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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Sam & Libby, Inc.
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(Name of Issuer)
Common Stock, $0.001 par value
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(Title of Class of Securities)
795843-10-1
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(CUSIP Number)
Stanley B. Hendler, Esq.
Todtman, Young, Tunick, Nachamie, Hendler & Spizz, P.C.
425 Park Avenue
New York, New York 10022
(212) 754-9400
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(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
July 30, 1996
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(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 this statement [X].
Page 1 of 6 pages
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SCHEDULE 13D
CUSIP No. 795843-10-1 Page 2 of 6 Pages
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Braha Industries Inc. - 13-2732973
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS
00 (See Item 3)
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5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
[ ]
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6) CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7) SOLE VOTING POWER
1,369,260 See Item 5
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NUMBER 8) SHARED VOTING POWER
OF 1,369,260 See Item 5
SHARES
BENEFICIALLY --------------------------------------------------------
OWNED BY 9) SOLE DISPOSITIVE POWER
EACH 1,369,260 See Item 5
REPORTING
PERSON --------------------------------------------------------
WITH 10) SHARED DISPOSITIVE POWER
1,369,260 See Item 5
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,369,260 See Item 5
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN [ ]
SHARES
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9 % See Item 5
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14) TYPE OF REPORTING PERSON
CO
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ITEM 1. SECURITY AND ISSUER.
This Statement relates to shares of common stock, par value $0.001 per share
(the "Shares"), of Sam & Libby, Inc., a California corporation (the "Issuer").
The principal executive offices of the Issuer are located at 58 West 40th
Street, New York, NY 10018.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by Braha Industries Inc., a New York
corporation (the "Reporting Person" or "Braha"). The Reporting Person's address
is 10 West 33rd St., New York, NY 10001. The Reporting Person's principal
business is the import of footwear.
During the past five years, the Reporting Person has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the past five years, the Reporting Person has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On June 26, 1996, the Reporting Person, the Issuer, Lane International
Trading, Inc., a California corporation ("Lane"), and La Lano International
Trading, Inc., a Taiwan corporation ("La Lano"), entered into a Composition and
Conversion Agreement (the "Agreement"). Pursuant to the Agreement, Braha
agreed to forgive $897,777.50 of the Issuer's approximate $3,200,000
indebtedness to Braha (the "Debt"), for an approximate aggregate remaining debt
of $2,302,222.50. Of the remaining debt aggregating $2,302,222.50, an aggregate
of $1,297,777.50, is to be repaid in consecutive monthly installments of
$250,000.00, due on or before the first of each month, commencing August 1996
and ending
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November 1996. The balance of $1,004,445 was converted into 1,339,260 Shares
of the Issuer at a conversion of debt purchase price of $.75 per Share (the
"Braha Shares"). The Braha Shares were issued on July 30, 1996.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Person acquired the Braha Shares in consideration for a
partial forgiveness of indebtedness of the Issuer to the Reporting Person as
further described in Item 3 hereof. The Reporting Person has no plans or
proposals which would result in the occurrence of the events enumerated in
subsections (a) through (g) of Item 4.
The Reporting Person, intends to review on a continuing basis its investment
in the Issuer and may, depending upon its evaluation of the Issuer's business
and prospects, as well as other factors, determine to increase, decrease or
continue to hold or dispose of its position in the Issuer.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The Reporting Person beneficially owns 1,369,260 Shares of the Issuer (the
"Shares Owned"), constituting 9.9967% of the outstanding Shares of the
Issuer. (1) The Reporting Person has sole voting and dispositive power over
the Shares Owned. The Shares Owned constitute the Braha Shares and 30,000 Shares
owned by The Braha Industries, Inc. Profit Sharing Plan which is administered by
all the shareholders of Braha (the "Pension Shares"). Pursuant to Rule 13d-4
promulgated under the Securities Act of 1934, as amended, the Reporting Person
hereby disclaims beneficial ownership over the Pension Shares.
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(1) Based on 13,741,367 Shares outstanding of the Issuer as indicated to the
Reporting Person by the Issuer.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
On June 26, 1996, the Issuer entered into a Registration Rights Agreement
with the Reporting Person and Lane granting each certain registration rights for
Shares of the Issuer acquired pursuant to the Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Conversion and Composition Agreement, dated June 26, 1996, among the
Issuer, the Reporting Person, Lane and La Lano.
2. Registration Rights Agreement, dated June 26, 1996, among the Issuer, the
Reporting Person and Lane.
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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.
Dated: July 30, 1996 BRAHA INDUSTRIES INC.
By: /s/ Ralph Braha
________________________
Ralph Braha, President
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EXHIBIT 1
COMPOSITION AND CONVERSION AGREEMENT
AGREEMENT, dated as of June 26, 1996, by and among SAM & LIBBY, INC., a
California corporation, with its principal office at 58 West 40th Street, New
York, New York 10018 (the "Company"), BRAHA INDUSTRIES, INC., a New York
corporation, with its principal office at 1 East 33rd Street, New York, New York
10016 ("Braha"), LANE INTERNATIONAL TRADING, INC., a California corporation,
with its principal office at 31284 San Antonio Street, Suite 7, Hayward,
California 94544 ("LIT") and LA LANO INTERNATIONAL TRADING, INC., a Taiwan
corporation, with offices at Room 8, 8th Floor, No. 20, Ta Lung Rd., Taichung,
Taiwan R.O.C. ("La Lano"). Lane International Trading, Inc. and La Lano
International Trading, Inc. shall hereinafter sometimes be referred to, jointly
and severally, as "Lane".
W I T N E S S E T H :
WHEREAS, the Company has been and still is engaged in the business of
the design, development and marketing of women's and children's footwear; and
WHEREAS, the Company, in the course of transacting its business, has
incurred various indebtedness to each of Braha and Lane; and
WHEREAS, Braha and Lane are willing to settle the Company's respective
outstanding indebtedness to them, but solely upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and of the mutual
undertakings of the respective parties hereto and the mutual promises of and to
the several parties hereto, it is agreed as follows:
1. Braha hereby agrees to forgive Eight Hundred Ninety-Seven Thousand
Seven Hundred Seventy-Seven Dollars and Fifty Cents ($897,777.50) of the
Company's approximate Three Million Two Hundred Thousand Dollars ($3,200,000)
indebtedness to Braha, for an approximate aggregate remaining debt of Two
Million Three Hundred Two Thousand Two Hundred Twenty-Two Dollars and Fifty
Cents ($2,302,222.50) when, as and if the approximate One Million Two Hundred
Ninety- Seven Thousand Seven Hundred Seventy-Seven Dollars and Fifty Cents
($1,297,777.50) referred to in Section 4 hereof has been paid in full.
2. Lane hereby agrees to forgive Three Hundred Ninety Thousand Five
Hundred Twenty-Two Dollars ($390,522) of the Company's One Million Seven Hundred
Thirty-Four Thousand Eight Hundred Thirty Dollars ($1,734,830) indebtedness to
Lane, for an aggregate remaining debt of One Million Three Hundred Forty-Four
Thousand Three Hundred Eight Dollars ($1,344,308) when, as and if the Three
Hundred Twenty-Five Thousand Three Hundred Fifty-Two Dollars ($325,352) referred
to in Section 5 hereof has been paid in full.
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3. On the date the opinion of corporate counsel to the Company is
delivered to Braha and Lane in accordance with Section 14 of this Agreement, the
Company shall cause its transfer agent to issue a stock certificate to Braha for
One Million Three Hundred Thirty-Nine Thousand Two Hundred Sixty (1,339,260)
shares of the Company's Common Stock, $0.001 par value and a stock certificate
to LIT for One Million Three Hundred Fifty-Eight Thousand Six Hundred Eight
(1,358,608) shares of the Company's Common Stock, $0.001 par value, (together
the "Conversion Stock") at a conversion of debt purchase price of $0.75 per
share, for an aggregate purchase price to Braha of One Million Four Thousand
Four Hundred Forty-Five Dollars ($1,004,445) and to Lane of One Million Eighteen
Thousand Nine Hundred Fifty Six Dollars ($1,018,956) (as it applies to each of
Braha and/or Lane, the "Conversion Debt") to be applied to the approximate
aggregate remaining debt of each of Braha and Lane under Sections 1 and 2
hereof. Braha and LIT have each severally subscribed for the purchase of the
Conversion Stock with the Conversion Debt by their execution of this Agreement,
subject to the receipt of the aforementioned opinion of corporate counsel to the
Company as hereinabove referred.
4. After provisional application of the debt reduction provided for in
Section 1 above and the application of the Conversion Debt as set forth in
Section 3 above, there is now due and payable from the Company to Braha the
approximate aggregate sum of One Million Two Hundred Ninety-Seven Thousand Seven
Hundred Seven Dollars and Fifty Cents ($1,297,777.50), which the Company and
Braha agree shall be paid in consecutive monthly installments, due on or before
the first (1st) day of each month commencing August, 1996 and ending November,
1996, of Two Hundred Fifty Thousand Dollars ($250,000) per month, an installment
of Two Hundred Thousand Dollars ($200,000) due on or before the first (1st) day
of December, 1996, and a final installment of Ninety-Seven Thousand Seven
Hundred Seventy-Seven Dollars and Fifty Cents ($97,777.50) due on or before the
first (1st) day of January, 1997, all without interest thereon, except as
provided in Section 9 hereof, until paid.
5. After provisional application of the debt reduction provided for in
Section 2 above and the application of the Conversion Debt as set forth in
Section 3 above, there is now due and payable to Lane the aggregate sum of Three
Hundred Twenty- Five Thousand Three Hundred Fifty-Two Dollars ($325,352), which
the Company and Lane agree shall be paid in consecutive monthly installments,
due on or before the first (1st) day of each month commencing August, 1996, and
ending December, 1996, of Forty-Six Thousand Nine Hundred Sixty-Six ($46,966)
per month, and a final installment of Eighty-Two Thousand Thirty-Three Dollars
($82,533) due on or before the first (1st) day of January, 1997, without
interest thereon, except as provided in Section 9 hereof, until paid.
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6. Braha and/or Lane may unilaterally agree with the Company to defer
and/or reduce payments to itself under Sections 4 or 5 hereof, as the case may
be, without the consent of the remaining party and without constituting an Event
of Default (as hereinafter defined) hereunder.
7. The Company shall have the right to make prepayments under Sections
4 or 5 hereof; provided, however, that unless agreed to the contrary by the
parties hereto, Braha shall receive 80.82% of any such prepayments and Lane
shall receive 19.18% of any such prepayments. Provided, however, that in the
event that the Company successfully concludes the presently proposed sale of
certain of its assets to Maxwell Shoe Company, Inc. (the "Maxwell Transaction")
then, in that event, the Company shall prepay to Braha and/or Lane, as the case
may be, the remaining balance due and owing to such entity under Sections 4
and/or 5 hereof (after application of the related debt reduction provided for in
Sections 1 and/or 2 hereof and the Conversion Debt provided for in Section 3
hereof) within five (5) business days following the date upon which the Company
receives the proceeds of such sale as cleared funds ("Maxwell Funding Date").
8. If an Event of Default (as those terms are hereinafter defined)
shall occur with respect to Braha and/or Lane, as the case may be, then,in such
event, the entity(ies) as to which such Event of Default shall have occurred
will no longer be subject to the provisional forgiveness provisions of Sections
1 and/or 2 hereof, as the case may be, and any sums due under this Agreement
shall be immediately due and payable by the Company.
9. Interest shall accrue at the maximum interest rate permitted by law
from January 1, 1996, on any portion of the debts outstanding referred to in
Sections 1 and/or 2 hereof, until such time as the Company has repaid such debt
or portion, or such debt or portion has been forgiven and/or such debt or
portion has become Conversion Debt, all as hereinabove provided. Provided,
however, that no payment of such interest shall be due and/or payable by the
Company unless and until an Event of Default shall have occurred hereunder, in
which case all such accrued, but unpaid interest shall become immediately due
and payable. Notwithstanding the foregoing, Braha and/or Lane, as the case may
be, hereby agrees to forgive such interest in its entirety upon payment of the
amounts due to it under the provisions of Section 4 or 5 hereof (after
application of the debt reduction and Conversion Debt provided for in Sections
1, 2 and 3 hereof), as the case may be.
10. The Company shall contemporaneously with the issuance of the stock
certificates to Braha and LIT in accordance with the provision of Section 3
hereof execute and deliver to each of Braha and LIT a Registration Rights
Agreement in the form of Exhibit A annexed hereto, which relates solely to the
Conversion Stock
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purchased hereunder with the Conversion Debt.
11. Braha and Lane severally acknowledge that the Conversion Stock to
be issued in consideration of the Conversion Debt will not be registered under
the Securities Act of 1933 (the "1933 Act") and therefore shall be subject to
restrictions on sale and/or other transfers under federal and state securities
laws and, in connection therewith, the certificates to be issued for the
Conversion Stock shall each bear a restrictive legend in substantially the
following form:
"The shares represented by this certificate have not
been registered under the securities act of 1933. The
shares have been acquired for investment and may not
be transferred or assigned in the absence of an
effective registration statement for these shares
under the Securities Act of 1933 or an exemption from
registration under such Act."
12. All actions to be taken by Lane pursuant to this Agreement shall
require the signature of each of La Lano and LIT, except as to any and all
rights with respect to the issuance of the Conversion Stock, with respect to
which La Lano may take no action or exercise any rights under this Agreement. It
being understood and agreed by both such entities that no Event of Default may
be declared by one such entity unless also declared by the other and that no
exercise of any right hereunder, except as hereinabove reserved to LIT, may be
exercised by any such entity individually without the written consent of the
Company first obtained.
13. The Company represents and warrants to Braha and Lane as of the
date of the execution of this Agreement, as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
all requisite corporate power and authority for the carrying on of its business
in the manner conducted;
(b) the Company has all necessary corporate powers and has
taken all necessary corporate action required to make all provisions of this
Agreement and any and all other documents and instruments delivered in
connection herewith the valid and enforceable obligations of the Company,
subject to usury and creditor's rights laws;
(c) neither the execution, delivery and performance of this
Agreement
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nor the offer, issuance and sale of the Conversion Stock to Braha and LIT, as
the case may be, will; (i) conflict with or violate the Articles or By-laws of
the Company; (ii) conflict with or result in a default under or breach of any
instrument or agreement to which the Company is a party or by which it is bound;
(iii) require the consent (other than such consents as may have been required
and which have been obtained) of, or other action by, any non-governmental
person, including any shareholder, trustee or creditor of, any lessor to or any
investor in the Company; or (iv) cause the Company to be in violation of any
statute, law, regulation or ordinance or any judgment, decree, writ, injunction,
order, award or other action of any court or governmental authority or
arbitrator;
(d) the Company has reserved an aggregate of Two Million Six
Hundred Ninety-Seven Thousand Eight Hundred Sixty-Eight (2,697,868) shares of
its Common Stock, $0.001 par value, for issuance in connection with this
Agreement; and
(e) the Conversion Stock has been duly authorized and, when
issued and delivered, will be validly issued and fully paid and nonassessable;
and that Braha and LIT, will receive good title to the Conversion Stock free and
clear of any liens, encumbrances, rights and restrictions of any nature, other
than restrictions on transfer of the shares of Conversion Stock imposed by
relevant state and federal securities laws.
14. The Company shall cause an opinion of Wilson, Sonsini, Goodrich and
Rosati, corporate counsel to the Company, dated the date hereof, in form and
substance reasonably acceptable to counsel for Braha and/or Lane, as the case
may be, to be delivered to Braha and Lane.
15. Each of Braha and Lane represent and warrant to the Company, as of
the date of this Agreement, as follows:
(a) It is a corporation duly organized, validly existing and
in good standing under the laws of the state (or country) of its incorporation
and has all requisite corporate power and authority for the carrying on of its
business in the manner conducted;
(b) it has all necessary corporate powers and has taken all
necessary corporate action required to make all provisions of this Agreement and
any and all other documents and instruments delivered in connection herewith its
valid and enforceable obligations, subject to creditor's rights laws;
(c) neither the execution, delivery and performance of this
Agreement
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nor (with respect only to Braha and LIT) the purchase, acquisition and receipt
of the Conversion Stock will: (i) conflict with or violate the Articles or
By-laws of Braha or Lane, as the case may be; (ii) conflict with or result in a
default under or breach of any instrument or agreement to which Braha or Lane,
as the case may be, is a party or by which it is bound; (iii) require the
consent (other than such consent as may have been required and which have been
obtained) of, or other action by, any non-governmental person, including any
shareholder, trustee or creditor of, any lessor to or any investor in Braha or
Lane, as the case may be; or (iv) cause the Braha or Lane, as the case may be,
to be in violation of any statute, law, regulation or ordinance or any judgment,
decree, writ, injunction, order, award or other action of any court or
governmental authority or arbitrator;
(d) that the Conversion Stock Braha and/or LIT, as the case
may be, acquires pursuant to the provisions of Section 3 hereof are being
acquired for investment purposes only and not with a view toward resale thereof;
(e) it is an experienced investor who can afford the risk of
loss of its entire investment; has had access to financial and other information
regarding the Company's business and has been afforded the opportunity to ask
the officers of the Company for such information as it required, except for the
Letter of Intent for the Maxwell Transaction; and
(f) Braha and/or LIT, as the case may be, understands that the
benefits of the Registration Rights Agreement are personal to it and may not be
assigned or otherwise devolve to any other person or entity, except as
specifically provided for therein.
16. The Company undertakes and agrees that:
(a) The Company will pay to Lane the sum of Three Hundred
Thirty- Five Thousand Two Hundred Eighty Dollars and Seven Cents ($335,280.07)
within three (3) business days following the first to occur of (i) the date upon
which the Company receives additional funding from BNY Financial Corporation,
pursuant to its ongoing negotiations with such entity for a new banking
agreement; (ii) the Maxwell Funding Date; or (iii) the thirty-third (33rd) day
following the execution of this Agreement by all parties named herein. Provided,
however, that such amount is to be paid in full on the first to occur of (i),
(ii) or (iii) above, and any adjustments provided for herein not agreed to in
writing by Lane and the Company prior to either of such events, shall be
retroactively adjusted upon resolution by Lane and the Company. This sum relates
to the Company's purchase orders placed, and Lane's invoices issued, after March
23, 1996. The Company agrees to notify Lane when, as and if such additional
funding is received and or the Maxwell Funding Date shall occur.
(b) that the Company shall at all times have such number of
shares of its Common Stock issued and outstanding so that the then issued and
outstanding Shares of Conversion Stock then owned beneficially and of record by
Braha (including
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30,000 shares presently owned by the Braha Industries, Inc. Profit Sharing
Trust) or Lane (including 10,653 shares presently owned by Lane Shay) shall,
separately, and not in the aggregate, constitute less than ten percent (10%) of
the shares of the Company's Common Stock then issued and outstanding, unless the
Company shall have obtained the written consent of Braha and/or Lane, as the
case may be.
17. The amounts referred to in Sections 1, 2 and subsection 16(a)
hereof are believed by the Company, Braha and Lane to be definitive and are
subject to adjustment for mathematical errors and for missing invoices or
payments.
18. The approximate amount of aggregate debt due to Braha under Section
1 hereof includes all invoices of Braha to the Company up to and including March
20, 1996, and the aggregate debt due to Lane under Section 2 hereof includes all
invoices of Lane to and including March 23, 1996. Any and all debt (except
interest as defined in Section 9 hereof) incurred by the Company with such
entities on or after the applicable dates set forth herein is not subsumed
within Sections 1 or 2 hereof, as the case may be.
19. The Company agrees that it will not assert any claims for defective
merchandise against Braha and/or Lane with respect to invoiced merchandise
included within the applicable periods set forth in Section 18 above.
20. This Agreement may be executed in two or more counterparts each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
21. The Company shall be deemed to be in breach of this Agreement and
the claims of Braha and/or Lane, as the case may be, shall be reinstated in
full, except as to (i) such portions thereof as were forgiven (with all
conditions thereto having been met) under Sections 1, 2 and/or 9 hereof and (ii)
the conversion of the Conversion Debt into Conversion Stock, all with respect
only to whichever of Braha and/or Lane such Event of Default relates, upon the
happening of one or more of the following events and the giving of the
applicable written notice provided below to such effect by Braha and/or Lane, as
the case may be (provided, however, that in the event of an Event of Default
under sub-sections g, h, i and/or j below, no notice shall be required) and
notwithstanding the foregoing, the Company may use such notice period to effect
the cure of any such breach prior to the expiration of the notice period when
such breach shall become an Event of Default and, if so cured, the Event of
Default shall be deemed not to have occurred ("Event of Default"):
(a) the failure of the Company to make any of the payments
provided in Section 4 hereof, which breach remains uncured for a period of
fifteen (15) days after written notice thereof to the Company (this sub-section
shall not be a breach available to Lane);
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(b) the failure of the Company to make any of the payments
provided in Section 5 hereof, which breach remains uncured for a period of
fifteen (15) days after written notice thereof to the Company (this sub-section
shall not be a breach available to Braha);
(c) the failure of the Company to pay when due its current
obligations to Braha arising after the date hereof, which breach remains uncured
for a period of thirty-five (35) days after the expiration of trade terms, if
any, then being extended to the Company and after written notice thereof to the
Company (this sub-section shall not be a breach available to Lane);
(d) the failure of the Company to pay when due its current
obligations to Lane arising after the date hereof (this sub-section shall not be
a breach available to Braha), which breach remains uncured for a period of
thirty-five (35) days after the expiration of trade terms, if any, then being
extended to the Company and after written notice thereof to the Company;
(e) the failure of the Company to pay, when due, the payment
provided in Section 16(a) hereof, which breach remains uncured for a period of
five (5) days after written notice thereof to the Company (this sub-section
shall not be a breach available to Braha);
(f) the failure of the Company to comply with any material
covenant in this Agreement for a period of thirty-five (35) days after written
notice thereof to the Company;
(g) the filing of a petition against the Company in a court of
competent jurisdiction in an involuntary case under the federal bankruptcy laws,
as may now or hereafter be constituted or hereafter amended, or any applicable
federal or state bankruptcy, insolvency or other similar law or the appointment
of a receiver, liquidator, assignee, custodian, trustee or other similar
official for all or any substantial part of the property of the Company and the
continuance of any such decree, order or appointment unstayed and in effect for
a period of ninety (90) consecutive days;
(h) the commencement by the Company of a voluntary case under
the federal bankruptcy laws, as may now or hereafter be constituted or hereafter
amended, or any other applicable federal or state bankruptcy, insolvency or
other similar law, or the making by any of the Company of any assignment for the
benefit of creditors;
(i) the entry of a judgment by a court of competent
jurisdiction against the Company and the scheduling of a sale of a substantial
part of the Company's inventory or equipment pursuant to any formal legal
proceeding instituted against the Company and the Company having failed to
discharge or vacate the lien of such judgment or legal proceeding within at
least five (5) days before the date scheduled for the sale; or
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(j) the failure of the Company to pay any taxes as a result of
which any action shall have been taken to foreclose upon any lien for such taxes
on any of the Company's property, unless such claim is contested in good faith.
22. In no event shall the provisions of subsection 21(c) and/or 21(d)
hereof be deemed to require either Braha or Lane, as the case may be, to give
any notice, or extend any cure period, to the Company with respect to its
non-payment of any such current debt, such subsections relating only to the
declaration of an Event of Default hereunder.
23. Upon the occurrence of an Event of Default and proper notice by
Braha and/or Lane to the Company, if no cure is effected during the applicable
notice period, if any, the noticing party may exercise any and all of its legal
or equitable rights or remedies.
24. The failure or delay of Braha and/or Lane to declare any default or
to enforce any rights, powers or remedies hereunder shall not operate as a
waiver of their respective rights to subsequently declare any such default or
enforce such rights, powers or remedies, but any default or right, power or
remedy shall continue to remain in full force and effect notwithstanding that
Braha and/or Lane may, at any time, in its discretion, by action taken or by
forbearance, grant, agree to or permit any extensions, renewals, modifications,
waivers or indulgences whatsoever.
25. Nothing contained in this Agreement shall be construed or deemed to
release or discharge any rights and remedies that either Braha and/or Lane may
now or hereafter have against any endorser, guarantor or other surety who may
now or hereafter be liable to either of them upon any debt within the purview of
this Agreement, and each such right and remedy is hereby expressly reserved.
26. Provided that the Company shall not be in substantial default in
the performance of any of the material terms, provisions and conditions of this
Agreement, and shall keep, observe and perform the same, neither Braha nor Lane
will institute any action or proceeding, or continue any pending action or
proceeding against the Company and will not levy any execution, attachment or
any other process against the Company's property for and by reason of any debt
owing to Braha as of March 20, 1996, and as to Lane as of March 23, 1996, and
will not file or join in any petition in bankruptcy or in any proceeding under
the Bankruptcy Code or its amendment or in any other proceeding having for its
object the appointment of a receiver or trustee for the Company.
27. All notices, requests, demands, exercises and other communication
provided for herein shall be in writing and sent by express, certified or
registered mail, postage prepaid, return receipt requested, or by Federal
Express for next business day delivery (signature not waived) if domestic United
States and, if international, solely by Federal Express or Airborne Express for
the fastest possible delivery time available through such carrier to the
applicable party at the addresses indicated below:
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<PAGE>
If to the Company:
Sam & Libby, Inc.
58 West 40th Street
New York, NY 10018
Attn: Mr. Samuel L. Edelman
With a copy to each of:
Kaufmann, Feiner, Yamin, Gildin & Robbins LLP
777 Third Avenue
New York, NY 10017
Attn: Michael G. Yamin, Esq.
- and -
Wilson Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Attn: Steven L. Berson, Esq.
If to Braha:
Braha Industries, Inc.
1 East 33rd Street
New York, NY 10016
Attn: Mr. David Braha
With a copy to:
Todtman, Young, Tunick, Nachamie,
Hendler & Spizz, P.C.
425 Park Avenue
New York, NY 10022
Attn: Stanley B. Hendler, Esq.
If to LIT (or Lane):
Lane International Trading, Inc.
31284 San Antonio Street, Suite 7
Hayward, CA 94544
Attn: Mr. Lane Shay
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<PAGE>
With a copy to:
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
Three Embarcadero Center
7th Floor
San Francisco, CA 94111
Attn: Janet A. Nexon, Esq.
If to La Lano (or Lane):
La Lano International Trading, Inc.
Room 8, 6th Floor
No. 20, Ta Lung Rd.
Taichung, Taiwan R.O.C.
With a copy to:
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
Three Embarcadero Center
7th Floor
San Francisco, CA 94111
Attn: Janet A. Nexon, Esq.
All notices sent by Express Mail, Federal Express or Airborne Express will be
deemed given on the earlier of the date indicated as received on the return
receipt or on the signature log of Federal Express or Airborne Express, as the
case may be, or the first date of attempted delivery on a business day by such
carrier as indicated in their official records. All domestic notices sent by
certified or registered mail will be deemed given on the earlier of the date
indicated as received on the return receipt card or five (5) business days after
the mailing thereof as indicated by a United States Postal Service Stamp on the
official mailing receipt. For purposes of this Section, the term "business day"
excludes Saturday, Sunday, national holidays and state holidays in the country
and state of the noticed party.
28. The terms of this Agreement may not be modified, amended or altered
in any respect, nor compliance with any covenant or provision herein set forth
omitted or waived, except by a written instrument signed by the party or parties
to be charged.
29. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
30. All representations and warranties made in this Agreement
shall survive the execution and delivery hereof.
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<PAGE>
31. This Agreement constitutes the entire agreement between the parties
and supersedes any prior understandings or agreements concerning the subject
matter hereof.
32. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability or any other provision.
33. All questions pertaining to the validity, construction, execution
and performance of this Agreement shall be construed in accordance with and be
governed by the laws of the State of California, irrespective of the fact that
one or more of the parties hereto now is or may hereafter be, domiciled in a
different state, jurisdiction or country and each of the parties hereto hereby
consents to the exclusive jurisdiction of the Supreme Court of the State of New
York, County of New York, and the Federal District Court for the Southern
District of New York as the exclusive forums for the resolution of all matters
relating to this Agreement.
34. This Agreement shall not be binding or enforceable against any
party until (a) this Agreement has been signed by all parties and (b) there has
been delivered on or before July 1, 1996, an opinion of Wilson, Sonsini,
Goodrich & Rosati in the form agreed to by the parties, together with
certificates for all of the Conversion Stock being issued hereunder.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by their duly authorized officers, all as of the date
first above written.
SAM & LIBBY, INC.
By: /s/ Kenneth M. Sitomer
-----------------------------
Title: Chief Financial Officer and
--------------------------
Financial Officer
-----------------
BRAHA INDUSTRIES, INC.
By: /s/ Ralph Braha
------------------------------
Title: President
---------------------------
LANE INTERNATIONAL TRADING, INC.
By: /s/ Lane Shay
-----------------------------
Title: President
---------------------------
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<PAGE>
EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
June 26, 1996
Gentlemen:
This will confirm that in consideration of your agreement on June 26,
1996, to compromise the debt owed to each of you by Sam & Libby, Inc., a
California corporation (the "Company") in connection with which Braha (as
defined below) subscribed for and was issued One Million Three Hundred
Thirty-Nine Thousand Two Hundred Sixty (1,339,260) shares, and Lane (as defined
below) subscribed for and was issued One Million Three Hundred Fifty-Eight
Thousand Six Hundred Eight (1,358,608) shares, of the Company's Common Stock,
$0.001 par value (the "Shares"), all under the circumstances as set forth in the
Composition and Conversion Agreement dated June 26, 1996 by and among Braha
Industries, Inc. ("Braha"), Lane International Trading, Inc. ("Lane"), La Lano
International Trading, Inc. ("La Lano") and the Company (the "Conversion
Agreement"), and as an inducement to each of you to consummate the transactions
contemplated by the Conversion Agreement and the other agreements referred to
therein, the Company covenants and agrees with each of you as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
"Common Stock" shall mean the Common Stock, $0.001 par value,
of the Company, as constituted as of the date of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rule and
regulations of the Commission thereunder, all as the same shall be in
effect at the time.
"holder" or "holders" shall mean Braha and/or Lane, as the
case may be; this Agreement and/or the registration rights granted
hereunder being non- assignable by either of such entities, except to a
person or entity which (i) acquires all of the Restricted Stock of the
assignor, (ii) directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with such assignor, or (iii) is a purchaser of all or
substantially all of the assets of such assignor by merger, sale of
assets, stock sale or otherwise.
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<PAGE>
"Restricted Stock" shall mean the Shares of Common Stock, then
held beneficially and of record by Braha and/or Lane, excluding any
such Shares of Common Stock which have been (a) registered under the
Securities Act pursuant to an effective registration statement filed
thereunder and disposed of in accordance with the registration
statement covering them or (b) publicly sold pursuant to Rule 144 under
the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
2. Required Registration.
(a) At any time after ninety (90) days following the date of
this Agreement, the holders of Restricted Stock constituting at least fifty-one
percent (51%) of the total shares of Restricted Stock then outstanding may
request the Company to register under the Securities Act all or any portion of
the shares of Restricted Stock held by such requesting holder or holders for
sale in the manner specified in such notice, provided that the shares of
Restricted Stock for which registration has been requested shall constitute at
least thirty percent (30%) of the total shares of Restricted Stock then
outstanding if such holder or holders shall request the registration of less
than all shares of Restricted Stock then held by such holder or holders.
Notwithstanding anything to the contrary contained herein, no request may be
made under this Section 2 within one hundred eighty (180) days after the
effective date of a registration statement filed by the Company (other than a
registration statement on Form S-4, S-8 or another form not available for
registering the Restricted Stock for sale to the public). In furtherance hereof,
the Company undertakes and agrees that for a period of One Hundred Fifty (150)
days following the date of this Agreement, unless it has obtained the prior
written consent of all holders, that it will not file a registration statement
under the Securities Act for sale of any of its securities to the public, except
with respect to registration statements on Form S-4, S-8 or another form not
available for registering the Restricted Stock for sale to the public and, in
the event of any such registration statement being filed (except with the
consent of all holders) during such period, the 180-day period referred to above
shall not be applicable.
(b) Following receipt of any notice under this Section 2, the
Company shall immediately notify all holders of Restricted Stock from whom
notice has not been received and shall use its best efforts to register under
the Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from other holders within thirty (30) days after the giving of such
notice by the Company). If such method of disposition shall be an underwritten
public offering, the holders of a majority of the Shares of
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Restricted Stock to be sold in such offering may designate the managing
underwriter of such offering, subject to the approval of the Company, which
approval shall not be unreasonably withheld or delayed. The Company shall be
obligated to register Restricted Stock pursuant to this Section 2 on one (1)
occasion only; provided, however, that such obligation shall be deemed satisfied
only when a registration statement covering all of the Shares of Restricted
Stock specified in notices received as aforesaid, for sale in accordance with
the method of disposition specified by the requesting holders, shall have become
effective.
3. Incidental Registration. If the Company at any time (other than
pursuant to Section 2 or Section 4) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms S-4, S-8 or another form not available for
registering the Restricted Stock for sale to the public), each such time it will
give written notice to all holders of outstanding Restricted Stock of its
intention so to do. Upon the written request of any such holder, received by the
Company within thirty (30) days after the giving of such notice by the Company,
to register any of its Restricted Stock (which request shall state the intended
method of disposition thereof), the Company will use its best efforts to cause
the Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit the sale or
other disposition by the holder (in accordance with its written request) of such
Restricted Stock so registered. In the event that any registration pursuant to
this Section 3 shall be, in whole or in part, an underwritten public offering of
Common Stock, the number of Shares of Restricted Stock to be included in such an
underwriting may be reduced (pro rata among the requesting holders based upon
the number of shares of Restricted Stock owned by such holders) if and to the
extent that the managing underwriter shall be of the opinion that such inclusion
would adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that in no event may less than ten percent (10%) of
the total number of shares of Common Stock to be included in such underwriting
be made available for Shares of Restricted Stock. Notwithstanding the foregoing
provisions, the Company may withdraw or postpone any registration statement
referred to in this Section 3 without thereby incurring any liability to the
holders of Restricted Stock.
4. Registration on Form S-3. If at any time after ninety (90) days from
the date hereof (i) a holder or holders of Restricted Stock constituting at
least fifty percent (50%) of the total Shares of Restricted Stock then
outstanding request that the Company file a registration statement on Form S-3
or any successor thereto for a public offering of all or any portion of the
shares of Restricted Stock held by such requesting holder or holders, and (ii)
the Company is a registrant entitled to use Form S-3 or any successor thereto to
register such shares, then the Company shall use its best efforts to register
under the Securities Act on Form S-3 or any successor thereto,
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<PAGE>
for public sale in accordance with the method of disposition specified in such
notice, the number of shares of Restricted Stock specified in such notice.
Whenever the Company is required by this Section 4 to use its best efforts to
effect the registration of Restricted Stock, each of the procedures and
requirements of Section 2(b) shall apply to such registration; provided,
however, that there shall be no more than two (2) registrations on Form S-3
effected under this Section 4.
5. Registration Procedures. If and whenever the Company is required by
the provisions of Sections 2, 3 or 4 to use its best efforts to effect the
registration of any Shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and use its best efforts to file with the
Commission, within forty-five (45) days of the completion of the notification
process under Section 2 above, a registration statement (which in the case of an
underwritten public offering pursuant to Section 2, shall be on Form S-1, Form
SB-2 or other form of general applicability satisfactory to the managing
underwriter selected as therein provided) with respect to such securities and
use its best efforts to cause such registration statement to become and remain
effective for the period of the distribution contemplated thereby (determined as
hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;
(d) use its best efforts to register or quality the Restricted
Stock covered by such registration statement under the securities or "Blue Sky"
laws of such jurisdictions as the sellers of Restricted Stock or, in the case of
an underwritten public offering, the managing underwriter reasonably shall
request; provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a foreign corporation in
any jurisdiction where it is not so qualified or to consent to general service
of process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered
by such
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<PAGE>
registration statement with any securities exchange or quotation system on which
the Common Stock of the Company is then listed;
(f) immediately notify each Seller of Restricted Stock and
each underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(g) if the offering is underwritten, at the request of any
seller of Restricted Stock use its best efforts to furnish on the date that
Restricted Stock is delivered to the underwriters for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the Company
for the purposes of such registration, addressed to the seller, in form and
substance identical to the letter delivered by such counsel to the underwriters
and (ii) a letter dated such date from the independent public accountants
retained by the Company, addressed to such seller, in form and substance
identical to the letter delivered by such independent public accountants to the
underwriters; and
(h) make available for inspection by each seller of Restricted
Stock, any underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
For purposes of Sections 5(a) and 5(b), the period of
distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby or one hundred
eighty (180) days after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
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<PAGE>
In connection with each registration pursuant to Sections 2, 3
or 4 covering an underwritten public offering, the Company and each seller agree
to enter into any written agreement with the managing underwriter selected in
the manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
6. Expenses. All expenses incurred by the Company in complying with
Sections 2, 3 and 4, including without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "Blue Sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance, but excluding any
Selling Expenses, are called "Registration Expenses". All underwriting
discounts, selling commission applicable to the sale of Restricted Stock and
fees and disbursements of one special counsel for the sellers of Restricted
Stock are called "Selling Expenses".
The Company will pay all Registration Expenses in connection
with the one (1) registration statement provided for under Section 2, each
registration statement under Section 3 and the first registration effected by
the Company pursuant to Section 4. All Selling Expenses in connection with each
registration statement under Sections 2, 3 or 4 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.
7. Indemnification and Contribution.
(a) In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Sections 2, 3 or 4, the Company will
indemnify and hold harmless each seller of such Restricted Stock thereunder,
each underwriter of such Restricted Stock thereunder and each other person, if
any, who controls such seller or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Sections 2, 3 or 4 any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
such seller, each such underwriter and each such controlling person for any
legal or other expenses
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<PAGE>
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or motion; provided, however, that the
Company will not be liable in any case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by any such seller, any such underwriter or any such
controlling person in writing specifically for use in such registration
statement or prospectus.
(b) In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Sections 2, 3 or 4, each seller of
such Restricted Stock thereunder, severally and not jointly, will indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 2, 3 or 4, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that such seller will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus, and;
provided, further, however, that the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of the shares
sold by such seller under such registration statement bears to the total public
offering price of all securities sold thereunder, but not in any event to exceed
the proceeds received by such seller from the sale of Restricted Stock covered
by such registration statement.
8. Changes in Common Stock. If, and as often as, there is any change in
the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization,
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<PAGE>
or by any other means, appropriate adjustment shall be made in the provisions
hereof so that the rights and privileges granted hereby shall continue with
respect to the Common Stock as so changed.
9. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, the Company
agrees at all times to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act;
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each holder of Restricted Stock forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as such
holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing such holder to sell any Restricted Stock without
registration.
10. Representations and Warranties of the Company. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Articles of Incorporation or By-laws of the Company or any
provision of any indenture, agreement or other instrument to which it or any of
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
11. Miscellaneous.
(a) All covenants and agreements contained in this Agreement
by or
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<PAGE>
on behalf of any of the parties hereto shall bind and inure to the benefit of
the parties signatory hereto, but no rights contained in this Agreement shall
inure to the benefit of the respective successors, heirs and assigns of Braha
and/or Lane (including, transferees of any Restricted Stock) whether so
expressed or not, except for the permitted assignee of Braha and/or Lane, as
defined in Section 1 hereof under the definition of "holder" or "holders".
(b) All notices, requests, demands, exercises and other
communication provided for herein shall be in writing and sent by express,
certified or registered mail, postage prepaid, return receipt requested, or by
Federal Express for next business day delivery (signature not waived) if
domestic United States and, if international, solely by Federal Express or
Airborne Express for the fastest possible delivery time available through such
carrier to the applicable party at the addresses indicated below:
If to the Company:
Sam & Libby, Inc.
58 West 40th Street
New York, NY 10018
Attn: Mr. Samuel L. Edelman
With a copy to each of:
Kaufmann, Feiner, Yamin, Gildin & Robbins LLP
777 Third Avenue
New York, NY 10017
Attn: Michael G. Yamin, Esq.
- and -
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Attn: Steven L. Berson, Esq.
If to Braha:
Braha Industries, Inc.
1 East 33rd Street
New York, NY 10016
Attn: Mr. David Braha
With a copy to:
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Todtman, Young, Tunick, Nachamie,
Hendler & Spizz, P.C.
425 Park Avenue
New York, NY 10022
Attn: Stanley B. Hendler, Esq.
If to Lane:
Lane International Trading, Inc.
31284 San Antonio Street, Suite 7
Hayward, CA 94544
Attn: Mr. Lane Shay
With a copy to:
Howard, Rice, Nemerovski, Canady, Falk & Rabkin
Three Embarcadero Center
7th Floor
San Francisco, CA 94111
Attn: Janet A. Nexon, Esq.
If to any subsequent holder of Restricted Stock, to such holder at such
address as may have been furnished to the Company in writing by such holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Restricted Stock) or to
the holders of Restricted Stock (in the case of the Company) in accordance with
the provisions of this paragraph.
All notices sent by Express Mail, Federal Express or Airborne Express will be
deemed given on the earlier of the date indicated as received on the return
receipt or on the signature log of Federal Express or Airborne Express, as the
case may be, or the first date of attempted delivery on a business day by such
carrier as indicated in their official records. All domestic notices sent by
certified or registered mail will be deemed given on the earlier of the date
indicated as received on the return receipt card or five (5) business days after
the mailing thereof as indicated by a United States Postal Service Stamp on the
official mailing receipt. For purposes of this Section, the term "business day"
excludes Saturday, Sunday, national holidays and state holidays in the country
and state of the noticed party.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
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(d) This Agreement may not be amended or modified, and no
provision thereof may be waived, without the written consent of the Company and
the holders of at least fifty-one percent (51%) of the outstanding shares of
Restricted Stock affected by such amendment, modification or waiver.
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) The obligations of the Company to register shares of
Restricted Stock under Sections 2, 3 or 4 shall terminate on the third
anniversary of the date of the date of the Conversion Agreement.
(g) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
Upon your acceptance of the foregoing by signing and returning the
enclosed counterpart of this letter, this Agreement shall be a binding agreement
between the Company and each of you.
Very truly yours,
SAM & LIBBY, INC.
By: /s/ Kenneth M. Sitomer
-------------------------------
Title: Chief Financial Officer and
----------------------------
Financial Officer
-----------------
AGREED TO AND ACCEPTED as of
the date first above written:
BRAHA INDUSTRIES, INC.
By: /s/ Ralph Braha
-----------------------------------
Title: President
---------------------------------
-11-
<PAGE>
<PAGE>
LANE INTERNATIONAL TRADING, INC.
By: /s/ Lane Shay
-----------------------------------
Title: President
--------------------------------
-12-
