ASSET PURCHASE AGREEMENT
BY AND BETWEEN
BP CLOTHING LLC, AS THE BUYER,
AND
ADAMSON APPAREL, INC. AND BP
CLOTHING COMPANY, INC., AS THE SELLER PARTIES
DATED AS OF DECEMBER 18, 2003
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TABLE OF CONTENTS
PAGE
393525-10
ARTICLE 1.
SALE AND TRANSFER OF ASSETS..................................1
1.1. Acquired
Assets......................................................1
1.2. Excluded
Assets......................................................2
1.3. Non-Assignment of Certain
Property...................................3
1.4. Other Businesses of the
Seller Parties...............................4
ARTICLE 2.
ASSUMPTION OF OBLIGATIONS....................................4
2.1. Assumption of Certain
Liabilities....................................4
2.2. Liabilities Not
Assumed..............................................4
ARTICLE 3.
CONSIDERATION................................................4
3.1. Closing
Payments.....................................................4
3.2. Post-Closing
Payments................................................5
3.3. Post-Closing
Adjustments.............................................5
3.4. Net Sales
Percentage.................................................6
3.5.
Premises.............................................................7
ARTICLE 4.
CLOSING......................................................8
4.1.
Closing..............................................................8
4.2. Deliveries at
Closing................................................8
4.3. Allocation of
Consideration..........................................8
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES.........8
5.1. Organization;
Authority..............................................8
5.2. Corporate Approval; Binding
Effect...................................9
5.3.
Non-Contravention....................................................9
5.4. Trademarks, Patents,
Etc.............................................9
5.5. Consents; Transferability of
Licenses, Etc...........................9
5.6. Certain Financial
Information.......................................10
5.7. Absence of Certain Changes
and Events...............................10
5.8.
Liabilities.........................................................10
5.9. Litigation,
etc.....................................................11
5.10. Conformity to
Law...................................................11
5.11. Title to
Properties.................................................11
5.12.
Contracts...........................................................12
5.13. Potential Conflicts of
Interest.....................................13
5.14.
Inventory...........................................................13
5.15. Books of Account;
Records...........................................13
5.16.
Subsidiaries........................................................13
5.17. Accounts
Payable....................................................13
5.18.
Broker..............................................................13
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF THE BUYER.................13
6.1. Organization of the Buyer;
Authority.................................13
6.2. Corporate Approval; Binding
Effect...................................14
6.3.
Non-Contravention....................................................14
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TABLE OF CONTENTS
(continued)
PAGE
6.4. Governmental
Consents................................................14
6.5.
Broker...............................................................14
6.6.
Financing............................................................14
ARTICLE 7.
COVENANTS...................................................15
7.1. Access to Records,
Etc...............................................15
7.2. Payment of Supplies,
etc.............................................15
7.3. Covenant Against
Hiring..............................................15
7.4.
Confidentiality......................................................16
7.5.
Expenses.............................................................16
7.6. Public
Announcements.................................................16
7.7. Use of Name,
etc.....................................................16
7.8. Name
Change..........................................................16
7.9. Further
Assurances...................................................16
7.10. Tax
Treatment.......................................................17
ARTICLE 8.
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS.............18
8.1. Representations and Warranties
True at Closing.......................18
8.2. Compliance with
Agreement............................................18
8.3. No
Litigation........................................................18
8.4. Opinion of
Counsel...................................................18
8.5. Governmental
Approvals...............................................18
8.6.
Consents.............................................................18
8.7.
License..............................................................18
8.8. Release of
Liens.....................................................18
8.9.
Financing............................................................18
8.10. Bill of
Sale........................................................18
8.11. No Material Adverse
Change..........................................18
8.12. Certificate of
Amendment............................................19
8.13. Proceedings and Documents
Satisfactory..............................19
8.14. Aris
Guaranty.......................................................19
ARTICLE 9.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER PARTIES...19
9.1. Representations and Warranties
True at Closing.......................19
9.2. Compliance with
Agreement............................................19
9.3. No
Litigation........................................................19
9.4. Governmental
Approvals...............................................19
9.5.
Consents.............................................................19
9.6.
Note.................................................................19
9.7. Proceedings and Documents
Satisfactory...............................19
9.8.
Payment..............................................................20
9.9.
License..............................................................20
ARTICLE 10.
INDEMNIFICATION.............................................20
10.1. Indemnity by the Seller
Parties.....................................20
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TABLE OF CONTENTS
(continued)
PAGE
10.2. Indemnity by the
Buyer..............................................20
10.3.
Claims..............................................................20
10.4. Method and Manner of Paying
Claims..................................22
10.5. The Buyer's Right of
Offset.........................................22
10.6. Survival of Representations and
Warranties..........................22
ARTICLE 11.
TERMINATION.................................................23
11.1.
Termination.........................................................23
11.2. Notice of
Termination...............................................23
11.3. Effect of
Termination...............................................23
ARTICLE 12.
GENERAL.....................................................23
12.1.
Notices.............................................................23
12.2. Entire
Agreement....................................................24
12.3. Governing Law;
Jurisdiction.........................................24
12.4. Sections and Section
Headings.......................................25
12.5.
Assigns.............................................................25
12.6.
Severability........................................................25
12.7. No Implied Rights or
Remedies.......................................25
12.8.
Counterparts........................................................25
12.9. Satisfaction of Conditions
Precedent................................25
ARTICLE 13.
CERTAIN DEFINITIONS.........................................25
iii
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ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET
PURCHASE AGREEMENT is entered into as of the 18th day of
December, 2003 by and among BP Clothing
LLC, a Delaware limited liability
company (the "Buyer"), Adamson Apparel,
Inc., a Delaware corporation
("Adamson"), and BP Clothing Company, Inc.,
a New York corporation ("BP," and,
together with Adamson, the "Seller
Parties").
WHEREAS,
the Seller Parties are engaged in the manufacture, distribution
and/or sale of a line of clothing and
related accessories to such line of
clothing pursuant to that certain License
Agreement by and between Phat Fashions
LLC ("Licensor") and BP, dated as of July
1, 1999, substantially in the form of
EXHIBIT A hereto (the "License Agreement,"
and, such business, the "Business"),
and desire to sell the Business on certain
terms and conditions set forth
herein;
WHEREAS,
the Buyer desires to purchase and the Seller Parties desire to
sell substantially all of the operating
assets of the Seller Parties relating
exclusively to the Business on the terms
and subject to conditions set forth
herein;
WHEREAS,
in connection with such transaction Licensor and BP shall
terminate the License Agreement and
Licensor shall enter into a new License
Agreement (the "New License") with the
Buyer; and
WHEREAS,
the Buyer and the Seller Parties have agreed upon an allocation
of the Consideration (as defined below)
among the assets of the Seller Parties
relating to the Business;
NOW,
THEREFORE, in consideration of the mutual promises and agreements
set
forth herein, the Buyer and the Seller
Parties hereby agree as follows:
ARTICLE 1.
SALE AND TRANSFER OF ASSETS.
1.1
ACQUIRED ASSETS.
Subject to the terms and conditions set forth
herein, including, without limitation,
satisfaction or waiver of the conditions
set forth in Sections 8 and 9 hereof, at
the Closing (as defined in Section 4
hereof), the Seller Parties shall sell,
assign, transfer and deliver to the
Buyer, and the Buyer shall purchase,
acquire and take assignment and delivery
of, all of the Seller Parties' right and
title to and interest in and to the
business, rights, claims and assets (of
every kind, nature and description,
whether tangible or intangible, whether
accrued, contingent or otherwise, and
wherever situated) exclusively used in
connection with the Business (other than
the Excluded Assets specified in Section
1.2) (the "Acquired Assets"), free and
clear of any and all liens, security
interests, claims, charges, options,
mortgages, debts, leases (or subleases),
conditional sales agreements, title
retention agreements, material defects as
to title or restrictions against the
transfer or assignment thereof and
encumbrances of any kind (collectively,
"Encumbrances"). Nothing contained herein
shall require the physical delivery of
any Acquired Assets. The Acquired Assets
shall include, without limitation, all
of the Seller Parties' right, title and
interest in and to the following assets:
(a) All
trademarks, domain names, websites, trade dress, logos,
trade secrets, copyrights, designs,
technical information, know-how, processes,
customer lists, and other
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agreements related to the Business and the
License Agreement, as well as
accounting and related software, used in
the operation of the Business, all as
described on SCHEDULE 1.1(A) hereto (and
all claims for infringement of any
intellectual property and intangible rights
relating thereto) (the
"Intangibles"); and
(b) All usable
and saleable inventories of materials,
work-in-process, finished goods and
supplies, relating to the Business, whether
on the premises of any of the Seller
Parties, on the premises of others or in
transit (the "Inventory"), and the
inventory listed on Schedule 1.1(b)(i) (the
"Fabric Inventory"), other than such
inventory identified thereon as excluded
(the "Excluded Fabric Inventory") and the
trim inventory listed on Schedule
1.1(b)(ii) (the "Trim Inventory," and
together with the Fabric Inventory, the
"Other Inventory");
(c) All
machinery, equipment, tooling, parts, furniture, supplies
and other tangible personal property of the
Seller Parties used in the Business
(the "Personal Property"), including,
without limitation, all Personal Property
located at 6000 Sheila Street, Commerce, CA
90068 and all computers used in the
Business, and certain property located at
1466 Broadway, New York, New York, all
as described on SCHEDULE 1.1(C);
(d) All of the
Seller Parties' rights under Contracts (as defined
in Section 5.12 hereof), including, without
limitation, the Contracts listed on
SCHEDULE 1.1(D);
(e) All
franchises, licenses, patents, permits, consents,
authorizations, approvals and certificates
of any Governmental Authority (as
hereinafter defined) used in connection
with and/or necessary to the operation
of the Business, to the extent the same are
transferable (the "Permits")
including, without limitation, the Permits
listed on SCHEDULE L.L(E); and
(f) All books of
account, customer lists, client lists, employee
lists, files, papers, records and telephone
numbers used in conducting the
Business.
1.2.
EXCLUDED ASSETS.
Subject to the provisions herein, the assets listed
in this Section 1.2 are being retained by
the Seller Parties (the "Excluded
Assets"):
(a) all of the
Seller Parties' accounts receivable, cash,
commercial paper and cash equivalents, on
hand or in bank accounts, including,
without limitation, all accounts receivable
and tax refunds whether or not
relating to or arising out of the operation
of the Business (the "Receivables"),
including, without limitation, the
Receivables listed on SCHEDULE 1.2(A);
(b) any and all
fixtures, machinery, installations, equipment,
furniture, tools, spare parts, supplies,
materials, molds, dies and other
personal property of the Seller Parties not
related to the Business;
(c) all
corporate minute books, stock records, tax returns,
financial records (including, without
limitation, checkbooks, books of original
entry and bank statements) and
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supporting materials of the Seller Parties
not related to the Business for all
periods, all of which shall be subject to
the Buyer's right to inspect and copy;
(d) all
insurance policies, including, without limitation, all
refunds of unearned insurance premiums and
claims and rights to payments under
such policies;
(e) all claims,
causes of and choses in action of any sort that
Seller Parties may have, including, without
limitation, under any of the Seller
Parties' insurance policies, against any of
the officers, directors and/or
shareholders of any of the Seller Parties
and/or the parents, spouses and lineal
descendants of any such persons;
(f) rights of
set-off, counterclaim and/or recoupment respecting
any liabilities or obligations of the
Seller Parties not included within the
Assumed Liabilities (as hereinafter
defined);
(g) the
Consideration (as hereinafter defined);
(h) all leased
assets; and
(i) all other
inventories of any kind whatsoever (including,
without limitation, materials,
work-in-process, finished goods and supplies),
regardless of location, not relating to the
Business, including the Excluded
Fabric Inventory (the "Excluded
Inventory");
(j) all
proceeds, products, income, payments and distributions
arising from or relating to any Excluded
Assets;
(k) credit
support, credit enhancement, and other supporting
obligations that have been provided by
third parties with respect to the
Excluded Assets; and
(l) rights and
causes of action against account debtors and other
obligors, including interest and fees
payable, in respect of any Receivable or
any other Excluded Asset.
1.3.
NON-ASSIGNMENT OF
CERTAIN PROPERTY. To the extent that the
assignment hereunder of any of the
Intangibles (other than the License
Agreement), Permits or Contracts would
require the consent of any other party
(or in the event that any of the same shall
be nonassignable), neither this
Agreement nor any action taken pursuant to
its provisions shall constitute an
assignment or an agreement to assign if
such assignment or attempted assignment
would constitute a breach thereof or result
in the loss or diminution thereof;
provided, however, that in each such case,
the Seller Parties shall use their
best efforts to obtain the consents of any
such other party to an assignment to
the Buyer. If such consent is not obtained,
the Seller Parties shall cooperate
with the Buyer in any reasonable
arrangement designed to provide for the Buyer
the full benefits of any such Intangibles,
Permit, Personal Property Lease or
Contract including, without limitation,
enforcement, for the account and benefit
of the Buyer, of any and all rights of the
Seller Parties against any other
person with respect to any such
Intangibles, Permit, Personal Property Lease or
Contract.
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1.4.
OTHER BUSINESSES OF
THE SELLER PARTIES. For the avoidance of doubt,
the term "Business" shall exclude any
business of the Seller Parties other than
those activities included in the definition
of "Business" in the preamble to
this Agreement. The Seller Parties are not
selling and the Buyer is not
purchasing, pursuant to this Agreement, and
the term "Acquired Assets" shall not
include, without limitation, any of the
Seller Parties' assets not specifically
related to the Business.
ARTICLE 2.
ASSUMPTION OF OBLIGATIONS.
2.1
ASSUMPTION OF
CERTAIN LIABILITIES. The Buyer is assuming only the
following liabilities and obligations of
the Seller Parties, and the Buyer and
the Seller Parties agree that there will be
no other outstanding liabilities, to
suppliers or otherwise, of the Business
assumed by the Buyer, other than those
listed in this Section 2.1:
(a) All accounts
payable due to inventory suppliers and
manufacturers relating to Inventory being
acquired which is in the possession or
control of third parties on the Closing
Date, as set forth on SCHEDULE 2.1(A)
hereto, as of the date hereof (the
"Inventory Payables"); and
(b) Those
liabilities and obligations arising under the Permits
and the Contracts, but only to the extent
that a Permit or Contract is included
on SCHEDULES 1.1(D) or (E) and then only to
the extent that such liabilities and
obligations arise or are first required to
be performed after the date hereof.
The
liabilities and obligations of Seller identified in subsections
(a)
and (b) of this Section 2.1 are hereinafter
collectively referred to as the
"Assumed Liabilities."
2.2.
LIABILITIES NOT
ASSUMED. With the exception of the Assumed
Liabilities, the Buyer shall not by
execution and performance of this Agreement
or otherwise, assume or otherwise be
responsible for any liability or obligation
of any nature of any of the Seller Parties,
whether or not relating to the
Business, including, without limitation,
any accounts payable due to inventory
suppliers and manufacturers incurred prior
to the Closing Date (the "Excluded
Liabilities"), except as otherwise provided
in Section 2.1(a).
ARTICLE 3.
CONSIDERATION. In consideration of the sale, assignment and
transfer of the Acquired Assets to the
Buyer, and the Seller Parties' promises
and agreements contained herein, subject to
the conditions set forth in Article
8, the Buyer shall pay the following
consideration to the Seller Party
designated by the Seller Parties (the
"Designated Seller Party") in the
following manner:
3.1
CLOSING
PAYMENTS. At the Closing, against delivery of appropriate
instruments of sale, transfer, convergence
and assignment with respect to the
Acquired Assets, the Buyer shall
deliver:
(a) CASH
PORTION. $2,500,000 in cash LESS the amount listed on
Schedule 2.1(a) under the heading "Section
3.1(a) Offset Amount," (such
difference, the "Cash Portion") payable by
wire transfer to an account specified
by BP;
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(b) INVENTORY
PORTION. An amount in cash representing (i) the net
book value of the Inventory as of the
Closing Date as estimated in good faith by
Adamson from its books and records
("Estimated Inventory"), as set forth on
Schedule 3.1(b), LESS (ii) an amount equal
to the sum of certain Inventory
Payables assumed as listed on SCHEDULE
2.1(A) under the heading "Section 3.1(b)
Offset Amount" (such difference, the
"Inventory Portion"), payable by wire
transfer to an account of the CIT
Group/Commercial Services, Inc. ("CIT"), as
Adamson's factor and secured lender,
specified by CIT in writing, provided, that
once determined in accordance with this
Section 3.1(b), the exact amount of the
Inventory Portion shall be paid to the
account specified above without any
offset, deduction, claim or withholding
whatsoever, nor shall any Seller Party
or the Buyer, or any party claiming through
any such party, have any recourse to
CIT for any such offset, deduction, claim
or withholding of the Seller Parties
or the Buyer. The provisions of this
Section 3.1(b) shall not in any way affect
the Buyer's right to offset, deduct, claim
or withhold from any and all other
payments due by the Buyer to the Seller
Parties hereunder pursuant to the
provisions of the Agreement, including
without limitation Sections 3.3 and 10.5
hereunder, except with respect to payments
due pursuant to Sections 3.1(c) and
7.11;
(c) OTHER
INVENTORY. $1,063,181.58 in cash for the Other Inventory
shall be payable by wire transfer to an
account of CIT, as Adamson's factor and
secured lender, specified by CIT in
writing, provided that this amount shall be
paid to the account specified above without
any offset, deduction, claim or
withholding whatsoever, nor shall any
Seller Party or the Buyer, or any party
claiming through any such party, have any
recourse to CIT for any such offset,
deduction, claim or withholding of the
Seller Parties or the Buyer. The
provisions of this Section 3.1(c) shall not
in any way affect the Buyer's right
to offset, deduct, claim or withhold from
any and all other payments due by the
Buyer to the Seller Parties hereunder
pursuant to the provisions of the
Agreement, including without limitation
Sections 3.3 and 10.5 hereunder, except
with respect to payments due pursuant to
Sections 3.1(b) and 7.11;
(d) PROMISSORY
NOTE. A Promissory Note payable to BP in the
principal amount of $2,500,000, LESS the
sum of certain Inventory Payables
assumed as listed on SCHEDULE 2.1(A) under
the heading "SECTION 3.1(D) OFFSET
AMOUNT," (such difference, the "Principal
Amount") as such Principal Amount may
be adjusted pursuant to Sections 3.3(b) and
3.3(c), payable six months following
Closing, without interest, substantially in
the form of EXHIBIT B hereto (the
"Note," and, together with the Cash
Portion, the Inventory Portion, and the
Other Inventory amount, the "Purchase
Price").
3.2.
POST-CLOSING PAYMENTS.
Commencing on the seven-month anniversary of
the Closing Date (the "Net Percentage
Commencement Date"), the Buyer shall pay
to BP or its assigns an amount equal to
$2,500,000 (such amount, the "Net Sales
Amount" and, together with the Purchase
Price, the "Consideration") payable as
set forth in Section 3.4 hereof.
3.3
POST-CLOSING
ADJUSTMENTS.
(a) Subsequent
to the Closing, the Principal Amount of the Note
shall be adjusted as follows: within sixty
(60) days following the Closing Date,
the Buyer's independent certified public
accountants shall (i) perform a
post-closing review of the Inventory, and
shall arrive at the actual net book
value of the Inventory (the "Inventory
Audit Amount"), and (ii)
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perform a post-closing review of the Fabric
Inventory, and shall confirm that as
of the Closing Date all Fabric Inventory
other than the Excluded Fabric
Inventory listed on SCHEDULE 1.1(B)(I)
existed as set forth on such SCHEDULE
1.1(B)(I), and shall determine the cost
solely from SCHEDULE 1.1(B)(I) of any of
the Fabric Inventory not found to be
present as of the Closing Date (the "Fabric
Inventory Audit Amount"). The Buyer shall
send notice of the Inventory Audit
Amount and the Fabric Inventory Audit
Amount (the "Audit Notice") to Seller
pursuant to Section 12.1. The Seller
Parties shall have the right to dispute the
determination of the Audit Amount and/or
the Fabric Inventory Audit Amount made
by the Buyer's certified independent public
accountants by delivery of a written
objection to the Buyer pursuant to Section
12.1 within ten business days
following delivery of the Audit Notice. The
parties shall negotiate in good
faith to resolve such dispute. In the event
such dispute is resolved, or with
respect to any portion of the dispute so
resolved, then the Principal Amount of
the Note shall be adjusted as provided in
Section 3.3(b). If such dispute is not
resolved by negotiation, then it shall be
resolved pursuant to Section 3.3(c).
(b) If the
Estimated Inventory exceeds the Audit Amount, then the
difference between the Estimated Inventory
and the Audit Amount shall be
subtracted from the Principal Amount of the
Note and such reduced Principal
Amount shall be paid pursuant to the terms
of the Note. However, if the Audit
Amount exceeds the Estimated Inventory,
then the difference between the Audit
Amount and the Estimated Inventory shall be
added to the Principal Amount of the
Note and such increased Principal Amount
shall be paid pursuant to the terms of
the Note. In addition to the foregoing, the
Principal Amount of the Note shall
be further reduced by the amount of the
Fabric Inventory Audit Amount.
(c) In the event
the dispute regarding the Audit Amount cannot be
resolved by negotiation, (i) the undisputed
portion of the Inventory Audit
Amount, if any, shall increase or reduce
the Principal Amount of the Note as
provided in Section 3.3(b), (ii) the Fabric
Inventory Audit Amount, whether or
not disputed, shall reduce the Principal
Amount of the Note provided in Section
3.3(b), and shall not be paid unless so
determined through a final determination
by a court of competent jurisdiction, (iii)
any disputed portion of the
Inventory Audit Amount which would result
in a reduction in the Principal Amount
of the Note pursuant to Section 3.3(b)
shall reduce the Principal Amount of the
Note pursuant to Section 3.3(b), and shall
not be paid unless so determined
through a final determination by a court of
competent jurisdiction, and (iv) any
disputed portion of the Inventory Audit
Amount which would result in an increase
in the Principal Amount of the Note
pursuant to Section 3.3(b) shall not alter
the Principal Amount of the Note in any way
until confirmation by a final
determination by a court of competent
jurisdiction. Any amount of the Note which
is not in dispute shall be paid according
to its terms.
3.4.
NET SALES
PERCENTAGE.
(a) Commencing
on the Net Percentage Commencement Date, the Buyer
shall, in addition to the Purchase Price,
pay to the Designated Seller Party,
one percent (1%) of the net sales of all
products under the New License
(hereinafter the "Net Sales Percentage").
As used herein, "Net Sales" shall have
the meaning set forth in the New
License.
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(b) On the Net
Percentage Commencement Date, the Buyer shall
commence making monthly installment
payments of the Net Sales Percentage for the
preceding month to BP, and shall continue
until the earlier of (i) June 18, 2005
(the "Net Percentage End Date") and (ii)
such time as all payments of the Net
Sales Percentage to BP have reached the Net
Sales Amount.
(c) If, by the
Net Percentage End Date, payments of the Net Sales
Percentage have not yet reached the Net
Sales Amount, then on the Net Percentage
End Date, the Buyer shall pay to the
Designated Seller Party an amount equal to
the difference between the Net Sales Amount
and the total of all installments of
the Net Sales Percentage that have been
paid as of the Net Percentage End Date.
3.5
PREMISES; RIGHTS
OF ACCESS.
(a) The Buyer
shall have the right to occupy the premises used by
BP, located at 6000 Sheila Street,
Commerce, CA 90068, for a period not to
exceed six months, at the Buyer's sole
option, with the Buyer to provide BP
notice fifteen (15) days prior to its
termination of use of such premises. The
Buyer shall pay BP rent for its use of such
premises equal to BP's monthly rent
(and related out-of-pocket costs, i.e.,
utilities) each month the premises are
used, or such lesser pro rata amount for a
portion of any month used. In
addition, Buyer shall pay BP a monthly fee
of $5,000 (the "Lease Fee") for full
and exclusive use of any and all machinery,
assets and other items leased by the
Seller Parties as of the Closing for a
period not to exceed six months, at the
Buyer's sole option. The Lease Fee may be
discontinued by the Buyer at any time
upon fifteen (15) days notice prior to its
termination.
(b) For so long
as the Buyer shall occupy the premises used by BP
or otherwise control the computers and
equipment where Adamson's books and
records are stored, the Buyer shall give,
or cause to be given, to Adamson and
CIT and their respective representatives,
with reasonable notice and during
normal business hours, such reasonable
access to such premises and the
computers, equipment, books, records, files
and documents located at the
premises or that are otherwise under the
control of the Buyer, as shall be
reasonably necessary to enable Adamson to
issue sales invoices and perform other
operative and administrative functions, and
as shall be reasonably necessary to
enable CIT to conduct examinations of
Adamson and any assets or properties of
Adamson in which CIT has a lien or security
interest (which shall specifically
not include the Acquired Assets) or to
otherwise deal with or liquidate the
same, PROVIDED, HOWEVER, that neither of
the Seller Parties nor CIT shall have
any access to the books and records or any
other information relating to the
Buyer. No later than thirty (30) days
following the Closing date, the Buyer
shall cooperate with the Seller Parties,
and the Seller Parties hereby
undertake, at their expense, to cause any
books and records related to Grupo
Xtra of New York, Inc. or its affiliates
that are kept at the premises or
otherwise stored on the computers and
equipment being acquired by the Buyer
hereunder, to be downloaded or transferred
to appropriate media and delivered to
CIT. CIT shall be a third party beneficiary
of the provisions of this Section
3.5(b).
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ARTICLE 4.
CLOSING.
4.1.
CLOSING. The closing
of the transactions contemplated hereby (the
"Closing") shall be held at such time and
place as the Buyer and the Seller
Parties shall agree. The date on which the
Closing is actually held hereunder is
sometimes referred to herein as the
"Closing Date".
4.2.
DELIVERIES AT CLOSING.
Upon satisfaction or waiver of all conditions
set forth herein, at the Closing:
(a) The Seller
Parties shall duly execute and deliver to the Buyer
or its nominee or nominees such bills of
sale and instruments of assignment and
transfer with respect to the Acquired
Assets as the Buyer may reasonably request
and as may be necessary to vest in the
Buyer good and marketable title to all of
the Acquired Assets, in each case subject
to no Encumbrance.
(b) The Buyer
shall deliver the Purchase Price to the Designated
Seller Party or to such other entity or
entities as the Seller Parties shall
designate, in the manner prescribed by
Section 3.1 hereof.
(c) Each of the
parties hereto shall execute and deliver each of
the documents, instruments or agreements
required to be executed and/or
delivered by such party pursuant to
Sections 8 and 9 hereof.
4.3
ALLOCATION OF
CONSIDERATION. SCHEDULE 4.3 describes the allocation
of the Consideration among the Acquired
Assets, which the parties hereto shall
use in all tax and governmental filings. To
the extent that disclosures of
allocation are required to be made by the
parties to the IRS, the Buyer on the
one hand, and the Seller Parties on the
other hand, will disclose such reports
to the other prior to filing with the IRS.
In addition, none of the Seller
Parties or the Buyer will take a position
on any income, transfer or gain tax
return, before any Governmental Authority
charged with collection of any such
tax or in any judicial proceeding that is
in any manner inconsistent with such
allocation.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES. Each of
the Seller Parties jointly and severally
represents and warrants to the Buyer
(with the exception of Section 5.14 hereof
which Adamson represents and warrants
to the Buyer):
5.1.
ORGANIZATION;
AUTHORITY. (a) BP is a corporation duly organized,
validly existing and in good standing under
the laws of the State of New York;
and (b) Adamson is a corporation duly
organized, validly existing and in good
standing under the laws of the State of
Delaware. Each of the Seller Parties has
full corporate power and authority to (i)
enter into and perform the
transactions contemplated by this Agreement
(the "Contemplated Transaction"),
(ii) to carry on the Business as now
conducted, and (iii) to own, lease and
operate the Acquired Assets as it now does.
Each of the
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Seller Parties is duly licensed or
qualified to do business as a foreign entity,
and is in good standing in each
jurisdiction where such qualification is
necessary. Each of the Seller Parties has
delivered to the Buyer complete and
correct copies of the Certificate of
Incorporation and By-Laws of each of them
and all amendments thereto.
5.2.
CORPORATE APPROVAL;
BINDING EFFECT. Each of the Seller Parties has
obtained all necessary corporate action,
authorizations and approvals required
for the execution and delivery of the
Transaction Documents (as defined in
Article 13 hereof) to which it is a party
and the consummation of the
transactions contemplated hereby and
thereby. Each of the Transaction Documents
to which any of the Seller Parties is a
party has been duly executed and
delivered by such entity and constitutes
the legal, valid and binding obligation
of such entity, enforceable against it in
accordance with its terms, except to
the extent that (a) such enforceability may
be limited by any applicable
bankruptcy, reorganization, insolvency or
other laws relating to or affecting
generally the enforcement of creditors'
rights, or (b) the availability of the
remedy of specific performance or
injunctive or other equitable relief is
subject to the discretion of the court
before which any proceeding therefor may
be brought.
5.3.
NON-CONTRAVENTION.
Assuming the consents referred to in Schedule
5.5(b) are obtained, the execution and
delivery of the Transaction Documents by
the Seller Parties and the consummation of
the transactions contemplated hereby
and thereby will not (a) violate or
conflict with any provision of the
Certificate of Incorporation or By-Laws of
any of the Seller Parties, each as
amended to date; (b) conflict with or
result in the breach or termination of (or
constitute a default for any event which,
with notice or lapse of time or both
would constitute a default) under, or
accelerate the performance required by,
any contract, lease, agreement, commitment
or other instrument or restriction of
any kind to which any of the Seller Parties
is a party, or by which it or any
Acquired Asset is bound or affected; or (c)
constitute a violation of, or be in
conflict with, or constitute or create a
default under, or result in the
creation or imposition of any Encumbrance
upon any property of any of the Seller
Parties related to the Business pursuant
to: (i) any agreement or instrument to
which any of the Seller Parties is a party
or by which any of its properties is
bound, or (ii) any statute, judgment,
decree, order, regulation or rule of any
Governmental Authority.
5.4.
TRADEMARKS, PATENTS,
ETC. SCHEDULE 1.1(A) hereto sets forth a
complete and accurate list of all of the
Intangibles. Except to the extent set
forth in SCHEDULE 5.4, the Seller Parties
own or have the sole and exclusive
right to use all of the Intangibles used or
necessary for the ordinary course of
business as presently conducted, and the
consummation of the transactions
contemplated by the Transaction Documents
will not alter or impair any such
right. The Intangibles are all in full
force and effect as of the date hereof.
No claims have been asserted, and no claims
are pending, by any person regarding
the use of any such Intangibles, or
challenging or questioning the validity or
effectiveness of any of the Intangibles,
and there is no basis for such claim.
The use by the Seller Parties of Trademarks
(as defined in the License
Agreement) and all other Intangibles do not
infringe on the rights of any
Person.
5.5.
CONSENTS;
TRANSFERABILITY OF LICENSES, ETC.
(a) No consent,
approval or authorization of, or registration,
qualification or filing with, any
Governmental Authority is required for the
execution and delivery by the Seller
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Parties of the Transaction Documents to
wh
