<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)/1/
YES CLOTHING CO.
----------------
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
--------------------------
(Title of Class of Securities)
985832 10 4
-----------
(CUSIP Number)
GARY J. COHEN, ESQ.
SIDLEY & AUSTIN
555 WEST FIFTH STREET
LOS ANGELES, CALIFORNIA 90013-1010
(213) 896-6013
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JUNE 4, 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 the 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 of this statement, including all exhibits, should be
----
filed with the Commission. See Rule 13d-1(a) for other parties to whom
---
copies are to be sent.
(Continued on following pages)
(Page 1 of 8 Pages)
- ---------------------
The remainder of this cover page shall be filled out for a reporting
person's initial filing 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 information 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 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>
- ----------------------- ---------------------
CUSIP NO. 985832 10 4 13D PAGE 2 OF 8 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Georges Marciano
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 PF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
5 REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 2,700,000
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0-
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,700,000
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,700,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13
38.37%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
The Schedule 13D filed with the Securities and Exchange Commission (the
"SEC") on behalf of Georges Marciano on December 9, 1994 (the "Schedule 13D") as
amended by Amendment No. 1 filed with the SEC on February 6, 1995 (filed on
paper) and Amendment No. 2 filed with the SEC on July 12, 1995 (filed by EDGAR),
are hereby further amended as follows:
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement on Schedule 13D
relates is the common stock, no par value ("Common Stock"), of Yes Clothing Co.,
a California corporation (the "Issuer"), with its principal executive offices
located at 1380 West Washington Boulevard, Los Angeles, California 90007.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by Georges Marciano (the "Reporting Person")
individually and in his capacity as the trustee of the following five trusts
(the "Trusts"):
The Georges Marciano Trust, dated February 20, 1986, as amended, a
revocable "living" trust created under the laws of the State of
California.
The Georges Marciano Gift Trust II F/B/O Matthew David Marciano, dated
December 31, 1991, an irrevocable trust created under the laws of the
State of California. The principal beneficiary of this trust is the
Reporting Person's son, Matthew David Marciano.
The Georges Marciano Gift Trust II F/B/O Scott Marciano, dated December
31, 1991, an irrevocable trust created under the laws of the State of
California. The principal beneficiary of this trust is the Reporting
Person's son, Scott Marciano.
The Georges Marciano Gift Trust II F/B/O Kevin Marciano, dated December
31, 1991, an irrevocable trust created under the laws of the State of
California. The principal beneficiary of this trust is the Reporting
Person's son, Kevin Marciano.
The Georges Marciano Gift Trust II F/B/O Chloe Marciano, dated December
31, 1991, an irrevocable trust created under the laws of the State of
California. The principal beneficiary of this trust is the Reporting
Person's daughter, Chloe Marciano.
Prior to the transactions reported herein, the Trusts collectively owned
3,030,000 shares of Common Stock of the Issuer (the "Trust Shares"). As the sole
trustee of the Trusts, the Reporting Person had sole power to vote, or to direct
the voting of, the Trust Shares and investment power that includes the power to
dispose of, or direct the disposition of, the Trust Shares. Accordingly, the
Reporting Person was the beneficial owner of the
Page 3 of 8 Pages
<PAGE>
Trust Shares for purposes of this Statement/1/. Additionally, since the
Reporting Person has the power to revoke The Georges Marciano Trust, and obtain
direct ownership of the Trust Shares owned by it, he is executing this Statement
individually as to those shares.
In addition, the Reporting Person, individually, was the direct
beneficial owner of 7,184,693 shares of Common Stock, including 4,000,000 shares
of Common Stock which were represented by an Option and a Warrant. See Exhibits
10.27 and 10.28, Executive Stock Option Agreement (the "Option Agreement" or
"Option") and Warrant Agreement (the "Warrant Agreement" or "Warrant"), between
the Issuer and the Reporting Person dated as of June 17, 1995, to the Issuer's
Annual Report on Form 10-K for the Year Ended March 31, 1995, which exhibits are
incorporated herein by reference.
On May 30, 1996, the four Gift Trusts transferred to the Georges Marciano
Trust an aggregate of 600,000 shares, resulting in the Gift Trusts owning no
shares and the Georges Marciano Trust owning an aggregate of 3,030,000 shares of
Common Stock.
On June 4, 1996 the Reporting Person sold to Guy Anthome 3,514,693 shares
of Common Stock and to cancel the Option and Warrant referred to above. The
purchase price for the shares sold was $35,146.93. Of these shares, Georges
Marciano personally sold 3,184,693 shares and the Georges Marciano Trust sold
330,000 shares. In addition, pursuant to an Agreement between the Reporting
Person and the Issuer, the Reporting Person agreed to cancel certain debts owed
by the Issuer to him and his affiliates and to cancel the Option and Warrant
referred to above. As a result of these transactions, the Reporting Person (The
Georges Marciano Trust) is now the beneficial owner of 2,700,000 shares of the
Issuer Common Stock. A copy of the June 4, 1996 Agreement among the Reporting
Person, Guy Anthome and the Issuer is attached hereto as Exhibit A.
The business address of the Reporting Person and each of the Trusts is
9756 Wilshire Boulevard, Beverly Hills, California 90212.
The Reporting Person is a private investor and garment designer and
manufacturer. The Reporting Person owns and operates GO USA Streetwear, Inc., a
fashion company, located at 9756 Wilshire Boulevard, Beverly Hills, California
90212.
During the last five years, the Reporting Person has not been (a)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgement, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
The Reporting Person is a citizen of the United States.
- ---------------------
/1/ The Reporting Person is not a beneficiary of any of the Trusts, other
than The Georges Marciano Trust.
Page 4 of 8 Pages
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On January 31, 1995, pursuant to the Stock Purchase Agreement, dated as
of December 23, 1994 (the "Stock Purchase Agreement"), by and between the
Reporting Person and George Randall and Moshe Tsabag (collectively, the
"Sellers"), as amended by that certain Amendment to the Stock Purchase
Agreement, dated as of January 30, 1995 (the "Amendment"), the Trusts acquired
the Trust Shares from the Sellers for an aggregate purchase price of $6,060,000
in cash and notes. All funds used to purchase the Trust Shares were obtained
from trust funds of the respective Trusts, including margin loans against other
marketable securities held by such Trusts. The Georges Marciano Trust acquired
2,430,000 of the Trust Shares. The aggregate amount of funds required by The
Georges Marciano Trust to acquire such shares was $4,860,000, consisting of
$3,300,000 in cash and the remainder in the form of two non-negotiable
promissory notes of the Reporting Person (the "Notes"). Each of the four other
Trusts acquired 150,000 of the Trust Shares. The aggregate amount of funds
required by each such Trust to acquire the shares purchased by it was $300,000.
Each of the Stock Purchase Agreement and the Amendment were filed as
exhibits to the Reporting Person's Amendment No. 1 to Schedule 13D filed on
February 6, 1995 and are not being refiled herewith.
On July 12, 1995, pursuant to an understanding between the Issuer and the
Reporting Person, and pursuant to the Option Agreement and the Warrant
Agreement, the Reporting Person acquired 3,184,693 shares of Common Stock. The
Option and Warrant, each to purchase up to 2,000,000 additional shares of Common
Stock, were granted on June 17, 1995. The aggregate amount of funds required by
the Reporting Person to acquire such shares was $3,980,866, consisting of
$3,300,000 in cash and the remainder in the form of cancellation of a $680,866
outstanding debt and advances from the Issuer to the Reporting Person.
ITEM 4. PURPOSE OF TRANSACTION.
The Georges Marciano Trust acquired its portion of the Trust Shares for
the purpose of obtaining a controlling equity interest in the Issuer. Each of
the four other Trusts acquired its portion of the Trust Shares for investment
purposes.
It was the initial intention of the Reporting Person that the Issuer
continue to conduct its business in substantially the same manner as had been
conducted. This intention has changed and in 1995 the Reporting Person became
Chairman and Chief Executive Officer of the Issuer. The Reporting Person and the
Issuer entered into license agreements pursuant to which the Issuer began to
manufacture clothing bearing trademarks owned or controlled by Georges Marciano,
including Misfits (R) and GMSurf(TM).
The Issuer has suffered additional and continuing financial problems, and
the Reporting Person and the Issuer have agreed to cancel the License Agreements
between the Reporting Person and the Issuer for the use of the trademarks
GMSurf(TM), Misfits(R) and other
Page 5 of 8 Pages
<PAGE>
marks associated with Georges Marciano. In addition, through June 4, 1996 the
Reporting Person and his affiliates had either loaned to the Issuer or
guaranteed by way of letters of credit to the Issuer a total of approximately
$4,230,000. On or before June 4, 1996, an affiliate of the Reporting Person
purchased from the Company approximately $1,463,000 in original book value of
inventory and equipment for cancellation of approximately $1,463,000 in
indebtedness, reducing the amount owed to approximately $2,767,000.
On May 30, 1996, the four Gift Trusts transferred to the Georges Marciano
Trust an aggregate of 600,000 shares, resulting in the Gift Trusts owning no
shares and the Georges Marciano Trust owning an aggregate of 3,030,000 shares of
Common Stock.
On June 4, 1996, the Issuer, the Company and Guy Anthome, a Company
director, entered into an agreement whereby the Reporting Person agreed to sell
to Mr. Anthome 3,514,693 shares for an aggregate of $35,146.92. Of these shares,
Georges Marciano personally sold 3,184,693 shares and the Georges Marciano Trust
sold 330,000 shares. In addition, the Reporting Person agreed to cancel debts
owed to him and his affiliates by the Company totalling approximately $2,767,000
in exchange for payment to him of $250,000 on June 4, 1996 and note payable of
$250,000 due on January 31, 1997 with interest at 8% per annum. Finally, the
Reporting Person agreed to cancel the Option and Warrant in his favor and the
Reporting Person and Issuer exchanged releases. A copy of the June 4, 1996
Agreement setting forth the foregoing is attached hereto as Exhibit A.
As a result of all of the foregoing transactions, the Reporting Person
(The Georges Marciano Trust) is now the second largest shareholder of the
Issuer, holding an aggregate of 2,700,000 of the Issuer's Common Stock. The
Reporting Person may, from time to time, buy inventory from the Issuer at the
Issuer's cost pursuant to the June 4, 1996 Agreement.
The Reporting Person has no other plans or proposals which relate to, or
may result in, any of the matters listed in Items 4(a)-(j) of Schedule 13D
(although the Reporting Person reserves the right to do so).
ITEM 5. INTEREST IN THE SECURITIES OF ISSUER.
The Reporting Person (through The Georges Marciano Trust) holds 2,700,000
shares of Common Stock of the Issuer, representing approximately 38.37% of the
issued and outstanding shares of Common Stock of the Issuer. The four Gift
Trusts hold no shares of Common Stock of the Issuer. The Reporting Person,
individually, holds no shares of Common Stock of the Issuer. The Reporting
Person has the power to revoke The Georges Marciano Trust and obtain direct
ownership of the Trust Shares owned by it.
Except as described herein, the Reporting Person has not acquired or
disposed of any shares of Common Stock of the Issuer during the past sixty days.
Page 6 of 8 Pages
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
None other than those reflected on Exhibit A hereto.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Agreement among Issuer, Guy Anthome and the Reporting Person dated
June 4, 1996
Page 7 of 8 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 3 is true, complete
and correct.
/s/ Georges Marciano
-------------------------------------
Georges Marciano, individually and as
Trustee of the Trusts referred to
herein
Page 8 of 8 Pages
<PAGE>
EXHIBIT A
June 4, 1996
PERSONAL & CONFIDENTIAL
- -----------------------
Georges Marciano
Go USA, Inc.
Georges Marciano Design Studio
9756 Wilshire Boulevard
Beverly Hills, California 90212
Re: YES Clothing Co.
----------------
Dear Georges:
This letter will memorialize and describe the basic terms of the
arrangements to be completed among YES Clothing Co. (The "Company"), Guy Anthome
and Georges Marciano, Go USA, Inc., the Georges Marciano Trust, and their
affiliates (collectively "Marciano").
1. Certain Actions by the Parties Listed Above.
-------------------------------------------
(a) Go USA will on or before June 4, 1996 purchase certain assets
(inventory and equipment) approximating $1,463,000 in value from the
Company. In addition, Go USA shall advance certain funds resulting in a
cumulative payment of $3,100,000 to the Company.
(b) The Company shall pay off certain liabilities associated with
three letters of credit issued in favor of Republic Factors in the amount
of approximately $1.0 million each on behalf of the Company, and related
to amounts advanced by Republic Factors through June 4, 1996, which are
estimated to total approximately $3.0 million at June 4, 1996;
(c) Go USA will on or before June 4, 1996 mark "paid", cancel and
return the promissory note(s) issued by the Company to Go USA in the amount
of $2,767,000 (the net amount remaining after the purchase of the inventory
and equipment described above) and cancel any other indebtedness remaining
outstanding from the Company to Go USA at June 4, 1996, whether documented
by promissory note or not, except for $500,000 of such debt which shall be
repaid as set forth in paragraph 3 below.
<PAGE>
Georges Marciano
June 4, 1996
Page 2
(d) Georges Marciano shall return to the Company for cancellation
unexercised all options and warrants to purchase shares of securities of
the Company held by Marciano, including the options to purchase 2,000,000
shares of common stock of the Company and the warrants to purchase
2,000,000 shares of common stock of the Company;
(e) Georges Marciano shall resign as Chairman of the Board and a
director of the Company, effective the date hereof; and
(f) The Company, Anthome, and Marciano will execute the General
Release and Indemnity Agreement attached hereto as Exhibit C.
2. STOCK PURCHASE. Guy Anthome will purchase and Marciano will sell
--------------
approximately 3,514,693 shares of the common stock of the Company at a purchase
price of $0.01 per share, 3,184,693 shares from Georges Marciano and 330,000
shares from the Georges Marciano Trust. The price shall be paid in cash,
cashier's check or bank check. The sale shall be consummated no later than June
4, 1996. The shares will bear thereon a private placement (Section 4(2) legend
and will be held by Guy Anthome for investment purposes and not for resale or
distribution. Anthome acknowledges that the sale of the shares is made without
representation and warranty with respect to the nature, quality and prospects of
the Company and agrees that by virtue of his position as a Director he is
capable of evaluating the risks of his investment in the Company.
3. ACTIONS OF THE COMPANY WITH GO USA. In payment of the remaining
----------------------------------
debt owed to Go USA by the Company, and the other agreements hereunder, the
Company will pay Go USA the amount of $500,000, payable as follows:
(a) $250,000 in cash upon the consummation of both the sale of Common
Stock to Guy Anthome and the completion or satisfaction of all items set
forth in Paragraph 1 above; and
(b) the remaining $250,000 by an unsecured promissory note of the
Company in the form attached as Exhibit A due January 31, 1997.
4. FURTHER AGREEMENTS. The Company, Guy Anthome and Marciano will
------------------
enter into such further agreements as may be necessary or appropriate in
connection with the transactions described in this letter, including:
<PAGE>
Georges Marciano
June 4, 1996
Page 3
(a) the Company will provide directors and officers liability
insurance of at least $6,000,000 covering Georges Marciano to be kept in
force for a period of at least 24 months after the Closing at its sole
cost and expense.
(b) all licenses, trademark agreements and other arrangements for
the use of the name Georges Marciano, GM Surf, Go USA and other licenses
with Marciano or his affiliates have been cancelled and the Company will
have no further right to use any of the foregoing. All provisions of the
license agreements between Marciano and the Company with respect to the
foregoing trademarks are cancelled with the exception of indemnification
provisions thereof, which shall continue in full force and effect.
(c) the Company will make available COBRA benefits for Georges
Marciano and other employees who continue in the employ of Marciano after
the date hereof for at least 18 months after the closing of this
transaction. The cost of such benefits will either be paid by Marciano or
the employees themselves.
(d) the Company agrees to sell to Marciano at his request on
customary commercial terms for a period of up to 24 months from the
Closing, any of the apparel products it produces (other than trademarked
products produced for a specific customer) at the Company's fully absorbed
cost of goods sold (as determined in good faith by the Company) for sale by
Marciano at his or his affiliates' retail outlets.
5. GENERAL RELEASE AND WAIVER OF CIVIL CODE SECTION 1542. Marciano,
-----------------------------------------------------
on behalf of themselves and their successors and assigns do hereby remise,
release and forever discharge the Company and its respective successors and
assigns from any and all claims, rights, debts, liabilities, demands,
obligations, promises, acts, agreements, costs, expenses (all of the foregoing
being referred to collectively as the "Claims and Expenses") (including, but not
limited to, unknown Claims and Expenses through and including the date hereof
including, without limitation, any and all Claims and Expenses in any way based
on, arising out of or related to Georges Marciano's employment and position as a
director or Go USA's position as a creditor) as well as any claim not set forth
herein for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health and medical insurance or any other fringe benefit, workers'
compensation or disability under Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, or the California Fair Employment and Housing
Act, PROVIDED, HOWEVER, that this
-------- -------
general release is not intend to and shall not be construed as a release of any
rights, commitments, obligations or warranties of the parties under this
Agreement and all agreements executed in connection herewith and any statutory
or contractual rights to indemnification as a former director and officer
(collectively the "Continuing Agreements"),
<PAGE>
Georges Marciano
June 4, 1996
Page 4
all of which rights, commitments, obligations or warranties shall remain in full
force and effect.
Marciano, and each of them, expressly waive and relinquish all rights
and benefits under Section 1542 of the Civil Code of California, which reads as
follows:
"1542. Extent of General Release.
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
Marciano, and each of them, acknowledge that they, or any of them, may
hereafter discover facts different from or in addition to those they, or any of
them, now known or believe to be true with respect to the Claims and Expenses
herein released and agree that this Agreement shall be and remain effective in
all respects notwithstanding such different or additional facts. It is the
intention hereby fully finally and forever to settle and release all Claims and
Expenses which do now exist, may exist or heretofore have existed in favor of
Marciano against the and Company (or any of its predecessors in interest) on the
other. In furtherance of such intention, among other things, the releases herein
given shall be and remain in full force and effect as full and complete mutual
general releases notwithstanding the discovery or existence of any such
additional or different claims or facts relative thereto and notwithstanding the
breach of any terms or conditions of this Agreement.
6. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
-------------------------------------------
(a) The parties hereto represent and warrant that they have the full
right and authority to enter into this Agreement and that the officer or
representative of each party executing this Agreement on their respective
behalves has the full right and authority to execute this Agreement and to
fully bind the parties hereto, and that this Agreement represents the valid
and binding agreement of each of them enforceable in accordance with its
terms.
(b) Each of the parties represent, warrant and agree as follows:
(i) Each party has had the opportunity to seek independent legal
advice from their attorneys with respect to the advisability of making
this Agreement;
<PAGE>
Georges Marciano
June 4, 1996
Page 5
(ii) Neither party (nor any officer, agent, employee, partner,
representative or attorney of or any party) have made any statement,
representation or promise, other than as set forth herein, to any
other party in entering into this Agreement which has been relied upon
by any other party (or of any officer, agent, employee, partner,
representative or attorney for other party) in entering into or
executing this Agreement; and
(iii) Each party have made such investigation of the facts
pertaining to this Agreement and of all other matters pertaining
hereto as they deem necessary.
(iv) Neither party has assigned or transferred to any person
not a party to this Agreement any released matter or any part or
portion thereof and each shall defend, indemnify and hold harmless the
other from and against any claim (including the payment of attorneys'
fees and costs actually incurred whether or not litigation is
commenced) based on or in connection with or arising out of any such
assignment or transfer made, purported or claimed.
7. NOTICES. Any notice under this Agreement shall not be effective
-------
as such unless addressed as set forth below and mailed by U.S. certified mail,
return receipt requested, postage prepaid, or by telecopy or by overnight
delivery service and not otherwise. Notices shall be effective three business
days after mailing, or upon receipt if sent by telecopy or overnight delivery
service.
8. INTEGRATION. This Agreement has been fully negotiated and shall
-----------
not be interpreted for or against either party. This Agreement, and the
Continuing Agreements and the documents referenced herein constitute an
integration of the entire understanding and agreement of the parties. Any
representation, promise or condition, whether written or oral, not specifically
incorporated herein shall not be binding upon any of the parties hereto and all
parties acknowledge that they have not relied, in entering into this Agreement,
upon any representations, promises or conditions not specifically set forth
herein.
9. SURVIVAL. All representations, warranties, covenants, agreements
--------
and acknowledgments made by the parties herein shall be considered to have been
relied upon by the parties hereto and shall survive the execution, performance
and delivery of this Agreement and all other documents contemplated herein.
10. SUCCESSORS AND ASSIGNS. This Agreement, including, without
----------------------
limitation, the representations, warranties, covenants, agreements,
acknowledgments and indemnities contained herein, a) shall inure to the benefit
of and be enforceable by the
<PAGE>
Georges Marciano
June 4, 1996
Page 6
respective parties hereto, and Company's, Anthome's and Marciano's successors
and permitted assigns and permitted transferees, and b) shall be binding upon
and enforceable against the respective parties hereto, and the Company's,
Anthome's and Marciano's successors, permitted assigns and permitted
transferees.
11. CONSTRUCTION AND ATTORNEYS' FEES. This Agreement shall be
--------------------------------
construed and enforced in accordance with the laws of the State of California
where it is to be executed and delivered. Should any action (including an
arbitration proceeding) be brought by the parties hereto to enforce any
provision or right herein, the prevailing party shall be entitled to recover in
addition to any other relief, reasonable attorneys' fees and costs of
litigation.
12. NO MODIFICATION OR AMENDMENT EXCEPT BY WRITING. No modification,
----------------------------------------------
amendment or waiver of any of the provisions herein contained, nor any future
representation promises or conditions in connection with the subject matter
hereof shall be binding upon any party hereto unless made in writing and signed
by a duly authorized officer or agent on behalf of each party.
13. SEVERABILITY. In the event that any one or more of the
------------
provisions contained herein shall for any reason be held to be invalid illegal
or unenforceable, such shall not affect any other provisions of this Agreement
so long as the remaining provisions can and are construed to fulfill the intent
of the parties as set forth herein as if such invalid, illegal or unenforceable
provision was not contained herein.
14. CAPTIONS AND HEADINGS; COUNTERPARTS. Captions and paragraph
-----------------------------------
headings used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it. This Agreement may be executed
in two or more counterparts, all of which when taken together shall constitute
the entire instrument. Photographic copies of such signed counterparts may be
used in lieu of the originals for any purpose.
15. EXPENSES. Each of the Company, Marciano and Guy Anthome will
--------
bear their own costs and expenses, including attorneys' fees, in connection with
carrying out the transactions described in this letter.
16. PUBLICITY. Neither the Company, its officers or directors, or
---------
Marciano will disclose, directly or indirectly, whether through public
announcement, communication with any third party, or otherwise, any information
concerning the existence of this letter agreement until such time as the Company
determines that disclosure is required or advisable under federal securities or
other applicable law. Any public announcement concerning the
<PAGE>
Georges Marciano
June 4, 1996
Page 7
terms of the transactions described in this letter will be made with the
concurrence of the Company, Guy Anthome and Marciano.
If this letter is consistent with your understandings of the
agreements reached among the Company, Guy Anthome and Marciano, please sign and
return to us the enclosed copy of this letter no later than June 4, 1996.
Please call me at 213/765-7800 if you have any questions regarding
this letter.
Very truly yours,
/s/ Guy Anthome
-----------------------------------
Guy Anthome
and
YES CLOTHING CO.
By: /s/ Jeffrey Busse
-------------------------------
Jeffrey Busse
Accepted and Agreed to by:
/s/ Georges Marciano
- -------------------------------
Georges Marciano
GO USA, INC.
By: /s/ Georges Marciano
---------------------------
Georges Marciano, President
THE GEORGES MARCIANO TRUST
By: /s/ Georges Marciano
---------------------------
Georges Marciano, Trustee
<PAGE>
EXHIBIT A2
PROMISSORY NOTE
Dated: June 4, 1996 $250,000
For value received, the undersigned ("Maker") promises to pay to Go USA,
Inc. ("Holder"), or order at the office of Holder, located at 9465 Wilshire
Boulevard, Suite 700, Beverly Hills, California 90210 or at such other place as
the Holder hereof may from time to time designate, the sum of Two Hundred Fifty
Thousand Dollars ($250,000).
The outstanding principal balance shall bear simple interest at the rate of
eight percent (8.0%) per annum.
The outstanding principal sum of this Note together with all accrued and
unpaid interest shall be due and payable on January 31, 1997.
Principal and interest shall be payable in lawful money of the United
States of America. Payments shall be applied first to interest on past due
interest, then to past due interest, then to accrued interest and then to
principal. The undersigned may prepay all of part of this Note at any time
without penalty. All principal and interest not paid when due shall bear
interest from such date until paid in full at the rate of ten percent (10.0%)
per annum.
An event of default hereunder shall occur if (a) any payment due hereunder
is not paid as and when due, (b) Maker makes an assignment for the benefit of
its creditors or files a petition in bankruptcy, (c) Maker is adjudged
insolvent, or (d) an involuntary petition in bankruptcy (or similar statute) is
filed against the Maker and is not dismissed within thirty (30) days after
filing. If any such event of default occurs, the Holder hereof, at its option,
may declare all sums due hereunder immediately due and payable without notice or
demand.
No delay on the part of the Holder of this Note nor the failure to exercise
of any power or right under this Note shall operate as a waiver of such power or
right or preclude other or further exercise thereof or the exercise of any other
power or right. Acceptance of payment after its due date shall not waive the
right of the Holder hereof to require prompt payment when due of all other
payments or to declare a default for the failure to so pay. The undersigned
hereby waives presentation, demand for payment, notice of dishonor or
acceleration, protest and notice of protest, and any and all other notices or
demands in connection with delivery, acceptance, performance, default, or
enforcement of this Note.
If any payment under this Note is not paid when due or if any event of
default occurs hereunder, Maker promises to pay all costs of enforcement and
collection, including, but not limited to, reasonable attorneys' fees, whether
or not such enforcement and collection includes the filing of a lawsuit.
<PAGE>
This Note shall inure to the benefit of and shall bind the successors and
assigns of Maker.
IN WITNESS WHEREOF, the undersigned has executed this Note in Los Angeles,
California, on the day and year first above written.
YES Clothing Co.
/s/ Jeffrey Busse
________________________________
Jeffrey Busse
Chief Financial Officer
<PAGE>
EXHIBIT C
GENERAL RELEASE
AND
INDEMNITY AGREEMENT
The following General Release and Indemnity Agreement (this "Agreement") is
entered into as of June 4, 1996, by and between YES Clothing Co., a California
corporation, ("YES") and Guy Anthome, an individual ("Anthome"), on the one
hand, (the foregoing, collectively referred to as "Releasors" and "Indemnitors")
and Georges Marciano, The Georges Marciano Trust, GO USA, Inc., and their
affiliates, ("Marciano"), on the other hand (together "Releasees" and
"Indemnitees").
WHEREAS, contemporaneously herewith, YES, Anthome and Marciano are entering
into an agreement (the "Purchase Agreement") whereby Anthome will purchase from
Marciano certain shares of stock in YES; and
WHEREAS, under the terms of the Purchase Agreement, Marciano will pay
certain debts of YES and provide other consideration to and for the benefit of
YES and Anthome; and
WHEREAS, under the terms of the Purchase Agreement, as a condition to such
payment and delivery of such consideration, Marciano requires the delivery of
certain releases by Releasors and the indemnification of Georges Marciano, GO
USA, Inc., and their affiliates, by Indemnitors; and
WHEREAS the Releasors and Indemnitors desire to release and indemnify the
Releasees and Indemnitees.
NOW, THEREFORE, in consideration for the mutual representations, covenants
and other terms of this Agreement, the parties hereto agree as follows:
Release
-------
1. Released Matters. Except for the Excluded Matters defined in paragraph
----------------
2, below, Releasors, and each of them, on behalf of themselves and their
respective heirs, predecessors, successors, assigns, shareholders,
beneficiaries and affiliates, and their officers, directors, executors,
administrators, agents, representatives and insurers, and each of them,
fully and forever relieve, release, and discharge (and covenant not to sue
or otherwise institute legal or administrative proceedings against)
Releasees, and each of them and their heirs, executors, administrators,
successors, beneficiaries and assigns, from and for any and all claims,
debts, liabilities, demands, obligations, liens, promises, acts,
agreements, costs, expenses (including, without limitation, reasonable
attorneys' fees), damages, actions and
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<PAGE>
causes of actions of whatever kind or nature (collectively referred to as
"Claims"), whether known or unknown, fixed, contingent or maturing in the
future, which arise from or relate to, directly or indirectly, any of the
following from the beginning of time through the date of this Agreement
(except for the Excluded Matters, the "Released Matters"):
i) YES, its management, obligations, financing, operations and
personnel;
ii) Releasees' ownership and sale of YES stock; and
iii) Georges Marciano's tenure and actions as an officer,
director, shareholder or employee of YES.
2. Excluded Matters. This release and Releasors' covenant not sue shall
----------------
not apply to the following "Excluded Matters":
---
A) Claims against Releasees arising from the rights or
obligations provided in the Purchase Agreement;
B) Claims against Releasees arising from the rights or
obligations provided in any "Continuing Agreement," as that term is
defined in the Purchase Agreement or from failure of representations
and warranties of Releasee thereunder; and
C) Claims arising from the failure of a representation or
warranty set forth in Section 4, below.
3. Extent of Release. Releasors, and each of them, acknowledge
-----------------
and agree that the releases provided in this Agreement shall extend and
apply to all unknown, unsuspected and unanticipated Claims and that this
Agreement may be pleaded by Releasees, and any of them, as a full and
complete defense to, and may be used as the basis for an injunction
against, any action, suit or other proceeding which may be instituted,
prosecuted or attempted in breach of this release agreement. Releasors, and
each of them hereby represent and warrant that they understand and
expressly waive any and all benefits conferred upon them by the provisions
of Section 1542 of the Civil Code of the State of California, which reads
as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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<PAGE>
Releasors, and each of them, expressly waive any equivalent provision of
any statute of the United States or any other state or jurisdiction, and
similar principles of common law or equity.
4. Georges Marciano Representation and Warranty. Georges Marciano
--------------------------------------------
represents and warrants to Releasors that the shares of common stock in YES
sold pursuant to the Purchase Agreement are the sole property of Georges
Marciano and are free of any claims, liens or other encumbrances except as
stated on such certificate or as created pursuant to the Purchase
Agreement.
5. Releasors' Representation. Each Releasor represents and warrants
-------------------------
that he has not assigned or transferred any portion of the Claims released
herein to any other individual, firm, corporation or entity and to the best
of his knowledge that no other individual, firm, corporation or entity has
any lien, claim or interest in any of the Claims. Each Releasor further
covenants and agrees to use his best efforts to obtain all consents and
approvals which may be required in connection with the release of Releasees
from guaranties and accommodations entered into on behalf of YES, if any.
6. Effect of Covenants and Representations. Each of the parties
---------------------------------------
hereby expressly and knowingly acknowledges that he may hereafter discover
facts different from or in addition to those which he now knows or believes
to be true with respect to the claims herein released and he agrees that
this Agreement shall be and remain in full force and effect in all
respects, notwithstanding such different or additional facts. It is the
intention hereby fully, finally and forever to settle and release all such
matters and any and all claims relating to the Released Matters which do
now exist, may exist or heretofore have existed. In furtherance of such
intention, the releases herein given shall be and remain in effect as full
and completed releases of the Released Matters, notwithstanding the
discovery by any of the parties of the existence of any additional or
different claims or facts relating to the Claims. The Agreement is
intended, pursuant to the advice of independently selected legal counsel,
to be final and binding between and among the parties.
7. Releasors' Acknowledgment. Releasors, and each of them, hereby
acknowledge and agree that no representation, warranty or covenant with
respect to future activities, business or competition of YES has been made
by any Release. Georges Marciano, GO USA, Inc. and their affiliates will be
free to design, develop products, invest in, manage, consult and otherwise
compete freely in the garment industry, including the jeans business and
other markets of YES. Releasors, and each of them, further acknowledge and
agree that Georges Marciano is not subject to any exclusivity, non-
competition or similar restriction of any kind applicable to him personally
or to his current or future business enterprises or associations.
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<PAGE>
II. Indemnity
---------
8. Indemnified Matters. Indemnitors, and each of them, agree to
-------------------
indemnify, protect, defend and hold harmless Indemnitees, and each of them,
from and against any and all claims, losses, liabilities, and expenses
including Indemnitees' reasonable attorneys' fees, (collectively "Losses")
arising from or in connection with any threatened, pending or completed
action, suit or proceeding and any claim or offset, whether civil,
criminal, administrative or investigative (including, without limitation,
an action by or in the name of YES, its shareholders or successors) arising
from or in connection with any of the following "Indemnified Matters" and
whether now known, outstanding, contingent or arising in the future:
A) Claims relating to YES, its management, financing operations
or personnel (other than any such claims that are Excluded Matters as
set forth in paragraph 2 hereof).
B) Claims relating to YES' obligations to creditors, vendors,
customers, employees or shareholders;
C) Claims relating to actions, real or alleged, of any YES
officer, director or employee (including Georges Marciano) (other than
any such claims that are Excluded Matters as set forth in paragraph 2
hereof);
D) Claims relating to the Purchase Agreement (other than any
such claims that are Excluded Matters as set forth in paragraph 2
hereof); and
E) Claims relating to any guaranties or other accommodations
entered into on behalf of YES in the ordinary course of YES business.
Indemnitors shall reimburse Indemnitees on demand for any losses
to which the foregoing indemnity relates.
9. Tender of Defense. A party indemnified under the foregoing
-----------------
paragraph (an "Indemnitee") shall notify Indemnitors of the existence of
any claim or matter involving potential liabilities as to which the
Indemnitor's indemnification obligations would apply, within a reasonable
time after Indemnitee receives notice thereof; thereafter the Indemnitee
shall give the Indemnitor 30 days (or such other period as is required by
the contingencies of such claim or matter) in which to elect to defend the
same at its own expense and with counsel of its own selection (who shall be
approved by the Indemnitee, which approval shall not be unreasonably
withheld); provided that the Indemnitee shall at all times also have the
right to fully participate in the defense at its own expense unless (i) the
employment of counsel has been authorized by Indemnitor, (ii) Indemnitee
shall have reasonably concluded that there may be a conflict of interest
between the
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<PAGE>
Indemnitor and the Indemnitee in the conduct of the defense of such claim,
or (iii) Indemnitor shall have failed to employ counsel within a reasonable
period of time or continue prosecution of the defense of such claim, in
each of which cases the fees and expenses of counsel shall be reimbursed by
Indemnitor. If the Indemnitor shall, within such 30-day period, fail to
defend, the Indemnitee shall have the right, but not the obligation, to
undertake the defense of, and to compromise or settle (exercising
reasonable business judgment) the claim or other matter on behalf and at
the risk and expense of the Indemnitor. Except as provided above, the
Indemnitee shall not compromise or settle the claim or other matter without
the written consent of the Indemnitor, which consent shall not be
unreasonably withheld. If the claim is on that cannot by its nature be
defended solely by the Indemnitor (including, without limitation, any tax
proceeding), the Indemnitee shall make available all information and
assistance (including, without limitation, copies of all documents and
other writings) that the Indemnitor may reasonably request; provided that
any associated expenses shall be paid by the Indemnitor.
Indemnitors agree among themselves that any claim for indemnity or
tender of defense hereunder will be in the first instance the
responsibility of, and referred to, YES, it being intended that the
obligations of indemnity hereunder are primarily those of YES. In
connection with the foregoing, YES agrees to respond in a timely manner to
any claim for indemnity or tender of defense hereunder and to satisfy any
matured obligation of indemnity of any of the Indemnitors hereunder. YES
agrees to hold each of the other Indemnitors harmless of and from any and
all claims, losses, liabilities and expenses, including reasonable
attorneys' fees, arising from any failure of YES to satisfy its obligations
to any Indemnitee under this Agreement or any of the other Indemnitors
under this paragraph.
The foregoing to the contrary notwithstanding, no failure, incapacity
or prohibition of YES to satisfy indemnification obligations hereunder
shall serve as a defense to enforcement of the indemnity against any other
Indemnitor.
10. Contemporaneous Release; Other Indemnities. This Agreement is
------------------------------------------
being executed contemporaneously with the Purchase Agreement, which
Purchase Agreement contains a release provision relating to certain
potential claims of Marciano against YES and Anthome (the "Contemporaneous
Release"). Nothing in the Contemporaneous Release is intended or shall be
implied to limit or in any other way affect the full and complete rights of
indemnification afforded to Indemnitees by this Agreement (including,
without limitation, the rights to be indemnified for losses with respect to
claims as set forth in paragraph 8 hereof). The indemnity provided in this
Agreement shall also be separate and in addition to any right of
indemnification provided to Indemnitees according to the Articles of
Incorporation, Bylaws or Shareholders Agreement of YES, and YES Directors
and Officers insurance as well as by any prior agreement, statute, or
common law.
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<PAGE>
III. Interpretation and Enforcement
------------------------------
11. Interpretation. Each of the parties hereto represents, warrants,
--------------
and agrees as follows:
A) Each of the parties hereto has received prior independent legal
advice from legal counsel of his choice with respect to the advisability of
making the arrangement provided for herein and with respect to the
advisability of executing this Agreement. Each party has had adequate time
to review and consider this Agreement and has had the opportunity to
participate in its negotiation and drafting;
B) The terms of this Agreement are contractual, not a mere recital,
and are the result of negotiations between the parties;
C) Each party agrees that such party will not take any action which
would interfere with the performance of this Agreement by any of the
parties hereto or which would adversely affect the rights provided for
herein;
D) The corporate officers reviewing and executing the Agreement have
been duly authorized and empowered by the corporate party to do so;
E) This Agreement is intended to be final and binding, and is
further intended to be effective as a full and final accord and
satisfaction between them for all Claims which have or could have been
asserted, except for the Excluded Matters. Each party relies on the
finality of this Agreement as a material factor inducing that party's
execution of this Agreement; and
F) This Agreement is a release of unasserted or disputed claims
and does not constitute an admission of liability on the part of Releasors
or Releasees, as to any matters whatsoever.
12. Notice. Any notice, request, instruction, or other document to
------
be given hereunder by any party to another shall be in writing and
delivered personally or mailed by certified mail, postage prepaid, return
receipt requested (such mailed notice to be effective on the date of such
receipt) as follows:
if to the Releasees/Indemnitees:
Georges Marciano
GO USA Streetwear, Inc.
9465 Wilshire Boulevard, Suite 700
Beverly Hills, California 90212
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<PAGE>
with a copy to:
Robert J. Sutcliffe, Esquire
601 South Figueroa Street, Suite 4890
Los Angeles, California 90017
if to the Releasors/Indemnitors:
YES Clothing Co.
1380 West Washington Boulevard
Los Angeles, California 90007
Attention: Guy Anthome
Each of the parties shall be entitled to specify a different address
by giving notice as aforesaid.
13. Arbitration. In the event any dispute arises between the parties
-----------
or their related entities or individuals concerning, in whole or in part,
the subject matter or this Agreement, the Claims released herein, the
indemnity due hereunder, or any actions taken before the execution of this
Agreement, the parties agree that any such dispute and any and all claims
arising therefrom shall be subject to final and binding arbitration with
the arbitrator being selected and the arbitration being conducted in
accordance with the applicable rules of the American Arbitration
Association in effect at the time the claim or dispute arose. It is further
explicitly understood and agreed by the parties that the arbitrator will
have full authority to award any relief available in law or equity just as
if the dispute had been brought in a California court.
14. Attorneys' Fees. In the event that any party hereto should bring
---------------
any action, suit, arbitration or other proceedings against any other party
hereto or its related individuals or entities, concerning any matter
referred to herein, or contesting the validity of this Agreement, or
attempting to rescind, negate, modify or reform this Agreement or any of
the terms or provisions thereof, or to remedy, prevent or obtain relief
from a breach of this Agreement, or arising out of a breach of this
Agreement, the prevailing party shall recover all of such party's
reasonable attorneys' fees incurred in each and every such action, suit, or
other proceeding, including all appeals and petitions therefrom.
15. Interpretation. In interpreting this Agreement, the masculine
---------------
gender shall be deemed to include the feminine and neuter, the singular
shall be deemed to include the plural and vice versa.
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<PAGE>
16. Counterparts. This Agreement may be executed in counterparts,
------------
all of which shall be construed as one document.
17. Headings. The section and other headings contained in this
--------
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
18. Binding Effect. The provisions of this Agreement shall bind and
--------------
inure to the benefit of the parties and their respective trustees, heirs,
beneficiaries, executors, administrators, officers, directors, partners,
shareholders, employees, affiliates (provided that the indemnity granted in
Section 8 is not intended to inure to the benefit of any affiliate
corporation that is publicly held as of the date of this Agreement),
representatives, agents, attorneys, accountants, successors and assigns.
19. Severability. The invalidity or unenforceability of any
------------
particular provision of this Agreement shall not affect the other
provisions, and this Agreement shall be construed in all respects as if any
invalid or unenforceable provision were omitted. To the extent permitted by
applicable law, the parties hereby waive any provision of law that renders
any portion of this Agreement prohibited or unenforceable in any respect.
To the extent any such provision should be omitted, the parties will
negotiate in good faith to replace the stricken provision with a new
provision reflecting the same allocation of benefits and burdens.
20. Governing Law. The validity, construction and performance of
-------------
this Agreement shall be governed by the laws, without regard to the laws as
to choice or conflict of laws, of the State of California.
21. Further Action. Each party agrees to perform any further acts
--------------
and to execute and deliver any other documents which may be reasonably
necessary to effect the provisions of this Agreement.
22. Entire Agreement; Amendment. This Agreement supersedes all prior
negotiations and understandings concerning the subject matter of the
General Release and Indemnity and contains all of the terms and provisions
of the Agreement between the parties. There are no oral understandings,
statements or stipulations bearing on the effect of this Agreement that
have not been incorporated herein. This Agreement shall not be amended,
supplemented, or abrogated other than by a written instrument executed by
the parties.
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<PAGE>
"RELEASEES/INDEMNITEES" "RELEASORS/INDEMNITORS"
GEORGES MARCIANO YES CLOTHING CO.
/s/ Georges Marciano By: /s/ Jeffrey Busse
----------------------------- --------------------------
Georges Marciano
The Georges Marciano Trust
/s/ Georges Marciano
-----------------------------
Georges Marciano, Trustee
GO USA, Inc., a California corporation GUY ANTHOME
By: /s/ Georges Marciano /s/ Guy Anthome
------------------------- -------------------------
Guy Anthome
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