<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
KENWIN SHOPS, INC
(Name of Issuer)
Common Stock
(Title of Class of Securities)
491782-10
(CUSIP Number)
David I. Ferber, Esq.
Ferber Greilsheimer Chan & Essner,
530 Fifth Ave, New York, NY 10036
(212) 944-2200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 12, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: / /
Check the following box if a fee is being paid with the statement: / /
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE: Six copies fo this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) fo other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial fiing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The informaiton required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 491782-10 Page ______ of ______ Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person 11-3333465
D & A Funding Corporation
2. Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3. SEC Use Only
4. Source of Funds*
WC
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
New York
7. Sole Voting Power
167,956
Number of Shares
8. Shared Voting Power
Beneficially
Owned by Each
9. Sole Dispositive Power
Reporting Person 83,978
With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
167,956
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* / /
13. Percent of Class Represented by Amount in Row (11)
30.1%
14. Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 491782-10 Page ______ of ______ Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person 11-3110504
DPW Enterprises, Inc.
2. Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3. SEC Use Only
4. Source of Funds*
WC
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
New York
7. Sole Voting Power
3,500
Number of Shares
8. Shared Voting Power
Beneficially
Owned by Each
9. Sole Dispositive Power
Reporting Person 3,500
With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
3,500
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* / /
13. Percent of Class Represented by Amount in Row (11)
.006%
14. Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 491782-10 Page ______ of ______ Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Donald Weiner
2. Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3. SEC Use Only
4. Source of Funds*
PF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
New York
7. Sole Voting Power
2,000
Number of Shares
8. Shared Voting Power
Beneficially 171,456
Owned by Each
9. Sole Dispositive Power
Reporting Person 2,000
With
10. Shared Dispositive Power
87,478
11. Aggregate Amount Beneficially Owned by Each Reporting Person
173,456
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* / /
13. Percent of Class Represented by Amount in Row (11)
31.1%
14. Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 491782-10 Page ______ of ______ Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Arthur Gins
2. Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3. SEC Use Only
4. Source of Funds*
PF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
U.S.A.
7. Sole Voting Power
1,500
Number of Shares
8. Shared Voting Power
Beneficially 167,956
Owned by Each
9. Sole Dispositive Power
Reporting Person 1,500
With
10. Shared Dispositive Power
83,978
11. Aggregate Amount Beneficially Owned by Each Reporting Person
169,456
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* / /
13. Percent of Class Represented by Amount in Row (11)
30.4%
14. Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 491782-10 Page ______ of ______ Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Julius Herling
2. Check the Appropriate Box if a Member of a Group* (a) /X/
(b) / /
3. SEC Use Only
4. Source of Funds*
PF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
New York
7. Sole Voting Power
2,000
Number of Shares
8. Shared Voting Power
Beneficially
Owned by Each
9. Sole Dispositive Power
Reporting Person 2,000
With
10. Shared Dispositive Power
11. Aggregate Amount Beneficially Owned by Each Reporting Person
2,000
12. Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* / /
13. Percent of Class Represented by Amount in Row (11)
.003%
14. Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
1. Security and Issuer
This statement on Schedule 13D relates to shares of Common Stock, $.01
par value (the "Common Stock"), of Kenwin Shops, Inc. (the "Issuer"). The
principal executive offices of the Issuer are located at 4747 Granite Drive,
Tucker, Georgia 30084.
Item 2. Identity and Background
This statement is filed on behalf of D&A Funding Corporation ("D&A
Funding"), DPW Enterprises, Inc. ("DPW Enterprises"), Donald Weiner ("Mr.
Weiner"), Arthur Gins ("Mr. Gins"), and Julius Herling ("Mr. Herling"; with D&A
Funding, DPW Enterprises, Mr. Weiner and Mr. Gins collectively, the "Filing
Persons").
D&A Funding is a New York corporation with principal office and
business address at 1600 Route 110, Farmingdale, New York 11735. The principal
business of D&A Funding is selling women's apparel and providing financial and
consulting services to companies engaged in the apparel industry. The officers
and directors of D&A Funding are Mr. Weiner, director and President, and Mr.
Gins, director and Secretary/Treasurer.
DPW Enterprises is a New York Corporation with principal office and
business address at 1600 Route 110, Farmingdale, New York 11735. The principal
business of DPW Enterprises is investing. The officers and directors of DPW
Enterprises are Mr. Weiner, director and President, and Barbara Weiner, Mr.
Weiner's wife ("Mrs. Weiner"), director and Secretary/Treasurer.
Mr. Weiner is a United States citizen. Mr. Weiner's principal
occupation is President of Dresses For Less, Inc., 1600 Route 110, Farmingdale,
New York 11735. Dresses For Less, Inc. is a company engaged in the sale of
women's apparel and accessories. Mr. Weiner is filing this statement in his
capacity as custodian for his minor son, Michael Weiner, pursuant to the Uniform
Gifts to Minors Act. Mr. Weiner is Interim Chief Executive Officer of the
Issuer.
Mrs. Weiner is a United States citizen. Mrs. Weiner's principal
occupation is Secretary/Treasurer of Dresses For Less, Inc., 1600 Route 110,
Farmingdale, New York 11735.
Mr. Gins is a United States citizen. Mr. Gins's principal occupation is
President of Seam Products, Inc., 5711 Kennedy Boulevard, North Bergen, New
Jersey 07047. Seam Products, Inc. is a company engaged in the manufacture of
knit fabrics.
Mr. Herling is a United States citizen. Mr. Herling's principal
occupation is an attorney engaged in the practice of law with the firm
Roosevelt, Arfa, Herling & Cadoux, LLP, located at 1025 Westchester Avenue,
Suite 106, White Plains, New York 10604.
During the last five years none of D&A Funding, DPW Enterprises, Mr.
Weiner, Mrs. Weiner, Mr. Gins and Mr. Herling have been convicted in a criminal
proceeding nor was a party to a civil proceeding and subject to a judgment,
decree or final order enjoining future violations
<PAGE>
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The source and amount of funds used to acquire the Common
Stock of the Issuer are as follows:
Name Amount Source
---- ------ ------
D&A Funding $43,489 working capital
DPW Enterprises $ 7,312 working capital
Mr. Weiner $ 5,062 personal funds
Mr. Gins $ 3,250 personal funds
Mr. Herling $ 5,250 personal funds
Item 4. Purpose of Transaction
D&A Funding intends to purchase additional shares of Common
Stock in order to acquire a controlling interest in the Issuer. On
August 15, 1996 D&A Funding and the Issuer entered into a Management
Agreement (the "Management Agreement") pursuant to which D&A Funding
will acquire an additional 442,840 authorized but unissued and
treasury shares of Common Stock, at a purchase price of one ($.01)
cent per share, and will assume operating control of the Issuer's
business activities. The Management Agreement is subject to
shareholder approval and will not be effective until such approval has
been obtained at a special meeting of the shareholders. A copy of the
Management Agreement is included as an Exhibit to this Schedule 13D
and is incorporated herein by reference.
Pending shareholder approval of the Management Agreement, Mr.
Weiner has been appointed Interim Chief Executive Officer of the
Issuer. Ira Abramson has resigned as Chairman of the Board, Chief
Executive Officer, Vice President and Assistant Secretary of the
Issuer. Robert Schwartz has resigned as President of the Issuer. It is
anticipated that a new Board of Directors will be appointed following
approval of the Management Agreement by the shareholders.
Item 5. Interest in Securities of the Issuer
(a) The Filing Persons taken together are the beneficial
owners of 176,956 shares of Common Stock, which is approximately 31.7%
the Common Stock outstanding.
<PAGE>
D&A Funding beneficially owns an aggregate of 167,956 shares
of Common Stock, which is approximately 30.1% of the Common Stock
outstanding.
DPW Enterprises beneficially owns an aggregate of 3,500
shares of Common Stock, which is approximately .006% of the Common
Stock outstanding.
Mr. Weiner in his capacity as custodian for Michael Weiner
beneficially owns 2,000 shares of Common Stock. Mr. Weiner, in his
capacity as director and President of D&A Funding and DPW Enterprises,
may be deemed to be the beneficial owner of an aggregate of 171,456
shares of Common Stock under Section 13(d) of the Securities Exchange
Act of 1934 as amended (the "Exchange Act"). The total aggregate
number of shares of Common Stock which Mr. Weiner beneficially owns is
173,456, which is approximately 31.1% of the Common Stock outstanding.
Mrs. Weiner in her capacity as a director and Secretary/Treasurer of
DPW Enterprises, Inc. may be deemed under Section 13(d) of the Exchange Act to
beneficially own an aggregate of 3,500 shares of Common Stock, which is
approximately .006% of the Common Stock outstanding.
Mr. Gins beneficially owns 1,500 shares of Common Stock in
his personal name. Mr. Gins, in his capacity as a director and
Secretary/Treasurer of D&A Funding, may be deemed to be the beneficial
owner of an aggregate of 167,956 shares of Common Stock under the
Exchange Act. The total aggregate number of shares of Common Stock
which Mr. Gins beneficially owns is 169,456, which is approximately
30.4% of the Common Stock outstanding.
Mr. Herling beneficially owns an aggregate of 2,000 shares of Common
Stock, which is approximately .003% of the Common Stock outstanding.
(b) D&A Funding has sole power to vote 167,956 shares of
Common Stock and sole power to dispose of 83,978 shares of Common
Stock.
DPW Enterprises has sole power to vote and dispose of 3,500 shares of
Common Stock.
Mr. Weiner in his capacity as custodian for Michael Weiner has sole
power to vote and to dispose of 2,000 shares of Common Stock. Mr. Weiner may be
deemed to share power to vote and to dispose of 3,500 shares of Common Stock
with Mrs. Weiner, and to share power to vote 167,956 shares of Common Stock and
to dispose of 83,978 shares of Common Stock with Mr. Gins, under Section 13(d)
of the Exchange Act.
Mrs. Weiner may be deemed to share power to vote and dispose of 3,500
shares of Common Stock with Mr. Weiner under Section 13(d) of the Exchange Act.
Mr. Gins has sole power to vote and dispose of 1,500 shares of Common
Stock. Mr. Gins may be deemed to share power to vote 167,956 shares of Common
Stock and to
<PAGE>
dispose of 83,978 shares of Common Stock with Mr. Weiner under Section 13(d) of
the Exchange Act.
Mr. Herling has sole power to vote and dispose of 2,000 shares of
Common Stock.
(c) On July 29, 1996, DPW Enterprises purchased 500 shares of
Common Stock in an open market transaction on the American Stock
Exchange, at a price of $1.50 per share.
On August 29, 1996 DPW Enterprises acquired 3,000 shares of Common
Stock in an open market transaction on the American Stock Exchange, at a price
of $2.50 per share for 1,500 shares and $2.375 per share for the remaining 1,500
shares.
On August 29, 1996 Mr. Weiner purchased 2,000 shares of Common Stock in
an open market transaction on the American Stock Exchange, at a price of $2.50
per share for 1,000 shares and $2.375 per share for the remaining 1,000 shares.
On August 30, 1996 Julius Herling purchased 2,000 shares of Common
Stock in an open market transaction on the American Stock Exchange at a price of
$2.625 per share.
On September 12, 1996 D&A Funding acquired 83,978 shares of Common
Stock and irrevocable proxies to vote an additional 83,978 shares of Common
Stock in a private transaction with certain shareholders of the Issuer at a
price per share of $.50 per share plus 10 percent of the Issuer's per share
pre-tax earnings in each succeeding year, but not to exceed $4.50 per share in
the aggregate.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
On August 15, 1996 D&A Funding and the Issuer entered into a Management
Agreement, a copy of which is included as an Exhibit to this Schedule 13D and is
incorporated herein by reference.
On August 15, 1996 D&A Funding and the Issuer entered into a
Consignment Sale Agreement, a copy of which is included as an Exhibit to
this Schedule 13D and is incorporate herein by reference.
On September 12, 1996 D&A Funding executed an agreement to purchase
shares of Common Stock from certain shareholders of the Issuer. A copy of this
agreement is included as an Exhibit to this Schedule 13D and is incorporated
herein by reference.
Item 7. Material To Be Filed As Exhibits
1. Consignment Sale Agreement dated August 15, 1996 between D&A Funding
and the Issuer.
<PAGE>
2. Management Agreement dated August 15, 1996 between D&A Funding and the
Issuer.
3. Letter Agreement dated August 15, 1996, among D&A Funding and Lillian
Abramson, Kenneth Silberstein, Richard Moskowitz, Robert Schwartz,
Morrissa Moskowitz Anapulsky, Irwin Moskowitz, Ira Abramson, and
Michelle Silberstein Meltzer.
Signature
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
September 23, 1996 D&A FUNDING CORPORATION
- ------------------
By: /s/ Donald Weiner
-------------------------
President
DPW ENTERPRISES, INC.
By: /s/ Donald Weiner
-------------------------
President
/s/ Donald Weiner
-----------------------------
Donald Weiner
/s/ Arthur Gins
-----------------------------
Arthur Gins
/s/ Julius Herling
-----------------------------
Julius Herling
<PAGE>
_ CONSIGNMENT SALE AGREEMENT made this ____ day of August, 1996
by and between KENWIN SHOPS, INC. ("Buyer"), a New York corporation with its
principal place of business at 4747 Granite Drive, Tucker, Georgia
30084 and D&A FUNDING CORP. ("Seller"), a New York corporation with
its principal place of business at 1600 Route 110, Farmingdale, New
York 11735.
Buyer hereby agrees to purchase and Seller hereby agrees to sell
on consignment 75,000 assorted ladies dresses or other ladies garments
manufactured by or containing labels from various suppliers, including
but not limited to the following:
Classic Apparel, Stuart Alan, Pride & Joy, Christie Austin, Alyne
Paige, Matisse, Long Paige, Bright Lights, Roina, Positive Influence,
Hot Potato, Kay Studio, Sheena, Tina Barrie, Jennie Fashion, Blondie
& Me, Leni Leni, JBS, all as more fully set forth on the Buyer's
Purchase Order Number 0255, dated August 13, 1996
1. The first shipment will be made immediately upon execution of
this Agreement and the Management Agreement dated August _, 1996.
2. The price of each garment shall be $12.00 and shall be resold
at $21.99. The purchase price of each unit of the goods delivered
hereunder shall be paid daily to Seller within two business days after
the goods have been sold by the Buyer under any sale. Title to the
goods is reserved in Seller as security until sale of the goods by
Buyer whereupon title to the proceeds of such sale shall vest in
Seller and shall be held in trust for Seller and delivered by Buyer to
Seller, subject to the first priority lien, if any, of the Sterling
National Bank & Trust Company.
3. All risk of theft or any damages to the merchandise, including
fire, is assumed by the Buyer and the Buyer shall keep the merchandise
fully insured at its own expense from such risks for the benefit of
and in the name of the Seller.
4. Buyer shall keep daily sales records of all merchandise in
form prescribed by Seller and send copies of the daily records to the
Seller.
5. This Agreement shall remain in effect until canceled. It may
be canceled upon sixty (60) days written notice by registered or
certified mail return receipt requested by either party to the other.
If the Buyer is in default in any payment to the Seller or in any
other term of this agreement, the Seller may cancel this Agreement at
any time. Cancellation by either party shall not relieve the Buyer of
any liability to the Seller for payment of merchandise not returned.
Buyer agrees to redeliver any goods not
<PAGE>
sold to Seller immediately upon receipt of instructions from Seller.
6. Buyer has executed and delivered to the Seller UCC-1 financing
statements covering the sales of the garments on consignment and
Seller is authorized to file same with each jurisdiction in which the
Buyer does business.
7. This agreement shall be governed in all respects by the laws
of the State of New York.
KENWIN SHOPS, INC.
By: /s/ Ira Abramson
----------------------------
Name: Ira Abramson
Title: Chairman of the Board
D&A FUNDING CORP
By: /s/ Donald Weiner
----------------------------
Name: Donald Weiner
Title: president
<PAGE>
MANAGEMENT AGREEMENT
This AGREEMENT is made as of the 15th day of August, 1996
by and between KENWIN SHOPS, INC., a New York corporation (the
"Company"), and D&A FUNDING CORP. a New York corporation (the
"Manager").
W I T N E S S E T H :
WHEREAS, the Manager has expertise in the retail garment
industry and in the supply, warehousing, pricing and financing of
inventory generally; and
WHEREAS, the Company has requested the Manager, and the
Manager has agreed, to provide services to the Company in
connection with the management and administration of all aspects
of the business of the Company.
NOW, THEREFORE, the parties hereby agree as follows:
1. Services.
1.1 During the term hereof (as provided in Section 2 of
this Agreement), the Manager shall manage the day to day
business of the Company subject, always, to the objectives and
policies of the Company as established from time to time by the
Company's Board of Directors (the "Board"), including:
(a) the administration or the day-to-day business of the
Company and the performance of such other administrative
functions in connection with the management of the business of
the Company as the Board shall request from time to time;
(b) negotiating and preparing, or causing to be negotiated
and prepared, any and all agreements, documents and instruments
with the Company's suppliers, vendors, lenders, employees and
landlords, including, without limitation, any amendments to
existing purchase agreements, loan agreements, security
documents, leases and other agreements and documents to which
the Company is a party as obligor;
(c) providing to the Company warehousing services in
connection with the Company's operations including, without
limitation, the use or the Manager's own warehouse facilities
for the purposes of effecting direct shipment to the Company's
retail stores;
(d) administering the Company's retail business including
<PAGE>
purchasing, owning, pricing and disposing of the Company's
inventory;
(e) the provision of the services of Mr. Donald Weiner
("Weiner") as the acting chief executive officer of the Company,
to whom all officers and employees of the Company shall report,
and such other officers and other staff of suitable skills and
experience from among the members of the staff of the Manager as
may be necessary in order to properly perform the services
referred to herein;
(f) keeping all such books and records of things done and
transactions performed on behalf of the Company as the Board may
require from time to time, including liaising with the Company's
accountants, financial advisors, lawyers and other professionals;
(g) from time to time or at any time as requested by the
Board, reporting to the Board concerning the performance of the
foregoing services and furnishing advice and recommendations
with respect to all aspects of the business affairs of the
Company;
(h) assisting the Company to comply with the requirements
of all applicable securities laws, including the Securities Act
and the Exchange Act; and
(i) such other services as the Company may request and the
Manager may agree to provide from time to time.
1.2. During the term hereof, the Manager shall do all in
its power to maintain and promote the existing business of the
Company and shall at all times and in all respects conform to
and comply with the lawful directions, regulations and
recommendations made by the Board and in the absence of any
specific directions, regulations and recommendations as
aforesaid and subject to the terms and conditions of this
Agreement shall provide general administrative and advisory
services in connection with the management of the business of
the Company; provided, however, that the parties recognize that
the Manager conducts its own business and shall not be required
to devote itself exclusively to the affairs of the Company but
only to such an extent as may be required in order to perform
its duties under this Agreement. The Manager shall be free to
act for and represent any other person, firm, corporation,
company or other entity throughout the world without the consent
of the Company whether or not the said person, firm, corporation,
company or other entity is engaged in business in competition with
the Company.
2
<PAGE>
2. Term.
The term of this Agreement shall commence on the date
hereof and shall terminate one year from the date hereof, unless
earlier terminated pursuant to Section 5 hereof.
3. Fees and Expenses:
(a) In consideration for the Manager's providing the
services to the Company specified in this Agreement (other than
with respect to the services described in Section l(c) hereof),
the Company shall pay the Manager a fee (the "Fee") at the
annual rate of Fifty Thousand Dollar ($50,000.00) per annum,
commencing on the date hereof, payable weekly in arrears. In
addition, in consideration for the Manager's providing the
services to the Company specified in Section l(c) hereof, the
Company shall pay to the Manager, weekly in arrears, an amount
equal to two percent (2%) of the aggregate original cost of
goods shipped to the Company during the immediately preceding
week.
In addition, in consideration for the Manager's
providing services to the Company specified in this Agreement,
the Company shall issue to the Manager all of the Company's
authorized but unissued stock and treasury stock currently held
in treasury by the Company, aggregating 443,650 shares of the
common stock, par value $1.00 per share, of the Company, at a
price of one cent per share all of which shall be fully paid and
nonassessable upon such issuance. In the event that the manager
terminates this agreement within one year from the date hereof,
all such shares shall be returned to the Company.
(b) The Manager shall not be liable to pay, and the Company
shall pay from its own funds, (i) all of the Company's expenses,
whether in connection with the services and activities set forth
in Section 1 or otherwise, including the Company's directors'
fees and expenses, (ii) all expenses, including attorneys' fees
and expenses, incurred on behalf of the Company in connection
with (A) any litigation commenced by or against the Company, (B)
any investigation by any governmental, regulatory or self-
regulatory authority, (iii) all premiums for insurance of any
nature, including, without limitation, any key man life
insurance, directors' and officers' liability insurance, general
liability insurance and business interruption insurance, (iv)
all costs in connection with the administration of the
registration and listing of the Company's securities, and (v)
any and all other fees and expenses that may be payable by the
Company at any time. The
3
<PAGE>
Company shall promptly reimburse the Manager for any and all
expenses incurred by the Manager from time to time, which shall
include, without limitation, all attorneys' fees and expenses in
connection with the preparation, negotiation, execution and
delivery of this Agreement, the Stock Purchase Agreement and
other agreements referenced or contemplated herein (vi)
directors and officers liability insurances for a period of
three years protecting not only the present officers and
directors but also all of the officers and directors of the
Company for the past three years, and (vii) all fees and
expenses of the attorneys for the Company.
4. Relationship of the Parties.
(a) The Company acknowledges that the Manager shall have
no responsibility hereunder, direct or indirect, with regard to
the formulation or implementation of the business plans,
policies, management or strategies (financial, tax, legal or
otherwise) of the Company, all of which are solely the
responsibility of the Company. The Company shall set corporate
policy independently through its own Board and nothing contained
herein shall be construed to relieve the directors or officers
of the Company from the performance of their respective duties
or to limit the exercise of their powers.
(b) Without limiting the foregoing, the Manager shall have
no liability to the Company for errors of judgment or for any
act or omission, negligent, tortious or otherwise, unless such
act or omission on the part of the Manager constitutes
negligence or willful misconduct.
(c) The Company hereby agrees to defend, indemnify and
save the Manager and its affiliates (other than the Company, if
the Company shall at any time be such an affiliate) officers,
directors, employees and agents harmless from and against any
and all loss, claim, damage, liability, cost or expense,
including reasonable attorneys' fees, incurred by the Manager or
any such affiliates based upon a claim by or liability to a
third party arising out of the operation of the Company's
business. The Company shall have the right, upon notice to the
Manager, to undertake the defense of the Manager by counsel
chosen by the Company in connection with any such claim or
liability and shall pay the fees and disbursements of such
counsel; provided, however, that such counsel is not reasonably
objected to by the Manager.
(d) In all activities under this Agreement the Manager
shall be an independent contractor. Nothing in this Agreement
shall be deemed to make the Manager, or any of its subsidiaries
or
4
<PAGE>
employees, the agent, employee, joint venturer or partner of the
Company or create in the Manager the right or authority to incur
any obligation on behalf of the Company or to bind the Company
in any way whatsoever except as may be expressly provided in
this Agreement.
(e) The provisions of Section 3(b) and this Section 4
shall survive any termination of this Agreement.
5. Termination.
5.1. The Company may terminate this Agreement as follows:
(a) At any time upon thirty (30) days' notice for any
reason upon the affirmative vote of the holders of two-thirds of
the Company's outstanding common shares;
(b) In the event:
(i) the Manager commits any material breach of or
omits to observe any of the material
obligations or undertakings expressed to be
assumed by it under this Agreement and, such
breach or omission, if capable of remedy, is
not remedied to the satisfaction of the
Company within thirty (30) days of notice by
the Company of such material breach or
omission and requiring action to remedy the
same; or
(ii) any material consent, authorization, license
or approval of, or registration with or
declaration to, governmental or public bodies
or authorities or courts required by the
Manager to authorize, or required by the
Manager in connection with, the execution,
delivery, validity, enforceability of
admissibility in evidence of this Agreement or
the performance by the Manager of its
obligations under this Agreement which the
Company reasonably considers to be necessary
or desirable in order to ensure that the
interests of the Company are not prejudiced
and the ability of the Manager to perform its
obligations under this Agreement is not
materially affected, is modified in a manner
unacceptable to the Company or is not granted
5
<PAGE>
or is revoked or terminated or expires and is
not renewed or otherwise ceases to be in full
force and effect (each of which is hereinafter
referred to as a "Breach") exempt as any such
Breach shall be caused by Company or its
Board, officers or agents; or
(iii) the Manager takes any action or any legal
proceedings are started or other steps taken
for (1) the Manager to be adjudicated or found
bankrupt or insolvent or a petition in
bankruptcy to be filed either by or against
the Manager, (2) the winding-up or dissolution
of the Manager or (3) the appointment of a
liquidator, administrator, examiner, trustee,
sequestrator, receiver or similar officer of
the Manager over the whole or any part of its
undertakings, assets, rights or revenues, or
any similar event occurs or similar proceeding
is taken and not dismissed within 90 days,
with respect to the Manager in any
jurisdiction to which the Manager is subject,
in which event this Agreement shall be
automatically terminated without need for
notice on the part of the Company; or
(iv) it becomes unlawful at any time for the
Manager to perform all or any of the material
covenants or its obligations under this
Agreement, or for the Company to exercise the
rights vested in it under this Agreement.
(c) Upon the effective date of termination pursuant to
this Section, the Manager shall promptly wind up its service
hereunder as may be required in order to minimize any
interruption to the Company's business.
(d) Upon termination the Manager shall, as promptly as
possible, submit a final accounting of funds received and
disbursed under this Agreement and any undisbursed funds of the
Company in the Manager's possession or control will be promptly
paid by the Manager as directed by the Company.
5.2 The Manager may terminate this Agreement with or
without cause at any time upon at least 30 days' prior written
notice to the Company.
6
<PAGE>
6. Rights of the Manager and Restrictions on its Authority.
6.1 Notwithstanding the other provisions of this Agreement:
(a) the Manager may act upon any advice, resolutions,
requests, instructions, recommendations, direction or
information obtained in writing from the Company or any banker,
accountant, broker, lawyer or other person acting as agent of or
adviser to the Company and the Manager shall incur no liability
to the Company for anything done or omitted or suffered in good
faith in reliance upon such advice, instruction, resolution,
recommendation, direction or information made or given by the
Company or its agents and shall not be responsible for any
misconduct, mistake, oversight, error or judgment, neglect,
default, omission, forgetfulness or want of prudence on the part
of any such banker, accountant, broker, lawyer, agent or adviser
or other person as aforesaid;
(b) the Manager shall not be under any obligation to carry
out any request, resolution, instruction, direction or
recommendation of the Company or its agents if the performance
thereof is or would be illegal or unlawful or the Manager
reasonably believes such action may subject it to liabilities
not expressly assumed hereby;
(c) the Manager shall incur no liability to the Company
for doing or (as the case may be) failing to do any act or thing
which it shall be required to do or perform or forbear from
doing or performing by reason of any provision of any present or
future law or any regulation or resolution made pursuant thereto
or any decision, order or judgment of any court or any lawful
request, announcement or similar action of any person or body
exercising or purporting to exercise the legitimate authority of
any government or of any central or local governmental
institution in each case where above entity has jurisdiction.
6.2. Nothing herein shall affect the exercise of central
management and control of the Company by the Board and in
particular but without prejudice to the generality of the
foregoing, nothing herein shall derogate from the powers and
duties of the Board to manage and administer the Company and its
business.
7. Notices.
All notices, consents and other communications hereunder
or necessary to exercise any rights granted hereunder, shall be
in writing, either by prepaid registered mail or telecopy as
follows:
If to the Company:
7
<PAGE>
Kenwin Shops, Inc.
4747 Granite Drive
Tucker, Georgia 30084
Attention: Richard Moskowitz,
Vice President & Secretary
Telephone: (770) 938-0451
Telecopy: (770) 938-4631
With a copy to:
Martin L. Conrad, Esq.
c/o Jaffin, Conrad, Finkelstein & Frank
230 Park Avenue, Suite 510
New York, New York 10169
Telephone: (212) 661-4480
Telecopy: (212) 599-2957
If to the Manager:
D&A Funding Corp.
c/o Dresses For Le$$, Inc.
1600 Route 110
Farmingdale, New York 11735
Attention: Donald Weiner, President
Telephone: (516) 249-3344
Telecopy: (516) 249-1542
With copies to:
Julius Herling, Esq. 1025
Westchester Avenue, Suite 106
White Plains, New York 10604
Telephone: (914) 287-0875
Telecopy: (914) 682-8446
and:
David I. Ferber, Esq.
530 Fifth Avenue
New York, New York 10036-5101
Telephone: (212) 944-2200
Telecopier: (212) 944-7630
8. Entire Agreement, etc.
This Agreement embodies the entire agreement and
understanding between the parties hereto relating to the
services to be provided by the Manager to the Company and may
not be amended, waived or
8
<PAGE>
discharged except by an instrument in writing executed by the
party against whom enforcement of such amendment, waiver or
discharge is sought.
9. Miscellaneous.
This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New
York and the parties submit to the jurisdiction of any federal
or state courts located in the Borough of Manhattan, City of New
York, in connection with any claim arising out of this
Agreement. This Agreement constitutes the sole understanding and
agreement of the parties hereto with respect to the subject
matter thereto. The headings of this Agreement are for ease of
reference and do not limit or otherwise affect the meaning
hereof. All the terms of this Agreement, whether so expressed or
not, shall be binding upon the parties hereto and their
respective successor and assigns. This Agreement may be signed
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
10. Effective Date
This Agreement shall become effective upon the execution of
all other agreements (including but not limited to stock
purchase agreements, consulting agreements for Ira Abramson and
employment agreements for Richard Moskowitz) between D&A Funding
Corp. and Kenwin Shops, Inc. and the relevant officers and
directors of Kenwin Shops, Inc. which are contemplated to
transfer control of Kenwin Shops, Inc. Said other agreements
shall be executed within seven (7) days of the date hereof. If
said other agreements are not executed within seven (7) days of
the date hereof, either party shall have the option to terminate
this Agreement. However, the Company may not terminate this
Agreement if the stock purchase agreement is not signed by any
of the stockholders.
11. Proxies
The Sellers shall deliver to the Manager irrevocable
proxies for all of their stock within 7 days of the date hereof,
failing which the Manager shall have the right to terminate this
Agreement.
12. Counterparts.
This Agreement may be executed in written counterparts which
9
<PAGE>
together shall constitute an instrument.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
D&A FUNDING CORP.
By: /s/ Donald Weiner
-----------------------------------
Donald Weiner, President
KENWIN SHOPS, INC.
BY: /s/ Ira Abramson
-----------------------------------
Ira Abramson, Chairman of the Board
10
<PAGE>
D&A Funding Corporation
August 15, 1996
Richard Moskowitz
Lillian Abramson
Ira Abramson
Robert Schwartz
Kenneth Silberstein
Michele Silberstein Meltzer
Irwin Moskowitz
Morissa Moskowitz Anapulsky
c/o Kenwin Shops, Inc.
4747 Granite Drive
Tucker, Georgia 30084
Dear Ladies and Gentlemen:
We have heretofore offered to purchase from each of you the
respective number of shares of common stock ("Common Stock") of Kenwin
Shops, Inc. (the "Company") registered in your respective names and as
set forth on Schedule A annexed hereto, aggregating 83,978 shares of
Common Stock (the "Shares"), on our own behalf or on behalf of
nominees to be designated. This will confirm our understanding and
agreement with respect to the purchase of the Shares upon the
following terms and conditions:
1. Purchase of shares. Subject to the terms and conditions hereof,
we agree to purchase from you (collectively, "You" or the "Sellers').
The number of Shares set forth opposite each Seller's name on Schedule
A annexed hereto and, in reliance upon the representations and
warranties herein set forth, we agree to pay to you the purchase price
hereinafter set forth.
2. Purchase Price. The purchase price (the "Purchase Price") for
all of the Shares will equal an initial payment of $.50 cents per
Share, plus successive payments, each equal to 10% of the per share
net income before taxes of the Company, as reflected in its audited
financial statement prepared in accordance with generally accepted
accounting practices and procedures consistently applied, for each of
the fiscal years thereafter, but not more than $4 in the aggregate
(not including the initial sum of $. 50). The successive payments of
the Purchase Price will be due and payable not later than the earlier
of (a) the date upon which the Company's Annual Report on Form 10-K is
filed with the Securities and Exchange Commission, or (b) 20 days
after the Company's auditors have delivered final copies of the
Company's financial statements
<PAGE>
August 15, 1996
Page 2
accompanied by their unqualified certificate with respect to such
financial statements. The aggregate Purchase Price, however, shall not
exceed $4.50 per Share, including the initial payment of $.50 per
Share.
3. Closing. The closing of the within transaction shall be held
at the offices of Messrs. Jaffin, Conrad, Finkelstein & Frank, 230
Park Avenue, New York, New York 10169 (telephone 212-661-4480),
simultaneously, with the execution hereof (hereinafter called the
"Closing Date") or at such later time and date as we and the Sellers
shall mutually determine.
4. Conditions to our Obligation. The obligation to purchase and
pay for the shares as herein provided is subject to the accuracy of
all representations and warranties hereinafter contained and the
fulfillment of the following conditions at or subsequent to the
Closing Date.
(a) All members of the existing Board of Directors of the Company
shall have resigned and all actions shall have been taken to elect a
new Board of Directors of which we shall designate not less than two
thirds of the nominees for election to the Board of Directors in
replacement of the pre-existing Board of Directors
(b) The Company shall commit to maintain and to bear the costs
thereof of not less than a one-year medical insurance policy for the
benefit of Robert Schwartz and his wife and children and, in addition,
at the expense of Robert Schwartz the Company shall nevertheless keep
his life insurance in force.
(c) We shall have received the opinion of the Company's counsel,
Messrs. Jaffin, Conrad, Finkelstein & Frank, dated the Closing Date,
addressed to us in form and substance satisfactory to us and to our
counsel, to the effect that the Company has been duly organized and is
a validly existing corporation in good standing under the laws of the
State of New York with adequate power and authority to conduct its
business as it is now being conducted and is duly qualified to do
business in each state in which the nature of its business requires
such qualifications; (i) this agreement, a certain consignment
agreement entered into of even date and consulting and employment
agreements entered into of even date with, respectively, Messrs. Ira
Abramson and Richard Moskowitz, have been duly authorized, validly
executed and delivered by the Company and constitute the valid and
legal obligations of the Company; (ii) the execution of this Agreement
and the performance of the transactions required or anticipated as
consistent with the terms of this Agreement constitute transactions
exempt from the registration requirements of the Securities Act of
1933; and (iii) as to such other matters as we or our counsel shall
reasonably require.
(d) The representation and warranties herein contained shall be
true and correct on and as of the Closing Date.
(e) We shall have completed our due diligence examination and
have concluded that the matters represented to us are substantially as
so represented.
<PAGE>
August 15, 1996
Page 3
5. Representations and Warranties. Each of the Sellers and the
Company represent and warrant that:
(a) The company has been duly organized and is a validly existing
corporation in good standing under the laws of the State of New York
with full power and authority to conduct its business as the same is
now being conducted and is duly qualified to do business in all states
in which the nature of its business requires such qualification. There
are no actions, suits or proceedings pending against, nor to the best
knowledge of the Company, threatened against the Company, its property
or assets in any court or before any governmental or administrative
agency, which may have any material or adverse effect upon the
business as the same is now being conducted or upon any of the
properties, financial condition or legal status of the Company, and
the Company is not in default under any order or judgment of any court
or governmental agency or administrative agency, except as described
on Schedule B annexed hereto.
(b) The Company is not a party to any agreement or instrument nor
is it subject to any charter, by-laws or other corporate restrictions
or agreements or arrangements which materially or adversely affect its
business or operations, or its property, assets or condition.
(c) The Company is not in default in the performance, observance
or fulfillment of any obligations or of any indebtedness or contract
or any other commitment, or agreement or arrangement to which it is a
party, except with respect to the Sterling National Bank & Trust Co.
(d) This Agreement has been duly authorized, validly executed and
delivered by and on behalf of the Company and the Sellers and, upon
such execution and delivery, will constitute a valid and binding
agreement of the Cormpany enforceable in accordance with its terms.
The Company has full power and authority to enter into this Agreement
and to perform and execute all actions required to be taken in
accordance with the terms of this Agreement and, upon the execution of
this Agreement a majority of the shareholders of the Company shall
have approved the transactions provided for herein.
(e) The execution and consummations of the transactions
contemplated by this Agreement will not result in the breach of any
terms, conditions or provisions of, nor will they constitute a default
under, nor result in the creation of any lien, charge or incumbrance
upon any property or assets of the Company pursuant to any indenture,
agreement, corporate charter, contract or other instruments to which
the Company is a party or by which the Company or any of its assets or
properties may be bound. The certified financial statements of the
Company as of December 31, 1995 and the related statement of income
and expenses for the period ended December 31, 1995, as well as the
interim financial statements of the Company as and for the period
ended June 30, 1996 as prepared by Gross Collins & Cress, P.C.,
attached hereto are correct and complete and fairly represent the
financial condition and operations of the Company as of their
respective dates and for the periods covered therein.
(f) Each of the Sellers has good and marketable title to all of
the Shares owned by him/her, free and clear of all liens, pledges
and encumbrances and each of the Sellers
<PAGE>
August 15, 1996
Page 4
has the complete right to sell and transfer the same without
causing a breach of any agreement to which he/she is a party.
(g) The financial statements referred to above have been prepared
in accordance with generally accepted accounting practices
consistently applied and maintained throughout the periods involved.
Since the respective dates of such financial statements there have
been no change in the assets, liabilities, or conditions, financial or
otherwise, of the Company except changes arising from transactions
incurred in the ordinary course of business and none of such changes
have been material or adverse, except as set forth on Schedule B. The
Company has no liabilities, contingent or otherwise, not reflected in
such financial statements as of the respective dates, except as set
forth on Exhibit B. Since the dates of such financial statements
neither the business nor the property of the Company have suffered
material loss or damage and the financial statements fairly present
the financial condition of the Company as of their respective dates,
except as set forth on Schedule B.
6. Purchase for Investment. We hereby represent and warrant that
the shares to be purchased hereunder are and will be purchased for
investment and not with a view to the resale or distribution thereof.
7. Post-Closing. You will ensure the proper preparation and timely
filing with the Securities and Exchange Commission, the American Stock
and all other appropriate agencies of all necessary reports, motions,
notices, forms, schedules and releases necessary to comply with all
applicable laws and regulations caused or necessitated by or arising
out of the transactions described herein or as contemplated hereby.
8. General Provisions.
(a) All agreements, representations and warranties made herein
shall survive the execution of this Agreement and the sale and
delivery of the certificates representing the shares.
(b) This Agreement, the attached schedules and the other
agreements referred to herein, constitute the entire agreement among
the parties pertaining to the subject matter hereof and supersede all
prior and contemporaneous agreements and understandings of the parties
in connection therewith. No covenant or condition not expressed in
this Agreement or in the other agreements referred to herein shall
affect or be effective to interpret change or restrict this Agreement.
No modification, waiver, termination or cancellation of this Agreement
shall be binding unless the same shall be a writing sign by the party
against whom enforcement of such modification, waiver, termination or
cancellation is sought.
(c) This Agreement may be executed in any number of counterparts,
each of which shall be an original and such counterparts shall
together constitute one and the same instrument.
<PAGE>
August 15, 1996
Page 5
(d) This Agreement shall be construed, enforced and governed by
the laws of the State of New York. In the event of any dispute with
respect to this Agreement or the transaction provided for herein, it
is agreed that the courts of the State of New York and the Federal
court, city and the Southern District of New York shall have full
personal jurisdiction over the parties and the subject matter hereof
and any such dispute shall be subject to proceedings initiated in such
courts.
IN WITNESS WHEREOF, the parties have hereunto executed this
Agreement as of the date set forth above.
D&A Funding Corporation
By: /s/ Donald Weiner
---------------------------
/s/ Ira Abramson
-------------------------------
Ira Abramson
/s/ Lillian Abramson
-------------------------------
Lillian Abramson
/s/ Robert Schwartz
-------------------------------
Robert Schwartz
/s/ Kenneth Silberstein
-------------------------------
Kenneth Silberstein
/s/ Michele Silberstein Meltzer
-------------------------------
Michele Silberstein Meltzer
/s/ Irwin Moskowitz
-------------------------------
Irwin Moskowitz
/s/ Morissa Moskowitz Anapulskv
-------------------------------
Morissa Moskowitz Anapulskv
/s/ Richard Moskowitz
-------------------------------
Richard Moskowitz
<PAGE>
August 15,1996
Page 6
Schedule A
Lillian Abramson 21,950
Kenneth Silberstein 18,595
Richard Moskowitz 12,489
Robert Schwartz 10,043
Morrissa Moskowitz Anapulsky 7,200
Irwin Moskowitz 6,315
Ira Abramson 4,972
Michelle Silberstein Meltzer 2,414
------
Total: 83,978
------
------
<PAGE>
August 15, 1996
Page 7
Schedule B
Exceptions
None.
<PAGE>
AMENDMENT
This is an amendment to a certain letter agreement dated August 15, 1996 among
D & A Funding Corporation, Robert Schwartz and other parties. To induce Robert
Schwartz to enter into said letter agreement, D & A Funding Corporation and
Kenwin Shops, Inc. (the "Company") agree to take all steps to cause the Company,
at the Company's expense, to continue to provide a medical insurance policy
covering Robert Schwartz, his wife and his children, without exclusion for
pre-existing conditions or Crohn's disease, for a period of one year after
Robert Schwartz's termination of employment. At the option of Robert Schwartz,
such medical insurance policy shall be in the form of continuing coverage under
the Company's group medical plan. Following the end of such one-year period,
Robert Schwartz shall continue to be offered by the Company all rights under
applicable federal and state law to continuing coverage under the Company's
group medical plan and to such conversion privileges as are afforded by
applicable federal and state law. D & A Funding Corporation and the Company
shall take all steps sufficient to cause the Company to transfer ownership and
possession to Robert Schwartz, or his designee, of the life insurance policy
currently maintained on Robert Schwartz's life.
/s/ Robert Schwartz
------------------------------
Robert Schwartz
KENWIN SHOPS, INC.
By: /s/ Richard Moskowitz
------------------------------
Name: Richard Moskowitz
Title: Pres.
D & A FUNDING CORPORATION
By: /s/ Donald Weiner
------------------------------
Name: Donald Weiner
Title:
