EXHIBIT 10.20
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OPTION AGREEMENT
This OPTION AGREEMENT is made and entered into as of this 22nd day of
December, 1994 by and between:
THE ▇▇▇▇▇▇▇, ▇▇▇▇▇ COMPANY, a Delaware corporation, having offices at 78
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇"); and
PBS ENTERPRISES LTD., a New York corporation, having offices located at 56
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▇▇▇▇▇▇▇▇ Street, Suite 402, New Rochelle, New York 10801 ("PBS"); and
DAVEDAN PROPERTIES LTD., a Jamaica limited liability company, having
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offices located at Sandside, Port ▇▇▇▇▇, Jamaica ("Davedan"); and
▇▇▇▇▇▇ MANUFACTURING COMPANY LTD., a Jamaica limited liability company,
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having offices located at Sandside, Port ▇▇▇▇▇, Jamaica ("▇▇▇▇▇▇").
RECITALS
1. ▇▇▇▇▇▇▇, ▇▇▇▇▇ is engaged in the business of designing, manufacturing and
marketing intimate apparel and specialty shapewear.
2. Davedan is the owner of certain real property and buildings and
improvements thereon known as ▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, as
more particularly described on Schedule 1 (the "Site").
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3. ▇▇▇▇▇▇ is engaged in the manufacture of intimate apparel at a facility
located on the Site.
4. PBS is an Affiliate (as defined herein) of Davedan and ▇▇▇▇▇▇; ▇▇▇▇▇▇ has
contractual relationships with Davedan to utilize the Site and PBS has a
contractual relationship with ▇▇▇▇▇▇ to utilize Maggie's manufacturing capacity.
5. PBS, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall enter into a certain Exclusive
Subcontracting Agreement of even date herewith pursuant to which ▇▇▇▇▇▇ shall
agree to devote one hundred percent (100%) of its manufacturing capacity to the
satisfaction of ▇▇▇▇▇▇▇, Adler's requirements for the manufacture of intimate
apparel (the "Exclusive Subcontracting Agreement").
6. As a condition of entering into the Exclusive Subcontracting Agreement,
▇▇▇▇▇▇▇, ▇▇▇▇▇ desires to acquire an option to purchase, and PBS desires to sell
and to cause ▇▇▇▇▇▇ and Davedan to sell,
upon exercise of such option, (i) all of PBS' sewing machines and Maggie's
assets, except for certain Excluded Assets (as defined herein) and (ii) all of
Davedan's rights in and to the Site and improvements thereon, subject to the
terms and conditions hereof.
NOW THEREFORE, in consideration of the foregoing and of the mutual
representations, covenants and agreements hereinafter set forth, the parties
hereto hereby agree as follows:
ARTICLE I.
Definitions
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As used herein, the following terms shall have the meanings indicated:
"Actual Operating Costs" has the meaning set forth in the Exclusive
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Subcontracting Agreement.
"Affiliate" means, with respect to a party, any entity (including a natural
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person) controlled by, controlling or under common control with such party. For
purposes hereof, the term "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of an
entity, whether through the ownership of voting securities, by conduct or
otherwise.
"Annual Amount" has the meaning set forth in the Exclusive Subcontracting
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Agreement.
"Assets" shall mean all of the properties, rights, assets, businesses,
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privileges, interests and claims, in the possession of ▇▇▇▇▇▇ or Davedan,
wherever situated, of every kind, nature and description, tangible or
intangible, relating to, or used in connection with, the Business, including,
without limitation, all equipment, spare parts, leasehold improvements,
supplies, books, records and the PBS sewing machines listed on Schedule 2.
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Assets shall not include any Excluded Assets.
"Assumed Severance Obligations" means, calculated as of the Closing Date, the
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amount owing to employees of ▇▇▇▇▇▇ in the nature of severance, redundancy or
other payments assuming such employees were terminated by ▇▇▇▇▇▇ on the Closing
Date.
"Business" means the business of manufacturing intimate apparel as conducted by
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▇▇▇▇▇▇ at the Site.
"Business Expansion Costs" has the meaning set forth in the Exclusive
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Subcontracting Agreement.
"Business Interruption" means any loss to, or destruction of, any of the Assets
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or the Property or any taking by any Governmental
Authority of any of the Assets or the Property, whether through the exercise of
the right of condemnation, eminent domain, or otherwise, which event has a
material adverse effect on the operation of the Business.
"Closing" has the meaning set forth in Section 4.1.
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"Closing Date" has the meaning set forth in Section 4.1.
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"Deposit" means $70,000.00.
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"Escrow Agent" has the meaning set forth in the Escrow Agreement.
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"Escrow Agreement" means an escrow agreement substantially in the form of
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Exhibit 1 to be executed by PBS, ▇▇▇▇▇▇▇, ▇▇▇▇▇ and the Escrow Agent
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concurrently herewith.
"Excluded Assets" means (i) cash on hand, bank accounts and accounts receivable
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owned by ▇▇▇▇▇▇, Davedan or PBS on the Closing Date; (ii) any and all assets of
PBS other than the sewing machines listed on Schedule 2; and (iii) any and all
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right, title and interest of ▇▇▇▇▇▇, Davedan or PBS in and to this Agreement and
any Related Agreement.
"Exclusive Subcontracting Agreement" has the meaning set forth in the fifth
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Recital.
"Expiration Date" means April 1, 1997, except that, in the event that PBS
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notifies ▇▇▇▇▇▇▇, ▇▇▇▇▇ of its termination of the Exclusive Subcontracting
Agreement pursuant to Article VI.D thereof or of this Agreement, the Expiration
Date means (a) if such notice is received in 1995, the date six (6) months after
receipt of such notice; (b) if such notice is received in 1996, the date three
(3) months after receipt of such notice; and (c) if such notice is received in
1997, the date forty-five (45) days after receipt of such notice; provided,
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however, that, in any and all events, the Expiration Date shall not be later
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than April 1, 1997.
"Final Payment" means the aggregate amount received by PBS and Strouse, Adler,
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in the case of loss or destruction of the Assets or the Property, as final
payment under all applicable policies of insurance in complete discharge and
settlement of all claims thereunder, or, in the case of a taking of the Assets
or Property, as an award or settlement upon compromise or other disposition of
any and all claims relating to or arising out of such taking.
"Financial Information" has the meaning stated in Section 7.19.
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"Governmental Authority" means the governments of Jamaica and the United States
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or any state, county, borough, municipal, local, parish or other governmental
department, entity, authority, commission, board, bureau, court, agency or any
instrumentality of either of them.
"Lease" means that certain lease by and among ▇▇▇▇▇▇ and Davedan, dated March 1,
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1988 pursuant to which ▇▇▇▇▇▇ has secured its right to use the Site for the
conduct of the Business.
"Licenses" has the meaning set forth in Section 7.15.
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"Loss" means any and all damages, demands, losses, obligations, tax, interest,
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penalty, suit, judgment, order, lien, liabilities, debts, claims, actions,
causes of action, encumbrances, costs and expenses, whether administrative,
judicial or otherwise, of every kind and nature, including, without limitation,
reasonable attorneys', consultants', accountants' and expert witness fees.
"Option" has the meaning set forth in Section 2.1.
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"Option Notice" has the meaning set forth in Section 2.3.
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"PBS Parties" means PBS, ▇▇▇▇▇▇ and Davedan.
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"PBS Party Obligations" has the meaning set forth in Section 3.5.
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"Permitted Encumbrances" means those liens, encumbrances and restrictions on the
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Property set forth on Schedule 7.6.
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"Projected Operating Costs" has the meaning set forth in the Exclusive
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Subcontracting Agreement.
"Property" means the Site, together with (i) all property rights, easements,
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rights-of-way, privileges and appurtenances thereto; (ii) all leases, rents and
profits derived therefrom; (iii) the right to use any street, road, highway or
avenue, open or proposed, public or private, adjoining or adjacent thereto; (iv)
all strips and gores adjoining or adjacent thereto; (v) all oil, gas and mineral
rights; and (vi) any and all buildings, structures or improvements thereon or
thereto.
"Purchase Price" has the meaning set forth in Section 3.1.
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"Related Agreements" means the Exclusive Subcontracting Agreement, the Escrow
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Agreement, the Restrictive Covenant Agreement, the Specific Performance
Agreement and any and all agreements, certificates or instruments to be executed
and delivered in connection herewith or therewith.
"Remaining Subcontracting Payment" means, as of a given Closing Date, the
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balance of the Annual Amount due and payable to PBS for the year in which such
Closing Date occurs plus (a) $725,000.000, if such Closing Date is prior to
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December 31, 1995; or (b) $375,000.00, if such Closing Date is after December
31, 1995 and before December 31, 1996; provided, however, that if such Closing
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Date occurs after October 2, 1997, there shall be no Remaining Subcontracting
Payment.
"Restrictive Covenant Agreement" means that certain agreement by and among
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▇▇▇▇▇▇▇, ▇▇▇▇▇ and PBS, ▇▇▇▇▇▇, Davedan, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of
even date herewith.
"Shareholders" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
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"Site" has the meaning set forth in the second Recital.
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"Specific Performance Agreement" means that certain agreement by and among
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Strouse, Adler, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of even date herewith.
ARTICLE II.
Option to Purchase
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2.1 Grant of Option. PBS hereby grants to ▇▇▇▇▇▇▇, ▇▇▇▇▇ an option (the
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"Option") to purchase and acquire the Assets and the Property upon payment of
the Purchase Price, such Option to be exercisable as provided herein.
2.2 Option Period. Subject to the terms and conditions hereof, the Option may
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be exercised by ▇▇▇▇▇▇▇, ▇▇▇▇▇ at any time after January 1, 1995 until the
Expiration Date.
2.3. Manner of Exercise. ▇▇▇▇▇▇▇, ▇▇▇▇▇ may exercise the Option by providing
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notice thereof to PBS, which notice shall designate the Closing Date (the
"Option Notice"). Simultaneously with the giving of the Option Notice, ▇▇▇▇▇▇▇,
▇▇▇▇▇ shall pay the Deposit, by check or wire transfer, to the Escrow Agent to
be held in escrow subject to the terms and conditions of the Escrow Agreement.
Upon exercise of the Option by Strouse, Adler, the obligation of the PBS
Parties to consummate the Closing as provided in Section 4.1 shall be absolute
and unconditional, except for the satisfaction of the conditions set forth in
Article VI.
2.4 Caveat. In order to maintain ▇▇▇▇▇▇▇, Adler's rights to purchase the
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Property, PBS agrees that ▇▇▇▇▇▇▇, ▇▇▇▇▇ may lodge a caveat against the
Property, in form and substance acceptable to ▇▇▇▇▇▇▇, ▇▇▇▇▇ and PBS, which
reflects the existence of this Agreement and ▇▇▇▇▇▇▇, Adler's rights and
Davedan's obligations hereunder and PBS undertakes to execute and deliver all
documents and to do any acts or things necessary to accomplish the foregoing.
ARTICLE III.
Purchase Price
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3.1 Purchase Price. The purchase price for the Assets and the Property upon
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exercise of the Option (the "Purchase Price") shall
be $700,000.00 plus the amount of the Remaining Subcontracting Payment, if any,
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calculated as of the Closing Date.
3.2 Adjustments to Purchase Price. The Purchase Price shall be reduced by an
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amount equal to fifty percent (50%) of the Assumed Severance Obligations.
3.3 Allocation of Purchase Price. The Purchase Price shall be allocated among
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the Assets and the Property in accordance with Schedule 3.3.
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3.5 No Assumption of Liabilities. It is specifically acknowledged and agreed by
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the PBS Parties that at the Closing ▇▇▇▇▇▇▇, ▇▇▇▇▇ is, except for the Assumed
Severance Obligations, assuming no liabilities of any PBS Party of any nature
whatsoever, whether absolute, accrued, contingent or otherwise ("PBS Party
Obligations"), including, but not limited to (a) liabilities in respect of taxes
due or payable to any Governmental Authority; (b) any liabilities for uncleared
checks, provided that the underlying liability with respect to such check is not
an Actual Operating Cost or a Business Expansion Cost; (c) any executory
obligation of any PBS Party under any contracts or agreements of any PBS Party;
(d) any obligations or liabilities to any current or former employee of any PBS
Party, including, without limitation, obligations or liabilities with respect to
accrued vacation, sick leave, severance or any payments relating to such
employee's work attendance record; and (e) any liability or obligation on
account of any claim for broker's or finder's fees or commissions arising by
reason of any services alleged to have been rendered on behalf of any PBS Party
with respect to this Agreement or any Related Agreement. ▇▇▇▇▇▇▇, ▇▇▇▇▇ agrees
to timely pay and discharge the Assumed Severance Obligations and the PBS
Parties agree to timely pay and discharge all PBS Party Obligations.
IV. ARTICLE
Closing
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4.1 Closing. The closing of the sale and purchase of the Assets and the
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Property (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or such other place
as the parties may agree, on the closing date set forth in the notice of
exercise of the Option given by ▇▇▇▇▇▇▇, ▇▇▇▇▇ pursuant to Section 2.3 (the
"Closing Date"); provided, however, that such Closing Date shall not be later
than January 15, 1998.
4.2 PBS Closing Deliverables. At the Closing, PBS shall deliver the following
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documents and things to ▇▇▇▇▇▇▇, ▇▇▇▇▇:
(a) ▇▇▇▇ of Sale. A duly executed ▇▇▇▇ of Sale or other appropriate
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document(s) conveying to ▇▇▇▇▇▇▇, ▇▇▇▇▇ good and marketable fee simple
title to the Property free and clear of
all mortgages, liens and encumbrances and other conditions of title in form
and substance customary in Jamaica.
(b) Termination of Lease. A termination of the Lease in recordable form.
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(c) Property Records. Originals of all of the following documents relating
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to the Property, if applicable: (i) licenses, permits and certificates of
occupancy; (ii) service contracts and maintenance agreements; (iii)
warranties or guaranties, including warranties or guarantees given by
general contractors, subcontractors, suppliers and manufacturers with
respect to any buildings or improvements on the Property; (iv) appraisals,
paid tax bills for the year in which the Closing occurs, tax assessment
notices; (v) engineering reports or other, similar, technical data and
information; (vi) as-built plans and specifications, including
specifications for any proposed improvement to the Property; (vii) any
material correspondence which discloses claims, allegations or other
adverse information regarding the Property, including with respect to
environmental and other conditions regarding health and safety. It shall
not be the responsibility of ▇▇▇▇▇▇, Davedan or PBS to obtain any such
documents if they do not currently exist.
(d) Assignment and ▇▇▇▇ of Sale of Davedan PBS and ▇▇▇▇▇▇. A duly executed
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Assignment and ▇▇▇▇ of Sale in form and substance satisfactory to ▇▇▇▇▇▇▇,
▇▇▇▇▇ conveying all of the Assets to ▇▇▇▇▇▇▇, ▇▇▇▇▇ free and clear of all
liens and encumbrances, including, without limitation, those listed on
Schedule 7.10.
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(e) Resolutions. Certified copies of the resolutions duly adopted by the
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shareholders and board of directors of each of PBS, ▇▇▇▇▇▇ and Davedan
authorizing the execution, delivery and performance of this Agreement and
the transfer of the Assets and Property, which resolutions shall be in full
force and effect at the time of delivery.
(f) Releases. Releases of any and all mortgages, liens, pledges,
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encumbrances, including, without limitation, Permitted Encumbrances and
those encumbrances listed on Schedule 7.10.
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(g) Legal Opinion. An opinion of counsel to PBS, ▇▇▇▇▇▇ and Davedan in
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form and substance acceptable to ▇▇▇▇▇▇▇, ▇▇▇▇▇ and its counsel as to the
matters described in Sections 7.1, 7.2, 7.3, 7.4 and 7.16.
4.3 ▇▇▇▇▇▇▇, ▇▇▇▇▇ Closing Deliverables. At the Closing, ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall
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deliver the following documents and things to PBS:
(a) Payment of Purchase Price. The Purchase Price, less the Deposit, by
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bank check or wire transfer.
(b) Resolutions. Certified copies of the resolutions duly adopted by the
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board of directors of ▇▇▇▇▇▇▇, ▇▇▇▇▇ authorizing the execution and delivery
of and performance of its obligations under this Agreement, which
resolutions shall be in full force and effect at the time of delivery.
(c) Legal Opinion. An opinion of counsel to ▇▇▇▇▇▇▇, ▇▇▇▇▇ in form and
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substance acceptable to the PBS Parties and their counsel as to the matters
described in Section 8.1, 8.2 and 8.3.
ARTICLE V
Closing Conditions of ▇▇▇▇▇▇▇, ▇▇▇▇▇
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All of the obligations of ▇▇▇▇▇▇▇, ▇▇▇▇▇ to consummate the Closing are
subject to the satisfaction at or prior to the Closing of each and every one of
the following conditions precedent (any of which may be waived by ▇▇▇▇▇▇▇, ▇▇▇▇▇
in its sole discretion):
5.1 Representations and Warranties True. Each of the representations and
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warranties of PBS contained herein or in any certificate or document delivered
pursuant hereto or in connection with the transactions contemplated hereby shall
be true and correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of such date.
5.2 Performance. PBS shall have performed and complied with all of the
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agreements, covenants and obligations required under this Agreement to be
performed prior to or at the Closing and all conditions to be fulfilled by
persons other than the parties to this Agreement shall have been so fulfilled.
5.3 Delivery of PBS Deliverables. PBS shall have delivered prior to or at the
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Closing all of the documents and items set forth in Section 4.2.
5.4 Nonoccurrence of Certain Events. There shall not have occurred or been
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discovered any event, condition, fact or circumstance, including any change in
the political, social or economic climate of Jamaica, which has affected or
which may adversely affect in any material respect (a) ▇▇▇▇▇▇▇, Adler's ability
to operate the Business as such Business is being operated on the date hereof
and on the Closing Date; or (b) the condition of the Assets or the Property. In
addition, no litigation, arbitration or other legal or administrative proceeding
shall have been commenced or shall be pending by or before any court,
arbitration panel or Governmental Authority or official thereof, and no statute,
rule or regulation of any Governmental Authority shall have been enacted after
the date of this Agreement, and no judicial or administrative decision shall
have been rendered which (i) enjoins or prohibits the consummation of all or a
material part of the transactions contemplated by this Agreement; (ii) is an
action by any Governmental Authority which seeks to enjoin or prohibit the
consummation of all or a material part of the transactions contemplated by this
Agreement; or (iii) affects in any way (x) ▇▇▇▇▇▇ or PBS' title to the Assets or
ability to transfer to ▇▇▇▇▇▇▇, ▇▇▇▇▇ good title to the Assets; or (y) Davedan's
title to the Property or ability to transfer good, marketable title to the
Property. In such event, there shall be no ▇▇▇▇▇▇▇, ▇▇▇▇▇ claim for damages or
specific performance against PBS, Davedan or ▇▇▇▇▇▇.
5.5 Consents. PBS and ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall have obtained all authorizations,
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consents, waivers and approvals as may be required in connection with the
consummation of the transactions contemplated hereby.
ARTICLE VI
Closing Conditions of PBS
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All of the obligations of PBS to consummate the Closing are subject to
the satisfaction at or prior to the Closing of each and every one of the
following conditions precedent (any of which may be waived by PBS in its sole
discretion):
6.1 Representations and Warranties True. Each of the representations of
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▇▇▇▇▇▇▇, ▇▇▇▇▇ contained herein or in any certificate or document delivered
pursuant hereto or in connection with the transactions contemplated hereby shall
be true and correct on and as of the Closing Date with the same force and effect
as though made on and as of such date.
6.2 Performance. ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall have performed and complied with all of
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the agreements, covenants and obligations required under this agreement to be
performed prior to or at the Closing and all conditions to be fulfilled by
persons other than the parties to this Agreement shall have been so fulfilled.
6.3 Delivery of ▇▇▇▇▇▇▇, ▇▇▇▇▇ Deliverables. ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall have
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delivered prior to or at the Closing all of the documents and things set forth
in Section 4.3.
6.4 Nonoccurrence of Certain Events. No litigation, arbitration or other legal
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or administrative proceeding shall have been commenced or shall be pending by or
before any court, arbitration panel or Governmental Authority or official
thereof, and no statute, rule or regulation of any Governmental Authority shall
have been enacted after the date of this Agreement, and no judicial or
administrative decision shall have been rendered which (i) enjoins or prohibits
the consummation of all or a material part of the transactions contemplated by
this Agreement; or (ii) is an action by any Governmental Authority which seeks
to enjoin or prohibit the consummation of all or a material part of the
transactions contemplated by this Agreement.
ARTICLE VII
Representations and Warranties of PBS
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In order to induce ▇▇▇▇▇▇▇, ▇▇▇▇▇ to enter into this Agreement and the
Related Agreements, to exercise the Option and to consummate the transactions
contemplated hereby, PBS hereby represents and warrants to ▇▇▇▇▇▇▇, ▇▇▇▇▇ for
and on behalf of the PBS Parties as follows:
7.1 Organization. PBS is a corporation duly organized, validly existing and in
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good standing under the laws of the State of New York. Each PBS Party has all
requisite right, power and authority to enter into this Agreement and the
Related Agreements (as the case may be) and to consummate the transactions
contemplated hereby and thereby. The Shareholders are all of the shareholders
(as the case may be) of PBS, ▇▇▇▇▇▇ and of Davedan.
7.2 Authorization of Agreement. The execution and delivery of, and the
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performance of the obligations under, this Agreement and the Related Agreements
(as the case may be) by each of the PBS Parties has been duly authorized by all
requisite corporate and company (as the case may be) action. This Agreement and
each of the Related Agreements to which he, she or it is a party constitute the
legal, valid and binding obligation of the PBS Parties and the Shareholders,
enforceable against each of them in accordance with their respective terms. The
Related Agreements are in full force and effect.
7.3 No Violation or Conflict. The execution and delivery of, and the
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performance of the obligations under, this Agreement and each of the Related
Agreements by the PBS Parties and the Shareholders (as the case may be) and the
consummation of the transactions contemplated hereby and thereby, and the
compliance with the terms hereof and thereof, (i) do not and will not violate or
conflict with any provision of law or regulation, or any writ, order or decree
of any court or Governmental Authority, or any term of the certificate of
incorporation, bylaws, articles of association or memorandum of association of
such PBS Party; (ii) do not and will not, with or without the passage of time or
the giving of notice or both, result in a breach of, or constitute a default or
require any consent under, or result in the creation of any lien, charge or
encumbrance upon the Property or any of the Assets under, any agreement or
instrument to which any of the PBS Parties or the Shareholders is a party or
pursuant to which the Assets or the Property may be bound or affected.
7.4 Consent or Approval of Governmental Authorities. No consent, approval or
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authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required in connection with the
execution, delivery or performance by the PBS Parties or the Shareholders of
this Agreement or any Related Agreement or the consummation of the
transactions contemplated hereby or thereby which has not been obtained,
complied with or otherwise satisfied.
7.5 Solvency. None of the PBS Parties or the Shareholders has (i) made an
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assignment for the benefit of creditors; (ii) been adjudicated bankrupt; or
(iii) filed a petition in voluntary bankruptcy or sought reorganization, the
appointment of a receiver or other accommodation with his, her or its creditors
under any law, regulation or rule respecting bankruptcy or reorganization.
7.6 Title to Real Property. Davedan is the owner of marketable title to the
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Property, free and clear of all liens, encumbrances and restrictions of any
kind, except those Permitted Encumbrances set forth on Schedule 7.6.
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7.7 Certain Real Property Matters. No portion of the Property is, or to the
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knowledge of the PBS Parties, will be, affected by any special assessments or
impact fees imposed by any Governmental Authority. None of the PBS Parties has
received notice, or has any knowledge of (a) any change contemplated in the
requirements of any Governmental Authority, (b) any judicial or administrative
action, (c) any action by adjacent landowners, or (d) any material adverse
condition affecting (i) the Business or the Property, (ii) the operation by
either ▇▇▇▇▇▇▇, ▇▇▇▇▇ or ▇▇▇▇▇▇ of the Business, or (iii) the ability of
▇▇▇▇▇▇▇, ▇▇▇▇▇ to conduct the Business or use the Property in a manner
substantially the same as the conduct of the Business and the use of the
Property by ▇▇▇▇▇▇ immediately prior to the date hereof. Except for ▇▇▇▇▇▇ and
Strouse, Adler, there are no other parties in possession of any portion of the
Property whether as lessees, tenants at sufferance, trespassers or otherwise.
7.8 Notices. As of December 22, 1994, none of the PBS Parties has received
-------
notice from, or has knowledge of, any insurance company, board of fire
underwriters (or other body exercising similar functions) or Governmental
Authority (i) requesting the performance of any repairs, alterations or other
work on the Property, (ii) that the either the Property or the use or operation
thereof is currently in violation of any zoning, environmental, health, safety
or land use law, rule or regulation; (iii) that any investigation has commenced
or is contemplated regarding such a violation. If any PBS Party receives such a
notice after December 22, 1994, PBS shall promptly notify ▇▇▇▇▇▇▇, ▇▇▇▇▇. None
of the PBS Parties has received written notice of the institution of any
proceedings by any Governmental Authority relating to any proposed taking of any
portion of the property by condemnation, eminent domain or under similar
authority.
7.9 Service Contracts. There are no service contracts, warranties, permits,
-----------------
licenses, as-built plans or specifications pertaining to the Property as of the
date of this Agreement.
7.10 Title to Assets. ▇▇▇▇▇▇ and PBS have, and upon consummation of the
---------------
transactions contemplated hereby, ▇▇▇▇▇▇▇, ▇▇▇▇▇ will have,
good title to all of the Assets necessary to allow ▇▇▇▇▇▇▇, ▇▇▇▇▇ to operate the
Business in the same manner as the Business is being operated prior to the date
hereof. None of the Assets is subject to any mortgage, lien, pledge,
encumbrance, claim or charge of any kind, except as disclosed on Schedule 7.10.
-------------
The Assets include all of the tangible and intangible property as of the Closing
Date necessary to the conduct of the Business as conducted by ▇▇▇▇▇▇ prior to
the Closing Date. None of the Assets is used by PBS, ▇▇▇▇▇▇, Davedan or any
third party in connection with the operation of any business other than the
Business. All of the Assets are located on the Property.
7.11 Leases. ▇▇▇▇▇▇ is not a party to any lease, whether written or oral,
------
relating to the Assets or the Business other than the leases described on
Schedule 7.11. All of the leases described on Schedule 7.11 are in full force
------------- -------------
and effect on the date hereof and on the Closing Date and none is in default.
7.12 Contracts. To the knowledge of the PBS Parties, there are no contracts,
---------
commitments, licenses, agreements or permits of a material nature which relate
in any manner to the Business.
7.13 Compliance With Laws. To the knowledge of the PBS Parties, each of the PBS
--------------------
Parties is in compliance with all laws, rules or regulations applicable to the
conduct of the Business, including the Property and the Assets. None of the PBS
Parties is subject to any order, judgement or decree of any Governmental
Authority, or is presently charged or threatened with, or subject to any
investigation, proceeding or inquiry of any Governmental Authority. No PBS Party
has received notice of, or has knowledge of, any uncorrected violation of any
law, rule or regulation with respect to any PBS Party or the conduct of their
respective businesses, including the Business, or properties or assets,
including the Property and the Assets, asserted by a Governmental Authority.
7.14 Employee Matters. To the knowledge of the PBS Parties, the Business has
----------------
not been the object of any union organizing activity and there have been no
attempts to organize the employees of the Business either by organized unions or
the employees themselves. None of the PBS Parties is subject to any collective
bargaining agreement or similar agreement or arrangement with any union or labor
organization. No election or proceeding relating to labor relations of the
Business is pending or, to the knowledge of the PBS Parties, threatened, nor is
any labor dispute or disturbance pending or, to the knowledge of the PBS
Parties, threatened. ▇▇▇▇▇▇ is generally on good terms with its employees.
Except as described on Schedule 7.14, none of the PBS Parties has any pension or
-------------
profit-sharing plan or employee benefit or severance plan of any kind for any of
its employees, has any written employment agreement with any of its employees,
or is in breach of any oral or written agreement or understanding with respect
to employment. Except as described on Schedule 7.14, all employees of ▇▇▇▇▇▇ are
-------------
terminable at will and without payment of, or the incurring of any liability
relating to, severance, accrued vacation pay, sick leave or any
amount due in respect of any employee's work attendance record or any other
benefits as a result of such termination.
7.15 Licenses and Permits. As of December 22, 1994, ▇▇▇▇▇▇ has all licenses,
--------------------
approvals, franchises, certificates, permits, planning permissions or
authorizations ("Licenses") necessary for the conduct of the Business and all
such Licenses are in full force and effect and no action or claim is pending,
and no notice of any action or claim has been received, which threatens to
revoke, vary, modify, suspend or terminate any License or declare any License
invalid in any respect. Neither the execution or delivery of nor the performance
of the obligations under this Agreement or any Related Agreement shall adversely
effect the status of any License nor permit or cause such License to be
terminated. A list of all Licenses is set forth on Schedule 7.15.
-------------
7.16 Litigation. There are no actions, suits, proceedings or investigations
----------
pending, or to the knowledge of the PBS Parties, threatened, nor has any notice
of any of such items been received by any PBS Party, in any court or before any
Governmental Authority against or affecting any of the PBS Parties, any of the
Assets or any portion of the Property.
7.17 Zoning. To the knowledge of the PBS Parties, the Property conforms in all
------
respects to and with all applicable requirements of any Governmental Authority
regarding zoning and land use so that the present use of the Property in the
Business is a proper use (which is not impaired, limited, restricted or
otherwise modified by the transfer to ▇▇▇▇▇▇▇, ▇▇▇▇▇).
7.18 Tax Matters. All tax returns and reports required to be filed by any of
-----------
the PBS Parties pursuant to the requirements of any Governmental Authority have
been timely filed with the appropriate Governmental Authority and all taxes
required to be paid have been timely paid. No objection to any return, report or
payment or claim for additional taxes is currently being asserted.
7.19 Financial Information. The PBS Parties have furnished to ▇▇▇▇▇▇▇, ▇▇▇▇▇
---------------------
certain financial information regarding ▇▇▇▇▇▇ and Maggie's use of the Property
and conduct of the Business, which information is set forth in Schedule 7.19
-------------
(the "Financial Information"). The Financial Information is a true, accurate and
complete description of all direct manufacturing expenses of ▇▇▇▇▇▇ for the 1993
calendar year.
7.20 Illegal Payments. None of the PBS Parties has (i) made any contributions,
----------------
payments or gifts of its funds or property to or for the private use of any
official, employee or agent of any Governmental Authority where either the
payment or the purpose of such contribution, payment or gift is illegal under
the laws of any Governmental Authority; (ii) established or maintained any
unrecorded fund or asset for any purpose, or has made any false or artificial
entries on any of its books or records for any reason; (iii) made any payments
to persons with the intention or
understanding that any part of such payment was to be used for any purpose other
than that described in the documents supporting the payment; or (iv) made any
contribution, or has reimbursed any political gift or contribution made by any
other person, to a candidate for public office where such contribution would
violate the applicable laws of any Governmental Authority.
7.21 Commitments. To the knowledge of the PBS Parties, no commitments relating
-----------
to the Property or Assets have been made to any Governmental Authority, utility
company, school board, church or other religious body or any homeowner or
homeowners association or any other organization, group or individual which
would impose an obligation upon ▇▇▇▇▇▇▇, ▇▇▇▇▇ or its successors or assigns or
Affiliates to make any contribution, dedication of money or land, or to
construct, install or maintain any improvements of a public or private nature on
or off the Property. No Governmental Authority has imposed any requirement that
any owner of the Property or the Assets pay directly or indirectly any special
fees or contributions or incur any expense or obligations in connection with the
Property or the Assets.
7.22 No Material Adverse Change. Since January 1, 1994, the Business has been
--------------------------
operated in the ordinary course and consistent with past practice. Without
limiting the generality of the foregoing, there has not been (i) any material
adverse change in the Business, the Assets, the Property or the cost of
operating the Business, nor, to the knowledge of the PBS Parties, are such
changes threatened, anticipated or contemplated; (ii) any material increase in
the compensation paid to any employee; (iii) any actual, or to the knowledge of
the PBS Parties, threatened, anticipated or contemplated material damage,
destruction, loss, conversion, termination, cancellation, default, or taking by
condemnation, eminent domain or other action by any Governmental Authority which
has materially affected or which may hereafter materially affect the Business,
the Assets or the Property; (iv) any material and adverse pending or, to the
knowledge of the PBS Parties, threatened, anticipated or contemplated dispute
with any supplier, employee, adjacent landowner or Governmental Authority or any
pending or, to the knowledge of the PBS Parties, threatened, anticipated or
contemplated occurrence or situation which is likely to result in a material
change in the terms or conditions of any relationship with any supplier,
employee, adjacent landowner or Governmental Agency regarding the Business; or
(v) any pending or, to the knowledge of the PBS Parties, threatened, anticipated
or contemplated occurrence or situation materially and adversely affecting the
Business, the Assets or the Property, including any adverse change in the
political, social or economic climate of Jamaica.
7.23 Adverse Legislation. None of the PBS Parties has any knowledge of any
-------------------
legislation which has been enacted, or rule or regulation promulgated, by any
Governmental Authority within the twelve (12) months preceding the date hereof
up to and including the Closing Date, or any proposed legislation, rule or
regulation currently
pending before any Governmental Authority which materially and adversely affects
the Business, the Assets or the Property. None of the PBS Parties has any
knowledge of any law, rule or regulation of any Governmental Authority which
makes, or will make ▇▇▇▇▇▇▇, ▇▇▇▇▇ or its successors, assigns or Affiliates
liable for any liability, obligation or indebtedness of any PBS Party. If any
PBS Party acquires knowledge of such legislation, rule or regulation prior to
the Closing Date, PBS shall promptly notify ▇▇▇▇▇▇▇, ▇▇▇▇▇ thereof.
7.24 Disclosure. No representation or warranty contained in this Agreement and
----------
no statement, report or certificate furnished or to be furnished to ▇▇▇▇▇▇▇,
▇▇▇▇▇ by or on behalf of any PBS Party pursuant hereto or pursuant to any
Related Agreement or in connection with the transactions contemplated hereby or
thereby contains or will contain any untrue statement of material fact or omits
or will omit to state a material fact necessary in order to render the
statements contained herein or therein not misleading or omits or will omit to
state a material fact necessary in order to provide a prospective purchaser of
the Assets and the Property with full and proper information as to the same and
as to the prospects of the Business and the value of the assets and properties
used therein.
ARTICLE VIII.
Representations and Warranties of ▇▇▇▇▇▇▇, ▇▇▇▇▇
------------------------------------------------
In order to induce PBS to enter into this Agreement and the Related
Agreements and to consummate the transactions contemplated hereby and thereby,
▇▇▇▇▇▇▇, ▇▇▇▇▇ hereby represents and warrants to PBS as follows:
8.1 Organization. ▇▇▇▇▇▇▇, ▇▇▇▇▇ is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware. ▇▇▇▇▇▇▇,
▇▇▇▇▇ has all requisite right, power and authority to enter into this Agreement
and the Related Agreements and to consummate the transactions contemplated
hereby and thereby.
8.2 Authorization of Agreement. The execution and delivery of and the
--------------------------
performance of the obligations under this Agreement and the Related Agreements
by ▇▇▇▇▇▇▇, ▇▇▇▇▇ have been duly authorized by all requisite corporate action.
This Agreement and each of the Related Agreements constitute the legal, valid
and binding obligations of Strouse, Adler, enforceable in accordance with their
respective terms.
8.3 No Violation or Conflict. The execution and delivery of and the performance
------------------------
of the obligations under this Agreement and the Related Agreements by Strouse,
Adler, the consummation by it of the transactions contemplated hereby and
thereby, and the compliance by it with the terms hereof and thereof, do not and
will not violate or conflict with any provision of law or regulation, or any
writ, order or decree of any court or Governmental Authority, the
violation of which would interfere with ▇▇▇▇▇▇▇, Adler's ability to consummate
the transactions contemplated hereby and thereby, or any term of its certificate
of incorporation or bylaws.
8.4 Brokers and Finders. ▇▇▇▇▇▇▇, ▇▇▇▇▇ has not been solicited or contacted by
-------------------
any financial advisor, broker or finder and ▇▇▇▇▇▇▇, ▇▇▇▇▇ has not incurred, nor
will it incur, any broker's, finder's or similar fees, commissions or expenses
payable by any party hereto in connection with the transactions contemplated by
this Agreement or the Related Agreements.
ARTICLE IX.
Conduct Prior to Closing
------------------------
9.1 Operation of Business. From January 2, 1995 until the Closing, ▇▇▇▇▇▇▇,
---------------------
▇▇▇▇▇ and PBS shall each use its best efforts to ensure that the Business is
operated in accordance with the Exclusive Subcontracting Agreement.
9.2 PBS Party Obligations. From the date hereof until the Closing, the PBS
---------------------
Parties agree, except with the prior written consent of Strouse, Adler, which
shall not be unreasonably withheld, not to sell, lease, assign or dispose of any
Assets other than in the ordinary course of business, or create, incur or suffer
to be created or incurred any lien, pledge, mortgage or other encumbrance upon
the Assets or the Property which cannot be satisfied out of the proceeds of the
Closing.
9.3 Access to Information. PBS shall cause ▇▇▇▇▇▇ and Davedan and their
---------------------
professional consultants to give Strouse, Adler, its representatives, lenders,
appraisers, engineers, lawyers, accountants, and its other professional
consultants full and continuous access to the Property and the Assets, input and
cooperation, during all business hours on all business days to all of the
employees, accountants, offices, books and records relating to the Business, and
to furnish such information and documents regarding the Business, the Assets and
the Property as ▇▇▇▇▇▇▇, ▇▇▇▇▇ and its representatives or consultants may
reasonably request and as are usually available in order that ▇▇▇▇▇▇▇, ▇▇▇▇▇ may
conduct such factual, legal, accounting and tax due diligence as is appropriate
for a transaction of the type and magnitude of the transactions contemplated
hereby.
9.4 Diligent Application for all Approvals. Commencing upon the giving by
--------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ of the Option Notice, the PBS Parties agree to use their best
efforts to assist ▇▇▇▇▇▇▇, ▇▇▇▇▇ in preparing and in making diligent and
expeditious application for, to follow up on, and to actively and diligently
pursue all approvals, consents and licenses necessary for the consummation of
the transactions contemplated hereby or for the maintenance and operation by
▇▇▇▇▇▇▇, ▇▇▇▇▇ of the Business after the Closing Date.
9.5 Risk of Loss. From the execution of this Agreement until the Closing Date,
------------
PBS shall bear all risk of loss to the Assets and the Property and the legal
doctrine of equitable conversion shall not be applicable to this Agreement or
any Related Agreement or any of the transactions contemplated hereby or thereby.
▇▇▇▇▇▇▇, ▇▇▇▇▇ shall reimburse ▇▇▇▇▇▇ and PBS for any property and liability
insurance obtained with respect to the Assets or the Property until the Closing,
which amount shall be included as an Actual Operating Expense under the
Exclusive Subcontracting Agreement.
In the event of any Business Interruption, PBS shall immediately notify
▇▇▇▇▇▇▇, ▇▇▇▇▇ of the existence and nature thereof and, for the duration
thereof, all of ▇▇▇▇▇▇▇, Adler's obligations under the Exclusive Subcontracting
Agreement, including the obligation to make payments thereunder, shall be
suspended and any payments previously made hereunder or under any Related
Agreement which relate to the period of time covered by the duration thereof
shall be equitably reduced. If such Business Interruption continues or is
reasonably expected to continue for more than sixty (60) days, within thirty
(30) days of receipt of such notice, ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall give PBS notice either
(a) requiring PBS to repair, rebuild or restore the Assets and the Property (as
the case may be) as near as practicable to the state thereof prior to such
Business Interruption; or (ii) of ▇▇▇▇▇▇▇, Adler's intention to terminate the
Exclusive Subcontracting Agreement, which termination shall be effective upon
receipt by PBS of such notice.
In the event that ▇▇▇▇▇▇▇, ▇▇▇▇▇ exercises its option to require PBS to
repair, rebuild or restore the Assets and the Property because of a Business
Interruption continuing more than sixty (60) days or in the event of any other
Business Interruption, PBS shall use its best efforts and due diligence to
repair, rebuild or restore the Assets and the Property as soon as possible and
all insurance proceeds of ▇▇▇▇▇▇ shall be made available to PBS for such repair,
rebuild or restoration. In the event of any Business Interruption extending
beyond the Expiration Date, the Option shall remain in full force and effect and
it shall be exercisable for thirty (30) days after receipt of Final Payment.
ARTICLE X.
Indemnity
---------
10.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by any party hereto, and every one of
the rights and remedies afforded to the non-breaching party with respect to any
breach thereof shall be effective irrespective of any investigation, inspection
or inquiry made at any time by or on behalf of any other party or by its
employees or agents or by reason of any prior knowledge thereof. No
representation or warranty in Articles VII or VIII shall survive
the Closing except for representations in Sections 7.6 and 7.10, which shall
survive the Closing.
10.2 Obligations Joint and Several. Each of ▇▇▇▇▇▇, Davedan and PBS recognizes
-----------------------------
and acknowledges that each and every obligation of any one of them or all of
them hereunder is joint and several as to each of them.
10.3 Indemnification by PBS Parties. Each of the PBS Parties, jointly and
------------------------------
severally, assumes, indemnifies and agrees to hold ▇▇▇▇▇▇▇, ▇▇▇▇▇ harmless from,
against and in respect of:
(a) any Loss arising out of, relating to, or in connection with the
operation of the Business prior to January 2, 1995 or the condition of the
Property on January 2, 1995 arising out of any fact, action, omission,
circumstance or event which occurred prior to January 2, 1995, even if
discovered after January 2, 1995;
(b) any Loss attributable to any breach of any warranty or representation,
or the failure by any PBS Party to observe or perform any covenant or
agreement, of any PBS Party contained herein or in any Related Agreement;
or
(c) any Loss suffered or incurred in enforcing this indemnity.
10.4 Indemnification by ▇▇▇▇▇▇▇, ▇▇▇▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ assumes, indemnifies and
---------------------------------
agrees to hold each of the PBS Parties harmless from, against and in respect of:
(a) any Loss attributable in any way to the operation of the Business or
the Property after January 2, 1995 and through the Closing Date, except for
items covered in Sections 9.5 or 10.3 hereof or under the Exclusive
Subcontracting Agreement;
(b) any Loss attributable to any breach of any warranty or representation,
or the failure by ▇▇▇▇▇▇▇, ▇▇▇▇▇ to observe or perform any covenant or
agreement, contained herein or in any Related Agreement; or
(c) any Loss suffered or incurred in enforcing this indemnity.
ARTICLE XI.
Additional Covenants and Agreements
-----------------------------------
11.1 No Solicitation. Upon execution of this Agreement until the earlier of the
---------------
Closing or the Expiration Date, none of the PBS Parties shall directly, or
through a third party solicit, initiate or participate in any discussions or
negotiations with, or provide any information to, any entity other than ▇▇▇▇▇▇▇,
▇▇▇▇▇ or its
representatives and affiliates concerning any offer or proposal for any merger,
sale of substantial assets, sale of shares of capital stock or debt securities,
joint venture or any similar transaction, unless such entity is made aware of
the existence of this Agreement and the Related Agreements and the encumbrance
on the Property and the Assets created hereby and thereby.
11.2 Confidentiality. Any and all information supplied by ▇▇▇▇▇▇▇, ▇▇▇▇▇ or any
---------------
PBS Party, or learned by the ▇▇▇▇▇▇▇, ▇▇▇▇▇ in the course of its due diligence
investigation and the terms and conditions of this Agreement and any Related
Agreement ("Confidential Information") shall be held in strict confidence and
disclosed only to employees, agents or representatives of the parties and on a
need to know basis. In the event of a termination of this Agreement, (a) any
documents, computer disks or other materials containing Confidential
Information, together with any copies thereof, shall be immediately returned to
the disclosing party, and (b) all Confidential Information shall be maintained
in strict confidence; provided, however, that Confidential Information may be
disclosed to the extent (i) it becomes available to the public generally or
becomes known to competitors of the disclosing party through sources other than
the parties hereto, (ii) such information was lawfully acquired by the other
party from a third party, or (iii) such disclosure is required by any
Governmental Authority. Nothing in this Section 11.2 shall prevent or otherwise
restrict ▇▇▇▇▇▇▇, ▇▇▇▇▇ from disclosing Confidential Information to the National
Association of Securities Dealers where required or appropriate.
11.3 Post-Closing Access. In connection with any matter relating to any period
-------------------
prior to, or any period ending on, the Closing Date, ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall, upon
request and at the expense of PBS, permit PBS and its representatives full
access at all reasonable times during normal business hours to the books and
records of ▇▇▇▇▇▇ relating to the Business and Davedan relating to the Property,
for such period. ▇▇▇▇▇▇▇, ▇▇▇▇▇ shall not dispose of such books and records
during the three (3) year period commencing on the Closing Date without the
consent of PBS, which shall not be unreasonably withheld. Following the
expiration of such three (3) year period, ▇▇▇▇▇▇▇, ▇▇▇▇▇ may dispose of such
books and records at any time upon giving fifteen (15) days written notice to
PBS, unless PBS agrees to take, and does take, possession of such books and
records within such fifteen (15) day period at no expense to ▇▇▇▇▇▇▇, ▇▇▇▇▇.
11.4 Publicity. There shall be no press release or public announcement
---------
concerning this Agreement, any Related Agreement or the transactions
contemplated hereby or thereby unless such an announcement is required by any
Governmental Authority. In the event such an announcement or press release is to
be made, the parties shall cooperate in the preparation thereof. Whenever
practicable, each party shall furnish drafts of all such press releases and
announcements to the other party prior to their release.
11.5 Taxes. Each of ▇▇▇▇▇▇▇, ▇▇▇▇▇ and the PBS Party, respectively, shall
-----
timely pay and discharge any taxes or assessment including, without limitation,
conveyance taxes and stamp duties, assessed upon each of them in connection with
the purchase and sale of the Assets and Property. Except as required by law,
there shall be no withholding of the Purchase Price to satisfy the taxes
referred to herein.
ARTICLE XII.
Rights of Termination and Remedies for Default
----------------------------------------------
12.1 Default by PBS Parties. In the event that all of the conditions set forth
----------------------
in Article V of this Agreement have been satisfied or waived by ▇▇▇▇▇▇▇, ▇▇▇▇▇
on or prior to the Closing Date, but any of the PBS Parties is (a) unwilling to
consummate the Closing in accordance with the terms and conditions of this
Agreement; or (b) is unable to consummate the Closing in accordance with the
terms and conditions hereof if the facts, circumstances or conditions resulting
in such inability were within the control of any PBS Party or if the best
efforts of any PBS Party could remedy, cure, solve, satisfy or eliminate such
facts, circumstances or conditions resulting in such inability; or (c) in the
event that any of the PBS Parties is otherwise in breach of this Agreement or
any Related Agreement, then ▇▇▇▇▇▇▇, ▇▇▇▇▇ may proceed to enforce its rights by
an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Related
Agreement, or for an injunction against a violation of any of the terms hereof
or thereof, or in and of the exercise of any power granted hereby or thereby or
by law. Each of the PBS Parties recognizes that in such event, any remedy at law
may be inadequate and that, therefore, ▇▇▇▇▇▇▇, ▇▇▇▇▇ may seek such equitable
relief, including, without limitation, temporary and permanent injunctive
relief. No course of dealing and no delay on the part of ▇▇▇▇▇▇▇, ▇▇▇▇▇ in
exercising any right shall operate as a waiver thereof or otherwise prejudice
any of ▇▇▇▇▇▇▇, Adler's rights. No right conferred hereunder or under any
Related Agreement shall be exclusive of any other right referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the generality of the foregoing, ▇▇▇▇▇▇▇, ▇▇▇▇▇
shall be entitled to recover, among other things, reasonable attorneys' fees and
expenses incurred by it in enforcing this Agreement and any Related Agreement.
12.2 ▇▇▇▇▇▇▇, Adler's Right to Terminate. If any one or more of the conditions
-----------------------------------
set forth in Article V has not been fulfilled, satisfied or waived in writing by
▇▇▇▇▇▇▇, ▇▇▇▇▇ on or prior to the Closing Date, then Strouse, Adler, at its
option, may terminate this Agreement, effective upon receipt by PBS of such
notice. In the event of any such termination, PBS shall immediately refund to
▇▇▇▇▇▇▇, ▇▇▇▇▇ the Deposit and if such termination was caused by the occurrence
of an event or condition described in Section 5.4 hereof, all of the remaining
obligations of the PBS Parties
hereunder and under any Related Agreement shall terminate; otherwise, ▇▇▇▇▇▇▇,
Adler's exercise of its right of termination and any return of the Deposit shall
not be in limitation of ▇▇▇▇▇▇▇, Adler's other rights and remedies hereunder or
in any Related Agreement and no PBS Party shall be released from any liability
hereunder or under any Related Agreement. In any event, upon any such
termination by Strouse, Adler, all of the obligations of ▇▇▇▇▇▇▇, ▇▇▇▇▇
hereunder and under any Related Agreement shall immediately terminate.
12.3 Default by ▇▇▇▇▇▇▇, ▇▇▇▇▇. In the event that the PBS Parties are ready,
-------------------------
willing and able to proceed with the Closing and all of the conditions set forth
in Article VI have been fulfilled, satisfied or waived in writing by PBS, and
▇▇▇▇▇▇▇, ▇▇▇▇▇ fails to complete the transactions contemplated by this Agreement
on the Closing Date, then PBS, at its option, may terminate this Agreement,
effective upon receipt from PBS of such notice. In the event of any such
termination, PBS shall retain, as liquidated damages, the Deposit and the
Exclusive Subcontracting Agreement, if it has been previously terminated, shall
be immediately reinstated and shall remain in full force and effect until the
date nine (9) months after the effective date of such termination. The Annual
Amount to be paid thereunder for such nine-month period shall be equal to 75% of
the Annual Amount for the then-current year of the Exclusive Subcontracting
Agreement. PBS' right to retain the Deposit and to reinstatement of the
Exclusive Subcontracting Agreement shall be its sole and exclusive remedy in the
event of such a failure.
12.4 PBS Right to Terminate. At any time after July 1, 1995 and prior to January
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16, 1997, and provided that ▇▇▇▇▇▇▇, ▇▇▇▇▇ has not previously exercised the
Option and further provided that no loss or taking has occurred under Section
9.5, PBS may terminate this Agreement at its option upon not less than twelve
(12) months written notice to ▇▇▇▇▇▇▇, ▇▇▇▇▇. In the event of any termination of
this Agreement by PBS, subject to ▇▇▇▇▇▇▇, Adler's right to exercise the Option
until the Expiration Date, all of the obligations of ▇▇▇▇▇▇▇, ▇▇▇▇▇ and the PBS
Parties hereunder and under any Related Agreement shall terminate.
12.5 Adjustments upon Termination. Upon any termination of this Agreement or
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any Related Agreement by either ▇▇▇▇▇▇▇, ▇▇▇▇▇ or PBS for any reason or no
reason, PBS shall refund to ▇▇▇▇▇▇▇, ▇▇▇▇▇ any Annual Amount or Actual Operating
Costs or Business Expansion Costs paid to PBS prior to the date such termination
is effective but which relate to the period after such date. ▇▇▇▇▇▇▇, ▇▇▇▇▇
shall remain liable for any Business Expansion Costs incurred by it prior to
termination.
12.6 Force Majeure. Neither ▇▇▇▇▇▇▇, ▇▇▇▇▇ nor any PBS Party shall be
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responsible for the nonfulfillment of any of its obligation under this Agreement
or any Related Agreement, if such nonfulfillment is due to force majeure,
including but not limited to, earthquakes, acts of war, acts of the public
enemy, hurricanes,
floods or any other deed or act, whether or not named explicitly herein, which
is beyond the control of the affected party and which cannot be reasonably
foreseen. In the event any PBS Party believes that a force majeure event has
occurred, PBS shall advise ▇▇▇▇▇▇▇, ▇▇▇▇▇ thereof immediately in writing. In the
event that ▇▇▇▇▇▇▇, ▇▇▇▇▇ believes that a force majeure event has occurred, it
shall advise PBS immediately thereof in writing. As soon as possible after the
giving of such a notice, the parties shall hold a joint meeting for the purpose
of establishing the magnitude and type of the event and whether such event
results in a partial or total suspension of the obligations of the party
affected. The term for fulfillment of any obligation suspended by reason of
force majeure shall be extended for the same period of time as the delay caused
by the force majeure.
ARTICLE XIII.
Miscellaneous
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13.1 Entire Agreement. This Agreement and the Related Agreements together with
----------------
the schedules and exhibits hereto and thereto contain the entire understanding
of the parties with respect to the subject matter hereof and thereof. All
understandings, oral and written, and agreements heretofore had between the
parties are merged in this Agreement and the Related Agreements. This Agreement
and the Related Agreements supersede and replace the Letter of Intent by and
among ▇▇▇▇▇▇▇, ▇▇▇▇▇ and PBS dated November 2, 1994.
13.2 Binding Effect; Assignment. The rights and obligations under this Agreement
--------------------------
and any Related Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No PBS
Party may assign its obligations under this Agreement or any Related Agreement
without the written consent of Strouse, Adler, which consent shall not be
unreasonably withheld. Any transaction or series of transactions which result in
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ owning, individually or
collectively, less than 67% of each PBS Party's voting securities or equity
shall be deemed an assignment. The rights and obligations of ▇▇▇▇▇▇▇, ▇▇▇▇▇
under this Agreement and any Related Agreement may be assigned (i) to any
Affiliate of ▇▇▇▇▇▇▇, ▇▇▇▇▇; (ii) to any transferee of greater than fifty
percent (50%) of the assets of ▇▇▇▇▇▇▇, ▇▇▇▇▇; or (iii) in all other events,
upon the consent of PBS, which consent shall not be unreasonably withheld. PBS
shall have the right to receive such information as is necessary to assure it of
the financial viability of any ▇▇▇▇▇▇▇, ▇▇▇▇▇ assignee.
13.3 Notices. Notice, demand, offer or other writing required or permitted to be
-------
given under this Agreement or any Related Agreement shall be in writing and
transmitted by hand-delivery, facsimile, or a nationally recognized overnight
courier service as follows:
If to ▇▇▇▇▇▇▇, ▇▇▇▇▇:
The ▇▇▇▇▇▇▇, ▇▇▇▇▇ Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to any PBS Party:
PBS Enterprises, Ltd.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ Shalleck
With a copy to:
Gartner & Bloom, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party shall have the right to change the place to which such notice shall be
sent or delivered by a similar notice sent in like manner to all other parties.
13.4 Governing Law. This Agreement shall be governed by and interpreted in
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accordance with the laws of the State of Connecticut. Each of PBS, ▇▇▇▇▇▇ and
Davedan hereby irrevocably consents to the in personam jurisdiction of the
-- --------
United States District Court for the District of Connecticut and consents to
service of process by certified mail care of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. at the
address provided in Section 13.3. ▇▇▇▇▇▇▇, ▇▇▇▇▇ hereby consents to service of
process by certified mail care of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. at the address provided
in Section 13.3. Any order or judgment entered in enforcing this Agreement or
any Related Agreement may be actionable in Jamaica and no party hereto or
thereto shall oppose the same.
13.5 Further Assurances. On a reciprocal basis, the PBS Parties and ▇▇▇▇▇▇▇,
------------------
▇▇▇▇▇ agree to, at any time before or after the Closing, execute and deliver all
additional documents, and do any other acts or things that may reasonably be
requested by the other in order to perfect their respective rights and interests
contemplated hereunder and that they each will aid in the prosecution, defense
or other litigation with third persons arising from this Agreement, all without
further consideration.
13.6 Rules of Construction. References in this Agreement or in any Related
---------------------
Agreement to "herein," "hereof" and "hereunder" shall be deemed to refer to this
Agreement or such Related Agreement (as the case may be) and shall not be
limited to any particular text, Article or Section in which such words appear.
References in this Agreement or in any Related Agreement to "Exhibit,"
"Schedule," "Article" or "Section" shall be deemed to refer to the specific
Exhibit, Schedule, Article or Section of this Agreement or such Related
Agreement (as the case may be) indicated. The use of any gender shall include
all genders and the use of any singular shall include the plural and vice versa
as context may require. All dollar figures expressed herein shall, unless
otherwise specifically indicated, be deemed to refer to lawful currency of the
United States of America.
13.7 Joint Effort. The preparation of this Agreement and the Related Agreements
------------
has been a joint effort of the parties hereto and thereto and their legal
counsel. All parties have participated in the negotiation and preparation of
this Agreement and the Related Agreements at all times from the commencement of
negotiations through the execution hereof and thereof and the resulting
documents shall not be construed more strictly against any one of the parties
than any other.
13.8 Severability. If any provision of this Agreement or any Related Agreement,
------------
or the application thereof, shall for any reason and to any extent be determined
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions of this Agreement or such Related Agreement shall be
interpreted so as best to reasonably effect the intent of the parties. The
parties agree to further replace any such invalid or unenforceable provisions
with valid and enforceable provisions designed to achieve, to the extent
possible, the business purpose and intent of such invalid and unenforceable
provisions.
13.9 Effectiveness. Neither this Agreement nor any Related Agreement shall be
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effective unless and until executed and delivered by each of the parties hereto.
13.10 Counterparts. This Agreement and the Related Agreements may be
------------
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
13.11 Knowledge of PBS Parties. Whenever reference is made herein or in any
------------------------
Related Agreement to the knowledge of the PBS Parties of a subject, such
reference shall be deemed to mean the actual knowledge of such PBS Party and the
actual knowledge of any PBS Party or of any Shareholder shall be imputed to all
PBS Parties.
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the date first above written.
THE ▇▇▇▇▇▇▇, ▇▇▇▇▇ COMPANY PBS ENTERPRISES LTD.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇ Shalleck
---------------------------- ---------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇ ▇▇▇▇▇ Shalleck
Its: Vice President Its: President
Price Operations
▇▇▇▇▇▇ MANUFACTURING COMPANY, DAVEDAN PROPERTIES, LTD.
/s/ ▇▇▇▇▇ ▇▇▇▇▇ Shalleck /s/ ▇▇▇▇▇ ▇▇▇▇▇ Shalleck
---------------------------- ---------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇ Shalleck By: ▇▇▇▇▇ ▇▇▇▇▇ Shalleck
Its: Managing Director Its: Managing Director