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EXHIBIT B
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of May 19,
2003 between Richemont Finance S.A., a societe anonyme organized under the laws
of the Grand Duchy of Luxembourg ("Richemont"), and Xxxxxxx Direct, LLC a
Delaware limited liability company ("Xxxxxxx").
WHEREAS, Xxxxxxx desires to purchase and Richemont desires to sell
to Xxxxxxx all of Richemont's securities in Hanover Direct, Inc., a Delaware
corporation ("Hanover"), consisting of shares of Common Stock, par value $0.66
2/3 per share (the "Common Stock"), and Series B Participating Preferred Stock,
par value $0.01 per share (the "Series B Preferred Stock").
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein, Richemont and Xxxxxxx hereby
agree as follows:
1. Purchase and Sale of Stock. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties contained
herein, Xxxxxxx shall acquire and purchase, and Richemont shall sell and deliver
to Xxxxxxx, on the date hereof, 29,446,888 shares of Common Stock and 1,622,111
shares of Series B Preferred Stock (together, the "Shares") free and clear of
all material liens, encumbrances, security interests and mortgages ("Liens")
(other than (x) those arising as a result of the delivery of the Shares to
Xxxxxxx or arising out of actions taken by Xxxxxxx, (y) those arising under
applicable securities laws, and (z) those relating to the restrictive legend set
forth on the Certificates (as defined below)), for a purchase price equal to US
$40,000,000 (the "Purchase Price").
2. Closing
(a) Time and Place. The closing of the transactions contemplated by
this Agreement shall take place at the offices of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, Four Times Square, New York, NY commencing simultaneously with the
execution of this agreement.
(b) Delivery by Richemont. At the closing of the transactions
contemplated hereby (the "Closing") and upon delivery of the Purchase Price,
Richemont will deliver to Xxxxxxx stock certificates (the "Certificates")
representing the Shares, in each case duly endorsed for transfer or accompanied
by blank stock powers.
(c) Delivery by Xxxxxxx. At the Closing, Xxxxxxx will deliver to
Richemont concurrently with the execution and delivery of this Agreement, the
Purchase Price for the Shares in the form of a wire transfer of same day federal
funds to the bank account specified in Exhibit A to this Agreement.
3. Representations and Warranties of Xxxxxxx. Xxxxxxx represents and
warrants to Richemont as follows:
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(a) Authorization; Enforcement. Xxxxxxx has all requisite power and
authority to authorize, execute, deliver and perform this Agreement. The
execution, delivery and performance by Xxxxxxx of this Agreement, and the
consummation by Xxxxxxx of the transactions contemplated hereby, have been duly
authorized by all necessary action on the part of Xxxxxxx and no further consent
or authorization therefor is presently required by Xxxxxxx. This Agreement has
been duly and validly executed and delivered by Xxxxxxx and constitutes the
valid and binding obligations of Xxxxxxx, enforceable against Xxxxxxx in
accordance with its terms.
(b) No Conflicts. None of the execution, delivery or performance of
this Agreement by Xxxxxxx will conflict with the organizational documents of
Xxxxxxx, in each case as in effect on the date hereof, or result in any material
breach of, or constitute a material default under, any (x) material contract,
agreement or instrument to which Xxxxxxx is a party or by which it or any of its
assets is bound or (y) material law or regulation to which Xxxxxxx or any of its
assets is subject.
(c) Consents; Approvals. Other than filings required pursuant to the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act"), neither the execution, delivery or performance
by Xxxxxxx of this Agreement, nor the consummation by it of the obligations and
transactions contemplated hereby, requires any consent or approval of,
authorization by, exemption from, filing with or notice to any governmental
entity or any other person.
(d) Other Acknowledgments. Xxxxxxx represents, acknowledges and
confirms as of the date of this Agreement with respect to the transactions
contemplated hereby or when agreeing to any other matter with Richemont that:
(i) Xxxxxxx (1) is a sophisticated institutional investor and has
such knowledge and experience in financial and business matters as to be capable
of evaluating independently the merits, risks and suitability of entering into
this Agreement and the transactions contemplated hereby, (2) is able to bear the
risks attendant to the transactions contemplated hereby for an indefinite
period, (3) is dealing with Richemont on a professional arms-length basis and
neither Richemont nor any of its affiliates or representatives is acting as a
fiduciary or advisor to Xxxxxxx with respect to this Agreement and any of the
transactions contemplated hereby, and (4) has expertise in assessing tax, legal,
jurisdictional and regulatory risk.
(ii) Xxxxxxx has itself been, and will continue to be, solely
responsible for making its own independent appraisal of and investigations into,
and in connection with this Agreement and the transactions contemplated hereby
it has made such an independent appraisal of and investigation into, the
financial condition, creditworthiness, affairs, status and nature of Hanover and
its related companies and it has not relied, and will not hereafter rely, on
Richemont or any affiliate, representative or agent of Richemont or any other
third party with respect to such matters or to update them with respect to such
matters or to keep such matters under review on its behalf. In addition, without
limiting the foregoing, Xxxxxxx has not relied, and will not hereafter rely, on
Richemont or any affiliate, representative or agent of Richemont or any other
third party with respect to information relating to or in any way affecting the
Shares.
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(iii) Xxxxxxx is receiving the transfer of the Shares hereunder for
investment purposes, and not with a view to, or for a resale in connection with,
any distribution of such Shares. Xxxxxxx has not entered into any agreement,
contract, understanding or commitment to and has no present intention to offer,
sell, transfer or otherwise dispose of any portion of such Shares either
currently or after the passage of a fixed or determinable period of time or upon
the occurrence or non-occurrence of any predetermined event or circumstance and
has not offered for sale or entered into any negotiations for the sale or
transfer of any of the Shares.
(iv) Xxxxxxx understands that the shares of Series B Preferred Stock
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and that the certificate evidencing such shares bears a
legend to that effect.
(v) Xxxxxxx understands that the shares of Common Stock bear a
restrictive legend pursuant to Section 2(b)(viii) of that certain Agreement,
dated as of December 19, 2001, between Hanover and Richemont.
(vi) Xxxxxxx acknowledges that in connection with its investment in
Hanover, Richemont has informed Xxxxxxx that Richemont and its affiliates,
representatives or agents may have possession of material non-public information
that could have a bearing on the price or valuation of the Shares, but which
Richemont and its affiliates, representatives or agents may not be permitted to
disclose, shall not disclose and/or have not disclosed to Xxxxxxx. Xxxxxxx
acknowledges and agrees that Richemont and its affiliates, representatives and
agents shall have no obligation whatsoever to, and that Richemont shall have no
obligation whatsoever to cause such affiliates, representatives or agents to,
disclose any such information to Xxxxxxx and Xxxxxxx hereby waives any rights to
receive such information and forever waives, to the maximum extent permitted by
law, on its own behalf and on the behalf of its affiliates, successors and
assigns, any claims or remedies arising out of or relating to any such
non-disclosure.
(e) Accredited Investor. Xxxxxxx is an "accredited investor," as
that term is defined in Regulation D promulgated under the Securities Act.
4. Representations and Warranties of Richemont. Richemont represents and
warrants to Xxxxxxx as follows:
(a) Authorization; Enforcement. Richemont has all requisite power
and authority to authorize, execute, deliver and perform this Agreement. The
execution, delivery and performance by Richemont of this Agreement, and the
consummation by Richemont of the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of Richemont and no further
consent or authorization therefor is presently required by Richemont. This
Agreement has been duly and validly executed and delivered by Richemont and
constitutes the valid and binding obligations of Richemont, enforceable against
Richemont in accordance with its terms.
(b) No Conflicts. None of the execution, delivery or performance of
this Agreement by Richemont will conflict with the organizational documents of
Richemont, in each
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case as in effect on the date hereof, or result in any material breach of, or
constitute a material default under, any (x) material contract, agreement or
instrument to which Richemont is a party or by which it or any of its assets is
bound or (y) material law or regulation to which Richemont or any of its assets
is subject.
(c) Consents; Approvals. Other than filings required pursuant to the
Exchange Act, neither the execution, delivery or performance by Richemont of
this Agreement, nor the consummation by it of the obligations and transactions
contemplated hereby, requires any consent or approval of, authorization by,
exemption from, filing with or notice to any governmental entity or any other
person.
(d) Ownership of the Shares. Richemont owns the Shares free and
clear of all Liens other than (x) those arising as a result of the delivery of
the Shares to Xxxxxxx or arising out of actions taken by Xxxxxxx, (y) those
arising under applicable securities laws, and (z) those relating to the
restrictive legend set forth on the Certificates. The Shares represent all of
the securities of Hanover owned by Richemont as of the date of this Agreement.
5. Indemnification.
(a) Xxxxxxx hereby agrees that it will indemnify Richemont and each
of its affiliates and each of their respective directors, officers, partners,
employees, owners, representatives, agents, heirs, executors, administrators,
stockholders, successors, assigns and controlling persons (the "Indemnified
Parties") and agrees to hold each of the Indemnified Parties harmless from and
against, and to pay to each of the Indemnified Parties the amount of, any loss,
liability, claim, damage, or expense (including reasonable attorneys' fees),
whether or not involving a third party claim, arising, directly or indirectly,
from or in connection with, or in respect of any action or inaction by Xxxxxxx
or its affiliates related to Chelsey's investment in Hanover or Chelsey's
ownership of, or actions or inactions relating to, the Shares and Hanover (other
than the purchase by Xxxxxxx and sale by Richemont of the Shares as contemplated
by this Agreement).
(b) Each of the parties hereby agrees that it will indemnify the
other party and agrees to hold the other party harmless from and against, and to
pay to the other party the amount of, any loss, liability, claim, damage, or
expense (including reasonable attorneys' fees), whether or not involving a third
party claim, arising, directly or indirectly, from or in connection with, or in
respect of any breach of any representation or warranty set forth in this
Agreement by the indemnifying party.
(c) Nothing set forth in this Section 5 shall be deemed to be
exclusive of any other rights or remedies that any of the parties may have in
respect of the subject matter of this Section 5, whether by law, contract or
otherwise.
6. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof. This
Agreement supersedes any
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prior agreement or understanding among them, and may not be modified or amended
in any manner other than by an instrument in writing signed by the parties
hereto, or their respective successors or assigns, or otherwise as provided
herein. Without limiting the foregoing, with respect to the transactions
contemplated by this Agreement and the subject matter of this Agreement, neither
Richemont and its affiliates nor Xxxxxxx and its affiliates make any
representations or warranties other than those explicitly set forth in this
Agreement.
(b) Choice of Law. EXCEPT AS OTHERWISE PROVIDED HEREIN, THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH
THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
(c) Jurisdiction. The parties hereto agree that any proceeding
arising out of or relating to this Agreement or the breach or threatened breach
of this Agreement may be commenced and prosecuted in a court in the State of
Delaware. Each of parties hereto hereby irrevocably and unconditionally consents
and submits to the exclusive personal jurisdiction of any court in the State of
Delaware in respect of any such proceeding. Each of the parties hereto consents
to service of process upon such party with respect to any such proceeding by
registered mail, return receipt requested, and by any other means permitted by
applicable laws and rules. Each of the parties hereto waives any objection that
such party may now or hereafter have to the laying of venue of any such
proceeding in any court in the State of Delaware and any claim that such party
may now or hereafter have that any such proceeding in any court in the State of
Delaware has been brought in an inconvenient forum.
(d) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER AND (iii) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET
FORTH HEREIN.
(e) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their legal representatives, heirs,
administrators, executors, successors and permitted assigns. Except for the
provisions of Section 5, nothing in this Agreement, express or implied, is
intended or shall be construed to give any person other than the parties to this
Agreement and their respective successors or permitted assigns, any legal or
equitable right, remedy or claim under or in respect of any agreement or any
provision contained herein.
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(f) Third Party Beneficiaries. It is expressly agreed that each of
the Indemnified Parties (other than Richemont) shall be third party
beneficiaries of this Agreement for purposes of Section 5 of this Agreement and
shall be entitled to enforce it in accordance with its terms.
(g) Amendments. Neither this Agreement nor any term or provision
hereof may be amended, modified, waived or supplemented orally, but only by a
written instrument executed by the parties hereto.
(h) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by Richemont or Xxxxxxx without the prior written consent of the
other parties.
(i) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given on the date of delivery, if personally delivered, or if mailed
(registered or certified mail, postage prepaid, return receipt requested), on
the third (3rd) business day following mailing as follows:
If to Richemont:
Richemont Finance S.A.
00 Xxxxxxxxx Xxxxxx Xxxxx
X 0000 Xxxxxxxxxx
Fax: 000-0000-000-0000
Attention: Xxxx Xxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
If to Xxxxxxx:
Xxxxxxx Direct LLC
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
(j) Headings. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
(k) Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this
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Agreement, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
(l) Waivers. No provision of this Agreement shall be deemed to have
been waived unless such waiver is contained in a written notice given to the
party claiming such waiver, and no such waiver shall be deemed to be a waiver of
any other or further obligation or liability of the party or parties in whose
favor the waiver was given.
(m) Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute one and the same instrument.
(n) Further Assurances. The parties agree (i) to furnish upon
request to each other such further information, (ii) to execute and deliver to
each other such other documents, and (iii) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement.
(o) No Recourse Against Others. Except as set forth in Section 5 of
this Agreement, no director, officer, partner, employee, owner, representative,
agent, heir, executor, administrator, beneficiary, stockholder, or controlling
person, as such, of Richemont or Xxxxxxx shall have any liability hereunder or
for any obligations of Richemont or Xxxxxxx, as applicable, in respect of the
Shares or for any claim based on, in respect or by reason of, such obligations
or their creation or this Agreement. Each party, by execution of this Agreement,
waives and releases all such persons for all such liabilities.
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IN WITNESS WHEREOF, Richemont and Xxxxxxx have executed this
Agreement as of the date first above written.
RICHEMONT FINANCE S.A.
By:
---------------------------------
Name:
Title:
XXXXXXX DIRECT, LLC
By:
---------------------------------
Name:
Title: