ASSET REPURCHASE AGREEMENT
between
▇▇▇▇ PHILIPPE FRAGRANCES, INC.,
Seller
and
▇▇▇▇▇▇, INC.,
Buyer
dated as of March ____, 1997
ASSET REPURCHASE AGREEMENT
ASSET REPURCHASE AGREEMENT made this ______ day of March 1997 between
▇▇▇▇▇▇, Inc., a Delaware corporation ("Buyer"), and ▇▇▇▇ Philippe Fragrances,
Inc., a Delaware corporation ("Seller").
In connection with the termination of the license agreement by Buyer as
successor in interest to Conopco, Inc. which termination is consented to by
Seller of even date herewith between Seller and Buyer to license in the United
States and Puerto Rico the use of the CUTEX trademark on Products (the "License
Agreement"), Seller wishes to sell and Buyer wishes to buy certain assets of
Seller, used in the packaging, distributing and selling of nail enamel and nail
care treatment products, nail care implements and lipstick under the trademark
CUTEX in the United States and Puerto Rico, but excluding nail enamel remover,
as set forth in Schedule 1 hereto (the "Products") all on the terms and
conditions of this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Transfer of Assets, Assumption of Certain Liabilities,
Purchase Price
1.1 Transfer of Assets. At the Closing, as defined in Section 2.1,
Seller will sell, convey, transfer, assign and deliver to Buyer and Buyer will
purchase and accept from Seller, the following properties, assets and rights
used or held by Seller for use exclusively in the sale of Products (the
"Assets"):
(i) tools, dies and molds used in connection with the
manufacture of the Products, which shall include the tools, dies and
molds as set forth in Schedule 1.1(i), reasonable wear and tear
excepted;
(ii) subject to the limitations set forth in Article 8 of the
License Agreement, inventories of finished products, work-in-progress,
components, raw materials, packaging materials, labels, samples and
supplies ("Inventory");
(iii) subject to Section 1.3, Seller's rights accruing after
the Closing Date under contracts, commitments, understandings, binding
arrangements and other
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agreements of any kind or nature, written or oral, including without
limitation, purchase orders for the sale of Products and for the
purchase of raw material and packaging materials (collectively,
"Contracts") as set forth in the annexed Schedule 1.1(iii), provided
that Buyer's obligations under the Contracts shall not exceed a dollar
amount equal to 20% of Annual Net Sales Value for the Contract Year
immediately preceding termination (as such terms are defined in the
License Agreement) unless Buyer consents to an increase in excess of
20% which consent shall not be unreasonably withheld.
1.2 Excluded Assets. There shall be excluded from Assets and Seller
shall retain all assets not expressly set forth in Section 1.1 (the "Excluded
Assets"), including without limitation, all accounts receivable (and security
interests therein), cash and cash equivalents, real property, furniture,
equipment, machinery and vehicles related to or used in the sale of Products and
any rights and interests under leases respecting any of the foregoing.
1.3 Consents to Certain Assignments. To the extent that the sale,
conveyance, transfer or assignment of any Contract requires the consent of any
third party, this Agreement shall not constitute an agreement to complete such
sale, conveyance, transfer or assignment if such action would constitute a
breach of the terms of such Contract. If Seller is unable to obtain such consent
to the assignment of any Contract, the Closing shall nonetheless take place and
Seller will take all steps (not including the payment of any consideration)
reasonably requested by Buyer to secure such consent after the Closing or
otherwise to transfer or provide to Buyer the benefits of such Contract. Buyer
shall use its reasonable efforts to cooperate with Seller in obtaining such
consents.
1.4 Assumption of Certain Liabilities. On the Closing Date, as defined
in Section 2.1, Buyer shall assume and thereafter pay, honor and discharge when
due and payable the following liabilities and obligations of Seller with respect
to Assets (the "Assumed Liabilities"):
(i) all liabilities, obligations and commitments of Seller
accruing with respect to periods after the Closing Date under the
Contracts including but not limited to commitments and obligations for
advertising, premiums and coupons;
(ii) all Losses (as defined in Section 8.1.1(i)) arising out
of the sale of Products by Buyer from and after the Closing Date; and
(iii) all customer returns of Products and the crediting of
customers therefor in accordance with Seller's historical returns
policy, except that during the six-month period following the Closing
Date and with respect to customer returns of Products up to $850,000.00
Seller shall within thirty (30) days
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reimburse Buyer for the difference between the cost of the returned
Product as set by Seller's standard cost sheets and the amount credited
the customer in accordance with Seller's order sheet and returns
authorization form. Seller also agrees to not undertake any action
which results in higher than normal customer returns of Products. In
the event Seller terminates the License Agreement prior to the
expiration of the initial term or renewal, Buyer shall not assume any
liabilities for returned Products and Seller shall have the right to
sell Products returned during the 12-month period following
termination, to any customer other than accounts regularly serviced by
Seller selling Products at its usual and customary price for a period
not to exceed six (6) months from the date the returned Products are
received by Seller.
1.5 Retention of Certain Liabilities. Buyer shall not assume any
liabilities and obligations of Seller with respect to the sale of Products,
other than the Assumed Liabilities. All such liabilities, obligations or
commitments of Seller are herein referred to as the "Retained Liabilities." The
Retained Liabilities include, without limitation, (i) all Losses (as defined in
Section 8.1.1(i)) of Seller arising out of the sale of Products prior to the
Closing Date, (ii) any liabilities or obligations of the Seller for any
off-invoice allowances, markdown allowances, cash discounts that are prompt
payments on receivables, customer development funds, billbacks, other
promotional spending or other such sums attributable to sales made by Seller
prior to the Closing Date, whether the obligation to pay falls due before or
after the Closing Date, (iii) all responsibility for employees of Seller, and
(iv) all liabilities for borrowed money, trade accounts payable and income or
other taxes, in each case except for any of the foregoing that are Assumed
Liabilities.
1.6 Closing Purchase Price. The purchase price for Assets is cash in
the amount of Fifty Thousand Dollars ($50,000.00) for the tools, dies and molds
as listed in Schedule 1.1(i) plus the value of the Inventory as shown on the
Inventory Statement (set forth in Section 3.4) (referred to as the "Closing
Purchase Price") subject to adjustment as provided in Section 2.4.
1.7 Transfer Taxes. Buyer shall pay any sales tax and other transfer
taxes and any interest or penalties relating thereto arising from the transfer
of Assets pursuant to this Agreement.
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ARTICLE II
Closing and Post Closing Inventory Adjustment
2.1 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall be held simultaneously with the closing of the acquisition by
Buyer of the Cutex trademarks from Conopco, Inc. at the offices of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ or at
such other place or on such other date and time as the parties may agree. The
date on which the Closing takes place is called the "Closing Date." The Closing
shall be deemed to be effective as of the close of business on the business day
prior to the Closing Date.
2.2 Deliveries by Seller. At the Closing, Seller will deliver to Buyer
the following duly executed documents:
(i) a ▇▇▇▇ of sale covering Assets in the form of Exhibit A
attached hereto;
and
(ii) an assignment and assumption agreement providing for the
assignment to Buyer of the Contracts and the assumption by Buyer of the
Assumed Liabilities (the "Assignment and Assumption Agreement") in the
form of Exhibit B attached hereto together with Schedules 3.4, 3.6, 3.9
and 3.10.
2.3 Deliveries by Buyer. At the Closing, Buyer will deliver to Seller
the following:
(i) immediately available funds by wire transfer, bank,
cashier or certified check payable to the order of Seller in United
States dollars drawn on a United States bank, foreign correspondent
bank of a United States bank, or a foreign bank with a regular
corresponding United States bank, acceptable to, Company, in an amount
equal to the Closing Purchase Price; and
(ii) a duly executed Assignment and Assumption Agreement.
2.4 Post Closing Inventory Adjustment
2.4.1 Closing Date. Within 45 days following the Closing Date,
Seller shall deliver to Buyer a statement of the lower of cost or fair market
value ("Book Value") of the Inventory as of the close of business on the
business day prior to the Closing Date (the "Closing Date Inventory Statement").
The Closing Date Inventory Statement shall be prepared in accordance with the
historical accounting principles and practices of Seller and prepared in a
manner consistent with the preparation of the Inventory Statement referred to in
Section 3.4.
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The Book Value of Inventory included on the Closing Date Inventory Statement
shall reflect a physical count of the Inventory conducted on the business day
prior to the Closing Date and shall exclude any Inventory which is damaged or
obsolete or which exists in quantities in excess of a commercially reasonable
mix and balance. For purposes of this Agreement, (i) "obsolete" shall mean
inventories of Products which have not been marketed and sold to the trade
within the 12-month period preceding the Closing Date and have been discontinued
as evidenced by deletion from Seller's order forms; and (ii) "commercially
reasonable mix and balance" shall mean inventories (on a unit and Product SKU
basis) of raw materials, work-in-process, components, finished goods, packaging
materials and labels that do not in each case exceed a 12-month's supply based
on gross sales less returns in the prior 12 months. The physical count of the
Inventory shall be conducted by Seller and its representatives. Buyer and its
representa tives shall have the right to observe the physical count of the
Inventory.
2.4.2 Objections; Resolutions of Disputes. Unless Buyer
notifies Seller in writing within thirty (30) days after receipt of the Closing
Date Inventory Statement that it objects to the Book Value of the Inventory set
forth on the Closing Date Inventory Statement and specifies in reasonable detail
the basis for any such objection, the Book Value of the Inventory reflected on
the Closing Date Inventory Statement shall become final and binding upon the
parties for purposes of this Agreement. If Buyer submits written objections to
Seller within such period, Buyer and Seller, during the 15-day period following
Buyer's delivery of its notice of objections to Seller, shall attempt in good
faith to resolve Buyer's objections. If Buyer and Seller are unable to resolve
all such objections within such period, the matters remaining in dispute shall
be submitted to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Neutral Auditor"). The resolution of
disputed items by the Neutral Auditor shall be final and binding. The fees and
expenses of the Neutral Auditor shall be borne equally by Buyer and Seller.
During the 15-day period following receipt of the Closing Date Inventory
Statement and during the pendency of any dispute, Seller shall provide access to
Buyer and Buyer's authorized representatives, during normal business hours, to
Seller's books, records and work papers related to preparation of the Closing
Date Inventory Statement. After final determination of any disputes with respect
to the Book Value of the Inventory as set forth on the Closing Date Inventory
Statement, Buyer shall have not further right to make any claims against Seller
with respect to any element of the Book Value of the Inventory on any basis.
2.4.3 Adjustment Payment. Within ten (10) days after the Book
Value of the Inventory on the Closing Date becomes final and binding in
accordance with Section 2.4.2, (i) if the Book Value of the Inventory on the
Closing Date (the "Final Inventory") exceeds the amount set forth on the
Inventory Statement, Buyer shall pay to Seller an amount equal to such excess
plus simple interest thereon at the prime rate as published in the Wall Street
Journal per annum from the Closing Date to the date of payment, by wire transfer
of immediately available funds; and (ii) if the Final Inventory is less than the
amount set forth on the Inventory Statement, Seller shall pay to Buyer an amount
equal to such shortfall plus simple interest thereon at the prime
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rate as published in the Wall Street Journal per annum from the Closing Date to
the date of payment, by wire transfer of immediately available funds.
2.4.4 Inventory Close Out. Within twelve (12) months of the
Closing Date, any inventory of Seller not purchased by Buyer may be used or sold
by Seller to any customer other than accounts regularly serviced by Seller
selling Products at its usual and customary price.
ARTICLE III
Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer as follows:
3.1 Organization. Seller is a corporation duly incorporated, organized
and validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to own Assets.
3.2 Authorization. Seller has full corporate power and authority to
execute and deliver this Agreement and all other documents contemplated hereby
and to consummate the transactions contemplated hereby and thereby. Seller has
taken all corporate action required by its Certificate of Incorporation and
By-laws to authorize the execution and delivery of this Agreement and all other
documents contemplated hereby and to authorize the consummation of the
transactions contemplated hereby and thereby. This Agreement is a legal, valid
and binding obligation of Seller, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally from time to time in effect
and, as to enforceability, general equitable principles.
3.3 No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (i) conflict
with or violate any provision of the Certificate of Incorporation or By-laws of
Seller, (ii) conflict with or violate any statute, law, rule, regulation,
ordinance, order, writ, injunction, judgment or decree applicable to Seller or
by which Assets are bound, or (iii) conflict with or result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would constitute a default) under any agreement or other instrument to which
Seller is a party or by which Assets are bound which would either result in the
creation of any lien, claim, charge or other encumbrance on any Assets. Except
for consents of other parties to the Contracts, no notice, declaration, report
or other filing or registration with, and no waiver, consent, approval or
authorization of, any governmental or regulatory authority or any other person
is required in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
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3.4 Financial Statements. Schedule 3.4 to be delivered at Closing is
the unaudited Inventory Statement (the "Inventory Statement") as of the most
recent date prior to the notice of termination under Article 8 of the License
Agreement ("Notice Date"), and the unaudited statement of Sales and Profits
before Indirects from the sale of Products for the two (2) most recent years
prior to the Notice Date, prepared in accordance with generally accepted
accounting principles and practices ("GAAP") consistently applied (except with
respect to the treatment of overhead costs, which shall be added in the
calculation of the Book Value of Inventory) and fairly present in all material
respects the Book Value of the Inventory as at that date and the Sales and
Profits before Indirects from the sale of products for the periods covered
thereby. The Sales and Profits before Indirects shall be set forth in the same
detail as provided in Schedule 3.4 of the Asset Purchase Agreement dated of even
date hereto between Buyer and Seller (the "Purchase Agreement").
3.5 Title to Assets. Seller has good title to Assets, subject to no
liens, claims, charges or other encumbrances, other than liens for taxes not yet
due and payable and other statutory liens arising in the ordinary course of
business which are being contested in good faith.
3.6 Contracts. Schedule 3.6, to be delivered at closing, sets forth a
list of all Contracts except (i) orders for the purchase by Seller of finished
goods, raw materials, components, packaging materials, labels and supplies used
in the sale of Products, in each case with a remaining commitment of Twenty
Thousand Dollars ($20,000.00) or less and a remaining term of twelve (12) months
or less; (ii) orders from customers for purchase of Products with a remaining
commitment of Twenty Thousand Dollars ($20,000.00) or less and a remaining term
of twelve (12) months or less; and (iii) commitments to customers for trade
promotions, in each case with a remaining commitment of Twenty Thousand Dollars
($20,000.00) or less and a remaining term of twelve (12) months or less. The
aggregate commitment under Contracts not listed on Schedule 3.6 does not exceed
Two Hundred Thousand Dollars ($200,000.00). Seller has delivered or made
available to Buyer full and complete copies of all written Contracts and
descriptions of the terms of all oral Contracts listed on Schedule 3.6. Seller
and, to the best of Seller's knowledge, each other party to each Contract is in
compliance in all material respects with the terms thereof and each Contract was
entered in the ordinary course of business.
3.7 Inventory. All of the finished products included in the Inventory
reflected in the Inventory Statement were (a) manufactured by or on behalf of
Seller in the ordinary course of business; and (b) saleable in the ordinary
course of business, except to the extent of any reserve reflected on the
Inventory Statement.
3.8 Seller's Conduct. Since the date of this Agreement, Seller has
conducted the manufacture and sale of Products only in the ordinary course in a
manner consistent with past practice and there has been no material adverse
change in the sale of Products.
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3.9 Compliance with Law. Except as set forth in Schedule 3.9 to be
delivered at closing, the manufacture and sale of Products by Seller is in
compliance in all material respects with all applicable statutes, laws, rules,
regulations, orders, ordinances, judgments and decrees of all governmental
authorities ("Laws") and Seller has not been informed of any alleged violations
of any Laws.
3.10 Litigation. Except as set forth in Schedule 3.10 to be delivered
at closing, no claim, action, suit, proceeding or investigation seeking damages
in excess of Two Thousand Dollars ($2,000.00) is pending or, to the best of
Seller's knowledge, threatened before any court, arbitrator, or governmental
agency which may have a material adverse affect on the sale of Products or which
seeks to prevent the consummation of the transactions contemplated by this
Agreement.
ARTICLE IV
Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
4.1 Organization. Buyer is a corporation duly incorporated, organized,
validly existing and in good standing under the laws of the State of Delaware.
4.2 Authorization. Buyer has full corporate power and authority to
execute and deliver this Agreement and all other agreements contemplated hereby
and to consummate the transactions contemplated hereby and thereby. Buyer has
taken all corporate action required by its Certificate of Incorporation and
By-laws to authorize the execution and delivery of this Agreement and all other
documents contemplated hereby and to authorize the consummation of the
transactions contemplated hereby and thereby. This Agreement is a legal, valid
and binding obligation of Buyer, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium
and other laws affecting creditors' rights generally from time to time in effect
and, as to enforceability, general equitable principles.
4.3 Consents or Approvals. No consent, action, approval or
authorization of, or registration, declaration or filing with, any governmental
department, commission, agency or other instrumentality having jurisdiction over
Buyer is required to be obtained or made by Buyer to authorize the execution and
delivery by Buyer of this Agreement or the performance by Buyer of its terms.
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ARTICLE V
Covenants Pending the Closing
5.1 Seller's Conduct. Between the date of this Agreement and the
Closing Date, Seller will, except as otherwise agreed to in writing by Buyer,
(i) perform in all material respects its obligations under the Contracts and
(ii) not enter into any new Contract or an extension or amendment of any
existing Contract that would cause any representation or warranty of Seller
hereunder to be untrue.
5.2 Access. From the date of this Agreement to the Closing Date, Seller
will give to Buyer and its representatives, during normal business hours,
reasonable access to the books, records and Contracts of Seller related
exclusively to the manufacture and sale of Products and furnish to Buyer such
documents and information concerning exclusively the manufacture and sale of
Products as Buyer may reasonably request from time to time provided, however,
Seller shall have no obligation prior to the Closing to reveal to Buyer
proprietary information, including without limitation, know-how, formulas or
trade secrets.
5.3 Reasonable Efforts. Each party will use its reasonable efforts to
take or cause to be taken all actions and to do or cause to be done all things
necessary, proper or advisable to perform its obligations hereunder, to satisfy
the conditions to the Closing and to consummate the transactions contemplated
hereby. Seller shall use all reasonable efforts to obtain consents to the
assignments of the Contracts listed on Schedule 3.6.
ARTICLE VI
Conditions to Closing
6.1 Conditions to the Obligations of Both Parties. The obligations of
each party hereto to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction at or prior to the Closing of the following
conditions:
6.1.1 No law, rule, regulation, order, decree, injunction,
stay or restraining order shall have been enacted, entered, promulgated or
enforced by any court of competent jurisdiction or governmental or regulatory
authority or instrumentality that prohibits the consummation of all or any part
of the transactions contemplated hereby, and no action or proceeding shall be
pending or threatened by any governmental authority or private person seeking
any such order, or decree or seeking to recover any damages or obtain other
relief as a result of the consummation of such transactions.
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6.1.2 All required registrations and filings with any
government or governmental or regulatory authority shall have been made and any
waiting period applicable to the transactions contemplated hereby pursuant to
any law, rule, regulation, order or decree of any government or instrumentality
or agency thereof having jurisdiction with respect to the transactions herein
contemplated shall have expired or been terminated.
6.2 Conditions to Buyer's Obligation to Close. The obligation of Buyer
to purchase Assets, assume the Assumed Liabilities and otherwise consummate the
transactions contemplated hereby shall be subject to the satisfaction, at or
before the Closing, of the following conditions:
6.2.1 Seller shall have performed in all material respects the
obligations required to be performed by it at or prior to the Closing.
6.2.2 The representations and warranties of Seller contained
herein shall have been true and correct in all material respects when made and
shall be repeated at the Closing Date and shall be true and correct in all
material respects at and as of the Closing Date.
6.2.3 Seller shall have delivered to Buyer a certificate,
dated the Closing Date and signed by an officer of Seller, as to the
satisfaction of the conditions set forth in Sections 6.2.1 and 6.2.2 above.
6.3 Conditions to Seller's Obligation to Close. The obligation of
Seller to sell, convey, transfer and assign Assets and otherwise consummate the
transactions contemplated hereby shall be subject to the satisfaction, at or
before the Closing Date, of the following conditions:
6.3.1 Buyer shall have performed in all material respects the
obligations required to be performed by it at or prior to the Closing.
6.3.2 The representations and warranties of Buyer contained
herein shall have been true and correct in all material respects when made and
shall be repeated at the Closing Date and shall be true and correct in all
material respects at and as of the Closing Date.
6.3.3 Buyer shall have delivered to Buyer a certificate, dated
the Closing Date and signed by an officer of Buyer, as to the satisfaction of
the conditions set forth in Sections 6.3.1 and 6.3.2 above.
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ARTICLE VII
Termination
7.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing by mutual consent
of Buyer and Seller.
7.2 Effect of Termination. Any termination of this Agreement except
pursuant to Section 7.1 shall not affect or diminish any rights accruing to
either party pursuant to this Agreement at or prior to such termination.
ARTICLE VIII
Indemnification
8.1 Obligation of Parties to Indemnify.
8.1.1 Indemnification by Seller. Subject to the limitations
set forth in Section 8.3, Seller shall indemnify, defend and hold harmless Buyer
and its Affiliates (as defined in Section 10.6), on an after-tax basis and after
giving effect to the amount, if any, of insurance proceeds actually received by
Buyer, excluding any portion thereof attributable to policies directly or
indirectly self-insured, with respect to the following:
(i) any and all claims, losses, damages, liabilities,
deficiencies, obligations or expenses, including without limitation
reasonable legal fees and expenses ("Losses"), arising or resulting
from the failure of Seller to pay, honor and discharge when due and
payable the Retained Liabilities;
(ii) any and all Losses resulting or arising from the
non-fulfillment by Seller of any agreement or covenant of Seller under
this Agreement; and
(iii) any and all Losses resulting or arising from the
inaccuracy of any representation or the breach of any warranty made by
Seller herein.
8.1.2 Indemnification by Buyer. Subject to the limitations set
forth in Section 8.3, Buyer shall indemnify, defend and hold harmless Seller and
its Affiliates, on an after-tax basis and after giving effect to the amount, if
any, of insurance proceeds actually received by Seller, excluding any portion
thereof attributable to policies directly or indirectly self-insured, with
respect to the following:
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(i) any and all Losses resulting or arising from the failure
of Buyer to pay, honor and discharge when due and payable the Assumed
Liabilities;
(ii) any and all Losses resulting or arising from the
non-fulfillment by Buyer of any agreement or covenant of Buyer under
this Agreement;
(iii) any and all Losses resulting or arising from the
inaccuracy of any representation or the breach of any warranty made by
Buyer herein; and
(iv) any and all Losses arising out of the sale of Products by
Buyer from and after the Closing Date.
8.1.3 Purchase Price Adjustments. Payments by Seller or Buyer
pursuant to this Section 8.1 shall be considered adjustments to the Closing
Purchase Price hereunder and treated as such for all purposes by the parties
hereto, except as otherwise required by applicable tax law.
8.2 Indemnification Procedure for Third Party Claims. If any
indemnified party receives written notice of the commencement of any action or
proceeding or the assertion of any claim by a third party or the imposition of
any penalty or assessment for which indemnity may be sought under this Article
VIII (a "third party claim") and such indemnified party intends to seek
indemnity pursuant to this Article VIII, such indemnified party shall promptly
provide the indemnifying party with notice of such third party claim. Except in
the case of claims seeking equitable relief from the indemnified party, the
indemnifying party shall, upon acknowledgment of its obligation to indemnify the
indemnified party, be entitled to participate in or, at its option, assume the
defense or settlement of such third party claim. The defense or settlement shall
be conducted through counsel selected by the indemnifying party and approved by
the indemnified party, which approval shall not be unreasonably withheld, and
the indemnified party shall fully cooperate with the indemnifying party in
connection therewith, provided that the indemnified party shall be entitled at
any time to employ, at its own expense, separate counsel to represent it. In the
event that the indemnifying party fails to assume the defense or settlement of
any third party claim within twenty (20) days after receipt of notice thereof
from the indemnified party, such indemnified party shall have the right to
undertake the defense or settlement of such third party claim at the expense and
for the account of the indemnifying party. The indemnifying party shall not
settle any third party claim the defense or settlement of which is controlled by
it without the indemnified party's prior written consent, unless the terms of
such settlement or compromise releases such indemnified party from any and all
liability with respect to such third party claim.
8.3 Limitation on Indemnification. Notwithstanding the foregoing
provisions of this Article VIII, (i) neither party shall be responsible for any
indemnifiable Losses suffered by the
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other under Sections 8.1.1 (iii) or 8.1.2 (iii) unless a claim therefor is
asserted in writing on or prior to the first anniversary of the Closing Date;
(ii) Seller shall not be liable for any Losses suffered by Buyer claimed under
Section 8.1.1 (iii) unless the aggregate amount of such Losses exceeds One
Hundred Thousand Dollars ($100,000.00), and then only to the extent of any such
excess; and (iii) the aggregate liability of Seller for Losses suffered by Buyer
shall in no event exceed the Closing Purchase Price set forth in Section 1.6.
ARTICLE IX
Additional Agreements
9.1 Announcements. Neither Buyer nor Seller will issue any press
release, public announcement or any communication to the trade with respect to
this Agreement or the transactions contemplated hereby except with the prior
approval of the other, such approval not to be unreasonably withheld or delayed,
or except as may be required by law.
9.2 Information Transfer. After the Closing Date, Seller shall provide
to Buyer at no charge access to all sales and business records relating
exclusively to the sale of the Products by Seller prior to the Closing
including, without limitation, advertising materials, customer lists, cost and
pricing information, supplier lists and catalogues. Seller shall also promptly
provide copies (including computerized records) of all customer lists, sales
records, and such other records that Buyer may reasonably specify.
9.3 Termination of Insurance. Buyer acknowledges that Seller's
insurance coverage for Assets shall terminate as of the Closing Date.
9.4 Asset Transfer. As soon as practicable after the Closing Date but
within thirty (30) days, Buyer shall remove Assets at Buyer's expense. Any
Assets not removed within such period may be deemed to be abandoned and
forfeited by Buyer to Seller.
9.5 Packaging Material. Seller hereby grants and hereby agrees to
obtain consents from its Affiliates (if any) granting the rights to Buyer to Use
all packaging or related material purchased by Buyer pursuant hereto that
contains or reflect, Seller's or its Affiliates' trademarks for a period not to
exceed twelve (12) months from the Closing Date.
9.6 Employee Matters. Buyer and Seller hereby acknowledge and agree
that Buyer shall not have any obligation whatever to employees of the Seller
involved with the manufacture, distribution and sale of the Products
("Employees"), or with regard to matters of liabilities relating to such
Employees, including but not limited to obligations concerning employee
compensation and benefits, severance payments, occupational safety matters and
workers'
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compensation matters, other than any obligations arising from the employment of
or similar arrangement made by Buyer with any of the Employees to commence on or
after the Closing Date.
ARTICLE X
Miscellaneous
10.1 Notices. Any notice or other communication given under this
Agreement shall be in writing and shall be either (i) delivered personally, (ii)
sent by documented overnight delivery service such as Federal Express, (iii)
sent by facsimile transmission, provided that a confirmation copy of any such
transmission is sent no later than the business day following the date of such
transmission by documented overnight delivery service or first class mail,
postage prepaid, or (iv) sent by first class mail, postage prepaid, unless the
party giving such notice knows or has reason to know of any strike or other
condition that may delay delivery of such mail. Such notice shall be deemed to
have been duly given (a) on the date of delivery, if delivered personally, (b)
on the business day after dispatch by documented overnight delivery service such
as Federal Express, if sent in such manner, (c) on the date of facsimile
transmission, if so transmitted during business hours, or (d) on the third
business day after deposit in the United States or Canadian mail, postage
prepaid, if sent in such manner. Notices or other communications shall be
directed to the following addresses:
Notices to Seller: ▇▇▇▇ Philippe Fragrances, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇,
Chief Executive Officer
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Attorney at Law
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices to Buyer: ▇▇▇▇▇▇, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇,
Chairman and CEO
with a copy to: Bathgate, ▇▇▇▇▇▇▇ & ▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇, Esq.
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Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
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Either party, by notice given in accordance with this Section 10.1, may specify
a new address for notices under this Agreement.
10.2 Entire Agreement; Amendment; Waiver. This Agreement and the
schedules and exhibits annexed hereto constitute the entire understanding
between the parties with respect to the subject matter hereof, and supersede all
other understandings and negotiations with respect thereto. This Agreement may
be amended only in a writing signed by both parties hereto. Any provision of
this Agreement may be waived only in a writing signed by the party to be charged
with such waiver. No course of dealing between the parties shall be effective to
amend or waive any provision of this Agreement.
10.3 Assignment. This Agreement may not be assigned by either party
without the written consent of the other except to Affiliates of either party.
10.4 Governing Law. This Agreement shall be governed by the laws of
the State of New York which are applicable to agreements made and to be
performed entirely therein.
10.5 Captions. The captions in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the interpretation
hereof.
10.6 Affiliates. For purposes of this Agreement, an affiliate of any
party is any person controlling, controlled by or under common control with such
party and, in the case of Buyer, shall include any person the voting shares of
which is owned directly or indirectly by the parent of Buyer.
10.7 Bulk Sales Law. Buyer hereby waives compliance with the Bulk
Sales Law. Seller will indemnify Buyer for any Losses arising out of any
noncompliance therewith.
10.8 Fees. Each of the parties hereto shall pay its respective legal
and accounting fees and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments
executed pursuant hereto and any other costs and expenses incurred by such
party, except as otherwise expressly set forth herein, whether or not the
Closing occurs.
10.9 Further Assurances. From time to time after the Closing, Seller
and Buyer shall execute and deliver such documents and instruments as the other
party may reasonably request in order to consummate more effectively the
purchase and sale of Assets as contemplated hereby.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
▇▇▇▇▇▇, INC.
By: /s/
-------------------------------
▇▇▇▇ PHILIPPE FRAGRANCES, INC.
By: /s/
-------------------------------
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