ASSET PURCHASE AGREEMENT
By and Among
THE BOMBAY COMPANY, INC.,
▇▇▇▇▇▇ STREET TRADING COMPANY
and
▇▇▇▇▇▇ STREET HOLDING COMPANY
Dated as of May 27, 2005
i
TABLE OF CONTENTS
1. SALE OF ASSETS
1.1 Assets to Be Sold..................................................
1.2 Retained Assets....................................................
1.3 Instruments of Conveyance..........................................
1.4 Nonassignable Contracts............................................
2. ASSUMPTION OF LIABILITIES
2.1 Liabilities Assumed by Buyer.......................................
2.2 Retained Liabilities...............................................
3. PURCHASE PRICE AND ALLOCATION
3.1 Purchase Price.....................................................
3.2 Payment of Purchase Price and Additional Consideration.............
3.3 Allocation of Purchase Price.......................................
3.4 Aged Receivables...................................................
4. CLOSING.
4.1 Closing Date.......................................................
5. REPRESENTATIONS AND WARRANTIES OF SELLER
5.1 Due Organization and Authority.....................................
5.2 Qualification......................................................
5.3 Authority to Execute and Perform Agreement.........................
5.4 INTENTIONALLY OMITTED..............................................
5.5 No Breach..........................................................
5.6 Actions and Proceedings............................................
5.7 Consents, Approvals and Filings....................................
5.8 Real Property......................................................
5.9 Title to Tangible Assets...........................................
5.10 Taxes..............................................................
5.11 Certain Environmental Conditions...................................
5.12 Financial Statements; Undisclosed Liabilities......................
5.13 Operations.........................................................
5.14 Contracts..........................................................
5.15 Accounts Receivable................................................
5.16 Intellectual Property..............................................
5.17 Records............................................................
5.18 Suppliers and Customers............................................
5.19 Employee Matters...................................................
5.20 Litigation.........................................................
5.21 Certain Payments...................................................
5.22 Marketing Rights...................................................
5.23 Representations Not Waived.........................................
5.24 Disclosure.........................................................
6. REPRESENTATIONS AND WARRANTIES OF BUYER
6.1 Due Organization and Authority.....................................
6.2 Authority to Execute and Perform Agreement.........................
6.3 No Breach..........................................................
6.4 Actions and Proceedings............................................
6.5 Consents and Approvals.............................................
7. COVENANTS AND AGREEMENTS
7.1 Expenses...........................................................
7.2 Indemnification for Brokerage Commissions..........................
7.3 Access; Records; Operations Manuals................................
7.4 Further Assurances.................................................
7.5 Mail or Other Communications Received After Closing................
7.6 Taxes..............................................................
7.7 Sales Representative Agreements....................................
8. EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS
8.1 Employees..........................................................
8.2 Benefit Plans......................................................
8.3 No Right to Benefits...............................................
8.4 Employee Agreements................................................
8.5 Right to Change Benefits...........................................
9. CLOSING OBLIGATIONS OF SELLER
9.1 Closing Documents..................................................
9.2 Secretary's Certificate............................................
9.3 Ancillary Agreements...............................................
9.4 Certificates of Good Standing......................................
9.5 Inventory to be Delivered..........................................
9.6 Lease Assignments..................................................
9.7 UCC-3s.............................................................
10. CLOSING OBLIGATIONS OF BUYER
10.1 Purchase Price and Closing Documents...............................
10.2 Secretary's Certificate............................................
10.3 Ancillary Agreements...............................................
11. SURVIVAL
12. INDEMNIFICATION.
12.1 Obligation of Seller to Indemnify..................................
12.2 Obligation of Buyer to Indemnify...................................
12.3 Notice and Opportunity to Defend...................................
12.4 Limitations on Amount - Seller.....................................
12.5 Limitations on Amount - Buyer......................................
13. COVENANT NOT TO COMPETE.
13.1 Agreement Not to Compete...........................................
13.2 Confidentiality....................................................
13.3 Enforcement........................................................
14. MISCELLANEOUS
14.1 Publicity..........................................................
14.2 Notices............................................................
14.3 Entire Agreement...................................................
14.4 Amendments and Waivers; Preservation of Remedies...................
14.5 Governing Law, Jurisdiction, Forum Selection.......................
14.6 Binding Effect; No Assignment......................................
14.7 Variations in Pronouns.............................................
14.8 Counterparts.......................................................
14.9 Schedules..........................................................
14.10 Headings...........................................................
14.11 Severability of Provisions.........................................
14.12 No Third-Party Beneficiaries.......................................
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APPENDICES
Appendix A Definitions
EXHIBITS
Exhibit A Intentionally Omitted
Exhibit B Form of Trademark Assignment
Exhibit C Form of Assignment and Assumption Agreement
Exhibit D Form of Consulting Services Agreement
Exhibit E Form of Transition Services Agreement
Exhibit F Form of ▇▇▇▇ of Sale
Exhibit G Waylock Certificate
SCHEDULES
Schedule A Facilities
Schedule 1.1(i) Assets to be Sold
Schedule 1.1(ii) Inventory List
Schedule 1.1(iii)Equipment
Schedule 1.1(iv) Assumed Contracts
Schedule 1.1(v) Records
Schedule 1.1(vi) Acquired Intellectual Property
Schedule 1.1(vii)Accounts Receivable
Schedule 1.1(xii)Domain Name
Schedule 1.1(xv) Telephone Numbers
Schedule 1.1(xviii)Finished Goods In-Transit
Schedule 1.1(xix)Goods On-Order
Schedule 1.2(ix) Retained Product Designs
Schedule 2.1 Certain Assumed Liabilities
Schedule 3.3 Allocation of Purchase Price
Schedule 5.6 Actions and Proceedings
Schedule 5.7 Consents, Approvals and Filings
Schedule 5.9 Title to Tangible Assets
Schedule 5.10 Taxes
Schedule 5.11(a) Certain Environmental Conditions
Schedule 5.11(c) Compliance
Schedule 5.11(d) Contaminants
Schedule 5.11(e) Environmental Notices
Schedule 5.11(f) Underground Storage Tanks
Schedule 5.11(g) Environmental Legal Proceedings
Schedule 5.11(h) Shipment of Contaminants
Schedule 5.11(i) Contaminant Legal Proceedings
Schedule 5.12(a) Annual Financial Statements
Schedule 5.12(b) Interim Statement
Schedule 5.12(c) Financial Liabilities
Schedule 5.13 Operations
Schedule 5.14 Contracts
Schedule 5.16(d) Trademarks
Schedule 5.16(f) Licenses
Schedule 5.18(a) Customer List
Schedule 5.18(b) Finished Goods Suppliers
Schedule 5.19 Employee Matters
Schedule 5.20(a) Seller Litigation
Schedule 5.20(b) Bombay Litigation
Schedule 5.22 Manufacturing and Marketing Rights
Schedule 8.1 Employees
1
This ASSET PURCHASE AGREEMENT, dated as of May 27, 2005, is entered
into by and between ▇▇▇▇▇▇ STREET HOLDING COMPANY, INC., a Nevada corporation
("Buyer"), THE BOMBAY COMPANY, a Delaware corporation ("Bombay"), and ▇▇▇▇▇▇
STREET TRADING COMPANY, a Delaware corporation ("Seller").
W I T N E S S E T H :
WHEREAS, Seller wishes to sell, and Buyer wishes to purchase, a
portion of the tangible and intangible assets owned by Seller and used to
operate its wholesale furniture and home accessories business (the "Business"),
which Business is conducted at or through the facilities set forth on Schedule
A (the "Facilities"), all upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, capitalized terms used but not defined herein have the
meanings specified in Appendix A.
NOW, THEREFORE, in consideration of the premises and the covenants
and other agreements set forth herein, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be contractually
bound, hereby agree as follows:
1. SALE OF ASSETS
1.1 Assets to Be Sold. Except as otherwise provided in Section 1.2,
upon the terms and subject to the conditions herein set forth, at the Closing,
Seller will sell, assign, transfer, convey and deliver to Buyer all right,
title and interest of Seller (and with respect to trademarks listed on Schedule
1.1(vi), certain of such trademarks will be conveyed by Seller's Affiliates) in
and to the following assets owned by Seller:
(i) all current, fixed and other assets listed on Schedule
1.1(i);
(ii) all Inventory;
(iii) all Equipment;
(iv) subject to Section 1.4, all contracts, licenses (including
software license agreements), leases (including real property Leases),
sales orders, purchase orders and other agreements set forth on Schedule
1.1(iv) (collectively, the "Assumed Contracts");
(v) all Records;
(vi) all Intellectual Property listed on Schedule 1.1(vi);
(vii) all Accounts Receivable listed on Schedule 1.1(vii);
(viii)all sales, promotion, marketing and advertising rights and
materials, customer lists, mailing lists, all files relating to the
foregoing and other data related to the Assets;
(ix) all deposits and retentions held by third parties under all
Assumed Contracts;
(x) all non-governmental licenses, franchises, authorizations and
approvals, including the Uniform Code Council numbers currently used by
Seller, in each case relating to the Assets;
(xi) all guaranties, representations, warranties, indemnities and
similar rights in favor of Seller as they relate to the Assets;
(xii) all domain names listed on Schedule 1.1(xii);
(xiii)all packaging graphics, print plates and associated files
(electronic or otherwise) related to the Assets;
(xiv) the right to receive and to use all labels, packaging,
containers, and literature of Seller in existence on the Closing Date
(including those containing the name of Seller), that relate to the
Assets;
(xv) all telephone (including 800 numbers), fax and cell numbers
listed on Schedule 1.1(xv);
(xvi) copies of Seller's customer credit files;
(xvii)all Finished Goods in-Transit; and
(xviii)all Goods On-Order.
All the foregoing rights, properties and assets to be sold, assigned,
transferred, conveyed and delivered to Buyer hereunder are hereinafter
collectively referred to as the "Assets." At the Closing, Buyer will purchase
the Assets for the consideration set forth in Section 3.1 upon the terms and
subject to the conditions set forth in this Agreement.
0.2 Retained Assets. Anything in Section 1.1 to the contrary
notwithstanding, the following rights, properties and assets, as the same shall
exist on the Closing Date, will be excluded from the Assets to be sold,
assigned, transferred, conveyed and delivered to Buyer hereunder and will not
be included within the meaning of the term "Assets" (all of such excluded
assets being hereinafter collectively referred to as the "Retained Assets"):
(i) the consideration delivered to Seller pursuant to this
Agreement for the Assets and all rights, guaranties, representations,
warranties, indemnities and similar rights in favor of Seller under this
Agreement and other documents, instruments and agreements executed by
Buyer in connection herewith;
(ii) all rights to refunds, rebates or credits of any Taxes for
which Seller is liable pursuant to Section 7.6 and any prepaid or
deferred Tax assets of Seller;
(iii) except as otherwise provided in Article 8, all assets and
rights of Seller under any benefit plans or benefit arrangements,
including the Benefit Plans and the Benefit Arrangements;
(iv) all cash, negotiable securities, certificates of deposit and
other cash equivalents;
(v) all other assets and liabilities of Seller that do not relate
to the Business;
(vi) Records that Seller is required to retain pursuant to any
statute, rule, regulation or ordinance, provided that Seller shall permit
Buyer access to such Records as provided in Section 7.3 and to make
copies thereof, general books of account and books of original entry that
comprise Seller's permanent accounting or Tax records, provided that
Seller shall permit Buyer access to such books as provided in Section 7.3
and to make copies thereof, the stock record and minute books of Seller
and books and records that relate to Retained Liabilities and Retained
Assets (collectively "Retained Records");
(vii) assets located at the Facilities that are owned by third
parties;
(viii)any retroactive rebates of insurance premiums, insurance
claims, proceeds and settlements, and any other refunds, benefits, or
claims of any kind related to the operation of the Business on or prior
to the Closing Date, except to the extent that any of the foregoing
relates to the Assumed Liabilities; and
(ix) certain product designs listed on Schedule 1.2(ix).
0.3 Instruments of Conveyance. In order to effectuate the sale,
assignment, transfer and conveyance of the Assets, Seller will execute and
deliver to Buyer at the Closing one or more of each of the Deeds and
Assignments.
0.4 Nonassignable Contracts. To the extent that assignment or transfer
hereunder by Seller of any Assumed Contract to Buyer is not permitted or is not
permitted without the consent (including waiver of a termination, right of
first refusal or option right) of any Person, this Agreement will not be deemed
to constitute an undertaking by Seller to assign or transfer the same if such
consent is not given or if such an undertaking otherwise would constitute a
breach or cause a loss of benefits thereunder. Seller and Buyer will use their
commercially reasonable efforts to obtain timely any and all such consents. To
the extent the Buyer receives the benefits of any such contracts, Buyer shall
pay, or reimburse Seller for, or perform any liabilities and obligations
arising thereunder from and after the Closing until such contracts have been
assigned to Buyer or terminated, whichever comes first.
1. ASSUMPTION OF LIABILITIES
1.1 Liabilities Assumed by Buyer. Buyer will assume, upon the terms
and subject to the conditions set forth herein, at the Closing, and will
perform or satisfy (or cause to be performed or satisfied) thereafter, only the
following liabilities and obligations:
(i) all liabilities and obligations of Seller under the Assumed
Contracts with respect to any period beginning on or after the Closing
Date, except as described in Section 1.4;
(ii) except as otherwise provided in this Agreement, all
liabilities, obligations, claims, demands and causes of action arising
from and accruing with respect to the functioning, use and operation of
the Assets by Buyer on and after the Closing Date; and
(iii) all liabilities or obligations with respect to Taxes for
which Buyer is liable pursuant to Section 7.6;
(iv) the liabilities of Seller set forth on Schedule 2.1;
(v) obligations related to products sold by Seller and returned
for credit, exchange or repair (excluding product liability claims);
(vi) any liability or obligation of Buyer based upon or arising
under this Agreement;
(vii) purchase orders for Goods On Order; and
(viii)returns of products sold by Seller.
All of the foregoing liabilities and obligations of Seller to be assumed by
Buyer hereunder are hereinafter collectively referred to as the "Assumed
Liabilities." Buyer will not assume or in any way be liable or responsible
for: (x) any liabilities or obligations of Seller relating to the Assets or
Seller or any claims in respect thereof, other than Assumed Liabilities or (y)
any liabilities, obligations or claims of or against Seller, other than Assumed
Liabilities, which may be asserted against or imposed upon Buyer by reason of
its being a successor to or transferee of Seller or an acquiror of the Assets.
1.2 Retained Liabilities. The Retained Liabilities shall remain the
sole responsibility of and shall be retained, paid, performed and discharged
solely by Seller. The Retained Liabilities shall include the following:
(i) any liability or obligation with respect to Taxes for which
Seller is liable pursuant to Section 7.6;
(ii) any liability or obligation of Seller based upon or arising
under this Agreement;
(iii) any liability or obligation with respect to any present,
former or prospective employees of Seller arising out of or in connection
with their employment or possible employment with Seller at any time, or
any liability or obligation with respect to any present, former or
prospective contract employee, independent sales representative or other
independent contractor of Seller arising out of or in connection with
their relationship or possible relationship with Seller at any time,
including any liability arising out of:
(A) any benefit plans or benefit arrangements, including
but not limited to the Benefit Plans and Benefit Arrangements;
(B) any collective bargaining agreements;
(C) any shut-down agreements;
(D) any charges, complaints and/or grievances concerning
Seller's termination of its employees, contract employees, independent
sales representatives or other independent contractors;
(E) any violations or alleged violations of any federal,
state, provincial, local or foreign Laws by Seller;
(F) any tort or contract claims of any kind, or any other
claims relating to affirmative action compliance, compensation, health
and welfare benefits, vacation pay, unemployment insurance benefits,
deferred compensation, pension and retirement benefits, severance
benefits, disability benefits, other fringe benefits, rights arising
under a collective bargaining agreement, or rights or benefits under the
Consolidated Omnibus Budget Reconciliation Act, as amended, Title VII of
the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, as amended, the Americans with Disabilities Act, the
Occupational Safety Hazard Act, the Worker Adjustment Retraining and
Notification Act, ERISA, the California Civil Rights Initiative or any
other federal, state, provincial, local or foreign employment Law;
(G) any claims asserted by Seller's present or former
employees or independent contractors for workers' compensation,
unemployment compensation or comparable benefits; or
(H) the termination or refusal to employ by Seller of any
of its present, former or prospective employees, or the termination or
refusal to utilize by Seller of any of its present, former or prospective
contract employees, independent sales representatives or other
independent contractors;
(iv) any conditions, obligations or liabilities of Seller, actual,
contingent or otherwise, relating to Contaminants, and/or arising
pursuant to Environmental Laws, including, but not limited to, On-Site
Environmental Liabilities and Off-Site Environmental Liabilities, in each
case in respect of the period on or prior to the Closing Date;
(v) any liability arising out of the violation of, or failure by
Seller to comply with, any Law;
(vi) any liability or obligation of Seller relating to the
Retained Assets;
(vii) any liability or obligation of Seller arising out of any
indebtedness (other than the obligations listed on Schedule 2.1) with
respect to any period ending on or prior to the Closing Date;
(viii)any liability or obligation of Seller with respect to any
claim, action, suit, proceeding or arbitration by any Person, or arising
out of any inspection, investigation or audit or any enforcement or other
action by any Governmental Entity;
(ix) any liability or obligation of Seller under any instrument,
agreement or contract that is not an Assumed Contract; and
(x) any audit, legal, financial adviser, broker or finder fees or
commissions payable by Seller.
Except as provided herein, all of the foregoing liabilities, obligations or
claims are not being assumed by Buyer hereunder or otherwise, and are
hereinafter collectively referred to as the "Retained Liabilities."
2. PURCHASE PRICE AND ALLOCATION
2.1 Purchase Price. Subject to Section 3.2, on the Closing Date, Buyer
will pay to Seller, as consideration for the Assets, the sum of $4,700,000
(such amount as may be adjusted pursuant to this Agreement, the "Purchase
Price"), payable as set forth in Section 3.2.
2.2 Payment of Purchase Price and Additional Consideration. 1) Subject
to the other provisions of this Section 3.2, at the Closing, Buyer will deliver
to Seller in cash by wire transfer of immediately available funds (to one or
more accounts designated in writing by Seller at least three Business Days
prior to the Closing Date) the sum of $4,700,000.
(a) Notwithstanding Section 3.2(a), if the Accounts Receivable
purchased at Closing (i) exceed $1,800,000, the Purchase Price shall be
increased by an amount equal to the difference between $1,800,000 and the
amount of Accounts Receivable being acquired; or (ii) are less than $1,800,000,
the Purchase Price shall be reduced by an amount equal to the difference
between the amount of Accounts Receivable purchased and $1,800,000.
(b) The parties agree that the Purchase Price shall be reduced by
the amount of the Assumed Liabilities listed on Schedule 2.1.
(c) Bombay shall receive all Finished Goods In-Transit and Buyer
shall pay at Closing Seller's estimated Landed Cost for such products. Bombay
shall cause such Finished Goods In-Transit to be delivered to Buyer at its
Gilbertsville facility. Buyer shall assume Seller's obligations with respect
to the Goods On Order.
1.2 Allocation of Purchase Price. Buyer and Seller have reached
agreement concerning the allocation of the amount of the consideration paid for
the Assets in accordance with the rules under Section 1060 of the Code and the
Treasury Regulations promulgated thereunder, as set forth on Schedule 3.3.
Seller and Buyer each agree to prepare and file an IRS Form 8594 in a timely
fashion in accordance with the rules under Section 1060 of the Code and the
Treasury Regulations promulgated thereunder and consistent with the allocation
set forth on Schedule 3.3. The allocation of the Purchase Price set forth on
Schedule 3.3 shall be binding on Buyer and Seller for all Tax reporting
purposes except that neither party shall be unreasonably impeded in their
ability and discretion to negotiate, compromise and/or settle any Tax audit,
claim or similar proceeding.
1.3 Aged Receivables. The parties agree that included in Schedule
1.1(vii) is a list of "Aged Receivables" that total $63,293. If after the
ninety (90) day period following Closing, Buyer collects an aggregate amount of
Net Collections in excess of $19,495, it shall pay to Seller all sums collected
in excess of $19,495. If after such ninety (90) day period, Buyer collects
less than $19,495 of Net Collections, Seller shall pay to Buyer an amount equal
to the result of subtracting the amount actually collected from $19,495. Any
sums due and owing under this Section 3.4 shall be due and payable on the
ninety-fifth (95th) day following the Closing.
2. CLOSING.
2.1 Closing Date. The signing and closing of the sale and purchase of
the Assets and the transactions contemplated hereby (the "Closing") will take
place at the offices of Bombay, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or
at such other mutually acceptable location as Buyer and Seller may agree in
writing, at 9:00 a.m., local time, on May 27 , 2005 or if the deliveries to the
Closing set forth in Articles 9 and 10 have not been satisfied (other than any
such conditions which by their nature must be satisfied or waived by the
appropriate party hereto on or before such date), as soon as practicable (but
in no event later than five Business Days) after such deliveries have been
satisfied or waived. The "Closing Date" will be deemed to be 12:01 a.m. on the
date upon which the Closing occurs.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller and Bombay represent
and warrant to Buyer as set forth below. Solely with respect to Sections
5.13(vii), 5.13(xi), 5.18(a), 5.20(a) and 5.21(a), with Buyer's consent, Seller
and Bombay are making such representations and warranties solely in reliance on
a certificate provided to them by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a copy of which is attached
hereto as Exhibit G.
3.1 Due Organization and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware and has full power and authority to own, lease and operate its assets,
properties and business and to carry on its business as currently conducted.
3.2 Qualification. Seller is qualified to do business in the States of
Delaware, Georgia, Illinois, Nevada, Texas, Pennsylvania and North Carolina,
and is in good standing in each of such states.
3.3 Authority to Execute and Perform Agreement. Seller has all
requisite power and authority to enter into, execute and deliver this Agreement
and each of the Seller Documents, and to perform fully its obligations
hereunder and thereunder, and no other act or proceeding on the part of Seller
is necessary to authorize the same. This Agreement and each of the Seller
Documents has been duly authorized, executed and delivered by Seller, and,
assuming the due authorization, execution and delivery of this Agreement and
each of the Seller Documents by Buyer, each is, or upon execution will be, a
valid and binding obligation of Seller enforceable against Seller in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights and remedies
generally or general principles of equity (regardless of whether considered and
applied in a proceeding at law or in equity) (the "Enforcement Exception").
3.4 INTENTIONALLY OMITTED
3.5 No Breach. The execution, delivery and performance of this
Agreement and each of the Seller Documents, and the consummation of the
transactions contemplated hereby and thereby, will not (i) violate or result in
the breach of any provision of the organizational documents of Seller; (ii)
assuming the receipt of the Contract Consents, violate, result in the breach
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any material contract to which Seller
is a party or by which Seller or any of the Assets may be bound (including any
Assumed Contract); (iii) result in the creation or imposition of any Lien upon
the Business or the Assets; (iv) violate any order, writ, judgment, injunction,
consent, award or decree of any Governmental Entity against Seller or affecting
the Business or the Assets; or (v) violate any Law applicable to any of Seller,
the Business or the Assets.
3.6 Actions and Proceedings. Except as set forth on Schedule 5.6,
there are no outstanding orders, writs, judgments, injunctions, consents,
awards or decrees of any Governmental Entity against Seller relating to or
affecting the Business or the Assets, and there is no action, litigation,
claim, suit or other legal, administrative, investigative or arbitral
proceeding of any type whatsoever pending or, to Seller's Knowledge, threatened
against Seller or its officers, directors, employees or agents which would have
a Material Adverse Effect.
3.7 Consents, Approvals and Filings. Except for any consents required
under the Assumed Contracts the "Contract Consents"), or otherwise required
(the "Other Consents") the execution and delivery by Seller of this Agreement
and the Seller Documents, and the performance by Seller of its obligations
hereunder and thereunder, do not require Seller to obtain any consent, approval
or other action of, or make any filing with or give any notice to, any
Governmental Entity or any other Person. All Contract Consents and Other
Consents are described on Schedule 5.7.
3.8 Real Property. 2) The Facilities are located at the addresses
listed on Schedule A (the "Facilities Real Property").
(a) Seller leases the premises described on Schedule A. Neither
Seller nor the lessor under any such lease is in default under such lease nor
has the lessor given notice that the lease is, will be or has been terminated.
(b) There is neither any condemnation proceeding nor any sale or
other disposition in lieu of condemnation pending and, to Seller's Knowledge,
threatened or contemplated, with respect to the Facilities Real Property, or
any part thereof.
2.2 Title to Tangible Assets. 3) Except as set forth on Schedule 5.9,
Seller has good, valid and marketable title to the Assets. Such Assets are
otherwise free and clear of any Lien, except for Permitted Liens.
(a) Except as set forth on Schedule 5.9, at the Closing, Seller
will deliver to Buyer good, valid and marketable title to all the Assets free
and clear of all Liens, other than Permitted Liens. Except as set forth on
Schedule 5.9, all Deeds and Assignments when delivered at the Closing will be
sufficient to vest good, valid and marketable title in Buyer.
3.2 Taxes. Except as set forth on Schedule 5.10, (i) Seller has filed,
or will file when due, all federal, state, provincial, local, foreign and other
Tax Returns (including relating to their respective properties, franchises,
payroll, excise, stamp, occupation, customs, duties, ad valorem, transfer,
sales and use) required to be filed and all Taxes, interest, penalties,
additions to Tax, and other charges due and payable as shown on such Tax
Returns, or due with respect to taxable periods covered by such Tax Returns,
have been paid; (ii) such Tax Returns were when filed (or when filed will be)
true, correct and complete, and disclosed (or will disclose) all Taxes required
to be paid by Seller for the periods covered thereby; (iii) all Taxes (whether
or not shown on any Tax Return) owed by Seller have been timely paid, except
such Taxes being contested in good faith or that are the subject of an
extension; (iv) there is no examination, action, suit, investigation, audit,
claim or assessment or proceeding pending, proposed or threatened by any
Governmental Entity relating to the determination, assessment or collection of,
or any delinquencies in filing relating to, any Taxes owing by Seller and to
Seller's Knowledge, no basis exists therefor; (v) Seller has not waived or been
requested to waive any statute of limitations in respect of Taxes, which waiver
is currently in effect, (vi) all monies required to be withheld by Seller
(including from Employees for income Taxes, social security Taxes and other
payroll Taxes) have been collected or withheld, and paid to the respective
taxing authorities; (vii) none of the Assets is properly treated as owned by
any Person other than Seller for income Tax purposes; and (viii) none of the
Assets is "tax-exempt use property" within the meaning of Section 168(h) of the
Code.
3.3 Certain Environmental Conditions. 4) Except as set forth on
Schedule 5.11(a), there is no pending, or, to Seller's Knowledge, threatened
litigation, suit, complaint, investigation or administrative action or claim of
any type whatsoever alleging that (i) the Facilities Real Property, the Assets,
the Business, or Seller in connection with its operation of the Business, is in
violation of or not in compliance with or subject to liability pursuant to any
Environmental Laws; or (ii) the Facilities Real Property, or Seller in
connection with the operation of the Business, is responsible for or subject to
Remediation of a Contaminant (or the costs thereof) with respect to the
Facilities Real Property or with respect to any off-site facility or location,
including, any waste disposal site whether or not located on the Facilities
Real Property.
(a) All reports, studies, audits, notices and correspondence,
whether generated by Seller, any Governmental Entity or any other Person, and
all tests, analyses and other documents, in the possession or control of, or
which are reasonably available to, Seller and which relate to compliance by the
Business or Seller in connection with the operation of the Business, the Assets
or the Facilities Real Property with Environmental Laws have been made
available to Buyer.
(b) Except as set forth on Schedule 5.11(c), Seller has complied,
and is currently complying in all material respects, with all Environmental
Laws applicable to Seller with respect to the Business and the Facilities Real
Property, and all Permits required thereunder.
(c) Except as set forth on Schedule 5.11(d), to Seller's
Knowledge, no Contaminant is or has been present or released on, in, under,
about or above the Facilities Real Property in violation of applicable
Environmental Laws or in an amount, concentration, or condition that could
give rise to an Environmental Claim. All releases of Contaminants by Seller
that have occurred on the Facilities Real Property, if any, have been timely
reported to the appropriate Governmental Entity if required by applicable Laws
and Seller has conducted all required Remediation of such releases pursuant to
applicable Environmental Laws.
(d) Except as set forth on Schedule 5.11(e), no Notice with
respect to the Seller's actual or alleged non-compliance with Environmental
Laws in connection with the Business or the environmental condition of any of
the Facilities Real Property or Assets is threatened or pending, nor has any
such Notice been issued by any Governmental Entity or other Person which has
not been provided to Buyer, if in existence prior to Closing, responded to and
resolved fully and in a timely fashion.
(e) Except as set forth on Schedule 5.11(f), to Seller's
Knowledge, no underground storage tank or waste management unit is, and no
underground storage tank or waste management unit has at any time been, located
on any of the Facilities Real Property that has not been removed or properly
closed in compliance with applicable Environmental Laws. To Seller's Knowledge,
the locations on the Facilities Real Property of all current or previous
underground storage tanks or waste management unit that are or were used by
Seller or, by any other Person, are described on Schedule 5.11(f).
(f) Except as set forth on Schedule 5.11(g), Seller is not
subject to any pending proceeding, or to Seller's Knowledge, potential
proceeding, under any Environmental Law.
(g) Except as set forth on Schedule 5.11(h), Seller (i) has not,
in connection with the Business or the Facilities Real Property, transported,
or arranged for the transport of, Contaminants to any facility or site for
reuse, recycling, reclamation, treatment, storage or disposal which is or was
not authorized for such activity, or (ii) is not subject to any pending or, to
Seller's Knowledge, potential proceeding, response, or clean-up under any
Environmental Law or other Environmental Claim with respect to any such
facilities or sites.
(h) To Seller's Knowledge, there are no Contaminants in any
inactive, closed or abandoned storage or disposal areas or facilities on the
Facilities Real Property. Except as set forth on Schedule 5.11(i), such areas
and facilities are not subject to actual or, to Seller's Knowledge, potential
proceedings, investigations, responses, clean-ups or Notices by officials of
any Governmental Entity or by any other Person or any other Environmental Claim
as a result of any on-site or off-site management, transport, treatment,
storage or disposal of Contaminants.
4.2 Financial Statements; Undisclosed Liabilities. 5) Attached as
Schedule 5.12(a) are the unaudited balance sheets of Seller as of January 31,
2004 and January 29, 2005, and the related unaudited statements of income of
Seller for the fiscal years then ended (the "Annual Financial Statements").
The Annual Financial Statements (i) were prepared in accordance with the
Records of Seller; and (ii) fairly present the financial position of Seller as
of the dates set forth therein and the results of operations for the periods
set forth therein.
(a) Attached as Schedule 5.12(b) are the unaudited statement of
income of the Seller for the three months ended April 30, 2005 (the "Interim
Statement"). The Interim Statement (i) was prepared in accordance with the
Records of Seller; (ii) fairly presents (subject to normal year-end
adjustments) the results of operations of Seller for the period then ended; and
(iii) reflects accurately in all material respects the costs and expenses of
Seller for the periods then ended.
(b) There are no liabilities, debts, claims or obligations with
respect to Seller (whether accrued, absolute, contingent, unasserted or
otherwise and whether or not of a nature required by GAAP to be reflected,
disclosed or otherwise provided for in a balance sheet of Seller) which,
individually or in the aggregate, could have a Material Adverse Effect on the
Condition of the Business, except (i) those reflected or otherwise provided for
in the Annual Financial Statements, (ii) for liabilities and obligations
incurred in the ordinary course of business consistent with past practice since
the date of the Annual Financial Statements, (iii) those specifically described
on Schedule 5.12(c), and (iv) Retained Liabilities.
5.2 Operations. Except as disclosed on Schedule 5.13, since April 30,
2005, Seller has operated the Business only in the ordinary course of business
consistent with past practice, and, without limiting the generality of the
foregoing, Seller has not:
(i) changed in any material respect the character, operation or
Condition of the Business;
(ii) (A) sold, abandoned or made any other disposition of any of
its properties or assets except in the ordinary course of business
consistent with past practice; (B) except for the Permitted Liens,
granted or suffered any Lien on any of its properties or assets of the
Business; or (C) except as would not have a Material Adverse Effect,
amended any Assumed Contract or entered into or amended any other
contract material to its operations which is in force and effect as of
the Closing Date;
(iii) except in the ordinary course of business consistent with
past practice, incurred or assumed any debt, obligation or liability
(whether absolute, contingent or otherwise, and whether or not currently
due and payable);
(iv) suffered any material destruction, damage or loss (other than
ordinary wear and tear), whether or not covered by insurance, relating to
any of its properties or assets, including the Assets;
(v) waived, canceled, sold or otherwise disposed of for less than
the fair value thereof any claim or right which it had against any other
Person, except for routine settlements or resolutions of disputed
customer or supplier accounts in the ordinary course of business
consistent with past practice or except as would not have a Material
Adverse Effect;
(vi) entered into any employment agreement or entered into,
adopted, amended, paid, agreed to pay or incurred any obligation for any
payment or contribution to, or with respect to, any benefit plan, or any
collective bargaining or severance agreement, or paid or promised to pay
any bonus to, or granted an increase in compensation or benefits to, any
Employee, except for normal accruals under benefit plans and normal
compensation adjustments in accordance with past practice;
(vii) received any notice that any supplier, distributor,
independent sales representative, customer or contractor has terminated
or is terminating its relationship with, or is threatening any legal or
similar action against, Seller;
(viii)made any forward purchase commitments, except for purchase
commitments in the ordinary course of business consistent with past
practice;
(ix) entered into any material transaction (except as contemplated
herein), whether or not in the ordinary course of business consistent
with past practice;
(x) prepared or filed any Tax Return inconsistent with past
practice or, on any such Tax Return, taken any position, made any
election, or adopted any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar Tax
Returns in prior periods (including positions, elections or methods which
would have the effect of deferring income to periods for which Buyer is
liable pursuant to Section 7.6 or accelerating deductions to periods for
which Seller and Bombay are liable pursuant to Section 7.6); or
(xi) received written notice from any customer listed on Schedule
5.18(a) of their intent to cease their business relationship with Seller,
except as otherwise disclosed on Schedule 5.18(a).
5.3 Contracts. Except for the Assumed Contracts, and as set forth on
Schedule 5.14, there is no binding, written agreement or contract to which
Seller is a party with respect to the Business: (i) with any current or former
Employee, independent contractor or temporary employment agency; (ii) with any
labor union or collective bargaining association representing any Employee;
(iii) for the sale, transfer or lease of any asset or group of related assets
of the Business having a fair market value in excess of $25,000; (iv) for the
purchase of any asset or group of related assets for a purchase price in excess
of $25,000; or (v) that involves an obligation to pay or render, or an
entitlement to receive monies or services with a fair market value in excess of
$25,000; or (vi) that is otherwise material to the Business. Except as set
forth on Schedule 5.14, (w) each Assumed Contract is in full force and effect
and is enforceable by Seller against the other party or parties thereto in
accordance with its terms, except as enforceability may be limited by the
Enforcement Exception, and there have been no terminations or cancellations
thereunder; (x) Seller has delivered to Buyer a true, correct and complete copy
of each of the Assumed Contracts, together with all amendments, modifications
and supplements thereto, and (y) none of the Assumed Contracts will be in
breach or default, terminate or be terminable by virtue of the transactions
contemplated hereby. Except as disclosed on Schedule 5.14, neither Seller nor,
to Seller's Knowledge, any other Person has materially breached its obligations
or defaulted under any Assumed Contract, and there has occurred no event or
condition which, with the giving of notice or passage of time or both, would
constitute such a material breach or material default on the part of Seller or,
to Seller's Knowledge, any other Person.
5.4 Accounts Receivable. The Accounts Receivable of the Business
(which are listed on Schedule 1.1(viii) represent sales actually made in the
ordinary course of business or pursuant to activities described in Schedule
5.15, and are not to Seller's Knowledge subject to any defense or offset.
5.5 Intellectual Property. 6) To Seller's Knowledge, Seller owns or
possesses adequate licenses or other valid rights (which are assignable by
Seller) to use the trademarks used in connection with the operation of the
Business as currently conducted.
(a) With respect to the trademarks used by Seller, to Seller's
Knowledge, Seller has not interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of any other
Person, and none of the directors, officers or management - level employees of
Seller has ever received any written charge, complaint, claim, demand or notice
from any Governmental Entity or other Person alleging any such interference,
infringement, misappropriation or conflict (including any claim that Seller
must license or refrain from using any trademarks used by any other Person).
To Seller's Knowledge, no Person has interfered with, infringed upon,
misappropriated, misused or otherwise come into conflict with any trademarks
used by Seller relating to the Business.
(b) With respect to the Business, Seller does not own or hold a
license to any patent or patent registration.
(c) Schedule 5.16(d) identifies (i) each trademark registration
which has been issued to Seller or its Affiliates in the United States and all
jurisdictions worldwide relating to the Business; (ii) each pending trademark
application which Seller or its Affiliates has filed with respect to any
trademark relating to the Business anywhere in the world; and (iii) each trade
name or unregistered trademark identified on Schedule 1.1(vi) and used by
Seller in connection with the Business. Seller has delivered to Buyer correct
and complete copies of all such trademark registrations and applications, and
has made available to Buyer correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each such
trademark.
(d) Except for software used in connection with the Business,
Seller does not own or hold a written license to any copyrighted material.
(e) Schedule 5.16(f) identifies each license, agreement, covenant
not to ▇▇▇ or other permission which Seller has granted to any other Person
with respect to any trademark relating to the Business in the United States and
all jurisdictions worldwide. Seller has delivered to Buyer correct and
complete copies of all such licenses, agreements and other permissions (as
amended to date) and has made available to Buyer correct and complete copies of
all written documentation evidencing the legality, validity and enforceability
of each such license, agreement and other permission (if applicable).
(f) With respect to each item of Intellectual Property required
to be identified on Schedules 5.16(d) and (f):
(i) Seller or an Affiliate owns all right, title and interest in
and to such item, free and clear of any Lien or any other encumbrances;
(ii) such item is not subject to any outstanding injunction,
judgment, order, decree, ruling or charge;
(iii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to Seller's Knowledge,
threatened which challenges the legality, validity, enforceability, use
or ownership of such item;
(iv) neither Seller nor any Affiliate has agreed to indemnify any
Person for or against any interference, infringement, misappropriation,
misuse or other conflict with respect to such item;
(v) all licenses, covenants not to ▇▇▇, agreements and other
permissions pertaining to such item and all other rights to which Seller
or an Affiliates is entitled with respect thereto are in compliance in
all respects with all applicable Laws in all jurisdictions worldwide,
including, without limitation, those pertaining to remittance of foreign
exchange and Taxes; and
(vi) neither Seller nor an Affiliate has made a previous
assignment, sale, transfer or agreement constituting a present or future
assignment, mortgage, sale or transfer of, or granted any Lien on, such
item other than licenses granted in the ordinary course of business
consistent with past practice (and each such license has been identified
on Schedule 5.16(f)); nor has Seller or any Affiliate granted any
release, covenant not to ▇▇▇ or other non-assertion assurance to any
Person with respect to such item.
6.2 Records. Seller maintains its Records (including, but not limited
to, those kept for financial reporting and Tax purposes) in accordance with
good business practice and in sufficient detail to reflect accurately and
fairly in all material respects the transactions and the Condition of the
Business.
6.3 Suppliers and Customers. 7) Listed on Schedule 5.18(a) are the
names and addresses of Seller's 10 largest customers (measured by dollar
volume) and the approximate percentage of the business which each such customer
represented during each of the fiscal years ended January 31, 2004 and January
29, 2005. To Seller's Knowledge, such list discloses any actual or threatened
termination, cancellation or limitation of, or any material modification or
change in, the business relationship of Seller with any customer or group of
customers identified on such list.
(a) Listed on Schedule 5.18(b) are the Chinese finished goods
suppliers of the Business and the approximate percentage of the total dollar
value of all merchandise purchased by Seller supplied by each such supplier
during each of the fiscal years ended January 31, 2004 and January 29, 2005.
This list of suppliers is the property of Seller and is expressly subject to
the terms and conditions of a Consulting Services Agreement, in the form
attached hereto as Exhibit D, and Section 13.2 herein.
7.2 Employee Matters. Listed on Schedule 5.19 are the names, titles
and cash compensation of all management of Seller regardless of compensation
levels, and other employees Seller who are currently compensated at a rate in
excess of $50,000 per year. Schedule 5.19 contains a complete and accurate
list of all employment agreements of Seller existing on the date hereof. All
employees of Seller working in the United States are citizens of, or eligible
to be employed in, the United States by an employer.
7.3 Litigation. 8) Except as set forth on Schedule 5.20(a), there is
no litigation, arbitration or governmental proceeding pending, or to Seller's
Knowledge, threatened (i) against Seller affecting any of the Assets; (ii) that
questions the validity of this Agreement, or the right of Seller to enter into
this Agreement or consummate the transactions contemplated hereby; or (iii)
against any officer or employee of Seller relating to the Business, in such
capacity or relating to his prior employment relationships. Except as set
forth in Schedule 5.20(a), Seller is not aware of any fact that is likely to
form the basis of any such litigation, arbitration or proceeding.
(a) Except as set forth on Schedule 5.20(b), there is no
litigation, arbitration or governmental proceeding pending, or to Bombay's
Knowledge, threatened (i) against Bombay affecting any of the Assets; (ii) that
questions the validity of this Agreement, or the right of Bombay to enter into
this Agreement or consummate the transactions contemplated hereby; or (iii)
against any officer or employee of Bombay relating to the Business, in such
capacity or relating to his prior employment relationships. Except as set
forth on Schedule 5.20(b), Bombay is not aware of any fact that is likely to
form the basis of any such litigation, arbitration or proceeding.
8.2 Certain Payments. Neither Seller, nor any U.S. based manager,
officer (excluding officers who are also employees of Bombay) or employees of
Seller, has paid or caused to be paid, directly or indirectly, in connection
with the Business (i) to any government or agency thereof or, any agent of any
supplier or customer any bribe, kick-back or other similar unlawful payment; or
(ii) any contribution to any political party or candidate (other than from
personal funds of directors, officers or employees not reimbursed by their
respective employers or as otherwise permitted by applicable law).
8.3 Marketing Rights. Except as set forth on Schedule 5.22, with
respect to the Business, Seller has not granted rights in writing to
manufacture, market or sell its products to any other Person and is not bound
by any written agreement that affects Seller's right to market or sell its
Business products.
8.4 Representations Not Waived. The representations and warranties of
Seller contained herein will not be affected or deemed waived by reason of any
investigation or inspection made by or on behalf of Buyer and/or its
representatives or agents or by reason of the fact that Buyer and/or its
representatives or agents knew or should have known that any such
representation or warranty is or might be inaccurate in any respect.
8.5 Disclosure. Neither this Agreement nor any Schedule or Exhibit to
this Agreement contains an untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein or therein not
misleading. None of the documents supplied to Buyer in the due diligence room
established by Seller and Bombay contains an untrue statement of a material
fact. There is no fact which Seller has not disclosed to Buyer in writing and
of which Seller is aware which materially and adversely affects or could
reasonably be expected to materially and adversely affect the business,
prospects, financial condition, operations, property or affairs of Business.
9. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to Seller as follows:
9.1 Due Organization and Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws the State of
Nevada, and has, or will have on the Closing Date, all requisite power and
authority to own, lease and operate its assets, properties and business and to
carry on its business as currently conducted and as contemplated by this
Agreement.
9.2 Authority to Execute and Perform Agreement. Buyer has all
requisite power and authority to enter into, execute and deliver this Agreement
and each of the Buyer Documents, and to perform fully its obligations hereunder
and thereunder, and no other act or proceeding on the part of the Buyer is, or
will be on the Closing Date, necessary to authorize same. This Agreement has
been, and each of the Buyer Documents to be delivered by Buyer at the Closing
will be, duly authorized, executed and delivered by Buyer and, assuming the due
authorization, execution and delivery of this Agreement and each of the Buyer
Documents by Seller, each is, or upon execution will be, a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except as enforceability may be limited by the Enforcement Exception.
9.3 No Breach. The execution, delivery and performance by Buyer of
this Agreement and each of the Buyer Documents to which it is party, and the
consummation of the transactions contemplated hereby and thereby, will not (i)
violate or result in the breach of any provision of the articles of
incorporation, bylaws or other constituent documents of Buyer, (ii) violate,
result in the breach of, or constitute a default (or an event which, with the
giving of notice or the lapse of time or both, would constitute a default)
under, any material contract to which Buyer is party or by which Buyer or any
of its assets may be bound, (iii) violate any order, writ, judgment,
injunction, award or decree of any arbitrator or Governmental Entity against
Buyer or affecting any of its assets or properties, or (iv) violate any
applicable Law.
9.4 Actions and Proceedings. There are no outstanding orders, writs,
judgments, injunctions, awards or decrees of any Governmental Entity against
Buyer, and there are no actions, litigations or suits or other legal,
administrative, investigative or arbitral proceedings of any type whatsoever
pending, or to Buyer's Knowledge, threatened, against or involving Buyer which,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the ability of the Buyer to consummate the
transactions contemplated hereby.
9.5 Consents and Approvals. Except for any required consents or
approvals from appropriate Governmental Entities for the issuance or transfer
of the Permits, the execution and delivery by Buyer of this Agreement and the
Buyer Documents, and the performance by Buyer of its obligations hereunder and
thereunder, do not require Buyer to obtain any consent, approval, or other
action of, or make any filing with or give any notice to, any Governmental
Entity or other Person.
10. COVENANTS AND AGREEMENTS. The parties hereto covenant and agree as
follows:
10.1 Expenses. Each party to this Agreement will bear its own expenses
incurred in connection with the preparation, execution and performance of this
Agreement, including all fees and expenses of agents, representatives,
attorneys and accountants. Notwithstanding any other provision in this
Agreement to the contrary, Seller also will bear (i) the costs associated with
any sales, use, registration, inventory, transfer, or similar Taxes, and (ii)
any recording or registration costs payable by either party as a result of the
transactions contemplated hereby.
10.2 Indemnification for Brokerage Commissions. Seller and Bombay
represent and warrant to Buyer that no broker, finder, agent or similar
intermediary has acted on behalf of Seller in connection with this Agreement,
and (ii) there are no brokerage commissions, finders' fees or similar fees or
commissions payable by Buyer in connection herewith on account of Seller's
actions. Seller and Bombay jointly and severally agree to indemnify and hold
Buyer harmless from any claim or demand for commission or other compensation by
any broker, finder, agent or similar intermediary (including, but not limited
to, Broker) claiming to have been employed or retained by or on behalf of
Seller, and to bear the cost of any legal expenses incurred by Buyer in
defending against any such claim. Buyer represents and warrants to Seller and
Bombay that (x) no broker, finder, agent or similar intermediary has acted on
behalf of Buyer in connection with this Agreement, and (y) there are no
brokerage commissions, finders' fees or similar fees or commissions payable by
Seller in connection herewith on account of Buyer's actions. Buyer agrees to
indemnify and keep Seller and Bombay harmless from any claim or demand for
commission or other compensation by any broker, finder, agent or similar
intermediary claiming to have been employed or retained by or on behalf of
Buyer, and to bear the cost of any legal expenses incurred by Seller and Bombay
in defending against any such claim.
10.3 Access; Records; Operations Manuals. 9) After the Closing, Buyer
and Seller will afford to each other and their respective representatives the
opportunity, upon reasonable request and notice, to examine and make copies of
their respective books and records relating to the Business and the Assets, and
at the cost and expense of the requesting party, to consult with their
respective officers, employees, accountants and other representatives in
connection with any reasonable business purpose, including the preparation of
Tax Returns and financial reports and the conducting of any audits with respect
thereto, the administration of Buyer's benefit plans and benefit arrangements,
the review of any materials, books, records or circumstances relating to either
party's ongoing obligations under this Agreement or for any other reasonable
business purpose.
(a) On the Closing Date, Seller will deliver or cause to be
delivered to Buyer the following:
(i) all Records (other than Retained Records), subject to the
following:
(A) Buyer will be provided, at Buyer's expense, with copies
of Retained Records upon Buyer's reasonable written request, which
request shall identify the Retained Records sought, provided such
Retained Records relate to the Business, the Assets or Buyer's
obligations under this Agreement; and
(ii) to the extent written by Seller prior to the date hereof,
operations, maintenance and other manuals setting forth in reasonable
detail all procedures necessary to operate the Assets in a safe, reliable
and legal manner.
9.2 Further Assurances. Each party hereto will, and will cause its
respective Affiliates to, execute such agreements, documents, instruments and
other papers, including, but not limited to, any and all licenses, permits,
registrations, orders and approvals required by applicable Law or Governmental
Entities, and take such further actions, at any time and from time to time,
after the Closing Date, as may be reasonably requested by the other party to
carry out the provisions hereof and the transactions contemplated hereby.
9.3 Mail or Other Communications Received After Closing. On and after
the Closing Date, Buyer may receive and open all mail or other communications
addressed to Seller and that Buyer reasonably believes relates to the Business,
the Assets or the Assumed Liabilities and deal with the contents thereof to the
extent that such mail or other communications and the contents thereof relate
to the Business, the Assets or any of the Assumed Liabilities. Buyer agrees to
keep and cause to be kept confidential the contents of, and to deliver or cause
to be delivered promptly to Seller, all mail or communications (including any
mail or communications that relate to the Retained Assets or the Retained
Liabilities) received by Buyer which are addressed to Seller. Buyer may retain
a copy of such mail or communications if it also relates to the Assets or
Assumed Liabilities. If, after the Closing Date, Seller receives any wire
transfers of funds that relate to Accounts Receivable that constitute Assets,
Seller shall immediately pay such funds to Buyer. In the event that Seller
receives mail or other communications which relate to the Business, the Assets
or any of the Assumed Liabilities on or after the Closing Date, Seller will
deliver or cause to be delivered promptly to Buyer such mail or other
communications. Seller agrees to keep and cause to be kept confidential the
contents of such mail or other communications.
9.4 Taxes. 10) Except for Taxes which constitute Assumed Liabilities,
Seller and Bombay will be liable for and will pay, and will indemnify, defend
and hold harmless Buyer and its Affiliates (and directors, officers, employees,
stockholders, successors, assigns, representatives and agents) from and
against, all Taxes (whether assessed or unassessed) applicable to the Business,
the Assets and the Assumed Liabilities, in each case attributable to taxable
years or periods ending on or prior to the close of the day on which the
Closing occurs and, with respect to any Straddle Period, the portion of such
Straddle Period ending on and including the close of the day immediately prior
to the day on which the Closing occurs provided, that Seller and Bombay will
not be liable for or pay, and will not indemnify, defend or hold harmless,
Buyer and its Affiliates (and their respective directors, officers, employees,
stockholders, successors, assigns, representatives and agents) from and
against, any Taxes for which Buyer is liable under this Agreement, including,
pursuant to Section 7.6(b) (which Taxes will be the liability of Buyer). For
this purpose, in the case of real property, personal property and other ad
valorem Taxes, Taxes for the period that includes the day immediately prior to
the Closing Date shall be prorated on a daily basis. Seller shall be
responsible for the preparation and filing of all Tax Returns applicable to the
Business, the Assets and the Assumed Liabilities attributable to taxable years
or periods ending on or prior to the close of the day immediately prior to the
day on which the Closing occurs.
(a) Buyer will be liable for and will pay, and will indemnify,
defend and hold harmless Seller and its Affiliates (and their respective
directors, officers, employees, stockholders, successors, assigns,
representatives and agents) from and against, Taxes which constitute Assumed
Liabilities, all Taxes (whether assessed or unassessed) applicable to the
Business, the Assets and the Assumed Liabilities that are attributable to
taxable years or periods beginning on the date on which the Closing occurs and,
with respect to any Straddle Period, the portion of such Straddle Period
beginning on the day on which the Closing occurs; provided, that Buyer will not
be liable for or pay, and will not indemnify, defend or hold harmless, Seller
and its Affiliates (and their respective directors, officers, employees,
stockholders, successors, assigns, representatives and agents) from and
against, any Taxes for which Seller is liable under this Agreement, including,
pursuant to Section 7.6(a) or Section 5.10 (which Taxes will be the liability
of Seller). For this purpose, in the case of real property, personal property
and other ad valorem Taxes, Taxes for the period that includes the Closing Date
shall be prorated on a daily basis. Buyer shall be responsible for the
preparation and filing of all Tax Returns applicable to the Business, the
Assets and the Assumed Liabilities attributable to taxable periods beginning on
or after the day on which the Closing occurs.
(b) Seller and Bombay, on the one hand, or Buyer, on the other
hand, as the case may be, will provide reimbursement for any Tax paid by one
party or its Affiliates, all or a portion of which is the responsibility of the
other party in accordance with the terms of this Section 7.6. Not later than
10 business days prior to the payment of any such Tax, the party paying such
Tax will give notice to the other party of the Tax payable and the portion
which is the liability of the other party, although failure to timely give such
notice will not relieve the other party from its liability hereunder.
(c) After the Closing Date, Seller, Bombay and Buyer will, and
will cause their respective Affiliates to: (i) assist in all reasonable
respects the other party in preparing any Tax Returns which such other party or
its Affiliate is responsible for preparing and filing; (ii) cooperate in all
reasonable respects in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns concerning the Business, the Assets or
the Assumed Liabilities; (iii) make available to the other party and to any
taxing authority as reasonably requested by the other party all information,
records, and documents relating to Taxes concerning the Business, the Assets or
the Assumed Liabilities; (iv) provide timely notice to the other party in
writing of any pending or threatened Tax audits or assessments relating to
Taxes concerning the Business, the Assets or the Assumed Liabilities for
taxable periods for which the other party may have a liability under this
Section 7.6; and (v) furnish the other party with copies of all correspondence
received from any taxing authority in connection with any Tax audit or
information request with respect to any such taxable period.
(d) Notwithstanding anything to the contrary in this Agreement,
the obligations of the parties set forth in Section 7.6(a)-(d) will be
unconditional and absolute and will remain in effect for a period of 10 years
from the Closing Date.
10.2 Sales Representative Agreements. Seller and Bombay agree that if
requested by Buyer, Seller and Bombay shall assist Buyer in securing consents
from Seller's sales representatives to transfer their sales representative
agreements to Buyer; provided, however, such consents must contain a full
release (to the extent permitted by Law) of Bombay and Seller. Neither Bombay
nor Seller shall be required to expend any funds or an unreasonable amount of
time or effort in performing its duties under this Section 7.7. With respect
to any agreements not transferred within ninety (90) days following the
Closing, Seller and Bombay shall have the right to terminate such agreements.
11. EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS
11.1 Employees. On or prior to the Closing Date, Seller will have
terminated, as of the Closing Date, the employment of all Employees employed by
Seller in the Business (other than those Employees listed on Schedule 8.1
hereto). Seller will retain all liabilities, and carry out all obligations
with respect to each such terminated Employee's compensation, benefits,
vacation pay and other entitlements resulting from such termination. Buyer
will, effective as of the Closing Date, offer to employ, on terms and
conditions substantially the same as the Employee's then current terms of
employment with respect to base salary (excluding any right to participate in
any Employee Benefit Plan), the Employees employed by Seller in the Business
(other than those Employees listed on Schedule 8.1 thereto). Neither Seller
(excluding ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇) nor Bombay will make any representations or
assurances to the Employees that all or any of them will be hired by Buyer or
what their wages, hours, or terms and conditions of employment would be were
they employed by Buyer.
11.2 Benefit Plans. Without limiting the generality of Section 2.2
hereof, and except as otherwise provided in this Article 8, Seller and Bombay
will retain and be solely responsible for (i) all liabilities and obligations
under all of Seller's Benefit Plans and Benefit Arrangements (other than
Assumed Liabilities), including all liabilities and obligations arising under
the continuation coverage requirements of COBRA with respect to Employees and
their dependents whose health care continuation rights arise out of the
transactions contemplated hereby; (ii) any long-term disability benefits
provided under any Benefit Plan, including any claims resulting from
disabilities incurred but not reported as of the Closing Date; (iii) any
benefits provided to Employees who do not become Continuing Employees; (iv) any
expenses incurred under Seller's Benefit Plans and Benefit Arrangements; and
(v) any award of stock appreciation rights, stock options, restricted stock,
performance shares or units, or other incentive compensation by Seller or
Bombay.
11.3 No Right to Benefits. No provision contained in this Agreement
will create any third party beneficiary or other rights in any Employee or
former Employee of Seller (or any beneficiary or dependent thereof) in respect
of continued employment or resumed employment with Buyer or the Business, and
no provision of this Agreement will create any such rights in any such Person
in respect of any benefits that may be provided under any employee benefit plan
or arrangement that may be established by any Buyer.
11.4 Employee Agreements. Subject to required consents, Seller hereby
assigns to Buyer all of Seller's rights under all confidentiality and non-
competition agreements that exist with any Employees (other than those
Employees, if any, retained by Seller). Immediately upon execution of this
Agreement, Seller shall provide copies of all such agreements to Buyer.
11.5 Right to Change Benefits. Buyer will have the right, in the
exercise of its managerial discretion, to make changes or cause changes in the
compensation, benefits (including medical, pension, thrift plan or other
benefits), and other terms of employment for, and to terminate the employment
of, any Continuing Employee.
12. CLOSING OBLIGATIONS OF SELLER. Simultaneous with the execution of this
Agreement, Seller shall provide the following documents to Buyer:
12.1 Closing Documents. Seller will have executed and delivered to
Buyer the Seller Documents.
12.2 Secretary's Certificate. Seller will have delivered to Buyer a
certificate, in form and substance reasonably satisfactory to Buyer, signed by
the Secretary of Seller and dated the Closing Date, certifying the accuracy and
completeness of the following documents to be delivered therewith: (i)
resolutions duly adopted by the Board of Directors of Seller authorizing and
approving the transactions contemplated hereby; and (ii) the incumbency of
certain officers of Seller.
12.3 Ancillary Agreements. Seller shall execute and deliver the
Ancillary Agreements with Buyer.
12.4 Certificates of Good Standing. Seller shall provide Buyer with
certificates of good standing (tax and corporate, to the extent available)
issued by the States of Delaware, Georgia, Pennsylvania, Nevada, Texas, North
Carolina and Illinois.
12.5 Inventory to be Delivered. On the Closing Date, Seller shall
deliver to Buyer approximately $1,500,000 (based on Seller's Landed Cost) of
Inventory, consisting of SKUs agreed to by the parties and listed on Schedule
1.1(ii).
12.6 Lease Assignments. Seller shall deliver showroom lease assignments
executed by Seller and the applicable showroom landlords, which lease
assignments shall contain a full release by the landlord of Seller.
12.7 UCC-3s. Seller shall deliver UCC-3s listing ▇▇▇▇▇ Fargo Retail
Finance, LLC as a secured party and releasing its Liens on the Assets.
13. CLOSING OBLIGATIONS OF BUYER. Simultaneous with execution of this
Agreement, Buyer shall provide the following documents to Seller:
13.1 Purchase Price and Closing Documents. Buyer will have delivered to
Seller the Purchase Price as provided in Section 3.2 and Buyer will have
executed and delivered to Seller the Buyer Documents.
13.2 Secretary's Certificate. Buyer will have delivered to Seller a
certificate, in form and substance reasonably satisfactory to Seller, signed by
the Secretary of Buyer and dated the Closing Date, certifying the accuracy and
completeness of the following documents to be delivered therewith: (i) Buyer's
Articles of Incorporation and Bylaws as in effect on the Closing Date; (ii)
resolutions duly adopted by the Board of Directors of Buyer authorizing and
approving the transactions contemplated hereby; and (iii) the incumbency of
certain officers of Buyer.
13.3 Ancillary Agreements. Buyer shall execute and deliver the
Ancillary Agreements.
14. SURVIVAL. All covenants, agreements and indemnities contained herein
survive indefinitely, without limitation as to time (except as may be otherwise
provided in such covenants and agreements), the execution and delivery of this
Agreement and the Closing hereunder. All representations and warranties
contained herein shall survive for a period of one year from the Closing Date;
provided, however, that the representations and warranties as to environmental
and tax matters shall terminate and expire upon the expiration of the
applicable statute of limitations or any extensions thereof.
15. INDEMNIFICATION.
15.1 Obligation of Seller to Indemnify. Seller and Bombay jointly and
severally agree to indemnify, defend and hold harmless Buyer and its Affiliates
(and their respective directors, officers, employees, stockholders, successors,
assigns, representatives, attorneys and agents) (collectively, the "Buyer
Indemnitees") from and against all claims, losses, actions, demands,
liabilities, damages, deficiencies, diminution in value, costs or expenses,
including interest, penalties and reasonable attorneys' fees and disbursements
(collectively, "Losses"), actually incurred, suffered or paid, directly or
indirectly, by or asserted against any of the Buyer Indemnitees based upon,
arising out of, in connection with, or otherwise in respect of: (i) any breach
of any representation or warranty of Seller or Bombay contained in this
Agreement, the Schedules hereto, or the Seller Documents; (ii) any breach of
any covenant or agreement of Seller or Bombay contained in this Agreement or
any Seller Document; (iii) any Retained Liability; (iv) any proceedings
currently or in the future pending against Seller or Bombay except those
relating to an Assumed Liability or Assumed Contract (only with respect to
matters occurring prior to the Closing Date); (v) relating to the operation of
Seller, the Business or the Facilities prior to the Closing Date; provided,
however, Seller and Bombay shall have no indemnity obligation under this item
(v) to the Buyer Indemnitees (x) with respect to matters listed on Schedules to
this Agreement or as to matters as to which Bombay and Seller are relying upon
a certificate from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in making its representations and
warranties, (y) with respect to matters limited to Seller's or Bombay's
Knowledge, for matters as to which they have no Knowledge, and (z) absent a
final non-appealable judgment or settlement (subject to Buyer's, Seller's, and
Bombay's mutual agreement) which holds Buyer liable as the successor in
interest to Seller for matters exclusively arising from the operation of
Seller, the Business or the Facilities prior to the Closing Date; (vi) the
Employees, agents, consultants, sales representatives or distributors of
Seller; (vii) the failure of Seller to comply with applicable bulk sales laws;
(ix) any of Seller's or Bombay's Benefit Plans or Benefit Arrangements; (x) any
penalties, fines or assessments against Seller or Bombay imposed or assessed by
any Governmental Entity relating to matters that arose or occurred prior to the
Closing Date; (xi) Seller's failure to have the Permits necessary to operate
the Business or own or operate its properties or assets; (xii) the
contribution by Bombay or any director, manager, officer or employee of Bombay
to any political party or candidate (other than personal funds of directors,
officers or employees not reimbursed by their respective employees or as
otherwise permitted by Law); or (xiii) the payment by the Persons listed in
item (xii) above to any government or agency thereof, any agent of any supplier
or customer, of any bribe, kick-back or other similar unlawful payment.
15.2 Obligation of Buyer to Indemnify. Buyer agrees to indemnify,
defend and hold harmless Seller and its Affiliates (and their respective
directors, officers, employees, stockholders, successors, assigns,
representatives, attorneys and agents) (collectively the "Seller Indemnitees")
from and against any Losses actually incurred, suffered or paid, directly or
indirectly, by the Seller Indemnitees based upon, arising out of, in connection
with, or otherwise in respect of: (i) any breach or alleged breach of any
representation or warranty of Buyer contained in this Agreement, or the Buyer
Documents; (ii) any breach or alleged breach of any covenant or agreement of
Buyer contained in this Agreement or any Buyer Document; (iii) any Assumed
Liability or Assumed Contract, (only with respect to matters occurring after
the Closing Date); or (iv) the operation of the Business after the Closing
Date.
15.3 Notice and Opportunity to Defend. 11) Within ten (10) days after
receipt by any Person entitled to indemnification under this Article 12 (the
"Indemnitee") of notice of any demand, assertion or other circumstance
(including receipt of a report prepared by a third party consultant or
engineer) which could give rise to a claim or obligation or the commencement
(or threatened commencement) of any action, proceeding or investigation (each,
an "Asserted Liability") that may result in a Loss, the Indemnitee will give
notice thereof (the "Claims Notice") to the party obligated to provide
indemnification or payment pursuant to Section 12.1 or 12.2 (the "Indemnifying
Party"), as the case may be, subject to the procedures contained in this
Section 12.3. The Claims Notice will describe the Asserted Liability in
reasonable detail and will, if possible, indicate the amount of the Loss that
has been or may be suffered by the Indemnitee. In no event will the
Indemnitee's failure to give a Claims Notice to the Indemnifying Party relieve
the Indemnifying Party of any liability under this Article 12, except to the
extent that such failure materially prejudices the Indemnifying Party's ability
to adequately defend such claim.
(a) After giving the Claims Notice, the Indemnitee shall permit
the Indemnifying Party to assume the defense of such claim with counsel
reasonably satisfactory to the Indemnitee; provided, however, that any
Indemnitee shall have the right to employ separate counsel and to participate
in the defense of such claim, but the fees and expenses of such counsel shall
be at the expense of Indemnitee unless: (x) the Indemnifying Party has agreed,
in writing, to pay such fees or expenses; (y) the Indemnifying Party shall have
failed to assume the defense of such claim and employ counsel reasonably
satisfactory to the Indemnitee within fourteen (14) days of the receipt of the
Claims Notice; or (z) based upon advise of counsel to the Indemnitee, there
shall be one or more defenses available to the Indemnitee that are not
available to the Indemnifying Party or there shall exist conflicts of interest
pursuant to applicable rules of professional conduct between the Indemnitee and
the Indemnifying Party (in which case if the Indemnitee notifies the
Indemnifying Party in writing that the Indemnitee elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such claim on behalf of such
Indemnitee), in each of which events the fees and expenses of such counsel
shall be at the expense of the Indemnifying Party. The Indemnifying Party will
not be subject to any liability for any settlement made without its consent
(but such consent will not be unreasonably withheld, conditioned, qualified or
delayed), but if settled with its written consent, or if there be a final
judgment against the Indemnitee in any such action or proceeding, the
Indemnifying Party shall indemnify and hold harmless the Indemnitee from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. No Indemnitee will be required to consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the complainant or plaintiff to such
Indemnitee of a release from all liability in respect to such claim or
litigation.
11.2 Limitations on Amount - Seller. Seller and Bombay shall have no
liability (for indemnification or otherwise) with respect to claims arising
under Section 12.1 until the total of all Losses with respect to such matters
exceeds $75,000, and then only for the amount by which such Losses exceed
$75,000. However, the provisions of the preceding sentence shall not apply to
claims arising under Section 12.1 in respect of breaches of Seller's and
Bombay's representations, warranties and covenants contained in Sections 5.7,
5.10, 5.15 and 7.2. Notwithstanding anything in this Agreement to the
contrary, in no event shall the amount of Losses indemnified by Seller and
Bombay exceed an amount equal to the amount of the Purchase Price plus the
amount paid by Buyer to Seller pursuant to Section 3.2(d).
11.3 Limitations on Amount - Buyer. Buyer shall have no liability (for
indemnification or otherwise) with respect to claims arising under Section 12.2
until the total of all Losses with respect to such matters exceeds $75,000, and
then only for the amount by which such Losses exceed $75,000. However, the
provisions of the preceding sentence shall not apply to claims arising under
Section 7.2.
12.COVENANT NOT TO COMPETE.
12.1 Agreement Not to Compete. 12) As a material inducement to Buyer to
enter into this Agreement and to consummate the transactions contemplated
hereby, and for and in consideration of the sum of $50,000 (which constitutes
part of the Purchase Price) to be paid to Seller at Closing, Seller and Bombay
agree to the covenants and agreements set forth in this Section 13.1 for the
benefit of Buyer and its Affiliates.
(a) Neither Seller, Bombay nor any of their respective Affiliates
will, at any time from and after the Closing Date and through the first
anniversary of the Closing Date, without the prior written consent of Buyer,
(i) directly or indirectly engage in, or (ii) acquire control of or more than a
five percent (5%) interest in a publicly-traded entity, or assist or render
services (whether or not for compensation, or as an agent, advisor, consultant
or lender) to or for, any business involved in the wholesale sale of accent
furniture worldwide. Notwithstanding anything contained in this Section
13.1(b) to the contrary, Seller, Bombay and their respective Affiliates shall
have no such restrictions with respect to (i) operating retail stores; (ii)
selling products on a wholesale basis to, and providing advisory or consulting
services to, the international licensees of Seller's Affiliates; or (iii)
occasional sales of over-stock and close-out items to the wholesale trade;"
provided however, that nothing in this Section 13.1(b) shall prevent Seller,
Bombay or any of their respective Affiliates from acquiring more than a five
percent (5%) interest in a publicly-traded entity whose most recent annual
financial statements indicate that less than 25% of its annual revenues were
derived from the wholesale selling of accent furniture.
(b) The parties agree that they will not (and will not permit any
of their Affiliates to), at any time from and after the Closing Date and
through the one year anniversary thereof, directly or indirectly through the
actions of any other Person, whether for its own benefit or for that of another
Person, whether for its own benefit or for that of another Person: (i) solicit
for hire, divert or hire, or attempt to solicit for hire, divert or hire, any
individual who then is or at any time within the 12 month period preceding the
proposed hire date, an officer, director, manager, or other employee of another
party hereto or any of its Affiliates, or induce or attempt to induce any such
individual to terminate his or her employment with the other party or any of
its Affiliates; or (ii) take any action, or advise or assist any Person in
taking any action that could damage the relationships between such parties and
the suppliers listed on Schedule 5.18(b).
12.2 Confidentiality. 13) As used in this Section 13.2, the term
"Confidential Information" includes any and all of the following information of
the Buyer, Seller, and Seller's Affiliates that has been disclosed in any form
by either party (Buyer on the one hand, and Seller and its Affiliates,
collectively on the other hand), or its representatives (collectively, a
"Disclosing Party") to the other party or its representatives (collectively, a
"Receiving Party"):
(i) all information that is a trade secret under applicable trade
secret or other Law;
(ii) all information concerning product specifications, data,
know-how, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas, research
and development, manufacturing or distribution methods and processes,
customer lists, customer requirements, price lists, market studies,
business plans, computer hardware, software and database technologies,
systems, structures, and architectures;
(iii) all information concerning the business and affairs of the
Disclosing Party (which includes historical and current financial
statements, financial projections and budgets, tax returns and
accountants' materials, historical, current and projected sales, capital
spending budgets and plans, business plans, strategic plans, marketing
and advertising plans, publications, client and customer lists and files,
contracts, the names and backgrounds of key personnel and personnel
training techniques and materials, however documented), and all
information obtained from review of the Disclosing Party's documents or
property or discussions with the Disclosing Party regardless of the form
of the communication; and
(iv) all notes, analyses, compilations, studies, summaries and
other material prepared by the Receiving Party to the extent containing
or based, in whole or in part, upon any information included in the
foregoing.
(b) Any trade secrets of a Disclosing Party shall also be
entitled to all of the protections and benefits under applicable trade secret
law and any other applicable Law. If any information that a Disclosing Party
deems to be a trade secret is found by a court of competent jurisdiction not to
be a trade secret for purposes of this Section 13.2, such information shall
still be considered Confidential Information of that Disclosing Party for
purposes of this Section 13.2 to the extent included within the definition. In
the case of trade secrets, both Buyer and Seller hereby waive any requirement
that the other party submit proof of the economic value of any trade secret or
post a bond or other security.
(c) Each Receiving Party acknowledges the confidential and
proprietary nature of the Confidential Information of the Disclosing Party and
agrees that for a period of one (1) year from the Closing Date such
Confidential Information shall be kept confidential by the Receiving Party; and
shall not be disclosed by the Receiving Party to any person, except in each
case as otherwise expressly permitted by the terms of this Agreement or with
the prior written consent of an authorized representative of Seller with
respect to Confidential Information of Seller or an authorized representative
of Buyer with respect to Confidential Information of Buyer. Buyer and Seller
shall disclose the Confidential Information of the other party only to its
representatives who are informed by Buyer or Seller, as the case may be, of the
obligations of this Section 13.2 with respect to such information, and Buyer
and Seller shall be responsible and liable for any breach of the provisions of
this Section 13.2 by it or its representatives.
(d) Seller and Bombay shall maintain as confidential any
Confidential Information (for this purpose, any information of Seller of the
type referred to in Sections 13.2(a)(i), (ii) and (iii), whether or not
disclosed to Buyer) of the Seller relating to any of the Assets or the Assumed
Liabilities. Notwithstanding the preceding sentence, Seller or its Affiliates
may use any Confidential Information without restriction, as they deem
reasonably necessary to comply with applicable securities Laws and related
filing and disclosure requirements, including without limitation, the filing of
this Agreement with the United States Securities and Exchange Commission.
(e) From and after the Closing Date, the provisions of Section
13.2(c) above shall not apply to or restrict in any manner Buyer's use of any
Confidential Information of the Seller relating to any of the Assets or the
Assumed Liabilities, except for Merchandise Supplier Information, which shall
be subject to the restrictions contained herein and the Consulting Services
Agreement.
(f) Sections 13.2(c) and (d) do not apply to that part of the
Confidential Information of a Disclosing Party that was or is (a) generally
available to the public other than as a result of a breach of this Section 13.2
or the Confidentiality Agreement by the Receiving Party or its Representatives;
(b) developed by the Receiving Party independently of any Confidential
Information of the Disclosing Party; or (c) available to the Receiving Party on
a non-confidential basis from a third party not bound by a confidentiality
agreement or any legal, fiduciary or other obligation restricting disclosure.
(g) If a Receiving Party becomes compelled in any proceeding or
is requested by a Governmental Entity to make any disclosure that is prohibited
or otherwise constrained by this Section 13.2, that Receiving Party shall
provide the Disclosing Party with prompt notice of such compulsion or request
so that it may seek an appropriate protective order or other appropriate remedy
or waive compliance with the provisions of this Section 13.2. In the absence of
a protective order or other remedy, the Receiving Party may disclose that
portion (and only that portion) of the Confidential Information of the
Disclosing Party that, based upon advice of the Receiving Party's counsel, the
Receiving Party is legally compelled to disclose or that has been requested by
such Governmental Entity, provided, however, that the Receiving Party shall use
reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded by any Person to whom any Confidential Information is so
disclosed. The provisions of this Section 13.2(g) do not apply to any
proceedings between the parties to this Agreement, or to disclosures made by
Seller or any of its Affiliates pursuant to Section 13.2(d).
(h) The parties agree that the provisions of this Section 13.2
are expressly subject to the terms and conditions of the Consulting Services
Agreement.
13.2 Enforcement. The parties hereto agree and stipulate that the
agreements and covenants contained in this Article 13 hereof are fair and
reasonable in light of all of the facts and circumstances of the relationship
between Buyer, Bombay and Seller; however, Buyer, Bombay and Seller are aware
that in certain circumstances courts have refused to enforce or otherwise
restrict certain agreements not to compete. Therefore, in furtherance of, and
not in derogation of the provisions of this Article 13, Buyer, Bombay and
Seller agree that in the event a court should decline to enforce the provisions
of Article 13, that Article 13 shall be deemed to be modified or reformed to
restrict Seller's and Bombay's competition with Buyer and its Affiliates to the
maximum extent, as to time, geography and business scope, which the court shall
find enforceable; provided, however, in no event shall the provisions of
Article 13 be deemed to be more restrictive to Seller than those contained
herein.
14. MISCELLANEOUS
14.1 Publicity. Except as otherwise required by any applicable Laws,
including without limitation the securities Laws, rules and regulations and
related filing and disclosure requirements, neither Seller nor Buyer will make
any publicity release, statement or announcement concerning this Agreement or
the transactions contemplated hereby without the prior written approval thereof
by Buyer or Seller, as the case may be, except as required by applicable Law,
in which case the party issuing the release, statement or commencement shall
so advise the other party in writing and submit a copy of such release in
advance of such issuance.
14.2 Notices. Any notice or other communication required or permitted
hereunder will be in writing and will be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice will be deemed given when delivered
personally, or sent by facsimile transmission (after receiving confirmation of
receipt) or, if mailed, five days after the date of deposit in the United
States mail or, if express mailed, one Business Day after delivery to a
reputable overnight express mail courier, as follows:
(i) If to Buyer, to:
▇▇▇▇▇▇ Street Holding Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which copy shall not constitute notice to
Buyer):
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Seller, to:
The Bombay Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may by notice given in accordance with this Section 14.2 designate
another address or Person for receipt of notices hereunder.
14.3 Entire Agreement. This Agreement (including the Schedules hereto),
the Buyer Documents and the Seller Documents contain the entire agreement and
understanding among the parties with respect to the purchase and sale of the
Assets and supersede all prior agreements, written or oral, with respect
thereto, including, but not limited to, the Letter of Intent.
14.4 Amendments and Waivers; Preservation of Remedies. This Agreement
may be amended, superseded, canceled, renewed or extended, and the terms hereof
may be waived, in each case only by a written instrument signed by Buyer and
Seller or, in the case of a waiver, by the party waiving compliance. No delay
on the part of either party in exercising any right, power or privilege
hereunder will operate as a waiver or ratification thereof; nor will any waiver
on the part of either party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege.
14.5 Governing Law, Jurisdiction, Forum Selection. This Agreement, and
the rights and obligations of Buyer and Seller hereunder, will be governed by,
and construed and enforced in accordance with, the internal substantive laws of
the State of Texas, without regard to principles of conflict of laws. Buyer and
Seller each agrees that any action or proceeding based upon or relating to this
Agreement will, to the fullest extent permitted by applicable law, be brought
and maintained exclusively in the courts of Dallas County in the State of
Texas, Dallas Division or in the United States District Court for the Northern
District of Texas, Dallas Division. Buyer and Seller each hereby irrevocably
submits to the jurisdiction and venue of the courts of the State of Texas and
of the United States District Court for the Northern District of Texas, Dallas
Division for purposes of any such action or proceeding, and irrevocably agrees
to be bound by any judgment rendered by any such court in connection with such
action or proceeding, subject to all rights of appeal and reconsideration.
Buyer and Seller each hereby irrevocably waives, to the fullest extent
permitted by law, any objection that it may have to the laying of venue of any
such action or proceeding brought in any such court and any claim that any such
action or proceeding has been brought in an inconvenient forum.
14.6 Binding Effect; No Assignment. This Agreement will be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. This Agreement may not be assigned by either party hereto without
the prior written consent of the other party; provided, that Buyer may assign
any or all of its rights hereunder to one or more Affiliates of Buyer, but no
such assignment will release Buyer from any of its obligations hereunder.
14.7 Variations in Pronouns. All pronouns and any variations thereof
refer to the masculine, feminine or neuter, singular or plural, as the context
may require.
14.8 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered will be
an original, and all such counterparts will together constitute one and the
same instrument.
14.9 Schedules. The Schedules are an integral part of this Agreement as
if fully set forth herein. All references herein to Articles, Sections and
Schedules will be deemed references to such parts of this Agreement, unless the
context otherwise requires.
14.10 Headings. The headings in this Agreement, in any Appendix, Exhibit
or Schedule hereto and in the table of contents are for reference only and will
not affect the meaning or interpretation of this Agreement.
14.11 Severability of Provisions. If any provision or portion of any
provision of this Agreement, or the application of any such provision or
portion to any Person or circumstance, shall be held invalid or unenforceable,
the remaining provisions of this Agreement or the remaining portion of such
provision, and the application of such provision or portion to Persons or
circumstances other than those as to which it is held invalid or unenforceable,
will not be affected thereby.
14.12 No Third-Party Beneficiaries. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any Person, other
than the parties hereto and their respective successors and permitted assigns,
any rights or remedies under or by reason of this Agreement.
2
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
BUYER: SELLER:
▇▇▇▇▇▇ STREET HOLDING COMPANYBAILEY STREET TRADING COMPANY
By: By:
Name: Name:
Title: Title:
BOMBAY:
THE BOMBAY COMPANY, INC.
By:
Name:
Title:
A-1
APPENDIX A
DEFINITIONS AND RULES OF USAGE
Rules of Usage
The terms defined below shall have the respective meanings set forth
below for all purposes, and such meanings shall be equally applicable to both
the singular and plural forms of the terms defined. "Include," "includes" and
"including" shall be deemed to be followed by "without limitation." "Writing,"
"written" and comparable terms refer to printing, typing, lithography and other
means of reproducing words in a visible form, including electronic or digital
formats. Any instrument or Law defined or referred to below or in any
instrument that recites it is to be construed in accordance with this Appendix
means such instrument or Law as from time to time amended, modified or
supplemented, including (in the case of instruments) by waiver or consent and
(in the case of Laws) by succession of comparable successor Laws and includes
(in the case of instruments) references to all exhibits, appendices and
attachments thereto and instruments incorporated therein. References to any
Person are, unless the context otherwise requires, also to its successors and
assigns. "Hereof," "herein," "hereunder" and comparable terms refer to the
entire instrument in which such terms are used and not to any particular
article, section or other subdivision thereof or attachment thereto.
References to the singular include, unless the context otherwise requires,
references to the plural and vice versa. References in an instrument to
"Article," "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument.
Definitions
"Accounts Receivable" means all accounts and notes receivable of
the Business, calculated in accordance with GAAP.
"AEA" means the Atomic Energy Act of 1954 (42 U.S.C. Section 2011
et seq.).
"Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person.
"Agreement" means the Asset Purchase Agreement dated as of May __,
2005, by and between Buyer and Seller, as may be amended, modified or
supplemented from time to time.
"Ancillary Agreements" means the Assignment and Assumption
Agreement with respect to each Assumed Contract, the ▇▇▇▇ of Sale, the
Consulting Services Agreement, the Transition Services Agreement and the
Trademark Assignment substantially in the forms attached to the Agreement as
Exhibits C, F, D, E and B, respectively.
"Annual Financial Statements" has the meaning specified in Section
5.12.
"Asserted Liability" has the meaning specified in Section 12.3.
"Assets" has the meaning specified in Section 1.1.
"Assignment and Assumption Agreement" means that certain form of
agreement by which Seller assigns and Buyer assumes certain contracts of
Seller.
"Assumed Contracts" has the meaning specified in Section 1.1.
"Assumed Liabilities" has the meaning specified in Section 2.1.
"Benefit Arrangements" means each and all retirement, savings,
bonus, commission, deferred compensation, incentive compensation, holiday,
vacation, severance pay, stock option, stock purchase, performance, sick pay,
sick leave, disability, tuition refund, service award, company car,
scholarship, relocation, patent award, fringe benefit or other employee benefit
plans, and contracts, policies, practices or arrangements providing employee or
executive compensation benefits to Employees, other than the Benefit Plans.
"Benefit Plans" means each and all "employee benefit plans" as
defined in Section 3(3) of ERISA, currently or at any time during the past six
years maintained or contributed to by the Controlled Group, including (i) any
such plans that are "employee welfare benefit plans" as defined in Section 3(1)
of ERISA, and (ii) any such plans that are "employee pension benefit plans" as
defined in Section 3(2) of ERISA, regardless of whether such Benefit Plans are
excluded from ERISA coverage by Section 4 of ERISA.
"▇▇▇▇ of Sale" means that certain form of agreement attached
hereto as Exhibit F.
"Business" has the meaning specified in the second introductory
paragraph of the Agreement.
"Business Day" means, any day other than Saturday, Sunday or a
United States federal holiday on which federally chartered banking and
financial institutions are not open for the transaction of business.
"Buyer" has the meaning specified in the first introductory
paragraph of the Agreement.
"Buyer Documents" means, collectively, the Ancillary Agreements and
the other documents to be delivered on or prior to the Closing Date by Buyer
pursuant to the Agreement.
"Buyer Indemnitees" has the meaning specified in Section 12.1.
"CAA" means the Clean Air Act (42 U.S.C. Section 7401 et seq.).
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.).
"Claims Notice" has the meaning specified in Section 12.3.
"Closing" has the meaning specified in Section 4.
"Closing Date" has the meaning specified in Section 4.
"COBRA" means Section 4980B of the Code and Part 6 of Title I of
ERISA.
"Code" means the Internal Revenue Code of 1986, as amended.
"Condition of the Business" means the business, operations, assets,
liabilities, properties, condition (financial or otherwise) or prospects of the
Business.
"Confidential Information" has the meaning specified in Section
13.2.
"Consulting Services Agreement" means that certain form of
agreement attached hereto as Exhibit D where by Seller shall provide consulting
services to Buyer relating to sourcing relationships and shall license its
supplier list to Buyer, subject to the limitations and restrictions contained
therein.
"Contaminant" means (i) those substances included within any
statutory and/or regulatory definitions of "hazardous substance," "hazardous
waste," "extremely hazardous substance," "mold," "fungus," "regulated
substance," "contaminant," "pollutant", "hazardous material" or "toxic
substance," under any Environmental Law, (ii) those substances listed in 49
C.F.R. 172.101 and in 40 C.F.R. Part 302; (iii) any material, waste or
substance which is (A) petroleum, oil or a fraction thereof, (B) asbestos,
(C) polychlorinated biphenyls, (D) formaldehyde, (E) designated as a "hazardous
substance" pursuant to 33 U.S.C. {section} 1321 or listed pursuant to 33 U.S.C.
{section} 1317; (F) explosives or (G) radioactive materials (including
naturally occurring radioactive materials); (iv) solid wastes (as defined under
Environmental Laws), (v) radon gas in an ambient air concentration exceeding
four picocuries per liter (4 pCi/l); and (vi) such other substances, materials,
or wastes that are or become classified or regulated as harmful, hazardous or
toxic, or the presence of which or, the release of which into, or in air, soil,
water or any other environmental medium is regulated or controlled under any
federal, state or local law or regulation as now or hereafter amended.
"Continuing Employee" means each Employee who becomes an employee
of Buyer as of the Closing Date or within 60 days thereafter.
"Contract Consents" has the meaning specified in Section 5.7.
"Controlled Group" means Seller, any Affiliate of Seller or any
other organization that together with Seller is treated as a single employer
under Section 414 of the Code.
"CWA" means the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 et seq.).
"Deeds and Assignments" means, collectively, the following
instruments and agreements, in each case in a form reasonably satisfactory to
Seller and Buyer: (i) a ▇▇▇▇ of sale; and (ii) such other agreements or
documents as Buyer reasonably deems necessary or appropriate to vest in or
confirm to Buyer title to all the Assets.
"Employees" means all employees of Seller immediately prior to the
Closing Date (excluding those on lay-off or leave of absence, whether paid or
unpaid, seasonal, temporary and/or part-time employees).
"Enforcement Exception" has the meaning specified in Section 5.3.
"Environmental Claim" means any claim; demand, enforcement or other
action including grand jury or other proceedings by investigative bodies or
tribunals; cause of action; suit; loss; cost; damage; punitive damage; fine,
penalty, expense, liability, criminal liability, judgment, governmental or
private investigation relating to Remediation or compliance with requirements
of Environmental Laws; notice, proceeding; lien; personal injury or property
damage, whether threatened, sought, brought or imposed, that is related to or
that seeks to recover losses related to, or seeks to impose liability
regarding, the Seller in connection with the Business, the Assets, any of the
Facilities Real Property, or operations conducted on the Facilities for (i)
improper use or treatment of waters, wetlands, woodlands or other protected
land or species; (ii) noise; (iii) radioactive materials (including naturally
occurring radioactive materials); (iv) explosives; (v) pollution, contamina-
tion, preservation, protection, remediation or clean-up of the air, surface
water, ground water, soil or wetlands; (vi) solid, gaseous or liquid waste
generation, handling, discharge, release, threatened release, treatment,
storage, disposal or transportation; (vii) exposure of persons or property to
Contaminants and the effects thereof; (viii) the manufacture, processing,
distribution in commerce, use, treatment, storage, disposal or transportation,
Remediation of Contaminants; (ix) injury to, death of or threat to the health
or safety of any person or persons caused directly or indirectly by
Contaminants; (x) destruction, damage or harm caused directly or indirectly by
Contaminants or the release of any Contaminant on any property (whether real or
personal); (xi) the implementation of spill prevention and/or disaster or other
plans relating to Contaminants; (xii) community right-to-know and other
disclosure or reporting requirements with respect to Containments or any
Environmental Law. Environmental Claims include On-Site Environmental
Liabilities and Off-Site Environmental Liabilities.
"Environmental Laws" means any and all laws, rules, regulations,
ordinances, orders or guidance documents in effect as of the date hereof of any
federal, state or local executive, legislative, judicial, regulatory or
administrative agency, board or authority or any judicial or administrative
decision relating thereto that relate to (i) waters, wetlands, woodlands or
other protected land or species; (ii) noise; (iii) radioactive materials
(including naturally occurring radioactive materials); (iv) explosives;
(v) pollution, contamination, preservation, response, remediation, protection,
or clean-up of the air, surface water, ground water, soil, waters or wetlands;
(vi) Contaminant generation, handling, discharge, release, threatened release,
treatment, storage, disposal or transportation; (vii) exposure of persons or
property to Contaminants and the effects thereof; (viii) injury to, death of or
threat to the safety or health of employees and any other persons; (ix) the
manufacture, processing, distribution in commerce, use, treatment, storage,
disposal, transportation or Remediation of Contaminants; (x) destruction,
contamination of, or the release onto any property (whether real or personal)
directly or indirectly connected with Contaminants; (xi) the implementation of
spill prevention and/or disaster or other plans relating to Contaminants;
(xii) community right-to-know and other disclosure or reporting requirements
relating to the management or release of Containments, including, but not
limited to, CERCLA, CWA, RCRA, AEA, CAA, EPCRA, FIFRA, OPA, SDWA, SMCRA, TSCA,
UMTRCA, HMTA and NWPA and regulations promulgated under any of the foregoing,
all as now and hereafter amended.
"EPCRA" means the Emergency Planning and Community Right to Know
Act (42 U.S.C. Section 11001 et seq.).
"Equipment" means all office machinery, furniture, furnishing,
maintenance materials, and spare parts relating to SKUs comprising Inventory
set forth on Schedule 1.1(iii).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Facilities" has the meaning specified in the second introductory
paragraph of the Agreement.
"Facilities Real Property" has the meaning specified in Section
5.8.
"FIFRA" means the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. Section 136 et seq.).
'Finished Goods In-Transit" means certain items listed on Schedule
1.1(xviii) ordered by and in-transit to Seller from finished goods suppliers in
China.
"GAAP" means United States generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
"Goods On-Order" means certain items listed on Schedule 1.1(xix)
ordered by Seller from finished goods suppliers in China, but for which Seller
does not yet hold good, valid and marketable title.
"Governmental Entity" means any government or political
subdivision, whether federal, state, provincial, local or foreign, or any
administrative, regulatory or other agency, commission or instrumentality of
such government or political subdivision, or any arbitrator or arbitral
tribunal, including any court of law.
"HMTA" means the Hazardous Materials Transportation Authorization
Act (49 U.S.C. Section 5101 et seq.).
"Indemnifying Party" has the meaning specified in Section 12.3.
"Indemnitee" has the meaning specified in Section 12.3.
"Intellectual Property" means as it relates to the Business, (i)
all inventions (whether patentable or unpatentable and whether or not reduced
to practice), all improvements thereto, and all patents, patent applications
and patent disclosures, together with all reissues, continuations,
continuations-in-part, divisionals, utility models, extensions and
reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith, including, without limitation, the names "▇▇▇▇▇▇ Street" and "▇▇▇▇▇▇
Street Trading Company;" (iii) all copyrightable works, all copyrights and all
applications, registrations, renewals and derivatives in connection therewith,
(iv) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, product designs, process designs, work
papers, manuals, training materials, technical data, designs, drawings,
specifications, customer, vendor and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (v) all computer
software (including data and related documentation), (vi) all other proprietary
rights, (vii) all copies and tangible embodiments thereof (in whatever form or
medium), and (viii) all licenses or agreements in connection with the
foregoing.
"Interim Statement" has the meaning specified in Section 5.12.
"Inventory" means the inventories set forth on Schedule 1.1(ii).
"IRS" means the Internal Revenue Service.
"Knowledge" means (a) with respect to Seller and Bombay, the actual
personal knowledge, after reasonable investigation, of any of the officers
(excluding ▇▇▇▇ ▇▇▇▇▇▇▇) and directors of Seller, Bombay or any Affiliate of
Seller; and (b) with respect to Buyer, the actual personal knowledge, after
reasonable investigation, of any of the officers and directors of Buyer or any
Affiliate of Buyer.
"Landed Cost" means vendor cost, bank fees, freight, consolidation
fees, drayage, duties, broker fees, insurance, MSG commissions, other line
items fees directly associated with a SKU, and other allocated fees spread
among other SKUs in a container.
"Laws" means all federal, state, provincial, local and foreign
laws, statutes, ordinances, rules, regulations, orders, judgments, decrees,
writs, arbitral orders, settlement agreements, conciliation agreements,
injunctions or other requirements of all applicable governmental, judicial,
legislative, executive, administrative and regulatory authorities.
"Letter of Intent" means that certain letter of intent dated April
12, 2005, by and between The Bombay Company, Inc., an Affiliate of Seller and
Red River Ventures I, L.P.
"License Agreement" has the meaning specified in Section 1.1(xvi).
"Liens" means all liens, pledges, mortgages, deeds of trust,
security interests, claims, covenants, leases, subleases, charges, conditions,
options, rights of first refusal, licenses, easements, servitudes, rights of
way, encumbrances or any other restriction or limitation whatsoever.
"Losses" has the meaning specified in Section 12.1.
"Material Adverse Effect" means a change or effect that will have a
material adverse effect on the Business or the Assets taken as a whole.
"Net Collections" means the aggregate amount of Aged Receivables
net of collection costs paid by Buyer.
"Notices" means all written or oral notices of violation, Liens,
complaints, suits, orders, citations, fines, penalties or other notices.
"NWPA" means the Nuclear Waste Policy Act (42 U.S.C. Section 10101
et seq.).
"Off-Site Environmental Liabilities" means any and all liabilities,
obligations, claims, damages, costs and expenses, including capital
expenditures and natural resource damages (whether arising before, on or after
the Closing Date) incurred (i) as a result of any requirement or violation of
or obligation under, any Environmental Laws, or (ii) as a result of or in
connection with any investigation, inquiry, order, demand, claim, action,
citation, fine or other proceeding by any Governmental Entity or by any other
Person, and that in either case arises as a result of the off-site release,
treatment, storage or disposal, transport (or any arrangement with respect
thereto by or on behalf of Seller) of any Contaminant generated, stored,
treated, transported, disposed of, or handled in connection with the ownership
or operation of the Facilities Real Property, the Assets or the Business on or
before the Closing Date.
"On-Site Environmental Liabilities" means any and all liabilities,
obligations, claims, damages, costs and expenses, including capital
expenditures and natural resource damages (whether arising before, on or after
the Closing Date) incurred (i) as a result of any requirement of, obligation
under or violation of any Environmental Laws, or (ii) as a result of or in
connection with any investigation, inquiry, order, demand, claim, action,
citation, fine or other proceeding by any Governmental Entity or by any other
Person and that in either case arises as a result of the condition, ownership,
occupancy or use of the Facilities Real Property, or operation of the Assets or
the Business thereon, in each case occurring, existing or commencing on or
before the Closing Date, even if continuing thereafter, including the migration
of Contaminants originating from or migrating to or from the Facilities Real
Property in on, under, within or by means of soil, soil vapor, groundwater or
surface water; provided, that On-Site Environmental Liabilities will not
include any Off-Site Environmental Liabilities.
"OPA" means the Oil Pollution Act of 1990 (33 U.S.C. Section 2701
et seq.).
"Other Consents" means the assent of a third party required for
Seller to enter into this Agreement. These shall include without limitation,
the consent of Seller's lenders pursuant to the Permitted Indebtedness.
"Permits" means licenses, permits, consents, registrations, orders
and approvals issued by a Governmental Entity.
"Permitted Indebtedness" means funds borrowed from time to time by
Seller and certain of its Affiliates from ▇▇▇▇▇ Fargo Retail Finance, LLC and
other listed lenders pursuant to that Loan and Security Agreement entered into
on September 29, 2004 by The Bombay Company, Inc. and its subsidiaries that are
signatories thereto, and ▇▇▇▇▇ Fargo Retail Finance, LLC and lenders that are
signatories thereto, as amended by the First Amendment to Loan and Security
Agreement entered into on November 24, 2004.
"Permitted Liens" means (i) any Liens securing Taxes, (ii) any
claims of materialmen, carriers, landlords and like Persons, in each case,
which are not yet due and payable or are being contested in good faith and
which, either individually or in the aggregate, would not interfere with
Buyer's ownership, use or operation of such Assets or conduct of the Business
and would not create the risk of imposition of criminal penalties on Buyer,
(iii) the Lien of all ad valorem real estate Taxes and assessments not yet due
and payable as of the Closing Date, subject to adjustment as herein provided,
(iv) local building, subdivision and zoning laws, ordinances and regulations,
now or hereafter in effect relating to the Facilities Real Property.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability company or partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
Governmental Entity or other entity.
"Purchase Price" has the meaning specified in Section 3.1.
"RCRA" means the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Section 6901 et seq.).
"Records" means those documents set forth on Schedule 1.1(v).
"Remediation" means any action necessary to: (i) investigate,
clean-up, remediate or otherwise respond to the release or threat of release of
Contaminants as required by applicable Environmental Law; and (ii) the taking
of all reasonably necessary precautions required by applicable law to protect
against the release or threatened release of Contaminants at, on, in, about,
under, within or near the air, soil, surface water, groundwater or soil vapor.
"Retained Assets" has the meaning specified in Section 1.2.
"Retained Liabilities" has the meaning specified in Section 2.2.
"Retained Records" has the meaning specified in Section 1.2.
"SDWA" means the Safe Drinking Water Act (42 U.S.C. Sections 300f
et seq.).
"Seller" has the meaning specified in the first introductory
paragraph of the Agreement.
"Seller Documents" means the Deeds and Assignments, the Ancillary
Agreements and the other documents to be delivered on or prior to the Closing
by Seller pursuant to the Agreement.
"Seller Indemnitees" has the meaning specified in Section 12.2.
"SKU" means stock keeping units.
"SMCRA" means the Surface Mining Control and Reclamation Act of
1974 (30 U.S.C. Sections 1201 et seq.).
"Straddle Period" means a taxable year or period beginning before
and ending after the close of the day preceding the day the Closing occurs,
which will be treated on a "closing of the books" basis as two partial periods,
one ending on the close of the day preceding the day the Closing occurs and the
other beginning on the day on which the Closing occurs, except that Taxes (such
as property Taxes) imposed on a periodic basis will be allocated on a daily
basis.
"Tax" means (i) any federal, state, provincial, local or foreign
net income, gross income, gross receipts, windfall profits, severance,
production, property, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add-on minimum, ad valorem, excise, value
added, transfer, stamp, environmental, registration or inventory tax, or any
other tax, custom, duty, governmental fee or other like assessment or charge of
any kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity, and (ii) any liability for the payment of amounts with
respect to any tax, duty, fee, assessment and charge described in clause (i) as
a result of being a member of an affiliated, consolidated, combined or unitary
group, or as a result of any obligation under any tax sharing arrangement or
tax indemnity agreement.
"Tax Return" means any return, report or similar statement required
to be filed with respect to any federal, state, local, provincial or foreign
Taxes (including any attached schedules), including, any information return,
claim for refund, amended return or declaration of estimated Tax.
"Trademark Assignment" means the assignment that transfers the
trademarks listed on Schedule 5.16(d) to Buyer.
"Transition Agreement" means that certain agreement containing the
terms and conditions of certain services to be provided to Buyer for a period
of ninety (90) days, and to which a warehouse storage agreement and office
lease agreement for certain Facilities Real Property is attached.
"Treasury Regulations" means the regulations of the United States
Department of Treasury promulgated thereunder.
"TSCA" means the Toxic Substances Control Act (15 U.S.C. Section
2601 et seq.).
"UMTRCA" means the Uranium Mill Tailings Radiations Control Act of
1978 (42 U.S.C. Section 7901 et seq.).