EX. 10.2
TRANSITION AGREEMENT
THIS TRANSITION AGREEMENT (this "AGREEMENT") is entered into as of
_____________ __, 2002, by and between Electronics Boutique of America Inc., a
Pennsylvania corporation ("SELLER") and Sports Collectibles Acquisition
Corporation, a Delaware corporation ("BUYER").
WHEREAS, Seller and Buyer are parties to an Asset Purchase Agreement,
dated as of October 10, 2002 (the "ASSET PURCHASE AGREEMENT"), pursuant to which
Buyer has agreed to purchase the Business (as defined in the Asset Purchase
Agreement) from Seller;
WHEREAS, the Business uses certain services provided by Seller;
WHEREAS, as a material inducement to Buyer to execute and deliver the
Asset Purchase Agreement, Seller has agreed to provide certain services to Buyer
for the purpose of enabling Buyer to manage an orderly transition in its
operation of the Business, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. DEFINITIONS.
1.1 "BUSINESS" shall have the meaning set forth in the Asset
Purchase Agreement.
1.2 "TRANSITION PLAN" shall mean the operational plan attached
hereto as SCHEDULE 1.2.
1.3 "TRANSITION SERVICES" shall mean the aggregate of all services
as set forth in SCHEDULE 1.3. A Transition Service shall mean any specific
service set forth in SCHEDULE 1.3.
1.4 Capitalized terms not expressly defined in this Agreement shall
have the meanings ascribed to them in the Asset Purchase Agreement.
2. PROVISION OF SERVICES; PAYMENTS.
2.1 As an inducement to Buyer to execute and deliver the Asset
Purchase Agreement, Seller shall provide the Transition Services to Buyer
pursuant to this Agreement in a manner consistent with the manner they have
heretofore been provided to the Business while it was operated by Seller;
PROVIDED, HOWEVER, that, with respect to day-to-day operational and
administrative services for the Business, Seller shall not be required to
provide any new or different services or greater level of services (as to
quality or quantity) than historically provided by Seller or its agents to the
Business.
2.2 Following execution of this Agreement, representatives of Buyer
and Seller shall meet on a bi-weekly basis to monitor each of Buyer's and
Seller's progress under, and compliance with, the terms of the Transition Plan.
2.3 In consideration of Seller's willingness to provide Transition
Services to Buyer, Buyer shall pay to Seller the sum of $300,000, which sum
shall be due and payable upon execution of this Agreement. In the event that
Seller fails to provide a Transition Service (a "SERVICE DELIVERY FAILURE"),
Buyer shall notify Seller of such failure and Seller shall have ten days to cure
such Service Delivery Failure. If Seller shall not have cured such Service
Delivery Failure by the end of such ten day period (or such shorter period as
the Buyer and Seller may agree), Buyer and Seller shall negotiate in good faith
to determine the amount of any refund to which Buyer is entitled as a result of
the Service Delivery Failure and, following such determination, Seller shall
promptly provide such refund to Buyer. Buyer shall not be entitled to make a
claim for a Service Delivery Failure if Buyer has not cooperated with Seller
under this Article 2.
2.4 Within 30 days after receipt of an invoice from Seller therefor,
Buyer shall reimburse Seller for all increased costs and expenses incurred by
Seller with respect to the Transition Services (as compared to historical costs
and expenses incurred by Seller with respect to such services on its own behalf)
during the period between the date of execution of the Asset Purchase Agreement
and the Termination Date (as defined herein) for which Seller has obtained
Buyer's prior written approval.
2.5 Seller shall not be obligated to hire, retain or engage any
additional personnel with respect to the provision of the Transition Services,
nor shall Seller be required to purchase, lease or license any additional
equipment, hardware or software in connection with the provision of the
Transition Services, unless necessary for Seller to continue to provide the
Transition Services as required under this Agreement, which obligation shall
nevertheless be subject to the fulfillment by Buyer of its obligations with
respect to any increased costs and expenses incurred by Seller in connection
therewith as set forth in Section 2.4.
2.6 Seller shall be excused from performance of its obligations
under this Agreement to the extent that performance is not permitted by any
circumstances reasonably beyond its control, including but not limited to, acts
of God, fire, explosion, labor strikes or compliance with any law or request of
a governmental authority. Notwithstanding anything to the contrary contained
herein, and subject to Section 2.3, in the event that circumstances would cause
Seller to be unable to render Transition Services to Buyer without adverse
consequences to Seller, Seller shall be excused from rendering such Transition
Services.
3. CONFIDENTIALITY. Each of Seller and Buyer will treat and hold as
confidential all information concerning the Business, the Assets, the Assumed
Liabilities and information regarding the respective business operations of the
parties and their Affiliates which is of a type that in accordance with the
disclosing party's past practices has been treated as confidential or
proprietary ("CONFIDENTIAL INFORMATION"), and refrain from using any
Confidential Information except in connection with this Agreement. Each of
Seller and Buyer will instruct each of its employees, agents and independent
contractors to keep all Confidential Information confidential in accordance with
this SECTION 3. If either party (or any of such party's employees, agents or
2
independent contractors providing Transition Services) is requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, then it will notify the other
party promptly of the request or requirement so that such party may seek an
appropriate protective order or waive compliance with the provisions of this
SECTION 3. If in the absence of a protective order or the receipt of a waiver
hereunder, a party is, on the advice of counsel, compelled to disclose any
Confidential Information in connection with any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process, then it may disclose
such Confidential Information in connection therewith; provided, that it will
use reasonable commercial efforts to obtain, at its expense, an order or other
assurance that confidential treatment will be accorded to such Confidential
Information.
4. TERMS; TERMINATION. Seller shall provide to Buyer such Transition
Services as are requested by Buyer pursuant to this Agreement for a period
through and including the date which is six (6) months from the Closing Date
(the "TERMINATION DATE"). Following the Termination Date or earlier termination
of this Agreement, Seller shall cooperate with Buyer to transfer all original
records (in any format) in the possession of Seller relating to the Transition
Services provided hereunder, but only to the extent such original records are
divisible and transferable from such records of Seller unrelated to the
Business. If such original records are not divisible and transferable from such
records of Seller unrelated to the Business, Seller shall only be required to
transfer a copy of such records. Upon the Termination Date or earlier
termination of this Agreement, Seller shall cooperate with Buyer to transfer all
information and materials regarding the Business including, without limitation,
inventory of Buyer in the possession of Seller, if any, to Buyer.
5. NO IMPLIED ASSIGNMENTS OR LICENSES. Nothing in this Agreement is to be
construed as an assignment or grant of any right, title or interest in any
trademark, copyright, design or trade dress, patent right or other intellectual
or industrial property right other than as expressly provided for in the
Transition Services or Transition Plan. This Section 5 shall have no effect on
any assignment or license under the Asset Purchase Agreement.
6. RELATIONSHIP OF PARTIES. The parties are independent contractors under
this Agreement. Except as expressly set forth herein, neither party has the
authority to, and each party agrees that it shall not, directly or indirectly
contract any obligations of any kind in the name of or chargeable against the
other party without such party's prior written consent.
7. INDEMNIFICATION.
7.1 Seller hereby agrees to defend, indemnify and hold harmless
Buyer and its Affiliates and their respective officers, directors, employees and
agents from and against any and all liabilities, losses, claims, damages, and
expenses of any nature, including reasonable attorneys' fees, arising out of or
resulting from any default or breach by Seller in the performance of its
obligations under this Agreement; PROVIDED, HOWEVER, that Seller shall not be
liable to Buyer for any amounts in excess of the aggregate amount payable
hereunder for Transition Services (net of reimbursed costs and expenses) and for
claims covered by Seller's general liability and property insurance policy.
3
7.2 Buyer hereby agrees to defend, indemnify and hold harmless
Seller and its Affiliates and their respective officers, directors, employees
and agents from and against any and all liabilities, losses, claims, damages,
and expenses of any nature, including reasonable attorneys' fees, arising out of
or resulting from any default or breach by Buyer in the performance of its
obligations under this Agreement; PROVIDED, HOWEVER, that Buyer shall not be
liable to Seller for any amounts in excess of the aggregate amount payable
hereunder for Transition Services (net of reimbursed costs and expenses).
7.3 Claims for indemnification under Sections 7.1 and 7.2 shall be
made pursuant to the procedures set forth in Article VII of the Asset Purchase
Agreement, as is appropriate. Nothing herein shall limit the rights to
indemnification, or the obligations to indemnify, of the parties under the Asset
Purchase Agreement.
7.4 Between the date hereof and the Termination Date, Seller shall
continue all of its existing general liability and property policies of
insurance (or comparable insurance) with respect to its distribution center or
other property of Buyer in the care or custody of Seller in full force and
effect and at least at such levels as are in effect on the date hereof (and not
cancel any such insurance or take, or fail to take, any action that would enable
the insurers under such policies to avoid liability for claims arising out of
occurrences prior to the Termination Date).
8. AMENDMENT AND WAIVER. This Agreement may be amended and any provision
of this Agreement may be waived; provided, that any such amendment or waiver (a)
will be binding upon Seller only if such amendment or waiver is set forth in a
writing executed by Seller and (b) will be binding upon Buyer only if such
amendment or waiver is set forth in a writing executed by Buyer. No course of
dealing between or among any Persons having any interest in this Agreement will
be deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any Party under or by reason of this Agreement. No
failure by any Party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof will constitute a waiver of any such
breach or any other covenant, duty, agreement or condition.
9. NOTICES. All notices, demands and other communications given or
delivered under this Agreement will be in writing and will be deemed to have
been given when personally delivered, delivered by express courier service, or
delivered by facsimile (with receipt confirmed). Notices, demands and
communications to the Parties will, unless another address is specified in
writing, be sent to the address indicated below:
To Seller:
Electronics Boutique of America, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
4
with a copy to (which shall not constitute notice to Seller):
Klehr, Harrison, ▇▇▇▇▇▇, Branzburg & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Buyer:
Sports Collectibles Acquisition Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice to Buyer):
▇▇▇▇▇ & Revness, P.C.
Three Glenhardie Corporate Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the party to whom notice is to be given may have
previously furnished to the others in the manner set forth above, provided that
notice of a change of address shall be deemed given only upon receipt. Notice by
counsel for a party shall constitute notice by such party.
10. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by either party without the prior written
consent of the other party hereto. Any such assignment made without prior
written consent shall be null and void. Notwithstanding the foregoing, Buyer
shall have the right to assign its rights, interests and obligations to any
Affiliate of Buyer.
11. SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.
12. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent.
In the event an ambiguity or question of intent or interpretation arises, this
Agreement will be construed as if drafted jointly by the Parties, and no
presumption or burden of proof will arise favoring or disfavoring any Person by
virtue of the authorship of any of the provisions of this Agreement.
5
13. CAPTIONS. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and will not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement will be enforced and construed
as if no caption had been used in this Agreement.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes any
prior understandings, agreements or representations by or between the parties
hereto, written or oral, which may have related to the subject matter hereof in
any way. In the event of any inconsistency between the terms of this Agreement
and the Asset Purchase Agreement, the terms of this Agreement shall control.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which taken
together will constitute one and the same instrument.
16. GOVERNING LAW. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in accordance
with the internal laws of the Commonwealth of Pennsylvania, without giving
effect to any choice of law or conflict of law provision that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania. In furtherance of the foregoing, the internal law of the
Commonwealth of Pennsylvania will control the interpretation and construction of
this Agreement (and all schedules and exhibits hereto), even if under that
jurisdiction's choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
17. WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR EACH
OF THE PARTIES TO ENTER INTO THIS AGREEMENT AND THE ASSET PURCHASE AGREEMENT
(EACH PARTY HAVING HAD OPPORTUNITY TO CONSULT COUNSEL), EACH PARTY EXPRESSLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR
ARISING IN ANY WAY FROM THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN.
[Remainder of Page Intentionally Left Blank]
6
IN WITNESS WHEREOF, the parties hereto have caused this Transition
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
ELECTRONICS BOUTIQUE OF AMERICA INC.
By: ____________________________
Name:
Title:
SPORTS COLLECTIBLES ACQUISITION
CORPORATION
By: ____________________________
Name:
Title:
SCHEDULE 1.2
TRANSITION PLAN
The Transition Plan shall be prepared in accordance with Section 8.6 of
the Asset Purchase Agreement and affixed as Schedule 1.2 to the Transition
Agreement upon Closing.
SCHEDULE 1.3
TRANSITION SERVICES
A List of the Transition Services shall be prepared in accordance with
Section 8.6 of the Asset Purchase Agreement and affixed as Schedule 1.3 to the
Transition Agreement upon Closing.