SETTLEMENT OF DEBTS AND ASSET PURCHASE AGREEMENT
SETTLEMENT OF DEBTS AND ASSET PURCHASE AGREEMENT (this "Agreement"), entered
into as of the 29th day of March, 2002, by and among FAMOUS FIXINS, INC., a New
York corporation (hereinafter, the "Seller"), STARBRAND, LLC, a limited
liability company organized under the laws of the State of Delaware
(hereinafter, the "Buyer"), and the Investors signatory hereto under the heading
"Investors", (each an "Investor" and together the "Investors").
WITNESSETH:
WHEREAS, the Seller has been unable to raise the required capital to
continue its business in its present form and desires to divest all of its
operations and sell substantially all of its assets;
WHEREAS, the Seller desires to retire a substantial portion of the debt it
has incurred which has hindered its operations;
WHEREAS, the Buyer desires to purchase substantially all of the assets of
the Seller and the Seller desires to sell such assets to the Buyer upon the
terms and conditions hereinafter set forth;
WHEREAS, the Investors desire to exchange the Exchanged Debentures for a
Class B Membership Interest in the Buyer; and
WHEREAS, as additional consideration for the purchase of the Net Assets, the
Buyer shall surrender to the Seller for cancellation the Exchanged Debentures
that the Buyer receives from the Investors.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
and agreements herein set forth, the parties hereby covenant and agree as
follows;
1. DEFINITIONS
1.1 "Assets" shall mean all of the assets and properties, real, personal and
mixed, including, without limitation, all licenses, copyrights,
trademarks, tradenames, accounts receivable, equipment, inventory,
barter credits and cash, marketable securities and other cash
equivalents of the Seller as at the Closing Date.
1.2 "Assignment and Assumption Agreement" shall mean the assignment and
assumption agreement entered into between the Seller and the Buyer on or
before the Closing in the form of Exhibit A hereto.
1.3 "Bankruptcy Event" shall have the meaning ascribed to such term in
Section 7.7.
1.4 "▇▇▇▇ of Sale" shall have the meaning ascribed to such term in Section
2.3, in the form of Exhibit B hereto.
1.5 "Business" shall mean the business of the Seller as presently conducted
as a going concern.
1.6 "Class B Membership Interest" shall mean a membership interest in Buyer
with such rights and privileges as set forth in the Operating Agreement.
1.7 "Closing" shall have meaning ascribed to such term in Section 10.
1.8 "Closing Date" shall have the meaning ascribed to such term in Section
10.
1.9 "Common Stock" shall have the meaning ascribed to such term in Section
5.9.
1.10 "Commission Documents" shall have the meaning ascribed to such term in
Section 5.7.
1.11 "Convertible Debentures" shall mean the 4% convertible debentures of
the Seller issued to the Investors on November 7, 2000, pursuant to the
Purchase Agreement.
1.12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
1.13 "Exchanged Debentures" shall have the meaning ascribed to such term in
Section 3.1.
1.14 "Excluded Assets" shall mean the Assets set forth on Schedule X
attached hereto.
1.15 "Excluded Liabilities" shall mean the Liabilities set forth on Schedule
Y attached hereto.
1.16 "GAAP" shall mean U.S. generally accepted accounting principles.
1.17 "Information Statement" shall have the meaning ascribed to such term in
Section 7.7.
1.18 "Liabilities" shall mean all debts, accrued liabilities, accrued
expenses, accounts payable, obligations, costs, expenses and
contingencies of the Seller which exist or have been accrued as at the
Closing Date.
1.19 "Net Assets" shall mean all Assets other than the Excluded Assets.
1.20 "Net Liabilities" shall mean all Liabilities other than the Excluded
Liabilities.
1.21 "Operating Agreement" shall mean the Buyer's Operating Agreement,
substantially in the form of Exhibit C attached hereto.
1.22 "Purchase Agreement" shall mean that certain Convertible Debenture and
Warrants Purchase Agreement, dated October 27, 2000 among the Seller and
the Investors.
1.23 "SEC" shall mean the Securities and Exchange Commission.
1.24 "Shareholders' Consents" shall have the meaning ascribed to such term
in Section 5.10.
2. ACQUISITION OF THE ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Transfer of Assets. Subject to the terms and conditions set forth in
this Agreement and in reliance upon the representations and warranties
herein set forth, at the Closing, the Seller shall sell, assign,
transfer, convey and deliver all of the Seller's right, title and
interest in the Net Assets and the Business to the Buyer.
2.2 Assumption of Liabilities. Pursuant to an Assignment and Assumption
Agreement, substantially in the form attached hereto as Exhibit A, and
as further consideration for the purchase and sale of the Net Assets,
the Buyer shall, from and after the Closing Date, assume all Net
Liabilities.
2.3 ▇▇▇▇ of Sale. On the Closing Date, Seller shall deliver to the Buyer a
▇▇▇▇ of sale, deed and such other documents and instruments of
conveyance ("▇▇▇▇ of Sale") which shall be necessary to vest in the
Buyer good and marketable title to the Net Assets.
2.4 Books and Records. From and after the Closing Date, the Buyer shall
provide the Seller and their representatives such information as the
Seller reasonably requires for its reporting obligations under the
securities laws pursuant to Section 7.6.
2.5 Excise Taxes. All sales and documentary and transfer taxes arising out
of the sale of the Net Assets hereunder and all charges for or in
connection with the recording of any document or instrument herein
provided shall be paid by the Buyer.
3. EXCHANGE AND CANCELLATION OF CONVERTIBLE DEBENTURES
3.1 Exchange of Convertible Debentures. At the Closing, the Investors,
severally and not jointly, agree to exchange with the Buyer, in the
aggregate, US$450,000 principal amount of the Convertible Debentures
(the "Exchanged Debentures") for, in the aggregate, all of the Buyer's
Class B Membership Interests in the manner set forth in the Operating
Agreement. At the Closing, each Investor shall deliver to the Buyer the
principal amount of Exchanged Debentures set forth on the signature
pages hereto, the Buyer and the Investors shall deliver the fully
executed Operating Agreement and the Investors shall each receive a
receipt evidencing each such Investor's Class B Membership Interest.
3.2 Cancellation of Buyer's Interest in Convertible Debentures. At the
Closing, as additional consideration for the purchase of the Net Assets,
the Buyer shall surrender the Exchanged Debentures to the Seller for
immediate cancellation. The Buyer acknowledges and agrees that,
effective upon surrender of the Exchanged Debentures, the Seller shall
be released and discharged from any and all actions, causes of actions,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims,
and demands whatsoever, in law or equity relating to the Exchanged
Debentures.
4. FURTHER ASSURANCES
From time to time from and after the Closing, the parties hereto shall
execute and deliver, or cause to be executed and delivered, any and all such
further agreements, certificates and other instruments, and shall take or cause
to be taken any and all such further action, as any of the parties may
reasonably deem necessary or desirable in order to carry out the intent and
purposes of this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller, by its execution of this Agreement, does hereby acknowledge and
agree that Buyer is intimately familiar with the Business and financial
condition of the Seller. Accordingly, except as otherwise expressly set forth in
this Section 5, neither the Seller nor any other officer, director, stockholder
or affiliate of the Seller shall make any representation or warranty to the
Buyer or any other person firm or corporation, pursuant to this Agreement.
Subject to the foregoing and except as set forth on the disclosure schedules
attached hereto, the Seller hereby represents and warrants as follows:
5.1 Valid and Binding Agreement. The Seller has full legal right, power and
authority to execute and deliver this Agreement and has the full legal
right, power and authority to consummate the transactions contemplated
hereby. This Agreement is enforceable against the Seller in accordance
with its terms, except to the extent limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally, and
except that the remedy of specific performance or similar equitable
relief is available only at the discretion of the court before which
enforcement is sought.
5.2 Organization, Good Standing and Qualification. The Seller: (a) is a
corporation duly organized, validly existing and in good standing under
the laws of the State of New York; and (b) has all necessary corporate
power and authority to carry on its respective business and to own,
lease and operate its properties.
5.3 Subsidiaries. The Seller does not own, directly or indirectly, any stock
or other equity securities of any corporation or entity, or have any
direct or indirect equity or ownership interest in any person, firm,
partnership, corporation, venture or business.
5.4 Compliance with Laws.
a) To the best of Seller's knowledge, the Seller is, and has been at
all times during the three (3) year period prior to the date hereof,
in compliance with all domestic, foreign, federal, state, local and
municipal laws and ordinances and governmental rules and regulations
and all requirements of insurance carriers, applicable to its
business, affairs, properties or assets.
b) To the best of Seller's knowledge, neither the Seller nor any of its
directors, officers or employees, has received any written notice of
default or violation, nor, to the best of Seller's knowledge, is the
Seller or any of its directors, officers or employees in default or
violation, with respect to any judgment, order, writ, injunction,
decree, demand or assessment issued by any court or any federal,
state, local, municipal or other governmental agency, board,
commission, bureau, instrumentality or department, domestic or
foreign, relating to any aspect of the Seller's Business, affairs,
properties or assets. Neither Seller, nor, to the best of Seller's
knowledge, any of its directors, officers or employees, has received
written notice of, been charged with, or is under investigation with
respect to, any violation of any provision of any federal, state,
local, municipal or other law or administrative rule or regulation,
domestic or foreign, relating to any aspect of the Seller's
Business, affairs, properties or the Assets, which violation would
have a material adverse effect on the Seller, the Business or any
material portion of the Assets.
5.5 Litigation. Except as disclosed in the Commission Documents, there is no
suit, action, arbitration, or legal, administrative or other proceeding
or governmental investigation (including, without limitation, any claim
alleging the invalidity, infringement or interference of any patent,
patent application, or rights thereunder owned or licensed by the
Seller) pending, or to the best knowledge of the Seller, threatened, by
or against the Seller or any of its assets or properties. The Seller is
not aware of any state of facts, events, conditions or occurrences which
might properly constitute grounds for or the basis of any suit, action,
arbitration, proceeding or investigation against or with respect to the
Seller.
5.6 Transactions with Affiliates. No asset employed or used in any of the
Business of the Seller is owned by, leased from or leased to Seller, or
any other partnership, corporation or trust formed, owned or operated
for Seller's benefit, or any officer, director or employee of the Seller
or any affiliate of the Seller.
5.7 Commission Documents, Financial Statements. The common stock of the
Seller (the "Common Stock") is registered pursuant to Section 12(g) of
the Exchange Act, and the Seller has filed all reports, schedules,
forms, statements and other documents required to be filed by it with
the Commission pursuant to the reporting requirements of the Exchange
Act, including material filed pursuant to Section 13(a) or 15(d) of the
Exchange Act (the "SEC Documents"), and the Seller has filed with the
SEC its Form 10-KSB for the year ended December 31, 2001 (the Seller's
SEC Documents, including filings incorporated by reference therein,
herein referred to as the "Commission Documents"). The Commission
Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and do not contain any material untrue statement of a
material fact or omit to state a material fact materially required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not materially
misleading. The financial statements of the Seller included in the
Commission Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC applicable thereto or other applicable rules and
regulations with respect thereto. Such financial statements have been
prepared in accordance with GAAP applied on a consistent basis during
the periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the case of
unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly present
in all material respects the financial position of the Seller as of the
dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
5.8 Consent of Seller's Shareholders. By written consents in lieu of a
meeting dated March __, 2002, the Seller's shareholders holding at least
a majority of the voting rights of all outstanding shares of capital
stock as of such date have duly voted in favor of the following actions:
a) sale by the Seller of the Net Assets to the Buyer, in exchange for
the assumption by the Buyer of the Net Liabilities; and
b) amendment of Seller's Certificate of Incorporation to increase the
authorized number of shares of Common Stock that the Seller may
issue from 25,000,000 to 200,000,000.
c) Having sufficient voting power to approve such proposals through
such shareholders' ownership of the capital stock, no other consents
will be solicited in connection with the aforementioned actions.
Pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as
amended, the actions will not be effective until 20 days after the
date the Information Statement is mailed to the Seller's
shareholders. An executed copy of all such written consents, duly
certified by an officer of the Seller, is attached hereto as Exhibit
D ("Shareholders' Consents").
5.9 Liabilities. Set forth on the disclosure schedules is a true, correct
and complete list of all of the material Liabilities and the names and
addresses of the creditors of the Seller.
6. REPRESENTATIONS AND WARRANTIES OF THE BUYER
Except as set forth on the disclosure schedules attached hereto, the Buyer
represents and warrants to the Seller and the Investors as follows:
6.1 Valid and Binding Agreement. The Buyer has full legal right, power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligations of the Buyer, enforceable against the
Buyer in accordance with their respective terms, except to the extent
limited by bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally, and except that the remedy of
specific performance or similar equitable relief is available only at
the discretion of the court before which enforcement is sought.
6.2 Organization, Good Standing and Qualification. The Buyer: (a) is a
limited liability company validly existing under the laws of the State
of Delaware, (b) is not required, by the nature of its properties or
business, to be qualified to do business as a foreign entity or
corporation in any foreign jurisdiction except New York upon the
Closing.
6.3 Issuance of Class B Membership Interest. The Class B Membership
Interests to be issued under this Agreement and the Operating Agreement
have been duly authorized by all necessary action required under
applicable law, when paid for and issued in accordance with the terms
hereof, the Class B Membership Interests shall be validly issued and
outstanding, fully paid and non-assessable, and the Investors shall be
entitled to all rights accorded to a holder of the Class B Membership
Interest under the Operating Agreement and applicable law. The Class B
Membership Interest issued hereunder shall be free from restrictions on
transfer other than restrictions on transfer under this Agreement, the
Operating Agreement and applicable federal, state, local and foreign
securities laws.
6.4 Litigation. No litigation or administrative proceeding of or before any
court, tribunal or government entity is presently pending, or, to the
knowledge of the Buyer, threatened against the Buyer or any properties
of the Buyer or with respect to this Agreement, which, if adversely
determined, could have a material adverse effect on the Buyer or which
would draw into question the validity of this Agreement.
7. ADDITIONAL AGREEMENTS OF THE PARTIES
7.1 Confidentiality. Notwithstanding anything to the contrary contained in
this Agreement, and subject only to any disclosure requirements which
may be imposed upon the parties hereto under applicable state or federal
securities laws, it is expressly understood and agreed by the parties
that (i) this Agreement and the conversations, negotiations and
transactions relating hereto and/or contemplated hereby, and (ii) all
financial information, business records and other non-public information
concerning the Seller and the Buyer which the Buyer, Seller or their
representatives has received or may hereafter receive, shall be
maintained in the strictest confidence by the parties hereto, and shall
not be disclosed to any person that is not associated or affiliated with
the Buyer or the Seller and involved in the transactions contemplated
hereby, without the prior written approval of the parties hereto, except
to the extent required by law or regulation, or the extent such
information becomes generally available to the public. Subject to the
foregoing, the parties hereto shall use their best efforts to avoid
disclosure of any of the foregoing or undue disruption of any of the
business operations or personnel of the other parties hereto.
7.2 Additional Agreements and Instruments. On or before the Closing Date,
the parties shall execute, deliver and file all exhibits, agreements,
certificates instruments and other documents, not inconsistent with the
provisions of this Agreement, which, in the opinion of counsel to the
parties hereto, shall reasonably be required to be executed, delivered
and filed in order to consummate the transactions contemplated by this
Agreement.
7.3 Non-Interference. The parties hereto shall not cause to occur any act,
event or condition which would cause any of their respective
representations and warranties made in this Agreement to be or become
untrue or incorrect in any material respect as of the Closing Date, or
would interfere with, frustrate or render unreasonably expensive the
satisfaction by the other party or parties of any of the conditions
precedent set forth in this Agreement.
7.4 Reporting and Compliance with the Law. From the date hereof through the
Closing Date, the Seller shall duly and timely file all tax returns
required to be filed with the proper authorities and duly observe and
conform, in all material respects, to all applicable laws and orders.
The Seller has applied for an extension of time in connection with its
2001 year end tax returns, and in the event that the Seller has not
completed such prior to the Closing Date, the Buyer shall cooperate with
the Seller to file such tax returns as soon as practicable thereafter.
7.5 No Bankruptcy Filing or Pending Acquisition. The Buyer hereby covenants
and agrees that as at the date hereof and on the Closing Date: (a) the
Buyer has no present intention to effect any assignment for the benefit
of creditors or filing under the federal Bankruptcy Act or any state law
affecting creditors and debtors, whether voluntary or involuntary (a
"Bankruptcy Event"); and (b) there is not pending or contemplated by the
Buyer, the acquisition of the securities or assets of any person, firm
or corporation, or any joint venture or other material transaction with
any such person, firm or corporation which has not been fully disclosed
in writing to the other parties.
7.6 Preparation of Financial and SEC Documents. After the Closing Date,
Buyer agrees to use reasonable efforts to cooperate with the Seller in
the preparation of the Seller's SEC Documents for a reasonable period of
time hereafter.
7.7 Information Statement. Within three business days following the date
hereof, the Seller shall file a preliminary Information Statement
relating to the transactions contemplated by this Agreement with the SEC
(the "Information Statement") and upon clearance from the SEC, the
Seller shall, within five business days of such clearance, distribute
the definitive Information Statement to the Seller's shareholders in
compliance with Rule 14c-2 under the Exchange Act. The Information
Statement and the delivery thereof will comply in all material respects
with the requirements of the Exchange Act and the rules and regulations
of the SEC promulgated thereunder.
7.8 Corporate Action. Prior to the Closing, the Seller shall file such
certificates or other documents in order to effectuate the matters
contemplated by the Shareholders' Consents.
8. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
In addition to the fulfillment of the parties' agreements in Section 7
above, the obligations of Buyer to consummate the transactions contemplated by
this Agreement are further subject to the satisfaction, on or before the Closing
Date, of all the following conditions, any one or more of which may be waived in
writing by the Buyer:
8.1 Accuracy of Representations and Warranties All representations and
warranties made by Seller in this Agreement, in any schedule(s) hereto,
and/or in any written statement delivered to the Buyer under this
Agreement shall be true and correct in all material respects on and as
of the Closing Date as though such representations and warranties were
made on and as of such dates.
8.2 Performance. The Seller and the Investors shall have performed,
satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with
by them on or before the Closing Date.
8.3 Certification. The Buyer shall have received a certificate, dated as of
the Closing Date, signed by the Seller, certifying, in such detail as
the Buyer and its counsel may reasonably request, that the conditions
specified in Sections 8.1 and 8.2 above have been fulfilled.
8.4 Resolutions. The Buyer shall have received certified consents of the
Board and shareholders of the Seller in form reasonably satisfactory to
counsel for the Buyer, authorizing the execution, delivery and
performance of this Agreement, and all actions to be taken by the Seller
hereunder.
8.5 Absence of Litigation. No action, suit or proceeding by or before any
court or any governmental body or authority, against the Seller or
pertaining to the transactions contemplated by this Agreement or their
consummation, not disclosed in the Commission Documents, shall have been
instituted on or before the Closing Date, which action, suit or
proceeding would, if determined adversely, (a) have a material adverse
effect on the Seller, its Business or any material portion of its
assets, (b) impair the ability of the Seller to deliver all of the
Assets to the Buyer in accordance with the terms of this Agreement, or
(c) impair the ability of the Buyer to consummate its acquisition of the
Assets.
8.6 Consents. All necessary disclosures to and agreements and consents of
(a) any parties to any material contracts and/or licensing authorities
which are material to the Seller's Business, and (b) any governmental
authorities or agencies to the extent required in connection with the
transactions contemplated by this Agreement, shall have been obtained
and true and complete copies thereof delivered to the Buyer.
8.7 Proceedings and Instruments Satisfactory. All proceedings, corporate or
other, to be taken in connection with the transactions contemplated by
this Agreement, and all documents incidental thereto, shall be
reasonably satisfactory in form and substance to the Buyer and its
counsel.
8.8 Satisfaction of Agreements. All of the obligations and agreements of
Seller specified in Section 7 shall have been satisfied by Seller to the
reasonable satisfaction of the Buyer.
9. CONDITIONS PRECEDENT TO SELLER'S AND INVESTORS' PERFORMANCE
In addition to the fulfillment of the parties' agreements in Section 7
above, the obligations of Seller and the Investors to consummate the
transactions contemplated by this Agreement are further subject to the
satisfaction, at or before the Closing Date of all of the following conditions,
any one or more of which may be waived in writing by the Seller and the
Investors:
9.1 Accuracy of Representations and Warranties. All representations and
warranties made by the Buyer in this Agreement and/or in the written
statement delivered by the Buyer under this Agreement shall be true and
correct in all material respects on and as of the Closing Date as though
such representations and warranties were made on and as of such dates.
9.2 Performance. The Buyer shall have performed, satisfied and complied with
all covenants, agreements and conditions required by this Agreement to
be performed, satisfied or complied with by the Buyer on or before each
of the Closing Date.
9.3 Certification. The Seller shall have received a certificate, dated the
each of the Closing Date, signed by the Buyer certifying, in such detail
as the Seller and its counsel may reasonably request, that the
conditions specified in Sections 9.1 and 9.2 above have been fulfilled.
9.4 Resolutions. The Seller shall have received certified resolutions of the
managing member of the Buyer, in form reasonably satisfactory to counsel
for the Seller, authorizing the execution, delivery and performance of
this Agreement and all actions to be taken by the Buyer hereunder.
9.5 Proceedings and Instruments Satisfactory. All proceedings to be taken in
connection with the transactions contemplated by this Agreement, and all
documents incidental thereto, shall be reasonably satisfactory in form
and substance to the Seller and its counsel.
9.6 Satisfaction of Agreements. All of the obligations and agreements of the
Buyer specified in Section 7 shall have been satisfied by the Buyer to
the reasonable satisfaction of Seller.
9.7 Approval of Seller's Stockholders. This Agreement and all of the
transactions contemplated hereby and pursuant to the Information
Statement shall have been duly approved, adopted and ratified by a
sufficient number of the votes of the shareholders of the Seller.
9.8 Representations. At or prior to the Closing, the Investors shall have
received documents as the Investors or its counsel shall reasonably
require incident to the Closing to confirm the representations and
warranties of the other parties.
9.9 Consent of Creditors. At or prior to the Closing, the Seller shall have
obtained the written consent of substantially all of the creditors set
forth on Schedule 5.9 attached hereto, in a form reasonably satisfactory
to the Investors, to the terms of the Assignment and Assumption
Agreement.
10. CLOSING
10.1 Closing Date. Unless this Agreement shall be terminated pursuant to
Section 11 below, the delivery of all consideration, documents and
instruments required pursuant to this Agreement and set forth below to
be executed and delivered (the "Closing"), shall take place at the
offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or such other location in New York, New York or elsewhere as
agreed to between the parties, on such date as shall be more than 23
calendar days from the date the Information Statement shall have been
mailed to the Seller's shareholders in compliance with Rule 14c-2 under
the Exchange Act; provided, however, that in no event shall the Closing
Date be later than 60 calendar days from the date hereof without the
written consent of all parties hereto (the date of the Closing being
referred to in this Agreement as the "Closing Date").
10.2 Closing Deliveries. At the Closing, the following documents shall be
delivered by the respective parties, unless waived by all of the parties
hereto:
a) Fully executed original of this Agreement and the disclosures
attached hereto;
b) Fully executed original Operating Agreement;
c) Receipt of all Class B Membership Interests issued to the Investors
from the Buyer;
d) Exchanged Debentures duly assigned to the Buyer;
e) Duly executed notice to the Buyer surrendering the Exchanged
Debentures for cancellation upon receipt thereof;
f) Duly executed Assignment and Assumption Agreement;
g) Duly executed ▇▇▇▇ of Sale;
h) President's Certificate of Seller substantially in the form of
Exhibit E attached hereto;
i) Managing Member's Certificate of Buyer substantially in the form of
Exhibit E attached hereto;
j) Documents as required pursuant to Section 9.8; and
k) Copies of the executed written consents of the Seller's creditors as
required pursuant to Section 9.9.
11. TERMINATION OF AGREEMENT
11.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing
Date:
a) by the mutual written consent of all of the parties hereto;
b) by any party, if: (i) a material breach shall exist with respect to
the written representations and warranties made by another party or
parties, as the case may be, (ii) another party shall fail to
perform any covenant or agreement on their part to be performed
hereunder, or shall take any action prohibited by this Agreement, if
such actions shall or may have a material adverse effect on the
Seller and/or the transactions contemplated hereby, (iii) another
party shall not have furnished, upon reasonable notice therefor,
such certificates and documents required in connection with the
transactions contemplated hereby and matters incidental thereto as
it or they shall have agreed to and matters incidental thereto as it
or they shall have agreed to furnish, and it is reasonably unlikely
that the other party will be able to furnish such item(s) prior to
May 31, 2002, or (iv) any consent of any third party to the
transactions contemplated hereby (whether or not the necessity of
which is disclosed herein or in any Schedule hereto) is reasonably
necessary to prevent a default under any outstanding material
obligation of Seller or the Buyer, and such consent is not
obtainable without material cost or penalty (unless the party or
parties not seeking to terminate this Agreement agree or agrees to
pay such cost or penalty); or
c) by any party, at any time on or after May 31, 2002, if the
transactions contemplated to be consummated at the Closing shall not
have been consummated prior thereto, and the party or parties
directing termination shall not then be in breach or default of any
obligations imposed upon such party by this Agreement.
11.2 Effect of Termination of Agreement. In the event of termination of
this Agreement pursuant to Section 11.1(a), no party to this
Agreement shall have any liability to the other for the termination
of this Agreement. In the event of termination by any party as
provided in this Section 11.1(b), prompt written notice shall be
given to the other party.
12. INDEMNIFICATION
12.1 General.
a) SELLER. The Seller hereby agrees to defend, indemnify and hold
harmless the Buyer from, against and in respect of any and all
claims, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies, including interest, penalties and
reasonable attorneys' fees (collectively "Losses"), that the Buyer
may incur, sustain or suffer as a result of the failure of the
Seller to perform any of the covenants and agreements of the Seller
contained in this Agreement on the Closing Date or thereafter except
to the extent such failure results from the actions or omissions of
the Buyer or its nominees or representatives (hereinafter referred
to as "Seller Covenant Losses").
b) THE BUYER. The Buyer does hereby agree to defend, indemnify and hold
harmless the Seller and the Investors from, against and in respect
of any and all Losses that the Seller or the Investors many incur,
sustain or suffer as a result of:
(i) a breach of any of the representations, and warranties of the
Buyer which are contained in Article 6 of this Agreement
(hereinafter referred to as "Buyer Breach of Warranty Losses");
or
(ii) the failure of the Buyer to perform any of the covenants and
agreements of Buyer contained in this Agreement on the Closing
Date or thereafter (hereinafter referred to as "Buyer Covenant
Losses").
12.2 Limitations on Breach of Warranty Losses.
a) Anything elsewhere contained in this Agreement to the contrary
notwithstanding, except for any Losses involving a finding by any
court of competent jurisdiction (from which no appeal can or has
been taken) that statutory or common law fraud has been committed by
the Buyer, any affiliate of the Buyer, the Buyer shall not be liable
with respect to any Buyer Breach of Warranty Losses unless and until
the aggregate amount of all such Buyer Breach of Warranty Losses
incurred by the Seller or the Investors shall exceed the sum of
$5,000 (the "Basket").
b) The provisions of Section 12.2(a) shall apply only to a Buyer Breach
of Warranty Losses. In the event that any Seller Covenant Losses or
Buyer Covenant Losses shall occur and shall be continuing at any
time from and after the Closing Date, the injured party or parties
shall have all applicable remedies at law or in equity available to
it, as are provided in this Agreement, without regard to any Basket.
12.3 Claims for Indemnity. Whenever a claim shall arise for which any
party shall be entitled to indemnification hereunder, the
indemnified party shall notify the indemnifying party in writing
within sixty (60) days of the indemnified party's first receipt of
notice of, or the indemnified party's obtaining actual knowledge of,
such claim, and in any event within such shorter period as may be
necessary for the indemnifying party or parties to take appropriate
action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights
and shall estimate (to the extent reasonably possible) the amount of
potential liability arising therefrom. If the indemnifying party
shall be duly notified of such dispute, the parties shall attempt to
settle and compromise the same or may agree to submit the same to
arbitration or, if unable or unwilling to do any of the foregoing,
such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement
compromise, arbitration or litigation shall promptly thereafter be
paid and satisfied by the indemnifying party or parties obligated to
make indemnification hereunder.
12.4 Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or
demand by any third party against the indemnified party or any of
its affiliates, the indemnifying party or parties shall be entitled
(without prejudice to the indemnified party's right to participate
at its own expense through counsel of its own choosing), at its
expense and through a single counsel of its own choosing, to defend
or prosecute such claim in the name of the indemnifying party or
parties, or any of them, or if necessary, in the name of the
indemnified party. In any event, the indemnified party shall give
the indemnifying party advance written notice of any proposed
compromise or settlement of any such claim. If the remedy sought in
any such action or demand is solely money damages, the indemnifying
party shall have fifteen (15) days after receipt of such notice of
settlement to object to the proposed compromise or settlement, and
if the indemnifying party does so object, the indemnifying party
shall be required to undertake, conduct and control, through counsel
of its own choosing and at its sole expense, the settlement or
defense thereof, and the indemnified party shall cooperate with the
indemnifying party in connection therewith.
12.5 Resolution of Disputes.
a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made in
New York by persons domiciled in New York City and without regard to
its principles of conflicts of laws. Each party hereto agrees to
submit themselves to the IN PERSONAM jurisdiction of the state and
federal courts situated within the Southern District of the State of
New York with regard to any controversy arising out of or relating
to this Agreement. The non-prevailing party to any dispute hereunder
shall pay the expenses of the prevailing party, including reasonable
attorneys' fees, in connection with any such dispute.
b) Notwithstanding Section 12.5(a) above, in the event that any actual
or anticipatory breach of any covenant and agreement contained
herein by any one or more party may cause irreparable damage to any
other parties hereto for such actually or potentially damaged party
would have no adequate remedy at law, the aggrieved party or parties
may immediately apply to any court of competent jurisdiction for a
temporary restraining order or such other preliminary or permanent
injunctive or interim relief as may be deemed appropriate by such
court.
13. COSTS
13.1 Finder's or Broker's Fees. Each of the Buyer and the Seller represents
and warrants that neither it nor any of its respective affiliates has
dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement, and no broker or other
person is entitled to any commission or finder's fee in connection with
any of these transactions.
13.2 Expenses. The parties shall each pay all costs and expenses incurred or
to be incurred by them, respectively, in negotiating and preparing this
Agreement and in closing and carrying out the transactions contemplated
by this Agreement, except to the extent set forth in Schedule Y.
14. FORM OF AGREEMENT
14.1 Effect of Headings. The Section headings used in this Agreement and the
titles of the Schedules hereto are included for purposes of convenience
only, and shall not affect the construction or interpretation of any of
the provisions hereof or of the information set forth in the disclosure
schedules.
14.2 Entire Agreement; Waivers. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof,
and supersedes all prior agreements or understandings as to such subject
matter. No party hereto has made any representation or warranty or given
any covenant to the other except as set forth in this Agreement. No
waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the
waiver.
14.3 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts; each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Except as otherwise stated herein, in lieu of the original documents, a
facsimile transmission or copy of the original documents shall be as
effective and enforceable as the original.
15. PARTIES
15.1 Parties in Interest. Nothing in this Agreement, whether expressed or
implied, is intended to confer any rights or remedies under or by reason
of this Agreement on any persons other than the parties to it and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement
intended to relieve or discharge the obligations or liability of any
third persons to any party to this Agreement.
15.2 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly
given (i) on the date of service if served personally on the party to
whom notice is to be given, or if given by facsimile transmission to the
number indicated below, or (ii) on the third day after mailing if mailed
to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as
follows:
If to the Buyer:
STARBRAND, LLC
[ADDRESS]
If to Seller:
Famous Fixins, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, President
If to the Investors:
As set forth on the signature page hereto.
or to such other address as either party shall have specified by notice
in writing given to the other party.
16. MISCELLANEOUS
16.1 Amendments and Modifications. No amendment or modification of this
Agreement shall be valid unless made in writing and signed by the party
to be charged therewith.
16.2 Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted
assigns.
16.3 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement should be
prohibited or invalid under applicable Law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
*******************
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first set forth above.
FAMOUS FIXINS, INC.
By: /s/
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Pres
STARBRAND, LLC
By: /s/
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
INVESTORS:
Address: ROSEWORTH GROUP, LTD
---------
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Drive By: /s/
Road Town, Tortola, BVI ------------------------------
Principal Amount of Exchanged Debentures: Name: ▇▇▇▇▇ ▇▇▇▇
$195,000 Title: Director
Address: AUSTOST ANSTALT ▇▇▇▇▇▇
---------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/
Principal Amount of Exchanged Debentures: ------------------------------
$112,000 Name:
Title: (Representative)
Address: BALMORE FUNDS, S.A
--------
Trident ▇▇▇▇▇▇▇▇
Road Town, Tortola, BVI
Principal Amount of Exchanged Debentures By: /s/
$143,000 ------------------------------
Name:
Title: Director
SCHEDULE X
----------
1. any claims for tax refunds, tax loss carryforwards or carrybacks or tax
credits of any kind applicable to the Business, income (loss) or Assets of
the Seller prior to the Closing Date.
2. the stock book, minute book, stock records, transfer sheets and other
corporate records of the Seller.
SCHEDULE Y
----------
1. Outstanding principal and interest of the Convertible Debentures, excluding
$450,000 Exchanged Debentures; and
2. Outstanding principal and interest of the Seller's non-convertible
promissory notes issued to Roseworth Group Limited and Alpha Capital AG.
3. Outstanding principal and interest of Seller's 4% convertible debentures
issued to AMRO International, S.A.
4. Notwithstanding Section 13.2 of the Agreement, the reasonable legal,
accounting and SEC disclosure related fees, including filing fees, mailing
costs, or other expenses which were and will reasonably be incurred in
connection with this transaction, including Commission Documents less
$20,000 to be paid by the Buyer; provided the Investors have given their
prior written consent to the payment by the Seller of such fees.
DISCLOSURE SCHEDULES
--------------------
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This AGREEMENT is made this 15th day of May 2002, by and among
Starbrand, LLC, a Delaware limited liability company, having an address at ▇▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("Assignee" or the "Company") and
Famous Fixins, Inc., a New York corporation, having an address at ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("Assignor").
W I T N E S S E T H:
WHEREAS, Assignor and Assignee have entered into a Settlement of Debts
and Asset Purchase Agreement dated as of March 29, 2002 ("Purchase Agreement").
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Purchase Agreement; and
WHEREAS, Assignor desires to sell, assign and transfer to Assignee the
Business, Net Assets and the Net Liabilities and Assignee desires to accept said
sale, assignment, transfer and acquisition of the Business, the Net Assets and
the Net Liabilities from Assignor upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Assignment of the Business, the Net Assets and the Net Liabilities.
Subject to the terms and conditions set forth herein and in the
Purchase Agreement, Assignor hereby assigns and transfers to Assignee,
and Assignor agrees to purchase and assume from Assignee, (i) the
Business, the Net Assets and the Net Liabilities of the Assignor being
sold and assigned to Assignee hereunder, (ii) its rights, liabilities,
duties and obligations in and to the Net Liabilities (whether known or
unknown, whether absolute or contingent, whether liquidated or
unliquidated and whether due or to become due) undertaken by Assignor,
and (iii) all of the Net Assets currently owned by Assignor, of every
kind and description, real, personal and mixed, tangible and
intangible, wherever situated.
2. Assignee Bound. Assignee hereby accepts the foregoing assignment and
transfer and promises to be bound by and upon all the covenants,
agreements, terms and conditions set forth herein and in the Purchase
Agreement on the part of the Assignee.
3. Assignee Indemnification. Assignee shall and does hereby indemnify and
save Assignor harmless from and against any and all claims, demands,
actions, causes of action, suits, proceedings, damages, liabilities,
costs and expenses of every nature whatsoever and relating to the
Business, the Net Assets and the Net Liabilities (including without
limitation all reasonable attorneys' fees and expenses) and arising
from matters occurring after the date hereof.
4. Assignor Indemnification. Assignor shall and does hereby indemnify and
save Assignee harmless from and against any and all claims, demands,
actions, causes of action, suits, proceedings, damages, liabilities,
costs and expenses of every nature whatsoever and relating to the
Excluded Assets or Excluded Liabilities.
5. Benefit and Assignments. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that no party shall assign or transfer
all or any portion of this Agreement without the prior written consent
of the other party, and any such attempted assignment shall be null and
void and of no force or effect.
6. Broker. The parties represent and warrant to each other that all
negotiations relating to this Agreement and the transactions
contemplated hereby have been carried on between them directly and
without the intervention of any other party in such manner as to give
rise to any valid claim against any of the parties for a brokerage
commission, finder's fee or other like payment.
7. Waiver. Any party hereto shall have the right to waive compliance by
the other of any term, condition or covenant contained herein. Such
waiver shall not constitute a waiver of any subsequent failure to
comply with the same or any different term, condition or covenant.
8. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and
without regard to its principles of conflicts of laws. Each party
hereto agrees to submit themselves to the in personam jurisdiction of
the state and federal courts situated within the Southern District of
the State of New York with regard to any controversy arising out of or
relating to this Agreement.
9. Headings. The paragraph headings of this Agreement are for convenience
of reference only and do not form a part of the terms and conditions of
this Agreement or give full notice thereof.
10. Severability. Any provision hereof that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability, without
invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. Entire Agreement. This Agreement, the Purchase Agreement and the
Schedules and Exhibits thereto, contain the entire understanding
between the parties, no other representations, warranties or covenants
having induced either party to execute this Agreement. This Agreement,
the Purchase Agreement and the Schedules and Exhibits thereto
supersedes all prior or contemporaneous agreements with respect to the
subject matter hereof. This Agreement may not be amended or modified in
any manner except by a written agreement duly executed by the party to
be charged, and any attempted amendment or modification to the contrary
shall be null and void and of no force or effect.
12. Joint Drafting. The parties agree that this Agreement shall be deemed
to have been drafted jointly by all parties hereto, and no construction
shall be made other than with the presumption of such joint drafting.
13. Counterparts. This Agreement may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and
which together shall constitute one and the same instrument. In lieu of
the original documents, a signed facsimile transmission or copy of the
original documents shall be as effective and enforceable as the
original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Assignment and Assumption Agreement to be executed as of the day and year first
above written.
WITNESS: ASSIGNOR:
FAMOUS FIXINS, INC.
/s/ By: /s/
------------------- --------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Pres
WITNESS: ASSIGNEE:
STARBRAND, LLC
/s/ By: /s/
------------------- --------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Pres
EXHIBIT B
▇▇▇▇ OF SALE
KNOW ALL MEN BY THESE PRESENTS, pursuant to that certain Settlement of
Debts and Asset Purchase Agreement (the "Agreement"), dated as of March 29, 2002
by and among Famous Fixins, Inc. (the "Seller"), having an address at ▇▇▇▇ ▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, New York, Starbrand, LLC (the "Buyer"),
having an address at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, New York,
management of the Seller and certain debt holders of the Seller in connection
with the sale of substantially all of the assets and business of the Seller,
that the undersigned Seller, for and in consideration of the payment of the good
and valuable consideration set forth therein, the receipt and sufficiency of
which is hereby acknowledged, does hereby convey, transfer and assign to the
Buyer as of the date hereof all of Seller's right, title and interest in and to
all of the Net Assets.
TO HAVE AND TO HOLD, the Net Assets are hereby sold, assigned,
transferred and conveyed to the Buyer, its successors and assigns, to and for
their own use and benefit forever.
Capitalized terms used but defined in the ▇▇▇▇ of Sale shall have the
same meaning as are ascribed to such terms in the Agreement.
This instrument shall be binding upon Seller, its respective successors
and assigns, and shall inure to the benefit of Buyer and its successors and
assigns.
This ▇▇▇▇ of Sale shall be governed by, construed and enforced in
accordance with the laws of New York.
IN WITNESS WHEREOF, Seller has caused this ▇▇▇▇ of Sale to be executed
as of the 15th day of May, 2002.
FAMOUS FIXINS, INC.
By: /s/
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Pres