx shall be borne solely by Xxxxxx, and the cost of
any independent accountants chosen by Xxxxxxx'x and Xxxxxx'x independent
accountants to resolve any objection shall be borne one-half each by Xxxxxx and
Xxxxxxx.
2.3 Xxxxxx Registration Rights with Respect to Xxxxxxx Common Stock. In
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the event that Xxxxxxx elects to issue shares of Xxxxxxx Common Stock to Xxxxxx
pursuant to Section 2.2(e) above:
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(a) Xxxxxx will have those registration rights with respect to such shares
of Xxxxxxx Common Stock as are more fully set forth in the Xxxxxxx Registration
Rights Agreement; and
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(b) in order to permit Xxxxxx the opportunity to exercise the registration
rights provided for in the Xxxxxxx Registration Rights Agreement, Xxxxxxx agrees
that it will not, at any time during the "Lockout Period" (as defined below),
directly or indirectly, without the prior written consent of Xxxxxx, offer,
sell, offer to sell, contract to sell, grant any option to purchase or otherwise
sell or dispose (or announce any offer, sale, offer of sale, contract of sale,
grant of any option to purchase or other sale or disposition) of any shares of
Xxxxxxx Common Stock or any securities convertible into, or exchangeable or
exercisable for, Xxxxxxx Common Stock or other capital stock of Xxxxxxx, except
for grants of or issuances pursuant to the exercise of employee stock options.
For the purposes of this paragraph (b), the term "Lockout Period" means the
period commencing on the date of receipt of a Put Exercise Notice pursuant to
Section 2.2(a) hereof and continuing until the date of consummation of the
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purchase of Class B Member Units contemplated thereby pursuant to Section
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2.2(d)hereof and, in the event that Xxxxxxx issues shares of Xxxxxxx Common
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Stock in payment of the Aggregate Put Price for such Class B Member Units
pursuant to Section 2.2(e) hereof, continuing for an additional period
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of ninety days thereafter.
2.4 Xxxxxxx Retail's Rights Upon Exercise of the Xxxxxx Put Rights. In
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the event that Xxxxxx gives a Put Exercise Notice to Xxxxxxx pursuant to Section
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2.2(a) hereof, Xxxxxxx Retail shall have the right at any time within fifteen
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days following the date such notice is given to exercise the Xxxxxxx Option
Rights pursuant to Section 3.1, provided that such rights are then exercisable
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in accordance with Section 3.1. In the event that Xxxxxxx Retail exercises
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the Xxxxxxx Option Rights within the fifteen day period permitted by this
Section 2.4, the Class A Member Units that Xxxxxxx Retail is entitled to
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acquire upon the exercise thereof shall be deemed to be outstanding on the date
of the Put Exercise Notice for the purposes of the computation of the Put Price
Per Member Unit as of such date.
2.5 Assignments by Xxxxxxx. Xxxxxxx may assign to Xxxxxxx Retail the
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right to purchase the Class B Member Units that are the subject of a Put
Exercise Notice given by Xxxxxx pursuant to Section 2.2 above, but no such
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assignment shall relieve Xxxxxxx of its obligation to deliver the consideration
specified in Section 2.2(e)(ii) unless and until Xxxxxxx Retail shall have
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performed such obligation.
ARTICLE III
XXXXXXX RETAIL'S OPTION RIGHTS
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3.1 Xxxxxxx Retail's Option to Acquire Additional Class A Member Units.
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(a) Xxxxxxx Retail shall have the right (the "Xxxxxxx Option Rights"),
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exercisable at any time prior to February 1, 2000 by giving written notice of
such exercise to the Company with a copy thereof to Xxxxxx, to acquire that
additional Class A Member Interest in the Company as is evidenced by 1,175 Class
A Member Units, upon the delivery to the Company of an additional Capital
Contribution equal to $1,000 ; provided, however, in the event (i) the Xxxxxxx
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Option
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Rights have not been exercised, and (ii) notwithstanding such non-exercise, GAAP
would require Xxxxxxx to consolidate for financial reporting purposes Xxxxxxx'x
results of operations with the results of operations of the Company, then
Xxxxxxx Retail shall only have the right to acquire the aforementioned
additional Class A Member Interest in the event the Company has earned net
income (as determined by GAAP) for at least one quarter. Notwithstanding any
other provision of this Section 3.1, in the event GAAP would require Xxxxxxx
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to include in its consolidated statements of income losses in an amount greater
than $250,000 which are attributable to or derived from its ownership of Class A
Member Interests, then the Xxxxxxx Option Rights shall automatically be deemed
to be of no effect and shall be void.
(b) The closing of the Xxxxxxx Option Rights pursuant to paragraph (a)
above shall take place concurrently with the closing of the transactions
contemplated by Section 2.2 hereof if the Xxxxxxx Option Rights are exercised
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on the basis contemplated by Section 2.4 hereof, and otherwise shall take
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place on the date (not later than thirty days following the date that Xxxxxxx
Retail's notice is given pursuant to paragraph (a) above) agreed upon by the
Company and Xxxxxxx Retail (or, if such day is not a Business Day, on the next
succeeding Business Day), at the principal place of business of the Company (or
at such other place as Xxxxxxx Retail and the Company shall agree).
(c) On the date of closing of the Xxxxxxx Option Rights pursuant to
paragraph (b) above, Xxxxxxx Retail shall make the Capital Contribution
specified in paragraph (a) above and, upon the making of such Capital
Contribution, Xxxxxxx Retail shall be deemed to hold 1,175 additional Class A
Member Units and such Class A Member Units, together with any other Class A
Member Units then held by Xxxxxxx Retail, shall evidence Xxxxxxx Retail's
aggregate Member Interest in the Company.
3.2 Xxxxxxx Retail's Right to Require Exercise of Xxxxxx Exchange Rights.
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(a) In the event that Xxxxxxx Retail exercises the Xxxxxxx Option Rights
pursuant to Section 3.1(a) hereof, Xxxxxxx Retail shall have the further
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right, provided that the Formula Value as of the date of such exercise is not
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less than $57,000,000 (determined on the basis set forth in Section 2.2(g),
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to require that Xxxxxx exercise the Xxxxxx Exchange Rights by giving written
notice of such election to Xxxxxx concurrently with its notice given pursuant
to Section 3.1(a). Upon receipt of such notice, Xxxxxx shall be deemed to
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have exercised the Xxxxxx Exchange Rights in accordance with the terms and
conditions of Section 2.1 hereof.
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(b) In the event that Xxxxxxx Retail exercises its right to require Xxxxxx
to exercise the Xxxxxx Exchange Rights pursuant to paragraph (a) hereof, then
the closing of the Xxxxxx Exchange Rights shall take place concurrently with the
closing of the Xxxxxxx Option Rights in accordance with Section 3.1(b) hereof.
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In the event that the transactions contemplated by Section 3.1 hereof fail to
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close for any reason within the respective time periods provided in Section
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3.1(b), then, at the election of Xxxxxx, Xxxxxx may rescind its deemed
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exercise of the Xxxxxx Exchange Rights pursuant to this Section 3.2 by giving
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written notice of such rescission to Xxxxxxx Retail.
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(c) If Xxxxxx is required to exercise the Xxxxxx Exchange Rights pursuant
to this Section 3.2, then the Company shall be obligated to pay to Xxxxxx, in
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order to compensate Xxxxxx for the loss of interest income on the Subordinated
Notes and its rights as a creditor of the Company, an early exchange fee equal
to the product of (i) $1,000,000 multiplied by (ii) that fraction, the numerator
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of which is the total number of days then remaining from the date of such
exchange until the stated maturity of the Subordinated Notes and the denominator
of which is 360, and Xxxxxxx Retail, in its capacity as Manager, shall cause the
Company to pay to Xxxxxx the amount of such early exchange fee, together with
any accrued but unpaid interest on the Subordinated Notes through and including
the date of exchange, concurrently with, and as a condition to, the closing of
the Xxxxxx Exchange Rights pursuant to this Section 3.2. The early exchange
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fee shall be treated as a guaranteed payment pursuant to Section 707(a) of the
Code.
ARTICLE IV
GENERAL PROVISIONS
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4.1 Assignment. Neither this Agreement nor any of the rights, interests
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or obligations hereunder can be assigned or delegated by Butler, Maxwell,
Xxxxxxx Retail or the Company without the prior written consent of the others;
provided, however, that Xxxxxxx may assign and delegate any of its rights,
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interests or obligations under Section 2.2 hereof to the extent provided in
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Section 2.5 hereof; and Xxxxxx and Xxxxxxx Retail may assign and delegate any
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of their respective rights, interests or obligations hereunder to any transferee
of such party's Member Interest in a Transfer permitted under the Operating
Agreement.
4.2 Notices. All notices that are required or may be given pursuant to
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this Agreement must be in writing and delivered personally, by a recognized
courier service, by a recognized overnight delivery service, by telecopy or by
registered or certified mail, postage prepaid, to the parties at the following
addresses (or to the attention of such other person or such other address as any
party may provide to the other parties by notice in accordance with this Section
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4.2):
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If to Xxxxxx:
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c/o GE Capital Equity Capital Group, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
With copies to:
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General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
00
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Counsel -- Equity Capital Group
Facsimile: (000) 000-0000
and
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx Xxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Xxxxxxx or Xxxxxxx Retail:
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000 Xxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxxxxx 00000
(or, if by mail, X.X. Xxx 00
Xxxxxxxxx, Xxxxxxxxxxxxx 00000)
Attention: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
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Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to the Manager:
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To Xxxxxxx Retail, as provided above, or
as shall be specified by any successor
Manager hereunder by notice give in
accordance with this Section 4.2.
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If to the Company:
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SLJ Retail LLC
000 Xxxxxxxxxx Xxxxx
Xxxxx X
Xxxxxx, Xxxxxxx 00000
Attention: President
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Facsimile: (000) 000-0000
With a copy to:
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Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or overnight delivery service or sent by
telecopy or, if mailed, when actually received.
4.3 Binding Effect. This Agreement will be binding upon and inure to the
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benefit of the parties hereto and their successors, legal representatives, and
permitted assigns.
4.4 No Third Party Beneficiary. This Agreement is made solely and
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specifically between and for the benefit of the parties hereto, and their
respective successors and assigns subject to the express provisions hereof
relating to successors and assigns, and no other Person whatsoever will have any
rights, interest, or claims hereunder or be entitled to any benefits under or on
account of this Agreement as a third party beneficiary or otherwise.
4.5 Waiver. No failure by any party to insist upon the strict performance
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of any covenant, duty, agreement, or condition of this Agreement or to
exercise any right or remedy consequent upon a breach thereof will
constitute waiver of any such breach or any other covenant, duty,
agreement, or condition.
4.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which together will constitute one agreement binding on all
the parties hereto, notwithstanding that all such parties are not signatories to
the original or the same counterpart.
4.7 Entire Agreement. This Agreement contains the entire understanding
----------------
of the parties relating to the subject matter hereof and supersedes all prior
written or oral and all contemporaneous oral agreements and understandings
relating to the subject matter hereof. This Agreement cannot be modified or
amended except in writing signed by the party against whom enforcement is
sought.
4.8 Governing Law. This Agreement will be governed by and construed and
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interpreted in accordance with the laws of the State of New York applicable to
contracts made and to be performed in that State.
4.9 Section 754 Election. Notwithstanding anything contained in the
--------------------
Operating Agreement to the contrary, Xxxxxxx Retail, as Manager, shall be
entitled to cause the Company
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to make an election pursuant to Section 754 of the Code following the
acquisition by Xxxxxxx or Xxxxxxx Retail of all or any part of Xxxxxx'x Member
Interest pursuant to Section 2.2 of this Agreement. Such election shall not
-----------
be revoked without the written consent of Xxxxxxx or Xxxxxxx Retail.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement as of the date first above written.
THE XXXXXX GROUP INC.
/s/ Xxxxxxx X. Xxxxxxx
By:__________________________________
Xxxxxxx X. Xxxxxxx
Executive Vice President
XXXXXXX SHOE COMPANY INC.
/s/ Xxxxx X. Xxxxxxxx
By:__________________________________
Xxxxx X. Xxxxxxxx
Executive Vice President
XXXXXXX RETAIL INC., individually
and as Manager
/s/ Xxxxx X. Xxxxxxxx
By:__________________________________
Xxxxx X. Xxxxxxxx
Chairman
SLJ RETAIL LLC
By: XXXXXXX RETAIL INC., its Manager
/s/ Xxxxx X. Xxxxxxxx
By:__________________________________
Xxxxx X. Xxxxxxxx
Chairman
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