Exhibit 2.1
ASSET PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 16, 2005
AMONG
ICONIX BRAND GROUP, INC.,
(THE "BUYER"),
RAMPAGE LICENSING, LLC
(THE "SELLER"),
RAMPAGE CLOTHING COMPANY
("RAMPAGE CLOTHING"),
XXXXXXX.XXX, LLC
("XXXXXXX.XXX")
AND
EACH OF
XXXXX XXXXXX
XXXXXXXXX XXXXXX XXXXXXX
XXXXXXXX XXXXXX
XXXX XXXXXXX
XXXXX XXXXX
(COLLECTIVELY, THE "PRINCIPALS").
TABLE OF CONTENTS
Page
1. Certain Definitions......................................................................................3
2. Sale and Purchase of Assets.............................................................................20
2.1 Assets.........................................................................................20
2.2 Excluded Assets................................................................................22
2.3 Assumption of Certain Liabilities..............................................................23
2.4 Non-Assumption of Liabilities..................................................................24
2.5 Delivery of Certain Assets.....................................................................24
3. Closing; Purchase Price.................................................................................25
3.1 Closing........................................................................................25
3.2 Purchase Price.................................................................................26
3.3 Purchase Price Allocation......................................................................27
3.4 Purchase Price Adjustment......................................................................27
4. Representations, Warranties and Covenants of Seller, Rampage Clothing,
Xxxxxxx.xxx and Xxxxx Xxxxxx............................................................................28
4.1 Due Organization and Qualification; Subsidiaries...............................................29
4.2 Capitalization; Options........................................................................30
4.3 Authority to Execute and Perform Agreement.....................................................31
4.4 Financial Statements...........................................................................33
4.5 No Material Adverse Change.....................................................................35
4.6 Tax Matters....................................................................................35
4.7 Compliance with Laws...........................................................................35
4.8 Permits........................................................................................36
4.9 No Breach......................................................................................37
4.10 Consents and Approvals.........................................................................39
4.11 Judgments and Proceedings......................................................................39
4.12 Employee Relations.............................................................................41
4.13 Contracts......................................................................................41
4.14 Real Property..................................................................................43
4.15 Books of Account and Reports...................................................................43
4.16 Tangible Property..............................................................................43
4.17 Intangibles....................................................................................44
4.18 Title..........................................................................................47
4.19 Indebtedness...................................................................................48
4.20 Undisclosed Liabilities........................................................................48
4.21 Suppliers, Customers and Licensees.............................................................49
4.22 Employee Benefit Plans.........................................................................49
4.23 Insurance......................................................................................50
4.24 Software.......................................................................................51
4.25 Ownership of Assets............................................................................52
4.26 No Broker......................................................................................53
4.27 Full Disclosure................................................................................53
4.28 Related Party Transactions.....................................................................54
5. Representations and Warranties of Seller and Principals.................................................54
i
5.1 Enforceable Agreement..........................................................................54
5.2 Investment Matters.............................................................................55
6. Representations and Warranties of Buyer.................................................................57
6.1 Subsidiaries...................................................................................57
6.2 Due Incorporation and Qualification............................................................58
6.3 Authority to Execute and Perform Agreement.....................................................59
6.4 No Breach......................................................................................60
6.5 No Broker......................................................................................61
6.6 Capitalization.................................................................................62
6.7 Tax Matters....................................................................................62
6.8 Issuance of Buyer's Stock......................................................................63
6.9 Filings, Consents and Approvals................................................................64
6.10 Regulatory Compliance..........................................................................64
6.11 No Buyer Material Adverse Change...............................................................66
6.12 Internal Accounting Controls...................................................................67
6.13 Listing and Maintenance Requirements...........................................................67
6.14 Compliance with Laws...........................................................................68
6.15 Investment Company.............................................................................69
6.16 Application of Takeover Protections............................................................69
7. Deliveries by Seller, Rampage Clothing and Principals...................................................70
8. Deliveries by Buyer.....................................................................................74
9. Interpretation and Survival of Representations and Warranties...........................................75
10. Certain Post-Closing Obligations........................................................................78
10.1 Voting Restrictions............................................................................78
10.2 Restrictions on Sale of Shares.................................................................80
10.3 Automatic Registration.........................................................................82
10.4 Form D.........................................................................................97
10.5 Tax Returns....................................................................................97
10.6 Cooperation on Tax Matters.....................................................................97
10.7 Assistance with Audits.........................................................................98
10.8 Limited License................................................................................99
11.
Indemnification.........................................................................................99
11.1 Obligation of Seller, Rampage Clothing and Principals to
Indemnify.............................99 11.2 Limitation as to the
Seller's, Rampage Clothing's, Xxxxxxx.xxx's
and Principals' Indemnification Obligations...................................................101
11.3 Obligation of Buyer to Indemnify..............................................................104
11.4 Limitation as to the Buyer's Indemnification Obligations......................................106
11.5 Limitation as to Maximum Aggregate Claims.....................................................107
11.6 Third Party Claims............................................................................108
11.7 Sole and Exclusive Remedy.....................................................................110
12. Assistance.............................................................................................111
13. Expenses...............................................................................................112
14. Further Assurances.....................................................................................112
15. Non-compete............................................................................................113
ii
16. Miscellaneous..........................................................................................118
16.1 Publicity.....................................................................................118
16.2 Notices.......................................................................................119
16.3 Entire Agreement..............................................................................127
16.4 Waivers and Amendments........................................................................127
16.5 Binding Agreement.............................................................................129
16.6 Governing Law.................................................................................129
16.7 Assignment....................................................................................129
16.8 Variations in Pronouns........................................................................130
16.9 Severability..................................................................................130
16.10 Counterparts..................................................................................130
16.11 Exhibits and Schedules........................................................................130
16.12 Headings......................................................................................131
16.13 Consent to Jurisdiction and Service of Process................................................131
iii
SCHEDULES AND EXHIBITS
SCHEDULE DESCRIPTION
1.37 Specified Contracts
2.3(2) Additional Assumed Liabilities
3.3 Purchase Price Allocation
4.1 Due Incorporation and Qualification; Subsidiaries
4.2 Capitalization; Options
4.4 Financial Statements
4.5 No Material Adverse Change
4.7 Compliance with Laws
4.8 Permits
4.9 No Breach
4.10 Consents and Approvals
4.11 Judgments and Proceedings
4.13 Contracts
4.16 Tangible Property
4.17 Intangibles
4.18 Title
4.19 Indebtedness
4.21 Suppliers and Licensees
4.23 Insurance
4.24 Software
4.26 No Broker
4.28 Related Party Transactions
5.2 Investment Matters
6.1 Subsidiaries
6.5 No Broker
6.8 Registration Rights
6.9 Consents
6.10 Regulatory Compliance
6.14 Compliance with Laws
EXHIBITS DESCRIPTION
Exhibit A Master Trademark Assignment Agreement
Exhibit B Security Release
Exhibit C Assignment and Assumption Agreement
Exhibit D Opinion of Xxxxxxxxx Xxxxx
Exhibit E Letter to Licensee
Exhibit F Opinion of Blank Rome LLP
iv
36
521949.00108/6418374v.21
ASSET PURCHASE AGREEMENT
AGREEMENT, dated as of September 16, 2005, by and among Iconix
Brand Group, Inc., a Delaware corporation ("Buyer"), Rampage Licensing, LLC, a
California limited liability company ("Rampage Licensing"), Xxxxxxx.xxx, LLC, a
Delaware limited liability company ("Xxxxxxx.xxx"), Rampage Clothing Company, a
California corporation ("Rampage Clothing") and Xxxxx Xxxxxx, Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxx (collectively, the
"Principals").
Background
WHEREAS, Rampage Licensing is engaged in the business of
marketing and licensing the RAMPAGE(R) family of marks and names for use in
connection with a wide variety of goods and services and utilizes the RAMPAGE(R)
xxxx and domain name in connection with the operation and administration of a
web site located at the URLs xxxx://xxx.xxxxxxx.xxx and
xxxx://xxx.xxxxxxxxxxxxxxxxxxxxxx.xxx; and
WHEREAS, Rampage Clothing is engaged in the business of
designing, manufacturing, marketing, selling and distributing apparel products
branded with one or more of the RAMPAGE(R) marks; and
WHEREAS, the Principals indirectly own or control all of the
outstanding equity, ownership and beneficial interests of each of Rampage
Licensing, Xxxxxxx.xxx and Rampage Clothing; and
WHEREAS, the Buyer desires to become engaged in the Business
(as defined herein) and to acquire substantially all of the assets of Rampage
Licensing (hereinafter, the "Seller") used in connection with the Business and
to assume certain of Seller's liabilities, and Seller desires to sell such
assets to Buyer, all upon the terms and subject to the conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained herein, and intending to be legally bound, the parties agree
as follows:
1. Certain Definitions. For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, (1) the terms
defined in this Section have the meanings assigned to them in this Section,
wherever they appear in this Agreement (2) all accounting terms not otherwise
defined herein have the meanings assigned under generally accepted accounting
principles consistently applied and as in effect on the date hereof ("GAAP") and
(3) all words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section or
other subdivision.
1.1 "Acknowledged Encumbrances" means, collectively, (i) Encumbrances
specifically disclosed or reserved against in the Financial Statements, (ii)
Encumbrances for Taxes, fees, levies, duties or other governmental charges not
yet past due; (iii) Encumbrances for mechanics, material, laborers, employees,
suppliers or similar liens arising by operation of Law for sums which are not
yet past due.
1.2 "Affiliate" means, with respect to a specified Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, the specified Person.
1.3 "Asset Material Adverse Change" means any change in the Assets that,
individually or in the aggregate, has an Asset Material Adverse Effect
1.4 "Asset Material Adverse Effect" means a material adverse effect on any of
the Assets, taken as a whole, other than (i) effects resulting from the
execution or announcement of this Agreement or any other Transaction Document or
resulting from or relating to compliance with the terms of, or the taking of any
action required by, this Agreement or any other Transaction Document, (ii)
effects of any change arising in connection with acts of war, sabotage,
terrorism, military actions or the escalation thereof, (iii) effects of any
change in applicable Laws, regulations or accounting rules, (iv) changes in
general economic, financial, regulatory, political or market conditions in the
world and (v) changes in conditions or developments generally applicable to the
industries in which the Assets are utilized and that do not affect the Assets in
any manner materially disproportionate to other Persons in such industry.
1.5 "Business" means the business conducted by Rampage Licensing, Xxxxxxx.xxx
and their respective operations, prospects and condition (financial and
otherwise), including the marketing and licensing of the RAMPAGE(R) family of
marks and names for use in connection with a wide variety of goods and services.
1.6 "Buyer's Stock" means shares of common stock, par value $0.001 per
share, of Iconix Brand Group, Inc.
1.7 "Buyer Material Adverse Change" means any change in the business,
properties, assets or financial condition of Buyer or any of its Subsidiaries
that, individually or in the aggregate, has a Buyer Material Adverse Effect.
1.8 "Buyer Material Adverse Effect" means a material adverse effect on the
business, properties, assets or financial condition of Buyer and its
Subsidiaries, taken as a whole, other than (i) effects resulting from the
execution or announcement of this Agreement or any other Transaction Document or
resulting from or relating to compliance with the terms of, or the taking of any
action required by, this Agreement or any other Transaction Document, (ii)
effects of any change arising in connection with acts of war, sabotage,
terrorism, military actions or the escalation thereof, (iii) effects of any
change in applicable Laws, regulations or accounting rules, (iv) changes in
general economic, financial, regulatory, political or market conditions in the
world and (v) changes in conditions or developments generally applicable to the
industries in which Buyer is involved and that do not affect Buyer in any manner
materially disproportionate to other Persons in such industry.
1.9 "Closing" means the closing of the transactions contemplated by this
Agreement.
2
1.10 "Closing Date" means the date on which the Closing occurs.
1.11 "Code" means the Internal Revenue Code of 1986, as amended.
1.12 "Consent" means any consent, approval, order or authorization of, or any
declaration, filing or registration with, or any application or report to, or
any waiver by, or any other action (whether similar or dissimilar to any of the
foregoing) of, by or with, any Person, which is necessary in order to take a
specified action or actions in a specified manner and/or to achieve a specified
result or to avoid the occurrence of a default.
1.13 "Contract" means any written or oral contract, agreement, instrument,
order, commitment or binding arrangement, express or implied, of any nature
whatsoever.
1.14 "Contract Right" means any right, power or remedy under any Contract,
including but not limited to rights to receive property or services or otherwise
to derive benefits from the payment, satisfaction or performance of another
party's obligations.
1.15 "Documents" means and includes any document, agreement, instrument,
certificate, notice, Consent, affidavit, correspondence (by letter, electronic
mail, telex or otherwise), written statement, schedule or exhibit whatsoever.
1.16 "Employee Benefit Plan" means (1) any employee benefit plan, as defined in
Section 3(3) of ERISA, or (2) any other plan, trust agreement or arrangement for
any bonus, severance, hospitalization, vacation, deferred compensation, pension
or profit sharing, retirement, payroll savings, stock option, group insurance,
death benefit, fringe benefit, welfare or any other employee benefit plan or
fringe benefit arrangement of any nature whatsoever, including those benefiting
former employees.
1.17 "Encumbrance" means any lien, security interest, pledge, mortgage,
easement, leasehold, assessment, covenant, restriction, or any other
encumbrance, claim, burden or charge of any kind or nature whatsoever.
1.18 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.19 "Indebtedness" means all items which, in accordance with GAAP, would be
included in determining total liabilities as shown on the liability side of a
balance sheet as of the date Indebtedness is to be determined.
1.20 "Insurance Policies" means any policy or binder for fire, public liability,
product liability, general liability, life, hospital, medical, disability,
comprehensive, automobile, property damage, workmen's compensation, key man,
fidelity bond, theft, forgery, vehicular, or errors and omissions insurance, or
for any other insurance of any nature whatsoever.
3
1.21 "Intangible" means, throughout the world, the Marks, all trade secrets,
patterns, designs, pressbooks, promotional material, artwork, vendor numbers,
know-how, patents, patent applications, copyrights, copyright applications,
copyright registrations; Web sites, including the content contained therein,
domain names, domain name registrations, designs, formula, invention,
technology, Software, database or other intangible asset of any nature (whether
in use, operational, active, under development or design, non-operative, or
inactive, owned, marketed, maintained, supported, used, licensed or otherwise
held for use by, or licensed to or with respect to which rights are granted to a
Person), and all good will, whether or not related to the foregoing, whether
arising under statutory or common law in any jurisdiction or otherwise, and
includes, without limitation, any and all Intellectual Property Rights in and to
the foregoing.
1.22 "Intellectual Property Right(s)" means any and all proprietary rights
(throughout the universe, in all media, now existing or created in the future,
and for the entire duration of such rights) arising under statutory or common
law, contract, or otherwise, and whether or not perfected, including without
limitation, all (a) rights associated with patents, reissues and reexamined
patents, and patent applications, whenever filed and wherever issued, and all
priority rights resulting from such applications; (b) rights associated with
works of authorship including, but not limited to, copyrights, moral rights,
design rights, copyright applications, copyright registrations, and rights to
prepare derivative works; (c) rights relating to the protection of trade secrets
and confidential information; (d) rights in and to trademarks, service marks,
trade names, logos, symbols, and the like; (e) product right; (f) rights
analogous to those set forth in this definition and any and all other
proprietary rights relating to Intangibles not already included herein; (g)
rights associated with divisions, divisionals, continuations,
continuations-in-part, substitutes, renewals, reissues and extensions of the
foregoing (as and to the extent applicable) now existing, hereafter filed,
issued, or acquired; and (h) the right to xxx for past infringement of any
Intangible and/or Intellectual Property Rights, provided any such Intellectual
Property Right is related to the Business.
1.23 "Inventory" means any raw materials, supplies, work-in-progress, finished
goods, parts or any other inventory of any nature whatsoever.
1.24 "Judgment" means any order, writ, injunction, fine, citation, award, decree
or any other judgment of any kind whatsoever of any foreign, federal, state or
local court, governmental body, administrative agency, regulatory authority or
arbitration tribunal.
1.25 "Law" means any provision of any law, statute, ordinance, order,
constitution, charter, treaty, rule or regulation enacted, approved or adopted
by any governmental, administrative or regulatory authority, including common
law.
1.26 "Liabilities" means any direct or indirect Indebtedness, liability, claim,
loss, damage, Judgment, deficiency or obligation, known or unknown, fixed or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise whether or not of a kind required by GAAP to be set
forth on financial statements.
1.27 "License Agreement" means that certain License Agreement dated as of the
date hereof between Xxxxx Xxxxxx Clothing, LLC and IP Holdings LLC.
4
1.28 "Losses" means any and all Liabilities, Proceedings, causes of action,
costs and expenses including, without limitation, costs of investigation, actual
interest costs, penalties and attorneys' fees.
1.29 "Marks" means all names, corporate names, domain names, fictitious names,
trademarks, trademark applications, trademark registrations, service marks,
service xxxx applications, service xxxx registrations; trade names, brand names,
product names, logos, trade dress, symbols, slogans or other designations used
by Seller, Rampage Clothing or Xxxxxxx.xxx in commerce or in connection with the
Business.
1.30 "Permit" means any license, permit, certificate, Consent, right or
privilege of any kind or nature whatsoever granted, issued, approved or allowed
by any foreign, federal, state or local governmental, administrative or
regulatory authority including those relating to Real Property.
1.31 "Person" means any individual, sole proprietorship, joint venture,
partnership, corporation, limited liability company, association, joint-stock
company, unincorporated organization, cooperative, trust, estate, government
entity or authority (including any branch, subdivision or agency thereof),
administrative or regulatory authority, or any other entity of any kind or
nature whatsoever.
1.32 "Principal Representative" means Xxxx Xxxxxxx.
1.33 "Proceeding" means any claim, suit, action, equitable action, litigation,
investigation, arbitration, trademark opposition, cancellation action,
administrative hearing or any other judicial or administrative proceeding of any
kind or nature whatsoever, or any formal demand which might lead to any of the
foregoing.
1.34 "Property" means real, personal or mixed property.
1.35 "Real Property" means any real estate, land, building, structure,
improvement or other real property of any kind or nature whatsoever owned,
leased or occupied by Seller, all shares of stock or other ownership interests
through which interests in real estate may be held, and all appurtenant and
ancillary rights thereto, including, without limitation, easements, covenants,
water rights, sewer rights and utility rights.
1.36 "Seller's Actual Knowledge" means the actual knowledge of Xxxxx Xxxxxx,
Xxxx Xxxxxxx or Xxxxx Xxxxx after due inquiry of such persons with such
individuals who are members, stockholders, directors or officers of or employed
by Seller, Rampage Clothing and/or Xxxxxxx.xxx responsible for the matter being
represented or warranted.
1.37 "Specified Contracts" means those Contracts set forth on Schedule 1.37.
1.38 "Software" means any computer program, operating system, applications
system, firmware or software of any kind or nature whatsoever, including,
without limitation, all object code, source code, technical manuals, user
manuals and other documentation therefor, whether in machine-readable form, a
programming language or any other language or symbols, and whether stored,
encoded, recorded or written on disk, tape, film, memory device, paper or other
media.
5
1.39 "Subsidiaries" with respect to any Person, means any other Person or
business entity, with respect to whom 50% or more of the equity interest (or
debt or other interest convertible into an equity interest) is owned directly or
indirectly by such Person.
1.40 "Tangible Property" means any machinery, buildings, fixtures, equipment,
parts, furniture, leasehold improvements, office equipment, vehicles, tools,
forms, molds, supplies, archive garments or other tangible property of any kind
or nature whatsoever.
1.41 "Tax" or "Taxes" means all taxes and governmental impositions of any kind
in the nature of (or similar to) taxes, payable to any federal, state, local or
foreign taxing authority or other governmental authority, including, but not
limited to, those on or measured by or referred to as income, franchise,
profits, gross receipts, capital, ad valorem, custom duties, alternative or
add-on minimum taxes, estimated, environmental, disability, registration, value
added, sales, use, service, real or personal property, capital stock, license,
payroll, withholding, employment, social security, workers' compensation,
unemployment compensation, utility, severance, production, excise, stamp,
occupation, premiums, windfall profits, transfer and gains taxes, and interest,
penalties and additions to tax imposed with respect thereto.
1.42 "Tax Return" shall mean any return (including any information return),
report, statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information (including any amendments
thereto) that is, has been or may in the future be filed with or submitted to,
or required to be filed with or submitted to, any governmental authority in
connection with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any Law relating to any Tax.
1.43 "Transaction Documents" means, collectively, this Agreement and each other
Documents required to be executed in connection with the transactions
contemplated hereby, provided, the License Agreement shall not be included in
the definition of Transaction Documents.
2. Sale and Purchase of Assets.
2.1 Assets. Seller hereby sells, transfers, conveys, assigns and delivers to
Buyer and Buyer hereby purchases and acquires from Seller, all right, title and
interest in and to all of Seller's assets, business, and rights of every nature,
kind and description wheresoever located and whether or not reflected on the
books and records of Seller (excluding only those assets set forth in Section
2.2) including, without limitation, the following (all of which being
hereinafter collectively referred to as the "Assets"):
(1) All Intangibles owned by Seller and all Intellectual Property Rights
associated therewith, all goodwill, licenses and sublicenses granted or obtained
with respect thereto, and rights thereunder, remedies against infringements
thereof, and rights to protection of interests therein under the laws of all
jurisdictions;
6
(2) All of Seller's rights, powers and privileges in and to the Specified
Contracts, together with all Contract Rights thereunder, including all rights to
royalties earned or accruing on or after the Closing Date;
(3) All designs, patterns, archive garments, press books, promotional materials
and all other brand collateral materials and other Tangible Property used in or
related to the Business;
(4) All prepaid assets (including the pro rata portion of advances or guaranteed
minimum royalty and advertising payments credited against royalties earned after
the Closing Date or any liquidated damages, under the Specified Contracts) and
expenses other than rent escrows and security deposits; and
(5) All of Seller's claims, causes of action and other legal rights and
remedies, whether or not known as of the Closing, relating to Seller's ownership
of the Assets and/or the Business, but excluding claims against Buyer with
respect to the transactions contemplated herein.
2.2 Excluded Assets. Notwithstanding anything to the contrary contained herein,
there is excluded from the sale and purchase contemplated by this Agreement the
following assets (the "Excluded Assets"):
(1) All Contracts which are not listed on Schedule 1.37 whether or not relating
to an Asset being purchased hereby and the Contract rights of Rampage Clothing
Company under items (l), (m) and (n) listed on Schedule 1.37;
(2) All cash in the bank or invested on the Closing Date, except for cash
deposits from customers and the pro rata portion of advances, guaranteed minimum
royalty or advertising payments credited against royalties earned prior to the
Closing Date under the Specified Contracts and any sales royalty payments made
after the Closing Date for periods ending prior to the Closing Date.
2.3 Assumption of Certain Liabilities. On the terms set forth herein, on and
after the Closing Date, Buyer shall assume, perform and pay only the following
Liabilities ("Specified Liabilities") but only to the extent the same are not
incurred or resulting from (directly or indirectly) any breach or default by
Seller under any Contract with any Person or any representation, warranty or
covenant of Seller noted herein:
(1) All Liabilities of Seller arising and relating to periods after the Closing
in the nature of services to be performed, payments to be made or goods to be
delivered under the Specified Contracts transferred pursuant to this Agreement,
but not including any Liabilities of Seller under any Contract with any
affiliate or Principal or other member of Seller;
(2) All such other Liabilities specifically assumed by Buyer on Schedule
2.3(2) hereof.
2.4 Non-Assumption of Liabilities. Notwithstanding anything herein capable of
interpretation to the contrary, except for the Specified Liabilities, Seller
shall pay or otherwise fully discharge, as the same shall become due, all of
their respective Liabilities existing as of the Closing Date or thereafter
whether or not disclosed to Buyer on any Schedule hereto, and Buyer does not
assume and shall in no event be liable therefor (collectively, the "Retained
Liabilities").
7
2.5 Delivery of Certain Assets. Concurrently herewith, Seller is delivering, on
behalf of Buyer, all of the Assets which are comprised of Intangibles and
Intellectual Property Rights directly to IP Holdings LLC, an indirect,
wholly-owned Subsidiary of Buyer ("IP Holdings"). The parties hereto acknowledge
and agree that, notwithstanding this Section 2.5, all of the Assets, including
the Assets subject to this Section 2.5, are being acquired by Buyer hereunder
and the delivery by Seller of the Assets subject to this Section 2.5 to IP
Holdings shall be deemed to be a delivery of such Assets initially to Buyer
followed by a contribution of such Assets by Buyer to the capital of IP
Holdings.
3. Closing; Purchase Price
3.1 Closing. The Closing of the transactions contemplated by this Agreement
shall take place concurrently herewith at the offices of Blank Rome LLP, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. All transactions occurring at the
Closing shall be deemed to occur concurrently.
3.2 Purchase Price. In consideration of the sale, transfer, conveyance and
delivery of the Assets, and in reliance upon the representations and warranties
made herein by Seller, Rampage Clothing, Xxxxxxx.xxx and Principals, Buyer
shall, in full payment thereof, pay to Seller, or their respective designees,
the following aggregate consideration: (i) Twenty-Five Million, Seven Hundred
Fifty Thousand Dollars ($25,750,000) payable in immediately available funds at
the Closing (the "Cash Consideration") and (ii) the issuance of such number of
restricted shares of Buyer's Stock as are equal to Twenty Million, One Hundred
Fifty Thousand Dollars ($20,150,000) divided by the average per share closing
price reported on the Nasdaq National Market for the ten (10) consecutive
trading days ending on the trading day immediately preceding the Closing Date
(the "Shares") and (iii) the assumption of the Specified Liabilities (the
"Shares" together with the Cash Consideration and the Specified Liabilities,
collectively hereinafter referred to as the "Purchase Price").
3.3 Purchase Price Allocation. The Purchase Price for the Assets shall be
allocated in a manner set forth on Schedule 3.3 hereto. In connection with the
determination of such schedule, the parties shall cooperate with each other and
provide such information as any of them shall reasonably request. The parties
shall (a) prepare and, where applicable, file each report relating to the
federal, state, local, foreign and other Tax consequences of the purchase and
sale contemplated hereby (including the filing of IRS Form 8594) in a manner
consistent with such allocation schedule and (ii) take no position in any Tax
Return or other Tax filing, proceeding, audit or otherwise which is inconsistent
with such allocation.
3.4 Purchase Price Adjustment. The Seller and Buyer shall adjust the Purchase
Price, as follows: (a) the Purchase Price will be decreased by an amount equal
to the pro rata portion of advances on royalties paid to Seller under the
Specified Contracts prior to the Closing for all periods after the Closing; and
(b) the Purchase Price shall be increased by an amount equal to the pro rata
8
portion of royalties received by Buyer under the Specified Contracts for all
periods prior to the Closing. The parties, upon their mutual consent, shall, as
soon as practical but no later than ninety (90) days after the Closing Date,
make any adjustments to the Purchase Price as necessary. The party owing an
amount to the other party based on such post-Closing adjustments shall make
payment via bank check or wire transfer to the other party within ten (10)
business days after completion of the adjustments.
4. Representations, Warranties and Covenants of Seller, Rampage Clothing,
Xxxxxxx.xxx and Xxxxx Xxxxxx. Knowing that Buyer relies thereon, Seller, Rampage
Clothing, Xxxxxxx.xxx and Xxxxx Xxxxxx ("Hansel"), jointly and severally,
represent, warrant and covenant to Buyer as of the Closing as follows:
4.1 Due Organization and Qualification; Subsidiaries. Each of Rampage Licensing
and Xxxxxxx.xxx is a limited liability company, and Rampage Clothing is a
corporation duly organized, validly existing and in good standing, under the
laws of the jurisdiction of its respective organization. Seller has the full
power and authority to own, lease and operate its Assets, Properties and
Business, to carry on its Business as and where such Business is now conducted,
except where such failure to have such power and authority would not have an
Asset Material Adverse Effect. Each of Seller and Rampage Clothing has the full
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated hereby upon the terms and conditions herein
provided. Seller is duly qualified as a foreign entity in good standing under
the Laws of each jurisdiction set forth in Schedule 4.1. There is no other
jurisdiction in which the nature of Seller's respective Business or location of
its Properties requires such licensing or qualification, except where such
failure to have such power and authority would not have an Asset Material
Adverse Effect. Except as set forth in Schedule 4.1, Seller has no Subsidiaries,
nor does Seller own, directly or indirectly any shares of stock or other equity
interest in or control, alone or in combination with others, any Persons.
Schedule 4.1 sets forth the names and titles of Seller's directors and officers.
4.2 Capitalization; Options. Schedule 4.2 sets forth the capital structure of
Seller, including the numbers and types of membership interests authorized and
the number of each type of membership interests that are issued and outstanding.
Schedule 4.2 contains an accurate and complete list of: (i) the full legal names
of the members of Seller; (ii) the addresses of such members; (iii) the number
of membership interests, warrants, options or other securities owned of record
and beneficially by each such member and the certificate numbers of the
certificates representing such equity interests. Except for the members listed
on Schedule 4.2, there are no other record or beneficial owners of any
membership interests of Seller or any other securities of Seller. Except for the
membership interests listed on Schedule 4.2, there have been and currently are
no other issued or outstanding equity interests. All of the issued and
outstanding equity interests of Seller have been duly authorized and validly
issued and are fully paid and non-assessable. Except as set forth on Schedule
4.2, there exists no right of first refusal or other preemptive right with
respect to Seller or the equity interests, Business or Assets of Seller. In
addition, Schedule 4.2 sets forth a list of all of the full legal names of each
Principal together with such Principal's address.
9
4.3 Authority to Execute and Perform Agreement. Each of Seller, Rampage Clothing
and Xxxxxxx.xxx has all requisite power and authority and approvals required to
enter into, execute, deliver and perform this Agreement and its obligations
hereunder and to consummate the transactions contemplated herein. The execution,
delivery and performance of this Agreement and each other Transaction Document
to which each of Seller, Rampage Clothing and Xxxxxxx.xxx is a party, the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of Seller, Rampage Clothing and
Xxxxxxx.xxx. This Agreement and each other Transaction Document to which each of
Seller, Rampage Clothing and Xxxxxxx.xxx is a party, has been duly executed and
delivered by each of Seller, Rampage Clothing and Xxxxxxx.xxx, and constitutes
Seller's, Rampage Clothing's, and Xxxxxxx.xxx's valid and legally binding
obligation, enforceable against each of Seller, Rampage Clothing and Xxxxxxx.xxx
in accordance with its terms and conditions, except as the same may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar Laws,
relating to or affecting creditors' rights generally or general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
4.4 Financial Statements. Attached to Schedule 4.4 are true, complete and
correct copies of the consolidating financial statements and notes thereof of
each Seller and Rampage Clothing, as reviewed by independent certified public
accountants for the year ended December 31, 2004 and December 31, 2003, the
financial statements for Rampage Licensing which were separately audited for the
year ended December 31, 2003, and consolidating financial statements for Seller
and Rampage Clothing, as audited for the year end December 31, 2002. Schedule
4.4 also sets forth Seller's and Rampage Clothing's financial statements
(including unaudited balance sheets and the related statements of income,
retained earnings and cash flows) at and for the seven months ended July 31,
2005. The foregoing financial statements are hereinafter collectively referred
to as the "Financial Statements". The Financial Statements have been prepared
from the books and records of the Sellers and Rampage Clothing, and fairly
present in all material respects the financial position of each Seller and
Rampage Clothing as at such dates and the results of its operations and the
changes in its retained earnings and its financial positions for the periods
then ended in accordance with GAAP consistently applied throughout the periods
indicated (except, in the case of the Financial Statements for the seven-month
period ended July 31, 2005, for immaterial year-end adjustments, and the absence
of footnotes, and certain reclassifications for management reporting purposes).
The Financial Statements do not contain any material misstatements or omissions
regarding the business, assets, condition (financial or otherwise) of Seller or
Rampage Clothing. Since the most recent fiscal year end, there have been no
material changes in the accounting policies of Seller or Rampage Clothing except
for any such changes required pursuant to GAAP. The Financial Statements are not
affected by transactions or accounts with affiliated companies, if any, other
than as set forth in Schedule 4.4.
4.5 No Material Adverse Change. Except as set forth in Schedule 4.5, since
December 31, 2004 there has been no Asset Material Adverse.
10
4.6 Tax Matters. Except to the extent that a failure to file a Tax Return, pay,
collect or withhold Taxes, or any inaccuracy in a Tax Return would not result in
Buyer being liable for such Taxes, (i) the Seller has timely filed all Tax
Returns that are required to be filed before the Closing Date, (ii) the
information provided on such Tax Returns is complete and accurate in all
material respects and (iii) all Taxes due on such Tax Returns have been paid in
full. No material claim has ever been made by any governmental authority in a
jurisdiction where Seller does not file a Tax Return that it is or may be
subject to taxation by that jurisdiction. None of the Assets is subject to any
lien for Taxes, other than in respect of Taxes not yet past due.
4.7 Compliance with Laws. Except as set forth in Schedule 4.7, Seller has
complied in all material respects with all Laws relating to its Business or
operations or to the Assets. Except as set forth and specifically identified in
Schedule 4.7, none of Seller, Rampage Clothing, Xxxxxxx.xxx or Hansel has
received notice of any alleged material violation of or claim under any such
Laws, and to Seller's Actual Knowledge, there is no basis for any material
violation thereof which may occur in the future (either upon notice, lapse of
time, or both), and no investigation, charge, claim or other action under any
such Laws is pending or threatened.
4.8 Permits. Except as set forth in Schedule 4.8, no Permits are material to or
necessary for the conduct of the Business of Seller or the use and operation of
the Assets. At Closing, Seller holds all Permits which are material to or
necessary for it to conduct its business as heretofore conducted ("Material
Permits"). A true, correct and complete list of Seller's Permits is set forth in
Schedule 4.8. All Material Permits are in full force and effect, no violations
are or have been recorded in respect of any Material Permit and no Proceeding is
pending or, to Seller's Actual Knowledge, threatened to revoke, terminate or
limit any Material Permit. Except as set forth and specifically identified in
Schedule 4.8, Seller is not in default, and has not received any notice of any
claim of default, with respect to any Material Permit or of any notice of any
other claim or Proceeding (or, to Seller's Actual Knowledge, threatened
Proceeding) relating to any Material Permit. Except as set forth in Schedule
4.8, all Permits are assignable and transferable by Seller to Buyer without the
Consent of any Person, except where such failure would not have an Asset
Material Adverse Effect..
4.9 No Breach. Except as set forth and specifically identified in Schedule 4.9,
the consummation of the transactions herein contemplated including, without
limitation, the execution, delivery and performance of this Agreement and the
documents required to effect the transactions herein contemplated, do not and
will not (1) constitute a violation of or default under (either immediately or
upon notice, lapse of time or both), conflict with or result in a breach of (a)
Seller's organizational documents, (b) the terms of any Specified Contract to
which Seller is a party and to which the Assets are or may be bound, (c) any
Judgment relating to the Assets and binding upon Seller, or (d) any Laws
affecting the Assets; or (2) result in the creation or imposition of any
Encumbrance on any of the Assets or give to any Person any interest or right in
any of the Assets; or (3) accelerate the maturity of or otherwise modify any
Liability or obligation of Seller relating to the Assets or the Specified
Liabilities; or (4) result in the breach of any of the terms and conditions of,
constitute a default under or otherwise cause any impairment of, any Specified
Contract, or Permits which, if not cured, could have a material adverse effect
in any one case or in the aggregate on Seller, the Assets or the Business.
4.10 Consents and Approvals. Except as set forth in Schedule 4.10, no Consent,
waiver, authorization, order or notice is required in connection with the
execution, delivery and performance by Seller, Rampage Clothing and Xxxxxxx.xxx
of this Agreement or the consummation of the transactions contemplated hereby,
including, but not limited to, the assignment of any and all of the Specified
Contracts, except where such failure would not have an Asset Material Adverse
Effect.
11
4.11 Judgments and Proceedings. Except as set forth in Schedule 4.11, there is
no outstanding Judgment against or affecting the Assets or the assets of Rampage
Clothing or Xxxxxxx.xxx. Except as set forth in Schedule 4.11, there is no
Proceeding pending, or to Seller's Actual Knowledge, threatened, against or
affecting any of Seller's, Rampage Clothing's or Xxxxxxx.xxx's properties,
assets, business, operations or prospects. True and correct copies of all
complaints, pleadings, petitions, notices, motions and other papers filed in
connection with the Proceedings listed in Schedule 4.11 have been delivered to
Buyer. Except as set forth and specifically identified in Schedule 4.11, there
are no Proceedings pending or, to Seller's Actual Knowledge, threatened, or any
contingent liability, which would give rise to any right of indemnification on
the part of any officer, director, employee or agent of Seller, Rampage
Clothing, Xxxxxxx.xxx or their heirs, executors or administrators thereof
against Seller, Rampage Clothing, Xxxxxxx.xxx or any of their successors. Except
as set forth and specifically identified in Schedule 4.11, to Seller's Actual
Knowledge, no breach of contract, tort, or other claim (whether arising from
Seller's, Rampage Clothing's or Xxxxxxx.xxx's business operations or otherwise)
has been asserted or threatened, by or against Seller, Rampage Clothing or
Xxxxxxx.xxx, and no breach of contract claim has been asserted or threatened by
or against Seller, Rampage Clothing or Xxxxxxx.xxx against any Person with
regard to the Specified Contracts.
4.12 Employee Relations. Seller does not have, nor at any time has had any
employees.
4.13 Contracts. Schedule 4.13 sets forth a true and correct list of all
Contracts to which Seller or the Assets is bound or subject with a value in
excess of $5,000. True and correct copies of all Specified Contracts have been
delivered to Buyer and Schedule 4.13 includes a complete and accurate
description of all oral Specified Contracts. All of the Specified Contracts set
forth on Schedule 4.13 and referred to in this Agreement or in the other
Schedules hereto are valid and subsisting in full force and effect and binding
on the parties thereto in accordance with their terms; Seller is not in default
under any of them, nor to Seller's Actual Knowledge is any other party to any
such Specified Contract in default thereunder, nor to Seller's Actual Knowledge
is there any condition or basis for any claim of a default by any party thereto
or event which, with notice, lapse of time or both, would constitute a default
thereunder; and Seller has paid in full or accrued all amounts due thereunder
for periods on or prior to the date hereof (whether or not currently payable)
and has satisfied in full or provided in full for all of its Liabilities and
obligations thereunder for periods on or prior to the date hereof. Except as
disclosed in Schedule 4.13, all rights of Seller under the Specified Contracts
extending beyond the Closing Date are assignable to Buyer and upon assignment
shall continue unimpaired and unchanged in Buyer on and after the Closing Date
without (a) the Consent (except for any Consent(s) which have been or will be
obtained at or before the Closing) of any Person or (b) the payment of any
penalty, the incurrence of any additional obligation or the change of any term.
Except as set forth on Schedule 4.13, Seller has examined, monitored or
otherwise policed, to the extent deemed prudent by Seller and in accordance with
the customary practices in the industry in which Seller participates, the
activities of all of the licensee counterparties under the Specified Contracts
to verify that the products manufactured, sold or offered for sale under the
Marks licensed to such licensees pursuant to the Specified Contracts meet, in
all material respects, the quality control standards and requirements for use of
the Marks set forth in such Specified Contracts.
12
4.14 Real Property. Seller does not own, lease or occupy, and has not
at any time has owned, leased or occupied all or any portion of any Real
Property.
4.15 Books of Account and Reports. Seller has delivered to Buyer true, correct
and complete copies of its charter or other formation documents, and all
amendments thereto.
4.16 Tangible Property. Schedule 4.16 sets forth a list and summary description
of all interests owned, leased or subleased (as lessor or lessee) or claimed by
each Seller (including, without limitation, options) in or to Tangible Property.
Except as set forth on Schedule 4.16, all Specified Contracts pursuant to which
Seller may hold or use any interest owned or claimed by Seller (including,
without limitation, options) in or to Tangible Property are in full force and
effect, Seller is not in default thereunder and to Seller's Actual Knowledge, no
condition exists which, with notice, lapse of time or both, would constitute a
default.
4.17 Intangibles.
(1) All Intangibles to the Seller's Business, owned, used, applied for and/or
registered in the name of or licensed to Seller, Rampage Clothing or Xxxxxxx.xxx
are listed on Schedule 4.17. Except as specifically identified and disclosed in
Schedule 4.17, all of Seller's rights in and to the Intangibles set forth in
Schedule 4.17 are free and clear of any claims of infringement, invalidity or
Encumbrance (other than any Acknowledged Encumbrances). None of the Seller,
Rampage Clothing, Xxxxxxx.xxx or Hansel has notice of any adversely held
Intangible of any other Person or notice of any claim of any other Person or
notice of any claim of any other Person relating to any of the Intangibles set
forth in Schedule 4.17 or any process or confidential information of Seller, and
none of the Seller, Rampage Clothing, Xxxxxxx.xxx or Hansel knows of any basis
for any such charge or claim. None of the Seller, Rampage Clothing or
Xxxxxxx.xxx has infringed upon or misappropriated any Intellectual Property
Rights of any Person and none of the Intangibles infringes upon or violates the
Intellectual Property Rights or other proprietary rights of any Person. Except
as set forth in Schedule 4.17, none of the Seller, Rampage Clothing, Xxxxxxx.xxx
or Hansel has licensed any Person to use any Intangible or other Intellectual
Property Rights of Seller, nor is Seller obligated to pay any royalties,
licensing fees or similar payments to any Person.
(2) Schedule 4.17 contains a complete and accurate list and summary description
of all registrations and pending applications for the Marks. All registered and
pending Marks have been registered or applied for and pending, respectively (as
indicated on the schedule) with the United States Patent and Trademark Office or
the trademark office of the jurisdiction to which the registration or
application pertains, and are currently in compliance with all applicable Laws
in all material respects. The Marks are valid, subsisting, and enforceable and
are not subject to any maintenance fees or taxes or actions falling due within
sixty (60) days after the date hereof. Except as set forth in Schedule 4.17, (i)
no Xxxx is now involved in any opposition, invalidation or cancellation
Proceeding or any other Proceeding relating to the validity or registrability
thereof, and, to the Seller's Actual Knowledge, no such action is threatened
with respect to any of the Marks; (ii) to the Seller's Actual Knowledge, there
is no potentially interfering trademark or trademark application of any other
Person with regard to the Marks anywhere in the world; (iii) none of the Marks
has been challenged or threatened in any way; (iv) where applicable, the Assets
bear Marks accompanied by the proper federal registration notice where permitted
by law except for where such failure to comply with proper federal registration
notice is not material to the operation of the Business.
13
(3) Except as set forth on Schedule 4.17, to the Seller's Actual Knowledge, none
of Seller, Rampage Clothing or Xxxxxxx.xxx has received any form of notice
advising it that any Intangible, including the Marks, could not be owned, used,
applied for and/or registered in the name of or licensed to Seller, to Rampage
Clothing or to Xxxxxxx.xxx in any jurisdiction throughout the world.
4.18 Title. Except as set forth on Schedule 4.18, Seller owns outright and has
good, valid and marketable title to all of the Assets, free and clear of all
Encumbrances (other than any Acknowledged Encumbrances). There are no
outstanding options or commitments to which Seller, Rampage Clothing,
Xxxxxxx.xxx or any Principal is a party which relate to the Assets or the sale
by any of them of the Assets. At Closing, Buyer shall acquire all assets used by
Seller in the Business, other than those assets set forth in Section 2.2. Within
the past 10 years, Seller has not done business under or been known by any name
other than its present corporate name, and Seller had not done business at any
address other than the addresses set forth in Schedule 4.18.
4.19 Indebtedness. All Indebtedness of Seller as at the Closing Date is set
forth on Schedule 4.19. Schedule 4.19 sets forth a true and correct aged list of
Seller's accounts payable as of the Closing Date.
4.20 Undisclosed Liabilities. As of the Closing Date, Seller does not have any
material Liabilities in respect of its businesses, other than (1) Liabilities
reflected or reserved for on the Financial Statements or (2) Liabilities that
have arisen or been incurred since the date of the latest Financial Statement in
the ordinary course of business consistent with past practices.
4.21 Suppliers, Customers and Licensees. Except as set forth in Schedule 4.21,
during the last 12 months, no single customer, supplier or licensee provided
more than five percent of Seller's, Rampage Clothing's or Xxxxxxx.xxx's revenue.
To Seller's Actual Knowledge, no supplier, customer or licensee of Seller,
Rampage Clothing or Xxxxxxx.xxx intends to cancel or materially reduce its
ongoing commercial relationship with the businesses of the Seller, Rampage
Clothing or Xxxxxxx.xxx, as the case may be.
4.22 Employee Benefit Plans. Seller has not at any time established, maintained,
participated in, or contributed to any Employee Benefit Plan. Seller has no
Liabilities or obligations under any Employee Benefit Plan. Seller has not
incurred any Liability to the Pension Benefit Guaranty Corporation (or any
successor thereto), including any Liability under Sections 4063 or 4064 of
ERISA.
14
4.23 Insurance. Schedule 4.23 sets forth all Insurance Policies held by or on
behalf of Seller in respect of the Assets, specifying the insurer, the policy
number (or covering note number with respect to binders), the risks covered, the
premium, the deductibles and the amount of coverage provided and describing each
pending claim thereunder of more than $10,000. Seller is not in default with
respect to any provision contained in any such Insurance Policy nor, to the
Seller's Actual Knowledge, has Seller failed to give any notice or present any
claim under any such Insurance Policy in due and timely fashion. Seller has not
received a written notice of cancellation, non-renewal or audit of any such
Insurance Policy.
4.24 Software. Schedule 4.24 is an accurate and complete list and description of
all Software (except for any standard or "off-the-shelf" computer software)
owned, licensed, leased or otherwise used by Seller in connection with its
businesses, and identifies which of such Software is owned, licensed, leased, or
otherwise used, as the case may be. Except as set forth in Schedule 4.24, Seller
owns, free and clear of any Encumbrances (other than Acknowledged Encumbrances),
or has a valid right to use pursuant to lease, license, sublicense, agreement or
permission, all of the Software currently used by Seller in connection with its
business. With respect to all Software owned by a third party and used by Seller
in connection with its business pursuant to a valid lease, license, sublicense,
agreement or permission, (1) to the Seller's Actual Knowledge, the lease,
license, sublicense, agreement or permission covering such Software is valid,
legally binding, enforceable and in full force and effect and may be transferred
pursuant to this Agreement; (2) to the Seller's Actual Knowledge, no party to
any such lease, license, sublicense, agreement or permission is in breach
thereof and no event has occurred which with notice or lapse of time would
constitute a breach thereof, permitting termination or modification thereof; and
(3) Seller has not granted any sublicense, sublease or similar right with
respect to any such lease, license, sublicense, agreement or permission.
4.25 Ownership of Assets. All of the Assets are owned by Seller. Prior to the
Closing Date, (i) Rampage Clothing has transferred to Seller any Assets owned by
Rampage Clothing which are used, in whole or in part, in connection with the
Business and (ii) Xxxxxxx.xxx has transferred to Seller any Assets owned by
Xxxxxxx.xxx which are used, in whole or in part, in connection with the
Business, including but not limited to all rights to the Xxxxxxx.xxx and
Xxxxxxxxxxxxxxxxxxxxxx.xxx domain names. The Assets constitute all of the
assets, properties and rights used in and which are necessary for conducting the
Business as heretofore conducted by Seller.
4.26 No Broker. Except as set forth in Schedule 4.26, no broker, finder, agent
or similar intermediary has acted for or on behalf of Seller in connection with
this Agreement or the transactions contemplated hereby, and no broker, finder,
agent or similar intermediary is entitled to any broker's fee, finder's fee, or
similar fee or commission in connection therewith based on any agreement,
arrangement or understanding with Seller or any action taken by Seller. Any item
disclosed in Schedule 4.26 will be paid by Seller, Rampage Clothing, and
Principals.
4.27 Full Disclosure. All Transaction Documents delivered by or on behalf of the
Seller, Xxxxxxx.xxx, Rampage Clothing and/or Principals in connection with this
Agreement and the transactions contemplated hereby are true and complete; and
all such Transaction Documents delivered by Seller, Xxxxxxx.xxx, Rampage
Clothing and/or Principals are authentic.
15
4.28 Related Party Transactions. Except as described on Schedule 4.28 and except
for any employment or consulting Contracts listed on Schedule 4.13, there are
currently no Real Property leases, personal property leases, loans, guarantees,
Contracts, transactions, understandings or other arrangements of any nature
between or among any of the Seller and any current or former member, owner,
shareholder, partner, director, officer or controlling Person of Seller (or any
of their respective predecessors) or any other Person affiliated with the Seller
(or any of its respective predecessors).
5. Representations and Warranties of Seller and Principals. Knowing that Buyer
relies thereon, Seller and Principals, jointly and severally, represent, warrant
and covenant to Buyer as of the Closing as follows:
5.1 Enforceable Agreement. This Agreement has been duly executed by each of the
Principals and constitutes the legal, valid and binding obligation of each
Principal and is enforceable against each Principal in accordance with its
terms.
5.2 Investment Matters. The Shares to be issued hereunder are being acquired for
each Principal's own account and not on behalf of any other Person, and all such
Shares are being acquired for investment purposes only and not with a view to,
or for sale in connection with, any resale or distribution of such Shares. Each
of the Principal's has received or examined Buyer's Annual Report on Form 10-K
for the transition period from February 1, 2004 through December 31, 2004,
Buyer's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 and
Buyer's July 26, 2005 Proxy Statement. Each of the Principal's has had the
opportunity to ask questions and receive answers from Buyer concerning Buyer,
and have been furnished with all other information about Buyer which it has
requested. Each Principal is an "accredited investor" as defined in Rule 501(a)
of the Securities Act of 1933, as amended. Each Principal believes that he has
been fully apprised of all facts and circumstances necessary to permit him to
make an informed decision about acquiring the Shares, that he has sufficient
knowledge and experience in business and financial matters that he is capable of
evaluating the merits and risks of an investment in the Shares, and that he has
the capacity to protect its own interests in connection with the transactions
contemplated hereby. Each of the Principals have been advised by Buyer and
understand that, (1) the Shares to be issued hereunder will not be registered
under any federal or state securities laws, (2) such shares must be held
indefinitely unless and until they are subsequently registered or an exemption
from registration becomes available, (3) the certificates representing such
shares shall bear appropriate restrictive legends, and (4) Buyer shall have the
right to direct the transfer agent of its common stock to place a stop transfer
order against such certificates. Except as set forth on Schedule 5.2, none of
the Principals has sold any shares of capital stock, membership interests or
other securities of Seller or of Buyer at any time during the 30-day period
ending on the Closing Date.
6. Representations and Warranties of Buyer. Knowing that Seller and Principals
rely thereon, Buyer represents, warrants and covenants to Seller and Principals
on the Closing Date as follows:
16
6.1 Subsidiaries. Buyer has no direct or indirect Subsidiaries, and does not
own, directly or indirectly, any equity interest in or control, alone or in
combination with others, any Persons, other than those listed in Schedule 6.1.
Except as disclosed in Schedule 6.1, Buyer owns, directly or indirectly, all of
the capital stock of each such Subsidiary free and clear of any and all
Encumbrances, and all the issued and outstanding shares of capital stock of each
such Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights.
6.2 Due Incorporation and Qualification. Each of Buyer and each of its
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, organization or formation (as applicable). Each of Buyer and its
Subsidiaries has the corporate or other similar applicable power and authority
necessary to own, lease and operate their respective assets and business, to
carry on their respective businesses as and where such businesses are now
conducted, except where such failure to have such power and authority would not
have a Buyer Material Adverse Effect. Buyer has full power and authority to
enter into and perform this Agreement and each of the other Transaction
Documents to which it is a party and to consummate the transactions contemplated
hereby and thereby upon the terms and conditions herein and therein provided.
Each of Buyer and its Subsidiaries is duly qualified as a foreign corporation or
other entity in good standing under the Laws of each jurisdiction in which the
nature of their respective business or the location of any of their respective
assets requires such licensing or qualification, except where the failure to be
so qualified or licensed would not have a Buyer Material Adverse Effect.
6.3 Authority to Execute and Perform Agreement. Buyer has the requisite
corporate power and authority to execute, deliver and perform this Agreement and
each of the other Transaction Documents to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and each other Transaction Document to which Buyer
is a party and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Buyer. This Agreement and each other Transaction Document to which Buyer is a
party constitutes a valid and legally binding agreement of Buyer enforceable
against Buyer in accordance with their respective terms and conditions, except
that such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws relating to or affecting
creditors' rights generally or general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
6.4 No Breach. The consummation of the transactions herein contemplated
including, without limitation, the execution, delivery and performance by Buyer
of this Agreement and each of the other Transaction Documents to which it is a
party do not and will not constitute a violation of or default under (either
immediately or upon notice, lapse of time or both) or result in a breach of (a)
Buyer's certificate of incorporation, bylaws or other organic governing
documents, (b) the terms of any Contract to which Buyer or any of its
Subsidiaries or any of their respective assets are bound, (c) any Judgment
binding upon Buyer or any of its Subsidiaries, (d) any Permit; or (e) any Law
(including federal and state securities laws) applicable to Buyer or any of its
Subsidiaries or any of their respective assets, except, in the cases of clause
(b), (c), (d) or (e), any such violation, default or breach that would not have
a Buyer Material Adverse Effect.
17
6.5 No Broker. Except as set forth in Schedule 6.5, no broker, finder, agent or
similar intermediary has acted for or on behalf of Buyer in connection with this
Agreement or the transactions contemplated hereby, and no broker, finder, agent
or similar intermediary is entitled to any broker's fee, finder's fee, or
similar fee or commission for which either Seller or any Principal will be
liable in connection therewith based on any agreement, arrangement or
understanding with Buyer or any action taken by Buyer.
6.6 Capitalization. The issue and sale of the Shares will not, immediately or
with the passage of time, obligate Buyer to issue shares of Buyer's Stock or
other securities to any Person (other than the Seller and Principals) and will
not result in a right of any holder of Buyer securities to adjust the exercise,
conversion, exchange or reset price under such securities. To the knowledge of
Buyer, except as set forth in the SEC Reports (as hereinafter defined), no
Person or group of related Persons beneficially owns (as determined pursuant to
Rule 13d-3 under the Securities and Exchange Act of 1934), or has the right to
acquire, by agreement with or by obligation binding upon Buyer, beneficial
ownership of in excess of 5% of the outstanding Buyer's Stock, ignoring for such
purposes any limitation on the number of shares of Buyer's Stock that may be
owned at any single time.
6.7 Tax Matters. (i) The Buyer and its Subsidiaries have timely filed all Tax
Returns (other than franchise Tax Returns) that are required to be filed before
the Closing Date, (ii) the information provided on such Tax Returns is complete
and accurate in all material respects and (iii) all Taxes shown to be due on
such Tax Returns have been paid in full.
6.8 Issuance of Buyer's Stock. The shares of Buyer's Stock issued in connection
with this Agreement are duly authorized and duly and validly issued, fully paid
and nonassessable, free and clear of all Encumbrances and are not subject to
preemptive or similar rights. No registration under the Securities Act is
required for the offer and sale of the Shares to the Seller under this
Agreement. Buyer is eligible to register the Shares for resale by the Seller and
the Principals under Form S-3 promulgated under the Securities Act. Except as
set forth in Schedule 6.8, Buyer has not granted or agreed to grant any Person
any rights (including "piggy-back" registration rights) to have any securities
of Buyer registered with the Securities and Exchange Commission (the
"Commission") or any other governmental authority that have not been satisfied
or waived.
6.9 Filings, Consents and Approvals. Except as set forth on Schedule 6.9, Buyer
is not required to obtain any Consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority, The Nasdaq National
Market or other Person in connection with the execution, delivery and
performance by Buyer of this Agreement and the other Transaction Documents to
which it is a party.
6.10 Regulatory Compliance. Since December 31, 2003, Buyer has duly and timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of the
18
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (the
foregoing materials being collectively referred to herein as the "SEC Reports").
As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder and other federal, state and local laws, rules
and regulations applicable to such documents and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. To the knowledge
of the Buyer, except as set forth in the SEC Reports or as set forth on Schedule
6.10, since December 31, 2004, the Buyer has not entered into any agreement or
arrangement, taken any action or incurred any Liability, nor has any event
occurred, which, pursuant to applicable Laws, would require Buyer to disclose
such agreement, arrangement, action, Liability or event in its annual report on
Form 10-K for Buyer's fiscal year ended December 31, 2005. The financial
statements of Buyer included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP, except as may
be otherwise specified in such financial statements or the notes thereto, or, in
the case of unaudited financial statements, as permitted by Rule 10-01 of
Regulation S-X promulgated under the Securities Act and the Exchange Act, and
fairly present in all material respects the financial position of Buyer and its
consolidated Subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.
6.11 No Buyer Material Adverse Change. Since December 31, 2004 there has
not occurred a Buyer Material Adverse Change.
6.12 Internal Accounting Controls. Buyer and its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance in
all material respects that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability,
and (iii) access to assets is permitted only in accordance with management's
general or specific authorization.
6.13 Listing and Maintenance Requirements. Buyer's Stock is registered pursuant
to the Exchange Act and is listed on The Nasdaq National Market, and Buyer has
taken no action designed to terminate the registration of Buyer's Stock or
delisting Buyer's Stock from The Nasdaq National Market. Buyer has not, in the
two years preceding the date hereof, received notice (written or oral) from The
19
Nasdaq National Market to the effect that Buyer is not in compliance with the
listing or maintenance requirements thereof. Buyer is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with the listing and maintenance requirements for continued listing of Buyer's
Common Stock on The Nasdaq National Market. The issuance and sale of the Shares
hereunder does not contravene the rules and regulations of The Nasdaq National
Market and no approval of the shareholders of Buyer is required for Buyer to
issue and deliver to the Seller the Shares as contemplated by this Agreement and
the other Transaction Documents.
6.14 Compliance with Laws. Except as set forth in Schedule 6.14, since January
1, 2002, the business of the Buyer and its Subsidiaries has been conducted in
compliance with all applicable Laws, except for any failure to be so conducted
that would not have a Buyer Material Adverse Effect.
6.15 Investment Company. Buyer is not, and is not an Affiliate of, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended..
6.16 Application of Takeover Protections. There are no control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under Buyer's
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Seller or the
Principals as a result of the Seller and Buyer fulfilling their obligations or
exercising their rights under this Agreement and the other Transaction
Documents, including without limitation Buyer's issuance of the Shares.
7. Deliveries by Seller, Rampage Clothing and Principals. Concurrently herewith
at the Closing, Seller and, where applicable, Rampage Clothing or the
Principals, are delivering to Buyer or its designee, the following, which shall
be in form and substance acceptable to Buyer and Buyer's counsel:
7.1 Documents and instruments of transfer for the Assets including, without
limitation, bills of sale for all Tangible Property, assignments of all
Intangibles (including all Intellectual Property Rights appurtenant thereto) and
assignments of all assignable licenses and Permits relating to the Assets or the
use, occupancy or operation thereof including, but not limited to, documents
substantially in the form of Exhibit "A" (Master Trademark Assignment
Agreement), Exhibit "B" (Security Release) and Exhibit "C" (Assumption and
Assignment Agreement).
7.2 Copies of the minutes of the meetings of the managers and members of Rampage
Licensing and Xxxxxxx.xxx and the board of directors and shareholders of Rampage
Clothing authorizing the execution and performance of this Agreement and the
amendment of Seller's and Rampage Clothing's charter or formation documents to
change its name, certified by Seller's Secretary;
7.3 Documents sufficient to effect amendments of Seller's, Rampage Clothing's
and Xxxxxxx.xxx's charter or other formation documents to change its name to one
which is not similar to its present name, which documents shall be in proper
form;
7.4 Copies or originals of all files, papers, books and records, licenses,
permits, approvals, applications, correspondence, and other documents relative
to the Assets;
7.5 Termination statements and any other termination documents terminating
all Encumbrances in and to the Assets;
20
7.6 A certificate, dated no earlier than ten days prior to the Closing Date,
that Seller, Rampage Clothing and Xxxxxxx.xxx is in good standing in its
jurisdiction of formation;
7.7 Certificate of incumbency and specimen signatures of all signatory
officers of Seller, certified by Seller's Secretary and or manager;
7.8 Certificate of incumbency and specimen signatures of all signatory officers
of Rampage Clothing and Xxxxxxx.xxx, certified by the respective secretary of
Rampage Clothing and the secretary or manager of Xxxxxxx.xxx;
7.9 The License Agreement;
7.10 The favorable opinion of Xxxxxxxxx Xxxxx, a Professional Law Corporation,
counsel to Seller, Rampage Clothing and Xxxxxxx.xxx, dated the Closing Date and
addressed to Buyer substantially in the form attached hereto as Exhibit "D";
7.11 Permits and Consents from any person required for consummation of the
Closing in form and substance satisfactory to Buyer including, without
limitation, all governmental and administrative Consents and approvals;
7.12 All such further Documents and Contracts which may be requested by Buyer or
its counsel, in order to more effectively transfer title to the Assets to Buyer,
or to effectuate and carry out any provision of this Agreement and the
transaction provided herein;
7.13 Evidence of termination of arrangements relating to the payment of revenues
of Rampage Licensing to Rampage Clothing, the Creditors' Trust and/or others and
evidence of termination of the license agreement between Seller and Rampage
Clothing.
7.14 Letters, in the form attached hereto as "Exhibit E," from Seller to each
licensee under the Specified Contracts directing such licensee to make all
payments due to Seller under such Specified Contracts, to Buyer, and setting
forth the Buyer's address for such payments.
8. Deliveries by Buyer. Concurrently herewith at the Closing, Buyer is
delivering to Seller, and, where applicable, Principals, the following, which
shall be in form and substance acceptable to Seller and Principals and Seller's
counsel and Principals' counsel:
8.1 Purchase Price;
8.2 The License Agreement signed by Buyer; and
8.3 The favorable opinion of Blank Rome LLP, counsel to Buyer, dated the Closing
Date and addressed to Seller, substantially in the form of Exhibit "F".
9. Interpretation and Survival of Representations and Warranties.
Notwithstanding any right of Buyer to fully investigate the affairs of Seller
(and vice versa) and notwithstanding any knowledge of facts determined or
determinable by Buyer pursuant to such investigation or right of investigation
21
(and vice versa), Buyer, Seller, Rampage Clothing and Principals, as the case
may be, have the right to rely fully upon the representations, warranties,
covenants and agreements contained in this Agreement or in any Transaction
Document delivered to them or any representatives in connection with the
transactions contemplated by this Agreement. Each warranty, representation and
covenant contained herein is independent of all other warranties,
representations and covenants contained herein (whether or not covering
identical or related subject matter) and must be independently and separately
complied with and satisfied. All representations, warranties, covenants and
agreements shall survive the execution and delivery hereof and the Closing
hereunder. Notwithstanding the foregoing:
9.1 the representations and warranties of the Seller and Principals contained in
Sections 4.1, 4.2, 4.3, 4.17, 4.18, 4.22, 4.25 and 5.2 of this Agreement, the
representations and warranties of Buyer contained in Sections 6.1, 6.2, 6.3,
6.5, 6.6, 6.8 and 6.10 of this Agreement and the respective covenants and
agreements of the parties hereto contained in this Agreement, and the related
agreements of the Seller, the Principals and Buyer to indemnify each other set
forth in Section 11, shall survive the Closing and continue in full force and
effect indefinitely and the parties hereto shall have the right to seek
indemnification from the Seller, the Principals or Buyer, as the case may be, in
respect thereof indefinitely; and
9.2 all other representations and warranties of the Seller and Buyer hereunder,
and the related agreements of the Seller, the Principals and Buyer to indemnify
each other set forth in Section 11, shall survive the Closing and continue in
full force and effect until, and all indemnification claims with respect thereto
shall be made prior to, the eighteenth (18th) month anniversary of the Closing
Date, except for representations, warranties and related indemnities for which
an indemnification claim shall be pending as of the end of the applicable period
referred to above, in which event such indemnities shall survive with respect to
such indemnification claim until the final disposition thereof.
9.3 With respect to any representation, warranty and related indemnity, the
period commencing on the date hereof and terminating on the date that such
representation, warranty and indemnity expires pursuant to clause 9.1 or 9.2
above shall be referred to herein as the "Applicable Survival Period".
10. Certain Post-Closing Obligations
10.1 Voting Restrictions. Each Seller and Principal hereby agrees to vote the
Shares owned or held of record by each of them in favor of matters approved by
the Board of Directors of Buyer (the "Board") or at the direction of the Board
in connection with all matters seeking Buyer's stockholder approval, or to take
all actions by written consent in lieu of any such meeting as directed by the
Board, other than for Excluded Transactions (as hereinafter defined) until the
Seller and Principals do not own, in the aggregate, more than 500,000 Shares (as
such number shall be appropriately be adjusted for any stock split, stock
combination or other similar event affecting the outstanding number of shares of
Buyer's Stock occurring after the date hereof). It being understood that the
provisions of this clause shall not apply to any Shares sold or otherwise
transferred by any of the foregoing Persons to Persons other than the foregoing
Persons. "Excluded Transactions" shall mean any transaction or series of
22
transactions that, directly or indirectly, (A) results in any holder of the
Shares receiving proportionately less or different consideration for any Shares
held by such holder or otherwise being treated disproportionately adversely than
any other holder of Buyer's Stock or other interests convertible, exchangeable
or exercisable into shares of Buyer's Stock; (B) has the effect of increasing
the proportionate share of Buyer's outstanding Stock held by any affiliate of
Buyer, except as a result of (y) the issuance to such affiliate for fair value
of any such shares of Buyer's Stock, or (z) the issuance of equity securities of
Buyer to Buyer's employees in the ordinary course of business pursuant to
employee benefit plans or arrangements approved by the Board; (C) has an adverse
effect on any existing employment, consulting or other arrangement between Buyer
or any of its subsidiaries and any such holder or any affiliate of such holder
of Buyer's Stock; or (D) would subject any holder of Buyer's Stock to liability
under any applicable Law.
10.2 Restrictions on Sale of Shares. During the 24 month period following the
Closing Date (such period herein referred to as the "Restricted Period"), no
Seller or Principal shall, directly or indirectly, through an "affiliate" or
"associate" (as such terms are defined in the General Rules and Regulations
under the Securities Act of 1933, as amended), a family member or otherwise,
offer, sell, pledge, hypothecate, grant an option for sale, or otherwise dispose
of, or transfer or grant any rights with respect thereto in any manner either
privately or publicly (each, a "Transfer") any of the Shares or shares of the
Buyer's Stock acquired by any of the Seller or Principals pursuant to a stock
split, stock dividend, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of Buyer (each an
"Adjustment") affecting the Shares (together with the Shares, "Securities"), or
enter into any agreement or any transaction that has the effect of transferring,
in whole or in part, directly or indirectly, the economic consequence of
ownership of the Securities, whether any such agreement or transaction is to be
settled by delivery of the Securities, in cash or otherwise; except that,
subject to the terms and conditions of this Agreement, (i) during the first 12
month period of the Restricted Period (the "Initial Period"), Seller and/or
Principals may Transfer, in open market transactions, such number of Securities
for which the gross proceeds of all such Transfers occurring during the
Restricted Period equal no more than an aggregate of $10,150,000 and (ii) on the
first day of each of the first four consecutive three-month periods following
the expiration of the Initial Period, the restrictions on Transfer provided for
in this Section 10.2 shall lapse, on a cumulative basis, with respect to 25% of
the number of Shares owned by Seller and Principals at the end of the Initial
Period (taking into account and proportionally adjusting for any Adjustments
occurring during such period) and Seller and/or Principals may Transfer such
Shares, in open market transactions without restriction.
10.3 Automatic Registration.
(1) Not later than thirty (30) days after the Closing Date, Buyer shall prepare
and file with the Commission a Registration Statement covering the resale of all
of the Shares. The Registration Statement shall be on Form S-3 (except if Buyer
is not then eligible to register for resale the Shares on Form S-3, in which
case such registration shall be on another appropriate form in accordance
herewith) and shall contain a "Plan of Distribution" in form and substance
agreed upon by the parties hereto and customary for transactions of this type.
Buyer shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as soon as possible
but, in any event, no later than one hundred twenty (120) days after the Closing
Date, and shall use its commercially reasonable efforts to keep the Registration
Statement continuously effective under the Securities Act until the earlier of
the date when (i) all the Shares covered by the Registration Statement have been
23
sold pursuant thereto or, so long as a Registration Statement covering all of
the Shares is then effective, otherwise or (ii) the Shares may be publicly sold
without volume restrictions under Rule 144(k) of the Securities Act as
determined by the counsel to Buyer pursuant to a written opinion letter to such
effect, addressed and acceptable to Buyer's transfer agent, the Seller and the
Principals (the "Effectiveness Period"). Buyer's obligation under this Section
is subject to the applicable seller of the Shares being registered providing
Buyer with such information regarding such seller and its ownership of shares of
Buyer Stock as Buyer determines necessary to include in the Registration
Statement.
(2) In connection with Buyer's registration obligations hereunder, Buyer shall:
(a) Not less than two business days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto,
furnish to Xxxx Xxxxxxx, who is hereby designated by the Seller and Principals
as the representative of the Principals and Seller for the purposes of this
Section 10.3 (in such capacity, the "Principal Representative") copies of all
such documents proposed to be filed which documents will be subject to the
review of the Principal Representative and one counsel to the Principal
Representative. Buyer shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Principal
Representative or counsel to the Principal Representative shall reasonably
object in good faith.
(b) (A) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep the Registration Statement
continuously effective as to the applicable Shares for the Effectiveness Period;
(B) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 under the Securities Act; and (C) respond as promptly as practicable to
any comments received from the Commission with respect to the Registration
Statement or any amendment thereto and, as promptly as reasonably possible
provide the Principal Representative true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement.
(c) Notify the Principal Representative as promptly as practicable (and, in the
case of (A)(1) below, not less than three business days prior to such filing)
and (if requested by any such Person) confirm such notice in writing no later
than two business days following the day (A)(1) when a Prospectus or any
Prospectus supplement or post-effective amendment to the Registration Statement
is proposed to be filed; (2) when the Commission notifies Buyer whether there
will be a "review" of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement (Buyer shall provide true and
complete copies thereof and all written responses thereto to the Principal
Representative); and (3) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (B) of any request
by the Commission or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or all
of the Shares or the initiation of any Proceedings for that purpose; (D) of the
receipt by Buyer of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (E) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or
24
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) Use its commercially reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (A) any order suspending the effectiveness of
the Registration Statement, or (B) any suspension of the qualification (or
exemption from qualification) of any of the Shares for sale in any jurisdiction,
at the earliest practicable moment.
(e) Furnish to Seller and each Principal, without charge, at least one conformed
copy of the final Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(f) Promptly deliver to Seller and each Principal, without charge, as many
copies of the Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto as such Persons may reasonably request.
Buyer hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling holders in connection with the
offering and sale of the Shares covered by such Prospectus and any amendment or
supplement thereto.
(g) Prior to any public offering of Shares, use its commercially reasonable
efforts to register or qualify or cooperate with the selling holders in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Shares for offer and sale under the
securities or Blue Sky laws of all jurisdictions within the United States
reasonably requested by either Seller or any Principal, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Shares covered
by the Registration Statement; provided, that Buyer shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or subject Buyer to any material tax in any such jurisdiction where it
is not then so subject.
(h) Cooperate with the Seller and the Principals to facilitate the timely
preparation and delivery of certificates representing Shares to be delivered to
a transferee pursuant to the Registration Statement, which certificates shall be
free of all restrictive legends, and to enable such Shares to be in such
denominations and registered in such names as any such Persons may request.
25
(i) Use commercially reasonable efforts to cause all Shares covered by a
Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by Buyer are
then listed.
(j) Upon the occurrence of any event contemplated by clause (c)(2) or (3), as
promptly as practicable, take all such action as is necessary to cause the
removal of any such stop order or any such suspension of the qualification or
exemption from qualification.
(k) Upon the occurrence of any event contemplated by clause (c)(5), as promptly
as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(l) Comply with all applicable rules and regulations of the Commission, take
such other actions as may be reasonably necessary to facilitate the registration
of the Shares hereunder; and make available to its security holders, as soon as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, including Rule 158 promulgated thereunder (for the purpose of
this clause (xii), "Availability Date" means the 45th day following the end of
the fourth fiscal quarter that includes the effective date of such Registration
Statement, except that, if such fourth fiscal quarter is the last quarter of
Buyer's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter).
(3) All fees and expenses incident to the performance of or compliance with the
provisions of Section 10 of this Agreement by Buyer shall be borne by Buyer
whether or not any Shares are sold pursuant to the Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with The
Nasdaq National Market or other applicable securities exchange, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Shares and of printing prospectuses if the printing of prospectuses is
reasonably requested by the holders of a majority of the Shares included in the
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for Buyer, (v) Securities Act liability
insurance, if Buyer so desires such insurance, and (vi) fees and expenses of all
26
other Persons retained by Buyer in connection with the consummation of the
transactions contemplated by this Section 10. In addition, Buyer shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Section 10 (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and the
fees and expenses incurred in connection with the listing of the Shares on any
securities exchange as required hereunder.
(4) With a view to making available to the holders of Shares the benefits of
Rule 144 (or its successor rule) under the Securities Act and any other rule or
regulation of the Commission that may at any time permit such holders to sell
Shares to the public without registration, Buyer covenants and agrees to: (i)
make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act, until the earlier of (A) such date
as all of the Shares may be resold to the public without volume restrictions
pursuant to Rule 144(k) under the Securities Act or any other rule of similar
effect or (B) such date as all of the Shares shall have been resold; (ii) file
with the Commission in a timely manner all reports and other documents required
to be so filed pursuant to Rule 144(c) under the Securities Act in order to
permit the holders of the Shares to be entitled to transfer the Shares without
registration pursuant to Rule 144 under the Securities Act; and (iii) furnish to
each holder of Shares upon request (A) a written statement by Buyer that it has
complied with the reporting requirements of the Exchange Act, (B) a copy of
Buyer's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
and (C) such other information as may be reasonably requested in order to avail
such holder of any rule or regulation of the Commission that permits the selling
of any such Shares without registration.
(5) It is acknowledged and agreed that any holder of the Shares (whether or not
such holder is a Seller or a Principal) is an intended third party beneficiary
of the provisions of this Section 10.3; provided that (i) such holder agrees in
writing to be bound by the provisions of this Section 10.3 applicable to such
holder, (ii) such holder shall become the beneficial owner of such Shares prior
to the effectiveness of the Registration Statement and (iii) such holder shall
have notified Buyer of its intention to be included as a selling stockholder
under the Registration Statement prior to (x) in the event that the Registration
Statement is declared effective without the filing with the Commission of any
amendments to the initial filing of the Registration Statement, the date of the
initial filing of the Registration Statement with the Commission or (y) in the
event that any amendments to the Registration Statement are filed with the
Commission prior to the effectiveness of the Registration Statement, the date of
the last amendment to the Registration Statement so filed with the Commission
prior to the effectiveness of the Registration Statement.
10.4 Form D. Buyer shall file on a timely basis a Notice of Sale of Securities
on Form D with respect to the Shares and shall provide a copy thereof to the
Principal Representative.
10.5 Tax Returns. The Seller shall file all Tax Returns required to be filed
with respect to the Assets on or prior to October 31, 2005.
10.6 Cooperation on Tax Matters. Seller, Principals and Buyer 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 Agreement 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
27
convenient basis to provide additional information and explanation of any
material provided hereunder. Seller and Principals agree to retain all books and
records with respect to Tax matters pertinent to the Seller relating to any Tax
period beginning before the Closing Date until the expiration of the statute of
limitations (including any applicable extensions) of the respective Tax periods,
and to abide by all record retention agreements entered into with any
governmental authority.
10.7 Assistance with Audits. On or before October 1, 2005, Seller shall deliver
to Buyer financial statements of the Seller which have been audited by an
independent certified public accountant for the year ended December 31, 2004.
Seller shall, at Buyer's expense, use its commercially reasonable efforts to
take all actions, including the making available of Seller's accountants and the
granting of access to Buyer and its accountants to all Books and Records of the
Seller, to assist Buyer in connection with Buyer's preparation of financial
statements as required by Items 2.01 and 9.01 of Form 8-K in order for Buyer to
meet its Form 8-K obligations within the applicable time period required by such
form.
10.8 Limited License. In consideration of the transactions contemplated by this
Agreement, Buyer grants Rampage Clothing, during the period beginning on the
Closing Date and ending September 30, 2005, (i) a non-exclusive royalty-free
worldwide license to sell and deliver any of the apparel or other products
contemplated to be sold and/or delivered pursuant to purchase orders of Rampage
Clothing existing at the Closing, provided that such orders are actually shipped
to customers on or prior to September 30, 2005 and (ii) a non-exclusive
royalty-free worldwide license to use the Intellectual Property Rights in
connection with the activities described in clause (i) above.
11. Indemnification.
11.1 Obligation of Seller, Rampage Clothing and Principals to Indemnify. Seller,
Rampage Clothing, Xxxxxxx.xxx and Principals shall, jointly and severally,
indemnify, defend and hold harmless Buyer and its officers, directors,
shareholders and affiliates (collectively, the "Buyer Indemnified Parties") from
and against any and all Losses with respect to the following:
(1) any misrepresentation or breach of any representation, warranty, covenant or
agreement of Seller, Rampage Clothing, Xxxxxxx.xxx and Principals (or any of
them) contained in this Agreement or in any Transaction Document delivered
pursuant to this Agreement (a "Seller Failure of Representation");
(2) any and all Retained Liabilities (a "Retained Liability Loss");
(3) Any breach of or failure to perform any covenant, agreement or obligation of
either Seller, Rampage Clothing or any Principal contained in this Agreement or
in any other Transaction Document (a "Seller Failure of Covenant");
(4) Any Liability or obligation arising out of the Proceedings described in
Section 4.11 (whether or not listed on Schedule 4.11);
28
(5) Any Liability or obligation resulting from any violations of WARN, committed
by Seller, Rampage Clothing or Xxxxxxx.xxx, for a period of 90 days following
Closing; and/or
(6) Any actions, causes of action, claims, suits, Proceedings, demands,
assessments, settlements, Judgments, damages, Losses, costs and legal and other
expenses incident to any of the foregoing.
11.2 Limitation as to the Seller's, Rampage Clothing's, Xxxxxxx.xxx's and
Principals' Indemnification Obligations. The following provisions of this
Section 11.2 shall limit the respective indemnification obligations of the
Seller, Rampage Clothing, Xxxxxxx.xxx and Principals hereunder.
(1) Limitation as to Time. Notwithstanding anything set forth in this Agreement
to the contrary, no Seller nor any Principal shall have any indemnification
liability under clauses 11.1(1) and 11.1(2) to any Buyer Indemnified Party in
respect of any Seller Failure of Representation from and after the Applicable
Survival Period, unless such claim was brought in writing in accordance with the
terms hereof, prior to the lapse of the Applicable Survival Period in which case
it shall survive until such claim has been settled or resolved.
(2) Limitation as to Minimum Aggregate Claims. Notwithstanding anything set
forth in this Agreement to the contrary, neither Seller, Rampage Clothing,
Xxxxxxx.xxx nor any Principal shall have any indemnification liability under
this Section 11 to any Buyer Indemnified Party with respect to any Losses in
connection with any Seller Failure of Representation or any Seller Failure of
Covenant until the aggregate dollar amount of all such Losses indemnifiable
hereunder exceeds $250,000 and then only to the extent such Losses exceed such
$250,000 threshold.
(3) Maximum Aggregate Limitation. The maximum aggregate collective
indemnification liability of the Seller, Rampage Clothing, Xxxxxxx.xxx and the
Principals under this Section 11 in respect of Seller Failure of Representatives
and Seller Failure of Covenants shall in no event exceed the sum of $25,000,000.
(4) Limitation as to Form of Indemnification Payment. In the event that Seller,
Rampage Clothing, Xxxxxxx.xxx or any Principal shall, pursuant to the terms of
this Agreement, be obligated to make any indemnification payment to Buyer under
this Section 11, Seller, Rampage Clothing, Xxxxxxx.xxx or such Principal may at
its election make such payment in cash, in the form of shares of Buyer's Stock
or any combination thereof. For the purpose of the foregoing, in the event that
any Seller, Rampage Clothing, Xxxxxxx.xxx or Principal shall elect to make any
indemnification payment (or any portion thereof) in the form of shares of
Buyer's Stock, each such share of Buyer's Stock shall be deemed to be valued at
the closing sales price per share of Buyer's Stock on the The Nasdaq National
Market on the trading date immediately preceding the date such payment is made.
11.3 Obligation of Buyer to Indemnify. Buyer shall indemnify, defend and hold
harmless the Seller and the Principals and their respective officers, directors,
shareholders and affiliates (collectively, the "Seller Indemnified Parties")
from and against any and all Losses with respect to the following:
29
(1) any breach of any representation or warranty of Buyer contained in this
Agreement or in any other Transaction Document (a "Buyer Failure of
Representation");
(2) any breach of or failure to perform any covenant, agreement or obligation of
Buyer contained in this Agreement or in any other Transaction Document (a "Buyer
Failure of Covenant");
(3) all Specified Liabilities;
(4) any claim or Proceeding brought by any Person against any Seller Indemnified
Party after the Closing asserting any Liability of the business of the Buyer or
any of its Subsidiaries or the Assets arising from any event, fact or
circumstance arising out of or relating to the ownership or operation of the
business of the Buyer or any of its Subsidiaries or the Assets by Buyer after
the Closing (a "Post-Closing Activity Loss"); and/or
(5) any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent
that such untrue statements or omissions are based solely upon information
regarding such Seller Indemnified Party or such Seller Indemnified Party's
proposed method of distribution of Shares, in each case, furnished in writing to
Buyer by such Seller Indemnified Party expressly for use therein.
11.4 Limitation as to the Buyer's Indemnification Obligations. The following
provisions of this Section 11.4 shall limit the respective indemnification
obligations of the Buyer hereunder:
(1) Limitation as to Minimum Aggregate Claims. Notwithstanding anything set
forth in this Agreement to the contrary, Buyer shall not have any
indemnification liability under this Section 11 to any Seller Indemnified Party
with respect to any Losses in connection with any Buyer Failure of
Representation, any Buyer Failure of Covenant or any Post-Closing Activity Loss
until the aggregate dollar amount of all such Losses indemnifiable hereunder
exceeds $250,000 and then only to the extent such Losses exceed such $250,000
threshold.
11.5 Limitation as to Maximum Aggregate Claims. Notwithstanding anything set
forth in this Agreement to the contrary, the maximum aggregate indemnification
liability of Buyer under this Section 11 in connection with all Buyer Failure of
Representations and all Buyer Failure of Covenants shall in no event exceed
$25,000,000 in the aggregate.
30
11.6 Third Party Claims. If a claim by a third party is made against any party
or parties hereto and the party or parties against whom said claim is made
intends to seek indemnification with respect thereto under Sections 11.1 or
11.2, the party or parties seeking such indemnification shall promptly notify
the indemnifying party or parties, in writing, of such claim; provided, however,
that the failure to give such notice shall not affect the rights of the
indemnified party or parties hereunder except to the extent that such failure
materially and adversely affects the indemnifying party or parties due to the
inability to timely defend such action. The indemnifying party or parties shall
have 10 business days after said notice is given to elect, by written notice
given to the indemnified party or parties, to undertake, conduct and control,
through counsel of their own choosing (subject to the consent of the indemnified
party or parties, such consent not to be unreasonably withheld) and at their
sole risk and expense, the good faith settlement or defense of such claim, and
the indemnified party or parties shall cooperate with the indemnifying parties
in connection therewith; provided: (a) all settlements require the prior
reasonable consultation with the indemnified party and the prior written consent
of the indemnified party, which consent shall not be unreasonably withheld
(provided, that no such consent will be required in the event that such
settlement contains (i) no admission of liability and (ii) an unconditional
release of the indemnified party from any and all Liability in respect thereof),
and (b) the indemnified party or parties shall be entitled to participate in
such settlement or defense through counsel chosen by the indemnified party or
parties, provided that the fees and expenses of such counsel shall be borne by
the indemnified party or parties. So long as the indemnifying party or parties
are contesting any such claim in good faith, the indemnified party or parties
shall not pay or settle any such claim; provided, however, that notwithstanding
the foregoing, the indemnified party or parties shall have the right to pay or
settle any such claim at any time, provided that in such event they shall waive
any right of indemnification therefor by the indemnifying party or parties. If
the indemnifying party or parties do not make a timely election to undertake the
good faith defense or settlement of the claim as aforesaid, or if the
indemnifying parties fail to proceed with the good faith defense or settlement
of the matter after making such election, then, in either such event, the
indemnified party or parties shall have the right to contest, settle or
compromise (provided that all settlements or compromises require the prior
reasonable consultation with the indemnifying party and the prior written
consent of the indemnifying party, which consent shall not be unreasonably
withheld) the claim at their exclusive discretion, at the risk and expense of
the indemnifying parties.
11.7 Sole and Exclusive Remedy. Each of the parties hereto acknowledge and agree
that, after the Closing Date, notwithstanding any other provision of this
Agreement to the contrary, such party's sole and exclusive monetary remedy with
respect to any of the matters described in this Section 11 and any and all other
claims relating to the subject matter of this Agreement and the Transaction
Documents and the transactions contemplated hereby and thereby shall be in
accordance with, and limited by, the provisions set forth in this Section 11.
Notwithstanding anything to the contrary contained in the foregoing, nothing
contained in this Agreement shall relieve or limit the liability of any party or
any officer or director of such party from any liability arising out of or
resulting from actual fraud or intentional misrepresentation in connection with
the transactions contemplated by this Agreement or the Transaction Documents.
31
12. Assistance. Regardless of which party is controlling the defense of any
claim, each party shall act in good faith and shall provide reasonable documents
and cooperation to the party handling the defense.
13. Expenses. Whether or not the transactions contemplated by this Agreement
shall be consummated, each party shall pay its own expenses incident to
preparing for, entering into and carrying into effect this Agreement and the
transactions contemplated hereby. Seller shall each be responsible for and make
arrangements to pay all sales, transfer, stamp, recording and similar Taxes, if
any, incurred in connection with any Intangibles and Tangible Property conveyed
to Buyer hereunder.
14. Further Assurances.
14.1 In addition to the actions specifically required to be taken or delivered
by this Agreement, whether on or before or from time to time after the Closing,
and without further consideration, each party hereto shall take such other
actions, and execute and/or deliver such other documents and instruments, as the
other party hereto or its counsel may reasonably request in order to effectuate
and perfect the transactions contemplated by this Agreement.
14.2 After the Closing Date, Seller and Principals shall do the following:
(1) Deliver to Buyer all notices, correspondence and other items relating to the
Assets which are from time to time received by them or are in their possession.
(2) File with the appropriate governmental body documents sufficient to effect a
change of Seller's, Rampage Clothing's and Xxxxxxx.xxx's name to one not similar
to its current name and send proof of such filing and proper advertising thereof
to Buyer, and file with each jurisdiction listed in Schedule 4.1 such Documents
as are necessary to effectuate such change of name in each such jurisdiction.
15. Non-compete.
15.1 Non-compete.
(1) For a period of the longer of (i)
the term of the License Agreement or two (2) years from the date hereof,
Xxxxx Xxxxxx agrees that neither he, nor any entity in which he
maintains a financial or ownership interest, will, either directly or
indirectly, design, manufacture, license, purchase or sell to any department
store junior collection (or young contemporary) or specialty store buyer,
women's junior collection sportswear directly competitive with the Marks, or
take any actions or sell any product that shall in any way reduce the
availability of "open to buy" from Seller's or its Affiliate's customers, or
undermine or interfere with the sale of Articles (as defined in the License
Agreement) in any way. For purposes of this Section 15.1 "directly competitive"
shall mean brands that have similar consumer base and price points as the Marks.
By way of illustration, and not limitation, Buyer acknowledges and consents to a
Principal's ownership, directly or indirectly, of "Love Tease" a juniors
trademark targeted at lower price points than the Marks in primary markets and
"Grass" a denim (jeans and tops) trademark targeted at upscale specialty
retailers. Both "Love Tease" and "Grass" shall be excluded from the restrictions
32
of this Section 15.1 so long as the price points and consumer base of those
brands, and the price points for Articles, remain substantially similar to the
price points and consumer base that are currently in effect. Notwithstanding the
foregoing, in the event that the License Agreement is terminated pursuant to
Section 2.4 of the License Agreement, the restriction set forth in this Section
15.1 shall immediately terminate.
(2) Each of Xxxx Xxxxxxx and Xxxxx Xxxxx hereby agrees that for a period of two
(2) years after the date hereof, neither of them shall, in any way, have any
direct or indirect investment in, or active participation in the management of,
any of the following brands or any licensees thereof: GUESS and XOXO. For
purposes of clarification, nothing in the foregoing sentence shall prohibit each
of Messrs. Xxxxxxx and Xxxxx from owning, directly or indirectly, for investment
purposes only, not more than 5% of the publicly traded capital stock of GUESS.
15.2 The parties hereto hereby acknowledge and agree that (i) Buyer would be
irreparably injured in the event of a breach by any of the Principals of any of
their obligations under this Section 15, (ii) monetary damages would not be an
adequate remedy for any such breach, and (iii) Buyer shall be entitled to
injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach. It is hereby also agreed that the existence of any
claims which Principals may have against Buyer, whether under this Agreement or
otherwise, shall not be a defense to the enforcement by Buyer of any of the
rights under this Section 15.
15.3 It is the intent of the parties hereto that the covenants contained in this
Agreement shall be enforced to the fullest extent permissible under the laws of
and public policies of each jurisdiction in which enforcement is sought
(Principals hereby acknowledge that said restrictions are reasonably necessary
for the protection of Buyer). Accordingly, it is hereby agreed that if any one
or more of the provisions of this Section 15 shall be adjudicated to be invalid
or unenforceable for any reason whatsoever, said provision shall be (only with
respect to the operation thereof in the particular jurisdiction in which such
adjudication is made) construed by limiting and reducing it so as to be
enforceable to the extent permissible.
15.4 The provisions of this Section 15 shall be in addition to, and not in lieu
of, any other obligations with respect to the subject matter hereof, whether
arising as a matter of contract, by law or otherwise, including, but not limited
to, any obligations which may be contained in any employment agreements between
the Principals and Buyer entered into at or after the Closing. Notwithstanding
the joint and several obligations of the Principals set forth in Section 11
hereof, in no event shall the breach by any Principal of the restrictive
covenants set forth in Section 15.1 or 15.2 result in an indemnification
obligation for the non-breaching Principals set forth in this Agreement.
16. Miscellaneous.
16.1 Publicity. The parties shall consult with each other before issuing any
press release with respect to the Agreement or the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement without the prior consent of the other parties, which shall not be
33
unreasonably withheld, conditioned or delayed; provided, however, that Buyer
may, without the prior consent of the other parties (but after prior
consultation, to the extent practicable in the circumstances) issue such press
release or make such public statement as may upon the advice of outside counsel
be required by law or the rules and regulations of the NASDAQ.
16.2 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and either delivered personally to the addressee,
or mailed, certified or registered mail or express mail, postage prepaid, or
sent by a nationally recognized courier service, service charges prepaid, and
shall be deemed given when so delivered personally, if by certified or
registered mail, four days after the date of mailing or if express mailed or
sent by a nationally recognized courier service, two days after the date of
mailing, as follows:
(1) If to Buyer:
Iconix Brand Group, Inc.
000 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx, President
With a required copy to:
Blank Rome LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(2) If to Seller:
Rampage Licensing LLC
c/x Xxxxxxx Company, LLC
00000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
With a required copy to:
Xxxxxxxxx Xxxxx
0000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
(3) If to Principals:
Xx. Xxxx Xxxxxxx c/x Xxxxxxx
Company, LLC 00000 Xxxxxx
Xxxxxxxxx, Xxxxx 000 Xxxxxxxxx,
XX 00000
34
Xx. Xxxxx Xxxxxx 0000 X. Xxxxxxx
Xxxxxx Xxxxxxxx, XX 00000
With a required copy to:
Xxxxxxxxx Xxxxx
0000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
and to such other address or addresses as Buyer, Seller or the Principals, as
the case may be, may designate to the other by notice as set forth above.
16.3 Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior or contemporaneous agreements,
written or oral, with respect thereto.
16.4 Waivers and Amendments. This Agreement may be amended, modified, superseded
or cancelled and the terms and conditions hereof may be waived, only by a
written instrument signed by all the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege hereunder,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies which
any party may otherwise have at law or in equity. The rights and remedies of any
party arising out of or otherwise in respect of any inaccuracy in or breach of
any representation, warranty, covenant or agreement contained in this Agreement
shall in no way be limited by the fact that the act, omission, occurrence, or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject matter of any other representation, warranty,
covenant or agreement contained in this Agreement (or in any other agreement
between the parties) as to which there is no inaccuracy or breach.
16.5 Binding Agreement. All of the terms and provisions of this Agreement shall
be binding upon, inure to the benefit of and be enforceable by each of the
parties hereto and their respective heirs, legal representatives, executors,
successors and assigns.
16.6 Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of New York applicable to agreements made, delivered
and to be performed entirely within such State.
16.7 Assignment. This Agreement and the rights and obligations of the parties
hereto shall not be assigned by any party to any Person without the prior
written consent of the other party. Nothing in this Agreement, unless otherwise
expressly provided, is intended to confer upon any Person, other than the
parties hereto and their successors and assigns, any rights or remedies under or
by reason of this Agreement.
35
16.8 Variations in Pronouns. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
16.9 Severability. If any provision of this Agreement shall be determined by a
court of competent jurisdiction to be invalid or unenforceable, such
determination shall not affect the remaining provisions of this Agreement, all
of which shall remain in full force and effect.
16.10 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
16.11 Exhibits and Schedules. The Exhibits and Schedules to this Agreement are a
part of this Agreement as if set forth in full herein.
16.12 Headings. The headings in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
16.13 Consent to Jurisdiction and Service of Process. Any Proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby may be
instituted in any state or federal court in the State of New York, and each
party waives any objection which such party may now or hereafter have to the
laying of the venue of any such Proceeding, and irrevocably submits to the
jurisdiction of any such court in any such Proceeding. Any and all service of
process and any other notice in any such Proceeding shall be effective against
any party if given by registered or certified mail, return receipt requested, or
by any other means of mail which requires a signed receipt, postage prepaid,
mailed to such party as herein provided. Nothing herein contained shall be
deemed to affect the right of any party to serve process in any manner permitted
by law or to commence legal Proceedings or otherwise proceed.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
36
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BUYER: SELLER:
ICONIX BRAND GROUP, INC. RAMPAGE LICENSING, LLC
By: /s/ Xxxx Xxxx By: /s/ Xxxxx Xxxxxx
--------------------------------------------- --------------------------------
Name Xxxx Xxxx Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer Title: Manager
XXXXXXX.XXX, LLC
XXXXXXX.XXX, LLC
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Manager
RAMPAGE CLOTHING:
RAMPAGE CLOTHING COMPANY
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
PRINCIPALS:
/s/ Xxxxxxxxx Xxxxxx Xxxxxxx /s/ Xxxxx Xxxxxx
------------------------------------ -------------------
XXXXXXXXX XXXXXX XXXXXXX XXXXX XXXXXX
/s/ Xxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxx
------------------------------------ -------------------
XXXX XXXXXXX XXXXXXXX XXXXXX
/s/ Xxxxx Xxxxx
------------------------------------
XXXXX XXXXX
37
LIST OF OMITTED SCHEDULES AND EXHIBITS
SCHEDULE DESCRIPTION
1.37 Specified Contracts
2.3(2) Additional Assumed Liabilities
3.3 Purchase Price Allocation
4.1 Due Incorporation and Qualification; Subsidiaries
4.2 Capitalization; Options
4.4 Financial Statements
4.5 No Material Adverse Change
4.7 Compliance with Laws
4.8 Permits
4.9 No Breach
4.10 Consents and Approvals
4.11 Judgments and Proceedings
4.13 Contracts
4.16 Tangible Property
4.17 Intangibles
4.18 Title
4.19 Indebtedness
4.21 Suppliers and Licensees
4.23 Insurance
4.24 Software
4.26 No Broker
4.28 Related Party Transactions
5.2 Investment Matters
6.1 Subsidiaries
6.5 No Broker
6.8 Registration Rights
6.9 Consents
6.10 Regulatory Compliance
6.14 Compliance with Laws
EXHIBITS DESCRIPTION
Exhibit A Master Trademark Assignment Agreement
Exhibit B Security Release
Exhibit C Assignment and Assumption Agreement
Exhibit D Opinion of Xxxxxxxxx Xxxxx
Exhibit E Letter to Licensee
Exhibit F Opinion of Blank Rome LLP
38
