Exhibit 2.1
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AGREEMENT OF PURCHASE AND SALE
BY AND AMONG
THE CRESTLEY COLLECTION, LTD.,
THE BRADFORD EXCHANGE, LTD.
(ONLY WITH RESPECT TO SECTION 12(P) HEREIN)
AND
STANHOME INC.
APRIL 22, 1997
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TABLE OF CONTENTS
Page
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
2. Purchase and Sale of the Business . . . . . . . . . . . . 7
(a) Basic Transaction . . . . . . . . . . . . . . . . . . 7
(b) Purchase Price . . . . . . . . . . . . . . . . . . . 7
(c) The Closing . . . . . . . . . . . . . . . . . . . . . 8
(d) Deliveries at the Closing . . . . . . . . . . . . . . 8
3. Conditions to Obligation to Close . . . . . . . . . . . . 8
(a) Conditions to Obligation of the Buyer . . . . . . . . 8
(b) Conditions to Obligation of the Seller . . . . . . 10
4. Representations and Warranties of the Seller . . . . . . 12
(a) Organization of Seller . . . . . . . . . . . . . . 12
(b) Authorization of Transaction . . . . . . . . . . . 12
(c) Noncontravention . . . . . . . . . . . . . . . . . 12
(d) Brokers' Fees . . . . . . . . . . . . . . . . . . . 12
(e) The Shares . . . . . . . . . . . . . . . . . . . . 12
(f) Entire Business . . . . . . . . . . . . . . . . . . 13
(g) Information . . . . . . . . . . . . . . . . . . . . 13
5. Representations and Warranties of the Buyer . . . . . . 13
(a) Organization of Buyer . . . . . . . . . . . . . . . 13
(b) Authorization of Transaction . . . . . . . . . . . 13
(c) Noncontravention . . . . . . . . . . . . . . . . . 14
(d) Brokers' Fees . . . . . . . . . . . . . . . . . . . 14
(e) Litigation . . . . . . . . . . . . . . . . . . . . 14
(f) Availability of Funds . . . . . . . . . . . . . . . 14
(g) Purchase for Investment . . . . . . . . . . . . . . 14
(h) Xxxx-Xxxxx-Xxxxxx Act . . . . . . . . . . . . . . . 14
6. Representations and Warranties Concerning Xxxxxxxx and Its
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 14
(a) Organization, Qualification, and Corporate Power . 15
(b) Capitalization . . . . . . . . . . . . . . . . . . 15
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . 15
(d) Noncontravention . . . . . . . . . . . . . . . . . 16
(e) Financial Statements . . . . . . . . . . . . . . . 16
(f) Title to Assets . . . . . . . . . . . . . . . . . . 16
(g) Tangible Assets . . . . . . . . . . . . . . . . . . 17
(h) Events Subsequent to Most Recent Fiscal Year End . 17
(i) Undisclosed Liabilities . . . . . . . . . . . . . . 19
(j) Legal Compliance . . . . . . . . . . . . . . . . . 19
(k) Tax Matters . . . . . . . . . . . . . . . . . . . . 19
(l) Real Property . . . . . . . . . . . . . . . . . . . 21
(m) Intellectual Property . . . . . . . . . . . . . . . 22
(n) Contracts . . . . . . . . . . . . . . . . . . . . . 25
(o) Powers of Attorney . . . . . . . . . . . . . . . . 26
(p) Insurance . . . . . . . . . . . . . . . . . . . . . 26
(q) Litigation . . . . . . . . . . . . . . . . . . . . 27
(r) Product Warranty . . . . . . . . . . . . . . . . . 27
(s) Product Liability; Advertising Liability . . . . . 27
(t) Employees . . . . . . . . . . . . . . . . . . . . . 27
(u) Employee Benefits . . . . . . . . . . . . . . . . . 28
(v) Guaranties . . . . . . . . . . . . . . . . . . . . 30
(w) Environment and Safety Matters . . . . . . . . . . 30
(x) Brokers' Fees . . . . . . . . . . . . . . . . . . . 31
(y) Certain Business Relationships with Xxxxxxxx and Its
Subsidiaries . . . . . . . . . . . . . . . . . . . 31
7. Pre-Closing Covenants . . . . . . . . . . . . . . . . . 31
(a) General . . . . . . . . . . . . . . . . . . . . . . 31
(b) Notices and Consents . . . . . . . . . . . . . . . 32
(c) Operation of Business . . . . . . . . . . . . . . . 32
(d) Preservation of Business . . . . . . . . . . . . . 32
(e) Full Access . . . . . . . . . . . . . . . . . . . . 32
(f) Notice of Developments . . . . . . . . . . . . . . 32
(g) Exclusivity . . . . . . . . . . . . . . . . . . . . 32
(h) Estoppel Letters . . . . . . . . . . . . . . . . . 33
(i) Certain Executives . . . . . . . . . . . . . . . . 33
(j) Delivery of Certain Agreements . . . . . . . . . . 33
8. Post-Closing Covenants . . . . . . . . . . . . . . . . . 34
(a) General . . . . . . . . . . . . . . . . . . . . . . 34
(b) Litigation Support . . . . . . . . . . . . . . . . 34
(c) Transition . . . . . . . . . . . . . . . . . . . . 34
(d) Confidentiality . . . . . . . . . . . . . . . . . . 34
(e) Covenant Not to Compete . . . . . . . . . . . . . . 35
(f) Benefits Plans . . . . . . . . . . . . . . . . . . 35
(g) Change of Corporate Names . . . . . . . . . . . . . 35
(h) Certain Retained Liabilities . . . . . . . . . . . 36
(i) Severance Policy . . . . . . . . . . . . . . . . . 37
(j) Maintenance of Records for Claims . . . . . . . . . 37
(k) Records . . . . . . . . . . . . . . . . . . . . . . 37
9. Remedies for Breaches of This Agreement . . . . . . . . 37
(a) Survival of Representations and Warranties . . . . 37
(b) Indemnification Provisions for Benefit of the Buyer 37
(c) Indemnification Provisions for Benefit of the
Seller . . . . . . . . . . . . . . . . . . . . . . 38
(d) Limitation on Indemnification . . . . . . . . . . . 38
(e) Matters Involving Third Parties . . . . . . . . . . 39
(f) Determination of Adverse Consequences . . . . . . . 40
(g) Other Indemnification Provisions . . . . . . . . . 40
10. Tax Matters . . . . . . . . . . . . . . . . . . . . . . 41
(a) Tax Periods Ending on or Before the Closing Date . 41
(b) Tax Periods Beginning Before and Ending After the
Closing Date . . . . . . . . . . . . . . . . . . . 41
(c) Cooperation on Tax Matters . . . . . . . . . . . . 42
(d) Tax Refunds and Credits . . . . . . . . . . . . . . 42
(e) Tax Sharing Agreements . . . . . . . . . . . . . . 43
(f) Certain Taxes . . . . . . . . . . . . . . . . . . . 43
11. Termination . . . . . . . . . . . . . . . . . . . . . . 43
(a) Termination of Agreement . . . . . . . . . . . . . 43
(b) Effect of Termination . . . . . . . . . . . . . . . 43
12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 44
(a) Press Releases and Public Announcements . . . . . . 44
(b) No Third Party Beneficiaries . . . . . . . . . . . 44
(c) Entire Agreement . . . . . . . . . . . . . . . . . 44
(d) Succession and Assignment . . . . . . . . . . . . . 44
(e) Counterparts . . . . . . . . . . . . . . . . . . . 44
(f) Headings . . . . . . . . . . . . . . . . . . . . . 44
(g) Notices . . . . . . . . . . . . . . . . . . . . . . 45
(h) Governing Law . . . . . . . . . . . . . . . . . . . 45
(i) Amendments and Waivers . . . . . . . . . . . . . . 45
(j) Severability . . . . . . . . . . . . . . . . . . . 45
(k) Expenses . . . . . . . . . . . . . . . . . . . . . 46
(l) Construction . . . . . . . . . . . . . . . . . . . 46
(m) Incorporation of Exhibits and Schedules . . . . . . 46
(n) Specific Performance . . . . . . . . . . . . . . . 46
(o) Submission to Jurisdiction . . . . . . . . . . . . 46
(p) Guarantee . . . . . . . . . . . . . . . . . . . . . 46
EXHIBITS
Exhibit A - Group Subsidiaries
DISCLOSURE SCHEDULES
Section 4(g) - Information
Section 6(a) - Organization, Qualification and
Corporate Power
Section 6(c) - Subsidiaries
Section 6(d) - Noncontravention
Section 6(e) - Financial Statements
Section 6(f) - Title to Assets
Section 6(g) - Tangible Assets
Section 6(h) - Events Subsequent to Most Recent Fiscal
Year End
Section 6(i) - Undisclosed Liabilities
Section 6(j) - Legal Compliance
Section 6(k) - Tax Matters
Section 6(l)(ii) - Real Property
Section 6(m)(i) - Intellectual Property
Section 6(m)(ii) - Intellectual Property
Section 6(m)(iii) - Intellectual Property
Section 6(m)(iv) - Intellectual Property
Section 6(m)(v) - Intellectual Property
Section 6(n) - Contracts
Section 6(p) - Insurance
Section 6(q) - Litigation
Section 6(r) - Product Warranty
Section 6(t) - Employees
Section 6(u) - Employee Benefits
Section 6(w) - Environmental and Safety Matters
Section 6(y) - Certain Business Relationships with
Xxxxxxxx and its Subsidiaries
AGREEMENT OF PURCHASE AND SALE
This Agreement is dated April 22, 1997, by and among The
Crestley Collection, Ltd., a Delaware corporation (the "Buyer"),
with respect to Section 12(p) below only, The Bradford Exchange,
Ltd., an Illinois corporation ("Bradford"), and Stanhome Inc., a
Massachusetts corporation (the "Seller"). The Buyer and the
Seller are sometimes collectively referred to herein as the
"Parties," and separately as a "Party." Capitalized terms used
herein have the definitions set forth or referenced in Section 1
hereof.
RECITALS
WHEREAS, the Seller is the direct owner of all of the issued
and outstanding shares of Xxxxxxxx Worldwide Holdings, Inc., a
Delaware corporation ("Xxxxxxxx");
WHEREAS, the Buyer desires to acquire the entire business of
Xxxxxxxx and the Group Subsidiaries (excluding the assets
described in Section 2(a)(ii) below, but including all assets
transferred to the Buyer pursuant to the UK Facilitation
Agreement, the Canadian Facilitation Agreement and the German
Facilitation Agreement, the "Business") through the purchase of
all of the outstanding shares of Xxxxxxxx from the Seller and the
Seller desires to sell the Business to the Buyer, upon the terms
and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein made, and in consideration of the
representations, warranties and covenants herein contained, the
Parties agree as follows:
AGREEMENT
1. Definitions.
"Accredited Investor" has the meaning set forth in
Regulation D promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, amounts paid in
settlement, Liabilities, obligations, Taxes, Liens, losses,
expenses, and fees, including court costs and reasonable
attorneys' fees and expenses.
"Affiliate" means a Person that, directly or indirectly,
controls, or is controlled by, or is under common control with,
another Person.
"Affiliated Group" means any affiliated group within the
meaning of Code Section 1504 or any similar group defined under a
similar provision of state, local or foreign law.
"Agreement" means this Agreement as executed on the date
hereof and as amended and supplemented in accordance with the
terms hereof.
"April 25 Balance Sheet" has the meaning set forth in
Section 7(c) below.
"Basis" means any past or present fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction that forms or could form the basis for any specified
consequence.
"Business" has the meaning set forth in the recitals of this
Agreement.
"Business Intellectual Property" has the meaning set forth
in Section 6(m)(i) below.
"Buyer" has the meaning set forth in the preface above. To
the extent that the Buyer assigns (whether by asset transfer,
transfer of stock or otherwise) the Business in whole or in part
to an Affiliate, the term "Buyer" as used herein shall, as the
context requires, refer to any such assignee.
"Canadian Facilitation Agreement" has the meaning set forth
in Section 3(a)(ix)(F) below.
"Cash Payment" has the meaning set forth in Section 2(b)
below.
"Closing" has the meaning set forth in Section 2(c) below.
"Closing Date" has the meaning set forth in Section 2(c)
below.
"COBRA" has the meaning set forth in Section 6(u) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning
the Business that is not already generally available to the
public.
"Controlled Group of Corporations" has the meaning set forth
in Code Section 1563.
"Disclosure Schedule" means the disclosure schedule
heretofore delivered to the Buyer by the Seller.
"EEGG" means Enesco European Giftware Group Limited, a
corporation organized under the laws of England and Wales.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an
Employee Pension Benefit Plan, (b) qualified defined contribution
retirement plan or arrangement which is an Employee Pension
Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including
any Multiemployer Plan), or (d) Employee Welfare Benefit Plan,
material fringe benefit plan, incentive, bonus, separation pay,
stock option or stock purchase plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in
ERISA Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in
ERISA Section 3(1).
"Enesco" means Enesco Corporation, an Ohio corporation and
an indirect wholly owned subsidiary of the Seller.
"Environmental and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations,
ordinances and similar provisions having the force or effect of
law and all judicial and administrative orders, concerning public
health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation, all
those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls,
noise or radiation, as such of the foregoing are enacted or in
effect, prior to or on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" means the party defined as the Escrow Agent
in the Escrow Agreement.
"Escrow Agreement" has the meaning set forth in Section
3(a)(ix)(I).
"Escrow Amount" has the meaning set forth in Section 2(b)
below.
"Excess Loss Account" has the meaning set forth in Treasury
Regulation Section 1.1502-19.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Financial Statements" has the meaning set forth in Section
6(e) below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"German Facilitation Agreement" has the meaning set forth in
Section 3(a)(ix)(H) below.
"Group Subsidiaries" means the direct and indirect
subsidiaries of Xxxxxxxx listed on Exhibit A hereto.
"Xxxxxxxx" has the meaning set forth in the recitals to this
Agreement.
"Xxxxxxxx Canada" means The Xxxxxxxx Collection (Canada)
1992 Inc., a Canadian corporation.
"Xxxxxxxx Germany" means Xxxxxxxx Collection (Deutschland)
GmbH, a German corporation.
"Hamilton Savings Plan" has the meaning set forth in Section
8(f) below.
"Xxxxxxxx Severance Policy" means that certain Severance
Policy of Xxxxxxxx issued in and effective as of October 1996.
"Xxxxxxxx UK" means The Xxxxxxxx Collection Limited (U.K.),
a corporation organized under the laws of England and Wales.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended.
"HSR Rules" means the premerger notification rules (16
C.F.R. Section 801 et. seq.) promulgated under the Xxxx-Xxxxx-
Xxxxxx Act.
"Indemnified Party" has the meaning set forth in Section
9(d) below.
"Indemnifying Party" has the meaning set forth in Section
9(d) below.
"Initial Balance Sheet" has the meaning set forth in Section
6(e) below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, (b) all trademarks, service
marks, trade dress, logos, trade names, corporate names, and
internet domain names, together with all translations,
adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights (registered or unregistered),
and all applications, registrations, and renewals in connection
therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all
Confidential Information, including all trade secrets and
confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and
proposals), (f) all computer software (including data, databases
and related documentation), (g) all rights of publicity and
character rights, and (h) all other proprietary rights.
"Knowledge" means actual knowledge after reasonable
investigation. When used herein, the words "Knowledge of the
Seller" shall be deemed to include the knowledge of the
management of the Seller and/or Xxxxxxxx.
"Leased Real Property" has the meaning set forth in Section
6(l)(ii) below.
"Liability" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due), including any liability for
Taxes.
"Licenses" has the meaning set forth in Section 6(m)(iv)
below.
"License Agreement" has the meaning set forth in Section
3(a)(ix)(E) below.
"Liens" means any mortgage, pledge, security interest,
encumbrance, lien, claim or charge of any kind or right of others
of whatever nature.
"Litigation" means any claim, action, suit, inquiry,
proceeding or investigation by or before any court, arbitral
tribunal, administrative agency or commission or other
governmental or regulatory authority or agency.
"Material Adverse Effect" means a material adverse effect on
the business, financial condition, operations, or results of
operations of Xxxxxxxx and the Group Subsidiaries, taken together
as a whole.
"Most Recent Balance Sheet" means the balance sheet
contained within the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth
in Section 6(e) below.
"Most Recent Fiscal Month End" has the meaning set forth in
Section 6(e) below.
"Most Recent Fiscal Year End" has the meaning set forth in
Section 6(e) below.
"Multiemployer Plan" has the meaning set forth in ERISA
Section 3(37).
"Named Executive" means any of (i) Xxxxxxx X. Xxxxxxx, (ii)
Xxxx X. Xxxxx, (iii) Xxxx Xxxx and (iv) Xxxxxxx Xxxxxx.
"N.C. Cameron" means N.C. Cameron & Sons Limited, a Canadian
corporation.
"Net Book Value" shall mean the total assets reflected on
the Initial Balance Sheet or the April 25 Balance Sheet, as the
case may be, minus the total liabilities reflected on the Initial
Balance Sheet or the April 25 Balance Sheet, as the case may be.
"Ordinary Course of Business" means the ordinary course of
business consistent with past practice (including with respect to
quantity and frequency).
"Party(ies)" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"Products" means collector's plates, dolls, die cast
products, figurines, xxxxxxx, plaques, ornaments and other
collectible and giftware items.
"Prohibited Transaction" has the meaning set forth in ERISA
Section 406 and Code Section 4975.
"Purchase Price" has the meaning set forth in Section 2(b)
below.
"Reportable Event" has the meaning set forth in ERISA Section
4043.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Seller" has the meaning set forth in the preface above.
"Shares" means Xxxxxxxx'x common stock, par value $10.00 per
share.
"Subsidiary" of any Person means a corporation, partnership,
limited liability company or other entity (a) more than 50% of
whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority)
are, or (b) which does not have outstanding shares or securities
(as may be the case in a partnership, joint venture or
unincorporated association), but more than 50% of whose ownership
interest representing the right to made decisions for such other
entity is, now or hereafter owned or controlled, directly or
indirectly, by such Person; provided that such corporation,
partnership, limited liability company or other entity shall be
deemed to be a Subsidiary only so long as such ownership exists.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental
(including taxes under Code Section 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Impact" means the amount determined in good faith by
the Indemnified Party and the Indemnifying Party to reasonably
estimate, on a marginal basis, the actual aggregate net Tax
benefit with respect to the Indemnified Party's current and
future Tax liabilities (assuming an income Tax rate equal to the
highest combined marginal federal, state and local income Tax
rate imposed on corporations at the time such determination is
made, taking into account the deductibility of state and local
Taxes for determining federal taxable income, and discounting
future Tax Liabilities at a rate equal to the prime lending rate
published in the Wall Street Journal in effect at the time such
determination is made) attributable to (i) the item or adjustment
resulting in a Tax or (ii) that portion of an Adverse Consequence
for which, with respect to both (i) and (ii), the Indemnified
Party has a right to indemnification under Section 9 of this
Agreement.
"Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any
amendment thereof.
"Third Party Claim" has the meaning set forth in Section
9(d) below.
"Treasury Regulation" means any income tax regulation
promulgated under the Code and effective as of April 22, 1997.
"UK Facilitation Agreement" has the meaning set forth in
Section 3(a)(ix)(G) below.
2. Purchase and Sale of the Business.
(a) Basic Transaction.
(i) On and subject to the terms and conditions of this
Agreement, the Seller shall sell, convey, assign and deliver
to the Buyer and the Buyer shall purchase and acquire all of
the issued and outstanding Shares.
(ii) Notwithstanding anything in this Agreement to the
contrary, the following assets shall be specifically
excluded from the assets of the Group Subsidiaries being
indirectly acquired through the acquisition of all of the
Shares (and if any of the following is held by any Group
Subsidiary, such Group Subsidiary shall convey the same to
the Seller or to the Seller's designee (other than Xxxxxxxx
or a Group Subsidiary) prior to the Closing Date):
(A) the capital stock and, except as described in
the German Facilitation Agreement, the assets
of Xxxxxxxx Germany;
(B) the capital stock of Xxxxxxxx UK;
(C) the capital stock of Hamilton Canada; and
(D) all Intellectual Property primarily related
to the "GIFTNOW," "GIFTSTORE" and "SPORTS
IMPRESSIONS" trade names.
(b) Purchase Price. At the Closing, the Buyer shall
pay to the Seller, in immediately available funds, $13,700,000
(the "Cash Payment"), and the Buyer shall deposit $3,800,000 (the
"Escrow Amount") into the escrow account established pursuant to
the Escrow Agreement (the Cash Payment, together with the Escrow
Amount, being referred to herein as the "Purchase Price").
(c) The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place
at the offices of Xxxxxxxx & Xxxxx, at 000 X. Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx, 00000, commencing at 9:00 a.m. local time on
the earlier of May 15, 1997 or a date which is no more than three
business days following the satisfaction or waiver of all of the
conditions set forth in Sections 3(a) and 3(b), or such other
time and/or date as the Buyer and the Seller may mutually
determine. The date on which the Closing shall occur is
hereinafter referred to as the "Closing Date," and the Closing
shall be deemed effective as of the opening of business on the
Closing Date.
(d) Deliveries at the Closing. At the Closing,
(i) the Seller will deliver to the Buyer the various
certificates, instruments, and documents referred to in Section
3(a) below, and (ii) the Buyer will (A) deliver to the Seller the
various certificates, instruments, and documents referred to in
Section 3(b) below, (B) pay to or for the benefit of the Seller
the Purchase Price as prescribed by Section 2(b) above, and (C)
pay or cause to be paid to the Seller in immediately available
funds an amount equal to the amount of intercompany debt owing to
the Seller as reflected on the April 25 Balance Sheet (adjusted
up or down to reflect changes in such amount resulting from the
conduct of the Business in the Ordinary Course of Business
between April 25, 1997 and the Closing Date).
3. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The
obligation of the Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties of the Seller
contained herein shall be true and correct in all material
respects when made and at and as of the Closing Date except
for (A) changes permitted or contemplated hereby and (B) any
representation which is true as of a date specified in such
representation;
(ii) the Seller shall have performed and complied with
all of its agreements and covenants contained herein to be
performed on or prior to the Closing Date in all material
respects;
(iii) there shall have been no material adverse change
in the business, financial condition, operations or results
of operations of the Business since February 28, 1997;
(iv) there shall be pending no Litigation which is
reasonably likely to result in, and no Litigation has
resulted in, an injunction, judgment, order, decree, ruling,
or charge which would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect);
(v) the Seller, Xxxxxxxx, and the Group Subsidiaries
shall have received all authorizations, consents, and
approvals of governments and governmental agencies described
in Section 6(d) of the Disclosure Schedule other than
authorizations and approvals which, if not obtained, would
not (in the aggregate) have a Material Adverse Effect;
(vi) the Buyer shall have received the resignations,
effective as of the Closing Date, of each director and
officer of Xxxxxxxx and the Group Subsidiaries other than
those whom the Buyer shall have specified in writing prior
to the Closing Date;
(vii) the Buyer shall have received evidence
satisfactory to it that Xxxxxxxx shall have obtained all of
the Intellectual Property (other than the trade names and
other rights to "GIFTNOW," "GIFTSTORE" and "SPORTS
IMPRESSIONS"), including all customer lists, and customer
solicitation, order, purchase and payment history, and
licenses and records relating to Intellectual Property, of
each of Xxxxxxxx Germany and, to the extent used in the
Business, EEGG and N.C. Cameron, in each case free and clear
of any Lien or encumbrance and subject to no license,
sublicense or restriction on use;
(viii) all actions to be taken by the Seller in
connection with consummation of the transactions
contemplated hereby and all certificates, opinions,
instruments, and other documents reasonably necessary to
effect the transactions contemplated hereby will be
satisfactory in form and substance to the Buyer; and
(ix) the Seller shall have delivered to the Buyer, at
the Seller's expense, the following on the Closing Date:
(A) a certificate to the effect that each of the
conditions specified above in Sections 3(a)(i)
through 3(a)(v) is satisfied in all respects;
(B) stock certificates representing all of the
Shares, duly endorsed in blank or accompanied by
appropriate stock powers duly executed in blank, in
proper form for transfer;
(C) all of the third party consents specified in
Section 7(b) below;
(D) certified copies of the resolutions duly
adopted by the Seller's board of directors,
authorizing the execution and delivery of this
Agreement and the other agreements contemplated
hereby, and the consummation of all transactions
contemplated hereby and thereby;
(E) the License Agreement and the Wholesale
License Agreement by and between The Bradford
Exchange, Ltd. and Enesco, in the form heretofore
agreed by the Buyer and the Seller (collectively, the
"License Agreements"), executed by Enesco;
(F) the Canadian Facilitation Agreement by and
among the Buyer, the Seller and N.C. Cameron,
substantially in the form heretofore agreed by the
Buyer and the Seller (the "Canadian Facilitation
Agreement"), executed by the Seller and N.C. Cameron;
(G) the UK Facilitation Agreement by and among
the Buyer, the Seller and EEGG, substantially in the
form heretofore agreed by the Buyer and the Seller
(the "UK Facilitation Agreement"), executed by the
Seller and EEGG;
(H) the German Facilitation Agreement by and
among the Buyer, the Seller and Xxxxxxxx Germany,
substantially in the form heretofore agreed by the
Buyer and the Seller (the "German Facilitation
Agreement"), executed by the Seller and Xxxxxxxx
Germany;
(I) the Escrow Agreement by and among the Buyer,
the Seller and the Escrow Agent, substantially in the
form heretofore agreed by the Buyer and the Seller
(the "Escrow Agreement"), executed by the Seller and
the Escrow Agent;
(J) an opinion from counsel to the Seller,
substantially in the form heretofore agreed by the
Buyer and the Seller, addressed to the Buyer, and
dated as of the Closing Date; and
(K) such other documents or instruments as the
Buyer reasonably requests to effect the transactions
contemplated hereby.
The Buyer may waive any condition specified in this Section 3(a)
if it executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The
obligation of the Seller to consummate the transactions to be
performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the representations and warranties of the
Buyer contained herein shall be true and correct in all
material respects when made and at and as of the Closing
Date except for (A) changes permitted or contemplated
hereby and (B) any representation which is true as of a
date specified in such representation;
(ii) the Buyer shall have performed and complied
with all of its agreements and covenants contained herein
to be performed on or prior to the Closing Date in all
material respects;
(iii) there shall be pending no Litigation which is
reasonably likely to result in, and no Litigation has
resulted in, an injunction, judgment, order, decree, ruling,
or charge which would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any
of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in
effect);
(iv) the Seller, Xxxxxxxx, and the Group Subsidiaries
shall have received all other authorizations, consents, and
approvals of governments and governmental agencies described
in Section 6(d) of the Disclosure Schedule other than
authorizations and approvals which, if not obtained, would
not (in the aggregate) have a Material Adverse Effect;
(v) all license agreements and other agreements or
arrangements between the Seller or any of its Affiliates and
Xxxxxxxx or a Group Subsidiary shall have been terminated
effective upon the Closing Date other than purchase orders
entered into in the Ordinary Course of Business;
(vi) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated
hereby and all certificates, opinions, instruments, and other
documents reasonably necessary to effect the transactions
contemplated hereby will be reasonably satisfactory in form
and substance to the Seller; and
(vii) the Buyer shall have delivered to the Seller,
at the Buyer's expense, the following on the Closing Date:
(A) a certificate to the effect that each of the
conditions specified above in Sections 3(b)(i) through
3(b)(iv) is satisfied in all respects;
(B) the License Agreements, executed by The
Bradford Exchange, Ltd.;
(C) the Canadian Facilitation Agreement, executed
by the Buyer;
(D) the UK Facilitation Agreement, executed by
the Buyer;
(E) the German Facilitation Agreement, executed
by the Buyer;
(F) the Escrow Agreement, executed by the Buyer
and the Escrow Agent; and
(G) an opinion from counsel to the Buyer,
substantially in the form heretofore agreed by the
Buyer and the Seller, addressed to the Seller and dated
as of the Closing Date.
The Seller may waive any condition specified in this Section 3(b)
if it executes a writing so stating at or prior to the Closing.
4. Representations and Warranties of the Seller. The
Seller represents and warrants to the Buyer that the statements
contained in this Section 4 are correct and complete as of the
date of this Agreement and will be correct and complete, except
as set forth in the certificate required by Section 3(a)(ix)(A),
as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement
throughout this Section 4).
(a) Organization of Seller. The Seller is a
corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation
and has the corporate power and authority to own or lease its
properties and to carry on its business as currently conducted.
(b) Authorization of Transaction. The Seller has full
corporate power and authority to execute and deliver this
Agreement and all of the other agreements, documents and
instruments as are contemplated hereby to be executed and
delivered by it and to perform its obligations hereunder and
thereunder. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with
its terms and conditions, except to the extent that such
enforceability (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors' rights generally and (ii) is subject to general
principles of equity.
(c) Noncontravention. Neither the execution and
delivery of this Agreement by the Seller, nor the consummation of
the transactions contemplated hereby by the Seller, will (i)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which the Seller
is subject, (ii) violate any provision of its charter, bylaws or
other organizational documents or (iii) violate, conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other
arrangement to which the Seller is a party or by which it is
bound or to which any of its assets is subject, except, in the
cases of (i) and (iii) above, of violations, conflicts, breaches,
defaults, acceleration, termination, modification, cancellation
or failures to give notice which would not have a Material
Adverse Effect.
(d) Brokers' Fees. None of the Seller, Xxxxxxxx and
their respective Subsidiaries and Affiliates has any Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which the Buyer, its Affiliates, Xxxxxxxx or any
Group Subsidiary is liable or obligated.
(e) The Shares. The Seller holds of record and owns
beneficially all of the Shares, free and clear of any
restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Liens, options,
warrants, purchase rights, contracts, commitments, equities,
claims, and demands. The Seller is not a party to any option,
warrant, purchase right, or other contract or commitment that
could require the Seller to sell, transfer, or otherwise dispose
of any capital stock of Xxxxxxxx (other than this Agreement). The
Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any
capital stock of Xxxxxxxx or any Group Subsidiary. The Seller
has, and at the Closing will transfer to the Buyer, good title to
the Shares, free and clear of all Liens.
(f) Entire Business. The sale and delivery of the
Shares by the Seller to the Buyer pursuant to Section 2 hereof
will convey to the Buyer all assets and corporate or other
entities owned or controlled by the Seller and its Affiliates
necessary and sufficient to carry out the design, production,
marketing, advertising, promotion, distribution and sale of the
Products of the Business, in substantially the same manner as
conducted prior to the Closing Date, within the United States.
The Business includes all corporate or other entities owned or
controlled by the Seller and its Affiliates which have conducted
or conduct business in the United States under the trade name
"Xxxxxxxx Collection," "Museum Collections," "CPG" or
"Rivershore," any derivation of said trade names or any other
trade name, trademark or service xxxx containing the name
"Xxxxxxxx" that is owned or used by the Seller or its Affiliates.
Hamilton Canada (and, to the extent it operates the former
business of Hamilton Canada, N.C. Cameron), Xxxxxxxx UK (and, to
the extent it operates the former business of Xxxxxxxx UK, EEGG)
and Xxxxxxxx Germany are the only entities owned or controlled by
the Seller and its Affiliates conducting business outside the
United States under the name "Xxxxxxxx."
(g) Information. Except as set forth and for the
reasons specifically stated in Section 4(g) of the Disclosure
Schedule, the Seller has provided the Buyer or its
representatives with all information in the possession or control
of the Seller or its Affiliates requested to be provided to the
Buyer or its representatives, the Seller has responded in good
faith to all due diligence information requests of the Buyer or
its representatives, and all such information has been complete
and accurate.
5. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements
contained in this Section 5 are correct and complete as of the
date of this Agreement and will be correct and complete, except
as set forth in the certificate required by Section 3(b)(vii)(A),
as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement
throughout this Section 5).
(a) Organization of Buyer. The Buyer is a corporation
duly authorized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and has the corporate
power and authority to own or lease its properties and to carry
on its business as currently conducted.
(b) Authorization of Transaction. The Buyer has full
corporate power and authority to execute and deliver this
Agreement and all of the other agreements, documents and
instruments as are contemplated hereby to be executed and
delivered by it and to perform its obligations hereunder and
thereunder. This Agreement constitutes the valid and legally
binding obligation of the Buyer, enforceable in accordance with
its terms and conditions, except to the extent that such
enforceability (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors' rights generally and (ii) is subject to general
principles of equity.
(c) Noncontravention. Neither the execution and
delivery of this Agreement by the Buyer, nor the consummation of
the transactions contemplated hereby by the Buyer, will (i)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which the Buyer
is subject, (ii) violate any provision of its charter, bylaws or
other organizational documents or (iii) violate, conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound
or to which any of its assets is subject.
(d) Brokers' Fees. The Buyer has no Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or obligated.
(e) Litigation. As of the date of this Agreement,
there is no Litigation pending or, to the Buyer's Knowledge,
threatened (i) against the Buyer which is reasonably likely to
have a material adverse effect on the ability of the Buyer to
perform its obligations under this Agreement, or (ii) which seeks
to enjoin or obtain damages in respect of the consummation of the
transactions contemplated hereby. The Buyer is not subject to
any outstanding orders, rulings, judgments or decrees which would
have a material adverse effect on the ability of the Buyer to
perform its obligations under this Agreement.
(f) Availability of Funds. The Buyer has sufficient
cash or committed facilities to consummate the transactions
contemplated hereby and will have available on the Closing Date
sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
(g) Purchase for Investment. The Buyer is not
acquiring the Shares with a view to or for sale in connection
with any distribution thereof within the meaning of the
Securities Act or as nominee or agent for any other Person, or
with any present intention of distributing the Shares. The Buyer
agrees that the Shares may only be sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of if
registered under applicable law (including the Securities Act) or
pursuant to an available exemption from all applicable
registration requirements.
(h) Xxxx-Xxxxx-Xxxxxx Act. The Buyer does not have
either "total assets" or "annual net sales" equal to or greater
than $10,000,000, in each case as defined in the HSR Rules. No
stockholder of the Buyer owns 50% or more of the outstanding
voting securities of the Buyer or has the contractual power
presently which, together with ownership of voting securities of
the Buyer, allows such stockholder to designate 50% or more of
the directors of the Buyer. Accordingly, the Buyer is not
"controlled by" (as defined in Section 801.1(b)(1)(i) and (2) of
the HSR Rules) by any person.
6. Representations and Warranties Concerning Xxxxxxxx and
Its Subsidiaries. The Seller represents and warrants to the
Buyer that the statements contained in this Section 6 are correct
and complete as of the date of this Agreement and will be correct
and complete, except as set forth in the certificate required by
Section 3(a)(ix)(A), as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 6).
(a) Organization, Qualification, and Corporate Power.
Each of Xxxxxxxx and the Group Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation. Each of Xxxxxxxx and
the Group Subsidiaries is duly authorized to conduct business and
is in good standing under the laws of each jurisdiction where
such qualification is required. Each of Xxxxxxxx and the Group
Subsidiaries has full corporate power and authority and all
licenses, permits, and authorizations necessary to carry on the
Business as currently conducted and to own and use the properties
owned and used by it. Section 6(a) of the Disclosure Schedule
lists the directors and officers of each of Xxxxxxxx and the
Group Subsidiaries. The Seller has delivered to the Buyer correct
and complete copies of the charter and bylaws of each of Xxxxxxxx
and the Group Subsidiaries (as amended to date). The minute books
(containing the records of meetings of the stockholders, the
board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record
books of each of Xxxxxxxx and its Subsidiaries are correct and
complete. None of Xxxxxxxx and its Subsidiaries is in default
under or in violation of any provision of its charter or bylaws.
(b) Capitalization of Xxxxxxxx. The entire authorized
capital stock of Xxxxxxxx consists of 1,000 Shares, of which 100
Shares are issued and outstanding and no Shares are held in
treasury. All of the issued and outstanding Shares have been duly
authorized and validly issued and are fully paid and
nonassessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that
could require Xxxxxxxx to redeem, issue, sell, or otherwise cause
to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to Xxxxxxxx.
There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of
Xxxxxxxx.
(c) Subsidiaries. Section 6(c) of the Disclosure
Schedule sets forth for each Subsidiary of Xxxxxxxx (i) its name
and jurisdiction of incorporation, (ii) the number of shares of
authorized capital stock of each class of its capital stock,
(iii) the number of issued and outstanding shares of each class
of its capital stock, the names of the holders thereof, and the
number of shares held by each such holder, and (iv) the number of
shares of its capital stock held in treasury. All of the issued
and outstanding shares of capital stock of each Subsidiary of
Xxxxxxxx have been duly authorized and are validly issued, fully
paid, and nonassessable. Either Xxxxxxxx or one of its
Subsidiaries holds of record and owns beneficially all of the
outstanding shares of each Subsidiary of Xxxxxxxx, free and clear
of any restrictions on transfer (other than restrictions under
the Securities Act and state securities laws), Taxes, Liens,
options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. There are no outstanding or
authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or
commitments that could require any of Xxxxxxxx and its
Subsidiaries to redeem, sell, transfer, or otherwise dispose of
any capital stock of any of its Subsidiaries or that could
require any Subsidiary of Xxxxxxxx to issue, sell, or otherwise
cause to become outstanding any of its own capital stock. There
are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to
any Subsidiary of Xxxxxxxx. There are no voting trusts, proxies,
or other agreements or understandings with respect to the voting
of any capital stock of any Subsidiary of Xxxxxxxx. None of
Xxxxxxxx and its Subsidiaries controls directly or indirectly or
has any direct or indirect equity participation in any
corporation, partnership, trust, or other business association
which is not a Subsidiary of Xxxxxxxx.
(d) Noncontravention. Except as set forth in
Section 6(d) of the Disclosure Schedule, neither the execution
and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of
Xxxxxxxx and the Group Subsidiaries is subject, (ii) violate any
provision of the charter, bylaws or other organizational
documents of any of Xxxxxxxx and the Group Subsidiaries or (iii)
violate, conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of Xxxxxxxx and the
Group Subsidiaries is a party or by which it is bound or to which
any of its assets (including, without limitation, any
Intellectual Property) is subject (or result in the imposition of
any Lien upon any of its assets, including, without limitation,
any Intellectual Property). None of Xxxxxxxx and the Group
Subsidiaries needs to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any
government or governmental agency (including any foreign
government or foreign governmental agency) in order for the
Parties to consummate the transactions contemplated by this
Agreement.
(e) Financial Statements. The Seller has previously
delivered to the Buyer the following financial statements
(collectively the "Financial Statements"): (i) unaudited balance
sheets and statements of income (the "1996 Financial Statements")
as of and for the fiscal years ended December 31, 1994, December
31, 1995, and December 31, 1996 (the "Most Recent Fiscal Year
End") for Xxxxxxxx and the Group Subsidiaries; (ii) unaudited
balance sheets and statements of income (the "Most Recent
Financial Statements") as of and for the 2 months ended February
28, 1997 (the "Most Recent Fiscal Month End") for Xxxxxxxx and
the Group Subsidiaries; and (iii) the balance sheet (the "Initial
Balance Sheet") for Xxxxxxxx and the Group Subsidiaries as of
December 31, 1996 in the form previously delivered to the Buyer.
Except as set forth in Section 6(e) of the Disclosure Schedule,
the Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the
financial condition of Xxxxxxxx and the Group Subsidiaries as of
such dates and the results of operations of Xxxxxxxx and the
Group Subsidiaries for such periods, are correct and complete,
and are based on and consistent with the books and records of
Xxxxxxxx and the Group Subsidiaries.
(f) Title to Assets. Xxxxxxxx and the Group
Subsidiaries have good and marketable title to, or a valid
leasehold or license interest in, the properties and assets used
by them, or shown on the Most Recent Balance Sheet or acquired
after the date thereof, free and clear of all Liens, except (i)
for properties and assets disposed of in the Ordinary Course of
Business since the date of the Most Recent Balance Sheet, (ii)
such as are disclosed in Section 6(f) of the Disclosure Schedule
and (iii) Liens for current Taxes not yet due and payable and
minor encumbrances, if any, which, in the aggregate, (A) do not
materially detract from the value of the assets and (B) do not,
in any material respect, impair the continued use of the assets
by any of Xxxxxxxx and the Group Subsidiaries.
(g) Tangible Assets. Xxxxxxxx or the Group
Subsidiaries own or lease all buildings, machinery, equipment,
and other tangible assets necessary for the conduct of the
Business as presently conducted. Each such tangible asset is free
from defects (patent and latent), has been maintained in
accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used.
Section 6(g) of the Disclosure Schedule describes all personal
property of Xxxxxxxx or any of the Group Subsidiaries, other than
Products and other inventory in transit, located outside of the
state of Florida and the location of such property.
(h) Events Subsequent to Most Recent Fiscal Year End.
Except as set forth in Section 6(h) of the Disclosure Schedule,
since the Most Recent Fiscal Year End, there has not been any
adverse change in the business, financial condition, operations
or results of operations of any of Xxxxxxxx and the Group
Subsidiaries. Without limiting the generality of the foregoing,
and except as set forth in Section 6(h) of the Disclosure
Schedule, since the Most Recent Fiscal Year End:
(i) none of Xxxxxxxx and its Subsidiaries has sold,
leased, transferred, or assigned any of its assets, tangible
or intangible, other than for fair consideration in the
Ordinary Course of Business;
(ii) none of Xxxxxxxx and the Group Subsidiaries has
entered into any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and
licenses) involving more than $25,000, obligating Xxxxxxxx
or the Group Subsidiaries without the right to terminate
without penalty within 60 days, or outside the Ordinary
Course of Business;
(iii) no party (including any of Xxxxxxxx and its
Subsidiaries) has accelerated, terminated, modified, or
canceled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and
licenses) involving more than $25,000 to which any of
Xxxxxxxx and the Group Subsidiaries is a party or by which
any of them is bound;
(iv) none of Xxxxxxxx and the Group Subsidiaries has
imposed any Lien upon any of its assets, tangible or
intangible;
(v) none of Xxxxxxxx and the Group Subsidiaries has
made any capital expenditure (or series of related capital
expenditures) either involving more than $25,000 or outside
the Ordinary Course of Business;
(vi) none of Xxxxxxxx and the Group Subsidiaries has
made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person
(or series of related capital investments, loans, and
acquisitions) either involving more than $25,000 or outside
the Ordinary Course of Business;
(vii) none of Xxxxxxxx and the Group Subsidiaries has
issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either
involving more than $5,000 singly or $25,000 in the
aggregate;
(viii) none of Xxxxxxxx and the Group Subsidiaries has
delayed or postponed the payment of accounts payable and
other Liabilities outside the Ordinary Course of Business;
(ix) none of Xxxxxxxx and the Group Subsidiaries has
canceled, compromised, waived, or released any right or
claim (or series of related rights and claims) either
involving more than $25,000 or outside the Ordinary Course
of Business;
(x) none of Xxxxxxxx and its Subsidiaries has granted
any license or sublicense of any rights under or with
respect to any Intellectual Property;
(xi) there has been no change made or authorized in the
charter or bylaws of any of Xxxxxxxx and its Subsidiaries;
(xii) none of Xxxxxxxx and the Group Subsidiaries has
issued, sold, or otherwise disposed of any of its capital
stock, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock;
(xiii) none of Xxxxxxxx and the Group Subsidiaries has
redeemed, purchased, or otherwise acquired any of its
capital stock;
(xiv) none of Xxxxxxxx and its Subsidiaries has
experienced any damage, destruction, or loss (whether or not
covered by insurance) to its property;
(xv) none of Xxxxxxxx and the Group Subsidiaries has
made any loan to, or entered into any other transaction
with, any of its directors, officers, and employees outside
the Ordinary Course of Business;
(xvi) none of Xxxxxxxx and the Group Subsidiaries has
entered into any employment contract or collective
bargaining agreement, written or oral, or modified the terms
of any existing such contract or agreement;
(xvii) none of Xxxxxxxx and the Group Subsidiaries has
granted any increase in the base compensation of any of its
directors, officers, and employees outside the Ordinary
Course of Business;
(xviii) none of Xxxxxxxx and the Group Subsidiaries has
adopted, amended, modified, or terminated any bonus, profit-
sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors,
officers, and employees (or taken any such action with
respect to any other Employee Benefit Plan);
(xix) none of Xxxxxxxx and the Group Subsidiaries has
made any other change in employment terms for any of its
directors, officers, and employees outside the Ordinary
Course of Business;
(xx) none of Xxxxxxxx and the Group Subsidiaries has
made or pledged to make any charitable or other capital
contribution outside the Ordinary Course of Business;
(xxi) there has not been any other material occurrence,
event, incident, action, failure to act, or transaction
outside the Ordinary Course of Business involving any of
Xxxxxxxx and its Subsidiaries; and
(xxii) none of Xxxxxxxx and its Subsidiaries has agreed
to do, enter into or suffer any of the foregoing.
(i) Undisclosed Liabilities. Except as set forth on
Section 6(i) of the Disclosure Schedule, none of Xxxxxxxx and its
Subsidiaries has any Liability (and the Seller has no Knowledge
of any Basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand
against any of them giving rise to any Liability), except for (i)
Liabilities set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto) and (ii) Liabilities
which have arisen after the Most Recent Fiscal Month End in the
Ordinary Course of Business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort, infringement, or
violation of law).
(j) Legal Compliance. Except as set forth on Section
6(j) of the Disclosure Schedule, each of Xxxxxxxx, the Group
Subsidiaries and their Affiliates is in compliance with all
applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments
(and all agencies thereof), except where any financial Adverse
Consequence arising out of any failure so to comply would not,
individually or in the aggregate, exceed $25,000, and no
Litigation has been filed or commenced against any of them
alleging any failure so to comply.
(k) Tax Matters.
(i) Except as set forth in Section 6(k) of the
Disclosure Schedule:
(A) Each of Xxxxxxxx and its Subsidiaries has
filed all Tax Returns that it was required to file. All such
Tax Returns were correct and complete in all material
respects, except for income Tax Returns which were correct
and complete in all respects. Xxxxxxxx and its Subsidiaries
are not the beneficiary of any extension of time within
which to file any Tax Return.
(B) All Taxes owed by any of Xxxxxxxx and its
Subsidiaries (whether or not shown on any Tax Return) have
been paid (or reserved for). No claim has been made by an
authority in a jurisdiction where any of Xxxxxxxx and its
Subsidiaries does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no
Liens on any of the assets of any of Xxxxxxxx and its
Subsidiaries that arose in connection with any failure (or
alleged failure) to pay any Tax, except for Taxes not yet
due and payable.
(C) Each of Xxxxxxxx and its Subsidiaries has
withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or
other third party.
(D) There is no dispute or claim concerning any
Tax Liability of any of Xxxxxxxx and its Subsidiaries
claimed or raised by any authority in writing.
(E) None of Xxxxxxxx and its Subsidiaries has
waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax
assessment or deficiency.
(F) None of Xxxxxxxx and its Subsidiaries has
filed a consent under Code Section 341(f) concerning collapsible
corporations. None of Xxxxxxxx and its Subsidiaries has made
any payments, is obligated to make any payments, or is a
party to any agreement that under certain circumstances
could obligate it to make any payments that will not be
deductible under Code Section 280G. Seller is not a foreign
person within the meaning of Code Section 1445(b)(2). Each of
Xxxxxxxx and its Subsidiaries has disclosed on its federal income
Tax Returns all positions taken therein that could give rise to
a substantial understatement of federal income Tax within
the meaning of Code Section 6662. None of Xxxxxxxx and its
Subsidiaries is a party to any Tax allocation or sharing
agreement. None of Xxxxxxxx and its Subsidiaries (A) has
been a member of an Affiliated Group filing a consolidated
federal income Tax Return (other than a group the common
parent of which was Seller) or (B) has any Liability for the
Taxes of any Person (other than any of Seller and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(G) Neither Xxxxxxxx nor any of its Subsidiaries
will be required (A) as a result of a change in method of
accounting for a taxable period ending on or prior to the
Closing Date, to include any adjustment in taxable income
for any taxable period (or portion thereof) ending on or
after the Closing Date, (B) as a result of any "closing
agreement" as described in Code Section 7121 (or any corresponding
provision of state, local or foreign income Tax law) entered
into on or prior to the Closing Date, to include any item of
income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending
after the Closing Date or (C) as a result of any
intercompany transaction described in Treasury Regulation
Section 1.1502-13 or any excess loss account described in Treasury
Regulation Section 1.1502-19 (or any corresponding or similar
provision or administrative rule of state, local, or foreign
income Tax law) occurring or existing, as applicable, on or
prior to the Closing Date, to include any item of income in
taxable income for any taxable period (or portion thereof)
ending after the Closing Date.
(ii) Section 6(k) of the Disclosure Schedule sets forth
the following information with respect to each of Xxxxxxxx
and its Subsidiaries (or, in the case of clause (B) below,
with respect to each of the Subsidiaries) as of the most
recent practicable date (as well as on an estimated pro
forma basis as of the Closing giving effect to the
consummation of the transactions contemplated hereby): (A)
the basis of Xxxxxxxx and each Subsidiary in its assets; (B)
the basis of the stockholder(s) of each Subsidiary in its
stock; and (C) the amount of any net operating loss, net
capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution attributable
to Xxxxxxxx or any Subsidiary.
(iii) The unpaid Taxes of Xxxxxxxx and its Subsidiaries
(A) did not, as of the Most Recent Fiscal Month End, exceed
the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto)
and (B) do not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with
the past custom and practice of Xxxxxxxx and its
Subsidiaries in filing their Tax Returns.
(iv) Section 6(k) of the Disclosure Schedule lists all
federal, state, local, and foreign income Tax Returns filed
with respect to any of Xxxxxxxx and its Subsidiaries for
taxable periods ended on or after December 31, 1993,
indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject
of audit. The Seller has delivered to the Buyer correct and
complete copies of all portions of federal income Tax
Returns, examination reports, and statements of deficiencies
relating to Xxxxxxxx and any of the Group Subsidiaries
assessed against or agreed to by any of Xxxxxxxx and its
Subsidiaries since December 31, 1993.
(l) Real Property.
(i) None of Xxxxxxxx and the Group Subsidiaries owns
any real property.
(ii) Section 6(l)(ii) of the Disclosure Schedule lists
and describes briefly all real property leased or subleased
to any of Xxxxxxxx and the Group Subsidiaries (the "Leased
Real Property"). The Seller has delivered to the Buyer
correct and complete copies of the leases and subleases
listed in Section 6(l)(ii) of the Disclosure Schedule. With
respect to each lease and sublease listed in Section
6(l)(ii) of the Disclosure Schedule and except as set forth
in Section 6(l)(ii) of the Disclosure Schedule:
(A) the lease or sublease is legal, valid,
binding and enforceable with respect to Xxxxxxxx or
any applicable Group Subsidiary (and, to the
Knowledge of the Seller, is legal, valid, binding and
enforceable with respect to any other party thereto),
and in full force and effect;
(B) the consummation of the transactions
contemplated hereby will not cause the lease or
sublease to not be legal, valid, binding and
enforceable and in full force and effect on identical
terms;
(C) neither Xxxxxxxx (or any applicable Group
Subsidiary) nor, to the Knowledge of the Seller, any
other party to the lease or sublease is in breach or
default, and no event has occurred which, with notice
or lapse of time, would constitute a breach or
default or permit termination, modification, or
acceleration thereunder by Xxxxxxxx (or such Group
Subsidiary) or, to the Knowledge of the Seller, by
any other party;
(D) no party to the lease or sublease has
repudiated any provision thereof;
(E) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or
sublease;
(F) as to any sublease, the representations and
warranties set forth in subsections (A) through (E)
above are, to the Knowledge of the Seller, also true
and correct with respect to the underlying lease;
(G) none of Xxxxxxxx and its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in
trust, or encumbered any interest in the leasehold or
subleasehold;
(H) all facilities leased or subleased thereunder
are supplied with utilities and other services
necessary for the operation of said facilities;
(I) there are no pending or, to the Knowledge of
the Seller, threatened condemnation proceedings,
lawsuits, or administrative actions relating to the
Leased Real Property or other matters adversely
affecting the current use, occupancy or value
thereof.
(m) Intellectual Property.
(i) Except as set forth in Section 6(m)(i) of the
Disclosure Schedule, Xxxxxxxx and its Subsidiaries own or
have the right to use, pursuant to a valid and enforceable
license, sublicense, agreement, or permission, all
Intellectual Property necessary for or used in the operation
of the Business as currently conducted. Each item of
Intellectual Property owned or used by any of Xxxxxxxx and
its Subsidiaries immediately prior to the Closing hereunder
and as of the Closing Date (the "Business Intellectual
Property"), including but not limited to the Intellectual
Property conveyed to the Buyer in accordance with the UK
Facilitation Agreement, the Canadian Facilitation Agreement
and the German Facilitation Agreement, will be owned or
available for use by Xxxxxxxx and its Subsidiaries on the
same or more favorable terms and conditions immediately
subsequent to the Closing hereunder. Each of Xxxxxxxx and
its Subsidiaries has taken all necessary action to maintain
and protect each item of Business Intellectual Property that
it owns or uses and will continue to maintain and protect
all of such Intellectual Property prior to the Closing so
as to not adversely affect the validity or enforceability
thereof.
(ii) Section 6(m)(ii) of the Disclosure Schedule sets
forth a complete and accurate list of, and identifies the
owner of, all of the following that are owned by, licensed
to, issued to, used by, or filed by or on behalf of,
Xxxxxxxx or any of its Subsidiaries: (A) all patents and
registered trademarks and copyrights and all pending patent
applications and other applications for the registration of
trademarks and copyrights; (B) all material unregistered
trademarks and service marks, trade dress, trade names,
corporate names, logos, slogans and internet domain names;
(C) all material unregistered copyrights for the Products;
and (D) all material computer software.
(iii) Except as set forth in Section 6(m)(iii) of the
Disclosure Schedule, with respect to each item of Business
Intellectual Property owned by Xxxxxxxx or one of its
Subsidiaries:
(A) Xxxxxxxx or one of its Subsidiaries possesses
all right, title, and interest in and to the item,
free and clear of any Lien, license, or other
restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or
charge; and
(C) no Litigation is pending or, to the Knowledge
of the Seller, is threatened which challenges the
legality, validity, enforceability, use or ownership
of the item.
(iv) Section 6(m)(iv) of the Disclosure Schedule sets
forth a complete and accurate list of all licenses,
sublicenses, agreements or permissions pertaining to
Business Intellectual Property to which Xxxxxxxx or any of
its Subsidiaries is a party, either as licensee or licensor
(the "Licenses"). The Seller has delivered to the Buyer
correct and complete copies of all Licenses (as amended to
date). Except as set forth in Section 6(m)(iv) of the
Disclosure Schedule, with respect to each License:
(A) the License is legal, valid, binding,
enforceable, and in full force and effect;
(B) neither Xxxxxxxx (or any of its Subsidiaries)
nor, to the Knowledge of the Seller, any other party
to the License, is in breach or default of the
License, and no event has occurred which, with notice
or lapse of time, would permit termination,
modification or acceleration of the License or would
constitute a breach or default by Xxxxxxxx (or any
its Subsidiaries) or, to the Knowledge of the Seller,
by any other party to the License;
(C) all royalty payments required to have been
made under the License have been paid and all royalty
payments required to be made by Xxxxxxxx or any of
its Subsidiaries under such License have been
properly accrued;
(D) no party to the License has repudiated any
provision thereof and none of the Seller, its
Affiliates, Xxxxxxxx and its Subsidiaries have been
notified or have any reason to believe that any
License granted to Xxxxxxxx or its Subsidiaries will
not be renewed if permitted by its terms or will be
terminated;
(E) with respect to each sublicense included in
the Licenses, Seller has received no notice that the
representations and warranties set forth in
subsections (A) through (D) above are not true and
correct with respect to the underlying license;
(F) Seller has received no notice that the
underlying item of Intellectual Property is subject
to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(G) Seller has received no notice of any action,
suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand pending or threatened
which challenges the legality, validity, or
enforceability of the underlying item of Intellectual
Property;
(H) none of Xxxxxxxx and its Subsidiaries has
granted any sublicense or similar right with respect
to the License; and
(v) Except as set forth in Section 6(m)(v) of the
Disclosure Schedule:
(A) each registration pertaining to an item of
Business Intellectual Property is valid and
enforceable;
(B) none of Xxxxxxxx and its Subsidiaries has
interfered with, infringed, misappropriated, or
otherwise conflicted with, and the operation of the
Business as currently conducted will not interfere
with, infringe, misappropriate, or otherwise conflict
with any Intellectual Property rights or rights of
privacy of third parties, and since May 1, 1992,
neither the Seller nor Xxxxxxxx or any of its
Subsidiaries has received any charge, complaint,
claim, demand or notice regarding any of the
foregoing (including any claim that any of Xxxxxxxx
and its Subsidiaries must license or refrain from
using any Intellectual Property rights of any third
party). To the Knowledge of the Seller, no third
party has interfered with, infringed,
misappropriated, or otherwise come into conflict with
any Intellectual Property rights of any of Xxxxxxxx
and its Subsidiaries; and
(C) the transactions contemplated by this
Agreement will have no material adverse effect on
Xxxxxxxx'x or any of its Subsidiaries' right, title
and interest in and to, or Xxxxxxxx'x or any of its
Subsidiaries' right and ability to use and disclose,
any of the Business Intellectual Property or the
validity and enforceability thereof.
(n) Contracts. Section 6(n) of the Disclosure
Schedule lists the following contracts and other agreements to
which any of Xxxxxxxx and its Subsidiaries is a party:
(i) purchase orders in excess of $100,000;
(ii) any agreement for the lease of personal property
to or from any Person providing for payments in excess of
$25,000 per annum or obligating Xxxxxxxx or any of the Group
Subsidiaries without a right to terminate such agreement
without penalty within 60 days;
(iii) any agreement (or group of related agreements),
excluding purchase orders, for the purchase or sale of
foreign currencies, raw materials, commodities, supplies,
products, or other personal property, the distribution or
marketing of products or for the furnishing or receipt of
services, which cannot be terminated by Xxxxxxxx or any of
the Group Subsidiaries, without penalty, within 60 days,
results in a loss to any of Xxxxxxxx and the Group
Subsidiaries, or involves consideration in excess of
$25,000;
(iv) any agreement concerning a partnership or joint
venture;
(v) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any capitalized
lease obligation, in excess of $25,000 or under which it has
imposed a Lien on any of its assets, tangible or intangible;
(vi) any agreement with the Seller and its Affiliates
(other than Xxxxxxxx and the Group Subsidiaries);
(vii) any agreement of Xxxxxxxx or any of the Group
Subsidiaries which provides benefits or requires any payment
upon a change of control as a result of the consummation of
the transactions contemplated hereby;
(viii) any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance, or
other plan or arrangement for the benefit of its current or
former directors, officers, and employees;
(ix) any agreement for the employment of any individual
on a full-time or part-time or other basis or for consulting
services, providing annual compensation in excess of $75,000
or providing severance benefits;
(x) any agreement under which it has advanced or
loaned any amount to any of its directors, officers, and
employees outside the Ordinary Course of Business (excluding
the advancement of reasonable business expenses);
(xi) any agreement under which the consequences of a
default or termination would have a Material Adverse Effect;
(xii) any other agreement (or group of related
agreements) the performance of which involves consideration
in excess of $50,000;
(xiii) agreements with the top 15 artists (based on
sales) providing material to Xxxxxxxx and the Group
Subsidiaries; or
(xiv) any agreement pursuant to which Xxxxxxxx or any of
its Subsidiaries has agreed not to compete.
The Seller has delivered to the Buyer a correct and complete copy
of each written agreement listed in Section 6(n) of the
Disclosure Schedule (as amended to date) and a written summary
setting forth the terms and conditions of each oral agreement
referred to in Section 6(n) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is valid,
binding and enforceable with respect to Xxxxxxxx or any
applicable Group Subsidiary (and, to the Knowledge of the Seller,
is valid, binding and enforceable with respect to any other party
thereto), and in full force and effect; (B) neither the Seller
nor, to the Knowledge of the Seller, any other party is in breach
or default, and no event has occurred which with notice or lapse
of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement;
and (C) neither the Seller nor, to the Knowledge of the Seller,
any other party has repudiated any provision of the agreement.
(o) Powers of Attorney. Except for U.S. Treasury and
U.S. Customs Service powers of attorney, there are no outstanding
powers of attorney executed by or on behalf of any of Xxxxxxxx
and the Group Subsidiaries.
(p) Insurance. Section 6(p) of the Disclosure
Schedule sets forth the following information with respect to
each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond
and surety arrangements) to which any of Xxxxxxxx and the Group
Subsidiaries has been a party, a named insured, or otherwise the
beneficiary of coverage at any time within the past five years:
(i) the name, address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis)
and amount (including a description of how deductibles and
ceilings are calculated and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is
valid, binding and enforceable with respect to Xxxxxxxx or any
applicable Group Subsidiary (and, to the Knowledge of the Seller,
is valid, binding and enforceable with respect to any other party
thereto), and in full force and effect; (B) neither any of
Xxxxxxxx and the Group Subsidiaries nor, to the Knowledge of the
Seller, any other party to the policy is in breach or default
(including with respect to the payment of premiums or the giving
of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or
permit termination, modification, or acceleration, under the
policy; and (C) neither any of Xxxxxxxx and the Group
Subsidiaries nor, to the Knowledge of the Seller, any other party
to the policy has repudiated any provision thereof.
(q) Litigation. Section 6(q) of the Disclosure
Schedule sets forth each instance in which any of Xxxxxxxx and
its Subsidiaries (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or
is, to the Knowledge of the Seller, threatened to be made a party
to any Litigation. None of the Litigation set forth in Section
6(q) of the Disclosure Schedule would have a Material Adverse
Effect.
(r) Product Warranty. Each product manufactured,
sold, leased, or delivered by any of Xxxxxxxx and its
Subsidiaries has been in conformity in all material respects with
all applicable contractual commitments and all express and
implied warranties, and none of Xxxxxxxx and its Subsidiaries has
any Liability (and the Seller has no Knowledge of any Basis for
any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of
them that could reasonably be expected to give rise to any
Liability) for replacement or repair thereof or other damages in
connection therewith, subject only to any reserve for product
warranty claims set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the
past custom and practice of Xxxxxxxx and its Subsidiaries. No
product manufactured, sold, leased, or delivered by any of
Xxxxxxxx and its Subsidiaries is subject to any guaranty,
warranty, or other indemnity beyond the applicable standard terms
and conditions of sale or lease. Section 6(r) of the Disclosure
Schedule includes a copy of the standard terms and conditions of
product warranties for each of Xxxxxxxx and the Group
Subsidiaries.
(s) Product Liability; Advertising Liability. None of
Xxxxxxxx and its Subsidiaries has any civil or criminal Liability
(and the Seller has no Knowledge of any Basis for any present or
future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of them that could
reasonably be expected to give rise to any Liability) arising out
of any injury to individuals or property as a result of the
ownership, possession, or use of any product manufactured, sold,
leased, or delivered by any of Xxxxxxxx and its Subsidiaries.
All advertising or promotional materials published, printed,
written or distributed by Xxxxxxxx or its Subsidiaries prior to
the Closing Date are accurate and complete in all material
respects.
(t) Employees. None of Xxxxxxxx and the Group
Subsidiaries is a party to or bound by or has any liability with
respect to any collective bargaining agreement, nor has any of
them experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes. None of
Xxxxxxxx and the Group Subsidiaries has committed any unfair
labor practice. The Seller has no Knowledge of any organizational
effort presently being made or threatened by or on behalf of any
labor union with respect to employees of any of Xxxxxxxx and the
Group Subsidiaries. No employees, or agents who are engaged in
production, marketing or selling activities on behalf of Xxxxxxxx
and/or the Group Subsidiaries, are located outside of the state
of Florida.
(u) Employee Benefits.
(i) Section 6(u) of the Disclosure Schedule lists each
Employee Benefit Plan that any of Xxxxxxxx or any of its
Subsidiaries maintains, contributes to or has any liability
with respect thereto. With respect to each Employee Benefit
Plan maintained or contributed to by Xxxxxxxx or any of the
Group Subsidiaries:
(A) Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) complies
in form and in operation in all material respects
with the applicable requirements of ERISA, the Code,
and other applicable laws. No such Employee Benefit
Plan is a Multiemployer Plan.
(B) Except as set forth in Section 6(u) of the
Disclosure Schedule, all required reports and
descriptions (including Form 5500 Annual Reports,
Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed
appropriately with respect to each such Employee
Benefit Plan. The requirements of Part 6 of Subtitle
B of Title 1 of ERISA and of Code Section 4980B ("COBRA")
have been met with respect to each such Employee
Benefit Plan which is an Employee Welfare Benefit
Plan which provides health care benefits.
(C) All contributions (including all employer
contributions and employee salary reduction
contributions) which are due have been paid to each
such Employee Benefit Plan which is an Employee
Pension Benefit Plan and all contributions for any
period ending on or before the Closing Date which are
not yet due have been paid to each such Employee
Pension Benefit Plan or accrued in accordance with
appropriate accounting procedures. All premiums or
other payments for all periods ending on or before
the Closing Date have been paid with respect to each
such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
(D) Except as set forth in Section 6(u) of the
Disclosure Schedule, each such Employee Benefit Plan
which is an Employee Pension Benefit Plan and which
is intended to be a qualified plan meets the require-
ments of a "qualified plan" under Code Section 401(a)
and has received, a favorable determination letter
from the Internal Revenue Service.
(E) No such Employee Benefit Plan which is an
Employee Pension Benefit Plan is subject to Title IV
of ERISA.
(F) The Seller has delivered to the Buyer correct
and complete copies of the plan documents and summary
plan descriptions, the most recent determination
letter received from the Internal Revenue Service,
the most recent Form 5500 Annual Report, actuarial
report and all related trust agreements, insurance
contracts, and other funding agreements which
implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that
any of Xxxxxxxx, its Subsidiaries, and the Controlled Group
of Corporations which includes Xxxxxxxx and its Subsidiaries
maintains or during the prior 6-year period ending on the
Closing Date, has maintained or to which any of them
contributes, has, during the prior 6-year period ending on
the Closing Date, contributed, or has, during the prior 6-
year period ending on the Closing Date, been required to
contribute:
(A) No such Employee Benefit Plan which is a
defined benefit Employee Pension Benefit Plan has
been completely or partially terminated where
liabilities have not been satisfied in full or been
the subject of a Reportable Event as to which notices
would be required to be filed with the PBGC. No
proceeding by the PBGC to terminate any such Employee
Pension Benefit Plan has been instituted or to the
Knowledge of the Seller, threatened.
(B) None of Xxxxxxxx, its Subsidiaries and the
Controlled Group of Corporations has engaged in and,
to the Knowledge of the Seller, no plan administrator
has engaged in any non-exempt Prohibited Transactions
with respect to any such Employee Benefit Plan. No
action, suit, proceeding, hearing, or investigation
with respect to the administration or the investment
of the assets of any such Employee Benefit Plan
(other than routine claims for benefits) is pending
or to the Knowledge of the Seller, threatened.
(C) None of Xxxxxxxx or its Subsidiaries has
incurred, and the Seller has no Knowledge that any of
Xxxxxxxx or its Subsidiaries would incur, any
Liability to the PBGC (other than PBGC premium
payments) or otherwise under Title IV of ERISA or
under the Code with respect to any such Employee
Benefit Plan which is a defined benefit Employee
Pension Benefit Plan.
(iii) None of Xxxxxxxx, its Subsidiaries, and the other
members of the Controlled Group of Corporations that
includes Xxxxxxxx and its Subsidiaries contributes to, has
during the prior 6-year period ending on the Closing Date,
contributed to, or has, during the prior 6-year period
ending on the Closing Date, been required to contribute to
any Multiemployer Plan or has any Liability (including any
partial or total withdrawal liability) under any
Multiemployer Plan.
(iv) None of Xxxxxxxx and its Subsidiaries maintains or
has, during the prior 6-year period ending on the Closing
Date, maintained, or contributes, has, during the prior 6-
year period ending on the Closing Date, contributed, or has,
during the prior 6-year period ending on the Closing Date,
been required to contribute to any Employee Welfare Benefit
Plan providing medical, health, or life insurance or other
welfare-type benefits for current or future retired or
terminated employees of Xxxxxxxx or any of its Subsidiaries,
their spouses, or their dependents (other than in accordance
with COBRA).
(v) Guaranties. None of Xxxxxxxx and the Group
Subsidiaries is a guarantor of or otherwise is liable for any
Liability or obligation (including indebtedness) of any Person
other than Xxxxxxxx or a Group Subsidiary.
(w) Environment and Safety Matters. Except as set
forth in Section 6(w) of the Disclosure Schedule:
(i) Each of Xxxxxxxx, the Group Subsidiaries, and
their respective Affiliates has complied and is in
compliance in all material respects with all applicable
Environmental and Safety Requirements.
(ii) Without limiting the generality of the foregoing,
each of Xxxxxxxx, the Group Subsidiaries, and their
respective Affiliates has obtained and complied with, and is
in compliance with, in all material respects, all permits,
licenses and other authorizations that are required pursuant
to applicable Environmental and Safety Requirements for the
occupation of their facilities and the operation of the
Business.
(iii) Neither Xxxxxxxx nor any of the Group Subsidiaries
has received any written or oral notice, report or other
information regarding any actual or alleged violation of
applicable Environmental and Safety Requirements or any
common law standard related to the environment, health or
safety, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective
obligations, relating to the Business and arising under
applicable Environmental and Safety Requirements or any
related common law (except for such violations, liabilities
or potential liabilities as have been completely resolved,
including payment of all associated, fines and penalties).
(iv) To the Knowledge of the Seller, none of the
following exists at any property or facility owned or
operated in connection with the Business: (A) underground
storage tanks; (B) asbestos-containing material in any form
or condition; (C) materials or equipment containing
polychlorinated biphenyls; or (D) landfills, surface
impoundments, or disposal areas.
(v) With respect to the Business, neither Xxxxxxxx nor
any of the Group Subsidiaries, nor their respective
Affiliates has treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or released
any substance, including without limitation any hazardous
substance, or owned or operated the Business or any property
or facility (and no such property or facility is
contaminated by any such substance) in a manner that has
given or would give rise to liabilities, including any
liability for response costs, corrective action costs,
personal injury, property damage, natural resources damages
or attorney fees, or any investigative, corrective or
remedial obligations, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended or the Solid Waste Disposal Act, as amended
or any other Environmental and Safety Requirements or any
common law standard related to the environment, health or
safety.
(vi) Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will result in any obligations for site
investigation, cleanup, or notification to or consent of
government agencies or third parties, pursuant to any of the
so-called "transaction-triggered" or "responsible property
transfer" Environmental and Safety Requirements.
(vii) With respect to the Business, neither Xxxxxxxx nor
any of the Group Subsidiaries has, either expressly or by
operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective
or remedial action, of any other Person relating to
Environmental and Safety Requirements or any common law
standard relating to the environment, health or safety.
(x) Brokers' Fees. None of Xxxxxxxx and the Group
Subsidiaries has any Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(y) Certain Business Relationships with Xxxxxxxx and
Its Subsidiaries. Except as set forth in Section 6(y) of the
Disclosure Schedule, none of the Seller and its Affiliates (other
than Xxxxxxxx and its Subsidiaries) owns any asset, tangible or
intangible (including Intellectual Property or contractual
rights), which is used in the Business. None of the Seller and
its Affiliates has provided any services to Xxxxxxxx or its
Subsidiaries since January 1, 1994, except administrative and
corporate services (including tax, legal and insurance
administration) and shipping services under existing freight
agreements. Except as set forth in Section 6(y) of the
Disclosure Schedule, no employee, director or officer of Xxxxxxxx
or Seller has provided any services to Xxxxxxxx or the Group
Subsidiaries since January 1, 1994 outside of that Person's
regular course of business. Except as set forth in Section 6(y)
of the Disclosure Schedule, there are no debts or obligations
owing by Xxxxxxxx or any of the Group Subsidiaries to the Seller
or any of its Affiliates or Subsidiaries (other than Xxxxxxxx).
All debts and obligations owing to Xxxxxxxx or any Group
Subsidiary by the Seller or its Affiliates (other than Xxxxxxxx
or any Group Subsidiary) will be fully paid and discharged on or
prior to the Closing Date.
7. Pre-Closing Covenants. The Parties agree as follows
with respect to the period between the execution of this
Agreement and the Closing:
(a) General. Each of the Parties will use (and the
Seller will cause Xxxxxxxx and its Subsidiaries to use) its
reasonable best efforts to take all action and to do all things
necessary in order to consummate and make effective the
transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth
in Section 3 above). Time is of the essence herein.
(b) Notices and Consents. The Seller will cause each
of Xxxxxxxx and its Subsidiaries to give any notices to third
parties, and will cause each of Xxxxxxxx and its Subsidiaries to
use its reasonable best efforts to obtain any third party
consents, that the Buyer may request in connection with the
matters referred to in Section 6(d) above. Any payments to be
made in connection with this Agreement with respect to the
transfer of any agreement, contract, lease, license, instrument
or other arrangement to which any of Xxxxxxxx and its
Subsidiaries is a party shall be made by the Buyer.
(c) Operation of Business. The Seller will not cause
or permit any of Xxxxxxxx and its Subsidiaries to engage in any
practice, take any action, or enter into any transaction outside
the Ordinary Course of Business. Without limiting the generality
of the foregoing, the Seller will not cause or permit any of
Xxxxxxxx and its Subsidiaries to (i) redeem, purchase, or
otherwise acquire any of its capital stock, (ii) make any
material change in the conduct of the Business, or (iii)
otherwise engage in any practice, take any action, or enter into
any transaction of the sort described in Section 6(h) above. At
least 3 business days prior to the Closing, the Seller will
deliver to the Buyer an unaudited balance sheet as of April 25,
1997 (the "April 25 Balance Sheet") for Xxxxxxxx and the Group
Subsidiaries, prepared in accordance with GAAP applied on a basis
(and otherwise presented in a manner) consistent with that
utilized by the Seller for the Financial Statements and
presenting fairly the financial condition of Xxxxxxxx and the
Group Subsidiaries as of such date, showing a Net Book Value of
at least $16,400,000. The book value of items on this balance
sheet will be determined on the basis of the Business as
conducted prior to the Closing.
(d) Preservation of Business. The Seller will cause
each of Xxxxxxxx and its Subsidiaries to keep its business and
properties substantially intact, including its present
operations, physical facilities, working conditions, and
relationships with lessors, licensors, suppliers, customers, and
employees.
(e) Full Access. The Seller will permit, and the
Seller will cause each of Xxxxxxxx and the Group Subsidiaries to
permit, representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the
normal business operations of Xxxxxxxx and the Group
Subsidiaries, to all premises, properties, personnel, books,
records (including Tax records), contracts and documents of or
pertaining to each of Xxxxxxxx and the Group Subsidiaries.
(f) Notice of Developments. The Seller will give
prompt written notice to the Buyer of any material adverse
development causing a breach of any of the representations and
warranties in Section 6 above that is reasonably likely to
continue uncured to the Closing Date. Each Party will give
prompt written notice to the other Party of any material adverse
development causing a breach of any of his or its own
representations and warranties in Sections 4 and 5 above. No
disclosure by any Party pursuant to this Section 7(f), however,
shall be deemed to amend or supplement the Disclosure Schedule or
to prevent or cure any misrepresentation, breach of warranty, or
breach of covenant.
(g) Exclusivity. The Seller will not (and the Seller
will not cause or permit any of Xxxxxxxx and its Subsidiaries to)
(i) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of
any capital stock or other voting securities, or any substantial
portion of the assets, of any of Xxxxxxxx and its Subsidiaries
(including any acquisition structured as a merger, consolidation,
or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any
effort or attempt by any Person to do or seek any of the
foregoing. The Seller will not vote its Shares in favor of any
such acquisition structured as a merger, consolidation, or share
exchange. The Seller will notify the Buyer promptly, but in any
event within 48 hours, if any Person makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
(h) Estoppel Letters. The Seller will cause each of
Xxxxxxxx and its Subsidiaries to use its commercially reasonable
best efforts to obtain estoppel letters in form and substance
reasonably acceptable to the Buyer with respect to each parcel of
Leased Real Property.
(i) Certain Executives.
(i) The Seller shall use its reasonable best
efforts to obtain prior to the Closing a written non-
competition agreement from each Named Executive prohibiting
such Named Executive from working for or being connected with
any business competing with the direct response business of
Xxxxxxxx until at least the one-year anniversary of the
Closing Date.
(ii) If Xxxxxxx Xxxxxx does not continue his
employment with Xxxxxxxx or the Buyer until the six-month
anniversary of the Closing Date, the Seller shall cause Xxxxxx
Xxxxx (provided that Xx. Xxxxx is then still in the employ of
the Seller, its Affiliates or any successor thereof, it being
understood that the Seller shall not terminate Xx. Xxxxx
except for cause) to be seconded to the Buyer or Xxxxxxxx at
the Buyer's or Xxxxxxxx'x facilities for the majority of his
working days (or such longer period as is necessary to
manage Xxxxxxxx'x information systems in a satisfactory
manner) during such six-month period. Xx. Xxxxx'x salary
during such period shall be paid by the Seller.
(iii) If Xxxx Xxxx and Xxxx Xxxxxxxx do not
continue their employment with Xxxxxxxx or the Buyer through
the six-month anniversary of the Closing Date, the Seller
shall cause Xxxx Xxx (provided that Xx. Xxx is then still in
the employ of the Seller, its Affiliates or any successor
thereof, it being understood that the Seller shall not
terminate Xx. Xxx except for cause) to be made available to
Xxxxxxxx or the Buyer at Xxxxxxxx'x or the Buyer's
facilities for the majority of his working days (or such
longer period as is necessary) during such six-month period.
Xx. Xxx'x salary shall be paid during such period by the
Seller.
(iv) The Buyer agrees to offer, prior to the Closing,
employment to each of the Named Executives, Xxxx Xxxxxx and
Xxxx Xxxxxxxx for a term of at least six months following
the Closing Date.
(j) Delivery of Certain Agreements. Prior to the
Closing Date, the Seller shall deliver to the Buyer a list of any
agreement to which Xxxxxxxx or any of its Subsidiaries is a party
pursuant to which Xxxxxxxx or any of its Subsidiaries has agreed
to maintain information or materials confidential.
8. Post-Closing Covenants. The Parties agree as follows
with respect to the period following the Closing:
(a) General. In case at any time after the Closing
any further action is necessary or desirable to carry out the
purposes of this Agreement, each of the Parties will take such
further action (including the execution and delivery of such
further instruments and documents) as the other Party may
reasonably request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section 9 below). The Seller
acknowledges and agrees that from and after the Closing the Buyer
will be entitled to possession of all documents, books, records
(including Tax records), agreements, and financial data of any
sort relating to the Business.
(b) Litigation Support. In the event and for so long
as any Party actively is contesting or defending against any
Litigation (other than any such Litigation in which the Parties
are suing each other) in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving any of
Xxxxxxxx and the Group Subsidiaries, the other Party will
cooperate with it and its counsel in the contest or defense, make
available their personnel, and provide such testimony and access
to their books and records as shall be necessary in connection
with the contest or defense, all at the sole cost and expense of
the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under
Section 9 below).
(c) Transition. The Seller will not take any action
that is designed or intended to have the effect of discouraging
any lessor, licensor, customer, supplier, or other business
associate of any of Xxxxxxxx and its Subsidiaries from
maintaining the same business relationships with Xxxxxxxx and its
Subsidiaries after the Closing as it maintained with Xxxxxxxx and
its Subsidiaries prior to the Closing. The Seller will refer all
customer inquiries relating to the businesses of Xxxxxxxx and its
Subsidiaries to the Buyer from and after the Closing.
(d) Confidentiality. The Seller, its Affiliates,
their directors, officers, and employees will, and the Seller
will use its reasonable best efforts to cause the agents of
Xxxxxxxx and its Subsidiaries to, treat and hold as confidential
all of the Confidential Information, refrain from using any of
the Confidential Information except in connection with this
Agreement, and deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all tangible embodiments (and
all copies) of the Confidential Information which are in its
possession. In the event that the Seller is requested or required
(by oral question or request for information or documents in any
legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential
Information, the Seller will notify the Buyer promptly of the
request or requirement so that the Buyer may seek an appropriate
protective order or waive compliance with the provisions of this
Section 8(d). If, in the absence of a protective order or the
receipt of a waiver hereunder, the Seller is, on the advice of
counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, the Seller may
disclose the Confidential Information to the tribunal; provided,
however, that the Seller shall use its best efforts to obtain, at
the request of the Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the Buyer
shall designate.
(e) Covenant Not to Compete. For a period of five
years from and after the Closing Date, none of the Seller and its
Affiliates will engage directly or indirectly in the sale of any
Products through or by direct response marketing through or by
either print advertising or direct mail sent directly to
consumers anywhere in the world, except in the same manner and to
the same extent that Enesco is permitted to do so under the
License Agreement. Notwithstanding the immediately preceding
sentence, the Seller or its Affiliates may (i) acquire, operate
or develop a business which directly markets Products so long as
less than 10% of the aggregate gross revenues of such business
are derived from the direct marketing of such Products and (ii)
own no more than 1% of the outstanding stock of any publicly
traded corporation which directly markets any Products. If the
final judgment of a court of competent jurisdiction declares that
any term or provision of this Section 8(e) is invalid or
unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or
provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be
appealed.
(f) Benefits Plans. Promptly upon written
notification by Xxxxxxxx that, at its election, it has
established a savings plan (the "Xxxxxxxx Savings Plan")
qualified under Section 401(a) of the Code and/or meeting the
requirements of Section 401(k) of the Code, the Seller shall,
upon its receipt of a favorable determination letter from the
Internal Revenue Service or an opinion of counsel (in which case
the Buyer shall nevertheless promptly request such determination
letter) to the effect that the Xxxxxxxx Savings Plan has been
properly adopted and that the plan documents have been written to
comply with the requirements for a qualified plan under Section
401(a) of the Code, cause to be transferred from the Stanhome
Investment Savings Plan to the Xxxxxxxx Savings Plan the account
balances for all employees of Xxxxxxxx and the Group Subsidiaries
who, as of the actual date of transfer remain employees of
Xxxxxxxx or any of the Group Subsidiaries, and such account
balances shall have been determined no more than ten days prior
to the actual date of transfer. The transfer of such account
balances shall be in cash or property acceptable to the Buyer;
provided, however, that the Xxxxxxxx Savings Plan will accept a
transfer of promissory notes or other documentation evidencing
loans to employees under the Stanhome Investment Savings Plan.
In addition, the Seller will assist in the transition of the
post-Closing administration of all Employee Benefit Plans
applicable to employees of Xxxxxxxx or the Group Subsidiaries.
(g) Change of Corporate Names. The Seller shall, on,
or as soon as reasonably practicable after, the Closing Date,
change or cause to be changed, the corporate names of Hamilton
UK, Hamilton Canada and Xxxxxxxx Germany (including making any
filings with applicable governmental authorities in order to
effect such change) so as to eliminate the word "Xxxxxxxx" from
each such corporate name, and cease using any corporate or trade
name containing the word "Xxxxxxxx" (including on any stationery,
letterhead or business cards).
(h) Certain Retained Liabilities.
(i) The Parties acknowledge and agree that the two
lawsuits to which Xxxxxxxx is a party known as (A) Xxxxxx
Xxxxxxxxx v. The Xxxxxxxx Collection and Enesco Corporation,
United States District Court for the Eastern District of New
York (CV 9700152 (CPS)), and (B) The Xxxxxxxx Collection,
Inc. v. Florida Department of Revenue, Circuit Court of the
Second Judicial Circuit in and for Xxxx County, Florida
(Case No. 93-926), shall be retained by the Seller. The
Seller shall retain the sole right to defend and, subject to
the last sentence of this Section 8(h)(i), settle such
lawsuits at the Seller's expense and, notwithstanding
anything herein or in the Disclosure Schedule to the
contrary, will, subject to the last sentence of this Section
8(h)(i), indemnify and hold the Buyer and its officers,
directors and controlling persons harmless from and against
the entirety of any Adverse Consequences that the Buyer,
such officers, directors or controlling persons or Xxxxxxxx
may suffer in connection with such lawsuits. The Buyer
shall (at the Seller's expense) provide such cooperation in
connection with such lawsuits as the Seller may reasonably
request. The Seller shall pay the full amount of all
Adverse Consequences relating to any settlement or judgment
and be entitled to the full amount of any settlement or
judgment received on any counterclaim filed in such
lawsuits; provided, however, that (A) the Seller shall
negotiate any such settlement in good faith and shall not
agree to any settlement in either such lawsuit that could
have an adverse effect on the Buyer or Xxxxxxxx without the
prior written consent of the Buyer (not to be unreasonably
withheld) and (B) in the event that the Buyer declines to
consent to any such proposed settlement as provided in the
preceding clause (A), the Buyer shall be responsible for the
full amount, if any, by which the amount of all Adverse
Consequences relating to the ultimate settlement exceeds the
amount of all Adverse Consequences relating to the
settlement proposed pursuant to such clause (A) and the
Buyer shall be entitled to receive from the Seller the full
amount, if any, by which the amount of all Adverse
Consequences to the Seller of the settlement proposed
pursuant to such clause (A) exceeds the amount of all
Adverse Consequences of the ultimate settlement; provided
further, that in the event the Buyer declines to consent to
a settlement negotiated by the Seller, the Buyer may, at its
option, assume the complete defense of the applicable
lawsuit, in which case the Buyer shall not be responsible
for any out-of-pocket expenses (including attorneys' fees)
incurred by the Seller in connection with such lawsuit.
(ii) Notwithstanding anything herein or in the
Disclosure Schedule to the contrary, the Seller will
indemnify and hold the Buyer and its officers, directors and
controlling persons harmless from and against the entirety
of any Adverse Consequences (net of any reserve therefor
reflected on the April 25 Balance Sheet) that the Buyer,
such officers, directors or controlling persons or Xxxxxxxx
may suffer in connection with any Liability relating to
escheat and abandoned or unclaimed property obligations
arising from acts or omissions prior to the Closing
(including the preparation and filing of, or failure to
prepare or file, any unclaimed property forms with any
governmental authority).
(i) Severance Policy. The Buyer agrees to maintain,
or cause Xxxxxxxx to maintain, until the first anniversary of the
Closing Date, the Xxxxxxxx Severance Policy in effect in
substantially the same form as it exists immediately prior to the
Closing. The Seller shall be responsible for all severance
payments, if any, to be paid to any Named Executive (or otherwise
to be paid to any other employee of Xxxxxxxx or the Group
Subsidiaries in excess of any amount required to be paid pursuant
to the Xxxxxxxx Severance Policy).
(j) Maintenance of Records for Claims. Until the
period ending one year after the date on which any claim for
indemnification made by the Buyer pursuant to Section 9(b) is
settled or paid, the Buyer shall maintain, or cause to be
maintained, the records that relate to such claim. Such records
shall be (i) true and complete in all material respects and
(ii) available to the Seller or its designated representative for
inspection and compliance audit (at the Seller's expense) at
reasonable times during normal business hours upon reasonable
notice.
(k) Records. The Buyer shall maintain and make
available to the Seller or its external auditors at reasonable
times during normal business hours upon reasonable notice, at the
Seller's expense, all financial records of the Business necessary
for the Seller's preparation of its 1997 financial statements.
9. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All
of the representations and warranties contained in this Agreement
(other than those contained in Sections 6(f) and 6(k)) shall
survive the Closing (even if the damaged Party knew or had reason
to know of any misrepresentation or breach of warranty at the
time of Closing) and continue in full force and effect for a
period of three years thereafter, and the corresponding
obligation to indemnify under Sections 9(b) and 9(c) shall expire
at such time unless a claim has been made prior thereto;
provided, however, that the representations and warranties
contained in Sections 6(k) and the covenants and agreements set
forth in Article 10 shall survive the Closing (even if the Buyer
knew or had reason to know of any misrepresentation or breach of
warranty at the time of Closing) and continue in full force and
effect until the expiration of the applicable statute of
limitations (giving effect to any extensions or waivers), and the
representations and warranties contained in Section 6(f) shall
survive forever.
(b) Indemnification Provisions for Benefit of the
Buyer.
(i) In the event the Seller breaches (or in the event
any third party alleges facts that, if true, would mean the
Seller has breached) any of its representations, warranties
and covenants contained herein and, if there is an
applicable survival period pursuant to Section 9(a) above,
provided that the Buyer makes a written claim for
indemnification to the Seller within such survival period,
then the Seller (including any successor to any substantial
portion of the remaining businesses of the Seller and its
Subsidiaries) agrees, subject to Section 9(d), to indemnify
the Buyer and its officers, directors and controlling
persons from and against the entirety of any Adverse
Consequences the Buyer may suffer through and after the date
of the claim for indemnification (including any Adverse
Consequences the Buyer may suffer after the end of any
applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or
the alleged breach).
(ii) The Seller (including any successor to any
substantial portion of the remaining businesses of the
Seller and its Subsidiaries) agrees to indemnify the Buyer
and its officers, directors and controlling persons from and
against any Taxes of Xxxxxxxx and its Subsidiaries,
including (but not limited to) the unpaid Taxes of any
Person (other than any of Xxxxxxxx and its Subsidiaries)
under Treas. Reg. Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor,
by contract, or otherwise, with respect to any Tax year or
portion thereof ending on or before the Closing Date (or for
any Tax year beginning before and ending after the Closing
Date to the extent allocable (determined in a manner
consistent with Section 10(c)) to the portion of such period
beginning before and ending on the Closing Date), to the
extent such Taxes are not reflected in the reserve for Tax
Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and
Tax income) shown on the face of the April 25 Balance Sheet
(it being understood that any such indemnification shall not
be available to the extent that indemnification has already
been made in respect of the same Adverse Consequence
pursuant to Section 9(b)(i) above). There will be no
Liability included in the Tax Liability on the April 25
Balance Sheet for income Tax cushions or Tax on any
transactions or restructuring which are undertaken prior to
the Closing because of this Agreement, except to the extent
that such items were included in the Tax Liability on the
Initial Balance Sheet.
(c) Indemnification Provisions for Benefit of the
Seller. In the event the Buyer breaches (or in the event any
third party alleges facts that, if true, would mean the Buyer has
breached) any of its representations, warranties and covenants
contained herein, and, if there is an applicable survival period
pursuant to Section 9(a) above, provided that the Seller makes a
written claim for indemnification to the Buyer within such
survival period, then the Buyer (including any successor to any
substantial portion of the business of the Buyer) agrees, subject
to Section 9(d), to indemnify the Seller and its officers,
directors and controlling persons from and against the entirety
of any Adverse Consequences the Seller may suffer through and
after the date of the claim for indemnification (including any
Adverse Consequences the Seller may suffer after the end of any
applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach (or the
alleged breach).
(d) Limitation on Indemnification. The provisions for
indemnification under Sections 9(b)(i) and 9(c), as the case may
be, shall be effective only when the aggregate amount of all
Adverse Consequences for which indemnification is sought from the
Seller or the Buyer, under Section 9(b)(i) or Section 9(c),
respectively, exceeds $500,000, in which case the Indemnified
Party shall be entitled to indemnification of the amount of all
such Adverse Consequences, up to a maximum of $10,000,000
(excluding any claim for fraud). In the event that the Seller is
entitled to seek recovery under any current or previously
existing insurance policy in respect of any Adverse Consequence
which, when aggregated with all other Adverse Consequences
suffered by the Buyer, exceeds $10,000,000, the Seller shall use
its reasonable best efforts to seek such recovery and shall
reimburse the Buyer (or any applicable officer, director or
controlling person) for the full amount of such Adverse
Consequence so recovered (net of the Seller's reasonable out-of-
pocket expenses incurred in connection with seeking such
recovery). Any indemnity under this Section 9 shall be reduced
by any Tax Impact or insurance benefit realized by the
Indemnified Party. If the amount of any Adverse Consequences
shall, at any time subsequent to payment of an indemnity
therefor, be reduced by recovery, settlement or otherwise, the
amount of such reduction, less any reasonable, out-of-pocket
expenses incurred in connection therewith, shall promptly be
repaid by the Indemnified Party to the Indemnifying Party.
(e) Matters Involving Third Parties.
(i) If any third party shall notify either Party (the
"Indemnified Party"), in any manner, with respect to any
matter (a "Third Party Claim") which may give rise to a
claim for indemnification against the other Party (the
"Indemnifying Party") under this Section 9, then the
Indemnified Party shall promptly notify the Indemnifying
Party thereof in writing; provided, however, that no delay
on the part of the Indemnified Party in notifying the
indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim
with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party
notifies the Indemnified Party in writing within ten days
after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any
Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim, (B) the Indemnifying
Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the
indemnifying Party will have the financial resources to
defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third Party
Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or
an adverse judgment with respect to, the Third Party Claim
is not, in the good faith judgment of the Indemnified Party,
likely to establish a precedential custom or practice
adverse to the continuing business interests of the
Indemnified Party, and (E) the Indemnifying Party conducts
the defense of the Third Party Claim actively and
diligently.
(iii) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with
Section 9(e)(ii) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and
participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and
(C) the Indemnifying Party will negotiate any settlement in
good faith and will not consent to the entry of any judgment
or enter into any settlement with respect to any Third Party
Claim that could have an adverse effect on the Indemnified
Party without the prior written consent of the Indemnified
Party (not to be withheld unreasonably); provided, however,
that in the event that the Indemnified Party declines to
consent to any such proposed settlement as provided in
clause (C), the Indemnified Party shall be responsible for
the full amount of the amount, if any, by which the Adverse
Consequences of the ultimate settlement exceed the Adverse
Consequences to the Indemnifying Party of the settlement
proposed pursuant to clause (C) and the Indemnified Party
shall be entitled to receive from the Indemnifying Party the
full amount, if any, by which the Adverse Consequences to
the Indemnifying Party of the settlement proposed pursuant
to clause (C) exceed the Adverse Consequences of the
ultimate settlement; provided further, that in the event the
Indemnified Party declines to consent to a settlement
negotiated by the Indemnifying Party, the Indemnified Party
may, at its option, assume the complete defense of the Third
Party Claim, in which case the Indemnified Party shall not
be responsible for any out-of-pocket expenses (including
attorneys' fees) incurred by the Indemnifying Party in
connection with such Third Party Claim. Notwithstanding the
foregoing, with respect to any Tax-related matter for which
indemnification would be available hereunder, the
Indemnified Party shall only be entitled to participate in
such defense with the prior consent of the Indemnifying
Party.
(iv) In the event any of the conditions in Section
9(e)(ii) above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it may deem
appropriate (and the Indemnified Party need not consult
with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Parties will
reimburse the Indemnified Party promptly and periodically
for the costs of defending against the Third Party Claim
(including attorneys' fees and expenses), and (C) the
Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim to the fullest extent
provided in this Section 9.
(f) Determination of Adverse Consequences. The
Parties shall take into account the time value of money (using
the Applicable Rate as the discount rate) in determining Adverse
Consequences for purposes of this Section 9.
(g) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in
derogation of, any statutory, equitable, or common law remedy any
Party may have for breach of representation, warranty, or
covenant. The Seller and its Affiliates hereby agree that they
will not make any claim for indemnification against any of
Xxxxxxxx and the Group Subsidiaries by reason of the fact that
any of them was a director, officer, employee, or agent of any
such entity or was serving at the request of any such entity as a
partner, trustee, director, officer, employee, or agent of
another entity (whether such claim is for judgments, damages,
penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any
statute, charter document, bylaw, agreement, or otherwise) with
respect to any action, suit, proceeding, complaint, claim, or
demand brought by the Buyer against the Seller (whether such
action, suit, proceeding, complaint, claim, or demand is pursuant
to this Agreement, applicable law, or otherwise). The Seller and
its Affiliates hereby agree that they will have no right of
contribution or indemnity from any of Xxxxxxxx and its
Subsidiaries with respect to amounts paid by the Seller pursuant
to this Section 9.
10. Tax Matters. The following provisions shall govern the
allocation of responsibility as between the Buyer and the Seller
for certain Tax matters following the Closing Date:
(a) Tax Periods Ending on or Before the Closing Date.
(i) The Seller shall include Xxxxxxxx and its
Subsidiaries, and the Buyer shall cause Xxxxxxxx and its
Subsidiaries to consent to join, for all taxable periods of
the Seller ending on or before the Closing Date for which
Xxxxxxxx and its Subsidiaries are eligible to do so, in any
consolidated or combined federal, state and local income Tax
Returns of the Seller. The Buyer agrees to cooperate with
the Seller and its Affiliates in the preparation of the
portions of such Tax Returns pertaining to Xxxxxxxx and its
Subsidiaries, and hereby agrees to take no position
inconsistent with Xxxxxxxx and its Subsidiaries being
members of the consolidated or combined groups of which the
Seller is the common parent for all such periods. The
Seller shall cause to be timely paid all income Taxes to
which such Tax Returns relate for all periods covered by
such Tax Returns.
(ii) The Buyer shall prepare or cause to be prepared
and file or cause to be filed all Tax Returns other than the
consolidated, unitary or combined income Tax Returns
described in Section 10(a)(i) above for Xxxxxxxx and its
Subsidiaries for all periods ending on or prior to the
Closing Date which are filed after the Closing Date. All
such Tax Returns shall be prepared in accordance with past
practice and the Buyer shall submit each such Tax Return to
the Seller for the Seller's review and approval, which
approval shall not be unreasonably withheld, at least
fifteen (15) days prior to the date on which such Tax Return
is required to be filed (taking into account any
extensions). The Seller shall reimburse the Buyer for Taxes
of Xxxxxxxx and its Subsidiaries with respect to such
periods within fifteen (15) days after payment by the Buyer
or Xxxxxxxx and its Subsidiaries of such Taxes to the extent
such Taxes are not reflected in the reserve for Tax
Liability shown on the face of the April 25 Balance Sheet.
(b) Tax Periods Beginning Before and Ending After the
Closing Date. The Buyer shall prepare or cause to be prepared
and file or cause to be filed any Tax Returns of Xxxxxxxx and its
Subsidiaries for Tax periods which begin before the Closing Date
and end after the Closing Date. The Seller shall pay to the Buyer
within fifteen (15) days after the date on which Taxes are paid
with respect to such periods an amount equal to the portion of
such Taxes which relates to the portion of such taxable period
ending on the Closing Date to the extent such Taxes are not
reflected in the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing
differences between book and Tax income) shown on the face of the
April 25 Balance Sheet. For purposes of this Section, in the
case of any Taxes that are imposed on a periodic basis and are
payable for a taxable period that includes (but does not end on)
the Closing Date, the portion of such Tax which relates to the
portion of such taxable period ending on the Closing Date shall
(x) in the case of any Tax based upon or related to income or
receipts be deemed equal to the amount which would be payable if
the relevant taxable period ended on the Closing Date, and (y) in
the case of any Taxes other than Taxes based upon or related to
income or receipts, be deemed to be the amount of such Tax for
the entire taxable period multiplied by a fraction the numerator
of which is the number of days in the taxable period ending on
the Closing Date and the denominator of which is the number of
days in the entire taxable period. Any credits relating to a
taxable period that begins before and ends after the Closing Date
shall be taken into account as though the relevant taxable period
ended on the Closing Date. All determinations necessary to give
effect to the foregoing allocations shall be made in a manner
consistent with prior practice of Xxxxxxxx and its Subsidiaries.
(c) Cooperation on Tax Matters.
(i) The Buyer, Xxxxxxxx and its Subsidiaries and the
Seller shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with
the filing of Tax Returns pursuant to this Section 10
(including such amended Tax Returns for periods (or portions
thereof) ending on or prior to the Closing Date that the
Seller may reasonably request the Buyer, Xxxxxxxx or any of
the Group Subsidiaries to file) and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's
request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually
convenient basis to provide additional information and
explanation of any material provided hereunder. Xxxxxxxx and
its Subsidiaries and the Seller agree (A) to retain all
books and records with respect to Tax matters pertinent to
Xxxxxxxx and its Subsidiaries relating to any taxable period
beginning before the Closing Date until the expiration of
the statute of limitations (and, to the extent notified by
the Buyer or the Seller, any extensions thereof) of the
respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority,
and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such
books and records and, if the other party so requests,
Xxxxxxxx and its Subsidiaries or the Seller, as the case may
be, shall allow the other party to take possession of such
books and records. The Buyer shall not dispose of any
records relating to Taxes paid or payable by Xxxxxxxx or its
Subsidiaries prior to the later of the tenth anniversary of
the Closing Date or the final resolution of all litigation
initiated prior to the tenth anniversary of the Closing Date
relating to Taxes of Xxxxxxxx and its Subsidiaries for any
Tax period ending on or prior to the Closing.
(ii) The Buyer and the Seller further agree, upon
request, to provide the other party with all information
that either party may be required to report pursuant to
Section 6043 of the Code and all Treasury Department
Regulations promulgated thereunder.
(d) Tax Refunds and Credits. The Buyer shall, within
10 days of receipt of any Tax refund or credit (net of any Tax
Impact and excluding any refund or credit reflected on the
April 25 Balance Sheet) received by or on behalf of the Buyer or
any affiliate or successor thereto (A) for or attributable to any
Tax Period of Xxxxxxxx or its Subsidiaries ending at or prior to
the Closing Date or (B) for or attributable to any period up to
and including the Closing Date which is part of a Tax period of
Xxxxxxxx or its Subsidiaries beginning prior to and ending after
the Closing Date, pay the amount of such Tax refund or credit to
Seller (including any interest or addition thereon). If the
amount of any Tax refund or credit is applied against any other
liability of any of Xxxxxxxx or its Subsidiaries, the Buyer or
any affiliate or successor thereto for Taxes for any Tax period,
the Buyer shall, within 10 days of the date of such application,
pay to the Seller an amount equal to the amount of the Tax refund
or credit (including any interest or addition thereon). The
Buyer shall deliver with payment to the Seller a written
explanation of the facts surrounding the Tax refund or credit and
a copy of any related notice or statement received from any
taxing authority.
(e) Tax Sharing Agreements. All tax sharing
agreements or similar agreements with respect to or involving
Xxxxxxxx and its Subsidiaries shall be amended to terminate any
obligation that Xxxxxxxx and its Subsidiaries may have under such
agreements as of the Closing Date and, after the Closing Date,
Xxxxxxxx and its Subsidiaries shall not be bound thereby or have
any liability thereunder.
(f) Certain Taxes. All transfer, documentary, sales,
use, stamp, registration and other similar taxes and fees
incurred as a result of the consummation of the transactions
contemplated hereby, shall be paid by the Seller when due, and
the Seller will, at its own expense, file all necessary Tax
Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other
Taxes and fees, and, if required by applicable law, the Buyer
will, and will cause its Affiliates to, join in the execution of
any such Tax Returns and other documentation.
11. Termination.
(a) Termination of Agreement. The Parties may
terminate this Agreement as provided below:
(i) the Buyer and the Seller may terminate this
Agreement by mutual written consent at any time prior to the
Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the
Closing (A) in the event the Seller has breached any
material representation, warranty, or covenant contained in
this Agreement in any material respect, the Buyer has
notified the Seller of the breach, and the breach has
continued without cure for a period of 30 days after the
notice of breach or (B) if the Closing shall not have
occurred on or before June 30, 1997, by reason of the
failure of any condition precedent under Section 3(a) hereof
(unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant
contained in this Agreement); and
(iii) the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing
(A) in the event the Buyer has breached any material
representation, warranty, or covenant contained in this
Agreement in any material respect, the Seller has notified
the Buyer of the breach, and the breach has continued
without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or
before June 30, 1997, by reason of the failure of any
condition precedent under Section 3(b) hereof (unless the
failure results primarily from the Seller itself breaching
any representation, warranty or covenant contained in this
Agreement).
(b) Effect of Termination. If any Party terminates
this Agreement pursuant to Section 11(a) above, all rights and
obligations of the Parties hereunder shall terminate without any
Liability of any Party to any other Party, except for the
obligations under Sections 4(d) [Brokers], 5(d) [Brokers], 9(a)
[Indemnification], 12(a) [Press Releases and Public
Announcements], 12(g) [Notices], 12(h) [Governing Law], and 12(k)
[Expenses]. Notwithstanding anything herein to the contrary, (i)
if the Buyer terminates this Agreement pursuant to Section
11(a)(ii)(A), then the Seller shall pay all fees and expenses
(including reasonable attorneys' fees and expenses) incurred by
the Buyer in connection with this Agreement and the transactions
contemplated hereby (not to exceed $250,000) and (ii) if the
Seller terminates this Agreement pursuant to Section
11(a)(iii)(A), then the Buyer shall pay all fees and expenses
(including reasonable attorneys' fees and expenses) incurred by
the Seller in connection with this Agreement and the transactions
contemplated hereby (not to exceed $250,000).
12. Miscellaneous.
(a) Press Releases and Public Announcements. No Party
shall issue any press release or make any public announcement
relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the Buyer and the
Seller; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable
law or any listing or trading agreement concerning its publicly
traded securities (in which case the disclosing Party will use
its reasonable best efforts to advise and consult with the other
Party prior to making the disclosure).
(b) No Third Party Beneficiaries. This Agreement
shall not confer any rights or remedies upon any Person other
than the Parties and their respective successors and permitted
assigns.
(c) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement
among the Parties and supersedes any prior understandings,
agreements, or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject
matter hereof.
(d) Succession and Assignment. This Agreement shall
be binding upon and inure to the benefit of the Parties named
herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written
approval of the Buyer and the Seller; provided, however, that the
Buyer may (i) assign any or all of its rights and interests
hereunder to one or more of its Affiliates and (ii) designate one
or more of its Affiliates to perform its obligations hereunder
(in any or all of which cases the Buyer nonetheless shall remain
responsible for the performance of all of its obligations
hereunder).
(e) Counterparts. This Agreement may be executed in
one or more counterparts (including by means of telecopied
signature pages), each of which shall be deemed an original but
all of which together will constitute one and the same
instrument.
(f) Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims,
and other communications hereunder will be in writing. Any
notice, request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two business days after)
it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to the Seller: Copy to:
Stanhome Inc. Skadden, Arps, Slate, Xxxxxxx
000 Xxxxxxx Xxxxxx & Xxxx XXX
Xxxxxxxxx, XX 00000 One Beacon Street
Attention: Xxxxx X. Xxxxx, Esq. Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Buyer: Copy to:
c/o The Bradford Exchange Ltd. Xxxxxxxx & Xxxxx
0000 Xxxxx Xxxxxxxxx Xxxxxx 000 Xxxx Xxxxxxxx Xxxxx
Xxxxx, XX 00000 Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq. Attention: R. Xxxxx Xxxx, Esq.
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address
set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the
intended recipient. Any Party may change the address to which
notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State
of Illinois without giving effect to any choice or conflict of
law provision or rule (whether of the State of Illinois or any
other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Illinois.
(i) Amendments and Waivers. No amendment of any
provision of this Agreement shall be valid unless the same shall
be in writing and signed by the Buyer and the Seller. No waiver
by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Except as otherwise provided in
Sections 10(f) and 11(b) above, each of the Parties will bear its
own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions
contemplated hereby. The Seller agrees that none of Xxxxxxxx and
its Subsidiaries has borne or will bear the Seller's or any
Affiliate's costs and expenses (including, but not limited to,
legal, accounting, auditing, consulting and due diligence fees
and expenses) in connection with this Agreement or any of the
transactions contemplated hereby and Seller agrees that it will
pay for all of such costs and expenses.
(l) Construction. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation.
(m) Incorporation of Exhibits and Schedules. The
Exhibits and the Disclosure Schedule identified in this Agreement
are deemed to be a part of this Agreement.
(n) Specific Performance. Each of the Parties
acknowledges and agrees that the other Party would be damaged
irreparably in the event any of the provisions of this Agreement
are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees
that the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court
of the United States or any state thereof having jurisdiction
over the Parties and the matter (subject to the provisions set
forth in Section 12(o) below), in addition to any other remedy to
which they may be entitled, at law or in equity.
(o) Submission to Jurisdiction. Each of the Parties
submits to the jurisdiction of any state or federal court sitting
in Xxxx County, Illinois, in any action or proceeding arising out
of or relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and determined
in any such court. Each Party also agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any
other court. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding
so brought and waives any bond, surety, or other security that
might be required of any other Party with respect thereto. Each
Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law or at equity.
(p) Guarantee. By executing this Agreement, Bradford
hereby unconditionally guarantees to the Seller the payment
obligations of the Buyer hereunder, including the payment of the
Purchase Price, the payment required by Section 2(d)(ii)(C)
above, and all amounts owing to the Seller pursuant to Section
9(c) above. Nothing shall discharge or satisfy this guarantee
except the full payment of all such obligations.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement of Purchase and Sale on the date first above written.
STANHOME INC.
By: /s/ G. Xxxxxxx Xxxxxxxxx
----------------------------------
Title: President and Chief Executive
Officer
THE CRESTLEY COLLECTION, LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Attorney-in-fact
with respect to Section 12(p) herein only,
THE BRADFORD EXCHANGE, LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Attorney-in-fact
Exhibit A
GROUP SUBSIDIARIES
(and Jurisdiction of Incorporation)
Consumer Products Group, Inc. (Florida)
Xxxxxxxx Agency, Inc. (Florida)
The Xxxxxxxx Collection, Inc. (Florida)
Rivershore Studios, Inc. (Florida)
