EXHIBIT 10.63
INVENTORY PURCHASE AGREEMENT
Agreement dated this 12th day of March 1996 by and between ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, INC., a Delaware corporation ("Purchaser"), with its principal
office at ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ represented by
▇▇▇▇▇▇ ▇▇▇▇▇▇ in his capacity as Chief Operating Officer and invested with full
powers to execute this Agreement,, and ▇▇▇▇ ▇▇▇▇▇▇▇, S.A., a French corporation
("Seller"), with its principal offices at ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, registered on the Paris Trade and Companies Registry under the
number B 327 630 042, represented by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in his capacity as
President and invested with full powers to execute this Agreement.
W I T N E S S E T H:
WHEREAS, Seller desires to sell and Purchaser desires to acquire all of
the rights to certain assets of Seller upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises contained herein, the parties hereto hereby agree as follows:
ARTICLE I
SALE OF INVENTORY AND
RELATED MATTERS
1.1 Sale and Purchase of Inventory. Upon the terms and subject to the
conditions of this Agreement, at the Closing, as hereinafter defined, Seller
agrees to sell, transfer, convey and deliver to Purchaser, and Purchaser agrees
to purchase, all of Seller's right, title and interest in and to the all of the
items of Seller's Inventory, as hereinafter defined and as set forth in the
annexed Schedule 1.1, free and clear of all liens, pledges, charges, security
interests, encumbrances, title retention agreements, adverse claims, options,
equities or restrictions of any kind whatsoever ("Claims").
1.2 Purchase Price and Payment. Upon the closing of this
Agreement Purchaser agrees to pay the purchase price to the Seller as
follows:
The price for the Inventory determined two (2) business days prior to
the Closing by reference to the Seller's cost of the Inventory in French francs,
as set forth in the Schedule 1.1 calculated in United States Dollars at the then
current exchange rate as set forth in the Wall Street Journal on the immediately
preceding business day, together with the sum of U.S. $500,000 (the "Purchase
Price"). The Purchase Price shall be payable in United States dollars, as
follows:
(a) the first US$500,000 ninety (90) days from the date of closing of
this Agreement, evidenced by a promissory note in the form annexed hereto as
Exhibit 1.2(a);
(b) $1,020,000 in six (6) consecutive equal monthly installments
commencing from the date of the ▇▇▇▇ of lading for the Inventory, evidenced by a
promissory note in the form annexed hereto as Exhibit 1.2(b); and
(c) $780,000, payable in six (6) equal consecutive monthly installments
commencing three (3) months from the date of the ▇▇▇▇ of lading for the
Inventory, evidenced by a promissory note in the form annexed hereto as Exhibit
1.2(c). All of the notes annexed hereto are sometimes collectively referred to
as the "Notes".
1.3 Security for Payment of Purchase Price. Upon the closing of this
Agreement, Purchaser, Seller, Parent (as hereinafter defined) and the law firm
of Purchaser, ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, shall enter into an escrow agreement in the
form annexed hereto as Exhibit 1.4 (the "Escrow Agreement"), whereby all
documents evidencing certain intellectual property being conveyed pursuant to
the terms of the Intellectual Property Purchase Agreement between Parfums ▇▇▇▇
▇▇▇▇▇▇▇, S.A., the parent of Seller (the "Parent"), and Purchaser (the
"Intellectual Property Agreement"), shall be held in escrow by such law firm,
pending payment by Purchaser of the Notes and a promissory note issued pursuant
to the terms of the Intellectual Property Agreement (the "Intellectual Property
Note"). The date on which such payment in full of the Notes and the Intellectual
Property Note occurs is hereinafter referred to as the "Final Payment Date".
1.4 Covenants of Seller.
(a) Seller covenants and agrees with Purchaser that prior to the
Closing, Seller shall provide reasonable access to all financial information
relating to the Inventory, including financial statements, operations, inventory
costs, distribution agreements and any other supporting records, and Seller
covenants and agrees to maintain such books and records for three (3) years from
the Closing and to make them available for inspection by Purchaser or its
designee upon reasonable notice.
(b) All sales orders received by Seller or any Affiliate subsequent to
the execution of the letter of intent among Seller, Parfums ▇▇▇▇ ▇▇▇▇▇▇▇, S.A.
and Purchaser dated January 11, 1996 for any and all Products, shall have been,
and up to the Closing will be, forwarded via telecopier to Purchaser for its
approval, and Seller acknowledges that Purchaser may prohibit shipment of any or
all of such orders at its sole discretion. For purposes hereof, the term
"Affiliate" of Seller shall mean Groupe Inter Parfums, ▇▇▇▇ Philippe Fragrances,
Inc. and any other company, entity or individual which directly or indirectly
controls or is controlled by or is under common control with Seller. After the
Closing, if Seller or any Affiliate receives any such sales orders, Seller shall
promptly telecopy said orders to Purchaser.
1.5 No Liabilities Assumed. Purchaser does not hereby assume, and shall
not be liable for, any debt, obligation, responsibility or liability of Seller
or arising out of or relating to the Inventory through the Closing Date (as
hereinafter defined), whether known or unknown, contingent or absolute, or
otherwise (collectively, "Seller Liabilities"), and Seller agrees to indemnify
and hold harmless Purchaser from and against any Seller Liability in accordance
with Article VII hereof.
1.6 Closing. Subject to the fulfillment of the conditions precedent as
hereinafter set forth, the closing under this Agreement ("Closing"), shall take
place at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
at 10:00 A.M. on March 19, 1996 or at such other time and at such other place as
shall be fixed by mutual consent of the parties hereto, but in no event
subsequent to March 29, 1996 (the "Closing Date").
ARTICLE II
INVENTORY
2.1 Invoice, Shipment and Possible Adjustment to Purchase Price.
(a) Seller agrees to release the Inventory to Purchaser for shipment,
and to deliver the Inventory and the bills of lading to Purchaser's transport
agent's warehouse located in Paris, France, as follows: (i) Inventory equal to
the principal amount of the Note set forth in Exhibit 1.2(b) on or before March
29, 1996 and (ii) Inventory equal to the principal amount of the Note set forth
in Exhibit 1.2(c) commencing approximately April 1, 1996 but in all respects
completed on or before May 31, 1996.
(b) Within five (5) business days of receipt of a shipment of Inventory
and ▇▇▇▇ of lading to Purchaser's warehouse in Florida, Purchaser shall verify
the receipt of the Inventory as stated on the ▇▇▇▇ of lading.
(c) The purchase price for the Inventory shall be appropriately
adjusted to conform any actual discrepancy found by the Purchaser in good faith,
and notice of any such discrepancy shall be promptly given to Seller. If the
purchase price is determined to be in excess of the actual price paid on the
Closing Date, then Purchaser shall pay such difference to Seller and the
principal amount of the promissory note described in Article 1.2(c) shall be
correspondingly increased. If the purchase price is determined to be less than
the actual price paid at Closing, then the purchase price shall be reduced by
the cost of any missing Inventory, and the principal amount of the promissory
note described in Article 1.2(c) shall be correspondingly decreased.
2.2 Risk of Loss. The risk of loss of any Inventory prior to shipment
of the Inventory to Purchaser because of loss, theft, fire or other casualty,
shall be borne by Seller. Risk of loss shall pass to Purchaser on shipment
ex-factory.
2.3 Returns. In the event that items of Inventory are returned to
Seller by third parties subsequent to the Closing Date, then in such event,
Purchaser covenants and agrees with Seller to purchase for cash at a price equal
to the cost thereof determined in accordance with Schedule 7.2 annexed hereto,
on a monthly basis for the one hundred eighty (180) day period immediately
following the Closing Date, such returned finished goods Inventory, provided,
that such items of returned finished goods Inventory appear on the 1996 Price
List annexed hereto as Schedule 2.3, and are in saleable condition, except for
exterior packaging which may not be in saleable condition. Any Inventory
returned to Seller that, in Purchaser's opinion, is not in saleable condition,
must be destroyed by Seller at Seller's sole cost.
ARTICLE III
WARRANTIES AND REPRESENTATIONS
OF SELLER
Warranties and Representations of Seller. Seller hereby warrants and
represents to Purchaser as follows:
3.1 Due Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of France and has all requisite
corporate power and authority to carry on its businesses as currently conducted
and to own or lease and to operate its properties and assets as and where such
properties and assets are now owned or leased and operated.
3.2 Legal, Valid and Binding. Each of this Agreement and the other
documents contemplated hereby constitutes the legal, valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and the availability
of equitable remedies.
3.3 Other Consents and Approvals. Except for the consent or
non-objection of the French Treasury Department to the transactions contemplated
hereby, any and all consents, approvals, authorizations, or orders of or
registrations or qualifications with any person, bank, corporation, association,
governmental body, or court having authority or power to regulate, supervise or
direct the business and affairs of Seller necessary for the consummation of the
transactions specified in this Agreement shall have been obtained on or before
the Closing by Seller.
3.4 Due Authorization; Compliance with Law. The execution and delivery
of this Agreement and the other documents contemplated hereby and performance of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action and will not conflict with or result in a breach
of any of the terms or provisions of its Certificate of Incorporation or
By-laws, lease, bond, note, debenture, guaranty, deed of trust or other
agreement, instrument (or French equivalent thereof) or arrangement to which
Seller may be or is a party (including by operation of law) or by which the
property of Seller is bound, or any law, administrative regulation, or any order
of any court or governmental agency or authority entered in any proceeding to
which Seller was or is a party or by which its property is bound. The Business
is being conducted in compliance with all applicable law, statutes, ordinances,
regulations, decrees and orders, except for violations which have not had and
would not reasonably be expect to have a material adverse effect on the Business
or any of the Inventory.
3.5 No Litigation. There are no actions, suits, legal or governmental
proceedings pending or threatened against Seller relating to this Agreement, the
Inventory, or the transactions described herein.
3.6 Inventory. The Inventory has been acquired in the ordinary course
of business, in customary quantities and at prevailing prices, and has been
valued at the lower of cost or market on the financial statements of the Seller
in accordance with generally accepted accounting principles in France
consistently applied. The Inventory is located in France and consists solely of
finished goods (perfumes, fragrances, cosmetics, oils, creams, containers and
packaging), samples, testers and displays marketed and sold under the trademarks
Bal a Versailles and Revolution a Versailles, for which the Parent is the owner.
The Inventory is not subject to (i) any contract of sale or (ii) any Claims. At
the Closing, Seller shall convey to Purchaser good, marketable and indefeasible
title to all of the Inventory, free and clear of all Claims, except for the
escrow arrangement described by the terms of Article 1.4 hereof. All of the
Inventory is in good condition, operable and useful for its intended purpose
(ordinary wear and tear excepted), and none of the Inventory has been damaged by
any fire, accident, act of God or any other casualty that materially and
adversely impairs any such assets or the Business.
3.7 Absence of Adverse Change. Since January 11, 1996, there has been
no material adverse change in the Business or the Inventory, and there is no
condition, development or contingency of any kind of which the Seller has actual
knowledge which may result in any such material adverse change.
3.8 Survival of Warranties, Representations, etc. All statements
contained in any certificate or other instruments delivered by or on behalf of
Seller pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed a warranty and representation of Seller hereunder. All
warranties and representations made hereunder shall be effective as of the
Closing with the same force and effect as if made at such time, and shall
survive the Closing.
ARTICLE IV
WARRANTIES AND REPRESENTATIONS
OF PURCHASER
Warranties and Representations. Purchaser hereby warrants and
represents as follows:
4.1 Legal, Valid and Binding. This Agreement constitutes the legal,
valid and binding obligation of Purchaser, enforceable against it in accordance
with its terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors rights generally or court decisions with respect thereto and
the availability of equitable remedies.
4.2 No Litigation. There are no actions, suits, legal or governmental
proceedings pending or threatened against Purchaser relating to this Agreement
or the transactions described herein.
ARTICLE V
CONDITIONS TO PARTIES' OBLIGATIONS
5.1 Purchaser's Conditions. The obligations of Purchaser
under this Agreement are subject to the fulfillment of each of the conditions
set forth below:
(a) At the Closing the warranties and representations of Seller
contained in this Agreement shall be true and correct in all material respects;
Seller shall have complied with and duly performed any and all covenants,
agreements and conditions in all material respects, on its part to be complied
with or performed pursuant to or in connection with this Agreement; and Seller
shall have delivered to Purchaser at the Closing a certificate from a duly
authorized officer of Seller to such effect.
(b) No action or proceeding shall have been instituted to restrain or
prohibit the Closing of the transactions contemplated by this Agreement or the
Intellectual Property Purchase Agreement.
(c) Seller or Parent shall have obtained, and deliver evidence thereof
to Purchaser at the Closing, a termination of each existing license, sublicense
and/or distribution agreement in respect of the Intellectual Property, in form
reasonably satisfactory to counsel to Purchaser.
(d) Seller shall execute and deliver a ▇▇▇▇ of Sale to Purchaser to
evidence the conveyance of the Inventory from Seller to Purchaser in the form
set forth as Exhibit 4.1(d).
(e) Seller shall execute and deliver to Purchaser a Noncompetition
Agreement, the Escrow Agreement.
(g) Parent shall execute and deliver to Purchaser the Intellectual
Property Purchase Agreement and each of the documents contemplated thereby to be
executed and delivered by Parent.
(h) Purchaser shall have completed its due diligence investigation
of the Inventory and the Business.
(i) Seller shall not have engaged in any transaction out of the
ordinary course of business.
5.2 Sellers' Conditions. The obligations of Seller under this Agreement
are subject to the fulfillment of each of the conditions set forth below:
(a) At the Closing the warranties and representations of Purchaser
contained in this Agreement shall be true and correct in all material respects;
Purchaser shall have complied with and duly performed any and all covenants,
agreements and conditions in all material respects, on its part to be complied
with or performed pursuant to or in connection with this Agreement; and
Purchaser shall have delivered to Seller at the Closing a certificate from a
duly authorized officer of Purchaser to such effect.
(b) No action or proceeding shall have been instituted to restrain or
prohibit the Closing of the transactions contemplated by this Agreement or the
Intellectual Property Purchase Agreement.
(c) Purchaser shall execute and deliver to Seller the Noncompetition
Agreement and the Escrow Agreement.
(d) Seller shall execute and deliver the Intellectual Property
Agreement to the Parent.
ARTICLE VI
OTHER CONDITION PRECEDENT
6.1 Consent or Non-Objection of French Treasury. The closing of this
Agreement and the transactions contemplated hereby are expressly made subject to
the receipt by Parent of either consent or non-objection of the French Treasury
Department to the sale contemplated by the Intellectual Property Agreement, that
may be required in respect of foreign investment in France.
6.2 Non-receipt of Consent. In the event that the consent or
non-objection of the French Treasury Department is not obtained prior to the
close of business on March 29, 1996, then in either such event, this Agreement
shall be deemed null and void without any other action by or on behalf of the
parties hereto, unless both parties specifically agree in writing signed by both
parties to extend the Closing Date.
ARTICLE VII
INDEMNIFICATION
7.1 By Seller. Seller agrees to indemnify and hold harmless Purchaser
from and against any and all losses, claims, damages or liabilities to which
Purchaser may become subject, and to reimburse Purchaser for any and all legal
expenses (including the cost of any investigation and preparation) reasonably
incurred by Purchaser in connection with any claim or litigation, whether or not
resulting in any liability, insofar as such losses, claims, damages,
liabilities, or litigation arise out of or are based upon (i) any breach of
warranty or representation or failure to fulfill any covenant, agreement or
condition contained herein by Seller; (ii) any Seller Liabilities; or (iii) any
claims of creditors objecting to the transactions contemplated hereby as
described in Article 9.5 hereof (collectively the "Purchaser Claims").
7.2 By Purchaser. Purchaser agrees to indemnify and hold harmless each
of Seller and Parent from and against any and all losses, claims, damages, or
liabilities to Seller or Parent may become subject, and to reimburse each of
Seller and Parent for any legal or other expenses (including the cost of any
investigation and preparation) reasonably incurred by Seller or Parent in
connection with any claim or litigation, whether resulting in any liability,
insofar as such losses, claims, damages, liabilities or litigation arise out of
or are based upon any breach of warranty or representation or the failure to
fulfill any covenant, agreement or condition contained herein by Purchaser
(collectively "Seller Claims").
7.2 Threshold. Notwithstanding Articles 7.1 and 7.2 hereof, Purchaser
and Seller shall not be obligated to indemnify the other party except to the
extent that the aggregate amount of Seller Claims or Purchaser Claims (as the
case may be) has exceeded the sum of $10,000.
7.3 Limit of Indemnification. Notwithstanding Article 7.1 hereof, the
maximum liability of Seller under Article 7.1 hereof for Purchaser Claims is
$4,950,000, inclusive of any liability of Parent for indemnification of
Purchaser under the Intellectual Property Agreement.
ARTICLE VIII
CONDITIONS SUBSEQUENT
8.1 Change of Name. Promptly after the Closing, Seller shall
change its name to that which is not similar to ▇▇▇▇ ▇▇▇▇▇▇▇.
8.2 No "Knock-offs". Neither Seller nor any Affiliate will produce or
distribute any products bearing any confusingly similar names to any of the
trademarks constituting a portion of the Intellectual Property.
ARTICLE IX
MISCELLANEOUS
9.1 No Waiver. The failure of any of the parties hereto to enforce any
provision hereof on any occasion shall not be deemed to be a waiver of any
preceding or succeeding breach of such provision or any other provision.
9.2 Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties hereto and no amendment, modification or waiver
of any provision herein shall be effective unless in writing executed by the
party charged therewith.
9.3 Agreement, Exhibits and Schedules. As used herein, the term "this
Agreement," means the body of this Agreement and the Schedules and Exhibits
hereto, and the terms "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement and such Schedules and Exhibits as a
whole and not to any particular part of subdivision thereof.
9.4 Governing Law; Arbitration.
(a) This Agreement shall be construed, interpreted and enforced in
accordance with and shall be governed by the laws of France without regard to
the principles of conflicts of laws.
(b) (b) Any and all disputes between the parties arising out of or in
connection with this Agreement which the parties are unable to resolve amicably,
shall be finally determined by arbitration. The arbitration shall be held in
Brussels, Belgium, in accordance with the Rules of Conciliation and Arbitration
of the International Chamber of Commerce by one or more arbitrator appointed in
accordance with said rules. Any and all such arbitration proceedings shall be
conducted in the English language.
9.5 Objection Creditors. The parties hereto designate the following
person at following address to receive any and all objections to the sale
contemplated by this Agreement that may be raised by creditors of Seller: ▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇, Parfums ▇▇▇▇ ▇▇▇▇▇▇▇, S.A., 4, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇. Seller agrees to promptly to notify Purchaser
of any of such objections.
9.6 Binding Effect. This Agreement shall bind and inure to the
benefit of the parties, their successors and assigns.
9.7 Assignment. No party may assign its rights or delegate its
obligations under this Agreement and any such attempted assignment or delegation
shall be void and of no force and effect.
9.8 Article Headings. The article headings herein have been inserted
for convenience of reference only, and shall in no way modify or restrict any
of the terms or provisions hereof.
9.9 Notices.
(a) Any notice or other communication under the provisions of this
Agreement shall be in writing, and shall be given by postage prepaid, registered
or air mail, or by hand delivery with an acknowledgement copy requested, or by a
reputable overnight delivery or courier service; all to be directed to the
addresses set forth above, or to any new address of which any party hereto shall
have informed the others by the giving of notice in the manner provided herein.
Such notice or communication shall be effective, if sent by postage prepaid,
registered or air mail, five (5) days after it is mailed; if sent by a reputable
overnight delivery or courier service, two (2) days after properly forwarded; or
by hand delivery, upon receipt.
(b) The parties hereto agree to send copies of all notices under this
Agreement by telecopier to the other party, but such notice by telecopier shall
not relieve the sending party of the obligation to forward notice in accordance
with the terms of Article 9.9(a) hereof.
9.10 Unenforceability; Severability. If any provision of this Agreement
is found to be void or unenforceable by a court of competent jurisdiction, then
the remaining provisions of this Agreement, shall, nevertheless, be binding upon
the parties with the same force and effect as though the unenforceable part had
been severed and deleted.
9.11 Brokers' Fees. Seller covenants and agrees to Purchaser that
Purchaser shall have no liability with respect to any brokerage fees or agents'
commissions in connection with the transactions contemplated hereby by reason of
any of their acts or conduct. Purchaser covenants and agrees to Seller that
Seller shall have no liability with respect to any brokerage fees or agents'
commissions in connection with the transactions contemplated hereby by reason of
any of their acts or conduct.
9.12 Further Assurances. After the Final Payment Date, Seller shall at
any time and from time to time, at the request of Purchaser and without further
cost or expense to Purchaser, execute and deliver such other instruments of
conveyance or transfer and take such other actions as Purchaser may request in
order to vest in Purchaser clear and unencumbered title to the Inventory and to
comply with applicable law.
9.13 Declaration of Good Faith. The undersigned parties declare, under
the pain of penalties laid down in Article 1837 of the General Tax Code (Code
general des impois), that this Agreement states the whole amount of the purchase
price.
9.14 No Third Party Rights. The warranties, representations and other
terms and provisions of this Agreement are for the exclusive benefit of the
parties hereto, and no other person shall have any right or claim against any
party by reason of any of those terms and provisions or be entitled to enforce
any of those terms and provisions against any party.
9.15 Counterparts. This Agreement may be executed in counterparts,
all of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Operating Officer
▇▇▇▇ ▇▇▇▇▇▇▇, S.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
List of Schedules and Exhibits
Schedule 1.1: Inventory
Exhibit 1.2(a): Promissory Note
Exhibit 1.2(b): Promissory Note
Exhibit 1.2(c): Promissory Note
Exhibit 1.3: Escrow Agreement
Schedule 2.3: 1996 Price List
Exhibit 4.1(d): ▇▇▇▇ of Sale
Schedule 7.2: Cost of Finished Goods