FIRST AMENDMENT TO AMENDED AND RESTATED ASSET PURCHASE
AGREEMENT
This FIRST AMENDMENT
TO AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (the “
First Amendment ”), dated as of July 31, 2009, is made
by and among Hartmarx Corporation, a Delaware corporation (“
Parent ”) and the selling subsidiaries named on
Appendix I hereto (collectively, other than Canadian Sub, the
“ Sellers ”), Emerisque Brands UK Limited, a
company formed under the laws of England and Wales (“
Emerisque ”) and SKNL North America, B.V., a company
incorporated under the laws of The Netherlands (“ SKNL
”, collectively with Emerisque and any of their permitted
designees, the “ Purchasers ”), and S. Kumars
Nationwide Limited, a company incorporated under the laws of India
(“ SKNL Parent ”). Capitalized terms used but
not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Asset Purchase Agreement (as defined
below).
WHEREAS, Sellers,
Canadian Sub, Purchasers and SKNL Parent (solely for purposes of
Sections 7.2(c) and 8.10 therein) have entered into that certain
Amended and Restated Asset Purchase Agreement dated as of June 1,
2009 (the “ Asset Purchase Agreement ”); and
WHEREAS, Sellers,
Canadian Sub, Purchasers and SKNL Parent desire to amend the Asset
Purchase Agreement as hereinafter set forth pursuant to Section
8.12 thereof.
NOW, THEREFORE, in
consideration of the foregoing and the respective representations,
warranties, covenants, and agreements set forth herein and in the
Asset Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:
Section
1. Amendments.
(a)
Section 1.1(c) of the Asset Purchase Agreement is hereby
amended by adding the following at the end thereof:
“(v) all rights to direct
Sellers to assume and assign the WGW Agreement to Purchasers or
their designee upon the earlier of (a) entry of a Final Order in
the WGW Litigation by the Bankruptcy Court, the United States
District Court for the Northern District of Illinois or any other
court of competent jurisdiction (hereinafter referred to as the
“ Applicable Court ”) to which no appeal, motion
to rehear or reconsider, motion for a stay pending an appeal,
petition for certiorari, remand or any other application for
judicial review or other protest of any kind relating thereto is
pending or could be timely filed (a “ Final Non-Appealable
Order ”) deeming the WGW Agreement assumable and
assignable to Purchasers, or (b) the consent of WGW to the
assumption and assignment of the WGW Agreement to Purchasers; it
being understood and agreed that upon the occurrence of an event
set forth in clause (a) or (b) above, Purchasers may direct Sellers
to assume and assign the WGW
Agreement to Purchasers or their designee in
accordance with this Agreement and, upon such assignment,
Purchasers shall pay, or cause to be paid by a party other than
Sellers, all costs, whether pre-Petition Date or post-Petition Date
costs, relating to the assignment and assumption of the WGW
Agreement; provided , however , that (i) upon entry
of a Final Non-Appealable Order in the WGW Litigation deeming the
WGW Agreement not assumable and assignable to Purchasers, (ii) the
voluntary dismissal of the WGW Litigation at Purchasers’
direction or (iii) termination of the WGW Agreement pursuant to its
terms or entry of a Final Non-Appealable Order providing for such
termination (each of clauses (i), (ii) and (iii), a “ WGW
Termination Event ”), then all rights of Purchasers under
this Section 1.1(c)(v) shall terminate; and
(vi) all consideration to which
Sellers are entitled pursuant to the WGW Agreement from the Closing
Date to and including the effective date of any assumption and
assignment of the WGW Agreement to Purchasers or their designee,
which consideration shall be promptly paid to Purchasers upon
receipt by Sellers, as more fully set forth in the Transition
Services Agreement; provided , however , that the
rights of Purchasers and obligations of Sellers under this
Section 1.1(c)(vi) shall be effective only to the extent
that (i) (y) a WGW Termination Event has not occurred or (z)
Purchasers have not failed to promptly direct Sellers to assume and
assign the WGW Agreement to Purchasers or their designee in
accordance with this Agreement nor failed to pay all costs, whether
pre-Petition Date or post-Petition Date costs, upon such assumption
and assignment of the WGW Agreement in accordance with this
Agreement upon the occurrence of an event set forth in clause (a)
or (b) of Section 1.1(c)(v) above, and (ii) Purchasers are
in compliance with their obligations under Section 5.7(d)
herein.”
(b)
Section 1.1(d) of the Asset Purchase Agreement is hereby
amended and restated in its entirety as follows:
“any rights, claims, causes of action
or, solely with respect to the Assumed Liabilities and Acquired
Assets or otherwise as expressly set forth herein, defenses of
Sellers against third parties arising out of events occurring prior
to the Closing Date, including and, for the avoidance of doubt,
arising out of events occurring prior to the Petition Date and
including any rights under or pursuant to any and all warranties,
representations and guarantees made by suppliers, manufacturers and
contractors relating to products sold, or services provided, to
Sellers, excluding only the rights, claims and causes of action
that are identified as Excluded Assets in Section 1.2 , but
expressly including the rights, claims, defenses and causes of
action described on Exhibit 1.1(d) attached
hereto;”
(c)
Section 1.2(m) of the Asset Purchase Agreement is hereby
amended and restated in its entirety as follows:
“all avoidance actions and other causes
of action under Sections 544 through 553, inclusive, of the
Bankruptcy Code and similar actions under applicable state law,
including without limitation, the ability to compromise, settle or
defend any such claims;”
(d)
Section 1.2 of the Asset Purchase Agreement is hereby
amended by adding the following at the end thereof: "(t) the bank
accounts relating to the Business that are listed on Schedule
1.2(t) (including all rights or incidents of interest with
respect to the cash or cash equivalents in such bank accounts on or
before the Closing Date).
(e) A new
clause (e) is hereby added to Section 1.3 of the Asset
Purchase Agreement as follows (and existing clauses (e), (f) and
(g) of such Section 1.3 are hereby re-lettered as clauses
(f), (g) and (h)):
“(e) (i)
all accrued and unpaid pre- and post-petition liabilities related
to Assigned Contracts that are (a) set forth and established in the
Sale Order that was entered by the Bankruptcy Court on June 25,
2009, including Exhibit A thereto and (b) set forth
and established by orders and/or stipulations entered by the
Bankruptcy Court between July 2, 2009 and July 30, 2009, but also
including the order to be entered by the Bankruptcy Court resolving
the objections filed by Manhattan Associates and SAP America, Inc.
in the form agreed to by Sellers and Purchasers on July 29, 2009,
with respect to such Assigned Contracts (the foregoing hereinafter
referred to as the " Assigned Contract Amounts ") (it being
understood and agreed that the payment of any
Assigned Contract Amounts shall not be duplicative of the payment
of any Cure Costs ) ; and (ii) the obligations set forth in
paragraph 49.II of the June 25, 2009 Sale Order in an aggregate
amount not to exceed $2,300,000 (which $2,300,000 cap is inclusive
of the $2,000,000 amount set forth in paragraph 49.II of the June
25, 2009 Sale Order);”
(f)
Section 1.6 of the Asset Purchase Agreement is hereby
amended and restated in its entirety as follows:
“ Purchase Price.
In consideration for the Acquired Assets, the
Purchasers shall, in addition to the assumption of the Assumed
Liabilities, pay to (i) Wachovia as agent for the DIP Lenders at
the Closing consideration equal to the Pre-Closing DIP Balance (the
“ Base Purchase Price ”) through a combination
of (A) the proceeds of equity invested by the Purchasers, (B) one
or more borrowings under the New Credit Facility (which shall
include the delivery to Wachovia as agent for the DIP Lenders a
secured promissory note (the “ Term Note ”) in
the principal amount of $10.0 million, containing the terms set
forth on Exhibit M ) and (C) the application of the Deposit
previously delivered by the Purchasers to Wachovia as agent for the
DIP Lenders to the extent the Deposit has not previously been
applied to the DIP Balance and (ii) the Sellers the Post-Closing
Funding Amount. The
“ Purchase Price ” shall
consist of the sum of the aggregate value of the Assumed
Liabilities, the Base Purchase Price and the Post-Closing Funding
Amount.”
(g)
Section 1.7 of the Asset Purchase Agreement is hereby
amended and restated in its entirety as follows:
“
Base Purchase Price . (a) Immediately
following the close of business on the day prior to the Closing
Date, Sellers shall deliver to Purchasers the DIP Balance
Certificate.
(b) The Base Purchase Price shall
be paid in cash except to the extent of the sum of (i) the face
value of letters of credit included therein that are assumed or
replaced by Purchasers at Closing and (ii) the principal amount of
the Junior Note.”
(e) All
references to “Adjusted Base Purchase Price” in
Sections 2.2(b)(i), 4.6(a), 4.6(b), 4.7, 5.9 and 8.4(h)
(including the reference in Section 8.4(h) to
“Adjusted Purchase Price”) and in the definition of
“Financing” are hereby amended to “Base Purchase
Price”.
(f)
Section 5.7(d) of the Asset Purchase Agreement is hereby
amended and restated in its entirety as follows:
“(i) In the event an appeal
is taken or a stay pending appeal is requested, from the Bidding
Procedures Order or the Sale Order, Sellers shall promptly notify
Purchasers of such appeal or stay request and shall promptly
provide to Purchasers a copy of the related notice of appeal or
order of stay. Sellers shall also provide Purchasers with written
notice of any motion or application filed in connection with any
appeal from either of such orders. If an appeal or a
stay pending appeal is taken with respect to the Bidding Procedures
Order or the Sale Order, Sellers shall use their best efforts to
cause the timely opposing and dismissing of such appeal or stay
pending appeal and to cause such order to become a Final Order.
(ii) Sellers acknowledge and
agree that Purchasers are or shall be third party beneficiaries
and/or true parties in interest with respect to the WGW
Litigation. Prior to Closing, Sellers shall use their best
efforts to timely prosecute and/or defend against, as directed by
Purchasers and at Purchasers’ expense, the WGW Litigation,
including, without limitation, any appeal, motion to rehear or
reconsider, motion for a stay pending an appeal, petition for
certiorari, remand or any other application for judicial review or
other protest of any kind relating thereto. Purchasers shall
provide Sellers drafts of
